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2000 - Rules and Regulations
Subpart PRules and Procedures Relating to the Recovery
of Attorney Fees and Other Expenses
§ 308.169 Scope.
This subpart, and the Equal Access to Justice Act
(5 U.S.C. 504), which it
implements, apply to adversary adjudications before the FDIC. The types
of adjudication covered by this subpart are those listed in
§ 308.01 of the Uniform
Rules. The Uniform Rules and subpart B of the Local Rules apply to any
proceedings to recover fees and expenses under this subpart.
[Codified to 12 C.F.R.
§ 308.169]
§ 308.170 Filing, content, and service of documents.
(a) Time to file. An application and any other pleading
or document related to the application shall be filed with the
Executive Secretary within 30 days after service of the final order of
the Board of Directors in disposition of the proceeding whenever:
(1) The applicant seeks an award pursuant to 5 U.S.C. 504(a)(1)
as the prevailing party in the adversary adjudication or in a discrete
significant substantive portion of the proceeding; or
(2) The applicant, in an adversary adjudication arising from an
action to enforce compliance with a statutory or regulatory
requirement, asserts pursuant to 5 U.S.C.
{{12-30-99 p.2166.08}}504(a)(4) that the demand by
the FDIC is substantially in excess of the decision of the
administrative law judge and is unreasonable when compared with such
decision under the facts and circumstances of the case.
(b) Content. The application and related documents
shall conform to the requirements of § 308.10(b) and (c) of the
Uniform Rules.
(c) Service. The application and related documents
shall be served on all parties to the adversary adjudication in
accordance with § 308.11
of the Uniform Rules, except that statements of net worth shall be
served only on counsel for the FDIC.
(d) Upon receipt of an application, the Executive Secretary shall
refer the matter to the administrative law judge who heard the
underlying adversary proceeding, provided that if the original
administrative law judge is unavailable, or the Executive Secretary
determines, in his or her sole discretion, that there is cause to refer
the matter to a different administrative law judge, the matter shall be
referred to a different administrative law judge.
[Codified to 12 C.F.R. § 308.170]
[Section 308.170 amended at 64 Fed. Reg. 62102, November
16, 1999]
§ 308.171 Responses to application.
(a) By FDIC. (1) Within 20 days after service of an
application, counsel for the FDIC may file with the Executive Secretary
and serve on all parties an answer to the application. Unless counsel
for the FDIC requests and is granted an extension of time for filing or
files a statement of intent to negotiate under § 308.179 of this
subpart, failure to file an answer within the 20-day period will be
treated as a consent to the award requested.
(2) The answer shall explain in detail any objections to the
award requested and identify the facts relied on in support of the
FDIC's position. If the answer is based on any alleged facts not
already in the record of the proceeding, the answer shall include
either supporting affidavits or a request for further proceedings under
§ 308.180.
(b) Reply to answer. The applicant may file a reply
with regard to an application filed pursuant to 5 U.S.C. 504(a)(1), if
the FDIC has addressed in its answer any of the following issues: that
the position of the FDIC was substantially justified, that the
applicant unduly protracted the proceedings, or that special
circumstances make an award unjust. The applicant may file a reply with
regard to an application filed pursuant to 5 U.S.C. 504(a)(4), if the
FDIC has addressed in its answer any of the following issues: that the
applicant has committed a willful violation of law or otherwise acted
in bad faith, that the FDIC's demand is reasonable when compared to
the decision of the administrative law judge or that special
circumstances make an award unjust. The reply shall be filed within 15
days after service of the answer. If the reply is based on any alleged
facts not already in the record of the proceeding, the reply shall
include either supporting affidavits or a request for further
proceedings under § 308.180.
(c) By other parties. Any party to the adversary
adjudication, other than the applicant and the FDIC, may file comments
on an application within 20 days after service of the application. If
the applicant is entitled to file a reply to the FDIC's answer under
paragraph (b) of this section, another party may file comments on the
answer within 15 days after service of the answer. A commenting party
may not participate in any further proceedings on the application
unless the administrative law judge determines that the public interest
requires such participation in order to permit additional exploration
of matters raised in the comments.
(d) Additional response. Additional filings in the
nature of pleadings may be submitted only by leave of the
administrative law judge.
[Codified to 12 C.F.R. § 308.171]
[Section 308.171 amended at 64 Fed. Reg. 62102, November
16, 1999]
§ 308.172 Eligibility of applicants.
(a) General rule. To be eligible for an award under
this subpart, an applicant must have been named or admitted as a party
to the proceeding. In addition, the applicant must show that it meets
all other conditions of eligibility set out in paragraph (b) of this
section.
{{12-30-99 p.2166.09}}
(b) Types of eligible applicant. The types of eligible
applicant are:
(1) An individual with a net worth of not more than $2,000,000 at
the time the adversary adjudication was initiated; or
(2) Any owner of an unincorporated business, or any partnership,
corporation, associations, unit of local government or organization,
the net worth of which did not exceed $7,000,000 and which did not have
more than 500 employees at the time the adversary adjudication was
initiated.
(3) For purposes of an application filed pursuant to 5 U.S.C.
504(a)(4), a small entity as defined in
5 U.S.C. 601.
(c) Factors to be considered. In determining the types
of eligible applicants:
(1) An applicant who owns an unincorporated business shall be
considered as an "individual" rather than a "sole owner of an
unincorporated business" if the issues on which he or she prevails
are related to personal interests rather than to business interests.
(2) An applicant's net worth includes the value of any assets
disposed of for the purpose of meeting an eligibility standard and
excludes the value of any obligations incurred for this purpose.
Transfers of assets or obligations incurred for less than reasonably
equivalent value will be presumed to have been made for this purpose.
(3) The net worth of a bank shall be established by the net worth
information reported in conformity with applicable instructions and
guidelines on the bank's Consolidated Report of Condition and Income
filed for the last reporting date before the initiation of the
adversary adjudication.
(4) The employees of an applicant include all those persons who
were regularly providing services for remuneration for the applicant,
under its direction and control, on the date the adversary adjudication
was initiated. Part-time employees are included as though they were
full-time employees.
(5) The net worth and number of employees of the applicant and
all of its affiliates shall be aggregated to determine eligibility. The
aggregated net worth shall be adjusted if necessary to avoid counting
the net worth of any entity twice. As used in this subpart,
"affiliates" are individuals, corporations, and entities that
directly or indirectly or acting through one or more entities control a
majority of the voting shares of the applicant; and corporations and
entities of which the applicant directly or indirectly owns or controls
a majority of the voting shares. The Board of Directors may, however,
on the recommendation of the administrative law judge, or otherwise,
determine that such aggregation with regard to one or more of the
applicant's affiliates would be unjust and contrary to the purposes of
this subpart in light of the actual relationship between the affiliated
entities. In such a case the net worth and employees of the relevant
affiliate or affiliates will not be aggregated with those of the
applicant. In addition, the Board of Directors may determine that
financial relationships of the applicant other than those described in
this paragraph constitute special circumstances that would make an
award unjust.
(6) An applicant that participates in a proceeding primarily on
behalf of one or more other persons or entities that would be
ineligible is not itself eligible for an award.
[Codified to 12 C.F.R. § 308.172]
[Section 308.172 amended at 64 Fed. Reg. 62102, November
16, 1999]
§ 308.173 Prevailing party.
(a) General rule. An eligible applicant who, following
an adversary adjudication has gained victory on the merits in the
proceeding is a "prevailing party". An eligible applicant may be
a "prevailing party" if a settlement of the proceeding was
effected on terms favorable to it or if the proceeding against it has
been dismissed. In appropriate situations an applicant may also have
prevailed if the outcome of the proceeding has substantially vindicated
the applicant's position on the significant substantive matters at
issue, even though the applicant has not totally avoided adverse final
action.
(b) Segregation of costs. When a proceeding has
presented a number of discrete substantive issues, an applicant may
have prevailed even though all the issues were not resolved in its
favor. If such an applicant is deemed to have prevailed, any award
shall be based on the fees and expenses incurred in connection with the
discrete significant
{{12-30-99 p.2166.10}}substantive issue or issues on
which the applicant's position has been upheld. If such segregation of
costs is not practicable, the award may be based on a fair proration of
those fees and expenses incurred in the entire proceeding which would
be recoverable under § 308.175 if proration were not performed,
whether separate or prorated treatment is appropriate, and the
appropriate proration percentage, shall be determined on the facts of
the particular case. Attention shall be given to the significance and
nature of the respective issues and their separability and
interrelationship.
[Codified to 12 C.F.R.
§ 308.173]
§ 308.174 Standards for awards.
(a) For applications filed pursuant to
5 U.S.C. 504(a)(1), a prevailing
applicant may receive an award for fees and expenses unless the
position of the FDIC during the proceeding was substantially justified
or special circumstances make the award unjust. An award will be
reduced or denied if the applicant has unduly or unreasonably
protracted the proceedings. Awards for fees and expenses incurred
before the date on which the adversary adjudication was initiated are
allowable if their incurrence was necessary to prepare for the
proceeding.
(b) For applications filed pursuant to 5 U.S.C. 504(a)(4), an
applicant may receive an award unless the demand by the FDIC was
reasonable when compared with the decision of the administrative law
judge, the applicant has committed a willful violation of law or
otherwise acted in bad faith, or special circumstances make an award
unjust.
[Codified to 12 C.F.R. § 308.174]
[Section 308.174 amended at 64 Fed. Reg. 62102, November
16, 1999]
§ 308.175 Measure of awards.
(a) General rule. Awards will be based on rates
customarily charged by persons engaged in the business of acting as
attorneys, agents, and expert witnesses, even if the services were made
available without charge or at a reduced rate, provided that no award
under this subpart for the fee of an attorney or agent may exceed $125
per hour. No award to compensate an expert witness may exceed the
highest rate at which the FDIC pays expert witnesses. An award may
include the reasonable expenses of the attorney, agent, or expert
witness as a separate item, if the attorney, agent, or expert witness
ordinarily charges clients separately for such expenses. "Fees and
expenses awarded under 5 U.S.C. 504(a)(4) related to defending against
an excessive demand shall be paid only as a consequence of
appropriations paid in advance".
(b) Determination of reasonableness of fees. In
determining the reasonableness of the fee sought for an attorney,
agent, or expert witness, the administrative law judge shall consider
the following:
(1) If the attorney, agent, or expert witness is in private
practice, his or her customary fee for like services, or, if he or she
is an employee of the applicant, the fully allocated cost of the
services;
(2) The prevailing rate for similar services in the community in
which the attorney, agent, or expert 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.
(c) Awards for studies. The reasonable cost of any
study, analysis, test, project, or similar matter prepared on behalf of
an applicant may be awarded to the extent that the charge for the
service does not exceed the prevailing rate payable for similar
services, and the study or other matter was necessary for preparation
of the applicant's case and not otherwise required by law or sound
business or financial practice.
[Codified to 12 C.F.R. § 308.175]
[Section 308.175 amended at 64 Fed. Reg. 62102, November
16, 1999]
{{12-30-99 p.2166.11}}
§ 308.176 Application for awards.
(a) Contents. An application for an award of fees and
expenses under this subpart shall contain:
(1) The name of the applicant and an identification of the
proceeding;
(2) For applications filed pursuant to
5 U.S.C. 504(a)(1), a showing
that the applicant has prevailed, and an identification of each issue
with regard to which the applicant believes that the position of the
FDIC in the proceeding was not substantially justified;
(3) For applications filed pursuant to 5 U.S.C. 504(a)(4), a
showing that the demand by the FDIC is substantially in excess of the
decision of the administrative law judge and is unreasonable when
compared with such decision under the facts and circumstances of the
case;
(4) A statement of the amount of fees and expenses for which an
award is sought;
(5) For applications filed pursuant to 5 U.S.C. 504(a)(4), a
statement of the amount of fees and expenses which constitute
appropriations paid in advance;
(6) If the applicant is not an individual, a statement of the
number of its employees on the date the proceeding was initiated;
(7) A description of any affiliated individuals or entities, as
defined in § 308.172(c)(5), or a statement that none exist;
(8) A declaration that the applicant, together with any
affiliates, had a net worth not more than the ceiling established for
it by § 308.172(b) as of the date the proceeding was initiated;
(9) For applications filed pursuant to 5 U.S.C. 504(a)(1), a
statement whether the applicant is a small entity as defined in
5 U.S.C. 601; and
(10) Any other matters that the applicant wishes the FDIC to
consider in determining whether and in what amount an award should be
made.
[Codified to 12 C.F.R. § 308.176]
[Section 308.176 amended at 64 Fed. Reg. 62102, November
16, 1999]
§ 308.177 Statement of net worth.
(a) General Rule. A statement of net worth must be
filed with the application for an award of fees. The statement shall
reflect the net worth of the applicant and all affiliates of the
applicant.
(b) Contents. (1) The statement of net worth may be in
any form convenient to the applicant which fully discloses all the
assets and liabilities of the applicant and all the assets and
liabilities of its affiliates, as of the time of the initiation of the
adversary adjudication. Unaudited financial statements are acceptable
unless the administrative law judge or the Board of Directors otherwise
requires. Financial statements or reports to a Federal or state agency,
prepared before the initiation of the adversary adjudication for other
purposes, and accurate as of a date not more than three months prior to
the initiation of the proceeding, are acceptable in establishing net
worth as of the time of the initiation of the proceeding, unless the
administrative law judge or the Board of Directors otherwise requires.
(2) In the case of applicants or affiliates that are not banks,
net worth shall be considered for the purposes of this subpart to be
the excess of total assets over total liabilities, as of the date the
underlying proceeding was initiated, except as adjusted under
§ 308.172(c)(2). Assets and liabilities of individuals shall include
those beneficially owned within the meaning of the FDIC's rules and
regulations.
(3) If the applicant or any of its affiliates is a bank, the
portion of the statement of net worth which relates to the bank shall
consist of a copy of the bank's last Consolidated Report of Condition
and Income filed before the initiation of the adversary adjudication.
In all cases the administrative law judge or the Board of Directors may
call for additional information needed to establish the applicant's net
worth as of the initiation of the proceeding. Except as adjusted by
additional information that was called for under the preceding
sentence, net worth shall be considered for the purposes of this
subpart to be the total equity capital (or, in the case of mutual
savings banks, the total surplus accounts) as
{{12-30-99 p.2166.12}}reported, in conformity with
applicable instructions and guidelines, on the bank's Consolidated
Report of Condition and Income filed for the last reporting date before
the initiation of the proceeding.
(c) Statement confidential. Unless otherwise ordered by
the Board of Directors or required by law, the statement of net worth
shall be for the confidential use of counsel for the FDIC, the Board of
Directors, and the administrative law judge.
[Codified to 12 C.F.R.
§ 308.177]
§ 308.178 Statement of fees and expenses.
The application shall be accompanied by a statement fully
documenting the fees and expenses for which an award is sought. A
separate itemized statement shall be submitted for each professional
firm or individual whose services are covered by the application,
showing the hours spent in work in connection with the proceeding by
each individual, a description of the specific services performed, the
rate at which each fee has been computed, any expenses for which
reimbursement is sought, the total amount claimed, and the total amount
paid or payable by the applicant or by any other person or entity for
the services performed. The administrative law judge or the Board of
Directors may require the applicant to provide vouchers, receipts, or
other substantiation for any expenses claimed.
[Codified to 12 C.F.R.
§ 308.178]
§ 308.179 Settlement negotiations.
If counsel for the FDIC and the applicant believe that the issues in
a fee application can be settled, they may jointly file with the
Executive Secretary with a copy to the administrative law judge a
statement of their intent to negotiate a settlement. The filing of this
statement shall extend the time for filing an answer under § 308.171
for an additional 30 days, and further extensions may be granted by the
administrative law judge upon the joint request of counsel for the FDIC
and the applicant.
[Codified to 12 C.F.R. § 308.179]
[Section 308.179 amended at 64 Fed. Reg. 62102, November
16, 1999]
§ 308.180 Further proceedings.
(a) General rule. Ordinarily, the determination of a
recommended award will be made by the administrative law judge on the
basis of the written record. However, on request of either the
applicant or the FDIC, or on his or her own initiative, the
administrative law judge may order further proceedings such as an
informal conference, oral argument, additional written submissions, or
an evidentiary hearing. Such further proceedings will be held only when
necessary for full and fair resolution of the issues arising from the
application and will be conducted promptly and expeditiously.
(b) Request for further proceedings. A request for
further proceedings under this section shall specifically identify the
information sought or the issues in dispute and shall explain why
additional proceedings are necessary.
(c) Hearing. Ordinarily, the administrative law judge
shall hold an oral evidentiary hearing only on disputed issues of
material fact which cannot be adequately resolved through written
submissions.
[Codified to 12 C.F.R.
§ 308.180]
§ 308.181 Recommended decision.
The administrative law judge shall file with the Executive Secretary
a recommended decision on the fee application not later than 90 days
after the filing of the application or 30 days after the conclusion of
the hearing, whichever is later. The recommended decision shall include
written proposed findings and conclusions on the applicant's
eligibility and its status as a prevailing party and an explanation of
the reasons for any difference between the amount requested and the
amount of the recommended award. The recommended decision shall also
include, if at issue, proposed findings on whether the FDIC's position
was substantially justified, whether the applicant unduly protracted
the proceedings, or
{{12-30-99 p.2166.12-A}}whether special circumstances
make an award unjust. The administrative law judge shall file the
record of the proceeding on the fee application and, at the same time,
serve upon each party a copy of the recommended decision, findings,
conclusions, and proposed order.
[Codified to 12 C.F.R.
§ 308.181]
§ 308.182 Board of Directors action.
(a) Exceptions to recommended decision. Within 20 days
after service of the recommended decision, findings, conclusions, and
proposed order, the applicant or counsel for the FDIC may file with the
Executive Secretary written exceptions thereto. A supporting brief may
also be filed.
(b) Decision of Board of Directors. The Board of
Directors shall render its decision within 60 days after the matter is
submitted to it by the Executive Secretary. The Executive Secretary
shall furnish copies of the decision and order of the Board of
Directors to the parties. Judicial review of the decision and order may
be obtained as provided in 5 U.S.C.
504(c)(2).
[Codified to 12 C.F.R.
§ 308.182]
§ 308.183 Payment of awards.
An applicant seeking payment of an award made by the Board of
Directors shall submit to the Executive Secretary a statement that the
applicant will not seek judicial review of the decision and order or
that the time for seeking further review has passed and no further
review has been sought. The FDIC will pay the amount awarded within 30
days after receiving the applicant's statement, unless judicial review
of the award or of the underlying decision of the adversary
adjudication has been sought by the applicant or any other party to the
proceeding.
[Codified to 12 C.F.R. § 308.183]
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