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Pierce v. Underwood

Supreme Court of the United States · 1988 · Civil Procedure

Civil ProcedureAttorney's FeesEqual Access to Justice ActStandard of ReviewEAJA28 U.S.C. § 2412(d)substantially justifiedabuse of discretion

Facts

Respondents were members of a nationwide class of tenants in government-subsidized housing who challenged the Secretary's decision not to implement an operating-subsidy program authorized by federal housing legislation. Numerous district courts had already rejected the Secretary's position, and this case was eventually settled after a new Secretary agreed to pay $60 million into a settlement fund. While the settlement was being administered, Congress enacted the EAJA, and respondents sought attorney's fees on the ground that the Government's position had not been substantially justified. The District Court awarded fees above the statute's $75-per-hour cap based on supposed special factors, and the Ninth Circuit upheld the no-substantial-justification finding but reduced the overall award.

Issue

What standard of appellate review applies to a district court's determination under the EAJA that the Government's position was not substantially justified? What does "substantially justified" mean under 28 U.S.C. § 2412(d)(1)(A), and what counts as a "special factor" permitting fees above the EAJA's statutory hourly cap?

Rule

Under the EAJA, a district court's determination whether the Government's position was substantially justified is reviewed for abuse of discretion. "Substantially justified" means justified in substance or in the main, or justified to a degree that could satisfy a reasonable person, which is equivalent to having a reasonable basis in law and fact. Fees above the statutory hourly cap are allowed only when a narrow special factor exists, such as distinctive knowledge or specialized skill needful for the litigation and unavailable at the capped rate; broad considerations like novelty, difficulty, quality of counsel, results obtained, customary fees, or contingency do not qualify.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

In a federal benefits suit in Phoenix, Elena Ruiz prevailed against a federal department and then obtained attorney's fees under the EAJA after the district judge found the government's position was not substantially justified. On appeal, the government argues that because the dispute turned mostly on statutory interpretation rather than witness credibility, the court of appeals should review the substantial-justification ruling de novo.

What is the proper standard of review for the court of appeals?

Explanation. The majority held that a district court's determination whether the government's position was substantially justified is reviewed for abuse of discretion. The Court reasoned that the issue is context-dependent, often bound up with the district court's superior feel for the litigation, and that deferential review avoids turning fee disputes into a second major litigation.