[00:00:14] Speaker 04:
Okay, the next case before the court is Starry Associates versus the United States, an appeal from a decision of the Court of Federal Claims, case number 172148.

[00:00:26] Speaker 04:
Mr. Echols.

[00:00:33] Speaker 04:
Ms.

[00:00:34] Speaker 04:
Echols.

[00:00:34] Speaker 04:
I'm sorry.

[00:00:39] Speaker 04:
You want five minutes for rebuttal?

[00:00:41] Speaker 04:
Yes, sir.

[00:00:58] Speaker 05:
The court should reverse the trial court's award of actual attorney fees under the special factor provision of subsection D of section 2412 of the Equal Access to Justice Act.

[00:01:09] Speaker 03:
So can I just ask you from the start, what other special factor besides needing extremely skilled attorneys or a paucity of attorneys in that area can you think of?

[00:01:22] Speaker 03:
Because I tried to think of other special factors, and I have a hard time coming up with anything.

[00:01:28] Speaker 05:
Well, Your Honor, I can't say that I have considered any that would fall under the umbrella as the court is considering here.

[00:01:35] Speaker 05:
We've seen it by, you know, consideration of other courts, consideration of delay, things like that.

[00:01:41] Speaker 03:
However, as this court... But I assume you would argue delay isn't compensable under this either.

[00:01:48] Speaker 05:
Correct.

[00:01:49] Speaker 03:
I mean, delay sounds an awful like awarding interest under other words, which I think at least our precedent has made clear you can't do.

[00:01:57] Speaker 05:
That's correct, Your Honor.

[00:01:58] Speaker 05:
We agree with this court's ruling in Chiu.

[00:02:02] Speaker 03:
So you haven't been any more creative than I have in coming up with another special factor.

[00:02:06] Speaker 05:
No, we have not.

[00:02:07] Speaker 04:
So why would the language of the statute say, among other things, or including, why wouldn't it say the only time this can happen is when you don't have enough attorneys available, or the right skilled attorneys available?

[00:02:23] Speaker 05:
I think there is some flexibility in the statute to award an enhancement for a special factor as long as that special factor justifies the higher fee, as explicitly stated by the provision itself.

[00:02:35] Speaker 04:
But based on your argument, that's what I'm in the same place Judge Hughes is.

[00:02:38] Speaker 04:
If your argument is correct, if there's flexibility in the statute, what is it for?

[00:02:44] Speaker 05:
I think that it's for situations that maybe we can't come up with here today or that the Congress didn't come up with when they were promulgating the statute, but it does allow for some occasion where there is a special factor that justifies a higher fee.

[00:02:59] Speaker 05:
This problem with what Starry puts forward here in the expansive reading of the statute by the trial court is,

[00:03:04] Speaker 05:
that it is inconsistent with not only the canons of statutory construction, but a reading of the special factor exception so broadly also is not in keeping with the broader context of the statute itself.

[00:03:18] Speaker 05:
If we look at section D2A specifically, which is the special factor provision, what we see again explicitly stated is that whatever the special factor is that Starry or anyone else could dream of, that it must justify a higher fee.

[00:03:34] Speaker 05:
That's the first issue that we have here.

[00:03:37] Speaker 05:
Because Starry has made no showing, either before the trial court or on appeal or in this appeal, that anything related to the government's conduct has justified a higher fee.

[00:03:48] Speaker 05:
The other problem with such an expansive reading of the statute is that it does not comport with what is the threshold inquiry of an award under subsection D, which is under subsection D1B, which this court talks about in two.

[00:04:06] Speaker 05:
The statute requires that in considering whether or not the government's position is substantially justified, that the applicant

[00:04:18] Speaker 05:
alleged that the position was not substantially justified and that that determination shall be based on the record which should include, and this is explicitly set forth in statute, action or failure to act by the agency upon which the civil action is based.

[00:04:31] Speaker 05:
And as this court explains in Chu, following the 1985 amendment of the statute by President Reagan to include this language about the government action, that the

[00:04:41] Speaker 05:
The courts were then instructed to consider government conduct in that threshold inquiry of whether or not the position was essentially justified.

[00:04:52] Speaker 04:
But does it say that if you're to consider that in that threshold inquiry, you can't consider it anywhere else?

[00:05:00] Speaker 05:
Chu does not go that far.

[00:05:02] Speaker 05:
But we see that other courts have.

[00:05:03] Speaker 05:
The Second Circuit has gone that far.

[00:05:05] Speaker 05:
The Fifth Circuit has gone that far.

[00:05:06] Speaker 05:
The D.C.

[00:05:07] Speaker 05:
Circuit has gone that far.

[00:05:08] Speaker 04:
You're asking us to say that it doesn't matter

[00:05:11] Speaker 04:
how bad the government's conduct was, that once we conclude it wasn't substantially justified, then we can't look at that conduct for any other purpose.

[00:05:22] Speaker 05:
Proceeding under subsection D, the special factor exception does not allow for a consideration of the government's conduct, is what the government's position is.

[00:05:31] Speaker 05:
Congress has expressly provided redress.

[00:05:34] Speaker 05:
There is a structure by which the government, I'm sorry, the court may consider the government's conduct in assessing the amount of fees.

[00:05:44] Speaker 05:
And in doing so, the court must proceed under subsection B. That's not what happened here.

[00:05:49] Speaker 05:
The court was very clear that it was proceeding under, or its analysis was being conducted under subsection D. STARI was very clear that it was proceeding in its application under subsection D. Under subsection B,

[00:06:01] Speaker 04:
Do you believe that the bad faith that's contemplated under B relates to bad faith by the government lawyers litigating the case, or does it encompass bad faith by the agency?

[00:06:15] Speaker 05:
I think it more closely is concerned, or is more concerned, with the conduct during litigation.

[00:06:21] Speaker 04:
OK, so what you're saying then is that there is a difference between not substantially justified and completely egregious, right?

[00:06:29] Speaker 05:
I agree.

[00:06:29] Speaker 04:
And while we can debate with the underlying facts here, clearly the court felt that the underlying facts here meant that the conduct of the agency was particularly egregious, right?

[00:06:41] Speaker 04:
At least that's what the court thought, whether you agree with it or not.

[00:06:44] Speaker 04:
So what you're saying is there's no remedy for that.

[00:06:49] Speaker 05:
What we are saying is that under subsection D,

[00:06:52] Speaker 04:
that the remedy for a position that is not substantially justified in this case, the reason why... But you're saying there's no remedy under either, B or D, because you just told me B only relates to the lawyers and he didn't say anything bad about the lawyers before him.

[00:07:09] Speaker 05:
There is no remedy under subsection D necessarily for the agency's conduct, as it was found here.

[00:07:17] Speaker 05:
However, the remedy is not an equitable one.

[00:07:20] Speaker 05:
There is a remedy that's provided for under the statute, and that is the ability to recoup some of the fees up to a cap.

[00:07:26] Speaker 05:
There is no cap on the hours.

[00:07:28] Speaker 05:
So to the extent, as Starry argues, that the government's conduct has created this track of litigation that's caused it to incur costs and deal with all of the issues that are

[00:07:37] Speaker 04:
The answer to me is yes.

[00:07:42] Speaker 04:
There's no remedy for the difference between not substantially justified and really, really egregious.

[00:07:47] Speaker 04:
In that measure, there's nothing a court can do.

[00:07:51] Speaker 05:
That is correct.

[00:07:52] Speaker 05:
It is not up to the court to fashion a remedy that's not explicitly set forth by Congress in the statute.

[00:07:57] Speaker 05:
As this court has recognized... Is there any remedy outside of this statute?

[00:08:02] Speaker 04:
Could a separate action be brought against the government or the government

[00:08:07] Speaker 04:
individual that was involved in, say the individual was taking bribes and put aside criminal, but would there be any civil remedy for Starry under those circumstances?

[00:08:18] Speaker 05:
I'm not sure I have an answer to that, Your Honor.

[00:08:20] Speaker 05:
I'm not clear on that, but I believe what we're dealing with here, and I believe it was the second circuit in, I'm sorry, not the second circuit, it was the D.C.

[00:08:29] Speaker 05:
Circuit in Rayseald that addresses what Your Honor is alluding to, and the fact that there is

[00:08:35] Speaker 05:
there may be some perceived gap.

[00:08:37] Speaker 05:
The court may say the government's conduct here is troubling.

[00:08:41] Speaker 05:
And there is a gap between what I can find under subsection D and what's available as a remedy under subsection, I'm sorry, what I can find under subsection B under the bad faith, vexatious, wanton conduct standard, and what's available as a remedy or in terms of compensation, limited compensation under subsection D.

[00:09:03] Speaker 05:
The issue is, as the DC Circuit recognized, is that Congress has not devised a system to penalize the degree of the government's conduct or how unjustified the government's position may have been.

[00:09:15] Speaker 05:
That's just where we are.

[00:09:17] Speaker 05:
And while certainly, admittedly, the trial court was not pleased with the government's actions here, and that's clear from the opinion,

[00:09:26] Speaker 05:
That does not give the court carte blanche to come in and devise or fashion its own remedy to provide an equitable adjustment.

[00:09:33] Speaker 03:
Isn't the remedy for government misconduct in a procurement the ability to get an injunction against the procurement, to get bid prep costs that were contained in the procurement, and any other kinds of things?

[00:09:47] Speaker 03:
That's what you get for government misconduct in a procurement.

[00:09:51] Speaker 05:
That's correct, Your Honor.

[00:09:53] Speaker 05:
Conduct during the procurement is addressed on the merits.

[00:09:56] Speaker 03:
And in this case, there was- And Congress has enacted any statute that provides for any kind of enhanced damages or punitive damages or the like for egregious government misconduct.

[00:10:08] Speaker 05:
That's correct, Your Honor.

[00:10:09] Speaker 05:
Not under subsection D. If there are no further questions at this time, I'd like to yield the rest of my time.

[00:10:17] Speaker 05:
Or not yield, but reserve.

[00:10:19] Speaker 04:
One last question.

[00:10:22] Speaker 04:
The court have said that, given how improper it felt the government's purposes were, that it could enhance the number of hours for which there was recovery, rather than enhancing the fees.

[00:10:41] Speaker 05:
Assuming that there was sufficient proof that the number of hours were actually worked, incurred, or performed by the attorneys involved in this case,

[00:10:52] Speaker 05:
then there is no cap in the statute to compensating up to the rate cap plain as for that number of hours.

[00:11:01] Speaker 05:
And we certainly didn't quibble with Starry in this case about the number of hours that they claimed or anything of that nature.

[00:11:07] Speaker 05:
This appeal is really limited to this legal question as to whether or not the government's conduct is a sufficient basis to impose enhanced fees, which would be akin to impermissible imposition of punitive damages.

[00:11:22] Speaker 04:
And again, before you sit down, I know you want to save all this time, but I've got some questions.

[00:11:26] Speaker 04:
So 2412B, what cases talk about B and what the scope of B really is?

[00:11:33] Speaker 04:
I know you say you think it relates to DOJ conduct of the attorneys litigating the actual case before the Court of Federal Claims or before whoever you're litigating before.

[00:11:44] Speaker 04:
Are there cases that talk about that?

[00:11:46] Speaker 05:
There are cases that certainly explore what the scope of liability is for the government under subsection B of 2412.

[00:11:55] Speaker 04:
What do you think are the clearest cases?

[00:11:58] Speaker 05:
One I can think of off the top of my head is Sufi, S-U-F-I.

[00:12:03] Speaker 05:
I have a few more that I'd be happy to present to the court perhaps after this break.

[00:12:08] Speaker 04:
OK, thank you.

[00:12:16] Speaker 01:
Good morning.

[00:12:24] Speaker 01:
Lars Anderson, faculty, Starry Associates, the Women on Small Business.

[00:12:30] Speaker 01:
The small business status of Starry is a critical factor in this case.

[00:12:36] Speaker 01:
We believe this case should be decided on the plain language of the Equal Access to Justice Act,

[00:12:44] Speaker 01:
and the guidance provided by the US Supreme Court in Pierce v. Underwood.

[00:12:50] Speaker 04:
Did the court say that it was finding a special circumstance because of the small business nature of the entity involved?

[00:13:00] Speaker 01:
The subsection D of the Equal Access to Justice Act was set up by Congress specifically to provide some relief only to small businesses.

[00:13:13] Speaker 01:
A large business cannot seek any relief under subsection D, only small businesses.

[00:13:23] Speaker 01:
And it was the clear intent of Congress that if a small business litigated against the government and prevailed and the government's position was not substantially justified, that at a minimum the small business would receive some

[00:13:41] Speaker 01:
compensation for the legal fees.

[00:13:45] Speaker 04:
Right.

[00:13:45] Speaker 04:
And clearly, there is an entitlement to fees here, and the government is not objecting to that.

[00:13:51] Speaker 04:
The question is, when you say at a minimum, the question is, how do you get beyond that minimum?

[00:13:58] Speaker 03:
You get beyond that minimum because subsection D... I mean, use pricing in terms of a minimum, but that's not the language Congress uses.

[00:14:06] Speaker 03:
They say there's a cap

[00:14:08] Speaker 03:
Unless you provide special factors, or you already got the cost of living adjustment, I assume.

[00:14:15] Speaker 01:
Well, the government has acknowledged that we're entitled to it, although they haven't paid it.

[00:14:22] Speaker 01:
Which is another issue.

[00:14:24] Speaker 03:
Well, it's on appeal.

[00:14:25] Speaker 03:
I mean, he awarded more than they think they owe.

[00:14:28] Speaker 01:
Well, we'd ask the whole business to at least pay what they agreed they had.

[00:14:33] Speaker 01:
But the subsection D,

[00:14:36] Speaker 01:
specifically gives the court the discretion to award more than the cap of $125, they can award, they can up it for the cost of... But it's not unfettered discretion.

[00:14:52] Speaker 04:
I mean, that's the problem, is we're trying to figure out what defines that discretion.

[00:14:56] Speaker 01:
Only if the court were to find that the trial court, the Court of Plains, abused its discretion.

[00:15:04] Speaker 01:
Only an abuse of discretion in applying the special factors would be the review.

[00:15:12] Speaker 03:
The Supreme Court... Well, not if we conclude that this is a legally incorrect theory.

[00:15:17] Speaker 03:
I mean, the IJA was enacted to ensure that people weren't deterred from bringing cases against the government because they couldn't afford attorneys.

[00:15:27] Speaker 03:
And it put in place a cap.

[00:15:29] Speaker 03:
This whole statute is directed at

[00:15:33] Speaker 03:
affording attorneys and paying attorneys.

[00:15:35] Speaker 03:
It's not directed at punishing the government for misconduct.

[00:15:41] Speaker 01:
It is directed at providing some relief to a small business that has prevailed.

[00:15:50] Speaker 01:
And if in the discretion of the trial court believes there are some special factors that would permit enhancing the hourly rate,

[00:16:02] Speaker 01:
And the Supreme Court in Pierce v. Underwood made it very specific that the only review is whether or not the trial court abused its discretion.

[00:16:17] Speaker 03:
The government's position is essentially saying that if the government's conduct... Not if we disagree that this statute can't be used to punish government misconduct.

[00:16:28] Speaker 03:
Your theory sounds like enhanced damages or punitive damages to me in the form of extra attorney fees.

[00:16:35] Speaker 03:
If you want punitive damages or enhanced damages against the government, there has to be a clear and specific waiver of sovereign immunity against the United States.

[00:16:44] Speaker 03:
I don't see that here.

[00:16:46] Speaker 01:
I believe it is here.

[00:16:47] Speaker 01:
If you read the statute, it says that the court may determine a special factor will allow enhancement

[00:16:57] Speaker 01:
of attorney's fees.

[00:16:58] Speaker 02:
Now, we can't be intuitive to go in.

[00:17:01] Speaker 03:
I know I'm interrupting you, but I get to do that.

[00:17:04] Speaker 03:
You don't get to interrupt me.

[00:17:05] Speaker 03:
It says that in the context of the other adjustment clause, which is about cost of living.

[00:17:12] Speaker 03:
So that phrase you're talking about in context is looking at whether the attorney's fees should be enhanced either because the cost of living increase is allowed or other special factors such as the need to

[00:17:27] Speaker 03:
higher specialized attorneys.

[00:17:29] Speaker 03:
Those are all directed at the paying of the attorneys.

[00:17:33] Speaker 03:
They're not directed at whether the government committed misconduct or not.

[00:17:38] Speaker 01:
There is no limitation on the special field.

[00:17:42] Speaker 03:
There is if we read that sentence as placing a boundary on what special factors meant.

[00:17:49] Speaker 01:
The US Supreme Court in Pierce v. Underwood, which first addressed whether, in that case,

[00:17:57] Speaker 01:
whether the special counsel qualified as uniquely expertise.

[00:18:03] Speaker 01:
They said it didn't.

[00:18:04] Speaker 01:
But then it said, under special factors, you can consider other factors.

[00:18:10] Speaker 01:
And the only restrictions the Supreme Court put on the other special factors was abusive discretion by the trial court, and that those other factors, those special factors, could not be brought in general application to litigation

[00:18:27] Speaker 01:
and they could not be applicable to a broad spectrum of litigation.

[00:18:32] Speaker 03:
But that's exactly what you're asking for.

[00:18:34] Speaker 03:
You're asking for a rule that if the government's misconduct is egregious, that that can justify an enhancement.

[00:18:42] Speaker 03:
That is correct, Your Honor, because the government's misconduct... Are you aware of any case where the Supreme Court, this court,

[00:18:52] Speaker 03:
any other circuit court had used this special factor to penalize the government for misconduct rather than awarding enhanced fees because of lack of qualified counsel or the like.

[00:19:10] Speaker 01:
This is a case of first impression.

[00:19:11] Speaker 01:
There's no case that says they can't.

[00:19:14] Speaker 04:
Well, I'm not so sure about that.

[00:19:15] Speaker 04:
There are lots of other

[00:19:16] Speaker 04:
Court, not us, and not the Supreme Court.

[00:19:19] Speaker 01:
But again, the government's position, Congress set this up so that there could be some compensation to small businesses.

[00:19:27] Speaker 03:
There is compensation.

[00:19:28] Speaker 03:
That's exactly what they set up.

[00:19:30] Speaker 03:
They set up, you get this cap and these other adjustments.

[00:19:36] Speaker 03:
They wanted to give you actual attorney's fees, or if they wanted to give you actual attorney's fees in the face of egregious government misconduct, they would have said that.

[00:19:46] Speaker 03:
These special factors have to be read in the context of where they fall within the statutory language.

[00:19:52] Speaker 03:
And they're talking about adjustments to fees based upon factors inherent to the attorney, not to the government.

[00:20:05] Speaker 03:
Is there any place in that statutory cap language that references the government misconduct?

[00:20:14] Speaker 01:
The statute gives

[00:20:17] Speaker 01:
the trial court, the discretion.

[00:20:20] Speaker 01:
Well, that's what we're here to decide.

[00:20:22] Speaker 00:
But you can't just say that if she dicts it.

[00:20:25] Speaker 00:
To follow up on what Judge Hughes is saying, the statute, the whole context of the statute is to provide parties with the ability to access the judicial system to seek relief.

[00:20:42] Speaker 00:
It's not a statute

[00:20:44] Speaker 00:
intended to provide compensation or a remedy or a relief or a punishment, then that's why it seems to me it's focused on the attorney rate.

[00:20:59] Speaker 00:
The cap is on the rate of the attorney fee and it's talking about the ability to gain access to representation in order to

[00:21:11] Speaker 00:
avail oneself of the judicial system.

[00:21:14] Speaker 00:
It's not talking about what happens at the end of the trial and getting the proper remedy or relief or compensation.

[00:21:23] Speaker 01:
The Supreme Court in Pierce v. Underwood made it very clear that this subsection D is not limited to only

[00:21:35] Speaker 04:
additional compensation to have attorneys... And that's what we're going very back to the point that we started with, was we agree that the statute read logically does not limit itself to one circumstance, but we're trying to understand what the other circumstances might be.

[00:21:52] Speaker 04:
So let me ask you, did you ask for a finding of bad faith under 2412B?

[00:21:57] Speaker 01:
No, we didn't, Your Honor, because we're small business and

[00:22:03] Speaker 01:
Under D, we have to apply within 30 days.

[00:22:09] Speaker 01:
If we had, and the government's position basically is if the government's conduct is so egregious that the only remedy is to go under D, under B rather.

[00:22:22] Speaker 01:
And if you're a small business and you go under B and you can't prove bad faith under law,

[00:22:31] Speaker 01:
then you'd get nothing.

[00:22:34] Speaker 01:
And that was not the intent of Congress.

[00:22:36] Speaker 03:
Are you prohibited from asking for fees under both provisions?

[00:22:39] Speaker 01:
You cannot, Your Honor.

[00:22:41] Speaker 01:
Under D, if you're small business, you have to file within 30 days.

[00:22:46] Speaker 01:
Well, why can't you file both?

[00:22:49] Speaker 01:
I don't think you can cover two litigations.

[00:22:53] Speaker 03:
I don't understand what you're saying.

[00:22:55] Speaker 03:
Is there anything in the statute or anything in precedent that prohibits you from filing in each application saying,

[00:23:01] Speaker 03:
We're at least entitled to fees under D, the substantial justification thing with the cap.

[00:23:07] Speaker 03:
But we think the government's litigation misconduct or the misconduct overall was so egregious that we're also under B, entitled to actual attorney fees.

[00:23:18] Speaker 01:
It's possible.

[00:23:20] Speaker 01:
However, D was set up for small businesses.

[00:23:27] Speaker 01:
It provides that the trial court can exercise its discretion and special factors.

[00:23:34] Speaker 01:
And we should not be prohibited.

[00:23:37] Speaker 01:
A small business should not be excluded from getting an enhancement because of the misconduct of the government.

[00:23:43] Speaker 04:
Shoulds are questions for Congress, though.

[00:23:46] Speaker 04:
So we have to figure out what Congress actually said.

[00:23:49] Speaker 04:
I mean, there are lots of gaps.

[00:23:52] Speaker 04:
There's lots of times when it seems that it's unfair the way

[00:23:55] Speaker 04:
parties who have to deal with the government are treated, the question is, what are the remedies for that?

[00:24:01] Speaker 01:
Then again, you look at Pierce versus Underwood in the US Supreme Court.

[00:24:07] Speaker 03:
You keep citing Pierce.

[00:24:08] Speaker 03:
Can you quote the language you're relying on?

[00:24:10] Speaker 03:
Pierce?

[00:24:11] Speaker 03:
I've read Pierce numerous times, although not recently.

[00:24:15] Speaker 03:
And I can't recall anything specific that would justify using this special factor

[00:24:23] Speaker 03:
enhancement as a punishment for government misconduct.

[00:24:29] Speaker 01:
But for one thing, Pierce stated that under special factors to enhance fees, an appeal court must apply an abusive discretion standard.

[00:24:44] Speaker 01:
Still doesn't say what special factors are.

[00:24:47] Speaker 01:
Then it says, having excluded in Pierce the

[00:24:53] Speaker 01:
expert attorney requiring additional fees, the court then said we address other fees, other factors that fall under special factors.

[00:25:03] Speaker 01:
They eliminated some.

[00:25:05] Speaker 01:
They eliminated novelty and difficulty of issues.

[00:25:09] Speaker 01:
They eliminated the undesirability of the case.

[00:25:12] Speaker 01:
They eliminated the work and ability of counsel, and they eliminated results

[00:25:18] Speaker 01:
obtained as being special factors because the court said, and I quote, we think the other special factor envisioned by the exceptions must be such as they're not a broad and general application.

[00:25:34] Speaker 01:
They also said that they eliminated these particular factors because these factors are, quote, applicable to a broad spectrum of litigation.

[00:25:47] Speaker 01:
So from the US Supreme Court, that's the only restriction.

[00:25:52] Speaker 03:
I don't see how that helps you.

[00:25:54] Speaker 03:
Because what you're arguing for is essentially a form of punitive sanction against the government for misconduct, which is precisely the kind of broad category that they don't think applies.

[00:26:08] Speaker 03:
It's not a special factor.

[00:26:12] Speaker 01:
Special factor was

[00:26:14] Speaker 02:
What's the difference between difficulty of the case and egregious government misconduct?

[00:26:24] Speaker 01:
Very good distinction because many cases are difficult.

[00:26:28] Speaker 03:
Frankly, if you have a case where the government's misconduct is so egregious that it's likely you're going to win and win easily, it seems like it would be very easy to get an attorney rather than a hard case.

[00:26:45] Speaker 01:
Another significant difference between or factor of under subsection D that applies to small businesses is that unlike B, where you're limited to bad faith of the government during the trial, specifically under subsection D, the trial court can consider all the acts of the government that led to the litigation.

[00:27:12] Speaker 02:
And in our particular case... Sure, that's part of the substantial justification test.

[00:27:18] Speaker 02:
With the government's... What does that have to do with the statutory cap?

[00:27:23] Speaker 01:
It's easy.

[00:27:24] Speaker 01:
Because they have the discretion... You can't say most of the cases where the court, where the government, where a small business prevails and the court finds that the government was not substantially justified.

[00:27:39] Speaker 01:
Mostly it's because of rule...

[00:27:41] Speaker 01:
mistakes in law, mistakes in fact.

[00:27:46] Speaker 01:
And that would allow the government.

[00:27:49] Speaker 01:
The court can exercise its discretion and enhance the fees so long as it's not for factors that are found in many litigations.

[00:28:04] Speaker 01:
Agregious misconduct by the government is not found frequently, where they falsify declarations, where they misrepresent facts to the GAO and to the Court of Federal Claims.

[00:28:18] Speaker 01:
That is very special.

[00:28:20] Speaker 01:
That is not found in many litigations.

[00:28:24] Speaker 04:
OK.

[00:28:24] Speaker 04:
You're out of time.

[00:28:25] Speaker 04:
Thank you.

[00:28:39] Speaker 04:
I think the strongest argument he makes on the other side is the last one, which is this is really, really troublesome conduct by the government, not the government attorneys, but by those involved in the procurement process.

[00:28:57] Speaker 04:
And why shouldn't there be some remedy for that?

[00:29:03] Speaker 05:
I think, Your Honor, Luke's point earlier in the questioning

[00:29:09] Speaker 05:
Mr. Anderson, in the fact that it's not necessarily up to me, and it's certainly not up to the trial court, to determine whether or not there should be some redress for government conduct, no matter how unjustified, no matter how troubling that conduct may be.

[00:29:25] Speaker 05:
That is left to Congress and Congress alone to determine whether or not there ought to be a special enhancement or some sort of punitive

[00:29:35] Speaker 05:
vehicle by which a court may within its discretion assess fees or assess actual fees or some enhancement as a result of the government's conduct.

[00:29:44] Speaker 05:
And the problem that we have with the trial court's opinion here is not necessarily the court's desire to

[00:29:51] Speaker 05:
make some sort of equitable adjustment.

[00:29:53] Speaker 05:
It's the fact that there is no explicit waiver of sovereign immunity by Congress for a court to do so.

[00:30:01] Speaker 05:
And when presented with that challenge, the court chose to simply do so anyway.

[00:30:09] Speaker 05:
And to Mr. Anderson's point, that was pretty clear.

[00:30:13] Speaker 04:
I'm sorry.

[00:30:14] Speaker 04:
It was clear that the court chose to do so.

[00:30:17] Speaker 05:
And did so without citing any other authority other than Pierce.

[00:30:21] Speaker 05:
What we have before this court is consideration or an appeal for consideration of persuasive authority, like we see in the Second Circuit, the Fifth Circuit, the D.C.

[00:30:32] Speaker 05:
Circuit, where, for example, the Fifth Circuit finds to address the point of the policy goal here.

[00:30:39] Speaker 05:
The policy goal is not, as we've set forth in our brief, the policy goal is not full compensation.

[00:30:46] Speaker 05:
It is not to offer whatever actual fees are under subsection D. That scheme is set forth in subsection B. Congress clearly, by setting a rate cap, has determined that its policy goal of reducing deterrence for challenging unreasonable government conduct is served by having a cap, that you can have a rate cap and still pursue or achieve the policy goal here.

[00:31:11] Speaker 05:
There is a pretty low rate cap.

[00:31:13] Speaker 05:
It is a low rate cap, but Congress has decided that that satisfies its policy goal.

[00:31:19] Speaker 05:
And again, it is not up to the trial court to determine, certainly without any authority on point, that it may extend what Congress's express waiver of sovereign immunity to these sorts of circumstances.

[00:31:35] Speaker 04:
Do you agree that, with your friend on the other side, that D and B are mutually exclusive?

[00:31:41] Speaker 05:
No, I'm not sure what the basis of that conclusion is.

[00:31:46] Speaker 05:
We believe that the court must decide in its ruling which analysis it's awarding fees under.

[00:31:54] Speaker 04:
However, there was nothing preventing- You mean the court has to be stuck in one bucket or the other?

[00:31:59] Speaker 04:
And it's final determination because the analysis is different for whether you proceed under B or D. But you can't award fees under EJA and then also say, and I'm awarding additional fees for bad faith?

[00:32:12] Speaker 05:
Both sections are under the IJA, but I think that in order to award actual fees, I mean, I think the court does have to determine whether or not it's proceeding with an analysis under subsection B or D. But there's certainly nothing that prevented STARI in making its application from requesting in the alternative actual fees under B or D. How would they prove bad faith other than what looks pretty obvious on the face of what occurred here?

[00:32:37] Speaker 04:
Would they have to take depositions?

[00:32:39] Speaker 05:
Well, they did take depositions, and they took depositions in this case specifically on their claim that the government was acting in bad faith over the course of the procurement.

[00:32:47] Speaker 05:
So in the same way that they doggedly pursued a bad faith claim, even though the court did not choose to take up that question and stop short of addressing the issue, in the same way that they took up a bad faith argument throughout the course of this litigation before GAO and before the Court of Federal Claims,

[00:33:03] Speaker 04:
they certainly could have marshaled those same facts in order to make a showing under subsection D. When you say the court stopped short of addressing that issue, do we need to send it back for the court to address that issue?

[00:33:13] Speaker 05:
No, because the court was very clear that it need not do so, that it was proceeding under subsection D, and that its analysis, which expanded the scope of subsection D, I'm sorry, it was very clear that it was proceeding under analysis under subsection D, and that it's... What if it thought it couldn't?

[00:33:31] Speaker 04:
If it was told by us that it couldn't do what it did under D, shouldn't we say, but you should then reconsider whether or not you would have been better off under B?

[00:33:43] Speaker 05:
No, Your Honor.

[00:33:44] Speaker 05:
We believe that the court had its opportunity to consider the application that was set forth before it.

[00:33:49] Speaker 03:
Was there an application under B?

[00:33:51] Speaker 05:
There was not an application under B, but we certainly are not supporting the notion that if unsuccessful under one application as a matter of law,

[00:34:01] Speaker 05:
First of all, they were successful under subsection D. There was an award that was made.

[00:34:07] Speaker 05:
We are just challenging that piece of the award that impermissibly grants a special factor enhancement.

[00:34:13] Speaker 05:
And so there is compensation, as was intended by Congress.

[00:34:17] Speaker 05:
Starry received that in the trial court's award.

[00:34:20] Speaker 05:
This court may correct the court's error of the enhancement without deference.

[00:34:27] Speaker 05:
It may do so without sending it back.

[00:34:29] Speaker 04:
OK.

[00:34:29] Speaker 04:
Thank you.