Bankruptcy Efforts: The Ninth Circuit Denies 28 U.S.C. § 2412(d)(1)(A) Recovery Of Attorney Fees To Debtors Who Successfully Appealed Denials Of Their Chapter 13 Bankruptcy Plans

A Bankruptcy Court Does Not Fall Within The Definition Of “United States” Under The Equal Access to Justice Act, And An Uncontested Bankruptcy Case Does Not Constitute A Civil Action Brought By Or Against The United States.

            Four separate debtors, in four separate actions, successfully appealed to the 9^th Circuit after their unopposed Chapter 13 plans were denied by the lower bankruptcy court and Bankruptcy Appellate Panel (“BAP”) due to their estimated, rather than fixed, plan durations.  Afterward, each debtor moved against the bankruptcy court and BAP under the Equal Access to Justice Act (“EAJA”), 28 U.S. Code § 2412 – seeking to recover the attorney fees they incurred.

            The EAJA, under 28 U.S.C. § 2412(d)(1)(A), provides that “[A] court shall award to a prevailing party . . . fees and other expenses . . . incurred by that party in any civil action . . . including proceedings for judicial review of agency action, brought by or 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.”

            Due to the similar circumstances underlying the four fee requests, the 9^th Circuit considered them together in In re: Nanette Sisk, Case Nos. 18-17445 et al. (9^th Cir. September 1, 2020) (published).  While the 9^th Circuit acknowledged that Debtors’ counsel spent considerable time and resources pursuing the successful appeals, it nonetheless denied debtors’ applications for fees.

            Because the EAJA provides separate definitions for “court” and “United States,” a bankruptcy court does not fall within the EAJA’s definition of “United States,” and uncontested bankruptcy cases do not constitute “civil action[s] brought by or against the United States” within the meaning of the EAJA.  “[B]ecause the EAJA is a limited waiver of the government’s sovereign immunity, it must be strictly construed in favor of maintaining immunity not specifically and clearly waived.”  Kreines v. United States, 33 F.3d 1105, 1109 (9th Cir. 1994).