Former Employees of BMC Software, Inc. v. United States Secretary of Labor

Slip Op. 08-102
UNITED STATES COURT OF INTERNATIONAL TRADE
_______________________________________
:
FORMER EMPLOYEES OF
BMC SOFTWARE, INC., :
Plaintiffs, :
Court No. 04-00229
v. :
UNITED STATES SECRETARY OF LABOR, :
_______________________________________:
Defendant.
[Defendant’s Motion for Partial Reconsideration denied.]
Dated: September 26, 2008
Miller & Chevalier Chartered (James B. Altman and Daniel P. Wendt); Kathleen T. Wach,
Of Counsel; for Plaintiffs.
Gregory G. Katsas, Assistant Attorney General; Jeanne E. Davidson, Director, and Patricia
M. McCarthy, Assistant Director, Commercial Litigation Branch, Civil Division, U.S. Department
of Justice (Jane C. Dempsey); Stephen R. Jones, Office of the Solicitor, U.S. Department of Labor,
Of Counsel; for Defendant.
MEMORANDUM OPINION
RIDGWAY, Judge:
In this action, former employees of Houston, Texas-based BMC Software, Inc. (“the
Workers”) successfully challenged the determination of the U.S. Department of Labor denying their
petition for certification of eligibility for trade adjustment assistance (“TAA”) benefits. See
generally Former Employees of BMC Software, Inc. v. U.S. Sec’y of Labor, 30 CIT ____, 454 F.
Supp. 2d 1306 (2006) (BMC I). The Workers were subsequently awarded attorneys’ fees and
expenses under the Equal Access to Justice Act (“EAJA”), in Former Employees of BMC Software,
Court No. 04-00229 Page 2
Inc., 31 CIT ____, 519 F. Supp. 2d 1291 (2007) (BMC II).1 Following supplemental submissions
by the parties, the precise amount of the award was calculated and an appropriate order entered. See
Former Employees of BMC Software, Inc., 31 CIT ____, 2007 WL 4181696 (2007) (BMC III).
Now pending before the Court is Defendant’s Motion for Partial Reconsideration (“Def.’s
Motion”), in which the Government urges that the language of BMC II be modified in three places,
to delete criticism of positions taken by the Government.2 For the reasons outlined below,
Defendant’s Motion is denied.
I. Standard of Review
Rule 59(a)(2) of the Rules of this Court permits rehearing or reconsideration for any of the
reasons for which rehearing or reconsideration has been granted in suits in equity in the courts of
the United States. See USCIT R. 59(a)(2).3 The disposition of such a motion for rehearing or
1
Relying on the Court of Appeals’ decision in Richlin, BMC II permitted counsel to the
plaintiff Workers to recover for paralegal/legal assistant time not as part of fees, but only “as
expenses at the cost to the attorney.” See BMC II, 31 CIT at ____, 519 F. Supp. 2d at 1343-45(quoting Richlin Sec. Serv. Co. v. Chertoff, 472 F.3d 1370, 1381 (Fed. Cir. 2006)) (emphasis added
in BMC II). The Supreme Court has since reversed the Court of Appeals’ decision, holding that
paralegal/legal assistant services are reimburseable at prevailing market rates. See generally Richlin
Sec. Serv. Co. v. Chertoff, ____ U.S. ____, 128 S. Ct. 2007 (2008).
2
The plaintiff Workers did not participate in the briefing on Defendant’s Motion. But see
Plaintiffs’ Application for Fees and Expenses Pursuant to the Equal Access to Justice Act at 7-11,
21-22 (criticizing Government for duplicity and lack of candor, as discussed in section II.A., infra).
Further, the current counsel of record representing the Government in this matter did not
participate in the prior proceedings – either on the merits of the case or the fee litigation. Counsel
advises that the instant motion was filed at the request of the Director of the National Court Section
of the Civil Division of the U.S. Department of Justice. See Def.’s Motion at 2 n.1.
3
“On its face, Rule 59 provides for rehearing in actions which have been tried and gone to
judgment. . . . Nevertheless, it has been held that the ‘concept of a new trial under Rule 59 is broad
Court No. 04-00229 Page 3
reconsideration is committed to “the sound discretion of the court.” United States v. Gold Mountain
Coffee, Ltd., 8 CIT 336, 336, 601 F. Supp. 212, 214 (1984) (citations omitted).
The purpose of rehearing or reconsideration is not to allow a losing party to relitigate the
merits of a case. Belfont Sales Corp. v. United States, 12 CIT 916, 917, 698 F. Supp. 916, 918
(1988), aff’d, 878 F.2d 1413 (Fed. Cir. 1989). Rather, rehearing or reconsideration is granted only
to “rectify[ ] a significant flaw in the conduct of the original proceeding.” Gold Mountain Coffee,
8 CIT at 336, 601 F. Supp. at 214 (quotation marks and citation omitted). Thus, “[t]he major
grounds justifying reconsideration are an intervening change of controlling law, the availability of
new evidence, or the need to correct a clear error or prevent manifest injustice.” Doe v. New York
City Dep’t of Social Servs., 709 F.2d 782, 789 (2d Cir. 1983) (quotation marks and citations
omitted). As the court has previously put it, the purpose of rehearing or reconsideration is “to direct
the Court’s attention to some material matter of law or fact which it has overlooked in deciding a
case, and which, had it been given consideration, would probably have brought about a different
result.” Target Stores v. United States, 31 CIT ____, ____, 471 F. Supp. 2d 1344, 1349 (2007)
(quoting Agro Dutch Indus. Ltd. v. United States, 29 CIT 250, 253-54 (2005), rev’d on other
grounds, 167 Fed. Appx. 202 (Fed. Cir. 2006)).
enough to include a rehearing of any matter decided by the court without a jury.’” Nat’l Corn
Growers Ass’n v. Baker, 9 CIT 571, 585, 623 F. Supp. 1262, 1274 (1985) (quoting Timken Co. v.
United States, 6 CIT 76, 77, 569 F. Supp. 65, 67 (1983) (quoting Wright & Miller)), rev’d on other
grounds, 840 F.2d 1547 (Fed. Cir. 1988). See also Gainey v. Brotherhood of Railway & Steamship
Clerks, 303 F.2d 716, 718 (3d Cir. 1962) (noting that courts “have experienced no difficulty in
concluding that a motion for rehearing or reconsideration made . . . after the entry of an appealable
order is within the coverage of Rule 59”); In re Ionian Shipping Co., 49 F.R.D. 334, 336 (S.D.N.Y.
1969) (noting that “[i]t is clear that the concept of a ‘new trial’ used in Rule 59 has been interpreted
to encompass the rehearing of a motion”).
Court No. 04-00229 Page 4
In sum, a court ordinarily will not disturb its prior decision unless it is “manifestly
erroneous.” Gold Mountain Coffee, 8 CIT at 337, 601 F. Supp. at 214 (quoting Quigley & Maynard,
Inc. v. United States, 61 C.C.P.A. 65, 496 F.2d 1214 (1974)). Rehearing or reconsideration is
fundamentally “a means to correct a miscarriage of justice.” Nat’l Corn Growers Ass’n v. Baker,
9 CIT 571, 585, 623 F. Supp. 1262, 1274 (1985).
II. Analysis
In its Motion for Reconsideration, the Government takes exception to language in three parts
of BMC II, which criticized positions taken by the Government and referred generally to the
potential for sanctions in certain circumstances. See Def.’s Motion at 1-2, 4-5 (referring to BMC
II, 31 CIT at ____ n.50, ____ n.99, ____ & n.108, 519 F. Supp. 2d at 1326 n.50, 1354 n.99, 1364
& n.108).
Of course, as the Government properly notes, the Court in fact did not impose sanctions. See
Def.’s Motion at 1. Indeed, neither the Government nor its counsel was ever even threatened with
sanctions. Cf. NISUS Corp. v. Perma-Chink Systems, Inc., 497 F.3d 1316, 1320 (Fed. Cir. 2007)
(holding that judicial statements criticizing a lawyer – no matter how harshly – but which are not
accompanied by a sanction or findings are not directly appealable). The Government nevertheless
expresses concern that BMC II’s “citations to Rule 11 and other allusions to potentially sanctionable
conduct . . . may have significant repercussions beyond this individual case and detrimentally affect
both the attorneys’ reputations and potentially the vigor and creativity of advocacy by other
members of the bar.” See Def.’s Motion at 1-2. The Government therefore asks that the language
at issue be deleted from the opinion.
Court No. 04-00229 Page 5
To be sure, counsel for the Government – like private counsel – must be free to zealously
represent the interests of their clients. However, all lawyers must balance that obligation against
other (sometimes competing) ethical obligations. Thus, for example, counsel must take care to
“properly temper[] enthusiasm for a client’s cause with careful regard for the obligations of truth,
candor, accuracy, and professional judgment that are expected of them as officers of the court.”
Oliveri v. Thompson, 803 F.2d 1265, 1267 (2d Cir. 1986); see also, e.g., ABA Model Rules of
Professional Conduct (2008), Rule 3.3 (“Candor Toward the Tribunal”), Comment [4] (emphasizing
that “[t]he underlying concept is that legal argument is a discussion seeking to determine the legal
premises properly applicable to the case”); Amoco Oil Co. v. United States, 234 F.3d 1374, 1378
(Fed. Cir. 2000) (criticizing counsel’s “fail[ure] to cite, much less distinguish, clearly governing case
law” as potential violation of Rule 3.3).4
4
Indeed, government lawyers play a unique role in the administration of justice, and therefore
have some special duties. “A government lawyer ‘is the representative not of an ordinary party to
a controversy,’ the Supreme Court said long ago in a statement chiseled on the walls of the Justice
Department, ‘but of a sovereignty whose obligation . . . is not that it shall win a case, but that justice
shall be done.’” Freeport-McMoran Oil & Gas Co. v. Federal Energy Regulatory Comm’n, 962 F.2d
45, 47 (D.C. Cir. 1992) (Mikva, C.J.) (quoting Berger v. United States, 295 U.S. 78, 88 (1935), and
emphasizing that the solemn duty to do justice applies “with equal force to the government’s civil
lawyers”). See Trout v. Garrett, 780 F. Supp. 1396, 1421 n.60 (D.D.C. 1991) (noting inscription
above entrance to Office of the Attorney General of the U.S.: “The United States wins its point
whenever justice is done its citizens in the courts.”).
See generally, e.g., New York Code of Professional Responsibility (2007), Ethical
Consideration 7-14 (stating that “[a] government lawyer in a civil action or administrative
proceeding has the responsibility to seek justice and to develop a full and fair record, and should not
use his or her position or the economic power of the government to harass parties or to bring about
unjust settlements or results”) (mirroring ABA Model Code of Professional Responsibility EC 7-14);
In re Lindsey, 158 F.3d 1263, 1273 n.4 (D.C. Cir. 1998) (citing EC 7-14, and noting that “the
government lawyer in a civil action must ‘seek justice’ and avoid unfair settlements or results”);
Williams v. Sullivan, 779 F. Supp. 471, 472 (W.D. Mo. 1991) (explaining that government lawyer
“has a duty beyond just zealously representing her client”; “there is a special duty imposed on
Court No. 04-00229 Page 6
Each of the Government’s three objections is addressed in turn below. For the reasons set
forth there, the Government’s Motion for Reconsideration is denied.
A. Foonote 50
The Government first takes exception to footnote 50 of BMC II, which appears in a section
of the opinion addressing the Government’s objections to the plaintiff Workers’ claims for fees for
legal services rendered after the Workers had filed their comments on the Labor Department’s
remand determination (which certified the Workers as eligible to apply for TAA benefits). See
generally Def.’s Motion at 5-7; BMC II, 31 CIT at ____, 519 F. Supp. 2d at 1321-26.
The Government had opposed an award of fees for services rendered late in the proceeding,
arguing that the efforts of the Workers’ counsel “only protracted the litigation after certification.”
See BMC II, 31 CIT at ____, 519 F. Supp. 2d at 1321 (quoting Defendant’s Response to Plaintiffs’
Application for Attorney Fees and Expenses (“Def.’s EAJA Opposition”)). According to the
Government, the Workers’ counsel had “engage[d] the Court and the Government in a needless
colloquy regarding the hypothetical circumstance of a miscalculation of benefits,” which the
Government argued “[the] Court lacks jurisdiction to determine in any event.” See BMC II, 31 CIT
government lawyers to ‘seek justice and to develop a full and fair record’”); Bonanza Trucking
Corp. v. United States, 10 CIT 314, 321 n.18, 642 F. Supp. 1170, 1176 n.18 (1986) (noting that EC
7-14 mandates “that a government lawyer in an administrative proceeding has the responsibility to
develop a full and fair record”); Jones v. Heckler, 583 F. Supp. 1250, 1256 n.7 (N.D. Ill. 1984)
(quoting EC 7-14, and emphasizing that “counsel for the United States has a special responsibility
to the justice system”). See also, e.g., City of Los Angeles v. Decker, 18 Cal.3d 860, 871, 558 P.2d
545, 551 (1977) (explaining that “[o]ccupying a position analogous to a public prosecutor, [a
government lawyer in the civil arena] is possessed of important governmental powers that are
pledged to the accomplishment of one objective only, that of impartial justice”) (internal quotation
marks omitted).
Court No. 04-00229 Page 7
at ____, 519 F. Supp. 2d at 1321 (quoting Def.’s EAJA Opposition).
However, BMC II pointedly observed that “the Government . . . [had] no one but itself to
blame for the post-certification briefing” to which it objected. See BMC II, 31 CIT at ____, 519 F.
Supp. 2d at 1321. As BMC II explained at some length, the post-certification briefing was spawned
by the Government’s seeming attempts to distance itself from representations that its counsel made
early in these proceedings to induce the Workers to consent to a lengthy extension of time for the
filing of the results of the Labor Department’s remand investigation. See generally BMC II, 31 CIT
at ____, ____, ____, 519 F. Supp. 2d at 1322, 1325-26, 1363-64.
Specifically, “[c]ounsel for the Government induced the Workers’ consent to the requested
extension of time – and the Court’s entry of an order granting that extension – with express,
unequivocal assurances that ‘in the event petitioners are certified in this case, the petitioners would
be entitled to receive full TRA benefits [i.e., income support payments, known as “Trade
Readjustment Allowance” payments] regardless of the date they are certified.’” See BMC II, 31 CIT
at ____, 519 F. Supp. 2d at 1322 (quotations omitted). But, when the Labor Department’s remand
results eventually issued, there was no language reflecting the unconditional assurances that the
Government had previously given. See BMC II, 31 CIT at ____, 519 F. Supp. 2d at 1322.
As BMC II explained, when the Workers urged the Court to “expressly order[ ], in
accordance with Defendant’s representation, that Plaintiffs, having been certified, are entitled to
receive full TRA benefits, regardless of the date of their certification,” the Government refused to
amend the certification and responded (in essence) that the Court lacked jurisdiction to enforce the
representations that the Government’s counsel had made to the Court and to the Workers. See BMC
Court No. 04-00229 Page 8
II, 31 CIT at ____, 519 F. Supp. 2d at 1322 (quotation omitted).5 The Workers nevertheless
ultimately succeeded in obtaining all benefits to which they were entitled. See BMC II, 31 CIT at
____, ____ n.50, 519 F. Supp. 2d at 1299, 1326 n.50; see also BMC I, 30 CIT at ____, 454 F. Supp.
2d at 1350.
Against this backdrop, footnote 50 of BMC II observed:
Fortunately, [because the Workers succeeded in obtaining full benefits,] there was
ultimately no need here to test the limits of the Court’s jurisdiction vis-a-vis that of
the state courts. See generally BMC, 30 CIT at ____, 454 F. Supp. 2d at 1347(acknowledging that “the statutory scheme generally vests the state courts with
jurisdiction over disputes concerning the specific TAA benefits to which individual
members of a certified group of former employees are entitled”) (citations omitted).
Nor was it ultimately necessary to consider the need for sanctions, contempt
proceedings, or other action against the Government or its counsel. As noted above,
the Workers advised the Court that – armed with the post-certification memoranda
filed by the Government in this action interpreting the complex provisions of the
TAA statute and regulations and confirming that the delay in the Workers’
certification would have no effect on the benefits to which they were entitled – they
no longer foresaw any insurmountable obstacles to their receipt of the full measure
of TAA benefits. See id., 30 CIT at ____, 454 F. Supp. 2d at 1349-50 (citation and
footnote omitted).
See BMC II, 31 CIT at ____ n.50, 519 F. Supp. 2d at 1326 n.50 (emphasis added). The italicized
sentence is the focus of the Government’s objection.
The Government devotes the bulk of its brief on reconsideration of this point to arguing the
metes and bounds of the Court’s jurisdiction in TAA cases. The gravamen of the Government’s
5
As BMC II emphasizes, the Workers’ concerns that their receipt of benefits would be
negatively affected by the Government’s protracted delays in certification were by no means
“trumped up.” See BMC II, 31 CIT at ____ & n.43, 519 F. Supp. 2d at 1322-23 & n.43 (and
authorities cited there); BMC I, 30 CIT at ____ n.63, 454 F. Supp. 2d at 1341 n.63 (explaining in
detail the potentially devastating effects of delayed certification on benefits received by workers);
see also BMC I, 30 CIT at ____ n.69, 454 F. Supp. 2d at 1349 n.69; Former Employees of Tyco
Elecs. v. U.S. Dep’t of Labor, 28 CIT 1571, 1575-76, 350 F. Supp. 2d 1075, 1080-81 (2004).
Court No. 04-00229 Page 9
motion is that it was “entirely reasonable in arguing that the Court lacks authority to dictate whether
plaintiffs would receive ‘full’ trade readjustment allowance[] benefits.” See Def.’s Motion at 5-7.
But the Government’s argument is wide of the mark.
As a full and fair reading of BMC II makes clear, the potential risk of “sanctions, contempt
proceedings, or other action against the Government or its counsel” was not attendant to the
Government’s position on the Court’s jurisdiction per se. Indeed, BMC I acknowledged that “the
statutory scheme generally vests the state courts with jurisdiction over disputes concerning the
specific TAA benefits to which individual members of a certified group of former employees are
entitled.” BMC I, 30 CIT at ____, 454 F. Supp. 2d at 1347 (citations omitted).6
Thus, contrary to the Government’s implication, the concern here was not the Government’s
position on the jurisdiction of the Court. The concern was the Government’s arguably duplicitous
conduct – its seeming attempt to “have its cake and eat it too.” In order to secure a benefit for the
Government (i.e., the Workers’ consent to a lengthy extension of time for the filing of the Labor
Department’s remand results), the Government’s counsel expressly represented to the Workers and
to the Court – in writing – that, if the Workers were ultimately certified, “[they] would be entitled
to receive full TRA benefits regardless of the date they are certified.” But then, after the Workers
were certified, the Government sought to renege on that warranty, taking the position that –
6
Although BMC I acknowledged that – as the Government maintains – “the statutory
scheme generally vests the state courts with jurisdiction over disputes concerning the specific TAA
benefits to which individual members of a certified group of former employees are entitled” (see
BMC I, 30 CIT at ____, 454 F. Supp. 2d at 1347 (citations omitted)), BMC II further pointed out
that “it is far from clear that the extent of the benefits available to a group of petitioning workers
pursuant to a Labor Department TAA certification is a matter for the state courts (rather than the
Court of International Trade).” See BMC II, 31 CIT at ____ n.49, 519 F. Supp. 2d at 1325 n.49.
Of course, it was this latter issue which was of concern to the plaintiff Workers in this case.
Court No. 04-00229 Page 10
notwithstanding its earlier representations – the level of benefits to be received by the Workers was
a matter for state authorities and state courts.7 As the Workers emphasized, however:
Plaintiffs . . . have a reasonable expectation as litigants to have a measure of
reliability in their dealings with the government [as does the Court] . . . . The
Government should not have assured Plaintiffs of their entitlement to full benefits
if the Government knew it would ultimately take the position that its representation
(designed to induce an extension [of time]) could not be enforced. In such a
scenario, the Court must have the authority to hold the Government to its words.
See BMC II, 31 CIT at ____, 519 F. Supp. 2d at 1325-26 (quoting Plaintiffs’ Reply to Defendant’s
Response to Plaintiffs’ Comments on Remand Results).
The Government cites no authority for the proposition that a litigant is free to make
representations to the Court and to other parties to secure something of benefit, and then to later
disavow them – particularly where other parties have relied on them to their detriment.
It may be – as the Government has insisted in this case, and elsewhere – that the Court could
not have ordered the Labor Department to certify that, notwithstanding the delay in their
certification, the Workers were “entitled to receive full TRA benefits.” But it is beyond cavil that
a court has the inherent authority, where necessary, to hold litigants and counsel responsible for their
statements made in the course of litigation, whether through “sanctions, contempt proceedings, or
other action.” See generally BMC I, 30 CIT at ____, 454 F. Supp. 2d at 1348 (and authorities cited
there) (discussing court’s inherent powers); Precision Specialty Metals, Inc. v. United States, 315
F.3d 1346, 1357-58 (Fed. Cir. 2003) (discussing “the inherent power of the court to control and
7
See, e.g., BMC I, 30 CIT at ____ n.70, 454 F. Supp. 2d at 1349 n.70 (quoting Defendant’s
Memorandum of Law in Response to the May 12, 2005 Order, which argued: “[I]t is inappropriate
for the Court to inquire into matters beyond its jurisdiction. To the extent that any petitioners
experience perceived difficulties in the receipt of benefits after certification has issued, any such
grievance would be a matter for state courts.”).
Court No. 04-00229 Page 11
specify the standards of lawyers who appear before it”) (citation omitted).8 To the extent that
footnote 50 of BMC II may operate to “chill . . . enthusiasm or creativity” by constraining counsel
from promising what they cannot deliver, and by ensuring that they are both crystal clear and
completely candid in all communications with opposing counsel and with the Court, that will be all
to the good. See Def.’s Motion at 7 (arguing that “Rule 11 ‘is not intended to chill an attorney’s
enthusiasm or creativity in pursuing factual or legal theories.’”) (citation omitted).
In short, contrary to the Government’s assertions, nothing in footnote 50 of BMC II was
“undeserved and manifestly unjust.” The Government’s motion to strike that language from the
opinion is therefore denied.
8
In this case, the Government sought to portray federal authorities as powerless (relative to
state authorities) in the administration of TAA benefits, even if federal authorities’ delays in
certification threatened the benefits to which the Workers would otherwise be entitled.
But, in other similar cases, under pressure from the court as well as the workers’ counsel,
federal authorities have taken affirmative action to ensure that their delays did not negatively affect
the TAA benefits received by the workers in those cases. See BMC I, 30 CIT at ____ n.63, 454 F.
Supp. 2d at 1341 n.63 (discussing Tyco, Oxford Automotive, and Ericsson, where federal officials
granted so-called “Tyco Waivers” to assure full benefits for workers in those cases); see also Tyco,
28 CIT at 1575-76, 350 F. Supp. 2d at 1080-81 (discussing issuance of “Tyco Waiver” in that case).
This suggests that the Government recognizes that it is, in fact, accountable to the court in such
situations.
Moreover, in at least one critical respect, this case is even stronger than those other cases.
In this case, counsel for the Government made express representations – in writing – to the Court
and to the Workers’ counsel. In the other cases, the Government had made no such representations,
written or otherwise. See BMC I, 30 CIT at ____ n.69, 454 F. Supp. 2d at 1349 n.69 (discussing
Government’s failure in other cases to “affirmatively alert the court and all parties in advance to the
potentially devastating effect of litigation delays on the benefits ultimately awarded”).
Court No. 04-00229 Page 12
B. Footnote 99
The Government also challenges footnote 99 of BMC II,9 which appears in a section of the
opinion addressing the plaintiff Workers’ claim for a “special factor” enhancement of their award
of attorneys’ fees – a claim which the Government opposed. See generally Def.’s Motion at 7-9;
BMC II, 31 CIT at ____, 519 F. Supp. 2d at 1346-55.
As BMC II observed, “[t]he ‘special factor’ most commonly invoked in an attempt to justify
enhanced attorneys’ fees is that specified in the EAJA itself – ‘the limited availability of qualified
attorneys for the proceedings involved.’” BMC II, 31 CIT at ____, 519 F. Supp. 2d at 1347 (quoting
28 U.S.C. § 2412(d)(2)(A)(ii)). BMC II noted that, in Pierce v. Underwood, the Supreme Court
explained that the “special factor” of “the limited availability of qualified attorneys” “must refer to
attorneys ‘qualified for the proceedings’ in some specialized sense, rather than just in their general
legal competence.” BMC II, 31 CIT at ____, 519 F. Supp. 2d at 1347 (quoting Pierce v.
Underwood, 487 U.S. 552, 572 (1988)).
In addition, BMC II observed that Pierce v. Underwood narrowly construed the EAJA’s
reference to “the limited availability of qualified attorneys” as concerning only situations where an
attorney possesses “some distinctive knowledge or specialized skill needful for the litigation,” and
that the Supreme Court further held that “an extraordinary level of the general lawyerly knowledge
and ability useful in all litigation” does not suffice to warrant a “special factor” enhancement. BMC
II, 31 CIT at ____, 519 F. Supp. 2d at 1347 (quoting Pierce v. Underwood, 487 U.S. at 572). BMC
9
The Government’s Motion for Reconsideration at one point erroneously identifies the
footnote at issue as “footnote 91.” See Def.’s Motion at 9; but see id. at 5 (referring to “footnote
99”).
Court No. 04-00229 Page 13
II pointed out that Pierce v. Underwood suggested that the requisite “distinctive knowledge or
specialized skill” might include “an identifiable practice specialty such as patent law, or knowledge
of foreign law or language.” BMC II, 31 CIT at ____, 519 F. Supp. 2d at 1347 (quoting Pierce v.
Underwood, 487 U.S. at 572).
As BMC II emphasized, “[a]nalysis of the caselaw reveals that Courts of Appeals across the
country have taken divergent approaches to the ‘limited availability of qualified attorneys’ as a
special factor.” BMC II, 31 CIT at ____, 519 F. Supp. 2d at 1347 (citations omitted). BMC II
observed that “[m]uch of the debate surrounds whether technical specialties within the field of
administrative law constitute ‘distinctive knowledge or specialized skill[s]’ within the meaning of
Pierce v. Underwood.” BMC II, 31 CIT at ____, 519 F. Supp. 2d at 1347-48 (citations omitted).
BMC II then carefully surveyed the state of the existing law on point, concluding that “[a]ny attempt
to synthesize the jurisprudence on point compels the conclusion that the courts are truly ‘all over
the map,’ and that some precedent can be mustered to support almost any position – particularly if
one draws on the early caselaw.” BMC II, 31 CIT at ____, 519 F. Supp. 2d at 1351 (citations
omitted).
BMC II also analyzed the relevant caselaw of the U.S. Court of Appeals for the Federal
Circuit, as well as the pertinent decisions of courts subject to review by that court. See BMC II, 31
CIT at ____, 519 F. Supp. 2d at 1352-53. In one of the cases discussed, the Court of Appeals
directly (albeit succinctly) addressed the issue of legal expertise as a “special factor,” granting an
enhancement based specifically on counsel’s “capability and willingness” to handle appeals of
adverse decisions by the Merit Systems Protection Board. See BMC II, 31 CIT at ____, 519 F.
Court No. 04-00229 Page 14
Supp. 2d at 1352-53 (analyzing Gavette v. Office of Personnel Management, 788 F.2d 753, 754
(Fed. Cir. 1986) (emphasis added)).
In its EAJA Opposition, the Government asserted that it is “well-settled that . . . where
knowledge of general administrative law enables an attorney [to] prosecute a case, courts have
denied EAJA fees above the statutory cap.” See BMC II, 31 CIT at ____ n.99, 519 F. Supp. 2d at1354 n.99 (quoting Def.’s EAJA Opposition). The Government there urged the Court to follow the
Tyco decision, a TAA case in which another judge of this Court denied a “special factor”
enhancement. See BMC II, 31 CIT at ____, 519 F. Supp. 2d at 1353-54 (citing Def.’s EAJA
Opposition); Tyco, 28 CIT at 1578-79, 1582-83, 1589-92, 350 F. Supp. 2d at 1083, 1086, 1092-93.10
The Government’s EAJA Opposition did not cite, much less discuss or seek to distinguish, the
caselaw of the Court of Appeals for the Federal Circuit.
Against that backdrop, footnote 99 of BMC II observed:
The Government asserts that it is “well-settled that . . . where knowledge of general
administrative law enables an attorney [to] prosecute a case, courts have denied
EAJA fees above the statutory cap.”. . . . The Government’s strategic use of the
phrase “well-settled” could be read to be calculated to convey an impression of
unanimity (or, at least, near-unanimity) – the impression that the law on legal
expertise and “special factors” is a good deal more uniform and consistent than it
actually is. . . . [H]owever, counsel have a duty of candor toward the court; and
misrepresenting the state of the law is potentially sanctionable conduct.
BMC II, 31 CIT at ____ n.99, 519 F. Supp. 2d at 1354 n.99.
In its Motion for Reconsideration, the Government emphasizes that the key word in its
statement concerning “well-settled” law is the word “general” (as in “knowledge of general
10
As BMC II acknowledged, Tyco was then “the sole decision addressing a claim for a
‘special factors’ enhancement in a TAA case.” See BMC II, 31 CIT at ____, 519 F. Supp. 2d at
1353-54 (discussing Tyco, 28 CIT at 1589-92, 350 F. Supp. 2d at 1092-93).
Court No. 04-00229 Page 15
administrative law”). See Def.’s Motion at 8. But nowhere in its opposition to the plaintiff
Workers’ request for attorneys’ fees did the Government address the fact that – as BMC II noted –
the real debate in such cases “surrounds whether technical specialties within the field of
administrative law constitute ‘distinctive knowledge or specialized skill[s]’ within the meaning of
Pierce v. Underwood.” See BMC II, 31 CIT at ____, 519 F. Supp. 2d at 1347-48.11
More to the point, to support its assertion that it is “well-settled” that – “where knowledge
of general administrative law enables an attorney to prosecute a case” – no “special factor”
enhancement is appropriate, the Government’s opposition cited two cases. See Def.’s EAJA
Opposition at 35 (citing Atlantic Fish Spotters Ass’n v. Daley, 205 F.3d 488, 492 (1st Cir. 2000);
Truckers United For Safety v. Mead, 329 F.3d 891, 895 (D.C. Cir. 2003)). But, in fact, neither of
the two cases stands for the proposition that the Government claims.
Nowhere in either case did either court state that a “special factor” enhancement should be
denied “where knowledge of general administrative law enables an attorney to prosecute a case.”
Indeed, neither case even involved a claim of mere expertise in general administrative law. In
11
The Government’s EAJA Opposition identifies no case in which a party has sought a
“special factors” enhancement based solely on expertise in – to use the Government’s words –
“general administrative law.” (Emphasis added.) Nor did the Court’s extensive independent
research locate any such case.
Rather, as explained in one of the three cases that the Government cited in the relevant
section of its EAJA Opposition, “lawyers practicing administrative law typically develop expertise
in a particular regulated industry, whether energy, communications, railroads, . . . firearms,” or some
other field. See Truckers United for Safety v. Mead, 329 F.3d 891, 895 (D.C. Cir. 2003) (cited in
Def.’s EAJA Opposition at 35-36). Thus, the battleground in EAJA cases is typically whether
counsel’s expertise in some specialized field of administrative law justifies an enhancement to the
fee award – not whether an enhancement is warranted by counsel’s “knowledge of general
administrative law.” Compare Def.’s EAJA Opposition at 35.
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Atlantic Fish Spotters, counsel claimed special expertise in “fisheries law”; and in Truckers United,
counsel claimed special expertise in “the safety aspects of the trucking industry.” See Atlantic Fish
Spotters, 205 F.3d at 491; Truckers United, 329 F.3d at 892. Thus, as the Government itself noted
in its EAJA Opposition, the denial of a “special factor” enhancement in both cases was actually
based on court findings that the particular special expertise at issue was not required for the litigation
in question. See Def.’s EAJA Opposition at 35 (noting that Atlantic Fish Spotters denied “special
factor” enhancement “where expertise in fisheries law was not ‘essential’ to challenge
constitutionality of a Department of Commerce regulation prohibiting certain means of harvesting
tuna,” and that Truckers United denied “special factor” enhancement because “specialized expertise
in safety aspects of trucking industry . . . was ‘neither needful nor critical’ in action challenging
authority of Department of Transportation Inspector General to engage in compliance
investigation”).12
The third case on which the Government’s opposition relied – Tyco – similarly did not
involve a “special factor” enhancement claim based on mere “knowledge of general administrative
law.” To the contrary, the Tyco plaintiffs sought a “special factor” enhancement based on lead
counsel’s “specialized skills in the field of international trade law.” See Tyco, 28 CIT at 1579, 1590,
350 F. Supp. 2d at 1083, 1092. Thus, again, as the Government itself here acknowledged, the Tyco
Court denied a “special enhancement” because “counsel’s expertise in the field of international law
was ‘not needed for this litigation.’” See Def.’s EAJA Opposition at 35 (quoting Tyco, 28 CIT at
12
In Atlantic Fish Spotters, the court actually went even further, adding that “even if a
fisheries expert had been shown to be ‘necessary’ to litigate this case competently, there is no
finding nor any evidence to show that lawyers so skilled were unavailable at the presumptive
statutory rate of $125 per hour.” Atlantic Fish Spotters, 205 F.3d at 492-93.
Court No. 04-00229 Page 17
1590, 350 F. Supp. 2d at 1092).
Accordingly, contrary to the Government’s claims in its EAJA Opposition, this Court has
never “specifically held” that TAA cases “do not require any specialized skills or knowledge.” See
Def.’s EAJA Opposition at 35 (original emphasis omitted). Under the circumstances, the Tyco
Court’s statement that “[t]he basic litigation skills needed for these types of cases apply ‘to a broad
spectrum of litigation and thus are considered to be covered by the baseline statutory rate’” was
mere dicta. See Tyco, 28 CIT at 1591, 350 F. Supp. 2d at 1092-93 (quotation omitted).
In sum, contrary to the Government’s implication, none of the cases on which it relied
actually held that a “special factor” enhancement should be denied “where knowledge of general
administrative law enables an attorney to prosecute a case” – the proposition which the Government
identified as “well-settled.” Contrary to the Government’s statements, Tyco certainly did not
“specifically h[o]ld that TAA cases do not require any specialized skills or knowledge.” See Def.’s
EAJA Opposition at 35 (initial emphasis added; original emphasis omitted). Moreover, although
each of the three cases on which the Government relied – Atlantic Fish Spotters, Truckers United,
and Tyco – involved a claim of some specialized expertise, the Government elected not to brief that
issue. Nor did the Government cite, much less discuss or seek to distinguish, the caselaw of the
Court of Appeals for the Federal Circuit – including, in particular, Gavette, a case in which the Court
of Appeals granted a “special factor” enhancement based specifically on counsel’s “capability and
willingness” to handle appeals of adverse decisions by the Merit Systems Protection Board. See
Gavette, 788 F.2d at 754 (emphasis added).
In short, particularly in the context of the cases that it cited, the Government’s
Court No. 04-00229 Page 18
characterization of the law as “well-settled” was ill-considered. Under the circumstances, it simply
cannot be said that the Government’s EAJA Opposition fairly summarized the relevant law.
Nothing about the language of footnote 99 is “clearly erroneous and manifestly unjust.” The
Government’s motion to strike that language from the opinion is therefore denied.
C. Footnote 108 and Related Text
The Government’s third and final challenge is to footnote 108 of BMC II, and related text
in the main body of the opinion, which appear in the section of the opinion addressing the plaintiff
Workers’ claim for a cost of living adjustment (“COLA”) to the statutory hourly rate for attorneys’
fees. See generally Def.’s Motion at 9-11; BMC II, 31 CIT at ____, 519 F. Supp. 2d at 1364-67.
As BMC II explains, the Government opposed the request for a COLA, asserting that such
an adjustment was “not warranted,” and pointing to two cases – Phillips v. General Services
Administration and Baker v. Bowen. See BMC II, 31 CIT at ____ & n.108, 519 F. Supp. 2d at1364-65 & n.108 (citing Phillips v. General Services Administration, 924 F.2d 1577 (Fed. Cir.
1991); Baker v. Bowen, 839 F.2d 1075, 1084 (5th Cir. 1988)).
The entirety of the Government’s argument on this point read:
Plaintiffs’ arguments and requests for a cost of living adjustment should be rejected
because the policy of the statute is to pay non-enhanced fees for legal services
actually rendered. Phillips v. General Services Administration, 924 F.2d 1577, 1583
(Fed. Cir. 1991). The statute “is not designed to reimburse reasonable fees without
limit.” Id. at 1584. In addition, the Federal Circuit explained that:
[i]n Pierce, the Supreme Court also rejected as “special factors” (1)
the limited availability of attorneys with an extraordinary level of
general lawyerly knowledge and ability useful in all litigation, (2) the
novelty and difficulty of the issues, (3) the work and ability of
counsel, and (4) the results obtained, because all of these factors are
Court No. 04-00229 Page 19
applicable to a broad spectrum of litigation and thus are considered
to be covered by the baseline statutory rate of [then] $75 per hour,
plus a cost of living increase . . . .
Id. at 1584 (quoting Pierce, 487 U.S. at 571-73). “The Supreme Court, in Pierce,
concluded that Congress did not intend the EAJA to completely cover attorney fees.
‘To the contrary, the special factor formulation suggests Congress thought that [the
statutory rate] was generally quite enough public reimbursement for lawyers’ fees,
whatever the local or national market might be.’” Id. (quoting Pierce at 572)
(emphasis added).
Therefore, we respectfully request that the Court adhere to the statutory rate and
deny an upward adjustment to attorney fees here. See Baker v. Bowen, 839 F.2d
1075, 1084 (5th Cir. 1988) (noting that Congress intended for a cost of living
adjustment in the EAJA, but that the statute does not “absolutely require” it).
Def.’s EAJA Opposition at 39-40.
BMC II explained at some length why the Government’s citation to Phillips is “misleading.”
See BMC II, 31 CIT at ____, 519 F. Supp. 2d at 1364-65. As BMC II observed, for example, the
Government’s use of italics to highlight the phrase “whatever the local or national market might be”
conveys the impression that the holding of Phillips was anti-COLA. See BMC II, 31 CIT at ____,
519 F. Supp. 2d at 1364. But, as BMC II explains, a review of Phillips reveals that – in the excerpt
on which the Government relies – the Court of Appeals was actually emphasizing the limited
circumstances in which special factors adjustments are appropriate. See BMC II, 31 CIT at ____,
519 F. Supp. 2d at 1364-65 (discussing Phillips, 924 F.2d at 1584). Indeed, as BMC II noted, the
Court of Appeals expressly held that the Phillips plaintiff’s fee award should be calculated by using
the statutory rate increased to reflect a COLA. See BMC II, 31 CIT at ____, 519 F. Supp. 2d at 1365(discussing Phillips, 924 F.2d at 1583-84).
In its Motion for Reconsideration, the Government states that it “neither misquoted the
Court No. 04-00229 Page 20
Phillips decision, nor attempted to hide the fact that this statement [i.e., the quote that “the special
factor formulation suggests Congress thought that [the statutory rate] was generally quite enough
public reimbursement for lawyers’ fees, whatever the local or national market might be”] was made
in relation to ‘special factors’ adjustments.” See Def.’s Motion at 10. But the Government’s
contentions in its Motion for Reconsideration simply cannot be squared with the argument that it
made in its EAJA Opposition, which is quoted above in its entirety.
The Government’s EAJA Opposition began with its assertion that “Plaintiffs’ arguments and
requests for a cost of living adjustment should be rejected because the policy of the statute is to pay
non-enhanced fees for legal services actually rendered” – a proposition for which the Government
cited Phillips. See Def.’s EAJA Opposition at 39 (emphasis added). Any reader would be left with
the clear and unmistakeable understanding that the holding of Phillips was anti-COLA (or, read most
favorably to the Government, silent on the granting of a COLA). But, in fact, as discussed above,
the Phillips Court actually granted a COLA – a fact that the Government failed to even
acknowledge, much less address.
Nothing in the remainder of the discussion of Phillips in the Government’s EAJA Opposition
did anything to clarify the misimpression left by the Government’s first sentence. See Def.’s EAJA
Opposition at 39-40 (quoted above). Indeed, as BMC II noted, the Government’s italicization of the
phrase “whatever the local or national market might be” served only to reinforce the misimpression.
See BMC II, 31 CIT at ____, 519 F. Supp. 2d at 1364-65.
What is most telling is that, although the issue being briefed was the request for a COLA,
and although Phillips in fact addresses the award of a COLA, the Government ignored the COLA
Court No. 04-00229 Page 21
section of the Court of Appeals’ opinion, and instead quoted only select excerpts from the section
of Phillips addressing “special factor” enhancements. Compare Phillips, 924 F.2d at 1583(addressing COLA) and at 1583-84 (addressing claim for “special factor” enhancement) with Def.’s
EAJA Opposition at 39-40 (citing only Phillips, 924 F.2d at 1584). Simply stated, it was – and is
– disingenuous for the Government to suggest that anything in the reasoning (much less the holding)
of Phillips supported the Government’s opposition to a COLA in this case.
The Government similarly seeks to defend its citation to Baker v. Bowen as purported
support for its argument (quoted above) that “the Court [should] adhere to the statutory rate and
deny an upward adjustment to attorney fees here.” See Def.’s EAJA Opposition at 39-40 (citing
Baker v. Bowen, 839 F.2d at 1084). However, as BMC II observed, the Government’s EAJA
Opposition effectively misrepresented that case. See BMC II, 31 CIT at ____ n.108, 519 F. Supp.
2d at 1364 n.108 (noting that Government’s selective quotation of Baker v. Bowen “borders on the
sanctionable”). The Government emphasizes that the quotation in its parenthetical accompanying
Baker v. Bowen – which noted that “Congress intended for a cost of living adjustment in the EAJA,
but . . . the statute does not ‘absolutely require’ it” – is “entirely true,” and argues that it “neither
misquoted nor mischaracterized the current law on this issue.” Again, however, any reader of the
Government’s EAJA Opposition would be left with the clear and unmistakeable understanding that
Baker v. Bowen denied a COLA (or, at a minimum, was anti-COLA). In fact, however, the two
sentences immediately following the sentence that the Government quoted belie any such reading,
and make it clear that Baker v. Bowen contemplates that a COLA is to be granted as a routine matter
of course, “except in unusual circumstances”:
Court No. 04-00229 Page 22
Clearly, by mentioning it in the statute, Congress intended that the cost of living be
seriously considered by the fee-awarding court. Except in unusual circumstances,
therefore, if there is a significant difference in the cost of living . . . in a particular
locale that would justify an increase in the fee, then an increase [i.e., a COLA]
should be granted.
Baker v. Bowen, 839 F.2d at 1084 (emphases added). The Government conveniently failed to quote
those two latter sentences. Moreover, the Government made no effort to demonstrate “unusual
circumstances” to preclude the award of a COLA here.
In short, the Government’s quotations from Phillips and Baker v. Bowen were selective, to
say the least. Contrary to the plain implication of the Government’s EAJA Opposition, neither of
the two cases denied a COLA. Indeed, Phillips granted a COLA, and Baker v. Bowen stands for the
proposition that a COLA should be awarded “[e]xcept in unusual circumstances.”13 It is of little
moment that the Government may have accurately quoted the snippets on which it relies. In the
context in which the Government used them, the quotes are nonetheless misleading. The Court and
opposing parties should not be required to read every word of every case cited by the Government
in its briefs to ascertain whether it has taken a quotation out of context and, in effect, distorted the
facts of the case, the law of the case, or its holding. See n.4, supra; Precision Specialty Metals, 315
13
In its Motion for Reconsideration, the Government cites for the first time May v. Sullivan,
936 F.2d 176, 177-78 (4th Cir. 1991), which affirmed a trial court’s denial of a COLA “when
presented with nothing except an increase in the Consumer Price Index,” and when “even ‘need for
a cost of living increase’ was not asserted.” See Def.’s Motion at 10.
Several points are relevant here. First, it is now much too late for the Government to cite
authority to support its position. Moreover, the true problem with the Government’s EAJA
Opposition is not the position that it took, but – rather – that the cases that it cited not only failed
to support that position, but, indeed, essentially controverted it. (Further, the Government gave no
substantive reason for refusing a COLA, stating only that one was “not required”). Finally, as BMC
II makes abundantly clear, May v. Sullivan is largely an outlier, and is not reflective of the current
general state of the law on this point. See BMC II, 31 CIT at ____, 519 F. Supp. 2d at 1365-66.
Court No. 04-00229 Page 23
F.3d at 1354-57.
Nothing in BMC II’s analysis of the Government’s opposition to the COLA is either
“unwarranted” or “manifestly unjust.” Accordingly, the Government’s motion to strike footnote 108
and related text from that section of the opinion is also denied.
III. Conclusion
For all the reasons set forth above, Defendant’s Motion for Partial Reconsideration must be,
and hereby is, denied.
/s/ Judge Delissa Ridgway
___________________________________
Delissa A. Ridgway
Judge
Dated: September 26, 2008
New York, New York