On Appeal from the United States District Court for the Eastern District of Pennsylvania.
Garth and Sloviter, Circuit Judges and Neaher, District Judge.*fn*
The primary question which we must answer in this appeal is whether a township or other governmental entity is a "party" within the meaning of that term as it is found in the Equal Access to Justice Act (EAJA), 28 U.S.C. § 2412 (1982). Marple Township and Radnor Township (the Townships) claim to be such parties,*fn1 and therefore they seek an affirmance in major part of the district court judgment awarding attorneys' fees of $86,643.75 plus $2,511.67 in costs in favor of the Townships and two other entities. The Townships challenge, however, the hourly rate fixed by the district court in its calculation of the attorneys' fees. Thus the Townships have filed a cross-appeal.
The United States Department of Transportation (the Department), on the other hand, claims that Congress did not intend EAJA to operate in favor of such governmental entities as the Townships and it asks us to reverse the district court judgment awarding attorney fees. We hold that townships, such as the parties here, are not "parties" eligible for a fee award within the meaning of § 2412(d)(2)(B) of EAJA.
Because the underlying factual dispute leading to the district court order awarding fees is significant for an understanding of the positions taken by the parties here, we briefly recount the factual circumstances giving rise to this appeal.
Appellees/cross-appellants the Townships, along with Swarthmore College (the College) and Ashwood Manor Civic Association (the Civic Association), instituted an action against appellant/cross-appellee the Department, and the Pennsylvania Department of Transportation (PennDOT), that challenged the Department's conduct in implementing plans for a highway popularly known as the "Blue Route." The suit sought an injunction barring construction of the Blue Route on the grounds that the Department had violated federal law, including the National Environmental Policy Act (NEPA), 42 U.S.C. § 4321, et seq., and the Department of Transportation Act, 49 U.S.C. §§ 1651-1660 (1982) (repealed). (In a related action, Citizens Council of Delaware County challenged the Department's conduct with respect to a portion of the highway.) The plaintiffs alleged in major part that the Department had failed to prepare a proper supplemental environmental impact statement (EIS) pursuant to 23 C.F.R. § 771.14(i) (1980) (repealed) and a "4(f) statement" pursuant to section 4(f) of the Department of Transportation Act, 49 U.S.C. § 1653(f) (1982) (repealed and substantially recodified at 49 U.S.C.A. § 303 (West Supp. 1983).)*fn2
The facts as reported in the district court opinion on cross-motions for summary judgment (App. 282-325) may be summarized as follows. The Blue Route had been in the planning stages for many years prior to the litigation. An initial formal plan for building a route to connect Interstate-95 and the Pennsylvania Turnpike in southeast Pennsylvania was proposed in 1961, and the highway was partially built beginning in 1967. After NEPA became effective in 1970, the Department prepared an EIS and a 4(f) statement for some segments. Litigation about the portion of the highway at issue in the case here resulted in a consent decree that required the Department to issue a new EIS/4(f) statement. A draft statement was issued, and public hearings were held. A preliminary final statement was submitted to several federal agencies in 1978.
Some agencies criticized the statement, and the Department of the Interior questioned the lack of adequate consideration of alternatives as mandated by NEPA and § 4(f) of the Department of Transportation Act. The EPA also criticized the failure to consider alternatives. The Federal Highway Administrator (FHWA) refused to request the Secretary of Transportation to concur in the Final Statement; instead the FHWA suggested modifying the plan to reduce the scale of the highway. The Department and FHWA then formed a task force, which issued a report recommending various modifications in the highway plan. The report was incorporated into the Final EIS as an "addendum"; the body of the EIS was not changed. The Addendum stated, inter alia, that "Expressway encoachments in stream valleys have been significantly reduced" and that "As a result of the Task Force study, there will be major revisions to the previously completed final design discussed in the base Final EIS." (See App. 291).
The Final EIS/Section 4(f) Statement containing the Addendum was then submitted to the Secretary of the Department for the Secretary's required Section 4(f) determination that there were no alternatives to the plan, and that the plan minimized harm to public lands, see 49 U.S.C. § 1653(f) (1976) (repealed), supra note 2, and infra p. 22-23. The FHWA Deputy Administrator recommended that the Secretary do this as a "concurrence" in the recommendations contained in the statement; the Secretary then did so.
This final statement was approved by FHWA; notice of the action was published in the Federal Register in November 1980. Following further objections to the plan by the Department of Interior, FHWA agreed to various additional conditions to ensure compliance with environmental commitments contained in the EIS.
It was six months later that the Townships instituted the action above referred to. The suit by Citizens Council, which had been filed in 1974 and put into suspense, was then reactivated and consolidated with the Townships' suit.
On cross-motions for summary judgment, the district court held that the Department had violated NEPA and the Department of Transportation Act by issuing an inadequate supplemental EIS and 4(f) statement after the plan was revised. The court, inter alia, granted the plaintiffs' request for injunctive relief, enjoining the Department from proceeding further with work on the Blue Route until a supplemental EIS and 4(f) statement was prepared; the court also enjoined PennDOT from using any federal funds to work on the Blue Route until the proper EIS/4(f) statement issued. Marple Township v. Lewis, Secretary of Transportation, 21 ERC (BNA) 1010, 13 ELR 20349, No. 81-4627 (E.D. Pa. August 30, 1982); Citizens Council of Delaware County v. Secretary of Transportation, 21 ERC (BNA) 1010, 13 ELR 20349, No. 74-925 (E.D. Pa. August 30, 1982). This decision was not appealed.
The Townships, the College, and the Civic Association then jointly petitioned the district court for an award of attorney's fees under EAJA.
The district court on January 28, 1983, held that the plaintiffs were eligible parties under EAJA. The court held that the Townships qualified as eligible "parties" under 28 U.S.C. § 2412(d)(2)(B)(iii): "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 . . .; " it held that the College qualified as a tax-exempt entity under id. § 2412(d)(2)(B)(ii); and it held that the Civic Association qualified under id. § 2412(d)(2)(B)(iii) as an "association or organization, having not more than 500 employees." The court further held that the Department was not "substantially justified" in advancing its legal position within the meaning of EAJA § 2412(d)(1)(A) and that special circumstances did not make an award of attorneys' fees unjust, under that same subsection.
After the parties submitted arguments on the amount of the fee award, the court on July 12, 1983, granted the plaintiffs' petition in part, first reaffirming its earlier holding that the Department's position was not substantially justified. The court held most of the requests for fees and costs to be substantiated by the evidence produced in their support, and granted those requests to the extent they found support. However, the court found that no "special factors" within the meaning of EAJA § 2412(d)(2)(A) justified permitting an hourly fee greater than $75/hour. With the limitations noted, the court granted the plaintiffs' petition.
The Department appealed (at No. 83-1669) from the court's orders of January 28, 1983 and July 13, 1983, which granted the petition in part; the Townships, the College, and the Civic Association cross-appealed (at No. 83-1697) from that part of the district court's order of July 13, 1983 which limited the rate at which fees were calculated to $75 per hour.
We conclude that the Townships were not "parties" eligible for fees under EAJA, but because two other plaintiffs are eligible for fee awards, we hold the fees awarded by the district court to be reasonable, and we affirm the $75 rate at which they were calculated. We reverse and remand to the district court for a determination and apportionment of the fees to which the two remaining prevailing plaintiffs are entitled in light of our decision.
A threshold requirement for obtaining attorneys' fees under EAJA is that the petitioner be an eligible "party" within the meaning of EAJA, 28 U.S.C. § 2412(d)(2)(B). That provision states in pertinent part:
(B) "party" means (1) 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 Code and a cooperative association as defined in section 15(a) of the Agricultural Marketing Act (12 U.S.C. 1141(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 500 employees at the time the civil action was filed; . . . .
The Department contends that governmental bodies, such as the Townships, are not "parties" within the meaning of this provision.
Obviously, the first clause of the statute, because it refers only to individuals, has no application to this case where no individuals are parties. The question thus is whether a township falls within the definitions of the second or third clause of the statute. We hold that it does not and that accordingly, governmental bodies are not to be deemed "parties" within the meaning of EAJA.
First, § 2412(d)(2)(B)(ii), which refers to a net worth not exceeding $5,000,000 is not easily made applicable to governmental bodies. Indeed, counsel for the Townships admitted as much in oral argument before this court.
Second, and more important, the legislative history of EAJA indicates an unequivocal congressional intent to exclude governmental bodies from the statute's purview even if the statute could be construed on its face to include them.
The general intent underlying EAJA was to remedy the imbalance of means that has been thought to deter impecunious litigants from seeking review of, or defending against, unreasonable governmental action. By providing that prevailing parties would be entitled to attorneys' fees and costs, EAJA was intended to reduce the effect of the disparity in resources. See H. Rep. No. 1418, 96th Cong., 2d Sess. 5-6, 9-10 (1980), reprinted in 1980 U.S. Code Cong. & Ad. News at 4984, 4988-89.
The legislative history of the statute in general indicates that EAJA was primarily intended to benefit individuals and small businesses:
While the influance [sic] of the bureaucracy over all aspects of life has increased, the ability of most citizens to contest any unreasonable exercise of authority has decreased. Thus, at the present time, the Government with its greater resources and expertise can in effect coerce compliance with its position. Where compliance is coerced, precedent may be established on the basis of an uncontested order rather than the thoughtful presentation and consideration of opposing views. In fact, there is evidence that small businesses are the target of agency action precisely because they do not have the resources to fully litigate the issue. This kind of truncated justice undermines the integrity of the decision-making process.
H. Rep. No. 1418, supra, at 10, reprinted in U.S. Code Cong. & Ad. News at 4988 (emphasis added). Similarly, the legislative history of the "party" provision indicates that individuals and small businesses were the intended primary beneficiaries:
The definition of "party" is consistent with section 551(3) of title 5, and includes a "person" named or admitted as a party, or properly seeking and entitled as of right to be admitted as a party, in an agency proceeding, and a "person" admitted by an agency as a party for limited purposes.
The definition of "person" in this subsection identifies those individuals, businesses and organizations which may recover fees and expenses under this section. Those persons eligible to recover fees include individuals whose net worth does not exceed one million dollars and sole owners of unincorporated businesses, partnerships, corporations and associations or public or private organizations whose net worth does not exceed five million dollars. Excluded from the net worth limits are cooperative associations as defined in the Agricultural Marketing Act (12 U.S.C. 1141s(a)) and organizations 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. No business would be eligible if it employed more than 500 employees. The definition thus establishes financial criteria which limit the bill's applications to those persons and small businesses for whom ...