Levernier Const., Inc. v. U.S., 91-5058

• Decision Date: 22 October 1991
• Docket Number: No. 91-5058,91-5058
• Citation: 947 F.2d 497
• Parties: , 37 Cont.Cas.Fed. (CCH) P 76,202 LEVERNIER CONSTRUCTION, INC., Plaintiff-Appellee, v. The UNITED STATES, Defendant-Appellant.
• Court: U.S. Court of Appeals — Federal Circuit

Page 497

947 F.2d 497

60 USLW 2316, 37 Cont.Cas.Fed. (CCH) P 76,202

LEVERNIER CONSTRUCTION, INC., Plaintiff-Appellee, v. The UNITED STATES, Defendant-Appellant.

No. 91-5058.

United States Court of Appeals Federal Circuit.

Oct. 22, 1991.

Beverly L. Anderson, Winston & Cashatt, Spokane, Wash., argued for plaintiff-appellee. Patrick A. Sullivan, Winston & Cashatt, Spokane, Wash., was on the brief.

John E. Kosloske, Atty., Commercial Litigation Branch, Dept. of Justice, Washington, D.C., argued for defendant-appellant. With him on the brief were Stuart M. Gerson, Asst. Atty. Gen., David M. Cohen, Director and Thomas W. Petersen, Asst. Director.

Before MICHEL and PLAGER, Circuit Judges, and BENNETT, Senior Circuit Judge.

DECISION

BENNETT, Senior Circuit Judge.

The United States (Government) appeals from the judgment of the United States Claims Court, Levernier Constr., Inc. v. United States, 21 Cl.Ct. 683 (1990) (Levernier I ), as amended in 22 Cl.Ct. 247 (1991) (Levernier II ). The Claims Court held that the fees incurred by a construction contract claim consultant for the preparation of an equitable adjustment claim which was submitted to the contracting officer before the institution of suit in the Claims Court were recoverable under the Equal Access to Justice Act (EAJA), 28 U.S.C. § 2412 (1988). The Claims Court awarded Levernier Construction, Inc. (Levernier), the consultant fees, finding that the consultant's report was "necessary for the preparation of [Levernier's] case," 28 U.S.C. § 2412(d)(2)(A). The Claims Court further applied a cost-of-living adjustment (COLA) to the hourly rates claimed for paralegals and attorneys whose time was normally billed at or below the EAJA $75 per hour threshold. We reverse.

BACKGROUND

Levernier Construction, Inc., contracted with the Government for the construction of a commissary facility at Fairchild Air Force Base in Spokane, Washington, for $7.63 million. After completing the project, appellee submitted an equitable adjustment claim in the amount of $884,597. The claim was prepared by appellee's construction litigation consultant, the Earl Nelson Corporation. The contracting officer allowed only $141,142 of the claim after which appellee brought suit in the Claims Court under the Contract Disputes Act, 41 U.S.C. § 609(a)(1) (CDA).

The Government agreed to settle the claim with Levernier for the sum of $305,552 plus interest, exclusive of EAJA fees and expenses. Upon the parties' stipulation for entry of judgment, the Claims Court entered judgment on July 10, 1989, for Levernier in the agreed amount. Levernier then applied to the Claims Court for $60,633 in attorney's fees, $43,170.86 in consultant fees and expenses and $10,542.99 for other expenses. The Claims Court decided that Levernier was entitled to an award of fees and costs under the EAJA as a prevailing party (28 U.S.C. § 2412(d)(1)(A)), but only in the amount of $38,164.17. This amount represented the statutory maximum $75 per hour attorney fee rate with an 18% cost-of-living adjustment (COLA), which the Claims Court also applied to the time of paralegal employees and others involved whose pay did not exceed $75 per hour. The Claims Court did Levernier filed a Fed.R.Civ.P. 59(e) motion for reconsideration of the part of its EAJA award which denied the majority of the claimed consultant fees and expenses. Over the Government's objection, the Claims Court allowed Levernier to submit with its motion supplementary documentation not previously in the record which gave an itemized breakdown of consultant billing. The Claims Court then directed the entry of a revised judgment, granting appellee's motion for reconsideration and holding that appellee was entitled to recover an additional $30,649.95 in consultant fees and expenses. The Claims Court again recognized that the consultant fee requests were, in part, insufficiently documented, but found "that it would be unduly harsh, on the facts here, to fail to allow a substantial portion of the claimed amount," Levernier II, 22 Cl.Ct. at 254, and that "the EAJA 'recordkeeping requirement should not be imposed in a draconian manner.' " Id. (quoting Action on Smoking and Health v. Civil Aeronautics Bd., 724 F.2d 211, 220 (D.C.Cir.1984) (emphasis in original)). Looking again to the D.C. Circuit, the Claims Court relied on Raton Gas Transmission Co. v. Federal Energy Regulatory Comm'n, 891 F.2d 323 (D.C.Cir.1989), which had, because of a similar documentation insufficiency, discretionarily trimmed requested EAJA fees by 25%. Citing Raton, the court granted the plaintiff its requested consultant fees minus 30% (resulting in a consultant fee award of $30,649.95). Id. The Government appealed.

                not award Levernier attorney's fees and expenses incurred before the date of the contracting officer's final decision, which included the claimed consultant fees, expenses and costs.   The court ruled that the consultant's report was "the critical aid that facilitated the successful resolution of Levernier's case," and that, but for Levernier's failure to "reasonably document its claim by separately detailing and supporting each activity with specific assigned hours," the court would have been "constrained to allow [the consultant fees] pursuant to 28 U.S.C. § 2412(d)(1) and (2)(A)."  Levernier I, 21 Cl.Ct. at 691 (emphasis in original)
                

DISCUSSION

I. Standard of Review

Following the general rule established in Pierce v. Underwood, 487 U.S. 552, 108 S.Ct. 2541, 101 L.Ed.2d 490 (1988), this court typically reviews a trial court's award of fees and expenses under the EAJA for an abuse of discretion. However, before a trial judge may exercise that discretion by interpreting the facts in light of the statutory standard, he or she must show that the case properly falls within the statute's framework. Failure to correctly make this showing is legal error, which we review de novo.

II. Consultant Fees

This case hinges on a question of statutory interpretation. Section 2412(d)(1)(A) of Title 28 states that "a court shall award to a prevailing party other than the United States fees and other expenses, ... incurred by that party in any civil action ..., including proceedings for judicial review of agency action, brought by or against the United States in any court having jurisdiction of that action...." Section 2412(d)(2)(A) defines "fees and other expenses" for the purposes of the EAJA as "the reasonable expenses of expert witnesses, the reasonable cost of any study, analysis, engineering report, test, or project which is found by the court to be necessary for the preparation of the party's case, and reasonable attorney's fees...." ¹ Before analyzing whether the consultant fees incurred in this case fall under § 2412(d)(2)(A)'s definition of "fees and expenses," we must first establish whether, under § 2412(d)(1)(A), the proceedings involved in this case qualify as a "civil action."

A. "Civil Action"

The term "civil action" is not generally defined in the EAJA, although the statute does give clues as to its scope. See 28 U.S.C. § 2412(d)(1)(A); § 2412(d)(2)(E). The Government argues for a strict, literal interpretation of "civil action," stating that given its plain, ordinary meaning, this term applies only to proceedings in court. The Government maintains that the consultant fees cannot be recovered because they were incurred in an administrative agency action (dealing with an agency contracting officer) and not in a judicial proceeding. The Government also argues that because the EAJA is largely silent as to the interpretation of "civil action," we may not imply any increase in scope from the legislative silence. Levernier agrees that Congress' silence is important, but states that "nothing in the statute precludes the award of expenses incurred prior to the actual filing of a complaint," and thus the trial judge's interpretation of the statutory scheme is appropriate.

The Government relies on three Claims Court cases for the proposition that § 2412 does not authorize the recovery of fees and expenses incurred during proceedings before an agency contracting officer under the CDA: Cox Constr. Co. v. United States, 17 Cl.Ct. 29 (1989); Keyava Constr. Co. v. United States, 15 Cl.Ct. 135 (1988); and United Constr. Co. v. United States, 11 Cl.Ct. 597 (1987). The Claims Court attempted to distinguish these cases in its initial opinion, 21 Cl.Ct. at 689-91, and Levernier argues that these cases only stand for the proposition that attorney's fees incurred before a contracting officer may not be recovered.

In United Constr., the Claims Court stated as a general proposition that:

an EAJA award compensates a prevailing party only for costs and attorneys' fees and expenses incurred in a civil suit or agency adjudication, including an appeal to a contract board of appeals, not those incurred during administrative consideration of a claim before litigation. 5 U.S.C. § 504(a)(1) (fees and expenses in agency adjudication); 28 U.S.C. § 2412(d)(1)(A) (fees and expenses in civil action); § 2412(d)(2)(E) (civil action includes appeal to agency board of contract appeals).

United Constr., 11 Cl.Ct. at 599. In Keyava, the Claims Court held that a general engineering contractor which had won in a breach of contract action could not recover attorney's fees in connection with the prosecution of its claim before the contracting officer, finding that there was no legal basis for recovery of attorneys fees and expenses incurred in this context. The Claims Court stated:

The term "civil action" refers to a court proceeding, including "an appeal ... from a decision of a contracting officer." 28 U.S.C. § 2412(d)(2)(E). It does not, however, include the administrative process that precedes issuance of a final decision by a contracting officer. United Constr. Co. v. United States, 11 Cl.Ct. 597, 599 (1987). The term "adversary adjudication" is defined to include three types of proceedings: (1) an...