Bazalo v. Brown

IVERS, Judge, filed the opinion of the Court. STEINBERG, Judge, filed an opinion concurring in part and dissenting in part. IVERS, Judge: These cases are before the Court on the appellants’ applications for award of reasonable attorney fees and expenses under the Equal Access to Justice Act (EAJA), 28 U.S.C. § 2412. Because the three eases present a common question, we decide them in a single opinion. The issue presented in these cases is whether an appellant may correct a timely, but defective, EAJA application (i.e. one which fails to meet each of the jurisdictional requirements set forth in 28 U.S.C. § 2412(d)(1)(B)) after the 30-day filing period has expired. We hold that an appellant must submit a complete, non-defective, application within the 30-day period. An appellant, thereafter, may amend or supplement the application, but each of the mandatory requirements must be met within the statutory filing period. Applications which do not meet all of the jurisdictional requirements will be dismissed. I. FACTUAL BACKGROUND A. The Bazalo Case On September 29, 1994, the Court granted a joint motion to remand the matter to the BVA. Judgment was final on that date. On October 31, 1994, the appellant filed an EAJA application. The appellant alleged that he was a prevailing party and that the Secretary’s position was not substantially justified, and he submitted the hourly fees and an accounting of the services provided. Subsequently, the appellant submitted a revised list of fees and expenses. On May 31, 1995, the Secretary filed a response alleging that the Secretary’s position was substantially justified and, in the alternative if the Court should decide to award EAJA fees, the fees requested are excessive and should be reduced. On July 25, 1995, the appellant filed a response arguing that the government’s position was not substantially justified and that the hourly fee was reasonable. On August 24, 1995, the Secretary filed a motion to dismiss the appellant’s EAJA application for lack of subject matter jurisdiction, stating that the appellant’s EAJA application did not allege that the appellant was an eligible party, nor did it contain an affidavit that the appellant’s net worth did not exceed $2,000,000. The Secretary noted that the appellant had not moved to file an amendment to the EAJA application within the jurisdictional time period. B. The Burke Case Pursuant to their stipulated agreement, the parties filed a joint motion to dismiss with regard to one claim, and to remand a second claim. On February 22, 1995, the Court dismissed the second claim as not well-grounded. The appellant filed a motion for panel reconsideration or, in the alternative, for review by the full Court. On June 15, 1995, the Court denied the appellant’s motion for reconsideration, and clarified that when the appellant submitted a well-grounded claim to the regional office, he would be entitled to have the claim fully adjudicated. The appellant filed his application for reasonable attorney fees and expenses under — 307 — EAJA on August 29, 1995. On September 28, 1995, the Secretary filed a motion to dismiss for lack of subject matter jurisdiction, arguing that the EAJA application was untimely because the Court had dismissed the appeal. Pursuant to Rule 41(b) of this Court’s Rules of Practice and Procedure the order of dismissal constituted the mandate of this Court. The Secretary’s contention is that the EAJA application should have been filed on or before March 24, 1995, and that the appellant’s motion for reconsideration filed on March 27, 1995, should have contained a motion for leave to file a motion to recall the mandate and modify judgment. The Secretary also argues that, even if the Court were to construe the appellant’s March 27, 1995, motion for reconsideration as a motion for leave, the EAJA application would still have been due on July 17, 1995, 30 days following the Court’s denial of the motion for reconsideration on June 15,1995. The appellant filed a response to the Secretary’s motion on October 10,1995, along with a motion for the Court to find the Secretary in default and to award EAJA fees. The Court does not' accept the Secretary’s version of events as they relate to the timeliness of the EAJA application. It is clear from the record that this Court’s judgment was entered on June 15, 1995, and that the mandate was entered on August 14, 1995. The appellant filed his EAJA application within the 30-day filing period. The appellant referenced each of the elements of EAJA. Although he did not include a statement as to his net worth, the appellant did state that his net worth did not exceed $2,000,000, with a footnote that the appellant would submit a statement of net worth, if contested. See Appellant’s Application for Attorney Fees and Expenses (Appl.) at 3. C. The Hamilton Case On November 30, 1993, this Court vacated the decision of the BVA and remanded the ease for readjudication of the appellant’s claim. Judgment was entered on March 24, 1994. The mandate was issued on May 25, 1994. On June 6, 1994, the appellant filed an EAJA application. Counsel stated that he had supplied professional services to the appellant and attached an itemized list for his time and charges. On July 25, 1994, the appellant filed a motion to amend his EAJA application, stating that through mistake and inadvertence, he had neglected to allege, as required by the statute, that the position of the United States was not substantially justified. The Secretary filed a motion to dismiss the appellant’s EAJA application. The Secretary argued that the application did not comply with the statute because the appellant did not allege that he is a prevailing party, that he is eligible to receive EAJA awards, and that the position of the United States was not substantially justified, and did not specify what position or positions were not substantially justified. The Secretary reserved his response concerning the EAJA application until the Court rules on the appellant’s motion to amend his application. On March 23, 1995, the Court ordered the Secretary to file a supplemental memorandum addressing whether this Court has the authority to permit the appellant to amend his EAJA application. The Secretary, in his response, restated his contentions that the appellant’s EAJA application should be dismissed because he did not comply with the EAJA statutory requirements, in that he had failed to allege that he was a prevailing party, that he had failed to allege that he was an eligible party, that he had not submitted an affidavit that his net worth did not exceed $2,000,000, and that he had not alleged that the position of the United States was not substantially justified. The Secretary argued that, since the motion to amend did not include all the requirements of EAJA, his application should be dismissed because EAJA is a waiver of the sovereign immunity of the United States and, therefore, must be strictly construed. The appellant has filed another motion to amend his EAJA application on April 22, 1996, requesting that the Court judicially note the presence of all the EAJA requirements in his application and also including an updated declaration of net worth. II. ANALYSIS A. The EAJA Text and Rule 39(b) The EAJA is codified in 28 U.S.C. § 2412 (1991) and provides, in relevant part: — 308 — A party seeking an award of fees and other expenses shall, within thirty days of final judgment in the action, submit to the court an application for fees and other expenses which shows that the party is a prevailing party and is eligible to receive an award under this subsection, and the amount sought, including an itemized statement from any attorney or expert witness representing or appearing in behalf of the party stating the actual time expended and the rate at which fees and other expenses were computed. 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. 28 U.S.C. § 2412(d)(1)(B) (emphasis added). On October 29, 1992, Congress enacted section 506 of the Federal Courts Administration Act, Pub.L. No. 102-572, § 506, 106 Stat. 4506, 4513 (1992). Section 506(a) amended 28 U.S.C. § 2412(d)(2)(F) to make the EAJA applicable to this Court. See Stillwell v. Brown, 6 Vet.App. 291 (1994); Elcyzyn v. Brown, 7 Vet.App. 170 (1994). The basic requirements under the EAJA statute were incorporated into Rule 39 of the Court’s Rules of Practice and Procedure which provides, in relevant part: (a) Time for Filing. An application pursuant to 28 U.S.C. § 2412 for award of attorney fees and other expenses in connection with an appeal must be filed with the Clerk within 30 days after this Court’s judgment becomes final. (b) Content. The application_must include: (1) a statement that the applicant is a prevailing party and is eligible to receive an award; (2) identification of the specific position or positions of the Secretary that the appellant alleges were not substantially justified; and (3)an itemized statement from the applicant’s attorney as to each type of service which was rendered.... U.S.Vet.App.R. 39(a),(b)(l)-(3) (emphasis added). To summarize, under both the EAJA statute and Rule 39(b), the requirements for a complete, non-defective EAJA application are: (1) a showing that the appellant is a prevailing party; (2) a showing that the appellant is eligible for an award; (3) an allegation that the government’s position is not substantially justified; and (4) an itemized statement of the fees sought. See Lematta v. Brown, 8 Vet.App. 504 (1996). Since 28 U.S.C. § 2412(d)(1)(B) and Rule 39(b) include the mandating terms “shall” and “must” respectively, no EAJA application can be considered and fees awarded until all of the jurisdictional requirements are met. See id. at 507 (appellant may not be awarded attorney’s fees under the EAJA unless all requirements are met). B. Jurisdictional Requirements The requirements presented in 28 U.S.C. § 2412(d)(1)(B) and the Court’s Rule 39(b) are clear, and any application for attorneys fees that does not meet these requirements is defective. The answer then, to the question whether, after the expiration of the 30-day filing period, an appellant may complete his defective application, must be no. However, an appellant may be permitted to amend or supplement his or her non-defective application after the 30-day filing period. Since the EAJA is a waiver of the sovereign immunity of the United States, its provisions are to be strictly construed in the government’s favor. Grivois v. Brown, 7 Vet.App. 100, 101 (1994) (citing to Ardestani v. Immigration & Naturalization Serv., 502 U.S. 129, 136-37, 112 S.Ct. 515, 520-21, 116 L.Ed.2d 496 (1991); Library of Congress v. Shaw, 478 U.S. 310, 318, 106 S.Ct. 2957, 2963, 92 L.Ed.2d 250 (1986)). The Eighth Circuit has held that the submission of a timely EAJA application is a jurisdictional prerequisite to governmental liability for attorney’s fees. See Welter v. Sullivan, 941 F.2d 674, 675 (8th Cir.1991). We agree. See Grivois, supra. The Second Circuit has held that the — 309 — EAJA’s 30-day filing deadline is to be strictly-enforced and may not be waived. Federal Election Com’n v. Political Contrib. Data, 995 F.2d 383 (2nd Cir.1993); see also Howitt v. U.S. Dept. of Commerce, 897 F.2d 583, 584 (1st Cir.1990), cert. denied, 498 U.S. 895, 111 S.Ct. 244, 112 L.Ed.2d 203 (1990). Failure to submit an EAJA application within 30 days of final judgment precludes this Court from considering the fee application’s merits. Grivois, supra (citing Lord Jim’s v. NLRB, 772 F.2d 1446, 1449 (9th Cir.1985)). The EAJA’s 30-day deadline requirement puts the government on notice that the appellant is seeking attorney fees. See Action on Smoking & Health v. CAB, 724 F.2d 211, 225 (D.C.Cir.1984); Grivois, supra. Once the appellant has filed a timely EAJA application, the Court examines the contents of the application, the record on appeal, and the filings of the parties to determine whether all other jurisdictional requirements have been substantially met. See Tucker v. U.S. Postal Service, 676 F.2d 954 (3rd Cir.1982); Shalala v. Schaefer, 509 U.S. 292, 113 S.Ct. 2625, 125 L.Ed.2d 239 (1993). With respect to the first jurisdictional requirement, this Court has held that to comply properly with the requirements of 28 U.S.C. § 2412(d)(1)(B), an appellant must show that he or she is a prevailing party. Knight v. Brown, 8 Vet.App. 212 (1995) (per curiam order) (“An assertion of prevailing party status in a timely filed EAJA application is one prerequisite to the exercise of this Court’s jurisdiction over the application”); see also Lematta, 8 Vet.App. at 507 (prevailing party status may be proven in one of three ways: (1) show of success on merits; (2) proof as a result of “catalytic effects”; (3) or proof under an “inevitable victory” theory). With respect to (1), in Shalala, the Supreme Court held that a remand which relieves a party from an adverse decision satisfies the prevailing party requirement because it represents “ ‘succe[ss] on any significant issue in litigation which achieve[d] some of the benefit ... sought in bringing the suit.’ ” 509 U.S. at 302, 113 S.Ct. at 2632 (quoting Texas Teachers Ass’n v. Garland Independent School Dist., 489 U.S. 782, 791-92, 109 S.Ct. 1486, 1493, 103 L.Ed.2d 866 (1989)); see also Stillwell, 6 Vet.App. at 300. In sum, regardless of the method of proof, the appellant must show prevailing party status by both asserting such status and demonstrating how he or she attained' such status. See e.g., Lematta, supra; Shalala, supra. Under the EAJA, the appellant is also required to show that he or she is a party eligible for an EAJA award. Jurgens v. Brown, 8 Vet.App. 197, 199 (1995); Golliday v. Brown, 7 Vet.App. 249, 253 (1994); Stillwell, 6 Vet.App. at 298. Satisfying eligibility for an EAJA award is jurisdictional. United States v. Hopkins Dodge Sales, Inc., 707 F.Supp. 1078, 1081 (D.Minn.1989). An EAJA applicant must meet a net worth requirement by indicating a net worth not exceeding $2,000,000. 28 U.S.C. § 2412(d)(l)(B)(i); Golliday, 7 Vet.App. at 249. Although a Court retains “substantial discretion” in fixing the amount of an EAJA award, eligibility for such an award must be established by meeting the conditions of 28 U.S.C. § 2412. Commissioner, I.N.S. v. Jean, 496 U.S. 154, 163, 110 S.Ct. 2316, 2321-22, 110 L.Ed.2d 134 (1990). The eligibility provision pertains to eligibility at the time the appeal was filed. A showing of eligibility may be made by stating in the application that the appellant’s net worth at the time the appeal was filed did not exceed $2 million. Alternatively, in a case where the appellant has filed in forma pauperis (IFP), such a showing may be made simply by referencing the IFP ruling. • The applicant must also allege that the government’s position was not substantially justified. See Ardestani, Shaw, all supra; Jean, 496 U.S. at 158, 110 S.Ct. at 2318-19. To “allege” means to state, recite, claim, assert, or charge. Black’s Law Dictionary, 75 (6th ed. 1990). Once that allegation is made, the government has the burden of proving that it was substantially justified in its position. Jackson v. Bowen, 807 F.2d 127, 128 (8th Cir.1986) (per curiam); see Gavette v. OPM, 808 F.2d 1456, 1467 (Fed. Cir.1986) (en banc); see also Essex Electro Engineers, Inc. v. United States, 757 F.2d 247, 252 (Fed.Cir.1985). In establishing substantial justification, the government must show that its position had a reasonable basis — 310 — in law and fact. Pierce v. Underwood, 487 U.S. 552, 565-66, 108 S.Ct. 2541, 2550-51, 101 L.Ed.2d 490 (1988) (government’s position should be “justified to a degree that could satisfy a reasonable person” to defeat an EAJA application). In sum, the appellant must allege, though he need not show, that the government’s position lacks substantial justification. If the appellant does not show that he is a prevailing party, show that he is eligible to receive an award, and allege that the government’s position is not substantially justified, within the 80-day period, the application is deemed defective and will be dismissed. In addition, the last jurisdictional requirement that an appellant must satisfy within the 30-day application period is the filing of the itemized statement of the fees and expenses sought. C. Amending a Defective Application At least one court has permitted the amendment of a timely filed EAJA application which is defective in content. See Dunn v. United States, 775 F.2d 99, 103 (3rd Cir.1985) (“while the time for filing a claim must be strictly complied with, deficiencies in the contents of the claim may be corrected if the government cannot show any prejudice arising from the later correction of those deficiencies”). In Dunn, the Third Circuit analyzed section 2412(d)(1)(B) as containing two requirements which serve different purposes: “a time for filing, and a standard for pleading.” Id. at 103. The Third Circuit held that an amendment to a timely filed EAJA application was not subject to jurisdictional requirements, but rather, was subject to pleading requirements, which would permit the supplementation of the application, including the submission of affidavits detailing the amount of fees sought. Id. at 104-05. The plaintiff in Dunn filed a timely petition for attorney fees under EAJA but failed to include detailed information regarding the fees. The Third Circuit reasoned that, in the interest of finality and reliability, time bars for filing a claim should be strictly construed, but that “deficiencies in the contents of the claim may be corrected if the government cannot show any prejudice arising from the later correction of those deficiencies.” Id. at 103 (citing to Tucker, supra). While the Third Circuit permitted the correction of a defective application after the 30-day period had expired, that ruling is weak authority to support an appellant’s argument before this Court that his defective application should be considered after the 30-day deadline. Unlike this Court, the Third Circuit has no specific rule that incor.porates the EAJA jurisdictional requirements into court practice and procedure. Instead, the Third Circuit has a significantly less stringent pleading requirement for obtaining attorney’s fees. The Third Circuit’s Rule 108 contains only some of the mandatory requirements that appear in this Court’s Rule 39 and in 28 U.S.C. § 2412(d)(1)(B). The Third Circuit rule has no prevailing party requirement or requirement that the application contain an allegation that the government’s position was not substantially justified. The Third Circuit’s rule even allows for exceptions to the 30-day filing period under extraordinary circumstances. Its Rule 108.1(b) states: “The Court shall strictly adhere to the time set forth above and grant exceptions only in extraordinary circumstances.” Thus, the Third Circuit’s rule is comparably far more relaxed than the rule in this Court. It is evident from the Dunn opinion that the Third Circuit took the EAJA application and reviewed it under its own pleading requirements rather than the jurisdictional requirements of 28 U.S.C. § 2412(d)(1)(B). This Court’s Rule 39 follows the EAJA’s mandatory requirements, while the Third Circuit’s rule does not. Therefore, reliance upon the Dunn decision as a basis for circumvention of the EAJA requirements is unpersuasive. Although we conclude that the requirements of EAJA are mandatory in nature, timely pleadings addressing each of the requirements of EAJA may be amended or supplemented as deemed necessary by the Court or by the parties. See Shalala, at 302-03, 113 S.Ct. at 2632; Action on Smoking and Health, 12A F.2d at 224-26. However, a seriously deficient pleading cannot be treated lightly, and should result in dismissal. Counsel, unlike a pro se appellant, is — 311 — held to a higher standard and is responsible for following the dictates of the statute. See Business Guides v. Chromatic Communications, 498 U.S. 533, 111 S.Ct. 922, 112 L.Ed.2d 1140 (1991). Whereas the client is entitled to fees if the requirements of the statute are met, the government is entitled to counsel’s compliance with the basic EAJA requirements that are clearly set forth in the statute. We conclude that no application may be considered and no EAJA fees can be awarded unless all of the jurisdictional requirements of the EAJA statute are met. D. Disposition of Cases We now turn to the cases before the Court. In Bazalo, the appellant failed to show, within the 30-day filing period, that he is an eligible party. He neither stated that his net worth did not exceed $2,000,000 nor referenced an IFP filing. The Court will dismiss this application • as defective. The showing of eligibility is a jurisdictional requirement, not merely a notice requirement, and thus, is a prerequisite to government liability. See Hopkins Dodge Sales, Inc., 707 F.Supp. at 1081; Jurgens, 8 Vet.App. at 199. The EAJA clearly states that an EAJA application “shall” show eligibility status within 30 days of final judgment. The appellant in this ease did not meet this requirement. Accordingly, this Court is without jurisdiction to consider the matter. In the Burke case, the Court holds that the appellant submitted a timely EAJA application and addressed each of the requirements of the statute. Appellant’s counsel, as an officer of the Court, has stated that his client’s net worth did not exceed $2,000,-000 at the time of filing and has offered to provide documents showing that his client’s net worth is under the jurisdictional amount, if necessary. Appellant’s Appl. at 3. The appellant did not seek a waiver to proceed IFP. Therefore, while the Court interprets the statute as requiring that the appellant show that he is eligible (i.e. that he meets the net worth requirement) at the time of filing, counsel’s efforts in this regard are adequate to meet the requirements of the statute. Therefore, the Court has jurisdiction to entertain the Burke application. With regard to the Hamilton case, the Court is without jurisdiction for the following reasons. First, the appellant filed an EAJA application requesting payment for, and attached an itemized list of, his counsel’s time and charges. Subsequently, after the expiration of the 30-day filing deadline, the appellant filed a motion to amend his application stating that he had neglected to allege that the position of the United States was not substantially justified. As indicated in part H.B., supra, this allegation is a jurisdictional prerequisite. ’ A second motion to amend was filed in which the appellant argued that his application, under Shalala, showed that he was a prevailing party and that he was eligible to receive an EAJA award. Although it is true that the appellant was a prevailing party under Shalala, his application failed to show prevailing party status and failed to demonstrate how such status was obtained. Additionally, eligibility must be shown within the 30-day filing period by either stating in the application that the applicant’s net worth did not exceed $2 million at the time the case was filed or by referencing an IFP filing. The appellant failed to do either. While it is true that he did file his appeal IFP, an application including that information was not filed within the requisite 30-day period. Where an application is deficient in that it fails to address each requirement of the statute and where the sovereign has waived immunity, it would be prejudicial to the government to allow a later correction of those deficiencies. Ardestani, Shaw, Welter, and Tucker, all supra. Therefore, the Court is without jurisdiction to consider this matter. III. CONCLUSION In light of the above analysis, the Court holds that an appellant must submit a complete, non-defective, application within the 30-day period. This holding today supersedes Court Rule 39(b), and that rule is revoked by the Court by a separate order issued on this date. This opinion should assist attorneys in understanding what requirements must be met in order for them to obtain compensation for their services. One goal of the EAJA was to — 312 — promote quality legal representation for many veterans. By articulating the jurisdictional requirements clearly in this opinion, we aim to promote this goal.