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Bazalo v. West

U.S. Court of Appeals, Federal Circuit


August 06, 1998

CHARLES W. BAZALO, CLAIMANT-APPELLANT,
v.
TOGO D. WEST, JR., SECRETARY OF VETERANS AFFAIRS, RESPONDENT-APPELLEE.

Before Rich, Newman, and Schall, Circuit Judges.

The opinion of the court was delivered by: Rich, Circuit Judge.

Appealed from: United States Court of Veterans Appeals

Judge Donald J. Ivers

Opinion for the court filed by Circuit Judge RICH. Dissenting opinion filed by Circuit Judge SCHALL.

Charles W. Bazalo (Bazalo) appeals from a dismissal by the United States Court of Veterans Appeals (Court of Veterans Appeals) for lack of subject matter jurisdiction over his application for attorney fees and expenses under the Equal Access to Justice Act (EAJA), 28 U.S.C. § 2412 (1994). We reverse and remand.

Background

After remand of Bazalo's complaint, on which his EAJA application is based, to the Board of Veterans' Appeals, Bazalo filed a timely application for attorney fees and expenses under EAJA. The Secretary of Veterans Affairs (Secretary) filed a motion to dismiss Bazalo's EAJA application for lack of subject matter jurisdiction, however, because he had not alleged that he was an eligible party or that his net worth did not exceed $2,000,000.

The pertinent section of the EAJA reads:

A party seeking an award of fees and other expenses shall, within thirty days of final judgment in the action, submit to the court an application for fees and other expenses which shows that the party is a prevailing party and is eligible to receive an award under this subsection, and the amount sought, including an itemized statement from any attorney or expert witness representing or appearing in behalf of the party stating the actual time expended and the rate at which fees and other expenses were computed. The party shall also allege that the position of the United States was not substantially justified. Whether or not the position of the United States was substantially justified shall be determined on the basis of the record (including the record with respect to the action or failure to act by the agency upon which the civil action is based) which is made in the civil action for which fees and other expenses are sought.

28 U.S.C. § 2412(d)(1)(B). A "party" is defined, in part, as "an individual whose net worth did not exceed $2,000,000 at the time the civil action was filed . . . ." 28 U.S.C. § 2412(d)(2)(B).

The Court of Veterans Appeals promulgated Rule 39 to set forth the requirements of an EAJA application under the Court's Rules of Practice and Procedure. Rule 39 required that the applicant provide a statement that he is a prevailing party and is eligible to receive an award; that he identify the specific positions of the Secretary that were not substantially justified; and that he provide an itemized statement from his attorney as to each type of service rendered. See U.S. Vet. App. R. 39.

In construing the EAJA statute, the Court of Veterans Appeals held that the use of mandatory language such as "shall" and "must" in the EAJA statute and the necessity of strict construction of the United States' waiver of sovereign immunity established that each of the following four requirements are jurisdictional and must be met within the thirty-day filing period:

(1) a showing that the appellant is a prevailing party;

(2) a showing that the appellant is eligible for an award;

(3) an allegation that the government's position is not substantially justified; and

(4) an itemized statement of the fees sought.

The Court of Veterans Appeals found that a showing of eligibility could be made by stating in the EAJA application that the applicant's net worth, at the time of filing the appeal, did not exceed $2,000,000 or by filing a reference to an in forma pauperis ruling. The Court of Veterans Appeals revoked Rule 39 in a separate order as superseded by this holding requiring a specific statement as to an applicant's eligibility. Although Bazalo appeared to have met the requirements of Rule 39 then in effect, the Court of Veterans Appeals dismissed his EAJA application for lack of subject matter jurisdiction because it found that Bazalo did not show, within the thirty-day filing period, that he was an eligible party with a net worth that did not exceed $2,000,000 at the time the appeal was filed.

Discussion

The sole question presented here is whether a timely filed EAJA application may be supplemented after the expiration of the thirty-day filing requirement of § 2412(d)(1)(B) to meet an additional requirement of the section such as "eligibility" by establishing that the applicant's net worth did not exceed $2,000,000 at the time of the filing of the civil action. We hold that such amendment may be made as long as no prejudice to the government results.

We review de novo the interpretation of statutory provisions by the Court of Veterans Appeals. Jones v. Brown, 41 F.3d 634, 637 (Fed. Cir. 1994). To construe a statute, we begin by examining the language to determine the plain meaning of the words used by Congress. Id.

The EAJA is a waiver of sovereign immunity of the United States and must be strictly construed. Ardestani v. INS, 502 U.S. 129, 137 (1991). Once such sovereign immunity has been waived, however, we may not narrow such a waiver. Jones, 41 F.3d at 639 (quoting United States v. Kubrick, 444 U.S. 111, 117-18 (1979)).

I.

Bazalo relies on the Supreme Court's mandate that interpretive doubt about the meaning of language in a statute is to be resolved in the veteran's favor, citing Brown v. Gardner, 513 U.S. 115, 117-18 (1994). Based on this canon of construction, Bazalo asserts that the EAJA statute should be interpreted as requiring notice to the government that a veteran is seeking reasonable fees and expenses within the thirty-day time period, but allowing supplementation of the application to show the additional requirements that the veteran is a prevailing party, that the veteran is eligible for an award, that the government's position is not substantially justified, or that the fees sought are supported by an itemized statement. Bazalo relies on an abundance of cases from other circuits that have allowed such supplementation of a timely filed EAJA application that was deficient in a requirement of § 2412(d)(1)(B). See Thomas v. Peterson, 841 F.2d 332, 336 (9th Cir. 1988) (allowing amendment to an EAJA application on remand to establish the applicant was an eligible party); Olenhouse v. Commodity Credit Corp., 922 F. Supp. 489, 491 (D. Kan. 1996) (allowing applicants to amend their EAJA application after the thirty-day filing period to establish compliance with the net worth requirement absent prejudice to the government); Federal Deposit Ins. Corp. v. Addison Airport of Texas, Inc., 733 F. Supp. 1121, 1125 (N.D. Tex. 1990) (EAJA applicant allowed to amend the application after the thirty-day filing period); City of Brunswick v. United States, 661 F. Supp. 1431, 1439 (S.D. Ga. 1987) (holding once an applicant has complied with the thirty-day filing requirement, he may provide additional information as set forth in § 2412(d)(1)(B) by supplemental filing), rev'd on other grounds, 849 F.2d 501 (11th Cir. 1988), cert. denied, 489 U.S. 1053 (1989). But see Federal Deposit Ins. Corp. v. Fleischer, No. 93-2062-JWL, 1996 WL 707030, at *4 (D. Kan. Oct. 16, 1996) (EAJA application found insufficient for failure to file an itemized statement of fees incurred within thirty day filing requirement); United States v. Hopkins Dodge Sales, Inc., 707 F. Supp. 1078 (D. Minn. 1989) (showing of eligibility held to be a jurisdictional requirement). Lastly, Bazalo argues that his EAJA application met the standard for a non-defective application as set forth by the Court of Veterans Appeals' Rule 39 in effect at the time of the filing of his EAJA application. The retroactive application of the Court of Veterans Appeals' new standard, he asserts, is a violation of his due process rights.

The Secretary argues that the United States' waiver of sovereign immunity must be strictly construed. Strict construction of the EAJA statute requires, the Secretary argues, that we construe the use of "shall" as establishing that a showing of eligible status for an EAJA award is not a mere notice requirement, but a jurisdictional one as the Court of Veterans Appeals held. The liberal construction requirement that ambiguity is to be resolved in favor of the veteran is not applicable, the Secretary argues, because the EAJA does not involve benefits to veterans, but applies to any party prevailing against the government.

II.

We have unequivocally held that the thirty-day time limit for filing an EAJA application after final Disposition of an adversary adjudication is a jurisdictional prerequisite to an award of attorney fees. J.M.T. Mach. Co. v. United States, 826 F.2d 1042, 1047 (Fed. Cir. 1987). We have not addressed, however, whether any other requirement as set forth in the EAJA statute presents a jurisdictional prerequisite to an award of reasonable attorney fees and expenses. The United States Court of Appeals for the Third Circuit has squarely addressed the issue in Dunn v. United States, 775 F.2d 99 (3d Cir. 1985).

Dunn filed an EAJA application which was dismissed by the district court for lack of subject matter jurisdiction because the application and accompanying affidavit did not mention a specific amount of fees requested, an itemized statement of the actual time expended, or the rates used to calculate the fees. Id. at 102. Subsequent to the thirty-day time period, however, Dunn submitted affidavits supplying the missing information. The Third Circuit reversed the district court and held that only the time for filing an EAJA application under § 2412(d)(1)(B) is a jurisdictional prerequisite, while deficiencies in the contents of the application under that section could be remedied by amendment, as long as the government was not prejudiced by such amendment and the applicant complied with any orders for timely completion of the fee determination. Id. at 104.

The Third Circuit reasoned:

Requiring the filing of a fee claim (or any other) with the court or adjudicative agency serves the purpose of establishing a means certain for proving compliance with a time bar. Such certainty is required in most situations in the interest of finality and reliance. But once the claim is filed, whether or not it is as complete as it should be, the interests of proof of timeliness and of finality and reliance have been satisfied. What remains is the fleshing out of the details . . . .

Id.

We agree with the Third Circuit that while the time limitation should be strictly met, the content of the EAJA application should be accorded some flexibility. Bazalo filed a timely EAJA application alleging that he was "a prevailing party and entitled to receive an award as shown by [the Court of Veterans Appeals'] September 29, 1994 Order . . . ." In addition, Bazalo set forth the allegations as to why the United States' position was not substantially justified and included an itemized statement of the fees sought. The only allegedly jurisdictional requirement that Bazalo did not meet is the eligibility requirement. The Court of Veterans Appeals interprets eligibility as requiring a showing that Bazalo's net worth did not exceed $2,000,000 at the time the appeal was filed. This allegedly jurisdictional requirement is gleaned from the definition of "party" under § 2412(d)(2)(B).

We find that Bazalo's statement that he is a prevailing "party" satisfies the eligibility requirement for jurisdictional purposes. By definition, a "party" under the EAJA statute is one with a net worth of less than $2,000,000 at the time of filing of an appeal. Therefore, by making the statement that he was a "prevailing party" entitled to an award, Bazalo met the jurisdictional eligibility requirement. *fn1 Because he met the jurisdictional requirements of the EAJA statute, Bazalo could supplement his filing after the thirty-day time limitation to set forth a more explicit statement about his net worth.

The Dissent asserts that our reading of the EAJA statute renders the eligibility requirement superfluous. We disagree. The statute requires that the party seeking fees show that he is eligible to receive an award under the statute. This requirement is not exclusive of the other requirements.

To be "eligible" under the EAJA statute, a party must meet the additional requirements enumerated such as showing that the party prevailed and alleging that the United States was not substantially justified in its position. The additional requirement of net worth asserted by the Dissent as necessary to meet the jurisdictional threshold of the statute is not separately enumerated in the statute, but subsumed within the definition of "party." Therefore, we have not rendered the eligibility requirement superfluous, but read it in the context of all of the requirements of the EAJA statute. Conclusion

We hold that Bazalo's application for attorney fees and expenses met the jurisdictional prerequisites of the EAJA statute. Therefore, the Court of Veterans Appeals had jurisdiction to hear his EAJA application.

REVERSED AND REMANDED

SCHALL, Circuit Judge, Dissenting.

Paragraph 1 of Bazalo's EAJA application read as follows: "the Applicant is a prevailing party and entitled to receive an award as shown by this Court's September 29, 1994 Order vacating the BVA's March 4, 1993 decision in the matter and remanding the case to the BVA." This statement addressed Bazalo's entitlement to an EAJA award because it set forth the fact that Bazalo had prevailed in the underlying litigation. See 28 U.S.C. § 2412(d)(1)(B) (1994). The application, however, contained no statement directed to the matter of Bazalo's net worth. See 28 U.S.C. § 2412(d)(2)(B) (1994). It thus failed to address Bazalo's eligibility for an EAJA award. See 28 U.S.C. § 2412(d)(1)(B). Consequently, the application failed to meet the statutory requirement of showing that Bazalo was "a prevailing party and . . . eligible to receive an award." Id. (emphasis added). At the same time, it is undisputed that Bazalo did not seek to supplement the application within thirty days of when it was filed.

In arguing that he should have been allowed to supplement his application to show that he was eligible for an EAJA award, Bazalo advances the argument that any doubt about the meaning of § 2412(d)(1)(B) should be resolved in his favor because he is a veteran. The majority does not reach this argument. In any event, I believe that we should reject it. It is true that "provisions for benefits to members of the Armed Services are to be construed in the beneficiaries' favor." King v. St. Vincent's Hosp., 502 U.S. 215, 220-21 n.9 (1991). The EAJA is not a veterans' benefits statute, however. Rather, it is a statute of general applicability. The rule of statutory construction upon which Bazalo relies does not apply in this case.

Bazalo's second argument is that he should prevail under the reasoning of the United States Court of Appeals for the Third Circuit in Dunn v. United States, 775 F.2d 99 (3d Cir. 1985). In Dunn, the petitioner filed an EAJA application within the thirty days of final judgment, but the application included neither a specific amount of fees requested nor an itemized statement of the time spent and the rate at which fees were computed, as required by 28 U.S.C. § 2412(d)(1)(B). See Dunn, 775 F.2d at 101. Subsequently, but after the thirty-day period set forth in § 2412(d)(1)(B) had elapsed, the petitioner filed an attorney's affidavit that provided detailed time and billing information. See id. at 102. The Third Circuit characterized § 2412(d)(1)(B) as establishing "two requirements: a time for filing, and a standard for pleading." Id. at 103. The court reasoned that timely filing serves the purpose of notifying the government of the EAJA claim and that, "once the claim is filed, whether or not it is as complete as it should be, the interests of proof of timeliness and of finality and of reliance have been satisfied." Id. at 104. Thereafter, according to the court, "[w]hat remains is the fleshing out of the details." Id. The court thus allowed the application to be supplemented with the attorney's affidavit.

The majority states: "We agree with the Third Circuit that while the time limitation should be strictly met, the content of the EAJA application should be accorded some flexibility." I am unable to agree. I believe that the majority errs in accepting the reasoning of Dunn. In my view, Dunn misreads § 2412(d)(1)(B) and, in so doing, ignores principles relating to waivers of sovereign immunity.

I start from the premise that the EAJA is a waiver of sovereign immunity and therefore must be strictly construed. See Ardestani v. INS, 502 U.S. 129, 137 (1991). In relevant part, the EAJA states that a party "shall, within thirty days of final judgment in the action, submit to the court an application . . . which shows that the party is a prevailing party and is eligible to receive an award." 28 U.S.C. § 2412(d)(1)(B). We have held that the thirty-day filing period in § 2412(d)(1)(B) is jurisdictional and must be strictly enforced. See J.M.T. Mach. Co. v. United States, 826 F.2d 1042, 1047 (Fed. Cir. 1987).

The thirty-day time limit and the eligibility requirement are contained in the same sentence of § 2412(d)(1)(B). I do not see how the statute can be read as differentiating between a jurisdictional time requirement and a non-jurisdictional content requirement, such differentiation being the underpinning of Dunn. Rather, all of the statute's requirements are of equal weight. See Dunn, 775 F.2d at 105 (Adams, J., Dissenting) ("Nothing in the wording or structure of the sentence suggests that certain elements necessary to meet the statute's jurisdictional prerequisites are more or less important than others, or that some are to be interpreted more or less strictly than others."); see also United States v. Hopkins Dodge Sales, Inc., 707 F. Supp. 1078, 1080 (D. Minn. 1989) ("Nothing in the language of the statute or its legislative history suggests that a defective application which is not completed until after the 30 day limit has run is any less fatal to a court's jurisdiction than a late filed application.").

Proceeding from Dunn, the majority concludes that the statement in Bazalo's EAJA application that he was "a prevailing party" served to satisfy "the eligibility requirement for jurisdictional purposes." Based upon this Conclusion, the majority holds that "[b]ecause he met the jurisdictional requirements of the EAJA statute, Bazalo could supplement his filing after the thirty-day time limitation to set forth a more explicit statement about his net worth." In arriving at this result, the majority reasons as follows:

By definition, a "party" under the EAJA statute is one with a net worth of less than two million dollars at the time of filing an appeal. Therefore, by making the statement that he was a "prevailing party" entitled to an award, Bazalo met the jurisdictional requirement.

(Footnote omitted).

I am unable to accept the majority's reasoning. A statute is to be construed in a manner that gives meaning to all of its parts and does not render any part of the statute superfluous. See Colautti v. Franklin, 439 U.S. 379, 392 (1979) (It is an "elementary canon of construction that a statute should be interpreted so as to not render one part inoperative."); see also Perez v. Merit Sys. Protection Bd., 85 F.3d 591, 594 (Fed. Cir. 1996) (A court "must construe a statute so as to give effect, if possible, to every clause and word."). In allowing a party to satisfy both the prevailing party and the eligibility requirements of 28 U.S.C. § 2412(d)(1)(B) simply by stating that it is a "prevailing party," the majority renders superfluous the statutory language that a party "shall" submit an application "which shows that the party is . . . eligible to receive an award." *fn2 By deviating from a settled principle of statutory construction in this manner, the majority also deviates from the rule that the provisions of the EAJA, as a waiver of sovereign immunity, are to be strictly construed. As the Court of Veterans Appeals held, in his EAJA application, in order to meet the requirements of the statute, Bazalo was required to make a separate showing that his net worth was such that he was eligible to receive an award of attorney fees and expenses.

Because Bazalo's EAJA application was defective when it was filed and because no attempt was made to supplement it within thirty days, the Court of Veterans Appeals was without authority to consider the application.

For the foregoing reasons, I respectfully Dissent. I would affirm the decision of the Court of Veterans Appeals.


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