US Laws, Codes, Statutes & Cases

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[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
  January 24, 2002 and December 19, 2002]
[CITE: 5USC504]

 
             TITLE 5--GOVERNMENT ORGANIZATION AND EMPLOYEES
 
                     PART I--THE AGENCIES GENERALLY
 
                   CHAPTER 5--ADMINISTRATIVE PROCEDURE
 
                    SUBCHAPTER I--GENERAL PROVISIONS
 
Sec. 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.

(Added Pub. L. 96-481, title II, Sec. 203(a)(1), (c), Oct. 21, 1980, 94 
Stat. 2325, 2327; revived and amended Pub. L. 99-80, Secs. 1, 6, Aug. 5, 
1985, 99 Stat. 183, 186; Pub. L. 99-509, title VI, Sec. 6103(c), Oct. 
21, 1986, 100 Stat. 1948; Pub. L. 99-514, Sec. 2, Oct. 22, 1986, 100 
Stat. 2095; Pub. L. 100-647, title VI, Sec. 6239(b), Nov. 10, 1988, 102 
Stat. 3746; Pub. L. 103-141, Sec. 4(b), Nov. 16, 1993, 107 Stat. 1489; 
Pub. L. 104-121, title II, Sec. 231, Mar. 29, 1996, 110 Stat. 862.)

                       References in Text

    The Religious Freedom Restoration Act of 1993, referred to in 
subsec. (b)(1)(C)(iv), is Pub. L. 103-141, Nov. 16, 1993, 107 Stat. 
1488, which is classified principally to chapter 21B (Sec. 2000bb et 
seq.) of Title 42, The Public Health and Welfare. For complete 
classification of this Act to the Code, see Short Title note set out 
under section 2000bb of Title 42 and Tables.
    Section 7430 of the Internal Revenue Code of 1986, referred to in 
subsec. (f), is classified to section 7430 of Title 26, Internal Revenue 
Code.


                               Amendments

    1996--Subsec. (a)(4). Pub. L. 104-121, Sec. 231(a), added par. (4).
    Subsec. (b)(1)(A)(ii). Pub. L. 104-121, Sec. 231(b)(1), substituted 
``$125'' for ``$75''.
    Subsec. (b)(1)(B). Pub. L. 104-121, Sec. 231(b)(2), inserted before 
semicolon at end ``or for purposes of subsection (a)(4), a small entity 
as defined in section 601''.
    Subsec. (b)(1)(F). Pub. L. 104-121, Sec. 231(b)(3)-(5), added 
subpar. (F).
    1993--Subsec. (b)(1)(C). Pub. L. 103-141 added cl. (iv).
    1988--Subsec. (f). Pub. L. 100-647 added subsec. (f).
    1986--Subsec. (b)(1)(B). Pub. L. 99-514 substituted ``Internal 
Revenue Code of 1986'' for ``Internal Revenue Code of 1954''.
    Subsec. (b)(1)(C)(iii). Pub. L. 99-509 added cl. (iii).
    1985--Subsec. (a)(1). Pub. L. 99-80, Sec. 1(a)(1), (2), struck out 
``as a party to the proceeding'' after ``the position of the agency'', 
and inserted ``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.''
    Subsec. (a)(2). Pub. L. 99-80, Sec. 1(b), inserted ``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.''
    Subsec. (a)(3). Pub. L. 99-80, Sec. 1(a)(3), inserted ``The decision 
of the agency on the application for fees and other expenses shall be 
the final administrative decision under this section.''
    Subsec. (b)(1)(B). Pub. L. 99-80, Sec. 1(c)(1), amended subpar. (B) 
generally. Prior to amendment, subpar. (B) read as follows: `` `party' 
means a party, as defined in section 551(3) of this title, which is an 
individual, partnership, corporation, association, or public or private 
organization other than an agency, but excludes (i) any individual whose 
net worth exceeded $1,000,000 at the time the adversary adjudication was 
initiated, and any sole owner of an unincorporated business, or any 
partnership, corporation, association, or organization whose net worth 
exceeded $5,000,000 at the time the adversary adjudication was 
initiated, except that an organization described in section 501(c)(3) of 
the Internal Revenue Code of 1954 (26 U.S.C. 501(c)(3)) exempt from 
taxation under section 501(a) of the Code and 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, and (ii) any sole owner of an 
unincorporated business, or any partnership, corporation, association, 
or organization, having more than 500 employees at the time the 
adversary adjudication was initiated;''.
    Subsec. (b)(1)(C). Pub. L. 99-80, Sec. 1(c)(2), designated existing 
provisions of subpar. (C) as cl. (i) thereof by inserting ``(i)'' before 
``an adjudication under'', added cl. (ii), and struck out ``and'' after 
the semicolon at the end.
    Subsec. (b)(1)(D), (E). Pub. L. 99-80, Sec. 1(c)(3), substituted ``; 
and'' for the period at end of subpar. (D), and added subpar. (E).
    Subsec. (c)(2). Pub. L. 99-80, Sec. 1(d), amended par. (2) 
generally. Prior to amendment, par. (2) read as follows: ``A party 
dissatisfied with the fee determination made under subsection (a) may 
petition for leave to appeal to the court of the United States having 
jurisdiction to review the merits of the underlying decision of the 
agency adversary adjudication. If the court denies the petition for 
leave to appeal, no appeal may be taken from the denial. If the court 
grants the petition, it may modify the determination only if it finds 
that the failure to make an award, or the calculation of the amount of 
the award, was an abuse of discretion.''
    Subsec. (d). Pub. L. 99-80, Sec. 1(e), amended subsec. (d) 
generally. Prior to amendment, subsec. (d) read as follows:
    ``(1) Fees and other expenses awarded under this section may be paid 
by any agency over which the party prevails from any funds made 
available to the agency, by appropriation or otherwise, for such 
purpose. If not paid by any agency, the fees and other expenses shall be 
paid in the same manner as the payment of final judgments is made 
pursuant to section 2414 of title 28, United States Code.
    ``(2) There is authorized to be appropriated to each agency for each 
of the fiscal years 1982, 1983, and 1984, such sums as may be necessary 
to pay fees and other expenses awarded under this section in such fiscal 
years.''
    1980--Pub. L. 96-481, Sec. 203(c), which provided for the repeal of 
this section effective Oct. 1, 1984, was itself repealed and this 
section was revived by section 6 of Pub. L. 99-80, set out as a note 
below.


                    Effective Date of 1996 Amendment

    Section 233 of Pub. L. 104-121 provided that: ``The amendments made 
by sections 331 and 332 [probably means sections 231 and 232, amending 
this section and section 2412 of Title 28, Judiciary and Judicial 
Procedure] shall apply to civil actions and adversary adjudications 
commenced on or after the date of the enactment of this subtitle [Mar. 
29, 1996].''


                    Effective Date of 1988 Amendment

    Amendment by Pub. L. 100-647 applicable to proceedings commencing 
after Nov. 10, 1988, see section 6239(d) of Pub. L. 100-647, set out as 
a note under section 7430 of Title 26, Internal Revenue Code.


                    Effective Date of 1986 Amendment

    Amendment by Pub. L. 99-509 effective Oct. 21, 1986, and applicable 
to any claim or statement made, presented or submitted on or after such 
date, see section 6104 of Pub. L. 99-509, set out as an Effective Date 
note under section 3801 of Title 31, Money and Finance.


                    Effective Date of 1985 Amendment

    Section 7 of Pub. L. 99-80 provided that:
    ``(a) In General.--Except as otherwise provided in this section, the 
amendments made by this Act [reviving and amending this section and 
section 2412(d) of Title 28, Judiciary and Judicial Procedure, and 
amending and repealing provisions set out as notes under those sections] 
shall apply to cases pending on or commenced on or after the date of the 
enactment of this Act [Aug. 5, 1985].
    ``(b) Applicability of Amendments to Certain Prior Cases.--The 
amendments made by this Act shall apply to any case commenced on or 
after October 1, 1984, and finally disposed of before the date of the 
enactment of this Act [Aug. 5, 1985], except that in any such case, the 
30-day period referred to in section 504(a)(2) of title 5, United States 
Code, or section 2412(d)(1)(B) of title 28, United States Code, as the 
case may be, shall be deemed to commence on the date of the enactment of 
this Act.
    ``(c) Applicability of Amendments to Prior Board of Contracts 
Appeals Cases.--Section 504(b)(1)(C)(ii) of title 5, United States Code, 
as added by section 1(c)(2) of this Act, and section 2412(d)(2)(E) of 
title 28, United States Code, as added by section 2(c)(2) of this Act, 
shall apply to any adversary adjudication pending on or commenced on or 
after October 1, 1981, in which applications for fees and other expenses 
were timely filed and were dismissed for lack of jurisdiction.''


                             Effective Date

    Section 208 of title II of Pub. L. 96-481, as amended by Pub. L. 99-
80, Sec. 5, Aug. 5, 1985, 99 Stat. 186, provided that: ``This title and 
the amendments made by this title [see Short Title note below] shall 
take effect of [on] October 1, 1981, and shall apply to any adversary 
adjudication, as defined in section 504(b)(1)(C) of title 5, United 
States Code, and any civil action or adversary adjudication described in 
section 2412 of title 28, United States Code, which is pending on, or 
commenced on or after, such date. Awards may be made for fees and other 
expenses incurred before October 1, 1981, in any such adversary 
adjudication or civil action.''
    Section 203(c) of Pub. L. 96-481 which provided that effective Oct. 
1, 1984, this section is repealed, except that the provisions of this 
section shall continue to apply through final disposition of any 
adversary adjudication initiated before the date of repeal, was itself 
repealed by Pub. L. 99-80, Sec. 6(b)(1), Aug. 5, 1985, 99 Stat. 186.


                               Short Title

    Section 201 of title II of Pub. L. 96-481 provided that: ``This 
title [enacting this section, amending section 634 of Title 15, Commerce 
and Trade, section 2412 of Title 28, Judiciary and Judicial Procedure, 
Rule 37 of the Federal Rules of Civil Procedure, set out in Title 28 
Appendix, and section 1988 of Title 42, The Public Health and Welfare, 
and enacting provisions set out as notes under this section and section 
2412 of Title 28] may be cited as the `Equal Access to Justice Act'.''


                  Termination of Reporting Requirements

    For termination, effective May 15, 2000, of provisions in subsec. 
(e) of this section relating to annual report to Congress on the amount 
of fees and other expenses, see section 3003 of Pub. L. 104-66, as 
amended, set out as a note under section 1113 of Title 31, Money and 
Finance, and page 153 of House Document No. 103-7.

        Termination of Administrative Conference of United States

    For termination of Administrative Conference of United States, see 
provision of title IV of Pub. L. 104-52, set out as a note preceding 
section 591 of this title.


Prohibition on Use of Energy and Water Development Appropriations To Pay 
      Intervening Parties in Regulatory or Adjudicatory Proceedings

    Pub. L. 102-377, title V, Sec. 502, Oct. 2, 1992, 106 Stat. 1342, 
provided that: ``None of the funds in this Act or subsequent Energy and 
Water Development Appropriations Acts shall be used to pay the expenses 
of, or otherwise compensate, parties intervening in regulatory or 
adjudicatory proceedings funded in such Acts.''


                Revival of Previously Repealed Provisions

    Section 6 of Pub. L. 99-80 provided that:
    ``(a) Revival of Certain Expired Provisions.--Section 504 of title 
5, United States Code, and the item relating to that section in the 
table of sections of chapter 5 of title 5, United States Code, and 
subsection (d) of section 2412 of title 28, United States Code, shall be 
effective on or after the date of the enactment of this Act [Aug. 5, 
1985] as if they had not been repealed by sections 203(c) and 204(c) of 
the Equal Access to Justice Act [Pub. L. 96-481].
    ``(b) Repeals.--
        ``(1) Section 203(c) of the Equal Access to Justice Act [which 
    repealed this section] is hereby repealed.
        ``(2) Section 204(c) of the Equal Access to Justice Act [which 
    repealed section 2412(d) of title 28] is hereby repealed.''


                   Congressional Findings and Purposes

    Section 202 of title II of Pub. L. 96-481 provided that:
    ``(a) The Congress finds that certain individuals, partnerships, 
corporations, and labor and other organizations may be deterred from 
seeking review of, or defending against, unreasonable governmental 
action because of the expense involved in securing the vindication of 
their rights in civil actions and in administrative proceedings.
    ``(b) The Congress further finds that because of the greater 
resources and expertise of the United States the standard for an award 
of fees against the United States should be different from the standard 
governing an award against a private litigant, in certain situations.
    ``(c) It is the purpose of this title [see Short Title note above]--
        ``(1) to diminish the deterrent effect of seeking review of, or 
    defending against, governmental action by providing in specified 
    situations an award of attorney fees, expert witness fees, and other 
    costs against the United States; and
        ``(2) to insure the applicability in actions by or against the 
    United States of the common law and statutory exceptions to the 
    `American rule' respecting the award of attorney fees.''


                         Limitation on Payments

    Section 207 of title II of Pub. L. 96-481, which provided that the 
payment of judgments, fees and other expenses in the same manner as the 
payment of final judgments as provided in this Act [probably should be 
``this title'', see Short Title note above] would be effective only to 
the extent and in such amounts as are provided in advance in 
appropriation Acts, was repealed by Pub. L. 99-80, Sec. 4, Aug. 5, 1985, 
99 Stat. 186.

                  Section Referred to in Other Sections

    This section is referred to in title 15 section 634b; title 18 
section 293; title 20 section 1234; title 25 section 450m-1; title 28 
section 2412; title 42 section 3612.