836 F.3d 32
D.C. Cir.2016Background
- SecurityPoint Holdings challenged a TSA amendment to a template Memorandum of Understanding (MOU) that required airports to indemnify TSA for intellectual‑property claims; SecurityPoint argued the change would cripple its business and was unnecessary given an implied license.
- SecurityPoint sought a cease‑and‑desist from TSA; TSA denied the request and SecurityPoint petitioned for review in this Court.
- The D.C. Circuit vacated TSA’s order as arbitrary and capricious for failing to provide reasoned decisionmaking and remanded without retaining jurisdiction. The court did not decide SecurityPoint’s principal retaliation claim.
- SecurityPoint timely applied for attorneys’ fees under the Equal Access to Justice Act (EAJA); the parties briefed whether prior circuit precedent (Waterman) should be overruled in light of later Supreme Court decisions.
- The court held SecurityPoint was a prevailing party, found TSA’s position not substantially justified, and awarded fees reduced by 20% for partial success, totaling $86,714.78.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether SecurityPoint is a "prevailing party" under the EAJA | The vacatur and remand terminating the case conferred prevailing‑party status because it effected a court‑ordered change in legal relationship | Waterman and similar authority: a remand that is a "procedural victory" without real‑world change does not make a party prevailing | Court held SecurityPoint is prevailing; overruled Waterman as inconsistent with Shalala v. Schaefer and Buckhannon when remand terminates the action without retained jurisdiction |
| Whether the government’s position was "substantially justified" | TSA’s denial was unreasonable: it ignored key arguments (poison‑pill indemnity, harm to TSA, implied license) | TSA argued its position was reasonable and denied retaliatory motive; the court had not decided retaliation | Court held TSA failed to meet burden; its action lacked reasonable basis in law and fact and was not substantially justified |
| Proper fee amount under EAJA given limited success | Requested $108,393.48 for 564.2 hours; argued work was related and necessary | TSA argued SecurityPoint achieved only partial success and fees should be reduced; also challenged some billing entries | Applying Hensley, court treated claims as related, reduced award by 20% for partial success, upheld hours and rates, and awarded $86,714.78 |
| Whether remand with termination (vs. remand with retained jurisdiction) should affect fee eligibility | Remand terminating litigation grants prevailing‑party status even if outcome on remand is uncertain | TSA: distinction makes little sense for APA review and could create anomalous results | Court adopted Schaefer distinction: remands that terminate the action (no retained jurisdiction) yield prevailing‑party status; remands retaining jurisdiction do not |
Key Cases Cited
- Waterman Steamship Corp. v. Maritime Subsidy Bd., 901 F.2d 1119 (D.C. Cir. 1990) (prior circuit precedent treating remand as a "procedural" victory not necessarily conferring prevailing‑party status; overruled)
- Shalala v. Schaefer, 509 U.S. 292 (1993) (distinguishes remands that terminate litigation and confer prevailing‑party status from those retaining jurisdiction)
- Buckhannon Bd. & Care Home, Inc. v. W. Virginia Dep’t of Health & Human Res., 532 U.S. 598 (2001) (rejects catalyst theory; voluntary defendant changes do not alone create prevailing‑party status)
- Sullivan v. Hudson, 490 U.S. 877 (1989) (remand may not confer prevailing‑party status when court retains jurisdiction; discussed and distinguished)
- Hensley v. Eckerhart, 461 U.S. 424 (1983) (extent of plaintiff’s success is crucial to fee awards; relatedness of claims governs allocation)
- Pierce v. Underwood, 487 U.S. 552 (1988) ("substantially justified" means reasonable basis in law and fact)
- Role Models Am., Inc. v. Brownlee, 353 F.3d 962 (D.C. Cir. 2004) (government must show reasonableness of both agency position and litigation posture)