Memorandum Returning Without Approval a Bill To Reauthorize the Equal Access to Justice Act

I am withholding my approval of H.R. 5479, a bill "to amend section 504 of title 5, United States Code, and section 2412 of title 28, United States Code, with respect to awards of expenses of certain agency and court proceedings, and for other purposes."

H.R. 5479 would permanently reauthorize and make a number of significant changes to the Equal Access to Justice Act. The Act allows the award of attorneys' fees to certain parties who successfully litigate against the government unless the government demonstrates that its position is substantially justified or that special circumstances exist that make a fee award unjust. Because the Equal Access to Justice Act expired on September 30, 1984, legislation is needed to reauthorize the Act.

I am firmly committed to the policies underlying the Equal Access to Justice Act and will make the permanent and retroactive reauthorization of the Act a high legislative priority of the Administration in the next Congress. Where the Federal government has taken a position in litigation that is not substantially justified, and thereby has caused a small business or individual to incur unnecessary attorneys' fees and legal costs, I believe it proper for the government to reimburse that small business or individual for those expenses. The Equal Access to Justice Act thus serves an important salutary purpose that should become a permanent part of our government. Unfortunately, H.R. 5479 makes certain changes to the Equal Access to Justice Act that do not further the Act's basic purposes and that are inconsistent with fundamental principles of good government. The most objectionable of these provisions is the change the bill would make in the definition of "position of the United States." Under this changed definition, the Act would no longer apply only to the government's position taken in the administrative or court litigation, but would extend to the underlying agency action. This would result in needless and wasteful litigation over what is supposed to be a subsidiary issue, the award of attorneys' fees, and would further burden the courts, which would have to hear the claims in each case not once, but twice. In addition, this change could also undermine the free exchange of ideas and positions within each agency that is essential for good government.

For example, this change would require courts in making fee determinations to examine the conduct of an agency even where that conduct is not at issue in the court's review of the merits of the case before it. This would mean that a fee proceeding could result in an entirely new and subsidiary inquiry in the circumstances that gave rise to the original lawsuit. This inquiry only could lead to far lengthier proceedings than required if the court is merely to examine arguments made in court, but also could lead to extensive discovery of how the underlying agency position was formulated, and who advocated what position and for what reasons at what time. In effect, every step of the agency decision-making process, at whatever level, could become the subject of litigation discovery. Such extensive discovery could inhibit free discussion within an agency prior to any final agency policy decision or action for fear that any internal disagreements or reservations would be the subject of discovery and judicial inquiry.

In addition, H.R. 5479 contains a provision that would require the United States to pay interest on any awarded attorneys' fees not paid within 60 days after the date of the award. As noted by the Comptroller General of the United States, this provision would give lawyers who have received awards under the Act more favorable treatment than any other group entitled to interest payments from the United States. I agree with the Comptroller General that to the extent any interest should be paid under the Act, it should be paid on the same basis as other interest payments made by the government on court judgments.

The Department of Justice, the Office of Management and Budget, and other concerned agencies have repeatedly expressed to the Congress their serious reservations about these and other provisions of H.R. 5479. I wholly support the prompt reauthorization of the Equal Access to Justice Act and believe that the reauthorization should be retroactively effective to October 1, 1984. In light of the permanent nature of a reauthorization, such a reauthorization should include modifications and improvements in the Act, which the Administration is willing to explore with the Congress.

Concurrently with this memorandum, I am issuing a memorandum to all agency heads concerning the Equal Access to Justice Act. This memorandum reaffirms strong commitment to the policies underlying the Act and instructs agency heads review the procedures of their agencies to ensure that agency positions continue to be substantially justified. Special attention is to be given to those agency positions that affect small businesses. In addition, each agency is to accept and assist in the preparation of fee applications which can be considered once the Act is reauthorized.

I look forward to approving an acceptable reauthorization of the Equal Access to Justice Act early next year. For the reasons indicated, however, I am compelled to withhold my approval of H.R. 5479.

RONALD REAGAN

The White House,

November 8, 1984.