United States Court of Appeals
FOR THE EIGHTH CIRCUIT
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No. 11-1925
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United States of America, *
*
Appellant, *
* Appeal from the United States
v. * District Court for the
* Eastern District of Arkansas.
Bobby L. Hurt; Sue R. Hurt, *
*
Appellees. *
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Submitted: January 10, 2012
Filed: April 12, 2012
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Before RILEY, Chief Judge, MELLOY and SHEPHERD, Circuit Judges.
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RILEY, Chief Judge.
The United States sued Bobby and Sue Hurt, alleging they engaged in a pattern
or practice of sex discrimination in the rental of housing, in violation of the Fair
Housing Act (FHA), 42 U.S.C. § 3601, et seq. After a jury found for the Hurts, the
district court granted in part the Hurts’ motion for costs and attorney fees under the
Equal Access to Justice Act (EAJA), 28 U.S.C. § 2412. The government appeals the
award of attorney fees. We reverse and vacate the district court’s award of attorney
fees.
I. BACKGROUND
The United States sued the Hurts under the FHA, alleging (1) Bobby engaged
in a pattern or practice of sexual harassment of female tenants at trailer parks he
managed and Sue and he owned, in violation of 42 U.S.C. §§ 3604(a)-(c) and 3617;
and (2) Sue was liable as the trailer parks’ owner for the discriminatory conduct of her
agent, Bobby, because Sue knew or should have known about Bobby’s conduct and
failed to prevent or correct it.
The case was tried to a jury. During the trial, eight women testified about
Bobby’s actions toward them while they were living in the Hurts’ trailer parks.
Several of the women claimed Bobby entered their homes and exposed his genitalia,
touched the women’s breasts and inner thighs, and made lewd comments. Others
testified Bobby solicited sexual favors in exchange for housing or utilities. One
woman said she told Sue about Bobby’s behavior. The women also described the
emotional harm they suffered as a result of Bobby’s alleged misconduct. Jimmy
Alexander, a manager of other trailer parks, corroborated some of the women’s
testimony, claiming Bobby gave him advice on collecting rent and obtaining sexual
favors from tenants.
At the close of the government’s case, and at the end of the evidence, the Hurts
moved for judgment as a matter of law1 arguing (1) the claim was time-barred with
regard to most of the alleged victims; (2) Sue could not be liable for Bobby’s actions;
(3) some of Bobby’s alleged misconduct did not violate the FHA; (4) there was
insufficient evidence of a pattern or practice of sexual harassment; and (5) the
government had not proved an award of punitive damages was applicable. The
district court granted judgment as a matter of law on the damages claim for one
1
Although the parties refer to motions for a “directed verdict” in their briefs, we
will use the term “judgment as a matter of law” from Federal Rule of Civil Procedure
50(a).
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alleged victim and the claim for punitive damages against Sue, but denied the motion
in all other respects. The district court found, even though several victims’ claims
were not recoverable, those victims could still be part of a pattern or practice of sexual
harassment in violation of the FHA. The district court applied the statute of
limitations standard the court had used in Title VII, 42 U.S.C. § 2000e, et seq., cases,
declaring “you can go back almost indefinitely if it’s part of the same pattern or same
practice.”
After the jury found the Hurts were not liable, the district court entered final
judgment for the Hurts on November 29, 2010. The Hurts then moved for $16,008.51
in costs and $271,550 in attorney fees pursuant to the EAJA. The district court
awarded the Hurts $16,008.51 in costs and $142,905 in attorney fees. The district
court first determined the government was substantially justified only in bringing
“claims” on behalf of four of the ten alleged victims2 identified and investigated
during the course of the litigation. The district court explained, although the six other
“victims provided sufficient testimony to create a material factual dispute, it was clear
that they were not credible.” In calculating the fee award, the district court first
reduced the amount of attorney fees requested by 15% to account for “duplicative
services and . . . defending motions on which the government was successful.” The
district court reduced that amount by 40%, “the percentage of the claims for which
there was a reasonable basis of law and fact.”
On appeal, the government contends the district court abused its discretion in
awarding the Hurts attorney fees, and does not contest the award of costs.
II. DISCUSSION
The EAJA requires awarding attorney fees to defendants who prevail in suits
brought by the United States “unless the court finds that the position of the United
2
Two of the ten women did not testify at trial.
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States was substantially justified or that special circumstances make an award unjust.”
28 U.S.C. § 2412(d)(1)(A). “Substantially justified” means the government’s position
“has a reasonable basis in law and fact.” Bah v. Cangemi, 548 F.3d 680, 683-84 (8th
Cir. 2008) (quoting Pierce v. Underwood, 487 U.S. 552, 566 n.2 (1988) (internal
quotation marks omitted)). The EAJA also allows for a discretionary award of other
costs. See 28 U.S.C. § 2412(a)(1). We review a district court’s award of attorney fees
under the EAJA for abuse of discretion, reviewing conclusions of law de novo and
findings of fact for clear error. See U.S. Dep’t of Labor v. Rapid Robert’s Inc., 130
F.3d 345, 347 (8th Cir. 1997). The government carries the burden of proving its
position was substantially justified. Bah, 548 F.3d at 684.
A. Single Claim
The EAJA “favors treating a case as an inclusive whole, rather than as atomized
line-items.” Comm’r v. Jean, 496 U.S. 154, 161-62 (1990). In determining whether
the government’s position is “substantially justified,” the district court should make
“only one threshold determination for the entire civil action.” Id. at 159.
In this case, the government brought a single pattern or practice claim. See Int’l
Bhd. of Teamsters v. United States, 431 U.S. 324, 360 (1977) (recognizing that “[t]he
plaintiff in a pattern-or-practice action is the Government”); United States v. Big D
Enters., Inc., 184 F.3d 924, 930 (8th Cir. 1999) (citing Int’l Bhd. of Teamsters in an
FHA pattern or practice suit and deciding the government (rather than individual
victims) must prove “the defendant engaged in discriminatory activity as a matter of
standard operating procedure”). The district court here should have made a single
determination about whether the government’s suit, as a whole, was substantially
justified. The district court improperly considered the case as consisting of ten
individual victims’ claims for separate assessment, rather than as a single pattern or
practice claim. This error requires reversal.
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The Hurts’ arguments to the contrary are without merit. First, the Hurts argue
the government waived this issue by not raising it when opposing the Hurts’ motion
for attorney fees in the district court. The government could not anticipate this error,
which the district court introduced in its order. In addition, before the order, the Hurts
argued the government should reimburse all of their attorney fees and did not
alternatively argue the government should reimburse a proportional award based on
the merit of the individual victims’ claims.
Next, the Hurts maintain the district court actually did not separately consider
whether each victim’s claim was substantially justified. The Hurts contend the district
court had already found the lawsuit as a whole was not substantially justified, and
only considered the alleged victims individually when calculating the amount of fees
owed. We disagree. The district court, in determining whether to award attorney fees,
stated “In determining what is reasonable, it must first be determined whether the
government had ‘a reasonable basis in law and fact’ to bring any of the claims that it
brought.” The district court then concluded only four of the “claims” were credible.
The district court plainly treated the lawsuit as a series of separate claims, rather than
as one pattern or practice claim.
B. Substantially Justified
The district court did not consider whether the government’s position as a
whole was substantially justified. As we did in Bah, “we conclude that the record
supports a finding that the [government’s] conduct was substantially justified.” Bah,
548 F.3d at 684. “[W]here a case involves primarily factual questions, this court has
found that the government’s position was substantially justified.” Bale Chevrolet Co.
v. United States, 620 F.3d 868, 873 (8th Cir. 2010); cf. EEOC v. Liberal R-II Sch.
Dist., 314 F.3d 920, 926 (8th Cir. 2002) (concluding the government’s position was
substantially justified where the government presented sufficient direct evidence to
avoid summary judgment), abrogated on other grounds by Torgerson v. City of
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Rochester, 643 F.3d 1031, 1043, 1059 (8th Cir. 2011).3 Credibility is the
quintessential factual question. See Johnson v. Carroll, 658 F.3d 819, 827 (8th Cir.
2011) (observing credibility is a question for the jury). For this reason, the Seventh
Circuit concluded, “when resolution of a case hinges to [a significant] extent on
determinations of witness credibility, it is an abuse of discretion to find that the
government’s position was not substantially justified.” Wilfong v. United States, 991
F.2d 359, 368 (7th Cir. 1993).
The Hurts contend Bale Chevrolet Co. is distinguishable because it involved a
novel legal issue and a knowledge issue, and the Hurts’ case does not involve a novel
legal issue. The novelty of the legal issue in Bale Chevrolet Co. was significant
because the taxpayer challenged both the legal and factual basis of the government’s
position. See Bale Chevrolet Co., 620 F.3d at 871-73. The Hurts only challenge the
factual basis of the government’s position. Because the legal basis of the
government’s position in the Hurts’ case is not novel, the government’s position is
more reasonable, not less.
The Hurts’ jury’s verdict turned on the credibility of the government’s
witnesses. The district court acknowledged as much, saying, “[a]lthough these
victims provided sufficient testimony to create a material factual dispute, it was clear
that they were not credible.”
Sexual harassment is actionable under the FHA when it creates “a hostile
housing environment” or constitutes “‘quid pro quo’ sexual harassment.” See Quigley
3
The Fourth Circuit, interpreting the fee-shifting provision under Title VII, 42
U.S.C. § 2000e-5(k), declared, “Generally . . . the denial of a motion for judgment as
the matter of law made at the close of all evidence strongly indicates that the
plaintiff’s case was not frivolous, unreasonable, or groundless.” EEOC v. Great
Steaks, Inc., 667 F.3d 510, 518 (4th Cir. 2012). We need not confront this position
today.
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v. Winter, 598 F.3d 938, 946-47 (8th Cir. 2010). A defendant creates a hostile
housing environment by subjecting a victim “to unwelcome sexual harassment, and
the harassment was sufficiently severe or pervasive so as to interfere with or deprive
[the victim] of her right to use or enjoy her home.” Id. Quid pro quo sexual
harassment “occurs when housing benefits are explicitly or implicitly conditioned on
sexual favors.” Id. at 947. The government presented evidence Bobby repeatedly
entered tenants’ homes and exposed his genitalia, touched female tenants’ breasts and
inner thighs, and made lewd comments. Several witnesses testified Bobby solicited
sexual favors in exchange for housing or utilities, which, if believed, would constitute
quid pro quo sexual harassment. There also was evidence Sue knew of the alleged
harassment. Although it is conceivable the government may bring a lawsuit with no
or so few credible witnesses that its position is not substantially justified, this is not
such a case. The district court recognized four of the ten victims as credible, which
shows the government’s theory of a pattern or practice of sexual discrimination was
substantially justified.
The Hurts assert the government’s position was not substantially justified
because the government did not present sufficient evidence at trial of either (1) a
timely claim, because of the statute of limitations, or (2) damages. We first reject the
contention that the statute of limitations prevents the government’s position from
being substantially justified. A pattern or practice claim is “based not solely on
isolated incidents . . . , but a continuing violation manifested in a number of
incidents.” Havens Realty Corp. v. Coleman, 455 U.S. 363, 381 (1982). Such a claim
is timely as long as at least one of the incidents occurred during the limitations period.
See id. at 380-81. The Hurts concede Bobby’s most recent alleged misconduct
occurred within the limitations period. This brings the entire pattern or practice claim
within the statute of limitations. See id.
Second, for proof of damages, the government need not have presented
“evidence of the actual dollar value of the injury.” Williams v. Trans World Airlines,
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660 F.2d 1267,1272-73 (8th Cir. 1981) (involving an employment discrimination
claim under 42 U.S.C. § 1981, determining for mental distress, “proof of out-of-
pocket losses or medical testimony, although relevant, is not necessary” and the
victim’s “own testimony may be solely sufficient to establish humiliation or mental
distress”). The victims’ own testimony that Bobby’s alleged pattern of sexual
harassment caused them emotional distress was sufficient. See id.; see also EEOC v.
Convergys Customer Mgmt. Grp., 491 F.3d 790, 797 (8th Cir. 2007) (basing damages
for emotional distress under the Americans with Disabilities Act solely on the
plaintiff’s testimony).
III. CONCLUSION
We reverse and vacate the district court’s award of attorney fees.
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