Photo Data, Inc. v. Sawyer, 81-2435.

• Decision Date: 22 February 1982
• Docket Number: No. 81-2435.,81-2435.
• Citation: 533 F. Supp. 348
• Parties: PHOTO DATA, INC., Plaintiff, v. Danford SAWYER, et al., Defendants.
• Court: U.S. District Court — District of Columbia

533 F. Supp. 348

PHOTO DATA, INC., Plaintiff, v. Danford SAWYER, et al., Defendants.

No. 81-2435.

United States District Court, District of Columbia.

February 22, 1982.

Gilbert J. Ginsburg, Jean Galloway, Donald S. Picard, Washington, D. C., for plaintiff.

Sp. Asst. U. S. Atty., Dayton Lehman, Jr., Dept. of Justice, Washington, D. C., for defendants.

MEMORANDUM OPINION

JOHN GARRETT PENN, District Judge.

This case comes before the Court on plaintiff's Application for Attorneys' Fees pursuant to Section 204(a) of the Equal Access to Justice Act (Act), 28 U.S.C. § 2412. Plaintiff seeks reimbursement from the United States for attorneys' fees and other litigation costs incurred during the period of September 30, 1981 through November 16, 1981, in connection with its Complaint for declaratory and injunctive relief and this application.

I

On or about June 23, 1981, plaintiff received an invitation from the Government Printing Office (GPO) to bid for, inter alia, the printing and distribution of the Federal Personnel Manual. The solicitation provided that the contract would be awarded to the lowest responsible bidder, with responsibility determined by a pre-award survey of the applicant's ability to perform the contract.

Although plaintiff submitted the lowest bid it was not awarded the contract due to a nonresponsibility finding made by the Contracting Officer, William L. Jackson, on September 30, 1981. His reasoning was as follows:

This determination was made because of the submission of improperly coded FIDE tapes on the previous 255-S contract and as a result of an unfavorable Pre-Award Survey conducted at your plant on September 22, 1981.¹

The contract was awarded to the next low bidder.

Plaintiff filed a written protest of the nonresponsibility determination on October 1, 1981, requesting that performance of the contract be stayed pending a Small Business Administration review of the GPO's finding. Thereafter, on October 2, 1981, plaintiff filed, in this Court, a Complaint for declaratory and injunctive relief, an application for a temporary restraining order, and a motion for preliminary injunction.

Immediately prior to a hearing on plaintiff's application for a temporary restraining order on October 5, 1981, the parties entered into a stipulation whereby plaintiff would withdraw its motions without prejudice, and defendants would rescind their previous finding, re-evaluate plaintiff's ability to perform the contract, and issue no work order under the award until they completed a new pre-award survey.

On November 6, 1981, the GPO informed plaintiff that it had been determined responsible. Accordingly, the contract with the second low bidder was cancelled and was then awarded to plaintiff.

This Application for Attorneys' Fees followed on November 16, 1981. Specifically, plaintiff seeks $10,576.00 as compensation for 126.9 hours expended by its attorneys on this case. Plaintiff has also requested reimbursement for litigation costs totalling $255.22.²

II

Under the "American Rule" prevailing litigants are not ordinarily entitled to collect attorneys' fees from the loser. Alyeska Pipeline Service Co. v. Wilderness Society, 421 U.S. 240, 247, 95 S.Ct. 1612, 1616, 44 L.Ed.2d 141 (1975). It is also well established that attorneys' fees may not be levied against the United States unless expressly provided for by Congress. Id. at 265-68, 95 S.Ct. at 1626-27; National Ass'n for Advancement of Colored People v. Civiletti, 197 U.S.App.D.C. 259, 261, 609 F.2d 514, 516 (1979), cert. denied 447 U.S. 922, 100 S.Ct. 3012, 65 L.Ed.2d 1114 (1980).

In 1980 Congress enacted the Equal Access to Justice Act, Pub.L. No. 96-481, 94 Stat. 2325 (1980). Section 204(a) of the Act amended 28 U.S.C. § 2412 to authorize attorneys' fees against the United States under certain circumstances. First, a court may assess fees and expenses against the government to the same extent that a private party would be liable for the same pursuant to common law or statute. 28 U.S.C. § 2412(b). Second, subsection (d)(1)(A) of the Act provides, in pertinent part:

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 (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.

28 U.S.C. § 2412(d)(1)(A). "Fees and other expenses" includes reasonable attorneys' fees. 28 U.S.C. § 2412(d)(2)(A).

Since the Court is unaware of any common law or statutory exception to the "American Rule" that applies to this case, plaintiff is entitled to attorneys' fees only if it satisfies the requirements promulgated in subsection (d)(1)(A) of the Act.

As a threshold matter plaintiff must qualify as a small business under the Act. 28 U.S.C. § 2412(d)(2)(B). In its application plaintiff asserts that it fulfills these requirements by employing no more than 500 individuals and having a net worth less than $5,000,000.³ Defendants do not dispute this contention.

The Act became effective on October 1, 1981, and applies to any civil action "which is pending on, or commenced on or after, such date." Pub.L. No. 96-481, § 208, 94 Stat. 2330 (1980) (see 28 U.S.C. § 2412 note). Although the action in this Court was filed after the effective date of the statute, on October 2, 1981, approximately 11.4 of the hours expended were for work performed on September 30, 1981. Defendants maintain that these hours are not covered by the Act.

The Court begins with the well settled principle that the starting point for interpreting a statute is the language of the statute itself. Absent an indication to the contrary in the legislative history the wording of the statute should be given its plain, clear and common meaning. Consumer Product Safety Comm'n v. GTE Sylvania, Inc., 447 U.S. 102, 108, 100 S.Ct. 2051, 2056, 64 L.Ed.2d 766 (1980); Aaron v. Securities and Exchange Comm'n, 446 U.S. 680, 700, 100 S.Ct. 1945, 1957, 64 L.Ed.2d 611 (1980); Perrin v. United States, 444 U.S. 37, 42, 100 S.Ct. 311, 314, 62 L.Ed.2d 199 (1979); American Trucking Ass'ns, Inc. v. United States, 195 U.S.App.D.C. 266, 271-72, 602 F.2d 444, 449-50, cert. denied 444 U.S. 991, 100 S.Ct. 522, 62 L.Ed.2d 420 (1979); Higgins v. Marshall, 190 U.S.App.D.C. 54, 56, 584 F.2d 1035, 1038 (1978), cert. denied 441 U.S. 931, 99 S.Ct. 2051, 60 L.Ed.2d 659 (1979).

The Act explicitly applies to cases pending on October 1, 1981, and nothing in the legislative history suggests that it should be interpreted to apply only to that part of a case pending on October 1, 1981 that occurs on or after that date. Moreover, construing the Act to bifurcate cases on October 1, 1981 would eschew the purpose of the Act to provide financial assistance to those litigants who would not ordinarily be able to contest unreasonable government action,⁴ as it would diminish their recovery and thereby remove the incentive to sue. Without express direction from Congress this Court will not infer such an incongruous intent.⁵

Only "prevailing parties" may recover attorneys' fees from the United States. The legislative history clearly states that the term "prevailing party," for purposes of the Act, is not limited to those litigants who win a final judgment following trial on the merits. It includes parties who obtain a favorable settlement of their case. H.R. Rep.No.96-1418, 96th Cong., 2nd Sess. 11, reprinted in 1980 U.S.Code Cong. and Ad. News 4953, 4990. See Foster v. Boorstin, 182 U.S.App.D.C. 342, 561 F.2d 340 (1977). Plaintiff's sole goal throughout the various stages of this dispute was to secure the contract to print and distribute the Federal Personnel Manual. While the stipulation entered into in this Court did nothing more than guarantee plaintiff further consideration, plaintiff eventually was awarded the contract. Had a different result ensued it is obvious that plaintiff would have renewed its action in this Court. The Court therefore concludes that plaintiff prevailed in this case.

Under the terms of the Act plaintiff may not recover attorneys' fees if "the position of the United States was substantially justified" or "special circumstances make an award unjust." 28 U.S.C. § 2412(d)(1)(A).

The test of whether or not a Government action is substantially justified is essentially one of reasonableness. Where the Government can show that its case had a reasonable basis both in law and fact, no award will be made. In this regard, the strong deterrents to testing Government action require that the burden of proof rest with the Government. This allocation of the burden, in fact, reflects a general tendency to place the burden of proof on the party who has readier access to and knowledge of the facts in question. The committee believes that it is far easier for the Government, which has control of the evidence, to prove the reasonableness of its action than it is for a private party to marshal the facts to prove that the Government was unreasonable.

H.R.Rep.No.96-1418, 96th Cong., 2nd Sess. 10-11, reprinted in 1980 U.S.Code Cong. and Ad.News 4989. Another reason for placing the burden of proof on the government stems from the underlying, and deeply imbedded, conflict between the historical reluctance of courts to shift fees and the remedial purpose⁶ of the Act. H.R.Rep.No. 96-1418, 96th Cong., 2nd Sess. 9-10, reprinted in 1980 U.S.Code Cong. and Ad. News 4987-89.

The term "position of the United States" is not defined in the Act or legislative history. Defendants claim that the gravamen of plaintiff's action in this Court was that the GPO's nonresponsibility determination was subject to Small Business Administration review. Since defendants believe that the Small Business Administration does not have jurisdiction to review the GPO's finding, and...