U.S. v. Rubin

• Decision Date: 07 October 1996
• Docket Number: No. 94-55627,No. CV-91-06870-DWW,94-55627,CV-91-06870-DWW
• Citation: 97 F.3d 373
• Parties: 96 Cal. Daily Op. Serv. 7428, 96 Daily Journal D.A.R. 12,251 UNITED STATES of America, Plaintiff-Appellee, v. Israel RUBIN, as President of I.D. Enterprises, Inc.; I.D. Enterprises, Inc., Defendants-Appellants. D.C.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 373

97 F.3d 373

96 Cal. Daily Op. Serv. 7428, 96 Daily Journal

D.A.R. 12,251

UNITED STATES of America, Plaintiff-Appellee, v. Israel RUBIN, as President of I.D. Enterprises, Inc.; I.D Enterprises, Inc., Defendants-Appellants.

No. 94-55627.

D.C. No. CV-91-06870-DWW.

United States Court of Appeals Ninth Circuit.

Argued and Submitted Nov. 15, 1995.

Decided Oct. 7, 1996.

Elon A. Pollack, Politis, Pollack & Doram, Los Angeles, CA, for defendants-appellants.

Robert I. Lester, Assistant United States Attorney, Los Angeles, CA, for plaintiff-appellee.

Appeal from the United States District Court for the Central District of California, David W. Williams, District Judge, Presiding. D.C. No. CV-91-06870-DWW.

Before: FLETCHER, CANBY, and HAWKINS, Circuit Judges.

OPINION

FLETCHER, Circuit Judge:

I.D. Enterprises, Inc. and its president, Israel Rubin (collectively "Rubin"), appeal from the district court's denial of their motion for attorneys' fees pursuant to the Equal Access to Justice Act ("EAJA"), 28 U.S.C. § 2412. We have jurisdiction pursuant to 28 U.S.C. § 1291 and affirm.

FACTUAL HISTORY & PROCEDURAL BACKGROUND

Rubin is in the import-export business and is required by statute and regulation to maintain certain records relating to the conduct of that business. Rubin does not dispute the basic authority of the United States Customs Service to seek, via summons, certain documents to insure compliance with the nation's customs laws.

The proceedings below were initiated when the government sought, pursuant to 19 U.S.C. § 1510, to enforce an administrative summons issued under 19 U.S.C. § 1509. The district court entered an order directing Rubin to comply with the summons. Rubin appealed. Unsuccessful in obtaining a stay pending appeal and to avoid being held in contempt, Rubin turned over the documents.

This Court reversed, holding that the district court committed plain error by entering an order that did not take into account the government's concession that it in fact needed fewer documents than requested in the summons. ¹ See United States v. Rubin, 2 F.3d 974 (9th Cir.1993).

On remand, the government moved to dismiss the underlying action for mootness as it had already obtained and reviewed the documents sought. The district court dismissed the action with prejudice. Rubin thereupon filed a motion for attorneys' fees pursuant to the EAJA. The district court denied defendants' motion and Rubin filed this appeal.

DISCUSSION

28 U.S.C. § 2412(d)(1)(A) provides that a court shall, in a civil proceeding brought by the United States, award fees and other expenses to the prevailing party "unless the court finds that the position of the United States was substantially justified or that special circumstances make an award unjust." The United States "bears the burden of proving its position was substantially justified." Timms v. United States, 742 F.2d 489, 492 (9th Cir.1984). The United States' position is substantially justified if it "has a reasonable basis both in law and in fact." Id.

The district court's decision to deny attorneys' fees under 28 U.S.C. § 2412 is reviewed for abuse of discretion. Pierce v. Underwood, 487 U.S. 552, 559, 560, 108 S.Ct. 2541, 2547, 101 L.Ed.2d 490 (1988). The district court abused its discretion if it "based its decision on an erroneous legal conclusion or a clearly erroneous finding of fact." Andrew v. Bowen, 837 F.2d 875, 877 (9th Cir.1988). "Interpretation of the EAJA is a question of law reviewable de novo." Id.

The district court determined that Rubin was the prevailing party pursuant to local rule. The government does not dispute that finding.

The district court determined next that the government's attempt to compel the production of documents of which it had duplicates was not substantially justified in light of United States v. Powell, 379 U.S. 48, 57-58, 85 S.Ct. 248, 254-55, 13 L.Ed.2d 112 (1964), which held that, to obtain enforcement of a summons, the IRS must establish that the information sought is not already in its possession. The government contended that it desired access to duplicate copies of documents it already had in its possession in order to determine whether Rubin was attempting to avoid payment of dutiable costs by maintaining "double" or "phony" invoices. The district court found that explanation "not persuasive enough to satisfy the government's burden" under Powell. ²

Nonetheless, the district court refused to award fees and costs because it determined that the government was substantially justified in seeking the production of the remaining documents. This determination was based in large part upon its conclusion that the issue of what documents the Customs Service may require an importer to produce pursuant to § 1509 was one of first impression.

Without deciding the extent of the Customs Service's summons power under § 1509, we find that the district court did not abuse its discretion in determining that the government was substantially justified in its position. As the Supreme Court has noted, "the EAJA ... favors treating a case as an inclusive whole, rather than as atomized line-items". Commissioner, Immigration and Naturalization Service v. Jean, 496 U.S. 154, 161-62, 110 S.Ct. 2316, 2320, 110 L.Ed.2d 134 (1990). There may well be situations in which the government is justified initially but its subsequent unjustified actions merit an award of attorney's fees for the unjustified portion of the conduct. For example, the government might have suspicion to justify investigating an importer; the investigation might reveal that the government's suspicions were wrong, yet the government might nonetheless persist in bringing suit for allegedly owing duty. This appeal, however, does not present such a situation, and the district court did not abuse its discretion either in treating the case as a whole or in determining that the position of the government was, as a whole, substantially justified.

CONCLUSION

Because the district court did not abuse its discretion in determining that the position of the government was substantially justified, we affirm its order denying an award of attorney's fees under the EAJA.

AFFIRMED.

HAWKINS, Circuit Judge, dissenting:

The majority reaches a result here that I believe undermines an act of Congress with an entirely salutary purpose: leveling the playing field between the average citizen and a government with vast litigation resources. The Equal Access to Justice Act ("EAJA") aims to insure that the government does not take unjustified positions when it hauls a citizen into court and, if it does, that the citizen can recover attorney's fees.

The record before us contains a district court finding that the United States Customs Service took an unjustified position when it sought to compel the production of documents it already possessed. The question here is whether that finding is trumped by the district court's other finding that the government was substantially justified in seeking the production of the remaining documents. In other words, if the government takes an unjustified position as to part of its litigation posture, can it avoid fee shifting (which would clearly be called for if no other issue were involved) by taking a justified position with respect to other issues?

The majority feels that Commissioner, I.N.S. v. Jean, 496 U.S. 154, 110 S.Ct. 2316, 110 L.Ed.2d 134 (1990), compels an answer in the affirmative. I respectfully disagree. In Jean, the Supreme Court explained that the "narrow" issue was "whether the prevailing party is ineligible for fees for the services rendered during [a fee] proceeding unless the government's position in the fee litigation itself is not 'substantially justified.' " Id. at 156, 110 S.Ct. at 2317. The Supreme...