[House Hearing, 109 Congress]
[From the U.S. Government Publishing Office]


 
                        EQUAL ACCESS TO JUSTICE 
                           REFORM ACT OF 2005

=======================================================================

                                HEARING

                               BEFORE THE

                 SUBCOMMITTEE ON COURTS, THE INTERNET,
                       AND INTELLECTUAL PROPERTY

                                 OF THE

                       COMMITTEE ON THE JUDICIARY
                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED NINTH CONGRESS

                             SECOND SESSION

                                   ON

                                H.R. 435

                               __________

                              MAY 23, 2006

                               __________

                           Serial No. 109-126

                               __________

         Printed for the use of the Committee on the Judiciary


      Available via the World Wide Web: http://judiciary.house.gov


                                 ______

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                       COMMITTEE ON THE JUDICIARY

            F. JAMES SENSENBRENNER, Jr., Wisconsin, Chairman
HENRY J. HYDE, Illinois              JOHN CONYERS, Jr., Michigan
HOWARD COBLE, North Carolina         HOWARD L. BERMAN, California
LAMAR SMITH, Texas                   RICK BOUCHER, Virginia
ELTON GALLEGLY, California           JERROLD NADLER, New York
BOB GOODLATTE, Virginia              ROBERT C. SCOTT, Virginia
STEVE CHABOT, Ohio                   MELVIN L. WATT, North Carolina
DANIEL E. LUNGREN, California        ZOE LOFGREN, California
WILLIAM L. JENKINS, Tennessee        SHEILA JACKSON LEE, Texas
CHRIS CANNON, Utah                   MAXINE WATERS, California
SPENCER BACHUS, Alabama              MARTIN T. MEEHAN, Massachusetts
BOB INGLIS, South Carolina           WILLIAM D. DELAHUNT, Massachusetts
JOHN N. HOSTETTLER, Indiana          ROBERT WEXLER, Florida
MARK GREEN, Wisconsin                ANTHONY D. WEINER, New York
RIC KELLER, Florida                  ADAM B. SCHIFF, California
DARRELL ISSA, California             LINDA T. SANCHEZ, California
JEFF FLAKE, Arizona                  CHRIS VAN HOLLEN, Maryland
MIKE PENCE, Indiana                  DEBBIE WASSERMAN SCHULTZ, Florida
J. RANDY FORBES, Virginia
STEVE KING, Iowa
TOM FEENEY, Florida
TRENT FRANKS, Arizona
LOUIE GOHMERT, Texas

             Philip G. Kiko, General Counsel-Chief of Staff
               Perry H. Apelbaum, Minority Chief Counsel
                                 ------                                

    Subcommittee on Courts, the Internet, and Intellectual Property

                      LAMAR SMITH, Texas, Chairman

HENRY J. HYDE, Illinois              HOWARD L. BERMAN, California
ELTON GALLEGLY, California           JOHN CONYERS, Jr., Michigan
BOB GOODLATTE, Virginia              RICK BOUCHER, Virginia
WILLIAM L. JENKINS, Tennessee        ZOE LOFGREN, California
SPENCER BACHUS, Alabama              MAXINE WATERS, California
BOB INGLIS, South Carolina           MARTIN T. MEEHAN, Massachusetts
RIC KELLER, Florida                  ROBERT WEXLER, Florida
DARRELL ISSA, California             ANTHONY D. WEINER, New York
CHRIS CANNON, Utah                   ADAM B. SCHIFF, California
MIKE PENCE, Indiana                  LINDA T. SANCHEZ, California
J. RANDY FORBES, Virginia

                     Blaine Merritt, Chief Counsel

                         David Whitney, Counsel

                          Joe Keeley, Counsel

                          Ryan Visco, Counsel

                    Shanna Winters, Minority Counsel


                            C O N T E N T S

                              ----------                              

                              MAY 23, 2006

                           OPENING STATEMENT

                                                                   Page
The Honorable Lamar Smith, a Representative in Congress from the 
  State of Texas, and Chairman, Subcommittee on Courts, the 
  Internet, and Intellectual Property............................     1
The Honorable Howard L. Berman, a Representative in Congress from 
  the State of California, and Ranking Member, Subcommittee on 
  Courts, the Internet, and Intellectual Property................     2

                               WITNESSES

Mr. Ryan W. Bounds, Chief of Staff, Office of Legal Policy, 
  Department of Justice
  Oral Testimony.................................................     4
  Prepared Statement.............................................     6
Mr. Michael Farris, J.D., Chairman and General Counsel, Home 
  School Legal Defense Association
  Oral Testimony.................................................    16
  Prepared Statement.............................................    17
Mr. Jonathan Hiatt, General Counsel, American Federation of 
  Labor, Congress of Industrial Organizations, AFL-CIO
  Oral Testimony.................................................    21
  Prepared Statement.............................................    23
Mr. James M. Knott, Sr., President and Chairman of the Board, 
  Riverdale Mills Corporation
  Oral Testimony.................................................    34
  Prepared Statement.............................................    35

                                APPENDIX
               Material Submitted for the Hearing Record

The Honorable Howard L. Berman, a Representative in Congress from 
  the State of California, and Ranking Member, Subcommittee on 
  Courts, the Internet, and Intellectual Property................    45
The Honorable John Conyers, Jr., a Representative in Congress 
  from the State of Michigan and Ranking Member, Committee on the 
  Judiciary......................................................    47
Statement of the Honorable Edwin Meese III, Ronald Reagan 
  Distinguished Fellow in Public Policy and Chairman, Center for 
  Legal and Judicial Studies, The Heritage Foundation............    49
News Alert from the National Association of Manufacturers........    55
A Dear Colleague from the United States Senate on Organizations 
  supporting the Equal Access to Justice Reform Act of 2005, H.R. 
  435/S. 2017....................................................    56
Statement of the Honorable Donald A. Manzullo, Chairman, U.S. 
  House of Representatives, and Chairman, Committee on Small 
  Business.......................................................    59
Supplemental Statement of the Honorable Donald A. Manzullo, 
  Chairman, U.S. House of Representatives, and Chairman, 
  Committee on Small Business....................................    83
Letter from Colby M. May, Director, American Center for Law & 
  Justice to the Honorable Donald A. Manzullo, Chairman, U.S. 
  House of Representatives, and Chairman, Committee on Small 
  Business.......................................................    90
Letter from Laura W. Murphy, Director LaShawn Warren, Legislative 
  Counsel, American Civil Liberities Union.......................    91
Letter from Richard Lessner, Ph.D., Executive Director, The 
  American Conservative Union to the Honorable Donald A. 
  Manzullo, U.S. House of Representatives, and Chairman, 
  Committee on Small Business....................................    92
Letter from Richard Haught, D.D.S., President and James B. 
  Bramson, D.D.S., Executive Director, American Dental 
  Association to the Honorable Donald A. Manzullo, U.S. House of 
  Representatives, and Chairman, Committee on Small Business.....    93
Letter from Michael D. Maves, MD, MBA, American Medical 
  Association to the Honorable Donald A. Manzullo, U.S. House of 
  Representatives, and Chairman, Committee on Small Business.....    95
Letter to Susan Steinman, Linda Lipsen, Daniel Cohen, Association 
  of Trial Lawyers of America from the Honorable Donald A. 
  Manzullo, U.S. House of Representatives, and Chairman, 
  Committee on Small Business....................................    96
Letter from R. Bruce Josten, Executive Vice President, Government 
  Affairs, Chamber of Commerce of the United States of American 
  to the Honorable Donald A. Manzullo, U.S. House of 
  Represetatives, and Chairman, Committee on Small Business......    97
Letter from the Honorable Edwin Meese III, Ronald Reagan 
  Distinguished Fellow in Public Policy and Chairman, Center for 
  Legal and Judicial Studies, The Heritage Foundation to the 
  Honorable Donald A. Manzullo, U.S. House of Representatives, 
  and Chairman, Committee on Small Business......................    98
Letter from J. Michael Smith, Esq., President, National Center 
  for Home Education to the Honorable Donald A. Manzullo, U.S. 
  House of Representatives, and Chairman, Committee on Small 
  Business.......................................................    99
Letter from Jim Covington III, Director of Legislative Affairs, 
  Illinois State Bar Association to the Honorable Donald A. 
  Manzullo, U.S. House of Representatives, and Chairman, 
  Committee on Small Business....................................   100
Letter from Wade Henderson, Executive Director and Nancy Zirkin, 
  Deputy Director of the Leadership Conference on Civil Rights to 
  the Honorable Donald A. Manzullo, U.S. House of 
  Representatives, and Chairman, Committee on Small Business and 
  the Honorable Earl Blumenauer, Member of Congress, U.S. House 
  of Representatives.............................................   101
Letter from Hilary O. Shelton, Director, Washington Bureau, 
  National Assosication for the Advancement of Colored People to 
  the Honorable Donald A. Manzullo, U.S. House of 
  Representatives, and Chairman, Committee on Small Business and 
  the Honorable Earl Blumenauer, Member of Congress, U.S. House 
  fo Representatives.............................................   103
Letter from John Engler, President and CEO, the National 
  Assosciation of Manufacturers to the Honorable Donald A. 
  Manzullo, U.S. House of Representatives, and Chairman, 
  Committee on Small Business....................................   105
Letter from Dan Danner, Senior Vice President, Federal Public 
  Policy, The National Federation of Independent Business (NFIB) 
  to the Honorable Donald A. Manzullo, U.S. House of 
  Representatives, and Chairman, Committee on Small Business.....   106
Letter from Drew Caputo, Senior Attorney, The Natural Resources 
  Defense Counsel to the Honorable Donald A. Manzullo, U.S. House 
  of Representatives, and Chairman, Committee on Small Business 
  and the Earl Blumenauer, Member of Congress, U.S. House of 
  Representatives................................................   107
Letter from Patrick Gallagher, Director of Environmental Law, 
  Sierra Club to the Honorable Donald A. Manzullo, U.S. House of 
  Representatives, and Chairman, Committee on Small Business and 
  the Honorable Earl Blumenauer, Member of Congress, U.S. House 
  of Represenatives..............................................   108
Letter from the Small Business Equal Access to Justice Coalition 
  to the Honorable F. James Sensenbrenner, Jr., Chairman, House 
  Judiciary Committee............................................   109
Letter from J. William Lauderback, Executive Vice President, The 
  American Conservative Union to the Honorable Donald A. 
  Manzullo, U.S. House of Representatives, and Chairman, 
  Committee on Small Business....................................   111
Letter from Caroline Fredrickson, Director, LaShawn Warren, 
  Legislative Counsel, American Civil Liberities Union, to the 
  Honorable F. James Sensenbrenner, Jr., Chairman, U.S. House of 
  Representatives, House Judiciary Committee and the Honorable 
  John Conyers, Jr., a Representative in Congress from the State 
  of Michigan, Ranking Member, House Judiciary Committee.........   113
Letter from the Honorable Donald A. Manzullo, U.S. House of 
  Representatives and Chairman, Committee on Small Business and 
  the Honorable Earl Blumenauer, Member of Congress, U.S. House 
  of Representatives, the Honorable Olympia Snowe, Chair, 
  Committee on Small Business and Entrepreneurship, United States 
  Senate, and the Honorable Russell Feingold, United States 
  Senate to the Honorable Arlen Specter, Senate Judiciary and the 
  Honorable F. James Sensenbrenner, Jr., Chairman, House 
  Judiciary Committee............................................   115
Statement of the Honorable Earl Blumenauer, Member of Congress, 
  U.S. House of Representatives..................................   119


                        EQUAL ACCESS TO JUSTICE 
                           REFORM ACT OF 2005

                              ----------                              


                         TUESDAY, MAY 23, 2006

                  House of Representatives,
              Subcommittee on Courts, the Internet,
                         and Intellectual Property,
                                Committee on the Judiciary,
                                                    Washington, DC.
    The Subcommittee met, pursuant to notice, at 4:07 p.m., in 
Room 2141, Rayburn House Office Building, the Honorable Lamar 
Smith (Chairman of the Subcommittee) presiding.
    Mr. Smith. The Committee on Courts, the Internet and 
Intellectual Property will come to order
    I believe all of our witnesses are here. I am going to 
recognize myself for an opening statement, then the Ranking 
Member. And all other Members' opening statements will, without 
objection, be made a part of the record.
    During the debates that preceded the Constitution's 
ratification, James Madison wrote in the Federalist Number 51:
    ``In framing a government which is to be administered by 
men over men, the great difficulty lies in this,--you must 
first enable the government to control the governed; and in the 
next place oblige it to control itself.
    Today, our Subcommittee will examine the effectiveness of a 
law, the Equal Access to Justice Act of 1980, known as EAJA, 
which was enacted by Congress for the purpose of getting the 
Federal Government to control itself.
    The legislative purpose behind EAJA was characterized in 
the 2004 case of Scarborough versus Principi. Writing for the 
Court, Justice Ginsburg stated:
    ``Congress enacted EAJA in 1980 to eliminate the barriers 
that prohibit small businesses and individuals from securing 
vindication of their rights in civil actions and administrative 
proceedings brought by or against the Federal Government. . . 
.[Its] aim was to ensure that certain individuals [and] 
organizations will not be deterred from seeking review of, or 
defending against, unjustified governmental action because of 
the expense involved.''
    The purpose of EAJA was to shift the expense of defending 
against unreasonable or overzealous government conduct from the 
backs of individuals and small entities to the Federal 
Government, which, in some cases, had initiated and pursued the 
wrongful action.
    According to an estimate by the Congressional Research 
Service, there are approximately 200 fee shifting statutes that 
Congress has enacted as exceptions to the general rule that 
each litigant in a lawsuit ought to bear the expense of their 
own legal fees.
    While EAJA's purpose is similar to other fee shifting 
statutes, its precise language, unique restrictions, and 
historical application have caused many to conclude that the 
law offers a ``false hope'' of recovery to the vast majority of 
citizens who are harmed by unreasonable Federal action.
    Despite initial estimates by the Department of Justice that 
its enactment would lead to a $500 million liability over its 
first 3 years, a 1998 GAO report could only substantiate $3.9 
million in costs over that period and a $34 million expense 
over the first 13 years that the law was on the books.
    When combined with concerns that EAJA has been interpreted 
in a manner that is inconsistent with Congress original intent, 
this record has caused a large number of diverse organizations 
to unite in a call for reform.
    Organizations as ideologically diverse as the American 
Civil Liberties Union, the American Conservative Union, the 
American Trial Lawyers Association, and the U.S. Chamber of 
Commerce, have endorsed efforts to amend EAJA.
    EAJA was enacted to ensure that agencies of the Federal 
Government take seriously Mr. Madison's imperative that the 
Government ought to be obliged to control itself. However, not 
everyone agrees that reforms are warranted, and that is why 
this hearing will be of special interest.
    That concludes my opening remarks. And the gentleman from 
California, Mr. Berman, is recognized for his.
    Mr. Berman. Thank you very much, Mr. Chairman, for 
scheduling the hearing.
    While this issue has come up before the Subcommittee in the 
past, we once again have an opportunity to engage in fresh 
discussions. Congress enacted the Equal Access to Justice Act 
in 1980 as a means of ensuring both individuals and 
organizations the right to effective counsel in vindicating 
important civil rights and civil liberties protections.
    Congress presumably sought to achieve three interconnected 
goals through the EAJA: one, to provide an incentive for 
private parties to contest government overreach; two, to deter 
subsequent government wrongdoing, and; finally, to provide more 
complete compensation for citizens injured by government 
action.
    Since in most suits the government is the deep pocket and 
can marshal more resources in litigation than most private non-
institutional parties, private parties may not be able to 
afford protracted litigation against the government.
    The goal of the Equal Access to Justice Act was to make the 
justice system more accessible to individuals of modest means, 
small businesses, and nonprofit organizations, by allowing the 
recovery of their attorney fees when they prevail in disputes 
with the Federal Government.
    The ability to obtain attorneys fees is most often found in 
civil rights, environmental protection and consumer protection 
statues in order to help equalize contests between the Federal 
Government and private parties. But the Equal Access to Justice 
Act does not function in exactly the same way as those fee 
shifting provisions do.
    Prevailing here in litigation does not automatically result 
in an award of attorneys fees. We will hear more about those 
criteria and how we are changing those criteria, I would think, 
in the hearing. Although this act has been an important step in 
providing access to counsel, concerns have been raised 
regarding the substantial justification defense. Although I 
also have heard concerns raised about removing the substantial 
justification defense. I look forward to hearing more about 
that in this hearing.
    The hourly cap rate on attorneys fees of $125, and what 
constitutes a small business. Even though EAJA has arguably 
approved the accessibility of the justice system for small 
parties, we should discuss whether potential barriers remain 
and what changes, if any, should be made to the mechanism used 
to determine the recovery of fees.
    Thank you.
    Mr. Smith. Thank you, Mr. Berman.
    Mr. Smith. I would like also to thank the gentleman from 
Virginia, Mr. Forbes, and the gentleman from California, Mr. 
Schiff, for being in attendance today at this hearing. I, 
furthermore, want to recognize the gentleman who actually wrote 
the legislation on which we are having the hearing today and 
that is the gentleman from Illinois, Mr. Manzullo, for stopping 
by and joining us as well.
    And I may well be asking questions on his behalf when we 
get to that point. But I appreciate his initiative and his 
leadership in regard to writing this legislation and seeing it 
to the point where we are now having a hearing on it.
    Before we hear from our witnesses today I would like to 
invite you to stand and be sworn in if you would.
    [Witnesses sworn.]
    Mr. Smith. Our first witness is Ryan Bounds, chief of staff 
in the Office of Legal Policy at the Department of Justice. In 
that capacity, he assists the Assistant Attorney General for 
legal policy in developing and coordinating the Department's 
views on potential improvements in the civil justice system.
    Before joining the Office of Legal Policy in 2004, Mr. 
Bounds served as an associate at a law firm and as a clerk to a 
circuit court judge. He holds a bachelor's degree from Stanford 
University and a JD from Yale Law School.
    Our second witness is Michael Farris, who is chairman and 
general counsel to the Home School Legal Defense Association, 
an organization with 80,000 member families that he founded in 
1983. Mr. Farris is a Constitutional lawyer with extensive 
appellate experience in the U.S. Supreme Court, seven U.S. 
circuit courts of appeal, and 10 State supreme courts. He is a 
prolific author who has written extensively on Constitutional 
law issues.
    Mr. Farris is an honors graduate of Gonzaga University 
School of Law. He received his BA degree in political science 
from Western Washington State College, now known as Western 
Washington University.
    Our next witness is Jonathan Hiatt, who is the general 
counsel of the AFL-CIO, a position in which he has served for 
10 years. Prior to that, Mr. Hiatt served as the general 
counsel of the Service Employees International Union, and as a 
partner in a Boston-based union-side labor law firm.
    Mr. Hiatt is a graduate of Boalt Hall School of Law at the 
University of California Berkeley, and Harvard College.
    Our final witness is James Knott, who is the President and 
CEO of Riverdale Mills Corporation. Riverdale Mills Corporation 
is in Northbridge, Massachusetts.
    Mr. Knott also serves on the board of directors of the 
National Association of Manufacturers. He studied mechanical 
engineering at Northeastern University and has an economics 
degree from Harvard.
    In addition, he has studied at the Harvard Business School, 
the Army War College, and was earlier this month awarded an 
honorary doctorate of science by the University of Maine.
    Mr. Knott will relate to the Members of the Subcommittee 
his own experience with an agency of the Federal Government 
that targeted him and his business based upon an anonymous tip, 
an experience that led to a criminal indictment and the threat 
of a $1.5 million penalty and 6 years in jail.
    Welcome to you all. We have your written statements, and 
without objection your entire written statements will be made a 
part of the record. But please limit your oral testimony to 5 
minutes.
    And Mr. Bounds we will begin with you.

   STATEMENT OF RYAN BOUNDS, CHIEF OF STAFF, OFFICE OF LEGAL 
                 POLICY, DEPARTMENT OF JUSTICE

    Mr. Bounds. Thank you, Mr. Chairman, Mr. Ranking Member, 
and other Members of the Subcommittee. Thank you for allowing 
me to testify before you today with respect to the Justice 
Department's views on H.R. 435, the Equal Access to Justice 
Reform Act.
    The Department of Justice opposes this bill. Before 
explaining why, I would like to emphasize that the Department 
shares the desire of H.R. 435's proponents to reduce the burden 
that excessive litigation and unjust enforcement actions impose 
on small businesses and individuals and on the courts.
    Unfortunately, H.R. 435 will not advance this purpose. 
Indeed, the enactment of H.R. 435 would create perverse 
incentives for small businesses, non-profit organizations and 
individuals to file and to prolong lawsuits and for government 
agencies that are sued to adhere to rather than reconsider 
their positions in close cases.
    By expanding the number of parties who can recover 
attorneys fees under the act and the amount of fees that can be 
recovered, the bill would obviously make litigation with the 
government cheaper and more frequent. H.R. 435 would thus 
generate more litigation, not less, between the government on 
the one hand and small businesses, non-profit organizations, 
and individuals on the other.
    Ultimately, such reliance on lawsuits to guide government 
policy-making and enforcement decisions substitutes litigation 
for the political process, a policy that the Justice Department 
does not support.
    H.R. 435 will induce unwise litigation in more subtle ways 
as well. The bill requires the government to pay attorneys fees 
to a prevailing party even when the government's action is 
substantially justified. Therefore, eligible parties will have 
a fairly good prospect of recovering attorneys fees in close 
cases, such as those involving new statutes or the application 
of existing law in novel situations.
    In such cases, eligible parties and the government will 
make equally informed predictions of judicial resolution of the 
issue, but eligible parties will have simple incentives to 
pursue litigation. They do not have to reimburse the government 
for its costs if they lose, and they have individualized stakes 
in the outcome.
    The Department strongly opposes this change not only 
because it would increase litigation, but because it does not 
reflect the reality that enforcing the law often requires 
making judgment calls in close cases. Where a government agency 
is required to pay attorneys fees in a substantial proportion 
of such cases, those agencies would simply be deterred from 
making close calls at all. The government would, at the margin, 
be relatively timid in enforcing the law, and private parties 
would exploit that timidity. For this very reason, Congress 
provided for a substantial justification defense under EAJA in 
the first place, noting that an automatic fee shifting rule 
would have a ``chilling'' effect on proper government 
enforcement efforts.
    To appreciate the perils of timidity, consider immigration 
enforcement. The Department of Homeland Security's efforts to 
detain and to remove illegal aliens in the United States has 
generated more than 13,000 court cases in the last fiscal year 
as aliens sought to remain at large in the United States.
    The government loses some proportion of these cases even 
when its actions are substantially justified. This happened, 
for instance, in a 2001 case in which the government sought to 
remove an illegal alien who was revealed in classified evidence 
to have been involved in the 1993 bombing of the World Trade 
Center. The alien successfully challenged the reliance on the 
classified evidence. By making the government pay attorneys 
fees in circumstances like these, which the government did not 
have to pay under EAJA as it is currently drafted, H.R. 435 
will either discourage attempts at robust enforcement of 
immigration laws or divert resources from enforcement to paying 
for aliens' attorneys.
    Neither result is consistent with seeking either to prevent 
illegal immigration or to combat terrorism. Every time as a 
deterrent for best law enforcement, H.R. 435 will induce 
agencies to stick to positions they would otherwise abandon in 
order to avoid liability for attorneys fees. This result stems 
from the bill's expansion of the definition of a prevailing 
party entitled to fees to include any party whose claims 
against the government are catalysts for voluntary or 
unilateral changes in policies that the parties sought.
    If changing policy would be a part of the agency's 
assessment, to be legally compelled, the agency will avoid 
making the change and paying potentially exorbitant attorneys 
fees. Instead, the agency will successfully conclude litigation 
and then change its policy for free.
    H.R. 435 would thus chill legitimate enforcement activity, 
encourage and prolong litigation with the government, and 
impose huge costs on agency budgets. The Department of Justice 
strongly opposes this legislation.
    In the end, political responsive oversight by the President 
and the Congress can more effectively restrain governmental 
overzealousness and intransigence in litigation and attorneys 
fees.
    Thank you for the opportunity to present the Department's 
views on H.R. 435, and I am ready and willing to answer 
whatever questions you may have. Thank you.
    Mr. Smith. Thank you, Mr. Bounds.
    [The prepared statement of Mr. Bounds follows:]

                  Prepared Statement of Ryan W. Bounds



    Mr. Smith. Mr. Farris.

    STATEMENT OF MICHAEL FARRIS, J.D., CHAIRMAN AND GENERAL 
         COUNSEL, HOME SCHOOL LEGAL DEFENSE ASSOCIATION

    Mr. Farris. Chairman Smith, Ranking Member Berman, Members 
of the Subcommittee, thank you for inviting me to testify on 
H.R. 435, the Equal Access to Justice Reform Act of 2005.
    I am here today to speak in strong support of this bill. 
The Home School Legal Defense Association normally litigates 
against State and local governments. We often make claims under 
section 1988 for attorneys fees when the State and local 
officials have violated either the Constitution or the civil 
rights statutes of the United States.
    We have never made an EAJA claim, and so, we appear today 
not in self-interest of any sort, but simply out of principle 
that the justice of the situation requires the Federal 
Government to essentially follow the same rules that State and 
local governments are expected to follow under section 1988 of 
the Civil Rights Act.
    This bill is about small parties having a chance in court 
against the Federal Government. It is about small parties 
having a chance to protect and defend their legal rights when 
they are violated by the Federal Government. This act is 
designed to fix the good intentions of the EAJA, but I would 
submit that the current law is terribly flawed.
    The reason it is flawed is basically in the use of the 
substantially justified rule, which imposes an artificial 
barrier on the ability to collect attorneys fees. Most people 
would say the common sense of the situation is, if you prove 
that the government has violated the law of the United States 
or the Constitution of the United States, the Federal 
Government simply ought to pay for the attorney fees of the 
prevailing party. That is not the case under this substantially 
justified rule.
    The intentions of the officials are weighed, and it imposes 
a barrier that is simply not in place in the case of State and 
local litigation. The ``parade of horribles'' that we hear 
against this legislation and the rare cases that are offered 
for justification for opposing this legislation would be true 
in principle, at least, in State and local governments as well. 
The State and local governments would be bankrupted in their 
ability to have legitimate law enforced, activities have been 
curtailed, or we simply make the State or local governments pay 
attorneys fees when it is proven that they violate the law or 
the Constitution of the United States.
    Just plain equity ought to say that the Federal Government 
ought to obey the same rules that it imposes on State and local 
governments. There is no moral justification for this Congress 
to impose a rule in State and local governments, that it is not 
willing to follow for itself.
    Now, State and local governments have to not only pay 
attorney fees whenever the other side is the prevailing party, 
they have to pay at market rates. The $125-an-hour rate for 
attorneys may have been the market rate at one point in time, 
or is a general approximation, but it is simply not the case 
anymore. You would not be able to pay in most law firms a brand 
new lawyer fresh out of law school at that rate, much less 
someone who has 20 or 30 years of experience.
    Again, it is one more burden upon the Federal Government 
shouldering its responsibilities when it has violated the law. 
Also, rather than encouraging litigation, this bill would 
discourage the ongoing pursuit of litigation when it is obvious 
who should win and who should lose. If the Federal Government 
is willing to say, okay, we violated the law, we are going to 
give you a consent decree or something like that, the incentive 
right now is to continue the case on to litigation, not take 
the consent decree because you lose your ability to recover 
attorney fees for all of the hundreds and perhaps thousands of 
hours that you have invested in the case.
    This promotes settlement. This promotes getting rid of the 
cases clogging our courts. And so the definition of prevailing 
party needs to be shifted so that the plaintiffs have an 
incentive to settle up their case and to get on with their life 
rather than simply litigating to the end for the sole reason of 
being able to recover their attorney fees.
    The thing that strikes me most of all is if there is this 
``parade of horribles'' what it indicates is not that the 
Federal Government is going to have to pay all of these 
attorney's fees, but there is an epidemic of illegal activity 
on the part of the Federal Government, that we are violating, 
our government is violating the Constitution of the United 
States, or the laws of the United States so often that we have 
to worry about how many millions of dollars in attorneys fees 
we are going to have to pay.
    I think that the incentive should be on the part, as the 
Chairman correctly read, from James Madison, the government, 
first of all, needs to obey the law. When it does not, it 
should have to pay the attorneys fees of those who have 
suffered in that illegal activity.
    Thank you very much.
    Mr. Smith. Thank you, Mr. Farris.
    [The prepared statement of Mr. Farris follows:]

                Prepared Statement of Michael P. Farris

    Chairman Smith, Ranking Member Berman, and Members of the 
Subcommittee:
    My name is Michael P. Farris. Thank you for inviting me testify on 
H.R. 435, the Equal Access to Justice Reform Act of 2005. I am here 
today to speak in strong support of this bill.
    For the record, I founded and continue to serve as Chairman for the 
Home School Legal Defense Association (HSLDA), the largest home 
schooling organization in the nation. We represent over 80,000 member 
families, with approximately 320,000 children. We are informally 
affiliated with dozens of other home schooling organizations. It is 
estimated that there are over two million children being homeschooled 
in this country today. I am also the founding President of Patrick 
Henry College, where I teach constitutional law. Today, I speak only on 
behalf of HSLDA, a 501 (c)(4) organization.
    This bill is about small parties having a chance in court against 
the Federal Government. It is about small parties having a chance to 
protect and defend their legal rights when they are violated by the 
Federal Government. The Equal Access to Justice Act of 1980 (EAJA) was 
designed with that purpose, but it is terribly flawed. H.R. 435 would 
fix it.
    The ability to pursue justice and fairness is not a partisan issue. 
Nor is this bill partisan. In fact, HSLDA is just one of many groups 
from across the political spectrum giving its strong support to this 
bill--groups ranging from the American Civil Liberties Union and Sierra 
Club to the Heritage Foundation and American Conservative Union to what 
appears to be the entire business community. The breadth and diversity 
of this support is rare, but not unique.
    In the early 1990s, I had the honor to be the co-chairman of the 
drafting committee for the Coalition for the Free Exercise of Religion, 
which helped draft and pass the Religious Freedom Restoration Act of 
1993 (RFRA). That Coalition was as broad as the present EAJA Coalition 
and had many of the same participants. It was gratifying to work side-
by-side with attorneys from organizations I often face as opponents in 
the courtroom. While we disagreed and still disagree on the outcome of 
many cases, we share an unwavering commitment to the principle that the 
free exercise of religion should be treated as a fundamental freedom.
    We also share an unwavering commitment to the ability to assert and 
defend and protect such fundamental freedoms in the courts. That's why 
we incorporated into the RFRA the Civil Rights Attorneys Fee Awards Act 
of 1976, 42 U.S.C. 1988 (``Section 1988''), the primary fee-shifting 
statute against State and local governments, which allows prevailing 
parties under the RFRA to recover their attorneys' fees at the end of 
the case.
    The Constitution serves as a restraint on government, not private 
parties. It protects some rights explicitly from government 
infringement. Other rights it protects implicitly by restraining the 
powers of the government. Many statutes serve similar purposes. When 
rights guaranteed by the Constitution and such statutes are infringed, 
the infringer always is the government. The party filing pleadings or 
taking action against you is the government. The party across the aisle 
in the courtroom is the government. The party threatening your freedoms 
is the government.
    Freedom means little if there is no real way to stop the government 
from violating the higher laws designed to restrain its power. But 
ordinary Americans cannot resist the government for very long. With its 
skilled litigators and virtually unlimited resources, the government 
can outlast most litigants. There must be a leveling mechanism that 
gives a small party at least a prayer against the government in court.
    Section 1988 was among the first of such leveling mechanisms. 
Congress passed it 1976 to protect people from violations of federal 
law by state and local governments. For 30 years, Section 1988 has 
provided attorney fee recovery against state and local governments in 
cases where those governments were proven to have violated the Federal 
Constitution or Federal statutes. For 30 years, it has provided a 
chance to withstand illegal action by State and local governments. For 
30 years, it has been accepted by the state and local governments and 
administered by the courts without a fuss. As an example of federal 
policy, it stands as a model. It works.
    The way it works is simple. Section 1988 and similar ``prevailing 
party fee-shifting statutes,'' including EAJA, encourage competent 
attorneys to take good cases, meritorious cases, against the government 
on a contingency-fee basis--i.e., by providing legal services 
throughout the case at no cost to the client in the hopes of recovering 
legal fees at the end of the hopefully-successful case. The calculation 
that every attorney must make at the outset is this: Can I afford to 
represent this client who is being pursued wrongfully by the government 
but cannot come close to paying my hourly rates or monthly bills, 
especially when I know that 1) the government can expend great 
resources and drag out the case, 2) there is no guarantee I'll win in 
the end and therefore ever recover any of my fees, 3) the government 
will manage to get any fee award reduced well below the fees I actually 
incur, and 4) I'll have to carry any hope of fee recovery for 
potentially many years.
    Such fee recovery statutes encourage only appropriate litigation. 
Few attorneys in their right minds would take such a case unless they 
were reasonably confident of winning in the end, becoming eligible to 
attempt to collect at least part of his fees. Therefore, such statutes 
provide hope for parties who suffer actual wrongs at the hands of the 
government, they bring accountability to erring government officials, 
and they help refine public policy through useful adjudication. No such 
statute ever inspires the filing of a frivolous claim or defense, or 
even a ``close'' or marginal one. In the vast majority of cases, the 
case is not filed unless it has considerable merit--that is, where the 
government is pretty clearly wrong and acting illegally. Otherwise, it 
is rarely worth the risk in terms of time and treasure. Most attorneys 
have to earn a living and can afford to take very few cases pro bono-
especially lengthy, complex cases against the government. They need a 
chance to get paid.
    Thus, the cases and defenses encouraged by such statutes are 
precisely the kind of cases that everyone would agree should be 
brought.
    And Congress did agree. Just four years after passing Section 1988, 
Congress passed the EAJA to serve as a fee recovery counterpart 
applicable to the Federal Government--where the federal law violator 
was the Federal Government. Under the EAJA, the Federal Government 
would be held to account for its violations of the federal Constitution 
and federal laws, much as the State and local governments have been 
held to account under Section 1988. But EAJA is very different.
    Under Section 1988, a prevailing party against a State or local 
government recovers attorneys' fees in any case where the party 
succeeds in an important respect. When that party ``prevails,'' it 
becomes eligible for attorney fee recovery and submits a fee 
application documenting the legal services provided. The courts 
determine the amount of fees to be awarded, based on what the court 
determines to be reasonable in the case and based on local market rates 
that the court determines to be appropriate for the kind and quality of 
legal services provided.
    Under Section 1988, there is no escape clause that enables the 
State or local government to avoid paying attorneys fees to the 
prevailing party. There is no size standard for eligible parties. There 
is no rate cap on the hourly rates for the legal services provided.
    Under the EAJA, there is each of these and many other unjustifiable 
differences.
    First, EAJA has size standards. EAJA applies only to small parties 
defined as small businesses with up to 500 employees and a net worth of 
up to $7,000,000, nonprofit charitable organizations with up to 500 
employees, and individuals with a net worth of up to $2,000,000. But 
H.R. 435 takes no issue with EAJA having size standards (applying only 
to small parties). Nor do I.
    Second, EAJA contains an escape clause for the Federal Government 
even after it loses a case, having been proven to have violated Federal 
law. It's called ``substantial justification.'' Prevailing small 
parties must argue in their fee applications--after winning their 
case--that the legal position taken by the Federal Agency in the case 
was not ``substantially justified.''
    In other words, the prevailing small party must win again. While 
the burden of proof may technically be on the Federal agency to show 
that its position was indeed substantially justified, in reality it is 
the prevailing small party that must overcome this hurdle. Regardless, 
the ``substantial justification'' defense initiates in every case a 
second, lengthy series of legal proceedings that rehash the merits of 
the case.
    A few minutes of electronic research of cases involving the EAJA 
confirm what many in this hearing room already know. That is, in a 
great many cases, after years of litigating and following multiple 
appeals, a party that has won a final judgment in its favor is still 
determined ineligible for fee recovery on the theory that the Federal 
Government's position, although proven illegal, was not so unreasonable 
or abusive as to be ``not substantially justified.''
    Third, EAJA contains a cap on hourly rates for legal services of 
$125. Indexed for inflation, many courts now award up to $150 per hour. 
Such a rate--whether $125 or $150 or something in between--is far below 
market rates, especially for complex and usually contingent litigation 
against the federal government. In the major legal markets where such 
litigation often occurs such as New York, Boston, Washington, Chicago, 
San Francisco, Los Angeles, the typical hourly rates range from $200 to 
$750. The EAJA rate will not pay for the most recent law school 
graduate, let alone an experienced attorney.
    This rate cap represents a significant disincentive to qualified 
attorneys to take good cases against the federal government. Perhaps 
because it is so counterproductive, this kind of rate cap has no 
counterpart in fee shifting against state and local governments under 
Section 1988, which employs a ``reasonable hourly'' or ``market'' rate. 
Indeed, EAJA itself employs a ``market'' rate. EAJA states that ``the 
amount of fees awarded under this section shall be based upon 
prevailing market rates for the kind and quality of the services 
furnished.'' But then it caps this rate by way of exception: ``except 
that . . . attorney or agent fees shall not be awarded in excess of 
$125 per hour.'' H.R. 435 simply would remove that exception, which 
leads to absurd results.
    Let me give just one example. In a case called Sorenson v. Mink, 
239 F.3d 1140 (9th Cir. 2001), where social security claimants 
prevailed against both the federal Social Security Administration and 
relevant state agencies, the court awarded market rates under Section 
1988 against the state agencies but had to award much lower rates under 
EAJA against the federal agency--for the same federal law violations in 
the same case. This cap is a big disadvantage for small parties in 
disputes with Federal agencies.
    Thus, at the outset, the attorney must know whether the client is 
being pursued by the Federal Government or by a State or local 
government. If the violation of Federal law is by a State or local 
government, the attorney stands a good chance of recovering his fees 
under Section 1988. If the very same Federal law violation is by the 
Federal Government, he stands a very good chance of receiving nothing 
or very little at the end of a long case even if he wins it completely.
    Put yourself in this attorney's shoes. In a typical situation, a 
client comes in with a very sympathetic case and very little financial 
resources. The attorney listens long enough to determine that the 
client's rights under the Constitution very likely were violated. But 
the government agency involved is Federal. This means several things to 
the attorney.
    First, the Federal Government has more resources than any other 
government, can maintain the case for years, and is filled with 
competent attorneys who sometimes seek to win at any cost. Federal 
attorneys often worry about reputation and career advancement, as do 
their private sector counterparts. They also often seek to ``make law'' 
or create precedents quickly, which often means pressing cases rapidly 
against those who cannot hire entire law firms to fight back.
    Second, the Federal Government, even at the end of a long case that 
it has soundly lost, will almost never concede liability for attorneys' 
fees. Under EAJA, it certainly will claim that its position, although 
proven illegal, was substantially justified. This will prolong the 
litigation by many months or even years, requiring the attorney to re-
litigate the merits of the case and carry his hope for eventual fee 
recovery that much longer.
    Third, the attorney knows that, even if he can overcome the 
substantial justification defense, EAJA will cap his hourly rate at 
$125 (or $150)--which happens to be just half of his regular hourly 
rate. Which means that, even if he soundly wins, not once but twice (on 
the merits and again during fee recovery phase), he will get, at the 
very most, half the fees he incurred.
    Fourth, he knows that in every fee recovery case under any fee 
recovery statute the government always objects to most services 
provided--e.g., there were many attorneys involved who spent too much 
time on this service or that one. He knows the government will seek, 
and the court will agree, to strike any legal services not directly 
related to the winning claims or defenses--even though the attorney was 
obliged, ethically and in good faith, to assert all reasonable claims 
and defenses on the behalf of the client (and not just the ones that 
hindsight will reveal to have been winners). He knows he will get 
``nickeled and dimed'' to death--and this is his best case scenario.
    And this ignores the possibility that the Federal Government will 
concede the case before a judge can rule on the merits, which will 
deprive the attorney of any fee recovery at all. After years of 
litigating a case, the Federal Government may decide to throw in the 
towel and drop its enforcement action against the client, repeal or 
modify a regulatory action that had burdened the client, or otherwise 
provide the relief sought by the client. The government may do this for 
many reasons. Maybe it has grown weary of the case or moved beyond it 
in terms of office agenda or policy. Maybe it has become convinced of 
its error. Or maybe it expects to lose and wishes to avoid the 
embarrassment of an adverse court judgment and/or payment of attorneys' 
fees. Under current court precedents, the attorney recovers nothing, 
even if he was working the case for many years and even if he clearly 
was succeeding and would have won a court judgment in time.
    In sum, the attorney knows that, if he's very lucky, some years 
later and probably without recovering any interest for lost time, he 
will get about one-third of the fees he incurred years earlier from a 
case he thoroughly and completely won. Again, this is his best case 
scenario.
    Contrast the very same case against a State or local government. 
Under Section 1988, if he wins, he will recover his fees at the going 
market rate--which in the real world is usually the rate he routinely 
charges his paying clients--i.e., the rate the market will bear for an 
attorney of his skills providing certain services in the particular 
location. No substantial justification defense. No rate cap. No Federal 
Government resources to fight indefinitely. No other nonsense under 
EAJA.
    Because the case would be against the Federal Government, in our 
scenario, the attorney gives his regrets to the prospective client and 
tries to encourage him and give him a referral. Thus, a case that 
definitely should be brought, could be brought, only if the wrongdoer 
was a State or local government, not the Federal Government. This 
happens all the time.
    And it is complete nonsense. Section 1988 has worked very well for 
30 years. It has been administered fairly and without fuss and it has 
not bankrupted any State or local treasuries. Nor has it caused any 
severe hardships on State or local treasuries. There is no reason for 
EAJA to retain these counterproductive differences.
    The same Federal legislature (Congress) that passed that passed 
Section 1988 passed the EAJA only four years later. But Congress filled 
EAJA with new and unique exceptions and loopholes, making it much 
harder for litigants to recover fees against the Federal Government. 
This results in gross disincentives for small parties to attempt to 
resist illegal Federal actions. It results in gross disparity in 
accountability to Federal law among the different levels of government 
in the United States, giving the Federal Government a pass. And it 
should be remedied now.
    I therefore urge this Committee, and this Congress, to act swiftly 
to pass H.R. 435, the Equal Access to Justice Reform Act. Thank you for 
you time and consideration of this important matter.

    Mr. Smith. Mr. Hiatt.

    STATEMENT OF JONATHAN HIATT, GENERAL COUNSEL, AMERICAN 
FEDERATION OF LABOR, CONGRESS OF INDUSTRIAL ORGANIZATIONS, AFL-
                              CIO

    Mr. Hiatt. Thank you, Mr. Chairman, Ranking Member. I am 
Jonathan Hiatt on behalf of the AFL-CIO. We oppose this bill as 
currently drafted. We believe it would seriously weaken 
enforcement of the National Labor Relations Act, of the 
Occupational Safety and Health Act, of the Fair Labor Standards 
Act, of the Mine Safety Health Act and other labor and 
employment laws, but also housing laws, consumer protection 
laws, environmental and other laws that are enacted to promote 
the public welfare.
    Our written testimony focuses on two major sets of 
concerns: One, the elimination of the requirement that to be 
eligible for the award of attorney fees, a prevailing party has 
to show that the government's position was not substantially 
justified, and the other, the size requirement, increasing of 
the size requirement for eligibility as a so-called small 
business, the increase which would effectively bring 98 percent 
of all U.S. firms within that definition.
    I want to focus primarily on the first of these concerns 
concerning the substantially justified standard. This standard 
applies in two distinct sets of circumstances, and I think it 
is very important to make that destinction especially in 
connection with the other--with the points that the other 
witnesses have made. The first is where the government is a 
defendant, that is where a private party is claiming that the 
government has engaged in wrongdoing or has violated--has acted 
illegally by denying a benefit or violating a Federal right, 
and the second is where the government is acting as a public 
prosecutor where the government has brought an action against a 
private party to enforce a Federal law, and the private party 
has prevailed.
    Those two sets of circumstances involve very different sets 
of concerns, and removing the substantially justified standard 
would impact the two types of cases in very different ways.
    In the first, where the private party is the plaintiff and 
the government is found to have acted illegally, making 
attorneys fees automatically available to the prevailing party 
would penalize the government for wrongful conduct, would deter 
future misconduct, would make it easier for plaintiff's rights 
who have been violated to gain access, and we do not disagree 
with the NAACP, with the Leadership Conference on Civil Rights, 
with the ACLU, with prior witnesses who believe that that 
change may very well serve a salutary public purpose. But in 
the second case, where the government is the public prosecutor, 
you have a situation somewhat different from 1988, and the case 
of a State and local government law, there is no issue of the 
government having acted illegally, no issue of the government 
having violated private parties' rights. To the contrary, to 
where the government brings an action that is substantially 
justified, it is doing exactly what Congress intended.
    In the case of the National Labor Relations Act, for 
example, the Board's General Counsel brings an unfair labor 
practice complaint only if he or she believes that there has 
been reasonable cause to believe that the law has been 
violated. The same with the Fair Housing Act, with the 
Americans with Disabilities Act, with the Agriculture Fair 
Practices Act, with various whistleblower laws and so on.
    So, perversely, the premise of this proposed law is that 
agencies enforcement responsibilities like the NLRB should be 
deterred even where there is a substantial justification for 
believing that the law has been violated.
    And indeed the result, we believe, would be a very loud 
message to agencies only to bring complaints where they are 
absolutely certain to prevail and would have many of the 
effects that Mr. Bounds described.
    For example, the impact on the Department of Labor in 
bringing minimum wage or overtime actions under the Fair Labor 
Standards Act or fiduciary duty violation actions under ERISA 
would be subdued, and not just in labor and employment laws, 
but where there is substantial justification to believe that 
companies are putting unsafe products on store shelves, or 
where the SEC was substantially justified in believing that a 
company is bilking its investors, or where EPA is substantially 
justified in believing that a company has violated pollution 
regulations.
    Those are not the kinds of situations where automatic 
attorney's fees should go to the prevailing party unless the 
government is found to not have had substantial justification 
in bringing its action.
    Meanwhile, it is hardly as if--and I hope that the 
Committee will keep this in mind--that it is hardly as if that 
Federal agencies are currently being overly aggressive in the 
enforcement of regulatory statutes. If anything, we believe the 
current problem is one of underenforcement. Since we submitted 
our written testimony, five more miners died--six more miners 
have died under a statute that is so weak in its enforcement 
that the average violation for serious and substantial 
violations is $156 and where there has been a reduction of 190 
full-time inspectors in the last 5 years.
    Lastly, with respect to the definition of small business, 
as I mentioned at the beginning, the notion that somehow 
extending special relief to small businesses defined in a way 
that would bring 98 percent of all firms in the United States 
within that definition, we believe, is not what Congress must 
have in mind; and moreover, we have cited in our written 
testimony a good deal of evidence showing the disproportionate 
violations that take place in small business and ask that the 
Committee be mindful of that.
    Thank you.
    Mr. Smith. Thank you, Mr. Hiatt.
    [The prepared statement of Mr. Hiatt follows:]

                    Prepared Statement of Jon Hiatt




    Mr. Smith. Mr. Knott.

STATEMENT OF JAMES M. KNOTT, SR., PRESIDENT AND CHAIRMAN OF THE 
               BOARD, RIVERDALE MILLS CORPORATION

    Mr. Knott. Good afternoon, Chairman Smith and Members of 
the Subcommittee. I thank you for the opportunity to testify 
before you today on behalf of the National Association of 
Manufacturers about the need for H.R. 435, the Equal Access to 
Justice Reform Act of 2005. H.R. 435 would update and improve 
the Equal Access to Justice Act.
    My name is James M. Knott, Sr. I am the Founder and 
President of Riverdale Mills Corporation. In addition, I serve 
on the board of directors of the NAM, and I have been in the 
manufacturing business in Massachusetts since October 1, 1956.
    The National Association of Manufacturers is the Nation's 
largest industrial trade association, representing small and 
large manufacturers in every industrial sector and in all 50 
States. Through its direct membership and affiliate 
organization--the Council of Manufacturing Associations, the 
Employer Association Group and the State Associations Group--it 
represents more than 100,000 manufacturers.
    I believe my story demonstrates why a small company needs 
the protections of the EAJA when it challenges the Goliath 
called the United States government.
    Simply put, the government has a lot of resources and is 
loathe to admit to mistakes when it takes action against a 
company. The history of the EAJA shows that government takes a 
very dim view of granting requests for reimbursement and thus 
it has been underutilized.
    I came here today to tell you about what the EPA did to my 
company, Riverdale Mills Corporation, founded in 1979 in an 
abandoned mill building in the economically depressed town of 
Northbridge, Massachusetts.
    However, telling you about that event in which the EPA 
falsified evidence to get me indicted for a felony that carried 
the penalty of a $1.5 million fine and 6 years of my life in 
jail would take much longer than the 5 minutes I can speak here 
today. Therefore, what I would like to do today is to ask you 
to go to the Riverdale Mills Corporation Web site at 
www.riverdale.com and look at ``news.'' There you can see a 60-
Minute show about how the EPA people falsified the evidence 
with which to put me out of business.
    The fact that the evidence was falsified was proven in 
Worcester Federal court, and the U.S. Justice Department asked 
the judge to dismiss the case. I sued the EPA for falsifying 
the evidence and severely damaging the company. The judge found 
in my favor and awarded me and my company damages of only about 
20 percent of the actual out-of-pocket costs.
    However, in my case, the First Circuit Court of Appeals 
ultimately determined that neither my company nor I were 
eligible for reimbursement under the Hyde amendment, 
overturning the ruling of the district court that my company 
was entitled to reimbursement. The Hyde amendment is a special 
provision dealing with criminal rather than civil prosecutions 
and sets a higher standard for reimbursement.
    Since the Supreme Court of the United States denied my case 
in a writ of certiorari, I will not use that forum to argue the 
First Circuit Court's decision was in error. But I think it is 
very important for the Subcommittee to learn what a small 
business faces when a U.S. Government agency decides that it is 
going to go after a company on charges even when they emanated 
from an anonymous tip and there was no true basis for 
prosecution.
    When I bought the abandoned mill to manufacture plastic-
coated zinc-galvanized welded wire mesh to be used to make 
traps for the New England lobster fishing industry, the only 
habitable portion of the mill was 20,000 square feet.
    Today, after adding nine additions, it is about 372,000 
square feet and employs about 100 people. Twenty to 25 percent 
of its products are shipped out of the U.S.A. To Canada, Europe 
and South America.
    As you will see in the 60-Minute show, on the 7th of 
November, 1997, 21 EPA personnel swarmed into my offices, many 
of them with pistols holstered on their hips and they announced 
they were going to do a search and seizure. They seized about 7 
and a half feet of documents, 95 percent of which had nothing 
whatsoever to do with the Riverdale Mill wastewater treatment 
plant, as they were authorized to seize.
    I see that it is time to stop, and I would be delighted to 
answer any questions that you might have.
    Mr. Smith. Thank you, Mr. Knott.
    [The prepared statement of Mr. Knott follows:]

               Prepared Statement of James M. Knott, Sr.

    Chairman Smith and members of the subcommittee on Courts, the 
Internet and Intellectual Property, thank you for the opportunity to 
testify before you today on behalf of the National Association of 
Manufacturers (NAM) about the need for H.R. 435, the Equal Access to 
Justice Reform Act of 20005. H.R. 435 would update and improve the 
Equal Access to Justice Act (EAJA). My name is James Knott, Sr., and I 
am president and chief executive officer of Riverdale Mills 
Corporation. In addition, I serve on the Board of Directors of the NAM 
and have been in the manufacturing business in Massachusetts since 
October 21, 1956.
    The National Association of Manufacturers is the nation's largest 
industrial trade association representing small and large manufacturers 
in every industrial sector and in all 50 states. Through its direct 
membership and affiliate organizations--the Council of Manufacturing 
Associations, the Employer Association Group and the State Associations 
Group--it represents more than a hundred thousand manufacturers.
    I believe that my story demonstrates why a small company needs the 
protections of the EAJA when it challenges the Goliath of the United 
States government. Simply put, the government has a lot of resources, 
and is loathe to admit to mistakes when it takes action against a 
company. The history of the EAJA shows that the government takes a very 
dim view of granting requests for reimbursement and thus it has been 
underutilized.
    In my case, the First Circuit Court of Appeals ultimately 
determined that neither I nor my company were eligible for 
reimbursement under the Hyde Amendment. It is important to note, 
however, that this decision overturned the ruling of the District Court 
that my company was entitled to reimbursement, although even that award 
was far below my company's out-of-pocket expenses. The Hyde Amendment 
is a special provision dealing with criminal rather than civil 
prosecutions and sets a higher standard for reimbursement. Since the 
Supreme Court of the United States denied my case a writ of certiorari, 
I will not use this forum to argue the First Circuit's decision was in 
error. But, I think it is very important for the subcommittee to learn 
what a small business faces when the U.S. government decides that it is 
going to go after a company on charges, even when they emanated from an 
anonymous tip and where there is no true basis for prosecution.
    I started a manufacturing business called Coatings Engineering 
Corporation, the day after I was honorably discharged from the United 
States Army where I served two years of active duty in Oklahoma, Texas 
and Louisiana as the Motor Officer in the 91st Armored Field Artillery 
Battalion. As the Battalion Motor Officer, a position normally filled 
by a Major, not a Second Lieutenant, I received a Meritorious Service 
medal for having 365 of the best-maintained wheeled and tracked 
vehicles in the 1st Armored Division.
    The building I started the business in was built in 1858 on the 
Charles River in South Natick, Massachusetts. It had fallen into 
serious disrepair, in need of windows, doors and patches on the roof to 
stop rainwater from flooding its interior. All of those things were 
done, the business boomed and, six years later I sold the growing and 
successful business to a large manufacturer of wire fencing 
headquartered in Georgetown Connecticut, The Gilbert & Bennett 
Manufacturing Company. I managed it for them for 16 years, and in 1978 
I decided it was time to start over; I bought an abandoned mill 
building, originally built in 1852, which straddled the Blackstone 
River in the village of Riverdale, part of the Town of Northbridge, an 
economically-depressed area, about 13 miles Southeast of Worcester, 
Massachusetts.
    I bought the abandoned mill to manufacture plastic-coated, zinc-
galvanized, welded-wire-mesh, to be used to make traps for the New 
England lobster fishing industry. The only habitable part of the mill 
was about 20,000 square feet; it was there that I designed and built 
the machinery to make the product and I began producing it in 1980. 
Today, after adding nine additions to the mill it now is about 372,000 
square feet in area and employs about 100 people; 20 to 25% of its 
products are shipped out of the USA to Canada, Europe and South 
America.
    On the 7th of November 1997, I was sitting in my office at the mill 
talking on the telephone, when a local patrolman walked into the lobby 
followed by a man in a black jacket with the word POLICE on its back in 
large white letters. Within a few seconds the lobby was filled with 21 
similarly attired men, many of them carrying pistols holstered on their 
belts.
    I got off the telephone, went out into the lobby and said, ``What's 
going on here?'' One of the EPA people detached himself from the group 
and said, ``We are looking for James Knott.'' I said, ``I am James 
Knott, what are you doing?'' The EPA person said, ``We are here to do a 
search and seizure.'' I said, ``Show me the warrant authorizing you to 
do this.'' The EPA ``CID (Criminal Investigation Division)'' agent 
said, ``We will leave you a copy when we leave.'' I said, ``If you 
don't show me the warrant right now, I will call the police and have 
you removed from these premises.'' Reluctantly, the agent gave me the 
warrant. I read it and learned that the EPA people had been authorized 
to search the premises and seize documents related to the operation of 
the Riverdale Mills Corporation Wastewater Treatment Plant. Seven hours 
later, the EPA people left the plant taking about seven feet of 
documents with them, only about 5% of which had anything whatsoever to 
do with the Wastewater Treatment Plant. Nine months later, on the 12th 
of August 1998, the indictment, with penalties of a $1.5 million fine 
and six years of my life in jail, was issued.
    I knew without any doubt that I had never discharged any acidic 
wastewaters to the publicly-owned sewer, but the problem was how to 
prove it and how could I bear the expenditure of time and money it 
would take. The first step was to examine logbooks kept by EPA 
inspectors who had tested wastewater discharges 17 days before the 
invasion. I hired a retired FBI Agent who was a handwriting expert and 
we went to the EPA offices in Boston. The retired FBI Agent was able to 
show me that the EPA inspectors who had tested the wastewaters 17 days 
before the invasion had found all of the discharges to the publicly-
owned sewer to be the perfectly neutral pH of 7--neither acidic nor 
caustic. One of the 7's had been altered to a 4 and a number of other 
7's had been altered to 2's with a ballpoint pen that embossed the 
alterations through the pages they were on and engraved them into the 
following pages.
    The next step was to confront the EPA inspector in whose logbook 
the numbers had been altered on the stand, in court in front of a 
judge. The EPA inspector admitted the numbers had been altered and the 
judge ruled that that falsified evidence could not be used by the EPA 
in their case against me and Riverdale Mills Corporation. Without 
evidence that the Rivers Protection Act had been violated, the U.S. 
Justice Department asked the judge to dismiss the case and the judge 
complied.
    The out-of-pocket cost to prove that corruption existed in the EPA 
and also in the US Justice Department--where no one observed the very 
obvious fact that numbers had been altered--cost me about $218,000, 
which is a substantial part of the annual profits with which Riverdale 
Mills has expanded its production facilities, provided new jobs and 
paid taxes to the local, state and federal governments. With the 
limitations of the EAJA as it now exists, the district court awarded my 
company fees of only $68,726, which was ultimately overturned by the 
First Circuit.
    This is why it is very important that the ``Equal Access to Justice 
Reform Act of 2005'' become law. The ability of small businessmen like 
me to be compensated for the costs of protecting themselves and their 
businesses from the attack of overzealous bureaucrats. That's why I 
think that the provision that would charge EAJA awards to the budget of 
the agency that took the action, rather than the general treasury, is 
very important. Right now, the agencies themselves are not punished 
when they are so egregiously overzealous that EAJA compensation 
requests are granted. Award amounts, where warranted of course, also 
need to be raised.
    The NAM will be submitting additional and more detailed comments 
about the provisions of H.R. 435 for the record.
    Thank you Mr. Chairman and members of the subcommittee for your 
time and attention to this matter. I would be happy to answer any 
questions you may have for me.

    Mr. Smith. Mr. Bounds, let me direct my first question to 
you. And say that the Department of Justice may not have the 
most credibility on this particular issue. As you know, they 
opposed the original EAJA bill saying that the cost would be 
excessive. I think they projected that the cost would be $500 
million for the first 3 years. The cost probably was closer to 
1 percent of that than to what the DOJ estimated.
    Furthermore, it would be a rare government agency indeed 
who would encourage lawsuits against them and then have to pay 
attorneys' fees. So I understand all of that.
    However, I wanted to give you an opportunity to redeem 
yourself when it comes to credibility and just focus on one 
aspect of the bill at hand, and that is the attorney's fees. 
Attorneys' fees have only been raised once in 25 years. They 
are now capped at $125 an hour, as I recall.
    Don't you think that you might support an increase in the 
cost or the amount of attorney's fees? And not getting into the 
other issues, but doesn't that sound like an improvement that 
could be made to the system, that if you are going to have 
these lawsuits, and if we do not change anything else, that we 
should at least change that?
    Mr. Bounds. Thank you.
    First, I would like to respond to the question by 
underscoring that the presumptive cap of $125 under the statute 
is regularly deviated from under----
    Mr. Smith. You mentioned that in your testimony. I am aware 
of that.
    But sometimes it is not, and in the case of Mr. Knott, for 
instance, his attorneys' fees were limited because of that 
statute. So why don't we go on and say, raise the cap so that 
everyone--there would be no doubt, you don't have to ask for a 
special consideration by the court.
    Mr. Bounds. Well, the Department of Justice is delighted to 
comment on legislative proposals as they are made by Members of 
Congress or circulated by the Committee.
    The Department does not think that the attorney fees are 
necessarily too low now because of the court's capacity and 
agencies' capacities to deviate from the fee cap in particular 
cases when the circumstances would merit.
    To the extent that there are specific proposals to raise 
the cap, those obviously would have to be considered on a case-
by-case basis. Obviously, there would be no effective cap if 
the cap were raised to cover, you know, Manhattan law firms.
    Mr. Smith. But certainly we could raise the fees by a 
certain amount, and then that would enable individuals who 
might be bringing the lawsuit to at least get what they 
consider to be very competent counsel and not be deterred from 
doing that.
    Mr. Bounds. I understand the appeal of raising the cap. As 
I say, the Department would be delighted to consider the merits 
of any potential that----
    Mr. Smith. Which is to say that you cannot say anything 
more right now.
    Mr. Bounds. I am not myself authorized to do so.
    Mr. Smith. Okay. Thank you, Mr. Bounds.
    Mr. Farris, Mr. Hiatt mentioned in his written testimony 
two different classes of EAJA cases, one involved violation of 
a right; the other one involved enforcement action. And he 
concludes that automatic attorney fees are appropriate in the 
first instance, that is, where someone has obtained a judgment 
against the Federal Government for violation of their rights, 
but not in the second case involving enforcement actions.
    What do you think of that distinction.
    Mr. Farris. Well, I think it is too easy to become a 
plaintiff, rather than a defendant, to raise exactly the same 
arguments. Bringing declaratory judgment, if I had an agency 
that was threatening my client with an enforcement action, I 
would bring a declaratory judgment action wherever it was 
permitted and simply be the plaintiff, so that I could win 
attorneys' fees and beat them to court, in effect. There is no 
substantial difference at the end of the day.
    The question is, did the government violate the law? Did 
the government violate the Constitution? And wherever that is 
true, whether plaintiff or defendant, commonsense justice says 
that the government ought to pay.
    Mr. Smith. Okay. Thank you, Mr. Farris.
    Mr. Hiatt, you heard Mr. Knott's testimony, which I think 
is pretty compelling. And what I wanted to ask you, if you have 
a situation like this where the government apparently falsified 
the evidence, they actually changed the numbers--I think it was 
changing 2s to 9s or 9s to 2s, something like that--if this was 
a civil case, doesn't that cry out for automatic recovery of 
attorney fees? Don't you think that is a compelling case where 
attorneys' fees should be awarded?
    Mr. Hiatt. Well, I think if this were a civil case, you 
would not need automatic award of attorney fees, because it 
would be so clear, if the facts are as Mr. Knott describes 
them, and I have no reason to doubt that there was no 
substantial justification for the action; that would be 
sufficient. And that is exactly the right; that should be the 
standard.
    Mr. Knott says that under a special provision, and I am not 
familiar with the details of the Hyde amendment, but under the 
special provisions of that, you have an exception where 
apparently even the substantial justifications standard does 
not apply.
    I am very sympathetic if the facts are as they are, but I 
do not think that that in any way detracts from----
    Mr. Smith. You just do not want to expand, you do not want 
to eliminate the defense or increase the number of eligible 
plaintiffs to 98 percent of all businesses?
    Mr. Hiatt. Well, to think if it is going to deter the 
government--and, respectfully, I do not really think the cost 
being any different from Mr. Bound's estimate is the issue as 
much as it is how much of a deterrent will it be for the 
government to have to worry about costs.
    Mr. Smith. I am going to squeeze in one question if other 
Members do not mind. But, Mr. Hiatt, before I get to that last 
question, would you have any objection to raising the cap on 
attorney fees?
    Mr. Hiatt. We have absolutely no objection to the 
provisions of the bill, as I understand it right now, requiring 
the Attorney General to study and report to Congress about how 
effective the act has been or whether the rate cap should be 
changed. We are quite open to hearing more about that.
    Mr. Smith. Okay, great.
    Mr. Knott, thank you for your personal experience. Boy, do 
I regret you had to go through that--the threats to you, the 
threats to your freedom, the cost to you all. I mean, that is 
where you almost believe there ought to be double or triple 
damages when the government acts in that kind of almost 
malicious manner; and maybe I should stop there.
    But, nevertheless, my question is this. Do you know of any 
instances where people have failed to bring lawsuits just 
because of the cost? And has that been a deterrent, and is that 
another argument for the bill itself?
    Mr. Knott. I know of many cases where they have avoided 
these things. I was offered--you know, would I like to settle 
this case? And I said, I do not want to settle it, I want to 
settle you. And that is what I embarked upon.
    When, in the Hyde amendment, the lawyers' fees were capped 
at $75 an hour, I haven't been able to find many of those 
lawyers. What that meant was, I had to do three-quarters of the 
work for them, you know, in order to get the job done.
    Mr. Smith. Thank you, Mr. Knott.
    Mr. Bounds, would you get back to us? And I know that you 
are limited in what you can say today, but would you get back 
to us specifically on the issue of increasing the cap on 
attorney fees and see if the Department of Justice might 
revisit that issue for us.
    Mr. Bounds. I will see what I can find out.
    Mr. Smith. Okay. Thank you, Mr. Bounds.
    [The Department of Justice did not provide the Subcommittee 
with a response to this inquiry, as was requested, prior to the 
closing of the Hearing Record]
    Mr. Smith. The gentleman from California, Mr. Berman, is 
recognized for his questions.
    Mr. Berman. While you are at it, Mr. Bounds, could you get 
back to us on what the cap is on paying private lawyers to 
represent defendants in criminal cases where the Federal public 
defenders office is conflicted out? I am curious whether we are 
looking at rates or just some rates here. Thank you.
    [The Department of Justice did not provide the Subcommittee 
with a response to this inquiry, as was requested, prior to the 
closing of the Hearing Record]
    Mr. Berman. The problem--it is very interesting, the 
interplay here. I am focused on this substantial justification 
issue because, Mr. Farris, you said--first of all, your 
arguments basically are not about small versus big, they are 
about government versus individuals, or companies or non-profit 
associations who might be suing or being sued by the 
government.
    But this is an effort to incentivize the smaller guy both 
to defend and to bring lawsuits. But you do in the context of 
the big government versus the small guy--but in the National 
Labor Relations Board case, in spite of the fact that--I am not 
sure what Mr. Hiatt's basis is for thinking that this will 
dilute the otherwise vigorous enforcement of that act, as I am 
unaware of the vigorous enforcement of that act. But in any 
event, it is sometimes about an even smaller party going to the 
government to pursue enforcement of that person's legal rights 
against a company that might be small, but is a lot larger and 
is a lot more able to handle the cost of litigation than the 
individual.
    So an individual, the National Labor Relations Board's 
General Counsel does not go out there just issuing unfair labor 
practice complaints; it is because some worker came to the 
National Labor Relations Board or one of their regional offices 
saying that he was fired because he had joined a union or that 
other rights protected by that law were violated by that 
employer.
    Now the General Counsel decides whether or not what this 
guy says is true, and if he thinks it is true and he has a 
substantial basis for thinking it is true and there is a 
substantial basis for thinking that that conduct violated the 
law, the General Counsel brings this unfair labor practice 
complaint on behalf of this single individual; and the employer 
fights it, and maybe the employer prevails at the end.
    But a court determines that they were not out on an abusive 
witch hunt, or this was not a frivolous complaint, it was a 
close question and they lost.
    Why shouldn't that--why isn't what Mr. Bounds talks about, 
albeit in the context of immigration cases, true that that 
General Counsel, now thinking that, particularly the way this 
bill works, the costs of it are going to come out of the budget 
for the National Labor Relations Board, is going to think twice 
about taking anything which is a close question because he is 
going to end up facing his agency with attorneys' fees burden. 
And in the end the small guy will really get hurt because they 
will have no agency to go to, even though we created these 
agencies to protect that guy against the abuse of his rights.
    Mr. Farris. Mr. Berman, I understand the logical difference 
between the plaintiff case that I typically am involved with 
and the situation that you are describing here. I do not think 
that the proposed distinction of being the plaintiff or 
defendant really is the right distinction, and so through some 
other means of accomplishing some objective there.
    Mr. Berman. I agree. I am not sure I like the analysis that 
says do it one way but not the other way.
    Mr. Farris. Right.
    Mr. Berman. But my point wasn't, who was plaintiff and 
defendant; my point is, who is really the small guy and who is 
going to get shafted as a result of this. It is one thing to 
have an overzealous government but it is another thing to be 
hurting the even smaller party.
    Mr. Farris.I think that the government should do what is 
right in every circumstance.
    If it has to pay attorney fees for doing what it thinks is 
right, you are not going to have an absolutely perfect system, 
whichever way you go, and basically we have to decide as a 
matter of principle, whether or not the government pays 
attorney fees when it has wronged someone.
    I don't favor personally the small or big rule. I do not 
think it should matter. I think the principle is the same, and 
the government should act on behalf of all of the citizens 
whether it is a small group or a large group and should 
vigorously enforce the law that is before it.
    But when it is found that the government has behaved 
illegally, I think the government should pay, period.
    Mr. Berman. These words, ``found that the government has 
behaved illegally,'' I mean, if that is--if that is true, I 
do--I think I have great sympathy for what you are saying. But 
the fact that a particular enforcement case and a close 
question before an independent judge is found against the 
government does not mean the government acted illegally, and in 
a weird way the substantial justification test is sort of a 
term of art in a process that decides whether the government 
was acting in good faith or not.
    Mr. Farris.Let me give you an example.
    Mr. Smith. Mr. Farris, please be quick. I want to have time 
for Mr. Forbes to ask questions.
    Mr. Farris. I will not respond to that.
    Mr. Smith. Okay. Thank you, Mr. Berman.
    The gentleman from Virginia, Mr. Forbes, is recognized for 
his questions.
    Mr. Forbes. Thank you, Mr. Chairman, and thank all of you 
for being here today.
    My comment and question is a little bit bigger in scope 
than just this bill. Mr. Farris mentioned something that I 
think is important, that we forget when it is the government we 
are interested in doing what is right, not always just what is 
legal.
    And, Mr. Bounds, you talked to us about political 
oversight. That is why I am here today. This may not be a 
perfect bill, but I am groping for, really my question is not 
the close calls that you have talked about, but what I am 
worried about is what I see oftentimes as unfair balance of 
power and sheer heavy-handedness that the government brings.
    I mean, I could bring a notebook of cases that I have 
actually seen, but three of them I am going to do real quick, 
and they are not all ones that would be pertinent to this 
legislation.
    I watched a young man, just a short period of time ago, 
late 20's; the government came at him, and they acknowledged 
because they thought his father was wealthy, they had seven 
lawyers coming at him. It cost him $1.4 million to defend. At 
the end, he has to reach a plea agreement because they threaten 
to go after his father and his mother if he did not do it, and 
he to this day doesn't think that he was guilty.
    In the late 1990's, DOJ--and this was before your time 
maybe--but they went after hospitals across the country for 
coding violations. And if you remember, this was an enforcement 
situation. But they sent out to the hospitals demand letters 
that basically said, if you do not pay this amount of money, we 
are coming after you for treble damages and attorneys' fees, 
and we are going to get you the PR for your hospital.
    I bet you 80 percent of the hospitals that got those 
letters paid them and did not feel they were liable because of 
the unfair balance they felt they had to go against.
    Mr. Berman raised an excellent point when he talked about, 
sometimes you have a small guy going after a corporation. I 
watched that enforcement action go against a small Dunkin 
Donuts franchise owner, mom-and-pop operation. I watched him go 
in three times where the government just continued the case 
each time.
    He looks at me finally and says, How can I do this? How can 
I possibly stand up? And the government even looks at him and 
says, We know you have done nothing wrong, but we want you to 
reach a settlement anyway.
    And the question I have for you is, you mentioned in your 
testimony the negative consequences of this bill would not be 
offset by any significant improvements in EAJA.
    What will get significant improvements in what the Justice 
Department is doing, one? And are you doing anything internally 
to adjust that balance of power when you see situations like 
Mr. Knott talked about, you see these situations where you know 
the government is going at it with just absolutely unfair, 
unequal balance against some of these?
    What are your suggestions? What are you guys doing 
internally so we do not have to take this kind of action? 
Because that is what the political oversight is. If you cannot 
police yourself, we have got to do it. What are you doing?
    Mr. Bounds. Well, I want to assure the Committee that when 
cases involving excessive force or overbearing prosecutions or 
miscarriage of the law come to the attention of the Attorney 
General and the leadership of the Department, those cases are 
taken very seriously; and obviously there is a managerial 
function, a supervising prosecutor in the U.S. Attorneys' 
Offices around the country as well as within the Department of 
Justice offices.
    And that is this entire point of my testimony, which is 
that is how it should function. You will never have an attorney 
fee shifting statute that is going to overcome the disparity 
between a single individual and the government. So the 
management of these cases has to be a political oversight, 
which means the President and the Congress, and the members of 
the Cabinet have to police the actions of the government in 
particular cases.
    And so to the extent that any specific case comes to 
someone's attention, it would be reviewed and remedies would be 
sought. But without any specific case, I really cannot----
    Mr. Forbes. But just to understand, that is what we are 
here today trying to do, to do that oversight. And my time is 
running out too.
    But the question I would ask you, do you have any reports 
or anything that you can get back to us of what efforts you 
have been making in DOJ to do that policing effort that you are 
talking about, and maybe give us a list of, you know, what 
remedies that you have put out and how you have tried to stop 
it.
    I would be interested to see how many cases you guys have 
looked at and what you have done over the last year or so, if 
you could do that.
    Mr. Bounds. I would be happy to look into it. Thank you.
    [The information referred to follows:]
    [The Department of Justice did not provide the Subcommittee 
with a response to this inquiry, as was requested, prior to the 
closing of the Hearing Record]
    Mr. Forbes. Thank you, Mr. Chairman.
    Mr. Smith. Thank you, Mr. Forbes.
    We, as you just heard, have had some votes called. In fact, 
we have six votes coming up, and we will need to head over to 
the House floor. Thank you all for your testimony. It has been 
very helpful, very instructive, and perhaps there will be some 
ways, as we have discussed today, that we can have some reforms 
at least to the process.
    Thank you all.
    [Whereupon, at 4:55 p.m., the Subcommittee was adjourned.]

                            A P P E N D I X

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               Material Submitted for the Hearing Record

 The Honorable Howard L. Berman, a Representative in Congress from the 
 State of California, and Ranking Member, Subcommittee on Courts, the 
                  Internet, and Intellectual Property



                              ----------                              


The Honorable John Conyers, Jr., a Representative in Congress from the 
    State of Michigan and Ranking Member, Committee on the Judiciary



                              ----------                              


Statement of the Honorable Edwin Meese III, Ronald Reagan Distinguished 
  Fellow in Public Policy and Chairman, Center for Legal and Judicial 
                    Studies, The Heritage Foundation



                              ----------                              


       News Alert from the National Association of Manufacturers



                              ----------                              


    A Dear Colleague from the United States Senate on Organizations 
supporting the Equal Access to Justice Reform Act of 2005, H.R. 435/S. 
                                  2017



                              ----------                              


Statement of the Honorable Donald A. Manzullo, Chairman, U.S. House of 
       Representatives, and Chairman, Committee on Small Business




                              ----------                              


 Supplemental Statement of the Honorable Donald A. Manzullo, Chairman, 
    U.S. House of Representatives, and Chairman, Committee on Small 
                                Business




                              ----------                              


 Letter from Colby M. May, Director, American Center for Law & Justice 
     to the Honorable Donald A. Manzullo, Chairman, U.S. House of 
       Representatives, and Chairman, Committee on Small Business



                              ----------                              


   Letter from Laura W. Murphy, Director LaShawn Warren, Legislative 
                Counsel, American Civil Liberities Union



                              ----------                              


 Letter from Richard Lessner, Ph.D., Executive Director, The American 
 Conservative Union to the Honorable Donald A. Manzullo, U.S. House of 
       Representatives, and Chairman, Committee on Small Business



                              ----------                              


  Letter from Richard Haught, D.D.S., President and James B. Bramson, 
    D.D.S., Executive Director, American Dental Association to the 
   Honorable Donald A. Manzullo, U.S. House of Representatives, and 
                 Chairman, Committee on Small Business



                              ----------                              


Letter from Michael D. Maves, MD, MBA, American Medical Association to 
 the Honorable Donald A. Manzullo, U.S. House of Representatives, and 
                 Chairman, Committee on Small Business



                              ----------                              


 Letter to Susan Steinman, Linda Lipsen, Daniel Cohen, Association of 
 Trial Lawyers of America from the Honorable Donald A. Manzullo, U.S. 
  House of Representatives, and Chairman, Committee on Small Business



                              ----------                              


   Letter from R. Bruce Josten, Executive Vice President, Government 
 Affairs, Chamber of Commerce of the United States of American to the 
    Honorable Donald A. Manzullo, U.S. House of Represetatives, and 
                 Chairman, Committee on Small Business



                              ----------                              


Letter from the Honorable Edwin Meese III, Ronald Reagan Distinguished 
  Fellow in Public Policy and Chairman, Center for Legal and Judicial 
 Studies, The Heritage Foundation to the Honorable Donald A. Manzullo, 
    U.S. House of Representatives, and Chairman, Committee on Small 
                                Business



                              ----------                              


Letter from J. Michael Smith, Esq., President, National Center for Home 
     Education to the Honorable Donald A. Manzullo, U.S. House of 
       Representatives, and Chairman, Committee on Small Business



                              ----------                              


    Letter from Jim Covington III, Director of Legislative Affairs, 
  Illinois State Bar Association to the Honorable Donald A. Manzullo, 
    U.S. House of Representatives, and Chairman, Committee on Small 
                                Business



                              ----------                              


Letter from Wade Henderson, Executive Director and Nancy Zirkin, Deputy 
Director of the Leadership Conference on Civil Rights to the Honorable 
   Donald A. Manzullo, U.S. House of Representatives, and Chairman, 
 Committee on Small Business and the Honorable Earl Blumenauer, Member 
               of Congress, U.S. House of Representatives



                              ----------                              


 Letter from Hilary O. Shelton, Director, Washington Bureau, National 
  Assosication for the Advancement of Colored People to the Honorable 
   Donald A. Manzullo, U.S. House of Representatives, and Chairman, 
 Committee on Small Business and the Honorable Earl Blumenauer, Member 
               of Congress, U.S. House fo Representatives



                              ----------                              


 Letter from John Engler, President and CEO, the National Assosciation 
  of Manufacturers to the Honorable Donald A. Manzullo, U.S. House of 
       Representatives, and Chairman, Committee on Small Business



                              ----------                              


 Letter from Dan Danner, Senior Vice President, Federal Public Policy, 
The National Federation of Independent Business (NFIB) to the Honorable 
   Donald A. Manzullo, U.S. House of Representatives, and Chairman, 
                      Committee on Small Business



                              ----------                              


Letter from Drew Caputo, Senior Attorney, The Natural Resources Defense 
      Counsel to the Honorable Donald A. Manzullo, U.S. House of 
Representatives, and Chairman, Committee on Small Business and the Earl 
     Blumenauer, Member of Congress, U.S. House of Representatives



                              ----------                              


 Letter from Patrick Gallagher, Director of Environmental Law, Sierra 
        Club to the Honorable Donald A. Manzullo, U.S. House of 
  Representatives, and Chairman, Committee on Small Business and the 
     Honorable Earl Blumenauer, Member of Congress, U.S. House of 
                             Represenatives



                              ----------                              


Letter from the Small Business Equal Access to Justice Coalition to the 
   Honorable F. James Sensenbrenner, Jr., Chairman, House Judiciary 
                               Committee



                              ----------                              


   Letter from J. William Lauderback, Executive Vice President, The 
 American Conservative Union to the Honorable Donald A. Manzullo, U.S. 
  House of Representatives, and Chairman, Committee on Small Business



                              ----------                              


Letter from Caroline Fredrickson, Director, LaShawn Warren, Legislative 
  Counsel, American Civil Liberities Union, to the Honorable F. James 
  Sensenbrenner, Jr., Chairman, U.S. House of Representatives, House 
      Judiciary Committee and the Honorable John Conyers, Jr., a 
Representative in Congress from the State of Michigan, Ranking Member, 
                       House Judiciary Committee



                              ----------                              


      Letter from the Honorable Donald A. Manzullo, U.S. House of 
   Representatives and Chairman, Committee on Small Business and the 
     Honorable Earl Blumenauer, Member of Congress, U.S. House of 
Representatives, the Honorable Olympia Snowe, Chair, Committee on Small 
Business and Entrepreneurship, United States Senate, and the Honorable 
Russell Feingold, United States Senate to the Honorable Arlen Specter, 
    Senate Judiciary and the Honorable F. James Sensenbrenner, Jr., 
                  Chairman, House Judiciary Committee



                              ----------                              


 Statement of the Honorable Earl Blumenauer, Member of Congress, U.S. 
                        House of Representatives



                                 
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