When Congress voted earlier this month to extend the Equal Access to Justice Act, it handed President Reagan a bit of a dilemma.
If the president signs the measure, it could undermine efforts by the Office of Management and Budget to limit the size of attorney fee awards when plaintiffs sue the government under certain laws. But a veto could be interpreted as a blow to the "little guy;" in particular, it would upset the small business community, which sees the law as a much-needed protection against overzealous government agencies.
The equal access act, first approved in 1980, allows citizens to collect legal fees when they successfully defend themselves in court against a government action which the court finds to be not "substantially justified" by the agency. The law, which technically expired on Sept. 30, was designed to ensure that individuals and small businesses would not be deterred by a lack of resources from defending themselves against capricious government enforcement actions.
From the start, the law has included the same $75-per-hour cap that the Reagan administration has sought to impose on all attorney awards the government is forced to pay. The meaasure's supporters say that since it took effect in 1981, it has cost substantially less than the $360 million that was first estimated. According to congressional sources, only about $3.5 million has been awarded.
During the debate on the bill, Carolyn B. Kuhl, a deputy assistant attorney general, said the Reagan administration backed an extension of the act. Changing the law, she said, would expand eligibility and allow the "worthwhile goals of the act to be undercut by inappropriate awards." An OMB spokesman said last week that White House officials are "still evaluating" the measure to decide whether Reagan should sign it.
The final version of the legislation that Congress passed reflects Capitol Hill bargaining at its most Byzantine. Despite the administration's position, the bill essentially makes it easier for more citizens to collect fees and makes it harder for the government to prove it was justified in bringing the case.
Among other things, the new bill would:
Allow the courts, in deciding whether to award fees, to consider "underlying" reasons why the agency acted against an individual or firm. In the past, the courts generally required the government to prove that its case was "substantially justified" only after the case reached the court. The OMB fought this change by arguing that the stricter standard would force agencies to open their files and inner-office memos to defend their "underlying" motives.
Raise eligibility limits. Under the old law, individuals with a net worth of less than $1 million, and other entities, including businesses and cities, with a net worth of less than $5 million, could qualify. The new bill would raise the threshold to $2.5 million for individuals, and to $7 million for businesses and cities.
Specify that persons who win procurement cases before the Board of Contract Appeals may demand that the government pay their lawyers' fees. This provision would cover persons who filed for lawyer fees in the past four years after having won a contract appeal case, but whose request was rejected because it was unclear whether the board could award fees.
The provision was a concession to Sen. Charles E. Grassley (R-Iowa), who dropped his demand that citizens involved in tax proceedings become eligible to collect their lawyer fees. The Justice Department had opposed both changes.
Stipulate that the fee awards must be paid out of the budget of the agency that lost the case, not from the general Treasury.
Force the government to pay interest when it does not promptly make its fee payments.
Frank S. Swain, chief advocacy counsel of the Small Business Administration, said he would recommend that the bill be signed. "There are some people in the administration who are not pleased by some of the changes," he said, "but it's a good bill for small business, and the inconvenience to the government is minor, at best."