National Feder. of Republican Assemblies v. U.S., 00-0759-RV-C.
| Decision Date | 17 January 2003 |
| Docket Number | No. 00-0759-RV-C.,00-0759-RV-C. |
| Parties | NATIONAL FEDERATION OF REPUBLICAN ASSEMBLIES, et al., Plaintiffs, v. UNITED STATES of America, et al., Defendants. |
| Court | U.S. District Court — Southern District of Alabama |
David B. Rivkin, Jr., E. Mark Braden, Frederick W. Chockley, Baker & Hostetler LLP, Washington, DC, J. Michael Druhan, Jr., Johnston Druhan, LLP, James W. Zeigler, Mobile, AL, lee A. Casey, Baker & Hostetler LLP, Washington, DC, James C. Johnston, Mobile, AL, for Plaintiffs.
Ginny S. Granade, U.S. Attorney's Office, Mobile, AL, Robert L. Welsh, U.S. Department of Justice, Washington, DC, Charles Baer, U.S. Attorney's Office, Mobile, AL, Christopher M. Pietruszkiewicz, Trial Attorney, Tax Division, U.S. Department of Justice, Washington, DC, for Defendants.
This matter is before the Court on the plaintiffs' Motion for Attorneys' Fees, Costs, and Other Expenses. (Doc. 53). The parties have filed papers supporting their respective positions, (Docs. 54, 58, 59), and the motion is now ripe for resolution. After careful consideration of the motion, the parties' arguments and the evidentiary materials submitted by the plaintiffs, the Court concludes that the motion is due to be denied.
The relevant procedural history of this case has been set forth in previous orders and will not be repeated herein. In August 2002, the Court entered an order declaring I.R.C. § 527(j) unconstitutional to the extent it requires disclosures of contributions and expenditures in Connection with state and local electoral advocacy and to the extent it requires disclosures of expenditures in connection with federal electoral advocacy. (Doc. 47 at 68). Judgment was entered accordingly. (Doc. 48). As clarified by subsequent order, enforcement of these portions of Section 527(j) against the remaining organizational plaintiffs was enjoined. (Doc. 52).
The Equal Access to Justice Act ("EAJA") provides in relevant part as follows:
Except as otherwise specifically provided by statute, 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). "For the purposes of this subsection ... `fees and other expenses' includes ... reasonable attorney fees." Id. § 2412(d)(2)(A). A "party" is an individual with a net worth of under $2 million or an organization with a net worth of under $7 million and no more than 500 employees. Id. § 2412(d)(2)(B).
The defendants argue that the plaintiffs' demand for fees and expenses is governed by a special provision of the tax code. That section, however, applies only to proceedings "in connection with the determination, collection, or refund of any tax, interest, or penalty under this title." I.R.C. § 7430(a). The defendants have offered no authority or explanation for the proposition that the plaintiffs' constitutional challenge to Sections 527(i) and (j), instituted prior to any possible incurrence of a tax or penalty under their provisions, constitutes a proceeding in connection with the "determination" of a tax or penalty. At any rate, the defendants concede that "there are no significant differences" between Section 7430 and EAJA. (Doc. 58 at 5 n. 1).
The parties agree that there are four broad issues for consideration under EAJA: (1) whether the plaintiffs are "prevailing part[ies]"; (2) whether they meet the size and wealth parameters; (3) whether the defendants' position was "substantially justified"; and (4) whether the plaintiffs' fees and expenses are "reasonable." 1
EAJA does not define "prevailing party." As noted by the plaintiffs, the Eleventh Circuit has construed the test under EAJA to be "`whether [the plaintiff] has received substantially the relief requested or has been successful on the central issue.'" Jean v. Nelson, 863 F.2d 759, 765 (11th Cir.1988)(quoting Martin v. Heckler, 773 F.2d 1145, 1149 (11th Cir.1985)(en banc)), aff'd on other grounds, 496 U.S. 154, 110 S.Ct. 2316, 110 L.Ed.2d 134 (1990).
The plaintiffs' unreasoned assumption that they meet this standard, (Doc. 54 at 7-8), is troublesome. The "relief requested" in the amended complaint was that Sections 527(i) and (j) be declared unconstitutional and that the defendants be enjoined from enforcing them. The plaintiffs obtained no relief with respect to Section 527(i),2 and Section 527(j) was left intact with respect to the disclosure of contributions for federal electoral advocacy. According to the defendants, this means the plaintiffs received less than half the relief they requested. Although the Court is skeptical of the defendants' rather crude mathematical calculus, given these glaring holes it is not immediately obvious that the plaintiffs received "substantially" the relief they requested. Cf. Pierce v. Underwood, 487 U.S. 552, 566 n. 2, 108 S.Ct. 2541, 101 L.Ed.2d 490 (1988) ().
Similarly, it is not obvious that the plaintiffs prevailed on "the central issue," both because it is not clear what "the central issue" in fact was and because it is not clear what level of "success" on the central issue is required. The Court rejects as unacceptably superficial the defendants' suggestion that, because it was the focus of the majority of counts in the original complaint and/or because it was listed first in the statement of challenges in the amended complaint, the constitutionality of Section 527(i) must have been "the central issue" in the case. On the other hand, it is difficult to consider Section 527(j) as "the central issue" when the plaintiffs afforded equal dignity to Section 527(i) in their pleadings and in their briefing on the defendants' motion to dismiss. The central issue in the case would appear most naturally to be the constitutionality of Public Law 106-230—that is, Sections 527(i) and (j) in combination. If that is correct, the plaintiffs' failure to prevail with respect to the former provision and their incomplete success with respect to the latter make it difficult to conclude that they were "successful" on the central issue. See Walker v. Anderson Electrical Connectors, 944 F.2d 841, 846 n. 11 (11th Cir.1991) ( ); Taylor v. City of Fort Lauderdale, 810 F.2d 1551, 1556 n. 7 (11th Cir. 1987) () (quoting Institutionalized Juveniles v. Secretary, 758 F.2d 897, 911 (3rd Cir.1985)).
Apparently without realizing its import, the plaintiffs quote Hensley v. Eckerhart, 461 U.S. 424, 103 S.Ct. 1933, 76 L.Ed.2d 40 (1983), for the proposition that plaintiffs can be prevailing parties "`if they succeed on any significant issue in litigation which achieves some of the benefit the parties sought in bringing suit.'" Id. at 433, 103 S.Ct. 1933 (quoting Nadeau v. Helgemoe, 581 F.2d 275, 278-79 (1st Cir.1978) (emphasis added)). Hensley did not so hold,3 but the later case of Texas State Teachers Association v. Garland Independent School District, 489 U.S. 782, 109 S.Ct. 1486, 103 L.Ed.2d 866 (1989), did. See id. at 791,109 S.Ct. 1486.
Both Hensley and Garland were decided under 42 U.S.C. § 1988, not under EAJA. The Eleventh Circuit has never held that the forgiving standard for prevailing party status enunciated in these cases applies to cases such as this under EAJA but, for the reasons set forth below, the Court concludes that the Eleventh Circuit would do so if the question were properly presented to it.
First, the Garland Court rejected the "central issue" test employed by the Fifth and Eleventh Circuits under Section 1988 as posing a question "almost impossible to answer" and perversely "provok[ing] prolonged litigation ... and ensuring that the fee application will spawn a second litigation of significant dimension." 489 U.S. at 791, 109 S.Ct. 1486. The Eleventh Circuit has recognized that EAJA should not be applied so as to achieve such a result. Jean v. Nelson, 863 F.2d at 764.
Second, the Jean Court understood that Congress intended the term "prevailing party" to be construed as it is under Section 1988 and other fee-shifting statutes. 863 F.2d at 765 n. 8. Assuming that the Jean Court's reading of legislative history is correct and that it extends to post-EAJA changes in fee-shifting jurisprudence, Congress would have intended that the forgiving Garland standard be transferred to EAJA.
Third, albeit in dictum, the Jean Court indicated it would be comfortable with a lower standard. The Court quoted Hanrahan v. Hampton, 446 U.S. 754, 757, 100 S.Ct. 1987, 64 L.Ed.2d 670 (1980) (per curiam), another Section 1988 case, for the proposition that "a plaintiff is `prevailing' if he proves `his entitlement to some relief on the merits of his claims,'" and then announced that "[o]ur court has applied these standards in the EAJA context." 863 F.2d at 766 (emphasis supplied in Jean).4
Fourth, the Eleventh Circuit has stated that Hensley's "typical" formulation is appropriate "[f]or condemnation cases" under EAJA, United States v. 640.00 Acres of Land, 756 F.2d 842, 847-48 (11th Cir. 1985), suggesting that the Court would look favorably on extending the same test to other proceedings under EAJA.5
Fifth, apparently every other appellate court has held or assumed that the Garland standard applies to fee applications under EAJA. See Sims v. Apfel, 238 F.3d 597, 600 (5th Cir.2001); Kerin v. United States Postal Service, 218 F.3d 185, 189 n. 1 (...
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