891 F.

2d 7

Hortensia De ALLENDE, et al., Plaintiffs, Appellees,

v.
James BAKER, Secretary of State, et al., Defendants,
Appellants.
No. 89-1360.

United States Court of Appeals,

First Circuit.
Heard Sept. 13, 1989.
Decided Dec. 5, 1989.

Gregory C. Sisk, Seattle, Wash., with whom Michael Jay Singer, Attys.,
Appellate Staff Civ. Div., Dept. of Justice, Stuart E. Schiffer, Acting Asst.
Atty. Gen., Washington, D.C., and Wayne A. Budd, U.S. Atty., Boston,
Mass., were on brief for defendants, appellants.
Leonard B. Boudin, with whom Edward Copeland, New York City, and
Allan R. Rosenberg, Boston, Mass., were on brief for plaintiffs, appellees.
Before TORRUELLA, SELYA and MAYER, * Circuit Judges.
TORRUELLA, Circuit Judge.

This is an appeal from the decision of the United States District Court for the
District of Massachusetts awarding attorney's fees under 28 U.S.C. 2412(d),
and from its decision to enhance the hourly rate of plaintiffs' counsel beyond
that otherwise permitted by the Act.

The Equal Access to Justice Act ("EAJA"), 28 U.S.C. 2412(d), imposes

liability upon the government for fees and expenses incurred in litigation, but
only if the opposing party prevails within the meaning of the statute, and if the
government's position was not substantially justified. 1 See McDonald v. Sec'y
of Health and Human Services, 884 F.2d 1468, 1469 (1st Cir.1989). Thus, to
avoid liability under the statute, the government must prove either that the
claiming party did not prevail,2 or that the government's position was
substantially justified.3 McDonald at 1475.

At issue on appeal is whether the district court erred in determining that the
"position of the United States was substantially justified." The district court
determined that the government's position was not substantially justified and
awarded attorney's fees to the appellant, Allende. 709 F.Supp. 18. We reverse,
finding that although the government ultimately did not prevail, nevertheless its
position was substantially justified.

I. BACKGROUND
4

The underlying action to this appeal arose as a challenge to the denial of a nonimmigrant visa to Hortensia de Allende, widow of slain Chilean president,
Salvador Allende. At the invitation of several church and scholarly groups,
Mrs. Allende sought entry into the United States for an eleven day lecture tour
in March, 1983 to speak about matters including the state of human rights in
Chile. The State Department denied Mrs. Allende's visa application under the
exclusionary provisions of 8 U.S.C. 1182(a)(27). Under the Department's
interpretation, section 27 permitted it to deny entry to any person upon the
determination that entry would be prejudicial to the foreign policy interests of
the United States.

In 1983, Mrs. Allende was a member and honorary president of the World
Peace Council, an organization which the Department of State believed to be
used by the Soviet Union as a propaganda tool to advance "the Soviet goal of
unilateral Western arms reduction or disarmament." At the time when she
applied for a visa, the Undersecretary of State thought that the sensitive nature
of ongoing negotiations related to arms limitations and reductions counseled
against permitting Mrs. Allende to make speeches in the United States. He
reasoned that her speeches would lead to covert manipulation of public opinion
by the Soviet Union, which would be contrary to United States' foreign policy
interests.

Section 212(a) of the Immigration and Nationality Act of 1952, 8 U.S.C.

1101 et seq., lists the terms and conditions under which aliens may enter the
United States as visitors or immigrants. Section 1101(a)(15) places the burden
of proof upon the alien to prove that he or she is eligible to receive a visa, and is
not subject to exclusion under any provision of the Act. Section 1182(a) lists
thirty-three categories of aliens considered ineligible to receive visas, two of
which were at issue in this litigation.

The first of these categories, subsection 27, is the exclusion relied upon by the
government. Subsection 27 applies to:

8
Aliens
who the consular officer or the Attorney General knows or has reason to
believe seek to enter the United States solely, principally, or incidentally to engage in
activities prejudicial to the public interest, or endanger the welfare, safety, or
security of the United States.
9

The government, by long practice, had construed this section to permit

exclusion of aliens when an alien's entry or presence in the country, rather than
only anticipated harmful activities after entry, would be prejudicial to the public
interest.

10

The second category, subsection 28, permits exclusion of aliens who are, or
who at any time have been,

11
members
of or affiliated with ... the Communist or any other totalitarian party ... of
any foreign state, [or] ... any ... affiliate ... of any such ... party.
12

8 U.S.C. 1182(a)(28)(C). 18 U.S.C. 1182(d)(3)(A) authorizes a waiver of

the provisions of subsection 28, although not of subsection 27, under conditions
enumerated in the McGovern Amendment, 22 U.S.C. 2691. The amendment
provides standards for the Secretary of State's determination of whether to
recommend a waiver of subsection 28. It essentially requires the granting of a
waiver, because such a waiver can only be avoided if the Secretary can certify
to the Speaker of the House of Representatives that admission of the alien
would be contrary to the security interests of the United States.4

13

The government's position in the action was that even if a waiver of subsection
28 was required by the McGovern Amendment, one of the other provisions,
such as subsection 27, could still apply to deny entry to an alien. Allende
contended that the McGovern Amendment required a waiver, and that
subsection 27 did not authorize her exclusion, because it could apply only
where the State Department expected the alien to engage in prejudicial
activities after entry.5 She also argued that if the statute did authorize her
exclusion, then it violated the First Amendment.

14

While Allende, on the merits, was pending, an almost indistinguishable action

had been filed in the District of Columbia Circuit by similarly situated
plaintiffs. The district court there initially granted the government's summary
judgment motion, rejecting the plaintiffs' argument that the government did not
have authority under subsection 27 to exclude for foreign policy reasons.
Abourezk v. Reagan, 592 F.Supp. 880 (D.D.C.1984). A divided panel of the
District of Columbia Circuit vacated, and remanded for consideration of

whether administrative practice supported the government's construction of

subsection 27 as encompassing concerns of prejudice arising from mere entry
or presence of an alien as opposed to anticipated prejudicial activity after entry.
Abourezk v. Reagan, 785 F.2d 1043 (D.C.Cir.1986). The court further stated
that, under subsection 27, an alien can be excluded only for reasons
"independent of," and not merely arising from, membership in, or affiliation
with, a proscribed organization. Id. at 1058. The Supreme Court affirmed on an
equally divided vote, without opinion. Reagan v. Abourezk, 484 U.S. 1, 108
S.Ct. 252, 98 L.Ed.2d 1 (1987). On remand, the district court granted summary
judgment to plaintiffs, and the case is currently pending on appeal.
15

After the District of Columbia Circuit decision, the Allende district court held
that the government may exclude aliens under subsection 27 for foreign policy
reasons only if those reasons are "independent of" and not merely "in addition
to" the alien's affiliation with a communist organization. The court, in so
holding, followed the reasoning of Abourezk v. Reagan, 785 F.2d 1043
(D.C.Cir.1986), aff'd by an equally divided court, 484 U.S. 1, 108 S.Ct. 252, 98
L.Ed.2d 1 (1987). The district court concluded that the government failed to
establish that the reason for excluding Mrs. Allende was "separate and
independent of her membership in the World Peace Council and the Women's
International Democratic Federation."

16

After the Supreme Court's decision in Abourezk, a divided panel of this court
affirmed the district court's decision for Allende, but on different grounds from
those relied upon in Abourezk. This court held only that an alien's mere entry or
presence in the country cannot be an "activity" prejudicial to the public interest
within the meaning of subsection 27, and declined to reach the merits of the
rule of independence. Allende v. Shultz, 845 F.2d at 1120, n. 17. The court
concluded that the government had excluded Allende on the basis of her
proposed activities, and that 901 of the Foreign Relations Act, P.L. No. 100204 901, prohibited the denial of a visa on speech related grounds. Id. at
1121.

17

After the decision, plaintiff moved for an award of attorney's fees under the
Equal Access to Justice Act, 28 U.S.C. 2412(d), contending that the
government's position had not been substantially justified. The district court
granted the motion, concluding that subsection 27 clearly permits denial of
visas only where the government anticipates prejudicial activity after entry.
Thus, the district court held that the government's position was not substantially
justified. Any other interpretation, according to the district court, would render
the McGovern Amendment, limiting application of subsection 28, nugatory.
Cost of living increases were granted to three attorneys, and the hourly rates of

two other lawyers were raised well above the statutory cap. It is from this
decision that the government now appeals.
II. STANDARD OF REVIEW
18

The scope of review of decisions made by district courts depends upon the
nature of what is being reviewed. This court will review questions of law de
novo, questions of fact for clear error, and matters committed to the district
court's discretion only for abuse of that discretion. Pierce v. Underwood, 487
U.S. 552, 108 S.Ct. 2541, 101 L.Ed.2d 490 (1988). Difficulty arises where, as
here, there are mixed questions of law and fact.

19

However, the Supreme Court recently resolved this conflict with regard to the
award of attorney's fees and costs under the EAJA in Pierce v. Underwood, 108
S.Ct. 2541. In that case, the Court held that the decision of a district court to
allow or disallow fees is reviewable only for abuse of discretion. Id. at 2548.

20 question whether the Government's litigating position has been "substantially

[T]he
justified" is precisely such a multifarious and novel question, little susceptible, for
the time being at least, of useful generalization, and likely to profit from the
experience that an abuse-of-discretion rule will permit to develop.
21

Id. In concluding that abuse of discretion was the appropriate standard to use,
the Court reasoned that standard would promote the interests of sound judicial
administration because, by reason of settlement conferences and other pretrial
activities, the district court is in a better position to decide whether a
government position was "substantially justified," because of insights therein
gained which may not be adequately conveyed by the record. Id. at 2547. See
also McDonald v. Sec'y of Health and Human Serv., 884 F.2d 1468, 1473 (1st
Cir.1989).6 Moreover, the use of such a standard would be in conformity with
the goal that requests for attorney's fees not result in a second major litigation.
Underwood, 108 S.Ct. at 2549. See also Benitez v. Collazo-Collazo, 888 F.2d
930, 933 (1st. Cir.1989); McDonald, at 1474. Thus, the district court's
conclusion that the government's position was not substantially justified, and
thus that attorney's fees and costs were assessable, is reviewable only for abuse
of discretion.7

III. SUBSTANTIAL JUSTIFICATION

22

The parameters of substantial justification litigation have been clearly defined

both by this Circuit, and by the Supreme Court. E.g., Underwood, 108 S.Ct.
2541. As we held in United States v. Yoffe, 775 F.2d 447, 450 (1st Cir.1985),

"the test for determining whether the government's position was 'substantially
justified' is one of reasonableness; was the government's position reasonable
both in law and fact." Id. at 449. See also Underwood, 108 S.Ct. at 2550
("substantially" does not mean justified to a high degree, but instead means
"justified to a degree that could satisfy a reasonable person"). The mere fact
that the government lost in the underlying litigation does not create a
presumption that its position was not substantially justified. Yoffe, 775 F.2d at
450.
23

Consequently, so long as the government had a reasonable basis both in law and
in fact for its position, and the facts supported its theory, then the government's
position was substantially justified, and any decision of the district court to the
contrary is error. See Yoffe, 775 F.2d at 451. While the burden of proof is upon
the government to demonstrate that its position was substantially justified, e.g.,
McDonald, at 1475, it need only do so by a preponderance of the evidence.
Yoffe, 775 F.2d at 450.

24 government has the burden of proving substantial justification by a

The
preponderance of the evidence ... In order to carry the devoir of persuasion, the
government must show that it had a reasonable basis for the facts alleged, that it had
a reasonable basis in law for the theories it advanced, and that the former supported
the latter.
25

Sierra Club v. Sec'y of the Army, 820 F.2d 513, 517 (1st Cir.1987) (citing
United States v. Yoffe, 775 F.2d at 450). In this case, we believe that the
government unquestionably sustained its burden.

IV. ABUSE OF DISCRETION

26

Allende argues that the government's initial decision to deny her visa
application was not substantially justified. She contends that her application
falls squarely within subsection 28 (membership in the communist party), not
within subsection 27, and thus that the McGovern Amendment requires a
waiver. According to her analysis, the government's attempt to reclassify her
application under subsection 27 was just an end run, or attempt to circumvent
Congress' intention when it created the separate categories. The appellee
contends that the government's conduct should be recognized as unreasonable
in light of what she characterizes as the plain meaning of the statute as well as
the statutory context and the distinction drawn by Congress between statusbased and conduct-based ineligibility. Finally, Allende argues that it is
significant that the Department warned in its Foreign Affairs Manual against
the use of subsection 27 as a catch-all provision to exclude individuals who do

not fit into one of the other 32 categories.

27

The government responds by arguing that its decision to deny Allende a visa
was overwhelmingly justified on foreign policy grounds. The government
contends that Mrs. Allende was excluded to communicate the attitude of the
United States government toward the activities of the Soviet Union in pursuing
propaganda activities through its instrumentality, the World Peace Council.
According to the government, such communication was important at that time
because of the delicate nature of arms negotiations which were then being
conducted. Although this court ultimately concluded that Mrs. Allende's visa
denial was not authorized, the government contends that this fact should not
detract from the foreign policy concerns that it was acting on at the time. It
argues that if courts do not give the Executive Branch substantial deference in
the conduct of foreign affairs, and fee sanctions are lightly awarded, it may
chill flexible Executive decision-making, thereby impairing the conduct of
United States foreign policy.

28

When the State Department denied Allende's visa in 1983, no court had
construed subsection 27 in a manner preventing the government from denying
applicants like Allende entry.8 Thus, the Allende case raised issues of first
impression, and it was appropriate for the government to seek specific
instruction from the court on these issues. Moreover, the government's position
in litigation was never without substantial justification, given decisions in
parallel cases, including the support of three of the six participating members of
the Supreme Court in Abourezk. Merely because the district court, and this
court on appeal, ultimately disagreed, does not make the government's position
an unreasonable one, given the other factors herein stated.

29

Consequently, given the state of law, both at the time the visa application was
denied, and during the time the lawsuit occurred, we hold that the district court
abused its discretion by awarding fees to Allende on the basis that the
government's position was not substantially justified. It was at least reasonable,
both in law and in fact, and under Underwood, that is sufficient.9

30

Reversed. Costs to appellant.

Of the Federal Circuit, sitting by designation

The Equal Access to Justice Act provides, in pertinent part, that:

Except as otherwise specifically provided by statute, a court shall award to a

prevailing party other than the United States fees and other expenses, in
addition to any costs awarded pursuant to subsection (a), incurred by that party
in any civil action (other than cases sounding in tort), including proceedings for
judicial review of agency action, brought by or against the United States in any
court having jurisdiction of that action, unless the court finds that the position
of the United States was substantially justified or that special circumstances
make an award unjust.
28 U.S.C. 2412(d)(1)(A) (emphasis added).
2

It is uncontested, on appeal, that Allende was the prevailing party

Although, under the statute, it is also possible for the government to avoid
liability by proving that special circumstances make an award unjust, 28 U.S.C.
2412(d)(1)(A), the government does not allege that such circumstances exist
in the case

22 U.S.C. 2691 provides:

[T]he Secretary of State should, within 30 days of receiving an application for a
nonimmigrant visa by any alien who is excludible from the United States by
reason of membership in or affiliation with a proscribed organization but who is
otherwise admissible to the United States, recommend that the Attorney
General grant the approval necessary for the issuance of a visa to such alien,
unless the Secretary determines that the admission of such alien would be
contrary to the security interests of the United States ...

This court ultimately agreed with Allende's position, holding that "[s]ubsection
27 plainly requires a reasonable belief that an alien will engage in specific
activities harmful to the public interest. Mere entry alone does not suffice."
Allende, 845 F.2d 1111, 1119-20. Foreign policy is included within the rubric
of public interest. Id. at 1120 n. 17

"Although Underwood dealt with review of a district court's determination of

"substantial justification" under EAJA, logic compels application of the same
standard to a district court's identification of a "prevailing party." McDonald, at
1473

Under the abuse of discretion standard, this court will reverse the decision of a
district court only if we are left with "a definite and firm conviction that the
court below committed a clear error of judgment in the conclusion it reached
upon a weighing of the relevant factors." In re Josephson, 218 F.2d 174, 182
(1st Cir.1954)

The government argues that its interpretation of subsection 27 to allow

exclusion of aliens upon a showing of anticipated prejudice which would be
occasioned by the entry or presence of an alien in the United States was
reasonable despite a later determination that the statute required a showing of
anticipated prejudicial activities after entry. In other words, it argues that to
distinguish between entry and activities sets up a false dichotomy. Moreover,
the government argues, to limit subsection 27 to post-entry activities makes
subsection 29 entirely duplicative. That section requires denial of visas to aliens
who "after entry" would engage in certain proscribed activities, such as
espionage, sabotage, and public disorder

Given that we hold that it was error to award fees, we do not reach the question
as to the propriety and amount of the awards given