IN THE MATTER OF: WIND CLAN CONSTRUCTION COMPANY, INC., PETITIONER

*1 On December 22, 2016, Wind Clan Construction Company, Inc. (“Petitioner”) filed a Motion for Attorneys' Fees (“Fee Petition”) with the U.S. Small Business Administration Office of Hearings and Appeals (“OHA”). In its Fee Petition, Petitioner asserts that as the prevailing party in Wind Clan Construction Company. Inc., SBA No. BDPE-2016-05-25-03, it is entitled to reimbursement of $7,492.50 for attorney fees expended in furtherance of the named appeal. See 5 U.S.C. § 504; 13 C.F.R. §§ 134.102(g), 134.601-618.

*1 On February 6, 2017, the U.S. Small Business Administration (“SBA” or the ““Agency”) filed a Response arguing that Petitioner is not eligible for reimbursement because Petitioner did not, among other things, provide its number of employees as of the date the administrative proceeding was initiated as required by 13 C.F.R. § 134.612(a)(5), or demonstrate a net worth of less than 7 million dollars at that time. 13 C.F.R. § 134.611 (a)(5). The Response also maintains that Petitioner did not meet the certification requirement imposed by 13 C.F.R. § 134.611(a)(8).

*1 The matter is now before this Court, pursuant to 5 U.S.C. § 504 and 13 C.F.R. § 134.102(g), to determine whether fees should be granted to Petitioner pursuant to the Equal Access to Justice Act (“EAJA”).¹

*1 On April 9, 2016, SBA's Associate Administrator for Business Development issued a determination finding that Petitioner is not an eligible 8(a) Business Development program based on its failure to provide sufficient evidence to overcome SBA's initial determination that a non-disadvantaged individual controls or has the power to control the firm. Petitioner appealed the Associate Administrator's determination, and on November 23, 2016, this Court issued a Decision finding that determination to be “arbitrary, capricious and contrary to law.”

*1 Petitioner filed a timely Fee Petition requesting attorneys' fees in the amount of $7,492.50 under the EAJA. On January 4, 2017, the Court issued a Briefing Schedule requiring a response from SBA by January 24, 2017.

*1 On January 10, 2017, SBA filed a Motion for Extension of Time requesting until February 6, 2017, to file its response. On January 23, 2017, the Court issued an Order Granting SBA's Motion. On February 6, 2017, SBA filed its timely Response. On February 13, 2017, Petitioner filed a Reply to SBA's Response to Petitioner's Motion for Attorney's Fees.²

*2 The Equal Access to Justice Act establishes procedures under which a party that prevails in certain types of administrative proceedings may apply for reimbursement of fees and other expenses incurred by that party in connection with the proceeding. 5 U.S.C. § 504; 13 C.F.R. § 134.601: see Total Solutions Inc., SBA No. EAJA-1104, 2011 WL 1086069, at *1 (2011) (describing the circumstances under which the EAJA allows for recovery of fees). A prevailing party recovers an award under the EAJA, if it demonstrates that: (1) it is eligible for reimbursement under the requirements set forth in the EAJA and its accompanying regulations; (2) the agency's position during the subject administrative proceeding was not substantially justified; and (3) the amount of the reimbursement requested is reasonable. See Tootle Constr., LLC. SBA No. EAJA-1105, 2012 WL 7784773, at *5-8 (2012).

*2 1. Eligibility Standards. A party seeking reimbursement under the EAJA bears the burden of demonstrating that it has met the EAJA's eligibility requirements and its accompanying regulations. Id. at 5. A party may request reimbursement under the EAJA if: (1) the party has prevailed over the SBA in a final decision arising out of an “adversary adjudication” and (2) the party meets the eligibility requirements listed in 13 C.F.R. § 134.606.

*2 “In order for an administrative proceeding to qualify, SBA must have been represented by counsel or by another representative who enters an appearance and participates in the proceeding.” 13 C.F.R. § 134.603. Only certain administrative proceedings qualify as adversary adjudications. Proceedings listed under 13 C.F.R. § 134.102(a), (i), and (j)(l) qualify, but those listed in 13 C.F.R. § 134.102(k) do not See 13 C.F.R. § 134.102(j)(l) (explicitly referring to appeals from 8(a) BD Program determinations based solely on a negative finding of social or economic disadvantage, or ownership or control).

*2 Additionally, section 134.606 states that a party is eligible for possible reimbursement if four conditions are met: (i) the party is an individual, owner of an unincorporated business, partnership, corporation, association, organization, or unit of local government; (ii) the party meets the definition of a party in 5 U.S.C. § 551(3); (iii) the party prevailed in the subject administrative proceeding; and (iv) the party meets certain net worth and employee eligibility requirements set forth in 13 C.F.R. § 134.606 & 134.607.

*3 Title 5 U.S.C. § 551(3) defines a party as including “a person or agency named or admitted as a party, or properly seeking and entitled as of right to be admitted as a party, in an agency proceeding, and a person or agency admitted by an agency as a party for limited purposes.”

*3 Under § 134.607, the owner of an unincorporated business is eligible for reimbursement if, as of the date the administrative proceeding was initiated, the business' net worth did not exceed $7 million and the business had no more than 500 employees. 13 C.F.R. § 134.607.

*3 Once the prevailing party has established eligibility the onus then shifts to the government, if it wishes to show that its position in the subject proceeding was substantially justified.

*3 2. Substantial Justification. A prevailing party that is found to be eligible may receive an award for fees and expenses unless the Court finds that the SBA's position in the subject proceeding was “substantially justified,” or special circumstances exist that would make the granting of an award unjust. 13 C.F.R. § 134.605(a). “The ‘position of the agency’ includes not only the position taken by SBA in the administrative proceeding, but also the position which it took in the action which led to the administrative proceeding.” An agency's position is substantially justified if it is “justified to a degree that could satisfy a reasonable person” because it has a “reasonable basis both in law and fact.” Pierce v. Underwood, 487 U.S. 552, 565 (1988).

*3 Once a petitioner asserts that the agency's position was not substantially justified, the burden is on the agency to show that its position was substantially justified and that it had a reasonable basis in fact and law. 13 C.F.R. § 134.605(a); Scarborough v. Principi, 541 U.S. 401, 414-15 (2004); Tootle Constr., SBA No. EAJA-1105, at 2. The fact that the SBA did not prevail in a proceeding does not create a presumption that the SBA's position was not substantially justified. 13 C.F.R. § 134.605(a); see Pierce, 487 U.S. at 569.

*3 3. Reasonable Fees and Expenses. Awards under the EAJA are calculated based only on fees and expenses actually incurred by the prevailing party. 13 C.F.R. § 134.610(a). An award for attorney fees may not exceed a maximum reimbursement rate of $75 per hour, regardless of the rate paid. 13 C.F.R. § 134.610(c).³ A party must submit an itemized invoice for the services of each provider for which the party is seeking reimbursement. 13 C.F.R. § 134.613. Each invoice must contain a description of the hours worked; the specific services provided; the rate at which fees were calculated; the total amount charged; and the provider's verification that the invoice is accurate. 13 C.F.R. § 134.613(a)-(e).

*4 In determining the reasonableness of the requested fees, the Court considers the provider's customary fee for similar services, the prevailing rate for similar services in the provider's community, the time actually spent representing the prevailing party, and the time reasonably spent on the case in light of the difficulty and complexity of the issues. 13 C.F.R. § 134.610(b)(l)-(4).

*4 The reviewing court has the discretion to determine what constitutes reasonable attorney fees, including the discretion to reduce or deny, the amount of the award requested as justice requires. See 5 U.S.C. § 504(a)(3); 13 C.F.R. § 134.605(b); Perdue v. Kenny A., 559 U.S. 542, 552 (2010) (reaffirming earlier decisions mat a court may enhance the amount of attorney fees awarded in rare and exceptional circumstances and discussing what those circumstances are); Hensley v. Eckerhart, 461 U.S. 424, 433-37(1983) (discussing factors the court should take into account when determining whether an upward or downward adjustment to the amount of fees is appropriate); see also Tootle Constr., SBA No. EAJA-1105, at 7-8 (finding that if petitioner were allowed reimbursement, it would be limited to $5,000, rather than the $6,315 petitioner requested); HUD v. Fung, HUDALJ No. 07-053-FH, 2011 WL 4346396, at *411 (2011) (discussing the reasonableness of the fees requested and concluding that $36,615 was the appropriate amount of reimbursement, rather than the $98,488 requested by the prevailing party).

*4 Eligibility. To demonstrate eligibility, Petitioner must show that the following four conditions are met: (i) Petitioner is an individual owner of an unincorporated business, partnership, corporation, association, or local government; (ii) the party meets the definition of a party under 5 U.S.C. § 551(3); (iii) the party prevailed in the prior proceeding; and (iv) the party meets certain net worth and employee eligibility requirements. 13 C.F.R. § 134.606.

*4 In this case, Petitioner is a business owned by Tara Peaden, the majority owner and CEO. Petitioner meets the definition of a party in 5 U.S.C. § 551 (3) because it is “a person or agency named or admitted as a party ...in an agency proceeding” (i.e. Petitioner was the named party and prevailing party in Wind Clan Construction Company. Inc., SBA No. BDPE-556 (2016). Ms. Peaden filed an Affidavit of Petitioner's Net Worth and Number of Employees, dated December 21, 2016, accompanying the Fee Petition. Attached to that affidavit were balance sheets for Petitioner for the time the adversarial proceeding commenced and the time of filing the Fee Petition. In response to the SBA Answer, petitioner filed a Supplemental Affidavit of Petitioner's Net Worth, No Affiliates, and Number of Employees, dated February 13, 2017, asserting that Petitioner's business net worth never exceeded $7 million dollars and that, aside from the two owners, Petitioner had two employees on the date the administrative proceeding was initiated. Ms. Peaden's Supplemental Affidavit also certified the accuracy and truthfulness of the matters stated in the petition and its attachments and that Petitioner is aware, as required by 13 C.F.R. § 134.611(a)(8), of the possible sanctions imposable by 18 U.S.C. § 1001. Accordingly, the Court finds Petitioner meets the eligibility requirements for this petition as specified by 13 C.F.R. § 134.606.

*5 Substantial Justification. Petitioner claims “the position of SBA in denying Petitioner's admission in the 8(a) program was not substantially justified.” The EAJA Petition cites to the Decision in Wind Clan Construction Company. Inc., SBA No. BDPE-556 (2016), where the Court specifically concluded the Associate Administrator for Business Development's determination to be “arbitrary, capricious and contrary to law”, and that the SBA's position in the proceeding was “not reasonable and was contrary to law.” Id. In the case at-hand, the SBA attempts to re-litigate the matters decided adversely in the underlying case. However well-stated the argument, the same result prevails. This Court plainly held that the Associate Administrator's decision was “arbitrary, capricious and contrary to law.” It is simply not possible to reconcile the Court's previous ruling with SBA's contention of ““substantial justification” in bringing the action.

*5 Reasonable Fees. At the time of its enactment, the EAJA provided that “attorney or agent fees shall not be awarded in excess of $75 per hour unless the agency determines by regulation that an increase in the cost of living or a special factor, such as the limited availability of qualified attorneys or agents for the proceedings involved, justifies a higher fee.” 5 U.S.C. § 504(b)(1)(A). As previously noted, subsequent raising of the statutory limit to $125 per hour was overridden by the SBA's continued imposition of a regulatory limit of $75 per hour.

*5 Petitioner presents credible and convincing evidence that it is entitled to receive compensation for the $7,492.50 it actually incurred in attorneys' fees for representation in the underlying Decision and in the present Fee Petition for a total of 33.3 hours of services, computed at the rate of $225 per hour.⁴ Such evidence includes detailed invoices, affidavits authenticating said invoices, and proof of payment. Petitioner also includes an Affidavit from Jesse W. Rigby, a disinterested attorney who has practiced since 1988 in the local Northwest Florida area where the prevailing fee for similarly competent and experienced attorneys would be $250 per hour. Upon review of the services rendered by Mr. Hatler the Court concludes that the hours expended and the amount billed and paid were reasonable. The Court would award that amount if permitted by statute and regulation, but that level of reimbursement is not authorized either under the EAJA statute or the SBA implementing regulation.⁵

*5 At the current statutory limit of $125 per hour, the Court could award the Petitioner only slightly over half the requested and justified attorney's fees paid. However, the Agency decision authority is not authorized to award fees exceeding the limit of SBA regulations. Accordingly, Petitioner's Fee Petition is, in part, GRANTED. Pursuant to SBA regulation, Petitioner is entitled to reimbursement for 33.3 hours of attorneys' fees at $75 per hour, totaling $2,535.

*6 So ORDERED,