J.h. Mcquiston, Plaintiff-appellant, v. John O. Marsh, Jr., Secretary of the Army; U.S. Armymissile Command, Defendants-appellees, 790 F.2d 798 (9th Cir. 1986)

* BACKGROUND

McQuiston, a manufacturer of defense equipment, sued to enjoin the United States Army from awarding a contract that allegedly violated federal procurement laws. The district court removed the case from its calendar until the General Accounting Office ruled on McQuiston's bid protest. Meanwhile, the Army conducted an internal audit and determined that the item covered by the contract was no longer required. The Army cancelled the contract solicitation and moved to dismiss McQuiston's complaint as moot. The court granted the government's motion, but retained jurisdiction "for the purpose of allowing plaintiff to seek relief, in the future ... as a result of any such new procurement."

McQuiston moved for attorney's fees and costs based on the EAJA and on various other statutes and theories. The district court summarily concluded without making findings of fact that McQuiston was not a prevailing party under EAJA, that the Army's position was substantially justified, and that the motion was untimely. McQuiston appealed. We held that although McQuiston's motion was not timely under 28 U.S.C. § 2412(d), it was timely under 28 U.S.C. § 2412(b), and we remanded the case to the district court to determine whether McQuiston was the prevailing party and whether the government acted in bad faith. McQuiston v. Marsh, 707 F.2d 1082 (9th Cir. 1983) ("McQuiston I "). We rejected McQuiston's other theories of recovery. Id. 1085-86.

Following our remand to the district court in McQuiston I, the district court held a hearing at which it considered proposed findings of fact and conclusions of law presented by the respective parties. The district court then found that McQuiston was not the prevailing party, that the government had not acted in bad faith, and again denied McQuiston's application for attorney's fees and costs.

II

DISCUSSION

In deciding that McQuiston's motion under 28 U.S.C. § 2412(d) was not timely in McQuiston I, we noted that the term "final judgment" as it appears in 28 U.S.C. § 2412(d) (1) (B)¹  requires a party seeking an award of attorney's fees to submit an application for fees within thirty days from the date the district court enters judgment. We rejected McQuiston's argument that the thirty-day requirement of subsection (B) means that an application need only be filed within thirty days of the expiration of the time to appeal. Id. at 1085.

After McQuiston I was decided, Congress amended 2412(d) (1) by adding subsection (d) (2) (G). The term "final judgment" was defined as "... a judgment that is final and not appealable ..." See Act of August 5, 1985, Sec. 2(c) (2), Pub. L. No. 99-80, 1985 U.S.Code Cong. & Ad.News (99 Stat.) 183, 185 (to be codified at 28 U.S.C. § 2412(d) (2) (G)). This amendment effectively changed the law in this circuit and overruled that portion of McQuiston I in which we had defined the term "final judgment" in 28 U.S.C. § 2412(d) (1) (B) as heretofore stated. The 1985 amendment provided that "... amendments made by this Act shall apply to cases pending on ... the date of the enactment of this Act." Section 7(a), 1985 U.S.Code Cong. & Ad.News (99 Stat.) at 186. This case was still pending on the date the Act was enacted, and, as a result, McQuiston's application for fees was thereby rendered timely under 28 U.S.C. § 2412(d).

EAJA permits an award of fees to the "prevailing party." 28 U.S.C. § 2412(b), (d). The district court found that McQuiston was not the prevailing party for purposes of 28 U.S.C. § 2412(b). It accordingly denied McQuiston's motion for attorney's fees and costs.

As we stated in McQuiston I:

"Prevailing party" as used in the EAJA is to be interpreted consistently with the law that has been developed defining that term.... A party who prevails on an important matter in the course of litigation, even though not ultimately prevailing on all issues, may be eligible to recover fees.... The party need not obtain formal relief, but must establish a "clear, causal relationship between the ligitation brought and the practical outcome realized." [American Constitutional Party v. Munro, 650 F.2d 184, 188 (9th Cir. 1981) ] (emphasis in original).... At a minimum, the lawsuit must have been a catalyst that prompted the opposing party to take action....

707 F.2d at 1085 (some citations omitted).

The determination whether a party is a "prevailing party" is a factual one. McQuiston I, 707 F.2d at 1085. Accord Citizens Coalition for Block Grant Compliance v. City of Euclid, 717 F.2d 964, 966-67 (6th Cir. 1983). We may not disturb the district court's findings of fact unless they are clearly erroneous. Anderson v. City of Bessemer, --- U.S. ----, 105 S. Ct. 1504, 1511, 84 L. Ed. 2d 518 (1985); United States v. McConney, 728 F.2d 1195, 1200 (9th Cir.), cert. denied, --- U.S. ----, 105 S. Ct. 101, 83 L. Ed. 2d 46 (1984); see Citizens Coalition, 717 F.2d at 967.

In making its findings, the district court found the gravamen of McQuiston's complaint to be that by refusing to correct a disputed relay description for a proposed electronic Network contract, the Army was unfairly denying McQuiston an opportunity to compete for that proposed contract on an equal footing with his competitors. The court also found that after McQuiston filed his complaint the Army determined its need for Networks could be met by alternate means, that there was a lower customer demand for the Networks, that Networks were then considered repairable whereas previously they had been considered nonrepairable, that NATO no longer needed Networks, and that no procurement of Networks was anticipated in the foreseeable future. In addition, the district court also found that the Army had cancelled its request for proposals for the Network contract, not because of McQuiston's lawsuit, but because of these changed circumstances. The district court's findings are supported by the affidavits of John J. Fitzpatrick, a contracting officer for the Request for Proposals Unit of the Army, and Lewis A. Pankey, an Inventory Management Specialist in the United States Army Missile Command. The court specifically found that no causal nexus existed between McQuiston's lawsuit and the action taken by the Army, and that his lawsuit did not prompt the Army to cancel its request for proposals for the Network contract. It also found that the government did not act in bad faith in initiating, implementing, or cancelling its request for proposals, nor did it act in bad faith in the action that led to the lawsuit or in the conduct of the litigation.

McQuiston relies on Cher v. Forum Int'l. Ltd., 692 F.2d 634 (9th Cir. 1982), cert. denied, 462 U.S. 1120, 103 S. Ct. 3089, 77 L. Ed. 2d 1350 (1983) to argue that this court must give the district court's findings "special scrutiny" because, he contends, the district court adopted as its findings the findings proposed by the government's counsel. This argument is not persuasive. McQuiston correctly characterizes Cher as requiring special scrutiny to proposed findings adopted verbatim by the district court. Id. at 637; accord, Sealy, Inc. v. Easy Living, Inc., 743 F.2d 1378, 1385 n. 3 (9th Cir. 1984). However, the Supreme Court, while reiterating its criticism of verbatim adoption of proposed findings, disapproved departure from the clearly erroneous standard of review mandated by Fed. R. Civ. P. 52(a). Anderson, 105 S. Ct. at 1510-11. In Clady v. County of Los Angeles, 770 F.2d 1421 (9th Cir. 1985), cert. denied, --- U.S. ----, 106 S. Ct. 1516, 89 L. Ed. 2d ---- (1986), we recognized Anderson and declined to scrutinize closely an order in which the district court had allegedly adopted, as its own, 171 of the 178 sub-parts of the prevailing party's proposed findings. We noted that the district court did not uncritically accept the proposed findings. Id. at 1427. The same is true in this case. Out of fifteen findings submitted by the Army, the district court modified three and added six. It is clear from the record that the district court did not uncritically accept findings proposed by the Army.

The district court did not clearly err by finding that McQuiston was not a prevailing party. In reviewing the findings and the evidence before the district court on which those findings were based, we are not "left with the definite and firm conviction that a mistake has been committed." Pullman-Standard v. Swint, 456 U.S. 273, 284-85 n. 14, 102 S. Ct. 1781, 1788 n. 14, 72 L. Ed. 2d 66 (1982), quoting United States v. United States Gypsum Co., 333 U.S. 364, 395, 68 S. Ct. 525, 541, 92 L. Ed. 746 (1948).

III

CONCLUSION

Because the district court did not clearly err by finding that McQuiston was not a prevailing party under either subsection (b) or (d) of 28 U.S.C. § 2412, he is not entitled to attorney's fees or costs.

AFFIRMED.