United States District Court, D. Maryland
R. ALEXANDER ACOSTA, Plaintiff
AMERIGUARD SEC. SERVS., INC., et al., Defendants
MEMORANDUM AND ORDER
K. Bredar Chief Judge.
before the Court is the motion of Defendant AmeriGuard
Security Services, Inc. ("AmeriGuard"), for an
award of attorneys' fees. (ECF No. 129.) Plaintiff R.
Alexander Acosta, the Secretary of Labor, has opposed the
motion (ECF No. 133), and AmeriGuard has replied (ECF No.
138). No hearing is necessary. Local Rule 105.6 (D. Md.
2018). The motion will be granted.
request for attorneys' fees is pursuant to the Equal
Access to Justice Act ("EAJA"), 28 U.S.C. §
2412. Unless doing so is expressly prohibited by statute,
EAJA permits a court to award "reasonable fees and
expenses of attorneys ... to the prevailing party in any
civil action brought by or against the United States or any
agency or any official of the United States acting in his or
her official capacity in any court having jurisdiction of
such action." 28 U.S.C. § 2412(b). EAJA further
mandates such an award, "[e]xcept as otherwise
specifically provided by statute, ... to a prevailing party
other than the United States [of] fees and other expenses, in
addition to any costs awarded . . ., incurred by that party
in any civil action (other than cases sounding in tort), . .
. brought by or against the United States .. ., unless the
court finds that the position of the United States was
substantially justified or that special circumstances make an
award unjust." 28 U.S.C. § 2412(d)(1)(A). Whether
the position of the United States was substantially justified
is determined on the basis of the record in the civil action.
28 U.S.C. § 2412(d)(1)(B). The attorneys' fees
awarded "shall be based upon prevailing market rates for
the kind and quality of the services furnished, except that.
. . attorney fees shall not be awarded in excess of $ 125 per
hour unless the court determines that an increase in the cost
of living or a special factor, such as the limited
availability of qualified attorneys for the proceedings
involved, justifies a higher fee." 28 U.S.C. §
2412(d)(2)(A). The legislative history shows the figure of
$125 per hour was set in 1996. In the case of a corporation
who is a prevailing party, it is eligible for an award under
§ 2412 if, at the time the civil action was filed, its
net worth did not exceed $7, 000, 000 and it had not more
than 500 employees. 28 U.S.C. § 2412(d)(2)(B)(ii).
achieved total victory in the case by the Court's grant
of summary judgment in AmeriGuard's favor and against the
Secretary, AmeriGuard is clearly a prevailing party. It has
also established to the Court's satisfaction that it did
not have a net worth in excess of $7, 000, 000 or more than
500 employees at the time the suit was filed on November 16,
2015. (See Reijnders Affid., AmeriGuard's Mot.
Ex. 1, ECF No. 129-2.) The total amount of fees requested by
AmeriGuard is $104, 203.50, and AmeriGuard has provided
detailed time records supporting its request. (Hourigan
Affid., AmeriGuard's Mot. Ex. 2, ECF No. 129-3.) The
Secretary has not contested the reasonableness of the amount
of fees requested; consequently, the amount of the award is
not in dispute. See E.E.O.C. v. Clay Printing Co.,
13 F.3d 813, 814 n.2 (4th Cir. 1994).
the Secretary does contest is whether his position in this
case as against AmeriGuard was substantially justified. The
Supreme Court has opined that the statutory phrase means
'"justified in substance or in the main'-that
is, justified to a degree that could satisfy a reasonable
person. That is no different from the 'reasonable basis
both in law and fact' formulation adopted by the Ninth
Circuit and the vast majority of other Courts of Appeals that
have addressed this issue." Pierce v.
Underwood, 487 U.S. 552, 565 (1988). The burden of proof
of substantial justification rests on the Secretary. See
Tyler Bus. Servs., Inc. v. N.L.R.B., 695 F.2d 73, 75
(4th Cir. 1982).
decisions, standing alone, do not conclusively establish
substantial justification or the lack thereof. However,
they-and more critically their rationales-are the most
powerful available indicators of the strength, hence
reasonableness, of the ultimately rejected position. As such,
they obviously must be taken into account both by a district
court in deciding whether the Government's position,
though ultimately rejected on the merits, was substantially
justified, and by a court of appeals in later reviewing that
decision for abuse of discretion.
Clay Printing, 13 F.3d at 815 (internal quotation
marks omitted). Objective indicia are also relevant.
Underwood, 487 U.S. at 568. These include such
factors as "the terms of a settlement agreement, the
stage in the proceedings at which the merits were decided,
and the views of other courts on the merits."
Id. Additionally, the Supreme Court noted in
Underwood, "one would expect that where the
Government's case is so feeble as to provide grounds for
an EAJA award, there will often be (as there was here) a
settlement below, or a failure to appeal from the adverse
judgment," Id. at 560. Thus, a failure to
appeal may be considered another objective indicator relevant
to the substantial justification determination.
first to the summary judgment in AmeriGuard's favor, the
Court noted there that the Secretary's allegation that
AmeriGuard was a fiduciary under the Employee Retirement
Income Security Act ("ERISA") was a
"bald" one, supported neither by facts nor by law.
had no authority or control over the employee benefit plans
at issue, and it never exercised authority or control over
the plans or their assets. In short, AmeriGuard did not meet
the ERISA requirements to be considered a fiduciary. The
Secretary attempted to get around that obvious failure of
proof by contending that AmeriGuard had a duty under the
Taft-Hartley Act to appoint an employer representative to the
benefit plans, but this case was not brought under the
Taft-Hartley Act. The case was brought solely under ERISA,
and it is ERISA's statutory definitions of
"fiduciary" that controlled the ruling in
AmeriGuard's favor. Moreover, despite the Secretary's
current effort to claim his Taft-Hartley argument created a
question of first impression, which, therefore, imbued his
case against AmeriGuard with substantial justification, the
Secretary fails to respond fully to the standard he himself
relies upon in the unpublished case of So. Dredging Co.,
Inc. v. United States, 96 F.3d 1439 (4th Cir. 1996)
(per curiam). There, the Circuit opined that the
"substantially justified" standard "allows the
government to advance 'in good faith . . . novel but
credible . . . interpretations of the law that often
underlie vigorous enforcement efforts.'" 96 F.3d at
*3 (emphasis added). Unlike the So. Dredging case in
which the Circuit observed, "the government made a
credible case for its own statutory interpretation given the
legislative history, the principle regarding broad
interpretations of environmental enforcement regulations, and
the Executive Order," id., here, the
Secretary's "novel" interpretation of
Taft-Hartley and ERISA was not also "credible." The
Secretary provided no legislative history showing Congress
intended ERISA's definitions of "fiduciary" to
hinge upon any language in the Taft-Hartley Act. The
Secretary's argument was created out of whole cloth spun
from thin air. The Court concludes the Secretary's case
against AmeriGuard was not substantially justified. That
conclusion is buttressed by an objective indicator: the
Secretary's failure to appeal the adverse judgment
AmeriGuard is entitled to an award of attorneys' fees
under EAJA. AmeriGuard's supporting detail indicates its
attorneys' fees (including paralegal fees) are modest in
relation to prevailing market rates. Even so, the Court must be
cognizant of the statutory proscription against rates higher
than $125 per hour unless supported by an increase in the
cost of living or by other special factors. The Court does
not find any special factors other than cost of living to be
applicable. As for the increase in cost of living since 1996
when the $125 per hour rate was set, AmeriGuard has provided
information indicating that the permissible hourly rate, if
one accounts for the cost of living, is now appropriately set
at $203.02. (CPI Inflation Calculator, U.S. Dep't of
Labor, Nov. 27, 2018, AmeriGuard's Mot. Ex. 3, ECF No.
129-4.) The Court will use that figure as the maximum
allowable rate. Doing so only affects the rates charged by
the shareholders Craig F. Ballew and Michael K. Hourigan, who
customarily charge $250 per hour. The two associate
attorneys, usually compensated at $160 per hour, and the two
paralegals, usually compensated at $90 per hour, are not
affected by the maximum allowable rate. At $203.02 per hour
instead of $250, the total permissible fee for the time of
Attorneys Ballew and Hourigan is $70, 782.92. Added to the
already permissible fees of $16, 672 for Associate Attorneys
James K. Howard and Rafiq R. Gharbi and $369 for Paralegals
Vanessa L. Wallace and Nicole M. Cook, the total amount
awarded to AmeriGuard for attorneys' fees is $87, 823.92.
accordance with the foregoing, it is hereby ORDERED:
1. AmeriGuard's Motion for Award of Attorneys' Fees
(ECF No. ...