By Ellen Smith
A small limestone operator is not entitled to EAJA fees where the Secretary vacated seven citations issued against the operator after the MSHA inspector was no longer available to testify at a hearing, the D.C. Circuit Court of Appeals ruled April 19.
Cactus Canyon Quarries, located in Burnet County, Texas, was cited for the alleged violations on May 20, 2013, and on Aug. 15, 2013, MSHA proposed penalties totaling $700.
On Aug. 19, 2013, the company’s president and attorney, Andy Carson, requested that the case be designated for simplified proceedings. Nine days later, an attorney for the Solicitor’s Office asked for more time to review the case since she had just received the files from MSHA. After several phone conversations, the parties could not agree on settlement language. The Solicitor claimed that the company wanted language in the settlement that would limit MSHA’s ability to cite violations at the quarry in the future. It was also noted that there were several disputed facts. No action was taken regarding the request for simplified proceedings because the case was not assigned to an ALJ until April 1, 2014.
Facts in Dispute
Facts were still in dispute in May 2014, and this is when the Secretary found that MSHA did not have any witnesses for the case, since the inspector had left the agency. The Solicitor’s Office then filed a motion, stating the Secretary had vacated the citations, and requested a dismissal of the case. Cactus Canyon opposed, stating it wanted a settlement and EAJA fees.
On June 14, 2014, Review Commission Judge Priscilla Rae dismissed the proceedings, ruling that the Secretary had “unfettered discretion to vacate citations.” Cactus Canyon then filed for $11,250 for EAJA fees, based on the amount of time it spent defending itself against the $700 in penalties. The Secretary filed an answer, and Cactus Canyon then filed for an additional $2,500 in EAJA fees for time spent on a reply brief. In denying EAJA fees, Judge Rae said the company was not a prevailing party.
“This case involved minor safety violations that are routinely cited by MSHA, and the citations on their face provide substantial justification for the Secretary’s actions in initiating the litigation,” Judge Rae said in her Sept. 15, 2014, decision (21 MSHN D-2642).
“There is no indication of government overreach or mischievous purposes such as harassment, nor is it at all apparent that MSHA litigated the claim vigorously such as would have burdened the operator with the high cost of defending himself, as MSHA did not conduct discovery or prepare for a hearing and in fact appears to have let the case sit for about six months without taking any action on it.”
She noted several cases that support her agreement with the Secretary that Cactus Canyon was not a prevailing party within the meaning of EAJA. The case was dismissed based on the Secretary vacating the citations, which occurred before discovery and trial preparation had taken place.
Conditions Not Met in Three-Part Test
The D.C. Circuit said while the company argued there were “good reasons” why it was entitled to fees, and that its case differed from EAJA case law under Buckhannon Board & Care Home Inc. 532 U.S. 598 (2001), which established a definition of “prevailing party,” the company never fully explained the reasons, or why its case, brought under the Mine Act, was different than Buckhannon or why it mattered.
The company stated that under the current EAJA case law, the Secretary can avoid paying attorney fees by vacating citations, but the legislative history of EAJA “does not make clear that a voluntary dismissal necessarily entitles a defendant to ‘prevailing-party’ status,” the court said.
The court cited a three-part test for EAJA fees, and whether a party has prevailed: There must be a court-ordered change in the legal relationship of the parties; the judgment must be in the favor of the party seeking the fees; and the judicial pronouncement must be accompanied by judicial relief.
The case involving the seven citation was dismissed without prejudice, the court said. “The Secretary unilaterally ended its relationship with Cactus Canyon, leaving the parties where they were before the citations were issued.” There is nothing in the case stating that the Secretary is barred from reissuing citations for the same conditions, the court said, and there is nothing in the record suggesting that the ALJ’s dismissal bars the Secretary from re-issuing the citations against Cactus Canyon.”
CACTUS CANYON QUARRIES INC., 4/19/2016, CA DC No. 14-1260 23 MSHN D-837