F I L E D
United States Court of Appeals
Tenth Circuit
PUBLISH
OCT 17 2000
UNITED STATES COURT OF APPEALS
PATRICK FISHER
Clerk
TENTH CIRCUIT
THE SHOOTING STAR RANCH,
LLC,
Plaintiff-Appellant,
v. No. 99-1197
UNITED STATES OF AMERICA;
UNITED STATES FOREST
SERVICE, an agency of the United
States Department of Agriculture;
DAN GLICKMAN, Secretary of the
Department of Agriculture; MICHAEL
DOMBECK, Chief of the Forest
Service; ELIZABETH ESTILL,
Regional Forester in the Rocky
Mountain Region of the Forest
Service; JERRY SCHMIDT, Forest
Supervisor for the Routt and Medicine
Bow National Forests,
Defendants-Appellees.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
(D.C. No. 96-N-2225)
Submitted on the briefs:
Karen Budd-Falen of Budd-Falen Law Offices, P.C., Cheyenne, Wyoming, for
Plaintiff-Appellant.
Thomas L. Strickland, United States Attorney, Michael E. Hegarty, Assistant
United States Attorney, Denver, Colorado, for Defendants-Appellees.
Before BALDOCK , KELLY , and HENRY , Circuit Judges.
BALDOCK , Circuit Judge.
Plaintiff The Shooting Star Ranch settled a quiet title action against various
entities of the United States and then sought attorney fees and costs in the district
court pursuant to the Equal Access to Justice Act (EAJA), 28 U.S.C. § 2412(d).
The district court denied plaintiff’s claim, holding it had failed to establish that it
met the financial requirements of the EAJA and thus was not a party eligible for
an award of costs and fees. Plaintiff appeals. We review the judgment of the
district court for abuse of discretion, see United States v. 88.88 Acres of Land ,
907 F.2d 106, 108 (9th Cir. 1990), and affirm. 1
1
After examining the briefs and appellate record, this panel has
determined unanimously to grant the parties’ request for a decision on the briefs
without oral argument. See Fed. R. App. P. 34(f); 10th Cir. R. 34.1(G). The case
is therefore ordered submitted without oral argument.
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In order to qualify as a “party” under the EAJA for purposes of an award,
plaintiff had to establish that, at the time the civil action was filed, its net worth
did not exceed $7,000,000 and it employed not more than five hundred
employees. See 28 U.S.C. at § 2412(d)(2)(B). In an attempt to carry this burden,
plaintiff submitted an unsworn, unverified letter from its certified public
accountant stating that plaintiff’s net worth was between $1,500,000 and
$1,800,000. Appellant’s App. at 19. The government challenged this assertion as
inadequate to establish plaintiff’s net worth at the time the action was filed.
Appellees’ Supp. App. at 52. Plaintiff was granted leave to file a reply, which it
did. The exhibits submitted with the reply, however, dealt with various corporate
matters pertinent to plaintiff, but did not bolster the mere letter from plaintiff’s
accountant on the issue of net worth. 2
2
On appeal to this court, plaintiff requests leave under Fed. R. App. P.
10(e) to supplement the record with an affidavit as to its value and with various
income tax documents. Rule 10(e) allows supplementation of the record by a
circuit court when material evidence is omitted in the record either by error or
accident. See Fed. R. App. P. 10(e)(2). Plaintiff does not argue that the omission
of the material it now seeks to present was the result of either error or accident.
“Rule 10(e) allows a party to supplement the record on appeal but does not grant a
license to build a new record.” United States v. Kennedy , No. 98-1421, 2000 WL
1352891, at *2 (10th Cir. Sept. 20, 2000) (quotation omitted). This court will not
consider evidence not presented before the district court. See id.
Plaintiff’s citation to Martinez v. Mafchir , 35 F.3d 1486, 1492 n.6 (10th
Cir. 1994) is inapposite. In Martinez , the defendants did not oppose the
plaintiff’s motion to supplement, and the additional evidence did not affect the
(continued...)
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It is clear from the legislative history of the EAJA that Congress intended
to provide for the recovery of costs and fees to insure that entities “‘not be
deterred from seeking review of, or defending against, unjustified governmental
action because of the expense involved in securing the vindication of their
rights.’” D’Amico ex rel. NLRB v. Industrial Union of Marine & Shipbuilding
Workers of Am. , 630 F. Supp. 919, 922 (D. Md. 1986) (quoting H.R. Rep. No. 99-
120, at 4 (1985), reprinted in 1985 U.S.C.C.A.N. 132, 132-33.) The effort to
secure such an award, however, should not result in a second major piece of
litigation. See Hensley v. Eckerhart , 461 U.S. 424, 437 (1983).
While the EAJA itself fails to define “net worth” or explain how such a
calculation should be arrived at, the Committee Reports accompanying the EAJA
establish that “net worth” is to be “calculated by subtracting total liabilities from
total assets.” H.R. Rep. No. 96-1418, at 15 (1980) reprinted in 1980
U.S.C.C.A.N. 4984, 4994; see also American Pac. Concrete Pipe Co. v. NLRB ,
788 F.2d 586, 590 (9th Cir. 1986) ( quoting S. Rep. No. 96-253, at 17 (1979)).
Further, generally accepted accounting principles apply to the net worth inquiry.
See id. at 591. Thus, while Congress clearly intended to grant relief to qualifying
2
(...continued)
correctness of the district court’s decision. See id.
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parties, the means by which a claimant establishes qualification is still an
evidentiary process.
When challenged as to eligibility for an EAJA award, the party seeking
such an award must do more than make a bare assertion that it meets the statutory
criteria. Here, plaintiff’s sole evidence regarding its net worth is an unverified
and unsworn letter from its accountant. It is not possible to calculate net worth
by subtracting total liabilities from total assets based merely on the accountant’s
letter. Especially in the face of a challenge by the government, such evidence
cannot, without more, establish plaintiff’s net worth.
Plaintiff argues that the government should have been required to present
evidence refuting plaintiff’s net worth assertion before plaintiff could be required
to come forward with more evidence. We do not reach that question here because
plaintiff did not even produce an affidavit of its net worth when faced with a
challenge by the government and despite being given the opportunity to
supplement the record by the district court. We have found no cases where a
mere assertion in an application, without more, withstood a challenge as to net
worth by the government.
Here, plaintiff has failed to produce even an affidavit in the district court
on an issue on which it had the burden of proof. See Pate v. United States , 982
F.2d 457, 459 (10th Cir. 1993) (discussing statute, 26 U.S.C. § 7430, that
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incorporates EAJA requirements); see also Estate of Woll ex rel. Woll v. United
States , 44 F.3d 464, 470 (7th Cir. 1994) (party seeking EAJA award bore burden
of establishing that it met net worth requirements). On this record, we cannot say
that the district court abused its discretion in denying plaintiff “party” status for
purposes of the EAJA.
Plaintiff-Appellant’s motion to supplement the record is DENIED. The
judgment of the United States District Court for the District of Colorado is
AFFIRMED.
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