Jeroski v. Federal Mine Safety & Health Review Commission , 697 F.3d 651 ( 2012 )

In the
United States Court of Appeals
For the Seventh Circuit
No. 11-3687
E DWARD JEROSKI, doing business as
USA C LEANING S ERVICE
AND B UILDING M AINTENANCE,
Petitioner,
v.
F EDERAL M INE S AFETY AND H EALTH
R EVIEW C OMMISSION and
U.S. S ECRETARY OF L ABOR,
Respondents.
Petition to Review Order of
Federal Mine Safety and Health Review Commission.
A RGUED S EPTEMBER 14, 2012—D ECIDED O CTOBER 11, 2012
Before P OSNER, R OVNER, and W ILLIAMS, Circuit Judges.
P OSNER, Circuit Judge. We are asked to reverse an
administrative denial of an application for an award of
attorneys’ fees under the Equal Access to Justice Act,
5 U.S.C. § 504. The Act provides, so far as bears on this
case, that “a prevailing party” shall be awarded “fees and
2 No. 11-3687
other expenses” incurred by it in an “adversary adjudi-
cation” before a federal agency unless “the position
of the agency was substantially justified.” § 504(a)(1).
The parallel provision applicable to a judicial (as dis-
tinct from an administrative) adjudication, 28 U.S.C.
§ 2412(a)(1), is not involved.
The petitioner, USA Cleaning, is a proprietorship with
fewer than 10 employees. (A proprietorship is not a
legal entity, but merely a name under which the owner,
who is the real party in interest, does business. York Group,
Inc. v. Wuxi Taihu Tractor Co., 632 F.3d 399, 403 (7th Cir.
2011); Bartlett v. Heibl, 128 F.3d 497, 500 (7th Cir. 1997);
see 5 U.S.C. § 504(b)(1)(B). We have reformed the
caption accordingly, but will continue to refer to USA
Cleaning as the petitioner, as the parties do.) It provides
janitorial services, mainly to a cement plant in Logansport,
Indiana owned by Essroc Cement Corporation. But after
an inspection of the plant by an inspector from the
Federal Mine Safety and Health Administration, the
administration ordered the three janitors whom
the inspector had noticed doing cleaning work in the
plant to undergo 24 hours of safety training. The mine-
safety administration also issued what is called a “with-
drawal order,” forbidding USA Cleaning to allow these
janitors to reenter the plant until they completed
the training. 30 U.S.C. § 814(g)(1).
A cement plant is not a mine—cement is made, not
mined—and obviously people who clean a cement plant
are not “miners” in the ordinary sense of the word. But
federal mine-safety regulations, the validity of which is
No. 11-3687 3
not challenged, define a “miner” as anyone who “works
at a mine and who is engaged in mining operations,” and
define “mining operations” to include “maintenance and
repair of mining equipment.” 30 C.F.R. §§ 46.2(g)(1)(i),
46.2(h). And “mine” includes any “facilit[y] . . . used in . . .
the milling of [extracted] minerals.” 30 U.S.C. § 802(h)(1).
The minerals from which cement is made are mined, and
the mined minerals are then milled in plants such as
Essroc’s. The mine-safety administration was concerned
that by working in the plant, and specifically in plant
buildings in which cement was being milled, the janitors
were being exposed to safety hazards similar to those
of the workers who do the actual milling, and so were
“miners.” That they were not employees of Essroc,
but of an independent contractor, is acknowledged to be
irrelevant.
Still, to regard them as having been engaged in milling,
and specifically in “maintenance and repair” of the equip-
ment Essroc uses in milling, is a considerable stretch;
and we’ll assume, though without having to decide, that
it’s a stretch that breaks the elastic band that is an
agency’s interpretation of its own regulations. No mat-
ter. The petitioner must lose even if the mine-safety
administration exceeded its authority in ordering the
safety training of the janitors and, pending completion
of that training, barring them from the plant.
When Essroc learned of the withdrawal order, it
offered to provide legal assistance to USA Cleaning at
no cost to the tiny company, and within a week the
lawyers ran up a bill of $22,000. The lawyers initiated on
4 No. 11-3687
the company’s behalf a proceeding before the Federal
Mine Safety and Health Review Commission to vacate
the order—a “contest proceeding”—on the ground that
the janitors were not engaged in mining operations. A
week after issuing the withdrawal order the mine-
safety administration vacated it, though without acknowl-
edging error in having issued it. The review commis-
sion followed suit by dismissing, without prejudice,
USA Cleaning’s contest proceeding. Though it had in-
curred no legal expense as a consequence of the order,
USA Cleaning asked the mine-safety administration to
award it the $22,000 in legal fees that Essroc had paid
the lawyers to labor to get the order lifted. The admin-
istration refused, precipitating an appeal by USA
Cleaning first to the review commission, which upheld
the refusal, and now to us.
An initial peculiarity about the petition for review in
our court (besides the misnaming of the petitioner)
should be noted. Not the Federal Mine Safety and Health
Administration, but a separate body, the Federal Mine
Safety and Health Review Commission, is named as
the respondent along with the Secretary of Labor. The
review commission is the equivalent of a court. It did not
issue the order challenged by the petitioner, but merely
upheld the refusal of the mine-safety administration—the
agency that had by issuing the order “conduct[ed] an
adversary adjudication” with the petitioner—to award
attorneys’ fees. The administration is an agency in the
Department of Labor, so the Secretary of Labor is a
proper respondent—but the only proper respondent,
so we dismiss the review commission.
No. 11-3687 5
The Secretary argues that USA Cleaning was not a
“prevailing party” in the aborted agency proceeding
because the mine-safety administration merely with-
drew its withdrawal order—it can reissue it if it wants
to. No legal right of USA Cleaning has yet been
vindicated, no order entered that would establish the
right of the janitors to do cleaning in Essroc’s plant
without 24 hours of safety training. All eight courts of
appeals to have considered the meaning of “prevailing
party” in the Equal Access to Justice Act would have
denied that status to USA Cleaning. See, e.g., Green Avia-
tion Management Co. v. FAA, 676 F.3d 200, 202-03
(D.C. Cir. 2012); Turner v. National Transportation Safety
Board, 608 F.3d 12, 16 (D.C. Cir. 2010); United States
v. Milner, 583 F.3d 1174, 1196-97 (9th Cir. 2009); Aronov
v. Napolitano, 562 F.3d 84, 89 (1st Cir. 2009) (en banc);
Ma v. Chertoff, 547 F.3d 342 (2d Cir. 2008) (per curiam);
Morillo-Cedron v. District Director for U.S. Citizenship & Im-
migration Services, 452 F.3d 1254, 1257-58 (11th Cir.
2006); Goldstein v. Moatz, 445 F.3d 747, 751 (4th Cir. 2006);
Marshall v. Commissioner of Social Security, 444 F.3d 837,
840 (6th Cir. 2006); Thomas v. National Science Foundation,
330 F.3d 486, 492 n. 1 (D.C. Cir. 2003); Brickwood Contractors
v. United States, 288 F.3d 1371, 1379 (Fed. Cir. 2002).
But we are not one of the eight circuits; this is our first
brush with the issue. And except for Turner and Green
Aviation, the decisions we’ve just cited concern the
section of the Equal Access to Justice Act that deals with
judicial rather than administrative adjudication. But
there is no material difference between the two sections,
at least so far as relates to the meaning of “prevailing
6 No. 11-3687
party.” And while not all the decisions involve voluntary
dismissals, all hold that a “prevailing party” is a party
that obtains relief which determines or affects its legal
status, as would have happened in this case had the
review commission, rather than dismissing the contest
proceeding without prejudice, ruled that USA Cleaning’s
employees were not “miners” within the meaning of
the mine-safety act and the regulations under it.
Yet are those decisions sound? All rely on the
Supreme Court’s decision in Buckhannon Board & Care
Home, Inc. v. West Virginia Dep’t of Health & Human Re-
sources, 532 U.S. 598 (2001), a case involving not the
Equal Access to Justice Act but the Fair Housing Amend-
ments Act of 1988 and the Americans with Disabilities
Act. Both of those acts provide that “the court, in its
discretion, may allow the prevailing party . . . a reasonable
attorney’s fee.” 42 U.S.C. §§ 12205, 3613(c)(2). Buckhannon
calls “prevailing party” a “legal term of art” designating
a party that obtains a judgment or other relief from a
court; defines “judgment” to mean an enforceable judg-
ment, which a dismissal without prejudice is not; finds
the legislative history too inconclusive to warrant the
further departure sought by Buckhannon from the “Amer-
ican Rule” that each party to a lawsuit bears its own
litigation expenses (as distinct from England’s “loser
pays” rule); and points out that to allow fee shifting in
cases that a court had dismissed at the government’s
behest, without prejudice, would discourage such dis-
missals and thus might actually disserve the interests
of persons who get into legal tangles with the government.
No. 11-3687 7
The key term in the Equal Access to Justice Act is
“prevailing party,” and is the identical term that was the
Supreme Court’s focus in Buckhannon. Other terms in
the Act differ from terms in the fee-shifting provisions
of the housing and disabilities statutes, however, and
USA Cleaning argues for example that the requirement
imposed by the Equal Access to Justice Act but not by
the statutes at issue in Buckhannon that a party seeking
an award of fees show no “substantial justification” for
the government’s litigating position obviates the
concern expressed in Buckhannon with allowing an at-
torneys’ fee award to a plaintiff who “simply [had filed]
a nonfrivolous but nonetheless potentially meritless
lawsuit.” 532 U.S. at 606. But the difference is minor,
since those statutes confer discretionary authority to
deny an award of fees even to a prevailing party. Anyway
USA Cleaning was not really a plaintiff. The contest
proceeding that it initiated was an appeal from the mine-
safety administration’s orders.
The legislative history of the Equal Access to Justice
Act, however, favors the petitioner’s position. The con-
ference report on the original Act (enacted in 1980, with
an expiration date of 1984) was explicit that a prevailing
party can be a defendant who obtained a voluntary dis-
missal of the government’s suit, H.R. Rep. No. 1431, 96th
Cong., 2d Sess. 21 (1980), as were the House and Senate
reports on reenacting the Act. H.R. Rep. No. 120, 99th
Cong., 1st Sess. 13 (1985); S. Rep. No. 586, 98th Cong., 2d
Sess. 10-11 (1984). But similar language appeared in the
legislative history of the fee-shifting provisions at issue
in Buckhannon, and the Court was unmoved by it. 532
8 No. 11-3687
U.S. at 607-08. And the legislative history of the Equal
Access to Justice Act is not crystal-clear so far as relates
to this case, because it does not foreclose the possibility
that a voluntary dismissal must be with prejudice to
entitle the defendant to prevailing-party status.
Still, one might as an original matter question the
Court’s reasoning in Buckhannon and thus not want to
apply it to a different statute from the two statutes in
that case. The fact that “prevailing party” is a “legal term
of art” doesn’t tell us whether it’s also a “legislative”
term of art—a term carrying a special meaning for legis-
lators—which is all that matters. Nor is it apparent
that Congress is so committed to the “American Rule”
that it would deny fee shifting to anyone who was not
a “prevailing party” in the Black’s law dictionary
sense that the Court thought made “prevailing party”
a legal term of art. 532 U.S. at 603. The Court may not
have been realistic about the legislative process in as-
suming that legislators think like judges, though on
the other hand reliance on legislative history, even
on committee reports as distinct from stray comments
by individual legislators, can be unrealistic too. One
never knows how many legislators read committee
reports, or if they do whether they agree with them or
just with the statutory text. Inferring collective intent
is often a hazardous enterprise.
But we needn’t explore these byways. The Court’s
approach in Buckhannon supports the position that
eight circuits have taken with respect to the meaning of
“prevailing party,” and we bow to this heavy weight
of authority.
No. 11-3687 9
For completeness we note (without having to decide
the validity of) an independent ground urged by the
government for finding USA Cleaning ineligible for an
award of attorneys’ fees. To be a prevailing party under
the Equal Access to Justice Act a business must
have a net worth of less than $7 million. 5 U.S.C.
§ 504(b)(1)(B)(ii). USA Cleaning satisfies this criterion
but Essroc does not—and it is Essroc that paid the
fees, doubtless because it does not welcome a
broad construal of the Federal Mine Safety and Health
Administration’s authority to require costly training
of Essroc’s employees, and wants to head off the adminis-
tration at the pass as it were. The real contenders in
this litigation are Essroc and the mine-safety administra-
tion; USA Cleaning is like the dormouse in Alice and
Wonderland sandwiched in between the March Hare and
the Mad Hatter, or like “the baser nature [that] comes /
Between the pass and fell incensèd points / Of mighty
opposites” in Hamlet (Act V, sc. 2). It is a bit player.
Were this simply a case in which a firm that did not
qualify for relief under the Equal Access to Justice Act
had paid the fees of a firm that did qualify and was
now claiming reimbursement from the government, the
claim would fail. Owner-Operator Independent Drivers
Ass’n, Inc. v. Federal Motor Carrier Safety Administration,
675 F.3d 1036, 1039 (7th Cir. 2012). But there is more
to this case, requiring recognition that “the critical
concern underlying the common precondition that the
fee claimant must have incurred the expense is the need
to assure that the employee would not have been
deterred from pursuing the suit had the EAJA not ex-
10 No. 11-3687
isted.” Id. at 1040; see also Sullivan v. Hudson, 490 U.S.
877, 883-84 (1989).
So were Essroc an insurance company picking up the
tab for USA Cleaning’s legal fees pursuant to an
insurance contract, the fact that the insurance company’s
net worth exceeded $7 million would not be a bar. Owner-
Operator Independent Drivers Ass’n, Inc. v. Federal Motor
Carrier Safety Administration, supra, 675 F.3d at 1039. Not
only because of the insurance premiums, whereby in
effect the insured pays legal fees (more precisely the
actuarial expectation of such fees, the calculation on
which the premiums for liability insurance are based),
but also because fee shifting lowers the cost of insurance
by enabling the insurance company to recoup the cost
of the insured’s legal fees that the company pays. In
both respects insurance increases the likelihood that
small businesses will have the resources and there-
fore incentive to challenge unlawful agency actions.
So treating insurance as a bar to reimbursement of fees
under the Equal Access to Justice Act would operate as
the deterrent deplored in our quotation from the Owner-
Operator opinion.
Another example of where payment of fees by an in-
eligible third party would not be a bar to reimbursement
under the Act is where a lawyer offering his services pro
bono, or some other benefactor, picks up the tab for a
small firm that cannot afford to hire a lawyer. In such
a case fee shifting lowers the cost of providing pro
bono legal services.
No. 11-3687 11
Closer to the present case is one in which the act that
precipitates the unlawful agency action is the act of an
employee. The employer will usually be the defendant
and bear all legal costs, so reimbursement of its fees
could not be justified as necessary to motivate the em-
ployee to fight the agency’s action. The wrinkle in this
case, however, is that the “employee”—who is actually
not an employee but an independent contractor, a dis-
tinction of no significance, however, to the Equal Access
to Justice Act—was the target of the agency action,
rather than the principal, Essroc. USA Cleaning lacked
the wherewithal to hire pricey lawyers to fight the mine-
safety administration. Had Essroc, the principal, not
financed the litigation, USA Cleaning would probably
have been deterred from trying to resist the training
and withdrawal orders.
But we give no weight to USA Cleaning’s observation
that it has no formal agreement to reimburse Essroc
should it obtain an award of attorneys’ fees. In the
unlikely (unthinkable, really) event that USA Cleaning
decided to pocket an award of fees that had been paid
by Essroc rather than by it, how could that be thought
reimbursement of attorneys’ fees rather than a windfall?
We note in closing, with disapproval, USA Cleaning’s
denunciation, in its reply brief, of the Secretary of Labor’s
brief as “vitriolic.” It’s an excellent brief, and not in the
least vitriolic. Moreover, since the merits of the admin-
istrative action that the mine-safety administration aban-
doned have not been determined, USA Cleaning (which
is to say the lawyers hired by Essroc) is not justified
12 No. 11-3687
in calling the administration’s withdrawn order “admin-
istrative bullying,” or in claiming that the Secretary of
Labor “admits to targeting a tiny, sole proprietorship by
depriving it of one-third of its revenue,” or that “when
challenged, the Secretary positively bristles at the
notion that she should have to defend her actions in
any forum,” or that she is trying to “change the words
Congress chose to enact,” or that she is guilty of “hubris,”
like Oedipus. The reply brief is bumptious, hyperbolic—
even vitriolic—an angry Essroc speaking through
Essroc’s lawyers. We realize there’s no love lost between
mine operators and their federal regulators, but we
expect the lawyers to be temperate.
The petition for review is
D ENIED.
10-11-12