487 U.S. 552 (1988)
In 1974 Congress enacted the Housing and Community Development Act authorizing the Secretary of Housing and Urban Development to make operating-subsidy payments to owners of government-subsidized apartment buildings.1 The Secretary decided not to implement the program.2 Tenants residing in government-subsidized housing, including the nationwide class represented by respondents Underwood and others, filed suit in nine federal district courts challenging that decision.3 The District Court for the District of Columbia granted summary judgment to the tenants, entered a permanent injunction and writ of mandamus requiring disbursement of accumulated funds, and the Supreme Court stayed the judgment pending appeal.4
While appeals were pending a newly appointed Secretary settled most of the cases by agreeing to pay $60 million into a settlement fund for distribution to owners or tenants whose rents had increased.5 The present case was transferred to the Central District of California for administration of the settlement.6 In 1980 Congress enacted the Equal Access to Justice Act.7 Respondents moved for attorney's fees under the Act.8
The District Court granted the motion, finding the Secretary's position not substantially justified.9 It determined that respondents' attorneys had provided 3,304 hours of service, applied hourly rates ranging from $80 to $120 because of special factors, produced a lodestar of $322,700, and multiplied that figure by three-and-one-half, resulting in a total award of $1,129,450.10
The Court of Appeals for the Ninth Circuit held that the District Court had not abused its discretion in finding the position not substantially justified but eliminated the multiplier and reduced the award to $322,700. The Supreme Court granted certiorari to address the standard of review for substantial-justification determinations, the meaning of substantially justified, and the identification of special factors justifying fees above the statutory cap.11
Whether a district court's determination that the position of the United States was not substantially justified under the Equal Access to Justice Act is reviewed for abuse of discretion?12
A district court's determination whether the position of the United States was substantially justified under 28 U.S.C. § 2412(d)(1)(A) is reviewed for abuse of discretion.13 The statute's text emphasizes that the court finds the position substantially justified.14 The district court possesses unique familiarity with pretrial facts and settlement dynamics.15 The question is multifarious and novel and therefore benefits from the flexibility of deferential review rather than a rigid rule.16
Yes. The statute provides that fees shall be awarded unless the court finds that the position of the United States was substantially justified.17 This formulation emphasizes the district court's role and suggests deference on appeal.18 The question whether a litigating position is substantially justified involves multifarious, fleeting facts that resist generalization.19 Abuse-of-discretion review is therefore the sound choice for sound judicial administration.20
The Court of Appeals therefore correctly reviewed the District Court's determination under that standard.21
The determination is reviewed for abuse of discretion.22
Related opinions on this issue
Justice White would apply de novo review to a district court's determination whether the Government's position was substantially justified.23 The question is one of law once historical facts are established.24 Appellate courts possess special expertise in assessing competing legal interpretations.25
De novo review promotes consistency and predictability across circuits.26 It prevents the same governmental position from being deemed substantially justified in one district court and not in another.27 The statute is silent on the standard of review, and the general rule favors de novo review of legal issues.28
Whether the term substantially justified in the Equal Access to Justice Act means justified to a degree that could satisfy a reasonable person?29
The term substantially justified in 28 U.S.C. § 2412(d)(1)(A) means justified to a degree that could satisfy a reasonable person.30 That is, it means having a reasonable basis both in law and in fact.31 It does not mean justified to a high degree of certainty.32 It does not mean merely undeserving of sanctions for frivolousness.33
Yes. The statutory phrase is substantially justified, not justified to a high degree of certainty.34 The word substantial most naturally conveys justified in substance or in the main.35 Legislative history from the 1980 reports describes the standard as one of reasonableness in law and fact.36
Analogous uses of substantial in the Administrative Procedure Act and Federal Rule of Civil Procedure 37 confirm that the term does not require a large quantity of evidence.37 Rather, it requires evidence that a reasonable mind would accept as adequate.38 The Government's position therefore need only have a reasonable basis both in law and in fact to be substantially justified.39
Substantially justified means having a reasonable basis both in law and in fact.40
Related opinions on this issue
Joined by Justice Marshall And Justice Blackmun
Justice Brennan agrees that substantially justified means more than merely reasonable. It requires a solid basis in both law and fact rather than a marginal or not unreasonable basis.41 Congress rejected a reasonably justified standard in favor of the higher substantially justified test.42
The 1985 House Report expressly states that the test must be more than mere reasonableness.43 The phrase substantially justified was a congressional attempt to fashion a middle ground between an earlier proposal to award fees in all cases in which the Government did not prevail and the Department of Justice's proposal to award fees only when the Government's position was arbitrary, frivolous, unreasonable, or groundless.44 The test of reasonableness is firmly encamped near the position espoused by the Justice Department.45
Whether the district court abused its discretion in determining that the Secretary's position was not substantially justified?46
A district court does not abuse its discretion in finding the position of the United States not substantially justified when the Government's legal arguments, though colorable, were rejected by every court to consider the merits and when the objective indicia of settlement and timing of disposition do not conclusively demonstrate substantial justification.47
No. The Secretary argued that the operating-subsidy program was permissive rather than mandatory because the statute used authorized to make rather than shall make.48 The Secretary also argued that Pennsylvania v. Lynn supported suspension of permissive programs.49 The Secretary further argued that insufficient appropriations gave discretion to suspend the program.50 Respondents countered with mandatory statutory language requiring establishment of an initial operating expense level and crediting of excess charges to a reserve fund usable only for operating subsidies.51
Every one of the nine district courts and two courts of appeals that reached the merits rejected the Secretary's position.52 The District Court therefore did not abuse its discretion in concluding that the position was not substantially justified.53
The district court did not abuse its discretion.54
Related opinions on this issue
Justice Blackmun dissents from the judgment of the Court.55 In his view the position of the United States was not substantially justified.56 The Government's interpretation of the statute was not reasonable.57
The District Court therefore abused its discretion in denying fees.58 He would have held that the position of the United States was not substantially justified because the Government's interpretation of the statute was not reasonable and the District Court abused its discretion in denying fees under the Equal Access to Justice Act.59
Joined by Justice O'connor
Justice White would hold under de novo review that the Secretary's refusal to implement the operating-subsidy program was substantially justified.60 The statutory language distinguished between authorized and shall.61 Pennsylvania v. Lynn supported the Secretary's exercise of discretion over permissive programs.62
The governing law did not mandate HUD's surrender early in the litigation.63 The law did not become so one-sided as to render HUD's position clearly unjustifiable even after several lower courts had ruled against the Secretary.64
Whether a special factor under the Equal Access to Justice Act that justifies awarding attorney's fees in excess of the statutory cap must be something not of broad and general application?65
A special factor under 28 U.S.C. § 2412(d)(2)(A)(ii) justifying fees above the $75-per-hour cap must be something not of broad and general application.66 An example is the limited availability of attorneys possessing a distinctive knowledge or specialized skill needful for the litigation.67 Factors like novelty and difficulty of issues, undesirability of the case, work and ability of counsel, results obtained, or the contingent nature of the fee do not qualify.68
Yes. The statute permits fees above the cap only when a special factor such as the limited availability of qualified attorneys for the proceedings involved justifies a higher rate.69 Limited availability refers to attorneys with an identifiable practice specialty or distinctive knowledge required for the case.70 It does not refer merely to lawyers who are generally experienced or skilled.71
The latter interpretation would nullify the cap by allowing market rates to govern whenever they exceed $75.72 Factors such as novelty and difficulty of issues, undesirability of the case, work and ability of counsel, results obtained, and the contingent nature of the fee are of broad and general application.73 They therefore do not qualify as special factors.74
Special factors are limited to distinctive specialized skills or knowledge not of broad application.75
Related opinions on this issue
Joined by Justice Marshall And Justice Blackmun
Justice Brennan disagrees with the Court's miserly reading of special factors.76 He would permit enhancements analogous to those recognized in Blum v. Stenson for superior quality of service or exceptional success.77 The statute expressly allows consideration of factors such as the limited availability of qualified attorneys.78
The phrase such as indicates that other analogous factors may also justify exceeding the cap in rare cases.79 A special factor may be readily analogized to the factors identified in Blum to enhance the lodestar figure under section 1988.
Whether the district court abused its discretion by awarding fees above the statutory cap based on the factors it identified?80
A district court abuses its discretion by awarding fees above the statutory cap when it relies on factors of broad and general application such as novelty and difficulty of issues, undesirability of the case, work and ability of counsel, results obtained, customary fees in other cases, and the contingent nature of the fee rather than on a qualifying special factor.81
Yes. The District Court relied on novelty and difficulty of issues, undesirability of the case, work and ability of counsel, results obtained, customary fees and awards in other cases, and the contingent nature of the fee to justify rates ranging from $80 to $120 and a multiplier of three-and-one-half.82 Each of these factors is of broad and general application to litigation.83 Therefore none constitutes a special factor under the statute.84
The District Court therefore abused its discretion in exceeding the statutory cap.85 The case must be remanded for recalculation of the fee award without reliance on those factors.86
The district court abused its discretion in exceeding the cap.87