28 U.S.C. § 2412(d)(1)(A) and (B). (emphasis added).
The government's position is only "substantially justified" if it has a solid, though not correct, basis in fact and law. McDonald v. Schweiker, 726 F.2d 311, 316 (7th Cir. 1986). "Substantially justified" is a higher standard than "nonfrivolous." Id.
Defendant's application for fees under EAJA seems timely,
as the Seventh Circuit has held that an EAJA application is timely if filed less than 30 days after any appellate proceedings are completed. McDonald, 726 F.2d 311, 314-315 (7th Cir. 1983). See also Melkonyan v. Sullivan, 501 U.S. 89, 115 L. Ed. 2d 78, 111 S. Ct. 2157, 2162 (1991).
The issue before the court is whether EAJA applies in Title VII cases. The EEOC stresses that the majority of the federal appellate decisions hold EAJA is inapplicable. The EEOC further argues that the Seventh Circuit's "invitation" is mere dicta. Defendant, on the other hand, styles the Seventh Circuit's statements as a holding in their favor, and stress the equity of their position--a small company forced to litigate for years at ruinous expense against a government agency with a questionable case. Defendant asserts that the EEOC is not like a private plaintiff who might be deterred from vigorously asserting rights under Title VII out of fear of a fee award.
The federal circuit courts are in conflict on this issue, and our own circuit court has not definitively addressed the issue.
This court's duty is to examine the decisions of the other circuit courts, in the context of guidance provided by our circuit court, and select the appropriate rule. Ultimately, this determination will require a balancing of policies between Title VII and EAJA.
The only circuit courts that specifically addressed the issue have concluded EAJA does not apply to Title VII cases. The Fifth Circuit in EEOC v. Kimbrough Inv. Co., 703 F.2d 98, 103 (5th Cir. 1983) held that the EAJA does not apply to actions under Title VII, as Title VII has an explicit provision relating to the recovery of attorney's fees. The court stated that EAJA only applies to claims for attorney's fees where no other specific statute deals with the award of attorney's fees against the government. Id. The Fifth Circuit's position was adopted by the Eighth Circuit in Huey v. Sullivan, 971 F.2d 1362 (8th Cir. 1992) U.S. App. Pndg. The Huey court stated that EAJA does not apply to Title VII actions, as the savings clause of EAJA prohibits EAJA from narrowing or broadening the award of fees allowed by other federal statutes. 971 F.2d at 1367.
The Ninth Circuit reached a similar conclusion in Escobar Ruiz v. INS, 787 F.2d 1294 (9th Cir. 1986) reh. 838 F.2d 1020 (9th Cir. 1988) (en banc), holding that the "Except as otherwise specifically provided" language in EAJA indicates that EAJA was not intended to apply in actions under statutes with their own fee shifting provisions. 787 F.2d at 1296-97. The court emphasized the language of the House Judiciary Committee that EAJA ". . . . applies to all civil actions except . . . those already covered by existing fee-shifting statutes." Id. (Citing H.R.Rep. No. 1418, 96th Cong. 2nd Sess. 18 (1980), reprinted in 1980 U.S. Code Cong. and Ad. News 4953, 4984, 4997.) The Ninth Circuit concluded, however, that EAJA applied to INS cases, as Section 292 of the INS Act was not a fee shifting provision. 838 F.2d at 1028.
As noted by our appellate court, the Federal Circuit reached a different result in a case under the Back Pay Act in Gavette v. Office of Personnel Management, 808 F.2d 1456 (Fed. Cir. 1986). In Gavette, the government argued that because the Back Pay Act contained its own fee shifting provision, EAJA did not apply. 808 F.2d at 1463. The court disagreed, noting that the Back Pay Act had a very narrow fee shifting provision, which EAJA supplemented, rather than replaced or superseded. Id. at 1464-65. The Federal Circuit reaffirmed this position in Beck v. Sec. of D.H.H.S., 924 F.2d 1029, 1038 (Fed. Cir. 1991),
holding that the EAJA "may be used to supplement another statute's attorney's fee provision where the other statute has a more difficult or narrower standard for awarding fees."
Under the Beck analysis, EAJA could be used to supplement the narrow (at least for a defendant) fee shifting provision of the Civil Rights Act. Further, the policies behind EAJA seem broad enough to cover this case. "The EAJA was enacted largely to encourage individuals and small businesses to litigate against the government adverse determinations in administrative proceedings and civil actions, regardless of the cost of such litigation." Berman v. Schweiker, 713 F.2d 1290, 1295 (7th Cir. 1983). EAJA, in effect, prevents individuals from being easily deterred from "challenging government actions due to the high cost of civil litigation." Id. Further, EAJA may compensate parties from expenses incurred in defending against unreasonable government action. Id. (citing Robertson and Fowler, Recovering Attorneys' Fees from the Government Under the Equal Access to Justice Act, 56 Tulane L. Rev. 903, 944 (1982).) That EAJA may deter the government from taking inappropriate positions has also been noted. Id. at 1296. Thus, a party who litigates an issue against the government, perhaps to correct an erroneous agency decision, is "also refining and formulating public policy." Id.
As noted by the Seventh Circuit, allowing fees under EAJA in this case could advance EAJA's policies. A small company was forced to litigate for years, at near crushing expense, against a governmental agency. Consolidated, 989 F.2d at 238. The agency's position, while not "frivolous", was weak. Defendant ultimately succeeded in correcting the government's erroneous position. Granting fees in this case would serve two purposes:
-- compensate defendant for expenses incurred in defending against an unreasonable government position;
-- deter future improper action by the EEOC.