November/December 2011: EAJA Attorney Fee Awards Under Scrutiny

Washington Watch | November/December 2011
By Bruce Moyer

Congress is considering legislation that would set restrictions on the award of attorneys' fees to litigants who win lawsuits challenging the federal government's actions. Western lawmakers are taking aim at a fee-shifting statute they contend uses taxpayer funds to enrich environmental groups that sue the government over minor infractions and gum up the works at federal agencies like the Bureau of Land Management, the Forest Service, and the U.S. Fish and Wildlife Service.

At issue is the Equal Access to Justice Act (EAJA), a 1980 fee-shifting law that reimburses qualified individuals, small businesses, and groups for their attorneys' fees when they prevail against the government on a wide variety of claims before administrative agencies and the federal courts and demonstrate that the government's position was not "substantially justified."

Congressional critics of the EAJA contend that, by letting some nonprofit groups recover fees for legal challenges against the government, the government is subsidizing these outside groups' repeated lawsuits against the government. Western lawmakers are especially vexed by legal fee awards to environmental groups bringing legal challenges against energy projects and other uses of federal land. They charge that increasing numbers of lawsuits related to environmental issues are clogging up the courts, burdening federal agencies, and failing to bring a comprehensive solution to resource management issues. EAJA recipients of fee awards say that the awards are justified, especially when they have convinced courts that agencies have ignored or improperly implemented environmental and resource management statutes.

Identical bills have been introduced in the House and the Senate to overhaul the EAJA in several respects, including narrowing the eligibility of nonprofit groups to receive EAJA fees, capping fee awards, and requiring greater transparency over how much the government is paying in EAJA awards. The bills also would raise the rate of payment for attorneys under the EAJA from $125 per hour to $175 per hour.

The House and Senate measures, both titled the Government Litigation Savings Act (H.R. 1996, S. 1061), have been introduced by two Wyoming lawmakers, Sen. John Barrasso (R-Wyo.) and Rep. Cynthia Lummis (R-Wyo.). The Barrasso-Lummis bill received a hearing by the House Judiciary Subcommittee on Courts, Commercial and Administrative Law on October 11. Congresswoman Lummis said her bill would halt the use of the EAJA by "giant environmental groups with big litigation shops" and a "stop-everything agenda."

The EAJA overhaul legislation would narrow the eligibility of nonprofit groups to receive attorneys' fee awards by limiting fees to groups with a net worth of not more than $7 million. Under current law, an individual is eligible for EAJA fees if his or her net worth does not exceed $2 million; a business is eligible if its net worth does not exceed $7 million and it has 500 or fewer employees. There is no eligibility under the current law for nonprofit groups. The Barrasso- Lummis legislation would change that. In return for raising the attorneys' fee award rate under the EAJA from $125 per hour to $175 per hour, the Lummis- Barrasso bill also eliminates the latitude available under the current law for attorneys to pierce the fee cap, which has resulted in wide disparity among the circuit appeal courts in their application of the law.

The legislation also would require plaintiffs to have a "direct and personal monetary interest" in the matter being litigated, which would limit parties without a direct commercial link to the litigation from qualifying for fees. Critics of this proposal say that it would eliminate the availability of fee awards to litigants bringing nonmonetary injunctive actions against the government. The legislation also would place a cap on the aggregate amount the government will pay to an individual or entity for attorneys' fees and require judges to reduce attorneys' fees if parties acted in a "dilatory" manner or in bad faith.

How much is the government spending in EAJA awards? No one is quite sure. In 1995, Congress struck the provisions in the original law that required the government to track agency payments largely because of problems over the disclosure of settlement agreements. The Barrasso-Lummis proposal would reinstate the tracking requirements and direct the Government Accountability Office to audit the implementation of the law since 1995.

This legislation is unlikely to become law in this Congress, even if the bill is passed by the House of Representatives, but it is one more measure that could gain new life should Republicans take control of both houses of Congress in 2012.
© 2011 Bruce Moyer. All rights reserved.


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