54 Fed. Cl. 337 | Fed. Cl. | 2002
OPINION
INTRODUCTION
The matter before us is an application for attorney fees and expenses pursuant to the Equal Access to Justice Act (“EAJA”) recorded at 28 U.S.C. § 2412.
JURISDICTION
This court maintains jurisdiction over plaintiffs application for attorney fees and expenses by operation of law, having properly exercised jurisdiction in the underlying cause of action, to wit, a 19 U.S.C. § 1619 informant’s claim. See Everett Plywood Corp. v. United States, 3 Cl.Ct. 705, 708 (1983). The operative statutory language of the EAJA provides that “attorney fees and other expenses may be awarded to the prevailing party in a civil action brought by or against the United States ‘in any court having jurisdiction of that action.’ ” Id. at 708 (citing 28 U.S.C. § 2412(d)(1)(A))(emphasis added). Irrefutably, plaintiffs original informant’s award claim was properly before this court pursuant to 28 U.S.C. § 1419(a)(1) (granting the Court of Federal Claims jurisdiction over claims against the United States that are founded upon any Act of Congress). It is, therefore, proper for us to consider plaintiffs subsequent application/motion for attorney fees and expenses.
BACKGROUND
Judgment was issued in the underlying case on February 22, 2002, pursuant to a settlement agreement, whereby plaintiff accepted defendant’s Rule 68 Offer of Judgment
Following thereupon, plaintiff met with Agent Adan and other Customs agents at Customs’ Miami office the next day. Apparently plaintiff brought with him to that meeting (i) yachting magazines, (ii) a broker’s computerized listing of yachts for sale in the area, and (iii) a handwritten list containing the names of sixteen (16) yachts.
Soon thereafter, as early as April 10, 1995, the relationship between Mr. Doe and Customs began to sour. Having completed a criminal background check on plaintiff, Agent Adan discovered that plaintiff had a record of two prior arrests which caused Customs to believe that plaintiff had not been forthcoming during an early conversation. Plaintiff contended that the question previously asked of him by the agent was whether he had any “convictions,” and not “arrests.” At the same time, the parties were at odds over Customs’ refusal to enter into a formal agreement with plaintiff regarding his role in “Operation Freeboard” and any monetary compensation resulting therefrom. Not surprisingly, the impasse caused by those tensions proved sufficient to permanently sever any further cooperation between the parties.
Notwithstanding the foregoing, Customs proceeded, on April 24,1995, to constructively seize the “Intrepid II” for “being offered for sale without proper entry being filed and proper duty being paid in violation of 19 U.S.C. § 1592(c).” Def. Opp’n Br. at 7. Customs thereby levied a $2,835,000 penalty against the vessel’s owner, of which 99 percent was subject to a drawback claim.
Continuing its active investigation under “Operation Freeboard,” on May 8,1995, Customs cited the owner of the yacht “M/V Southern Cross III” for “offering the yacht for sale in the United States while it was entered under a temporary importation bond in violation of 19 CFR § 31(a)(3)(iii).” Def. Opp’n Br. at 8. In the end, Customs determined that it had insufficient evidence to sustain the charge, and was subsequently forced to terminate the $450,000 liquidated damages action.
Finally, on August 6,1999, Customs issued a penalty notice to Merle Wood and Associates, a yacht brokerage firm, in the amount of $2,835,000, for “offering foreign vessels for sale in the United States without paying the proper duties in violation of 19 U.S.C. § 1592.” Id. Apparently there have been no payments or collections respecting said penalty, and, with the statute of limitations having since run, Customs is precluded from taking any further action.
Beginning in February 1997, plaintiff submitted sixteen (16) administrative claims for monetary compensation in connection with Operation Freeboard pursuant to 19 U.S.C. § 1619. Customs eventually denied all of plaintiffs claims on the ground that plaintiff had not provided “original information.”
Notwithstanding his outstanding administrative claims with Customs, plaintiff brought an informant’s award claim in this court on November 12, 1999, seeking twenty-five (25) percent of any and all penalties and/or duties assessed by Customs
In its trial brief, defendant argued that, at best, plaintiff could only obtain an award from the net amounts recovered, ie., 25 percent of the $27,835 net amount actually recovered from the “Intrepid II” seizure, but even that was unattainable by plaintiff be
DISCUSSION
As a foundation, the Claims Court has long observed that the EAJA was created to address “a longstanding congressional concern that private individuals and small businesses were being ‘deterred from seeking review of, or defending against, unreasonable governmental action because of the expense involved in securing the vindication of their rights in civil actions and administrative proceedings.’ ” Change-All Souls Housing Corp. v. United States, 1 Cl.Ct. 302, 303 (1982) (citations omitted). Hence, “[t]he primary purpose of the Act is to reduce the economic deterrents ... [with the] intentf ] to make whole those small businesses and individuals who have been the victims of unreasonable governmental actions.” Id.
Conversely, the eligibility requirements of the EAJA are intended to preclude the recovery of attorney fees and expenses by individuals and other entities who can well afford the cost of litigation. Unification Church v. INS, 762 F.2d 1077, 1082 (Fed.Cir.1985). Standard of Review
In connection with the foregoing, the relevant subsections of the EAJA provide the following guidance for properly applying the statute:
“Except as otherwise specifically provided by statute, a court shall award to a prevailing party other than the United States fees and other expenses, in addition to any costs awarded pursuant to subsection (a), 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.”
28 U.S.C. § 2412(d)(1)(A).
“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).
Application
Succinctly stated, to establish prima facia entitlement to an award pursuant to the EAJA, the plaintiffs timely application must: (1) make a showing that the plaintiff (i) is a prevailing party, (ii) is financially eligible to receive an award, and (iii) actually incurred the fees it is seeking to recover; and (2) allege that the government’s position in the underlying cause of action lacked substantial justification. Since the foregoing elements are in the conjunctive, the court is, therefore, statutorily constrained to deny plaintiffs application/motion should he fail to meet any one of the foregoing requirements.
On the other hand, should the plaintiff adequately establish statutory compliance, the burden of proof then shifts to the government to show that its position was “substantially justified or that special circumstances make an award unjust.” Citizens Coalition v. Euclid, 537 F.Supp. 422, 424 (N.D.Ohio 1982), aff'd, 717 F.2d 964 (6th Cir.1983) (cit
Financial Eligibility
Pursuant to 28 U.S.C. § 2412(d)(2)(B)-
“A ‘party' means (i) an individual whose net worth did not exceed $2,000,000 at the time the civil action was filed, or (ii) any owner or an unincorporated business, or any partnership, corporation, association, unit of local government, or organization, the net worth of which did not exceed $7,000,000 at the time the civil action was filed, and which had not more than 500 employees at the time the civil action was filed.”
Plaintiffs eligibility as a party was contested by defendant in its initial opposition brief indicating that the plaintiff had not complied with the EAJA by making a showing of, and not merely alleging, eligibility. Def. Opp’n Br. at 12. Specifically, defendant complained that “[plaintiffs] application, and memorandum in support thereof, is completely devoid of either: 1) an allegation that he is eligible; or 2) any [probative] evidence of his financial status at the time he filed his complaint.” Id. In connection therewith, plaintiff amended his application presumably intending to cure the deficiencies noted by defendant. Subsequently, in defendant’s brief opposing plaintiffs amended application, defendant is silent as to any further challenges to eligibility, and focuses, inter alia, on its substantial justification argument.
Included with plaintiffs amended application, plaintiff submitted an affidavit in the form of a questionnaire and a document entitled “Cashflow Worksheet” (also affirmed by plaintiff). The questionnaire listed six (6) inquiries regarding plaintiffs financial status to which the plaintiff responded as follows (paraphrasing):
1. He is not presently employed.
lb. He was last employed in 1993 (the balance of question, “amount of salary received,” was left unanswered).
2. Within the past twelve (12) months he has not received any income of any kind from any source.
3. He does not own any cash or have any checking or savings accounts. ,
4. He does not own any real estate, stocks, bonds, notes, automobiles, or other valuable property (excluding ordinary household furnishings and clothing).
5. He supports his wife.
6. He has retained an attorney to represent him.
The Cashflow Worksheet proffered the following:
BALANCE SHEET
Liquid Assets
Cash, Bank Accounts, Money
Market Funds $ 65
Total $ 65
Liabilities
Unsecured Personal Credit $85,000
Total $85,000
Net Worth ($84,935).15
Plaintiff cited to this court’s opinion in Fields v. United States
In Fields, the plaintiff, a government contractor, sought to demonstrate his financial eligibility on the grounds that he, as an individual, did not have net worth in excess of $2,000,000, and, as a business, did not have net worth in excess of $7,000,000, nor employees numbering more than 500. Plaintiff therein submitted a mere affidavit in narrative form containing self-serving statements to that effect. After plaintiff contractor was allowed to supplement his application, the court remarked that “plaintiff has submitted a hodge-podge of data, but has failed to submit balance sheet(s).” Id. at 383. But that was not the court’s holding. The holding in Fields is contained in the passage below:
“[We] disagree[ ] with plaintiffs hospitable contention that the submission of his self-serving, non-probative affidavit alone is sufficient to establish his status as a ‘party’ eligible for the award of fees under the EAJA. Plaintiff submitted a bland affidavit stating that his individual net worth, the net worth of the unincorporated business he owns, and the number of employees he retained all at the time the action was filed meet the eligibility requirements of 28 U.S.C. § 2412(d)(2)(B), but offered no supporting documentary evidence. A conclusory affidavit rnthout supporting evidence is inadequate to establish such ‘party’ status. Thus, a petitioner requesting fees under the EAJA must present sufficient evidence so that his or her net worth may be ascertained and verified by the court____”
Fields, 29 Fed.Cl. at 382 (additional emphasis added).
In the case here at bar, by submitting a “naked” worksheet in the itemized form of a balance sheet, plaintiff may have followed the letter, but certainly not the substance, of this court’s instruction in Fields. Irrefutably, plaintiffs questionnaire and worksheet, alone, are of the same bland, self-serving, non-probative, unsupported variety as those rejected in Fields. Therefore, we are constrained to hold that plaintiffs submissions clearly fall short of the sufficient showing-expressed in the holding in Fields, and he admits as much in his reply brief, as follows:
“Plaintiff has timely filed his application and amended application for fees; he has alleged and shown that he is a prevailing party; and, he has shown that the position taken by the United States, as demonstrated by its abrupt change in position, inter alia, was not substantially justified. The United States has not contested that the plaintiff meets the statutory eligibility requirements of section 2412(d)(2)(B), thus conceding this issue. [Citation omitted]. Plaintiff does not own a business so [the $7,000,000/500 employee standard of] this provision is inapplicable. The plaintiff and his wife have been in a situation over the past several years where they are, without equivocation, down-on-their-luck. Without question, plaintiffs net worth is less than $2,000,000. Plaintiff has sworn under the penalty of perjury that his net worth statements are correct.
Plaintiff is aware that if he had supporting documentary evidence for his net worth statement, it would greatly assist the Court to evaluate his net worth. But the fact is he does not have tax records; nor balance sheet; nor a financial statement which might be presented in applying for a loan. The net worth statement submitted with the amended application is an accurate depiction of his assets and liabilities. Plaintiff advised undersigned counsel by telephone that he has not filed tax returns because whatever income he might have earned, was below the required amount which would have triggered the filing of a tax return [footnote omitted]. While plaintiff would have preferred to submit an*343 audited, certified balance sheet and net worth statement, it was financially impossible.”
Pl.’s Reply to Def.’s Opp’n to Pl.’s Am.App. at 5-6.
Although the defendant ceased to challenge plaintiffs financial eligibility, this court cannot turn a blind-eye to such a woefully inadequate showing. Based upon the foregoing bland statements, plaintiffs counsel has all but portrayed plaintiff as a pauper without “portfolio.” While the court is not unsympathetic to any unfortunate plight that may have befallen plaintiff, it is, however, unmoved by the reliance of plaintiffs counsel on a plethora of self-serving contentions in lieu of the presentation of probative evidentiary support.
Plaintiff, in effect, is asking us to ignore this court’s prior holding in Fields. He is also asking the court to ignore the incredulous aspects of his self-serving representations to the court, inasmuch as (1) the underlying cause of action began with the assertion that plaintiff was “a prospective buyer” of a yacht (at some time between 1987 and 1995), (2) plaintiff now represents that he has absolutely no means of subsistence from any source, (3) notwithstanding fact (2), he supports his wife,
Again, this is not a matter of the court taking a callous stand here. Instead we are bound to a strict construction of the operative statute. Fields, 29 Fed.Cl. at 381. Just as we acknowledged in Fields, “[t]he purpose of the EAJA is to lift the ‘bar of sovereign immunity for award of fees in suits brought by litigants qualifying under the statute.’ Levernier Constr., Inc. v. United States, 947 F.2d 497, 502 (Fed.Cir.1991). As a waiver of sovereign immunity, the Act must be strictly construed, allowing for the award of fees ‘only to the extent explicitly and unequivocally provided.’ Id. (quoting Fidelity Constr. Co., Inc. v. United States, 700 F.2d 1379, 1386 (Fed.Cir.[1983]) [ ].” Id. (quoting Scherr Constr. Co. v. United States, 26 Cl.Ct. 248, 250 (1992) (emphasis omitted))).
At first glance, plaintiff appears to be the precise litigant intended by Congress when it created the EAJA, but to be sure, plaintiff must make a sufficient showing. In that connection, this court has already ruled in its previous decision in Fields that self-serving affidavits alone do not cut muster, and such still holds true regardless of the form in which they may be presented. The court independently observes that there are several means by which plaintiff’s submissions could have been supported with probative, verifiable documentary evidence, with minimal effort required to be expended by plaintiff.
CONCLUSION
Thus, for all of the foregoing reasons, plaintiffs application/motion for an award of attorney fees and expenses pursuant to 28 U.S.C. § 2412 is hereby DENIED for want of proof.
IT IS SO ORDERED.
. 28 U.S.C. § 2412(d)(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, in addition to any costs awarded pursuant to subsection (a), 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.”
. 19 U.S.C. § 1619(a) reads in pertinent part:
"If any person who is not an employee or officer of the United States ... furnishes to ... any customs officer original information concerning any fraud upon the customs revenue,*338 or any violation of the customs laws ... [and] such information leads to a recovery of any duties withheld, or any fine, penalty, or forfeiture of property incurred; the Secretary may award and pay such person an amount that does not exceed 25 percent of the net amount so recovered.”
. See RAMCOR Services Group, Inc. v. United States, 185 F.3d 1286, 1288 (Fed.Cir.1999); 28 U.S.C. § 2412(d)(1)(A).
. COFC Rule 68, Offer of Judgment, states at follows:
"At any time more than 10 days before the trial begins, a party defending against a claim may serve upon the adverse party an offer to allow judgment to he taken against the defending party for the money or property or to the effect specified in the defending parly's offer, with costs then accrued. If within 10 days after the service of the offer the adverse party serves written notice that the offer is accepted, either party may then file the offer and notice of acceptance together with proof of service thereof, and thereupon the clerk shall enter judgment.”
Defendant served the offer of judgment on February 12, 2002, and plaintiff timely accepted on February 22, 2002.
. See 19 U.S.C. § 1592.
. Pl.’s Mem. Supp. Mot. Atty’s Fees & Costs at 2 (emphasis added); Joint Status Report of October 16, 2001 at 1; Pl.’s [Pre-trial] Mem. Contentions Fact & Law at 1.
. The "Always," the "Lady Emmanuel,” and the “Southern Cross III.”
. The "Always,” "Lady Emmanuel,” "Bison,” “Southern Cross,” "Caprise,” "L’Aquasition,” “Sea Anemity,” "Almaviva,” "Intrepid II,” "Princess Marla,” "October Rose,” "Galaxy,”
. See 19 U.S.C. § 1313(j).
. These claims were denied on July 18, 2001.
. Plaintiff's administrative appeal of July 24, 2001, was denied on October 23, 2001.
. Pursuant to 19 U.S.C. § 1619.
. In other words, plaintiff made a showing that he was the prevailing party, had incurred attorney fees, and alleged that the government’s position lacked substantial justification.
. The worksheet presented by plaintiff had numerous line-items and several captions, but the information captured here are those lines containing relevant figures. In other words, no other information on the worksheet shows any assets or other value nor lends itself to the computation of net worth.
. Plaintiff’s mathematical error has been corrected from $85,065.00 to $84,935.00.
. 29 Fed.Cl. 376 (1993), aff'd, 64 F.3d 676, 1995 WL 479327 (Fed.Cir.1995).
. Note that plaintiff does not accurately represent the court's statement.
. The reasonable inference deduced by the court from this admission by plaintiff is that his spouse is fully dependent upon him for self-support and thus is without funds.
