In the
United States Court of Appeals
For the Seventh Circuit
No. 10-2340
O WNER-O PERATOR INDEPENDENT D RIVERS
A SSOCIATION, INC., et al.,
Petitioners,
v.
F EDERAL M OTOR C ARRIER S AFETY A DMINISTRATION,
Respondent.
Petition for Review of an Order of the
Federal Motor Carrier Safety Administration.
No. FMCSA-2004-18940
S UBMITTED F EBRUARY 13, 2012—D ECIDED A PRIL 2, 2012
Before
R OVNER and W OOD , Circuit Judges, and
G OTTSCHALL, District Judge.
W OOD , Circuit Judge. In our opinion on the merits
in this case, we vacated a final rule issued by the Federal
The Honorable Joan B. Gottschall, of the United States
District Court for the Northern District of Illinois, sitting by
designation.
2 No. 10-2340
Motor Carrier Safety Administration (FMCSA) about
the use of electronic monitoring devices in commercial
trucks. Owner-Operator Independent Drivers Ass’n v.
Federal Motor Carrier Safety Admin., 656 F.3d 580 (7th Cir.
2011). Three of the petitioners, William J. Culligan, Adam
D. Burnett, and Douglas Oldham, each of whom is a
commercial truck driver, now seek attorneys’ fees and
costs under the Equal Access to Justice Act (EAJA).
FMCSA opposes the award. It argues that these indi-
vidual drivers are not entitled to fees because the
fourth petitioner, Owner-Operator Independent Drivers
Association (OOIDA), which is not included in the fee
petition, is the only party responsible for paying the
attorneys’ fees incurred in the prosecution of the petition
for review. After examining the relevant arrangements,
we agree with FMCSA that the individual petitioners
are not entitled to the requested fees.
The EAJA provides that a court must award fees and
costs incurred by the prevailing party unless the position
of the United States was substantially justified or that
special circumstances make the award unjust. 28 U.S.C.
§ 2412(d)(1)(A). There is no question that the petitioners
prevailed when we vacated the rule that they challenged
in their petition for review. The EAJA defines a party
as “an individual whose net worth did not exceed
$2,000,000 at the time the civil action was filed” or, as
relevant here, an “organization, the net worth of which
did not exceed $7,000,000 at the time the civil action
was filed.” 28 U.S.C. § 2412(d)(2)(B). The individual
petitioners represent that they all meet the net worth
requirements, and we have no reason to question that
No. 10-2340 3
statement. We infer, however, that OOIDA does not
meet the qualifications of a “party” for purposes of a
fee award under the EAJA, because it has not joined in
the fee petition.
We recently noted the problem of the “stand-in liti-
gant”—that is, someone who litigates in the place of
a party that is ineligible for an award of fees under
the EAJA either because of size or wealth, where the
ineligible party pays the attorneys’ fees for the stand-in.
United States v. Thouvenot, Wade & Moerschen, Inc., 596
F.3d 378, 383 (7th Cir. 2010), citing SEC v. Comserv Corp.,
908 F.2d 1407, 1416 (8th Cir. 1990). In order to address
that concern, we must examine the details of the rela-
tionship between the petitioners and their counsel. Each
of the individual petitioners in our case entered into a
separate fee arrangement with the same law firm. In
those agreements, the firm committed not to charge
fees and costs to the individual driver. OOIDA had a
separate agreement with the same law firm; its agree-
ment binds it to pay all of the fees and costs associated
with this case. FMCSA argues that the net effect of these
arrangements prevents the individual petitioners from
meeting their burden to establish that they are solely
responsible for the fees. The court, it says, must look
beyond the names on the fee petition and ascertain
who is the real party in interest with respect to fees. See
Unification Church v. INS, 762 F.2d 1077, 1081 (D.C. Cir.
1985). The petitioners acknowledge that they bear the
burden of proving eligibility for fees under the EAJA,
Sosebee v. Astrue, 494 F.3d 583, 587 (7th Cir. 2007), but
they reply that the EAJA requires only that they estab-
4 No. 10-2340
lish that they are “prevailing parties” as defined in the
Act. See Nail v. Martinez, 391 F.3d 678, 682-83 (5th Cir.
2004) (rejecting the “real party in interest” test based on
its conclusion that Congress specifically defined “party”
and there is no justification for further defining an
eligible party).
FMCSA points out that the D.C. Circuit’s decision in
Unification Church did not take such a simplistic ap-
proach. The plaintiffs there are similar to the peti-
tioners before us—an organization and three individu-
als. The parties in Unification Church had agreed that
the organization would pay the fees. This fact led the
court to conclude that the individual plaintiffs had
nothing at stake in the award of fees, for the straight-
forward reason that the ineligible organization was
solely responsible for paying them. Unification Church,
762 F.2d at 1082-83. The petitioners respond that the
D.C. Circuit later remarked that the essential considera-
tion in Unification Church was the existence of a fee ar-
rangement among the plaintiffs. AARP v. EEOC, 873
F.2d 402 (D.C. Cir. 1989). The AARP court looked to
whether there was some relationship or agreement
among some or all of the plaintiffs, either explicit or
implicit, permitting a plaintiff who would not qualify
for an award to receive free legal services if its side were
to prevail. Id. at 405. In the present case, petitioners
conclude, the three truck drivers each had a separate
and independent attorney/client relationship with coun-
sel and each signed a separate retention agreement.
Because there was no umbrella fee arrangement “among”
all of the petitioners, there is nothing to prevent each
petitioner from receiving fees.
No. 10-2340 5
In our view, this line of argument shaves things
too finely. The absence of an agreement among the
parties may be one piece of evidence, but it does not
end the inquiry by itself. AARP held that a variety
of factors are pertinent. It explained that a court “should
consider whether there is one counsel representing
several plaintiffs of disparate size or wealth, especially
where the size or wealth of one or more of those
plaintiffs would likely disqualify it from recovering
fees under the EAJA,” how long and when counsel
has been and became counsel of record for each
plaintiff, the appearances and representations made by
the various attorneys on behalf of their respective
clients, and whether some plaintiffs retained pro bono
counsel. Each of these considerations would throw
light on the ultimate question whether “a plaintiff
pursued counsel independent of the stimulus of a large
or wealthy plaintiff.” AARP, 873 F.2d at 405-06.
Applying that approach to our case, we see first that
the individual petitioners are obviously of disparate
size and wealth as compared to OOIDA. The absence of
the organization from the fee petition is explainable only
by the natural assumption that it is not eligible for
fees under the statute. OOIDA and the individual peti-
tioners were represented by the same law firm through-
out this litigation. Counsel of record, attorney Paul
Cullen, lists on the petitioners’ fee petition that he
has served as General Counsel to OOIDA and has repre-
sented the association and its members for over
20 years. There is no indication that attorney Cullen
had an attorney/client relationship with the individual
6 No. 10-2340
petitioners before the current litigation. FMCSA also
points out that the attorney time records submitted
with the petition catalogue numerous instances in
which counsel conferred with OOIDA, but there are
no entries reporting communications with the three
individuals. These factors all support the conclusion
that the relationship between the petitioners is such
that the individual petitioners are not eligible for a
fee award. Even if the petitioners did not have an
explicit fee arrangement among themselves, their fee
arrangements with the same law firm—a firm that had
represented OOIDA for over 20 years—resulted in an
implicit arrangement whereby the ineligible organiza-
tion paid the full amount of the fees and costs and
the individual drivers were not responsible for any pay-
ment.
Our conclusion here should not be understood as
a holding that the answer to the question whether a
party is directly liable for the payment of attorneys’ fees
is always dispositive with respect to eligibility for an
EAJA award. For example, we recently explained that
an award of attorneys’ fees under the EAJA can include
fees incurred by the party’s liability insurer, because
the party had contracted with the insurance company
to pay premiums in exchange for the insurance com-
pany’s bearing the defense costs. Thouvenot, 596 F.3d at
383. Accord Ed A. Wilson, Inc. v. General Services Admin.,
126 F.3d 1406 (Fed. Cir. 1997). Similarly, courts have
awarded fees where the prevailing party is represented
by a legal services organization or counsel appearing
pro bono. AARP, 873 F.2d at 406; Watford v. Heckler, 765
No. 10-2340 7
F.2d 1562, 1567 n.6 (11th Cir. 1985); Cornella v. Schweiker,
728 F.2d 978, 987 (8th Cir. 1984). In contrast, courts have
denied fees under the EAJA in situations where an em-
ployer paid the attorneys’ fees on behalf of its employ-
ees. The Fourth Circuit held that five former employees
were not eligible for an award of EAJA fees when the
company was legally obligated to indemnify them for
their attorneys’ fees. United States v. Paisley, 957 F.2d
1161 (4th Cir. 1992). To similar effect, the Eighth Circuit
held that a corporate officer was not eligible for an
EAJA award when the company’s insurance policy reim-
bursed the company for its indemnification of its
officers and directors. Comserv, 908 F.2d at 1414-15.
To determine when a fee award is appropriate, the
court must bear in mind the purpose of the EAJA. In
reconciling one decision awarding fees with a decision
denying eligibility for fees where none of the
prevailing parties had paid out-of-pocket expenses, the
Eighth Circuit concluded that “[t]he lesson we draw
from these two cases is that EAJA awards should be
available where the burden of attorneys’ fees would have
deterred the litigation challenging the government’s
actions, but not where no such deterrence exists.”
Comserv, 908 F.2d at 1415-16. We agree with that practical
approach. The critical concern underlying the common
precondition that the fee claimant must have incurred
the expense is the need to assure that the employee
would not have been deterred from pursuing the suit
had the EAJA not existed. Paisley, 957 F.2d at 1164. As
we put it before, “[t]he purpose of the EAJA is to
eliminate the financial disincentive for people to chal-
8 No. 10-2340
lenge unreasonable governmental actions.” Krecioch v.
United States, 316 F.3d 684, 686 (7th Cir. 2003), citing
Sullivan v. Hudson, 490 U.S. 877, 883-84 (1989). The intent
of the EAJA is to assist individuals or small entities, not
to subsidize large entities that are better able to afford
legal services. Unification Church, 762 F.2d at 1081. To
hold otherwise would raise “[t]he possibility of one
client using another to obtain fees otherwise unavailable
under the Act.” Id. at 1083.
In this case, we conclude that the purpose of the
EAJA would not be served by awarding fees to the indi-
vidual petitioners. Financial considerations would not
have deterred the individual drivers from pursuing
this action, because they are not liable for payment of
the attorneys’ fees even if no fees are awarded by this
court. Accordingly, we D ENY the petitioners’ motion
for attorneys’ fees.
4-2-12