Wagner v. Shinseki

United States Court of Appeals
for the Federal Circuit
__________________________

PHILLIP E. WAGNER,
Claimant-Appellant,
v.
ERIC K. SHINSEKI, SECRETARY OF VETERANS
AFFAIRS,
Respondent-Appellee.
__________________________

2010-7113
__________________________

Appeal from the United States Court of Appeals for
Veterans Claims in case no. 08-1702, Judge Alan G.
Lance, Sr.
______________________

Decided: April 29, 2011
_______________________

KENNETH M. CARPENTER, Carpenter Chartered, of
Topeka, Kansas, argued for claimant-appellant. On the
brief was THEODORE C. JARVI, Law Offices of Theodore C.
Jarvi, of Tempe, Arizona.

DANIEL RABINOWITZ, Attorney, Commercial Litigation
Branch, Civil Division, United States Department of
Justice, of Washington, DC, argued for respondent-
appellee. With him on the brief were TONY WEST, Assis-
tant Attorney General, JEANNE E. DAVIDSON, Director,
WAGNER v. DVA 2

and BRIAN M. SIMKIN, Assistant Director. Of counsel on
the brief were MICHAEL J. TIMINSKI, Deputy Assistant
General Counsel, and KRISTIANA BRUGGER, Attorney,
United States Department of Veterans Affairs, of Wash-
ington, DC.
__________________________

Before BRYSON, MAYER, and DYK, Circuit Judges.
MAYER, Circuit Judge.
Phillip E. Wagner appeals from a final judgment of
the United States Court of Appeals for Veterans Claims
(“Veterans Court”) denying his application for supplemen-
tal attorney fees incurred in the defense of his initial
application for attorney fees under the Equal Access to
Justice Act (“EAJA”), 28 U.S.C. § 2412. See Wagner v.
Shinseki, No. 08-1702, 2010 U.S. App. Vet. Claims LEXIS
713 (Vet. App. Apr. 21, 2010). We reverse and remand.
BACKGROUND
Wagner served in the United States Navy from July
1962 to July 1979 and from March 1982 to March 1988.
He appealed to the Veterans Court after the Board of
Veterans’ Appeals (“board”) denied his claim for service-
connected benefits for a thyroid disorder. Pursuant to a
joint motion of the parties, the Veterans Court vacated
the board’s decision and remanded the case to the De-
partment of Veterans Affairs for reconsideration.
Wagner subsequently filed an application for attorney
fees under the EAJA, arguing that the remand made him
a “prevailing party” for purposes of establishing entitle-
ment to an EAJA award. He sought fees of $11,710.57 for
70.3 hours of attorney work. The Secretary of Veterans
Affairs conceded that Wagner was a prevailing party for
purposes of the EAJA, but challenged the amount of the
3 WAGNER v. DVA

fee request based on “the reasonableness of the requested
fees.” See Wagner v. Shinseki, No. 08-1702, 2009 U.S.
App. Vet. Claims LEXIS 1791, at *1 (Vet. App. Oct. 14,
2009) (citations and internal quotation marks omitted).
Specifically, the Secretary argued that (1) the fee for legal
research should be reduced by 14.6 hours because Theo-
dore C. Jarvi, Wagner’s attorney, was an experienced
veterans’ law attorney, and should not have needed to
conduct extensive research, (2) the fee for review of Wag-
ner’s claim file should be reduced by 8.8 hours because
Jarvi had already spent 7.7 hours reviewing the file, and
(3) the fee for scanning the claims file and instructing
staff on how to combine the files of the record before the
agency (“RBA”) should be reduced by 4.0 hours since these
tasks were purely clerical. Id. at *2-3. Wagner thereafter
filed a response, defending his original fee application and
requesting additional fees of $4,134.00 for time spent
defending the fees that had been challenged by the Secre-
tary.
On October 14, 2009, the Veterans Court granted
Wagner an EAJA award of $8,601.80, which was an
approximately 26.5 percent reduction from the $11,710.57
he had requested. Id. at *1-4. The court reduced Wag-
ner’s requested fees for legal research by 8.5 hours, the
fees sought for review of the claims file by 8.8 hours, and
the fees sought for scanning the claims file and instruct-
ing staff on how to combine files from the RBA by 1.5
hours. Of the 27.4 hours that had been challenged by the
Secretary, the Veterans Court disallowed 18.8 hours. Id.
On October 26, 2009, Wagner filed a revised fee appli-
cation, seeking $2,458.90 in supplemental fees for time
expended defending his original EAJA fee request. Wag-
ner did not seek compensation for time spent on argu-
ments that were rejected by the Veterans Court when it
made its original award. He argued, however, that he
WAGNER v. DVA 4

was partially successful in defending his original fee
application, and that he should be compensated for the
10.87 hours he spent successfully responding to the
Secretary’s challenges to his application as well as for the
4.0 hours he spent reviewing the Veterans Court’s deci-
sion and drafting the supplemental fee request.
On February 17, 2010, the Veterans Court, in a single
judge decision, denied the application for supplemental
fees. The court stated that it would “not reward [Wagner]
for his efforts to defend his earlier application” since the
court had “substantially reduced [Wagner’s] original
EAJA application after concluding that much of the
requested fees were unreasonable.” See Wagner v. Shin-
seki, No. 08-1702, 2010 U.S. App. Vet. Claims LEXIS 197,
at *3 (Vet. App. Feb. 17, 2010) (“Supplemental Fees Deci-
sion”). The court asserted that “[i]t would be anomalous
to reduce an [initial EAJA] award by some $3,000 and
then award nearly that amount to the losing party simply
for putting up a fight.” Id.
Wagner thereafter filed a motion seeking panel review
of the decision denying him supplemental fees, but the
Veterans Court denied this motion on April 21, 2010.
Wagner then appealed to this court.
DISCUSSION
We have jurisdiction over appeals from the Veterans
Court under 38 U.S.C. § 7292. Interpretation of the EAJA
is a question of law, subject to de novo review. 1 Kelly v.
Nicholson, 463 F.3d 1349, 1352 (Fed. Cir. 2006).

1 In relevant part, the EAJA provides:

Except as otherwise specifically provided by stat-
ute, a court shall award to a prevailing party
other than the United States fees and other ex-
5 WAGNER v. DVA

The primary purpose of the EAJA is to ensure that
litigants “will not be deterred from seeking review of, or
defending against, unjustified governmental action be-
cause of the expense involved.” Scarborough v. Principi,
541 U.S. 401, 407 (2004) (citations and internal quotation
marks omitted). The statute plays a particularly impor-
tant role in the veterans’ adjudicatory system:
Removing [deterrents to seeking judicial review]
is imperative in the veterans benefits context,
which is intended to be uniquely pro-claimant,
and in which veterans generally are not repre-
sented by counsel before the [regional office] and
the board. [The] EAJA is a vital complement to
this system designed to aid veterans, because it
helps to ensure that they will seek an appeal
when the VA has failed in its duty to aid them or
has otherwise erroneously denied them the bene-
fits that they have earned.
Kelly, 463 F.3d at 1353 (citations and internal quotation
marks omitted).
“[A]n award of fees incurred in every stage of litiga-
tion is consistent with the legislative purpose of the EAJA

penses, in addition to any costs awarded pursu-
ant to subsection (a), incurred by that party in
any civil action (other than cases sounding in
tort), including proceedings for judicial review of
agency action, brought by or against the United
States in any court having jurisdiction of that ac-
tion, unless the court finds that the position of
the United States was substantially justified or
that special circumstances make an award un-
just.

28 U.S.C. § 2412(d)(1)(A).
WAGNER v. DVA 6

. . . .” Fritz v. Principi, 264 F.3d 1372, 1377 (Fed. Cir.
2001). Thus, a prevailing party in a veterans case is
entitled to an award of fees not only for hours devoted to
the underlying merits litigation, but also for attorney time
reasonably expended defending an initial EAJA applica-
tion. Comm’r, Immigration & Naturalization Serv. v.
Jean, 496 U.S. 154, 161-62 (1990) (“Jean”); Fritz, 264 F.3d
at 1377. Fees awarded for the defense of an initial fee
application are commonly referred to as “supplemental
fees” or “fees on fees.”
Wagner contends that the Veterans Court misinter-
preted 28 U.S.C. § 2412(d)(1)(A) when it denied, in full,
his petition seeking supplemental fees. He notes that he
was partially successful in defending against the Secre-
tary’s challenge to his initial EAJA application, and
argues that he should be awarded supplemental fees
commensurate with the degree of success he achieved.
We agree. In Jean, the Supreme Court expressly re-
jected the argument that a claimant could be awarded
supplemental fees only if the government’s challenge to
an initial EAJA application was not substantially justi-
fied. 496 U.S. at 158-62. The Court explained that “[a]ny
given civil action can have numerous phases,” but that
“the EAJA—like other fee-shifting statutes—favors
treating a case as an inclusive whole, rather than as
atomized line-items.” Id. at 161-62. Recognizing that
“requiring courts to make a separate finding of ‘substan-
tial justification’ regarding the Government’s opposition
to fee requests would multiply litigation,” id. at 163, the
Court concluded that only one “threshold” determination
that the government’s position in the underlying merits
litigation was not substantially justified is required, id. at
160. Accordingly, “a party who prevails in fee litigation
under [the] EAJA may recover fees for legal services
rendered during the fee litigation even if some of the
7 WAGNER v. DVA

Government’s positions regarding the proper fee were
‘substantially justified,’ i.e., the district court need not
make a second finding of no substantial justification
before awarding fees for the fee contest itself.” Scarbor-
ough, 541 U.S. at 419 n.6 (citing Jean, 496 U.S. at 160-
62).
When calculating a supplemental fee award, a court is
required to consider “the relationship between the
amount of the fee awarded and the results obtained”
through the initial EAJA application. 2 Jean, 496 U.S. at
163 n.10. Thus, supplemental fees should be denied “to
the extent” that a claimant’s defense of his original fee
application proves unsuccessful. Id. Conversely, how-
ever, supplemental fees should be granted to the extent
that a claimant successfully defends his original fee
application. See Fritz, 264 F.3d at 1377 (emphasizing
that a veteran is “entitled to attorney fees incurred
throughout the litigation, including those incurred in
preparation and defense of the fee application to the
extent those fees are defensible” (footnote omitted)). To

2 The Court explained:

Because [Hensley v. Eckerhart, 461 U.S. 424, 437
(1983)] requires the district court to consider the
relationship between the amount of the fee
awarded and the results obtained, fees for fee
litigation should be excluded to the extent that
the applicant ultimately fails to prevail in such
litigation. For example, if the Government’s
challenge to a requested rate for paralegal time
resulted in the court’s recalculating and reducing
the award for paralegal time from the requested
time, then the applicant should not receive fees
for the time spent defending the higher rate.

Jean, 496 U.S. at 163 n.10.
WAGNER v. DVA 8

deny a litigant all supplemental fees simply because the
defense of his original fee application was not wholly
successful unjustifiably dilutes the value of the original
EAJA fee award and is contrary to the fundamental
objectives of the EAJA. See Orange Blossom Ltd. P’ship
v. S. Cal. Sunbelt Developers, Inc., 608 F.3d 456, 463 (9th
Cir. 2010) (explaining that “it would be inconsistent [with
the purpose of fee-shifting statutes] to dilute a fees award
by refusing to compensate attorneys for the time they
reasonably spent in establishing their rightful claim to
the fee” (citations and internal quotation marks omitted));
Prandini v. Nat’l Tea Co., 585 F.2d 47, 53 (3d Cir. 1978)
(“If an attorney is required to expend time litigating his
fee claim, yet may not be compensated for that time, the
attorney’s effective rate for all the hours expended on the
case will be correspondingly decreased.”); see also Norman
v. Hous. Auth. of Montgomery, 836 F.2d 1292, 1305 (11th
Cir. 1988) (“To paraphrase the acute observation of base-
ball great Yogi Berra, a case ain’t over till it’s over. This
means that . . . counsel are entitled to compensation until
all benefits obtained by the litigation are in hand.”).
Courts should look to the framework established in
Hensley, 461 U.S. at 435-39, when calculating an appro-
priate supplemental fee award. 3 See Jean, 496 U.S. at
161-63. In setting the fee, “the most critical factor is the
degree of success obtained.” Hensley, 461 U.S. at 436.

3 Although Hensley involved the award of fees un-
der the Civil Rights Attorney’s Fees Act of 1976, 42 U.S.C.
§ 1988, the standards set forth for awarding attorney fees
“are generally applicable in all cases in which Congress
has authorized an award of fees to a ‘prevailing party.’”
Hensley, 461 U.S. at 433 n.7. Furthermore, although
Hensley involved an initial fee application, the fee guide-
lines it provides are applicable to supplemental fee appli-
cations as well. Jean, 496 U.S. at 161-63.
9 WAGNER v. DVA

Thus, where a claimant “has achieved only partial or
limited success,” a court “may attempt to identify specific
hours that should be eliminated, or it may simply reduce
the award to account for the limited success.” Id. at 436-
37. Because Hensley requires a court to calibrate the
amount of attorney fees to the degree of success a claim-
ant has achieved, it is generally appropriate to make an
award of supplemental fees that is commensurate with
the degree of success obtained on the original fee applica-
tion. See, e.g., Schwarz v. Sec’y of Health & Human
Servs., 73 F.3d 895, 909 (9th Cir. 1995) (affirming an
award of 50 percent of the supplemental fees sought by a
claimant where she obtained approximately 50 percent of
the fees claimed in her initial fee application); Spellan v.
Bd. of Educ., 69 F.3d 828, 829 (7th Cir. 1995) (emphasiz-
ing that a claimant’s success on his original fee applica-
tion “is a material consideration in adjudicating the
amount of fees recoverable in litigating an attorneys’ fee
award”); Thompson v. Gomez, 45 F.3d 1365, 1367-69 (9th
Cir. 1995) (concluding that a district court properly
awarded 87 percent of the supplemental fees requested
where claimants received 87 percent of the fees sought in
their original fee application); In re Burlington N., Inc.
Emp’t Practices Litig., 832 F.2d 430, 433-36 (7th Cir.
1987) (concluding that the district court properly reduced
a fees on fees award based upon the degree of success
obtained in the original fee litigation); Harris v.
McCarthy, 790 F.2d 753, 758-59 (9th Cir. 1986) (affirming
a district court’s decision to award claimants 11.5 percent
of their supplemental fee request since they had obtained
only 11.5 percent of the fees requested in their original fee
application); Institutionalized Juveniles v. Sec’y of Pub.
Welfare, 758 F.2d 897, 924-25 (3d Cir. 1985) (concluding
that the district court properly reduced fees on fees by
12.5 percent where claimants did not obtain complete
success on their original fee application); Mercer v. Duke
WAGNER v. DVA 10

Univ., 301 F. Supp. 2d 454, 469 (M.D.N.C. 2004) (reducing
a request for supplemental fees by 20 percent because the
initial fee request was reduced by 20 percent), aff’d, 401
F.3d 199 (4th Cir. 2005).
Here, Wagner was partially successful in defending
against the government’s challenge to his initial fee
application, and he is entitled to supplemental fees com-
mensurate with the degree of success he achieved. 4 While
“the relative degree of success in litigating for merits fees
should bear upon the size of the fees-on-fees award,”
Thompson, 45 F.3d at 1368, there is no justification for
denying a supplemental fee request in its entirety simply
because the claimant’s initial fee application was not
wholly successful.
To be sure, a court has broad discretion in awarding
attorney fees, see Hensley, 461 U.S. at 437, and is not
bound, in all cases, to make an award of supplemental
fees that is proportionate to the degree of success obtained
on the original EAJA application. A litigant is only

4 The Secretary challenged 27.4 of the hours
claimed in Wagner’s initial EAJA application, and the
Veterans Court disallowed 18.8, or approximately 68.6
percent, of the challenged hours. Wagner asserts that
when he submitted his application for supplemental fees,
he reduced the hours claimed proportionately to his
degree of success in defending his original fee application.
On remand, the Veterans Court will have the opportunity
to consider whether the supplemental fees sought by
Wagner accurately reflect attorney hours reasonably
devoted to the successful defense of the original fee appli-
cation. We think it inappropriate to establish a blanket
rule regarding whether the recovery of supplemental fees
should be in proportion to the success obtained on the
original EAJA application or the success in defending the
contested fees. The considerations discussed in this
opinion, however, should be taken into account on re-
mand.
11 WAGNER v. DVA

entitled to “reasonable” attorney fees, 28 U.S.C.
§ 2412(d)(2)(A), and in fashioning a reasonable supple-
mental fee award a court may properly discount any
“[e]xorbitant” or “unfounded” fee applications. Jean, 496
U.S. at 163; see also Fritz, 264 F.3d at 1377 (emphasizing
that a supplemental fee award can be reduced “to the
extent that the applicant ultimately fails to prove justifi-
cation for each item of fee claimed” or if the fee applica-
tion is “procedurally defective”). On remand, the
Veterans Court will have the opportunity to consider
whether such factors warrant a reduction in Wagner’s
supplemental fee award. If the court decides to discount
Wagner’s supplemental fee request, however, it needs to
provide a reasoned explanation as to why particular
attorney hours should be excluded. See Hensley, 461 U.S.
at 437 (explaining that a court must “provide a concise
but clear explanation of its reasons for the fee award”);
United States v. Eleven Vehicles, Their Equip. & Accesso-
ries, 200 F.3d 203, 213 (3d Cir. 2000) (emphasizing that a
trial court cannot deny supplemental fees without provid-
ing an adequate explanation as to why such fees are
“excessive, redundant [or] otherwise unnecessary” (cita-
tions and internal quotation marks omitted)).
In denying Wagner’s application for supplemental
fees, the Veterans Court stated that “[i]t would be anoma-
lous to reduce an [initial EAJA] award by some $3,000
and then award nearly that amount to the losing party
simply for putting up a fight.” Supplemental Fees Deci-
sion, 2010 U.S. App. Vet. Claims LEXIS 197, at *3. We
disagree. As the Supreme Court made clear in Jean,
“[t]he EAJA applies to a wide range of awards in which
the cost of litigating fee disputes would equal or exceed
the cost of litigating the merits of the claim.” 496 U.S. at
163-64 (footnote omitted). Thus, regardless of whether
Wagner could recoup, through his supplemental fee
WAGNER v. DVA 12

application, an amount that is nearly equal to the amount
that he was denied on his original fee application, he is
entitled to be compensated for all hours reasonably ex-
pended successfully defending his original fee request.
See id. at 164-65 (“The Government’s general interest in
protecting the federal fisc is subordinate to the specific
statutory goals of encouraging private parties to vindicate
their rights and curbing excessive regulation and the
unreasonable exercise of Government authority.” (foot-
notes omitted) (citations and internal quotation marks
omitted)).
CONCLUSION
Accordingly, the judgment of the United States Court
of Appeals for Veterans Claims is reversed and the case is
remanded for further proceedings consistent with this
opinion.
COSTS
Wagner shall have his costs.
REVERSED AND REMANDED