[Federal Register Volume 67, Number 54 (Wednesday, March 20, 2002)]
[Proposed Rules]
[Pages 12898-12903]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-6516]


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 Proposed Rules
                                                 Federal Register
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 This section of the FEDERAL REGISTER contains notices to the public of 
 the proposed issuance of rules and regulations. The purpose of these 
 notices is to give interested persons an opportunity to participate in 
 the rule making prior to the adoption of the final rules.
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  Federal Register / Vol. 67, No. 54 / Wednesday, March 20, 2002 / 
Proposed Rules  

[[Page 12898]]



DEPARTMENT OF AGRICULTURE

Office of the Secretary

7 CFR Part 1


Procedures Relating to Awards Under the Equal Access to Justice 
Act

AGENCY: Office of the Secretary, USDA.

ACTION: Proposed rule.

-----------------------------------------------------------------------

SUMMARY: The U.S. Department of Agriculture (``USDA'') proposes to 
amend its regulations implementing the Equal Access to Justice Act 
(``EAJA''). The proposed amendments incorporate modifications enacted 
in the Small Business Regulatory Enforcement Fairness Act of 1996.

DATES: In order to be considered, comments should be submitted by May 
20, 2002.

ADDRESSES: Comments should be directed to Barbara Good, Attorney 
Advisor, Room 3311 South Building, Office of the General Counsel, U.S. 
Department of Agriculture, 14th and Independence Avenue, SW., 
Washington, DC 20250-1400.

FOR FURTHER INFORMATION CONTACT: Barbara S. Good, Attorney Advisor, 
Room 3311 South Building, Office of the General Counsel, U.S. 
Department of Agriculture, 14th and Independence Avenue, SW, 
Washington, DC 20250-1415; telephone (202) 720-8045.

SUPPLEMENTARY INFORMATION: In the Small Business Regulatory Enforcement 
Fairness Act of 1996 (``SBREFA''), Pub. L. No. 104-121, Title II, Mar. 
29, 1996, 100 Stat. 857 to 874, Congress amended EAJA in two 
significant respects with regard to administrative proceedings.
    First, Congress amended 5 U.S.C. 504(a) by adding a new basis for 
recovery under EAJA. Under prior law, only a ``prevailing party'' other 
than the United States in an adversary adjudication before an agency 
was eligible for recovery of fees and expenses. 5 U.S.C. 504(a)(1). 
Pursuant to new paragraph (a)(4), a party to an adversary adjudication 
arising from an agency action to enforce the party's compliance with a 
statutory or regulatory requirement may be entitled to reimbursement of 
fees and expenses. In such enforcement cases, where the demand by the 
agency is ``substantially in excess'' of the decision of the 
adjudicative officer and is ``unreasonable'' when compared with such 
decision under the facts and circumstances of the case, the agency 
adjudicative officer is directed to award to an eligible party the fees 
and other expenses related to defending against the excessive demand. 
Award is qualified if the party has committed a willful violation of 
law or otherwise acted in bad faith, or special circumstances make an 
award unjust.
    SBREFA further amended Section 504(b)(1) to add new subparagraph 
(F), which defines the term ``demand'' as ``the express demand of the 
agency which led to the adversary adjudication, but does not include a 
recitation by the agency of the maximum statutory penalty (i) in the 
administrative complaint, or (ii) elsewhere when accompanied by an 
express demand for a lesser amount.''
    SBREFA also added, in 5 U.S.C. 504(b)(1)(B), a new category of 
applicants eligible for fees based on a claim of excessive demand. In 
addition to the other categories of eligible applicants, a small entity 
as defined in 5 U.S.C. 601 will be eligible for reimbursement with 
respect to a claim of excessive demand in a regulatory or statutory 
enforcement action.
    The second major change, in 5 U.S.C. 504(b)(1)(A), increased from 
$75 per hour to $125 per hour the maximum rate for fees awardable. The 
qualifying language ``unless the agency determines by regulation that 
an increase in the cost of living or a special factor, such as the 
limited availability of qualified attorney or agents for the proceeding 
involved justifies a higher fee'' remains. Departmental rules at 7 CFR 
1.186 currently implementing EAJA attorney fees set a cap of $75 per 
hour. It is appropriate to amend 7 CFR 1.186 to reflect the statutory 
increase to $125 per hour.
    In view of these statutory changes, the Department is proposing 
conforming amendments to its regulations. In addition, the Department 
is making minor changes to modify obsolete provisions related to 
effective dates, and to correct minor errors, and to make minor 
stylistic changes.
    The Department retains its stance concerning the applicability of 
EAJA to National Appeals Division proceedings as set forth in the 
preamble to the final rule for National Appeals Division rules of 
procedure at 64 FR 33367, June 23, 1999.
    This proposed rule has been reviewed under Executive Order No. 
12866 and has been determined that it is not a ``significant regulatory 
action'' since it will not have an annual effect on the economy of $100 
million or more or adversely and materially affect a sector of the 
economy, productivity, competition, jobs, the environment, public 
health or safety, of State, local or tribal governments or communities. 
This proposed rule will not create any serious inconsistencies, or 
otherwise materially alter the budgetary impact of entitlements, 
grants, user fees, or loan programs, or the rights and obligations of 
recipients thereof, and does not raise novel legal or policy issues 
arising out of legal mandates, the President's priorities or principles 
set forth in E.O. 12866. Therefore, this proposed rule has not been 
reviewed by the Office of Management and Budget.
    USDA certifies that this rule will not have a significant impact on 
a substantial number of small entities as defined in the Regulatory 
Flexibility Act, Pub. L. No. 96-534, as amended (5 U.S.C. 601 et seq.).
    USDA has determined that the provisions of the Paperwork Reduction 
Act as amended, 44 U.S.C. chapter 35, do not apply to any collections 
of information contained in this rule because any such collections of 
information are made during the conduct of administrative action 
involving an agency against specific individuals or entities. 5 CFR 
1320.4(a)(2).

List of Subjects in 7 CFR Part 1

    Administrative practice and procedures.
    Accordingly, 7 CFR, Subtitle A, Part 1, Subpart J is proposed to be 
revised to read as follows:

[[Page 12899]]

PART 1--[AMENDED]

Subpart J--Procedures Relating to Awards Under the Equal Access to 
Justice Act in Proceedings Before the Department

    Authority: 5 U.S.C. 504(c)(1).

General Provisions

Sec.
1.180   Definitions.
1.181   Purpose of these rules.
1.182   When EAJA applies.
1.183   Proceedings covered.
1.184   Eligibility of applicants.
1.185   Standards for awards.
1.186   Allowable fees and expenses.
1.187   Rulemaking on maximum rates for attorney fees.
1.188   Awards against other agencies.
1.189   Delegations of authority.

Information Required From Applicants

1.190   Contents of application.
1.191   Net worth exhibit.
1.192   Documentation of fees and expenses.
1.193   Time for filing application.

Procedures for Considering Applications

1.194   Filing and service of documents.
1.195   Answer to application.
1.196   Reply.
1.197   Comments by other parties.
1.198   Settlement.
1.199   Further proceedings.
1.200   Decision.
1.201   Department review.
1.202   Judicial review.
1.203   Payment of award.

General Provisions


Sec. 1.180  Definitions.

    (a) The definitions contained in Sec. 1.132 of this part are 
incorporated into and made applicable to this subpart.
    (b) Adjudicative Officer means an administrative law judge, 
administrative judge, or other person assigned to conduct a proceeding 
covered by EAJA.
    (c) Agency means an organizational unit of the Department whose 
head reports to an official in the Office of the Secretary.
    (d) Agency counsel means the attorney from the Office of the 
General Counsel representing the agency of the Department administering 
the statute involved in the proceeding.
    (e) Days means calendar days.
    (f) Department means the United States Department of Agriculture.


Sec. 1.181  Purpose of these rules.

    The Equal Access to Justice Act, 5 U.S.C. 504 (called ``EAJA'' in 
this subpart), provides for the award of attorney fees and other 
expenses to eligible individuals and entities who are parties to 
certain administrative proceedings (called ``adversary adjudications'') 
before the Department. An eligible party may receive an award when it 
prevails over the Department unless the position of the Department was 
substantially justified or special circumstances make an award unjust. 
Alternatively, an eligible party may receive an award in connection 
with an adversary adjudication arising from an agency action to enforce 
the party's compliance with a statutory or regulatory requirement where 
the demand by the agency is substantially in excess of the decision of 
the adjudicative officer and is unreasonable when compared with such 
decision under the facts and circumstances of the case. The rules in 
this subpart describe the parties eligible for awards and the 
proceedings that are covered. They also explain how to apply for 
awards, and the procedures and standards that the Department will use 
to make awards.


Sec. 1.182  When EAJA applies.

    EAJA applies to any adversary adjudication pending or commenced 
before the Department on or after August 5, 1985, except with respect 
to a proceeding covered under Sec. 1.183(a)(1)(iii) of this part, which 
is effective on or after October 21, 1986. In addition, the provisions 
of Sec. 1.185(b) relating to award for excessive demand apply only to 
adversary adjudications commenced on or after March 29, 1996. Changes 
in maximum rates for attorney fees are effective as of [the effective 
date of the final rule].


Sec. 1.183  Proceedings covered.

    (a)(1) The rules in this subpart apply to adversary adjudications. 
These are:
    (i) Adjudications required by statute to be conducted by the 
Department under 5 U.S.C. 554 in which the position of the Department 
or any other agency of the United States, or any component of an 
agency, is presented by an attorney or other representative who enters 
an appearance and participates in the proceeding,
    (ii) Appeals of decisions of contracting officers made pursuant to 
section 6 of the Contract Disputes Act of 1978 (41 U.S.C. 605) before 
the Agriculture Board of Contract Appeals as provided in section 8 of 
that Act (41 U.S.C. 607), and
    (iii) Any hearing conducted under chapter 38 of title 31, United 
States Code.
    (2) Any proceeding in which the Department may prescribe a lawful 
present or future rate is not covered by EAJA. Proceedings to grant or 
renew licenses also are excluded, but proceedings to modify, suspend, 
or revoke licenses are covered if they are otherwise ``adversary 
adjudications.'' The proceedings covered include adversary 
adjudications under the following statutory provisions.

Agricultural Marketing Agreement Act of 1937 (7 U.S.C. 608c(15)(A))
Animal Quarantine Laws (21 U.S.C. 104, 117, 122, 127, 134e, and 
135a)
Animal Welfare Act (7 U.S.C. 2149)
Archaeological Resources Protection Act (16 U.S.C. 470ff)
Beef Research and Information Act (7 U.S.C. 2912)
Capper-Volstead Act (7 U.S.C. 292)
Cotton Research and Promotion Act (7 U.S.C. 2111)
Egg Products Inspection Act (21 U.S.C. 1047)
Egg Research and Consumer Information Act (7 U.S.C. 2713, 2714(b))
Endangered Species Act (16 U.S.C. 1540(a))
Federal Land Policy and Management Act (43 U.S.C. 1766)
Federal Meat Inspection Act (21 U.S.C. 604, 606, 607(e), 608, 671)
Federal Seed Act (7 U.S.C. 1599)
Horse Protection Act (15 U.S.C. 1823(c), 1825)
Packers and Stockyards Act (7 U.S.C. 193, 204, 213, 218d, 221)
Perishable Agricultural Commodities Act (7 U.S.C. 499c(c), 499d(d), 
499f(c), 499h(a), 499h(b), 499h(c), 499i, 499m(a))
Plant Protection Act (7 U.S.C. 2279e, 7734(b), 7736)
Potato Research and Promotion Act (7 U.S.C. 2620)
Poultry Products Inspection Act (21 U.S.C. 455, 456, 457(d), 467)
Swine Health Protection Act (7 U.S.C. 3804(b), 3805(a))
U.S. Cotton Standards Act (7 U.S.C. 51b, 53)
U.S. Grain Standards Act (7 U.S.C. 79(g)(3), 85, 86)
U.S. Warehouse Act (7 U.S.C. 246, 253)
Virus-Serum-Toxin Act (21 U.S.C. 156)
Wheat and Wheat Foods Research and Nutrition Education Act (7 U.S.C. 
3409)

    (b) The failure of the Department to identify a type of proceeding 
as an adversary adjudication shall not preclude the filing of an 
application by a party who believes the proceeding is covered by EAJA; 
whether the proceeding is covered will then be an issue for resolution 
in proceedings on the application.
    (c) If a proceeding includes both matters covered by EAJA and 
matters specifically excluded from coverage, any award made will 
include only fees and expenses related to covered issues.


Sec. 1.184  Eligibility of applicants.

    (a) To be eligible for an award of attorney fees and other expenses 
under EAJA, the applicant must meet one of the following conditions:
    (1) The applicant must be a prevailing party to the adversary 
adjudication for which it seeks an award; or
    (2) The applicant must be a party to an adversary adjudication 
arising from an agency action to enforce the party's

[[Page 12900]]

compliance with a statutory or regulatory requirement in which the 
demand by the agency was substantially in excess of the decision of the 
adjudicative officer and the demand is unreasonable when compared with 
such decision under the facts and circumstances of the case.
    (b) In addition to the criteria set out in paragraph (a) of this 
section, a party seeking an award must be one of the following:
    (1) An individual with a net worth of not more than $2 million;
    (2) The sole owner of an unincorporated business who has a net 
worth of not more than $7 million, including both personal and business 
interests, and not more than 500 employees;
    (3) A charitable or other tax-exempt organization described in 
section 501(c)(3) of the Internal Revenue Code (26 U.S.C. 501(c)(3)) 
with not more than 500 employees;
    (4) A cooperative association as defined in section 15(a) of the 
Agricultural Marketing Act (2 U.S.C. 1141j(a)) with not more than 500 
employees;
    (5) Any other partnership, corporation, association, unit of local 
government, or organization with a net worth of not more than $7 
million and nor more than 500 employees;
    (6) For purposes only of paragraph (a)(2) of this section, a small 
entity as defined in 5 U.S.C. 601.
    (c) For the purpose of eligibility, the net worth and number of 
employees of an applicant shall be determined as of the date the 
adversary adjudication was initiated: Provided, that for purposes of 
eligibility in proceedings covered by Sec. 1.183(a)(1)(ii) of this 
part, the net worth and number of employees of an applicant shall be 
determined as of the date the applicant filed its appeal under 41 
U.S.C. 606.
    (d) In interpreting the criteria set forth in paragraph (b) of this 
section, the following apply:
    (1) An applicant who owns an unincorporated business will be 
considered as an ``individual'' rather than a ``sole owner of an 
unincorporated business'' if the issues on which the applicant prevails 
are related primarily to personal interests rather than to business 
interests.
    (2) The employees of an applicant include all persons who regularly 
perform services for remuneration for the applicant, under the 
applicant's direction and control. Part-time employees shall be 
included on a proportional basis.
    (3) The net worth and number of employees of the applicant and all 
of its affiliates shall be aggregated to determine eligibility. Any 
individual, corporation, or other entity that directly or indirectly 
controls or owns a majority of the voting shares or other interest of 
the applicant, or any corporation or other entity of which the 
applicant directly or indirectly owns or controls a majority of the 
voting shares or other interest, will be considered an affiliate for 
purposes of this subpart, unless the adjudicative officer determines 
such treatment would be unjust and contrary to the purposes of EAJA in 
light of the actual relationship between the affiliated entities. In 
addition, the adjudicative officer may determine that financial 
relationships of the applicant other than those described in this 
paragraph constitute special circumstances that would make an award 
unjust.
    (4) An applicant that participates in a proceeding primarily on 
behalf of one or more other person or entity that would be ineligible 
is not itself eligible for an award.


Sec. 1.185  Standards for awards.

    (a) Prevailing party. (1) A prevailing applicant may receive an 
award for fees and expenses incurred in connection with a proceeding, 
or in a significant and discrete substantive portion of the proceeding, 
unless the position of the Department was substantially justified. The 
position of the Department includes, in addition to the position taken 
by the Department in the adversary adjudication, the action or failure 
to act by the Department upon which the adversary adjudication is 
based. The burden of proof that an award should not be made to an 
eligible prevailing applicant because the position of the Department 
was substantially justified is on the agency.
    (2) An award to a prevailing applicant will be reduced or denied if 
the applicant has unduly or unreasonably protracted the proceeding or 
if special circumstances make the award sought unjust.
    (b) Excessive demand. (1) If, in an adversary adjudication arising 
from an agency action to enforce a party's compliance with a statutory 
or regulatory requirement, the demand by the agency is substantially in 
excess of the decision of the adjudicative officer and is unreasonable 
when compared with such decision under the facts and circumstances of 
the case, the adjudicative officer shall award to the party the fees 
and other expenses related to defending against the excessive demand, 
unless the party has committed a willful violation of law or otherwise 
acted in bad faith, or special circumstances make an award unjust. Fees 
and expenses awarded under this paragraph shall be paid only as a 
consequence of appropriations provided in advance.
    (2) ``Demand'' means the express demand of the agency which led to 
the adversary adjudication, but does not include a recitation by the 
agency of the maximum statutory penalty:
    (i) In the administrative complaint, or
    (ii) Elsewhere when accompanied by an express demand for a lesser 
amount.


Sec. 1.186  Allowable fees and expenses.

    (a) Awards will be based on rates customarily charged by persons 
engaged in the business of acting as attorneys, agents, and expert 
witnesses, even if the services were made available without charge or 
at reduced rate to the applicant.
    (b) No award for the fee of an attorney or agent under the rules in 
this subpart may exceed $125.00 per hour. No award to compensate an 
expert witness may exceed the highest rate at which the Department pays 
expert witnesses, which is set out at Sec. 1.150 of this part. However, 
an award also may include the reasonable expenses of the attorney, 
agent, or witness as a separate item, if the attorney, agent, or 
witness ordinarily charges clients separately for such expenses.
    (c) In determining the reasonableness of the fee sought for an 
attorney, agent, or expert witness, the adjudicative officer shall 
consider the following:
    (1) If the attorney, agent or witness is in private practice, his 
or her customary fee for similar services, or if an employee of the 
applicant, the fully allocated cost of the services;
    (2) The prevailing rate for similar services in the community in 
which the attorney, agent, or witness ordinarily performs services;
    (3) The time actually spent in the representation of the applicant;
    (4) The time reasonably spent in light of the difficulty or 
complexity of the issues in the proceeding; and
    (5) Such other factors as may bear on the value of the services 
provided.
    (d) The reasonable cost of any study, analysis, engineering report, 
test, project or similar matter prepared on behalf of a party may be 
awarded, to the extent that the charge for the service does not exceed 
the prevailing rate for similar services, and the study or other matter 
was necessary for preparation of the applicant's case.


Sec. 1.187  Rulemaking on maximum rates for attorney fees.

    (a) If warranted by an increase in the cost of living or by special

[[Page 12901]]

circumstances (such as limited availability of attorneys qualified to 
handle certain types of proceedings), the Department may adopt 
regulations providing that attorney fees may be awarded at a rate 
higher than $125 per hour in some or all of the types of proceedings 
covered by this part. The Department will conduct any rulemaking 
proceedings for this purpose under the informal rulemaking procedures 
of the Administrative Procedure Act.
    (b) Any person may file with the Department a petition for 
rulemaking to increase the maximum rate for attorney fees in accordance 
with Sec. 1.28 of this part. The petition should identify the rate the 
petitioner believes the Department should establish and the types of 
proceedings in which the rate should be used. It also should explain 
fully the reasons why the higher rate is warranted. The Department will 
respond to the petition within 60 days after it is filed, by initiating 
a rulemaking proceeding, denying the petition, or taking other 
appropriate action.


Sec. 1.188  Awards against other agencies.

    If an applicant is entitled to an award because it prevails over 
another agency of the United States that participates in a proceeding 
before the Department and takes a position that is not substantially 
justified, the award or an appropriate portion of the award shall be 
made against that agency.


Sec. 1.189  Delegations of authority.

    The Secretary of Agriculture delegates to the Judicial Officer, 
except as otherwise delegated, authority to take final action on 
matters pertaining to EAJA in proceedings covered by the rules in this 
subpart. The Secretary by order or regulation may delegate authority to 
take final action on matters pertaining to EAJA in particular cases or 
categories of cases to other subordinate officials or bodies. With 
respect to proceedings covered under Sec. 1.183(a)(1)(ii) of this part, 
the Board of Contract Appeals is authorized by statute (41 U.S.C. 607) 
to take final action.

Information Required From Applicants


Sec. 1.190  Contents of application.

    (a) An application for an award of fees and expenses under EAJA 
shall identify the applicant and the proceeding for which an award is 
sought. Unless the applicant is an individual, the application shall 
state the number of employees of the applicant and describe briefly the 
type and purpose of its organization or business. The application shall 
also:
    (1) Show that the applicant has prevailed and identify the position 
of the Department that the applicant alleges was not substantially 
justified and shall briefly state the basis for such allegation; or
    (2) Show that the demand by the Department in the proceeding was 
substantially in excess of, and was unreasonable when compared with, 
the decision in the proceeding.
    (b) The application also shall, as appropriate, include a 
declaration that the applicant is a small entity as defined in 5 U.S.C. 
601 or a statement that the applicant's net worth does not exceed $2 
million (if an individual) or $7 million (for all other applicants, 
including their affiliates). However, an applicant may omit this 
statement if:
    (1) It attaches a copy of a ruling by the Internal Revenue Service 
that it qualifies as an organization described in section 501(c)(3) of 
the Internal Revenue Code (26 U.S.C. 501(c)(3)) or, in the case of a 
tax-exempt organization not required to obtain a ruling from the 
Internal Revenue Service on its exempt status, a statement that 
describes the basis for the applicant's belief that it qualifies under 
such section; or
    (2) It states that it is a cooperative association as defined in 
section 15(a) of the Agricultural Marketing Act (12 U.S.C. 114j(a)).
    (c) The application shall state the amount of fees and expenses for 
which an award is sought.
    (d) The application also may include any other matters that the 
applicant wishes the Department to consider in determining whether, and 
in what amount, an award should be made.
    (e) The application shall be signed by the applicant or an 
authorized officer or attorney of the applicant. It also shall contain 
or be accompanied by a written verification under oath or affirmation 
under penalty of perjury that the information provided in the 
application and all accompanying material is true and complete to the 
best of the signer's information and belief.


Sec. 1.191  Net worth exhibit.

    (a) An applicant, except a qualified tax-exempt organization or 
cooperative association, must provide with its application a detailed 
exhibit showing the net worth of the applicant and any affiliates (as 
defined in Sec. 1.184 of this part) when the proceeding was initiated. 
The exhibit may be in any form convenient to the applicant that 
provides full disclosure of the applicant's and its affiliates' assets 
and liabilities and is sufficient to determine whether the applicant 
qualifies under the standards in this subpart. The adjudicative officer 
may require an applicant to file additional information to determine 
its eligibility for an award.
    (b) Ordinarily, the net worth exhibit will be included in the 
public record of the proceeding. However, an applicant that objects to 
public disclosure of information in any portion of the exhibit and 
believes there are legal grounds for withholding it from disclosure may 
submit that portion of the exhibit directly to the adjudicative officer 
in a sealed envelope labeled ``Confidential Financial Information,'' 
accompanied by a motion to withhold the information from public 
disclosure. The motion shall describe the information sought to be 
withheld and explain, in detail, why it falls within one or more of the 
specific exemptions from mandatory disclosure under the Freedom of 
Information Act, 5 U.S.C. 552(b) (1) through (9). The material in 
question shall be served on counsel representing the agency against 
which the applicant seeks an award, but need not be served on any other 
party to the proceeding. If the adjudicative officer finds that the 
information should not be withheld from disclosure, it shall be placed 
in the public record of the proceeding. Otherwise, any request to 
inspect or copy the exhibit shall be disposed of in accordance with the 
established procedures of the Department under the Freedom of 
Information Act (Secs. 1.1 through 1.23 of this part).


Sec. 1.192  Documentation of fees and expenses.

    (a) The application shall be accompanied by full documentation of 
the fees and expenses, including the cost of any study, analysis, 
engineering report, test, project, or similar matter, for which an 
award is sought.
    (b) The documentation shall include an affidavit from any attorney, 
agent, or expert witness representing or appearing on behalf of the 
party, stating the actual time expended and the rate at which fees and 
other expenses were computed and describing the specific services 
performed.
    (1) The affidavit shall state the services performed. In order to 
establish the hourly rate, the affidavit shall state the hourly rate 
which is billed and paid by the majority of clients during the relevant 
time periods.
    (2) If no hourly rate is paid by the majority of clients because, 
for instance, the attorney or agent represents most clients on a 
contingency basis, the attorney or agent shall provide information 
about two attorneys or agents with similar experience, who

[[Page 12902]]

perform similar work, stating their hourly rate.
    (c) The documentation also shall include a description of any 
expenses for which reimbursement is sought and a statement of the 
amounts paid and payable by the applicant or by any other person or 
entity for the services provided.
    (d) The adjudicative officer may require the applicant to provide 
vouchers, receipts, or other substantiation for any fees or expenses 
claimed, pursuant to Sec. 1.199 of this part.


Sec. 1.193  Time for filing application.

    (a) An application may be filed whenever the applicant has 
prevailed in the proceeding or in a significant and discrete 
substantive portion of the proceeding, but in no case later than 30 
days after final disposition of the proceeding by the Department.
    (b) For the purposes of this subpart, final disposition means the 
date on which a decision or order disposing of the merits of the 
proceeding or any other complete resolution of the proceeding, such as 
a settlement or voluntary dismissal, become final and unappealable, 
both within the Department and to the courts.
    (c) If review or reconsideration is sought or taken of a decision 
as to which an applicant believes it has prevailed, proceedings for the 
award of fees shall be stayed pending final disposition of the 
underlying controversy. When the United States appeals the underlying 
merits of an adversary adjudication to a court, no decision on an 
application for fees and other expenses in connection with that 
adversary adjudication shall be made until a final and unreviewable 
decision is rendered by the court on the appeal or until the underlying 
merits of the case have been finally determined pursuant to the appeal.

Procedures for Considering Applications


Sec. 1.194  Filing and service of documents.

    Any application for an award or other pleading or document related 
to an application shall be filed and served on all parties to the 
proceeding in the same manner as other pleadings in the proceeding 
except as provided in Sec. 1.191 of this part for confidential 
financial information. The provisions relating to filing, service, 
extensions of time, and computation of time contained in Sec. 1.147 of 
this part are incorporated into and made applicable to this subpart, 
except that the statutory 30 day time limit on filing the application 
as set out in Sec. 1.193 of this part may not be extended.


Sec. 1.195  Answer to application.

    (a) Within 30 days after service of an application, agency counsel 
may file an answer. If agency counsel fails to timely answer or settle 
the application, the adjudicative officer, upon a satisfactory showing 
of entitlement by the applicant, may make an award for the applicant's 
allowable fees and expenses.
    (b) If agency counsel and the applicant believe that the issues in 
the fee application can be settled, they may jointly file a statement 
of intent to negotiate a settlement. The filing of this statement shall 
extend the time for filing an answer for an additional 30 days, and 
further extensions may be granted by the adjudicative officer upon 
request by agency counsel and the applicant.
    (c) The answer shall explain in detail any objections to the award 
requested and identify the facts relied on in support of agency 
counsel's position. If the answer is based on any alleged facts not 
already in the record of the proceeding, agency counsel shall include 
with the answer either supporting affidavits or a request for further 
proceedings under Sec. 1.199 of this part.


Sec. 1.196  Reply.

    Within 15 days after service of an answer, the applicant may file a 
reply. If the reply is based on any alleged facts not already in the 
record of the proceeding, the applicant shall include with the reply 
either supporting affidavits or a request for further proceedings under 
Sec. 1.199 of this part.


Sec. 1.197  Comments by other parties.

    Any party to a proceeding other than the applicant and agency 
counsel may file comments on an application within 30 days after it is 
served or on an answer within 15 days after it is served. A commenting 
party may not participate further in proceedings on the application, 
unless the adjudicative officer determines that the public interest 
requires such participation in order to permit full exploration of 
matters raised in the comments.


Sec. 1.198  Settlement.

    The applicant and agency counsel may agree on a proposed settlement 
of the award before final action on the application, either in 
connection with a settlement of the underlying proceeding, or after the 
underlying proceeding has been concluded. If a prevailing party and 
agency counsel agree on a proposed settlement of an award before an 
application has been filed, the application shall be filed with the 
proposed settlement.


Sec. 1.199  Further proceedings.

    (a) Ordinarily, the determination of an award will be made on the 
basis of the written record. However, on request of either the 
applicant or agency counsel, or on his or her own initiative, the 
adjudicative officer may order further proceedings, such as an informal 
conference, oral argument, additional written submissions or, as to 
issues other than substantial justification (such as the applicant's 
eligibility or substantiation of fees and expenses), pertinent 
discovery or an evidentiary hearing. Such further proceedings shall be 
held only when necessary for full and fair resolution of the issues 
arising from the application, and shall be conducted as promptly as 
possible. Whether the position of the Department was substantially 
justified shall be determined on the basis of the administrative 
record, as a whole, which is made in the adversary adjudication for 
which fees and other expenses are sought.
    (b) A request that the adjudicative officer order further 
proceedings under this section shall identify specifically the 
information sought or the disputed issues, and shall explain 
specifically why the additional proceedings are necessary to resolve 
the issues.
    (c) In the event that an evidentiary hearing is held, it shall be 
conducted pursuant to Secs. 1.130 through 1.151 of this part, except 
that any hearing in a proceeding covered by Sec. 1.183(a)(1)(ii) of 
this part shall be conducted pursuant to Rules 17 through 25 of the 
Board of Contract Appeals contained in Sec. 24.21 of this title.


Sec. 1.200  Decision.

    The adjudicative officer or Board of Contract Appeals shall issue 
an initial decision on the application as expeditiously as possible 
after completion of proceedings on the application. Whenever possible, 
the decision shall be made by the same administrative judge or panel 
that decided the contract appeal for which fees are sought. The 
decision shall include written findings and conclusions on the 
applicant's eligibility and status as a prevailing party, and an 
explanation of the reasons for any difference between the amount 
requested and the amount awarded. This decision also shall include, if 
at issue, findings on whether the position of the Department was 
substantially justified, whether the applicant unduly protracted the 
proceedings, or whether special circumstances make an award unjust. If 
the applicant has sought an award against more than one agency, the 
decision shall allocate responsibility for

[[Page 12903]]

payment of any award made among the agencies, and shall explain the 
reasons for the allocation made.


Sec. 1.201  Department review.

    (a) Except with respect to a proceeding covered by 
Sec. 1.183(a)(1)(ii) of this part either the applicant or agency 
counsel may seek review of the initial decision on the fee application, 
in accordance with the provisions of Secs. 1.145(a) and 1.146(a) of 
this part or in accordance with any delegation made pursuant to 
Sec. 1.189 of this part. If neither the applicant nor agency counsel 
seeks review, the initial decision on the fee application shall become 
a final decision of the Department 35 days after it is served upon the 
applicant. If review is taken, it will be in accord with the provisions 
of Secs. 1.145(b) through (i) and 1.146(b) of this part, or
    (b) With respect to a proceeding covered by Sec. 1.183(a)(1)(ii) of 
this part, either party may seek reconsideration of the decision on the 
fee application in accordance with Rule 29 of the Board of Contract 
Appeals contained in Sec. 24.21 of this title. In addition, either 
party may appeal a decision of the Board of Contract Appeals to the 
Court of Appeals for the Federal Circuit in accordance with 41 U.S.C. 
607.


Sec. 1.202  Judicial review.

    Judicial review of final agency decisions on awards may be sought 
as provided in 5 U.S.C. 504(c)(2).


Sec. 1.203  Payment of award.

    An applicant seeking payment of an award shall submit to the head 
of the agency administering the statute involved in the proceeding a 
copy of the final decision of the Department granting the award, 
accompanied by a statement that the applicant will not seek review of 
the decision in the United States courts. The agency will pay the 
amount awarded to the applicant within 60 days, unless judicial review 
of the award or of the underlying decision of the adversary 
adjudication has been sought by the applicant or any other party to the 
proceeding.

    Dated: February 25, 2002.
Ann M. Veneman,
Secretary of Agriculture.
[FR Doc. 02-6516 Filed 3-19-02; 8:45 am]
BILLING CODE 3410-14-P