Gerald K. Kandel, Robert E. Knopes, Federico A. Maura, Stanley A. Zuckerman, Ronald… v. United States

NOTE: This disposition is nonprecedential.
United States Court of Appeals
for the Federal Circuit
______________________
GERALD K. KANDEL, ROBERT E. KNOPES,
FEDERICO A. MAURA, STANLEY A. ZUCKERMAN,
RONALD M. MARTINEZ,
Plaintiffs-Appellants
v.
UNITED STATES,
Defendant-Appellee
______________________
2024-2193
______________________
Appeal from the United States Court of Federal Claims
in No. 1:06-cv-00872-DAT, Judge David A. Tapp.
______________________
Decided: February 4, 2026
______________________
ROGER J. MARZULLA, Marzulla Law, LLC, Washington,
DC, argued for plaintiffs-appellants. Also represented by
NANCIE GAIL MARZULLA.
BLAKE WILLIAM COWMAN, Commercial Litigation
Branch, Civil Division, United States Department of Jus-
tice, Washington, DC, argued for defendant-appellee. Also
represented by REGINALD THOMAS BLADES, JR., PATRICIA
M. MCCARTHY, BRETT SHUMATE.
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KANDEL v. US 2
______________________
Before LOURIE, BRYSON, and REYNA, Circuit Judges.
BRYSON, Circuit Judge.
In this appeal from the Court of Federal Claims (“the
Claims Court”), the appellants challenge the denial of their
motion for attorney fees and costs under the Equal Access
to Justice Act (“EAJA”), 28 U.S.C. 2412. The two issues
raised on appeal are (1) whether EAJA authorizes an
award of the fees and expenses of the class administrator
in this class action, and (2) whether the government’s con-
duct—both prior to suit and in the litigation—was “sub-
stantially justified.” Because the Claims Court did not
expressly address the issue of whether the government’s
pre-suit conduct was substantially justified, we vacate the
court’s order and direct that it address that issue; if the
Claims Court finds against the government on that ques-
tion, it will have to address whether EAJA authorizes an
award of class administrator’s fees and expenses.
I
Under the Lump Sum Act, 5 U.S.C. § 5551(a), federal
employees who leave government service are entitled to a
lump-sum payment for their unused annual leave. This
case was focused on whether cost of living adjustments, lo-
cality increases, and other adjustments should be included
in the calculation of that lump-sum payment.
Prior to 1999, according to the government, the Federal
Personnel Manual, published by the Office of Personnel
Management (“OPM”), directed that the rate of pay for the
lump sum to be paid to a departing employee was to be cal-
culated based on the rate the employee was receiving im-
mediately prior to leaving government service. Federal
Personnel Manual Supp. 990-2, Bk. 550, Subch. S2 § S2-
3(a). In 1999, OPM issued a regulation directing that, go-
ing forward, such lump sum payments would include the
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KANDEL v. US 3
various adjustments that “become effective during the
lump-sum leave period,” i.e., adjustments that the sepa-
rated employee would otherwise have received had the em-
ployee’s separation date been extended by the period of
unused annual leave. 5 C.F.R. § 550.1205(b); see also 5
C.F.R. §§ 550.1201–07.
In 1999, a group of former government employees filed
a class action in the Claims Court styled Archuleta v.
United States, No. 99-205C. The employees alleged that
the class members had been underpaid for their accumu-
lated vacation time because, prior to 1999, the lump sum
payments did not include cost of living adjustments, local-
ity pay increases, and other pay adjustments. After a set-
tlement was reached with the former employees of 17
agencies, the claims of the former employees of the remain-
ing agencies were severed into two cases, styled Athey v.
United States, No. 99-2051C, and Solow v. United States,
No. 06-872C. The Solow case was later renamed Kandel v.
United States, the case from which the present dispute has
arisen. Former employees of the Department of Veterans
Affairs were placed in the Athey case, and former employ-
ees of all other remaining agencies became members of the
Kandel case. See Appellee’s Br. 3–5 & n.2.
The Claims Court certified the Kandel class in April
2012 and appointed class counsel and a class administrator
at that time. J.A. 57–60. Following various rulings that
had the effect of substantially narrowing the class, the
Claims Court eventually approved two separate Kandel
subclass settlements in 2020 and 2021. J.A. 113–18, J.A.
134–39.1 The government paid the plaintiffs a total of
$305,208.46 pursuant to those two settlements. Unlike
many class action settlements, the two Kandel settlements
1 According to the government, there were a total of
1196 class members in those two subclasses at the time of
the settlements. Appellee’s Br. 17.
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KANDEL v. US 4
did not address the issues of attorney fees or costs. See
Kandel v. United States, 171 Fed. Cl. 672, 676 (2024).
The Kandel class subsequently sought an order direct-
ing the government to pay into the settlement fund an
award to cover attorney fees and expenses. The request
included a total of $2,582,670,92 in attorney fees and ex-
penses and $754,511.13 in administrative fees and ex-
penses for the class administrator, Epiq Systems, Inc.
Kandel v. United States, 160 Fed. Cl. 255, 255–56 (Fed. Cl.
2022). The plaintiffs based that claim for fees and costs on
subsection (b) of EAJA, 28 U.S.C. § 2412(b), relying on the
so-called “common fund” doctrine. The Claims Court de-
nied that request. Id. The court based its ruling on this
court’s decision in Athey v. United States, No. 2020-2291,
2021 WL 4282593 (Fed. Cir. Sept. 21, 2021) (non-preceden-
tial), aff’g, 149 Fed. Cl. 497 (2020).
In the Athey case, we upheld the Claims Court’s deci-
sion denying the plaintiffs’ motion for fees and expenses, in
which the plaintiffs based their claims on EAJA subsec-
tions (b) and (d), 28 U.S.C. 2412(b), (d). With respect to
EAJA subsection (b), we explained that the “common fund”
theory of recovery does not impose additional liability on
the losing defendant, but “is essentially a suit for contribu-
tion from third party beneficiaries for expenses actually in-
curred.” Athey, 2021 WL 4282593, at *3 (quoting Knight v.
United States, 982 F.2d 1573, 1579–80 (Fed. Cir. 1993)).
We noted that EAJA subsection (b) applies “only in certain,
specified conditions—namely, ‘under the common law or
under the terms of any statute which specifically provides
for such an award.’” Id. That provision, we explained,
“simply reflects the belief that, at a minimum, the United
States should be held to the same standards in litigating
as private parties.” Id. (quoting Gavette v. OPM, 808 F.2d
1456, 1466 (Fed. Cir. 1986)). Because the common fund
theory would not require the defendant in a private action
to pay the fees and costs of a plaintiff’s lawsuit, we held
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KANDEL v. US 5
that the common fund theory could not be invoked to re-
quire the government to make such an award.
With respect to EAJA subsection (d), we held in Athey
that an award of attorney fees and expenses could be based
on that subsection only if the government’s conduct was not
“substantially justified.” 2021 WL 4282593, at *5. After
reviewing the history of the case, we held that the Claims
Court did not abuse its discretion in determining that the
government’s conduct was substantially justified. Id. at
*5–6. We therefore affirmed the Claims Court’s decision
denying the request for an award of fees and costs.
In this case, after failing in 2022 to obtain an award of
fees and expenses under EAJA subsection (b), the plaintiffs
again moved for fees and costs, this time under EAJA sub-
section (d). J.A. 290–97.2 The Claims Court denied that
motion, holding that while the class qualified as a prevail-
ing party in the litigation, the government’s position was
substantially justified. For that reason, the court held that
attorney fees and expenses could not be awarded under
EAJA subsection (d). Kandel v. United States, 171 Fed. Cl.
672 (2024) (J.A. 1–11). The plaintiffs then took this appeal.
II
We review decisions of the Court of Federal Claims re-
garding requests for attorney fees and costs for abuse of
discretion. DGR Assocs., Inc. v. United States, 690 F.3d
1335, 1340 (Fed. Cir. 2012) (citing Pierce v. Underwood,
487 U.S. 552, 558 (1988)). “Thus, only if the trial court
2 This subsequent motion under subsection (d)
sought $730,021.34 in fees for Epiq, as opposed to the
$754,511.13 sought in the previous motion under subsec-
tion (b). Similarly, the attorney fees and expenses sought
in each motion varied slightly, although the basic requests
were similar. Compare Kandel, 160 Fed. Cl. at 255–56,
with Kandel, 171 Fed. Cl. at 677 (J.A. 1–11).
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KANDEL v. US 6
erred in interpreting the law or exercised its judgment on
clearly erroneous findings of material fact, or its decision
represents an irrational judgment in weighing the relevant
factors can its decision be overturned.” Chiu v. United
States, 948 F.2d 711, 713 (Fed. Cir. 1991) (citations omit-
ted).
III
The plaintiffs argue that class administrator’s fees and
expenses may be awarded under EAJA as a “discrete reim-
bursable cost category in a prevailing [party’s] request for
attorney’s fees” separate from, and in addition to, the set-
tlement payment. Appellant’s Br. 21. At oral argument,
counsel for the plaintiffs stated that the plaintiffs’ argu-
ment for reimbursement of the class administrator’s fees
and expenses was based on EAJA subsection (b), not sub-
section (d). Oral Argument in Case No. 2024-2193, 3:35–
5:48, at https://www.cafc.uscourts.gov/oral-arguments/24-
2193_01122026.mp3. However, the plaintiffs did not make
that argument in their briefs before this court, which were
exclusively directed to EAJA subsection (d).3 For that rea-
son, the plaintiffs have waived any arguments relating to
subsection (b). See SmithKline Beecham Corp. v. Apotex
Corp., 439 F.3d 1312, 1319 (Fed. Cir. 2006); Becton Dickin-
son & Co. v. C.R. Bard, Inc., 922 F.2d 792, 800 (Fed. Cir.
3 As noted, the plaintiffs previously filed a motion
seeking fees and expenses under EAJA subsection (b),
which the Claims Court denied. Kandel, 160 Fed. Cl. 255.
The plaintiffs did not appeal from that order and do not
refer to that order in their briefs. Nothing in their briefs
indicates that the subsection (b) argument is part of this
appeal. Moreover, the plaintiffs’ notice of appeal refers
only to the Claims Court’s decision of June 12, 2024, not to
the Claims Court’s earlier decision in 2022, which ad-
dressed the plaintiffs’ arguments under EAJA subsection
(b). See J.A. 244.
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KANDEL v. US 7
1990). Even if that argument was not waived, we find that
the class administrator’s fees and expenses in this case are
not awardable under EAJA subsection (b) for the reasons
given below.
A
EAJA subsection (b) provides that “a court may award
reasonable fees and expenses of attorneys,” in addition to
generally recoverable costs under 28 U.S.C. § 1920, to the
extent that such fees or expenses are available “under the
common law or under the terms of any statute which spe-
cifically provides for such an award.” 28 U.S.C. § 2412(b).
While the plaintiffs cite several cases in which courts
have awarded class administrator fees and expenses as
part of settlements in class action cases, none of those cases
involved awards of class administrator fees and expenses
separate and in addition to the agreed amount of the set-
tlement. Rather, the cited cases all involve situations in
which the settlement agreement expressly provided for the
payment of administrator fees and expenses from the set-
tlement fund.
In Athey, we held that EAJA subsection (b) requires
that there must be a “predicate basis for shifting fees in
either ‘the common law or under the terms of any statute
which specifically provides for such an award.’” Athey,
2021 WL 4282593 at *4. While such costs are frequently
provided for in class action settlements, they were not pro-
vided for in the two settlements at issue in this case, and
the plaintiffs have not pointed to any source in common law
or statute that would authorize shifting those class admin-
istrator fees and expenses. EAJA subsection (b) therefore
provides no basis for shifting those costs to the govern-
ment.
The plaintiffs’ arguments to the contrary are unavail-
ing. First, they argue that it is unreasonable that Epiq
should not be paid for the work it did as the class
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KANDEL v. US 8
administrator. But Epiq entered into a contract with the
plaintiffs’ representatives. See J.A. 282–86. Absent a stat-
utory basis for shifting the burden of compensating Epiq to
the government, Epiq must look to its contracting partners
for relief.
The plaintiffs’ second argument is that the court ap-
pointed Epiq as the class administrator. But the court’s
responsibility for appointing a class representative, like
the court’s responsibility for appointing class counsel, is to
protect the class against possible abuses. See In re Rite Aid
Corp. Sec. Litig., 396 F.3d 294, 307 (3d Cir. 2005) (The
court acts “as a fiduciary for the class.”). The appointment
does not impose on the government the responsibility to
pay Epiq for its services unless the government agreed to
do so in the settlement agreement. And in this case, the
settlement agreements did not so provide.4 We therefore
reject the plaintiffs’ argument that they are entitled to an
award of the class administrator’s fees and expenses under
EAJA subsection (b).
B
At oral argument, counsel for the plaintiffs appears to
have disclaimed reliance on EAJA subsection (d) as a
ground for seeking an award of class administrator fees
4 It is not surprising that the government did not
agree to include attorney fees and the class administrator’s
fees and expenses as part of the settlements, since the
amount of the requested attorney fees ($2,779,559.55 or, at
a minimum, $744,763.85) and the class administrator’s
fees and expenses ($730,021.34) dwarf the amount payable
to the class members under the settlements ($305,208.46).
J.A. 290-91.
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KANDEL v. US 9
and expenses.5 We will address that issue nonetheless, as
the plaintiffs relied on subsection (d) in their briefs, and
their disclaimer of subsection (d) at oral argument was not
clear and unequivocal.
EAJA subsection (d) provides that “a court shall award
to a prevailing party other than the United States fees and
other expenses . . . unless the court finds that the position
of the United States was substantially justified or that spe-
cial circumstances make an award unjust.” 28 U.S.C.
§ 2412(d). The statute contains an express definition of the
term “fees and other expenses” for purposes of subsection
(d): It states that “fees and other expenses includes the
reasonable expenses of expert witnesses, the reasonable
cost of any study, analysis, engineering report, test, or pro-
ject which is found by the court to be necessary for the prep-
aration of the party’s case, and reasonable attorney fees.”
28 U.S.C. § 2412(d)(2)(A).
It is unclear from the plaintiffs’ briefs and arguments,
both before the Claims Court and here, under which cate-
gory of subsection (d) the plaintiffs believe class adminis-
trator fees and expenses should fall. The plaintiffs
variously categorize class administrator fees and expenses
as falling within subsection (d) as a “cost” that is “associ-
ated with the litigation,” Appellants’ Reply Br. 8–9; as a
subset of “attorney’s fees,” Appellant’s Br. 21; as
5 Counsel stated that the question regarding the
class administrator issue “is whether the trial court erred
in failing to pay the class administrator costs and expenses
under section (b) . . . . Section (b) of EAJA doesn’t have this
substantial justification requirement [of subsection (d)],
but rather it states that the United States shall be liable
for expenses, non-taxable expenses, to the same extent as
any other party.” Oral Arg. 0:23–1:04.
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KANDEL v. US 10
“expenses,” Appellants’ Reply Br. 9; or generally as “rea-
sonable fees and expenses,” J.A. 160.
The plaintiffs, however, have not shown that the fees
and expenses of the class administrator in this case fall
within any of the three specific categories of “fees and other
expenses” that are used in the definition of that term in
EAJA subsection (d). First, class administrator fees and
expenses are not recoverable as “reasonable expenses of ex-
pert witnesses,” since class administrators are not wit-
nesses. Second, the plaintiffs have not shown that class
administrator fees and expenses are a “reasonable cost of
any study, analysis, engineering report, test, or project . . .
necessary for the preparation of the party’s case.” Third,
class administrator fees and expenses are plainly not “at-
torney fees.” Epiq was not retained as counsel, and its en-
gagement agreement explicitly provides that none of the
services it was to provide “constitute legal advice.” J.A.
285.6
If a class administrator’s fees and expenses can qualify
for an award under EAJA subsection (d), it can do so only
if such expenses fall under the general term “fees and other
expenses” in subsection (d)(1)(A). Section (d)(2)(A) states
that the phrase “fees and other expenses” “includes” the
three categories that follow. The use of the term “includes”
could be understood to mean that those three categories are
not exclusive. If that is so, it could be argued that the fees
6 Class administrator fees and expenses are also not
reimbursable as “costs” under 28 U.S.C. § 1920 by way of
the reference to EAJA subsection (a) in subsection (d), be-
cause class administrator fees and expenses do not fall into
one of the categories enumerated under 28 U.S.C. § 1920.
While section 1920 provides for taxation of costs of court
appointed experts, interpreters, and interpretation ser-
vices, class administrators do not fall under any of these
categories.
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KANDEL v. US 11
and expenses of a class administrator are included within
the phrase “fees and other expenses” in EAJA subsection
(d).
Unfortunately, the parties have not directly addressed
that issue in their briefs, and we have not discovered any
direct authority on the question.7 As discussed in part IV
below, we have determined that it is necessary to remand
this case for the Claims Court to address the question
whether the conduct of the government agencies during the
pre-litigation period was substantially justified. If the
Claims Court on remand finds that the agencies’ conduct
was substantially justified, that ruling will dispose of the
plaintiffs’ argument that the class administrator’s fees and
expenses can be recovered under EAJA subsection (d), and
make it unnecessary for the Claims Court to decide
whether class administrator fees and expenses fall within
the category of “other expenses” in EAJA subsection (d).
7 This court’s decision in Oliveira v. United States,
827 F.2d 735 (Fed. Cir. 1987), stated that the three catego-
ries of compensable expenses set forth in 28 U.S.C.
§ 2412(d)(2)(A) “is not an exclusive listing,” but the court
then added that EAJA authorizes the payment of “only
those reasonable and necessary expenses of an attorney in-
curred or paid in preparation for trial of the specific case
before the court, which expenses are those customarily
charged to the client where the case is tried.” 827 F.2d at
744. The Oliveira case thus did not resolve the question
whether an expense such as a class administrator’s fees
and expenses falls within the scope of the unspecified
“other expenses” in EAJA subsection (d)(2)(A). Moreover,
in construing the language of that subsection, it is neces-
sary to take account of the fact that EAJA waives sovereign
immunity, and “does so only to the extent explicitly and
unequivocally provided.” Starry Assocs., Inc. v. United
States, 892 F.3d 1372, 1380 (Fed. Cir. 2018)
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KANDEL v. US 12
For that reason, we deem it best to leave the issue of
whether a class administrator’s fees and expenses consti-
tute “other expenses” within the meaning of EAJA subsec-
tion (d) for the Claims Court to address in the first
instance, in the event that the court on remand finds it nec-
essary to do so in reaching a final decision on the fee issue
in this case.
IV
The second issue raised by the plaintiffs is whether the
government’s conduct, both in the litigation and before,
was substantially justified, and thus whether the govern-
ment is subject to an award of attorney fees and other ex-
penses pursuant to EAJA subsection (d). That subsection
provides that an award of “fees and other expenses” cannot
succeed against the United States if “the position of the
United States was substantially justified.” We summa-
rized the legal standard for determining whether the posi-
tion of the United States was “substantially justified” in
Chiu, where we wrote that in evaluating a claim under
EAJA subsection (d), trial courts “are instructed to look at
the entirety of the government’s conduct and make a judg-
ment call whether the government’s overall position had a
reasonable basis in both law and fact,” and that “the en-
tirety of the conduct of the government is to be viewed, in-
cluding the action or inaction by the agency prior to
litigation.” 948 F.2d at 715.8
The Claims Court provided a thorough analysis of the
government’s position during this litigation, which the
8 EAJA subsection (d)(2)(D) makes clear that the
“position of the United States” that is assessed for substan-
tial justification “means, in addition to the position taken
by the United States in the civil action, the action or failure
to act by the agency upon which the civil action is based.”
28 U.S.C. § 2412(d)(2)(D).
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KANDEL v. US 13
court found to be substantially justified. See J.A. 7–10.
We find no error in that determination. However, the
Claims Court did not make clear whether it considered the
agencies’ action or inaction prior to the litigation in evalu-
ating whether the government’s position was substantially
justified.
To be sure, the Claims Court, in its summary of the ap-
plicable legal standard, acknowledged the relevance of the
agencies’ pre-litigation conduct. See J.A. 7. But the court’s
subsequent analysis did not expressly address whether the
agencies’ relevant pre-litigation conduct was justified. A
remand is necessary for that purpose.9
On remand, the Claims Court should evaluate the con-
duct of the United States as a whole, including the pre-lit-
igation conduct of the relevant agencies, in determining
whether “the government’s overall position had a reasona-
ble basis in both law and fact;” i.e., was substantially justi-
fied. Chiu, 948 F.2d at 715.
9 In arguing that the agencies’ pre-litigation conduct
was substantially justified, the government asserts that
prior to OPM’s issuance in 1999 of the regulations address-
ing the lump-sum payments, the Federal Personnel Man-
ual provided that payments to former employees for
accumulated annual leave should be “based on the pay rate
[the employee] is receiving immediately prior to the date
he is considered separated for lump-sum purposes.” Fed-
eral Personnel Manual, supra. In 1993, a court found that
interpretation of the Lump Sum Act to be “permissible and
reasonable.” Gaffney v. United States, 834 F. Supp. 1, 5
(D.D.C. 1993). However, rather than resolve the question
whether the agencies’ pre-litigation conduct was “substan-
tially justified,” we leave that issue to the Claims Court to
decide in the first instance.
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KANDEL v. US 14
V
Accordingly, while we agree with the Claims Court’s
analysis in most respects, we vacate and remand for the
court to address the plaintiffs’ claim that they are entitled
to attorney fees and expenses based on their claim that the
agencies’ pre-litigation conduct was not substantially jus-
tified and, if so, whether the plaintiffs are entitled to an
award of the class administrator’s fees and expenses.
VACATED AND REMANDED
No costs.
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