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The Honorable Dennis DeConcini
Chairman

Subcommittee on Improvements
Committee on the Judiciary

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June 7, 1979

In conclusion, the AMA is sympathetic and supportive of the intent of this legislation. We agree that steps must be taken to restore a balance between government and citizens, to increase the public accountability of the bureaucracy and to deter inappropriate agency adjudications. However, we do not believe, for the reasons already ennunciated, that S 265 is the proper vehicle to achieve these goals. We believe that our draft proposal is a better means of attaining these desirable results and we urge its enactment by the Congress.

Sincerely,

Janith fam

James H. Sammons, M.D.

JHS: RBF/dap
Enclosure

January, 1979

REIMBURSEMENT OF LITIGATION COSTS FOR PARTIES WHO PREVAIL

IN ACTIONS BEFORE ADMINISTRATIVE AGENCIES

The cost of defending administrative actions before federal regulatory agencies often can be staggering. In fact, parties have been known to capitulate to agency demands and enter into consent decrees, even when they have had a reasonable chance of success, rather than suffer the enormous costs of seeking vindication. With the growth of more federal agency authority, it can be expected that there will be more complex, expensive and protracted litigation.

The draft bill would ameliorate the hardships by requiring administrative agencies to reimburse victorious defendants in actions initiated by the agency for reasonable attorney's fees and other costs directly related to the defense of the action. When a party prevails on only part of the charges made by the agency, the party would be reimbursed only for the cost directly related to defending the claims that were successfully defended. Agencies would be required to establish a reserve fund to insure payment of costs to prevailing parties.

American Medical Association, Legislative Department, Public Affairs Division

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96th Congress
Ist Session

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DRAFT

To amend the Administrative Procedure Act (Chapter 5 of Title 5, U.S. Code) to
require the award of reasonable attorney fees and other relevant costs to persons
successfully defending adjudicatory proceedings conducted by Administrative
Agencies.

Be it enacted by the Senate and House of Representatives of the United
States of America in Congress assembled:

SECTION 1. Subchapter 2 of Chapter 5 of Title 5 of the U.S. Code is amended
by inserting directly after Section 558 a new Section 558a, as follows:
"Section 558a: (a) This Section applies to all actions initiated by an

agency, or by a person before an agency, that are subject to
the provisions of Section 554 of this Chapter, where a reasonable
estimate of attorney's fees and other costs directly related in
defending such an action is expected to exceed $5,000, or such
lower amount determined in regulations issued by the agency.

(b) (1) In cases where an agency has initiated, on its own initiative,

an adjudicatory action wherein a person is named as party

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(2)

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defendant (or such other similar identification, where applicable) and such party-defendant prevails on all charges, allegations and claims raised against him in such action,

the agency shall reimburse such party-defendant for all
reasonable attorney fees and other costs directly related
to defending the action before the agency.

In cases where an agency has initiated, on its own initiative,
an adjudicatory action naming a person as a party-defendant
(or such other designation where applicable) and such party-
defendant prevails on some, but not all of the charges, claims
and allegations raised in the action against him, the agency
shall reimburse such party-defendant for all reasonable
attorney's fees and other costs directly related to defending
the charges, claims and allegations raised on which the
party-defendant has prevailed.

At the time an agency initiates an adjudicatory action subject
to the provisions of Section 554 of this Subchapter, it shall,
for purposes of this section, reserve from its currently appropri-
ated operating funds, an amount equal to 50% of a reasonable
estimate of the attorney's fees and other expenses directly related
to the defense of the action by all party-defendants.

Agencies subject to the requirements of this section may request
such funds, as necessary to meet its obligations pursuant to this
Subsection, through the general appropriations process."'

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SECTION 2. The analysis of Chapter 5 of Title 5, United States Code, is

amended by inserting immediately after the item relating to Section 558

of such Title the following new item:

"558a. Attorney's fees and other costs: Prevailing parties."

51-438 079 - 10

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