Advanced Government Solutions, Inc. v. United States , 2015 U.S. Claims LEXIS 1315 ( 2015 )

In the United States Court of Federal Claims
No. 14-855C
(Filed: October 19, 2015)
)
ADVANCED GOVERNMENT )
SOLUTIONS, INC., ) Denial of Attorneys’ Fees under the
) Equal Access to Justice Act; Voluntary
Plaintiff, ) Corrective Action; Not a Prevailing
) Party
v. )
)
THE UNITED STATES, )
)
Defendant. )
)
John M. Mudock, with whom were Janine S. Benton, Kathy C. Potter, Sharon A. Roach,
and Rosanne E. Stafiej, Benton, Porter & Murdock, P.C., Falls Church VA, for plaintiff.
P. Davis Oliver, Civil Division, U.S. Department of Justice, Washington, DC, with whom
were Benjamin C. Mizer, Assistant Attorney General, and Robert E. Kirschman, Jr.,
Director, and Reginald T. Blades, Jr., Assistant Director, Commercial Litigation Branch,
for defendant.
OPINION AND ORDER DENYING
PLAINTIFF’S MOTION FOR ATTORNEYS’ FEES AND COSTS
FIRESTONE, Judge
Plaintiff Advanced Government Solutions, Inc. (“AGS”) has filed the present
motion seeking attorneys’ fees and costs pursuant to the Equal Access to Justice Act
(“EAJA”), 28 U.S.C. § 2414(d), and Rule 54(d)(1) of the Rules of the United States
Court of Federal Claims (“RCFC”). In this pre-award bid protest, the government took
voluntary corrective action which allowed AGS to submit a bid in a competition from
which AGS had previously been excluded. AGS requests an award of $400 in litigation
costs and $38,695 in attorneys’ fees.
Here, the government took voluntary corrective action which resolved all of the
issues in AGS’s complaint before the court issued any decision on the merits of this case.
Thus, under applicable Federal Circuit and Supreme Court precedent, AGS is not a
“prevailing party” under EAJA and RCFC 54(d)(1). Accordingly, AGS’s motion is
DENIED.
I. BACKGROUND
AGS filed this pre-award bid protest challenging AGS’s elimination from
consideration of a solicitation issued by the Department of Defense (“DOD”) on May 15,
2014. The solicitation required that all proposals be redacted so as not to include any
identifying information about the bidder, and provided that “[p]roposals that contain
identifying information shall be excluded from competitive evaluation.” AR 523. AGS
was one of five companies to submit a proposal. On June 10, 2014, the DOD informed
AGS that it would be excluded from competitive evaluation because AGS’s proposal
included an unredacted identifier. AGS requested an opportunity to correct what it
classified as a clerical error, but the agency denied its request. On June 16, 2014, AGS
filed a protest with the GAO arguing that three of the four other bids also contained
identifying references. Those companies, however, were not eliminated from
consideration.
The GAO dismissed AGS’s protest, and on September 15, 2014, AGS filed its
complaint in this court. As it did before the GAO, AGS argued before this court that the
government had treated it unfairly by excluding AGS’s proposal for containing an
unredacted identifier but allowing proposals with similar identifying information to
remain in the evaluation process. AGS’s amended complaint, filed October 10, 2014,
ECF No. 22, sought a permanent injunction ordering the government to rescind AGS’s
notice of exclusion; permit AGS to resubmit a redacted proposal for the limited purpose
of correcting missed redactions; and appoint a new Technical Evaluation Team, source
selection authority, contracting specialist, and contracting officer.
On October 31, 2014, the government filed a notice of corrective action and
requested that the court stay briefing on the motions for judgment on the administrative
record. ECF No. 28. The government stated that it intended to rescind AGS’s exclusion
notice, amend the solicitation to remove the redaction requirement, and appoint a new
evaluation team, thus addressing each of the requests in AGS’s complaint. The court
granted the government’s request for a stay pending a new round of bidding on the
contract. ECF No. 31. The contract was ultimately awarded to another company,
Horizon Industries, Ltd. Despite the fact that it was not awarded the contract, AGS stated
in a joint stipulation of dismissal, filed July 6, 2015, that AGS had “received the relief it
requested as a result of Defendant’s corrective action.” ECF No. 42.
On July 7, 2015, AGS filed the present motion seeking attorneys’ fees and costs
under the EAJA. Pl.’s Mot. for Fees (“Pl.’s Mot.”) at 9, ECF No. 47. The government
opposed the motion, arguing that AGS was not a prevailing party under EAJA and that
the government’s position was substantially justified. The court has determined that oral
argument is not necessary.
II. DISCUSSION
A. Recovering Attorneys’ Fees and Costs under the EAJA
Under the EAJA, a “prevailing party” in a civil action against the United States
may recover attorneys’ fees and other costs “unless the court finds that the position of the
United States was substantially justified or that special circumstances make an award
unjust.” 28 U.S.C. § 2412(d)(1)(A). “The 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., Inc. v. United States, 185 F.3d 1286, 1288 (Fed. Cir. 1999)).
However, “the government bears the burden of proving its position was substantially
justified.” Libas, Ltd. v. United States, 314 F.3d 1362, 1365 (Fed. Cir. 2003) (citing Neal
& Co. v. United States, 121 F.3d 683, 686 (Fed. Cir. 1997)). A plaintiff seeking review
of agency action may be a prevailing party for the purposes of the EAJA if a court finds
that the agency committed an error and remands to the agency, even if the agency does
not ultimately grant the plaintiff the substantive relief it originally sought. Ward v. U.S.
Postal Serv., 672 F.3d 1294, 1299 (Fed. Cir. 2012) (citing Former Emps. of Motorola
Ceramic Prods. v. United States, 336 F.3d 1360, 1366 (Fed. Cir. 2003)). In order to be
“substantially justified,” the government’s position must be “justified in substance or in
the main—that is, justified to a degree that could satisfy a reasonable person.” Norris v.
SEC, 695 F.3d 1261, 1265 (Fed. Cir. 2012) (per curium) (quoting Pierce v. Underwood,
487 U.S. 552, 565 (1988)).
In Buckhannon Bd. & Care Home, Inc. v. West Virginia Department of Health &
Human Resources, the Supreme Court addressed the question of whether a plaintiff could
be a “prevailing party” for the purposes of a fee shifting statute if the plaintiff “achieves
the desired result because the lawsuit brought about a voluntary change in the defendant’s
conduct.” 532 U.S. 598, 601 (2001). The Court rejected this so-called “catalyst theory”
and instead found that in order to be a prevailing party, the plaintiff must have “been
awarded some relief by the court . . . .” Id. at 603. The Court further explained that a
“judicially sanctioned change in the legal relationship of the parties” such as a judgment
on the merits or a consent decree was necessary in order to confer prevailing party status.
Id. at 604-05 (citations omitted). The Federal Circuit has found that the Supreme Court’s
standard in Buckhannon applies when determining whether a plaintiff is a prevailing
party under the EAJA. Brickwood Contractors, Inc. v. United States, 288 F.3d 1371,
1380 (Fed. Cir. 2002); see also, e.g., Brown v. McDonald, 591 F. App’x 942, 944 (Fed.
Cir. 2014). As the Federal Circuit held in Rice Services, Ltd. v. United States, “[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.” 405 F.3d 1017, 1025 (Fed. Cir. 2005).
B. AGS is Not a Prevailing Party
In this case, the government agreed to take voluntary corrective action, and the
parties agreed to voluntarily dismiss the case, before the court had an opportunity to issue
any opinion on the merits. Therefore, under Federal Circuit and Supreme Court
precedent, there has been no “actual relief on the merits of [AGS’s] claim” that
“materially alter[ed] the legal relationship between the parties by modifying the
defendant’s behavior in a way that directly benefits the plaintiff.” Innovation Dev.
Enters. of Am., Inc. v. United States, 600 F. App’x 743, 746 (Fed. Cir. 2015) (quoting
Farrar v. Hobby, 506 U.S. 103, 111-12 (1992)). Nor is the parties’ joint stipulation of
dismissal sufficient to confer prevailing party status. In Rice, the Federal Circuit found
that an order of dismissal “was not an enforceable judgment on the merits because the
court did not reach the merits,” and therefore, the plaintiff was not a prevailing party.
405 F.3d at 1026. In Rice, as in this case, the court gave “no indication as to its view on
the merits of the case prior to the government seeking dismissal.” Id. at 1028. The
Circuit distinguished the order of dismissal from a consent decree, finding that while a
consent decree “carr[ies] sufficient ‘judicial imprimatur’ to materially change the legal
relationship of the parties,” the defendant had already “substantially” and “voluntarily”
afforded the plaintiff its requested relief by the time the order of dismissal was filed. Id.
at 1026-27. Likewise, in this case, the government had already provided the relief AGS
sought before the parties agreed to dismiss this case.1
AGS argues that it should be considered a prevailing party because, as a result of
this lawsuit, AGS was no longer excluded from bidding on the contract. AGS
acknowledges that there has been no ruling on the merits, but nevertheless argues that
EAJA fees are appropriate “under the unique facts of this case.” Pl.’s Mot. 4. AGS
describes what it characterizes as the government’s bad faith treatment of AGS, including
1
The parties dismissed this case pursuant to RCFC 41(a)(1)(A)(ii), which does not require any
judicial intervention. Therefore, there is even less of a judicial imprimatur on the dismissal of
this case as there was in Rice.
misrepresentations in the GAO and its disparate treatment of AGS during the bidding
process. Id. at 5-6. However, even assuming that all of AGS’s allegations are true, AGS
does not cite, and the court is not aware of, any case law supporting AGS’s position that
the catalyst theory applies to cases in which the government exhibits bad faith.2
Plaintiff’s claim for attorneys’ fees and costs case presents precisely the set of
facts that typify the “catalyst theory,” which both the Supreme Court and the Federal
Circuit have rejected. The case law is clear that “‘[a] defendant’s voluntary change in
conduct, although perhaps accomplishing what the plaintiff sought to achieve by the
lawsuit,’ cannot confer prevailing party status on a plaintiff.” Brown, 591 F. App’x at
944 (quoting Buckhannon, 532 U.S. at 605). In this case, there has been no enforceable
judicial ruling on the merits and thus AGS is not a prevailing party.3
III. CONCLUSION
Because AGS is not a prevailing party for the purposes of the EAJA, AGS’s
motion for fees and costs is DENIED.
IT IS SO ORDERED.
s/Nancy B. Firestone
NANCY B. FIRESTONE
Judge
2
In his concurring opinion in Brown v. McDonald, Judge Wallach opined that if the agency’s
“level of incompetency rises to a level approaching malevolence, at some point legal action to
obtain redress should require EAJA compensation.” 591 F. App’x at 945. This view is not the
law of the Circuit.
3
Because the court finds that plaintiff was not a prevailing party, a necessary prerequisite to
recovering fees or costs under the EAJA, there is no need to discuss the parties’ arguments
regarding whether the government’s position was substantially justified.