National Ass'n of Mfrs. v. Department of Labor

• Decision Date: 03 November 1998
• Docket Number: No. 97-5157,97-5157
• Citation: 159 F.3d 597
• Parties: NATIONAL ASSOCIATION OF MANUFACTURERS, Appellee, v. DEPARTMENT OF LABOR, Appellant.
• Court: U.S. Court of Appeals — District of Columbia Circuit

Page 597

159 F.3d 597

333 U.S.App.D.C. 7

NATIONAL ASSOCIATION OF MANUFACTURERS, Appellee, v. DEPARTMENT OF LABOR, Appellant.

No. 97-5157.

United States Court of Appeals, District of Columbia Circuit.

Argued Feb. 17, 1998.

Decided Nov. 3, 1998.

Appeal from the United States District Court for the District of Columbia (No. 95cv00715).

Katherine S. Gruenheck, Attorney, U.S. Department of Justice, argued the cause for appellant. On the briefs were Frank W. Hunger, Assistant Attorney General, Mary Lou Leary, U.S. Attorney at the time the briefs were filed, and Michael Jay Singer, Attorney, U.S. Department of Justice.

Behnam Dayanim argued the cause for appellee. With him on the brief was Hamilton Loeb.

Before: WILLIAMS, HENDERSON and GARLAND, Circuit Judges.

GARLAND, Circuit Judge:

The United States Department of Labor ("DOL") appeals from an award of attorneys' fees to the National Association of Manufacturers ("NAM") under the Equal Access to Justice Act ("EAJA"), 28 U.S.C. § 2412(d)(1)(A). If NAM were considered as a separate entity, it would unquestionably be eligible for an EAJA award. Some of its members, however, would not be. DOL's principal contention is that a trade association suing on behalf of its members is only eligible for attorneys' fees if both the association and its members satisfy the statutory criteria.

We decline to adopt such a per se rule. Although there may be cases in which an association's eligibility for an award will depend upon the eligibility of its members--for example, when an association is merely litigating as a "front" for those members--there is no evidence that this is such a case. Accordingly, we affirm the award of attorneys' fees and remand the case for further proceedings consistent with this opinion.

I

NAM is an incorporated trade association representing over 13,000 employers in various industries. Its members range from small start-up companies to large multinational corporations. On April 14, 1995, NAM filed a complaint in district court challenging regulations adopted by DOL to implement congressional amendments to the H-1B visa program, which allows American companies to employ aliens in certain "specialty occupations." See 8 U.S.C. § 1101(a)(15)(H)(i)(b). To establish its standing to sue, NAM asserted it was acting as a representative of its members, whose ability to employ aliens was burdened by the regulations. See App. 9 (Pl.'s Compl., p 11).

After both sides moved for summary judgment, the district court held that DOL had promulgated six components of the H-1B program without complying with the notice and comment requirements of the Administrative Procedure Act, 5 U.S.C. § 553(b)(3), and granted partial summary judgment for NAM. The court granted summary judgment for DOL on the remaining issues. Neither side appealed the decision on the merits, and NAM filed an application for an award of attorneys' fees and other expenses under the EAJA.

The EAJA provides 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 ... 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). The EAJA defines an eligible "party" under the Act to include "any partnership, corporation, association, unit of local government, or organization, the net worth of which did not exceed $7,000,000 ... and which had not more than 500 employees at the time the civil action was filed...." Id. § 2412(d)(2)(B)(ii). Thus, a court must grant an EAJA award: (1) for fees "incurred," (2) by an eligible "party," (3) who "prevail[s]" against the government, (4) unless the position of the government was "substantially justified," or (5) unless "special circumstances" make an award unjust.

In the district court, the government opposed NAM's request for fees on the second and fourth grounds: that NAM was not an eligible party because certain of its members, who the government said were the "real parties in interest" in the litigation, exceeded the statute's net worth and employment ceilings; and that the government's position in the litigation was substantially justified. The government did not dispute below, and does not contest here, that NAM prevailed in the litigation for purposes of the Act. See, e.g., Maduka v. Meissner, 114 F.3d 1240, 1241 (D.C.Cir.1997) ("A party has 'prevailed' if: (1) the party received a significant part of the relief it sought; and (2) the lawsuit was a catalytic, necessary or substantial factor in obtaining that result.") (citation omitted).

The district court rejected the government's arguments. See National Ass'n of Mfrs. v. United States Dep't of Labor, 962 F.Supp. 191 (D.D.C.1997). The court held that NAM was eligible for attorneys' fees because the association itself met the eligibility criteria, and because the EAJA applies those criteria to associations rather than to their individual members. The court declined to apply a "real party in interest" exception merely because NAM's members stood to benefit from a favorable ruling in the litigation. See id. at 194-95 & n. 5. The court also rejected the argument that DOL's position in the litigation was substantially justified, noting that a "government agency that overtly disregards the notice requirements of the APA cannot credibly argue that [its] underlying actions were substantially justified." Id. at 197. The district court concluded that NAM was entitled to$41,145.59 in fees and other expenses, a figure which DOL does not dispute.

II

On appeal, DOL does not challenge the district court's determination that the government's position was not "substantially justified." It does, however, contest the court's determination that NAM was an eligible "party" under the EAJA. And it seeks to raise two additional defenses it acknowledges it did not directly raise below: that "special circumstances" make the award of fees here unjust, and that NAM has not "incurred" fees because it has been represented by a law firm, acting pro bono, that has agreed to forego any fees unless NAM receives an EAJA award. While we generally review a district court's award of attorneys' fees under the EAJA only for an abuse of discretion, see Pierce v. Underwood, 487 U.S. 552, 563, 108 S.Ct. 2541, 101 L.Ed.2d 490 (1988), we review an award de novo insofar as it rests on conclusions of law, such as an interpretation of the statutory terms that define eligibility for an award, see Love v. Reilly, 924 F.2d 1492, 1493 (9th Cir.1991); see generally Pierce, 487 U.S. at 558, 108 S.Ct. 2541.

We consider the government's contention that NAM is not an eligible party in this Part, and address the government's two additional defenses in Part III below.

A

As noted above, the EAJA states that an "association" is an eligible party if it had, at the time the action was filed, a net worth no greater than $7,000,000 and a work force no larger than 500 employees. The government does not dispute that NAM, itself, meets both the net worth and employment criteria of the statute. See App. 13-14 (NAM Aff. pp 6-7). NAM, on the other hand, does not dispute that "some--although not all--of its members and affiliates possess net worths and/or numbers of employees that would place them outside the definition of 'party' contained in the EAJA." App. 21 (NAM Letter).

An association may sue the government either to redress its own injuries or to redress injuries to its members. See United Food & Commercial Union Local 751 v. Brown Group, Inc., 517 U.S. 544, 551-52, 116 S.Ct. 1529, 134 L.Ed.2d 758 (1996). An association's standing to sue in the latter circumstance is generally referred to as "associational" or "representational" standing. See, e.g., Pennell v. City of San Jose, 485 U.S. 1, 7 n. 3, 108 S.Ct. 849, 99 L.Ed.2d 1 (1988). DOL argued below that when an association relies only on representational standing, the association's members are the real parties in interest to the litigation. In those circumstances, DOL contended, a court must look behind the association and, if a single member has assets or employees above the listed ceilings, deny an EAJA award. In this court, DOL's opening brief rephrases the argument somewhat, arguing for a "rebuttable presumption" that an association's members are the real parties in interest in a suit litigated by the association on their behalf. "Rebuttable," however, may not be the most accurate way to characterize the presumption the government seeks. In its reply brief, the government explains that the burden this presumption would impose on trade associations "to show complete independence and freedom from their members is virtually impossible to meet." DOL Reply Br. at 14.

Whether cast as a rebuttable or irrebuttable presumption, the difficulty with the government's argument is that it conflicts with the plain language of the statute, which expressly lists as eligible for fees any "association ... the net worth of which did not exceed $7,000,000 ... and which had not more than 500 employees." 28 U.S.C. § 2412(d)(2)(B)(ii) (emphasis added). The statute thus places its eligibility ceilings on the association itself. It does not, for example, refer to the net worth "of whose members" but to the "net worth of which"--the antecedent of "which" being "association." There is no mention anywhere in the statute or legislative history of a need to consider the net worth or employment totals of an association's individual members. ¹

The government does not dispute, moreover, that an association is eligible for a fee award without regard to the eligibility of its members in at least some circumstances--namely, when it sues for injury to the association itself. But if an association is properly assessed on its own merits in some circumstances, the government's argument requires more...