OTIS R. BOWEN, SECRETARY OF HEALTH AND HUMAN SERVICES. PETITIONER V. CHRISTINE RUSSELL No. 87-251 In The Supreme Court Of The United States October Term, 1987 The Solicitor General, on behalf of the Secretary of Health and Human Services, petitions for a writ of certiorari to review the judgment of the United States Court of Appeals for the Third Circuit in this case. Petition For A Writ Of Certiorari To The United States Court Of Appeals For The Third Circuit TABLE OF CONTENTS Question presented Opinions below Jurisdiction Statutory provision involved Statement Reasons for granting the petition Conclusion Appendix A Appendix B Appendix C Appendix D OPINIONS BELOW The opinion of the court of appeals (App., infra, 1a-16a) is reported at 814 F.2d 148. The opinion of the district court denying an award of attorney's fees (App., infra, 17a-26a) is not yet reported. JURISDICTION The judgment of the court of appeals (App., infra, 28a) was entered on March 20, 1987. On June 8, 1987, Justice Brennan extended the time for filing a petition for a writ of certiorari to and including August 17, 1987. The jurisdiction of this Court is invoked under 28 U.S.C. 1254(1). STATUTORY PROVISION INVOLVED The Equal Access to Justice Act, 28 U.S.C. 2412(d), provides in relevant part: (1)(A) Except as otherwise specifically provided by statute, a court shall award to a prevailing party other than the United States fees and other expenses * * * incurred by that party in any civil action (other than cases sounding in tort), including proceedings for judicial review of agency action, brought by or against the United States in any court having jurisdiction of that action, unless the court finds that the position of the United States was substantially justified or that special circumstances make an award unjust. QUESTION PRESENTED Whether the court of appeals applied an incorrect standard in determining that the government was not "substantially justified," within the meaning of the Equal Access to Justice Act (EAJA), 28 U.S.C. 2412(d), in litigating this case. STATEMENT 1. Congress enacted the Equal Access to Justice Act of 1980 (EAJA), 28 U.S.C. 2412, "to diminish the deterrent effect of seeking review of, or defending against, governmental action by providing in specified situation an award of attorney fees, expert witness fees, and other costs against the United States." Pub. L. No. 96-481, Section 202(c)(1), 94 Stat. 2325. The Act does not mandate automatic fee-shifting. Instead, it provides that a court is to award fees to any party meeting specified qualifications (see 28 U.S.C. 2412(d)(2)(B)) that prevails in a nontort civil action against the United States, "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). 2. This attorney fee dispute arose out of a case in which respondent challenged the decision of the petitioner to deny waiver of recoupment of overpaid Social Security benefits under Section 204(b) of the Social Security Act, 42 U.S.C. 404(b), which provides that such recoupment may be waived where the recipient was without fault and certain other requirements are met. Petitioner had determined that respondent should have known that her institutionalized son was not "in her care" for purposes of entitlement to mother's insurance benefits, and thus she was "not without fault" in failing to report this fact to the Social Security Administration. App., infra, 2a-3a. /1/ The district court found that petitioner's determination that respondent was culpable in receiving the payment was not supported by substantial evidence. The district court, however, denied respondent's fee petition under the EAJA, finding that while petitioner had failed to prevail, his position was substantially justified under the Act. Id. at 20a-25a. The Third Circuit reversed, holding that petitioner's position was not substantially justified. Relying heavily on the legislative history of the 1985 enactment of EAJA, the court ruled that the test for substantial justification under EAJA is more than mere reasonablness: because there was a lack of substantial evidence supporting the Secretary's position on the merits, and because "there are no 'extraordinary special circumstances' here, it follows that the Secretary's position was not 'substantially justified' as Congress intended that concept to be applied." App., jnfra, 13a (citation omitted). /2/ REASONS FOR GRANTING THE PETITION This case, like Pierce v. Underwood, cert. granted, No. 86-1512 (May 18, 1987), and Dubose v. Pierce, petition for cert. pending, No. 86-516, raises the question of the meaning of the term "substantially justified" in EAJA, 28 U.S.C. 2412(d). As we explained in our brief in Underwood, /3/ the courts of appeals are not currently in agreement on the proper definition of that term. Because EAJA litigation would be greatly simplified by the formulation of clear rules to test the reasonableness of the government's position, we have, in our Underwood petition and in the brief, invited this Court to formulate such rules. In order to do so, this Court will in all likelihood, consider the legislative history on which the court below relied. If the Court agrees with our contention in Underwood that the test remains one of reasonableness, then the government should not have been held liable for EAJA attorney fees in this case; it would accordingly be appropriate for the court of appeals to reconsider its holding here in light of this Court's opinion in Underwood. When Congress originally enacted Section 204 of EAJA in 1980, /4/ it made the government liable for attorney fees incurred by persons who successfully oppose government action -- but only when the government's position was not "substantially justified." That standard was chosen as a "middle ground" (H.R. Rep. 96-1418, 96th Cong., 2d Sess. 14 (1980)) that "balances the constitutional obligation of the execurtive branch to see that the laws are faithfully executed against the public interest in encouraging parties to vindicate their rights" (id. at 10). See S. Rep. 96-253, 96th Cong., 1st Sess. (1979); 125 Cong. Rec. 21435 (1979) (remarks of Sen. DeConcini). Because EAJA is designed to encourage challenges only to "unreasonable governmental action" (Pub. L. No 94-481, Section 202(a), 94 Stat. 2325), it follows logically -- as Congress in enacting the 1980 Act repeatedly explained -- that "(t)he test of whether the Government position is substantially justified is essentially one of reasonableness in law and fact." H.R. Conf. Rep. 96-1434, 96th Cong., 2d Sess. 22 (1980). See S. Rep. 96-253, supra, at 6; H.R. Rep. 96-1418, supra, at 10, 13, 14. Congress emphasized that subsection (d) of Section 2412 "should not be read to raise the presumption that the Government position was not substantially justified, simply because it lost the case. Nor, in fact, does the standard require the Government to establish that its decision to litigate was based on a substantial probability of prevailing." S. Rep. 96-253, supra, at 7; H.R. Rep. 96-1418, supra, at 11. See 125 Cong. Rec. 21444-21445 (1979) (remarks of Sen. Kennedy). Instead, the government must show only that its arguments were plausible, and that an informed judgment would have viewed those arguments as having some substance and some possibility of success. Subsection (d) of Section 2412 of the original EAJA expired by its terms on October 1, 1984. Pub. L. No. 94-481, Section 204(c), 94 Stat. 2329. Congress subsequently reenacted that subsection as of August 5, 1985. Pub. L. No. 99-80, Section 2(a), 99 Stat. 184. While the reenactment left unchanged the statutory language authorizing an award of fees in the absence of substantial jutification, the accompanying House Report stated that the test for substantial justification "must be more than mere reasonablness." H.R. Rep. 99-120, 99th Cong., 1st Sess. 9 (1985). Despite this statement, we think it clear that the 1985 reenactment, which did not alter the text of Subsection (d) in any relevant way, should not be read to modify the "reasonableness" test for substantial justification that had been applied by 11 courts of appeals (including the court below) prior to 1985. See United States v. Yoffe, 775 F.2d 447, 449 (1st Cir. 1985) (citing cases). /5/ As then-Judge Scalia noted, the House Report did nothing more than "comment() upon language drafted in an earlier Congress, and reenacted, unamended as far as is relevant to the present point, in the 1985 law." Hirschey v. FERC, 777 F.2d 1, 8 (D.C. Cir. 1985) (Scalia, J., concurring) (emphasis in original). Such a report cannot be given dispositive weight. See generally Mohasco Corp. v. Silver, 447 U.S. 807, 822-824 (1980). Indeed, there are special reasons to be skeptical about the House Report: sponsors of the EAJA reenactment in both Houses took the extraordinary step of renouncing portions of the report on the floor. See 131 Cong. Rec S9993 (daily ed. July 24, 1985 (remarks of Sen. Grassley); 131 Cong. Rec. 16917 (1985) (remarks of Rep. Kindness); ibid. (remarks of Rep. Moorhead). CF. id. at 16917-16918 (remarks of Rep. Kastenmeier). See generally Rose v. FEC, 806 F.2d 1081, 1089-1090 (D.C. Cir 1986). In these circumstances, it is clear that Congress did not mean to disturb the settled meaning of the law through "reenactment of the same language unchanged" (Hirschey, 777 F.2d at 8 (Scalia, j., concurring) (emphasis omitted)). Several courts of appeals accordingly have held that the governing standard remains one of reasonableness, explaining that the 1985 legislative history is "conflicting and inconclusive." Russell v. National Mediation Board, 775 F.2d 1284, 1288-1289 (5th Cir. 1985). See Phil Smidt & Son, Inc. v. NLRB, 810 F.2d 638, 642 n.5 (7th Cir. 1987); Ullen v. Bowen, 820 F.2d 105 (4th Cir. 1987). /6/ Other courts have read the 1985 legislative history as changing the applicable standard. See Lee v. Johnson, 799 F.2d at 38 n.7; Gavette v. Office of Personnel Management, 785 F.2d 1568, 1579 (Fed. Cir. 1986 (en banc) (government must show "that (its position) was clearly reasonable") (emphasis in original); Riddle v. Secretary of HHS, 817 F.2d 1238, 1244 (1987) ("the government's position must have more than a reasonable basis") (emphasis in original), rehearing en banc granted (6th Cir. July 9, 1987). /7/ Although we submit that any distinction between tests formulated in terms of degrees of reasonableness must be largely semantic, the test adopted by the court below appears to go further. Instead of considering whether the Secretary's position was reasonable -- in any degree -- it simply found it dispositive, in the absence of "extraordinary special circumstances," that the Secretary's decision on the merits was reversed for lack of substantial evidence (App., infra, 13a). /8/ See also Trahan v. Regan, No. 86-5051 (D.C. Cir. July 28, 1987), slip op. 12 (EAJA fees available when agency decision contrary to law). This formulation avoids meaningful consideration of the statutory question that determines whether the government is liable for attorney fees -- whether its position was substantially justified. The substantial justification standard, however articulated, should focus on whether the government's position was plausible, and whether the government's arguments could have been made with some hope of success. In Underwood, this Court will consider whether the original understanding of the "substantial justification" standard promulgated in the 1980 EAJA retains its validity under the 1985 EAJA, contrary to the position of the court below. The Court's analysis in Underwood is likely to clarify the standard to be applied in situations like the one presented here. CONCLUSION This petition should be held pending this Court's decision in Pierce v. Underwood, No. 86-1512, and then disposed of as appropriate in light of that decision. Respectfully submitted. CHARLES FRIED Solicitor General RICHARD K. WILLARD Assistant Attorney General HARRIET S. Shapiro Assistant to the Solicitor General WILLIAM KANTER MARK W. PENNAK Attorneys AUGUST 1987 /1/ After respondent's spouse died, she applied for Social Security survivor benefits on behalf of herself and her two children. The younger son was confined in a state mental institution, and thus concededly not in her care. Although the application forms respondent signed clearly explained that her entitlement to benefits depended on her having an entitled child in her care, and warned her of her obligation to report to the Social Security Administration when she no longer had such a child in her care, respondent failed to notify the Administration when her elder son reached 18 and lost his entitlement. She thus received $8,338.50 in benefits to which she was not entitled. App., infra, 4a-7a. /2/ The court also required "the government, in relying entirely upon a legal argument, * * * (to) demonstrate that that argument presented an unsettled or close question of law." App., infra, 11a (quoting Lee v. Johnson, 779 F.2d 31, 38 (3d Cir. 1986)). Finding no such question present, the court rejected the Secretary's argument that respondent could be charged with knowledge of the regulations (App., infra, 14a). /3/ We are serving a copy of our Underwood brief on respondents. /4/ Sections 201-208 of Pub. L. No 96-481, 94 Stat. 2325-2330, constitute the original EAJA. Section 204, 94 Stat. 2327, amended 28 U.S.C. 2412. Accordingly, we refer hereafter simply to Section 2412. /5/ The only court that applied a semantically different test before 1985 was the District of Columbia Circuit, which required the government to demonstrate that its position was "slightly more" than reasonable. Spencer v. NLRB, 712 F.2d 539, 558 (1983), cert. denied, 466 U.S. 936 (1984). /6/ Several other courts have continued to apply the reasonableness standard without discussion of the 1985 legislative history. See League of Women Voters v. FCC, 798 F.2d 1255, 1257 (oth Cir. 1986); Fulton v. Heckler, 784 F.2d 348, 349 (10th Cir. 1986); United States v. Yoffe, 775 F.2d at 449. Cf. Haitian Refugee Center v. Meese, 791 F.2d 1489, 1497, vacated in part on other grounds, 804 F.2d 1573 (11th Cir. 1986) (leaving it unclear whether the standard is one of "reasonableness" or "more than mere reasonableness"). And compare Herring v. United States, 781 F.2d 119, 121 (8th Cir. 1986) (reasonableness standard) with United States v. 1,378.65 Acres of Land, 794 F.2d 1313, 1318 (8th Cir. 1986) ("clearly reasonable" sta-dard); Jackson v. Bowen, 807 F.2d 127 (8th Cir. 1986) (same), and Gamber v. Bowen, No. 86-5435-SD (8th Cir. July 10, 1987), slip op. 4 (same). /7/ The District of Columbia Circuit has adhered to its prior view that the government's position must be "slightly more than reasonable" (Battles Farm Co. v. Pierce, 806 F.2d 1098, 1101-1102 n.11 (1986), petition for cert. pending, No. 86-1661), although it has expressed skepticism that there is any meaningful distinction between its standard and one of simple reasonableness (ibid.). As we pointed out in our opposition to the certiorari petition in Battle Farm, the court there held "only that if a private plaintiff * * * combines one adventurous, far-reaching losing claim with a more orthodox winning claim, and the two are intertwined, we must consider the justification of the government's entire litigating position before awarding attorney's fees" (806 F.2d at 1104 (emphasis in original)). That petition thus does not present the issue at stake here, in Pierce v. Underwood, supra, and in Dubose v. Pierce, supra. /8/ This is equivalent to a per se rule, because Section 2412(d) in terms precludes the award of attorney fees in any case when "special circumstances make an award unjust." APPENDIX