Loumiet v. Office of the Comptroller of Currency
397 U.S. App. D.C. 112
| D.C. Cir. | 2011Background
- Loumi et al. appeals OCC order to pay own defense costs in FIRREA proceeding after prevailing in agency adjudication.
- OCC sought attorney’s fees under EAJA; ALJ denied, OCC decision became final without further review.
- FIRREA charged Loumi et al as IAP for participating in Greenberg’s investigation; ALJ rejected evidence showing harm to Bank.
- Comptroller later dismissed the IAP claims and Loumi et al sought EAJA fees; ALJ recommended denial, which the Comptroller adopted.
- Record showed Bank losses from ratio swaps; November and March reports by Greenberg exonerated Bank executives; no proven significant adverse effect linked to Loumi et al’s conduct.
- Court reverses, holding OCC position not substantially justified and remanding for fee amount calculation.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Division’s position was substantially justified. | Loumiet: Division failed to show substantial adverse effect; position not justified. | Comptroller: expert evidence and legal theories supported substantial justification. | No; position not substantially justified; remand for fee computation. |
| Whether Loumiet is a prevailing party under EAJA. | Loumiet prevailed in the FIRREA adjudication. | OCC concedes Loumiet prevails as prevailing party. | Loumiet is a prevailing party under EAJA. |
| Whether the Bank’ s harmed by Loumiet’s reports supports IAP status under FIRREA. | Division relied on alleged harm from continued employment to fit IAP. | Harm evidence shows potential, but not sufficient causation. | Insufficient evidence of causal link to significant adverse effect; lacks substantial justification. |
| Whether the issues are novel to support substantial justification. | Division argues novelty of “effects” prong supports justification. | Not novel; causation issues are not novel. | Not persuasive; novelty does not salvage substantial justification. |
| Whether remand is required to resolve fee-incurrence and hourly-rate issues under EAJA. | Issues of incurred fees and $125/hour cap warrant remand to Comptroller. | Remand appropriate for those determinations. | Remand granted to address fee-incurrence and rate issues. |
Key Cases Cited
- Pierce v. Underwood, 487 U.S. 552 (1988) (establishes substantial justification standard for EAJA)
- 5 U.S.C. § 504, — (—) (EAJA framework governing fees in adversary adjudications)
- Vollmer Co., Inc. v. Magaw, 102 F.3d 591 (D.C. Cir. 1996) (burden on agency to show substantial justification)
- Grant Thornton, LLP v. Office of Comptroller of Currency, 514 F.3d 1328 (D.C. Cir. 2008) (applies FIRREA/IAP framework and related fees issues)
- Cavallari v. Office of Comptroller of Currency, 57 F.3d 137 (2d Cir. 1995) (illustrates scope of IAP and related harm concept)
- Hill v. Gould, 555 F.3d 1003 (D.C. Cir. 2009) (unsettled area defense for substantial justification)
- Taucher v. Brown-Hruska, 396 F.3d 1168 (D.C. Cir. 2005) (requires reasonable basis in law and fact for EAJA)
- Palsgraf v. Long Island R. Co., 248 N.Y. 339 (N.Y. 1928) (comparative analogy for causation concepts)
- Lindquist & Vennum v. FDIC, 103 F.3d 1409 (8th Cir. 1997) (focus on financial loss/adverse effect standard under FIRREA)
- Grant Thornton LLP v. OCC, — (—) (cites as authority for contractor-liability and admissible evidence)