Elbert v. United States Department of Agriculture

Background

The plaintiffs are dark red kidney bean farmers and related entities that bought revenue insurance from the United States Department of Agriculture’s Risk Management Agency and the Federal Crop Insurance Corporation. The insurance was intended to protect against declining bean prices.

The agency-approved policy used a projected price and a harvest price to provide revenue protection. The policy as sold to the plaintiffs stated that, when insufficient market data existed to calculate the harvest price, the harvest price would equal the projected price. The court previously found that this change was significant and should have been resubmitted to the Federal Crop Insurance Corporation’s Board. It granted summary judgment to the plaintiffs, found that the agency violated the Administrative Procedure Act, vacated the agency action, and remanded the matter for further consideration.

The plaintiffs then sought $347,006.50 in attorneys’ fees and costs under the Equal Access to Justice Act. Their request covered 988.25 hours at $350 per hour and included $1,119 in costs. The defendants argued that the plaintiffs were not all eligible for an award, that the government’s positions were substantially justified, and that the requested fees were excessive.

Eligibility and justification

Under the Equal Access to Justice Act, a prevailing party suing the United States or a federal agency may recover reasonable fees and expenses unless the government’s position was substantially justified or special circumstances would make an award unjust. The party requesting fees must establish both that it prevailed and that it meets the statute’s eligibility requirements.

Four of the five plaintiffs submitted declarations addressing eligibility. The defendants did not challenge those four plaintiffs’ eligibility, but one plaintiff did not submit the required declaration. The court concluded that it could award fees to the eligible plaintiffs and reduced the fee portion by one-fifth to account for the plaintiff whose eligibility was not established.

The court also found that the defendants’ pre-litigation and litigation positions were not substantially justified. Before the lawsuit, the agency had been told three times that substituting the projected price for the harvest price could convert revenue insurance into yield insurance. The court also found no clear explanation in the record for why the relevant policy language was rewritten.

For the litigation position, the defendants relied on the fact that they had initially won summary judgment. The court rejected that argument, explaining that an interim victory does not by itself establish substantial justification. The court found that the government’s litigation position was based on a serious error because the record showed that the policy changes were significant and should have been resubmitted to the Board.

Amount of the award

The court found that all 988.25 requested hours were compensable. It declined to remove 420.5 hours for work performed before the case was transferred from the Eastern District of Michigan, reasoning that the work was part of the same matter rather than a separate related case. It also declined to remove time spent on unsuccessful or related efforts because those hours concerned claims and legal theories sufficiently connected to the successful claim.

The court adjusted the Equal Access to Justice Act’s $125 statutory hourly rate for inflation and counsel’s experience. Although the plaintiffs requested $350 per hour, the court set the reasonable rate at $325 per hour. That produced a presumptive attorneys’ fee award of $321,181.25. The court then reduced that amount by one-fifth, resulting in $256,945 in attorneys’ fees. It awarded the full $1,119 in requested costs.

Assignment and disposition

The plaintiffs asked the court to assign the award directly to their attorney. The court explained that Equal Access to Justice Act fees are awarded to the prevailing party, not directly to the attorney. It therefore awarded the fees and costs to the plaintiffs, who could then meet their contractual obligations to counsel.

The court ordered that the plaintiffs’ motion for attorneys’ fees and costs was GRANTED in part and DENIED in part. It ordered the defendants to pay $256,945.00 in attorneys’ fees and $1,119.00 in costs.