TIMBERS, Circuit Judge.
This appeal by the Secretary of Health and Human Services requires us to resolve,
The instant proceeding stems from the difficulty encountered by appellee Berman in obtaining earnings record credit for his work as an historical markers supervisor for the Illinois Department of Transportation (Department) from November 1974 through May 1975. Under the terms of his contract with the Department, Berman served as a consultant. He advised the Department whether it should approve requests for the erection of historical markers. He received $6,920 for his work. This was paid in eight monthly installments.
Berman then commenced the instant action pro se in the United States District Court for the Northern District of Illinois, challenging the adverse administrative ruling. The case was assigned to Judge Prentice H. Marshall. On October 16, 1980, Judge Marshall appointed Lawrence P. Bemis, Esq., of the firm of Kirkland & Ellis, as counsel for Berman.
After the appointment of Bemis as counsel for Berman, both parties moved for summary judgment. In a memorandum order dated August 14, 1981, Judge Marshall held that the ALJ erroneously had concluded that Berman was a contractual services employee of the state. The judge observed that this type of position was not even created until July 1, 1975, after Berman had completed his services for the Department.
After prevailing on the summary judgment motion, Berman applied for attorneys' fees. In an opinion dated February 16, 1982, 531 F.Supp. 1149 (granting fee application), the district court at the outset held that the instant action was pending on October 1, 1981, the effective date of the
On appeal, the Secretary challenges only the grant of attorneys' fees under the EAJA. He claims that the court erred in awarding attorneys' fees for work performed prior to the effective date of the EAJA. Consequently, the Secretary does not dispute on appeal that the instant action was pending on October 1, 1981. Furthermore, he does not argue that the government's position was substantially justified. The sole question presented on this appeal, therefore, is the narrow one of whether a court is precluded from granting attorneys' fees for work performed before the effective date of the EAJA.
The Secretary's argument is twofold. First, he argues that Congress in enacting the EAJA did not intend to provide for awards of retroactive attorneys' fees. Second, he argues that the district court (and other federal courts that have allowed retroactive attorneys' fees under the EAJA) failed to consider the proper application of the sovereign immunity doctrine. We shall discuss each of these arguments in turn.
RETROACTIVITY UNDER THE EAJA
The EAJA was enacted by Congress in 1980. By its terms, it expires in 1984. See EAJA, Pub.L. No. 96-481, §§ 203(c), 204(c), 94 Stat. 2327, 2329 (1980).
The EAJA is codified in two sections of the Code: 5 U.S.C. § 504 (Supp. IV 1980) and 28 U.S.C. § 2412 (Supp. IV 1980). Section 2412 sets forth the general rule regarding the liability of the federal government for fees and costs. Section 504 provides for an agency's liability for fees and costs arising from an adversary agency adjudication. On the instant appeal only Section 2412 is relevant, since the district court held that the Secretary was not liable for fees incurred during the administrative stage of the proceeding.
Before the EAJA, Section 2412 authorized an award of attorneys' fees against the United States only where specifically provided by statute. The EAJA amended this section to provide that if certain conditions are met any prevailing party may apply for attorneys' fees against the government unless such fees are expressly prohibited by another statute. 28 U.S.C. § 2412(b). These conditions are quite specific. For example, a "party" having a net worth in excess of $1,000,000 at the time an action is commenced is ineligible to apply for attorneys' fees, 28 U.S.C. § 2412(d)(2)(B)(i); fees are limited to reasonable attorneys' fees, 28 U.S.C. § 2412(d)(2)(A); and the party seeking an award must submit an application within 30 days of final judgment, 28 U.S.C. § 2412(d)(1)(B). Moreover, as we have stated above, a prevailing party may obtain attorneys' fees only if the government's position was not "substantially justified", 28 U.S.C. § 2412(d)(1)(A). Congress placed on the government the burden of establishing that its position was substantially justified. This is consistent with the well recognized policy that the party with greater access to and knowledge of the facts should bear the burden of proof. H.R.Rep. No. 1418, supra, at 10-11.
The EAJA was enacted largely to encourage individuals and small businesses to litigate against the government adverse determinations in administrative proceedings and civil actions, regardless of the cost of such litigation. In view of the traditional American rule regarding attorneys' fees, however, Congress concluded that, if it were to facilitate a prevailing private party's obtaining reimbursement for his or her legal expenses, then individuals and small businesses would be less likely to be deterred from challenging government action due to the high cost of civil litigation. H.R.Rep. No. 1418, supra, at 9-10. Moreover, it has been suggested that the EAJA was intended to compensate parties for expenses incurred in defending against unreasonable government action — a purpose which arguably is distinct from mitigating the deterrent effect of litigating. Robertson and Fowler, Recovering Attorneys' Fees From the Government under the Equal Access to
The EAJA also has a parallel objective of deterring the government from pursuing litigation — either in initiating it or defending against it — when the government's position is not substantially justified. According to House Report 1418, the prevailing bill — S. 265 — "rests on the premise that a party who chooses to litigate an issue against the Government is not only representing his or her own vested interest but is also refining and formulating public policy." H.R.Rep. No. 1418, supra, at 10. Litigation against the government, for example, can correct an erroneous agency rule or "provide a vehicle for developing or announcing more precise rules." H.R.Rep. No. 1418, supra, at 10.
House Report 1418 also indicates that Congress intended the EAJA to apply to appeals to the federal courts under the Social Security Act, although attorneys' fees are not available in administrative proceedings under that Act. H.R.Rep. No. 1418, supra, at 12; see also Shumate v. Harris, 544 F.Supp. 779, 781-82 (W.D.N.C.1982); Ocasio v. Schweiker, 540 F.Supp. 1320, 1321 (S.D.N.Y.1982) (although EAJA not applicable to administrative proceedings under Social Security Act, it does apply to district court review of Social Security decisions). The exclusion of applications for attorneys' fees in SSA administrative proceedings apparently was intended to reduce the financial strain on agencies from the EAJA. H.R.Rep. No. 1418, supra, at 22. In its report to the Committee on the Judiciary, the Congressional Budget Office (CBO) indicated that in fiscal year 1978, SSA cases accounted for 91% of all administrative cases which were adjudicated. Consequently, the CBO concluded that 9% (or 20,000) agency adjudications, based on 1978 data, would be covered by the EAJA. H.R.Rep. No. 1418, supra, at 22. The legislative history of the EAJA clearly indicates that Berman is precluded from obtaining attorneys' fees for work done during the administrative stage of the case. This reflects Congress' deliberate attempt to tailor eligibility for attorneys' fees so as to minimize the cost of the EAJA. As we indicate below, this cost-tailoring of the EAJA by Congress is relevant to the question of whether Congress was sufficiently explicit in its waiver of sovereign immunity in connection with the retroactive award of attorneys' fees.
The EAJA accordingly was enacted to establish a general statutory exception for awarding attorneys' fees to parties who prevail against the government. This was intended to be accomplished by "permit[ting] a court in its discretion to award attorneys' fees and other expenses to prevailing parties in civil litigation involving the United States to the same extent it may award fees in cases involving other parties." H.R.Rep. No. 1418, supra, at 9.
Against this background, we turn to the specific issue before us on this appeal: whether Congress intended to authorize the granting retroactively of attorneys' fees for work performed prior to the effective date of the Act. Section 208 of the EAJA sets forth its effective date and the scope of its application as follows:
EAJA, Pub.L. No. 96-481, § 208, 94 Stat. 2330 (1980) (emphasis added).
We must decide whether this section, coupled with the overall purpose of the EAJA, requires that a prevailing party who otherwise has satisfied the prerequisites of the Act, nevertheless should be barred from obtaining an award of attorneys' fees because his legal fees were for work performed before October 1, 1981.
Applying one of the basic canons of statutory interpretation — the plain meaning of the statute — Section 208 should cover work
Moreover, we are not persuaded by the construction of Section 208 suggested in Commodity Futures Trading Commission v. Rosenthal & Co., 537 F.Supp. 1094, 1096 (N.D.Ill.1982). There the district court, although reserving judgment on the retroactivity issue, suggested as one rational reading of Section 208 that the "take effect" clause of the section might apply to the "fees ... incurred" language of the Act, 28 U.S.C. § 2412(d)(1)(A), and thus apply only to fees incurred after October 1, 1981.
Further, the court in Commodity Futures Trading Commission referred to the district court's construction of the EAJA in the instant Berman case as "a reasonable — perhaps even the normal — one." Commodity Futures Trading Commission, supra, 537 F.Supp. at 1096.
Granting attorneys' fees retroactively also is consistent with the broad remedial purposes of the Act. As we have stated above, the purposes of the Act are threefold: (1) to encourage private litigants to pursue their administrative and civil actions against the government and not be deterred by the prospect of having to absorb the cost of their own attorneys' fees; (2) to compensate parties for the cost of defending against unreasonable government action; and (3) to deter the federal government from prosecuting or defending cases in which its position is not substantially justified.
In the instant case, the first purpose of the Act is not applicable. Berman commenced this action before the Act was enacted. Indeed, Berman's counsel was appointed several days before the Act was enacted. Consequently, it cannot be said that Berman pursued the instant action because of the EAJA.
The compensatory purpose of the Act, however, arguably is apposite here. Berman was the prevailing party. Furthermore, the district court concluded that the government's position was not substantially justified. Under the compensatory purpose rationale, normally no further inquiry is required. In view of the fact that Bemis originally accepted Berman's case without any reasonable expectation of remuneration, however, it would be disingenuous to conclude that awarding attorneys' fees here satisfies the legislative purpose of compensating Berman for his legal expenses. Consequently, we believe that it would be inappropriate to hold that the instant action comes within the Act's compensatory purpose. Robertson and Fowler, Recovering Attorneys' Fees, supra, at 944.
The gravamen of Berman's action is that he was deprived of appropriate earnings record credit because of a determination by the Secretary that he was neither a covered employee of Illinois nor a self-employed consultant. Even the ALJ acknowledged during the hearing that Berman was in a "Catch-22" situation where it was impossible for him to satisfy any of the SSA's earnings record requirements. Berman's situation, however, is not so uncommon as it might appear. In this country, it is not unusual for a state to contract with a highly specialized individual to perform unique services. Awarding attorneys' fees here may have the salutary effect of curbing the Secretary's summary denial of earnings record credit for those individuals situated similarly to Berman, i.e., professionally trained individuals who are employed by states for a limited purpose based on their specialized training. Furthermore, as a result of the instant case, the SSA would be well advised to reevaluate its procedures for determining for earnings record credit purposes whether an individual who has specialized research skills (as Berman does with respect to library research and military history), but whose skills are not in such great demand as to ensure regular employment, nevertheless may be found to be engaged in a "trade or business", 42 U.S.C. § 411 (1976 & Supp. II 1978), i.e., to satisfy the self-employment test.
Finally, we wish to refer briefly to the analysis by the district court in Allen v. United States, 547 F.Supp. 357 (N.D.Ill.1982), where the court, in holding that pre-Act fees should not be allowed retroactively, relied in part on the cost estimate provided by the CBO. In Allen, the court observed that the CBO's cost estimate "does not show an immediately large and steady outlay of funds throughout the life of the Act...." Allen, supra, 547 F.Supp. at 361. Apparently relying on the gradual increase of estimated funding over the life of the Act, the court concluded that Congress' intent could be inferred in part from these figures and that Congress did not intend that litigants should "receive a windfall award of attorney's fees incurred before the Act took effect." Id. We believe the court has misread the CBO report. That report clearly indicates that the gradual increase of estimated expenditures is attributable to the impact of "reporting requirements specified in the bill and the impact that enactment of this bill would have on the size of awards and the number of cases." H.R.Rep.
We hold, in light of the plain meaning of Section 208 and the governmental deterrence purpose of the Act, that the EAJA applies retroactively to attorneys' fees in the instant case for work performed prior to October 1, 1981.
SOVEREIGN IMMUNITY AND THE EAJA
Having held that the Act applies retroactively to attorneys' fees for work
We recently have observed, consistent with Supreme Court authority, that "[w]aivers of sovereign immunity must be strictly construed and are not to be extended by implication." Commissioners of Highways v. United States, 684 F.2d 443, 444 (7th Cir.1982); see also Lehman v. Nakshian, 453 U.S. 156, 160-61 (1981); Champaign-Urbana News Agency, Inc. v. J.L. Cummins News Co., Inc., 632 F.2d 680, 687 (7th Cir.1980). We therefore must determine whether Congress unequivocally expressed its intent to waive sovereign immunity in this type of case. United States v. Mitchell, 445 U.S. 535, 538 (1980); United States v. King, 395 U.S. 1, 4 (1969) (waiver "cannot be implied but must be unequivocally expressed"); United States v. Sherwood, 312 U.S. 584, 586 (1941) ("terms of [government's] consent to be sued ... define [a] court's jurisdiction to entertain the suit"). We turn again to the language of the Act and its legislative history to the extent that they bear upon the sovereign immunity doctrine.
The EAJA was passed in the wake of the Supreme Court's decision in Alyeska Pipeline Service Co. v. Wilderness Society, supra note 4. There, as we have stated above, the Court held that the award of attorneys' fees against the United States when the prevailing party acted as a private attorney general is barred by 28 U.S.C. § 2412 unless there is an express statutory exception. Although Congress recognized that individuals who fall within the coverage of the EAJA are not serving roles identical to those of the private attorney generals referred to in Alyeska, Congress viewed the public function of private litigants who might challenge erroneous administrative actions as analogous to that of the private attorney general. H.R.Rep. No. 1418, supra, at 10.
In drafting the EAJA, Congress thus was aware of the mandate of Alyeska that a waiver of sovereign immunity under 28 U.S.C. § 2412 in connection with attorneys' fees must be express and that Congress must unequivocally provide when attorneys' fees can be awarded against the United States. Alyeska, supra note 4, at 247, 265-68.
With respect to fees earned prior to October 1, 1981, Congress required in Section 208 only that an action be pending on the effective date of the Act. The "pending" action requirement by definition encompasses cases in which attorney work was performed before the effective date of the Act. Any other construction of Section 208 — even applying the sovereign immunity's strict construction doctrine — would give the provision an artificially tortured reading. Moreover, as we have indicated above, granting retroactive fee awards is consonant with the plain language of Section 208 and with the legislative purpose of the Act. We therefore hold that Congress in enacting the EAJA explicitly waived the government's immunity from fee awards and that
Furthermore, where Congress by statute has waived sovereign immunity and has demonstrated a clear legislative intent with respect to the broad remedial purpose of the Act, as here, each section of the Act must be accorded an interpretation that is consonant with the legislative purpose of the entire Act. Accordingly, we believe it is consistent with the broad remedial purpose of the Act to grant fees for pre-effective date work.
Finally, we wish to refer to a recent decision of our Court upon which the Secretary relies in support of his claims that Section 208 cannot be construed as a waiver of sovereign immunity with respect to retroactive fee awards. Commissioners of Highways v. United States, supra, 684 F.2d 443. In that case, we held that where the only aspect of a case pending on October 1, 1981 was the appellants' appeal from the denial of an award of attorneys' fees, the case was not pending for purposes of the EAJA on October 1, 1981. Commissioners of Highways, supra, 684 F.2d at 444. Thus, we did not reach the retroactivity issue that is before us in the instant case, since Commissioners of Highways never got beyond the threshold requirement that a case be pending on the effective date of the Act in order for the EAJA to apply.
In Commissioners of Highways, however, we did discuss the implications of the Supreme Court's upholding in the past the awarding of attorneys' fees retroactively where the only issue on an appeal pending when the statute was enacted was the propriety of a district court order denying attorneys' fees. Id. Since the instant case satisfies the explicit requirement of the EAJA that it be pending on the effective date of the Act, our analysis of the "pending" action requirement of the EAJA in Commissioners of Highways relates to an issue not before us in the instant case. See generally White v. New Hampshire Dep't of Employment Security, 455 U.S. 445, 451 n. 13 (1982) (fee inquiry separate from decision on the merits). Even if our discussion of the EAJA in Commissioners of Highways were apposite to the instant case, it appears that the appellants in that case did not satisfy another fundamental prerequisite of the Act, namely, that they be "parties" under the definition set forth in Section 2412(d)(2)(B). Commissioners of Highways, supra, 684 F.2d at 445. For these reasons, we believe that the analysis of the Act and the discussion of the sovereign immunity doctrine in Commissioners of Highways dealt with issues not before us in the instant case and therefore are not relevant here.
We hold that Congress explicitly waived the government's sovereign immunity for cases that fall within the ambit of the EAJA and that granting attorneys' fees retroactively in the instant action is consistent with the express terms and purpose of the Act.
A substantial majority of the courts which have ruled on the retroactivity issue that is before us in the instant case have concluded, as we do, that the Act applies retroactively to work performed before October 1, 1981.
Indeed, the only contrary views appear to be those set forth in the two Northern District of Illinois cases referred to above, namely, Allen v. United States, supra, and Commodity Futures Trading Commission v. Rosenthal & Co., supra, the latter not being a square holding on the retroactivity issue.
The following cases appear to have reached the same conclusion as we have on the retroactivity issue: Natural Resources Defense Council, Inc. v. U.S. Environmental Protection Agency, 703 F.2d 700, 712-13 (3d Cir.1983); Kay Manufacturing Co. v. United States, 699 F.2d 1376, 1378-79 (Fed.Cir.1983) (EAJA applies retroactively, but government's position substantially justified); Tyler Business Services, Inc. v. NLRB, 695 F.2d 73, 77 (4th Cir.1982) ("Act's test for recovery of attorney's fees is whether the case was pending on or after October 1, 1981, and not when the fees were incurred."), reh'g en banc denied (Feb. 7, 1983); MacDonald v. Schweiker, 553 F.Supp. 536, 541 (E.D.N.Y.1982) (adopting reasoning of district court in Berman); Grand Boulevard Improvement Assoc. v. City of Chicago, 553 F.Supp. 1154, 1160-61 (N.D.Ill.1982); Globe, Inc. v. United States, 553 F.Supp. 7, 9-10 (D.D.C.1982); Underwood v. Pierce, 547 F.Supp. 256, 260-61 (C.D.Cal.1982) (applying analogous federal statutes under which attorneys' fees have been granted retroactively); Lauritzen v. Secretary of Navy, 546 F.Supp. 1221, 1224 n. 2, 1226 (C.D.Cal.1982) (Act applies retroactively, although government's position was substantially justified); Shumate v. Harris, 544 F.Supp. 779, 782-83 (W.D.N.C.1982) (granting fees retroactively under EAJA); Nunes-Correia v. Haig, supra, 543 F.Supp. at 814-16; Ocasio v. Schweiker, 540 F.Supp. 1320, 1323-24 n. 15 (S.D.N.Y.1982) (retroactive fee award permitted under Act so long as matter was pending on October 1, 1981); Wolverton v. Schweiker, 533 F.Supp. 420, 423 (D.Idaho 1982) (plain meaning of EAJA requires retroactive awards); Photo Data, Inc. v. Sawyer, supra, 533 F.Supp. at 350-51 (D.D.C.1982) (nothing in legislative history indicates that Congress intended to bifurcate cases into pre- and post-October 1, 1981 work); National Lawyers Guild v. Attorney General, 94 F.R.D. 616, 620 (S.D.N.Y.1982) (Act permits retroactive fee awards). See generally Knights of the K.K.K. v. East Baton Rouge Parish School Board, 679 F.2d 64, 67-68 (5th Cir.1982); S & H Riggers & Erectors, Inc. v. OSHRC, 672 F.2d 426, 428 n. 4 (5th Cir.1982) (noting retroactivity issue); Heydt v. Citizens State Bank, 668 F.2d 444, 446, 448 (8th Cir.1982) (implying that EAJA is retroactive, but government's position was substantially justified); Donovan v. Dillingham, 668 F.2d 1196, 1199 (11th Cir.1982) (not reaching retroactivity issue because government's position was substantially justified); Ellis v. United States, 550 F.Supp. 674, 676 n. 4 (Ct.Cl.1982); Commodities Futures Trading Commission v. Rosenthal & Co., supra, 545 F.Supp. at 1019 n. 2 (noting divergent approaches to retroactivity issue taken in Allen and Berman); WATCH v. Harris, 535 F.Supp. 9, 13-14 (D.Conn.1981); Matthews v. United States, 526 F.Supp. 993, 1008 (M.D.Ga.1981) (denying award, but not discussing retroactivity issue); Muth v. Marsh, 525 F.Supp. 604, 609 (D.D.C.1981); Hearings on Oversight on the Equal Access to Justice Act Before the Subcomm. on Agency Administration of Senate Comm. on the Judiciary, 97th Cong., 2nd Sess. (1982) (statement of Loren A. Smith, Chairman, Administrative Conference of the United States) (noting that courts have not resolved retroactivity issue); Robertson and Fowler, Recovering Attorneys' Fees, supra, at 943-44 (retroactive application is consistent with the purposes of the Act).
Despite the weight of authority which supports our conclusion in the instant case, the Secretary nevertheless argues that Commissioners of Highways v. United States, supra, Allen v. United States, supra, and Brookfield Construction Co. v. United States, 661 F.2d 159 (Ct.Cl.1981), should
As we have indicated above, Commissioners of Highways is distinguishable in that it rests on the fact that the case was not pending on the merits on October 1, 1981 and the appellants were not "parties" within the definition of the Act.
The decision in Allen rests on an application of the three factors relied on in Brookfield Construction Co., where the Court of Claims concluded that a contractor could not recover retroactive statutory interest on its subsequently allowed claims against the government under the Contract Disputes Act of 1978, 41 U.S.C. § 611 (Supp. II 1978). The three factors relied on in Brookfield Construction Co. were: (1) Congress did not indicate that pre-Contract Disputes Act statutory interest would be applicable, thus imposing a large and unauthorized liability on the government; (2) the objectives and purposes of the interest provision of the Contract Disputes Act were not served by imposing pre-Act liability; and (3) sovereign immunity is not waived absent a clear mandate of Congress. Brookfield Construction Co., supra, 661 F.2d at 163.
Applying these three factors to the instant case, the Secretary argues that a retroactive fee award is inappropriate under the EAJA. We find the Secretary's reliance on Brookfield Construction Co. to be unpersuasive. As we have indicated above, the CBO Report accompanying House Report 1418 simply does not support the Secretary's argument that Congress did not intend that pre-Act fees would be included in the estimated authorizations.
In short, we are satisfied that our holding in the instant case is consistent with the approach that most federal courts throughout the country have taken in resolving the retroactivity issue.
Accordingly, we affirm the district court's award of $2,310.50 in fees and expenses plus costs in the instant case.
Costs to appellee on this appeal.
COFFEY, Circuit Judge, dissenting.
I dissent as I disagree with the majority's decision allowing recovery under the Equal Access to Justice Act (EAJA) for attorney's fees incurred prior to the effective date of legislation, October 1, 1981. The broad liability imposed on the public treasury by the majority in this case is an unwarranted departure from well-settled legal principles reciting that: (1) statutes are to be applied only prospectively unless there is clear, strong and imperative statutory language to the contrary; and (2) a limited waiver of sovereign immunity, such as the EAJA, must be strictly construed and must not be extended by implication. Neither the clear and unambiguous statutory language of the EAJA nor its legislative history discloses a congressional intent to open the public treasury to pay retroactive attorney's fees under the EAJA. Furthermore, allowing recovery of retroactive attorney's fees fails to promote the purpose of the EAJA, but rather merely constitutes an unwarranted windfall
It is a well-settled legal principle that retroactive application of a legislative act is impermissible absent a clear and unequivocal expression of a contrary Congressional intent. This court explicitly stated in South East Chicago Com'n v. Department of Housing and Urban Development, 488 F.2d 1119, 1122 (7th Cir.1973): "There are few principles of law more ancient, and none more respected, than the canon which holds that laws are enacted for the future." Similarly, the Supreme Court has mandated in unequivocal language that:
Greene v. United States, 376 U.S. 149, 160, 84 S.Ct. 615, 621, 11 L.Ed.2d 576 (1964). Furthermore, the court in Alyeska Pipeline Service Co. v. United States, 624 F.2d 1005, 1013, 224 Ct.Cl. 240 (Ct. Claims 1980) stated:
Based on this case law, it is clear that the EAJA cannot be construed as authorizing the retroactive award of attorney fees since the statute contains no "clear, strong and imperative" language mandating retroactive application. Union Pacific Railroad Co. v. Laramie Stock Yards Co., 231 U.S. 190 at 199, 34 S.Ct. 101 at 102, 58 L.Ed. 179. The EAJA merely provides that it "shall apply to any adversary adjudication ... which is pending on, or commenced on or after", October 1, 1981. The EAJA nowhere states that fee awards in "pending" cases are to be retroactive, but rather is silent concerning the recovery of pre-October 1981 fees. However, the majority interprets the statute's silence on the issue of retroactivity as mandating the retroactive award of attorney's fees, stating "Congress having failed to exclude pre-effective date fees, it is inappropriate for a court to impose a limitation which Congress chose not to impose." In holding that Congress's silence can be equated with a clear and unequivocal legislative directive for retroactive application of the EAJA, the majority casts aside and destroys well-settled principles of statutory construction to reach a decision based on the social policy that fees should be awarded for pre-October 1981 services. However, proper statutory construction requires that the EAJA only be applied so as to allow for the award of attorney's fees prospectively since "legislation must be considered as addressed to the future, not to the past." Aleyeska, 624 F.2d at 1013, quoting Union Pacific Railroad Co. v. Laramie Stock Yards Co., 231 U.S. 190, 199, 34 S.Ct. 101, 102, 58 L.Ed. 179 (1913). "This rule governs unless the words in the statute `are so clear, strong, and imperative that no other meaning can be annexed to them...." Aleyeska, 624 F.2d at 1013, quoting United States v. Heth, 7 U.S. (3 Cranch) 399, 413, 2 L.Ed. 479 (1806). Congress' silence on the issue of retroactivity cannot be construed as a clear, strong and imperative indication of an intent to allow a court to legislate for the retroactive recovery of attorney's fees. Rather, where Congress has been silent on the issue of retroactivity, well-settled principles of statutory construction from time immemorial mandate only prospective application of the EAJA.
The majority's decision to authorize the retroactive award of attorney's fees also violates the legal principle of sovereign immunity which precludes a litigant from asserting a claim against the sovereign
The EAJA states:
Strictly construing (as we must) this statutory language, it is clear that the EAJA's limited waiver of the Government's sovereign immunity cannot be interpreted as allowing for retroactive recovery of attorney's fees. The majority's interpretation of the EAJA focuses solely on the so-called "pending provision" of the statute, to the exclusion of Congress' explicit statement that the Act "shall take effect on October 1, 1981." By specifying an effective date, Congress envisioned the payment of fees for work done on or after that date, for to construe it otherwise would force the treasury to pay out unappropriated funds. Under the majority's tortured construction of the statute, the language pertaining to the effective date of the statute is rendered meaningless since in this case the majority has authorized recovery of attorney's fees for legal services performed before the effective date of the statute. It is well-settled that a statute must be construed as a whole rather than relying on one word, phrase or sentence in the statute. Philbrook v. Glodgett, 421 U.S. 707, 95 S.Ct. 1893, 44 L.Ed.2d 525 (1975); Brach v. Amoco Oil Co., 677 F.2d 1213 (7th Cir.1982). In reading one provision of the statute (the so-called "pending provision") in a manner which renders meaningless another provision of the statute (the effective date), the majority has ignored the cardinal principle of statutory construction that "in construing statutes we are obligated to give effect, if possible, to every word Congress used." Reiter v. Sonotone Corp., 442 U.S. 330, 339, 99 S.Ct. 2326, 2331, 60 L.Ed.2d 931 (1979).
The most logical and well-reasoned legal interpretation of the EAJA, and the interpretation most consistent with the principle that "waivers of sovereign immunity must be strictly construed and are not to be extended by implication", Commissioners of Highways, 684 F.2d at 444, is that the "pending" provision determines only in which cases fees may be awarded, while the language pertaining to the effective date of the Act governs which fees may be awarded in pending cases — only those fees incurred after the effective date of the Act. Any other interpretation of the statute, including the majority's, constitutes a judicial extension by implication of a limited waiver of sovereign immunity, in direct violation of the "duty of all courts to observe the conditions defined by Congress for charging the public treasury." Schweiker v. Hansen, 450 U.S. 785, 788, 101 S.Ct. 1468, 1471, 67 L.Ed.2d 685 (1981).
A clear indication that Congress did not authorize the award of attorney's fees for legal services rendered prior to October 1, 1981 is found by examining 28 U.S.C. section 2412(d)(4)(B). That subsection of the EAJA states:
(emphasis added). Thus, Congress appropriated funds for awards under the EAJA only for the fiscal years commencing on October 1, 1981 — no funds were appropriated for the fiscal year 1981. Nevertheless, the majority has seen fit to require the government to pay for legal services rendered in the 1981 fiscal year, despite the fact that Congress decided against appropriating money for such payments. The majority's decision ignores the fact that courts not only have the obligation to interpret and apply the law, but also to exercise fiscal responsibility. The majority in this case acts as if they were operating in an economic vacuum and imposes an unwarranted liability on the government.
I reject the majority's conclusion that permitting retroactive recovery of attorney's fees is consistent with the purpose of the EAJA. Section 202 of the EAJA sets forth the purposes underlying enactment of the EAJA:
Clearly, awarding retroactive attorney's fees in this case fails to further the Act's purpose of reducing the economic deterrents to challenging government action. The plaintiff Berman was obviously not "deterred from seeking review of ... governmental action because of the expense involved" in suing the government as he commenced this action pro se sixteen months before the EAJA even became effective. Thus, it is clear that the plaintiff commenced this action against the government with no expectation of being reimbursed for his attorney's fees, in fact, since he was proceeding pro se he presumably did not expect to even incur attorney's fees. Furthermore, at the time the district court appointed an attorney to represent the plaintiff, the court specifically informed the attorney that "this case will not produce a fund from which you could be compensated and there is no provision under the Social Security Act for an award of attorney's fees. Therefore, your representation is truly pro bona [sic] publico." Since the attorney in accepting the court's appointment did so on a pro bono basis with no expectation of remuneration for his services, it would thus certainly impose no hardship to deny his request for attorney's fees. As this court recently stated, it is
Caruth v. Pinkney, 683 F.2d 1044, 1049 (7th Cir.1982). Awarding retroactive attorney's fees in this case amounts to nothing more than an unexpected windfall from the public treasury to the plaintiff's attorney; certainly, Congress did not intend the EAJA to be merely a godsend to attorneys who performed legal services prior to the effective
Our Supreme Court has ruled that it is outside the competence of judges to "pick and choose among plaintiffs and statutes under which they sue and to award fees in some cases but not in others." Alyeska Pipeline Co. v. Wilderness Society, 421 U.S. 240, 269, 95 S.Ct. 1612, 1627, 44 L.Ed.2d 141 (1975). "Congress, however has full authority to make such decisions, and it responded to the challenge of Alyeska by doing the `picking and choosing' itself." Hensley v. Eckerhart, ___ U.S. at ___, 103 S.Ct. at 1936. (Brennan, J., concurring in part and dissenting in part). Here the majority has resorted to "picking and choosing" in the face of the contrary intent of the EAJA.
Furthermore, I disagree with the majority's conclusion that awarding retroactive attorney's fees will advance the purpose of the EAJA by "prospectively deter[ing] unreasonable government action." It is important to note that the summary judgment order against the government on the underlying merits of the plaintiff's case was issued on August 14, 1981, more than six weeks before the EAJA became effective. Certainly, the summary judgment order in this case has exactly the same effect on the future actions of the government, regardless of whether the plaintiff's attorney is now awarded retroactive attorney's fees or if, on the other hand, he receives no compensation for his services, as was the original understanding when he accepted the case. Therefore, I reject and fail to understand the majority's weak and hollow theory that retroactively awarding attorney's fees under the EAJA will somehow "prospectively deter unreasonable government action."
In conclusion, I would hold that the EAJA authorizes courts to award attorney's fees only for services rendered on or after the Act's effective date of October 1, 1981. The majority's decision, and the decisions of the other circuits also permitting retroactive recovery of attorney's fees under the EAJA, fail to adequately consider the important legal principle that "a waiver of traditional sovereign immunity cannot be implied but must be unequivocally expressed," Army and Air Force Exchange Service v. Sheehan, 456 U.S. 728, 102 S.Ct. 2118 at 2122, 72 L.Ed.2d 520, and further violate the time-honored rule of statutory construction mandating only prospective application of statutes in the absence of a clear, strong and imperative legislative expression to the contrary. Moreover, the legislative purpose of the EAJA will in no way be furthered by granting lawyers a windfall of retroactive attorney's fees at the government's expense. I dissent from the majority's decision to authorize recovery of attorney's fees incurred prior to the effective date of the Act, since that decision amounts to an unwarranted judicial extension of the liability imposed on the public treasury by the EAJA. I believe that it is the role of Congress and not the courts, to legislate in this area. "Under our constitutional framework, federal courts do not sit as councils of revision, empowered to rewrite legislation in accord with their conceptions of prudent public policy." United States v. Rutherford, 442 U.S. 544, 555, 99 S.Ct. 2470, 2477, 61 L.Ed.2d 68 (1979).
Although all of the work by Berman's counsel was completed prior to October 1, 1981, the retroactivity question is germane to other cases which were in the midst of litigation on October 1, 1981 and attorneys' fees reflected work performed both before and after October 1, 1981.
Fiscal year: Millions: 1981 .............................. --- 1982 .............................. $ 92 1983 .............................. $109 1984 .............................. $129 1985 .............................. ---
The estimated outlays for the EAJA are as follows:
Fiscal year: Millions: 1981 .............................. --- 1982 .............................. $ 69 1983 .............................. $115 1984 .............................. $126 1985 .............................. $ 20
H.R.Rep. No. 1418, supra, at 21. The CBO assumed that due to the delays in processing awards "not all funds will be spent during the year for which they are authorized to be appropriated." H.R.Rep. No. 1418, supra, at 23.