[Congressional Record Volume 144, Number 7 (Thursday, February 5, 1998)]
[Senate]
[Pages S452-S453]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. FEINGOLD:
  S. 1613. A bill to reform the regulatory process, and for other 
purposes; to the Committee on the Judiciary.


               EQUAL ACCESS TO JUSTICE AMENDMENTS OF 1998

  Mr. FEINGOLD. Mr. President, I rise today to introduce the Equal 
Access to Justice Reform Amendments of 1998. This legislation contains 
necessary improvements to existing law, the Equal Access to Justice 
Act, which will streamline and improve the current process of awarding 
attorney's fees to private parties who prevail in litigation against 
the government of the United States. I am introducing this legislation 
for the second consecutive Congress because I believe the reforms 
embodied in this legislation are important steps in reducing the 
government generated burden under which many individuals and small 
businesses currently operate.
  Over the past few years, certainly since the elections of 1994, many 
Members of the Senate have taken to the floor and spoken about the 
importance of ``getting government off the backs of the American 
people.'' We often hear about the need to reform government in very 
fundamental ways that effect people all across this nation. I agree and 
the legislation I propose here today deals directly with some aspects 
of the concerns we have heard in this chamber, by assisting everyday 
Americans who face legal battles with the federal government and 
prevail.
  At the outset, it is important to understand what the Equal Access to 
Justice Act is, and why it exists. The premise is very simple, EAJA 
places individuals and small businesses who face the United States 
Government in litigation, on equal footing by establishing guidelines 
for the award of attorney's fees when the individual or small business 
prevails. Quite simply, EAJA acknowledges that the resources available 
to the federal government in a legal dispute far outweigh those 
available to everyday Americans. This disparity is resolved by 
requiring the government, in certain instances, to pay the attorney's 
fees of successful private parties. By giving successful parties the 
right to seek attorney's fees from the United States, EAJA seeks to 
prevent small business owners from having to risk their companies in 
order to seek justice.
  My interest in this issue predates my election to the Senate and 
arises from my experience both as a private attorney and a Member of 
the Senate in my home state of Wisconsin. While in private practice, I 
became aware of how the ability to recoup attorney's fees is often the 
initial inquiry which must be made when deciding whether or not to seek 
redress in the courts. The significance of this factor should not be 
underestimated. Upon entering the State Senate, I authored legislation 
modeled on the federal law. Today, section 814.246 of the Wisconsin 
statutes contains provisions similar to the federal EAJA statute.
  It seemed to me then, as it does now, that we should do what we can 
to help ease the burdens on parties who need to have their claims 
reviewed and decided by impartial decision makers. To this end, I have 
reviewed the existing federal statutes with an eye toward improving 
them and making them work better. I believe that my legislation does 
just that. The bill I am introducing today, does a number of things to 
make EAJA more effective for individuals and small business men and 
women all across this country.
  One provision of my original bill that I introduced previously, 
raising the hourly attorneys fee cap to $125 from $75, has already been 
enacted as part of the Small Business Fair Treatment Act signed into 
law during the 104th Congress. While I am pleased that significant 
change was adopted, my legislation goes further by eliminating the 
existing ``special factors'' language which allowed the fee cap to be 
increased in certain circumstances. I believe the $125 level is 
consistent with the going rate and obviates the need for ``special 
factor'' language which often serves to slow the recovery process. 
Further, my legislation explicitly establishes a formula for 
calculating cost-of-living adjustments for awards and eliminates the 
often time consuming evaluation that was previously required in the 
absence of a specific standard. Both of these changes, coupled with the 
fee increase will work to make EAJA more efficient and effective for 
Americans.
  Another significant factor of my legislation is the elimination of 
the language which allows the government to escape paying attorneys' 
fees even if it loses a suit but can provide a substantial 
justification for its action. I believe that if an individual or small 
business battles the federal government in an adversarial proceeding 
and prevails, the government should pay the fees incurred. Imagine the 
scenario of a person who spends countless time and money dueling with 
the government and prevails, only to find out that they must now 
undergo the additional step of litigating the justification of the 
underlying governmental action. For the government, with its vast 
resources, this additional step poses no difficulty, but for the 
citizen it may simply not be financially feasible. A 1992 study 
prepared by University of Virginia Professor Harold Krent on behalf of 
the Administrative Conference of the United States found that only a 
small percentage of EAJA awards were denied because of the substantial 
justification defense and that while it is impossible to determine the 
exact cost of litigating the issue of justification, it is his opinion, 
based upon review of cases in 1989 and 1990, that while the substantial 
justification defense may save some money awards, it

[[Page S453]]

was not enough to justify the cost of the additional litigation. In 
short, eliminating this often burdensome second step is a cost 
effective step which will streamline recovery under EAJA.
  The final point in regard to streamlining and improving EAJA is 
language designed to encourage settlement and avoid costly and 
protracted litigation. Under the bill, the government is provided the 
ability to make an offer of settlement up to 10 days prior to a hearing 
on a fees claim. If the government's offer is rejected and the 
prevailing party seeking recovery ultimately wins a smaller award, that 
party is not entitled to attorneys' fees and costs they incurred after 
the date of government's offer. Again, this will speed the process and 
thereby reduce the time and expense of the litigation.
  We all know that the American small business owner has a difficult 
road to make ends meet and that unnecessary or overly burdensome 
government regulation can be a formidable obstacle to doing business. 
It can be the difference between success or failure. The Equal Access 
to Justice Act was conceived and implemented to help overcome the 
formidable power of the federal government. In this regard it has 
helped many Americans do just that. The legislation I am offering today 
will make EAJA more effective for more Americans while at the same time 
deterring the government from acting in an indefensible and unwarranted 
manner.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1613

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. EQUAL ACCESS TO JUSTICE REFORM.

       (a) Short Title.--This Act may be cited as the ``Equal 
     Access to Justice Reform Amendments of 1998''.
       (b) Award of Costs and Fees.--
       (1) Administrative proceedings.--Section 504(a)(2) of title 
     5, United States Code, is amended by inserting after ``(2)'' 
     the following: ``At any time after the commencement of an 
     adversary adjudication covered by this section, the 
     adjudicative officer may ask a party to declare whether such 
     party intends to seek an award of fees and expenses against 
     the agency should such party prevail.''.
       (2) Judicial proceedings.--Section 2412(d)(1)(B) of title 
     28, United States Code, is amended by inserting after ``(B)'' 
     the following: ``At any time after the commencement of an 
     adversary adjudication covered by this section, the court may 
     ask a party to declare whether such party intends to seek an 
     award of fees and expenses against the agency should such 
     party prevail.''.
       (c) Hourly Rate for Attorney Fees.--
       (1) Administrative proceedings.--Section 504(b)(1)(A)(ii) 
     of title 5, United States Code, is amended by striking all 
     beginning with ``$125 per hour'' and inserting ``$125 per 
     hour unless the agency determines by regulation that an 
     increase in the cost-of-living based on the date of final 
     disposition justifies a higher fee);''.
       (2) Judicial proceedings.--Section 2412(d)(2)(A)(ii) of 
     title 28, United States Code, is amended by striking all 
     beginning with ``$125 per hour'' and inserting ``$125 per 
     hour unless the court determines that an increase in the 
     cost-of-living based on the date of final disposition 
     justifies a higher fee);''.
       (d) Payment From Agency Appropriations.--
       (1) Administrative proceedings.--Section 504(d) of title 5, 
     United States Code, is amended by adding at the end the 
     following: ``Fees and expenses awarded under this subsection 
     may not be paid from the claims and judgments account of the 
     Treasury from funds appropriated pursuant to section 1304 of 
     title 31.''.
       (2) Judicial proceedings.--Section 2412(d)(4) of title 28, 
     United States Code, is amended by adding at the end the 
     following: ``Fees and expenses awarded under this subsection 
     may not be paid from the claims and judgments account of the 
     Treasury from funds appropriated pursuant to section 1304 of 
     title 31.''.
       (e) Offers of Settlement.--
       (1) Administrative proceedings.--Section 504 of title 5, 
     United States Code, is amended--
       (A) by redesignating subsections (e) and (f) as subsections 
     (f) and (g), respectively; and
       (B) by inserting after subsection (d) the following new 
     subsection:
       ``(e)(1) At any time after the filing of an application for 
     fees and other expenses under this section, an agency from 
     which a fee award is sought may serve upon the applicant an 
     offer of settlement of the claims made in the application. If 
     within 10 days after service of the offer the applicant 
     serves written notice that the offer is accepted, either 
     party may then file the offer and notice of acceptance 
     together with proof of service thereof.
       ``(2) An offer not accepted shall be deemed withdrawn. The 
     fact that an offer is made but not accepted shall not 
     preclude a subsequent offer. If any award of fees and 
     expenses for the merits of the proceeding finally obtained by 
     the applicant is not more favorable than the offer, the 
     applicant shall not be entitled to receive an award for 
     attorneys' fees or other expenses incurred in relation to the 
     application for fees and expenses after the date of the 
     offer.''.
       (2) Judicial proceedings.--Section 2412 of title 28, United 
     States Code, is amended--
       (A) by redesignating subsections (e) and (f) as subsections 
     (f) and (g), respectively; and
       (B) by inserting after subsection (d) the following new 
     subsection:
       ``(e)(1) At any time after the filing of an application for 
     fees and other expenses under this section, an agency of the 
     United States from which a fee award is sought may serve upon 
     the applicant an offer of settlement of the claims made in 
     the application. If within 10 days after service of the offer 
     the applicant serves written notice that the offer is 
     accepted, either party may then file the offer and notice of 
     acceptance together with proof of service thereof.
       ``(2) An offer not accepted shall be deemed withdrawn. The 
     fact that an offer is made but not accepted shall not 
     preclude a subsequent offer. If any award of fees and 
     expenses for the merits of the proceeding finally obtained by 
     the applicant is not more favorable than the offer, the 
     applicant shall not be entitled to receive an award for 
     attorneys' fees or other expenses incurred in relation to the 
     application for fees and expenses after the date of the 
     offer.''.
       (f) Elimination of Substantial Justification Standard.--
       (1) Administrative proceedings.--Section 504 of title 5, 
     United States Code, is amended--
       (A) in subsection (a)(1), by striking all beginning with 
     ``, unless the adjudicative officer'' through ``expenses are 
     sought''; and
       (B) in subsection (a)(2), by striking ``The party shall 
     also allege that the position of the agency was not 
     substantially justified.''.
       (2) Judicial proceedings.--Section 2412(d) of title 28, 
     United States Code, is amended--
       (A) in paragraph (1)(A), by striking ``, unless the court 
     finds that the position of the United States was 
     substantially justified or that special circumstances make an 
     award unjust'';
       (B) in paragraph (1)(B), by striking ``The party shall also 
     allege that the position of the United States was not 
     substantially justified. Whether or not the position of the 
     United States was substantially justified shall be determined 
     on the basis of the record (including the record with respect 
     to the action or failure to act by the agency upon which the 
     civil action is based) which is made in the civil action for 
     which fees and other expenses are sought.''; and
       (C) in paragraph (3), by striking ``, unless the court 
     finds that during such adversary adjudication the position of 
     the United States was substantially justified, or that 
     special circumstances make an award unjust''.
       (g) Reports to Congress.--
       (1) Administrative proceedings.--No later than 180 days 
     after the date of the enactment of this Act, the 
     Administrative Conference of the United States shall submit a 
     report to Congress--
       (A) providing an analysis of the variations in the 
     frequency of fee awards paid by specific Federal agencies 
     under the provisions of section 504 of title 5, United States 
     Code; and
       (B) including recommendations for extending the application 
     of such sections to other Federal agencies and administrative 
     proceedings.
       (2) Judicial proceedings.--No later than 180 days after the 
     date of the enactment of this Act, the Department of Justice 
     shall submit a report to Congress--
       (A) providing an analysis of the variations in the 
     frequency of fee awards paid by specific Federal districts 
     under the provisions of section 2412 of title 28, United 
     States Code; and
       (B) including recommendations for extending the application 
     of such sections to other Federal judicial proceedings.
       (h) Effective Date.--The provisions of this Act and the 
     amendments made by this Act shall take effect 30 days after 
     the date of the enactment of this Act and shall apply only to 
     an administrative complaint filed with a Federal agency or a 
     civil action filed in a United States court on or after such 
     date.
                                 ______