D'AMICO v. IND. U. OF MARINE & SHIPBUILDING WORKERS

• Decision Date: 14 March 1986
• Docket Number: Div. A. No. M-84-1821.
• Citation: 630 F. Supp. 919
• Parties: Louis J. D'AMICO, Regional Director of Region 5 of the National Labor Relations Board, for and on behalf of the NATIONAL LABOR RELATIONS BOARD v. INDUSTRIAL UNION OF MARINE AND SHIPBUILDING WORKERS OF AMERICA, AFL-CIO.
• Court: U.S. District Court — District of Maryland

630 F. Supp. 919

Louis J. D'AMICO, Regional Director of Region 5 of the National Labor Relations Board, for and on behalf of the NATIONAL LABOR RELATIONS BOARD v. INDUSTRIAL UNION OF MARINE AND SHIPBUILDING WORKERS OF AMERICA, AFL-CIO.

Div. A. No. M-84-1821.

United States District Court, D. Maryland.

March 14, 1986.

Richard L. Ahearn, Regional Atty., Region 5, N.L.R.B., Baltimore, Md., for plaintiff.

Mary Ellen Signorille and Abato, Rubenstein & Abato, Baltimore, Md., and Michael Brodie and Freedman & Lorry, Philadelphia, Pa., for defendant.

MEMORANDUM AND ORDER

JAMES R. MILLER, Jr., District Judge.

Pending in this action in an Application for Attorneys' Fees pursuant to the Equal Access to Justice Act (the EAJA), 28 U.S.C. § 2412(d), as amended, filed by Industrial Union of Marine and Shipbuilding Workers of America, AFL-CIO (the National Union) (Paper No. 41). Louis J. D'Amico, Regional Director of Region 5 of the National Labor Relations Board (the Regional Director), has filed a Motion to Dismiss the Application and an Amended Motion to Dismiss the Application (Paper Nos. 42 and 43). The National Union has filed a Response to the motion (Paper No. 45). No hearing is necessary to decide the motion. Local Rule 6(G).

This application for attorneys' fees stems out of a petition to adjudge the National Union in civil contempt and for injunctive relief (Paper No. 35), in which the Regional Director asserted that certain acts of the National Union were motivated by a desire by the National Union to retaliate against, and to remove from office, the officials of Local 33 who negotiated and administered the local's collective bargaining agreement with Bethlehem Steel Corporation's Sparrows Point, Maryland Shipyard. The Regional Director contended that such acts of the National Union were in violation of this court's Order of May 10, 1984, as clarified on March 4, 1985. For reasons set forth in a Memorandum dated September 30, 1985 (Paper No. 40), this court on September 27, 1985, issued an Order denying the Regional Director's petition (Paper No. 39).

The Regional Director asserts that the application should be dismissed for several reasons. He contends (1) that the National Union has not sufficiently established its eligibility for an award of fees and expenses under EAJA; (2) that the Regional Director was substantially justified in initiating the contempt petition; (3) that special circumstances exist which make an award unjust; and (4) that the National Union has not submitted a proper accounting of the fees and expenses it is claiming and is claiming fees and expenses in excess of those to which it would be entitled even if it were found to be entitled to an award.¹

Section 2412(d)(1)(A) of Title 28, United States Code, provides:

"Except as otherwise specifically provided by statute, a court shall award to a prevailing party other than the United States fees and other expenses, in addition to any costs awarded pursuant to subsection (a), incurred by that party in any civil action (other than cases sounding in tort) brought by or against the United States in any court having jurisdiction of that action, unless the court finds that the position of the United States was substantially justified or that special circumstances make an award unjust."

Initially, this court finds that the National Union is a prevailing party, since the Regional Director's Petition for Contempt was denied. This issue does not appear to be in dispute. The Regional Director does dispute, however, whether the National Union is a "party," eligible to receive fees and expenses under the EAJA.

I. Eligibility under the EAJA

In its application, the National Union alleges that it is a prevailing party under § 2412(d) as most recently amended and that at no time relevant to the application did the National Union's net worth exceed $7,000,000.00.² The Regional Director asserts that the application is insufficient, because it fails to allege that the National Union has less then 500 employees, because the National Union is not the real party in interest, and because the National Union has not sufficiently demonstrated its own eligibility.

The National Union has attached to its Response to the motion the affidavit of Ernest H. Soderstrom, who performs accounting services for the National Union and who avers that at approximately July 1985, the aggregate net worth of the National Union and its local affiliates was $4,778,727.00 and that since that time the net worth has declined (Paper No. 44, Soderstrom Affidavit, ¶ 6). He further avers that during the year 1985, the maximum number of persons employed on a full-time or regular part-time basis by the National Union and its affiliated locals has not exceeded 45 (id., Soderstrom Affidavit, ¶ 7). The Regional Director, however, continues to assert that the National Union has not met the threshold statutory requirements of establishing its eligibility for an award.

Section 2412(d)(1)(B) provides:

"A party seeking an award of fees and other expenses shall, within thirty days of final judgment in the action, submit to the court an application for fees and other expenses which shows that the party is a prevailing party and is eligible to receive an award under this subsection, and the amount sought, including an itemized statement from any attorney or expert witness representing or appearing in behalf of the party stating the actual time expended and the rate at which fees and other expenses are computed. The party shall also allege that the position of the United States was not substantially justified."

Section 2412(d)(2)(B) defines a "party" as, inter alia,

"(ii) any owner of an unincorporated business, or any partnership, corporation, association, unit of local government, or organization, the net worth of which did not exceed $7,000,000 at the time the civil action was filed, and which had not more than 500 employees at the time the civil action was filed...."

The Regional Director's argument that the National Union's application is insufficient because it does not allege that it has less than 500 employees has been rendered moot by the statement in the Soderstrom affidavit that the National Union and its Local affiliates employed no more than 45 employees during the relevant time period. Similarly, the Regional Director's argument that the real party in interest is not the National Union, but is the National Union combined with all of its affiliated local unions throughout the United States, has been rendered moot by the averments in the Soderstrom affidavit that the National Union and its local affiliates together have insufficient net worth and employees to exceed the statutory requirements.

Finally, the Regional Director argues that because § 2412(d)(1)(B) requires that the party "show" that it is eligible to receive an award under the section, in contrast to the requirement that it "allege" that the position of the United States was not substantially justified, the National Union must submit more than an affidavit stating that it has a net worth of less than $7,000,000.00 and employs less than 500 persons. The Regional Director asserts that the National Union, in order to meet its threshold statutory requirement of "showing" that it is eligible to receive an award, must submit a balance sheet showing its net worth. It further appears that the Regional Director argues that since the National Union has not sufficiently demonstrated its eligibility in its application, and the 30-day limit in § 2412(d)(1)(B) for submitting an application has expired, it should not be permitted to supplement its application, and, therefore, it has failed to submit within 30 days an application which establishes its eligibility for an award. Because it appears that such restrictions would conflict with the purposes of the EAJA, these arguments are without merit.

While it is clear that the statute places the burden of establishing eligibility on the applicant, it would impose unnecessarily burdensome restrictions on recovery to require an applicant to prove, to the government's satisfaction and in its initial application for fees and costs under the EAJA, that the applicant met all of the eligibility requirements. Often, when a party applies for fees under the EAJA, there is no serious question as to eligibility under § 2412(d)(1)(B). See, e.g., Hirschey v. F.E. R.C., 760 F.2d 305, 309 (D.C.Cir.1985). Accordingly, there is often no argument by the government that the applicant is not eligible, and, in such cases, other courts have accepted as sufficient proof an applicant's affidavit of net worth, see, e.g., Donahue v. Heckler, 600 F.Supp. 153, 157 (E.D. Wis.1985); Johnson v. Secretary of/and U.S. Department of HUD, 594 F.Supp. 265, 267 (E.D.La.1984), and even an affiant corporation's assertion that it meets the net worth and maximum employee eligibility requirements. See Trident Marine Construction, Inc. v. District Engineer, United States Army Corps of Engineers, 587 F.Supp. 799, 803 (W.D.Mich.1984). Cf. Carlisi v. Secretary of Health and Human Services, 583 F.Supp. 135, 139 n. 7 (E.D.Mich.1984) (dismissing the application for numerous flaws, but noting that although the applicant also failed to provide the court with any basis to determine if plaintiff's net worth was less than $1 million, the error was not fatal because the court could take judicial notice that plaintiff, as a recipient of state and federal government assistance, must have a net worth of less than $1 million). In the vast majority of cases, in which such eligibility is not questioned, it would require a significant amount of effort to be expended unnecessarily to require a showing as suggested by the Regional Director. In this court's view, an applicant's affidavit which indicates eligibility should be sufficient to meet the applicant's burden, absent some at least minimally factually supported argument by the government that the...