Takeaway
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Corrective action before the issuing of a ruling on the merits can prevent a protester from recovering attorneys’ fees.
In a unanimous decision issued by the U.S. Court of Appeals for the Federal Circuit on May 1, 2017, the Court held that an otherwise successful protester could not recover its attorney’s fees under the Equal Access to Justice Act (EAJA) because it was not a “prevailing party” in circumstances where the procuring agency determined to take corrective action prior to a final decision of the trial court. (See Dellew Corporation v. United States, No. 2016-2304 (Fed. Cir. 2017).) The ruling reversed the Court of Federal Claims decision to award protester $79,456.76 in attorneys’ fees and costs. The decision highlights the risk to protesters at the Court of Federal Claims where the procuring agency determines to take corrective action prior to the issuance of a final merits decision by the trial court. In this particular case, at a hearing on the merits of the bid protest, the trial court encouraged the procuring agency (the U.S. Department of the Army) to take corrective action to avoid the Court’s issuance of a “needless ruling.” Ten days after the hearing, in a Joint Status Report, the Agency did just that and advised the Court it was taking corrective action. The Government then filed a motion to dismiss the action as moot, which the Court granted, albeit retaining jurisdiction over the action. Upon application by the successful protestor to recover its attorneys’ fees and costs under EAJA, the Court awarded $79,456.76 to protester.
In its May 1 decision, the Federal Circuit reversed, finding that the protester was not a “prevailing party” as required by EAJA for the recovery of such an award. The Federal Circuit determined that the Army’s decision to take corrective action was voluntary, since it was taken before a written or oral ruling on the merits. The Federal Circuit also determined that the trial court’s comments at the merits hearing “did not carry a sufficient judicial imprimatur” to change the legal relationship between the parties. Additionally, the Federal Circuit found that the trial court gave more weight to its own precedent, instead of deferring to the judicial precedent of the U.S. Supreme Court and the Federal Circuit.
The bottom line for protesters at the Court of Federal Claims is this—if the agency takes corrective action before the Court issues an oral or written ruling on the merits, the protester likely cannot recover its attorneys’ fees.
