Scafar Contracting, Inc. v. Secretary of Labor Occupational Safety and Health Review CommissionScafar Contracting, Inc. v. Secretary of Labor Occupational Safety and Health Review Commission
OPINION OF THE COURT
In this appeal we must decide whether the requirement in the Equal Access to Justice Act (EAJA),
I. Jurisdiction and Standard of Review
The Occupational Safety and Health Review Commission had jurisdiction to evaluate the Secretary of Labor’s Petition pursuant to § 10(e) of the Occupational Safety and Health Act (OSH Act),
We have plenary review over the Commission’s legal interpretation of the EAJA.
Sea-Land Serv., Inc. v. Rock,
II. Factual and Procedural Background
The facts relevant to our review are not in dispute. In 1996, an OSHA Compliance Officer inspected a work site that involved removing and replacing a sewer line in Newark, New Jersey. Scafar Contracting was the trenching contractor responsible for the depth and safety of the trenches. As part of the inspection, the officer issued Scafar two citations alleging serious and willful violations of the Occupational Safety and Health Act. The proposed penalties were $99,000 for the alleged willful violations and $4,000 for the alleged serious violations. Scafar contested the citations and eventually the proceeding came before an Administrative Law Judge in February and April of 1998. In his July 24, 1998 decision, the ALJ vacated the willful violations and reduced the penalty for the serious violation to $1,600.
The ALJ issued his decision on September 2, 1999, granting Scafar’s application for $66,220.49 in fees, after finding that the Secretary was not substantially justified in issuing and pursuing enforcement of meritless OSH Act violations. In her Petition for Discretionary Review, the Secretary renewed her allegation that the application with respect to the agency adjudication was untimely.
1
The Commission granted review and adopted the Secretary’s position that the application was untimely for the fees sought under
On remand, the ALJ awarded Scafar $11,183.72 for fees and expenses incurred in connection with the proceedings before us.
2
Scafar petitioned the Commission for
III. Discussion
The Equal Access to Justice Act was enacted to award private litigants them expenses incurred in defending against unreasonable government actions. As the statute provides awards of these fees and expenses for both administrative and judicial proceedings, the EAJA has been bifurcated between
With respect to agency proceedings, the applicable statute is
An agency that conducts an adversary adjudication shall award, to a prevailing party other than the United States, fees and other expenses incurred by that party in connection with that proceeding, unless the adjudicative officer of the agency finds that the position of the agency was substantially justified or that special circumstances make an award unjust.
[w]hen the United States appeals the underlying merits of an adversary adjudication, no decision on an application for fees and other expenses in connection with that adversary adjudication shall be made under this section until a final and unreviewable decision is rendered by the court on the appeal or until the underlying merits of the case have been finally determined pursuant to the appeal.
Id.
Pursuant to the OSH Act, the Secretary has 60 days after the issuance of a final order to file her appeal.
When an appeal to our Court is taken, the forum for deciding fees shifts to the second statute.
In awarding fees and other expenses under this subsection to a prevailing party in any action for judicial review of an adversary adjudication, as defined in subsection (b)(1)(C) ofsection 504 of title 5, United States Code, ... the court shall include in that award fees and other expenses to the same extent authorized in subsection (a) of such section, unless the court finds that during such adversary adjudication the position of the United States was substantially justified, or that special circumstances make an award unjust.
Thus, we are presented with the question of how the term “final disposition” in
We start with a discussion of
1. The final word on “final judgment”
An application for fees in the civil action must be filed “within thirty days of final judgment in the action.”
In
McDonald,
the Court of Appeals for the Seventh Circuit addressed the question of “whether an application for such an award is untimely if filed more than 30 days after the district court renders its final judgment, although less than 30 days after any appellate proceedings are completed.”
The Seventh Circuit also expressed one other overwhelming concern. If the EAJA requires a prevailing party to file its application prior to the expiration of the time for the government’s appeal, this creates an incentive for the agency to appeal that is contrary to the remedial intent of the EAJA. Specifically, the court was concerned that early filing “delivers into the hands of the government a potent, acknowledged, and from the standpoint of the policy of the Equal Access to Justice Act perverse weapon for discouraging meritorious fee applications.” Id. at 315. Using the situation before them as an example, the court explained that:
[T]he government is unlikely to pursue an appeal where the stakes are only $652.50. Its adversary knows this and knows also that if he increases the stakes to the government by applying for fees, the government (as it emphasized to us in its briefs and at argument) will be more likely to appeal the underlying judgment.
Id. In light of this potential conflict, the Seventh Circuit found that:
The framers of the Equal Access to Justice Act could not have meant to create such a dilemma when they used the words “final judgment” without in all likelihood considering what the words might mean in the setting of the present case. They wanted to make it easier, not harder, for people of limited means to collect their small claims from the government.
Id. (citing H.R.Rep. No. 1418, 96th Cong.2d Sess. 18 (1980)). The court also pointed out that the General Accounting Office will not approve payment on EAJA claims until all appellate proceedings are at an end. Ultimately, the Seventh Circuit held that “final judgment” meant final and unappealable and reinstated the appellant’s application as timely.
We addressed the ambiguity of “final judgment” in
Taylor v. United States of America,
2. The unsettled word on “final disposition”
Unlike
The Secretary argues that we owe no deference to the model rules or the Conference because the Conference no longer exists. Notwithstanding OSHA’s interpretation, the EAJA is a statute of general applicability and we do not owe deference to any particular agency’s interpretation. However, as the Court of Appeals for the D.C. Circuit recently noted, “[bjecause Congress gave the Chairman of the Administrative Conference the task of overseeing the adoption by each agency of ‘uniform procedures,’ ... the Conference’s views warrant at the very least possible
Skidmore
deference.”
Adams v. SEC,
In attempting to discredit the model rules, the Secretary points to the regulations enacted by OSHA. These regulations say that an application must be filed “in no case later than thirty days after the Commission’s final disposition of the proceeding.” 29 C.F.R. 2204.302(a). The regulations further define “final disposition” to mean either:
(1) The date on which the order of the judge disposing of the case becomes final under section 12(j) of the OSH Act, 29 U.S.C. 661(3); or
(2) The date on which the order of the Commission affirming, modifying, or vacating the Secretary’s citation or proposed penalty or directing other appropriate relief becomes final under section 10(c) of the OSH Act, 29 U.S.C. 659(c).
29 C.F.R. 2204.302(d)(l)-(2). Pursuant to
In
Adams,
the Court of Appeals for the D.C. Circuit faced a situation similar to ours. The petitioner, Adams, had filed his application for fees beyond the 30 days from a final disposition that was unappealable to him. Although the internal SEC regulations defined “final disposition” to mean final and unappealable, they had further interpreted “unappealable” to mean unappealable as to the particular party, not 30 days from the time at which the order became unappealable to anyone.
6
Thus, because Adams had prevailed at the agency level, he did not have the right to appeal and the 30-day period began immediately. The court framed Adams’ argument as asking the court to hold that “regardless of whether the disposition giving rise to the EAJA fee is specifically appealable, the EAJA filing deadline should not expire in any case until 30 days after the time for appeal under the relevant law of appealability ... has expired or the appeal has been completed.”
Id.
at 184. After much discussion, the D.C. Circuit adopted the position that “final disposition” under
In looking at the issue, the court concluded that the case specific approach used by the SEC was unworkable and inconsistent with the purposes of the EAJA. The court first held “as a threshold matter that the meaning of ‘final disposition’ in
After discussing the history of
When the United States appeals the underlying merits of an adversary adjudication, no decision on an application for fees and other expenses in connection with that adversary adjudication shall be made under this section until a final andunreviewable decision is rendered by the court on the appeal or until the underlying merits of the case have been finally determined pursuant to the appeal.
[I]t can be read as presupposing the existence of a timely filed fee application, meaning that the fee application must be filed within 30 days of the final agency order, with the only restriction being that when the government files an appeal, the agency cannot act on the application until the appeal is completed; or, the language can be read as only reaffirming that no fees are appropriately awarded pursuant to§ 504 until the government’s efforts to appeal are completed, but leaving open the question of when a disposition is final for purposes of the commencement of the 30-day deadline.
Adams,
Because the amendment did not alter the time when the start of the 30-day period began to run, the court turned to the Seventh Circuit’s reasoning in
McDonald
and noted “four salient observations, all of which are applicable in agency as well as judicial proceedings.”
Id.
First, the court pointed out that the government would not pay any fees until the expiration of the time limits for appeal. Second, it expressed concern that any other reading would result in the need to file multiple fee applications and that “it makes more sense, at least from the claimant’s viewpoint, to be able to file a single application at the conclusion of all the proceedings.”
Id.
(citation omitted)] The court further supported this position by citing the Seventh Circuit’s explanation that “giving the claimant a choice whether to ask for fees after he wins in the district court or after the appeal maximizes his welfare, at some cost perhaps to the courts but none we can think of to the executive branch”
Id.
(quoting
McDonald,
[W]e find no evidence that appellate economy warrants an earlier application deadline in light of the lost economy from multiple fee applications. Further,appellate economy is built into the statutory scheme for fees in administrative proceedings; §§ 504(c)(1) and 2412(d)(3) work in tandem so that the appeals court can award fees for both the agency and court proceedings.
Id.
at 188-89. Fourth, the court noted the concern expressed by the Seventh Circuit that requiring early fee filing “delivers into the hands of the government a potent, acknowledged, and from the standpoint of the policy of [EAJA] perverse weapon for discouraging meritorious fee applications.”
Id.
at 189 (quoting
McDonald,
Ultimately, the D.C. Circuit held that:
§ 504(a)(2) of EAJA is to be interpreted as creating a bright-line rule, discernible by looking at the category of order in question and the applicable law of ap-pealability. When a potential appeal exists under the relevant statute, the time for appeal must lapse, or the appeal be completed, before the 30-day deadline begins to run.
Id. at 191. Thus, the only other circuit to squarely address this question has found that the EAJA’s “final disposition” should be interpreted as final and unappealable, where all rights to appeal must run before the start of the 30-day period for filing fees. Despite the difference in agencies, the reasoning of the D.C. Circuit is equally applicable in the context of OSHA’s regulations.
The concerns expressed by this Court in
Taylor
and by the D.C. Circuit in
Adams
resonate here. Pursuant to the OSH Act, the Secretary had 60 days from September 4, 1998 to appeal the decision rendered in Scafar’s favor. Under OSHA’s interpretation of the EAJA, Scafar would have been required to file its application by October 4, 1998 -well before the time the Secretary had to file her appeal-thus “delivering] into the hands of the government a potent, acknowledged, and from the standpoint of the policy of the [EAJA] perverse weapon for discouraging meritorious fee applications.”
Adams,
IV. Conclusion
Under the Secretary’s interpretation, a prevailing party would face multiple deadlines and multiple applications, while providing the Secretary with an incentive to appeal the merits, even with minor awards, because of the fees requested. This proposed construction would breathe life into the hypothetical problems and concerns earlier expressed by this Court and others over the proper interpretation of
We hold that a prevailing party will have 30 days following the expiration of the time for the Secretary to appeal a decision on the merits to file its fee application under
V.
For the foregoing reasons, we reverse the order of the Commission. Fees and expenses incurred in all previous proceedings may be applied for pursuant to
Notes
. At oral argument we asked the parties to comment on the potential concern that the Secretary had waived her right to assert the defense of untimeliness by not raising the issue when first opposing the application for fees filed with this Court. Because we find that Scafar filed its application for fees in a timely fashion under the statute, it is unnecessary to reach the issue of waiver.
. Properly, this amount did not include expenses incurred by Scafar during its inappropriate appeal of the Commission's November 21, 2000 remand order.
. The ambiguity of "final disposition" is highlighted by the conflicting interpretations put forth by OSHA in this case and the position of the Court of Appeals for the D.C. Circuit in
Adams v. SEC,
. Because the Congress charged the Administrative Conference with the official duty of interpreting the EAJA and developing model rules, we would traditionally afford the resultant determinations some deference:
[T]he Administrator’s policies are made in pursuance of official duty, based upon more specialized experience and broader investigations and information than is likely to come to a judge in a particular case.... We consider that the rulings, interpretations and opinions of the Administrator under this Act, while not controlling upon the courts by reason of their authority, do constitute a body of experience and informed judgment to which courts and litigants may properly resort for guidance. The weight of such a judgment in a particular case will depend upon the thoroughness evident in its consideration, the validity of its reasoning, its consistency with earlier and later pronouncements, and all those factors which give it power to persuade, if lacking power to control.
Skidmore v. Swift,
. Although not implicated on this appeal,
. Unlike OSHA's guidelines, the SEC's regulations follow the Conference's model rules and define "final disposition” as "final and unappealable, both within the Commission and to the courts.”
. The Secretary points out that OSHA adopted a regulation designed to implement this section. The text of that regulation provides:
If review of a Commission decision, or any item or items contained in that decision, is sought in the court of appeals under section 11 of the OSH Act, 29 U.S.C. 660, an application for an award filed with the Commission with regard to that decision shall be dismissed under 5 U.S.C. 554(c)(1) as to the item or items of which review is sought. If the petition for review in the court of appeals is thereafter withdrawn, the applicant may reinstate its application before the Commission within thirty days of the withdrawal.