United States v. Gavilan Joint Community College District

The United States brought suit against Gavilan Joint Community College District and Gavilan College (“Gavilan”) to recover overpayments received by Gavilan under a Veterans Administration educational program. The district court granted summary judgment to Gavilan, finding that the United States’ action was time-barred by the six-year statute of limitations. 662 F.Supp. 309 . Gavilan appeals from the district court’s denial of attorney’s fees under the Equal Access to Justice Act. It also appeals from the denial of sanctions under Rule 11, Fed.R.Civ.P.

The district court found “that the United States had no reasonable basis in law and fact on which to challenge [Gavilan’s] limitations defense,” but nevertheless held that under the “totality of the circumstances” the United States’ position was substantially justified because the underlying claim once had a reasonable chance for success. The district court misapplied the “totality of the circumstances” test in holding that the Government’s pursuit of a time-barred claim was substantially justified. We therefore reverse and remand for imposition of attorney’s fees.

BACKGROUND

The facts are not disputed. From 1972 to 1976, Gavilan…