Generally, administrative agencies must follow the American Rule, which requires each party to pay its own litigation costs, including attorney’s fees, in the absence of a statute allowing for an award of attorney’s fees. Therefore, any fee award must rest upon a statutory or contractual provision. However, the absence of an express delegation of authority to award fees does not preclude an agency from granting attorney’s fees if such authority can be implied, particularly when a denial of fees would constitute an abrogation of common-law rights, and the legislature has enacted no legislation otherwise prohibiting an award of fees.
The Equal Access to Justice Act (EAJA) provides that a federal agency that conducts an adversary adjudication must 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.
Under, 5 USCS § 504:
- 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.
- 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.
- 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.
- 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.
5 USCS § 504, which is part of the federal Administrative Procedures Act, offers attorneys’ fee awards only as to administrative proceedings, while 28 USCS § 2412, on the other hand, gives a broad opportunity for recovery of attorneys’ fees in any civil action other than a tort action (including a court review of an administrative determination) where the plaintiff is challenging unwarranted government action[i].
[i] Stigger v. Mann, 263 S.W.3d 721, 727 (Mo. Ct. App. 2008)