In this case concerning the scope of fee shifting under the Equal Access to Justice Act (EAJA), the Federal Circuit held that fees for paralegal services may only be awarded to prevailing parties at cost, rather than at market rates as four circuits have held. The Supreme Court held in a 1989 decision that paralegal services are compensable at market rates under the Civil Rights Attorney's Fees Awards Act, and EAJA is a federal fee-shifting statute generally interpreted similarly. In light of the division among the courts of appeals, and the Federal Circuit's failure to follow Supreme Court precedent, Public Citizen argues that the Supreme Court should grant certiorari and reverse the Federal Circuit's erroneous ruling.
In cases subject to EAJA, if paralegal services are recoverable only at cost, all other things being equal, firms will be less likely to use paralegals for appropriate tasks under the direction of an attorney, and more likely to use attorneys when unnecessary, creating both much greater litigation costs and inefficiency in the legal market.
The question presented is:
Under the Equal Access to Justice Act (EAJA), 5 U.S.C. § 504(a)(1) and 28 U.S.C. § 2412(d)(1)(A), may a prevailing party be awarded attorney fees for paralegal services at the market rate for such services, as four circuits have held, or does EAJA limit reimbursement for paralegal services to cost only, as the Federal Circuit panel majority below held?
The Supreme Court decided in favor of the petitioner, represented by Brian Wolfman of Public Citizen.