Equal Access to Justice Reform Act of 2005 - Includes within the functions and duties of the Small Business Administration's (SBA's) Office of Advocacy ensuring that the justice system remains accessible to small businesses for the resolution of disputes with the Federal Government.
Directs the Office to advise, cooperate with, and consult with the President and Attorney General regarding provisions concerning the awarding of Federal contracts to small businesses and minority-, female-, and veteran-owned businesses.
Requires the Attorney General to report to specified congressional committees on: (1) the effectiveness of the Equal Access to Justice Act (EAJA) in achieving its purpose of easing the burden upon small businesses of engaging in dispute resolution with the Federal Government; (2) variations in the frequency and amounts of fee awards paid by specified Federal entities; and (3) recommendations for congressional oversight or legislative changes.
Eliminates the EAJA's: (1) substantial justification standard whereby the Government can deny attorney's fees to prevailing parties if the agency's position was substantially justified; and (2) rate cap on expert witness and attorney's fees.
Sets forth provisions regarding settlement offers, declarations of intent to seek a fee award, payments from agency appropriations, and taxpayer eligibility for fee awards.
Defines "prevailing party" in EAJA cases to include a party whose pursuit of a non-frivolous claim or defense was a catalyst for a voluntary or unilateral change in position by the opposing party that provides any significant part of the relief sought.
[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H.R. 435 Introduced in House (IH)]
109th CONGRESS
1st Session
H. R. 435
To amend the provisions of titles 5 and 28, United States Code,
relating to equal access to justice, award of reasonable costs and
fees, and administrative settlement offers, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
February 1, 2005
Mr. Manzullo (for himself and Mr. Blumenauer) introduced the following
bill; which was referred to the Committee on the Judiciary, and in
addition to the Committee on Small Business, for a period to be
subsequently determined by the Speaker, in each case for consideration
of such provisions as fall within the jurisdiction of the committee
concerned
_______________________________________________________________________
A BILL
To amend the provisions of titles 5 and 28, United States Code,
relating to equal access to justice, award of reasonable costs and
fees, and administrative settlement offers, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Equal Access to Justice Reform Act
of 2005''.
SEC. 2. FINDINGS AND STATEMENT OF PURPOSE.
(a) Findings.--The Congress finds that--
(1) the Equal Access to Justice Act (Public Law 96-481; 94
Stat. 2325 et seq.) (in this section referred to as ``EAJA'')
was intended to make the justice system more accessible to
individuals of modest means, small businesses, and nonprofit
organizations (in this section collectively referred to as
``small parties'') through limited recovery of their attorneys
fees when they prevail in disputes with the Federal Government;
(2) although EAJA has succeeded, at modest cost, in
improving access to the justice system for small parties, EAJA
retains formidable barriers to attorneys' fees recovery (even
for small parties that completely prevail against the
Government), as well as inefficient and costly mechanisms for
determining the fees recovery;
(3) among the barriers retained by EAJA are--
(A) EAJA's ``substantial justification defense'',
whereby the Government can deny attorneys' fees
recovery to prevailing small parties if the Government
can show that its position, although proven illegal,
was not abusive or entirely unreasonable;
(B) EAJA's hourly rate cap on attorneys' fees of
$125, which is well below the market rate for competent
legal services in many legal markets (especially for
complex and high-risk litigation against the Federal
Government) and thus prevents fair reimbursement of
attorneys' fees for small parties and discourages
competent counsel from undertaking meritorious cases on
a contingency or reduced-fee basis; and
(C) EAJA's outdated small business eligibility
requirements, which have not increased or indexed for
inflation the net worth threshold of $7,000,000
established in 1985;
(4) among the inefficiencies retained by EAJA are--
(A) EAJA's substantial justification defense, which
initiates collateral litigation over attorneys' fees
recovery that both consumes significant Federal
resources and prolongs the time, expense, and risk of
pursuing fees recovery to the prevailing small party;
(B) EAJA's omission of any mechanism (such as the
offer in compromise feature of Federal Rule of Civil
Procedure 68) that would apply after a small party has
prevailed on the merits of its claim to encourage both
sides to reach a prompt and reasonable settlement of
attorneys' fees;
(C) EAJA's failure to create an educational and
technical assistance function within an appropriate
agency to facilitate more efficient use, settlement,
and payment of claims under EAJA; and
(D) EAJA's failure to reassign congressional
reporting obligations to an appropriate, existing
agency (EAJA lodges annual congressional reporting with
the Administrative Conference of the United States, an
agency which ceased to exist in 1995);
(5) none of these barriers or inefficiencies exists in the
primary Federal fee-shifting statute applicable to State and
local governments, Revised Statutes section 722 (42 U.S.C.
1988(b)), resulting in--
(A) an unequal level of accountability to Federal
law among governments in the United States (shielding
the Federal Government to a greater degree than State
and local governments from the consequences of
violating Federal law);
(B) an uneven playing field for small party victims
of Federal law violations (discouraging resistance to
illegal action by the Federal Government); and
(C) an inefficient use of Federal agency resources
(burdening the Federal budget);
(6) a further barrier and inefficiency is the practice of
Federal agencies of paying their EAJA liabilities from the
General Treasury rather than their own agency budgets,
relieving those agencies of the financial consequences of their
misconduct (i.e., EAJA liability) and burdening the Federal
budget unnecessarily;
(7) it is in the national interest to remove these barriers
and inefficiencies for small parties, particularly small
business owners, involved in disputes with the Federal
Government in order to develop sound policies relative to the
national economy in which small businesses play a significant
and strategic role; and
(8) the removal of these barriers and inefficiencies is
essential to--
(A) equalize the level of accountability to Federal
law among governments in the United States;
(B) discourage marginal or abusive Federal
enforcement actions directed at small parties;
(C) stop the practice of paying EAJA liabilities
from the General Treasury, which has insulated agencies
from the financial consequences of their misconduct and
burdened the Federal budget unnecessarily;
(D) refine and improve Federal policies through
adjudication;
(E) promote a fair and cost-effective process for
prompt settlement and payment of attorneys' fees
claims; and
(F) provide a fairer opportunity for full
participation by small businesses in the free
enterprise system, further increasing the economic
vitality of the Nation.
(b) Purpose.--It is, therefore, the purpose of this Act to remove
existing barriers and inefficiencies in EAJA in order to--
(1) equalize the level of accountability to Federal law
among governments in the United States;
(2) discourage marginal or abusive Federal enforcement
actions directed at small parties;
(3) stop the practice of paying EAJA liabilities from the
General Treasury, which has insulated agencies from the
financial consequences of their misconduct and burdened the
Federal budget unnecessarily;
(4) refine and improve Federal policies through
adjudication;
(5) promote a fair and cost-effective process for prompt
settlement and payment of attorneys' fees claims; and
(6) provide a fairer opportunity for full participation by
small businesses in the free enterprise system, further
increasing the economic vitality of the Nation.
(c) Compliance Policy.--In complying with the statement of
congressional policy expressed in this section, each Federal agency, to
the maximum extent practicable, should--
(1) avoid unjustified enforcement actions directed at small
parties covered by EAJA;
(2) alleviate unnecessary burdens of compliance with
justified enforcement actions directed at small parties covered
by EAJA; and
(3) minimize impediments to prompt resolution and payment
of reasonable attorneys' fees to prevailing small parties
covered by EAJA.
SEC. 3. REPORTING AND TECHNICAL ASSISTANCE BY OFFICE OF ADVOCACY.
(a) Functions of Office of Advocacy.--Section 202 of Public Law 94-
305 (15 U.S.C. 634b) is amended--
(1) in paragraph (3), by inserting before the semicolon at
the end the following: ``and for ensuring that the justice
system remains accessible to small businesses for the
resolution of disputes with the Federal Government;''; and
(2) by striking paragraph (11) and inserting the following:
``(11) advise, cooperate with, and consult with the
President and Attorney General with respect to section 303(b)
of the Small Business Economic Policy Act of 1980 (15 U.S.C.
631b(b)) and section 504(e) of title 5, United States Code;
and''.
(b) Duties of Office of Advocacy.--Section 203 of Public Law 94-305
(15 U.S.C. 634c) is amended--
(1) in paragraph (2), by inserting before the semicolon at
the end the following: ``, including the resolution of disputes
with the Federal Government and the role of procedures
established by the Equal Access to Justice Act (Public Law 96-
481; 94 Stat. 2325) in such disputes''; and
(2) in paragraph (3), by inserting after ``the Small
Business Act'' the following: ``, including those related to
the Equal Access to Justice Act,''.
(c) Reports to Congress.--
(1) In general.--Not later than 180 days after the date of
the enactment of this Act, the Attorney General, in cooperation
with the Chief Counsel for Advocacy of the Small Business
Administration, shall transmit to the congressional committees
specified in paragraph (2) a report containing--
(A) an analysis of the effectiveness of the Equal
Access to Justice Act (Public Law 96-481; 94 Stat.
2325) (in this paragraph referred to as ``EAJA'') in
achieving its purpose to ease the burden upon small
businesses and other small parties covered by EAJA of
engaging in dispute resolution with the Federal
Government, including--
(i) the relative awareness of EAJA in the
small business community;
(ii) the relative awareness of EAJA's
requirements among Federal agencies;
(iii) the extent and quality of rules and
regulations adopted by each Federal agency for
processing, resolving, and paying attorneys'
fees claims under EAJA;
(iv) the extent to which each Federal
agency claims any exemptions in whole or in
part from EAJA's coverage;
(v) the frequency or degree of use of
EAJA's procedures by prevailing small
businesses; and
(vi) an analysis of the costs and benefits
of EAJA generally;
(B) an analysis of the variations in the frequency
and amounts of fee awards paid by specific Federal
agencies and within specific Federal circuits and
districts under section 504 of title 5, United States
Code, and section 2412 of title 28, United States Code,
including the number and total dollar amount of all
claims filed with, and all claims processed, settled,
litigated, and paid by, each agency under EAJA; and
(C) recommendations for congressional oversight or
legislative changes with respect to EAJA, including any
recommendations for promulgation or amendment of
regulations issued under EAJA by specific Federal
agencies.
(2) Specified committees.--The congressional committees
referred to in paragraph (1) are the following:
(A) The Committee on the Judiciary and the
Committee on Small Business of the House of
Representatives.
(B) The Committee on the Judiciary and the
Committee on Small Business and Entrepreneurship of the
Senate.
(3) Report on small business and competition.--Section 303
of the Small Business Economic Policy Act of 1980 (15 U.S.C.
631b) is amended--
(A) in subsection (a) by striking paragraph (5) and
inserting the following:
``(5) recommend a program for carrying out the policy
declared in section 302 (including a policy to ensure that the
justice system remains accessible to small business enterprises
for the resolution of disputes with the Federal Government),
together with such recommendations for legislation as the
President may deem necessary or desirable.'';
(B) in subsection (b)--
(i) by striking ``(b)'' and inserting
``(b)(1)''; and
(ii) by adding at the end the following:
``(2) The President, after consultation with the Chief Counsel for
Advocacy of the Small Business Administration and the Attorney General,
shall transmit simultaneously as an appendix to such annual report, a
report that describes, by agency and department--
``(A) the total number of claims filed, processed, settled,
and litigated by small business concerns under section 504 of
title 5, United States Code, and section 2412 of title 28,
United States Code (originally enacted pursuant to the Equal
Access to Justice Act (Public Law 96-481; 94 Stat. 2325));
``(B) the total dollar amount of all outstanding awards and
settlements to small business concerns under such sections;
``(C) the total dollar amount of all claims paid to small
business concerns under such sections;
``(D) the underlying legal claims involved in each
controversy with small business concerns under such sections;
and
``(E) any other relevant information that the President
determines may aid Congress in evaluating the impact on small
business concerns of such sections.
``(3) Each agency shall provide the President with such information
as is necessary for the President to comply with the requirements of
this subsection.''; and
(C) in subsection (d)--
(i) by striking ``(d)'' and inserting
``(d)(1)''; and
(ii) by adding at the end the following:
``(2) All reports concerning the Equal Access to Justice Act
(Public Law 96-481; 94 Stat. 2325), or the congressional policy to
ensure that the justice system remains accessible to small business
enterprises for the resolution of disputes with the Federal Government,
shall be transmitted to the following congressional committees:
``(A) The Committee on the Judiciary and the Committee on
Small Business of the House of Representatives.
``(B) The Committee on the Judiciary and the Committee on
Small Business and Entrepreneurship of the Senate.''.
SEC. 4. EQUAL ACCESS FOR SMALL PARTIES IN CIVIL AND ADMINISTRATIVE
PROCEEDINGS.
(a) 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 ``, unless
the adjudicative officer'' and all that follows through
the period at the end and inserting a period; 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 of title 28, United
States Code, is amended--
(A) in subsection (d)(1)(A), by striking ``, unless
the court'' and all that follows through the period at
the end and inserting a period;
(B) in subsection (d)(1)(B), by striking ``The
party shall also allege'' and all that follows through
the period at the end and inserting a period; and
(C) in subsection (d)(3), by striking ``, unless
the court'' and all that follows through the period at
the end and inserting a period.
(b) Eligibility of Small Businesses for Fee Award.--
(1) Administrative proceedings.--Section 504(b)(1)(B)(ii)
of title 5, United States Code, is amended by striking
``$7,000,000'' and inserting ``$10,000,000''.
(2) Judicial proceedings.--Section 2412(d)(2)(B)(ii) of
title 28, United States Code, is amended by striking
``$7,000,000'' and inserting ``$10,000,000''.
(c) Elimination of Rate Cap.--
(1) Administrative proceedings.--Section 504(b)(1)(A) of
title 5, United States Code, is amended--
(A) by striking ``(i)''; and
(B) by striking ``by the agency involved'' and all
that follows through ``a higher fee'' and inserting
``by the agency involved''.
(2) Judicial proceedings.--Section 2412(d)(2)(A) of title
28, United States Code, is amended--
(A) by striking ``(i)''; and
(B) by striking ``by the United States'' and all
that follows through ``a higher fee'' and inserting
``by the United States''.
(d) Offers of Settlement.--
(1) Administrative proceedings.--Section 504(a) of title 5,
United States Code, as amended by this section, is further
amended by adding at the end the following:
``(5)(A) At any time after an agency receives an application
submitted under paragraph (2), the agency may serve upon the applicant
a written offer of settlement of the claims made in the application. If
within 10 business days after such service the applicant serves written
notice that the offer is accepted, either the agency or the applicant
may then file the offer and notice of acceptance together with proof of
service thereof.
``(B) An offer not accepted within the time allowed 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 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(d)(1) of title 28,
United States Code, as amended by this section, is further
amended by adding at the end the following:
``(E)(i) At any time after an agency receives an application
submitted under subparagraph (B), the agency may serve upon the
applicant a written offer of settlement of the claims made in the
application. If within 10 business days after such service the
applicant serves written notice that the offer is accepted, either the
agency or the applicant may then file the offer and notice of
acceptance together with proof of service thereof.
``(ii) An offer not accepted within the time allowed 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 fees or other expenses incurred (in relation to
the application for fees and expenses) after the date of the offer.''.
(e) Declaration of Intent to Seek Fee Award.--
(1) Administrative proceedings.--Section 504(a)(2) of title
5, United States Code, as amended by this section, is further
amended by inserting before the first sentence the following:
``At any time after the commencement of an adversary
adjudication, the adjudicative officer may (and if requested by
a party shall) require 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, as amended by this section, is further
amended by inserting before the first sentence the following:
``At any time after the commencement of an adversary
adjudication, as defined in subsection (b)(1)(C) of section 504
of title 5, United States Code, the court may (and if requested
by a party shall) require a party to declare whether such party
intends to seek an award of fees and expenses against the
agency should such party prevail.''.
(f) Payment of Attorneys' Fees From Agency Appropriations.--
(1) Administrative proceedings.--Section 504(d) of title 5,
United States Code, is amended--
(A) by striking ``subsection'' and inserting
``section''; and
(B) by adding at the end the following: ``Fees and
expenses awarded under this section 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.''.
(g) Eligibility of Taxpayers for Fee Award.--
(1) Administrative proceedings.--Section 504 of title 5,
United States Code, as amended by this section, is further
amended by striking subsection (f).
(2) Judicial proceedings.--Section 2412 of title 28, United
States Code, as amended by this section, is further amended by
striking subsection (e) and redesignating subsection (f) as
subsection (e).
(h) Conforming Amendment Relating to Reporting Requirement Under
Small Business Act.--Section 504(e) of title 5, United States Code, is
amended to read as follows:
``(e)(1) The Attorney General, after consultation with the Chief
Counsel for Advocacy of the Small Business Administration, shall report
annually to the Congress on the amount of fees and other expenses
awarded to individuals during the preceding fiscal year pursuant to
this section and section 2412 of title 28. The report shall describe
the number, nature, and amount of the awards, the claims involved in
the controversy, and any other relevant information which may aid the
Congress in evaluating the scope and impact of such awards for
individuals engaged in disputes with Federal agencies. Each agency
shall provide the Attorney General with such information as is
necessary for the Attorney General to comply with the requirements of
this subsection.
``(2) A requirement that the President report annually on
proceedings affecting small business concerns under this section and
under section 2412 of title 28 is provided in section 303(b) of the
Small Business Economic Policy Act of 1980 (15 U.S.C. 631b(b)).''.
(i) Applicability.--The provisions of this section and the
amendments made by this section shall apply to any proceeding pending
on, or commenced on or after, the effective date of this Act.
SEC. 5. DEFINITION OF PREVAILING PARTY IN EAJA CASES.
(a) Title 5.--Section 504(b)(1) of title 5, United States Code, is
amended by adding at the end the following new paragraph:
``(G) `prevailing party' includes, in addition to a party
who prevails through a judicial or administrative judgment or
order, a party whose pursuit of a nonfrivolous claim or defense
was a catalyst for a voluntary or unilateral change in position
by the opposing party that provides any significant part of the
relief sought.''.
(b) Title 28.--Section 2412 of title 28, United States Code, is
amended--
(1) in subsection (d)(2)(H), by inserting after ``means''
the following: ``, subject to subsection (g),''; and
(2) by adding at the end the following new subsection:
``(g) For the purposes of this section, the term `prevailing party'
includes, in addition to a party who prevails through a judicial or
administrative judgment or order, a party whose pursuit of a
nonfrivolous claim or defense was a catalyst for a voluntary or
unilateral change in position by the opposing party that provides any
significant part of the relief sought.''.
SEC. 6. 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.
<all>
Introduced in House
Introduced in House
Referred to the Committee on the Judiciary, and in addition to the Committee on Small Business, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Referred to the Committee on the Judiciary, and in addition to the Committee on Small Business, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Referred to the Committee on the Judiciary, and in addition to the Committee on Small Business, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Referred to the Subcommittee on Courts, the Internet, and Intellectual Property.
Subcommittee Hearings Held.
Llama 3.2 · runs locally in your browser
Ask anything about this bill. The AI reads the full text to answer.
Enter to send · Shift+Enter for new line