The Equal Access to Justice Act (EAJA); Attorney’s fees for a “prevailing party” against a federal agency under 28 USC § 2412(d)(1)(A); Whether the Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF) was “substantially justified” in treating rifles fitted with bump stocks as illegal “machineguns”; 26 USC § 5845(b); Garland v Cargill; Deference to the district court’s finding; Reasonableness of the position; Avoiding “hindsight bias”; Perez v Jaddou (4th Cir)

[This appeal was from the WD-MI.] The court held that the district court did not abuse its discretion by finding that defendant-ATF was “substantially justified” in reading § 5845(b) to include rifles fitted with bump stocks as illegal “machineguns.” Thus, it affirmed the district court’s denial of plaintiffs’ motion for attorney fees under the EAJA. Plaintiffs were parties in a nation-wide effort to have the ATF’s decision to consider bump stocks illegal machineguns overturned. The issue reached the Supreme Court in Cargill where the ATF lost the case. Plaintiffs then sought attorney fees under § 2412(d)(1)(A), which makes attorney frees available to the “prevailing party” in a suit against a federal agency under the EAJA if the agency’s position was not “substantially justified.” The district court ruled that the ATF’s position was substantially justified and denied plaintiffs’ motion for fees. The court noted that it had to “give deference to the district court’s finding. And” it concluded that the district “court acted reasonably because of the substantial judicial disagreement that this novel legal question produced.” The court reviewed the history and interpretations of the regulations and definitions related to various firearms and noted reasons why “a ‘reasonable person’ could have thought the ATF’s position” was correct. These included the fact that the “litigation raised ‘a novel question’” and that there were “‘objective indicia’ showing the reasonableness of the government’s position.” The court concluded that “given the plausible arguments supporting the ATF’s reading as well as the broad circuit debate that its reading engendered, the district court did not abuse its discretion by finding the reading substantially justified. A contrary holding would ‘succumb to [the] hindsight[] bias’ that we must avoid when considering this attorney’s fees question.”