Opinion
C. A. PC-2019-11633
10-30-2020
KEN ROCHA COLLISION, LLC Plaintiff, v. RHODE ISLAND DEPARTMENT OF ENVIRONMENTAL MANAGEMENT; JANET COIT, in her capacity as the Director of the RHODE ISLAND DEPARTMENT OF ENVIRONMENTAL MANAGEMENT; ADMINISTRATIVE ADJUDICATION DIVISION OF THE RHODE ISLAND DEPARTMENT OF ENVIRONMENTAL MANAGEMENT Defendants.
For Plaintiff: Joelle C. Rocha, Esq. For Defendant: Tricia A. Quest, Esq.
For Plaintiff: Joelle C. Rocha, Esq.
For Defendant: Tricia A. Quest, Esq.
DECISION
STERN, J.
Before this Court is Plaintiff, Ken Rocha Collision, LLC's (KRC), Motion for Litigation Expenses under the Equal Access to Justice for Small Businesses and Individuals Act, codified in G.L. 1956 chapter 92 of title 42 (EAJA). Defendants, Rhode Island Department of Environmental Management and Janet Coit, in her capacity as Director of the Rhode Island Department of Environmental Management (collectively, DEM), filed a timely objection. Jurisdiction is pursuant to G.L. 1956 chapter 30 of title 9.
I
Facts and Travel
This matter was previously before this Court in Ken Rocha Collision, LLC v. DEM, C.A. No. PC-2019-4836, where KRC sought review of Rhode Island Department of Environmental Management's Administrative Adjudication Division (AAD) hearing officer's denial of KRC's Motion to Dismiss and requested a declaratory judgment that the AAD lacked jurisdiction over violations filed under the Rhode Island Hazardous Waste Management Act (the HWMA or Act), codified in G.L. 1956 chapter 19.1 of title 23. On June 4, 2019, this Court granted KRC's Motion for Declaratory Judgment and held that AAD lacked subject-matter jurisdiction to adjudicate HWMA violations. (Pl. Mot. Appeal Ex. B, at 6.) Thereafter, KRC filed a Motion for Litigation Expenses under the EAJA and Rule 19.00 of the AAD Rules of Practice and Procedure in the AAD. (Pl. Mot. Appeal Ex. A, at 1.) The AAD hearing officer denied KRC's Motion reasoning that DEM was "substantially justified" in initiating the proceeding and during the proceeding, and thus, KRC was not entitled to litigation expenses under EAJA. Id. at 7.
The facts relevant to the instant appeal are as follows. On July 20, 2015, DEM conducted an inspection (Inspection) of the property located at 555 Cranston Street, Providence (the Property). (Pl. Compl. ¶ 5.) The Inspection resulted in DEM levying twelve (12) violations of the Act upon KRC. Id. ¶ 6. The findings, violations, and penalties resulting from those alleged violations were subsequently incorporated in a Notice of Violation (NOV). Id. ¶ 7. This NOV was initially served via mail in September 2016 to a person not the registered agent of KRC and at a property that was not KRC's principal office. Id.; (Pl. Mot. Appeal at 3.) KRC requested a hearing before the AAD regarding the service of this NOV, and the matter was assigned as AAD No. 16-004. (Pl. Mot. Appeal at 3.) Following that hearing, KRC filed a Motion to Dismiss the NOV arguing that service was improper, which was granted. Id.
DEM thereafter mailed another NOV to KRC at the appropriate location, effectuating proper service on February 14, 2017. Id. DEM proceeded with this NOV and KRC timely appealed. Id. Although an AAD conference was held regarding the NOV served on February 14, 2017, it was not until May 2018 that the AAD assigned a new identifying number to the NOV to formalize the February 14, 2017 service date. Id.
Following a subsequent hearing on September 8, 2018 before the AAD hearing officer and continuous back and forth communications between counsel regarding the AAD's jurisdiction over the alleged HWMA violations, KRC filed a Motion to Dismiss the NOV on November 24, 2018, arguing that the AAD lacked subject-matter jurisdiction over the alleged violations. Id. at 3-4. The AAD heard oral argument on January 25, 2019 regarding KRC's Motion to Dismiss for lack of subject-matter jurisdiction and later denied the motion on March 20, 2019, reasoning that the actions taken by DEM were within the statutory authority provided to it by § 23-19.1-22. Id. at 4; (Def.'s Mem. Obj. to Pl.'s Appeal Ex. 8, at 3-4.) KRC thereafter filed an appeal to this Court and filed a Motion for Declaratory Judgment in the same action. (Pl. Mot. Appeal at 4.) On June 4, 2019, this Court granted KRC's Motion for Declaratory Judgment and found that the AAD lacked jurisdiction to adjudicate alleged HMWA violations reasoning that "the plain and ordinary language of the HWMA makes unambiguously clear that any proceedings for enforcement of the HWMA shall be brought in Superior Court." (Pl. Mot. Appeal Ex. B, at 4, 6.) As a result, the AAD hearing officer dismissed the NOV proceeding in favor of KRC. Id. at 4-5.
KRC subsequently filed a Motion for Litigation Expenses under the EAJA on August 7, 2019 to be heard by the AAD hearing officer. (Pl. Mot. Appeal Ex. A, at 1.) The hearing officer denied KRC's Motion for Litigation Expenses reasoning that although KRC is a person as defined by the EAJA, prevailed in the administrative proceeding, and requested reasonable attorney's fees, DEM successfully demonstrated by a preponderance of the evidence that it was "substantially justified" in initiating the proceeding and in the proceeding itself. Id. at 3-4. KRC is now seeking review of the AAD hearing officer's denial of reasonable litigation expenses under the EAJA pursuant to § 42-92-5. (Pl. Mot. Appeal at 1.)
The hearing officer determined that the amount of reasonable attorney's fees was $16,686.29. (Pl. Mot. Appeal Ex. A, at 4.) However, this amount contained a mathematical error by not including, although listing, a $186.62 filing fee for KRC's Superior Court Complaint. The correct amount should have been $16,872.91. This amount, however, includes expert fees in the amount of $630 or $150 per hour.
II
Standard of Review
This Court will review a denial of reasonable litigation expenses under the EAJA as a question of law, de novo. Rollingwood Acres, Inc. v. Rhode Island Department of Environmental Management, 212 A.3d 1198, 1205-06 (R.I. 2019); Campbell v. Tiverton Zoning Board, 15 A.3d 1015, 1024 (R.I. 2011). The Court will, however, give deference to the adjudicatory officer's findings of fact made because the "question of fee determination is 'necessarily intertwined with the underlying agency decision.'" Rollingwood Acres, Inc., 212 A.3d at 1206 (quoting Tarbox v. Zoning Board of Review of Town of Jamestown, 142 A.3d 191, 198 (R.I. 2016)). That is, a reviewing court shall defer to the factual findings made by an administrative hearing officer when credibility evaluations are implicated because '"[t]he hearing officer's impressions as he or she observes a witness and listens to testimony are all important to the evidence sifting which precedes a determination of what to accept and what to disregard."' Id. (quoting Environmental Scientific Corp. v. Durfee, 621 A.2d 200, 206 (R.I. 1993)) (further internal quotations omitted).
III
Analysis
The EAJA provides two procedural avenues in which the initial fee determination may be made. See § 42-92-3(a), (b). The first scenario occurs under § 42-92-3(a) and is when a party is successful on the underlying merits at the agency level. See Section 42-92-3(a); Rollingwood Acres, Inc., 212 A.3d at 1204 (citing Tarbox, 142 A.3d at 196-97). The second scenario occurs when a party receives an unfavorable decision on the merits at the agency level but then successfully appeals that decision to the appropriate court. See Section 42-92-3(b); Rollingwood Acres, Inc., 212 A.3d at 1205. Here, the case involves the second scenario, and thus, the fee determination presented is governed by § 42-92-3(b). Section 42-92-3(b) provides that "[i]f a court reviews the underlying decision of the adversary adjudication, an award for fees and other expenses shall be made by that court in accordance with the provisions of this chapter." Thus, the fee determination here will be guided by the provisions found in § 42-92-3(a).
After the AAD rejected KRC's Motion to Dismiss for lack of subject-matter jurisdiction, KRC appealed to this Court by filing a Motion for Summary Judgment, "or, in the alternative," Motion for Declaratory Judgment. (Def.'s Mem. Obj. to Pl.'s Appeal Ex. 14.) As mentioned above, KRC was successful in its appeal to this Court.
Section 42-92-3(a) provides that "the adjudicative officer shall award to a prevailing party reasonable litigation expenses incurred by the party in connection with that proceeding" unless he or she finds that the agency was "substantially justified in actions leading to the proceedings and in the proceeding itself." Section 42-92-3(a) (emphasis added); see Rollingwood Acres, Inc., 212 A.3d at 1204. In the event one of the parties is "dissatisfied with the fee determination by the adjudicatory officer," he or she may "appeal to the court having jurisdiction to review the merits of the . . . agency adversary adjudication." Section 42-92-5; see Rollingwood Acres, Inc., 212 A.3d at 1204.
Under either procedural avenue, the primary inquiry is whether the administrative agency, here DEM, was substantially justified in its actions leading to the proceeding and in the proceeding itself. See Section 42-92-3(a); Rollingwood Acres, Inc., 212 A.3d at 1205. An agency is substantially justified when "the initial position of the agency, as well as the agency's position in the proceedings, has a reasonable basis in law and fact." Section 42-92-2(7). This substantial justification standard requires the agency to '"show not merely that its position was marginally reasonable,"' but that its position is '"clearly reasonable, well founded in law and fact, solid though not necessarily correct."' Rollingwood Acres, Inc., 212 A.3d at 1205 (quoting Taft v. Pare, 536 A.2d 888, 893 (R.I. 1988)). This substantial justification question, however, '"will not be precisely the same as the merits"' of the case but is '"what the Government was substantially justified in believing [the law] to have been."' Rollingwood Acres, Inc., 212 A.3d at 1205 (quoting Pierce v. Underwood, 487 U.S. 552, 561 (1988)).
A
Substantial Justification
Section 42-92-2(2) provides that "[a]ny agency charged by statute with investigating complaints shall be deemed to have substantial justification for the investigation and for the proceedings subsequent to the investigation." It is clear that DEM is an agency charged by statute with investigating complaints according to § 42-17.1-2(19). In turn, § 42-92-4 of the EAJA provides that "[a]ny agency authorized to conduct an adjudicatory proceeding shall, by rule, establish uniform procedures for the submission and consideration of applications for an award under this section." Section 42-92-4. DEM has promulgated such rules as required by the EAJA which provide that "the [adjudicatory hearing officer] shall award reasonable litigation expenses to the petitioner" so long as the record establishes, by a preponderance of the evidence, that: (1) the petitioner is a party as defined by § 42-92-2(a); (2) the respondent has prevailed against the Division in the underlying adjudicatory proceeding; (3) the Department instituted the underlying adjudicatory proceeding without substantial justification; and (4) the amount of litigation expenses sought qualify as reasonable litigation expenses as defined in § 42-92-2(c). 250 RICR 10-00-1.20(F).
It is undisputed that KRC is not only considered a "party" under the relevant statute but is a "prevailing party." (Pl. Mot. Appeal Ex. A, at 3-4.) Thus, the primary issue is whether DEM was "substantially justified" in initiating the underling adjudicatory proceeding, and if not, whether the amount of litigation expenses sought are "reasonable litigation expenses."
As mentioned above, the EAJA defines substantial justification as "the initial position of the agency, as well as the agency's position in the proceedings, ha[ving] a reasonable basis in law and fact." Section 42-92-2(7). To satisfy this substantial justification test, "the Government . . . must show not merely that its position was marginally reasonable; its position must be clearly reasonable, well founded in law and fact, solid though not necessarily correct." Taft, 536 A.2d at 893. In United States v. Yoffe, the court explained that the test for reasonableness is divided into three parts: "did the government have a reasonable basis for the facts alleged; did it have a reasonable basis in law for the theories advanced; and did the facts support its theory." Yoffe, 775 F.2d 447, 450 (1st Cir. 1985) (citing United States v. Community Bank and Trust Co., 768 F.2d 311, 314 (10th Cir. 1985)). Although fees are only awarded to prevailing parties, "the fact that the government lost does not create a presumption that its position was not substantially justified." Id. (citing Washington v. Heckler, 756 F.2d 959, 961 (3rd Cir. 1985)).
1
Reasonable Basis in Fact
DEM argues that it had a reasonable basis in fact because § 23-19.1-12 explicitly confers upon it the responsibility of inspecting "any hazardous waste management facility or any place that the director has reason to believe hazardous wastes are generated, stored, treated, or disposed of . . ." (Def.'s Mem. Obj. to Pl.'s Appeal at 8.) Specifically, DEM argues that KRC is an auto body repair shop subject to the Hazardous Waste Regulations and that based on the July 20, 2015 inspection, there was evidence of twelve (12) violations justifying the NOV. Id. at 8-9. KRC, however, argues that although DEM has the clear statutory authority to issue an NOV, the question is not "whether there were sufficient facts to initiate a prosecution" but whether there was "sufficient facts to issue an NOV and attempt to prosecute it before the AAD[.]" (Pl. Mot. Appeal at 11.) The hearing officer concluded that "DEM had a reasonable basis for the facts alleged" and thus was "substantially justified" in the actions leading to the proceeding and in the proceeding. (Pl. Mot. Appeal Ex. A, at 5.)
Here, we are first concerned with whether DEM had a reasonable basis in fact for initiating the proceeding and in the proceeding itself. That is, whether DEM had a reasonable basis in fact is a question of substance and not procedure. KRC argues that DEM had a duty to prosecute investigations in the "correct forum," and thus, the issue here is not "whether there were sufficient facts to initiate a prosecution" but whether there existed "sufficient facts to issue an NOV and attempt to prosecute it before the AAD[.]" (Pl. Mot. Appeal at 11.) However, it appears that KRC's argument is concerned more with how DEM initiated the proceedings rather than why DEM initiated the proceedings. It is clear that § 23-19.1-12 charges DEM with inspecting "any hazardous waste management facility or any place that the director has reason to believe hazardous wastes are generated, stored, treated, or disposed of." It is undisputed that KRC is an auto body repair shop that generates, stores, and disposes of hazardous waste and that the July 20, 2015 inspection performed by two DEM inspectors detailed the existence of twelve (12) reportable violations. (Def. Mem. Obj. to Pl. Appeal, at 8-9.) Therefore, it is clear that DEM had a reasonable basis in fact to initiate the proceeding by issuing a NOV because it was investigating a management facility that the DEM director had reason to believe generated, stored, treated, or disposed of hazardous waste.
Compare to Rollingwood Acres, Inc., 212 A.3d at 1211 (Court held that DEM was not substantially justified because DEM "knew or should have known" that the plaintiffs should not have been held responsible for the alleged violation and that DEM "resuscitated a long-defunct investigation against plaintiffs, and ultimately charged them with five alleged water quality violations for which they seemingly bore no responsibility.").
2
Reasonable Basis in Law
Since AAD's inception in 1989, DEM has adjudicated alleged HWMA violations in AAD pursuant to § 23-19.1-15. (Def. Mem. Obj. to Pl. Appeal at 12.) Section 23-19.1-15 provides in relevant part: "The superior court for Providence county shall have jurisdiction to enforce the provisions of this chapter and any rule, regulation, or order issued pursuant to this chapter." Importantly, however, this Court previously held that AAD lacks subject-matter jurisdiction to adjudicate matters under the HWMA reasoning that "the plain and ordinary language of the HWMA makes unambiguously clear that any proceedings for enforcement of the HWMA shall be brought in Superior Court." (Pl. Mot. Appeal Ex. B, at 4.) Thus, it is well-settled that HWMA violations cannot be adjudicated by the AAD. Having found that DEM had a reasonable basis in fact for initiating the proceeding and in the proceeding itself by issuing the NOV, the inquiry now shifts to whether DEM had a reasonable basis in law.
DEM argues that it did have a reasonable basis in law because it has been adjudicating NOVs for HWMA violations in the AAD since it was established in 1989, and "[g]iven the long history and previous actions brought to court on appeal from final decisions rendered at AAD and the numerous matters heard and decided at AAD wherein no judge, hearing officer, or litigant ever raised the issue of subject matter jurisdiction," whether AAD had jurisdiction to adjudicate violations under the Act is a matter of first impression. (Def. Mem. Obj. to Pl. Appeal at 10-12.) In other words, because DEM, among others, believed that the AAD had subject-matter jurisdiction over HWMA violations, and AAD has adjudicated such matters since its inception in 1989, DEM argues that it was "reasonable in its reliance upon almost thirty (30) years of precedent in proceeding at AAD." Id. at 12. KRC, however, argues that although this is a matter of first impression, "that fact, standing alone, is not enough to demonstrate substantial justification." (Pl. Mot. Appeal at 13.) Specifically, KRC argues that because the language contained in the jurisdictional statute is clear and unambiguous, DEM's interpretation of § 23-19.1-15 was unreasonable "irrespective of the surprising novelty of the issue." Id. at 15.
"Although a case may involve an issue of first impression, that fact, standing alone, is not enough to demonstrate substantial justification." Giannini v. Council on Elementary and Secondary Education, No. PC 2014-5240, 2017 WL 235040, at *5 (R.I. Super. Jan. 13, 2017) (citing Gutierrez v. Barnhart, 274 F.3d 1255, 1261 (9th Cir. 2001)). That is, "[w]hether a litigated issue is one of first impression is properly considered as one factor in determining whether the government's litigation position is substantially justified[.]" Gutierrez, 274 F.3d at 1261. There is, however, no per se rule that reasonable litigation fees cannot be awarded under the EAJA in a case where there exists an issue of first impression. Id. "The governing standard . . . allows the Government to advance 'in good faith . . . novel but credible . . . interpretations of the law that often underlie vigorous enforcement efforts.'" Giannini, 2017 WL 235040, at *5 (quoting Abramson v. U.S., 45 Fed. Cl. 149, 152 (1999)) (emphasis in original). This means that '"a true question of novelty or first impression must be present for the Government's position to be substantially justified."' Id. (quoting Abramson, 45 Fed. Cl. at 152). Importantly, however, the government does not get an "automatic 'first impression' free pass" if it violates "its own regulations, or assumably any clear legal rule, for the first time[.]" Gutierrez, 274 F.3d at 1262.
Here, the issue of whether the AAD had jurisdiction to adjudicate HWMA violations is one of first impression because, as DEM points out, "no judge, hearing officer, or litigant [has] ever raised the issue of subject matter jurisdiction" despite "the long history and previous actions brought to court on appeal from final decisions rendered at AAD[.]" (Def. Mem. Obj. to Pl. Appeal at 12.) Thus, if DEM's position on this issue "was at least colorably supported by the legislative history of the statutory provision involved, then its litigating position may have been substantially justified within the intendment of the Equal Access to Justice Act." Giannini, 2017 WL 235040, at *5 (quoting Change-All Souls Housing Corp. v. U.S., 1 Cl. Ct. 302, 304 (Cl. Ct. 1982)).
In Gutierrez, the government argued that it was substantially justified in its litigation position because a regulation requiring a particular form to be filled out and attached to a psychiatric review technique form was "unclear." Gutierrez, 274 F.3d at 1259. The court disagreed, however, reasoning that although it will generally find the government's litigation position to be substantially justified "when the rules under which it was operating were ambiguous and it pursued a reasonable interpretation" upon which the court had not previously ruled, the government is not "automatically shielded from a fee award because its argument involves any issue" that the court has not previously decided. Id. at 1261-62 (emphasis in original). The court held that because the issue of first impression presented by the government did not involve "contested interpretations of an ambiguous legal rule" but the impact of a failure to follow a "clear rule" contained in the agency's regulations, the government was not substantially justified in its litigation position despite presenting an issue of first impression. Id. at 1262 (emphasis in original).
Contrastingly, in Giannini, the court held that the defendant's litigation position was substantially justified because although the plaintiff "ultimately prevailed in her appeal, the arguments set forth by Defendants in opposition to her appeal were complex and nuanced." Giannini, 2017 WL 235040, at *6. The court explained that in order for an issue of first impression to be controlling, '"a true question of novelty or first impression"' must be present for the government's litigation position to be substantially justified. Id. at *5 (quoting Abramson, 45 Fed. Cl. at 152). Therefore, because the defendant raised a novel but credible argument which "required th[e] Court to undertake a thorough and extensive review of the evolution of education law in Rhode Island[,]" the defendant had a reasonable basis in fact and law and thus was substantially justified. Id. at *6.
Here, the issue of first impression presented by DEM concerning whether AAD had jurisdiction to hear HWMA violations is not dispositive because DEM's interpretation of the jurisdictional statute in question was not reasonable, and thus, DEM did not have a reasonable basis in law. Similar to the matter of first impression raised in Gutierrez, the issue of first impression here does not involve "contested interpretations of an ambiguous legal rule," Gutierrez, 274 F.3d at 1262, because this Court previously found that "the plain and ordinary language of the HWMA makes unambiguously clear that any proceedings for enforcement of the HWMA shall be brought in Superior Court." (Pl. Mot. Appeal Ex. B, at 4) (emphasis added). That is, the issue of first impression presented by DEM involves a failure to follow a "clear rule" rather than a situation where the rules under which DEM was operating were ambiguous and it pursued a "reasonable interpretation" on which the Court has not previously ruled. See Gutierrez, 274 F.3d at 1261-62 (emphasis in original). Therefore, because the issue of first impression presented by DEM does not raise a true question of novelty or first impression, DEM does not have a reasonable basis in law and thus was not substantially justified in initiating the proceeding or in the proceeding itself. See Giannini, 2017 WL 235040, at *5.
Accordingly, this Court finds that although DEM had a reasonable basis in fact for initiating the proceeding against KRC by issuing the NOV, DEM did not have a reasonable basis in law and thus was not substantially justified.
B
Reasonableness of Fees
Section 42-92-3(a) provides that "[w]henever the agency conducts an adjudicatory proceeding subject to this chapter, the adjudicative officer shall award to a prevailing party reasonable litigation expenses incurred by the party in connection with that proceeding . . ." Section 42-92-3(a) (emphasis added). Reasonable expenses are "those expenses which were reasonably incurred by a party in adjudicatory proceedings, including, but not limited to, attorney's fees, witness fees of all necessary witnesses, and other costs and expenses as were reasonably incurred." Section 42-92-2(6). There are, however, two exceptions to this general rule. Id. First, "[t]he award of attorney's fees may not exceed one hundred fifty dollars ($150) per hour, unless the court determines that special factors justify a higher fee." Id. at § 42-92-2(6)(i). Second, "[n]o expert witness may be compensated at a rate in excess of the highest rate of compensation for experts paid by this state." Id. at § 42-92-2(6)(ii).
It is well settled that affidavits or testimony is required to determine "the criteria on which a fee award is to be based . . ." Colonial Plumbing & Heating Supply Co. v. Contemporary Construction Co., 464 A.2d 741,744 (R.I. 1983). In Tri-Town Construction Co., Inc. v. Commerce Park Associates 12 LLC, the court explained that such affidavits or expert testimony "must be from counsel who is a member of the Rhode Island Bar and who is not representing the parties to the action in which fees are sought." Tri-Town Construction Co. Inc., 139 A.3d 467, 480 (R.I. 2016). This is because "attorneys 'are competent to testify as experts in determining what is a reasonable charge for legal services rendered."' Colonial Plumbing & Heating Supply Co., 464 A.2d at 744 (emphasis added) (quoting Cottrell Employees Credit Union v. Pavelski, 106 R.I. 29, 35, 255 A.2d 162, 165 (1969)). "Expert testimony of that kind in the form of an affidavit has been found to be adequate." Id. (citing Stewart v. Industrial National Bank R.I., 458 A.2d 675 (R.I. 1983)).
Here, it is clear that KRC complied with the requirements set out in Tri-Town Construction Co., Inc. and Colonial Plumbing & Heating Supply Co. by submitting an affidavit from Matthew T. Oliverio, an independent third-party attorney, regarding the reasonableness and necessity of KRC's attorney fees. (Pl. Mot. Appeal Ex. F.) The hearing officer agreed that this affidavit clearly indicates that Mr. Oliverio is not representing either party in this matter and provides a thorough analysis determining the reasonableness and necessity of Plaintiff's attorney's fees. Id.; see Pl. Mot. Appeal Ex. A, 4, 7. With respect to the reasonableness of the fees sought, this Court agrees with the hearing officer's finding that the amount of litigation fees sought by KRC in the amount of $16,242.91 is reasonable. However, the hearing officer erred in reducing Mr. Oliverio's hourly rate from $350 to $150 per hour reasoning that "this [$350] hourly rate exceeds that permitted for attorney's fees and there is no evidence that it is appropriate as an 'expert' fee." (Pl. Mot. Appeal Ex. A, 4.) The affidavit submitted by Mr. Oliverio was offered solely to satisfy the Tri-Town Construction Co., Inc. "affidavit[] or expert testimony" requirement in determining the reasonableness of the attorney's fee charged to KRC. Tri-Town Construction Co., Inc., 139 A.3d at 480. Therefore, Mr. Oliverio is an "expert witness" and not an "attorney" for purposes of this matter and thus must not be "compensated at a rate in excess of the highest rate of compensation for experts paid by this state." Section 42-92-2 (6)(ii). Importantly, DEM has failed to offer any evidence which suggests that the expert witness hourly rate paid to Mr. Oliverio was "in excess of the highest rate of compensation for experts paid by this state." Id.
This amount represents the litigation expenses incurred by KRC less Mr. Oliverio's fees at $150 per hour.
Accordingly, this Court finds that KRC satisfied the requirements established in Tri-Town Construction Co., Inc. and Colonial Plumbing & Heating Supply Co. for determining the reasonableness and necessity of KRC's legal fees and that Mr. Oliverio is an "expert witness" for purposes of determining his hourly rate.
IV
Conclusion
This Court finds that KRC is entitled to recover reasonable litigation expenses under the EAJA because although DEM had a reasonable basis in fact for initiating the proceeding and in the proceeding itself, it did not have a reasonable basis in law and thus was not substantially justified. Moreover, KRC offered sufficient evidence to establish the reasonableness of the legal fees incurred as required by Tri-Town Construction Co., Inc. and Colonial Plumbing & Heating Supply Co. Finally, Mr. Oliverio's hourly rate should not be limited to $150 because his role in this case was that of an "expert witness" and not an attorney. Thus, KRC is awarded reasonable litigation expenses in the amount of $16,242.91, plus Mr. Oliverio's expert fees at $350 per hour. Counsel shall submit the appropriate order and judgment.