Athey v. United States ( 2021 )

Case: 20-2291 Document: 32 Page: 1 Filed: 09/21/2021
NOTE: This disposition is nonprecedential.
United States Court of Appeals
for the Federal Circuit
______________________
ROBERT M. ATHEY, MICHAEL R. CLAYTON,
THELMA R. CURRY, RICHARD S. DROSKE,
RALPH L. FULLWOOD, PAUL D. ISING, CHARLES
A. MILBRANDT, TROY E. PAGE,
Plaintiffs-Appellants
v.
UNITED STATES,
Defendant-Appellee
______________________
2020-2291
______________________
Appeal from the United States Court of Federal Claims
in No. 1:99-cv-02051-DAT, Judge David A. Tapp.
______________________
Decided: September 21, 2021
______________________
IRA MARK LECHNER, Ira M. Lechner, Esq., Washington,
DC, argued for plaintiffs-appellants.
BRYAN MICHAEL BYRD, Commercial Litigation Branch,
Civil Division, United States Department of Justice, Wash-
ington, DC, argued for defendant-appellee. Also repre-
sented by REGINALD THOMAS BLADES, JR., JEFFREY B.
CLARK, ROBERT EDWARD KIRSCHMAN, JR.
Case: 20-2291 Document: 32 Page: 2 Filed: 09/21/2021
2 ATHEY v. US
______________________
Before REYNA, SCHALL, and STOLL, Circuit Judges.
STOLL, Circuit Judge.
Plaintiffs appeal the United States Court of Federal
Claims’ denial of their motion for attorney fees based on
two provisions of the Equal Access to Justice Act, 28 U.S.C.
§ 2412(b) and (d). Plaintiffs’ first basis for fees under
§ 2412(b) rests on an erroneous application of the common
law “common fund” doctrine. We therefore affirm the trial
court’s denial of fees on this basis. Regarding Plaintiffs’
second basis for fees under § 2412(d), the trial court
weighed the Government’s conduct and found the Govern-
ment’s overall position to have been “substantially justi-
fied” and accordingly denied attorney fees as a result. Our
review of this issue on appeal is highly deferential. Be-
cause we discern no abuse of discretion in the trial court’s
determination, we affirm on this basis as well.
BACKGROUND
This appeal originated from a class action lawsuit in
the United States Court of Federal Claims filed in
April 1999. Compl., Archuleta v. United States,
No. 99-205C, ECF No. 1 (Fed. Cl. Apr. 7, 1999). The plain-
tiffs in Archuleta alleged that several federal agencies had
underpaid the former-employee plaintiffs for their unused
leave, which is typically paid as a lump sum at the end of
their employment. Among other complaints, the Archuleta
plaintiffs alleged that the agencies had improperly failed to
include Cost of Living Adjustments (COLAs) and locality
pay increases in their payments.
Five months after the complaint was filed, the Office of
Personnel Management finalized a regulation making
clear that federal agencies should include COLAs and other
applicable pay in the lump-sum payment. 5 C.F.R.
§ 550.1201–1207. After this regulation was promulgated,
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ATHEY v. US 3
seventeen of the eighteen government agencies involved
settled with the former-employee plaintiffs, agreeing to the
COLAs and locality increases. The United States Depart-
ment of Veterans Affairs (VA) was the lone holdout. The
former VA employees who were plaintiffs in Archuleta were
severed into a new case at the Court of Federal Claims,
thus becoming the Athey plaintiffs (“Plaintiffs”). Am.
Compl., Athey v. United States, No. 99-2051C, ECF No. 2
(Fed. Cl. June 21, 2006).
The Athey litigation then proceeded for several years.
A few milestones are described below. In 2007, the Court
of Federal Claims granted the Government’s motion to dis-
miss from the case Plaintiffs’ claims to night premium pay,
weekend additional pay, and Sunday pay after October 1,
1997. Athey v. United States (Athey I), 78 Fed. Cl. 157,
161–64 (2007). The trial court also excluded all registered
nurses from the class. Id. Several years later, in 2015, the
trial court granted the Government’s motion for summary
judgment that Plaintiffs were not entitled to interest under
the Back Pay Act, 5 U.S.C. § 5596. Athey v. United States
(Athey II), 123 Fed. Cl. 42 (2015). Finally, in 2017, the par-
ties reached a settlement in which the Government agreed
to pay the lump-sum adjustments owed due to the COLAs
and locality increases for the 3,231 former VA employees
in Plaintiffs’ class.
Plaintiffs then appealed the trial court’s grant of the
Government’s motion to dismiss with respect to Plaintiffs’
claims for evening and weekend pay as well as the court’s
granting of summary judgment that Plaintiffs were not en-
titled to interest under the Back Pay Act. We affirmed
those determinations. Athey v. United States (Athey III),
908 F.3d 696 (Fed. Cir. 2018).
Thereafter, on January 13, 2020, Plaintiffs sought fees
at the trial court pursuant to the Equal Access to Justice
Act (EAJA), which allows for costs and attorney fees to be
awarded in suits against the United States in certain
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4 ATHEY v. US
situations. Plaintiffs specifically sought fees under
28 U.S.C. § 2412(b) and (d)(1)(A). Sections 2412(b) and
(d)(1)(A) state:
(b) Unless expressly prohibited by statute, a court
may award reasonable fees and expenses of attor-
neys, in addition to the costs which may be
awarded pursuant to subsection (a), to the prevail-
ing party in any civil action brought by or against
the United States or any agency or any official of
the United States acting in his or her official capac-
ity in any court having jurisdiction of such action.
The United States shall be liable for such fees and
expenses to the same extent that any other party
would be liable under the common law or under the
terms of any statute which specifically provides for
such an award.
...
(A) Except as otherwise specifically provided by
statute, a court shall award to a prevailing party
other than the United States fees and other ex-
penses, in addition to any costs awarded pursuant
to subsection (a), incurred by that party in any civil
action (other than cases sounding in tort), includ-
ing proceedings for judicial review of agency action,
brought by or against the United States in any
court having jurisdiction of that action, unless the
court finds that the position of the United States
was substantially justified or that special circum-
stances make an award unjust.
Section 2412(b), (d)(1)(A) (emphases added).
Section 2412(b) was intended to subject the United
States to the same common law or statutory exceptions to
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ATHEY v. US 5
the American Rule of attorney fees 1 that other private par-
ties would be subject to, such as the exceptions of “bad
faith,” “common fund,” and “common benefit.” See Gavette
v. OPM, 808 F.2d 1456, 1460 (Fed. Cir. 1986). Before the
trial court, Plaintiffs argued they were entitled to fees un-
der § 2412(b) based on the common law exceptions of “com-
mon fund” and “bad faith.” 2 They also argued under
§ 2412(d)(1)(A) that they were entitled to fees because the
position of the United States was not substantially justi-
fied.
The trial court denied Plaintiffs’ motion for fees. Athey
v. United States (Athey IV), 149 Fed. Cl. 497 (2020). With
regard to § 2412(b), the trial court determined that the
“common fund” exception to the American Rule allows a
plaintiff’s counsel to recover its fee from the common fund
awarded to a plaintiffs class in certain circumstances, but
it does not impose additional fees on a defendant. Id.
at 508–09. Accordingly, the trial court denied Plaintiffs’
attempts to extract an additional award from the Govern-
ment in a way not permitted by the “common fund” doc-
trine. Id. The trial court also denied Plaintiffs’ motion for
fees under § 2412(d) because, in the trial court’s judgment,
the overall position of the United States was substantially
justified. Id. at 510–13.
Plaintiffs appeal. We have jurisdiction under 28 U.S.C.
§ 1295(a)(3).
DISCUSSION
We review decisions of the Court of Federal Claims re-
garding attorney fees for an abuse of discretion. Haggart
v. Woodley, 809 F.3d 1336, 1354 (Fed. Cir. 2016); see also
1 The American Rule is that each party is responsi-
ble for its own attorney fees.
2 Plaintiffs do not appeal the trial court’s denial of
fees on the “bad faith” basis.
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6 ATHEY v. US
Chiu v. United States, 948 F.2d 711, 713 (Fed. Cir. 1991).
Errors of law in the determination of attorney fees, how-
ever, are reviewed de novo. Haggart, 809 F.3d at 1354.
I
We begin with Plaintiffs’ request for attorney fees un-
der EAJA § 2412(b). The trial court denied Plaintiffs’ mo-
tion for fees because the common-law theory Plaintiffs
invoked for applying § 2412(b)—the common fund excep-
tion to the American Rule—does not apply to impose “an
additional award” against a defendant, but instead allows
for fees and expenses to be recovered from the common
fund. Athey IV, 149 Fed. Cl. at 508–09. We agree that the
common fund doctrine does not apply here in the manner
proposed by Plaintiffs, and therefore we affirm the trial
court’s denial of fees under § 2412(b).
According to the plain language of the statutory text,
§ 2412(b) is a fee-shifting statute that applies only in cer-
tain, specified conditions—namely, “under the common law
or under the terms of any statute which specifically pro-
vides for such an award.” This provision “simply reflects
the belief that, at a minimum, the United States should be
held to the same standards in litigating as private parties.”
Gavette, 808 F.2d at 1466 (emphasis omitted) (quoting H.R.
Rep. No. 1418, 96th Cong., 2d Sess. 9, reprinted in 1980
U.S. Code Cong. & Ad. News 4984, 4987); see also M.A.
Mortenson Co. v. United States, 996 F.2d 1177, 1181 (Fed.
Cir. 1993) (citing S. Rep. No. 253, 96th Cong., 1st Sess. 4
(Star Print 1979)).
In applying for fees at the trial court, Plaintiffs them-
selves relied on the “common fund” common law exception
to the American Rule as providing the basis for fees under
§ 2412(b). As described below, however, the common fund
exception does not apply to impose fees on defendants, as
the trial court correctly held.
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ATHEY v. US 7
We discussed the common fund doctrine at some length
in Knight v. United States, 982 F.2d 1573 (Fed. Cir. 1993).
In Knight, plaintiffs’ attorneys made a claim for attorney
fees against the defendant Government under a common
fund theory. We rejected that claim, holding that plaintiffs’
attorneys were improperly applying the common fund doc-
trine because that theory “does not impose additional lia-
bility on the losing defendant,” and instead “is essentially
a suit for contribution from third party beneficiaries for ex-
penses actually incurred.” Id. at 1579–80. The fundamen-
tal basis for the exception is unjust enrichment—that a
party who benefits from a plaintiff’s attorney’s advocacy in
recovering an award should also contribute to that attor-
ney’s fees. Id. at 1580; see also Haggart, 809 F.3d at 1352.
Thus, we agree with the Court of Federal Claims’ determi-
nation that the common fund exception does not apply in
the manner asserted by Plaintiffs—namely to impose addi-
tional liability on the United States as a defendant.
Athey IV, 149 Fed. Cl. at 509.
On appeal, Plaintiffs interpret § 2412(b) as a fee-shift-
ing statute that operates independently of the common law
and the “common fund” doctrine. See, e.g., Appellants’
Br. 22 (arguing the “operative mechanism created by
[§ 2412(b)] is to ‘shift’ liability for payment of reasonable
attorney fees and related expenses to ‘the United States’
rather than from the ‘common fund’”), 24–27 (arguing that
the trial court erroneously applied the “common fund doc-
trine” in lieu of the “fee shifting” statute of § 2412(b)).
Plaintiffs propose that their interpretation is supported by
the legislative history and precedent interpreting § 2412(b)
and other fee-shifting statutes. We disagree with Plain-
tiffs’ interpretation.
First, Plaintiffs’ theory that § 2412(b) stands alone to
supplant the common law cannot be squared with the stat-
ute’s plain language, which requires a predicate basis for
shifting fees in either “the common law or under the terms
of any statute which specifically provides for such an
Case: 20-2291 Document: 32 Page: 8 Filed: 09/21/2021
8 ATHEY v. US
award.” 3 See Gavette, 808 F.2d at 1466; M.A. Mortenson,
996 F.2d at 1181. Indeed, it was Plaintiffs themselves that
predicated their § 2412(b) argument on the common fund
common law exception to the American Rule. J.A. 2580.
Thus, the trial court’s consideration of the applicability of
this common law theory was not erroneous.
Second, the legislative history does not support Plain-
tiffs’ interpretation. On appeal, Plaintiffs cite broad state-
ments describing the purpose of the EAJA statutory
scheme as removing a deterrent to initiating litigation
against or defending litigation initiated by the Government
by “providing in specified situations for an award of attor-
ney fees and other costs.” Appellants’ Br. 22–24; see also
id. at 21 n.5. In other words, EAJA was intended to allevi-
ate a potential litigant’s concern that they would be mone-
tarily worse off even if they won an award or mounted a
successful defense against the Government. This general
purpose, however, cannot overcome the plain language of
the particular statute that Plaintiffs argue entitles them to
fees—§ 2412(b)—which only applies in specified situations.
Here, that situation is where “any other party would be
3 To the extent that Plaintiffs are arguing the por-
tion of § 2412(b) reciting a “statute which specifically pro-
vides for such an award” is actually referring to § 2412(b)
itself as a fee-shifting statute, we reject this reading. If
§ 2412(b) were applied in this self-referential manner, the
Government would always be liable for fees under this sec-
tion and the section would no longer be limited to “common
law . . . or statute,” rendering the second sentence of
§ 2412(b) meaningless. See Sharp v. United States,
580 F.3d 1234, 1238 (Fed. Cir. 2009) (applying the statu-
tory cannon that courts “‘give effect, if possible, to every
clause and word of a statute’ and should avoid rendering
any of the statutory text meaningless or as mere surplus-
age” (quoting Duncan v. Walker, 533 U.S. 167, 174 (2001)).
Case: 20-2291 Document: 32 Page: 9 Filed: 09/21/2021
ATHEY v. US 9
liable under the common law.” And because other defend-
ants would not be liable for an additional award of fees un-
der the “common fund” doctrine, neither is the Government
here.
Finally, the precedent relied on by Plaintiffs does not
support their interpretation of § 2412(b). Plaintiffs first
rely on Baker Botts L.L.P. v. ASARCO LLC, 576 U.S. 121(2015), and NantKwest, Inc. v. Iancu, 898 F.3d 1177(Fed. Cir. 2018), for the proposition that § 2412(b) is a fee
shifting statute that trumps the American Rule. Appel-
lants’ Br. 21. Although this is generally true, fee shifting
pursuant to § 2412(b) has clearly-specified common-law
and statutory limits to when it trumps the American Rule.
In contrast, the EAJA fee shifting provision mentioned in
Baker Botts and NantKwest—§ 2412(d)—applies in a much
broader range of circumstances. 4
Plaintiffs also rely on Haggart v. Woodley, 809 F.3d
1336 (Fed. Cir. 2016), but Haggart does not support Plain-
tiffs’ interpretation. In Haggart, we found that a separate
fee-shifting statute—the Uniform Relocation Assistance
and Real Property Acquisition Policies Act of 1970 (URA),
which provides for “reasonable” attorney fees—preempted
an additional recovery under a common fund theory.
809 F.3d at 1354–59. In other words, plaintiffs’ counsel
was seeking, and was granted by the trial court, not only
“reasonable” attorney fees under the URA, but also addi-
tional fees under a “common fund” theory. Based on the
particular fee-shifting statute at issue in Haggart, which
was intended to make plaintiffs whole by shifting litigation
expenses to the Government, we declined plaintiffs’ coun-
sel’s request for additional fees under a common fund the-
ory as it would have “unjustly enriche[d] class counsel at
the expense of class members, a result diametric to the
4 As discussed below, however, even § 2412(d) has
limits on when fee shifting applies.
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10 ATHEY v. US
primary purpose of the common fund doctrine.” Id.
at 1357. Here, Plaintiffs point to no fee-shifting statute
that operates independently from the common law that
would apply, as the URA did in Haggart, but instead point
to § 2412(b), which expressly requires a predicate common
law or statutory basis to award fees.
Because Plaintiffs misapply the predicate common-law
exception upon which Plaintiffs based their § 2412(b) fees
motion, we affirm the trial court’s denial of fees on this ba-
sis.
II
We turn next to Plaintiffs’ request for fees under
§ 2412(d)(1)(A). The trial court denied Plaintiffs’ motion
after determining the Government’s position to have been
“substantially justified.” Athey IV, 149 Fed. Cl. at 510–13.
On appeal, Plaintiffs ask us to reweigh the trial court’s de-
termination, discounting the issues Plaintiffs consider to
have been “minor” or “peripheral” and focusing only on
what Plaintiffs call the “singular ‘position’” of the Govern-
ment—i.e., the position regarding the issues on which
Plaintiffs ultimately prevailed. Appellants’ Br. 32–36. We
decline Plaintiffs’ request to reweigh the trial court’s deter-
mination based on its view of the entire record, a determi-
nation that is reviewed with a significant amount of
deference under the abuse of discretion standard.
When evaluating a claim under § 2412(d), “trial courts
are instructed to look at the entirety of the government’s
conduct and make a judgment call whether the govern-
ment’s overall position had a reasonable basis in both law
and fact.” Chiu, 948 F.2d at 715; see also Pierce v. Under-
wood, 487 U.S. 552, 565 (1988). In making this judgment
call, “the entirety of the conduct of the government is to be
viewed, including the action or inaction by the agency prior
to litigation.” Chiu, 948 F.2d at 715; see also 28 U.S.C.
§ 2412(d)(2)(D) (defining “position of the United States”).
“When a party has prevailed in litigation against the
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ATHEY v. US 11
government, the government bears the burden of establish-
ing that its position was substantially justified.” Doty
v. United States, 71 F.3d 384, 385 (Fed. Cir. 1995), as mod-
ified, 109 F.3d 746 (Fed. Cir. 1997).
Here, the trial court agreed with the Government that
its overall position was substantially justified largely based
on its “string of successes” in paring the case down.
Athey IV, 149 Fed. Cl. at 513. In particular, the trial court
pointed to the Government’s success in defending against
claims made by Plaintiffs to “night premium pay, weekend
additional pay, and Sunday pay after October 1, 1997,”
back pay for “non-General Schedule employees” (i.e.,
nurses), as well as “pre-judgment interest under the Back
Pay Act.” Id. (citing Athey I, 78 Fed. Cl. 157 (granting mo-
tion to dismiss as to those issues)); see also Athey III,
908 F.3d 696 (affirming those issues). The Court of Federal
Claims determined that this “drumbeat of favorable deci-
sions for the United States on multiple key issues . . .
strongly indicates the United States’ position was ‘justified
to a degree that could satisfy a reasonable person.’”
Athey IV, 149 Fed. Cl. at 513 (quoting Pierce, 487 U.S.
at 569). 5 Considering the trial court’s familiarity with the
record before it and the high standard of review applicable
here, we cannot say that the trial court abused its discre-
tion in determining that the issues on which the Govern-
ment won were “key issues”; nor can we say that it abused
its discretion in concluding that these wins were sufficient
to render the Government’s overall position substantially
justified such that fees under § 2412(d) are precluded.
On appeal, Plaintiffs ask us to second guess the trial
court’s weighing of the relative importance of the issues in
determining whether the United States’ position was
5 Plaintiffs do not contest the trial court’s use of the
“justified to a degree that could satisfy a reasonable per-
son” standard.
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12 ATHEY v. US
“substantially justified.” More specifically, Plaintiffs chal-
lenge the trial court’s weighing of the COLA and locality
increases (issues on which Plaintiffs prevailed), on the one
hand, against the night premium pay, weekend pay, Sun-
day pay, and pre-judgment interest issues (issues on which
the Government prevailed), on the other hand. The key
piece of evidence Plaintiffs point to in making this argu-
ment is their expert’s declaration, which estimated mone-
tary values for the various issues and indicated that the
two issues on which Plaintiffs prevailed were much more
valuable than the issues on which the Government pre-
vailed. The expert’s speculation as to the potential mone-
tary values of the issues, even if accurate, cannot
substitute for the trial court’s judgment in weighing those
issues. This required weighing is a highly discretionary
task reserved for the trial court, as we described in Chiu:
This exercise . . . is quintessentially discretionary
in nature. For instance, whether the government
was substantially justified overall where in litiga-
tion it depended on the ground of lack of jurisdic-
tion and a party prevails on a substantive aspect of
the agency’s action which gave rise to the litigation
necessarily involves an apples to oranges compari-
son. It is for the trial court to weigh each position
taken and conclude which way the scale tips, and
as an appellate court we must be wary not to redis-
tribute these weights among different positions un-
less a serious error in judgment has been made.
948 F.2d at 715 n.4.
Here, Plaintiffs identify no such “serious error in judg-
ment” by the trial court and instead simply ask that we as-
sign more weight to the particular issues on which they
prevailed. We exercise our judicial restraint and decline
this invitation.
The trial court also addressed what it discerned to be
“the Class’s primary complaints”: “(1) the delay in
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ATHEY v. US 13
obtaining relief for class members and (2) the failure of the
United States to correct the procedures which led to class
members failing to receive compensation to which they
were entitled.” Athey IV, 149 Fed. Cl. at 512. On appeal,
Plaintiffs do not challenge the trial court’s determination
on the first concern, calling the “court approved enlarge-
ments [of time] irrelevant,” Appellants’ Reply Br. 12, and
thus we do not address it here.
Regarding the second concern, however, Plaintiffs’ re-
ply brief forcefully contests the Government’s narrative re-
garding previous settlement offers. For context, in the
Government’s response to Plaintiffs’ motion for fees at the
trial court, the Government countered Plaintiffs’ assertions
that the United States failed to correct the underpaid back
pay by highlighting a previous offer to settle by the Gov-
ernment. This offer was refused by Plaintiffs’ counsel.
Plaintiffs did not respond to this contention in their reply
at the trial court, and the trial court, accordingly, relied on
this contention. Athey IV, 149 Fed. Cl. at 512–13. Plain-
tiffs’ opening brief on appeal once again raised no issue con-
cerning this contention by the Government or the trial
court’s reliance thereon. It was only after the Government
again relied on this settlement offer in its response brief
that Plaintiffs addressed this contention, calling it a “false
narrative” because, according to Plaintiffs, the offer related
only to a small fraction of the plaintiffs’ class. Appellants’
Reply Br. 12–15.
Plaintiffs, however, failed to raise this argument at a
time when the Government could have responded, either at
this court or at the trial court. And in any case, this issue
only relates to the COLAs and locality pay issues on which
Plaintiffs were successful, but it in no way diminishes the
trial court’s view of the importance of the “multiple key is-
sues” that it relied on in finding the Government’s position
to have been “substantially justified.” Therefore, even if we
were to credit Plaintiffs’ reply argument, Plaintiffs still fail
to show the trial court abused its discretion.
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14 ATHEY v. US
CONCLUSION
The Court of Federal Claims properly denied Plaintiffs’
motion for fees under EAJA § 2412(b) as improperly apply-
ing the legal theory on which they based their motion for
fees (the “common fund” exception), and we find no abuse
in discretion in the trial court’s weighing of the Govern-
ment’s “overall position” under § 2412(d) and its conclusion
that the Government was “substantially justified.”
AFFIRMED