Richlin Security Service Co. v. Chertoff
Issues
Whether prevailing parties in actions brought against the United States under the Equal Access to Justice Act are entitled to receive reimbursement for paralegal services at their market value, or only at the cost to legal counsel for whom the services were provided.
Richlin Security Service Company entered into two contracts with the Immigration and Naturalization Service, now part of the Department of Homeland Security, to provide security guard services for detainees being held at the Los Angeles International Airport. Due to a mutual mistake, Richlin's employees were misclassified as "Guard I" instead of "Guard II" in the contracts, which resulted in their underpayment. Richlin litigated this case four times before the Department of Transportation Contract Appeals Board, which awarded Richlin payment for worker's compensation premiums, payroll taxes, and wages. Richlin then applied pursuant to the Equal Access to Justice Act for reimbursement of attorney fees, expenses and costs associated with the underlying litigation. Although Richlin was fully compensated for attorney's fees, the Board only awarded Richlin reimbursement of paralegal services at cost rather than the amount billed, resulting in a $40,000 deficiency in recovery. Richlin appealed the decision to the United States Court of Appeals for the Federal Circuit, which affirmed the Board's decision. Richlin argues that paralegal services should be reimbursed under "attorney's fees" because paralegals perform substantive work which contributes to attorney work product. The United States contends that Congress intended for paralegal services to be considered "expenses" under the EAJA, which are reimbursed at cost. The outcome of this case will impact citizens and organizations that rely on the EAJA to bring claims against the government for vindication of rights.
Questions as Framed for the Court by the Parties
Under the Equal Access to Justice Act (EAJA), 5 U.S.C. § 504(a)(l) and 28 U.S.C. § 2412(d)(1)(A), may a prevailing party be awarded attorney fees for paralegal services at the market rate for such services, as four circuits have held, or does EAJA limit reimbursement for paralegal services to cost only, as the Federal Circuit panel majority below held?
In 1990 and 1991, Richlin Security Service Company entered into fixed-price contracts with the Immigration and Naturalization Service to provide security guard services for detainees at the Los Angeles International Airport. Richlin Sec. Svc. Co. v. Chertoff, 472 F.3d 1370, 1371-72 (Fed. Cir. 2006).