United States v. Hudson

Summarized by Robert Yan , Otterbourg P.C.
15 years 3 months ago

Citation:

(2nd Circuit, Dec 31,1969)

Tag(s):

2nd Circuit

Ruling:

Holding that attorneys who appear pro se and prevail in an administrative or court proceeding against the United States in connection with the determination, collection or refund of any tax, interest or penalty are not eligible for attorney’s fees under 26 U.S.C. § 7430. The Court has previously ruled that an attorney appearing pro se is not entitled to attorney’s fees under certain other statutory provisions, but has not previously considered the issue in the context of 26 U.S.C. § 7430. See Pietrangelo v. United States Army, 568 F.3d 341 (2d Cir. 2009) (per curiam) (Freedom of Information Act); Hawkins v. 1115 Legal Serv. Care, 163 F.3d 684 (2d Cir. 1998) (Title VII and 42 U.S.C. § 1981). Section 7430 provides that a prevailing party is entitled to collect “reasonable fees paid or incurred for the services of attorneys in connection with the court proceeding.” 26 U.S.C. § 7430(c)(1)(B)(iii). The Court reasoned that the pro se attorney litigant was not entitled to attorney’s fees because the party neither paid nor incurred fees for services rendered by an attorney. To the extent the pro se attorney litigant may have invested his time in litigating the matter, such expenditure of time did not constitute an incurrence of attorney’s fee. The Court of Appeals for the First and Fourth Circuits have similarly held that pro se attorney litigants are not entitled to attorney’s fees under 26 U.S.C. § 7430. Lastly, the Court stated that the policy underlying fee-shifting statutes, like 26 U.S.C. § 7430, was to encourage litigants to retain counsel. The Court opined that awarding attorney’s fees to pro se attorney litigants would undermine that policy.

Procedural context:

Appeal to the United States Court of Appeals for the Second Circuit from a judgment from the United States District Court for the Northern District of New York reversing the decision from the United States Bankruptcy Court for the Northern District of New York awarding a pro se attorney litigant attorney’s fees under 26 U.S.C. § 7430. Affirmed.

Facts:

The Debtor, an attorney, appeared pro se and successfully challenged a claim asserted by the Internal Revenue Service. As the prevailing party, the Debtor sought attorney’s fees for legal work on his own behalf pursuant to 26 U.S.C. § 7430. The United States Bankruptcy Court for the Northern District of New York awarded the Debtor attorney’s fees, citing Cazalas v. United States Department of Justice, 709 F.2d 1051 (5th Cir. 1983) (pro se attorney litigant not disqualified from receiving attorney’s fees in connection with Freedom of Information Act litigation). In re Hudson, 345 B.R. 477 (Bankr. N.D.N.Y. 2006). The Bankruptcy Court reasoned that awarding reasonable attorney’s fees to pro se attorney litigants promoted a policy of “vigorous advocacy” while allowing the court to retain control of fees awarded. Id. at 484. On appeal, the United States District Court for the Northern District of New York held that an attorney appearing pro se cannot be awarded attorney’s fees under 26 U.S.C. § 7430. This appeal followed.

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