Jones v. Brown

NEBEKER, Chief Judge, filed the opinion of the Court. KRAMER, Judge, filed a concurring opinion. STEINBERG, Judge, filed a dissenting opinion. NEBEKER, Chief Judge: These consolidated motions, seeking attorney fees and expenses, require the resolution of whether a recent amendment to the Equal Access to Justice Act (EAJA), 28 U.S.C.A. § 2412 (West Supp.1993), applies to legal services performed in cases decided on their merits before the date of the amendment. In resolving this issue, we are quite mindful of the competing policy pressures favoring availability of counsel to veterans seeking to appeal denial of benefits and the rather strict command to require clear waivers of sovereign immunity by statute. There is, after all, much to be said for favoring compensation of counsel in these cases, and we do not lightly reach our conclusion. However, we hold that those legal services are not compensable because the clause concerning cases “pending” at the time of the amendment does not reach the services performed in these cases. I. Factual and Procedural Background The merits of each of the underlying appeals were decided prior to the enactment of — 103 — the Federal Courts Administration Act of 1992 (FCAA), Pub.L. No. 102-572, 106 Stat. 4506 (1992). Jones v. Derwinski, 1 Vet.App. 210 (1991), was decided on April 10, 1991. Karnas v. Derwinski, 1 Vet.App. 308 (1991), was decided on June 11,1991. Following the decision on the merits of his appeal, appellant Jones submitted a bill of costs and sought recovery pursuant to 28 U.S.C.A. § 2412(a) and (b). Appellant Karnas filed a motion for attorney fees under 28 U.S.C.A. § 2412(d). Subsequently, appellant Jones filed a motion for attorney fees. The matters were consolidated. See Jones and Karnas v. Derwinski, 2 Vet.App. 7 (1991) (en bane order). The Court, en banc, then held, pursuant to Ardestani v. INS, — U.S. -, 112 S.Ct. 515, 116 L.Ed.2d 496 (1991), that the EAJA did not apply to proceedings in this Court because sovereign immunity had not been waived. Jones v. Derwinski, 2 Vet.App. 231 (1992) [hereinafter Jones/Kamas]. Appellant Karnas appealed to the United States Court of Appeals for the Federal Circuit (Federal Circuit). Appellant Jones did not. During the pendency of the Karnas appeal, the FCAA was enacted. That Act contained an express waiver of sovereign immunity and made the EAJA applicable to any future appeal brought before this Court as well as to cases pending in the Federal Circuit or in this Court on the date of enactment of the FCAA, October 29, 1992. Pub.L. No. 102-572, § 506, 106 Stat. 4506, 4513 (1992). Prompted by the new legislation, the parties filed a joint motion with the Federal Circuit to vacate and remand as moot. The Federal Circuit granted the motion, vacated this Court’s decision as to appellant Karnas, and remanded for further proceedings consistent with the FCAA. See Karnas v. Principi, 985 F.2d 582 (1992). II. Analysis Appellant Karnas argues that the Federal Circuit, in granting the joint motion, has decided that these cases were “pending” by virtue of its remand to this Court since the Federal Circuit would have granted the joint motion to vacate and remand only if the cases were indeed pending. Otherwise, appellant Karnas argues, the issue on appeal before the Federal Circuit, i.e., whether these cases fell under the EAJA before the FCAA amendments were enacted, would still have needed to be decided by the Federal Circuit. Appellant Karnas’s argument is misguided for two reasons. We think it clear that the Federal Circuit, far from the holding ascribed to it, was merely reacting to the parties’ then assumption that the case was pending under the FCAA. The issue was not expressly posed in the joint motion and, understandably, the Federal Circuit remanded for further proceedings under that Act without an express holding on the “pending” question. The second problem with appellant Karnas’s argument is that, even without a joint motion, a remand would still have been the ordinary course for the Federal Circuit to take in order that this Court might first interpret the EAJA as amended by the FCAA. See 38 U.S.C.A. § 7292(a) (West 1991). Because the Federal Circuit has not determined whether these cases were in fact “pending” within the meaning of FCAA’s section 506, we turn to our analysis of the law. At the time of our 1992 decision in these cases, the Supreme Court, in Ardestani, had recently reemphasized that in order for the EAJA to apply, there must be an unambiguous waiver of sovereign immunity. “The EAJA renders the United States liable for attorneys’ fees for which it would not otherwise be liable, and thus amounts to a partial waiver of sovereign immunity. Any such waiver must be strictly construed in favor of the United States.” Ardestani — U.S. at -, 112 S.Ct. at 520. The Supreme Court also explained that the EAJA’s reach could not be extended “when the plain language of the statute, coupled with the strict construction of waivers of sovereign immunity, constrain us to do otherwise.” Id. — U.S. at -, 112 S.Ct. at 521. In the absence of such an express waiver of sovereign immunity, we held that the EAJA did not apply to proceedings in this Court. The Supreme Court’s most recent cases addressing the principles of construction applicable to waivers of the Government’s sovereign immunity are United States Dep’t of — 104 — Energy v. Ohio, — U.S. -, 112 S.Ct. 1627, 118 L.Ed.2d 255 (1992), and United States v. Nordic Village, Inc., — U.S.-, 112 S.Ct. 1011, 117 L.Ed.2d 181 (1992). In Department of Energy, the Court used a strict construction analysis and held that the language of the statutes did not provide a “clear and unequivocal” waiver of sovereign immunity from liability'for civil fines imposed for past violations. Dep’t of Energy, — U.S. at -, 112 S.Ct. at 1685. •Keeping in mind the Supreme Court’s admonition that waivers of sovereign immunity must be express and, where such a waiver is expressed, it must be narrowly construed, we begin our analysis of the EAJA as amended by the FCAA section 506, which states in pertinent part: [This amendment] shall apply to any case pending before the United States Court of Veterans Appeals on the date of the enactment of this Act, to any appeal filed in that court on or after such date, and to any appeal from that court that is pending on such date in the United States Court of Appeals for the Federal Circuit. Curiously, the Supreme Court was not included in the “case pending” sentence, though review there is also possible. See 38 U.S.C.A. § 7291 (West 1991). We note that this is not the first time that the question of which “pending” cases fall under the EAJA has been raised. The federal courts have had to decide this question twice before: both at the time of the original enactment of the EAJA in 1980 and after its subsequent reenactment with amendments in 1985. Disputes as to the applicability of both the original 1980 enactment and the 1985 amendments gave rise to litigation which, in turn, resulted in two distinct lines of decisions in the federal courts of appeals on the issue of whether a case was “pending” on the effective date of enactment or amendment. A. “Pending” Cases at the Time of the 1980 Enactment of the EAJA When the EAJA was enacted in 1980, section 208 of the Act provided that it applied to “any civil action or adversary adjudication described in section 2412 of title 28, United States Code, which is pending on, or commenced on or after [October 1, 1981].” Pub.L. No. 96-481, § 208, 94 Stat. 2330 (1980) (emphasis added). In early decisions, two courts of appeals held that the word “pending” included cases where the merits had been decided and only applications for attorney fees remained. In United States for Heydt v. Citizens State Bank, 668 F.2d 444, 446 (8th Cir.1982) (Heydt), the United States Court of Appeals for the Eighth Circuit, concluded that since no manifest injustice would occur should it consider appellant’s request for attorney fees, it would entertain his request. In reaching its decision, the Heydt court specifically relied on Bradley v. School Bd., 416 U.S. 696, 711-16, 94 S.Ct. 2006, 2016-18, 40 L.Ed.2d 476 (1974), in which the Supreme Court had held that, unless manifest injustice would result or some indication existed to the contrary in the statute or legislative history, an appellate court must apply the law in effect at the time it renders its decision. See also Knights of the KKK v. East Baton Rouge, 679 F.2d 64, 68 (5th Cir.1982) (KKK) (“fact that a motion for attorneys’ fees is the only matter pending before a court does not mean that court lacks jurisdiction or that the ease is not ‘pending’”). In subsequent decisions, however, other courts of appeals felt themselves constrained by the strict construction which must be accorded to waivers of sovereign immunity and held that “pending” for EAJA purposes includes only cases pending on the merits. In Nichols v. Pierce, 740 F.2d 1249, 1256 (D.C.Cir.1984) (citations omitted), the United States Court of Appeals for the District of Columbia (D.C.Circuit) commented: Examining the language of [EAJA], it is apparent that a fair reading of its terms does not demonstrate a congressional intent to establish liability. The Act itself offers no definition of the term “pending.” We do not believe the word “pending” should be interpreted as broadly as the appellant suggests. It may be that the result she urges is not explicitly ruled out by the Act. But this is not enough. As a waiver of sovereign immunity, the Act’s — 105 — terms must affirmatively establish liability, not merely fail to preclude it. The D.C. Circuit further reasoned that including claims pending on attorney fees alone would not further Congress’ purpose in enacting the EAJA. Since the EAJA was enacted in order to encourage those who might otherwise be deterred financially from bringing suit when faced with unreasonable governmental action, see EAJA, Pub.L. No. 96-481, § 202(a), 94 Stat. 2326 (1980), “no possible deterrent could be removed by an award of attorneys’ fees [here, given that] the appellant’s case was filed, briefed, argued, and decided by a final judgment on the merits before the Act ever took effect.” Nichols, 740 F.2d at 1257. See also Commissioners of Highways of Towns of Annawan v. United States (Highways), 684 F.2d 443, 444 (7th Cir.1982) (since waivers of sovereign immunity must be strictly construed and are not to be extended by implication, cases pending only on applications for attorney fees are not covered by EAJA); Stanwood v. Green, 744 F.2d 714, 716 (9th Cir.1984) (per curiam) (case not “pending” for purposes of civil rights attorney fees under section 1988 when “no unresolved substantive claim” remained). The United States Court of Appeals for the Ninth Circuit reached a similar conclusion in Tongol v. Donovan, 762 F.2d 727 (9th Cir.1985). Acknowledging the holdings of the Fifth and Eighth Circuits in KKK and Heydt, the Ninth Circuit nevertheless wrote, We believe the District of Columbia [Nichols decision] and Seventh Circuits [Highways decision] more closely reflect the approach mandated by [the] latest teachings of the Supreme Court. The Eighth Circuit’s opinion [Heydt] is devoid of any statutory analysis, and the Fifth Circuit’s conclusion [KKK] is hampered by a failure to heed principles of narrow construction. Tongol, 762 F.2d at 732 (citations omitted). B. Cases “Pending” at the Time of the 1985 Amendments to the EAJA In 1985, Congress amended and extended the EAJA. Pub.L. No. 99-80, 99 Stat. 183 (1985). The 1985 amendments were made applicable “to cases pending on or commenced on or after [August 5, 1985].” Pub.L. No. 99-80, § 7, 99 Stat. 183, 186 (1985). The question of what cases were actually “pending” arose again. In Russell v. National Mediation Bd., 775 F.2d 1284 (5th Cir.1985), the Fifth Circuit again held that eases which involve only EAJA applications are nevertheless “pending” cases. However, the Fifth Circuit took great care to distinguish its 1982 decision in KKK and, in so doing, appeared to question its rationale while acknowledging the decisions by the other courts of appeals which had rejected it because of the doctrine of sovereign immunity: Other courts have criticized our decision in KKK for failing to apply the principle that waivers of sovereign immunity are to be narrowly construed. [These cases] find Bradley inapposite to an EAJA case because the United States was not a party in Bradley and no waiver of sovereign immunity was involved. Whatever the merits of the criticism directed at KKK, it has little weight here_ [The] clarifying amendments in Pub.L. No. 99-80 do not waive sovereign immunity in the same sense that the original EAJA did; the original Act created a new liability where none previously had existed, while the portion of the new Act with which we are concerned — the definition of “position of the United States” — merely clarifies] the EAJA. Id. at 1287-88 (citations omitted). In Center for Science in the Public Interest v. Regan, 802 F.2d 518 (D.C.Cir.1986), the D.C.Circuit held that, for purposes of the 1985 amendments, the plain meaning of “pending” includes pending applications for attorney fees. The Court distinguished its Nichols decision by saying, the concerns which prompted the courts to decline to apply retroactively the original EAJA to cases which were closed save for the fee petition are inapplicable in the context of the application of the new definition of “position” under the new Amendments. By virtue of the original EAJA, the Government has already expressly waived sovereign immunity from attorneys’ fees in this case. Center for Science, 802 F.2d at 524 n. 11. One court of appeals has even held that, despite the “clarifying” nature of the 1985 — 106 — amendment defining “position of the United States”, the strict construction applied to waivers of sovereign immunity still dictates against including proceedings where only EAJA applications are pending. See Blackmon v. United States, 807 F.2d 70 (6th Cir.1986) (application of the 1986 amendments to pending fee petitions as to that definition would result in substantial drain on the treasury). Not surprisingly, appellants urge us to apply Heydt, KKK, and the line of cases which grew out of the 1985 EAJA amendments. We must decline this invitation, however, because those cases are simply inapposite. As this Court has made clear in its previous decision in these consolidated matters, we are presented with situations which are analogous not to the 1985 clarifying amendments to the EAJA but to the 1980 EAJA waiver of sovereign immunity. Jones/Karnas, 2 Vet.App. at 231. The FCAA was not merely a clarifying amendment; rather, it was Congress’ response to our original 1992 holding in Jones/Kamas that the EAJA did not apply to proceedings in this Court because there had been no express statutory waiver of sovereign immunity. Any ambiguity which might have resulted from the decisions of the courts of appeals following the 1980 enactment and the 1985 amendment of the EAJA was clarified once and for all by the Supreme Court in Ardesta-ni and Nordic Village: “The EAJA renders the United States hable for attorney’s fees for which it would not otherwise be hable, and that amounts to a partial waiver of sovereign immunity. Any such waiver must be strictly construed in favor of the United States.” Ardestani — U.S. at -, 112 S.Ct. at 521; see Nordic Village, — U.S. at -, 112 S.Ct. at 1014. Pursuant to this command, we accord the EAJA waiver of sovereign immunity embodied in the 1992 FCAA the same strict construction which was accorded to the 1980 EAJA waiver of sovereign immunity by the D.C.Circuit in Nichols, the Seventh Circuit in Highways, and the Ninth Circuit in Tongol. Finally, we note that appellant Karnas argues that language in a 1986 Federal Circuit decision demonstrates that the Federal Circuit viewed the 1985 amendments to the EAJA as applying to cases then pending merely on application for attorney fees, and that we are bound by this “holding.” Gavette v. Office of Personnel Management, 808 F.2d 1456 (Fed.Cir.1986) (en banc). The Federal Circuit stated in Gavette that “[t]he [1985] amendments ... provide for their applicability to 'pending cases without distinction, and the amendments apply to Gavette’s petition for fees.” Id. at 1467 (emphasis in original). This language does not, as appellant Karnas contends, constitute a holding, as that part of the opinion dealt with the meaning of “position of the United States”. Id. Moreover, the Federal Circuit in Gavette dealt with the 1985 reenactment of the EAJA without an expiration date, including the provisions to fill the time void between the expiration of the 1980 act and the 1985 reenactment, not the original enactment. The reference to the legislative history of the 1985 amendments in a footnote stating that those amendments were “clarifying” also has no bearing on our interpretation of the FCAA. Id. at 1467 n. 62. As we observed above, the FCAA so-called “clarification” served an entirely different purpose — to resolve the issue of EAJA’s applicability to this later-created Court. Furthermore, Gavette was decided before the Supreme Court’s holding in Ar-destani that EAJA waivers of sovereign immunity must be construed strictly. Ardestani — U.S. at -, 112 S.Ct. at 521; Nordic Village, — U.S. at -, 112 S.Ct. at 1016. C. Legislative History We are asked to view the legislative history of the FCAA, which states that the “intent of section [506] is to clarify the inclusion of the Court of Veterans Appeals as a ‘court’ for purposes of EAJA,” as reflective of an expressed desire to clarify the existence of a past waiver of sovereign immunity rather than a waiver concurrent with the amendment. See S.Rep. No. 342, 102d Cong., 2d Sess. 39 (1992). But in Nordic Village, the Supreme Court held that, although the statute had waived sovereign immunity, it had failed to unambiguously establish and unequivocally express that the waiver extended to monetary recovery in bankruptcy actions since it could be interpreted as not authoriz — 107 — ing such relief. Nordic Village, — U.S. at -, 112 S.Ct. at 1015. In its discussion of the rule that waivers of sovereign immunity must be express, the Supreme Court stated that legislative history has no role in the interpretation of the statutory waiver: The foregoing [interpretations of the Bankruptcy Code] are assuredly not the only readings of [the statute], but they are plausible ones — which is enough to establish that a reading imposing monetary liability on the Government is not “unambiguous” and therefore should not be adopted. Contrary to respondent’s suggestion, legislative history has no bearing on the ambiguity point_ [T]he “unequivocal expression” of elimination of sovereign immunity that we insist upon is an expression in statutory text. If clarity does not exist there, it cannot be supplied by a committee report. Id. — U.S. at -, 112 S.Ct. at 1016 (citations omitted). While the Supreme Court in Nordic Village relied on its earlier decision in Ardestani for the principle of strict construction, Nordic Village represents a termination of the narrow use of legislative history in construing waivers of sovereign immunity permitted by Ardestani See Nordic Village, — U.S. at -, 112 S.Ct. at 1016; Ardestani, — U.S. at -, 112 S.Ct. at 520 (the “‘strong presumption’ that the plain language of the statute expresses congressional intent is rebutted only in ‘rare and exceptional circumstances,’ when a contrary legislative intent is clearly expressed” (citations omitted)). Since the language of the EAJA as amended by the FCAA makes no distinction between pending on the merits and pending on applications for fees, it does not meet the “clear and unequivocal” requirement of Department of Energy or the “unequivocal expression” requirement of Nordic Village. The terms are susceptible to either interpretation, and since it is equally reasonable to construe the terms as referring only to cases pending on the merits, a reading which extends the Government’s waiver to cases pending on fee applications is not “ ‘unambiguous’ and therefore should not be adopted.” Nordic Village, — U.S. at -, 112 S.Ct. at 1016; see Dep’t of Energy, — U.S. at -, 112 S.Ct. at 1627. Guided by the Supreme Court in Nordic Village, once we conclude that the statutory language does not unambiguously waive immunity over cases pending on fee applications, that conclusion ends our analysis since the requisite “unequivocal expression” of the waiver cannot be “supplied by a committee report.” Nordic Village, — U.S. at -, 112 S.Ct. at 1016. Furthermore, even if we were to consider the language of the Senate report, we think it more plausible that the expression in the Senate report respecting clarification recognized that the question as decided by this Court in 1992 was still open and pending in the Federal Circuit. Thus, the Act, if the Senate report is at all relevant on this question of clarification, resolved or clarified the discrete issue that was sub judi-ce, not the existence of a past waiver. Finally, we note that Ardestani distinguished its holding that the immigration proceedings in question were “wholly outside the scope of the EAJA” from cases in which it had recognized that “once Congress has waived sovereign immunity over certain subject matter, the Court should be careful not to ‘assume the authority to narrow the waiver that Congress intended.’” — U.S. at -, 112 S.Ct. at 520 (citations omitted). Here, because the threshold requirement of a statutory waiver of sovereign immunity with respect to cases pending merely on application for attorney fees has not been met, we are not interpreting a statutory waiver of sovereign immunity too narrowly by holding that the eases before us do not fall under the EAJA. III. Conclusion We hold, therefore, that for purposes of FCAA section 506 and the EAJA, the term “case pending” includes only eases pending before the Court on the merits on or after October 29,1992; it does not include cases in which the only matters pending before the Court are EAJA applications. Since the Court lacks power to entertain them, the motions for attorney fees and expenses are DISMISSED.