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December 7, 1992



The opinion of the court was delivered by: MORRIS E. LASKER


The Purchase Environmental Protective Association, Inc. ("PEPA") moves for an award of attorneys fees and expenses in the amounts of $ 207,244.00 and $ 21,905.15 respectively under the Equal Access to Justice Act ("EAJA"). 28 U.S.C. § 2412(d).

 The motion arises in the aftermath of litigation which began in March 1988 in connection with an attempt by the United States Postal Service (the "Postal Service") to locate a new general mail facility and vehicle maintenance facility at a site near the Westchester County Airport. The selection of the site generated substantial controversy in response to which the Postal Service published four Environmental Assessments ("EA"s) and two "Wetlands Impact Reports" over the course of nearly two and a half years. The final EA and its appendices consisted of seven volumes containing extensive discussion of many possible environmental effects of the proposed facility. It included discussion of the anticipated impact of the project on the Kensico Reservoir, wetlands areas on the site, traffic in the area, and wastewater disposal and water supply, as well as the project's cumulative environmental impact in conjunction with other nearby land uses. The final EA, like its predecessors, concluded that a full Environmental Impact Statement ("EIS") was not required because the project would have "no significant impact . . . on the environment." 39 C.F.R. § 775.6(a)(2).


 The EAJA permits parties who successfully challenge government actions in the courts to recover the costs of litigation in non-tort civil actions, including proceedings for judicial review of agency action, "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). Congress enacted the EAJA in 1980 as an experiment to ameliorate the problem "that certain individuals . . . may be deterred from seeking review of, or defending against unreasonable governmental action because of the expense involved in securing the vindication of their rights." H.R.Rep. No. 1418, 96th Cong., 2d Sess. 5 (1980), reprinted in 1980 U.S.C.C.A.N. 4984, 4984.

 When Congress reenacted the EAJA in 1985 as a permanent measure, the phrase "position of the United States", left undefined in the original act, was defined to include both "the position taken by the United States in the civil action," as well as "the action or failure to act by the agency upon which the civil action is based." 28 U.S.C. § 2412(d)(2)(D).

 Congress made clear that for EAJA purposes, a court should inquire into both the underlying agency determination affecting the party, as well as the Government's litigation strategy in defense of that determination. See H.R.Rep. No. 99-120, 99th Cong., 1st Sess. 12, reprinted in 1985 U.S. Code Cong. & Admin. News 132, 141.

 Smith by Smith v. Bowen, 867 F.2d 731, 734 (2d Cir. 1989).

 The government's position is "substantially justified" if it is "'justified in the substance or in the main' - that is, justified to a degree that could satisfy a reasonable person" or it has a "reasonable basis both in law and fact." Pierce v. Underwood, 487 U.S. 552, 565, 101 L. Ed. 2d 490, 108 S. Ct. 2541 (1987). "To be 'substantially justified' means, of course, more than merely undeserving of sanction for frivolousness. . ." Id. at 566. The test is "essentially one of reasonableness," H.R.Rep. No. 1418 at 10, reprinted in 1980 U.S.C.C.A.N. at 4989. In assessing whether the government's position was substantially justified, the Court of Appeals has examined the clarity of the governing law, the foreseeable length and complexity of litigation, and the consistency of the government's position. Dubose v. Pierce, 761 F.2d 913, 918 (2d Cir. 1985) (factors aid analysis in "borderline cases"). The government bears the burden of demonstrating the justification for its position, Environmental Defense Fund, Inc. v. Watt, 722 F.2d 1081, 1085 (2d Cir. 1983).

 The "special circumstances" exception to the EAJA is a "'safety valve' [which] . . . gives the court discretion to deny awards where equitable considerations dictate an award should not be made." H.R.Rep. No. 1418, at 11, reprinted in 1980 U.S.C.C.A.N., at 4990. It has been held that such special circumstances arise when a party that is otherwise eligible for EAJA fees joins non-eligible parties who are fully willing and able to pursue the action against the United States on their own. In that situation the eligible party takes a free ride through the judicial process at the government's expense and an award is unjust. Louisiana v. Lee, 853 F.2d 1219, 1225 (5th Cir. 1988); Sierra Club v. U.S. Army Corps of Engineers, 776 F.2d 383 (2d Cir. 1985) (limiting award based on ratio of eligible to non-eligible parties).

 PEPA's application under the EAJA is denied because the government's overall position was substantially justified and because PEPA acted only in conjunction with three governmental non-eligible parties who vigorously pressed the challenge to the Postal Service's action regardless of PEPA's intervention.


 PEPA contends that the government's position was not substantially justified because the Court (i) overruled the Postal Service's determination that an EIS was not necessary, finding it to be arbitrary and capricious, (ii) found that the Postal Service had violated certain wetland regulations, and (iii) granted PEPA's intervention in the action over the government's opposition.

 This analysis is an oversimplification. The litigation had two phases. Initially, PEPA contended that the Postal Service had to comply with the environmental review process required by the National Environmental Policy Act, 42 U.S.C. § 4321 et seq. ("NEPA") before condemnation. The government prevailed on that pivotal issue and on every other issue presented at that time with the exception of PEPA's motion to intervene, which was granted, and the question of whether the Postal Service had violated its own wetlands regulations. U.S. v. 27.09 Acres of Land, 737 F. Supp. 277, 288-89 (S.D.N.Y 1990) (hereinafter "27.09 Acres I").

 27.09 Acres I was filed on May 15, 1990 and in December of that year the law firm of Davis Polk & Wardwell was substituted as attorney of record for PEPA and Sidley & Austin withdrew. The fees and expenses PEPA seeks to recover under the EAJA pertain solely to its representation by Sidley & Austin prior to this substitution. Thereafter PEPA moved for a preliminary injunction barring the Postal Service from proceeding with construction of the facility until an EIS had been prepared. PEPA prevailed. In reversing the Postal Service's determination that the project would have no significant environmental impact and that no EIS need therefore be prepared required this Court found that the agency's action had been "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law" pursuant to the Administrative Procedure Act. 5 U.S.C. § 706(2)(A). U.S. v. 27.09 Acres of Land, 760 F. Supp. 345, 348 (S.D.N.Y. 1991) (hereinafter "27.09 Acres II"). After the entry of the preliminary injunction, the Postal Service determined to pursue an alternate site and to reconvey the airport site to the County.

 PEPA's contention that the government's position was not substantially justified because the Court overruled the Postal Service determination that an EIS was not necessary arises out of 27.09 Acres II. There is at least a serious question whether PEPA can support its claim for costs under the EAJA by reference to the government's position at a time in the litigation when it was no longer represented by Sidley & Austin for whose services it seeks reimbursement. While the Court of Appeals has held that "it is inappropriate to examine separate parts of the litigation to determine whether the government's position in each phase was justified," Trichilo v. Secretary of Health and Human Services, 832 F.2d 743, 745 (2d Cir. 1987), it is not clear whether that prevents limiting the inquiry to the period for which PEPA actually ...

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