Rice Services, Ltd. v. U.S.

• Decision Date: 27 April 2005
• Docket Number: No. 04-5069.,04-5069.
• Citation: 405 F.3d 1017
• Parties: RICE SERVICES, LTD., Plaintiff-Appellee, v. UNITED STATES, Defendant-Appellant.
• Court: U.S. Court of Appeals — Federal Circuit

405 F.3d 1017

RICE SERVICES, LTD., Plaintiff-Appellee, v. UNITED STATES, Defendant-Appellant.

No. 04-5069.

United States Court of Appeals, Federal Circuit.

DECIDED: April 27, 2005.

Keith L. Baker, Barton, Baker, McMahon, Hildebrant & Tolle, LLP, of McLean, Virginia, argued for plaintiff-appellee. With him on the brief was William T. Welch.

Richard P. Schroeder, Trial Attorney, Commercial Litigation Branch, Civil Division, United States Department of Justice, of Washington, DC, argued for defendant-appellant. With him on the brief were Peter D. Keisler, Assistant Attorney General, David M. Cohen, Director, and Franklin E. White, Jr., Assistant Director. Of counsel was Paul W. Knoth, Attorney, Office of the General Counsel, United States Department of the Navy, of Washington, DC.

Before SCHALL, DYK, and PROST, Circuit Judges.

Opinion for the court filed by Circuit Judge SCHALL. Concurring opinion filed by Circuit Judge DYK.

SCHALL, Circuit Judge.

This is an appeal of a judgment awarding attorney's fees under the Equal Access to Justice Act ("EAJA"), 28 U.S.C. § 2412.¹ The case stems from a bid-protest action brought by Rice Services, Ltd. ("Rice") against the Department of the Navy ("Navy") challenging the award of a contract for dining services. Rice filed the bid-protest action in the Court of Federal Claims on May 9, 2002, asking for, among other things, a reevaluation of the bids pursuant to the terms of the solicitation. The parties filed cross-motions for summary judgment on the administrative record. In addition, the government filed a motion to dismiss the case for mootness due to the Navy's voluntary and unilateral decision to reevaluate the bids. The Court of Federal Claims granted the government's motion to dismiss and consequently denied the two pending motions for judgment on the administrative record. Rice Servs., Ltd. v. United States, No. 02-468 C (Fed.Cl. Sept.26, 2002) ("Dismissal Order").

Subsequently, having received the relief requested in its complaint, Rice filed an application for attorney's fees under the EAJA. The Court of Federal Claims granted Rice's application and awarded Rice $31,709.38 in attorney's fees. Rice Servs., Ltd. v. United States, No. 02-468 C (Fed.Cl. July 29, 2003) ("EAJA Order"). After the court denied the government's motion for reconsideration of the award, Rice Servs., Ltd. v. United States, 59 Fed.Cl. 619 (2004) ("Reconsideration"), the government appealed. The specific issue on appeal is whether the Court of Federal Claims erred in finding Rice a "prevailing party" under the EAJA. Because we find the court did err, we reverse.

BACKGROUND

I.

This case arises out of a procurement by the Navy for wardroom dining services at the U.S. Naval Academy in Annapolis, Maryland. Dismissal Order, slip op. at 1. The Navy awarded the dining services contract to EC Management Services of Maryland, LLC ("EC") in December of 2001. Id. The term of the contract was from January 1, 2002, through September 30, 2002, but under the contract, the Navy could award option years upon sixty days prior notice. Id. On December 28, 2001, Rice filed an agency-level protest with the Navy contesting the award to EC. Id. The Navy denied Rice's protest on January 29, 2002.

On May 9, 2002, Rice filed this action in the Court of Federal Claims. Rice requested the following relief: (1) a declaration that the award to EC was unlawful; (2) an injunction ordering a new award pursuant to the terms of the solicitation; (3) an order enjoining extension of the contract beyond its base period; and (4) an order enjoining any new award to EC. (Compl.¶ 1.) The administrative record was filed in the Court of Federal Claims on June 10, 2002, and the parties cross-moved for summary judgment on it shortly thereafter. Dismissal Order, slip op. at 2. In addition, the government filed a motion to dismiss the lawsuit on the ground that the case was moot due to the Navy's unilateral and voluntary decision to conduct a new contract solicitation. Id.

On July 18, 2002, as promised in the government's motion to dismiss, the Navy issued notices to each of the six original offerors, informing them that the Navy had decided to open discussions regarding the solicitation and asking each offeror if it was interested in participating. Id. All six offerors indicated they were interested in the proposal. Id. The Navy and offerors subsequently established a schedule for discussions, submission of new offers, oral presentations, and a reevaluation. Id. The schedule stated that a new award would be made by November 20, 2002. Id. In view of the new solicitation, the Navy stated that it would not exercise the option under the current contract with EC.² Id.

On September 26, 2002, the Court of Federal Claims granted the government's motion to dismiss and denied all other pending motions. Id. slip op. at 3. The court found that the case had become "essentially moot" because

[t]he relief requested by [Rice] has, substantially, been voluntarily afforded by the Navy. The original offerors, including [Rice] are voluntarily participating in the new submissions. The contract term awarded to [EC] expires on September 30, 2002. No option year will be awarded. New best and final offers for the wardroom dining service at issue will be obtained and a new award decision will be made by the Navy.

Id. slip op. at 2.³ The court concluded:

In this circumstance, . . . further action by the Court is not required or justified . . . and it is ORDERED that:

(1) The remedial action described and promised in defendant's submissions shall be undertaken;

(2) Accordingly, all outstanding motions are, otherwise, DENIED, without prejudice to any reassertion of the arguments therein which may be made in any subsequent protest action addressed to the remedial action underway;

(3) Plaintiff's complaint shall be DISMISSED, without prejudice to the assertion of any new protest action addressed to the remedial action in progress.

Id. slip op. at 3 (emphases in original).

II.

On December 17, 2002, Rice filed an application for attorney's fees under the EAJA. EAJA Order, slip op. at 2. The EAJA is a fee-shifting statute, which, under appropriate circumstances, allows a party who prevails in litigation against the government to recover attorney's fees and litigation costs. 28 U.S.C. § 2412. The statute states, in relevant part, 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." Id. § 2412(d)(1)(A).

The government opposed the fee application on the ground that Rice was not a "prevailing party" under the Supreme Court's decision in Buckhannon Board & Care Home, Inc. v. West Virginia Department of Health & Human Resources, 532 U.S. 598, 121 S.Ct. 1835, 149 L.Ed.2d 855 (2001), and this court's decision in Brickwood Contractors, Inc. v. United States, 288 F.3d 1371 (Fed.Cir.2002). EAJA Order, slip op. at 2. The government argued that Rice did not qualify as a prevailing party under Buckhannon because the remedial action taken by the Navy was not the result of a court order but, rather, the result of a unilateral and voluntary decision by the Navy. Id. In response, Rice argued that it was a prevailing party because the Dismissal Order of September 26, 2002, "affirmatively ordered the Navy to act" in carrying-out its promised remedial action. Id.

The Court of Federal Claims granted Rice's application and awarded Rice $31,709.38 in attorney's fees. Id. slip op. at 2-3. The court reasoned that the facts of this case were equivalent to those of Former Employees of Motorola Ceramic Products v. United States, 336 F.3d 1360 (Fed.Cir.2003), where this court held that a court order remanding a case to an agency constitutes "success on the merits" when the court did not retain jurisdiction on remand. EAJA Order, slip op. at 2 ("The circumstances presented in this matter are equivalent to the situation where the parties consent to a remand order for agency corrective action and where the court does not retain jurisdiction while the further agency action is undertaken.") Therefore, the court held, Rice was a prevailing party and entitled to the claimed attorney's fees.

The government subsequently filed a motion for reconsideration of the attorney's fee award. The government again argued that Rice did not "prevail" in its lawsuit because the trial court only dismissed the claim after the Navy had undertaken voluntary remedial action to reopen the solicitation. Reconsideration, 59 Fed.Cl. at 620. Therefore, according to the government, it was not a court order but the Navy's voluntary actions that gave Rice its requested relief. The government also argued that this court's decision in Brickwood, 288 F.3d at 1380, held that under Buckhannon the only types of court action that confer prevailing party status are enforceable judgments on the merits and court-ordered consent decrees, neither of which were present in this case. Reconsideration, 59 Fed.Cl. at 621.

The Court of Federal Claims denied the motion for reconsideration on January 13, 2004. The court recognized that Buckhannon rejected the "catalyst theory" for fee awards based on a voluntary change in a defendant's conduct. Id. Rather, in order to be a "prevailing party" after Buckhannon, the court stated, one must "receive at least some relief on the merits," which "alters the legal relationship of the parties." Id. (quoting Buckhannon, 532 U.S. at 603, 121 S.Ct. 1835). Contrary to the government's contention, however, the court held that Federal Circuit precedent did not limit "prevailing party" status under Buckhannon to merit-based decisions or court-ordered consent decrees. Id. The court indicated that the key question...