If the FAA initiates an enforcement action or civil penalty action and then loses, does the certificate holder or target of the civil penalty action have any recourse? Well, under the Equal Access to Justice Act (“EAJA”) it may be able possible to make the FAA pay for the attorney’s fees and expenses incurred by the certificate holder or target of the civil penalty action to defend against the claims asserted by the FAA. Although this may not seem like much consolation, it provides some recourse when the FAA has improperly pursued an action.
The EAJA is found at 5 U.S.C. 504 and is implemented in 49 CFR 826. According to 49 CFR 826.1, “The Equal Access to Justice Act, 5 U.S.C. 504 (the Act), provides for the award of attorney fees and other expenses to eligible individuals and entities who are parties to certain administrative proceedings (adversary adjudications) before the National Transportation Safety Board (Board). An eligible party may receive an award when it prevails over the Federal Aviation Administration (FAA), unless the Government agency’s position in the proceeding was substantially justified or special circumstances make an award unjust.” In order to determine whether EAJA fees are available, the key inquiries for a certificate holder or target of a civil penalty action who is applying for an award of fees (the “Applicant”) are (1) Is the Applicant a “prevailing party”? (2) Was the Applicant involved in an “adversary adjudication”? (3) Was the FAA’s position “substantially justified”? and (4) Were the fees actually “incurred” by the Applicant?
Was The Applicant A Prevailing Party?
Obviously, if an Applicant was successful at the hearing and the administrative law judge dismissed all charges against the Applicant, then the Applicant is a prevailing party. However, an Applicant may also be a prevailing party in situations where the FAA dismisses some, but not all of the charges or if the FAA asserts multiple charges against the Applicant but is only successful on some of the charges at the hearing. It is also possible that an Applicant could be considered a prevailing party under EAJA when the Applicant has been able to reach a favorable settlement with the FAA.
Was The Applicant Involved In An Adversary Adjudication?
For purposes of EAJA, an adversary adjudication does not arise until after an FAA order is appealed by the Applicant. If the FAA does not issue an order, EAJA is not triggered. Once the order is appealed, then the attorney’s fees and expenses incurred from that point on become eligible for an EAJA award.
Was The FAA’s Position Substantially Justified?
In order for the FAA’s position to be substantially justified, it must have been reasonable both in fact and in law. This means that sufficient, reliable evidence must have existed in support of a reasonable legal theory asserted by the FAA in the action. This determination is made based upon the entire administrative record and the FAA’s failure to prevail on the merits does not automatically result in award of the requested attorney’s fees and expenses. It is important to note that under EAJA, the FAA’s burden of proving substantial justification is less demanding than its burden of proof when arguing the merits of the underlying complaint at the hearing. If key factual issues can only be resolved through a credibility determination by the ALJ, then the FAA’s position is considered justified. This is often the case and certainly the most common argument raised by the FAA in opposition to an EAJA fee request.
Were The Fees Actually Incurred By The Applicant?
In order to recover EAJA fees, an Applicant must show that the Applicant actually incurred the fees and expenses requested. In a situation where the Applicant has paid an attorney for representation throughout the enforcement process out of the Applicant’s own pocket, this is easy. Conversely, when an Applicant’s employer or union pays the fees then the Applicant did not incur the fees for purposes of EAJA. However, if the employer advances the fees and the Applicant is obligated to repay those fees regardless of the outcome of the action, then the Applicant would be considered to have incurred the fees.
Also, it may be possible for an Applicant to incur fees by retaining an attorney on a contingent fee basis under which the attorney would only receive payment in the event of an EAJA recovery. However, this type of arrangement must be documented at the time the attorney is retained in order for it to qualify under EAJA. In general, documentation of the payment of, or obligation for, the fees is critical to recovery under EAJA.
The Application Process
Under EAJA, an application for an award must be filed within 30 days of the final disposition of the enforcement action. Final disposition occurs as of the date on which an un-appealed initial decision becomes administratively final. For example, in a certificate action, any appeal of an initial decision must be filed within 10 days from the date of the NTSB administrative law judge’s decision. Since the last day of a designated period is included in the computation of a time limit, on that tenth day, the 30-day period for filing an EAJA application also begins to run. Thus, in the case of a certificate action, the final day to file the EAJA application is actually the 29th day after expiration of the 10-day appeal period. As with many other deadlines in the enforcement process, this deadline is jurisdictional and will result in the denial of an EAJA request if it is filed after expiration of the 30 days. EAJA requires that the application be detailed and that it contain specific documentation and explanation of the fees and expenses requested. Additionally, the Applicant will need to submit evidence that the Applicant meets the net-worth limitations under EAJA (generally $2,000,000 for individuals and $7,000,000 for businesses).
The fees and expenses recoverable under EAJA include attorneys fees (at a current rate of approximately $156.00 per hour based upon the CPI) as well as costs and expenses reasonably incurred in the action such as witness fees, expert witness fees etc. The attorney’s fees and expenses will be evaluate to determine their reasonableness based upon the customary fee or cost for such services, the prevailing rate for similar services in the community, the time actually spent in the representation of the Applicant, and the time reasonably spent in light of the difficulty or complexity of the issues enforcement action.
This means that the attorney representing the Applicant must include more detail than simply the amount owed. To do this, the attorney needs to be careful to provide a description of the nature of the work performed on behalf of the Applicant without disclosing sensitive client information or information subject to the attorney-client privilege.
If you have to defend yourself against the FAA in an enforcement action or civil penalty action, having the charges dismissed can be a bittersweet victory. You have won the war, but your wallet is a lot lighter. Fortunately, the EAJA can provide you with some consolation. Assuming you qualify, you can force the FAA to reimburse you for the attorney’s fees and expenses you incurred defending yourself. Although this may not be complete satisfaction, making the FAA pay can certainly provide some consolation.
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