Arthur Newmark, M.d. v. Anthony Principi, Secretary, United States Department of Veterans Affairs

PRECEDENTIAL
Filed March 13, 2002
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No. 01-1809
ARTHUR NEWMARK, M.D.,
Appellant
v.
*ANTHONY PRINCIPI, SECRETARY,
UNITED STATES DEPARTMENT OF VETERANS
AFFAIRS; TRACY BARRETT, in her
official capacity as Acting Chief
of Staff, and in her individual capacity;
MICHAEL BERKWITS, in his official capacity
as Director of the Emergency Room, and in
his individual capacity; EARL FALLAST;
JOHN DOE Nos. 1-5; PHILADELPHIA VETERANS
AFFAIRS MEDICAL CENTER
*(Substituted Pursuant to F.R.A.P. 43(c))
Appeal from the United States District Court
for the Eastern District of Pennsylvania
(D.C. Civil No. 99-cv-05798)
District Judge: Honorable Jan E. DuBois
Argued January 17, 2002
Before: RENDELL, FUENTES, and MAGILL,*
Circuit Judges
_________________________________________________________________
* Hon. Frank J. Magill, Judge of the United States Court of Appeals for
the Eighth Circuit, sitting by designation.
(Filed March 13, 2002)
Alice W. Ballard, Esq. [ARGUED]
Law Office of Alice W. Ballard
225 South 15th Street, Suite 1700
Philadelphia, PA 19102
Counsel for Appellant
Arthur Newmark
Susan D. Bricklin, Esq. [ARGUED]
Office of the U.S. Attorney
615 Chestnut Street
Philadelphia, PA 19106
Counsel for Appellee

-- 1 of 9 --

Secretary of Veterans Affairs
OPINION OF THE COURT
RENDELL, Circuit Judge.
In 1999, Arthur Newmark filed a Bivens action against
the Secretary of the United States Department of Veterans
Affairs, and against the Acting Chief of Staff, the Director
and Emergency Room Director of the Philadelphia Veterans
Affairs Medical Center, (hereinafter PVAMC), and the Center
itself. In 2000, he filed an amended complaint adding
claims against PVAMC for violations of the Age
Discrimination in Employment Act (hereinafter ADEA).
Later that year, Newmark agreed to dismiss all claims in
return for an offer of judgment that paid $297,154 in back
pay. The terms of the offer of judgment entered by the
court, provided for the payment of attorneys’ fees to be
"determined by the court under the Equal Access to Justice
Act" for the portion of the work attributable directly to the
ADEA claims. After briefing by the parties, the District
Court determined that since the offer of judgment
specifically provided for the award of attorneys’ fees under
the EAJA, the Court did not need to establish whether the
ADEA would independently authorize such fees. The court
considered Newmark’s argument that under 28 U.S.C.
S 2412(b) he was entitled to fees against the government to
the same extent as he could have recovered from a private
2
party under the ADEA. The District court disagreed, finding
that the limit of $125 under S 2412(d) applied and that the
amount of the fees was required by the statute to be
capped at $125 per hour. Newmark has challenged only the
final conclusion -- that the statutory provisions of the
Equal Access to Justice Act require that attorneys’ fees be
capped at $125 per hour. For the reasons cited below, we
conclude that the District Court erred in so finding, and we
will vacate and remand for further proceedings.
I. Jurisdiction and Standard of Review
The District Court had jurisdiction pursuant to 28 U.S.C.
S 1331, since Newmark’s claims arose under the ADEA, 29
U.S.C. S 621, et seq. and under Bivens v. Six Unknown
Named Agents of Federal Bureau of Narcotics, 403 U.S. 388
(1971). The fee award was also determined pursuant to a
federal statute, 28 U.S.C. S 2412, the Equal Access to
Justice Act (EAJA). The District Court issued a final order
in this case, and we have jurisdiction over the appeal
pursuant to 28 U.S.C. S 1291.
Appellant urges that we apply a plenary standard of
review, since we are being asked to construe a statute. We
agree. An award of attorneys’ fees under the EAJA is
generally reviewed under an abuse of discretion standard.
See, e.g., Dewalt v. Sullivan, 963 F.2d 27, 28 (3d Cir. 1992).
Here, however, as in Dewalt, the question of whether the

-- 2 of 9 --

District Court abused its discretion turns on whether the
court properly applied the statutory provisions, which
presents a question of law to which we apply plenary
review. Id.
We note at the outset that this case comes to us in an
unusual procedural posture. The Department of Veterans
Affairs argued convincingly before the District Court for an
interpretation of the statute that was very close to the
District Court’s actual interpretation, namely that the cap
on fees set forth in subsection S 2412(d) controls an award
under S 2412(b). Between that time and the briefing before
us, the District of Colorado issued Villescas v. Richardson,
145 F. Supp. 2d 1228 (D. Colo. 2001), in which the court
determined that, for the purposes of an ADEA claim, the
3
analysis under the statute should be bifurcated, and
attorneys’ fees should be awarded under the second
sentence of S 2412(b). Id. at 1231. Because private litigants
under the ADEA have remedies governed by the FLSA, the
court interpreted the second sentence of S 2412(b) to refer
it to the FLSA’s allowance of "reasonable attorney’s fee . . .
and costs of the action." The court calculated the
reasonable attorney’s fee using a traditional lodestar
method. Id. According to the attorney appearing before us,
this opinion generated sufficient internal discussions
among "the Department of Justice components and U.S.
Attorneys’ offices" (Appee. Supp. Br. at 5) that they have
changed their position. Appellee was thus constrained to
argue before us that while its arguments were made before
the District Court in good faith, it now concedes the
correctness of Newmark’s position. However, the District
Court order to the contrary is still before us and Appellant
urges us to reverse and remand. Because decisions made in
other jurisdictions are not binding on us, we will examine
and interpret the statute ourselves in the light of our
precedent.
II. The Equal Access to Justice Act
A. The Structure of the Act
The relevant portions of the statute in question, the
EAJA, provide:
28 U.S.C. S 2412. Costs and fees
(a)(1) Except as otherwise specifically provided by
statute, a judgment for costs, as enumerated in section
1920 of this title, but not including the fees and
expenses of attorneys, may be awarded 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. A judgment for costs when taxed against the
United States shall, in an amount established by

-- 3 of 9 --

statute, court rule, or order, be limited to reimbursing
in whole or in part the prevailing party for the costs
incurred by such party in the litigation.
4
. . .
(b) Unless expressly prohibited by statute, a court may
award reasonable fees and (expenses of attorneys, in
addition to the costs which may be awarded pursuant
to subsection (a), 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. The United States shall be liable for
such fees and expenses to the same extent that any
other party would be liable under the common law
or under the terms of any statute which specifically
provides for such an award.
. . .
(d)(1)(A) Except as otherwise specifically provided by
statute, a court shall award to a prevailing party other
than the United States fees and other expenses, in
addition to any costs awarded pursuant to subsection
(a), incurred by that party in any civil action (other
than cases sounding in tort), including proceedings for
judicial review of agency action, brought by or against
the United States in any court having jurisdiction of
that action, unless the court finds that the position of
the United States was substantially justified or that
special circumstances make an award unjust.
. . .
(2) For the purposes of this subsection--
(A) "fees and other expenses" includes the
reasonable expenses of expert witnesses, the
reasonable cost of any study, analysis, engineering
report, test, or project which is found by the court to
be necessary for the preparation of the party’s case,
and reasonable attorney fees. (The amount of fees
awarded under this subsection shall be based upon
prevailing market rates for the kind and quality of the
services furnished, except that (i) no expert witness
shall be compensated at a rate in excess of the highest
rate of compensation for expert witnesses paid by the
United States; and (ii) attorney fees shall not be
5
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,

-- 4 of 9 --

justifies a higher fee.);
(Emphasis added).
The fee cap appears in S 2412(d)(2)(A), and is specifically
limited "for purposes of this subsection," i.e., to S 2412(d).
If S 2412(d) serves only to expand upon and clarify
S 2412(b), then fees awarded under S 2412(b) might be
subject to the cap on fees. If, on the other hand,S 2412(b)
and S 2412(d) present alternative awards, the limit under
S 2412(d) should not apply. The District Court noted that
courts frequently have relied on a general authorization of
fees under S 2412(b) as the predicate for the award
calculation under S 2412(d).1 From that consistent coupling,
the District Court inferred that the two sections were part
of an integrated statute. In so concluding, the District
Court overlooked the distinctions between the specific
provisions that follow the general authorization in
S 2412(b). We acknowledge that we have been imprecise in
awarding fees under the Equal Access to Justice Act
without specifically indicating the statutory provisions
under which the award is being sought. However, this is
understandable, because we have not previously been
presented with the precise issue before us, namely whether
the specific provisions of S 2412(b) do in fact stand alone as
authority for attorneys’ fees, separate from S 2412(d).2
_________________________________________________________________
1. As one example, see Donovan v. Dialamerica Mktg., Inc., 757 F.2d
1376, 1388 (3d Cir. 1985), cert. denied sub nom Dialamerica Mktg., Inc.
v. Brock, 474 U.S. 919.
The Act provides in relevant part that "a court may 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 and 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. S2412(b) (1982). The Act provides an exception to the award
of attorney’s fees if "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. S 2412(d)(1)(A).
2. In Dewalt v. Sullivan, 963 F.2d 27 (3d Cir. 1992), for example, the
original claim had been brought under the Social Security Act, 42 U.S.C.
6
Rather, our cases have assumed the general grant in
S 2412(b) as authorizing the calculation underS 2412(d).
But, appellants -- and now appellees as well -- have drawn
our focus to the statutory language, and make a convincing
point. We will begin by discussing the statutory language,
including its origins.
The first canon of statutory construction is to examine
the language of the statute itself and ascertain its plain
meaning. Sekula v. FDIC, 39 F.3d 448 (3d Cir. 1994). The
initial section of S 2412(b) provides that courts "may award
reasonable fees . . . to the prevailing party," which could

-- 5 of 9 --

refer either to the United States or its opponent. It then
states in the second section the parameters of the United
States’ liability if it does not prevail in certain instances:
"The United States shall be liable . . . to the same extent
that any other party would be liable under the common law
or under the terms of any statute which specifically
provides for such award." By contrast, in S 2412(d),
Congress mandates fees to be awarded where the
government is not the prevailing party -- in any type of civil
action -- and its position was not substantially justified.
Under S 2412(d), there is a cap on such fees.
It is incumbent upon courts to read each statutory
provision as having meaning, and to construe the statute
so the "meaning of each word inform[s] the others and ‘all
in their aggregate tak[e] their purport from the setting in
which they are used.’ " United States Nat’l Bank of Oregon
v. Indep. Ins. Agents of Am., 508 U.S. 439, 454 (1993)
(quoting NLRB v. Federbush Co., 121 F.2d 954, 957 (2d Cir.
1941). Having been advised of the parties’ interpretation we
conclude that it is perhaps the only way to give meaning to
the two sections. The ability of a court to award fees is
recognized in S 2412(b) which contains the general
authorization as we have previously noted. This
authorization would permit an award to either the United
_________________________________________________________________
S 301, et seq., which does not contain a provision for fee-shifting
referenced under S 2412(b). Accordingly, courts have consistently
evaluated claims for fees against the government under this statute as
falling under S 2412(d).
7
States or a private citizen who is a prevailing party. But
what we hadn’t previously focused on, is the meaning of the
second sentence of S 2412(b) which specifically addresses
the extent of the liability in certain instances when the
United States is not the prevailing party. This sentence
seeks to create a parity for those plaintiffs who are suing
the government rather than a private party on a cause of
action for which there is fee-shifting as against a private
party either at common law or by statute; in those
circumstances, the fee liability of the government is to be
the same. By contrast, S 2412(d) mandates a (capped) fee
award to the prevailing party who sues the government if
the government’s position was not substantially justified.
Viewed in this light, S 2412(d) appears to be a fail-safe
provision; even if the court has declined to exercise
discretion to award fees to any prevailing party-- as it may
under S 2412(b) -- it cannot refuse fees ifS 2412(d) applies.
Therefore, the waivers of sovereign immunity set forth in
S 2412(b) and S 2412(d) are fairly specific and we conclude
that the waiver in S 2412(b) is distinct from that in
S 2412(d).
Our reading is supported by the House Report on the
S.265, a bill presented to broaden the fee-shifting
framework under the then existing Civil Rights Attorney’s

-- 6 of 9 --

Fees Awards Act. That proposal became the Equal Access to
Justice Act. Its purpose was noted, in part, as:
to reduce the deterrents and disparity by entitling
certain prevailing parties to recover an award of
attorney fees, expert witness fees and other expenses
against the United States, unless the government
action was substantially justified. Additionally , the bill
ensures that the United States will be subject to the
common law and statutory exceptions to the American
rule regarding attorney fees. This change will allow a
court in its discretion to award fees against the United
States to the same extent it may presently award such
fees against other parties.
H.R. Rep. No. 96-1418 (Sept. 26, 1980)(emphasis added).
The first part of this statement recites what S 2412(d)
accomplishes. The second part notes that, in addition,
certain exceptions to the "American rule" (i.e., against fee-
8
shifting) are allowed -- noting what is accomplished in the
second sentence of (b), and appearing to reflect the
separateness of the second sentence of S 2412(b) from the
purpose and scope of S 2412(d).
B. The Case Law
Our case law is not in conflict with this reading. As noted
above, the majority of instances in which we have been
asked to consider appeals under the EAJA have been
situations in which appellants are either seeking or
challenging awards under S 2412(d). Thus, these decisions
are not instructive here. In these cases, we have credited
the general permission to grant fees under the first
sentence of S 2412(b) as authorizing fee awards that are
calculated using S 2412(d), viewing the mandatory language
in S 2412(d) as directing the discretion given in the first
sentence of S 2412(b); we have no need to disturb these
prior rulings. Recently, we did have occasion to address a
request by a claimant for an award specifically under the
provisions of S 2412(b), and, there, while finding plaintiff
not entitled to fees under S 2412(b), we treated assessment
of fee awards under the two sections as analytically
distinct. See Morgan v. Perry, 142 F.3d 670, 683 n.26 (3d
Cir. 1998), cert. denied sub nom Morgan v. Cohen , 525 U.S.
1070, 119 S. Ct. 801 (1999). We rejected the claimant’s
argument that he was entitled to fees underS 2412(b)
because Morgan had not identified a "statute or rule of
common law which specifically provides for an award of
attorney’s fees" for his claim. Id.
The case law of other Courts of Appeals comports with
this analysis. See, e.g., Maritime Mgmt, Inc. v. United States,
242 F.3d 1326, 1331 (11th Cir. 2001)("The statutory
framework of 28 U.S.C. S 2412 contains two parallel
provisions for awarding attorneys’ fees to plaintiffs that
prevail in civil suits against the United States."); Kerin v.

-- 7 of 9 --

USPS, 218 F.3d 185, 189 (2d Cir. 2000)("The EAJA contains
two distinct and express statutory waivers of sovereign
immunity permitting the recovery of attorneys’ fees in
lawsuits brought by or against the United States."); see also
Hyatt v. Apfel, 195 F.3d 188 (4th Cir. 1999)(affirming an
award of fees calculated in part under S 2412(d) and in part
9
under S 2412(b) where part of the litigation was conducted
in bad faith).
Most scholars also agree, noting that while the liability
under S 2412(b) is open-ended, the provisions are designed
to even the playing field in some situations, while the
provisions of S 2412(d) are intended to require some fee
relief in certain circumstances.
The Equal Access to Justice Act coupled an
unprecedented expansion in the government’s liability
for attorneys’ fees with strict limitations on the
availability and calculation of those fees. Both the
expanded liability and the fee restrictions are essential
to the statutory goal of deterring and correcting
unreasonable government conduct. At the same time,
however, the EAJA enacted a separate, relatively
narrow provisions, Section 2412(b), waiving the
government’s immunity from the fees to which other
litigants have long been subject. Unlike section
2412(d), section 2412(b) is neither novel nor visionary.
It is intended only to place the United States on the
same footing as any other litigant.
June Carbone, The Misguided Application of Traditional Fee
Doctrine to the Equal Access to Justice Act, 26 B.C.L. Rev.
843, 897-98 (1985). See also Gregory C. Sisk, A Primer on
Awards of Attorney’s Fees Against the Federal Government,
25 Ariz. St. L.J. 733, 786-88 (1993); John J. Sullivan, The
Equal Access to Justice Act in the Federal Courts , 84 Colum.
L. Rev. 1089, 1093 (1984).
Because we find S 2412(b) and S 2412(d) to provide for
different types of fee awards, and because the cap on fees
is positioned in S 2412(d) and is to apply only to fees
awarded under that subsection, we conclude that the
District Court misconceived the cap on fees awarded under
S 2412(d) as applying to all fees awarded under S 2412.
The District Court recognized that there is an unresolved
issue as to whether fees may be awarded under the ADEA
when suing the government, but it determined that it need
not decide the issue because the parties had specified that
fees were to be calculated under the EAJA. We agree that
the language in the consent judgment, whereby the parties
10
agreed that fees should be awarded under the EAJA,

-- 8 of 9 --

dispenses with the need for us -- or the District Court on
remand -- to examine the extent of the waiver of sovereign
immunity under the ADEA. Rather, since the EAJA
provides for "parity" in the allowance of fees against the
government in actions in which, by statute, private party
defendants are required to pay fees, and since the ADEA is
such a fee-shifting statute, section 2412(b) would apply.
Accordingly, we will VACATE the Order awarding
attorneys’ fees and REMAND to the District Court for
recalculation of the fee in a manner consistent with this
opinion.
A True Copy:
Teste:
Clerk of the United States Court of Appeals
for the Third Circuit
11

-- 9 of 9 --