SAMUEL R. PIERCE, JR., SECRETARY OF HOUSING AND URBAN DEVELOPMENT, PETITIONER V. MYRNA UNDERWOOD, ET AL. No. 1512 In the Supreme Court of the United States October Term, 1986 Petition for a Writ of Certiorari to the United States Court of Appeals for the Ninth Circuit The Solicitor General, on behalf of the Secretary of Housing and Urban Development, petitions for a writ of certiorari to review the judgment of the United States Court of Appeals for the Ninth Circuit in this case. TABLE OF CONTENTS Questions Presented Opinion below Jurisdiction Statutory provisions involved Statement Reasons for granting the petition Conclusion Appendix A Appendix B Appendix C Appendix D Appendix E OPINION BELOW The opinion of the court of appeals (App., infra, 3a-13a) is reported at 761 F.2d 1342. A subsequent amendment to the opinion of the court of appeals (App., infra, 1a-2a) is reported at 802 F.2d 1107. The opinion of the district court concerning the liability of the United States for attorneys' fees (App., infra, 22a-36a) is reported at 547 F. Supp. 256. The opinion of the district court regarding the amount of the fee award (App., infra, 14a-21a) is unreported. JURISDICTION The judgment of the court of appeals was entered on May 23, 1985. A timely petition for rehearing was denied on November 18, 1986 (App., infra, 37a-38a). On February 11, 1987, Justice O'Connor extended the time for filing a petition for a writ of certiorari to and including March 18, 1987. The jurisdiction of this Court is invoked under 28 U.S.C. 1254(1). STATUTORY PROVISIONS INVOLVED The Equal Access to Justice Act, 28 U.S.C. (Supp. III) 2412(d), provides in relevant part: (1)(A) Except as otherwise specifically provided by statute, a court shall award to a prevailing party other than the United States fees and other expenses * * * incurred by that party in any civil action (other than cases sounding in tort), including proceedings for judicial review of agency action, brought by or against the United States in any court having jurisdiction of that action, unless the court finds that the position of the United States was substantially justified or that special circumstances make an award unjust. * * * * * (2) For the purposes of this subsection -- (A) "fees and other expenses" includes * * * reasonable attorney fees (The amount of fees awarded under this subsection shall be based upon prevailing market rates for the kind and quality of the services furnished, except that * * * (ii) attorney fees shall not be awarded in excess of $75 per hour unless the court determines that an increase in the cost of living or a special factor, such as the limited availability of qualified attorneys for the proceedings involved, justifies a higher fee.)(.) QUESTIONS PRESENTED 1. Whether the government was "substantially justified," within the meaning of the Equal Access to Justice Act (EAJA), 28 U.S.C. (Supp. III) 2412(d), in litigating a question on which this Court, at the government's request, eventually granted certiorari and issued a stay. 2. Whether the courts below properly identified the "special factors" that justify a departure from EAJA's usual $75-per-hour cap on attorneys' fees. STATEMENT 1. Congress enacted the Equal Access to Justice Act of 1980 (EAJA or Act), 28 U.S.C. (Supp. III) 2412(d), "to diminish the deterrent effect of seeking review of, or defending against, governmental action by providing in specified situations an award of attorney fees, expert witness fees, and other costs against the United States." Pub. L. No. 96-481, Section 202(c)(1), 94 Stat. 2325. The Act does not mandate automatic fee-shifting. Instead, it provides that a court "shall award" fees to any party meeting specified qualifications (see 28 U.S.C. (Supp. III) 2412(d)(2)(B)) that prevails in a nontort civil action against the United States, "unless the court finds that the position of the United States was substantially justified or that special circumstances make an award unjust." 28 U.S.C. (Supp. III) 2412(d)(1)(A). EAJA also differs from many fee-shifting statutes in that it contains a specific statutory cap on permissible fee awards. The Act provides that fees generally are to be computed on the basis of "prevailing market rates for the kind and quality of the services furnished." 28 U.S.C. (Supp. III) 2412(d)(2)(A). But the statute conditions this general rule by directing that fees "shall not be awarded in excess of $75 per hour unless the court determines that an increase in the cost of living or a special factor, such as the limited availability of qualified attorneys for the proceedings involved, justifies a higher fee" (ibid.). 2. This attorney's fee dispute arose out of respondents' challenge to a decision by the Secretary of Housing and Urban Development (HUD) not to implement an "operating subsidy" program for low-income tenants. That program and the associated litigation are described in the Secretary's response and supplemental brief in response to the petition for certiorari in Dubose v. Pierce, 761 F.2d 913 (2d Cir. 1985), petition for cert. pending, No. 85-516. The Secretary's decision not to implement the "operating subsidy" program spawned a series of lawsuits, including the Dubose litigation, which was brought in the District of Connecticut, and the instant lawsuit, which was originally brought in the United States District Court for the District of Columbia and subsequently transferred to the Central District of California. See Underwood v. Hills, No. 76-469 (D.D.C. Apr. 5, 1979). Although the instant case was resolved adversely to the Secretary in district court (414 F. Supp. 526 (D.D.C. 1976)), this Court granted the Secretary's application for a stay of the district court's judgment (429 U.S. 892 (1976)). This Court subsequently granted the Secretary's petitions for writs of certiorari in two other operating subsidy cases. Harris v. Ross, 431 U.S. 928 (1977); Harris v. Abrams, 431 U.S. 928 (1977). Before the Court could resolve the merits of the operating subsidy dispute, however, the plaintiffs in the various cases and a new Secretary of HUD reached a comprehensive settlement. See generally Battles Farm Co. v. Pierce, 806 F.2d 1098, 1100 (D.C. Cir. 1986). This Court thereupon granted the Secretary's motion to refer the two cases on which certiorari had been granted back to the respective district courts for reconsideration in light of the settlement (439 U.S. 1001 (1978)). Several years later, while the settlement was still being administered, plaintiffs' counsel in a number of the operating subsidy cases, including this one, moved for attorneys' fees and expenses under EAJA, which had been enacted in 1980. On May 25, 1982, the district court held that the plaintiffs in this case were entitled to a fee award, determining that the government's position in the operating subsidy dispute had not been not "substantially justified" within the meaning of the Act (App., infra, 22a-36a). The court noted that when the action here was filed, nine district courts "had already made preliminary or final rulings" adverse to HUD in operating subsidy cases (id. at 31a). This background, in the court's view, "clearly raise(d) the possibility that the Government was unreasonable in pursuing the litigation" (id. at 32a (original quotation marks omitted)). The district court declined to attach any weight to this Court's grant of the government's petitions for writs of certiorari in the two related cases, explaining that the Court might have "decided to take up the case(s) to resolve the issues against HUD once and for all" (id. at 33a). And noting that HUD eventually settled the operating subsidy cases on the terms sought by the plaintiffs, the district court reasoned that "(s)uch a settlement probably would not have materialized had HUD been confident that the Court would uphold its position" (ibid.). Some ten months later, the district court set the fee award (App., infra, 14a-21a), concluding that several factors justified a departure from the usual EAJA $75-per-hour cap. While the court did not in terms find that a fee in excess of $75 per hour was necessary to attract qualified attorneys, it did state that "(f)ew attorneys possess the special skills and qualifications needed to handle successfully the litigation and settlement activities required by this case" (id. at 15a). Relying on Kerr v. Screen Extras Guild, Inc., 526 F.2d 67 (9th Cir. 1975), cert. denied, 425 U.S. 951 (1976), the court then held that there also were "(o)ther special factors" here that "justif(ied) a fee award in excess of $75 per hour" (App., infra, 15a). These included the "novelty and difficulty of the issues" (id. at 16a), the "contingent nature of the fee and the undesirability of the case" (id. at 17a), the "high() calibre" of the work performed by respondents' counsel (ibid.), and "prevailing market rates" (ibid.). The court therefore found it appropriate to award fees at rates ranging from $80 and $85 per hour for work performed in 1976 to $120 per hour for work performed in 1982. Using those rates, the court calculated a lodestar of $322,700 (id. at 20a). /1/ 3. The court of appeals affirmed the award of fees (App., infra, 3a-13a), finding for several reasons that the government's position in the operating subsidy litigation was not substantially justified. First, the court noted that a number of district courts had rejected the Secretary's position, "thus put(ting) (him) on clear notice that his position was without legal basis, but he continued to litigate the issue" (id. at 9a). The court also reasoned that the Secretary's decision to settle the litigation on terms that provided the plaintiffs with the requested relief "undermined" his contention that his legal position was supportable (ibid.). Conversely, the court of appeals refused to accord any weight to this Court's grant of certiorari in the two related operating subsidy cases, declining to "speculate as to the Court's intent in issuing those orders" (ibid.). And the court of appeals found no significance in this Court's stay of the district court's judgment in the instant case, concluding instead that the district court's decision "establishe(d) that the Secretary had no reasonable basis in law to ignore the mandates" of the legislation establishing the operating subsidy program (ibid.). While the court of appeals found the use of a multiplier inappropriate (see note 1, supra), it also agreed with the district court that fees should be awarded here at rates exceeding $75 per hour. The court of appeals recited the trial judge's statement that few attorneys possess the requisite skill to handle cases like this one. App., infra, 11a. And referring to the district court's use of the multi-factor analysis set forth in Kerr v. Screen Extras Guild, Inc., supra, the court of appeals held that "consideration of (the) Kerr factors is appropriate in determining the amount of fees to be awarded under the EAJA" (App., infra, 11a). The court therefore explained (id. at 11a-12a): The district court found that an hourly rate in excess of $75 was justified by several special factors, including the novelty and difficulty of the issues, the contingent nature of the fee, the undesirability of the case, the expertise of counsel, the amount involved and the results obtained, and the customary fees and awards in other cases. The district court did not abuse its discretion in concluding that the hourly rates requested by (respondent's counsel) -- ranging from $80 per hour for work in 1976 to $120 per hour for work in 1982 -- were appropriate and reasonable under the EAJA. The court of appeals therefore affirmed a fee award of $322,700 (id. at 13a). REASONS FOR GRANTING THE PETITION The court of appeals resolved two issues in deciding this case. As a threshold matter, it concluded that the government's position in the operating subsidy litigation was not "substantially justified." Having thus held that respondents' counsel are entitled to fees under EAJA, the court of appeals proceeded to identify several factors -- the paucity of qualified attorneys, the supposed difficulty and novelty of the legal issues, the contingent nature of the fee, the undesirability of the case, the expertise of counsel, the results obtained, and customary fees in similar lawsuits -- that, in its view, justified a departure from EAJA's $75-per-hour fee cap. Neither of these holdings can be reconciled with the analysis used by other courts of appeals in their EAJA rulings. The second prong of the decision below, moreover, is inconsistent with the decisions of this Court establishing general principles for setting attorney's fees. Given the enormous volume of EAJA litigation, the errors committed by the court of appeals are of considerable practical significance and warrant review by this Court, which has yet to consider a case involving the construction of EAJA. 1. In Dubose v. Pierce, 761 F.2d 913 (1985), petition for cert. pending, No. 85-516, the Second Circuit held that the government's position in the operating subsidy litigation was substantially justified. That decision, obviously, is in square conflict with the Ninth Circuit's holding below that the government's position in the litigation was not substantially justified. As we noted in our supplemental brief (at 5-6) in Dubose, this disagreement between the Second and Ninth Circuits reflects, not only divergent views about the nature of the government's obligations under a now-defunct statute, but also a difference of opinion about the significance to the EAJA reasonableness determination of other, more generally applicable factors. For example, the Ninth Circuit below accorded some weight to the fact that the Secretary eventually chose to settle the operating subsidy litigation, a consideration that the Second Circuit found to have little relevance. Compare App., infra, 9a with 85-516 Pet. App. 17. Conversely, the Ninth Circuit below refused to attribute any significance to this Court's stay of the district court's judgment or to this Court's grant of certiorari in other operating subsidy cases, while the Second Circuit viewed those actions "as indicative of the * * * view that the government's position was not unreasonable." Compare App., infra, 9a with 85-516 Pet. App. 16. This conflict in reasoning illustrates the lower courts' general inability to develop clear guidelines to govern the resolution of EAJA disputes -- a conflict sharply exemplified here, where two courts of appeals have reached contrary conclusions on essentially identical facts. We believe that EAJA litigation would be greatly simplified by the formulation of clear rules or presumptions that test the reasonableness of the government's position by reference to objective indicia. Although the relevent criteria obviously will vary from case to case, this litigation provides an example of such an indicium. This Court's decision to stay the district court's judgment below (429 U.S. 892 (1976)) should have been viewed as virtually conclusive evidence that the government's position here was "substantially justified." As Justice Brennan has observed (Rostker v. Goldberg, 448 U.S. 1306, 1308 (1980) (Brennan, J., in chambers)), this Court's grant of a stay generally presupposes that the applicant has "established that there is a 'reasonable probability' that four Justices will consider the issue sufficiently meritorious to grant certiorari" and that the applicant has "persuade(d) (the Court) that there is a fair prospect that a majority of the Court will conclude that the decision below was erroneous." See generally R. Stern, E. Gressman & S. Shapiro, Supreme Court Practice 690, 693-696 (6th ed. 1986). Where a Circuit Justice or, as here (see 429 U.S. 892 (1976)), the full Court has taken the extraordinary step of granting a stay at the government's request, that action should give rise to at least a rebuttable presumption that the government's position was "substantially justified." The grant of a stay by this Court, of course, is not a factor that is likely to arise in run-of-the-mill EAJA litigation. But the lower courts should be encouraged to search for other objective indicia of reasonableness (or unreasonableness) of the government's position, lest EAJA fee disputes invariably become time-consuming and expensive reruns of the litigation on the merits. Cf. Hensley v. Eckerhart, 461 U.S. 424, 455 (1983) (opinion of Brennan, J.). The conflict represented by Dubose and the instant case provides a concrete factual context in which this Court may furnish the lower courts with guidance about how the "substantially justified" inquiry of EAJA should be conducted. /2/ 2. a. The second issue in this case, which concerns the circumstances in which a departure from the EAJA $75-per-hour limit is permissible, is independently worthy of this Court's attention. The statute provides that "attorney fees shall not be awarded in excess of $75 per hour unless the court determines that an increase in the cost of living or a special factor, such as the limited availability of qualified attorneys for the proceedings involved, justifies a higher fee." 28 U.S.C. (Supp. III) 2412(d)(2)(A)(ii). Congress did not expressly identify, either in the Act itself or in the legislative history, the universe of "special factors" that might justify fee awards in excess of the statutory limit. See H.R. Rep. 96-1418, 96th Cong., 2d Sess. 15 (1980); S. Rep. 96-253, 96th Cong., 1st Sess. 16 (1979); H.R. Rep. 96-1005, 96th Cong., 2d Sess. Pt. 1, at 11 (1980); 125 Cong. Rec. 21444 (1979) (statement of Sen. Kennedy). See generally Aston v. Secretary of HHS, 808 F.2d 9, 11 & n.1 (2d Cir. 1986). But Congress certainly understood that $75 per hour -- the figure chosen as the statutory standard -- is lower than the usual rate charged by many attorneys, and that awarding fees at the $75 rate "would prevent a party from engaging * * * an expensive law firm and being able entirely to cover all the expenses that might be charged." Award of Attorneys' Fees Against the Federal Government: Hearings on S.265 Before the Subcomm. on Courts, Civil Liberties, and the Administration of Justice of the House Comm. on the Judiciary, 96th Cong., 2d Sess. 32 (1980) (statement of Rep. Kastenmeier). Indeed, the congressional mandate that fees exceed $75 per hour only when "special" circumstances are present indicates that it is only in rare cases that higher fees are justified. Cf. 28 U.S.C. (Supp. III) 2412(d)(1)(A) (barring an award of attorneys' fees, even if the government's position is not "substantially justified," where "special circumstances make an award unjust"). In light of this congressional intent, the courts of appeals, with the exception of the court below, have recognized that "the $75 statutory rate is a ceiling and not a floor." Chipman v. Secretary of HHS, 781 F.2d 545, 547 (6th Cir. 1986). The courts accordingly have held that, in EAJA, Congress "'expressed clearly its intention that prevailing market rates are relevant only up to $75 per hour,'" so that "'customary rates above $75 per hour cannot support a claim in excess of the statutory maximum rate'" (ibid. (citation omitted)). To implement this congressional design, the Sixth and the District of Columbia Circuits both have held that $75 per hour must be substituted for the attorney's customary rate (when that customary rate exceeds $75 per hour) in computing the EAJA lodestar. See ibid.; Action on Smoking & Health v. CAB (ASH), 724 F.2d 211, 219-220, 222, 223 (D.C. Cir. 1984). Cf. Vibra-Tech Engineers, Inc. v. United States, 787 F.2d 1416, 1420 (10th Cir. 1986). And while the courts have suggested that an increase to the lodestar for exceptional representation may be permissible in extraordinary EAJA cases, both the District of Columbia and the Tenth Circuits have emphasized that "(a) court * * * is not to take into account the level of skill normally expected of a lawyer charging $75 per hour, but rather the level of skill expected of a lawyer commanding this lawyer's usual reasonabl(e) hourly fee." ASH, 724 F.2d at 219 (emphasis in original). Accord, Vibra-Tech Engineers, 787 F.2d at 1420. Similarly, the District of Columbia and the Tenth Circuits have noted the congressional emphasis on the $75-per-hour figure in holding that the single "special factor" actually listed in the Act -- the "limited availability of qualified attorneys for the proceedings involved" -- may justify an increased fee award only in the "unusual situation where appropriately specialized legal services cannot be obtained in the market for $75 (an hour) or less." Vibra-Tech Engineers, 787 F.2d at 1420. Accord, ASH, 724 F.2d at 217. A determination that such a situation exists requires suitably detailed factual findings about the actual availability of qualified attorneys, not generalized statements about the supposed difficulty of the case. See generally Aston, 808 F.2d at 11; Chipman, 781 F.2d at 547. Cf. Pennsylvania v. Delaware Valley Citizens' Council No. 85-5 (July 2, 1986), slip op. 20. Thus, as the District of Columbia Circuit held in ASH, a fee award in excess of $75 per hour is not appropriate where the attorney's particular expertise, while useful in conducting the suit, was not "necessarily require(d)" for the prosecution of the litigation. 724 F.2d at 218. /3/ b. The decision below cannot be squared with these holdings of the other courts of appeals. In choosing to exceed the $75-per-hour cap, the court below listed as "special factors" not only the supposed paucity of attorneys possessing the necessary litigation skills (App., infra, 11a), but also "the novelty and difficulty of the issues, the contingent nature of the fee, the undesirability of the case, the expertise of counsel, the amount involved and the results obtained, and the customary fees and awards in other cases" (id. at 12a). By this analysis, the court evidently meant to label as EAJA "special factors" all of the considerations listed in Kerr, a previous Ninth Circuit decision that, in turn, had simply adopted (526 F.2d at 69-70) the 12 factors for calculating an attorneys' fee that are set out in Johnson v. Georgia Highway Express, Inc., 488 F.2d 714 (5th Cir. 1974). See generally Delaware Valley Citizens' Council, slip op. 14-15 & n.7. This reasoning cannot be reconciled with the approach of the other appellate decisions that we have discussed. While baldly asserting that few attorneys possessed the skills necessary to handle this case successfully (see App., infra, 11a, 15a), neither court below made a specific finding that "appropriately specialized legal services" could not "be obtained in the market for $75 (per hour) or less" (Vibra-Tech Engineers, 787 F.2d at 1420). On the record here, moreover, such a finding plainly could not have been made. /4/ And the consideration by the courts below of the expertise of respondents' counsel and of customary rates in similar cases (App., infra, 6a, 11a-12a, 17a) flatly conflicts with Chipman and ASH. Those decisions held that "'prevailing market rates are relevant only up to $75 per hour'" (Chipman, 781 F.2d at 547) and that the $75 figure must be substituted for the customary or prevailing rate in calculating the lodestar. More fundamentally, the court of appeals' approach would render EAJA's $75-per-hour cap nugatory. The 12 factors set out in Kerr and Johnson are considerations that have been taken into account by the courts in computing a reasonable fee, under statutes that do not contain statutory caps, as an alternative to the lodestar approach. See Kerr, 526 F.2d at 70; see generally Delaware Valley Citizens' Council, slip op. 14. As this Court has explained, many of these factors -- including, among those considered by the court below, the novelty and complexity of the issue, the skill and experience of counsel, the quality of representation, and the results obtained -- "are presumably fully reflected in the lodestar amount, and thus cannot serve as independent bases for increasing the basic fee award" in any but the most extraordinary case (id. at 17). This principle is fully applicable here. When computing fees under EAJA, factors such as the quality of representation, the complexity of the case, and the experience of counsel must be deemed subsumed within a lodestar calculated on the basis of the $75 rate specified by the statute. See Chipman, 781 F.2d at 547. /5/ As a result, a highly experienced (or simply high-priced) attorney may not receive his usual fee under EAJA. But that is a necessary consequence of EAJA's "explicit statutory fee cap." ASH, 724 F.2d at 217 (footnote omitted). If, instead, each of the Kerr and Johnson considerations -- which are, after all, used in calculating fees ab initio under other fee-shifting statutes -- is treated as a "special factor" justifying a departure from the $75-per-hour limit, attorneys compensated under EAJA will always receive more than $75 per hour, so long as they would have received more than $75 per hour had they been compensated under another statute. Indeed, if such an approach is taken, fees will be calculated under EAJA in a manner identical to their computation under fee-shifting statutes that do not have an express statutory cap. Congress plainly had no such result in mind when it explicitly limited EAJA attorneys' fees to a maximum rate of $75 per hour. c. The court of appeals' decision effectively reads the fee cap out of EAJA. That result is of considerable practical significance, since the issue here may arise with great frequency. According to figures compiled by the Administrative Office of United States Courts, the federal courts granted 555 EAJA fee applications in 1986 alone. And the decision below is not a sport. The Ninth Circuit previously has cited the Kerr multiple-factor analysis in approving EAJA fee awards exceeding $75 per hour. International Woodworkers v. Donovan, 769 F.2d 1388, 1391 (9th Cir. 1985). See also LaDuke v. Nelson, 762 F.2d 1318, 1333 (1985), modified, 796 F.2d 309, 310 (9th Cir. 1986). And this approach has been followed by district courts both inside and outside the Ninth Circuit. See Miller v. Hotel & Restaurant Employees, 107 F.R.D. 231, 242 (N.D. Cal. 1985); Bunn v. Bowen, 637 F. Supp. 464, 476 (E.D.N.C. 1986); Hyatt v. Heckler, 618 F. Supp. 227, 233 (W.D.N.C. 1985), vacated on other grounds, 757 F.2d 1455 (4th Cir. 1985). In these circumstances, review of the decision below is warranted. CONCLUSION The petition for a writ of certiorari should be granted. Respectfully submitted. CHARLES FRIED Solicitor General RICHARD K. WILLARD Assistant Attorney General ALBERT G. LAUBER, JR. Deputy Solicitor General CHARLES A. ROTHFELD Assistant to the Solicitor General WILLIAM KANTER JOHN S. KOPPEL Attorneys MARCH 1987 /1/ After setting the lodestar, the district court multiplied the lodestar figure by 3.5 to compensate respondents' attorneys for "the contingent nature of this case, its complexity, and, most importantly, the high quality of (counsel's) work, and the excellent results achieved." The court therefore entered a final fee award of $1,129,450. App., infra, 20a. This use of a multiplier was set aside by the court of appeals. In its initial opinion, the court of appeals held that reference to a multiplier is inappropriate under EAJA, for two reasons: because EAJA, unlike other fee-shifting statutes, "places a specific dollar limit on the hourly rate to be awarded" (id. at 13a), and because "(t)here is insufficient indication that Congress intended to expose the United States to compounds of the hourly rate" (ibid.). On rehearing, the court of appeals withdrew this aspect of its opinion, finding it unnecessary to decide "whether the use of a multiplier is permissible under the statutory language of the EAJA" (id. at 2a). Instead, the court concluded that "compensation for the special factors involved in this case was adequately provided for by the allowance of the hourly rates in excess of the $75.00 specified in the statute" (ibid.). /2/ We note, however, that this case, like Dubose was decided under the version of EAJA that was enacted in 1981 and expired by its terms in 1984. See 85-516 Supp. Br. 8-9. /3/ Although the courts have not yet focused on this consideration, the unusual nature of EAJA's "substantially justified" standard suggests that the plaintiff's risk of losing the suit (and thus of not receiving a fee award) is not a consideration that justifies a fee increase, whatever the relevance of that factor under other fee-shifting statutes. (Pennsylvania v. Delaware Valley Citizens' Council, No. 85-5, currently pending, presents the question whether contingency ever justifies an increase in fee awards, even outside the EAJA context.) Fees may be awarded under EAJA only when the government's position is unreasonable; in such a case, the plaintiff's risk of loss can hardly have been high. Cf. Hirschey v. FERC, 777 F.2d 1, 4-5 (D.C. Cir. 1985). This case itself illustrates the anomalies that follow from use of contingency as a factor to increase EAJA fees. In finding that the government's position was not substantially justified, the court of appeals concluded that "the Secretary had no reasonable basis in law" for failing to implement the operating subsidy program (App., infra, 9a), and that the government's lack of success in various district courts put the Secretary "on clear notice that his position was without legal basis" (ibid.). While we disagree with these characterizations of the Secretary's position, they obviously were essential to the court of appeals' holding that the government was liable for fees. And if it was clear from the outset that the Secretary's position was without merit, respondents' attorneys did not risk much in undertaking the representation here. /4/ It is obvious that special skill was not needed to conduct the litigation here. This case was one of 17 operating subsidy suits brought against the Secretary across the country; plaintiffs were successful in all 17 (see App., infra, 23a n.1). Thus, the district court in Dubose, while finding a fee award appropriate, declined to award a fee in excess of $75 per hour, stating that the operating subsidy litigation "presented a relatively simple question" and that "(b)ecause an unusually high degree of legal talent was not required in this case, there was no dearth of lawyers who could have achieved similar results." Dubose v. Pierce, 579 F. Supp. 937, 953 (D. Conn. 1984), rev'd on other grounds, 761 F.2d 913 (2d Cir. 1985), petition for cert. pending, No. 85-516. Indeed, plaintiffs had prevailed against the Secretary at least preliminarily in nine operating subsidy suits at the time that the instant action was brought (see App., infra, 33a n.11), and this suit was resolved in district court in less than three months, without trial and with minimal discovery, on the basis of arguments that already had been briefed elsewhere. The district court here also pointed (App., infra, 15a) to the settlement activities of respondents' counsel in concluding that there were few attorneys who could have handled this case. But the administration of even a complex settlement does not call for specialized counsel. And the suggestion that a high fee was necessary to attract qualified counsel is belied by the record here, since respondents' counsel undertook the representation several years before EAJA was enacted, at which time they could have had no expectation of a fee. See App., infra, 7a, 35a. Indeed, respondents' counsel expressly disavowed any intent to obtain a fee from the settlement fund. See ibid. /5/ The court of appeals in ASH indicated that the EAJA lodestar could be modified to reflect contingency, quality of representation, and exceptional results -- factors that it previously had held could be used to modify the lodestar under other fee-shifting statutes. 724 F.2d at 218-219 (citing Copeland v. Marshall, 641 F.2d 880 (D.C. Cir. 1980) (en banc)). The ASH decision, however, predated this Court's holdings in Delaware Valley Citizens' Council and Blum v. Stenson, 465 U.S. 886 (1984), which indicated that those factors generally are subsumed within the lodestar. When ASH is viewed in light of those decisions by this Court, it plainly is inconsistent with the holding below. While the holding below also predated Delaware Valley Citizens' Council, the court of appeals, in modifying its opinion in the wake of that decision, did not alter its holding that all the Kerr considerations are "special factors" for purposes of EAJA. See App., infra, 1a-2a. APPENDIX