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Third Circuit Denies Claim against Government for Attorney’s Fees under EAJA

Dr. John Handron, a psychologist, failed in his attempt to win reimbursement for tens of thousands of attorneys' fees from the government he had incurred in defending the government's claim that he had overbilled Medicare more than $600,000. An ALJ proceeding found the figure to actually be $5,434.48, and Dr. Handron moved pursuant to the Equal Access to Justice Act (EAJA), 5 U.S.C. Section 504(a)(1), for reimbursement.

Unfortunately his request for fees was denied by an administrative appeals council, and the District Court affirmed that denial, finding that it wasn't an "adversary adjudication" as defined under the EAJA. The Third Circuit Court of Appeals agreed with the District Court only in part, but still affirmed the denial of fees.

The EAJA, according to the Appellate Court, "was passed, in large part, to allow individuals and small businesses to fight back against unjustified government action, without fear that the high cost of doing so would make victory ultimately more expensive than acquiescence." In practice, however, that act has been interpreted to mean that "(i)t is basic fairness that the United States (not) be liable in an administrative proceeding in which its interests are not represented," U.S.C.C.A.N. at 4984, 4991 (1980). This has
been further refined in 1985, to mean that the position of the U.S. be represented by counsel or otherwise.

The appeals court focused on the meaning of the term "otherwise," contained in the above language, noting that "Congress chose language that left open the possibility that the government's position could be represented in some other manner and by someone other than a lawyer." The government objected, stating that the cases of Willis v. Sullivan, 931 F.2d 390 (6th Cir. 1991) and Rowell v. Sullivan, 813 F.Supp. 78 (D.D.C. 1993) in support. The court disagreed, stating that, "We believe a writing can represent the government's position and therefore bring a proceeding under the ambit of the EAJA."

In Dr. Handron's case, however, it found that the materials submitted by the government, which included a demand letter, the Fair Hearing Officer's decision, the boxes of medical records, and Nurse Clark's spreadsheet and legend, didn't constitute such a written submission by the government to trigger EAJA. "In conclusion," the Court wrote, "unlike the District Court, we do not believe that an adversary adjudication under 5 U.S.C. Section 504(a)(1) requires the government to send a human being to the relevant agency proceeding... (but) requires that the government direct some purposeful advocacy at the decision-maker, whether written or in person." See: Handron v. Secretary Dept. of Health and Human Services, 677 F.3d 144 (3d Cir. 2012).

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Related legal case

Handron v. Secretary Dept. of Health and Human Services