Appeal of

LINDA COPMAN

Under Contract No. HCR 967A0
PSBCA Nos. 4889 and 4903

APPEARANCE FOR APPELLANT:
Kenneth A. Ross, Esq.

APPEARANCE FOR RESPONDENT:
Carole A. Hughes, Esq.

OPINION OF THE BOARD ON EAJA APPLICATION

            Appellant, Linda Copman, has filed a timely application under the Equal Access to Justice Act (“EAJA”), 5 U.S.C. §504, for fees and other expenses totaling $7,877.51 incurred in connection with her prosecution of these appeals.

Background

            Respondent terminated Appellant’s mail delivery contract for default on December 21, 2001, and Appellant appealed.  The appeal was docketed as PSBCA No. 4889, and that case also included an appeal of the contracting officer’s earlier failure to grant Appellant an adjustment to her contract rate based on her insurance costs.  Subsequently, on April 8, 2002, Respondent issued a final decision asserting a claim for reprocurement costs against Appellant.  Appellant’s appeal of the excess reprocurement cost claim was docketed as PSBCA No. 4903.  The appeals were consolidated for decision.  On December 26, 2002, the Board denied PSBCA No. 4889, holding that the termination was justified, but granted PSBCA No. 4903, concluding that Respondent had failed to demonstrate entitlement to recover its reprocurement costs.  The insurance adjustment claim was dismissed for lack of jurisdiction.  Linda Copman, PSBCA Nos. 4889 and 4903, 2002 PSBCA LEXIS 17, December 26, 2002.

Appellant’s Eligibility

            Appellant has demonstrated that her net worth is below the eligibility limits set forth in 39 C.F.R. §960.4 (b) (1).  (Affidavit of Linda Copman).

Was Appellant a Prevailing Party?

            Appellant’s appeal of Respondent’s assessment of reprocurement costs was sustained on the basis that Respondent had failed to show that it had acted reasonably to minimize the excess costs incurred.  Therefore, Appellant was a prevailing party with respect to that issue.  Appellant did not prevail with respect to the propriety of the termination for default, and her insurance claim was dismissed for lack of jurisdiction.  Accordingly, she may not recover fees or expenses related to those issues.

Documentation

            In support of her EAJA claim, Appellant submitted an affidavit of counsel identifying the fees and expenses Appellant incurred in prosecution of PSBCA Nos. 4889 and 4903.  Exhibit A to the affidavit itemizes the attorney fees, describing briefly the nature of each task counsel performed, stating the date the task was performed and the number of hours spent.  In counsel’s affidavit, he states that his customary hourly rate exceeds $125 per hour.  The expenses claimed are identified by date incurred, nature of the expense and the amount.

            While the submission adequately identifies the attorney fees and expenses, see Community Heating & Plumbing Co. v. Garrett, 2 F.3d 1143, 1146 (Fed. Cir. 1993), the application does not identify which fees and expenses were incurred in defending against imposition of excess reprocurement costs, the issue on which Appellant was the prevailing party.

Was Respondent’s Position Substantially Justified?

            To avoid an award of attorney fees under EAJA, it is Respondent’s burden to demonstrate that its actions were substantially justified, i.e., that its pursuit of excess reprocurement costs had a reasonable basis in law and fact.  Pierce v. Underwood, 487 U.S. 552, 565 (1988); The Little Susitna Co., PSBCA Nos. 2216, 2333, 2511, 93-1 BCA ¶ 25,497; American Federal Contractors, Inc., PSBCA No. 1359, 88-2 BCA ¶ 20,526, Nello Constr. Co., PSBCA No. 3075, 93-1 BCA ¶ 25,495.  Further, the “substantially justified” standard applies not only to the position Respondent took in litigating the appeals before the Board, but also to its action in asserting its claim for excess reprocurement costs which gave rise to PSBCA No. 4903.  See 5 U.S.C. §504(b) (1); Commissioner v. Jean, 496 U.S. 154, 110 S. Ct. 2316, 110 L. Ed. 2d 134 (1990); The Little Susitna Co., PSBCA Nos. 2216, 2333, 2511, 93-1 BCA ¶ 25,497.

            In these appeals, Respondent’s termination of the contract for default was found to be justified, and Respondent demonstrated that after the termination it obtained replacement service at a rate higher than Appellant’s contract provided.  Linda Copman, PSBCA Nos. 4889 and 4903, 2002 PSBCA LEXIS 17, December 26, 2002, at *8, *12.  However, Respondent failed to persuade the Board that such excess costs incurred were reasonable under the circumstances.  Id., at *12-*13.

            That the Board denied Respondent’s claim for excess reprocurement costs does not by itself establish that Respondent’s position was not substantially justified,  see Broad Avenue Laundry and Tailoring v. United States, 693 F.2d 1387, 1391 (Fed. Cir. 1982); The Little Susitna Co., PSBCA Nos. 2216, 2333, 2511, 93-1 BCA ¶ 25,497; Bula Forge, Inc., PSBCA No. 1490, 89-1 BCA ¶ 21,380; American Federal Contractors, Inc., PSBCA No. 1359, 88-2 BCA ¶ 20,526, but it remains Respondent’s burden to demonstrate it acted reasonably.  In that regard, the predictability of Respondent’s loss before the Board is an issue.  If it was apparent that Respondent would not be entitled to recover its excess reprocurement costs in this appeal, Respondent would not have been substantially justified in pursuing such damages.  See Essex Electro Engineers, Inc., ASBCA Nos. 30118, 30119, 89-1 BCA ¶ 21,437.  The more clearly the established law dictates that Respondent could not recover its reprocurement costs under the circumstances presented by these appeals, the less “justified” would it be for Respondent to pursue them.  See Spencer v. NLRB, 712 F.2d 539, 559 (D.C. Cir. 1983), cert. denied, 466 U.S. 936, 104 S. Ct. 1908, 80 L. Ed. 2d 457 (1984).

            The requirement that Respondent demonstrate that it acted reasonably to minimize the excess reprocurement costs is well established.  See Cascade Pacific International v. United States, 773 F.2d 287, 293 (Fed. Cir. 1985); Don Wasylk d/b/a Klysaw, PSBCA Nos. 4186, 4283, 00-1 BCA ¶ 30,844; Alvin P. Koetitz, PSBCA No. 1261, 1985 PSBCA LEXIS 66, June 6, 1985; Richard A. Ferrara, PSBCA Nos. 4286, 4301, 00-1 BCA ¶ 30,847; M.D.R.-RIC, PSBCA No. 4472, 01-1 BCA ¶ 31,302.  Respondent should have been aware that absent reasonable mitigation of the excess reprocurement costs, they were not recoverable.  In the absence of some evidence of mitigation of its damages after the termination, Respondent has failed to carry its burden of demonstrating that its pursuit of excess reprocurement costs, through the original demand and subsequent litigation, was reasonable.  Accordingly, Respondent has not shown that its position regarding pursuit of excess reprocurement costs was substantially justified.

Expenses

            The application lists expenses of $247.35 for a deposition transcript, long distance telephone calls, facsimile costs, duplication costs, and the cost of on-line legal research.  Respondent has not challenged the reasonableness of these expenses, and expenses of this type are recoverable under EAJA.  See Banks Trucking, PSBCA No. 3528, 96-2 BCA ¶ 28,350; Coastal, Inc., PSBCA No. 1728, 89-2 BCA ¶ 21,876 at 110,059 recon. denied, 89-3 BCA ¶ 22,159 (long distance, photocopies and postage); American Federal Contractors, Inc., PSBCA No. 1359, 88-2 BCA ¶ 20,526 (duplicating, transcript, overnight delivery, transportation, telephone, parking); Northwest Piping, Inc., IBCA No. 2642-F, 90-1 BCA ¶ 22,446 (on-line computer research).

Apportionment

            Respondent argues that the application should be denied for Appellant’s failure to segregate the fees and expenses incurred in challenging the termination for default and pursuing her insurance claim from those associated with her successful challenge to the imposition of excess reprocurement costs.

            Appellant concedes that any EAJA award could be reduced by 15% because she did not prevail on her claim regarding an insurance adjustment but argues that all of the other fees and expenses should be recoverable.  Notwithstanding her lack of success regarding the termination for default, she argues that her purpose in appealing the termination was to avoid reprocurement costs, and that her success in doing so entitles her to fees and expenses for challenging the termination for default as well.  Appellant states that she had no interest in reinstating the contract and never made a specific claim for the liquidated damages she would have been entitled to under the contract if the termination were converted to one for the convenience of the Postal Service.  Therefore, she argues, attorney fees and expenses should not be limited to her attorney’s work on PSBCA No. 4903 because all of her efforts (other than addressing the insurance claim) may be viewed as resisting the imposition of reprocurement costs—either indirectly, by seeking to have the default termination overturned, or directly, by challenging the procedural aspects of the reprocurement action.

            However, notwithstanding the contracting officer’s mention of a claim against Appellant for excess reprocurement costs, such costs were not assessed in the December 21, 2001 final decision.  Nevertheless, Appellant pursued an appeal from that decision and argued that the termination for default was improper.  It was not until the contracting officer issued the April 8, 2002 final decision assessing reprocurement costs that appeal and litigation of that issue were possible.  See Garry J. Iman, PSBCA No. 4189, 99-1 BCA ¶ 30,330; Larry J. Miller, PSBCA No. 3632, 95-1 BCA ¶ 27,448.  Accordingly, Appellant may not recover attorney fees and expenses incurred before that date.  For attorney fees and expenses incurred after the contracting officer issued his final decision assessing reprocurement costs, Appellant may not recover for her attorney’s effort in challenging the termination, regardless of her purpose in doing so, because she did not prevail on that issue.

            Although Appellant has not properly segregated the fees and expenses related to the different claims considered in these appeals, the Board, nevertheless, has discretion to determine a reasonable apportionment of the fees and expenses based on its assessment of the record.  See Hensley v. Eckerhart, 461 U.S. 424, 440, 103 S. Ct. 1933, 1943, 76 L. Ed. 2d 40, 54-55 (1983); C & C Plumbing & Heating, ASBCA No. 44270, 95-2 BCA ¶ 27,806; Karcher Environmental, Inc., PSBCA Nos. 4085, 4093, 4282, 02-1 BCA ¶ 31,787.  Based on Appellant’s degree of success in the litigation and the limited focus of Appellant’s attorney on the reprocurement issue, the Board has determined that a reasonable recovery would be 20% of fees and expenses incurred on or after April 8, 2002, in prosecution of these appeals.  Accordingly, Appellant is entitled to recover attorney fees of $1,185 (47.4 hours x $125 per hour x 20%) and expenses of $49.47 ($247.35 x 20%).

Attorney Fees for EAJA Application

            Appellant claims 4.1 hours of attorney time in preparation and prosecution of her EAJA application.  Fees associated with the application are includable in an award made under EAJA, The Little Susitna Co., PSBCA Nos. 2216, 2333, 2511, 93-1 BCA ¶ 25,497; American Federal Contractors, Inc., PSBCA No. 1359, 88-2 BCA ¶ 20,526, but such fees are to be discounted to reflect the limited success of Appellant’s application.  See Commissioner v. Jean, 496 U.S. 154, 163 n. 10, 110 S. Ct. 2316, 110 L. Ed. 2d 134 (1990); Chiu v. United States, 948 F.2d 711, 722 (Fed. Cir. 1991); Banks Trucking, PSBCA No. 3528, 96-2 BCA ¶ 28,350; Nello Constr. Co., PSBCA No. 3075, 93-1 BCA ¶ 25,495 at 127,000.  We apply to these application fees the same discount as for the fees and expenses for prosecution of the appeals and allow an award of $102.50 (4.1 hours x $125 per hour x 20%).

Estimated Fees

            Appellant has included in her application 1.5 hours estimated “to complete working on quantum and close case.”  No award can be made for fees not yet incurred by Appellant, based on an estimate.

Conclusion

            Appellant is entitled to recover attorney fees of $1,287.50 and expenses of $49.74 for a total award of $1,337.24.

Norman D. Menegat
Administrative Judge
Board Member

I concur:
James A. Cohen
Administrative Judge
Chairman

I concur:
David I. Brochstein
Administrative Judge
Vice Chairman