Lane v. United States Department of Agriculture

United States Court of Appeals
FOR THE EIGHTH CIRCUIT
___________

No. 01-3257
___________

Dwight L. Lane; Darvin R. Lane, *
*
Appellants, *
*
v. *
*
United States Department of *
Agriculture; Ann M. Veneman, * Appeal from the United States
Secretary of the United States * District Court for the District
Department of Agriculture; the * of North Dakota.
Farm Service Agency of the United *
States Department of Agriculture; * [PUBLISHED]
Keith Kelly, Administrator of the *
Farm Service Agency of the United *
States Department of Agriculture; *
William G. Jenson, the Judicial *
Officer of the United States *
Department of Agriculture, *
*
Appellees. *
___________

Submitted: June 12, 2002

Filed: June 21, 2002
___________

Before HANSEN, Chief Judge, FAGG and BOWMAN, Circuit Judges.
___________

PER CURIAM.
 Brothers Dwight L. Lane and Darvin R. Lane (the Lanes) are before this Court
for the third time pursuing attorney’s fees from the United States Department of
Agriculture (the Agency) under the Equal Access to Justice Act (EAJA). 5 U.S.C.
§ 504 (2000). This case began when the Farmers Home Administration (now the
Farm Service Agency, or FSA) did not review the Lanes’ applications for delinquent
loan servicing within 90 days, then denied the applications. The Lanes appealed the
denial to the National Appeals Division (NAD) and won. The Lanes then sought
attorney’s fees under the EAJA. In the Lanes’ first appeal to this Court, we
concluded the appeal to the NAD was an adversary adjudication under the
Administrative Procedures Act thus attorney’s fees were available under the EAJA.
Lane v. United States Dep’t of Agriculture, 120 F.3d 106, 109-10 (8th Cir. 1997).
We remanded the case so the NAD hearing officer could consider the merits of the
Lanes’ fee petitions.

The NAD hearing officer found the Lanes were prevailing parties, the
Agency’s position in the underlying denial of delinquent loan servicing was not
substantially justified, and no special circumstances existed that would make a fee
award unjust. The NAD officer awarded Dwight Lane $95,933.45 and Darvin Lane
$118,064.26 for attorney’s fees, agent’s fees, and costs. The FSA petitioned the
Judicial Officer of the USDA for review of the NAD officer’s fee award. While the
FSA’s administrative appeal was pending, the Lanes challenged the FSA’s authority
to bring an administrative appeal to an EAJA award. Because the agency decision
was not final, the challenge was dismissed as premature. Lane v. United States Dep’t
of Agriculture, 187 F.3d 793, 795 (8th Cir. 1999). The Judicial Officer resolved the
administrative appeal by reducing Darvin’s award to $27,353.30 and Dwight’s award
to $28,043.30, for a total reduction of $158,601.17. The Lanes then petitioned the
district court for review. The district court* granted the Agency’s motion for

*
The Honorable Rodney S. Webb, United States District Judge for the District
of North Dakota.

-2-
summary judgment, affirming the Judicial Officer’s reduced award. The Lanes now
appeal. Having reviewed the record de novo and considered the facts and all
reasonable inferences that can be drawn from them in the light most favorable to the
Lanes, we conclude the district court correctly granted summary judgment to the
Agency. Forrest v. Kraft Foods, Inc., 285 F.3d 688, 691 (8th Cir. 2002).

Although the Lanes claim the district court did not apply the proper standard
of review, we disagree. Abuse of discretion governs review of fee awards, however,
questions of law are reviewed de novo. Jenkins v. Missouri, 127 F.3d 709, 713 (8th
Cir. 1997). The record shows the district court properly considered legal issues de
novo and applied legal conclusions to the factual record made before the
administrative agency. 5 U.S.C. § 554(c)(2) (2000). The district court correctly
recognized its authority to modify the fee award is limited to situations where the fee
award was unsupported by substantial evidence. Allen v. Nat. Trans. Safety Bd., 160
F.3d 431, 432 (8th Cir. 1998).

The Lanes object to the Judicial Officer’s exclusion of agent’s fees from the fee
award. Like the Judicial Officer and the district court, we reject the Lanes’ claim that
the EAPA allows recovery of both attorney’s and agent’s fees. The plain language
of the statute reads “‘fees and other expenses’ includes the reasonable expenses of
expert witnesses, the reasonable cost of any study . . ., and reasonable attorney or
agent fees.” 5 U.S.C. § 504(b)(1)(A) (2000); Duncan v. Walker, 533 U.S. 167, 172
(2001) (statutory construction begins with the language of the statute). Contrary to
the Lanes’ contention, “or”, in “attorney or agent fees” is disjunctive, meaning a
claimant cannot receive fee awards for both attorney and agent fees. United States
v. Smith, 35 F.3d 344, 346 (8th Cir. 1994). Congress intended agent fees to be
awarded where a nonattorney represents a party before an administrative agency. See
H.R. Rep. No. 96-1418 (1980) reprinted in 1980 U.S.C.C.A.N. 4984, 4993. The
reduced award is consistent with the intent of Congress to reduce the deterrent effect
of the expense of seeking review of unreasonable government action because it

-3-
compensates the Lanes for their reasonable representation-related expenses. Id. Even
if the statute is construed to permit awards of both attorney’s and agent’s fees, we
agree with the Judicial Officer that awarding fees to both Lanes’ attorneys and agent
would be unreasonable. The Judicial Officer found that the Lanes’ were represented
by two attorneys who specialized in agricultural law, the agent served in a
representational capacity, and three representatives were unnecessary. This fee
reduction is supported by substantial evidence and is not an abuse of discretion.

The Lanes also claim the Judicial Officer abused his discretion by disallowing
fees that accrued before the date the USDA formally denied the delinquent loan
servicing applications. The EAJA allows for awards of fees and expenses in
connection with an adversarial adjudication proceeding. Section 504(b)(1)(C) defines
adversarial adjudication meaning an adjudication under 5 U.S.C. § 554, when the
United States is represented by counsel and the controversy is resolved after a hearing
on the record. The Lanes contend the adversarial proceeding began when the Agency
failed to review their applications for delinquent loan servicing within the 90 day time
limit and investigated them for bad faith. The Agency’s notification that it was
seeking legal advice on whether the Lanes had acted in bad faith, while adversarial,
does not transform the Agency’s review of the loan servicing application into an
adjudicative proceeding. The Judicial Officer’s finding that the adversarial
adjudication began no earlier than the denial of the Lanes’ applications is not an
abuse of discretion. See Friends of the Boundary Waters Wilderness v. Thomas, 53
F.3d 881, 887-88 (8th Cir. 1995) (strictly construing the Government’s partial waiver
of sovereign immunity).

We thus affirm on the basis of the district court’s well-reasoned opinion.

-4-
A true copy.

Attest:

CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.

-5-