Gate Guard Services, L.P. v. Thomas Perez, 792 F.3d 554

Gate Guard provided gate attendants to oil fields and classified them as independent contractors; DOL investigated and alleged FLSA misclassification affecting ~400 attendants.
DOL investigator David Rapstine, with limited training in misclassification, opened the investigation after a tip, conducted only a few interviews, calculated over $6 million in back wages, and destroyed his handwritten interview notes.
DOL allegedly deviated from internal procedures (premature damages calculations, improper presentation of findings) and pressed for a multi-million dollar penalty despite limited evidence and contrary practices (e.g., Army Corps classifying similar workers as contractors).
Litigation: DOL filed an enforcement action; Gate Guard filed a declaratory judgment action. The district court transferred and consolidated cases, granted summary judgment for Gate Guard, and denied bad-faith EAJA fees but later awarded EAJA fees under the "substantially justified" provision.
District court found DOL’s position "not entirely frivolous" at the outset; Fifth Circuit reversed, holding DOL acted in bad faith and remanded for calculation of fees under 28 U.S.C. § 2412(b).

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether EAJA § 2412(b) allows fees for DOL’s conduct	DOL’s investigation and litigation conduct was bad faith, oppressive, and frivolous; fees warranted	DOL’s position was not frivolous at filing and thus no bad-faith fees	Fees under § 2412(b) are appropriate; reversed and remanded for fees calculation
Proper standard for bad-faith EAJA awards	Fifth Circuit precedent permits awarding fees for bad faith, vexatious, wanton, or oppressive conduct (disjunctive, flexible)	Other circuits require conjunctive test: meritlessness + improper purpose	Court rejects rigid conjunctive test; endorses flexible, equity-based approach consistent with Alyeska and circuit precedent
Whether frivolousness must be shown	Frivolousness can support fees but is not strictly required when litigation conduct abuses judicial process	DOL argued claim was not wholly unsupported and thus not frivolous	Court finds DOL’s case became frivolous during discovery and that abusive litigation conduct independently supports fees
Whether litigation conduct (discovery, deposition, privilege assertions) can justify fees	Misconduct (destroyed notes, withholding statements, obstructive deposition tactics, harassment) abused judicial process and justifies fees	DOL framed conduct as routine advocacy and disputed relevance	Court holds abusive discovery and litigation tactics support bad-faith EAJA award

Alyeska Pipeline Serv. Co. v. Wilderness Soc’y, 421 U.S. 240 (establishes general rule that each party bears its own fees but recognizes bad-faith exception)
F.D. Rich Co. v. U.S. ex rel. Indus. Lumber Co., 417 U.S. 116 (discusses common-fund and bad-faith bases for fee awards)
Hall v. Cole, 412 U.S. 1 (equity power to award fees where interests of justice require)
Roadway Express, Inc. v. Piper, 447 U.S. 752 (fees should not be imposed lightly; procedural protections required)
Holland v. Florida, 560 U.S. 631 (equity requires flexibility; warns against rigid tests)
Batson v. Neal Spelce Assocs., Inc., 805 F.2d 546 (5th Cir.) (fees warranted for abusive discovery and dilatory litigation tactics)
Baker v. Bowen, 839 F.2d 1075 (5th Cir.) (EAJA § 2412(b) allows fees when government abuses judicial process)
Perales v. Casillas, 950 F.2d 1066 (5th Cir.) (discussion of bad-faith, vexatious, wanton conduct under EAJA)
Rodriguez v. United States, 542 F.3d 704 (9th Cir.) (bad-faith finding may follow from frivolous or harassing advocacy)