Protester Entitled to Fees Under EAJA Because Government’s Litigation Position Wasn’t Substantially Justified; Superior Optical Labs, Inc. v. United States, COFC NO. 20-1211C

Request for fees under the Equal Access to Justice Act is granted. The court found fees were warranted because the government’s legal position in the underlying suit was not substantially justified. Indeed, the government’s position had been contrary to the plain language of a statute. Moreover, the novelty of the legal issue in the underlying suit did not itself justify the government’s litigation position.

Background

The COFC sustained a protest filed by Superior Optical Labs, challenging the Department of Veterans Affairs’ decision to transition requirements that had been set aside for veteran-owned small businesses to the AbilityOne Program. The court found that under the Veterans Affairs Contracting Consistency Act, the VA was required to continue setting the requirements aside for veteran-owned businesses. 

Following the decision, Superior applied for attorneys fees under the Equal Access to Justice Act.

Legal Analysis 

• Government’s Litigation Position Was Not Substantially Justified — A plaintiff can only recover fees under the EAJA if the government’s litigation position in the underlying suit was not substantially justified. The court found the government’s litigation position meritless. The government had argued the Consistency Act allowed it to transfer requirements from SDVSOBs to the AbilityOne Program. The court found the plain language of the Consistency Act negated the government’s position.
• Novelty of the Legal Issue Did Not Justify Government’s Position — The government argued that the novelty of the legal issues in the case made its position substantially justified. The court reasoned that novelty by itself cannot justify an argument. The point of EAJA is to remove the financial disincentive to challenge improper government action. If novel government arguments were per se justified, then the first challenger of improper government action could not recover fees, which would end up disincentivizing challenges to improper government action.

Superior is represented by Robert J. Sneckenberg, John E. McCarthy, Jr. and Rina M. Gashaw of Crowell & Moring LLP as well as Elizabeth Haws Connally of Connally Law, PLLC. The government is represented by Vincent D. Phillips, JrDouglas K. Mickle, Robert E. Kirschman, Jr. and Brian M. Boynton of the Department of Justice as well as Natica Chapman Neeley of the Department of Veterans Affairs.