Implementation of the Equal Access to Justice Act in Agency Proceedings, 58167-58175 [05-19896]

Agencies

• Office of the Secretary
• DEPARTMENT OF THE INTERIOR

[Federal Register Volume 70, Number 192 (Wednesday, October 5, 2005)]
[Proposed Rules]
[Pages 58167-58175]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 05-19896]


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DEPARTMENT OF THE INTERIOR

Office of the Secretary

43 CFR Part 4

RIN 1094-AA49


Implementation of the Equal Access to Justice Act in Agency 
Proceedings

AGENCY: Office of the Secretary, Interior.

ACTION: Proposed rule.

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SUMMARY: The Office of Hearings and Appeals (OHA) is proposing to amend 
its existing regulations that implement the Equal Access to Justice Act 
to bring them up to date with amendments to the statute that have been 
enacted since OHA adopted the existing regulations in 1983.

DATES: You should submit your comments by December 5, 2005.

ADDRESSES: You may submit comments, identified by the number 1094-AA49, 
by any of the following methods:

--Federal rulemaking portal: https://www.regulations.gov. Follow the 
instructions for submitting comments.
--E-mail: John--Strylowski@ios.doi.gov. Include ``RIN 1094-AA49'' in 
the subject line of the message.
--Fax: 703-235-9014.
--Mail: Director, Office of Hearings and Appeals, Department of the 
Interior, 801 N. Quincy Street, Suite 300, Arlington, Virginia 22203.
--Hand delivery: Director, Office of Hearings and Appeals, Department 
of the Interior, 801 N. Quincy Street, Suite 400, Arlington, Virginia 
22203.

FOR FURTHER INFORMATION CONTACT: Will A. Irwin, Administrative Judge, 
Interior Board of Land Appeals, U.S. Department of the Interior, 801 N. 
Quincy Street, Suite 300, Arlington, Virginia 22203, Phone 703-235-
3750. Persons who use a telecommunications device for the deaf (TDD) 
may call the Federal Information Relay Service (FIRS) at 800-877-8339.

SUPPLEMENTARY INFORMATION:

[[Page 58168]]

I. Public Comments

    If you wish to comment on this proposed rule, you may submit your 
comments by any of the methods listed in the ADDRESSES section.
    Our practice is to make comments, including names and home 
addresses of respondents, available for public review during regular 
business hours. Individual respondents may request that we withhold 
their home address from the rulemaking record. We will honor the 
request to the extent allowable by law.
    In some circumstances we may withhold from the rulemaking record a 
respondent's identity, as allowable by law. If you wish us to withhold 
your name and/or address, you must state this prominently at the 
beginning of your comment. However, we will not consider anonymous 
comments. We will make all submissions from organizations or 
businesses, and from individuals identifying themselves as 
representatives or officials or organizations or businesses, available 
for public inspection in their entirety.

II. Background

    Originally enacted in 1980, the Equal Access to Justice Act (the 
Act or EAJA) provides that ``[a]n agency that conducts an adversary 
adjudication shall award, to a prevailing party other than the United 
States, fees and other expenses incurred by that party in connection 
with that proceeding, unless the adjudicative officer of the agency 
finds that the position of the agency was substantially justified or 
that special circumstances make an award unjust.'' 5 U.S.C. 504(a)(1) 
(2000). The Act has been amended several times since 1980, most 
recently in 1996, when the maximum amount of fees that may normally be 
awarded to an attorney or agent was increased from $75 per hour to $125 
per hour. 5 U.S.C. 504(b)(1)(A)(ii).
    OHA issued final regulations implementing the Act in 1983. 43 CFR 
4.601-4.629, 48 FR 17595 (April 25, 1983). Those regulations were based 
on model rules published in 1981 by the Administrative Conference of 
the United States (ACUS). 46 FR 32900 (June 25, 1981). ACUS published 
revised model rules in 1986 that reflected the amendments Congress made 
when it re-authorized the Act in 1985. 1 CFR part 315 (1995), 51 FR 
16659 (May 6, 1986); see Administrative Conference of the U.S., Federal 
Administrative Procedure Sourcebook at 419 (2d ed. 1992). ACUS did not 
publish model rules reflecting amendments to the Act made since 1985 
before ACUS was terminated in 1996.
    In preparing these revised regulations implementing the Act, OHA 
has used the 1986 ACUS model rules as a point of departure, modifying 
them to put them in plain language, to reflect more recent amendments 
to the Act, and to make certain changes we believe are warranted for 
reasons explained in the following section-by-section analysis. We do 
not discuss changes that are simply editorial. Readers may find it 
helpful to have a copy of the 1986 model rules available as they review 
this proposed rule.

III. Section-by-Section Analysis

Section 4.601 What is the purpose of this subpart?

    This regulation is based on the ``purpose'' section of the 1986 
model rules, 1 CFR 315.101. We propose using the phrase ``the 
Department or other agency'' rather than ``this agency'' because OHA 
conducts proceedings for some agencies outside the Department, e.g., 
the Indian Health Service. See the proposed definition of ``other 
agency'' in section 4.602.
    The regulations in this subpart apply only to administrative 
proceedings under 5 U.S.C. 504, not to judicial proceedings under EAJA, 
28 U.S.C. 2412 (2000), or to the attorney fee provisions of any other 
statute.

Section 4.602 What definitions apply to this subpart?

    We propose revising most of the definitions in our previous 
regulations and have added some definitions.
    We propose adding ``deciding'' before ``official(s) who presided'' 
in the definition of ``adjudicative officer'' because it is in the Act, 
5 U.S.C. 504(b)(1)(D). ACUS suggested that the adjudicative officer 
should normally be the person who made the decision on the merits, but 
stated its belief that ``agencies can properly assign EAJA petitions to 
new board members or panels where illness, retirement, or other 
specific circumstances would prevent assignment to the original 
member.'' 51 FR 16663-64 (May 6, 1986).See United States v. Willsie, 
155 IBLA 296, 297-98 (2001). We are proposing language to cover such 
circumstances.
    Within OHA, the adjudicative officer will often be an 
administrative law judge, but in some cases, it may be a panel of two 
or more appeals board judges. The term ``adjudicative officer'' is 
therefore used to include both a single deciding official and a panel 
of deciding officials issuing a joint decision.
    Paragraphs (1) and (2) of the proposed definition of ``Adversary 
adjudication'' are based on the second sentence of the ``proceedings 
covered'' section of the model rules, 1 CFR 315.103(a). Paragraphs (3) 
and (4) are based on 1986 and 1993 amendments to the Act, Pub. L. 99-
509 and Pub. L. 103-141.
    The proposed definition of ``affiliate'' is based on the second 
sentence of paragraph (f) of the ``eligibility'' section of the model 
rules, 1 CFR 315.104(f).
    The proposed definition of ``demand'' is based on a 1996 amendment 
to the Act, Pub. L. 104-121;see 5 U.S.C. 504(b)(1)(F).
    The proposed definition of ``final disposition'' is based on 
paragraph (b) of the ``when an application may be filed'' section of 
the model rules, 1 CFR 315.204. Under the definition, a settlement or 
voluntary dismissal of the proceeding may serve as the final 
disposition, in which case any application for fees and expenses would 
be due within 30 days from that event, under section 4.613(a). But a 
settlement or voluntary dismissal may not be a sufficient basis for an 
award.
    For example, if the settlement or voluntary dismissal occurs at the 
hearings level because the Department or other agency has voluntarily 
changed its position in response to the filing of the proceeding and 
before there has been any ruling on the merits, the applicant will be 
unable to show it is a prevailing party entitled to fees. Buckhannon 
Board & Care Home, Inc. v. West Virginia Dept. of Health and Human 
Resources, 532 U.S. 598 (2001); Brickwood Contractors, Inc. v. United 
States, 288 F.3d 1371 (Fed. Cir. 2002);Perez-Arellano v. Smith, 279 
F.3d 791 (9th Cir. 2002). On the other hand, if the settlement or 
voluntary dismissal occurs at the appeals board level because the 
Department or other agency has changed its position in response to an 
adverse ruling on the merits at the hearings level, the applicant will 
likely be able to show that it is a prevailing party potentially 
entitled to fees.
    We propose adding a definition of ``other agency,'' as discussed 
above in connection with section 4.601.
    The proposed definition of ``party'' is drawn from 1 CFR 315.104(a) 
of the model rules and a 1996 amendment of the Act, Pub. L. 104-121.
    The proposed definition of ``position of the Department or other 
agency'' is based on the Act, 5 U.S.C. 504(b)(1)(E), but the exception 
provided in the Act has been transferred to section 4.605(b), as 
suggested in the ``standards for awards'' section of the model rules, 1 
CFR 315.105(b).

[[Page 58169]]

Section 4.603 What proceedings are covered by this subpart?

    Paragraphs (a), (b)(1), and (b)(2) are based on the ``proceedings 
covered'' section of the model rules, 1 CFR 315.103(a), except that the 
second sentence of section 315.103(a) has been moved to the definition 
of ``adversary adjudication'' in section 4.602, as stated above. Under 
that definition, an ``adjudication under 5 U.S.C. 554'' includes those 
proceedings required by a statute to be conducted under section 554, 
e.g., section 9 of the Taylor Grazing Act, 43 U.S.C. 315h (2000), see 
Bureau of Land Management v. Ericsson, 98 IBLA 258 (1987), and the 
Indian Self-Determination and Education Assistance Act, as amended, 25 
U.S.C. 450f(b)(3) (2000).
    Paragraph (a) also covers appeals of decisions of contracting 
officers made pursuant to section 6 of the Contract Disputes Act of 
1978, 41 U.S.C. 605, before the Interior Board of Contract Appeals 
under section 8 of that Act, 41 U.S.C. 607.
    Paragraph (b)(1) would clarify that the Act does not cover other 
hearings or appeals that are not governed by 5 U.S.C. 554, even if the 
Department has elected to conduct such hearings or appeals using 
procedures comparable to those under section 554. Examples include 
cases referred by an appeals board for a fact-finding hearing under 43 
CFR 4.337(a) or 4.415, and personnel grievance hearings for 
Departmental employees under 370 Departmental Manual 771, Subchapter 3.
    In Collord v. U.S. Department of the Interior, 154 F.3rd 933 (9th 
Cir. 1998), the U.S. Court of Appeals for the Ninth Circuit held that, 
because a mining claim is a property interest that may not be 
extinguished without due process, section 554 governs mining claim 
contests, and therefore those proceedings are adversary adjudications 
under the Act. The Interior Board of Land Appeals (IBLA) has followed 
the Collord decision with respect to mining claim contests, United 
States v. Willsie, 155 IBLA 296, 297 (2001), and has extended its 
applicability to Alaska Native Allotment Act claim contests, Heirs of 
David F. Berry, 156 IBLA 341, 343-44 (2002).
    However, the Ninth Circuit's reliance in Collord on Wong Yang Sung 
v. McGrath, 339 U.S. 33, 50-51 (1950), is open to question.See A Guide 
to Federal Agency Adjudication ]] 3.02, 11.03 (Michael Asimow, ed., 
American Bar Association, 2003); 1 Richard J. Pierce, Jr., 
Administrative Law Treatise, Sec.  8.2 (4th ed. 2002).
    Under existing court precedent, therefore, mining claim contests 
and Native allotment contests in the Ninth Circuit are deemed to fall 
within the proceedings covered by section 4.603(a), while mining claim 
contests in other judicial circuits may not be. See Kaycee Bentonite 
Corp., 79 IBLA 182 (1984) (pre-Collord analysis of the applicability of 
the Act to mining claim contest proceedings).
    Paragraph (c) is based on 1 CFR 315.103(c) of the model rules.

Section 4.604 When am I eligible for an award?

    We propose to omit section 4.604 of our previous regulations, or 
any revision of that section based on the ``when the Act applies'' 
section of the model rules, 1 CFR 315.102, because it is no longer 
needed. Section 4.605 of our previous regulations would become section 
4.604.
    Paragraph (a) is based on the ``eligibility of applicants'' section 
of the model rules, 1 CFR 315.104(a), except that we have moved the 
definition of ``party'' to section 4.602, as stated above.
    Paragraph (b) is based on 1 CFR 315.104(b). We propose adding 
paragraph (6) based on a 1996 amendment to 5 U.S.C. 504(b)(1)(B), Pub. 
L. 104-121.
    Paragraphs (c) through (g) are based on 1 CFR 315.104(c) through 
(g), except that the second sentence of paragraph 315.104(f) was moved 
to section 4.602 as the definition of ``affiliate.''

Section 4.605 Under what circumstances may I receive an award?

    Paragraph (a) is based on the ``standards for awards'' section of 
the model rules, 1 CFR 315.105(a), except that the second sentence of 
the model rule, which is based on 5 U.S.C. 504(b)(1)(E), has been moved 
to the definition of ``position of the Department or other agency'' in 
section 4.602, as stated above.
    Consistent with the model rules, section 4.605(a) provides that an 
award may be granted to a party who has prevailed in ``the proceeding'' 
or in ``a significant and discrete substantive portion of a 
proceeding.'' The latter phrase could include, in an appropriate case, 
an interlocutory appeal on a significant, separable issue, or an appeal 
that results in a remand to an ALJ for further proceedings. It would 
not include a ruling on a purely procedural issue during the course of 
a proceeding. See 46 FR 32900, 32907-08 (June 25, 1981); Van Hoomissen 
v. Xerox Corp., 503 F.2d 1131, 1133 (9th Cir. 1974); Bohn v. Heckler, 
613 F. Supp. 232, 234-35 (N.D. Ill. 1965).
    Paragraph (b) is based on 1 CFR 315.105(b) and 5 U.S.C. 
504(b)(1)(E).
    Paragraph (c) is based on 5 U.S.C. 504(a)(4), as added by a 1996 
amendment, Pub. L. 104-121.

Section 4.606 What fees and expenses may be allowed?

    Paragraph (a) is based on the ``allowable fees and expenses'' 
section of the model rules, 1 CFR 315.106(a)-(b), except that the 
maximum hourly fee has been increased from $75 per hour to $125 per 
hour, in accordance with a 1996 amendment, Pub. L. 104-121. Instead of 
supplying a fixed dollar amount for the rate of an expert witness, we 
propose substituting a standard of not more than the highest rate at 
which the Department or other agency pays expert witnesses with similar 
expertise.
    Paragraphs (b) and (c) are based on the corresponding paragraphs of 
the model rule, 1 CFR 315.106(c) and (d).
    We have omitted from section 4.606 any reference to fees for 
agents, who are included in the Act at section 504(a)(2), (b)(1)(A) and 
in section 315.105 of the model rules. As used in the Act, the term 
``agent'' does not mean any person who acts on behalf of a party; 
rather, it means a specialized non-attorney practitioner who is 
authorized to represent clients with special permission of the 
tribunal. Fanning, Phillips and Molnar v. West, 160 F.3d 717 (Fed. Cir. 
1998); Cook v. Brown, 68 F.3d 447 (Fed. Cir. 1995).
    The Department does not authorize specialized non-attorney 
practitioners to represent clients before it, see 43 CFR 1.3 (2004). 
Under section 1.3(b)(3), an individual who is not an attorney can 
represent himself, a member of his family, a partnership of which he is 
a member, a corporation of which he is an officer or full-time 
employee, etc.; but that does not make the individual an ``agent'' 
within the meaning of the Act. Consequently, a party could not seek 
fees for an agent in a proceeding before OHA, and there is no need for 
these regulations to include a reference to agents.

Section 4.610 What information must my application for an award 
contain?

    This section is based on the ``contents of application'' section of 
the model rules, 1 CFR 315.201. We propose adding paragraph (b)(4) to 
cross-reference the new language in section 4.605(c).

[[Page 58170]]

Section 4.611 What information must I include in my net worth exhibit?

    This section is based on the ``net worth exhibit'' section of the 
model rules, 1 CFR 315.202, except we propose adding a reference to a 
small entity in the first sentence of paragraph (a). We have also 
broken the paragraphs of the model rule into shorter paragraphs and 
have added a cross reference in the last sentence to the Department's 
Freedom of Information Act regulations.

Section 4.612 What documentation of fees and expenses must I provide?

    This section is based on the ``documentation of fees and expenses'' 
section of the model rules, 1 CFR 315.203.

Section 4.613 When may I file an application for an award?

    This section is based on the ``when an application may be filed'' 
section of the model rules, 1 CFR 315.204, except that paragraph (b) of 
the model rules has been moved to the definitions in section 4.602.

Section 4.620 How must I file and serve documents?

    This section is based on the ``filing and service of documents'' 
section of the model rules, 1 CFR 315.301.

Section 4.621 When may the Department or other agency file an answer?

    This section is based on the ``answer to application'' section of 
the model rules, 1 CFR 315.302.

Section 4.622 When may I file a reply?

    This section is based on the ``reply'' section of the model rules, 
1 CFR 315.303.

Section 4.623 When may other parties file comments?

    This section is based on the ``comments by other parties'' section 
of the model rules, 1 CFR 315.304.

Section 4.624 When may further proceedings be held?

    This section is based on the ``further proceedings'' section of the 
model rules, 1 CFR 315.306.

Section 4.625 How will my application be decided?

    This section is based on the ``decision'' section of the model 
rules, 1 CFR 315.307. We have omitted the final sentence about 
allocating awards among agencies because it is not expected to come up 
in cases that OHA handles.

Section 4.626 How will an appeal from a decision be handled?

    In this section we have retained the concept of the ``agency 
review'' section of the model rules, 1 CFR 315.308, that review of 
adjudicative officer decisions on applications take place in accordance 
with the Department's regular review proceedings. For example:
     An appeal from a decision of an administrative law judge 
on an application for an award in a proceeding under the Taylor Grazing 
Act would be appealed to IBLA under 43 CFR 4.478(e), 4.410 et seq. IBLA 
would render a final decision for the Department.
     An appeal from a decision of an OHA administrative law 
judge on an application for an award in a proceeding under the Indian 
Self-Determination and Education Assistance Act involving the Indian 
Health Service would be appealed to the Departmental Appeals Board, 
Department of Health and Human Services. The Board would render a final 
decision for that agency.
     A decision by a panel of judges of the Interior Board of 
Contract Appeals on an application for an award in a proceeding under 
the Contract Disputes Act would be final for the Department.

Section 4.627 May I seek judicial review of a final Departmental or 
other agency decision?

    This section is based on the ``judicial review'' section of the 
model rules, 1 CFR 315.309.

Section 4.628 How will I obtain payment of an award?

    This section is based on the ``payment of award'' section of the 
model rules, 1 CFR 315.310.

IV. Review Under Procedural Statutes and Executive Orders

A. Regulatory Planning and Review (E.O. 12688)

    In accordance with the criteria in Executive Order 12866, the 
Office of Management and Budget (OMB) has reviewed a summary of this 
rule and has determined that this is not a significant rule. OMB has 
not reviewed the rule itself under Executive Order 12866.
    1. This rule would not have an annual economic effect of $100 
million or adversely affect an economic sector, productivity, 
competition, jobs, the environment, public health or safety, or other 
units of government. A cost-benefit and economic analysis is not 
required. These amended regulations would have virtually no effect on 
the economy because they merely implement amendments to EAJA that are 
already in effect.
    2. This rule would not create inconsistencies with or interfere 
with other agencies' actions, since all agencies are subject to EAJA 
and its amendments.
    3. This rule would not alter the budgetary effects of entitlements, 
grants, user fees, loan programs, or the rights and obligations of 
their recipients. These proposed regulations have to do only with the 
procedures implementing EAJA, not with entitlements, grants, user fees, 
loan programs, or the rights and obligations of their recipients.
    4. This rule does not raise novel legal or policy issues. The 
proposed regulations would merely implement amendments to EAJA that are 
already in effect.

B. Regulatory Flexibility Act

    The Department of the Interior certifies that this rule would not 
have a significant economic effect on a substantial number of small 
entities as defined under the Regulatory Flexibility Act (5 U.S.C. 601 
et seq.). The proposed regulations merely implement amendments to EAJA 
that are already in effect. A Small Entity Compliance Guide is not 
required.

C. Small Business Regulatory Enforcement Fairness Act

    This rule is not a major rule under 5 U.S.C. 804(2), the Small 
Business Regulatory Enforcement Fairness Act. This rule:
    1. Would not have an annual effect on the economy of $100 million 
or more. The proposed regulations merely implement amendments to EAJA 
that are already in effect. They should have no effect on the economy.
    2. Would not cause a major increase in costs or prices for 
consumers, individual industries, Federal, State, or local government 
agencies, or geographic regions. Updating OHA's procedural regulations 
implementing EAJA, based on amendments to that Act, would not affect 
costs or prices for citizens, individual industries, or government 
agencies.
    3. Would not have significant adverse effects on competition, 
employment, investment, productivity, innovation, or the ability of 
U.S.-based enterprises to compete with foreign-based enterprises. 
Updating OHA's procedural regulations implementing EAJA, based on 
amendments to that Act, should have no effects, adverse or beneficial, 
on competition, employment, investment, productivity, innovation, or 
the ability of U.S.-based enterprises to compete with foreign-based 
enterprises.

[[Page 58171]]

D. Unfunded Mandates Reform Act

    In accordance with the Unfunded Mandates Reform Act (2 U.S.C. 1531 
et seq.), we find that:
    1. This rule would not have a significant or unique effect on 
State, local, or tribal governments or the private sector. Updating 
OHA's procedural regulations implementing EAJA, based on amendments to 
that Act, would neither uniquely nor significantly affect these 
governments. A statement containing the information required by the 
Unfunded Mandates Reform Act, 2 U.S.C. 1531 et seq., is not required.
    2. This rule would not produce an unfunded Federal mandate of $100 
million or more on State, local, or tribal governments or the private 
sector in any year, i.e., it is not a ``significant regulatory action'' 
under the Unfunded Mandates Reform Act.

E. Takings (E.O. 12630)

    In accordance with Executive Order 12630, we find that the rule 
would not have significant takings implications. A takings implication 
assessment is not required. Updating OHA's procedural regulations 
implementing EAJA, based on amendments to that Act, should have no 
effect on property rights.

F. Federalism (E.O. 13132)

    In accordance with Executive Order 13132, we find that the rule 
does not have sufficient federalism implications to warrant the 
preparation of a Federalism Assessment. There is no foreseeable effect 
on states from updating OHA's procedural regulations implementing EAJA, 
based on amendments to that Act. A Federalism Assessment is not 
required.

G. Civil Justice Reform (E.O. 12988)

    In accordance with Executive Order 12988, the Office of the 
Solicitor has determined that this rule would not unduly burden the 
judicial system and meets the requirements of sections 3(a) and 3(b)(2) 
of the Order. Because these regulations would merely implement 
amendments to EAJA that are already in effect, they would not burden 
either administrative or judicial tribunals.

H. Paperwork Reduction Act

    This proposed rule would not require an information collection from 
10 or more parties, and a submission under the Paperwork Reduction Act 
is not required. An OMB form 83-I has not been prepared and has not 
been approved by the Office of Policy Analysis. The proposed rule is an 
administrative and procedural rule that simply updates existing 
procedural regulations implementing EAJA, based on amendments to that 
Act.

I. National Environmental Policy Act

    The Department has analyzed this rule in accordance with the 
National Environmental Policy Act of 1969 (NEPA), 42 U.S.C. 4321 et 
seq., Council on Environmental Quality (CEQ) regulations, 40 CFR part 
1500, and the Department of the Interior Departmental Manual (DM). CEQ 
regulations, at 40 CFR 1508.4, define a ``categorical exclusion'' as a 
category of actions that the Department has determined ordinarily do 
not individually or cumulatively have a significant effect on the human 
environment. The regulations further direct each department to adopt 
NEPA procedures, including categorical exclusions. 40 CFR 1507.3. The 
Department has determined that this proposed rule is categorically 
excluded from further environmental analysis under NEPA in accordance 
with 516 DM 2, Appendix 1, which categorically excludes ``[p]olicies, 
directives, regulations, and guidelines that are of an administrative, 
financial, legal, technical, or procedural nature.'' In addition, the 
Department has determined that none of the extraordinary circumstances 
listed in 516 DM 2, Appendix 2, applies to the proposed rule. The 
proposed rule is an administrative and procedural rule that simply 
updates existing procedural regulations implementing EAJA, based on 
amendments to that Act. Therefore, neither an environmental assessment 
nor an environmental impact statement under NEPA is required.

J. Government-to-Government Relationship With Tribes

    In accordance with the President's memorandum of April 29, 1994, 
``Government-to-Government Relations with Native American Tribal 
Governments'' (59 FR 22951), E.O. 13175, and 512 DM 2, the Department 
of the Interior has evaluated potential effects of these rules on 
Federally recognized Indian tribes and has determined that there are no 
potential effects. These rules would not affect Indian trust resources; 
they would merely implement amendments to EAJA that are already in 
effect.

K. Effects on the Nation's Energy Supply

    In accordance with Executive Order 13211, we find that this 
regulation does not have a significant effect on the nation's energy 
supply, distribution, or use. Updating OHA's procedural regulations 
implementing EAJA, based on amendments to that Act, would not affect 
energy supply or consumption.

L. Clarity of This Regulation

    Executive Order 12866 requires each agency to write regulations 
that are easy to understand. We invite your comments on how to make 
this rule easier to understand, including answers to the following: (1) 
Are the requirements in the rule clearly stated? (2) Does the rule 
contain technical language or jargon that interferes with its clarity? 
(3) Does the format of the rule (grouping and order of sections, use of 
headings, paragraphing, etc.) aid or reduce its clarity? (4) Would the 
rule be easier to understand if it were divided into more (but shorter) 
sections? (A ``section'' appears in bold type and is preceded by the 
symbol ``Sec.  '' and a numbered heading; for example, Sec.  4.601 What 
is the purpose of these regulations?) (5) Is the description of the 
rule in the SUPPLEMENTARY INFORMATION section of the preamble helpful 
in understanding the proposed rule? (6) What else could we do to make 
the rule easier to understand?
    Send a copy of any comments that concern how we could make this 
rule easier to understand to: Office of Regulatory Affairs, Department 
of the Interior, Room 7229, 1849 C Street, NW., Washington, DC 20240. 
You may also e-mail the comments to this address: Exsec@ios.doi.gov.

List of Subjects in 43 CFR Part 4

    Administrative practice and procedure; Claims; Equal access to 
justice.

    Dated: September 27, 2005.
P. Lynn Scarlett,
Assistant Secretary--Policy, Management and Budget.

    For the reasons set forth in the preamble, the Office of Hearings 
and Appeals proposes to revise part 4, subpart F, of title 43 of the 
Code of Federal Regulations as set forth below:

PART 4--DEPARTMENT HEARINGS AND APPEALS PROCEDURES

* * * * *
Subpart F--Implementation of the Equal Access to Justice Act in Agency 
Proceedings

General Provisions

Sec.
4.601 What is the purpose of this subpart?
4.602 What definitions apply to this subpart?
4.603 What proceedings are covered by this subpart?
4.604 When am I eligible for an award?
4.605 Under what circumstances may I receive an award?
4.606 What fees and expenses may be allowed?

[[Page 58172]]

Information Required From Applicants

4.610 What information must my application for an award contain?
4.611 What information must I include in my net worth exhibit?
4.612 What documentation of fees and expenses must I provide?
4.613 When may I file an application for an award?

Procedures for Considering Applications

4.620 How must I file and serve documents?
4.621 When may the Department or other agency file an answer?
4.622 When may I file a reply?
4.623 When may other parties file comments?
4.624 When may further proceedings be held?
4.625 How will my application be decided?
4.626 How will an appeal from a decision be handled?
4.627 May I seek judicial review of a final decision?
4.628 How will I obtain payment of an award?

    Authority: 5 U.S.C. 504(c)(1).

Subpart F--Implementation of the Equal Access to Justice Act in 
Agency Proceedings

General Provisions


Sec.  4.601  What is the purpose of this subpart?

    The Equal Access to Justice Act provides for the award of attorney 
fees and other expenses to eligible individuals and entities who are 
parties to certain administrative proceedings (called ``adversary 
adjudications'') before the Department of the Interior. Under the Act, 
an eligible party may receive an award when it prevails over the 
Department or other agency, unless the position of the Department or 
other agency was substantially justified or special circumstances make 
an award unjust. The rules in this subpart describe the parties 
eligible for awards and the proceedings that are covered. They also 
explain how to apply for awards, and the procedures and standards that 
the Office of Hearings and Appeals will use in ruling on those 
applications.


Sec.  4.602  What definitions apply to this subpart?

    As used in this subpart:
    Act means section 203(a)(1) of the Equal Access to Justice Act, 
Pub. L. 96-481, 5 U.S.C. 504, as amended.
    Adjudicative officer means the deciding official(s) who presided at 
the adversary adjudication, or any successor official(s) assigned to 
decide the application.
    Adversary adjudication means any of the following:
    (1) An adjudication under 5 U.S.C. 554 in which the position of the 
Department or other agency is presented by an attorney or other 
representative who enters an appearance and participates in the 
proceeding;
    (2) An appeal of a decision of a contracting officer made pursuant 
to section 6 of the Contract Disputes Act of 1978 (41 U.S.C. 605) 
before the Interior Board of Contract Appeals pursuant to section 8 of 
that Act (41 U.S.C. 607);
    (3) Any hearing conducted under section 6103(a) of the Program 
Fraud Civil Remedies Act of 1986 (31 U.S.C. 3801 et seq.); or
    (4) Any hearing or appeal involving the Religious Freedom 
Restoration Act of 1993 (42 U.S.C. 2000bb et seq.).
    Affiliate means:
    (1) Any individual, corporation, or other entity that directly or 
indirectly controls or owns a majority of the voting shares or other 
interest of the applicant; or
    (2) Any corporation or other entity of which the applicant directly 
or indirectly owns or controls a majority of the voting shares or other 
interest.
    Demand means the express demand of the Department or other agency 
that led to the adversary adjudication, but does not include a 
recitation by the Department or other agency of the maximum statutory 
penalty:
    (1) In the administrative complaint; or
    (2) Elsewhere when accompanied by an express demand for a lesser 
amount.
    Department means the Department of the Interior or the component of 
the Department that is a party to the adversary adjudication (e.g., 
Bureau of Land Management).
    Final disposition means the date on which either of the following 
becomes final and unappealable, both within the Department and to the 
courts:
    (1) A decision or order disposing of the merits of the proceeding; 
or
    (2) Any other complete resolution of the proceeding, such as a 
settlement or voluntary dismissal.
    Other agency means any agency of the United States or the component 
of the agency that is a party to the adversary adjudication before the 
Office of Hearings and Appeals, other than the Department of the 
Interior and its components.
    Party means a party as defined in 5 U.S.C. 551(3) that meets the 
eligibility criteria set forth in Sec.  4.604.
    Position of the Department or other agency means:
    (1) The position taken by the Department or other agency in the 
adversary adjudication; and
    (2) The action or failure to act by the Department or other agency 
upon which the adversary adjudication is based.
    Proceeding means an adversary adjudication as defined in this 
section.
    You means a party to an adversary adjudication.


Sec.  4.603  What proceedings are covered by this subpart?

    (a) The Act applies to adversary adjudications conducted by the 
Office of Hearings and Appeals, including proceedings to modify, 
suspend, or revoke licenses if they are otherwise adversary 
adjudications.
    (b) The Act does not apply to:
    (1) Other hearings and appeals conducted by the Office of Hearings 
and Appeals, even if the Department uses procedures comparable to those 
in 5 U.S.C. 554 in such cases;
    (2) Any proceeding in which the Department or other agency may 
prescribe a lawful present or future rate; or
    (3) Proceedings to grant or renew licenses.
    (c) If a hearing or appeal includes both matters covered by the Act 
and matters excluded from coverage, any award made will include only 
fees and expenses related to covered issues.


Sec.  4.604  When am I eligible for an award?

    (a) To be eligible for an award of attorney fees and other expenses 
under the Act, you must:
    (1) Be a party to the adversary adjudication for which you seek an 
award; and
    (2) Show that you meet all conditions of eligibility in this 
section.
    (b) You are an eligible applicant if you are any of the following:
    (1) An individual with a net worth of $2 million or less;
    (2) The sole owner of an unincorporated business who has a net 
worth of $7 million or less, including both personal and business 
interests, and 500 or fewer employees;
    (3) A charitable or other tax-exempt organization described in 
section 501(c)(3) of the Internal Revenue Code (26 U.S.C. 501(c)(3)) 
with 500 or fewer employees;
    (4) A cooperative association as defined in section 15(a) of the 
Agricultural Marketing Act (12 U.S.C. 1141j(a)) with 500 or fewer 
employees;
    (5) Any other partnership, corporation, association, unit of local 
government, or organization with a new worth of $7 million or less and 
500 or fewer employees; or
    (6) For purposes of Sec.  4.605(c), a small entity as defined in 5 
U.S.C. 601(6).
    (c) For the purpose of eligibility, your net worth and the number 
of your employees must be determined as of the date the proceeding was 
initiated.

[[Page 58173]]

    (1) Your employees include all persons who regularly perform 
services for remuneration under your direction and control.
    (2) Part-time employees must be included on a proportional basis.
    (d) You are considered an ``individual'' rather than a ``sole owner 
of an unincorporated business'' if:
    (1) You own an unincorporated business; and
    (2) The issues on which you prevail are related primarily to 
personal interests rather than to business interests.
    (e) To determine your eligibility, your net worth and the number of 
your employees must be aggregated with the net worth and the number of 
employees of all of your affiliates. However, this paragraph does not 
apply if the adjudicative officer determines that aggregation would be 
unjust and contrary to the purposes of the Act in light of the actual 
relationship between the affiliated entities.
    (f) The adjudicative officer may determine that financial 
relationships other than those described in the definition of 
``affiliate'' in Sec.  4.602 constitute special circumstances that 
would make an award unjust.
    (g) If you participate in a proceeding primarily on behalf of one 
or more other persons or entities that would be ineligible, you are not 
eligible for an award.


Sec.  4.605  Under what circumstances may I receive an award?

    (a) You may receive an award for your fees and expenses in 
connection with a proceeding if:
    (1) You prevailed in the proceeding or in a significant and 
discrete substantive portion of a proceeding; and
    (2) The position of the Department or other agency over which you 
prevailed was not substantially justified. The Department or other 
agency has the burden of proving that its position was substantially 
justified.
    (b) An award will be reduced or denied if you have unduly or 
unreasonably protracted the proceeding or if special circumstances make 
the award sought unjust.
    (c) This paragraph applies to an adversary adjudication arising 
from an action by the Department or other agency to enforce compliance 
with a statutory or regulatory requirement:
    (1) If the demand of the Department or other agency in the action 
is excessive and unreasonable compared with the adjudicative officer's 
decision, then the adjudicative officer must award you your fees and 
expenses related to defending against the excessive demand, unless:
    (i) You have committed a willful violation of law;
    (ii) You have acted in bad faith; or
    (iii) Special circumstances make an award unjust.
    (2) Fees and expenses awarded under this paragraph will be paid 
only if appropriations to cover the payment have been provided in 
advance.


Sec.  4.606  What fees and expenses may be allowed?

    (a) The adjudicative officer must base awards under this subpart on 
rates customarily charged by persons engaged in the business of acting 
as attorneys and expert witnesses, even if the services were made 
available to you without charge or at a reduced rate.
    (1) The maximum that can be awarded for the fee of an attorney is 
$125 per hour.
    (2) The maximum that can be awarded to compensate an expert witness 
is the highest rate at which the Department or other agency pays expert 
witnesses with similar expertise.
    (3) An award may also include the reasonable expenses of the 
attorney or witness as a separate item, if the attorney or witness 
ordinarily charges clients separately for those expenses.
    (b) The adjudicative officer may award only reasonable fees and 
expenses under this subpart. In determining the reasonableness of the 
fee for an attorney or expert witness, the adjudicative officer must 
consider the following:
    (1) If the attorney or expert witness is in private practice, his 
or her customary fee for similar services;
    (2) If the attorney or expert witness is your employee, the fully 
allocated cost of the services;
    (3) The prevailing rate for similar services in the community in 
which the attorney or expert witness ordinarily performs services;
    (4) The time actually spent in representing you in the proceeding;
    (5) The time reasonably spent in light of the difficulty or 
complexity of the issues in the proceeding; and
    (6) Any other factors that bear on the value of the services 
provided.
    (c) The adjudicative officer may award the reasonable cost of any 
study, analysis, engineering report, test, project, or similar matter 
prepared on your behalf to the extent that:
    (1) The charge for the service does not exceed the prevailing rate 
for similar services; and
    (2) The study or other matter was necessary for preparation of your 
case.

Information Required From Applicants


Sec.  4.610  What information must my application for an award contain?

    (a) Your application for an award of fees and expenses under the 
Act must:
    (1) Identify you;
    (2) Identify the proceeding for which an award is sought;
    (3) Show that you have prevailed;
    (4) Specify the position of the Department or other agency that you 
allege was not substantially justified;
    (5) Unless you are an individual, state the number of your 
employees and those of all your affiliates, and describe the type and 
purpose of your organization or business;
    (6) State the amount of fees and expenses for which you seek an 
award;
    (7) Be signed by you or your authorized officer or attorney;
    (8) Contain or be accompanied by a written verification under oath 
or under penalty of perjury that the information in the application is 
true and correct; and
    (9) Unless one of the exceptions in paragraph (b) of this section 
applies, include a statement that:
    (i) Your net worth does not exceed $2 million, if you are an 
individual; or
    (ii) Your net worth and that of all your affiliates does not exceed 
$7 million in the aggregate, if you are not an individual.
    (b) You do not have to submit the statement of net worth required 
by paragraph (a)(9) of this section if you do any of the following:
    (1) Attach a copy of a ruling by the Internal Revenue Service that 
you qualify as a tax-exempt organization described in 26 U.S.C. 
501(c)(3);
    (2) Attach a statement describing the basis for your belief that 
you qualify under 26 U.S.C. 501(c)(3), if you are a tax-exempt 
organization that is not required to obtain a ruling from the Internal 
Revenue Service on your exempt status;
    (3) State that you are a cooperative association as defined in 
section 15(a) of the Agricultural Marketing Act (12 U.S.C. 1141j(a)); 
or
    (4) Seek fees and expenses under Sec.  4.605(c) and provide 
information demonstrating that you qualify as a small entity under 5 
U.S.C. 601, 15 U.S.C. 632, and 13 CFR part 121.
    (c) You may also include in your application any other matters that 
you wish the adjudicative officer to consider in determining whether 
and in what amount an award should be made.


Sec.  4.611  What information must I include in my net worth exhibit?

    (a) Unless you meet one of the criteria in Sec.  4.610(b), you must 
file with your

[[Page 58174]]

application a net worth exhibit that meets the requirements of this 
section. The adjudicative officer may also require that you file 
additional information to determine your eligibility for an award.
    (b) The exhibit must show your net worth and that of any affiliates 
when the proceeding was initiated. The exhibit may be in any form that:
    (1) Provides full disclosure of your and your affiliates' assets 
and liabilities; and
    (2) Is sufficient to determine whether you qualify under the 
standards in this subpart.
    (c) Ordinarily, the net worth exhibit will be included in the 
public record of the proceeding. However, if you object to public 
disclosure of information in any portion of the exhibit and believe 
there are legal grounds for withholding it from disclosure, you may 
submit that portion of the exhibit directly to the adjudicative officer 
in a sealed envelope labeled ``Confidential Financial Information,'' 
accompanied by a motion to withhold the information from public 
disclosure.
    (1) The motion must describe the information sought to be withheld 
and explain, in detail:
    (i) Why it falls within one or more of the exemptions from 
mandatory disclosure under the Freedom of Information Act, 5 U.S.C. 
552(b);
    (ii) Why public disclosure of the information would adversely 
affect you; and
    (iii) Why disclosure is not required in the public interest.
    (2) You must serve the net worth exhibit and motion on counsel 
representing the agency against which you seek an award, but you are 
not required to serve it on any other party to the proceeding.
    (3) If the adjudicative officer finds that the information should 
not be withheld from disclosure, it must be placed in the public record 
of the proceeding. Otherwise, any request to inspect or copy the 
exhibit will be disposed of in accordance with the Department's 
procedures under the Freedom of Information Act, 43 CFR 2.11 et seq.


Sec.  4.612  What documentation of fees and expenses must I provide?

    (a) Your application must be accompanied by full documentation of 
the fees and expenses for which you seek an award, including the cost 
of any study, analysis, engineering report, test, project or similar 
matter.
    (b) You must submit a separate itemized statement for each 
professional firm or individual whose services are covered by the 
application, showing:
    (1) The hours spent in connection with the proceeding by each 
individual;
    (2) A description of the specific services performed;
    (3) The rates at which each fee has been computed;
    (4) Any expenses for which reimbursement is sought;
    (5) The total amount claimed; and
    (6) The total amount paid or payable by you or by any other person 
or entity for the services provided.
    (c) The adjudicative officer may require you to provide vouchers, 
receipts, logs, or other substantiation for any fees or expenses 
claimed, as required by Sec.  4.624.


Sec.  4.613  When may I file an application for an award?

    (a) You may file an application whenever you have prevailed in the 
proceeding or in a significant and discrete substantive portion of the 
proceeding. You must file the application no later than 30 days after 
the final disposition of the proceeding.
    (b) Consideration of an application for an award must be stayed if 
any party seeks review or reconsideration of a decision in a proceeding 
in which you believe you have prevailed, pending final disposition of 
the review or reconsideration of the decision.
    (c) When the Department or other agency (or the United States on 
its behalf) appeals an adversary adjudication to a court, no decision 
on an application for fees and other expenses in connection with that 
adversary adjudication will be made until either:
    (1) A final and unreviewable decision is rendered by the court on 
the appeal; or
    (2) The underlying merits of the case have been finally determined.

Procedures for Considering Applications


Sec.  4.620  How must I file and serve documents?

    You must file and serve all documents related to an application for 
an award under this subpart on all other parties to the proceeding in 
the same manner as other pleadings in the proceeding, except as 
provided in Sec.  4.611(c) for confidential information. The Department 
or other agency and all other parties must likewise file and serve 
their pleadings and related documents on you and on each other, in the 
same manner as other pleadings in the proceeding.


Sec.  4.621  When may the Department or other agency file an answer?

    (a) Within 30 days after service of an application, the Department 
or other agency against which an award is sought may file an answer to 
the application. However, if consideration of an application has been 
stayed under Sec.  4.613(b), the answer is due within 30 days after the 
final disposition of the review or reconsideration of the decision.
    (1) Except as provided in paragraph (a)(2) of this section, failure 
to file an answer within the 30-day period may be treated as a consent 
to the award requested. In such case, the adjudicative officer will 
issue a decision in accordance with Sec.  4.625 based on the record 
before him or her.
    (2) Failure to file an answer within the 30-day period will not be 
treated as a consent to the award requested if the Department or other 
agency either:
    (i) Requests an extension of time for filing; or
    (ii) Files a statement of intent to negotiate under paragraph (b) 
of this section.
    (b) If the Department or other agency and you believe that the 
issues in the fee application can be settled, you may jointly file a 
statement of intent to negotiate a settlement. Filing this statement 
will extend for an additional 30 days the time for filing an answer, 
and the adjudicative officer may grant further extensions if you and 
the agency counsel so request.
    (c) The answer must explain in detail any objections to the award 
requested and identify the facts relied on to support the Department's 
or other agency's position. If the answer is based on any alleged facts 
not already in the record of the proceeding, the Department or other 
agency must include with the answer either supporting affidavits or a 
request for further proceedings under Sec.  4.624.


Sec.  4.622  When may I file a reply?

    Within 15 days after service of an answer, you may file a reply. If 
your reply is based on any alleged facts not already in the record of 
the proceeding, you must include with the reply either supporting 
affidavits or a request for further proceedings under Sec.  4.624.


Sec.  4.623  When may other parties file comments?

    Any party to a proceeding other than the applicant and the 
Department or other agency may file comments on an application within 
30 days after it is served or on an answer within 15 days after it is 
served. A commenting party may not participate further in the 
proceedings on the application unless the adjudicative officer 
determines that the public interest requires such participation in 
order to permit full

[[Page 58175]]

exploration of matters raised in the comments.


Sec.  4.624  When may further proceedings be held?

    (a) Ordinarily, the determination of an award will be made on the 
basis of the written record. However, the adjudicative officer may 
order further proceedings, which will be held only when necessary for 
full and fair resolution of the issues and will be conducted as 
promptly as possible.
    (b) The adjudicative officer may order further proceedings on his 
or her own initiative or in response to a request by you or by the 
Department or other agency. A request for further proceedings under 
this section must:
    (1) Identify the information sought or the disputed issues; and
    (2) Explain why the additional proceedings are necessary to resolve 
the issues.
    (c) As to issues other than substantial justification (such as your 
eligibility or substantiation of fees and expenses), further 
proceedings under this section may include an informal conference, oral 
argument, additional written submissions, pertinent discovery, or an 
evidentiary hearing.
    (d) The adjudicative officer will determine whether the position of 
the Department or other agency was substantially justified based on the 
administrative record of the adversary adjudication as a whole.


Sec.  4.625  How will my application be decided?

    The adjudicative officer must issue a decision on the application 
promptly after completion of proceedings on the application. The 
decision must include written findings and conclusions on all of the 
following that are relevant to the decision:
    (a) Your eligibility and status as a prevailing party;
    (b) The amount awarded, and an explanation of the reasons for any 
difference between the amount requested and the amount awarded;
    (c) Whether the position of the Department or other agency was 
substantially justified;
    (d) Whether you unduly protracted the proceedings; and
    (e) Whether special circumstances make an award unjust.


Sec.  4.626  How will an appeal from a decision be handled?

    (a) If the adjudicative officer is an administrative law judge, you 
or the Department or other agency may appeal his or her decision on the 
application to the appeals board that would have jurisdiction over an 
appeal involving the merits of the proceeding. The appeal will be 
subject to the same rules and procedures that would apply to an appeal 
involving the merits of the proceeding. The appeals board will issue 
the final Departmental or other agency decision on the application.
    (b) If the adjudicative officer is a panel of appeals board judges, 
their decision on the application is final for the Department or other 
agency.


Sec.  4.627  May I seek judicial review of a final decision?

    You may seek judicial review of a final Departmental or other 
agency decision on an award as provided in 5 U.S.C. 504(c)(2).


Sec.  4.628  How will I obtain payment of an award?

    (a) To obtain payment of an award against the Department or other 
agency, you must submit:
    (1) A copy of the final decision granting the award; and
    (2) A certification that no party is seeking review of the 
underlying decision in the United States courts, or that the process 
for seeking review of the award has been completed.
    (b) If the award is against the Department:
    (1) You must submit the material required by paragraph (a) of this 
section to the following address: Director, Office of Financial 
Management, Policy, Management and Budget, U.S. Department of the 
Interior, Washington, DC 20240.
    (2) Payment will be made by electronic funds transfer whenever 
possible. A representative of the Department will contact you for the 
information the Department needs to process the electronic funds 
transfer.
    (c) If the award is against another agency, you must submit the 
material required by paragraph (a) of this section to the chief 
financial officer or other disbursing official of that agency. Agency 
counsel must promptly inform you of the title and address of the 
appropriate official.
    (d) The Department or other agency will pay the amount awarded to 
you within 60 days of receiving the material required by this section.

[FR Doc. 05-19896 Filed 10-4-05; 8:45 am]
BILLING CODE 4310-79-P