Dgr Assoc.s Inc v. The United States
| Decision Date | 15 February 2011 |
| Docket Number | No. 10-396C,10-396C |
| Court | U.S. Claims Court |
| Parties | DGR ASSOCIATES, INC., Plaintiff, v. THE UNITED STATES, Defendant, and GENERAL TRADES & SERVICES, INC., Defendant-Intervenor. |
Equal Access to Justice Act, 28 U.S.C. § 2412(d) (2006); Award of Plaintiff's Attorneys' Fees, Costs, and Expenses; Government's Underlying Litigation Position Not Substantially Justified; Cost of Living Adjustment to Statutory Cap.
Darcy V. Hennessy, with whom was Leslie A. Boe, Hennessy and Boe, P.A., Mission, Kansas, for Plaintiff.
Steven M. Mager, with whom were Tony West, Assistant Attorney General, Jeanne E. Davidson, Director, and Patricia M. McCarthy, Assistant Director, United States Department of Justice, Commercial Litigation Branch, Civil Division, Washington, D.C., Christopher S. Cole, Department of the Air Force, and David A. Fishman, Small Business Administration, Of Counsel, for Defendant.
Wayne A. Keup, Wayne A. Keup, PLLC, Washington, D.C., for Defendant-Intervenor.
Plaintiff, DGR Associates, Inc. (DGR), seeks $37,402.72 in attorneys' fees, costs, and expenses from Defendant pursuant to the Equal Access to Justice Act (EAJA), 28 U.S.C. § 2412(d) (2006). DGR prevailed in its bid protest against the United States Air Force, showing that, in a procurement for housing maintenance, inspection, and repair services at Eielson Air Force Base, Alaska, the Air Force violated the Small Business Act, 15 U.S.C. § 657a(b)(2)(B) (2006), by not giving a priority to HUBZone small business concerns. The Court issued an injunction requiring the Air Force to terminate an unlawfully awarded contract, and to apply the statutory HUBZone preference in a new or revised solicitation. DGR Associates, Inc. v. United States, 94 Fed. Cl. 189 (2010).
DGR's claim for attorneys' fees consists of 211 hours incurred during June through October 2010, charged at an hourly rate of $175. The attorneys who represented DGR in this matter are Darcy Hennessy and Leslie Boe, the principals in the law firm of Hennessy and Boe, P.A., in Mission, Kansas. The costs and expenses consist of the Court's $350 filing fee, and Federal Express charges of $127.72 to file and serve pleadings at the beginning of the case.
The EAJA provides that, when a timely application is filed, an eligible prevailing party shall be awarded attorneys' fees and other expenses incurred by that party in any civil action brought by or against the United States "unless the court finds that the position of the United States was substantially justified or that special circumstances make an award unjust." 28 U.S.C. § 2412(d)(1)(A). A statutory cap of $125 per hour applies, unless the Court determines that an increase is warranted for a cost of living adjustment, or that a "special factor, such as the limited availability of qualified attorneys for the proceedings involved, justifies a higher fee." 28 U.S.C. § 2412(d)(2)(A). Defendant opposes DGR's request, arguing that the Government's underlying litigation position was substantially justified, or alternatively, that any recovery should be limited to the statutory cap.
For the reasons explained below, DGR is eligible for an award under the EAJA. The Court concludes that Defendant's position in the underlying litigation was not substantially justified. Therefore, the Court awards DGR $37,227.72 in attorneys' fees, costs, and expenses, comprised of attorneys' fees for 210 hours at an hourly rate of $175, and $477.72 in costs and expenses. The Court has disallowed one hour incurred by DGR's counsel in addressing the Defendant-Intervenor's position. The Court increased the statutory cap of $125 per hour for an appropriate cost of living adjustment of $50.27. However, the Court must limit DGR's recovery to the hourly rate actually charged, $175.
To be eligible for award under the EAJA, five conditions must be met: (1) the fee application must be submitted to the Court within 30 days of final judgment in the action and be supported by an itemized statement; (2) at the time the civil action was initiated, the applicant, if a corporation, must not have been valued at more than $7,000, 000 in net worth or employed more than 500 employees; (3) the applicant must have been the "prevailing party" in a civil action brought by or against the United States; (4) the Government's position must not have been "substantially justified;" and (5) there cannot exist any special circumstances that would make an award unjust. 28 U.S.C. § 2412(d)(1)(A), (B); Id. § 2412(d)(2)(B); see Comm'r, Immigration & Naturalization Serv. v. Jean, 496 U.S. 154, 158 (1990); United Partition Sys., Inc. v. United States, 95 Fed. Cl. 42, 49 (2010).
The contested issues in this EAJA application are whether Defendant's underlying litigation position was substantially justified, and whether DGR should recover an hourly attorneys' fee rate that exceeds the statutory cap of $125. The Court will address each of the EAJA requirements below to assure that they are met.
As noted, a fee application under the EAJA must be submitted to the Court within 30 days of final judgment in the action and be supported by an itemized statement. 28 U.S.C. § 2412(d)(1)(B). The term "final judgment" means "a judgment that is final and not appealable." 28 U.S.C. § 2412(d)(2)(G). In this case, the Court issued a final judgment on August 13, 2010, and Defendant's 60-day appeal period expired on October 12, 2010. Defendant did not appeal the Court's decision. On November 8, 2010, DGR filed a motion for leave to file under seal its EAJA application for attorneys' fees and costs. In the application and exhibits accompanying this motion, DGR submitted the necessary information and supporting documents. Therefore, DGR timely filed its complete EAJA fee application within the statutory period.
At the time that DGR filed its civil action against the United States, DGR's net worth was less than $7,000, 000 and DGR employed less than 500 people. See 28 U.S.C. § 2412(d)(2)(B); (Pl.'s Mot. Exhibit A, Nov. 8, 2010.). Defendant does not dispute that DGR is eligible to recover attorneys' fees and expenses under the EAJA. (Def.'s Resp. 17, Jan. 6, 2011.)
DGR prevailed on all of its arguments that the Air Force should have applied the statutory preference for HUBZone small business concerns. The Court issued an injunction requiring the Air Force to comply with the Small Business Act, 15 U.S.C. § 657a(b)(2)(B). DGR also overcame Defendant's affirmative defense that the Court lacked jurisdiction due to DGR's failure to file a judicial action prior to the closing date for receipt of proposals. DGR Associates, 94 Fed. Cl. at 200-04. Defendant does notcontest that DGR was the prevailing party for EAJA purposes. (Def.'s Resp. 19, Jan. 6, 2011.)
The Government bears the burden of showing that its position was substantially justified. See Infiniti Info. Solutions, LLC. v. United States, 94 Fed. Cl. 740, 748 (2010) (citing White v. Nicholson, 412 F.3d 1314, 1315 (Fed. Cir. 2005)). The substantial justification inquiry determines whether the Government's position was "'justified in substance or in the main'-that is, justified to the degree that would satisfy a reasonable person." Pierce v. Underwood, 487 U.S. 552, 565 (1988) (citations omitted). The Government's overall position "both prior to and during the litigation" must have a reasonable basis in both law and fact. United Partition Sys., 95 Fed. Cl. at 50 (). The key inquiry is "not what the law now is, but what the Government was substantially justified in believing it to have been." Loomis v. United States, 74 Fed. Cl. 350, 355 (2006) (quoting Pierce, 487 U.S. at 561). The Court must determine whether the Government was reasonable in bringing about and continuing the litigation at hand.
The mere fact that the Government did not prevail is not dispositive of the substantial justification inquiry. Schock v. United States, 254 F.3d 1, 5 (1st Cir. 2001). Whether one court agreed or disagreed with the Government does not establish whether the Government's position was not substantiality justified, although "a string of court decisions going either way can be indicative." Id. (citing Pierce, 487 U.S. at 568).
Defendant essentially presented two arguments in the underlying litigation to show why DGR's judicial bid protest should fail: (1) DGR waived its right to bring suit in this Court by not filing its action prior to the closing date for receipt of proposals; and (2) under the Small Business Act and applicable regulations, as interpreted by at least three executive agencies, the Air Force was not required to give priority to HUBZone small business concerns. The Court will address both of these arguments below.
As explained in the prior opinion, DGR Associates, 94 Fed. Cl. at 200-04, the Court found Defendant's waiver argument to be patently unreasonable. When DGR first saw that the Air Force's solicitation did not include a preference for eligible HUBZone offerors, DGR challenged the solicitation, first by letter to the contracting officer, and then by filing a formal agency-level protest. DGR took both of these actions prior to the closing date for receipt of proposals. The Court noted that DGR's letter and agency protest were "in compliance with [Federal Acquisition Regulation (FAR)], 48 C.F.R. § 33.103," and that by taking these actions, DGR was "adhering to the federal government's stated policy of attempting to resolve protests at the contracting officer and agency level." Id. at 202.
...
To continue reading
Request your trial