United States v. 269 Acres
| Decision Date | 15 January 2020 |
| Docket Number | Civil Action No. 9:16-2550-RMG |
| Court | U.S. District Court — District of South Carolina |
| Parties | United States of America, Plaintiff, v. 269 Acres, More or Less, Located in Beaufort County, State of South Carolina; et al., Defendants. |
Before the Court is the Landowners' motion for relief (Dkt. No. 211) from the Court's September 26, 2019 order, which held the Landowners were not entitled to attorneys' fees or litigation expenses and directed the parties to share equally in the expense of the Commission. For the reasons set forth below, the Landowners' motion for relief is granted in part and denied in part.
The United States of America (the "Government") filed this action on July 15, 2016 to impose a permanent restrictive easement over 269.22 acres of land (the "Property") located in Beaufort, South Carolina, which the Landowners had owned in fee simple since 1955. (Dkt. No. 1.) The easement encumbers 179 acres of the 446.33-acre industrially zoned parcel and the entire 90.22-acre residentially zoned parcel. It restricts land development in the flight path of jets in and out of the adjacent U.S. Marine Corps Air Station notwithstanding preexisting overlay zoning. (Dkt. No. 140-1.)
The Court appointed a three-person Commission pursuant to Rule 71.1 of the Federal Rules of Civil Procedure that was comprised of Jean H. Toal, Stephen A. Spitz and Alan J. Reyner. The sole issue in dispute was the appropriate amount of just compensation due to the Landowners for this constructive taking. After a three-day trial, the Commission issued its Report and Recommendation of just compensation, to which the Government objected. (Dkt. Nos. 164, 172.) After hearing oral arguments and reviewing the Commission's Recommendation de novo, the Court made specific findings of the pre- and post-taking values of both Industrial and Residential Parcel based on each's highest and best use, and found that the full award of just compensation due to the Landowners by the Government is $4,441,410.00. (Dkt. No. 180.) The Government has appealed this finding of just compensation, as well as the Court's finding of prejudgment interest, to the Court of Appeals for the Fourth Circuit.
Landowners move for relief from the September 26, 2019 order pursuant to Rule 60 of the Federal Rules of Civil Procedure (Dkt. No. 214 at 2), which provides in part that the district court, on a motion brought within a "reasonable time," may relieve a party from a final judgment or order for six enumerated reasons: (1) mistake, inadvertence, surprise, or excusable neglect; (2) newly discovered evidence that, with reasonable due diligence, could not have been discovered in time to move for a new trial under Rule 59(b); (3) fraud, misrepresentation, or misconduct by an opposing party; (4) the judgment is void; (5) the judgment has been satisfied, released or discharged, or is based on an early judgment that has been reversed or vacated, or applying it prospectively is no longer equitable; or (6) "any other reason that justifies relief." Fed. R. Civ. P. 60(b), (c). The movant must demonstrate that it acted promptly, has a meritorious claim, and that the opposing party will not suffer prejudice by having the judgment or order set aside. Nat'l Credit Union Admin. Bd. v. Gray, 1 F.3d 262, 264 (4th Cir. 1993). If these threshold conditions are met, the district court determines whether the movant satisfies one of the six enumerated grounds for relief.
The Fifth Amendment forbids the taking of private property for public use without "just compensation." U.S. Const. art. V. The compensation owed is the monetary equivalent of the property taken, which does not take into account indirect costs to the property owner caused by the taking. United State v. Bodcaw Co., 440 U.S. 202, 203 (1979). Thus, "attorneys' fees and expenses are not embraced within just compensation." Id. The American Rule provides that parties bear their own legal fees, exceptions to which must be explicitly authorized by Congress. In re Crescent Estates, LLC, 588 F.3d 822, 825-26 (4th Cir. 2009). Imposition of costs against the Government is generally prohibited and may only be imposed "to the extent allowed by law." Fed. R. Civ. P. 54(d)(1). Congress explicitly authorized the imposition of certain costs and attorneys' fees in the Equal Access to Justice Act ("EAJA"). 28 U.S.C. § 2412.
The district court's interpretation of the EAJA is subject to de novo review, United States v. 50.50 Acres of Land, 931 F.2d 1349, 1356 (9th Cir. 1991), and the determination of eligibility for fees is reviewed for abuse of discretion, Pierce v. Underwood, 487 U.S. 552 (1988); United States v. 515 Granby, LLC, 736 F.3d 309, 314 (4th Cir. 2013). If the district court determines that the applicant is entitled to fees and expenses, the court "has considerable discretion in determining the amount of the fee award." 575 Granby, LLC, 736 F.3d at 318. The court abuses its discretion when it makes a clear error of law. United States v. Basham, 561 F.3d 302, 326 (4th Cir. 2009). This "standard is deferential," 575 Granby, LLC, 736 at 314, but requires a "suitably informed deference" that may entail a "canvassing of the relevant materials," United States v. Paisley, 957 F.2d 1161, 1166, n.3 (4th Cir. 1992).
As an initial matter, the Court finds that Rule 60 is an appropriate vehicle for the relief sought by the Landowners, notwithstanding the Government's argument that Rule 54(b) is theappropriate vehicle. (Dkt. No. 213 at 1-2.) The Court entered the September 26, 2019 order before the deadline by which the Landowners could demonstrate their eligibility for fees and expenses had passed, and the Landowners now seek to "resolve what appears to be an administrative matter." (Dkt. No. 211 at 2.) The Landowners brought this Rule 60 motion within a reasonable time—twenty-eight days thereafter. The Court, therefore, considers the Landowners' arguments as brought under Rule 60 and declines to convert the motion as brought under Rule 54.
"The primary purpose of the [EAJA] was to increase the accessibility to justice[.]" H.R.Rep. 99-120 at 8. The statute was enacted in response to concerns that putative applicants "may be deterred from seeking review of, or defending against, unreasonable governmental action because of the expense involved in securing the vindication of their rights." Sullivan v. Hudson, 490 U.S. 877, 883 (1989). In 1985, the EAJA was amended to "extend[] and improve[] the liability of the United States for attorneys' fees and other expenses to certain parties who prevail against the United States[.]" H.R.Rep. 99-120 at 8.1
There are two methods for a district court to award attorneys' fees under the EAJA. First, the court must award "fees and other expenses" to the "prevailing party" 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). Congress has referred to the second clause in this mandatory provision as the Government's "escape clause," H.R.Rep. 99-120 at 9, similarly referenced by the Court of Appeals for the Fourth Circuit as a "safety valve"designed to "insure that the Government is not deterred from advancing in good faith the novel but credible extensions and interpretations of law that often underlie vigorous enforcement efforts." Niken v. Holder, 385 Fed. Appx. 299, 302 (4th Cir. 2001). This safety valve provides the district court with "discretion to deny awards where equitable considerations dictate an award should not be made." Id. Second, the district court may award fees to the "prevailing party" to the same extent any other party would be liable "under the common law" or statute. 28 U.S.C. § 2412(b). This method gives the court discretion to award fees where the Government acted "in bad faith, vexatiously, wantonly, or for oppressive reasons." Hyatt v. Shalala, 6 F.3d 250, 254 (4th Cir. 1993).
Both mandatory and discretionary awards are limited to an applicant that qualifies as an eligible "party," which the EAJA defines, relevant to this matter, as "an individual whose net worth did not exceed $2,000,000 at the time the civil action was filed." Id. § 2412(d)(2)(B). Similarly, an award under either method is available only to the "prevailing party," which the EAJA defines as, "in the case of eminent domain proceedings, as a party who obtains a final judgment (other than by settlement), exclusive of interest, the amount of which is at least as close to the highest valuation of the property involved that is attested to at trial on behalf of the property owner as it is to the highest valuation of the property involved that is attested to at trial on behalf of the Government." Id. § 2412(d)(2)(H).2 If the applicant is both a "party" and the "prevailing party,"the district court proceeds to consider, first, whether the fees sought are permitted "fees and expenses" under the statute. Id. § § 2412(d)(2)(A).3 The court may then proceed to determine the reasonable amount of fees in light of the statutory cap on hourly rate and possible upward adjustments from that cap, id. § 2412(d)(2)(A), and, last, whether that amount must be apportioned to account for applicants who did not qualify as a "party."
The Court previously denied the Landowners' attorneys' fees application on the basis that they did not demonstrate a net worth of $2,000,000 or less as of July 15, 2016. See Broaddus v. U.S. Army Corps of Eng'rs, 380 F.3d 162, 168 (4th Cir. 2004) (). An EAJA applicant must make this eligibility showing of net worth where, as...
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