Legislation Targets Enviro-Activist Lawsuits

September 2011Newsletters In the Zone

U.S. Representative Cynthia Lummis (R-Wyo.) and Senator John Barrasso (R-Wyo.) jointly introduced the Government Litigation Savings Act , legislation that prevents abuse of the Equal Access to Justice Act (EAJA), 5 USC Sec. 504 , by large environmental groups and others who frequently challenge the federal government in court.

The Government Litigation Savings Act will reduce the taxpayer’s burden to pay for attorney’s fees. The legislation also returns EAJA to its original intent by instituting targeted reforms on who is eligible to receive EAJA reimbursements, limiting repeated lawsuits and reinstating tracking and reporting requirements to make EAJA more transparent. Under the Government Litigation Savings Act, veterans, Social Security claimants, individuals and small businesses will still enjoy full access to EAJA funds.

EAJA was passed as a permanent appropriation in 1980 in order to help individuals, small businesses and nonprofit organizations with limited access to financial resources defend themselves against harmful government actions. EAJA allows for the reimbursement of attorney’s fees and costs associated with suing the federal government. When operating correctly, EAJA allows plaintiffs who sue the federal government to recover part of their attorney’s fees and costs if they “prevail” in the case. However, Congress and the agencies halted tracking and reporting of payments made through EAJA in 1995.

Some of the legislation’s key provisions include:

  • Requires EAJA filers to show a “direct and personal monetary interest” in the action to be eligible for payments. Direct and personal interest includes personal injury, property damage or unpaid agency disbursement.
  • Removes the net worth eligibility exemptions granted to 501(c)(3) organizations and agriculture cooperatives for access to EAJA funds. With this provision, any organization, regardless of tax status filing for EAJA reimbursements, must have a net worth of less than $7 million, and individuals must have a net worth of less than $2 million.
  • Establishes a cap of $175 per hour for attorney’s fees, pegged to inflation. All additional multipliers are removed.
  • Requires an agency to disallow EAJA reimbursements if the claimant “unreasonably protracted the proceedings, or acted in an obdurate, dilatory, mendacious, or oppressive manner, or in bad faith.”
  • Requires agencies to reduce reimbursements based on pro bono work.
  • Caps total EAJA reimbursements to $200,000 for any single action and allows no more than three EAJA awards in a calendar year.
  • Establishes reporting requirements anytime taxpayer money is paid out for attorney’s fees – including in confidential settlement agreements and consent decrees. Creates an online, searchable database for funds paid out of EAJA and to whom the funds were paid.

For more information, please contact Robert W. Gundlach, Jr. at 215.918.3636 or [email protected].

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