MEMORANDUM OPINION & ORDER
On February 13, 2013,
I. Factual and Procedural Background
GGS is a Texas limited partnership that locates gate attendants for oilfield operators. GGS contracts with approximately 400 gate attendants that perform the job of logging in vehicles entering and departing oilfield operаtion sites.
In July 2010, DOL Lead Wage and Hour Investigator David Rapstine (“Rap-stine”) began investigating GGS after receiving complaints from former GGS service technicians Danny McDaniel and Jerry Studlar, who was a “friend” of Rapstine from “parties” and “the bars and stuff like that.” (Simmons Dep., Dkt. No. 137, Ex. E at 61:3-63:24.) Rap-stine first contacted GGS via a July 15, 2010 letter advising GGS that an “opening conference” would take place on July 29, 2010. Rapstine then arrived unannounced at GGS’s office on July 19, 2010 and spoke to manager Sidney Smith.
An opening conference was held as planned on July 29, 2010. Shortly after concluding the conference, Rapstine sent an email to Sabrina Loudin, another Wage and Hour Investigator, stating in part: ‘Wish you could have been there, it was a good example of being quiet and letting them do all of the talking and consequently, digging their own grave.” (Dkt. No. 137, Ex. A-6.) Without furthеr investigation beyond the opening conference and his interviews with McDaniel, Studlar, and one other GGS worker, Rapstine began his back wages calculations. After he was
In October 2010, Rapstine informed GGS of the DOL’s findings. Specifically, the DOL found GGS to be in violation of the FLSA because the gate attendants were employees, not independent contractors. The DOL also mandated that GGS compensate the gate attendants at the federal minimum wage rate for 24 hours for each day they are assigned to an oilfield operation. Rapstine further advised GGS to pay $6,192,752.00 in back wages and unpaid overtime to the gate attendants and service technicians, as calculated in the “Summary of Unpaid Wages Due” he issued to GGS. On November 10, 2010, GGS’s counsel spoke to DOL District Director Eden Ramirez (“Ramirez”), who confirmed that litigation was imminent because GGS refused to come into compliance with the FLSA. Then on November 19, 2010, GGS’s counsel met with Ramirez, Targeted Enforcement Cоordinator Michael Speer, and an attorney from the DOL’s Office of the Solicitor for a final conference. The DOL insisted that GGS immediately come into compliance by reclassifying the gate attendants as employees and paying over $6 million in back wages to the gate attendants and service technicians.
Later that same day, November 19, 2010, GGS filed the above-captioned declaratory judgment action seeking a determination of whether it is in compliance with the FLSA (“Declaratory Judgment Action”). Specifically, GGS sought declaratory relief arising from the DOL’s flawed classification of the gate attendants as employees instead of independent contractors, its calculation totaling over $6 million in back wages, and its allegation that GGS had not complied with record-keeping requirements. On February 16, 2011 — before GGS served the DOL with its complaint in the Declaratory Judgment Action — the DOL filed an enforcement action under the FLSA in the Southern District of Texas, Corpus Christi Division, which was assigned to U.S. District Judge Janis Graham Jack (“FLSA Enforcement Action”). Hilda L. Solis, Secretary of Labor, United States Department of Labor v. Gate Guard Services, LP DBA Gate Guard Services, Bert Steindorf and Sidney L. Smith, Civil Action No. 2:11-41 (S.D.Tex.2011). The FLSA Enforcement Action sought back wages, liquidated damages, and injunctive relief against co-defendants GGS, owner Bert Steindorf, and manager Sidney Smith based on alleged minimum wage, overtime, and record-keeping FLSA violations pertaining to at least 345 of the gate attendants, as well as for overtime and record-keeping violations regarding the service technicians.
While GGS’s motion to dismiss or transfer the FLSA Enforcement Action was still pending, the DOL moved to dismiss the Declaratory Judgment Action on the grounds that the Court lacked subject matter jurisdiction over GGS’s Amended Complaint, and that the case was neither ripe for judicial review, nor would it resolve all of the issues between the Parties. GGS opposed dismissal and instead moved the Court to consolidate the FLSA Enforcement Action into the first-filed Declaratory Judgment Action. The Court denied the DOL’s motion to dismiss and further found that the two cases should be consolidated in the interests of judicial economy and to avoid excessive costs and duplication of effort, given the substantial overlap between the cases.
Once the cases were consolidated and discovery was underway, GGS filed a number of discovery-related motions during the course of the litigation. The first was a Motion to Compel Answers to Deposition Questions, Imposition of Sanctions, and Request for Guidelines on Deposition Conduct and for Magistrate Supervision of Depositions (Dkt. No. 41), based on disruptive conduct by the DOL’s lead attorney, Colleen B. Nabhan, during the deposition of Rapstine.
GGS next filed a Motion to Compel Production of Documents (Dkt. No. 58) seeking information that gate attendants provided to DOL Wage and Hour Investigators regarding their work for GGS in the form of questionnaires, witness statements, and investigation notes, as well as representations contained in the DOL’s FLSA Narrative after the DOL asserted that the information was protected under the government informant privilege. GGS later moved to amend its motion to compel after the DOL filed some of the withheld questionnaires and witness statements as evidence with the Court, therefore waiving the privilege. GGS also filed a Motion for Protective Order after DOL investigators telephoned gate attendants and sent out mass mailings stating that it was “imperative” that the gate attendants complete a survey before a specified deadline, and the DOL refused to revise its cover letter and survey and refused to stop telephoning or otherwise contacting the gate attendants regarding their responses. Finally, GGS filed a Motion to
The Court also held two telephone conferences concerning the Parties’ various discovery disputes, after which GGS agreed to withdraw the majority of its discovery-related motions in order to focus on the Parties’ cross-motions for summary judgment. After extensive briefing, the Court granted GGS’s Cross Motion for Summary Judgment on its Declaratory Judgment Action, denied the DOL’s Motion for Partial Summary Judgment, dismissed the DOL’s counter-claims against GGS in the FLSA Enforcement Action, and entered final judgment in favor of GGS and against the DOL.
GGS now seeks to recover the attorneys’ fees that it incurred in the prosecution of its Declaratory Judgment Action and in the defense of the FLSA Enforcement Action. According to GGS, as the prevailing party, it is entitled to attorneys’ fees under the Equal Access to Justice Act because the DOL’s actions, both during its administrative investigation and in the course of litigation, were taken without substantial justification.
II. Legal Standard
The Equal Access to Justice Act (EAJA), 28 U.S.C. § 2412, was enacted in response to concerns that persons “may be deterred, from seeking review of, or defending against, unreasonable governmental action because of the expense involved in securing the vindication of their rights.” Sullivan v. Hudson,
Under the first method, the court is required to grant attorneys’ fees to a prevailing party against the United States, unlеss there are special circumstances that make the award unjust or the government can show that it was substantially justified in its legal position. 28 U.S.C. § 2412(d)(1)(A); Hyatt v. Shalala,
The EAJA further permits a court to award attorneys’ fees to the prevailing party to the same extent it may award fees in сases involving other parties, whether by statute or common law. 28 U.S.C. § 2412(b).
As recognized by the Fourth Circuit in Hyatt v. Shalala, “The distinction between [Subsections 2412(b) and 2412(d) ] is of considerable consequence in the calculation of amount of fees.”
III. Analysis
GGS previously moved for attorneys’ fees solely under § 2412(b). By written Memorandum Opinion and Order entered July 24, 2013, the Court denied GGS’s motion upon finding that the DOL’s actions were not taken in bad faith. Gate Guard Servs., L.P. v. Solis,
A. Is GGS a “prevailing party”?
“As a threshold matter, a plaintiff is a ‘prevailing party’ under the EAJA ‘if he succeeds on any significant issue in litigation which achieves some of the benefit he sought in bringing suit.’ ” Davidson v. Veneman,
B. Do special circumstances exist that would make a fee award unjust?
The “special circumstances” provision of § 2412(d)(1)(A) is designed to prevent recovery when the party seeking its attorneys’ fees has engaged in bad faith behavior and when equitable considerations such as the doctrine of “unclean hands” would make an award of attorneys’ fees unjust. See, e.g., Devine v. Sutermeister,
C. Was the fee application timely?
The EAJA requires that a fee application be made within 30 days of final judgment. 28 U.S.C. § 2412(d)(1)(B). A final judgment was entered in this case on February 13, 2013. (Dkt. No. 136.) On February 27, 2013, GGS timely filed its original Motion to Recover Attorneys’ Fees pursuant to § 2412(b). In a Memorandum Opinion & Order entered July 24, 2013, the Court denied GGS’s motion without prejudicе and allowed GGS to supplement its original motion with regard to § 2412(d). Gate Guard Servs., L.P.,
The DOL argues in a footnote that “there was nothing for GGS to supplement given that its first filing had been previously denied,” and GGS’s motion should therefore be denied as untimely. (Dkt. No. 148 at 1 n. 2.) GGS is correct that an argument raised in a footnote is insufficient and may be disregarded by the Court. See Bridas S.A.P.I.C. v. Gov’t of Turkmenistan,
Thus, the Court finds that GGS timely filed its fee application.
D.Is GGS a “party” under § 2412(d)?
As recognized in Part II, supra, § 2412(d) provides for mandatory attorneys’ fees if the position of the United States was not substantially justified and the prevailing party meets certain financial eligibility requirements. The Fifth Circuit has made clear that “[a] prevailing party is eligible for fees and expenses only if he meets the statutory definition of a party[.]”
(B) “party” means (i) an individual whоse net worth did not exceed $2,000,000 at the time the civil action was filed, or (ii) any owner of 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....
28 U.S.C. § 2412(d)(2)(B). Thus, in order to recover attorneys’ fees under § 2412(d), GGS must demonstrate that its» net worth did not exceed $7,000,000.00 and it did not employ more than 500 employees as of November 19, 2010.
Neither the plain language of the EAJA nor the Fifth Circuit has specified the method of calculation required to show “net worth”. Black defines “net worth” as “[a] measure of one’s wealth, usually calculated as the excess of total assets over total liabilities.” BLACK’S LAW DICTIONARY (9th ed.2009). Similarly, the Cоmmittee Report accompanying the EAJA and numerous circuit courts provide that net worth “is calculated by subtracting total liabilities from total assets.” H.R.Rep. No. 1418, 96th Cong., 2d Sess. 15 (1980); S.Rep. No. 96-253, 96th Cong., 1st Sess. 17 (1979); accord, e.g., Bolt v. Merrimack Pharm., Inc.,
GGS has offered evidence that its net worth on November 19, 2010 was $6,186,896.00. (Sedwick Deck, Dkt. No. 147, Ex. A ¶ 10.) Arthur James Sedwick, Jr., a third-party, independent CPA with the accounting firm RRS, based his calculation on a review and analysis of GGS’s 2010 partnership income tax returns and a compiled financial statement for 2010 that he previously prepared during GGS’s annual engagement of RRS in 2010. (Id. ¶¶ 4-7.) Schedule L of GGS’s Form 1065 U.S. Return of Partnership Income for 2010 provides a detailed statement of GGS’s total assets, including cash, land, buildings, and other depreciable assets, as well as GGS’s liabilities. (Dkt. No. 147, Ex. A, Ex. 1, Sch. L.) The compiled financial statement contains Mr. Sedwick’s report; GGS’s 2010 Statement of Assets, Liabilities, and Partners’ Capital; GGS’s 2010 Statement of Revenues and Expenses; and GGS’s 2010 Statement of Changes in Partners’ Capital. (Id., Ex. A, ¶ 6, Ex. 2.) These documents, in turn, include detailed balance sheets and list GGS’s assets (including current and fixed assets) and liabilities (including allocated long-term debt and accrued liabilities). (Id., Ex. A, ¶ 6, Ex. 2, Exs. B-D.)
GGS has also offered evidence that it had 37 employees as of November 19, 2010, based upon an analysis of the Internal Revenue Service W-2 Forms prepared for 2010 and payroll records for the month of November 2010. (Brown Deck, Dkt. No. 147, Ex..B ¶ 3.)
The DOL argues that GGS has not met its burden of establishing that its net worth was less than $7,000,000.00 in November 2010 because Mr. Sedwick did not apply generally accepted accounting principles (GAAP) to determine GGS’s net worth. Instead, Mr. Sedwick used a cash basis accounting method, which is not recognized under GAAP. According to the DOL, this alone is sufficient to reject GGS’s documentation purporting to establish its net worth. The DOL further contends that the financial documents submitted by GGS in support of its net worth are “inherently unreliable” because they have
The DOL cites a handful of decisions recognizing that GAAP applies to the net worth inquiry under the EAJA; however, none of the district court or court of appeals cаses cited by the DOL considers whether a cash basis accounting method may be used. Instead, each case focuses mainly on whether the evidence provided would allow the court to calculate net worth by subtracting total liabilities from total assets. See Broaddus v. U.S. Army Corps of Eng’rs,
The DOL cites a single order by a magistrate judge — which the DOL incorrectly states is the decision of a “district court judge” — that directly supports its claim that financial statements prepared using a cash basis accounting method cannot be used to determine net worth because this method does not comply with GAAP. United States v. Prabhu,
With respect to the DOL’s remaining complaints, the DOL fails to cite any authority in support of its claim that the financial statements provided by GGS should be excluded because they were not audited. Similarly, the DOL fails to provide any support for its claim that GGS must provide documentation establishing the value of each asset it owns. Finally, there is absolutely no merit to the DOL’s assertion that Mr. Sedwick’s opinion is biased and self-serving simply because his accounting firm was compensated for its work. As GGS rightly states in its reply, it is difficult to fathom how any business could obtain impartial financial statements from any independent CPA without paying them.
The Court finds that GGS need only present sufficient evidence of its total assets and liabilities in order that the Court may verify its net worth on November 19, 2010, and GGS has sufficiently done so by submitting its 2010 partnership income tax returns and 2010 compiled financial statement, accompanied by the sworn declaration of an independent CPA. Because GGS has demonstrated that its net worth did not exceed $7,000,000.00 and it did not employ more than 500 employees as of November 19, 2010, GGS meets the statutory definition of a “party” under § 2412(d)(2)(B).
E. Was the DOL’s position substantially justified?
As the Supreme Court stated in Scarborough v. Principi “the required ‘not substantially justified’ allegation imposes no burden of proof on the fee applicant. It is, as its text conveys, nothing more than an allegation or pleading requirement.”
“The test of whether or not a government action is substantially justified is essentially one of reasonableness.” Knights of the Ku Klux Klan v. East Baton Rouge Parish Sch. Bd.,
GGS first argues that, acting on behalf of the DOL and motivated by a desire to help his friend, Rapstine ignored proper procedure and concluded that GGS was in violation of the FLSA without fairly and thoroughly investigating this matter. As evinced by the email Rapstine sent another investigator just hours after the opening conference stating that he had let GGS managers “dig[] their own grave,” Rapstine appeared to have made up his mind before the investigation was even underway. Rapstine’s supervisor, Ramirez, testified that before calculating back wages, it would be wise to first establish that the employer is covered under the FLSA so as not to waste time (Ramirez Dep., Dkt. No. 137, Ex. F at 100:4-15); however, Rapstinе did not do this. Instead, Rapstine began calculating back wages immediately after the opening conference, before interviewing any gate attendants or service technicians beyond the initial three. Also unsettling is the fact that Rapstine destroyed all of his interview notes taken between July and November 2010 by shredding and/or burning them. The same supervisor testified that Rap-stine should not have destroyed his notes. (Id. at 139:19-23.) After Rapstine’s closing conference with GGS on October 4, 2010, he submitted his file to Ramirez, who testified that Rapstine again “did not follow the proper procedures” in presenting the $6 million penalty to GGS. (Id. at 32:4-9.) The proper procedure is to first address future compliance and then proceed with presenting the estimate of findings to the employer; however, Rapstine deviated from the DOL’s Field Operations Handbook without permission to do so. Finally, after interviewing an additional 14 workers and reviewing Rapstine’s investigation records after GGS filed its Declaratory Judgment Action, the DOL reduced its $6 million demand to $2 million, acknowledging that it erred by not excluding sleep and meal time from its initial demand. According to GGS, that the DOL would allow Rapstine to assess an erroneous penalty of more than $6 million against GGS — a penalty so severe it could have put the company out of business — without the proper checks and balances to ensure its correctness shows that the DOL’s prelitigation conduct was not substantially justified.
GGS next argues that the manner in which the DOL conducted the litigation was unreasonable and unnecessary and caused GGS to incur significant attorneys’ fees. For example, after being served with GGS’s lawsuit, the DOL fought the transfer аnd consolidation of its later-filed FLSA Enforcement Action with the Declaratory Judgment Action, despite the significant overlap between the cases. Once these matters were resolved and the Parties began discovery, Ms. Nabhan stonewalled GGS at the first deposition by objecting to nearly every question asked, forcing GGS to end the deposition and seek the Court’s assistance in setting parameters for the DOL’s conduct. The cancellation of Rapstine’s deposition forced GGS to reschedule the deposition, which resulted in a duplication of travel costs and deposition preparation. Finally, the DOL repeatedly withheld evidence from GGS based on the government informant privilege. As a result, GGS was forced to file a motion to compel, which resulted in yet additional briefing and considerable expense to GGS. According to GGS, the aforementioned conduct was not substantially justified.
GGS next argues that the DOL was unable to present sufficient evidence on each of the five factors of the independent contractor/employee analysis. As a result,
Finally, GGS complains that the DOL acted without substantial justification when it refused to dismiss the FLSA Enforcement Action after learning that the Army Corps of Engineers (ACE) uses the services of gate attendants at federal parks under similar circumstances and classifies these gate attendants as independent contractors.
The DOL responds that it was substantially justified in pursuing this action because it conducted an “extensive investigation” and provided the Court with 39 summary judgment exhibits supporting its contention that the gate attendants are employees. The DOL states that other courts have found security guards to be employees and cites a recent decision by the Texas Workforce Commission (TWC) finding that gate attendants were employees, in order to show that another body reached a different conclusion under “a very similar set of facts.” (Dkt. No. 148 at 9-10 (citing Loma Rentals, L.L.C., Case No. TD-13-076-1313, Tеx. Workforce Com’n (Jul. 12, 2013)).) Finally, the DOL points out that the Court acknowledged there were “facts pointing in both directions” in its Memorandum Opinion and Order on the Parties’ cross motions for summary judgment (Dkt. No. 135 at 22) and did not indicate in its decision that the DOL’s position was unreasonable.
The DOL is correct that the Court previously stated that there were “facts pointing in both directions” in this case. This was somewhat of an overstatement by the Court, as there was only one fact weighing in the DOL’s favor — that the job per
The DOL further argues that if GGS is entitled to recover any attorneys’ fees at all, it should be limited to those fees incurred after the Court’s decision was issued in Mack v. Talasek on March 28, 2012. The Court disagrees. Had the DOL interviewed more than just a handful of GGS’s roughly 400 gate attendants before presenting GGS with a $6,000,000.00 demand and filing its Enforcement Action against GGS, it would have known the gate attendants were not employees. Once discovery revealed the facts cited in the paragraph above, the DOL should have abandoned this litigation. See Environmental Defense Fund, Inc. v. Watt,
For the aforementioned reasons, the Court finds that the DOL’s position in this action was not substantially justified. GGS is therefore entitled to attorneys’ fees under the EAJA.
F. Is GGS entitled to a fee enhancement above the statutory rate?
The Court next turns to the question of the amount of fees GGS is entitled to collect from the DOL. Under the EAJA, “attorney fees shall not be awarded in excess of $125 per hour unless the court determines that an increase in the cost of living or a special factor, such as the limited availability of qualified attorneys for the proceedings involved, justifies a higher fee.” 28 U.S.C. § 2412(d)(2)(A)(ii).
1. Limited Availability of Qualified Attorneys
The Supreme Court has explained that “the limited availability of qualified attorneys for the prоceedings involved” refers to attorneys having “some distinctive knowledge or specialized skill needful for the litigation in question — as opposed to an extraordinary level of the general lawyerly knowledge and ability useful in all litigation.” Pierce v. Underwood,
GGS’s attorney, while indisputably experienced in the practice of labor and employment law, does not possess a distinctive knowledge or skill that could only be acquired apart from the routine practice of law. See Pierce,
2. Cost-of-Living Adjustment
In the alternative, GGS argues that it is entitled to a cost-of-living adjustment with respect to its attorneys’ fees.
Under the EAJA, the statutory rate of $125.00 per hour may be adjusted to reflect “an increasе in the cost of living.” 28 U.S.C. § 2412(d)(2)(A). The Fifth Circuit has recognized that such an adjustment is not required; however, it has held that Congress’s intent is “that cost of living be seriously considered by the fee-awarding court.” Baker v. Bowen,
The historical notes accompanying the EAJA indicate that the statutory rate was last increased in 1998, more than 15 years ago. See 28 U.S.C. § 2412 (Historical and Statutory Notes). GGS has provided evidence showing that the cost of living has increased substantially since then, as measured by the DOL’s Consumer Price Index (CPI). (Idalski Supp. Decl., Dkt. No. 149, Ex. C ¶¶ 3-4.) The DOL does not dispute the number of hours billed by GGS’s counsel in this case, and its only argument against GGS’s request for a cost-of-living adjustment is a statement in a footnote that GGS’s request “should be denied.” (Dkt. No. 148 at 12, n. 10.) As stated supra, an argument raised in a footnote is insufficient and may be disregarded by the Court. See Bridas S.A.P.I.C.,
Applying the appropriate cost-of-living percentagе increases to the statutory hourly rate of $125.00 yields a cost-of-living adjusted hourly rate of $156.38 for 2010, $161.16 for 2011, $164.02 for 2012, and $165.87 for 2013. (Idalski Supp. Decl. ¶ 6.) Multiplying the cost-of-living adjusted hourly rate by the hours billed for each year yields a total of $521,812.94 in attorneys’ fees sought by GGS [ ($156.38/hour x 226.5 hours = $35,420.07 in 2010) + ($161.16/hour x 2054.55 hours = $331,111.28 in 2011) + ($164.02/hour x 684.6 hours = $112,288.09 in 2012) + ($165.87/hour x 259.2 hours = $42,993.50 in 2013) ]. (Id. ¶¶ 7,12.)
The Court finds that GGS is entitled to a cost-of-living adjustment for the years 2010 through 2013 as calculated above, and the number of hours billed by counsel is
G. Is GGS entitled to “other expenses”?
In addition to attorneys’ fees, the EAJA provides for the recovery of “other expenses,” which includes paralegal fees and travel expenses. 28 U.S.C. § 2412(d)(1)(A); see also Richlin Sec. Serv. Co. v. Chertoff,
GGS has presented evidence that it incurred a total of 34.7 hours of paralegal services in 2011 and 67.7 hours in 2012. (Idalski Supp. Decl. ¶¶ 10, 11.) The prevailing market rate for paralegal services in the Houston, Texas area during the relevant time period was $105.00 per hour. (Id. ¶ 9.) Multiplying the total paralegal hours billed by the prevailing rate yields a total of $10,752.00 in paralegal fees during the course of this litigation [ ($105.00/hour x 34.7 hours = $3,643.50 in 2011) + ($105.00/hour x 67.7 hours = $7,108.50 in 2012)]. The DOL does not contest that GGS is entitled to paralegal fees, nor does it contest the amount of paralegal fees requested. Accordingly, GGS is entitled to recover $10,752.00 in paralegal fees from the DOL.
GGS has also presented evidence that its attorneys incurred travel expenses in the amount of $32,962.67 in connection with this matter, and those expenses were billed to and paid by GGS. (Idalski Supp. Dеcl. ¶ 14.) The DOL claims that travel expenses are not recoverable under the EAJA; however, the caselaw provides otherwise. See Aston,
IV. Conclusion
For the reasons set forth аbove, GGS’s Supplemental Motion to Recover Attorneys’ Fees (Dkt. No. 147) is GRANTED. It is ORDERED that GGS shall recover from the DOL attorneys’ fees in the mount of $521,812.94, paralegal fees in the amount of $10,752.00, and travel expenses in the amount of $82,962.67, for a total of $565,527.61.
Notes
. Pursuant to Federal Rule of Civil Procedure 25(d), Thomas E. Perez was automatically substituted as the party in interest for the former Secretary of Labor, Hilda L. Solis.
. The DOL later voluntarily dismissed all of the FLSA claims related to GGS's service technicians and all claims against Smith.
. Specifically, during the course of the initial 45-minute deposition, Ms. Nabhan objected 102 times. At least 18 times, Ms. Nabhan instructed Rapstine not to answer basic questions about his investigation. She also coached Rapstine and repeatedly raised her hand before counsel for GGS finished asking the question. Given all her objections, Ms. Nabhаn had more speaking lines than the deponent.
. Subsection 2412(d)(1)(A) provides:
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 Ends 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).
. Subsection 2412(b) provides:
Unless expressly prohibited by statute, a court may award reasonable fees and expenses of attorneys, in addition to the costs which may be awarded pursuant to subsection (a), to the prevailing рarty in any civil action brought by or against the United States or any agency or any official of the United States acting in his or her capacity in any court having jurisdiction of such action. The United States shall be liable for such fees and expenses to the same extent that any other party would be liable under the common law or under the terms of any statute which specifically provides for such an award.
28 U.S.C. § 2412(b).
. The DOL explains that it was unaware of the ACE program until summary judgment briefing in this action; however, GGS has offered evidence that it produced information related to the ACE program to the DOL in December 2011.
. The DOL responds that it could not have known about the Mack decision at the start of this litigation because the final order in Mack was not issued until March 28, 2012. GGS notes that the Magistrate’s Memorandum & Recommendation (M & R) that was substantially adopted by the Court was entered on February 18, 2011, just two days after the DOL filed the FLSA Enforcement Action. Still, the DOL could not have known that the Court would adopt Magistrate Johnson’s M & R.