Marple Township v. Lewis

Nos. 74-925, 81-4627 (E.D. Pa. January 28, 1983)

The court finds that plaintiffs are entitled to attorneys fees under § 204(a) of the Equal Access to Justice Act (EAJA), 28 U.S.C. § 2412, for their successful National Environmental Policy Act and Federal-Aid Highway Act challenges to construction of Interstate 476, 13 ELR 20349. First, the court holds that Marple and Radnor Townships are eligible parties under the EAJA because they meet the criteria in § 2142(d)(2)(B)(iii) as organizations with less than 500 employees, and the Act does not expressly exclude fee awards to governmental bodies. This conclusion is consistent with the language of the statute and its purpose and is not barred by the legislative history, which is ambiguous on this issue. Further, the court holds that plaintiff Swarthmore College qualifies as a party under § 2412(d)(2)(B)(ii) because it is a nonprofit, tax-exempt entity, and plaintiff Ashwood Manor Civic Association qualifies as a party because it is an association with less than 500 employees. The court rejects defendants' assertion that fees should not be awarded because the United States' position was substantially justified. Plaintiffs prevailed on each count for which summary judgment was sought, while defendants sought to defend obvious inadequacies in the implementation of environmental laws. Finally, the court finds no special circumstances that would make an award of attorneys fees unjust.

Counsel are listed at 13 ELR 20349.

[13 ELR 20359]

Van Artsdalen, J.:

Memorandum Opinion and Order

On August 30, 1982, in an opinion and order, I granted the plaintiffs' motions for summary judgment and enjoined defendants from taking any steps, including the appropriation or use of federal funds, toward the construction or completion of Interstate 476, L.R. 1010, commonly referred to as the "Blue Route."

Plaintiffs have moved to recover attorney's fees and costs from the federal defendant in connection with this litigation pursuant to the Equal Access to Justice Act, 28 U.S.C. § 2412 (the Act). By virtue of an informal agreement among the parties, the issue of plaintiffs' entitlement to fees under the Act was briefed and presented to me for determination, with any objections to the nature and amounts of plaintiffs' claims to follow if I determine that the Act does in fact apply.

For the reasons which follow, I conclude that plaintiffs are entitled under the Act to recover attorney's fees and costs from the federal defendant.

The Act constitutes a significant relaxation of sovereign immunity in actions seeking attorney's fees from the United States. Commissioners of Highways of the Towns of Annawan v. United States, 684 F.2d 443, 444 (7th Cir. 1982). Section 2412(d)(1)(A) of the Act provides:

Except as otherwise specifically provided by statute, a court shall award to a prevailing party other than the United States fees and other expenses, in addition to any costs awarded pursuant to [section 2412(a)], incurred by that party in any civil action (other than cases sounding in tort) brought by or against the United States in any court having jurisdiction of that action, unless the court finds that the position of the United States was substantially justified or that special circumstances make an award unjust.

The federal defendant, Secretary of Transportation of the United States (Secretary), contends that: (1) plaintiffs are not eligible parties as defined by the Act; (2) the federal defendant was substantially justified in advancing its legal position in this action; and (3) special circumstances would make an award of attorney's fees improper in this action. I will address each argument in turn.

I. Plaintiffs as eligible parties under the Act

As is evident from the portion of the Act quoted above, certain prevailing parties in judicial actions involving the United States may be awarded attorney's fees. The term "party" is defined in 28 U.S.C. § 2412(d)(2)(B) as follows:

(B) "party" means (i) an individual whose net worth did not exceed $1,000,000 at the time the civil action was filed, (ii) a sole owner of an unincorporated business, or a partnership, corporation, association, or organization whose net worth did not exceed $5,000,000 at the time the civil action was filed, except that an organization described in section 501(c)(3) of the Internal Revenue Code of 1954 (26 U.S.C. 501(c)(3)) exempt from taxation under section 501(a) of the Code and a cooperative association as defined in section 15(a) of the Agricultural Marketing Act (12 U.S.C. 1141j(a)), may be a party regardless of the net worth of such organization or cooperative association, or (iii) a sole owner of an unincorporated business, or a partnership, corporation, association, or organization, having not more than 50 employees at the time the civil action was filed; . . . .

A. Marple Township and Radnor Township

The Secretary argues that governmental bodies like Marple and Radnor Townships are not eligible parties under the Act. In support of this argument the Secretary cites an exchange contained in a subcommittee report on the Act:

[13 ELR 20360]

MR. KASTENMEIR: And it would be its very nature exclude small governmental units?

SEN. DE CONCINI [sponsor of the bill]: It does.

MR. KASTENMEIR . . . And I was wondering if there was a school board sued by the Federal Government and they prevailed whether they might be entitled to this [attorney's fees]?

SEN. DE CONCINI: Mr. Chairman, we did not — we gave it some consideration, but we were primarily interested in bringing some relief to the individuals and small businessman. And I think that point is well taken as to the enforcement of other governmental agencies by the Federal Government . . . It's a very good point. And this bill S. 265 does not make any provision for that.

House Hearings on Award of Attorney's Fees Against the Federal Government Before the Subcommittee on Courts, Civil Liberties and the Administration of Justice, 96th Cong., 2d Sess. 31-32 (May 20 and June 24, 1980) (emphasis added).

Plaintiffs counter that this exchange clearly concerned actions in which small governmental bodies such as school boards would seek fees as defendants, not plaintiffs, and in which the federal government brings suit to effectuate the "enforcement of other governmental agencies." Plaintiffs contend this language has no bearing on situations like the instant one in which small governmental bodies bring suit against the federal government to challenge unreasonable government action.

Plaintiffs also present language from the final House and Senate reports on the Act which they assert indicates that the Act's "primary purpose is to encourage the correction for the public good of unreasonable governmental action without the unfair expenditure of tax dollars." Reply Memorandum in Support of Plaintiffs' Petition for Attorneys' Fees Pursuant to 28 U.S.C. § 2412(d) (Plaintiffs' Reply Memorandum) at 4. The legislative history referred to by the parties is as follows:

The bill rests on the premise that a party who chooses to litigate an issue against the Government is not only representing his or her own vested interest but is also refining and formulating public policy. An adjudication or civil action provides a concrete, adversarial test of Government regulation and thereby insures the legitimacy and fairness of the law. An adjudication, for example, may show that the policy of factual foundation underlying an agency rule is erroenous or inaccurate, or it may provide a vehicle for developing or announcing more precise rules. The bill thus recognizes that the expense of correcting erroron the part of the Government should not rest wholly on the party whose willingness to litigate or adjudicate has helped to define the limits of Federal authority. Where parties are serving a public purpose, it is unfair to ask them to finance through their tax dollars unreasonable Government action and also bear the costs of vindicating their rights.

S. REP. NO. 96-253, 96th Cong., 1st Sess. 5; H. REP. NO. 96-1418, 96th Cong., 2d Sess. 10 (emphasis added).

I find legislative history as submitted by the parties to be ambiguous at best. More significantly, I find the language of the Act to be clear and unambiguous in its definition of "party." The Act's own language provides for limitations on that term. There is no hint of an exclusion for small governmental bodies who otherwise meet the criteria in section 2412(d)(2)(B). Given the fact that Congress provided certain requirements in the definition of party in the Act and did not choose to exclude governmental bodies otherwise meeting the criteria set forth, the plain language of the Act embraces governmental bodies such as Marple and Radnor Townships. See Maine v. Thiboutot, 448 U.S. 1 (1979).

The Secretary also asserts that a recent case from the Court of Appeals for the Seventh Circuit, Annawan, supra, stands for the proposition that governmental bodies were not intended by Congress to come within the scope of the Act. In Annawan, commissioners of certain political subdivisions in the State of Illinois sought attorney's fees from the federal government. The Seventh Circuit held that the Act was not to be applied retroactively. Annawan, supra, 684 F.2d at 444-45. In the case, the court also stated that the commissioners were not "vindicating any public policy." Id. at 445. Without any explanation, the Court also summarily concluded that the commissioners did not come within the definitions of party set forth in the Act and stated that, as it read the findings and purpose of the Act, "its purpose is to diminish the deterrent effect of sovereign immunity in actions properly brought by private citizens to vindicate their rights. We do not believe that governmental bodies such as the Commissioners were intended to come within the scope of the Act." Id.

The language of the Annawan Court concerning the Act's applicability to the commissioners or to governmental bodies is merely dictum. The holding of the court addresses only retroactive application of the Act. There is no reasoning or analysis to support the Court's comments as to the non-applicability of the Act to the commissioners or, even more generally, to governmental bodies. These comments are no more than "obiter dictum: statement[s] of the law in an opinion which could not logically be a major premise of the selected facts of the decision."¹ Chowdhury v. Reading Hospital & Medical Center, 677 F.2d 317, 324 (3d Cir. 1982) (Aldisert, J., dissenting), quoting R. CROSS, PRECEDENT IN ENGLISH LAW 80 (2d ed. 1968). "Dictum is the antithesis of precedent . . . . [D]ictum, unlike holding, does not have the strength of a decision 'forged from actual experience by the hammer and anvil of litigation,' a fact to be considered with assessing its utility in the context of an actual controversy." Id. at 324, quoting Stone, The Common Law in the United States, 50 HARV. L. REV. 4, 7 (1936).

I see no basis for excluding small governmental bodies from the Act's coverage in situations such as the instant one where they are vindicating a public policy. I am not unaware that waivers of sovereign immunity are to be strictly construed and are not to be extended by implication. See, e.g., United States v. Mitchell, 445 U.S. 535, 538 (1980). Nonetheless, permitting recovery under the Act by small governmental bodies who meet the Act's express requirements is consistent with the Act's purpose of diminishing the deterrent effect of seeking review of, or defending against, governmental action by providing in specified situations an award of attorney's fees and other costs against the United States. Equal Access to Justice Act, as amended October 21, 1980, Pub. L. No. 96-481, § 202, 94 Stat. 2327 (set out in note under 5 U.S.C.A. § 504). In the absence of anything on the face of the statute indicating that governmental bodies who otherwise meet the Act's stated requirements are excluded and the further absence of unambiguous legislative history, I conclude that Radnor and Marple Townships may be eligible parties if they meet the Act's stated requirements.

In a footnote to Federal Defendant's Memorandum of Law in Opposition to Plaintiffs' Petition for Attorney's Fees (Defendant's Memorandum) (docket entry #69), the Secretary argues that, even if Radnor and Marple Townships are considered eligible under the Act, I must determine whether they exceed the five million dollar net worth limitation in the Act, since they are not tax-exempt organizations. Plaintiffs Radnor and Marple Township, however, claim eligibility under subsection (iii) of 2412(d)(2)(B) which does not have a net worth limitation. Subsection (iii) provides that a "party" can be "a sole owner of an unincorporated business, or a partnership, corporation, association or organization, having not more than 500 employees at the time the civil action was filed . . ." 28 U.S.C. § 2412(d)(2)(B)(iii). The net worth limitation applies only to the definition of a party found in subsection (ii). The disjunctive "or" is used between the subsections and is a clear indication that each subsection provides entirely separate criteria for the term "party."² The Secretary does not dispute the assertion that Marple and Radnor Townships each employ less than 500 persons. The Secretary also does not dispute plaintiffs' status as "prevailing" parties. See Goldhaber v. Foley, C.A. No. 82-1254 (3d Cir. January 17, 1983). But see section II. infra.

[13 ELR 20361]

Thus, I conclude that Marple and Radnor Townships meet the definition of "party" under 28 U.S.C. § 2412(d)(2)(B).

B. Swarthmore College and Ashwood Manor Civic Association

These plaintiffs, intervenors in this action, assert that they quality as parties under subsection (ii) of section 2412(d)(2)(B) (quoted supra) as non-profit, tax-exempt entities and that, in addition, Ashwood qualifies under subsection (iii) as an association with less than 500 employees.

The Secretary argues that a more restrictive definition of parties, found in the Act's provision applicable to attorney's fees recovered against the United States in administrative proceedings, 5 U.S.C. § 504(b), should be applied in the instant action. The Secretary asserts that the discrepancies between the two definitions are the result of a drafting error by legislators. This argument must fail. Section 2412, provides its own clear definition of "party," with three separate and distinct categories. There is no basis whatsoever to assume that the drafters of the legislation did not mean precisely what they said. That certain members of Congress or language in certain reports confused the two definitions provides no basis for me to ignore the clear and precise wording of that portion of the Act applicable to awards in judicial proceedings. I will, accordingly, apply the definitions found in section 2412(d)(2)(B).

Subsection (ii) provides that an organization described in section 501(c)(3) of the Internal Revenue Code of 1954 (Code) (26 U.S.C. 501(c)(3)) as exempt from taxation under section 501(a) of the Code may be a party as defined in the subsection regardless of its net worth. Plaintiffs, in Exhibit A to Plaintiffs' Reply Memorandum, have submitted a copy of a letter from the Treasury Department of the United States, Office of the Commissioner of Internal Revenue, to Swarthmore College stamped with the date March 30, 1950. In that letter, signed by the Deputy Commissioner and "By direction of the Commissioner," is rendered the opinion that Swarthmore College is exempt from federal income tax under provisions of section 101(6) of the Internal Revenue Code (the predecessor of section 501(c)(3)). It is further stated that the college need not file income tax returns unless the character of Swarthmore College (organized and operated exclusively for educational purposes) is changed. Clearly, then, Swarthmore College meets the definition in subsection (ii) regardless of its net worth.

Ashwood Civic Association (Ashwood) claims to be eligible for tax-exempt status, but has never applied for it.

The Secretary argues that it is not clear whether Ashwood could ever be granted tax-exempt status under section 501(c)(3). Because I conclude that Ashwood is within the definition of "party" in subsection (iii) to section 2412(d)(2)(B), I need not engage in either speculation or fact-finding as to Ashwood's tax-exempt status for purposes of subsection (ii).³

Ashwood asserts that it is a civic association and has no employees, thereby meeting the requirement of subsection (iii) that such an association have less than five hundred employees. The Secretary does not dispute Ashwood's lack of employees. It is clear then that, under the clear wording of section 2412(d)(2)(B), Ashwood meets the definition of "party."

II. The Government's Position in the Action

Under section 2412(d)(1)(A), an eligible prevailing party is entitled to attorney's fees and expenses from the federal government "unless the Court finds that the position of the United States was substantially justified or that special circumstances make an award unjust." "The purpose of the Act . . . is to charge to the United States the expenses incurred by a prevailing party who has challenged an unreasonable position taken by the United States." Goldhaber, supra, slip op. at 9. The Court of Appeals for the Third Circuit in Goldhaber concluded that the United States should be charged with that portion of expenses attributable to its unjustifiable positions. Id at 10. In Goldhaber, the Court concluded that the substantial justification of the United States in defending against one of plaintiff's claims does not render the position of the United States "substantially justified" when a litigant obtains the desired relief under a second claim. Id. at The Court therefore ordered apportionment of fees and costs.

Courts have differed in their determination as to "whether the government's position must be assessed at a pre-complaint or post-complaint stage." Id. at 7, citing cases. The Goldhaber Court declined to address this issue and I decline to do so for the same reason as expressed by that Court — in this action, as in Goldhaber, the position of the government has remained unchanged since before the filing of the complaint. Id. at 8.

Summary judgment in the instant action was granted in favor of plaintiffs on each and every claim on which summary judgment was sought. The Secretary now points to various portions in my opinion granting summary judgment in which I accepted a premise or assertion advanced by the government as support for the argument of substantial justification. These instances do not, however, as the Secretary asserts, change the fact that plaintiffs prevailed on all counts for which they sought summary judgment.Moreover, my acceptance of certain of the government's arguments, for purposes only of deciding the summary judgment motion, does not alter the fact that I found clear evidence on each claim that the government was not justified in proceeding with construction of the Blue Route.

The government, for example, maintained that it was unnecessary to prepare and circulate a Supplemental Environmental Impact Statement (EIS)/Section 4(f) Statement despite changes in construction plans decided on following the publication of the Final EIS which were substantial and based upon significant new information. This constituted a clear violation of applicable regulations, since the changes obviously significantly altered the environmental consequences of construction. In addition, the public was denied an opportunity to comment on the changes, in contravention of the theme running throughout virtually all decided cases on the issue of public comment prior to change.

In addition, in finding that the Section 4(f) Statement relied upon by the government was inadequate, I also concluded that it "leaves at best grave doubt that the Secretary properly exercised his authority." Marple Township v. Drew Lewis, C.A. Nos. 81-4267, 74-925, slip op. at 36 (E.D. Pa. August 30, 1982).

I do not read the recent Goldhaber decision as requiring that I apportion costs according to individual points of argument wonand lost. Such an approach would turn litigation such as this, already cumbersome by its very nature, into a competition where relative point scores for each argument would be totaled, perhaps analogous to such athletic competitions as diving, skating, ski-jumping and equestrian meets. Rather, major claims must be considered. In this action, plaintiffs prevailed on each count for which summary judgment was sought. Even though I did not reject every argument raised by the Secretary, in view of the deficiencies in the procedures followed by the government, the Secretary's position cannot be reasonably termed substantially justified. The Secretary did not, contrary to his assertion, seek to advance any novel not credible extension of the law, but rather sought to defend many obvious inadequacies in the manner in which environmental laws and regulations were implemented in the construction of the Blue Route.

III. Special Circumstances

I also see no "special circumstances" in the instant case which would make award of attorney's fees and costs against the government unjust. The parties are, in my opinion, in the precise situation contemplated by Congress in passing the Act to avoid the deterrent effect of high litigation costs on parties seeking to challenge unreasonable governmental conduct. Congress did not merely choose to provide attorney's fees to impecunious plaintiffs, as the Secretary seems to suggest. Defendant's Memorandum at 24. In challenging what was unreasonable conduct on the part of the government, the plaintiffs in this action have not only represented their own vested interests, but have refined and formulated public policy by providing a concrete, adversarial test of government regulation, thereby insuring legitimacy and fairness of the law. "Where parties are serving a public purpose, it is unfair to ask them to finance through their tax dollars unreasonable Governmental action and also bear the costs of vindicating their rights." S. REP. NO. 96-253, supra. This quote appears particularly [13 ELR 20362] applicable to small municipalities who successfully challenge unreasonable federal government action.

I conclude that the plaintiffs are entitled to attorney's fees in this action. The parties should now proceed to address the disputes, if any, as to the amount of the award.

Order

Upon consideration of the petition of plaintiffs for attorney's fees, along with supporting and opposing memoranda of law, it is hereby ordered, for the reasons set forth in the accompanying memorandum opinion, that the plaintiffs are entitled to recover attorney's fees under the Equal Access to Justice Act, 28 U.S.C. § 2412. All discovery on the amount of the fee award shall be completed by April 1, 1983. Any objections to the amount of the award shall be filed on or before April 8, 1983, together with an accompanying brief. Plaintiffs may file a reply brief on or before April 22, 1983.

1. In Annawan, no governmental body was a party to the action.

2. For reasons discussed in the next section of this memorandum opinion, I reject the Secretary's argument that the definition of "party" found in the Act's provisions relating to administrative actions should be utilized in construing and definding the term "party" for purposes of judicial actions under 28 U.S.C. § 2412.

3. I also need not address the Secretary's argument that the net worth of the association, for purpose of subsection (ii), should be determined by combining the net worth of each individual member.