Litigating a case against the government is an intimidating task. The government has virtually unlimited resources at its disposal to wage its case. Each side must bear it’s on costs of litigation, which means you must pay your attorney while the government attorneys are already paid by the taxpayers. However, in certain cases involving the government an award of attorneys is available to successful litigants, which can level the playing field. Here is a look at five areas where successful parties in litigation involving the government can recover attorney’s fees from the government.
1. Civil Rights Actions.
When the local, state, or federal government violates an individual’s or corporate entity’s constitutional rights, they can sue the government for damages under 42 U.S.C. § 1983. A claim under Section 1983 can arise when a party’s property is taken without due process of law, its free speech rights are infringed, or it is subject to a warrantless search and seizure. If a party is successful in its litigation and the government is found liable for violating its constitutional rights, 42 U.S.C. § 1988 authorizes the court to award the party reasonable attorneys fees and costs.
2. Equal Access to Justice Act.
The Equal Access to Justice Act (EAJA) provides for an award of attorneys fees and costs to a party that prevails in litigation against the federal government or a federal government agency. Unlike in attorney’s fees under 42 U.S.C. § 1983, under the EAJA, an award of attorneys fees and costs is mandatory. However, the EAJA applies only to cases involving the federal government or a federal government agency. Conversely, claims arising under 42 U.S.C. § 1983 can involve a local or state government.
In order to receive an award of attorneys fees and costs, a party must meet four criteria:
(1) they must be a “prevailing party” in its suit against the government;
(2) the government’s position must not be “substantially justified;”
(3) there are no “special circumstances” that would make the award unjust;
(4) the application must be made within thirty (30) days of final judgment;
Importantly, to be deemed a prevailing party entitled to attorneys fees, an applicant need not win on every claim it brings. Rather, the Supreme Court has stated that a prevailing party is “one who has succeeded on any significant claim affording it some right to relief.” The form of relief can be a judgment on the merits or a preliminary injunction.
The government bears the burden of proof in demonstrating that its position was had substantial justification. Substantial justification is “justification to a degree that could satisfy a reasonable person.” The Supreme Court has “interpreted the term substantial justification as describing a position that has a reasonable basis both in law and fact.”
Some examples of cases involving construction companies where the government failed to prove substantial justification for its position include:
- Successful bid protests;
- Successful payment claims;
- Successful appeals of denial of SBA, DVOSB, and VOSB certification;
- Successful defense of agency actions (OSHA, DOL, OFCCP)
The downside to attorney’s fees claims under the EAJA is that, typically, the award of attorneys fees is capped at $125 per hour, unless the court decides otherwise. Furthermore, individuals with a net worth of more than $2,000,000 or entities with a net worth of more than $7,000,000 and more than 500 employees are not eligible for an award of attorney’s fees under the EAJA.
3. GAO Bid Protests.
Disappointed bidders on a contract being let by the federal government or government agency have the ability to challenge the contract award by filing a bid protest with the Government Accountability Office (“GAO”). If GAO determines that a solicitation, proposed award, or award does not comply with statute or regulation, it may recommend that the agency pay the protester the costs of:
(1) Filing and pursuing the protest, including attorneys’ fees and consultant and expert witness fees; and
(2) Bid and proposal preparation.
4. Eminent Domain.
Eminent domain is the process by which the government can acquire private property for public use. If a private owner is successful in defending a claim by the federal government that a property should be acquired by eminent domain or if the federal government abandons its claim for the property then an award of the owner’s attorney’s fees is mandatory. Local and State governments can also acquire property through eminent domain. The rules vary from by State. However, many States contain provisions in their eminent domain laws for compensating private owner’s attorney’s fees.
Inverse condemnation is the legal term used to refer to when the government takes an action that impacts the economic value of a private property. The action can be a physical one, such as where the access to private property is effected, or regulatory, such as where a government regulation impacts the ability for an owner to use his land. The latter is sometimes referred to as a “regulatory taking.” If the federal government has engaged in inverse condemnation and a private property owner sues the federal government and is successful, then under 42 U.S.C. § 4654(c), an award of attorney’s fees is mandatory.
5. Civil Asset Forfeiture.
Under civil asset forfeiture laws, the federal government is empowered to seize property if it believes the property was obtained by or used to further committing a crime. This is true even if the owner of the property is never charged with any wrongdoing. As can be imagined, civil asset forfeiture laws are controversial. However, private property owner’s challenging a civil forfeiture proceeding under federal law who are successful are entitled to a mandatory award of attorney’s fees.
For more information about recovering attorneys fees and costs from the government, visit our Economic and Individual Liberty Program at http://zimolonglaw.com/practice-areas-2/economic-and-individual-liberty.
Wally Zimolong
Wally represents contractors (and subcontractors) and developers. His clients build and develop residential, commercial, and industrial properties nationwide. Wally enjoys working with the owners of the businesses he represents because they tend to be entrepreneurs and all around interesting people.
