and private litigants. House Report, supra, at 9, reprinted in  U.S.Code Cong. & Ad.News 4987.
Subsection (d) is a broad ranging change in prior law, for now any qualifying
party in litigation with the government shall be given reasonable fees (not to exceed $75/hour), unless the position of the government was substantially justified or if circumstances make the award unjust. The Act was passed on October 1, 1980, and applies to civil actions "which are pending on, or commenced on or after Oct. 1, 1981." Pub.L. 96-481, § 202, 94 Stat. 2325 (1980) (codified at 5 U.S.C. § 504 note).
The Act was enacted as a part of Congress' concern that the heavy cost of litigation against the government was having disastrous consequences on small businesses. See 126 Cong.Rec. H10,215-31 (daily ed. October 1, 1980) (remarks of Reps. Kastenmeier, Smith, Moakley, McDade, Heckler). The Act was added as a floor amendment to the Senate version of amendments to the Small Business Act. See 126 Cong.Rec. S13,686 (daily ed. Sept. 26, 1980). A similar bill had been reported out of the House Judiciary Committee on the previous day. At conference, the provisions of the Senate amendment were kept intact. See Conference Report, supra, at 21, reprinted in  U.S.Code Cong. & Ad.News 5010.
1. The Propriety of a Fee Award.
Under the Act a party may recover fees from the United States if the requirements of either 28 U.S.C. § 2412(b) or 28 U.S.C. § 2412(d) are met. Because the plaintiffs qualify for fees under subsection (d), the Court need not address the question whether this case has created a "common fund" or "common benefit" under subsection (b).
As a threshold matter, an applicant for attorneys' fees must meet the net worth limitations set up by the Act. 28 U.S.C. § 2412(d)(2)(B). Plaintiffs have asserted and defendants do not dispute that Globe Book Shops and Alexander Roesell fulfill those requirements. See Affidavit of Alexander S. Roesell, Plaintiffs' Application for Attorneys' Fees, Attachment 3.
Under subsection (d) of the statute no fees will be awarded if the government shows that its position was substantially justified or that special circumstances make the award unjust. The test of whether the government was substantially justified is "essentially one of reasonableness." House Report, supra, at 10-11, reprinted in  U.S.Code Cong. & Ad.News 4989. Defendants have not carried this burden. They claim that in the Globe cases the government "has been breaking new ground" as to the authority of the Bank Board to lease out commercial space. Nonetheless, the terms of the leases underlying this litigation were clearly unreasonable
and it is this "governmental action" against which the propriety of an award of fees is measured. Indeed, this seems to be precisely the kind of case Congress had in mind when it passed the Act.
The Act covers civil actions "which are pending on, or commenced on or after Oct. 1, 1981." Summary judgment in this case was given for Globe, Inc. on October 15, 1981; thus the case clearly was pending on the date that the statute went into effect. The central question before the Court, then, is whether plaintiffs are entitled to fees and expenses incurred before October 1, 1981.
Neither the statute nor the legislative history specifically addresses this question. However, both the Conference Report, supra, at 22, reprinted in  U.S.Code Cong. & Ad.News 5011, and the House Report on the similar bill upon which the Senate floor amendment was patterned, House Report, supra, 11, reprinted in  U.S.Code Cong. & Ad.News 4990, make specific reference to Bradley v. School Board of Richmond, 416 U.S. 696, 94 S. Ct. 2006, 40 L. Ed. 2d 476 (1975), as an example of the kind of case meant to be covered by the Act. In that case, plaintiffs were awarded attorneys' fees even though the statutory authorization for fees was not enacted until the suit was on appeal. The reference to Bradley indicates that, in cases such as the present one, fees should be awarded retroactively.
The two district courts that have already addressed this question have held that the Act does operate retroactively to encompass fees incurred prior to October 1, 1981. In Berman v. Schweiker, 531 F. Supp. 1149 (N.D.Ill.1982), the Court awarded fees in a case for which judgment had been entered on September 2, 1981. The Court reasoned that, because the appeal period had not run when the Act took effect, the case was still pending. Thus, in Berman, all fees awarded were incurred before the effective date of the Act. Similarly, Judge Penn of this Court in Photo Data v. Sawyer, 533 F. Supp. 348 (1982), awarded fees for work done prior to October 1, 1981 because
nothing in the legislative history suggests that it should be interpreted to apply only to that part of a case pending on October 1, 1981 that occurs on or after that date. Moreover, construing the Act to bifurcate cases on October 1, 1981 would eschew the purpose of the Act to provide financial assistance to those litigants who would not ordinarily be able to contest unreasonable government action, as it would diminish their recovery and thereby remove the incentive to sue . . . .