U.S. v. 329.73 Acres of Land, Situated in Grenada and Yalobusha Counties, State of Miss.

• Decision Date: 12 May 1983
• Docket Number: No. 80-3520,80-3520
• Citation: 704 F.2d 800
• Parties: UNITED STATES of America, Plaintiff-Appellant, v. 329.73 ACRES OF LAND, SITUATED IN GRENADA AND YALOBUSHA COUNTIES, STATE OF MISSISSIPPI, and J.G. Carter, et al., Defendants-Appellees.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 800

704 F.2d 800

20 ERC 1025

UNITED STATES of America, Plaintiff-Appellant, v. 329.73 ACRES OF LAND, SITUATED IN GRENADA AND YALOBUSHA COUNTIES, STATE OF MISSISSIPPI, and J.G. Carter et al., Defendants-Appellees.

No. 80-3520.

United States Court of Appeals Fifth Circuit.

May 12, 1983.

Maria A. Iizuka, James W. Moorman, Jacques B. Gelin, Dept. of Justice, Lands Div., Washington, D.C., for plaintiff-appellant.

Oscar P. Mackey, Jackson, Miss., E. Russell Blair, Oxford, Miss., Jim R. Bruce, Kennett, Mo., for defendants-appellees.

Appeals from the United States District Court for the Northern District of Mississippi.

Before CLARK, Chief Judge, BROWN, GEE, RUBIN, REAVLEY, POLITZ, RANDALL, TATE, JOHNSON, WILLIAMS, GARWOOD, JOLLY and HIGGINBOTHAM, Circuit Judges.

TATE, Circuit Judge:

On the appeal in this eminent domain proceeding, the defendant landowner moves for the recovery of attorneys' fees and litigation expenses against the United States, the condemnor. The landowner's motion is based upon section 204(a) of the Equal Access to Justice Act of 1980 (the "Act"), 28 U.S.C. Sec. 2412(d)(1)(A), which provides that a court "shall " award such expenses to a "prevailing party" against the United States in any non-tort civil action, "unless the court finds that the position of the United States was substantially justified or that special circumstances make an award unjust." The panel, which affirmed the condemnation award in favor of the landowner, refused to consider relief under this motion, holding that the Act does not apply to eminent domain cases, so that a landowner was not entitled to attorneys' fees against the United States even if the latter's position at the trial or on appeal was substantially un justified. 666 F.2d 281, 285 & n. 3 (5th Cir.1982); 678 F.2d 21, 22-23 (5th Cir.1982) (denial of panel rehearing). ¹ We granted the landowner's application for rehearing en banc, 681 F.2d 264 (5th Cir.1982), to consider his contention that this ruling was erroneous. ² We reverse, finding that both the unambiguous wording and the legislative history of the Act require its application to eminent domain cases as well as to other civil suits brought by or against the United States.

I.

The Equal Access to Justice Act, Pub.L. No. 96-481, 94 Stat. 2325 (1980), effective October 1, 1981, was enacted with the broad purpose of awarding litigants expenses of seeking review of or defending against unreasonable government action. ³ The legislative history of the Act makes clear that Congress intended to help small litigants vindicate their rights, challenge regulations or agency action that they would otherwise comply with in order to avoid paying the costs of litigation, and impose the risk of a fee award that must be paid by the agency as an incentive for agencies to police their enforcement and litigation activities so that only well-founded cases would be initiated or litigated. ⁴ Congress recognized, with respect to individuals or small businesses subject to extensive federal regulation, that "the Government with its greater resources and expertise can in effect coerce compliance with its position.... This kind of truncated justice undermines the integrity of the decision making process.... An adjudication or civil action provides a concrete, adversarial test of Government regulation and thereby insures the legitimacy and fairness of the law." H.R.Rep. No. 1418, 96th Cong., 2d Sess. 10, reprinted in 1980 U.S.Code Cong. & Ad.News 4988-89. The proponents of the Act expressed a similar concern that agencies could, by discretionary use of enforcement and litigation tactics, "target" smaller businesses or individuals less financially able to defend themselves and thus more easily obtain settlements or victories. Id.

Before enactment of this statute, it was possible for a prevailing private party to obtain judgment for costs (but not attorneys' fees) against the United States, see former 42 U.S.C. Sec. 2412, 80 Stat. 308 (1966). The courts adhered, however, to the "American rule," that each party to litigation bear his own attorney expenses, unless the prevailing party could invoke a specific statute that awarded fees in certain categories of cases or common law exceptions that had developed for parties bringing frivolous cases in bad faith or where the litigation provided a "common benefit" to the public or created a fund from which nonparties could benefit. See generally Robertson & Fowler, Recovering Attorneys' Fees From the Government Under the Equal Access to Justice Act, 56 Tul.L.Rev. 903, 909-11 (1982). The common law exceptions, however, did not apply to the United States because of its sovereign immunity. Id. at 903. Section 2412, as amended by the Act, thus significantly modified the traditional rules concerning fee-shifting in order to facilitate private challenges to unreasonable government action. See also Conference Report, H.R.Rep. No. 1434, 96th Cong., 2d Sess. 21 (Sept. 30, 1980); H.R.Rep. No. 1418, 96th Cong., 2d Sess. 9-10 (September 26, 1980), reprinted in 1980 U.S.Code Cong. & Ad.News 4994, 4998; Sen.Rep. No. 253, 96th Cong., 1st Sess. 5 (June 21, 1979) (American rule, with respect to litigation involving the government, deters and discourages private parties from litigating governmental claims).

A specific statutory purpose of the Act was that "because of the greater resources and expertise of the United States the standard for award against the United States should be different from the standard governing an award against a private litigant, in certain situations." Section 202(b) (emphasis added). Accordingly--in addition to other provisions that in general made the United States liable for attorneys' fees in circumstances where a private litigant would be liable ⁵--by section 204(a), 28 U.S.C. Sec. 2412(d), the Act provided that "any court having jurisdiction" of any civil action (other than cases sounding in tort) "brought by or against the United States" "shall award" to "a prevailing party other than the United States" attorneys' fees and litigation expenses (in addition to costs) incurred by that party--"unless the court finds that the position of the United States was substantially unjustified or that special circumstances make an award unjust." Sec. 2412(d)(1)(A). ⁶

The legislative reports explained the intended mechanics and test for applying this provision as follows: "After a prevailing party has submitted an application for an award, the burden of proving that a fee award should not be made rests with the Government. The test of whether the Government position is substantially justified is essentially one of reasonableness in law and fact." Conference Report, H.R.Rep. 1434, supra, at 22; see also H.Rep. 1418, supra, at 10-11, U.S.Code Cong. & Admin.News, p. 5011; Robertson and Fowler, supra, 56 Tul.L.Rev. at 928-34. See also Part II.B of this opinion ("Prevailing Party"), infra.

II.

The Act, then, expressly manifests a broad legislative purpose to afford a remedy to private litigants to recover their attorneys' fees and litigation expenses when the federal government has unreasonably caused them to be incurred. Moreover, section 204(a), 28 U.S.C. Sec. 2412(d)(1)(A) expressly requires that "any court" in which the private party is a prevailing party in a non-tort civil action "shall" award the private litigant his attorneys' fees and litigation expenses unless the government proves that its position was "substantially justified".

Despite these broad statutory purposes and language, the government contends that Sec. 2412(d) does not apply to eminent domain cases and does not permit the award to a landowner of his attorneys' fees and litigation expenses even if the government's position in condemnation cases is unreasonable and not "substantially justified". We may summarize the government's contentions, some of which were accepted by the panel that initially decided the appeal, as follows:

A. The award of attorneys' fees in condemnation cases against the government was already authorized, in limited circumstances, by 42 U.S.C. Sec. 4654, and the imposition of costs in such cases was specially regulated by Fed.R.Civ.P. 71A(l ) (1951). The 1980 Equal Access to Justice Act was not intended to affect or supersede these provisions, nor to change the prior jurisprudence that (except as there waived) the sovereign immunity of the United States prevented further imposition of fees or expenses of litigation upon the United States.

B. Under settled interpretations of these earlier provisions and of 28 U.S.C. Sec. 2412 (before its re-enactment by the Act as Sec. 2412(a) in 1980), the landowner whose property was condemned was not the "prevailing party". Since the 1980 Act only authorizes imposition of attorneys' fees against the United States in favor of a prevailing party, it therefore does not apply to eminent domain cases.

We below examine these contentions and find them without merit.

A. Statutory Intent of the 1980 Act to Apply to Condemnation Cases

Prior to the enactment of the 1980 statute, the Supreme Court held that attorneys' fees and litigation expenses are indirect costs that are not part of the just compensation for a taking that is required by the Fifth Amendment, also indicating that allowance of such expenses is a matter of legislative grace. United States v. Bodcaw Company, 440 U.S. 202, 203, 99 S.Ct. 1066, 1067, 59 L.Ed.2d 257 (1979). While so doing, the court further pointed out: (a) the settled rule that "litigation costs cannot be imposed against the United States in the absence of statutory authority", 440 U.S. at 203 n. 3, 99 S.Ct. at 2067 n. 3; (b) that the only then-present statutory authorization to impose court costs against the United States in certain instances, 28 U.S.C. Sec. 2412 (1966) ⁷ (subsequently re-enacted by the 1980 Act as 2412(a)) had been held not to apply to condemnation cases, id.; and (c) that the (then) only existing authority...