Tawakal Halal LLC v. United States

Background

Tawakal Halal LLC is a grocery store in Minneapolis, and Abdifateh Mohamed Omar is its owner. The plaintiffs sued for review of a final decision by the United States Department of Agriculture permanently disqualifying Tawakal Halal from participating as an authorized retailer in the Supplemental Nutrition Assistance Program.

In March 2019, the Department of Agriculture vacated its disqualification decision. The United States then moved to dismiss for lack of subject-matter jurisdiction, arguing that the agency’s action made the dispute moot—that is, there was no longer a live dispute requiring judicial relief. The court granted that motion, finding that the plaintiffs had received all the relief they could obtain concerning the validity of the disqualification and that there was no reasonable basis to expect the Department to reinstate the vacated decision.

Fee request and parties’ positions

The plaintiffs moved for attorney’s fees and costs under the Equal Access to Justice Act. They argued that they were prevailing parties because they obtained through litigation the result they sought: the Department of Agriculture’s vacatur of the disqualification and the resulting reinstatement of Tawakal Halal as an authorized retailer.

The United States argued that the plaintiffs were not prevailing parties because the Department’s action was voluntary and was not ordered or approved by the court. The Government characterized the plaintiffs’ theory as an attempt to recover fees merely because the lawsuit prompted a voluntary change in conduct. The Supreme Court has rejected that approach, known as the catalyst theory, when the change lacks court-imposed approval or relief.

Court’s analysis

The Equal Access to Justice Act generally permits a prevailing party other than the United States to seek fees and other expenses in qualifying civil actions. The party seeking fees bears the initial burden of showing that it is a prevailing party.

The court applied the Supreme Court’s rule that a plaintiff must receive at least some relief on the merits and that the relief must materially change the parties’ legal relationship through a judicial imprimatur, meaning a court-approved or court-ordered change. Enforceable judgments on the merits and court-ordered consent decrees can satisfy this requirement. A defendant’s voluntary change in conduct generally cannot.

The court concluded that the plaintiffs’ relief lacked the required judicial imprimatur. The Department of Agriculture vacated the disqualification before the court provided relief on the merits. Although the court’s July 2019 dismissal order recognized that the plaintiffs had achieved what they sought, that order did not itself cause or order the change in the parties’ legal relationship. The plaintiffs therefore were not prevailing parties.

The court rejected the plaintiffs’ argument that their case differed from the Supreme Court’s precedent because the agency’s action was specific to them rather than based on a change in law or policy. The court explained that voluntary agency action is insufficient regardless of what prompted it. The court also found that the other halal-store cases cited by the plaintiffs did not establish entitlement to fees because the record did not show whether those matters involved court-enforced consent decrees, and there was no settlement in this case. Finally, the court held that the fee definition in the Freedom of Information Act did not control because that statute expressly includes certain voluntary agency changes, while the Equal Access to Justice Act does not.

Ruling

Judge Eric C. Tostrud denied the plaintiffs’ Motion for Attorney Fees. Because the plaintiffs were not prevailing parties, the court did not decide whether the Government’s position was substantially justified or whether the amount of fees requested was reasonable.