The contractor appealed two claims but only prevailed on one. The contractor requested a fee award under the Equal Access to Justice Act (EAJA) for the successful claim. But the ASBCA couldn’t discern which fees were attributable to successful claim. The contractor and the government each proposed methods for calculating a percentage of recoverable fees. The board rejected each party’s methodology. Instead, the board went with a simple, Solomonic approach. The contractor asserted two claims. One was successful. Thus, the contractor was entitled to 50% of the total fees and expenses incurred.
Application Under the Equal Access to Justice Act of CKY, Inc., ASBCA No. 60451-EAJA
Background
The Army awarded CKY, Inc. a task order to reinforce a culvert near the Mississippi River. During performance, CKY experienced backflow into the culvert that delayed construction. CKY submitted a claim to recover the costs of dealing with the backflow. The Corps denied the claim. CKY appealed to the ASBCA.
The board denied CKY’s claim for any costs associated with backflow from the Mississippi River. But the board sustained a differing site conditions claim for costed relating to other undocumented culverts at the worksite. The board remanded to the parties to determine quantum.
The parties agreed the Corps would pay CKY $185,000. CKY requested the board award the company its attorney’s fees and expenses under the EAJA.
Analysis
Substantial Justification
An application for fees under the EAJA may be denied if the government position was substantially justified. In this case, the Corps argued that if the board were to consider the entirety of its litigation posture, then its position was justified. The Corps reasoned it had prevailed one of CKY’s three claims, so its position must have been reasonable.
The board didn’t see it that way. When considering substantial justification, each claim stands on its own. The board does not consider whether the government’s position was justified as whole. Rather, the board assesses whether the government’s position was justified with respect to each claim. The Corps may have prevailed on one of the claims. But the board still had to assess whether the Corps had a justifiable position on the claim it lost.
For that losing claim, the Corps had argued CKY wasn’t entitled to extra costs because the parties had executed a contract modification that compensated the company for the backflow. The court noted this modification had only covered costs resulting from change orders, not pre-change work. It was clear from the plain meaning of the modification that the document did not cover all CKY’s costs. The Corps’ position was not substantially justified.
Fee Amount
CKY billed over 666 hours to the case. But any award of fees under the EJA should exclude fees associated with unsuccessful claims. Here, CKY had asserted claimed associated with backflow from the river and a differing site condition claim. CKY had only prevailed on the differing site condition claim. But it was impossible to tell from CKY’s fee application which costs were associated with which claim.
CKY suggested the board simply deduct 25% from the total fees incurred. CKY derived this number from the number delay days associated with each claim. CKY reasoned that 25% of the delay was attributable to the river, so the rest of the fees were incurred litigating the differing site condition.
The Corps said the board should only award 16% of the total claimed amount. The Corps reasoned that the $185,000 CKY ultimately recovered was only 16% of what it had initially claimed.
The board rejected both approaches. As to CKY’s theory, the number of delay days associated with a claim does not determine the amount of time an attorney spends on a claim. Also, the government’s approach does not award CKY for its efforts in prevailing on the differing site condition and could result in disincentivizing future settlements.
The board decided the most equitable approach was to split it down the middle. CKY had asserted two claims but prevailed on one. Thus, it was entitled to 50% of its claimed fees.
CKY is represented by Islam M. Ahmad and Daniel J. Foster of Wilke Fleury, LLP. The government is represented by Michael P. Goodman, Stephen C. Roth, William G. Meiners, and J. Emmanuel I. Santa Terese of the Army Corps of Engineers.
–Case summary by Craig LaChance, Senior Editor
