1.This Act may be cited as the
Equal Access to Justice Reform Act of
2005
.
2.Findings and statement
of purpose
(a)The Congress finds that—
(1)the Equal Access to Justice Act
(Public Law
96–481; 94 Stat. 2325 et seq.) (in this section referred to as
EAJA
) was intended to make the justice system more accessible to
individuals of modest means, small businesses, and nonprofit organizations (in
this section collectively referred to as small parties
) through
limited recovery of their attorneys' fees when they prevail in disputes with
the Federal Government; and
(2)although EAJA has succeeded, at modest
cost, in improving access to the justice system for small parties, EAJA retains
formidable barriers to attorneys’ fees recovery (even for small parties that
completely prevail against the Government), as well as inefficient and costly
mechanisms for determining the fees recovery.
(b)It is, therefore, the purpose of this Act
to remove existing barriers and inefficiencies in EAJA in order to—
(1)equalize the level of accountability to
Federal law among governments in the United States;
(2)discourage marginal Federal enforcement
actions directed at small parties;
(3)reduce the practice of paying EAJA
liabilities from the General Treasury, to ensure that Federal agencies properly
consider the financial consequences of their actions and subsequent impact on
the Federal budget;
(4)refine and improve Federal policies through
adjudication;
(5)promote a fair and cost-effective process
for prompt settlement and payment of attorneys’ fees claims; and
(6)provide a fairer opportunity for full
participation by small businesses in the free enterprise system, further
increasing the economic vitality of the Nation.
(c)In complying with the
statement of congressional policy expressed in this section, each Federal
agency, to the maximum extent practicable, should—
(1)avoid unjustified enforcement actions
directed at small parties covered by EAJA;
(2)encourage settlement of justified
enforcement actions directed at small parties covered by EAJA; and
(3)minimize impediments to prompt resolution
and payment of reasonable attorneys’ fees to prevailing small parties covered
by EAJA.
3.Reporting and
technical assistance by office of advocacy
(a)Functions of
office of advocacySection
202 of Public
Law 94–305 (15 U.S.C. 634b) is amended—
(1)in paragraph (3), by inserting before the
semicolon at the end the following: and for ensuring that the justice
system remains accessible to small businesses for the resolution of disputes
with the Federal Government
; and
(2)by striking paragraph (11) and inserting
the following:
(11)advise, cooperate with, and consult with
the President and Attorney General with respect to section 303(b) of the Small
Business Economic Policy Act of 1980 (15 U.S.C. 631b(b)) and
section
504(e) of title 5, United States Code;
and
.
(b)Duties of office
of advocacySection 203 of
Public Law
94–305 (15 U.S.C. 634c) is amended—
(1)in paragraph (2), by inserting before the
semicolon at the end the following: , including the resolution of
disputes with the Federal Government and the role of procedures established by
the Equal Access to Justice Act (Public Law 96–481; 94 Stat. 2325) in
such disputes
; and
(2)in paragraph (3), by inserting after
the Small Business Act
the following: , including those related to the Equal Access to Justice
Act,
.
(c)
(1)Not later than 180
days after the date of enactment of this Act, the Attorney General, in
cooperation with the Chief Counsel for Advocacy of the Small Business
Administration, shall transmit to the congressional committees specified in
paragraph (2) a report containing—
(A)an analysis of the effectiveness of the
Equal Access to Justice Act (Public Law 96–481; 94 Stat. 2325) (in
this paragraph referred to as EAJA
) in achieving its purpose to
ease the burden upon small businesses and other small parties covered by EAJA
of engaging in dispute resolution with the Federal Government,
including—
(i)the relative awareness of EAJA in the small
business community;
(ii)the relative awareness of EAJA’s
requirements among Federal agencies;
(iii)the extent and quality of rules and
regulations adopted by each Federal agency for processing, resolving, and
paying attorneys’ fees claims under EAJA;
(iv)the extent to which each Federal agency
claims any exemptions in whole or in part from EAJA’s coverage;
(v)the frequency or degree of use of EAJA’s
procedures by prevailing small businesses; and
(vi)an analysis of the costs and benefits of
EAJA generally;
(B)an analysis of the variations in the
frequency and amounts of fee awards paid by specific Federal agencies and
within specific Federal circuits and districts under
section
504 of title 5, United States Code, and
section
2412 of title 28, United States Code, including the number and
total dollar amount of all claims filed with, and all claims processed,
settled, litigated, and paid by, each agency under EAJA; and
(C)recommendations for congressional oversight
or legislative changes with respect to EAJA, including any recommendations for
promulgation or amendment of regulations issued under EAJA by specific Federal
agencies.
(2)The congressional
committees referred to in paragraph (1) are the following:
(A)The Committee on the Judiciary and the
Committee on Small Business of the House of Representatives.
(B)The Committee on the Judiciary and the
Committee on Small Business and Entrepreneurship of the Senate.
(3)Report on small
business and competitionSection 303 of the Small Business Economic
Policy Act of 1980 (15 U.S.C. 631b) is amended—
(A)in subsection (a), by striking paragraph
(5) and inserting the following:
(5)recommend a program for carrying out the
policy declared in section 302 (including a policy to ensure that the justice
system remains accessible to small business enterprises for the resolution of
disputes with the Federal Government), together with such recommendations for
legislation as the President may deem necessary or
desirable.
;
(B)in subsection (b)—
(i)by striking (b)
and
inserting (b)(1)
; and
(ii)by adding at the end the following:
(2)The President, after consultation with the
Chief Counsel for Advocacy of the Small Business Administration and the
Attorney General, shall transmit simultaneously as an appendix to such annual
report, a report that describes, by agency and department—
(A)the total number of claims filed,
processed, settled, and litigated by small business concerns under
section
504 of title 5, United States Code, and
section
2412 of title 28, United States Code (originally enacted
pursuant to the Equal Access to Justice Act (Public Law
96–481; 94 Stat. 2325));
(B)the total dollar amount of all outstanding
awards and settlements to small business concerns under such sections;
(C)the total dollar amount of all claims paid
to small business concerns under such sections;
(D)the underlying legal claims involved in
each controversy with small business concerns under such sections; and
(E)any other relevant information that the
President determines may aid Congress in evaluating the impact on small
business concerns of such sections.
(3)Each agency shall provide the President
with such information as is necessary for the President to comply with the
requirements of this subsection.
;
and
(C)in subsection (d)—
(i)by striking (d)
and
inserting (d)(1)
; and
(ii)by adding at the end the following:
(2)All reports concerning the Equal Access to
Justice Act (Public Law 96–481; 94 Stat. 2325), or
the congressional policy to ensure that the justice system remains accessible
to small business enterprises for the resolution of disputes with the Federal
Government, shall be transmitted to the following congressional
committees:
(A)The Committee on the Judiciary and the
Committee on Small Business of the House of Representatives.
(B)The Committee on the Judiciary and the
Committee on Small Business and Entrepreneurship of the
Senate.
.
4.Equal access for small
parties in civil and administrative proceedings
(a)Elimination of
substantial justification standard
(1)Administrative
proceedingsSection 504 of title
5, United States Code, is amended—
(A)in subsection (a)(1), by striking ,
unless the adjudicative officer
and all that follows through the period
at the end and inserting a period; and
(B)in subsection (a)(2), by striking
The party shall also allege that the position of the agency was not
substantially justified.
.
(2)Section 2412 of
title 28, United States Code, is amended—
(A)in subsection (d)(1)(A), by striking
, unless the court
and all that follows through the period at
the end and inserting a period;
(B)in subsection (d)(1)(B), by striking
The party shall also allege
and all that follows through the
period at the end and inserting a period; and
(C)in subsection (d)(3), by striking ,
unless the court
and all that follows through the period at the end and
inserting a period.
(b)Eligibility of
small businesses for fee award
(1)Administrative
proceedings
(A)Section
504(b)(1)(B)(ii) of title 5, United States Code, is amended by
striking $7,000,000
and inserting
$10,000,000
.
(B)Adjustment in
net worth limitationSection
504(b) of title 5, United States Code, is amended by adding at the end the
following:
(3)Beginning on January 1 of the 5th year
following the date of enactment of this paragraph, and on January 1 every 5
years thereafter, the dollar amount under paragraph (1)(B)(ii) shall be
adjusted by the Producer Price Index as determined by the Secretary of the
Treasury, in collaboration with the Bureau of Labor
Statistics.
.
(2)
(A)Section
2412(d)(2)(B)(ii) of title 28, United States Code, is amended
by striking $7,000,000
and inserting
$10,000,000
.
(B)Adjustment in
net worth limitationSection
2412(d) of title 28, United States Code, is amended by adding at the end the
following:
(5)Beginning on January 1 of the 5th year
following the date of enactment of this paragraph, and on January 1 every 5
years thereafter, the dollar amount under paragraph (2)(B)(ii) shall be
adjusted by the Producer Price Index as determined by the Secretary of the
Treasury, in collaboration with the Bureau of Labor
Statistics.
.
(c)
(1)Administrative
proceedingsSection 504(b)(1)(A)
of title 5, United States Code, is amended—
(A)by striking (i)
; and
(B)by striking by the agency
involved
and all that follows through a higher fee
and
inserting by the agency involved
.
(2)Section
2412(d)(2)(A) of title 28, United States Code, is
amended—
(A)by striking (i)
; and
(B)by striking by the United
States
and all that follows through a higher fee
and
inserting by the United States
.
(d)
(1)Administrative
proceedingsSection 504(a) of
title 5, United States Code, as amended by this section, is further amended by
adding at the end the following:
(5)(A)At any time after an agency receives an
application submitted under paragraph (2), the agency may serve upon the
applicant a written offer of settlement of the claims made in the application.
If within 10 business days after such service the applicant serves written
notice that the offer is accepted, either the agency or the applicant may then
file the offer and notice of acceptance together with proof of service
thereof.
(B)An offer not accepted within the time
allowed shall be deemed withdrawn. The fact that an offer is made but not
accepted shall not preclude a subsequent offer. If any award of fees and
expenses for the merits of the proceeding finally obtained by the applicant is
not more favorable than the offer, the applicant shall not be entitled to
receive an award for fees or other expenses incurred (in relation to the
application for fees and expenses) after the date of the
offer.
.
(2)Section 2412(d)(1)
of title 28, United States Code, as amended by this section, is further amended
by adding at the end the following:
(E)(i)At any time after an agency receives an
application submitted under subparagraph (B), the agency may serve upon the
applicant a written offer of settlement of the claims made in the application.
If within 10 business days after such service the applicant serves written
notice that the offer is accepted, either the agency or the applicant may then
file the offer and notice of acceptance together with proof of service
thereof.
(ii)An offer not accepted within the time
allowed shall be deemed withdrawn. The fact that an offer is made but not
accepted shall not preclude a subsequent offer. If any award of fees and
expenses for the merits of the proceeding finally obtained by the applicant is
not more favorable than the offer, the applicant shall not be entitled to
receive an award for fees or other expenses incurred (in relation to the
application for fees and expenses) after the date of the
offer.
.
(e)Declaration of
intent to seek fee award
(1)Administrative
proceedingsSection 504(a)(2) of
title 5, United States Code, as amended by this section, is further amended by
inserting before the first sentence the following: At any time after the
commencement of an adversary adjudication, the adjudicative officer may (and if
requested by a party shall) require a party to declare whether such party
intends to seek an award of fees and expenses against the agency should such
party prevail.
.
(2)Section
2412(d)(1)(B) of title 28, United States Code, as amended by
this section, is further amended by inserting before the first sentence the
following: At any time after the commencement of an adversary
adjudication, as defined in subsection (b)(1)(C) of
section
504 of title 5, United States Code, the court may (and if
requested by a party shall) require a party to declare whether such party
intends to seek an award of fees and expenses against the agency should such
party prevail.
.
(f)Payment of
attorneys’ Fees from agency appropriations
(1)Administrative
proceedingsSection 504(d) of
title 5, United States Code, is amended to read as follows:
(d)(1)Fees and other expenses awarded under this
section shall be paid by any agency over which the party prevails from any
funds made available to the agency by appropriation or otherwise.
(2)Fees and expenses awarded under this
section may not be paid from the claims and judgments account of the Treasury
from funds appropriated pursuant to section 1304 of title 31.
(3)Paragraph (2) shall not apply to the
National Labor Relations Board, the Occupational Safety and Health
Administration, the Mine Safety and Health Administration, or the Equal
Employment Opportunity
Commission.
.
(2)Section 2412(d)(4)
of title 28, United States Code, is amended to read as follows:
(4)(A)Fees and other expenses awarded under this
subsection shall be paid by any agency over which the party prevails from any
funds made available to the agency by appropriation or otherwise.
(B)Fees and expenses awarded under this
section may not be paid from the claims and judgments account of the Treasury
from funds appropriated pursuant to section 1304 of title 31.
(C)Subparagraph (B) shall not apply to the
National Labor Relations Board, the Occupational Safety and Health
Administration, the Mine Safety and Health Administration, or the Equal
Employment Opportunity
Commission.
.
(g)Eligibility of
taxpayers for fee award
(1)Administrative
proceedingsSection 504 of title
5, United States Code, as amended by this section, is further amended by
striking subsection (f).
(2)Section 2412 of
title 28, United States Code, as amended by this section, is further amended by
striking subsection (e) and redesignating subsection (f) as subsection
(e).
(h)Conforming
amendment relating to reporting requirement under Small Business ActSection 504(e) of title 5, United
States Code, is amended to read as follows:
(e)(1)The Attorney General, after consultation
with the Chief Counsel for Advocacy of the Small Business Administration, shall
report annually to the Congress on the amount of fees and other expenses
awarded to individuals during the preceding fiscal year pursuant to this
section and section
2412 of title 28. The report shall describe the number, nature,
and amount of the awards, the claims involved in the controversy, and any other
relevant information which may aid the Congress in evaluating the scope and
impact of such awards for individuals engaged in disputes with Federal
agencies. Each agency shall provide the Attorney General with such information
as is necessary for the Attorney General to comply with the requirements of
this subsection.
(2)A
requirement that the President report annually on proceedings affecting small
business concerns under this section and under
section
2412 of title 28 is provided in section 303(b) of the Small
Business Economic Policy Act of 1980 (15 U.S.C.
631b(b)).
.
(i)The provisions of this section and the
amendments made by this section shall apply to any proceeding pending on, or
commenced on or after, the effective date of this Act.
5.Definition of
prevailing party in EAJA cases
(a)Section 504(b)(1) of
title 5, United States Code, is amended by adding at the end the
following:
(G)prevailing party
includes,
in addition to a party who prevails through a judicial or administrative
judgment or order, a party whose pursuit of a nonfrivolous claim or defense was
a catalyst for a voluntary or unilateral change in position by the opposing
party that provides any significant part of the relief
sought.
.
(b)Section 2412 of
title 28, United States Code, is amended—
(1)in subsection (d)(2)(H), by inserting after
means
the following: , subject to subsection
(g),
; and
(2)by adding at the end the following:
(g)For the purposes of this section, the term
prevailing party includes, in addition to a party who prevails
through a judicial or administrative judgment or order, a party whose pursuit
of a nonfrivolous claim or defense was a catalyst for a voluntary or unilateral
change in position by the opposing party that provides any significant part of
the relief
sought.
.
6.The provisions of this
Act and the amendments made by this Act shall take effect 30 days after the
date of the enactment of this Act.