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U.S. Code as of:
01/03/05
Section 504. Costs and fees of parties
(a)(1) An agency that conducts an adversary adjudication shall
award, to a prevailing party other than the United States, fees and
other expenses incurred by that party in connection with that
proceeding, unless the adjudicative officer of the agency finds
that the position of the agency was substantially justified or that
special circumstances make an award unjust. Whether or not the
position of the agency was substantially justified shall be
determined on the basis of the administrative record, as a whole,
which is made in the adversary adjudication for which fees and
other expenses are sought.
(2) A party seeking an award of fees and other expenses shall,
within thirty days of a final disposition in the adversary
adjudication, submit to the agency an application which shows that
the party is a prevailing party and is eligible to receive an award
under this section, and the amount sought, including an itemized
statement from any attorney, agent, or expert witness representing
or appearing in behalf of the party stating the actual time
expended and the rate at which fees and other expenses were
computed. The party shall also allege that the position of the
agency was not substantially justified. When the United States
appeals the underlying merits of an adversary adjudication, no
decision on an application for fees and other expenses in
connection with that adversary adjudication shall be made under
this section until a final and unreviewable decision is rendered by
the court on the appeal or until the underlying merits of the case
have been finally determined pursuant to the appeal.
(3) The adjudicative officer of the agency may reduce the amount
to be awarded, or deny an award, to the extent that the party
during the course of the proceedings engaged in conduct which
unduly and unreasonably protracted the final resolution of the
matter in controversy. The decision of the adjudicative officer of
the agency under this section shall be made a part of the record
containing the final decision of the agency and shall include
written findings and conclusions and the reason or basis therefor.
The decision of the agency on the application for fees and other
expenses shall be the final administrative decision under this
section.
(4) If, in an adversary adjudication arising from an agency
action to enforce a party's compliance with a statutory or
regulatory requirement, the demand by the agency is substantially
in excess of the decision of the adjudicative officer and is
unreasonable when compared with such decision, under the facts and
circumstances of the case, the adjudicative officer shall award to
the party the fees and other expenses related to defending against
the excessive demand, unless the party has committed a willful
violation of law or otherwise acted in bad faith, or special
circumstances make an award unjust. Fees and expenses awarded under
this paragraph shall be paid only as a consequence of
appropriations provided in advance.
(b)(1) For the purposes of this section -
(A) "fees and other expenses" includes the reasonable expenses
of expert witnesses, the reasonable cost of any study, analysis,
engineering report, test, or project which is found by the agency
to be necessary for the preparation of the party's case, and
reasonable attorney or agent fees (The amount of fees awarded
under this section shall be based upon prevailing market rates
for the kind and quality of the services furnished, except that
(i) no expert witness shall be compensated at a rate in excess of
the highest rate of compensation for expert witnesses paid by the
agency involved, and (ii) attorney or agent fees shall not be
awarded in excess of $125 per hour unless the agency determines
by regulation that an increase in the cost of living or a special
factor, such as the limited availability of qualified attorneys
or agents for the proceedings involved, justifies a higher fee.);
(B) "party" means a party, as defined in section 551(3) of this
title, who is (i) an individual whose net worth did not exceed
$2,000,000 at the time the adversary adjudication was initiated,
or (ii) any owner of an unincorporated business, or any
partnership, corporation, association, unit of local government,
or organization, the net worth of which did not exceed $7,000,000
at the time the adversary adjudication was initiated, and which
had not more than 500 employees at the time the adversary
adjudication was initiated; except that an organization described
in section 501(c)(3) of the Internal Revenue Code of 1986 (26
U.S.C. 501(c)(3)) exempt from taxation under section 501(a) of
such Code, or a cooperative association as defined in section
15(a) of the Agricultural Marketing Act (12 U.S.C. 1141j(a)), may
be a party regardless of the net worth of such organization or
cooperative association or for purposes of subsection (a)(4), a
small entity as defined in section 601;
(C) "adversary adjudication" means (i) an adjudication under
section 554 of this title in which the position of the United
States is represented by counsel or otherwise, but excludes an
adjudication for the purpose of establishing or fixing a rate or
for the purpose of granting or renewing a license, (ii) any
appeal of a decision made pursuant to section 6 of the Contract
Disputes Act of 1978 (41 U.S.C. 605) before an agency board of
contract appeals as provided in section 8 of that Act (41 U.S.C.
607), (iii) any hearing conducted under chapter 38 of title 31,
and (iv) the Religious Freedom Restoration Act of 1993;
(D) "adjudicative officer" means the deciding official, without
regard to whether the official is designated as an administrative
law judge, a hearing officer or examiner, or otherwise, who
presided at the adversary adjudication;
(E) "position of the agency" means, in addition to the position
taken by the agency in the adversary adjudication, the action or
failure to act by the agency upon which the adversary
adjudication is based; except that fees and other expenses may
not be awarded to a party for any portion of the adversary
adjudication in which the party has unreasonably protracted the
proceedings; and
(F) "demand" means the express demand of the agency which led
to the adversary adjudication, but does not include a recitation
by the agency of the maximum statutory penalty (i) in the
administrative complaint, or (ii) elsewhere when accompanied by
an express demand for a lesser amount.
(2) Except as otherwise provided in paragraph (1), the
definitions provided in section 551 of this title apply to this
section.
(c)(1) After consultation with the Chairman of the Administrative
Conference of the United States, each agency shall by rule
establish uniform procedures for the submission and consideration
of applications for an award of fees and other expenses. If a court
reviews the underlying decision of the adversary adjudication, an
award for fees and other expenses may be made only pursuant to
section 2412(d)(3) of title 28, United States Code.
(2) If a party other than the United States is dissatisfied with
a determination of fees and other expenses made under subsection
(a), that party may, within 30 days after the determination is
made, appeal the determination to the court of the United States
having jurisdiction to review the merits of the underlying decision
of the agency adversary adjudication. The court's determination on
any appeal heard under this paragraph shall be based solely on the
factual record made before the agency. The court may modify the
determination of fees and other expenses only if the court finds
that the failure to make an award of fees and other expenses, or
the calculation of the amount of the award, was unsupported by
substantial evidence.
(d) Fees and other expenses awarded under this subsection shall
be paid by any agency over which the party prevails from any funds
made available to the agency by appropriation or otherwise.
(e) The Chairman of the Administrative Conference of the United
States, after consultation with the Chief Counsel for Advocacy of
the Small Business Administration, shall report annually to the
Congress on the amount of fees and other expenses awarded during
the preceding fiscal year pursuant to this section. The report
shall describe the number, nature, and amount of the awards, the
claims involved in the controversy, and any other relevant
information which may aid the Congress in evaluating the scope and
impact of such awards. Each agency shall provide the Chairman with
such information as is necessary for the Chairman to comply with
the requirements of this subsection.
(f) No award may be made under this section for costs, fees, or
other expenses which may be awarded under section 7430 of the
Internal Revenue Code of 1986.
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