Section 504(a)(1) provides:

Any agency that conducts an adversary adjudication shall award, to a prevailing party other than the United States, fees and other expenses incurred by that party in connection with that proceeding, unless the adjudicative officer of the agency finds that the position of the agency was substantially justified or that special circumstances make an award unjust. Whether or not the position of the agency was substantially justified shall be determined on the basis of the administrative record, as a whole, which is made in the adversary adjudication for which fees and other expenses are sought.

§504(a)(1). Section 504(a)(2) provides:

A party seeking an award of fees and other expenses shall, within thirty days of a final disposition in the adversary adjudication, submit to the agency an application which shows that the party is a prevailing party and is eligible to receive an award under this section, and the amount sought, including an itemized statement from any attorney, agency, or expert witness representing or appearing in behalf of the party stating the actual time expended and the rete at which fees and other expenses were computed. The party shall also allege that the position of the agency was not substantially justified. When the United States appeals the underlying merits of an adversary adjudication, no decision on an application for fees and other expenses in connection with that adversary adjudication shall be made under this section until a final and unreviewable decision is rendered by the court on appeal or until the underlying merits of the case have finally been determined pursuant to the appeal.

§504(a)(2). Therefore, the plain language of §504 requires a party seeking attorney fees to show: (1) Claimant was a "prevailing party"; (2) the Government's position was not "substantially justified"; (3) no "special circumstances make an award unjust"; and (4) within thirty days of a final disposition in the adversary adjudication, the party must submit an application showing that he is a prevailing party and include an itemized statement of fees and expenses. See Commissioner, Immigration and Naturalization Service v. Jean, 496 U.S. 154, 158 (1990); 5 U.S.C. §§504(a)(1)(2).

   The only one of these elements at issue in the instant case for purposes of whether Petitioner may recover attorney fees under §504 is whether Petitioner is a prevailing party. Section 504 does not define the term "prevailing party." Therefore, it is necessary to look to how the courts have interpreted that term in regards to §504 cases as well as other attorney fee statutes.

   Mootness does not necessarily preclude the award of attorneys fees. See Bishop v. Committee on Professional Ethics and Conduct of the Iowa State Bar Association, 686 F.2d 1278, 1290 (8th Cir. 1982) (citing Midwest Growers Cooperative v. United States, 455 U.S. 942 (1982)). "In a case where the underlying action has been dismissed as moot on appeal, the propriety of an award of attorney's fees . . . turns on a determination of whether the plaintiff can be considered a 'prevailing party' in the underlying action in the district court." Bishop, 686 F.2d at 1290 (quoting United States v. Ford, 650 F.2d 1141, 1144 (9th Cir. 1981)). The determination of whether a party seeking attorney fees is a "prevailing party" is made without regard to whether the appeals court believes the District Court's decision on the underlying merits is correct. Bishop, 686 F.2d at 1290 (citing Curtis v. Taylor, 635 F.2d 645, 649 (5th Cir. 1980)). Even preliminary or temporary relief granted by the district court may be sufficient to make a plaintiff a "prevailing party . . .." Bishop, 686 F.2d at 1290.

   In Bishop, the plaintiff was an attorney who claimed that Iowa's restrictions on legal advertising violated his First Amendment rights. The District Court agreed, but the case was later held to be moot because plaintiff was subsequently disbarred. The 8th circuit held that because plaintiff was successful on four of his substantive claims at the District Court level, he was a prevailing party entitled to attorney fees for at least the time when the District Court entered judgment on the merits until the judgment vacating the case for mootness. See Bishop, supra. The extent to which a Claimant must be successful in their claims in order to be considered a prevailing party has been addressed in numerous subsequent cases.

   As the Court explained in Farrar v. Hobby, "[t]o qualify as a prevailing party, a civil rights plaintiff must obtain at least some relief on the merits of his claim." Farrar v. Hobby, 506 U.S. 103, 111 (1992). "If the plaintiff has succeeded on 'any significant issue in litigation which achieve[d] some of the benefits the parties sought in bringing suit,' the plaintiff has crossed the threshold to a fee award of some kind." Texas State Teachers Association v. Garland Independent School District, 489 U.S. 782, 791-792 (1989) (quoting Nadeau v. Helpgemoe, 581 F.2d 275, 278-279 (1st Cir. 1978)); See Paragould Music Company, Inc. v. City of Paragould, 738 F.2d 973, 974 (8th Cir. 1984). However, not every plaintiff victory will qualify him as a prevailing party for purposes of attorney fees.

   In Paragould Music Company, plaintiffs who owned a video arcade brought a §1983 action against city officials alleging that customers of the arcade were being harassed and illegally arrested and detained. Paragould Music Company, 738 F.2d at 974. The court ordered a temporary restraining order, but the arcade soon closed and the court dismissed the case as moot. Id. The owners requested attorney fees, but the court denied their request. In doing so, the court reasoned that the temporary restraining order did not give the plaintiffs prevailing party status once the case was dismissed as moot, because the order did not involve a determination of the merits of the underlying action. Rather, the temporary restraining order merely preserved the status quo. Id.

   In addition, to be considered a "prevailing party, "[t]he plaintiff must obtain an enforceable judgment against the defendant from whom fees are sought." Farrar, 506 U.S. at 111 (quoting Hewitt v. Helms, 482 U.S. 755, 760 (1987)). "Whatever relief the plaintiff secures must directly benefit him at the time of the judgment or settlement." Farrar, 506 U.S. at 11 (citing Hewitt, 482 U.S. at 764.) "In short, a plaintiff 'prevails' when actual relief on the merits of his claim materially alters the legal relationship between the parties by modifying the defendant's behavior in a way that directly benefits the plaintiff." Farrar, 506 U.S. at 111-112. See Yarbrough, 209 F.3d at 703.

   In the instant case, counsel for the Petitioner argues that Petitioner is a prevailing party entitled to fees. Petitioner asserts it is a prevailing party based on the ALJ's decision that ordered a new competition for the grant. Therefore, we next examine the facts in light of the case law and statutes outlined above to determine whether Petitioner may be considered a prevailing party for purposes of awarding attorneys fees.

   Under Bishop, mootness does not precluded Petitioner from being awarded attorney fees that accrued up until the time the ALJ made his decision ordering a recompetition of the grant. See Bishop, 686 F.2d at 1290. However, it remains necessary to determine whether the ALJ's decision to order a recompetition of the grant provided sufficient relief on the merits of the claim in order to render Petitioner a prevailing party as required by Farrar. See Farrar, 506 U.S. at 111.

   Under 20 C.F.R. §633.205(e), the only remedy available to MFET was to name it the recipient of the grant for the remainder of the grant period. As such, although the decision to order a recompetition of the grant was arguably a victory for the Petitioner, it did not render Petitioner successful on the merits of the case as required by Farrar, supra, to be considered a prevailing party.

   In order to be a prevailing party, Petitioner must obtain an enforceable judgment against the party from whom fees are sought. See Farrar, 506 U.S. at 111. In the instant case, Petitioner did not obtain an enforceable judgment against the Respondent for the following reasons. First, the ALJ's Decision and Order to recompete for the grant was outside the scope of the remedies allowed by the statute and thus not enforceable against Respondent. In addition, by the time the case arrived before the ARB on appeal, the fifteen month time limitation for ordering the remainder of the grant to be awarded to MFET had expired and no additional remedies remained for Petitioner against the Respondent.

   The quality of work Mr. Leventhal and his associates provided for MFET was exemplary and is to be commended. As explained in the undersigned's September 29, 1998, Decision and Order, the arguments, testimony and exhibits presented by Petitioner's counsels successfully proved their client was deprived of an equal opportunity to compete for the grant. However, I am bound by legal precedent. Therefore, because Petitioner did not receive actual relief on the merits of his claim in the form of an enforceable judgment, Petitioner may not be considered a prevailing party for the purpose of awarding attorney fees. It remains possible, however, that the Eighth Circuit may define the term "prevailing party" in a manner in which Petitioner would qualify, thereby allowing Petitioner's counsels to recover their well-earned attorney fees.

    The Claim by counsel for the Petitioner for attorney fees and expenses under 5 U.S.C. §504 is hereby DENIED.

      PAUL H. TEITLER
      Administrative Law Judge

Camden, NJ