New EAJA Decision in the DC Circuit

The Equal Access to Justice Act (EAJA) directs a court to award fees and other expenses to prevailing party in a civil action against the United States unless the government’s position was substantially justified or special circumstances make an award unjust. The EAJA has been used to recover attorney’s fees from the United States in connection with challenges to federal administrative actions. In the case of SecurityPoint Holdings, Inc. v. TSA, decided on September 2, 2016, the U.S. Court of Appeals for the D.C. Circuit held that SecurityPoint was entitled to substantial attorney’s fees (in the amount of $86,714.78) under the EAJA when its successful litigation against the TSA was a remand to the agency that required some corrective action. In so ruling, the Court of Appeals overruled Waterman Steamship Corp. v. Maritime Subsidy Board, a decision that had the effect of making SecurityPoint ineligible for the award of attorney’s fees, and may expand the right to recover these fees in the future.

SecurityPoint provides plastic bins used to secure items collected from airline passengers as part of TSA’s airport security program. In 2014, the DC Circuit agreed with SecurityPoint that administrative actions taken by TSA (with respect to advertising on the bins) were legally disadvantageous to SecurityPoint, and that TSA’s response to its complaints, in the form of a letter from its chief counsel, was a final action that could be reviewed by the courts under the Administrative Procedure Act.  In its October 28, 2014 decision in  SecurityPoint Holdings, Inc. v. TSA, the Court of Appeals held that TSA’s action was arbitrary and capricious, and it the matter was remanded to the TSA for correction. When that happened, SecurityPoint made a timely request for attorney’s fees in the amount of $108,393.48 under the EAJA. In opposing this fee request, TSA argued that, under DC Circuit precedent, SecurityPoint was not a prevailing party because it had achieved only a “purely procedural victory” as a result of the remand. The Court of Appeals then reviewed its precedents in the perspective of intervening Supreme Court interpretations of the EAJA and, in particular, Shalala v. Schaefer, and held that the remand “effectuated a court-ordered change in the legal relationship of the parties”, and SecurityPoint was eligible to receive attorney’s fees from the government. Consequently, “a petitioner who secures a remand terminating the case and requiring further administrative proceedings in light of agency error is a prevailing party without regard to the outcome on remand.”

This ruling may encourage litigants to seek attorney’s fees when they have some success against the government when litigating adverse administrative agency actions.