The general rule in this country, the so-called "American Rule" is that each party must pay its own attorney's fees. See Alyeska Pipeline Service Co. v. Wilderness Society, 421 U.S. 240 (1975). There are, however, numerous federal statutes providing for attorney fee awards where the United States or a federal agency or official is a party. The most generally applicable statute authorizing attorney's fees awards against the United States is the Equal Access to Justice Act (EAJA), 28 U.S.C. § 2412, which makes the federal government liable for fees where:
(1) any other party would be liable under common law or under the terms of any federal statute which specifically provides for such an award, 28 U.S.C. § 2412(b); or
(2) in any civil action (other than cases sounding in tort) 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. 28 U.S.C. § 2412(d)(1).
The principal grounds under which the American common law would permit attorney's fees to be awarded are the "bad faith" and "common fund" theories. The "bad faith" theory allows an award where a party has willfully disobeyed a court order or has "acted in bad faith, vexatiously, wantonly, or for oppressive reasons." F.D. Rich Co. v. Industrial Lumber Co., 417 U.S. 116, 129 (1974); accord Alyeska Pipeline Co. v. Wilderness Society, 421 U.S. at 258-59. Under the "common fund" theory, a court may award attorney's fees to a party whose legal action creates or preserves a fund of money, or obtains a benefit, for others as well as itself. While 28 U.S.C. § 2412(b) authorizes an award of attorney's fees against the federal government where any other party would be liable under the common law, it may not authorize an award against the federal government under the "common fund" theory. See Grace v. Burger, 763 F.2d 457 (D.C. Cir.), cert. denied, 474 U.S. 1026 (1985); Cable Atlanta, Inc. v. Project, Inc., 749 F.2d 626 (11th Cir. 1984); Chevron U.S.A. Inc. v. May Oilfield Services, Inc., 739 F.2d 498 (10th Cir. 1984); Millers Mutual Ins. Ass'n of Ill. v. Wassall, 738 F.2d 302 (8th Cir. 1984); Holbrook v. Pitt, 748 F.2d 1168 (7th Cir. 1984); Jordan v. Heckler, 744 F.2d 1397 (10th Cir. 1984); Puerto Rico v. Heckler, 745 F.2d 709 (D.C.Cir. 1984); McQuiston v. Marsh, 707 F.2d 1082 (9th Cir. 1983).
Where no statute, including the EAJA, specifically allows for the recovery of fees, sovereign immunity bars the award of fees. It is fundamental that the United States, as a sovereign, is immune from suit save as it consents to be sued and the terms of its consent to be sued in any court define the court's jurisdiction to entertain the suit. See United States v. Mitchell, 445 U.S. 535, 538 (1980). Waivers of sovereign immunity "cannot be implied but must be unequivocally expressed." United States v. King, 395 U.S. 1, 4 (1969). This rule of strict construction has been specifically applied to claims for attorney fee awards against the United States. Library of Congress v. Shaw, 478 U.S. 310 (1986); Ruckelshaus v. Sierra Club, 463 U.S. 680, 685 (1983); Nichols v. Pierce, 740 F.2d 1249, 1258-59 (D.C. Cir. 1984); Commissioner of Highways v. United States, 684 F.2d 443, 444 (7th Cir. 1982); Nibali v. United States, 634 F.2d 494, 497 (Ct.Cl. 1980).
A number of statutes allowing for attorney's fees provide limits upon the fees that may be recovered in an action against the United States. See, e.g., 38 U.S.C. § 784(g) (National Service Life Insurance); 29 U.S.C. § 2678 (Federal Tort Claims Act); cf. Nesbit v. Frederick Snare Corp., 96 F.2d 535, 537-39 (D.C.Cir.), cert. denied, 305 U.S. 608 (1938). Fee restrictions imposed by the Congress are constitutional. See Hines v. Lowarey, 305 U.S. 85, 91 (1938); Nebbia v. New York, 291 U.S. 502, 535-36 (1934); Margolin v. United States, 269 U.S. 93, 101 (1925).
The maximum fee permitted by statute is not automatically to be allowed. Rather, when the court is to set the fee, the court should determine and allow reasonable fees within the limits set by Congress. The amount of attorney's fees to be awarded is generally determined by multiplying the reasonable number of hours expended on a case by the reasonable hourly rate at which counsel should be compensated. See Blum v. Stenson, 465 U.S. 886 (1984); Hensley v. Eckerhart, 461 U.S. 424 (1983). When attorney's fees are awarded to the government, the hourly rate should be in accordance with the schedule set forth in the March 31, 1993 memorandum from Michael J. Roper, Deputy Assistant Attorney General, Comptroller, to all Financial Officers (as amended or updated from time to time).
[updated May 1998] [cited in USAM 4-10.010]