Bowers + Kubota Consulting, Inc., et al. v. Julie A. Su, Acting Secretary of Labor

This case concerns the Equal Access to Justice Act (EAJA), which was enacted to curb abusive and costly lawsuits involving the federal government. EAJA authorizes a party who prevails in litigation against a federal agency to seek attorneys’ fees and costs when the agency’s litigating position was not “substantially justified.” 28 U.S.C. § 2412. EAJA’s fuzzy standard has spawned disagreement among the lower federal courts over when fees are authorized. This appeal is emblematic of the disunity. It involves a meritless lawsuit by the Department of Labor (DOL) that was unjustified from the start. DOL’s case depended entirely on an expert valuation that was riddled with obvious errors, making it wholly unreliable. The district court thus rejected the entire opinion and entered judgment for petitioners. But the court denied EAJA fees, and a divided panel of the Ninth Circuit affirmed. The majority below held that DOL met its burden to show that its position was substantially justified because—although the government “knew or should have known” that the report was brimming with errors—the report had not yet been rejected by the district court, and the expert “stood firm in his conviction” that he was correct. Four other circuits have confronted similar circumstances; applying materially different legal standards, they would have reversed the denial of fees. The question presented is whether the government’s decision to take a case to trial is “substantially justified” (28 U.S.C. § 2412) when the government’s case relies solely on expert evidence that it knew or should have known was error-ridden and thus unreliable.