Shafer v. United States ( 2015 )

In the United States Court of Federal Claims
No. 13-889C
Filed December 8, 2015
NOT FOR PUBLICATION
)
ALAN SHAFER, )
)
Plaintiff, )
Equal Access to Justice Act, 28 U.S.C.
)
§ 2412.
v. )
)
THE UNITED STATES, )
)
Defendant. )
)
William S. Aramony, Alexandria, VA, for plaintiff.
Elizabeth Anne Speck, Trial Attorney, Steven J. Gillingham, Assistant Director, Robert E.
Kirschman, Jr., Director, Benjamin C. Mizer, Principal Deputy Assistant Attorney General,
Commercial Litigation Branch, Civil Division, United States Department of Justice, Washington,
DC, for defendant.
MEMORANDUM OPINION AND ORDER
GRIGGSBY, Judge
INTRODUCTION
Before the Court is plaintiff's motion for attorneys' fees pursuant to the Equal Access to
Justice Act (“EAJA”), 28 U.S.C. § 2412. The government opposes an award of attorneys' fees
and expenses, arguing that plaintiff is not a prevailing party and that the government’s position in
the underlying litigation was substantially justified. For the reasons set forth below, the Court
DENIES plaintiff’s motion for an award of attorneys’ fees.
FACTUAL AND PROCEDURAL BACKGROUND1
A. Factual Background
The relevant facts of this case are undisputed. Plaintiff, Alan Shafer, is a retired
Lieutenant Colonel who served honorably with the United States Air Force (“Air Force”) for
more than 30 years. Compl. at ¶ 2. While training to deploy to Afghanistan, plaintiff injured his
right knee. Compl. at ¶ 4; Pl. Rep. at Ex. 3. On December 3, 2008, plaintiff applied for length
of service retirement from the Air Force under 10 U.S.C. § 8918. Compl. at ¶ 5; Pl Memo. at Ex.
2; Pl. Rep. at Ex. 3; see also 10 U.S.C. § 8918. On April 17, 2009, the Air Force denied
plaintiff’s application for length of service retirement. Compl. at ¶ 6. Thereafter, on August 29,
2009, plaintiff was honorably discharged from the Air Force and placed on disability retirement,
pursuant to 10 U.S.C. § 1201(a). Compl. at ¶¶ 7-8, Ex. B; 10 U.S.C. § 1201(a)2.
On July 27, 2010, plaintiff filed an application for the correction of military records
before the Air Force Board for Correction of Military Records (“AFBCMR”) in an attempt to
obtain length of service retirement pay pursuant to 10 U.S.C. § 1409(b). Compl. at ¶ 10, Ex. A;
Def. Mot. at 2; Pl. Resp. at Ex. 3. On December 19, 2011, the AFBCMR denied plaintiff’s
application, finding no error or injustice. Compl. at ¶ 19, Ex. B, Ex. C; Pl. Resp. at Ex. 3; 10
U.S.C. § 1552.
On November 8, 2013, plaintiff filed the complaint in this matter challenging the
AFBCMR’s decision. See generally Compl. In the complaint, plaintiff contends that he was
entitled to receive length of service retirement pay calculated using the multiplier for regular
1
The facts recounted in this Memorandum Opinion and Order are taken from the complaint (“Compl. at
___”), defendant’s unopposed motion to remand (“Def. Mot. to Remand”), defendant’s motion to dismiss
and the appendix attached thereto (“Def. Mot. at __” and “Def. App. at __”), plaintiff’s response and
opposition to defendant’s motion to dismiss (Pl. Opp. at __”), defendant’s reply brief and the exhibits
attached thereto (“Def. Rep. at __”), plaintiff’s motion for attorneys’ fees and the memorandum in support
of his motion for attorneys’ fees (“Pl. Mot. at _” and “Pl. Memo. at _”), defendant’s response to the
motion for attorneys’ fees (“Def. Opp. at _”), and plaintiff’s reply in support of his motion for attorneys’
fees (“Pl. Rep. at _”).
2
Because the Air Force placed plaintiff on disability retirement, plaintiff’s retirement pay had been
capped at 75% of his base pay. Compl. at ¶ 7; 10 U.S.C. § 1401(a). Under a length of service retirement,
plaintiff is eligible to receive approximately 79% of his base pay under 10 U.S.C. § 1409(b). Compl. at ¶
7; see also 10 U.S.C. § 1409(a)(1)(A).
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service non-disability retirement found in 10 U.S.C. § 1409(b), pursuant to 10 U.S.C. § 1401(b).
Compl. at ¶¶ 17-18. Section 1401(b) provides, in pertinent part, that “[i]f a person would
otherwise be entitled to retired pay computed under more than one formula of the table in
subsection (a) or of any other provision of law, the person is entitled to be paid under the
applicable formula that is most favorable to him.” 10 U.S.C. § 1401(b).
On February 25, 2014, defendant filed a motion, on behalf of both parties, to stay and
remand this matter to the AFBCMR. Def. Mot. to Remand. In that motion, the parties requested
a remand to the AFBCMR because the administrative record did “not clearly document the
AFBCMR’s conclusion regarding the central issue of this case, what level of retirement pay
plaintiff was entitled to pursuant to 10 U.S.C. § 1401(b).” Id. On March 5, 2014, the Court
granted defendant’s motion for a remand to the AFBCMR and stayed the case during the
remand. See Order to Stay and Remand. The Court’s Remand Order states in pertinent part
that:
On February 25, 2014, defendant filed a motion requesting the court to remand this
matter to the Air Force Board for Correction of Military Records (AFBCMR).
Plaintiff joins this request. Consistent with defendant’s motion, the court hereby
orders the following: . . . This case is REMANDED to the AFBCMR, for a period
not to exceed six months, to consider: (i) plaintiff’s claim that the AFBCMR failed
to apply 10 U.S.C. § 1401(b) to his retirement application; (ii) any other matters
that plaintiff presents in writing to the AFBCMR regarding his retirement within
30 days of this remand order.
Order to Stay and Remand. The Court’s Remand Order took no position on the merits of
plaintiff’s claim. Id. Additionally, the matters that the Court directed the AFBCMR to consider
during the remand proceedings were requested by the parties in defendant’s remand motion. See
Def. Mot. to Remand.
During the remand before the AFBCMR, plaintiff argued that he was eligible for length
of service retirement under 10 U.S.C. § 8918, that the statutory provision for calculating regular
service non-disability retirement pay found in 10 U.S.C. § 1409(a)(1)(A) did not preclude
plaintiff from receiving length of service retirement pay, and that he should not be penalized with
lower retirement pay due to his disability. Pl. Rep. at Ex. 3. On November 26, 2014, the
AFBCMR issued an opinion stating that, “we are not convinced that the applicant’s retired pay
was calculated improperly.” Def. App. at 6. But, the AFBCMR, nonetheless, changed plaintiff’s
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retirement pay status to a length of service retirement pursuant to its authority to grant relief in
the interest of justice. See Def. App. at 1-7; 10 U.S.C. § 1409.
Specifically, in the opinion, the AFBCMR adopted a legal decision issued by the Air
Force Office of the Judge Advocate General, Administrative Law Directorate (“AF/JAA”)
finding that service members retired under 10 U.S.C. § 1201(a) “may not have their retired pay
calculated” using the higher multiplier found in § 1409(b), “through §1401(b)’s most favorable
formula provision, as it is specifically prohibited by §1409(a)(1)(A).” Pl. Rep. at Ex. 2; see also
Def. App. at 6. The AFBCMR concluded, however, that pursuant to its authority to “remove an
injustice”, plaintiff’s records should be corrected to reflect that he retired under length of service
retirement rules rather than for physical disability. Def. App. at 6-7; 10 U.S.C. § 1552.
Specifically, the AFBCMR found “it reasonable to conclude that had the applicant clearly
understood that the implications of choosing a disability retirement over a length of service
retirement would have resulted in a reduced retired pay multiplier, he would have likely elected
to discontinue his processing under the disability evaluation system (DES) and apply for a length
of service retirement.” Def. App. at 6. And so, the AFBCMR corrected plaintiff’s military
records to rescind his disability retirement and change plaintiff’s retirement status to length of
service retirement. Def. App. at 8-9; 11-19.
In light of the AFBCMR’s decision, the government moved to dismiss this matter as
moot on February 27, 2015. See Def. Mot. The Court subsequently dismissed the complaint on
July 13, 2015. See Memorandum Opinion and Order; Judgment. On August 7, 2015, plaintiff
filed a timely motion for attorneys’ fees and related expenses pursuant to EAJA. See Pl. Mot.
Defendant opposes plaintiff’s motion. See generally Def. Opp.
B. Procedural Background
Plaintiff filed the complaint in this matter on November 8, 2013. See generally Compl.
On February 25, 2014, defendant filed a motion on behalf of both parties to remand the matter
to the AFBCMR. See Def. Mot. to Remand. On March 5, 2014, the Court stayed and
remanded this case to the AFBCMR. See Order to Stay and Remand. The government filed a
status report notifying the Court of the AFBCMR’s decision on January 5, 2015. Status Report,
Jan. 5, 2015.
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On February 27, 2015, the government moved to dismiss plaintiff’s complaint as moot
because, “the Air Force afforded Mr. Shafer all of the relief he requested.” Def. Mot. at 4. On
March 29, 2015, plaintiff filed a response to the government’s motion. See generally Pl. Opp.
On June 22, 2015, the government filed its reply. See generally Def. Reply. On July 13, 2015,
the Court dismissed plaintiff’s complaint as moot. See generally Order, dated July 13, 2015.
On August 7, 2015, plaintiff timely filed a motion for attorneys’ fees and a
memorandum of law in support of plaintiff’s motion for attorneys’ fees pursuant to EAJA. See
Pl. Mot.; RCFC 54(d)(2)(B). On September 8, 2015, defendant filed a response and opposition
to plaintiff’s motion. See Def. Opp. On September 22, 2015, plaintiff filed a reply in support
of his motion for attorneys’ fees. See Pl. Rep. The matter having been fully briefed, the Court
addresses the pending motion for attorneys’ fees.
LEGAL STANDARDS
A. EAJA
The Equal Access to Justice Act (“EAJA”) sets forth the circumstances under which a
party may recoup attorneys’ fees, costs and certain other litigation expenses from the United
States. 28 U.S.C. § 2412(a), (d). EAJA is a “fee-shifting” statute. Hubbard v. United States,
480 F.3d 1327, 1333 (Fed. Cir. 2007). Congress enacted EAJA “‘to eliminate the barriers that
prohibit small businesses and individuals from securing vindication of their rights in civil actions
and administrative proceedings brought by or against the Federal Government.’” Scarborough v.
Principi, 541 U.S. 401, 406 (2004) (quoting H. R. Rep. No. 96–1005, at 9 (1980)).
The United States Supreme Court has held that a party may recover attorneys’ fees and
costs under EAJA if: (1) the party’s application is submitted to the court within 30 days of final
judgment in the action and is supported by an itemized statement; (2) the applicant’s net worth
does “not exceed $2,000,000 at the time the civil action was filed”; (3) the applicant is a
“prevailing party in any civil action brought by or against the United States . . . .”; (4) the
government's position was not “substantially justified”; and (5) no “special circumstances make
an award unjust.” 28 U.S.C. § 2412; see also Comm'r, Immigration & Naturalization Serv. v.
Jean, 496 U.S. 154, 158 (1990); Libas, Ltd. v. United States, 314 F.3d 1362, 1365 (Fed. Cir.
2003).
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In this regard, “[t]he EAJA applicant has the burden of proving he is a prevailing party.”
Davis v. Nicholson, 475 F.3d 1360, 1366 (Fed. Cir. 2007) (citing RAMCOR Servs. Grp. v. United
States, 185 F.3d 1286, 1288 (Fed. Cir. 1999)). The United States Court of Appeals for the
Federal Circuit has also held that, “where the plaintiff secures a remand requiring further agency
proceedings because of alleged error by the agency, the plaintiff qualifies as a prevailing party. . .
when successful in the remand proceedings where there has been a retention of jurisdiction.”
Former Employees of Motorola Ceramic Products v. United States, 336 F.3d 1360, 1366 (Fed.
Cir. 2003).
In addition, the government bears the burden of proving its litigating position in the
controversy was “substantially justified.” Libas, 314 F.3d at 1365 (citations omitted). To satisfy
this burden, the government's position must have “had a ‘reasonable basis in law and fact.’”
RAMCOR, 185 F.3d at 1290 (quoting Pierce v. Underwood, 487 U.S. 552, 566 n.2 (1988)).
To determine whether the government's position was substantially justified, the trial court
must “‘look at the entirety of the government's conduct. . . .’” Id. (quoting Chiu v. United States,
948 F.2d 711, 715 (Fed. Cir. 1991)). The government must also demonstrate that it was “‘clearly
reasonable in asserting its position, including its position at the agency level, in view of the law
and the facts.’” Luciano Pisoni Fabbrica Accessori Instrumenti Musicali v. United States, 837
F.2d 465, 466 (Fed. Cir. 1988) (quoting Gavette v. Office of Pers. Mgmt., 808 F.2d 1456, 1467
(Fed. Cir. 1986)); see also Blakley v. United States, 593 F.3d 1337, 1341 (Fed. Cir. 2010). And
so, the government's position may be substantially justified even if it is ultimately incorrect.
Manno v. United States, 48 Fed. Cl. 587, 589 (2001); see also Pierce, 487 U.S. at 561 (holding
the appropriate inquiry is “not what the law now is, but what the [g]overnment was substantially
justified in believing it to have been.”). In addition, the plaintiff bears the burden of proving the
additional requirements under EAJA. Al Ghanim Combined Grp. Co. v. United States, 67 Fed.
Cl. 494, 496 (2005).
LEGAL ANALYSIS
A. Plaintiff Is Not A Prevailing Party
In his motion, plaintiff seeks an award of attorneys’ fees and other costs and expenses
pursuant to the Equal Access to Justice Act. See generally Pl. Mot. The government opposes
plaintiff’s motion upon two grounds. Def. Opp. at 6-10. First, the government argues that
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plaintiff is not a prevailing party in this case, because the Court did not remand the case to the
AFBCMR to address an administrative agency error and plaintiff did not achieve success before
the agency. Def. Opp. at 6-8. Second, the government argues that its position in this litigation
was substantially justified because the AFBCMR found no agency error. Id. at 8-10. In the
alternative, the government argues that, should the Court determine that plaintiff is entitled to
attorneys’ fees, the Court should reduce the amount of those fees because plaintiff’s attorney is
not entitled to enhanced fees and the Air Force committed no error. Id. at 10-12.
For the reasons discussed below, the Court must deny plaintiff’s motion because plaintiff
has not shown that he was a prevailing party and the government’s position in this litigation was
substantially justified.
1. The Court Did Not Remand The Case Due To Agency Error
As an initial matter, plaintiff is not a prevailing party in this matter because the remand of
this case to the AFBCMR was not due to agency error. In Former Employees of Motorola, the
United States Court of Appeals for the Federal Circuit held that, “where the plaintiff secures a
remand requiring further agency proceedings because of an alleged error, the plaintiff qualifies
as a prevailing party . . . when successful in the remand proceedings where there has been a
retention of jurisdiction.” Former Employees of Motorola, 336 F.3d at 1366 (emphasis
supplied). The general rule is that, if the Court issuing the remand order does not identify or
acknowledge an error by the administrative agency, and there has not been a “concession of such
error by the agency”, the remand is procedural in nature and does not convey prevailing party
status upon the claimant. Davis, 475 F.3d at 1366; see also Thompson v. Shinseki, 682 F.3d
1377, 1382 (Fed. Cir. 2012) (stating that only remands based on “actual or perceived
administrative error” convey prevailing party status for EAJA purposes) (citing Davis, 475 F.3d
at 1364); Ward v. U.S. Postal Serv., 672 F.3d 1294, 1299 (Fed. Cir. 2012) (stating that “remands
not rooted in agency error do not result in prevailing party status” under EAJA); Gurley v. Peake,
528 F.3d 1322, 1328 (Fed. Cir. 2008) (holding that a remand for “judicial economy rather than
administrative error” does not convey prevailing party status).
In determining whether a remand is based upon agency error here, this Court has long
recognized that a remand predicated upon agreement of the parties “does not bar a finding of
prevailing party status.” Gurley, 528 F.3d at 1328. Additionally, the Court may look to the
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“context of the full record” to determine whether there has been administrative error. Martinez
v. United States, 94 Fed. Cl. 176, 182 (2010) (citing Davis, 475 F.3d at 1365).
The undisputed facts in this case make clear that plaintiff did not secure a remand
because of an alleged agency error. See Def. Mot. to Remand; Order to Stay and Remand. The
Court’s Remand Order granted a joint request from the parties to remand the case to the
AFBCMR and to stay the case during the remand. See Order to Stay and Remand. The Court’s
Remand Order states in pertinent part that:
This case is REMANDED to the AFBCMR, for a period not to exceed six months, to
consider: (i) plaintiff’s claim that the AFBCMR failed to apply 10 U.S.C. § 1401(b) to
his retirement application; (ii) any other matters that plaintiff presents in writing to the
AFBCMR regarding his retirement within 30 days of this remand order; . . . .
Id. The Court’s Remand Order took no position on the merits of plaintiff’s claim. Id. Nor did
the Remand Order find any error on the part of the Air Force. Id. Rather, the Court’s Remand
Order was purely procedural. See Akers v. Nicholson, 409 F.3d 1356, 1359 (Fed. Cir. 2005). It
is well established that such a procedural remand does not confer prevailing party status on an
EAJA claimant. Id. (holding when the parties agreed to a procedural remand, the remand merely
provided the opportunity for further adjudication and, thus, did not confer prevailing party status
on claimants) (citing Vaughn, 336 F.3d at 1356). And so, the Court’s Remand Order did not
confer prevailing party status upon plaintiff in this case. See 28 U.S.C. § 2412.
The Air Force also did not concede any administrative error during the remand
proceedings. Def. App. at 6-7. During the remand proceedings, the AFBCMR adopted the Air
Force’s findings that plaintiff was not eligible to have his “retired pay calculated under 10 U.S.C.
§1409 through §1401(b)’s most favorable formula provision. . . .” Pl. Rep. at Ex. 2; Def. App. at
6. Specifically, the AFBCMR determined that it was “not convinced that the applicant’s retired
pay was calculated improperly.” Def. App. at 6. Additionally, the AFBCMR held that:
We therefore accept the recommendations provided by AF/JAA and adopt its
rationale as the basis for our conclusion that the applicant’s military retired pay was
computed appropriately in accordance with the governing statutes and Air Force
policy.
Id. And so, the undisputed facts in this matter show that neither the agency, nor the Court,
identified or conceded any error with respect to the Air Force’s decision on plaintiff’s retirement
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status. See Order to Stay and Remand; Def. App. at 6-7. Given this, plaintiff cannot be a
prevailing party as contemplated by the EAJA statute. 28 U.S.C. § 2412; Former Employees of
Motorola, 336 F.3d at 1366.
2. Plaintiff Did Not Succeed On The Merits Before The AFBCMR
Because plaintiff has not shown that the remand of this case was because of an alleged
agency error, he has not met his burden to establish that he is a prevailing party. Nonetheless,
the undisputed facts also show that plaintiff was not successful before the agency.
In this regard, it is undisputed that plaintiff has received all of the relief that he requested
during the remand proceedings. Def. Mot.; Pl. Memo. at 2-3. The AFBCMR has changed
plaintiff’s retirement status to length of service retirement and corrected plaintiff’s military
records to reflect this retirement status. Def. Mot. at 3-4; Def. App. at 6-21. In addition, plaintiff
is currently receiving length of service retirement pay. Def. App. at 9, 11-18, 20-21; Def. Rep. at
2.
But, it is also undisputed that the AFBCMR awarded this relief based upon its authority
to grant relief to remove an injustice, rather than by a finding of error. Def. App. at 6-7; 10
U.S.C. § 1552. Specifically, during the remand proceedings, the AFBCMR held that if plaintiff
had understood the “implications of choosing a disability retirement over a length of service
retirement. . . he would have likely elected to discontinue his” disability retirement processing
and applied for length of service retirement. Def. App. at 6. And so, the AFBCMR determined
that it would correct plaintiff’s military record, and change his retirement status to length of
service retirement from disability retirement, “in the interest of justice.” Id. In doing so, the
AFBCMR specifically held that there was no agency error in this case. Def. App. at 6-7 (“the
applicant’s military retired pay was computed appropriately”); see also Compl. at Ex. B (“The
Board determines that: [t]he applicant be notified the evidence presented did not demonstrate the
existence of material error. . . .”).
This Court has long recognized that a party does not “succeed before the agency” when
the “lawsuit brought about a voluntary change in the defendant’s conduct.” Akers, 409 F.3d at1358 (citing Buckhannon Bd. & Care Home, Inc. v. W. Va. Dep't of Health & Human Res., 532
U.S. 598, 601 (2001) (rejecting the “catalyst theory”)); see also Brickwood Contractors, Inc. v.
United States, 288 F.3d 1371, 1379 (Fed. Cir. 2002) (applying the Buckhannon analysis to EAJA
cases). Rather, plaintiff must obtain “some relief or success on a significant issue in the
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litigation, such as an “enforceable judgment[ ] on the merits or [ ] a court-ordered consent
decree.” Buckhannon, 532 U.S. at 604 (citing Tx. State Teachers Ass'n, 489 U.S. at 792-93); see
also Rice Services, Ltd. v. United States, 405 F.3d 1017, 1025 (Fed. Cir. 2005) (“[I]n order to
demonstrate that it is a ‘prevailing party,’ an EAJA applicant must show that it obtained an
enforceable judgment on the merits or a court-ordered consent decree that materially altered the
legal relationship between the parties, or the equivalent of either of those.”) (citations omitted).
The outcome of the remand proceedings here is analogous to other circumstances where the
government has voluntarily changed its position after the commencement of litigation. It is well
established that plaintiff is not entitled to an award of attorneys’ fees under EAJA under such
circumstances. Akers, 409 F.3d at 1358. And so, plaintiff may not receive attorneys’ fees and
other costs under EAJA.
B. The Government’s Position Was Substantially Justified
Although the Court concludes that plaintiff is not a prevailing party for EAJA purposes−
and that he cannot recover attorneys’ fees under EAJA− the Court also briefly addresses the
issue of whether the government's litigation position in this matter was substantially justified3.
It is well established that the government bears the burden of proving its position was
substantially justified. See White v. Nicholson, 412 F.3d 1314, 1316 (Fed. Cir. 2005);
Hillensbeck v. United States, 74 Fed. Cl. 477, 479–80 (2006); Al Ghanim Combined Grp. Co., 67
Fed. Cl. at 496. The United States Supreme Court has also held that “substantially justified”
means “‘justified in substance or in the main’–that is justified to a degree that could satisfy a
reasonable person.” Pierce, 487 U.S. at 565. In this regard, “trial courts are instructed to look at
the entirety of the government’s conduct and make a judgment call [about] whether the
government’s overall position had a reasonable basis in both law and fact.” Chiu, 948 F.2d at
715.
The government’s position during the course of the litigation has been that the Air Force
properly determined that plaintiff was not entitled to length of service retirement pay under 10
U.S.C. § 1409(b). Def. App. at 6; Def. Opp. at 8-9. The AFBCMR agreed with this position
3
The Court notes that this litigation terminated before the Court could reach the merits of plaintiff's
claims. Nothing in this Memorandum Opinion and Order should be construed as the Court taking a
position on the merits of plaintiff's claims.
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during the remand proceedings. Def. App. at 6. In fact, while the AFBCMR ultimately awarded
plaintiff relief, it did so without finding any error with respect to the government’s litigation
position. Def. App. at 6-7. Given this, the undisputed facts in this case show that, overall, the
government’s position had a reasonable basis in law and fact. Chiu, 948 F.2d at 715. And so,
the government has demonstrated that its position during this litigation was “justified to a degree
that could satisfy the reasonable person.” Pierce, 487 U.S. at 564–65.
CONCLUSION
In sum, the undisputed facts in this matter demonstrate that plaintiff has not met his
burden to show that he is a prevailing party in order to obtain an award of fees under the Equal
Access to Justice Act. Plaintiff has not demonstrated that this case has been remanded to the
AFBCMR based upon an administrative agency error, nor has he shown that he succeeded before
the agency. In addition, the government has shown that its litigation position in the case was
substantially justified. For these reasons, plaintiff is not entitled to an award of attorneys’ fees
and other costs and expenses pursuant to the Equal Access to Justice Act.
For the foregoing reasons, the Court DENIES the plaintiff’s motion for attorneys’ fees.
The Clerk’s Office is directed to enter judgment in favor of defendant.
Each party to bear its own costs.
IT IS SO ORDERED.
s/ Lydia Kay Griggsby
LYDIA KAY GRIGGSBY
Judge
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