United States v. Sidney Estridge, James F. O'crowley, Jr., Herbert Maslin
797 F.2d 1454
8th Cir.
1986
Check Treatment

*1 eliminating disputed al est, provision for on a issue of material with no through Therefore, av- extremes of fluctuations fact. we reverse the district technique, other does eraging or some grant summary judgment of and we interest as- provide a reasonable proceedings. remand this case for further determining of sumption Each will bear its own costs of this lump of equivalence sum the actuarial distributions. Part, Affirmed Reversed and Re- rate, (d) per- interest one A variable manded in Part. greater Moody’s centage point than Corporate Bond Rate for the third Aaa retirement, not, prior to dur-

month period question, a reasonable determining equiva- actuarial

basis lump sum distributions under

lence of American Plan. [Airlines] deposition, In his Mr.

R. 106 at 33-34. repeated his Fischer also often belief that America, UNITED STATES of assumption, interest in order that it an Appellant, actuarially equiva- accurately result in an fluctuating lent amount times interest

rates, incorporate must some form of aver- ESTRIDGE, Sidney aging large, will moderate short- which O’Crowley, Jr., Appellee, changes in James F. term the current market inter- R. Ex. W at est rate. Herbert Maslin. testimony provided 22. This sufficient evi- dence, especially light in- of the rather No. 85-1706. complete point, record on this to create a Appeals, United States Court disputed According- issue of material fact. Eighth Circuit. ly, grant we reverse the district court’s III, summary judgment on Counts II and 16, 1986. Submitted Jan. and we remand this case for further record Decided March development proceedings. Additional- Opinion Application Attorney on Fees ly, (seeking injunctive since Count IV relief 5,1986. Appeal Aug. against the conduct forms the which basis III) through closely Counts related and, part, II and derivative Counts III, grant summary judg- we reverse the

ment on that count also and we remand it

along with the other two counts.8

Ill sum, summary judgment we hold that appellees appropriate

in favor of the respect

with to Count I since there was no

plan Accordingly, amendment. affirm we respect

the district with However, respect

to Count I. IV, through

Counts II we find that resolu- requires

tion of these three counts addition- determine, appellants’ 8. We leave it to the district releases are valid and enforceable. court to instance, in the first whether or all of the

PER CURIAM. This is an from a district court1 costs and fees under (EAJA), Access to Justice Act 2412(d)(1982)(amended 1985). U.S.C. the United States *3 sought O’Crowley to hold and three other 6672(a) individuals liable under 26 U.S.C. § (1982)2 unpaid employment taxes that Trophy (Arlen) Arlen Company, Inc. had wages from the employees withheld of its quarter for the last of 1975 and the first quarter O’Crowley prevailed of 1976.3 action, and the district court awarded him govern- Access to Justice Act.4 The appeals only the award of costs and O’Crowley. fees to We affirm. 2412(d)(1)(A)provides:

Section Except specifically pro- as otherwise by statute, vided a court shall to a prevailing party other than the United expenses, States fees and other in addi- any tion to pursuant costs awarded to (a), subsection (other any civil action than cases sound- tort), including proceedings judicial action, agency brought review of against or in any United States LAY, having jurisdiction court Judge, Before Chief FLOYD R.

GIBSON, Judge, Senior Circuit unless the court finds that the and Judge. substantially justi- United States was Oliver, (Gate- ny, Gateway Sporting Company The Honorable John W. United States Goods Judge District for the way). Western District of Mis- Of the three other individuals from souri, presiding. government sought whom the to collect Arlen's taxes, unpaid Sidney Estridge was chairman 6672(a) provides: 2. Section forty percent Gateway, and shareholder of Rob- collect, Any person required truthfully Gateway, ert L. Moats was controller of for, pay any imposed by account over tax president Herbert Maslin was of Arlen. tax, willfully this title who fails to collect such truthfully pay or tax, account for and over such against 4. The case Moats was resolved in his willfully attempts any manner to summary judgment, favor on cross motions for any payment defeat evade or such tax or the States, F.Supp. see Moats v. United 564 1330 thereof, shall, penalties in addition to other (W.D.Mo.1983), granted and the district court law, provided by penalty equal be liable to a attorneys' Moats’ fees and ex- evaded, the total amount of the tax or not EAJA, penses collected, see Moats v. United paid or not accounted for and over. States, (W.D.Mo.1984). F.Supp. 576 1537 penalty imposed No shall be under section any offense did not either of those deci- 6653 to which this section is court, however, applicable. sions. The district found Es- 6672(a). 26 U.S.C. tridge personally and Maslin liable for Arlen’s 6672(a). unpaid taxes under 26 U.S.C. During period question, director, president, chairman of Arlen and holding compa- chief executive officer of Arlen’s

1457 justified. special circumstances make Keasler v. fied or that United States, 1227, unjust. Cir.1985). an award F.2d review, Under this standard of the district 2412(d)(1)(A) (West 1985 28 U.S.C.A. § court’s conclusions of law are reviewable IV).5 In Supp. a detailed and Supp. & 1986 basis; a de novo of fact are opinion, the district court con- thoughtful subject clearly of course to the erroneous had not carried cluded that 2,116 rule. United States Boxes its burden 1481, 1486(10th “substantially justi- Cir.), against Beef, Boned 726 F.2d conclusion, reaching Jarboe-Lackey fied.” cert. denied sub nom. emphasized that the States, Feedlots, 469 U.S. Inc. v. United ment did not furnish (1984); 105, 105 S.Ct. 83 L.Ed.2d of fact or law on which specific statement NLRB, Spencer v. 563-64 government based its claim (D.C.Cir.1983), denied, cert. 466 U.S. preventing O’Crowley O’Crowley, thus (1984).7 104 S.Ct. 80 L.Ed.2d 457 demonstrating regard, to the extent that the district *4 factually against him and le- position findings concerning strength the The court also noted that gally untenable. positions litigation by taken in the United investigate failed to the government the States are based on assessments the by O’Crowley offered truth of evidence probative value of the evidence offered supported O’Crowley’spo- that would have government, they only the can be reversed sition, gave credence to obvi- unwarranted 2,166 clearly if erroneous. Boxes Boned witnesses, ously and failed to reeval- biased 1486; Beef, Spencer, 726 F.2d at prosecuting to continue uate whether at 564. government’s O’Crowley after the claim in against Moats had been resolved Moats’ government challenge and the district court had awarded favor particular of the district court under Moats costs and fees the clearly govern erroneous. Nor does the as court con- EAJA. The district therefore point any particular ment to error of law the not carried cluded that had concluding made the district court position its burden of that the was not “substantially justi- against Rather, substantially justified. the thrust O’Crowley costs and fied” and awarded government’s argument on is of the attorneys’ fees. against that the merit of its claim O’Crow ley solely credibility turned on the of cer role on review is limited to de Our applica tain witnesses. The district court’s termining whether the district court abused case, govern to this finding govern tion of the EAJA its discretion against O’Crowley argues, requires ment’s was not ment effect Congress not have affected the district court’s 5. We are aware that amended section thus would Therefore, exception 2412(d) August decision. with one noted after the district 7, supra note the 1985 amendments to the EAJA had awarded costs and attor- Act, our review of this case. neys’ Equal do not affect Access to Justice Exten- fees. Amendment, 99-80, 2, and Pub.L. No. § sion 183, (codified (1985) as amended at does not contend that this Stat. 184-86 2412(d) (West “special Supp. case was one in which circumstances U.S.C.A. & 1986 § 28 Supp. IV). unjust.” make an award See 28 U.S.C. Pursuant to the amendments’ ex- 2412(d)(1)(A). terms, governs press § the amended version 7, at 186-87. § case on Id. at 99 Stat. Although Although for the award of the 1985 amendments the basic standard 2,166 2412(d) aspects certain Boxes Boned and fees under section overrule costs 1, same, H.R.Rep. legislative history Spencer, makes see No. Part remains the Beef 8-10, Cong., reprinted 1st Sess. in 1985 the amendments were intended to 99th clear that 2412(d) Cong. (Aug. give sweep, see H.R. U.S.Code & Ad.News at 137-38 section a broader 8-10, Cong., pamphlet), not Rep. Sess. the amendments do affect No. Part 99th 1st proper appellate Cong. reprinted & Ad.News discussion of the standard in 1985 U.S.Code opinions. (Aug. pamphlet). in those The amendments review contained 137-38 second-guess the district court in Here the court’s depended decision al- determining entirely whose version of the facts the most on the determination of the ultimately credibility court would find credible. The of the witnesses. In such a clear, case, opinion district court’s makes how- when the is unable to ever, liability truth, ultimate un- determine telling which 6672(a) der 26 U.S.C. turned on far more it is reasonable to do what it did here: It credibility. than witness The district all “responsible” parties sued and let primary finding reason for the court decide the credibility issue. government’s against was the fact that ON APPLICATION FOR ATTORNEYS’ diligently did investi- FEES ON APPEAL gate responsible paying Ar- who was LAY, Judge. Chief Instead, len’s taxes. prior proceeding, a this court affirmed brought claims several officers and court award of attorneys’ fees Gateway, including directors of Arlen and Jr., to James O’Crowley, F. might O’Crowley, possibly who have been Act, Access to Justice responsible collecting paying Arlen’s 2412(d) (West U.S.C.A. Supp.1986) taxes, employee withholding hoping that (EAJA). O’Crowleynow seeks an award of ultimately the court would find one or more of those individuals liable for Arlen’s taxes. EAJA for the fees he in- light lengthy of the district court’s (1) curred opinion explaining and well-reasoned district court's decision *5 conclusion that the merits, his favor on the which was later against O’Crowley (2) voluntarily defending dismissed and

justified government’s and the failure to government’s appeal from the district court point error in the district court’s expenses award of fees and application factual of the law to filing EAJA and applica- this current EAJA findings, say those we cannot that the dis- grant O’Crowley’srequest except tion. We trict awarding court abused its discretion in as to expenses the fees and he incurred attorneys’ costs and fees under on the merits. Equal Access to Justice Act. Accord- the United ingly, we affirm the judgment of the dis- sought to hold and three trict court.8 other individuals liable under 26 U.S.C. 6672(a) (1982) unpaid employment § Judge, dissenting. Trophy Company, taxes that Arlen Inc. had disagree with the result reached wages withheld employees. of its majority in this case because I believe that O’Crowley prevailed in the action. Subse- of the in this case quently, the district court awarded O’Crow- “substantially justified” within the ley attorneys’ expenses fees and meaning Equal of the Access to Justice government appealed EAJA. The both the Act. district court’s decision in favor of O’Crow- This court accepted ley (the has heretofore a test on the merits “section 6672 ac- Express tion”) reasonableness in Iowa Distri and the district court’s award under NLRB, (the bution v. 739 F.2d 1305 Cir. the EAJA action” or “EAJA 1984). Merely losing award”), the case does appeals “EAJA and the were con- satisfy a determination of Upon lack of reason solidated. own mo- tion, however, ableness. Id. this court dismissed the Act, pay shall interest on the dis- EAJA. See Access to Justice Exten- Amendment, 99-80, 2(e), trict court’s award of costs and fees to sion and Pub.L. No. § O’Crowley pursuant 2412(f), (to provi- to section 99 Stat. at 185-86 be codified at 28 U.S.C. 2412(f)). sion added the 1985 amendments to the government’s appeal application of the section 6672 his timely EAJA as to both appeals. August action in an order dated prosecute The continued to Although we have found no cases appeal of the district court’s EAJA award. discussing issue, precise this we conclude argument,

After oral we affirmed the dis- judgment of dismissal on the mer trict court’s award under the EAJA on its must be treated separately from the 10, 1986, April March 1986. On we judgment affirming the district court’s issued our in the mandate EAJA action. in determining EAJA award the timeliness application filed his current O’Crowley’s application. EAJA In Obin expenses pursuing fees and v. District No. 9 the International As appeals filing application both and in sociation Aerospace Machinists and 5, May Workers, (8th Cir.1981), 651 F.2d 574 court held that “a claim for attorney’s fees Jurisdiction should be treated as a matter collateral to party seeking A an award of independent of the litiga merits of the fees and under the EAJA must tion.” Id. at 583. Supreme The Court application submit an for such an award to expressly approved of this characterization thirty days judg- the court within of “final Hampshire Department White New ment,” 2412(d)(1)(B)(West 28 U.S.C.A. § Employment Security, 455 U.S. Supp.1986), which the EAJA defines as “a 451, 102 S.Ct. 71 L.Ed.2d 325 judgment appealable,” that is final and not (1982). We find no rational basis for deter 2412(d)(2)(G). id. con- mining that a claim fees is tends that collateral independent to and of the merits untimely respect this court is to those for some but not for others. We O’Crowley incurred in therefore hold O’Crowley’sapplication defending against government’s appeal defend of the district court’s decision in the section ing government’s appeal of the section 6672 action before the dis- prior 6672 action untimely.1 to dismissal is missed this on its own motion. justification respect appeal, With to the section 6672 Substantial government argues, of this We now consider whether *6 the court became “final” for of 28 government has met its burden of 2412(d)(1)(B) August 6,1985, U.S.C.A. position appealing that its in the district when this court entered an order dismiss- “substantially EAJA award was ing government’s appeal the of the section justified.”2 burden, To meet this the 6672 action. counters that be- government position must show that appeal cause the of the section 6672 action “clearly reasonable, was well in founded appeal and the of the EAJA award were fact, though law and solid necessarily consolidated, the of this court on 1,378.65 correct.” United v. Acres appeal of the section 6672 action did Land, (8th Cir.1986). 794 F.2d 1313 judg- not become final until this court’s Schweiker, Cornella v. 741 F.2d 170 appeal in Cir.1984), ment of the EAJA award govern we held that whether the Thus, contends, became final. in ment’s action Very proceedings, Navigation late in these Southern Co. v. Baltimore & Phila- argued Co., 629, 635, that EAJA delphia Steamboat U.S. 44 untimely appeals was as to both because local (1924) (a S.Ct. 68 L.Ed. 480 court rule 17(a) requires applica- rule that fee enlarge jurisdiction cannot or restrict or sub- days entry tions be filed within fourteen after law). stantive judgment. 17(a). argument 8th Cir.R. This is wholly without merit. A local court rule cannot government “spe- does not contend that supercede expressly pre- a statute that allows cial circumstances” make an would award of vailing parties thirty days appli- in which to file expenses O’Crowley "unjust." fees and expenses. Washington- cations for fees and See substantially justified ruling and whether the was trict court that in the appealing in dis- a section 6672 action was not trict court fees and award justified, rather than defended a district expenses was under the EAJA substantial- finding in its favor. circum- separate inquiries. ly justified are Id. at these, stances such as we hold that words, merely 171. In because the other decision of the appeal United States to government prevail in appeal an award of expenses fees of a district court award of and ex- O'Crowley substantially justified. was not penses under EAJA does automati- O’Crowley is therefore entitled to the fees cally prevailing party entitle the to an expenses he defending expenses EAJA award for fees and in- in filing ap- current EAJA bringing defending appeal. curred in plication. reviewing

After the record and the briefs, however, parties’ we conclude that Amount of fees and under the facts of this case the O’Crowley has submitted evi substantially justified appealing was not in documenting dence the amount of attor the district court’s EAJA award. Unlike neys’ he incurred in de Cornelia, this is not a case in which the fending of the EAJA award legal raised several issues of filing in application.3 this EAJA impression the first in argu the circuit in government has not contested either the ing an that EAJA award was not warrant amount hourly of hours or the Cornella, 172; ed. rate re See 741 F.2d at see Heckler, quested by Rawlings O’Crowley. Although also the evi (9th Cir.1984) (in holding prevail by O’Crowley dence submitted sufficiently ing party supports was not entitled to EAJA claims, the number of hours he for fees and defense we find that is limited to a mini government’s appeal of a district court per mum rate of hour. $75 The EAJA award, the court noted that provides “attorney fees shall not be legal ques had raised several per awarded excess of $75 hour unless circuit). tions that were unsettled in the the court determines that an increase which, Nor is Cornelia, this a case as in living special factor, cost of or a such as a district availability qualified the limited attor ruling prevailing party neys involved, proceedings for the justifies not entitled to an EAJA award but lost on higher a fee.” U.S.C.A. Cornella, See 741 F.2d at 172. 2412(d)(2)(A)(ii) (West Supp.1986). Rather, case, in this makes O’Crowley present any did not evidence to precisely the arguments same in contend support higher rate nothing and we find it was in to indicate that a fee in excess of the appealing the district court’s EAJA award per maximum hour rate justified $75 *7 appealed as it did when it the district court this case. We therefore O’Crqwley place: EAJA award in the first $19,768.56 attorneys’ expenses. merits of its claim Judge, dissenting. solely turned credibility of certain For the my original reasons set forth in witnesses and dissent on substantially justified thus of the district attempting award, hold I unpaid for Arlen’s likewise dissent from liable withholding taxes under 26 U.S.C. award of 6672. Moreover, appealed a dis- believe the 3. also seeks to spent collecting recover the fees and authorize an award for time attempting judgment government. to collect the from the Cole v. Secre- Services, tary 657, in his favor F.Supp. in the sec- Health and Human EAJA, however, (D.Del.1983). tion 6672 action. The 664 n. 3 bringing ap- peal. America,

UNITED STATES

Plaintiff-Appellee, WASHINGTON,

Ralph H.

Defendant-Appellant.

No. 84-1024. Appeals,

United Court

Ninth Circuit.

Argued Dec. 1984.

Submitted Dec. 1984.

Decided Feb. Rehearing

As Amended on

Aug.