The general rule in federal litigation is that each party pays its own attorneys’ fees. But general rules always have exceptions. When a lawsuit is brought by or against the federal government, and the government loses, the winner can recover attorneys’ fees and costs under the Equal Access to Justice Act. The fees must be reasonable and are only available if the government’s position was not “substantially justified.” But EAJA just states that “a court shall award” those costs and fees. When a case has gone up on appeal, a winning party must choose between filing its EAJA petition in the court of appeals or in the trial court. The Sixth Circuit recently illustrated this quirk when it sent an EAJA petition back to the trial court without deciding if the Sixth Circuit had the authority to hear the petition.

The Department of Labor sued Cathedral Buffet, a church-run restaurant, under the Fair Labor Standards Act. The trial court ruled against Cathedral, but the Sixth Circuit reversed. Then Cathedral filed an EAJA petition for costs and attorneys’ fees with the Sixth Circuit.

The Sixth Circuit denied the motion and sent the case back to the trial court to rule on Cathedral’s EAJA petition. Noting that EAJA “does not specify where a petition for costs and fees may or must be filed,” the Sixth Circuit observed that “it remains an open question in this circuit” whether the Court of Appeals can decide an EAJA petition. But in Cathedral’s case, where “fees are sought for the entire litigation,” the district court was in a better position to decide if the government’s case had been substantially justified.

The Sixth Circuit rejected Cathedral’s arguments which the court “distilled to a single point: [Cathedral] does not wish to argue before the district court that the DOL’s position in this case was unreasonable, when that same district court adopted the DOL’s position . . . .” But although this was “understandable,” judicial economy favored sending the petition back to the trial court, especially since more fact-finding might be needed. The Sixth Circuit, after all, “do[es] not have a witness chair. . . .”

Read the Sixth Circuit’s opinion here.