
[Code of Federal Regulations]
[Title 45, Volume 1]
[Revised as of October 1, 2001]
From the U.S. Government Printing Office via GPO Access
[CITE: 45CFR13]

[Page 65-67]
 
                        TITLE 45--PUBLIC WELFARE
 
                    SUBTITLE A--DEPARTMENT OF HEALTH
                           AND HUMAN SERVICES
 
PART 13--IMPLEMENTATION OF THE EQUAL ACCESS TO JUSTICE ACT IN AGENCY PROCEEDING
S--Table of Contents
 
Subpart A--General Provisions

Sec. 13.1  Purpose of these rules.

    These rules implement section 203 of the Equal Access to Justice 
Act, 5 U.S.C. 504 and 504 note, for the Department of Health and Human 
Services. They describe the circumstances under which the Department may 
award attorney fees and certain other expenses to eligible individuals 
and entities who prevail over the Department in certain administrative 
proceedings (called ``adversary adjudications''). The Department may 
reimburse parties for expenses incurred in adversary adjudications if 
the party prevails in the proceeding and if the Department's position in 
the proceeding was not substantially justified. These rules explain how 
to apply for an award. They also describe what proceedings constitute 
adversary adjudications covered by the Act, what types of persons and 
entities may be eligible for an award, and what procedures and standards 
the Department will use to make a determination as to whether a party 
may receive an award.

Sec. 13.2  When these rules apply.

    These rules apply to adversary adjudications pending before the 
Department between October 1, 1981 and September 30, 1984.

Sec. 13.3  Proceedings covered.

    (a) These rules apply only to adversary adjudications. For the 
purpose of these rules, only an adjudication required to be under 5 
U.S.C. 554, in which the position of the Department or one of its 
components is represented by an attorney or other representative (``the 
agency's litigating party'') who enters an appearance and participates 
in the proceeding, constitutes an adversary adjudication. These rules do 
not apply to proceedings for the purpose of establishing or fixing a 
rate or for the purpose of granting, denying, or renewing a license. 
Department proceedings covered by these rules, if the agency's 
litigating party enters an appearance and participates, are listed in 
Appendix A.
    (b) If a proceeding is covered by these rules, but also involves 
issues excluded under paragraph (a) of this section from the coverage of 
these rules, reimbursement is available only for fees and expenses 
resulting from covered issues.

Sec. 13.4  Eligibility of applicants.

    (a) To be eligible for an award of attorney fees and other expenses 
under these regulations, the applicant must be a party, as defined in 5 
U.S.C. 551(3), to the adversary adjudication for which it seeks an 
award. An applicant must show that it meets all conditions of 
eligibility set out in this subpart and in Subpart B.
    (b) The categories of eligible applicants are as follows:
    (1) Individuals with a net worth of not more than $1 million;
    (2) Sole owners of unincorporated businesses if the owner has a net 
worth of not more than $5 million, including both personal and business 
interests, and not more than 500 employees;
    (3) Charitable or other tax-exempt organizations described in 
section 501(c)(3) of the Internal Revenue Code (26 U.S.C. 501(c)(3)) 
with not more than 500 employees;
    (4) Cooperative associations as defined in section 15(a) of the 
Agricultural Marketing Act (12 U.S.C. 1141j(a)) with not more than 500 
employees, and
    (5) All other partnerships, corporations, associations or public or 
private organizations with a net worth of not

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more than $5 million and with not more than 500 employees.
    (c) For the purpose of determining eligibility, the net worth and 
number of employees of an applicant is calculated as of the date the 
proceeding was initiated. The net worth of an applicant is determined by 
generally accepted accounting principles.
    (d) Whether an applicant who owns an unincorporated business will be 
considered as an ``individual'' or a ``sole owner of an unincorporated 
business'' will be determined by whether the applicant's participation 
in the proceeding is related primarily to individual interests or to 
business interests.
    (e) The employees of an applicant include all those persons 
regularly providing services for remuneration for the applicant, under 
the applicant's direction and control. Part-time employees shall be 
included on a proportional basis.
    (f) The net worth and number of employees of the applicant and all 
of its affiliates shall be aggregated to determine eligibility. Any 
individual, corporation or other entity that directly or indirectly 
controls or owns a majority of the voting shares or other interest of 
the applicant, or any corporation or other entity of which the applicant 
directly or indirectly owns or controls a majority of the voting shares 
or other interest, will be considered an affiliate for purposes of this 
part, unless the adjudicative officer determines that such treatment 
would be unjust and contrary to the purposes of the Act in light of the 
actual relationship between the affiliated entities. In addition, the 
adjudicative officer may determine that financial relationships of the 
applicant other than those described in this paragraph constitute 
special circumstances that would make an award unjust.
    (g) An applicant is not eligible if it appears from the facts and 
circumstances that it has participated in the proceedings only or 
primarily on behalf of other persons or entities that are ineligible.

Sec. 13.5  Standards for awards.

    (a) Awards will not be made for fees and expenses where the 
Department's position in the proceeding was substantially justified at 
the time the proceeding was initiated. The fact that a party has 
prevailed in a proceeding does not create a presumption that the 
Department's position was not substantially justified. The burden of 
proof that an award should not be made to an eligible prevailing 
applicant is on the agency's litigating party, which may avoid an award 
by showing that its position was reasonable in law and fact.
    (b) When two or more matters are joined together for one hearing, 
each of which could have been heard separately (without regard to laws 
or rules fixing a jurisdictional minimum amount for claims), and an 
applicant has prevailed with respect to one or several of the matters, 
an eligible applicant may receive an award for expenses associated only 
with the matters on which it prevailed if the Department's position on 
those matters was not substantially justified.
    (c) Awards for fees and expenses incurred before the date on which a 
proceeding was initiated will be made only if the applicant can 
demonstrate that they were reasonably incurred in preparation for the 
proceeding.
    (d) Awards will be reduced or denied if the applicant has unduly or 
unreasonably protracted the proceeding or if other special circumstances 
make an award unjust.

Sec. 13.6  Allowable fees and expenses.

    (a) Awards will be limited to the rates customarily charged by 
persons engaged in the business of acting as attorneys, agents and 
expert witnesses. Awards will not be made for more than the applicant's 
actual expenses. If a party has already received, or is eligible to 
receive, reimbursement for any expenses under another statutory 
provision or another program allowing reimbursement, its award under 
these rules must be reduced by the amount the prevailing party has 
already received, or is eligible to receive, from the Federal 
government.
    (b) An award for the fees of an attorney or agent may not exceed 
$75.00 per hour, regardless of the actual rate charged by the attorney 
or agent. An award for the fees of an expert witness

[[Page 67]]

may not exceed the highest rate at which the Department pays expert 
witnesses, which is $24.09 per hour, regardless of the actual rates 
charged by the witness. These limits apply only to fees; an award may 
include the reasonable expenses of the attorney, agent, or witness as a 
separate item, if the attorney, agent or witness ordinarily charges 
separately for such expenses.
    (c) In determining the reasonableness of the fees sought for 
attorneys, agents or expert witnesses, the adjudicative officer must 
consider factors bearing on the request, which include, but are not 
limited to:
    (1) If the attorney, agent or witness is in private practice, his or 
her customary fee for like services; if the attorney, agent or witness 
is an employee of the applicant, the fully allocated cost of service;
    (2) The prevailing rate for similar services in the community in 
which the attorney, agent or witness ordinarily performs services;
    (3) The time actually spent in the representation of the applicant;
    (4) The time reasonably spent in light of the difficulty or 
complexity of the issues in the proceeding; and
    (5) Such other factors as may bear on the value of the services 
provided.

Sec. 13.7  Studies, exhibits, analyses, engineering reports, tests and 
          projects.

    The reasonable cost (or the reasonable portion of the cost) for any 
study, exhibit, analysis, engineering report, test, project or similar 
matter prepared on behalf of a party may be awarded to the extent that:
    (a) The charge for the service does not exceed the prevailing rate 
payable for similar services,
    (b) The study or other matter was necessary to the preparation for 
the administrative proceeding, and
    (c) The study or other matter was prepared for use in connection 
with the administrative proceeding. No award will be made for a study or 
other matter which was necessary to satisfy statutory or regulatory 
requirements, or which would ordinarily be conducted as part of the 
party's business irrespective of the administrative proceeding.
