Bullfrog Films, Inc. v. Catto

• Decision Date: 01 March 1993
• Docket Number: No. CV 85-7930 AWT.,CV 85-7930 AWT.
• Citation: 815 F. Supp. 338
• Parties: BULLFROG FILMS, INC., et al., Plaintiffs, v. Henry E. CATTO, etc., et al., Defendants.
• Court: U.S. District Court — Central District of California

815 F. Supp. 338

BULLFROG FILMS, INC., et al., Plaintiffs, v. Henry E. CATTO, etc., et al., Defendants.

No. CV 85-7930 AWT.

United States District Court, C.D. California.

March 1, 1993.

David Cole, Michael Ratner, Morton Stavis, Center for Constitutional Rights, New York City, Dan Stormer, Ben Margolis, Hadsell & Stormer, Pasadena, CA, for plaintiffs.

Terree A. Bowers, U.S. Atty., Roger E. West, First Asst. U.S. Atty., Los Angeles, CA, Vincent M. Garvey, Deputy Director, Carol Federighi, U.S. Dept. of Justice, Civ. Div., Washington, DC, for defendants.

MEMORANDUM AND ORDER ON MOTION FOR ATTORNEYS' FEES

TASHIMA, District Judge.

This is plaintiffs' renewed motion for attorneys' fees under the Equal Access to Justice Act, 28 U.S.C. § 2412 (EAJA). A short history of this long case is necessary to the disposition of the motion.

BACKGROUND

This action was brought to challenge the constitutionality of the regulations promulgated by the United States Information Agency (USIA) to implement the Beirut Agreement, a treaty designed to facilitate the international distribution of educational films. 17 U.S.T. 1578, T.I.A.S. No. 6116. The court held the regulations to be facially unconstitutional. Bullfrog Films, Inc. v. Wick, 646 F.Supp. 492 (C.D.Cal.1986), aff'd, 847 F.2d 502 (9th Cir.1988) (Bullfrog I). The USIA was ordered to issue new, constitutional regulations. New regulations were issued. 52 Fed.Reg. 43,753 (1987), codified at 22 C.F.R. § 502.6(a)(3) (1991). However, these also were challenged by plaintiffs in this action. In an unpublished decision issued May 13, 1988, the court held these regulations to be unconstitutional as well.

While the second appeal was pending, Congress enacted the Foreign Relations Authorization Act, Fiscal Years 1992 and 1993. Pub.L. 102-138, 105 Stat. 647 (1991). Section 207 of that Act (Section 207) set forth new statutory standards governing the implementation of the Beirut Agreement. 19 U.S.C. § 2051. Section 207 superseded three of the four new regulations promulgated by the USIA in response to the court's order. For this reason, the Ninth Circuit dismissed most of the USIA's appeal as moot. Bullfrog Films, Inc. v. Wick, 959 F.2d 778, 781 (9th Cir.1992) (Bullfrog II). The case was remanded to this court for reconsideration of the sole provision of the new regulations which had not been superseded by Section 207. Id. at 781-82.

With respect to the issue of attorneys' fees under the EAJA, the court denied plaintiffs' motion for fees on the ground that, with respect Bullfrog I, the USIA's position was "substantially justified" under the Act, and, with respect to Bullfrog II, that it should be treated as a separate, post-judgment proceeding from Bullfrog I and that, as such, the motion was premature because the appeal with respect thereto was then still pending. The Ninth Circuit reversed with respect to Bullfrog I, holding that the USIA's position was not substantially justified. Bullfrog Films, Inc. v. Wick, 959 F.2d 782 (9th Cir.1992) (Bullfrog III). However the determination that Bullfrog II should be treated as a separate proceeding for purposes of the EAJA's prevailing party/final judgment rule was affirmed. Id.

Pursuant to the mandate in Bullfrog III, plaintiffs have now filed their renewed motion for attorneys' fees. They seek fees and costs for both Bullfrog I and Bullfrog II.¹ Plaintiffs seek fees of $217,974.18² and costs of $15,620.37. The USIA contends that plaintiffs' request should be reduced by at least $139,000 because: (1) plaintiffs are not entitled to fees for Bullfrog II; (2) plaintiffs' calculations are based on an inflated and incorrect hourly rate; and (3) plaintiffs request fees for duplicative and unnecessary work.

DISCUSSION

I. Bullfrog II

It is undisputed that plaintiffs are entitled to EAJA fees for Bullfrog I. The Ninth Circuit so held. Bullfrog III, 959 F.2d 782. To be entitled to fees for Bullfrog II, plaintiffs must establish that they were "prevailing parties," and defendants must fail to establish that the position of the USIA was "substantially justified" or that "special circumstances make an award unjust." 28 U.S.C. § 2412(d)(1)(A). Defendants contend that plaintiffs are not prevailing parties and that the USIA's position was substantially justified.³ At issue are fees claimed for 226.75 hours incurred by David Cole and related costs of $4,039.45.

(a) Prevailing Party Status

Defendants contend that under the EAJA's "final judgment" rule, § 2412(d)(1)(B) & (2)(G), plaintiffs are not prevailing parties because no final judgment has been rendered in Bullfrog II. However, it is well-settled in this Circuit that a final judgment is not a prerequisite to an award of fees under the EAJA. To establish prevailing party status, a party must demonstrate that "(1) as a factual matter, the relief sought by the lawsuit was in fact obtained as a result of having brought the action, and (2) there was a legal basis for the plaintiffs' claim." Andrew v. Bowen, 837 F.2d 875, 877 (9th Cir.1988). Defendants cannot, and do not, contest the second prong of this test. They do, however, contend that plaintiffs do not meet the first requirement because, since Section 207 was not enacted at USIA's request, the relief obtained under the new statute was not "obtained as a result of the lawsuit."

Plaintiffs contend that this litigation was the catalyst in sparking enactment of Section 207. By its enactment, plaintiffs achieved most of the relief they sought in this action.⁴ Although the legislation was not sought by the USIA, defendants concede that it did result from plaintiffs' lobbying efforts. It defies common sense, then, to contend, as the USIA does, that this does not mean that plaintiffs achieved their goals "through" the litigation. This position has previously been rejected, Coyote v. Roberts, 502 F.Supp. 1342 (D.R.I.1980), and the court agrees. Courts have routinely granted prevailing party status to plaintiffs when legislative relief is obtained in response to a lawsuit. E.g., American Constitutional Party v. Munro, 650 F.2d 184, 187 (9th Cir.1981); Hendrickson v. Branstad, 934 F.2d 158, 161 (8th Cir.1991); Hyatt v. Heckler, 807 F.2d 376, 382 (4th Cir.1986).

The litigation only need be a "material factor" in the legislative process. Munro, 650 F.2d at 188. Here, the litigation was at least a material factor in bringing about enactment of Section 207. The House Report specifically refers to the USIA's response to this court's order and criticizes the agency's implementation of the Beirut Agreement which this litigation first brought to public light. See H.R.Rep. No. 53, 102d Cong., 1st Sess. 65-66 (1991), reprinted in 1991 U.S.C.C.A.N. 384, 419-20; see also H.R.Conf. Rep. No. 238, 102d Cong., 1st Sess. 126 (1991), reprinted in 1991 U.S.C.C.A.N. 384, 468. Testimony about this litigation by plaintiffs is a part of the legislative history. Free Trade in Ideas, Hearings Before the Subcommittee on Courts, Intellectual Property, and the Administration of Justice of the House Committee on the Judiciary, 101st Cong., 1st Sess. 151 (Statement of Pamela C. Jones) (May 3 & 4, 1989); Restrictions on International Travel, Hearings Before Subcommittee on International Economic Policy and Trade and on International Operations of the House Committee on Foreign Relations, 101st Cong., 2d Sess. 113 (Statement of John Abrahall) (Mar. 13, 1990).

The court finds that this litigation was, at least, a "material factor" in bringing about enactment of Section 207. Accordingly, plaintiffs are prevailing parties in Bullfrog II.

(b) Substantial Justification

The "position of the United States" under § 2412(d)(1)(A) includes both the underlying agency action and the government's position in the litigation. Andrew v. Bowen, 837 F.2d at 878. What the government must show is that its position had a "reasonable basis both in law and fact." Oregon Environmental Council v. Kunzman, 817 F.2d 484, 498 (9th Cir.1987).

(i) The "propaganda" label

One of the challenged regulations authorized the USIA to label certain materials as "propaganda," even though the materials were educational and had been certified as such. The USIA contends that this regulation was substantially justified because the labelling of films as "propaganda," at least in some circumstances, is constitutional. See Meese v. Keene, 481 U.S. 465, 485, 107 S.Ct. 1862, 1873, 95 L.Ed.2d 415 (1987). Because a position or practice is not unconstitutional does not mean that, in all circumstances, it is substantially justified. Unlike Meese, where the government agency was carrying out a statutorily mandated duty, here, affixing the propaganda label on educational materials is not only not required either by the Treaty or its enabling statute, it contravenes the purpose of certification under the Beirut Agreement.

In Bullfrog I, the USIA was told in the strongest terms that its duty was to avoid content-based judgments. In spite of that admonition, by the "propaganda" regulation, the USIA sought to place its content-based disapproval on films which the Constitution required it to certify as educational. There is no justification for the USIA reaching beyond its duty under the Beirut Agreement in this regard. Its action was entirely gratuitous and not substantially justified.

(ii) Are the remaining regulations content-based?

With respect to the remaining regulations, the USIA contends that it followed the methodology test used by the Department of the Treasury in determining whether an organization is "educational" for tax exemption purposes. See National Alliance v. United States, 710 F.2d 868, 874 (D.C.Cir.1983) (upholding use of the methodology test). However, comparison of these regulations with the methodology test reveals that these regulations go much further in regulating content and expression. In addition to being impermissibly vague, the regulations make the USIA the arbiter of which methods are "generally...