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AMERICAN ACADEMY OF PEDIATRICS v. HECKLER

February 3, 1984

AMERICAN ACADEMY OF PEDIATRICS, ET AL., Plaintiffs,
v.
MARGARET M. HECKLER, Secretary, Department of Health and Human Services, Defendant



The opinion of the court was delivered by: GESELL

 Plaintiffs seek an award of attorney's fees under the Equal Access to Justice Act (EAJA), 28 U.S.C. § 2412 (1980), following a successful challenge to the legality of an interim final rule promulgated by the Secretary of Health and Human Services (the Secretary) relating to medical treatment of severely impaired infants. On April 14, 1983, this Court entered an Order and Declaration striking down the challenged rule and stating that "applications for attorney's fees and/or costs may be filed within 30 days of the time that this Order and Declaration becomes final." Petitions for stay of the Order and Declaration were denied by this Court and by the United States Court of Appeals, and an appeal was immediately taken. On August 4, 1983, the Secretary voluntarily dismissed the appeal. Within thirty days thereafter plaintiffs filed their applications for fees and expenses, which have now been fully briefed.

 In opposing the applications the Secretary argues that they are time-barred by 28 U.S.C. § 2412(d)(1)(B) of the EAJA, which states in part:

 
A party seeking an award of fees and other expenses shall, within thirty days of final judgment in the action, submit to the court an application for fees and other expenses which shows that the party is a prevailing party and is eligible to receive an award . . . . [Emphasis added].

 The Secretary takes the position that the "final judgment in the action," as that term is used in the EAJA, was this Court's decision of April 14. Plaintiffs disagree, arguing that "final judgment in the action" refers to the final resolution of the case, which occurred when the Secretary dismissed her appeal on August 4.

 After considering the EAJA "as a whole, taking all of its provisions and reading them in the context of the legal fabric to which they are to be applied," United States v. 329.73 Acres of Land, 704 F.2d 800, 819 (5th Cir. 1983) (en banc), the Court concludes that plaintiff's interpretation of § 2412(d)(1)(B) is correct. Several factors support this result. First and foremost, the Act contemplates that in the normal course of events award of attorney's fees will be made after completion of trial and appellate consideration of the merits. *fn1" In passing on the issue of fees, the Court must determine, for example, whether plaintiff is a "prevailing party" and whether the government's litigation position is "substantially justified." The fate of a case on appeal may well influence or determine the Court's findings on these issues. *fn2" If fees were to be awarded prior to appeal "the ultimately successful party might end up having subsidized a large segment of the losing party's suit against him." Grubbs v. Butz, 179 U.S. App. D.C. 18, 548 F.2d 973, 976 (D.C. Cir. 1976).

 Reading the Act to require that fee applications be made within 30 days of the District Court's final decision, and then postponing consideration of the fee request until after the appellate process is completed, would also lead to a result inconsistent with the purposes of the Act. Under this approach, a plaintiff who prevailed in the District Court would have wasted the effort expended on the fees petition (as well as the efforts of the government in responding) if it then lost on appeal. Absent any showing that Congress intended to mandate such a burdensome and inefficient procedure, the Court is reluctant to conclude that the statute requires it.

 The legislative history of the Act, while sparse on the point at issue, also supports plaintiffs' view. In discussing when interim fees may be awarded, the House Report states:

 
In cases that are litigated to conclusion, a party may be deemed "prevailing" for purposes of a fee award in a civil action prior to the losing party having exhausted its final appeal. [Emphasis added.]

 H.R. Rep. No. 96-1418 at 11 (1980). This permissive language clearly suggests that consideration of attorney's fees petitions after "the losing party [has] exhausted its final appeal" is appropriate.

 Finally, plaintiffs' interpretation of the statute is consistent with the view taken by the Department of Justice in its own EAJA Manual.

 
Adjudication of attorney fees liability prior to exhaustion of all appeals may waste valuable judicial resources because the very judicial determination upon which a plaintiff must rely to establish its claim to attorney fees cannot be finally determined until the completion of appellate review of the district court judgment entered in the case.

 U.S. Department of Justice, Award of Attorney Fees and Other Expenses in Judicial Proceedings Under the Equal Access to Justice Act 30-31.

 Accordingly, the Court holds that § 2412(d)(1)(B) of the EAJA allows a prevailing party to file an application for attorney's fees within 30 days of final disposition of a case on the merits. Accord, McDonald v. Schweiker, 726 F.2d 311 (4th Cir. ...


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