[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]






                   GOVERNMENT LITIGATION SAVINGS ACT

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

                                HEARING

                               BEFORE THE

                   SUBCOMMITTEE ON COURTS, COMMERCIAL
                         AND ADMINISTRATIVE LAW

                                 OF THE

                       COMMITTEE ON THE JUDICIARY
                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             FIRST SESSION

                                   ON

                               H.R. 1996

                               __________

                            OCTOBER 11, 2011

                               __________

                           Serial No. 112-57

                               __________

         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

                      LAMAR SMITH, Texas, Chairman
F. JAMES SENSENBRENNER, Jr.,         JOHN CONYERS, Jr., Michigan
    Wisconsin                        HOWARD L. BERMAN, California
HOWARD COBLE, North Carolina         JERROLD NADLER, New York
ELTON GALLEGLY, California           ROBERT C. ``BOBBY'' SCOTT, 
BOB GOODLATTE, Virginia                  Virginia
DANIEL E. LUNGREN, California        MELVIN L. WATT, North Carolina
STEVE CHABOT, Ohio                   ZOE LOFGREN, California
DARRELL E. ISSA, California          SHEILA JACKSON LEE, Texas
MIKE PENCE, Indiana                  MAXINE WATERS, California
J. RANDY FORBES, Virginia            STEVE COHEN, Tennessee
STEVE KING, Iowa                     HENRY C. ``HANK'' JOHNSON, Jr.,
TRENT FRANKS, Arizona                  Georgia
LOUIE GOHMERT, Texas                 PEDRO R. PIERLUISI, Puerto Rico
JIM JORDAN, Ohio                     MIKE QUIGLEY, Illinois
TED POE, Texas                       JUDY CHU, California
JASON CHAFFETZ, Utah                 TED DEUTCH, Florida
TIM GRIFFIN, Arkansas                LINDA T. SANCHEZ, California
TOM MARINO, Pennsylvania             [Vacant]
TREY GOWDY, South Carolina
DENNIS ROSS, Florida
SANDY ADAMS, Florida
BEN QUAYLE, Arizona
MARK AMODEI, Nevada

      Sean McLaughlin, Majority Chief of Staff and General Counsel
       Perry Apelbaum, Minority Staff Director and Chief Counsel
                                 ------                                

       Subcommittee on Courts, Commercial and Administrative Law

                 HOWARD COBLE, North Carolina, Chairman

               TREY GOWDY, South Carolina, Vice-Chairman

ELTON GALLEGLY, California           STEVE COHEN, Tennessee
TRENT FRANKS, Arizona                HENRY C. ``HANK'' JOHNSON, Jr.,
DENNIS ROSS, Florida                   Georgia
BEN QUAYLE                           MELVIN L. WATT, North Carolina
                                     [Vacant]

                      Daniel Flores, Chief Counsel

                      James Park, Minority Counsel
















                            C O N T E N T S

                              ----------                              

                       TUESDAY, OCTOBER 11, 2011

                                                                   Page

                                THE BILL

H.R. 1996, the ``Government Litigation Savings Act''.............     3

                           OPENING STATEMENTS

The Honorable Howard Coble, a Representative in Congress from the 
  State of North Carolina, and Chairman, Subcommittee on Courts, 
  Commercial and Administrative Law..............................     1
The Honorable John Conyers, Jr., a Representative in Congress 
  from the State of Michigan, and Ranking Member, Committee on 
  the Judiciary..................................................    15
The Honorable Steve Cohen, a Representative in Congress from the 
  State of Tennessee, and Ranking Member, Subcommittee on Courts, 
  Commercial and Administrative Law..............................    24

                               WITNESSES

Jeffrey Axelrad, Professorial Lecturer in Law, The George 
  Washington University Law School
  Oral Testimony.................................................    33
  Prepared Statement.............................................    35
Lowell E. Baier, President Emeritus, The Boone and Crockett Club
  Oral Testimony.................................................    45
  Prepared Statement.............................................    47
Jennifer R. Ellis, Chairman, Western Legacy Alliance
  Oral Testimony.................................................    54
  Prepared Statement.............................................    57
Brian Wolfman, Visiting Professor, Georgetown University Law 
  Center
  Oral Testimony.................................................    64
  Prepared Statement.............................................    67

          LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING

Prepared Statement of the Honorable John Conyers, Jr., a 
  Representative in Congress from the State of Michigan, and 
  Ranking Member, Committee on the Judiciary.....................    16
Prepared Statement of the Honorable Cynthia M. Lummis., a 
  Representative in Congress from the State of Wyoming...........    23
Material submitted by the Honorable Steve Cohen, a Representative 
  in Congress from the State of Tennessee, and Ranking Member, 
  Subcommittee on Courts, Commercial and Administrative Law......    27

                                APPENDIX
               Material Submitted for the Hearing Record

Prepared Statement of the Honorable Steve Cohen, a Representative 
  in Congress from the State of Tennessee, and Ranking Member, 
  Subcommittee on Courts, Commercial and Administrative Law......   107
Letter in Support of H.R. 1996, the ``Government Litigation 
  Savings Act''..................................................   114
Letter from Richard Paul Cohen, Executive Director, National 
  Organization of Veterans' Advocates, Inc. (NOVA)...............   117
Letter from Don Shawcroft, President, Colorado Farm Bureau.......   119
Letter from Victor B. Flatt, Tom & Elizabeth Taft Distinguished 
  Professor of Environmental Law, Director, Center for Law, 
  Environment, Adaptation and Resources (CLEAR), University of 
  North Carolina School of Law...................................   120
Letter in Support of H.R. 1996, the ``Government Litigation 
  Savings Act''..................................................   123
Letter from Wayne Allard, DVM, Vice President, Government 
  Relations, American Motorcyclist Association (AMA).............   125
Letter from Cynthia M. Lummis, Member of Congress................   126
Letter from Lowell E. Baier, President Emeritus, Boone and 
  Crockett Club..................................................   128

 
                   GOVERNMENT LITIGATION SAVINGS ACT

                              ----------                              


                       TUESDAY, OCTOBER 11, 2011

              House of Representatives,    
                    Subcommittee on Courts,
                 Commercial and Administrative Law,
                                Committee on the Judiciary,
                                                    Washington, DC.

    The Subcommittee met, pursuant to call, at 3:35 p.m., in 
room 2141, Rayburn House Office Building, the Honorable Howard 
Coble (Chairman of the Subcommittee) presiding.
    Present: Representatives Coble, Gowdy, and Cohen.
    Also Present: Representatives Conyers and Lummis.
    Staff Present: (Majority) Daniel Flores, Subcommittee Chief 
Counsel; John Hilton, Counsel; Johnny Mautz, Counsel; Ashley 
Lewis, Clerk; (Minority) Norberto Salinas, Counsel; and James 
Park, Counsel.
    Mr. Coble. Good afternoon, ladies and gentlemen. The 
Subcommittee will come to order. I will give my opening 
statement, and then I will recognize the distinguished 
gentleman from Michigan.
    We are a litigious society. One tactic often used by some 
plaintiffs with deep pockets but weak legal claims is to sue 
anyway and then drag out the litigation as long as possible. 
Sooner or later many defendants will realize that it is cheaper 
or less expensive to settle rather than enjoy the hollow 
victory of winning in court by breaking the bank. And no one 
has deeper pockets than the Federal Government. If it runs out 
of money, it simply prints more. The Federal Government 
literally has thousands of attorneys permanently on staff, so 
no person or corporation could ever hope to compete with such 
overwhelming resources.
    Recognizing this, in 1980 the Congress adopted the Equal 
Access to Justice Act to help small businesses and ordinary 
people vindicate their rights in litigation against the Federal 
Government. When the government loses in court, the Equal 
Access to Justice Act allows a court to order the government to 
pay the other side's attorneys fees and costs when the 
government's legal claim was not substantially justified. For 
this reason, the EAJA has been called the anti-bully law.
    Experience over the past 30 years, however, has revealed a 
number of shortcomings in the EAJA, which is what we are here 
to discuss today. Mrs. Lummis, our colleague from Wyoming, has 
been pursuing this issue for some time now, and I want to 
acknowledge her efforts in this regard. Her bill, H.R. 1996, 
the ``Government Litigation Savings Act,'' proposes several 
reforms to the EAJA. First is the lack of transparency. The 
EAJA formerly required the Chairman of the Administrative 
Conference of the United States and the Attorney General to 
file annual reports with Congress stating how much the Federal 
Government was paying out, but the conference lost its funding 
in 1995 and is only just now getting back on its feet, and the 
Attorney General's reporting requirement was repealed 
altogether in 1995. The bottom line is, there has been no 
government-wide accounting of EAJA payments since fiscal year 
1994. We don't know how much money is going out the door, we 
don't know if the EAJA is helping those for whom it was created 
to help; that is, ordinary Americans and small businesses. 
Fixing this lack of transparency is something I hope we can 
agree upon.
    Related to the question of who is benefiting from EAJA is 
the eligibility exception for nonprofit 501(c)(3) 
organizations. It is not altogether clear why this exception 
was included in the original law, but it is clear from a recent 
GAO audit that it benefits certain well-heeled environmental 
groups who use litigation as a strategy to advance their 
ideological agenda. Whether a multimillion-dollar organization 
that already is tax exempt should have the added benefit of 
being able to collect attorneys fees and costs from the Federal 
Government, which originally of course comes from the American 
taxpayers, is another issue which our witnesses I am sure will 
address.
    H.R. 1996 also would reform the special factor exception; 
that is, the $125 per hour cap on attorneys fees. Because of 
the lack of annual reporting, this evidence is anecdotal, but 
it appears that some courts interpret this exception very 
loosely. If the exception has become so large that it swallows 
the rule, why bother capping the attorneys fees at all? H.R. 
1996 would abolish this special factor exception.
    Finally, in many parts of the country a good lawyer, the 
kind you would want to hire if the Federal Government was on 
the other side, costs in excess of $125 per hour. H.R. 1996 
proposes to fix this by raising the cap to $175 per hour and 
allowing it to be adjusted annually based upon the consumer 
price index.
    In closing, I want to thank Mrs. Lummis for her dedication 
to the issue. H.R. 1996 deserves careful and serious 
consideration, and I look forward to the witnesses' testimony 
and reserve the balance of my time.
    [The bill, H.R. 1996, follows:]
    
    
    
                               __________
    Mr. Coble. I am now pleased to recognize the distinguished 
gentleman from Michigan, Mr. John Conyers, for his opening 
statement.
    Mr. Conyers. Thank you, Mr. Chairman. I am happy to be with 
you to form a quorum so that we could hold this hearing this 
afternoon, and I wanted to just go over some materials here to 
make sure I understand what it is we are doing, because 
according to the author, she did not intend to affect the 
enjoyment of the present law to affect veterans, Social 
Security claimants, and small businesses. And maybe I am wrong 
here, but we have information that the pro bono provision would 
prove a disaster for Social Security claimants, and the 
nonprofit legal service organizations and the private bar who 
often provide pro bono services would be, in many if not most 
instances, precluded from any legal recovery. So I hope that 
this becomes clarified in the course of our hearing today.
    Now, the Equal Access to Justice Act is more than 30 years 
old, and it has helped seniors, veterans, Social Security 
claimants vindicate their rights against inaccurate or 
unreasonable or sometimes illegal government action. So the 
first thing I want to indicate that according to our reading of 
the bill, this proposal may prevent those who are most--the 
most needy in our society from securing legal representation; 
that is senior citizens, that is veterans, that is disabled 
individuals, and so many of them would never get to court if 
they couldn't get attorneys who would take the case pro bono 
but would recover legal fees if they prevail. And so what we 
are doing is a horrendous disservice to disabled veterans, some 
several thousand who recovered fees during fiscal year 2010 
when they successfully appealed Veterans Administration 
decisions that denied them disability benefits.
    So I know that the Committee is very well intentioned, but 
why we would be doing something like this is something I will 
remain to have our distinguished panel of witnesses explain to 
me. So I thank you very much, Mr. Chairman, and ask unanimous 
consent to submit the rest of my statement for the record.
    Mr. Coble. Without objection. Thank you, Mr. Conyers.
    [The prepared statement of Mr. Conyers follows:]
    
    
    
                               __________

    Mr. Coble. Before I recognize the Ranking Member of the 
Subcommittee, the distinguished gentlewoman from Tennessee, 
Mrs. Lummis, the author of the bill, is not allowed to 
participate, but without objection, we will permit her to sit 
on the dais. Mrs. Lummis, good to have you with us, and without 
objection, I would like to introduce her statement for the 
record as well.
    [The prepared Statement of Ms. Lummis follows:]
    
    
    
                               __________

    Mr. Coble. I am now pleased to recognize Mr. Cohen, the 
gentleman from Memphis, for his opening statement.
    Mr. Cohen. Thank you, Mr. Chairman. I appreciate the----
    Mr. Conyers. Would the distinguished Ranking Member yield 
to me for just a quick query to the Chairman of the Committee?
    Mr. Cohen. The distinguished Ranking Member will yield to 
the distinguished Ranking Member of the full Committee and the 
Congressman who represents the Detroit Tigers.
    Mr. Conyers. Mr. Chairman, is it possible that the author 
of the bill would be able to be a witness to the hearings?
    Mr. Coble. I would think no, Mr. Chairman. I would say no.
    Mr. Conyers. And why is that, could I ask?
    Mr. Coble. Pardon?
    Mr. Conyers. You don't let the authors of bills testify?
    Mr. Coble. No, sir.
    Mr. Conyers. Oh, pardon me.
    Mr. Cohen. Overruled.
    Mr. Conyers. That is contrary to everything I thought I had 
learned about the way the process works; but if authors of the 
bill can't testify, but they can sit on the Committee, I guess 
that is second best.
    Mr. Coble. No doubt.
    Mr. Conyers. All right. Thank you.
    Mr. Coble. Mr. Cohen is recognized for 5 minutes.
    Mr. Cohen. Thank you. I am recognized in my capacity as 
being the Ranking Member. Could I yield my time to the 
distinguished lady from Wyoming and let her give her statement?
    Mr. Coble. Well, I think not.
    Mr. Cohen. Well, I tried. I tried.
    During this Congress, instead of focusing on much-needed 
job creation and the opportunity for Mrs. Lummis to make her 
statement, the majority has pushed broad anti-regulatory 
messages and talked about small business.
    Today we hold a hearing on H.R. 1996, the, quote, 
Government Savings Litigation Act, which seems to discourage 
those who want to challenge agency actions, including small 
businesses and nonprofit organizations. Specifically, the bill 
would amend the Equal Access to Justice Act, to prohibit small 
businesses and others who have successfully prevailed in court 
against the government from recovering legal fees. As such, 
this hearing and legislation seems to have the effect of being 
pro-government outreach and dissuading small businesses from 
having the opportunity to go to court and get their attorneys 
fees paid, just the opposite of what the majority has talked 
about many times and one of the many reasons why I wanted the 
distinguished, attractive, and bright lady from Wyoming to 
explain her bill.
    Under the EAJA, individuals and small businesses can 
request reasonable attorneys fees if they are the prevailing 
party in a legal action against the government. The award, 
however, is not automatic. If the government can show its 
actions were substantially justified, that is the test, then 
the award is denied. This substantial justification defense 
prevents many awards and discourages frivolous or marginal 
cases that were filed based solely on the hope of recovering 
attorneys fees.
    The Equal--the EAGA--JA--also caps the fee rate at below 
the market rate, except that a judge may award fees above the 
$125 cap if a specialized skill was necessary for the 
litigation. Still, the prevailing party must show that legal 
representation could not have been obtained at that capped rate 
but for the possibility of obtaining a higher rate. This below-
market cap rate minimizes litigation and discourages frivolous 
or marginal cases. I haven't heard of anybody getting $125 in a 
thousand years. I am sure nobody in this room even considers 
such a thing.
    The current EAJA attorney fee provision strikes the right 
balance between allowing small entities the opportunity to 
challenge the government, little guy against big guy, while 
preventing expensive and runaway litigation. Still, even with 
the very slim chance of recovering attorneys fees, critics 
suggest that awards under this act are astronomical and too 
common. This criticism, however, is based on a mere estimate of 
awards and pure conjecture about the frequency of awards, as 
there has been no comprehensive governmental study since 1998. 
An updated study to reflect the current situation rather than 
that 13 years of age would be a good government measure.
    This bill requires a report, which is laudable. 
Unfortunately, that is the only reasonable provision of this 
bill. H.R. 1996 should concern all of us. It will negatively 
impact veterans, seniors, our public health and small 
businesses.
    A 1998 GAO report found that in 1994, 98 percent of fee 
applications submitted and 87 percent of the dollars awarded 
under this act were in Social Security disability cases and 
veterans disability cases, two of our favorite constituencies. 
Based on those numbers, this bill would prevent the awarding of 
fees disproportionately in cases brought by nonprofit veterans 
groups challenging the VA for systematic delays. This 
discourages the filing of these cases and leaves it to 
individual veterans to bring the cases. Most of these veterans 
cannot afford to do so.
    Likewise, the bill also discourages legal aid programs from 
bringing cases on behalf of senior citizens. Further, because 
H.R. 1996 bars recovery of fees from most nonprofits in citizen 
suits, it will discourage environmental groups from bringing 
actions to enforce environmental laws that protect our public 
health and lands.
    In light of the impact on our veterans, seniors, and public 
health and lands, and many other concerns, various groups have 
expressed opposition. They include the National Organization of 
Veteran's Advocates, the National Organization of Social 
Security Claimant's Representatives, the Natural Resources 
Defense Council--which, of course, includes Robert Redford, who 
I am sure the sponsor of this bill likes, for all women like 
him--the National Legal Aid and Defender Association, the 
Center for Auto Safety, and the Center for Food Safety. There 
are dozens more.
    I thank our witnesses for their participation in today's 
hearing. I look forward to their testimony, and I look forward 
to the Memphis-East Carolina football game this Saturday and 
hope you won't beat up on us too badly, and----
    Mr. Coble. Based upon last week's outing against Houston, I 
don't think you have very much to worry about.
    Mr. Cohen. We are worse, believe me.
    Mr. Coble. We will find out.
    Mr. Cohen. Can I submit these for the record?
    Mr. Coble. Without objection, it will be received.
    [The information referred to follows:]



    
    
                               __________

    Mr. Cohen. Thank you, sir.
    Mr. Coble. And I say to the gentleman from Michigan, 
congratulations to the Tigers. Are they up now? Are they 
leading?
    Mr. Conyers. Not at all.
    Mr. Cohen. But they are going home. My team is over.
    Mr. Coble. Your team is over? Texas? Oh, boy.
    It is good to see all of you. I have detailed introductions 
to give, but I think we need to know the background of our 
distinguished witnesses, so please bear with me. Good to have 
each of you with us.
    Mr. Jeffrey Axelrad teaches at George Washington University 
School of Law. Mr. Axelrad served at the Justice Department for 
more than 35 years and was actively involved in policy and 
development as well as litigation. He worked as director of the 
Department of Justice's tort branch from 1977 to 2003. He also 
served as a trial attorney for 8 years, earning the civil 
division's highest honor, the Stanley D. Rose Memorial Award. 
He also received the Army's highest civilian award, the 
Commander's Award for Public Service, a Presidential 
Meritorious Executive Award, and the Office of Management and 
Budget General Counsel's Award. Mr. Axelrad, thank you for 
sharing your insights and experiences with the Subcommittee 
today.
    Mr. Lowell Baier is the immediate past president of The 
Boone and Crockett Club, the Nation's oldest conservation 
organization. The Boone and Crockett Club was founded by Teddy 
Roosevelt in 1887 to promote wildlife conservation and was 
instrumental in establishing Federal lands, conservation laws 
and agencies, and several other national conservation groups. A 
lawyer by training, Mr. Baier is currently leading the Club in 
the extensive study of the role of litigation in conservation. 
He also is the founding director of the National Conservation 
Leadership Institute and Executive Education Program for 
Conservation Professionals. For these and other accomplishments 
during his career as a small business owner, Mr. Baier was 
named conservationist of the year by Field and Stream magazine. 
Mr. Baier, we are glad to have you with us as well today.
    Ms. Jennifer Ellis is a cattle rancher and wheat and hay 
farmer from Blackfoot, Idaho. She chairs the Western Legacy 
Alliance, a volunteer organization focused on preserving 
working land and life-styles in the American West. Recently Ms. 
Ellis was president of the Idaho Cattle Association and 
chairman of Idaho Sage Grouse Advisory Committee. She also 
chaired Idaho's Wolf Depredation Committee, and she is director 
on the board of the Idaho Agricultural Credit Association, and 
the former chairman of the Blackfoot Hope House Project. 
Through these experiences, Ms. Ellis has acquired much 
firsthand knowledge of environmental litigation, more than she 
ever wanted to know I would dare wager. Ms. Ellis, thank you 
for coming all the way from Idaho to be with us today. We 
appreciate that.
    Finally, Mr. Brian Wolfman is a visiting professor of law 
at the Georgetown University School of Law where he served as 
the co-director for the school's Institute for Public 
Representation. Prior to joining the Georgetown faculty, Mr. 
Wolfman spent nearly 20 years at the national public interest 
law firm, Public Citizen Litigation Group, where he served the 
last 5 years as director. Prior to that, he also conducted 
trial and appellate litigation as a staff lawyer at a rural 
poverty law program in Arkansas. He has handled a broad range 
of litigation and argued five cases before the Supreme Court. 
He has taught appellate litigation courses at his alma mater, 
Harvard School of Law, and also served as an adjunct professor 
at Stanford, Vanderbilt, and American University. Mr. Wolfman, 
thank you as well for being with us.
    Gentlemen and lady, good to have you all with us. We try to 
go by the 5 minute rule, so if you will keep your eye peeled on 
the little panel before you, when the light is green, that 
indicates that you are alive and well, but that light will turn 
amber, and that is your notice that a 1-minute delay is about 
to be resolved. We will not keelhaul any of you for violating 
the 5-minute rule, but if you can comply with it, we would 
appreciate that. Is that panel working out there? Can you all 
see the panel? Can you see the green light now?
    Mr. Coble. Mr. Axelrad, we would be glad to have you start 
your testimony.

TESTIMONY OF JEFFREY AXELRAD, PROFESSORIAL LECTURER IN LAW, THE 
            GEORGE WASHINGTON UNIVERSITY LAW SCHOOL

    Mr. Axelrad. Thank you. I will summarize my statement and 
would appreciate the entire statement being placed in the 
record.
    Mr. Coble. Without objection.
    Mr. Axelrad. I am here to share my views on H.R. 1996, the 
Government Litigation Savings Act. This bill proposes sensible 
amendments to provisions of the Equal Access to Justice Act, 
commonly known as EAJA. My testimony will discuss specific 
improvements this bill makes to EAJA.
    Payment of costs and attorneys fees is a transfer of money, 
pure and simple. Our Constitution's appropriations clause bars 
payments from the public Treasury absent a congressional 
appropriation. This clause stands as a bulwark, ensuring that 
the Congress decides whether and under what conditions Treasury 
funds should be utilized.
    EAJA includes four types of key provisions. First, the 
United States is made susceptible to an award of attorney fees 
under certain circumstances when a private party would 
otherwise be responsible for paying an attorney fee after 
receiving an award in a judicial proceeding. This regime 
applies to settlements as well.
    Second, EAJA authorizes attorney fee awards and expenses if 
the nongovernment party prevails and the government's 
underlying conduct was not substantially justified absent 
special circumstances. This is a one-way, loser-pay provision 
that creates different law against the American taxpayer. EAJA 
puts the Federal Government in a unique and largely disfavored 
position. H.R. 1996 includes needed amendments to more 
precisely specify the means of determining an award.
    Third, EAJA includes standards for recovering attorney 
fees, including when the underlying conduct was not 
substantially justified and when the nongovernment party is 
considered the prevailing party. Vague terms like these can 
lead to protracted side litigation and manipulation. H.R. 1996 
seeks to avoid abuse and to clarify the provisions.
    Fourth, EAJA also penalizes the government if it is not 
sufficiently successful in seeking judicial review of an agency 
adjudication where civil action commenced by the United States. 
There is no such provision against such demands for the private 
party which can disadvantage government civil actions and 
enforcement proceedings.
    H.R. 1996 makes several needed amendments to EAJA's 
substantive attorney-fee award provisions and adds requirements 
to collect and assemble precise data permitting insight into 
EAJA's results in practical terms. H.R. 1996 raises the maximum 
rate of payment for attorneys from $125 per hour to $175 per 
hour and substitutes a precise means of determining cost-of-
living increases. In return for raising the fee, these 
amendments eliminate the exception to the fee limit for an 
attorney who asserts that a special factor, such as the limited 
availability of qualified attorneys or agents for the 
proceedings, justifies a higher fee.
    In Pierce v. Underwood, the Supreme Court attempted to 
limit the ability to evade application of the cap, but its 
decision did not end litigation over whether the fee cap can be 
pierced. Far from it. The Federal Appellate Courts' decisions 
are in disarray.
    H.R. 1996 places a limit or cap with a limited exception on 
the aggregate amount the Public Fisc will pay to an individual 
or entity for attorney fees or other expenses and confines EAJA 
to parties who have a direct and personal monetary interest in 
the proceedings. These amendments seek to confine EAJA to its 
legitimate and original purpose.
    H.R. 1996 sharpens the language of extant fee-reduction 
provisions by requiring reductions if the party seeking award 
has engaged in specified abusive misconduct. The ability of 
Congress to perform its oversight of EAJA depends on the 
availability of information concerning agency payments 
predicated on the act. Currently this information is largely 
unavailable. Agencies have no obligation to collect and 
assemble data, and even if some agencies did collect data, 
there is no central authority to organize and report the data 
in a sensible format both to the Congress and the public.
    H.R. 1996 remedies this lack of information. Specifically, 
H.R. 1996 requires the Chairman of the Administrative 
Conference of the United States to issue an annual report to 
the Congress and to make the report publicly available online. 
H.R. 1996 also requires GAO to conduct a one-time audit of 
EAJA's implementation during recent years, starting with 1995.
    H.R. 1996 leaves intact the basic structure and central 
focus of EAJA. H.R. 1996 serves to correct unintended 
consequences and clarifies vague terminology that has resulted 
in substantial wasteful collateral litigation. H.R. 1996 also 
requires that Congress receive information or that it may 
determine how effectively EAJA works in practice and the costs 
associated with EAJA. This will permit the Congress to provide 
more effective oversight and enhance the ability of citizens to 
hold their government accountable for the actions of government 
agencies. In my opinion, H.R. 1996 represents a move toward 
enhancing the ability of EAJA to best serve its intended 
purposes.
    I will be happy to answer any questions.
    [The prepared statement of Mr. Axelrad follows:]


    
    
                               __________

    Mr. Coble. Thank you, Mr. Axelrad.
    Mr. Baier, you are recognized for 5 minutes.

TESTIMONY OF LOWELL E. BAIER, PRESIDENT EMERITUS, THE BOONE AND 
                         CROCKETT CLUB

    Mr. Baier. Thank you, Mr. Chairman, Representative Cohen, 
Representative Conyers, Members of the Committee. I represent 
The Boone and Crockett Club, America's oldest conservation 
organization, founded in 1887 by Theodore Roosevelt, and I 
follow him as the Club's 28th president and am now president 
emeritus.
    We support this bill because it will improve managing the 
conservation of our Nation's fish, wildlife, and natural 
resources. We also support the Equal Access to Justice Act's 
historic primary purpose for retirees, for veterans, for small 
business, and for all citizens. They must be protected from 
mistakes and overzealous Federal agencies. These are the 
citizens who can least afford to protect themselves, and we are 
resolute that we do not tread on the historic purpose of EAJA.
    Under this bill, individuals will remain eligible to use 
EAJA if their net worth does not exceed $2 million, just as 
they do today. Likewise, small business will remain eligible 
provided their net worth does not exceed $7 million. The bill 
extends these same eligibility requirements to large interest 
groups. Today these groups can recoup legal fees under EAJA 
regardless of their net worth.
    Unlimited eligibility has helped make litigation 
commonplace in the conservation arena. This is so roundly 
understood that even Earl Devaney, the Inspector General of the 
Department of Interior in 2008, said, ``As it now stands, 
lawsuits are driving nearly everything the Fish and Wildlife 
Service does in the endangered species arena.''
    Just last month a new settlement agreement imposed the 
views of two aggressive interest groups on the entire 
endangered species listing program through 2017. This 
settlement resulted from litigation on procedural--procedural 
rather than substantive grounds. This is the type of litigation 
for which EAJA provides a perverse incentive. We want to put 
``equal'' back into the Equal Access to Justice Act by 
requiring everyone to meet the same eligibility standards.
    To be clear, litigation will continue, but the taxpayer 
will no longer pay the legal bills of large interest groups. 
Capping eligibility on 501(c)(3)s will also make EAJA 
consistent with the other 205 fee-shifting statutes, not one of 
which exempts 501(c)(3)s from the eligibility requirements that 
apply to private citizens and small business.
    Senior counsel, Henry Cohen, from the Congressional 
Research Service, in 2009 determined that EAJA was an anomaly 
in this regard. It is a glaring privilege that is the 
antithesis of equality and fairness. The antithesis of equality 
and fairness. Along with fairness, this bill will restore 
accountability and transparency to EAJA going forward.
    When EAJA was enacted in 1980, it required an annual report 
of the number of cases processed and total attorneys fees 
reimbursed. That reporting ended in 1995. Since then, the 
Congress and the country have been in the dark of the costs of 
EAJA, which is why this bill reinstates the reporting 
requirement beginning with an audit of prior unreported years.
    Our own targeted research based on GAO reports, tax 
returns, court records, and data from agencies, shows costs of 
EAJA of at least $50 million per year from litigation by the 
top 20 environmental litigants. What are the total costs? We 
don't know. That is why reinstating the annual reporting and 
audit costs since 1995 are critical.
    In conclusion, the actual payout of legal fees is just the 
tip of the iceberg. We estimate that it represents one-fifth of 
the total costs. The hidden costs are the personnel time spent 
by agencies reviewing procedures, defending procedures, and 
often redoing the entire process. Then there are the costs of 
the Justice Department attorneys defending the cases.
    Mr. Chairman, Members of the Committee, this bill is about 
the historic purpose of EAJA. America's conservation community 
urges you to put ``equal'' back into the Equal Access to 
Justice Act in the interest of fairness, sound management of 
our natural resources, and fiscal responsibility. Thank you for 
your consideration.
    Mr. Coble. Thank you, Mr. Baier.
    [The prepared statement of Mr. Baier follows:]
    
    
    
                               __________

    Mr. Coble. Ms. Ellis.

           TESTIMONY OF JENNIFER R. ELLIS, CHAIRMAN, 
                    WESTERN LEGACY ALLIANCE

    Ms. Ellis. Mr. Chairman, Members of the Committee, I 
appreciate the ability to come before you today, and I have 
come to see why it is they asked me today. I am going to dumb 
this conversation down a lot. I hope you will appreciate my 
efforts there.
    More than 20 years ago I was a rancher in Idaho when an 
environmental group declared that its goal was to put myself 
and other ranchers out of business. Other conservationists who 
cared for the land had a better goal of how ranchers could 
change to do their business. This made sense to me. Even though 
we didn't agree on the outcome all the time, we did agree to 
sit down at the table.
    Our self-appointed enemies brought a new and more 
aggressive campaign of lawsuits than we had ever seen before, 
so we formed the Western Legacy Alliance to allow ranchers, 
farmers, sportsmen, and local communities to defend their 
livelihoods. I started out 4 years ago, when we started on this 
project, I thought that EAJA was how environmentalists got the 
money to file the lawsuits, but it is not. They have other much 
better sources of money. I thought that EAJA was the law that 
gave them access to the courts, but it is not. The major 
environmental laws give them access to the court for standing 
and to pay their fees. The Endangered Species Act, Clean Water 
Act, and Clean Air Act are all examples of that.
    EAJA seemed to be written just for the environmental 
groups, but it wasn't. It was written for people like me--as 
Congressman Conyers and Congressman Cohen have made examples of 
small businesses, I am that small business--and also for people 
like my dad, who are Social Security recipients. I had no idea 
that there were 205 laws on the books that allowed fee shifts 
to occur, for groups to gain standing and then recoup their 
fees if they did prove the government was wrong, and none of 
these 205 laws exempt 501(c)(3) organizations.
    In sum, I thought that if we repealed EAJA, then our 
problems would all be solved. Having spent years now learning 
about EAJA, I see it doing really good work for the retirees, 
the veterans, and small businesses. But it is also being used 
by groups that do not need it, and used in ways that make the 
controversies in the West and in Tennessee much more difficult 
on everybody involved than they need to be.
    Passing H.R. 1996 will make things better while protecting 
the proper use of EAJA. And a case out West in the Yellowstone 
Park is a really good example; maybe you have all heard of it, 
the snowmobile debacle. Tour businesses sued to overturn the 
first ban on the snowmobiles and they won. After the Park 
Service issued a new decision, the environmentalists sued the 
Park Service and won. The back-and-forth in court was disputing 
not whether the Park Service was breaking any laws but whether 
it had considered all of the options. It wasn't about justice, 
it was about policy choices.
    I have always understood that people can push their agendas 
in court. I just disagree with using my tax dollars to do it. I 
support the GLSA even though it would prohibit some large 
business groups from collecting fees in the future. There are 
also other reasons that I support the GLSA. The bill improves 
EAJA for its intended users, which have been duly noted. It 
brings transparency and accountability to the costs of 
lawsuits. It separates EAJA from environmental policy, which is 
a completely separate issue. GLSA does these things by 
increasing allowable fees, focusing EAJA on direct and personal 
costs to people instead of to organizations, and reporting the 
amounts distributed and preventing repeat claims by the same 
organizations over and over.
    EAJA is different from the Clean Air and Clean Water Act 
and the ESA. Environmental laws support lawsuits about whether 
the government has done what the law says it must do. EAJA pays 
for environmental cases if you can show the government messed 
up the paperwork, which is a pretty easy thing to do, if any of 
you have seen the NEPA documents and the APA documents. It is a 
real easy way to block decisions that you just don't like.
    I urge the Committee to fix this by passing H.R. 1996 so 
that tax-exempt organizations have to pay their own way when 
they take on taxpaying businesses over differences of opinion. 
And I am actually on the receiving end of the collateral damage 
done by the misapplication of EAJA awards.
    With that, I will stand for any questions. Thank you.
    Mr. Coble. Thank you, Ms. Ellis. I guess you probably came 
the greatest distance here today, Ms. Ellis, so we commend you 
for that.
    [The prepared statement of Ms. Ellis follows:]
    
    
    
                               __________

    Mr. Coble. Mr. Wolfman, good to have you with us. You are 
recognized for 5 minutes.

  TESTIMONY OF BRIAN WOLFMAN, VISITING PROFESSOR, GEORGETOWN 
                     UNIVERSITY LAW CENTER

    Mr. Wolfman. Chairman Smith and Members of the 
Subcommittee, thank you for the opportunity to appear today in 
opposition to H.R. 1996. In almost every particular, H.R. 1996 
would undermine the purpose of EAJA to provide court access to 
citizens, citizens groups, and small businesses subjected to 
unreasonable and unlawful governmental conduct.
    I will focus today on two provisions of H.R. 1996 that 
would cause the most harm, but first I want to explain why 
claims that EAJA is being abused are dead wrong. In fact, EAJA 
is less favorable to a fee-seeking party than virtually any of 
the other more than 200 Federal fee-shifting statutes.
    First, under EAJA, to obtain a fee it is not enough for the 
plaintiff to prevail in the litigation, as it is under 
virtually all other fee-shifting statutes. Rather, the 
government can defeat a fee award entirely if it can show that, 
despite having lost the case, its position on the merits of the 
case was substantially justified. The Supreme Court says this 
means that even when the government takes unlawful action 
against its citizens, it does not have to pay a fee unless the 
positions it took in court were unreasonable. This is a 
powerful defense, and dozens upon dozens of cases deny EAJA 
fees on this ground. So no rational litigant or lawyer would 
bring a frivolous or marginal case in the hope of obtaining a 
fee.
    Second, under EAJA, prevailing parties cannot recover their 
fees at market rates. Under other fee-shifting statutes, 
prevailing parties are awarded attorneys fees at market rates, 
which in D.C. and other major cities can range up to $600 per 
hour or more. But EAJA limits fees to about $180 per hour, 
after adjustment for inflation. Fees can be enhanced above that 
rate only when the Supreme Court has said are narrow 
circumstances involving specialized areas of the law, and even 
then the fee is not paid at market rates. In light of EAJA's 
below-market rates, neither litigants nor lawyers would bring 
marginal cases in the hope of receiving fees.
    Let me turn to H.R. 1996's two most concerning provisions. 
Under H.R. 1996, to obtain an EAJA fee, the fee applicant must 
have, quote, a direct and personal monetary interest in the 
case, unquote. This would eliminate EAJA in the most important 
cases, those that challenge unlawful governmental regulations 
and conduct that affect the public generally. Take, for 
example, cases where service organizations and members of the 
private bar help people who serve our country obtain needed 
disability benefits from the Department of Veterans Affairs. 
EAJA is vitally important to the individual veteran whose 
benefits have been unlawfully denied. But EAJA may be even more 
important to the thousands or tens of thousands of veterans 
whose benefits requests are mishandled because the Department 
of Veterans Affairs has systematically delayed issuing benefit 
rulings or misapplied disability regulations. H.R. 1996 would 
make it impossible to obtain fees in cases brought by nonprofit 
veterans groups challenging such illegal conduct. I set out a 
number of other examples in my written testimony.
    H.R. 1996 would discourage these important cases and 
unfairly require citizens to bear all of their legal costs when 
these types of cases are brought.
    The next section I want to talk about is that H.R. 1996 
would amend EAJA to require a court to reduce or deny fees, 
quote, commensurate with pro bono hours, end quote. Pro bono 
refers to work performed by attorneys free of charge for people 
or charitable organizations unable to afford market-rate 
services. The no pro-bono provision is a very bad idea because 
citizens and citizen groups that hire pro bono lawyers are 
exactly the parties for whom EAJA was designed. They cannot 
afford to pay for legal services and may only be able to hire 
lawyers if there is some chance of a fee down the road if they 
show that the government acted unreasonably. Hundreds if not 
thousands of members of the private bar provide their services, 
for instance, to Social Security and veterans disability 
claimants, with EAJA as the only monetary inducement to take on 
these cases.
    Nearly 10 years ago I worked with a private lawyer in North 
Carolina with a case in the Supreme Court. The lawyer was a 
veteran himself who wanted to give back to those in uniform. He 
represented another veteran who had been denied service-
connected disability benefits. Ultimately, after years of 
litigation, the Court of Appeals for Veterans Claims found that 
the government's position was wrong and, quote, not reasonably 
debatable, unquote. The government then fought us over the EAJA 
fee itself, which we ultimately won in the Supreme Court.
    Under H.R. 1996, there would have been no fight. There 
would be no EAJA fee because the time of the North Carolina 
lawyer was provided pro bono. Here you have a man who served 
his country, serving another man who served his country, who 
would, if H.R. 1996 becomes law, have to think twice about 
taking on another veteran's disability case. It is hard to 
think of a more unfair result, a result that would make it 
difficult if not impossible for people victimized by 
unreasonable government action to attract competent counsel.
    I would welcome any questions. Thank you.
    Mr. Coble. Thank you, Mr. Wolfman.
    [The prepared statement of Mr. Wolfman follows:]
    
    
    
                               __________

    Mr. Coble. Now, we try to comply with the 5-minute rule as 
well, so if you all will keep your answers as tersely as you 
can, we would appreciate that, we can move along.
    Mr. Axelrad, will H.R. 1996 adversely affect the ability of 
people seeking Social Security benefits and veterans benefits 
to collect what the government owes them?
    Mr. Axelrad. No, it would not.
    Mr. Coble. Your microphone is not on.
    Mr. Axelrad. Oh, I am sorry, excuse me. H.R. 1996 would not 
affect the right of the individual to recover the award that 
the court or administrative tribunal provides to a Social 
Security beneficiary. The difference is that EAJA as of now has 
a special incentive--depending on where the attorney is located 
actually, because the courts are divided on this--to pay 
attorneys more; and so the cap that is written into EAJA is 
often honored in the breach, so the money will go to an 
attorney. It doesn't affect the rights of the individual to 
actually get the benefits of the award that the court 
determines.
    Mr. Coble. Thank you, sir. Mr. Baier, how does the EAJA in 
its current form disrupt the balance, as you say in your 
written testimony, in environmental and conservation 
policymaking?
    Mr. Baier. I am sorry, Mr. Chairman, I am having trouble 
hearing in this room. The last part of your----
    Mr. Coble. I will repeat it. How does the EAJA in its 
current form disrupt the balance, as you indicate in your 
written testimony, in environmental and conservation 
policymaking?
    Mr. Baier. It encourages and incentivizes lawsuits over 
procedural issues, and by procedural issues what I mean are 
missing deadlines. That is the primary challenge to the way it 
works. These are procedural deadlines that are imposed 
primarily under the Endangered Species Act, which are 
physically and humanly impossible for the Fish and Wildlife 
Service to at times meet. And the litigation that we are 
concerned about that has created this imbalance is primarily 
over procedural issues that relate to missing deadlines and 
paperwork issues.
    Mr. Coble. I thank you, sir.
    Ms. Ellis, when an environmental group sues the Federal 
Government, you discussed how ranchers in your organization end 
up paying three times for the same litigation. Elaborate on 
that, if you will.
    Ms. Ellis. Yes, Mr. Chairman, that is what I referenced as 
collateral damage. When EAJA was enacted in 1980, it said that 
there would be no peripheral damage to anyone outside the 
government, the only hit to a pocketbook was going to be to the 
government, when in actuality now I hold permits on Federal 
land that I am allowed to under the Taylor Grazing Act. When 
environmentalists bring challenges to those permits, they don't 
challenge me personally, they challenge the agency, we will use 
BLM as the example. So when they do that, they cannot--BLM 
attorneys cannot actually represent the losses that would 
happen to me if the change being requested by the plaintiff 
were enacted, and so I have to hire an intervening attorney 
that usually costs, for a good one right now, $400 an hour. So 
in order to have my interests represented when this lawsuit 
comes forward, I have to hire that attorney. I am from the 
Ninth Circuit, and usually they will not allow intervening 
attorneys in on the merits phase of the case, only in on the 
remedies phase. So I pay for my intervening attorney, then 
through my tax dollars I am paying for the agency attorney, the 
DOJ attorney, all of the staff time involved from the BLM 
conservation officers, and everybody preparing for the case. 
And then my tax dollars pay the EAJA award if they are found to 
be the winner in the complaint.
    Mr. Coble. I thank you. Let me try to beat that red light, 
Mr. Wolfman. From your written testimony it seems that you 
basically support the reporting provisions of H.R. 1996, but 
that the bill puts the cart before the horse. What evidence, if 
any, could convince you to support eliminating the exception to 
EAJA for multimillion-dollar organizations?
    Mr. Wolfman. Well, I don't know that there is any, but I 
would like to see what the----
    Mr. Coble. Pull that microphone a little closer to you, Mr. 
Wolfman.
    Mr. Wolfman. I am sorry, Mr. Chairman.
    Mr. Coble. It is okay.
    Mr. Wolfman. I don't know. I would like to see the evidence 
first. What I was saying in my testimony is, I am all for 
transparency, and I do agree that it was unfortunate that, 
after 1995, we did not have an annual report. I myself used it 
frequently. It was a useful document, and there is nothing 
wrong with that. What I was saying in my testimony is I find it 
odd people are complaining about a paucity of data, but they 
are willing to change the substantive law of EAJA without 
having the data. That puts the cart before the horse.
    Mr. Coble. I gotcha. I see that the red light appears. We 
have been joined by the distinguished gentleman from South 
Carolina, Mr. Gowdy. Good to have you with us, Trey. And Mr. 
Cohen, you are recognized for 5 minutes.
    Mr. Cohen. Thank you, Mr. Chairman. Mr. Axelrad, the first 
question that the Chairman asked you was about people getting 
their benefits, and I think it was veterans, and you said they 
get their benefits, if I am correct, but they just--the 
attorney wouldn't get their attorneys fees; is that kind of 
what you said?
    Mr. Axelrad. What I meant to say, I can't exactly quote 
myself, is that the individual who receives an award receives 
the entire award.
    Mr. Cohen. Right.
    Mr. Axelrad. And so the issue is for--and the changes in 
the terminology go to the compensation for the attorney, not 
the individual who receives the award.
    Mr. Cohen. Right. And I can get--where are you from?
    Mr. Axelrad. Where am I from?
    Mr. Cohen. Yeah.
    Mr. Axelrad. Originally from Uniontown, Pennsylvania. I 
have lived here for quite some time.
    Mr. Cohen. All right. Well, if I wanted to go to Uniontown, 
Pennsylvania, and the law said I could do it but said I 
couldn't have transportation, I would have to walk there. It 
would make it a lot harder to get to Uniontown. If your 
attorney can't get an expectation of getting a fee, you are not 
going to get an attorney, and if you can't get an attorney, you 
are not going to get a fee.
    Mr. Axelrad. Let's take the Social Security example that 
you proposed. There actually is a separate fee provision for 
Social Security benefits. What EAJA does, it provides 
suspenders when there is already a belt. But I am not 
suggesting that EAJA not apply to Social Security cases. All I 
am suggesting is that the provisions of EAJA have been 
broadened so that the exception has almost become the rule. The 
cap is being pierced, the 501(c)(3) organizations----
    Mr. Cohen. You mean the cap of a hundred and a quarter or 
so an hour?
    Mr. Axelrad. Beg pardon?
    Mr. Cohen. The cap of the dollar amount?
    Mr. Axelrad. Right now it is at $125 an hour.
    Mr. Cohen. Right. And Ms. Ellis just said you can't get a 
good lawyer in Idaho for $400. So how are you going to get a 
good lawyer in Washington for $126?
    Mr. Axelrad. Social Security decisions, for example, are 
based on the administrative record, I am sure there are--the 
new cap under H.R. 1996 would be $175 an hour. I don't think 
there would be any difficulty whatsoever, and in fact----
    Mr. Cohen. Are you a lawyer, sir?
    Mr. Axelrad. Oh, yes.
    Mr. Cohen. But you don't practice?
    Mr. Axelrad. I don't litigate. I do have a very limited 
practice.
    Mr. Cohen. Even in poor old Memphis, Tennessee, the most 
poverty stricken of the 60 major cities, unfortunately, you 
can't get a lawyer to go to traffic court for you for $175.
    Mr. Axelrad. I think there may be a misapprehension on the 
501(c)(3) organizations. All that H.R. 1996 does is it provides 
the same net-worth cap that applies to other entities. It is 
not saying that the impoverished organization can't avail 
itself of EAJA. It is the one that has a high net worth that is 
not able to pierce the cap----
    Mr. Cohen. Let me ask you a question. In your testimony----
    Mr. Axelrad [continuing]. Under the bill.
    Mr. Cohen. Thank you, sir. In your testimony you say these 
limitations and conditions have not been successful in 
cabining--which is a new word for me, I guess, cabining; I will 
work on it--awards, and have led to substantial, unproductive, 
tangential litigation. What is the substantial, unproductive, 
tangential litigation you are referring to?
    Mr. Axelrad. Over whether the----
    Mr. Cohen. Give me a case.
    Mr. Axelrad. Well, I cite several in my testimony where the 
issue is whether the Supreme Court's comment that the kind of 
specialty that would warrant piercing the cap is something like 
patent law where there is special expertise needed.
    Mr. Cohen. Right.
    Mr. Axelrad. Well, some courts have said that litigating 
Social Security cases is a specialty that sometimes warrants 
piercing the cap. Other courts have disagreed. So the courts 
get into litigation over exactly what is the kind of specialty 
that permits piercing the cap.
    When Congress enacted the cap, it was clear that they 
thought the cap would limit the amount paid by the taxpayers in 
the broad run of EAJA cases. It turns out, because even though 
the Supreme Court tried to--by cabining it, I mean reduce the 
degree of ability to litigate exceptions to the cap. It didn't 
work, and despite the cap, despite the Supreme Court decision, 
there are lots and lots of cases going every which way where 
the attorneys have been able to succeed in getting a greater 
attorney fee and fighting over how they can----
    Mr. Cohen. We have gotten to the red light.
    Mr. Axelrad [continuing]. Pierce it.
    Mr. Cohen. So, yes, thank you, sir.
    Mr. Coble. Thank you, Mr. Cohen. The gentleman from South 
Carolina, Mr. Gowdy, is recognized for 5 minutes.
    Mr. Gowdy. Thank you, Mr. Chairman. Professor Wolfman, who 
decides whether the government position was substantially 
justified?
    Mr. Wolfman. Either the court or the agency adjudicator, 
depending on whether it is an administrative case or a court 
case.
    Mr. Gowdy. Who has the burden of proof?
    Mr. Wolfman. The government has the burden to show its 
position was not substantially justified, but in practice that 
makes no difference because there is no factual determination, 
so burdens usually only matter when facts are at stake. It is a 
legal question.
    Mr. Gowdy. Well, what is the standard of proof by which it 
must be proven?
    Mr. Wolfman. A preponderance of the evidence, just like any 
other civil matter.
    Mr. Gowdy. You mentioned a few moments ago the importance 
of having data, so I am hopeful you will have the data for this 
because I don't. The percentage of cases where plaintiffs 
prevailed but the court said the government's position was 
substantially justified?
    Mr. Wolfman. That is an interesting question, and in the 
area of the Social Security and veterans cases, particularly 
veterans cases, it is very high that the--it usually doesn't 
even go to court, the agency typically settles.
    Mr. Gowdy. What about environmental cases?
    Mr. Wolfman. But in non-Social Security and veterans cases, 
I haven't done a study, so I am just--based on my experience, 
the government wins often. I cite just--what I did in my 
testimony is that I just said I am looking for cases in recent 
years in Courts of Appeals where the court found a reasonable--
--
    Mr. Gowdy. No, I think you did a good job with anecdotal 
evidence. I was looking for statistical evidence.
    Mr. Wolfman. I don't know of any study on that, I don't 
know of any study that--I know in the non-Social Security----
    Mr. Gowdy. You do not know what percentage of time 
plaintiffs prevailed but still were not allowed to recoup fees 
because a finder of fact----
    Mr. Wolfman. I do not. I don't know that anyone knows that. 
It would be, again, an interesting study. But I will say this, 
because I know it for a fact, is that in the non-Social 
Security and veterans areas, it is much higher than in those 
other areas.
    Mr. Gowdy. You once, I believe, and I don't want to 
mischaracterize your positions because I didn't know you in 
1994, but you once, I believe, supported the notion of doing 
away with the special factor exemption. Do you still support 
that?
    Mr. Wolfman. What I said was at that time--and I would have 
to look back for sure--is that if we chose a more reasonable 
rate that could go up with inflation, actual fees in the real 
market, as opposed to what has occurred, yes, because----
    Mr. Gowdy. Right. I think you said $175; if we go up to 
$175 we would do away with it.
    Mr. Wolfman. Yes, but that--yes, but with all respect, that 
would not be the case.
    Mr. Gowdy. I am just asking you if you said it, I am not 
asking if you meant it.
    Mr. Wolfman. No, but with all respect that was $175 in 1994 
dollars.
    Mr. Gowdy. Two hundred fifty dollars.
    Mr. Wolfman. That is correct, if we were at $250--
    Mr. Gowdy. What if we went up to $250, would you do away 
with it then?
    Mr. Wolfman. I think if we were at $250 an hour and we had 
a reasonable inflation adjuster, right----
    Mr. Gowdy. We just adjusted for inflation, we just bumped 
it from $175 to $250.
    Mr. Wolfman. Right. And if you had a mandatory reasonable 
inflation adjuster, I am with you on this.
    Mr. Gowdy. Then you would be fine doing away with it?
    Mr. Wolfman. I think that would be reasonable rather than 
necessarily what we have now. We have to appreciate that in the 
vast majority of the cases, the vast majority of the cases, 
what attorneys get and the clients get is the basic EAJA rate 
plus an inflation adjuster, except the agencies, which largely 
don't do any inflation adjustment.
    Mr. Gowdy. All right, let me ask you this because I am 
running out of time quickly. I think you said there are 203 
instances where we have something other than the American rule 
with respect to litigation in----
    Mr. Wolfman. Someone else said 203. I know it is 
approximately 200, yes.
    Mr. Gowdy. Are you an advocate for abolishing the American 
rule in all litigation and letting the finder of fact decide 
whether or not attorney----
    Mr. Wolfman. Absolutely not. Absolutely not. I think if you 
had----
    Mr. Gowdy. You hadn't heard my idea yet. Why don't we let 
the finder of fact decide whether or not litigation was 
frivolous or vexatious?
    Mr. Wolfman. Well, I can answer your question if you will 
allow me.
    Mr. Gowdy. I am going to. I just--I wanted to get my 
question out.
    Mr. Wolfman. I think having essentially the rule in Great 
Britain would deny ordinary action.
    Mr. Gowdy. That is not--what I just laid out is not Great 
Britain's rule. I didn't say loser pays. I said the finder of 
fact decides, the same group that we let decide capital cases, 
the same group that we let decide whether there is liability in 
a medical malpractice case or products case, let the finder of 
fact decide whether or not the lawsuit was frivolous or 
vexatious.
    Mr. Wolfman. Well, first of all----
    Mr. Gowdy. That is not the British rule, agreed?
    Mr. Wolfman. That is correct.
    Mr. Gowdy. Okay.
    Mr. Wolfman. I didn't know that is what you were saying, 
but I will say two things about that. First of all, that is 
already the law in the sense that----
    Mr. Gowdy. Well, wait a second. Can you name me a single 
time--how many times when summary judgment is granted or a 
motion to dismiss is granted does the judge then award 
attorneys fees for filing a frivolous lawsuit? In what 
percentage of the cases does that happen?
    Mr. Wolfman. A very small percentage because there is not--
--
    Mr. Gowdy. Well, then we don't have that rule.
    Mr. Wolfman. Well--Excuse me?
    Mr. Gowdy. Well, then we don't have the rule.
    Mr. Wolfman. We do have that rule. With all respect, we do 
have that rule. Rule 11 applies in every piece of civil 
litigation.
    Mr. Gowdy. How many times has it been enforced? In summary 
judgment cases and just for the viewer, that is where there is 
no dispute over fact, just the law, what percentage of time in 
summary judgment cases are sanctions administered for frivolous 
lawsuits?
    Mr. Wolfman. Well, not often. But with all respect, I don't 
think that proves anything, because all that means is there are 
not that many frivolous cases on purely legal matters.
    Mr. Gowdy. Well, then we don't need rule 11.
    Mr. Wolfman. Huh?
    Mr. Gowdy. Well, then we must not need rule 11 if there are 
no frivolous lawsuits.
    Mr. Wolfman. I didn't say there were none. Rule 11 provides 
an important incentive. But let me give you the other reason 
why I think that would be a poor idea. If you decided fee 
shifting at the back end, right, if you decided frivolity at 
the back end only, and didn't have the 200 fee-shifters at the 
front end, you wouldn't have the encouragement that these fee-
shifters provide at the front end to give litigants to enforce 
our important civil rights, environmental and consumer laws.
    Mr. Gowdy. We lose an incentive to litigate, to bring a 
lawsuit, because there may be a penalty on the back end if you 
lose.
    Mr. Wolfman. This is a debate that people can have. The 
Congress of the United States has decided that it is important 
on the front end in over 200 instances to provide that 
incentive.
    Mr. Gowdy. You are right. And I am asking you if it is 
important in the rest of all the category of cases if it does 
well in these 200.
    Mr. Wolfman. I think probably not. In my judgment it makes 
sense for the Congress to decide which types of litigation it 
wants to incentivize, and not do it on an across-the-board 
basis.
    Mr. Gowdy. My time has expired. Thank you, Mr. Chairman.
    Mr. Coble. The distinguished gentleman from Michigan, Mr. 
Conyers.
    Mr. Conyers. Thank you, Chairman Coble. I would like to 
start with Mrs. Ellis, please. Mrs. Ellis, have you ever used 
the legal services provided by a nonprofit?
    Ms. Ellis. No, sir.
    Mr. Conyers. So then you have never had the opportunity to 
take advantage of the Equal Access to Justice Act's fee 
provision?
    Ms. Ellis. No, sir.
    Mr. Conyers. All right. Thank you.
    Now, for Mr. Baier. I am the one that sent you a list, Mr. 
Baier, of groups that have sent us notice that they strongly 
oppose Government Litigation Savings Act, H.R. 1996. Do you 
have that list in front of you?
    Mr. Baier. I do, Representative Conyers, yes.
    Mr. Conyers. Okay. Now, look on these 3--4 pages. I think 
you will find that there are 46--64, 65 organizations that are 
conservation organizations. I started noting them. The first I 
put a number one by, Alaska Wilderness League; and then number 
two, the Big Black Foot River Keeper; and number three, Butte 
Environmental Council. Do you see those? Do you see those 
numbers?
    Mr. Baier. I do.
    Mr. Conyers. Okay. And out of this over 100, 65 of them are 
environmental organizations. Now, take a look, just scan them. 
Do you recognize any of those organizations?
    Mr. Baier. Congressman Conyers, yes, I recognize a few of 
these, yes.
    Mr. Conyers. Sure. They have a position of opposition to 
this bill. Is there any possible rationale you could suggest 
for this many people that work in the same field that you do, 
or did work, in having so different a view from you about the 
bill that we are discussing today?
    Mr. Baier. I do, sir.
    Mr. Conyers. Please tell me what it is.
    Mr. Baier. Well, I note that some of our larger, more 
recognizable environmental groups in the country are on this 
list such as the Environmental Defense Fund. The Environmental 
Defense Fund--and Defenders of Wildlife are on here as well. 
Defenders of Wildlife have a net worth of $23.7 million.
    Mr. Conyers. Oh, that is terrible.
    Mr. Baier. And that would put them, make them ineligible 
under this bill. Others fall into that same category. For 
example, Earth Justice.
    Mr. Conyers. Okay, that is two. But we got 65.
    Mr. Baier. Well, I would have to analyze it, Congressman, 
to better respond.
    Mr. Conyers. I will give you that list to take home with 
you. And you send it back to me, the ones that you recognize. 
And if you think that you--I assume that you are saying because 
they have so much money they can afford to be against this 
bill.
    Mr. Baier. Well----
    Mr. Conyers. Is that the inference that I am to draw from 
your explaining to me how big and rich this group is?
    Mr. Baier. Well, if I understand your question, sir, some 
of the larger ones on this list have net worths--for example, 
the Humane Society of the United States has a net worth of $160 
million.
    Mr. Conyers. Now, that is really bad. So what?
    Mr. Baier. Excuse me, I am sorry.
    Mr. Conyers. Yeah. I said, so what?
    Mr. Baier. Well, as I understand your question, you were 
wondering why they would oppose the bill.
    Mr. Conyers. Yes.
    Mr. Baier. And I would suggest, sir, because the bill would 
disqualify them from utilizing EAJA on procedural litigation.
    Mr. Conyers. But they were disqualified before this bill. 
They are disqualified now, aren't they?
    Could I get 1 minute, Chairman Coble?
    Mr. Coble. Without objection.
    Mr. Conyers. Okay. I just want to get one question in to 
Professor Axelrad if I can. Is it not true, sir, that on pages 
3 and 8, in the first section on page 3 and the top section on 
page 8, that both of these amounts--oh, well, this is the only 
bill we have got. Aren't these the two places that deny pro-
bono fees to lawyers who win awards, and specifically in this 
bill on page 3, the top, and page 8?
    Mr. Axelrad. You are referring to page 3 of the bill?
    Mr. Conyers. I am.
    Mr. Axelrad. Your citations appear to be correct to me.
    Mr. Conyers. Yeah. Well, thank you. And you agree that this 
is the way you would want to go even though there are over 100 
groups, and not all environmental, some just nonprofits, that 
think that this is a bill that should not advance beyond this 
Committee?
    Mr. Axelrad. I support the entire bill. I did not in my 
statement address the particular provision you are addressing 
now. I see the overall purpose of the bill as in keeping with 
the principle that the EAJA is an exception. It is a one-way, 
loser-pay provision in relevant part that doesn't otherwise 
exist. If a person who makes a claim for money or nonmonetary 
relief from the government and loses a claim, it doesn't matter 
whether the person had substantial justification or not, 
because the American public can't recover its costs in 
defending against that unsubstantial claim, whereas EAJA 
provides the opposite against the----
    Mr. Conyers. Do you know, sir, that you have to win the 
case before the attorney can get--she shakes her head no. You 
don't have to win? You can lose the case in claim fees?
    Mr. Axelrad. Many attorneys do not work on a contingency 
basis.
    Mr. Conyers. Well, on a pro-bono basis you can't work on a 
contingency. The client doesn't have any money.
    Mr. Axelrad. If someone is working on a pro-bono basis, 
they are working without an expectation of compensation. That 
to me is what the term ``pro bono'' means.
    Mr. Conyers. But that is exactly why we have this provision 
in the law, is that if a pro-bono lawyer takes the case and 
prevails, the court can award him legal fees. You object to 
that?
    Mr. Axelrad. I think that the--exceptions to the American 
rule that Congress created in EAJA should be narrowly confined. 
I have not specifically addressed this rule, but I favor the 
general principles that H.R. 1996 introduces.
    Mr. Conyers. Would you, Mr. Chairman, give me the time, 1 
minute more, to ask the other witness?
    Mr. Coble. Without objection.
    Mr. Conyers. Thank you very much. Can you help us, sir, Mr. 
Wolfman, about who gets pro-bono fees and who doesn't under 
this rule and in the general practice of law in the United 
States?
    Mr. Wolfman. So one of the things I think, thankfully, that 
has occurred in this country when lawyers are able to do it, is 
they provide their services to the poorest among us, the 
neediest, the people who are in the most difficult 
circumstances, on a pro-bono basis. It has always been the case 
that if there is a fee-shifting statute involved and the person 
prevails, and in the case of EAJA also the government's 
position is not substantially justified, it has always been the 
case that the pro-bono lawyer can have at least some prospect 
of and recovering a fee in that circumstance.
    Mr. Conyers. But if he wins.
    Mr. Wolfman. This provision--yes. Not only do you have to 
win, but under EAJA you have to effectively show that the 
position of the government is not reasonable. But what this 
bill would do, among other things that I think are unfortunate, 
it specifically says that the court shall reduce or deny all 
fees to the extent commensurate with pro-bono hours. So the 
pro-bono lawyers, many of whom are in this very city, that are 
willing to take on a veterans case, a Social Security case, or 
other cases--I just use those two examples--on a pro-bono basis 
can't get fees under EAJA. It says that. I mean, I am not 
making this up. That is what the bill says.
    Mr. Coble. The gentleman's time has expired.
    Mr. Conyers. And I thank the Chairman for his generosity.
    Mr. Coble. You are indeed welcome.
    We want to thank the witnesses for their testimony today.
    Without objection, all Members will have 5 legislative days 
to submit to the Chair additional written questions for the 
witnesses which we will forward and ask the witnesses to 
respond as promptly as they can so that their answers may be 
made a part of the record. Without objection all Members will 
have 5 legislative days to submit any additional material for 
inclusion in the record.
    [The information referred to follows:]
    With that, again, I thank the witnesses and the hearing 
stands adjourned.
    [Whereupon, at 4:50 p.m., the Subcommittee was adjourned.]





                            A P P E N D I X

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               Material Submitted for the Hearing Record

 Prepared Statement of the Honorable Steve Cohen, a Representative in 
Congress from the State of Tennessee, and Ranking Member, Subcommittee 
              on Courts, Commercial and Administrative Law





                                 
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