Payment of Attorney's Fees in Litigation Involving Successful Challenges to Federal Agency Action Arising Under the Administrative Procedure Act and the Citizen-Suit Provisions of the Endangered Species Act ( 2000 )

Payment of Attorney’s Fees in Litigation Involving Successful
Challenges to Federal Agency Action Arising Under the
Administrative Procedure Act and the Citizen-Suit Provisions
of the Endangered Species Act
For purposes o f settling attorney’s fees claim s in a case arising under both section 10 o f the A dm inis­
trative Procedure A ct and the citizen-suit provisions o f the E ndangered Species A ct, federal litiga­
tors, in allocating hours and costs betw een the A PA -Equal Access to Justice A ct and ESA claim s,
should subordinate EAJA section 2412(d) to ESA section 11(g)(4). Under this approach, hours
and costs necessary to both counts should be assigned to the ESA claim for attorney’s fees pur­
poses, leaving o nly the hours and costs necessary only to the APA claim to be paid under EA JA
November 27, 2000
M e m o r a n d u m O p in io n f o r t h e A s s is t a n t A t t o r n e y G e n e r a l
E n v ir o n m e n t a n d N a t u r a l R e s o u r c e s D iv is io n
You have asked us to determine how federal litigators, in settling attorney’s
fees claims in litigation arising under both section 10 of the Administrative Proce­
dure Act (“ APA” ), 5 U.S.C. §704 (1994), and the citizen-suit provision of the
Endangered Species Act (“ ESA” ), ESA § 11(g), 16 U.S.C. § 1540(g) (1994),
should allocate opposing parties’ hours and costs between the APA and ESA
claims. Fees attributable to APA claims are paid out of agency funds, while fees
attributable to ESA section 11(g) claims are paid out of the permanent indefinite
appropriation for the payment of judgments against the United States, commonly
known as the judgment fund. See 31 U.S.C. § 1304 (1994 & Supp. IV 1998).
Accordingly, to settle attorney’s fees claims in suits presenting both classes of
claims, federal litigators must allocate opposing parties’ compensable hours and
costs between these two classes in order to determine the amounts of funding
to be drawn from agency funds and the judgment fund.
Attorneys in the Wildlife and Marine Resources Section ( “ Wildlife Section” )
of the Environment and Natural Resources Division (“ ENRD” ) contacted us in
May 1999 concerning the allocation issue posed by their efforts to settle an oppo­
nent’s fees claim in Pacific Coast Federation o f Fishermen’s Assoc, v. National
Marine Fisheries Service, Civ. No. 97-775 (W.D. Wash.) (“ the Umpqua River
litigation” ), a multi-claim suit involving APA and ESA challenges to federal land
management decisions affecting the Umpqua River cutthroat trout. In June and
July 1999, we provided oral advice concerning the proposed Umpqua River settle­
ment. In December 1999, we provided a brief written summary of our views,
which the Wildlife Section had requested as a source of guidance for attorneys
in other pending APA-ESA cases. This memorandum responds to your subsequent
request for a fuller, more formal statement of our views.
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I. The Payment of Opponents’ Attorney’s Fees in Multi-claim Litigation
Arising under the APA and the ESA
In Bennett v. Spear, 520 U.S. 154 (1997), the Supreme Court found that certain
claims challenging agency action designating critical habitat for endangered spe­
cies were reviewable under the E S A ’s citizen-suit provision, while related claims
concerning agency compliance with ESA data collection requirements were
reviewable only under the APA. See 520 U.S. at 170-78. Under Bennett, suits
against federal agencies involved in the administration of the ESA can present
related claims arising under the APA and the ESA’s citizen-suit provision. The
Umpqua River litigation is one such suit. There, federal litigators determined that
it would be in the government’s interest to settle a multi-claim suit on terms that
would afford the plaintiffs substantial relief under one of their five APA claims
(count V of the Third Amended Complaint) and under their only ESA citizen-
suit claim (count VI). Plaintiffs’ claims for attorney’s fees and costs were also
included in the settlement discussions.
Fee awards for the successful prosecution o f APA claims are governed by sec­
tion 2412(d) of the Equal Access to Justice Act (“ EAJA” ), 28 U.S.C. § 2412(d)
(1994 & Supp. IV 1998). Agencies must pay section 2412(d) judgments out of
their own funds. Id. § 2412(d)(4). However, agencies may interpose several
defenses to section 2412(d) fees claims that are not generally available in other
contexts. In particular, an agency can avoid paying EAJA fees, even to a pre­
vailing party, if it can show (1) that the claimant failed to satisfy the EAJA-
specific means test for recovery o f fees and costs, see 28 U.S.C. § 2412(d)(2)(B)
(barring recovery by individuals with more than $2 million in net assets and by
profit-making enterprises with more than $7 million in net assets or more than
500 employees); (2) that the government’s position was substantially justified, id.§ 2412(d)(1)(A); (3) that special circumstances make an award of attorney’s fees
unjust, id:, or (4) that the claimant failed to file a section 2412(d) petition within
30 days of final judgment, id. § 2412(d)(1)(B). See generally Commissioner v.
Jean, 496 U.S. 154, 158 (1990) (summarizing preconditions to fee-award eligi­
bility under EAJA section 2412(d)). In addition, attorney’s fees under EAJA are
subject to an hourly cap, currently set at $125 per hour, which can only be
exceeded if a court determines “ that an increase in the cost of living [since 1996,
when the current hourly cap was set] or a special factor, such as the limited avail­
ability of qualified attorneys for the proceedings involved, justifies a higher fee.”
See 28 U.S.C. § 2412(d)(2)(A)(ii).
Fee awards for the successful prosecution of ESA citizen-suit claims are gov­
erned by section 11(g)(4) of the Act, 16 U.S.C. § 1540(g)(4). Section 11(g)(4)
authorizes the award o f attorney’s fees “ whenever the court determines such
award is appropriate.” The Supreme Court has construed this language to require
that at least “ some success on the merits be obtained before a party becomes
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eligible for a fee award.” See Ruckelshaus v. Sierra Club, 463 U.S. 680, 682
& n.l (1983). The United States pays section 11(g) attorney’s fees out of the
judgment fund. See 31 U.S.C. § 1304; see also 28 U.S.C. §§2414, 2517 (1994)
(procedures for the payment of judgments). In opposing section 11(g) fees claims,
the United States cannot invoke any of the special defenses to liability that exist
under EAJA, although special jurisdictional defenses to ESA citizen-suits may
be available to defeat fees claims in some cases. See ESA § 11(g)(2), 16 U.S.C.
§ 1540(g)(2). Hourly rates used to determine section 11(g)(4) fees awards are not
subject to a statutory cap; they are generally paid at rates that courts determine
to be “ reasonable” under the circumstances. Accordingly, hours allocated to ESA
claims may be compensated at a higher rate than hours allocated to related EAJA
claims. Compare, e.g., Jones v. Espy, 10 F.3d 690 (9th Cir. 1993) (due to EAJA
cap on hourly rates, prevailing plaintiff in litigation against federal and state
defendants recovers at a lower rate for hours allocated to the federal claims than
for hours allocated to the state claims).
II. The Allocation of Opposing Attorneys’ Hours and Costs Between Their
Successful APA and ESA Claims in the Umpqua River Litigation
The Wildlife Section, after deciding to pursue a comprehensive settlement of
the Umpqua River litigation, encompassing attorney’s fees as well as merits issues,
sought our assistance in determining the proper allocation of hours and costs
between the APA-EAJA claim set forth in count V of the third amended complaint
and the ESA citizen-suit claim set forth in count VI. Additionally, the Wildlife
Section pointed out that the Umpqua River plaintiffs had amended their complaint
to add count VI after summary judgment motions on the first four APA counts
had been fully briefed, and asked whether this relatively late presentation of the
ESA citizen-suit claim should affect the allocation of hours and costs in the
Umpqua River case.
For the reasons described below, we conclude that the ESA fees provision
should take precedence over EAJA section 2412(d) — i.e., that hours and costs
necessary to both successful counts should be allocated to the ESA claim for attor­
ney’s fees purposes. We also believe that the timing of the ESA count does not
necessarily preclude allocation of hours and costs — even hours spent and costs
incurred prior to the amendment of the complaint — to the ESA claim.
A. The Allocation of Hours and Costs Between Successful
Claims that Implicate Different Fee-Shifting Provisions
A proper allocation of hours and costs between APA-EAJA and ESA claims
for settlement purposes should follow the same analysis that the Department would
urge a court to follow in adjudicating the same allocation question. In our view,
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a court would properly resolve the fees phase of the Umpqua River litigation
(following a judgm ent for the plaintiffs on counts V and VI) by undertaking a
two-stage allocation of hours and costs among the claims that the plaintiffs pre­
sented. The court would, first, allocate total hours and costs between successful
claims (counts V and VI) and unsuccessful claims (counts I through IV) and,
second, allocate hours and costs attributed to the successful claims between count
V, which implicates the fee-shifting requirements of EAJA section 2412(d), and
count VI, which implicates the requirements of ESA section 11(g)(4). We believe
that the proper framework for both stages of this analysis may be found in Hensley
v. Eckerhart, 461 U.S. 424 (1983).
The allocation of hours and costs between successful and unsuccessful claims
calls for a relatively straightforward application of Hensley v. Eckerhart. Although
H ensley was specifically concerned with the allocation of costs and hours between
successful and unsuccessful claims in civil rights litigation governed by the fee-
shifting provisions of 42 U.S.C. § 1988 (1994 & Supp. IV 1998), the Court
indicated that its approach there was “ generally applicable in all cases in which
Congress has authorized an award of fees to a ‘prevailing party,’” 461 U.S. at433 n.7, and lower courts have relied upon Hensley in allocating costs and hours
between successful and unsuccessful claims in fees litigation arising under a
variety of other fee-shifting statutes.1 Under Hensley, courts determine how much
of a fees claimant’s work was reasonably necessary to the litigation of the success­
ful claims (that is, how much “ involve[d] a common core of facts or [was] based
on related legal theories” ) and whether the degree of success was commensurate
with the effort expended. Id. at 434-36. If successful and unsuccessful claims
were closely related, so that all of the hours and costs at issue contributed to
the prosecution of the successful claims, and the claimant’s victory on those claims
produced significant results, a claimant’s costs and hours may be fully com­
pensated. On the other hand, if successful and unsuccessful claims implicated dif­
ferent facts and legal theories, so that identifiable categories of work did not con­
tribute to the prosecution of the successful claims, or if the successful claims
achieved only partial or limited relief, appropriate reductions must be made.
Because the proposed Umpqua River settlement would give plaintiffs at least
some of the relief sought under two distinct claims that implicate two distinct
fee-shifting mechanisms, this case requires a second allocation of costs and hours
1See, e.g., George H yman Constr Co v. Brooks, 963 F.2d 1532, 1536 (D.C Cir. 1992) (finding that Hensley
requires allocation between successful and unsuccessful claims in case arising under the Longshore and Harbor
W orkers’ Compensation Act; noting that “ low er courts have adopted [Hensley's] instructions in a wide array of
statutory settings” ), Conservation Law Found, o f New England, Inc. v Secretary o f the Intenor, 790 F 2 d 965,
96 9 -7 0 (1st Cir. 1986) (work on unsuccessful claims arising under the Outer Continental Shelf Lands Act was
sufficiently related to work on successful claim s airing under the National Environmental Policy Act ( “ NEPA” )
to justify compensation, although work on unsuccessful ESA claims was insufficiently related to the NEPA claims
and should have been excluded from the fees award); Citizens Council o f Delaware County v Brinegar, 741 F.2d
584, 596 (3d Cir. 1984) ( “ sufficient interrelationship” existed among successful and unsuccessful NEPA claims
for the distnct court to avoid apportioning hours and costs among claims “ based on the success or failure of any
particular legal argum ent advanced by the plaintiffs” ).
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between those two claims — the count V APA claim, fees for which are governed
by EAJA section 2412(d), and the count VI citizen-suit claim, fees for which
are governed by ESA section 11(g)(4). We believe that a court, in addressing
this aspect of the problem, would apply EAJA section 2412(d) only as a fall­
back to other fee shifting provisions, such as ESA section 11(g)(4). A court fol­
lowing this approach would, in essence, apply the Hensley framework a second
time to determine which of the hours and costs attributable to the successful claims
were reasonably necessary to the litigation of the non-EAJA claim and allocate
only the residual hours and costs to the section 2412(d) fees claim.
Two provisions of EAJA indicate that section 2412(d) should be assigned this
secondary role. Section 2412(d)(1)(A) states that the United States may be ordered
to pay fees and expenses under section 2412(d), “ [e]xcept as otherwise specifi­
cally provided by statute.” A separate, uncodified provision establishes even more
clearly section 2412(d)’s subordinate status, stating that nothing in section 2412(d)
“ alters, modifies, repeals, invalidates, or supersedes any other provision of Federal
law which authorizes an award of such fees and other expenses to any party other
than the United States that prevails in any civil action brought by or against the
United States.” See Pub. L. No. 96-481, §206, 94 Stat. 2321, 2330 (1980), as
amended by Pub. L. No. 99-80, §3, 99 Stat. 183, 186 (1985), reprinted in 28
U.S.C. §2412 note (1994). The legislative history of EAJA further supports this
reading. In reporting out the bill that became EAJA, the House Judiciary Com­
mittee stated that
[Sjection [2412(d)] is not intended to replace or supercede any
existing fee-shifting statutes . . . in which Congress has indicated
a specific intent to encourage vigorous enforcement, or to alter the
standards or the case law governing those Acts. It is intended to
apply only to cases (other than tort cases) where fee awards against
the government are not already authorized.
H.R. Rep. No. 96-1418, at 18 (1980). In addition, the Committee observed that
section 206 (section 6 of the bill before the Committee) “ reinforcefd] the statutory
language and emphasize[d] the Congressional intent that the provisions of section
2412(d) . . . shall not supercede or alter existing statutory authority for fee awards
against the government.” Id. at 19; cf. United States v. 329.73 Acres o f Land,
Situated in Grenada and Yalobusha Counties, M ississippi, 704 F.2d 800, 807 (5th
Cir. 1983) (en banc) (EAJA section 206 “ operates to leave intact the more expan­
sive pre-Act fee-shifting statutes that permit award of attorneys’ fees against the
government” ).
Application of the Hensley methodology to the second-stage allocation issue
presented here is consistent with the courts’ extension of Hensley to cases
involving fee-eligible and fee-ineligible claims. Although Hensley involved the
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allocation of hours and costs between successful and unsuccessful claims, a
number of courts have applied its methodology to allocations between successful
fee-eligible and fee-ineligible claims.2 Following the framework set forth in
Hensley, these courts have examined whether work on the fee-ineligible claims
was reasonably necessary to the prosecution o f the fee-eligible claims and whether
the results obtained on the fee-eligible claims were commensurate with the
expenditures incurred. So too here, we believe that a court would first attribute
to the ESA claim all work reasonably related to the prosecution of that claim.
Those hours and costs would be evaluated for compensation under the ESA, with
payments adjusted in the event that the degree of success was not commensurate
with expenditures. Remaining fees and costs would be evaluated for compensation
under the more restrictive standards of section 2412(d) of EAJA, subject to the
same possibility of reduction for partial or limited success.
In reaching this view of the proper allocation of hours and costs between APA-
EAJA and ESA claims, we have considered arguments that sovereign immunity
principles require allocation of a greater proportion of a prevailing party’s litiga­
tion efforts to EAJA-eligible claims. Waivers of sovereign immunity, including
waivers of federal immunity to fees awards, are strictly construed in favor of
the sovereign. See Ardestani v. INS, 502 U.S. 129, 137 (1991) (“ The EAJA ren­
ders the United States liable for attorney’s fees for which it would not otherwise
be liable, and thus amounts to a partial waiver of sovereign immunity. Any such
waiver must be strictly construed in favor of the United States.” ); Ruckleshaus
v. Sierra Club, 463 U.S. at 685—86 (sovereign immunity principles require a nar­
row construction of the appropriateness standard for fees awards set forth in sec­
tion 307(f) of the Clean Air Act, which governs fees awards in citizen suits against
the United States, as well as against private parties); In re North, 94 F.3d 685,
689 (D.C. Cir. 1996) (per curiam) (“ Sovereign immunity prevents the award of
costs or fees against the United States absent specific statutory authorization.” ).
Because the United States, in defending fees claims under EAJA section 2412(d),
can invoke special defenses to liability (including the substantial justification
defense and financial eligibility tests for recovery), and a fees cap that are unavail­
able to it in fees litigation governed by ESA section 11(g), sovereign immunity
principles arguably require allocation of the greatest possible proportion of a pre­
2See, e .g , Entertainment Research Group, Inc v. Genesis Creative Group, In c , 122 F 3 d 1211, 1230-31 (9th
Cir. 1997) (upholding, under the test of relatedness established in Hensley, distnct court decision that prevailing
defendants were entitled to fees for successful defense against copynght claims but not for successful defenses of
unrelated claims to which no fee-shifung statute applied), cert, denied, 523 U S 1021 (1998), Bridges v Eastman
Kodak, Co., 102 F.3d 56, 59 (2d Cir. 1996) (affirming, under Hensley, distnct court’s determination that plaintiffs
success justified a full award o f fees where plaintiff prevailed on fee-eligible and fee-ineligible claims), cert denied,
520 U.S. 1274 (1997), see also, e.g., Andrews v United States, 122 F 3d 1367, 1376 (11th C ir 1997) (dictum)
(efforts devoted to fee-ineligible tort claim cannot be attributed fee-ebgible CERCLA claim); Mansker v TMG Life
Ins. Co., 54 F.3d 1322, 1329 (8th Cir. 1995) (plainuff in ERISA action prosecuting both personal claims, for which
fees were not available, and representative claims, for which fees were available, entitled to full recovery because
all tim e was necessary to the fee-eligible claims; analysis conforms to but does not cite Hensley)
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vailing party’s hours and costs to the EAJA-eligible claim rather than the ESA-
eligible claim.
This analysis is flawed in two respects. First, allocating litigation effort to non-
EAJA claims would not lead to uniformly lower fees awards. In some multi-claim
lawsuits, the United States may have jurisdictional defenses to the non-EAJA
claims that do not apply to the EAJA claims.3 Similarly, in some multi-claim
lawsuits, liability for fees and costs allocated to non-EAJA claims may be divided
among the United States and other, non-federal defendants while liability for fees
and costs allocated to the EAJA claims falls solely on the United States. And
in some cases fees awarded under the non-EAJA fee-shifting authority may be
lower than fees awarded for the same efforts under EAJA because of fee ceilings
and other statute-specific restrictions.4 It would seem a novel application of sov­
ereign immunity doctrine for a court to base the relationship between EAJA and
other fee-shifting statutes on a broad and uncertain generalization that the alloca­
tion of litigation effort to EAJA claims leads to smaller fee awards. Second, and
more fundamentally, even if it were certain that aggregate federal liability for
fees would be reduced by an approach that increased the proportion of total hours
and costs allocated to EAJA claims, the language of EAJA section 2412(d) would
preclude such an approach. EAJA was clearly written to function as a fallback
waiver of sovereign immunity. Congress explicitly instructed that section 2412(d)
should not be construed to alter or modify other fee-shifting provisions. Allocating
effort between non-EAJA and EAJA claims under the Hensley rule for successful
and unsuccessful claims conforms to this instruction; adjusting this allocation to
bring a greater proportion of total effort within the coverage of section 2412(d)
would disregard it.
One judicial decision might appear to rely upon sovereign immunity principles
to allocate a higher proportion of hours and costs to EAJA than would be proper
under the Hensley framework. In Slugocki v. United States, 816 F.2d 1572, cert,
denied, 484 U.S. 976 (1987), the Federal Circuit rejected a district court’s applica­
tion of Hensley's relatedness test in a case involving successful EAJA and non-
EAJA claims. There, the court of appeals reversed the district court’s award of
fees in a multi-claim overtime pay suit under fee-shifting provisions of the Fair
Labor Standards Act (“ FLSA” ). Prevailing plaintiffs in the case, a class of
Deputy U.S. Marshals, alleged that certain overtime practices of the Marshals
Service violated 5 U.S.C. §5542 prior to 1975 and the FLSA from 1975 onward
(following the amendment of the FLSA to bring the Deputy Marshals within its
coverage). Although the plaintiffs cited EAJA as well as the FLSA fees provision
in their fees application, the trial court awarded fees under the FLSA for the entire
suit, concluding that the “ FLSA and Title 5 claims were too interrelated to be
3See, e g , ESA § 1 l(g)(2)(A)(i), 16 U.S.C § 1540(g)(2)(A)(i) (jurisdictional requirement that citizen plaintiffs
provide written notice o f their intent to sue at least sixty days before filing complaint)
4 See, e.g.t 42 U S.C § 300aa-I5(b) (1994) (fees awards under the Vaccine Act capped at $30,000)
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segregated” under the Hensley standard. 816 F.2d at 1579 (summarizing district
court ruling). The court of appeals reversed, stating that “ allowance of attorneys’
fees for appellees’ Title 5 claims as a part of the FLSA award does not represent
strict observance of limitations on the Government’s waiver of sovereign immu­
nity.” Id. The court of appeals implicitly rejected the district court’s finding of
relatedness and remanded with instructions to “ segregate” work performed on
the Title 5 and FLSA claims and evaluate the Title 5 work under EAJA.5
We interpret the court of appeals’ decision in Slugocki as merely overturning
a trial court’s misapplication o f Hensley's relatedness standard in the cir­
cumstances of a particular lawsuit. Although the decision might also be read to
require a different approach to the allocation of hours and costs in litigation
involving successful EAJA and non-EAJA claims, we think that this interpretation
would be inconsistent with the EAJA’s specific instructions concerning the rela­
tionship between section 2412(d) and alternative fee-shifting provisions. These
provisions, in our view, fully support application of the Hensley framework to
multi-claim cases involving successful EAJA and non-EAJA claims.
Finally, in arriving at our view of the proper method for allocating hours and
expenses between APA-EAJA and ESA citizen-suit fees claims, we have also
considered how the allocation method that we have described might affect the
financial incentive that section 2412(d) establishes for agencies to ensure that their
legal positions are substantially justified. Under most fee-shifting statutes,
including ESA section 11(g)(4), awards of fees and expenses against the govern­
ment are paid from the judgment fund. Awards under EAJA section 2412(d), in
contrast, are “ paid by any agency over which the party prevails from any funds
made available to the agency by appropriation or otherwise.” 28 U.S.C.
§ 2412(d)(4). The legislative history of section 2412(d)(4) indicates that Congress
intended for the payment of fee awards from agency funds to operate as a financial
incentive for agencies to avoid legal positions that courts could find to lack
substantial justification.6 Thus, our conclusion that hours and costs should be alio-
5 The court recited a passage from Hensley th a t characterized “ ‘evaluation of the interrelatedness of several claims
within a single law suit’ ” as “ ‘a task for the distnct court that had and decided the case, subject to appellate
review for abuse o f discretion,’ ” but distinguished Hensley on grounds that “ all of the claims in Hensley fell within
an express w aiver o f sovereign immunity contained in section 42 U.S C § 1988 ” Id. (quoting H ensley, 461 U.S.
at 45 3 -5 4 (Brennan, J., concurring in part and dissenting in part)). The court o f appeals appears to have been unaware
that the passage it quoted, which it ascribed to the Supreme Court, was actually part o f Justice Brennan’s opinion
explaining his reasons for concurring in part and dissenting in part
6 The current language of section 2412(d)(4) originated with the 1985 legislation lhat revised and reenacted EAJA,
which had lapsed in accordance with sunset provisions contained in the original Act. See Pub L No 99-80, § 2(d),
99 Stat. 183, 185 (codified at 28 U S C §2412(d)(4) (1994)). The Senate Judiciary Committee explained that the
revised language, which clarified that section 2412(d) awards must be paid from agency funds, was intended to
“ retu m [] the law to the Senate’s intent when the bill was originally passed ” S Rep. No. 98-586, at 19-20 The
C om m ittee’s original intentions concerning the funding o f section 2412(d) awards were set forth in a 1979 report,
which explained that the contemporaneous Senate bill included an agency funding requirement in order to “ make
the individual agencies and departments accountable for [their] actions.” S Rep No. 96-253, at 21 A 1980 House-
Senate conference eliminated the original Senate bill’s agency funding language, substituting language that made
it difficult to determ ine how Congress intended to fund section 2412(d) awards See generally Funding o f Attorney
Fee Awards Under the Equal Access to Justice A ct, 6 Op O .L C 204, 212 (1982) (original Act’s funding provisions,
although ambiguous, were best understood to require that at least some section 2412(d) awards be paid “ from general
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cated to APA-EAJA claims only if they were not reasonably necessary to the
claimant’s prosecution of ESA citizen-suit claims might be questioned on grounds
that other approaches to the allocation of hours and costs among claims would
strengthen financial incentives for agencies to avoid unjustified positions.
We recognize that other conceivable approaches to the allocation of hours and
expenses between EAJA and non-EAJA claims, such as allocation based on rough
comparisons of the relative importance of the various claims, might give agencies
stronger financial incentives to ensure that their legal positions are substantially
justified. It is clear, however, that EAJA did not make the establishment of such
incentives the overriding objective o f federal law governing fees awards against
the United States. Congress, as we have seen, expressly relegated section 2412(d)
to a secondary role. Section 2412(d) has no application if Congress has “ specifi­
cally provided by statute” an alternative fee-shifting scheme for the claim at issue,
28 U.S.C. § 2412(d)(1)(A), and does not operate to “ alter[], modif[y] repealf],
invalidate[ ], or supersede[]” any other fee-shifting statute, Pub. L. No. 96—481,
§206, 94 Stat. at 2330 (as amended). In fact, EAJA itself subjected the United
States to a wide range of new fees claims that are decided without regard to
whether the United States was substantially justified and paid out of the judgment
fund when claimants prevail. See 28 U.S.C. § 2412(b) (1994) (United States liable
for fees and expenses under existing fee-shifting statutes and common-law doc­
trines “ to the same extent that any other party would be liable” ). In short, the
tendency for the allocation method that we have described to limit the effective­
ness of section 2412(d)’s financial incentives on agencies in the context of multi­
claim litigation is simply one manifestation of the limited scope that Congress
has provided for the operation of section 2412(d).
B. The Timing of the ESA Claim
The Umpqua River litigation, in addition to requiring elaboration of a general
framework for the allocation of hours and costs between APA-EAJA and ESA
citizen-suit claims, also posed the question of whether the allocation in this par­
ticular case should be affected by the claimant’s relatively late presentation of
the ESA citizen-suit claim. We were informed that the Third Amended Complaint
in the Umpqua River case, which added count VI, was filed after the parties had
filed summary judgment briefs on counts I through IV, though before the parties
had filed briefs on count V and the district court had ruled on the first five counts.
We were asked whether this circumstance should affect the allocation of hours
and costs between counts V and VI.
funds appropriated to the agencies against whom awards were entered” ) The amendment of section 2412(d)(4)
in 1985, as explained by the Senate Judiciary Committee’s report, was meant to establish the clear emphasis on
financial accountability that the Senate had advocated in 1979
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There is little discussion of this type of timing issue in reported fee-shifting
cases. Our analysis is based primarily on the Supreme Court’s consideration of
a related question in Smith v. Robinson, 468 U.S. 992 (1984). Prevailing plaintiffs
in that case initially challenged state officials’ refusal to provide certain edu­
cational services to a handicapped child under federal and state statutes that did
not authorize fee-shifting under the circumstances presented there. Toward the
conclusion of trial court proceedings in the case, however, plaintiffs added an
equal protection claim and then relied on this claim as the basis for a fee request
under 42 U.S.C. § 1988. Plaintiffs did not add the equal protection claim until
after they had obtained a Rhode Island Supreme Court ruling establishing their
statutory right to the relief they sought. The Court stated that the late-filed equal
protection claim had “ added nothing to petitioners’ [statutory] claims” and should
therefore be regarded as having had “ nothing to do with plaintiffs’ success” on
the merits. 468 U.S. at 1009 n.12. Under these circumstances, the Court found,
the equal protection claim could not provide the basis for a fees award. Id. The
Court remarked, however, that claims added before success has been assured on
other grounds can serve as the basis for a fee award, stating that “ [t]here is,
of course, nothing wrong with seeking relief on the basis of certain statutes
because those statutes provide for attorney’s fees, or with amending a complaint
to include claims that provide for attorney’s fees.” Id.', see also Seybold v. Francis
P. Dean, Inc., 628 F. Supp. 912, 914 (W.D. Pa. 1986) (holding that a fee-eligible
federal claim, though never stated in a complaint, was properly before the court
through constructive amendment). We are insufficiently familiar with the facts
of the Umpqua River litigation to have a view on the role of count VI in the
case. The preceding passage from Smith, however, makes clear that hours and
costs may be allocated to a claim that is added after litigation is well underway —
even if that claim is added for the purpose o f establishing a right to fees — pro­
vided that the later-filed claim contributes to the plaintiffs’ success on the merits,
and hours and costs are properly attributable to that claim in accordance with
the principles discussed above.
Although Smith indicates that hours and costs can be allocated to a fee-eligible
claim that is added by amendment, it does not address whether such allocations
should include hours and costs expended before the filing of the relevant amended
complaint. We recognize that some work performed prior to the introduction of
a later-filed fee-eligible claim, at least in some situations, could not reasonably
be deemed to “ relate” to that claim under the Hensley allocation methodology.
For example, we do not believe that work performed on a fee-ineligible claim
before the claimant could reasonably have anticipated the eventual filing of the
later fee-eligible claim can be said to relate to the claim under Hensley.1 Accord­
7 Restrictions on the allocation o f pre-filing hours and costs to late-filed fee-eligible claims presumably will not
apply to essential pre-filing efforts, such as the factual investigations, research, and drafting that normally precede
the filing o f a complaint or amended complaint
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Attorney's Fees in Litigation Under Administrative Procedure Act and Endangered Species Act
ingly, we believe that Hensley itself places limits on the allocation of early litiga­
tion efforts to later-filed fee-eligible claims.
In the present case, however, we are aware of no circumstance that would pre­
clude an allocation of early litigation efforts to count VI of the Umpqua River
litigation. Count VI was filed approximately five months after the plaintiffs com ­
menced this action by filing a four-count APA action and a request for emergency
injunctive relief. Plaintiffs, however, must have formed plans to file their citizen-
suit claim at least two months before the filing date, since ESA section 11(g)
requires plaintiffs to provide at least sixty days’ notice before filing a citizen-
suit. Moreover, we are advised that, in the view of trial counsel for the govern­
ment, the eventual addition of a citizen-suit claim — following the requisite notice
and delay — appears to have been a part of plaintiffs’ litigation strategy from the
outset. In view of these circumstances, we can find no per se bar to the allocation
of previously incurred hours and costs to the later-filed citizen-suit claim in the
Umpqua River litigation.
in. CONCLUSION
Based on the foregoing analysis, we conclude that, in allocating hours and costs
between the APA-EAJA and ESA claims in the Umpqua River litigation, federal
litigators should subordinate EAJA section 2412(d) to ESA section 11(g)(4).
Under this approach, hours and costs necessary to both counts should be assigned
to the ESA claim for attorney’s fees purposes, leaving only the hours and costs
necessary only to the APA claim to be paid under EAJA. We also conclude that
the timing of the ESA citizen-suit claim, which was added after significant
development of the APA issues had already occurred, does not preclude allocation
of hours and costs to the ESA claim, so long as those hours and costs were reason­
ably necessary to litigation of the ESA claim as well.
RANDOLPH D. MOSS
Acting Assistant Attorney General
Office o f Legal Counsel
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