Federal Circuit Creates Split, Holding that Equal Access to Justice Act Allows Recovery of Paralegal Costs to Attorney, Not Market Rate

Federal Circuit Creates Split, Holding that Equal Access to Justice Act Allows Recovery of Paralegal Costs to Attorney, Not Market Rate

BNA's United States Law Week (Vol. 75, No. 25, Jan. 9, 2007) reports that a recent Federal Circuit case, Richlin Sec. Service Co. v. Chertoff, --- F.3d ---, 2006 WL 3771798 (Fed. Cir. Dec. 26, 2006), created a circuit split by holding that "paralegal fees are 'expenses' rather than 'attorney or agent fees' or general 'fees' within the meaning of the" Equal Access to Justice Act. The Federal Circuit thus departs from a 1988 Eleventh Circuit holding that paralegal services are included within "attorney's fees" under the EAJA.

Here is an excerpt from Judge Dyk's opinion:

"The question here is whether, under EAJA, amounts for paralegal services may be recovered at market rates as part of "fees" or whether they are recoverable only at cost as part of the recovery of "expenses."As a preliminary matter, we note that EAJA provides that " 'fees and expenses' includes the reasonable expenses of expert witnesses . . . and reasonable attorney or agent fees." 5 U.S.C. § 504(b)(1)(A) (emphasis added). Richlin does not appear to argue that paralegal services should be reimbursed on the theory that the statute allows recovery of any and all types of fees. Rather, Richlin argues that they are recoverable under the specific category of "attorney's fees." While Congress' use of the term "includes" does raise the possibility that Congress intended to permit reimbursement of other types of fees, we conclude that the statutory text compels a conclusion that EAJA permits only reimbursement of expert, agent, and attorney's fees.

. . .

Both EAJA and [42 U.S.C.] § 1988 [Civil Rights Attorney's Fees Awards Act] provide for the recovery of "attorney's fees," and the Supreme Court has generally stated that "fee-shifting statutes' similar language is a strong indication that they are to be interpreted alike." Indep. Fed. of Flight Attendants v. Zipes, 491 U.S. 754, 758 n. 2 (1989) (internal citations and quotation marks omitted). However, where, as here, there are differences in the surrounding language, structure and purpose of the statute, the Supreme Court has interpreted identical language in different statutes differently . . . . Here too we conclude that the different statutes require different interpretations. Initially we note that the language of the two statutes is different in important respects. Under § 1988 the effect of denying "fee" recovery for paralegal services would likely have been to deny recovery entirely. Section 1988 provides for the recovery of only attorney's fees and costs, not expenses."

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