Sally Hyde (Michael J. Peterson, on the brief), Bosworth & Slivka, P.C. and Robert G. Heiserman, Denver, Colo., for plaintiff-appellee, cross-appellant.

James W. Winchester (Robert N. Miller, U.S. Atty., with him, on the briefs), Asst. U.S. Atty., Denver, Colo., for defendants-appellants, cross-appellees.

Before HOLLOWAY, Chief Judge, BARRETT, Circuit Judge, and SAM, District Judge.*

SAM, District Judge.

FACTS

The Immigration and Naturalization Service (referred to hereinafter as the INS) appeals the district court's award of attorney's fees and costs to Mr. Kopunec, a South African citizen who avoided immediate deportation by obtaining in district court a reversal of the INS's "automatic revocation" of his visa.

In 1979, Mr. Kopunec came with his family from South Africa to the United States. He went into business for himself restoring old cars. He later issued some of the stock in his business to Jan Tichy, and they continued the business together under the name "Auto Trade."

During the period of time from Mr. Kopunec's arrival in the United States to the inception of this suit, Mr. Kopunec had been granted six preference visas. Auto Trade, under the signature of its president, Jan Tichy, was the petitioner for Mr. Kopunec's sixth visa. In late 1981, internal problems led to the division of Auto Trade between Mr. Kopunec and Mr. Tichy, each performing separate functions with separate bank accounts. At some point thereafter, Mr. Kopunec decided to go to Canada temporarily to obtain a United States visa. He then transferred his Auto Trade stock to Mr. Tichy for no consideration. Upon his return, without obtaining another visa, Mr. Kopunec went into business with Mr. Sebring, doing the same work with the same customers in a location around the corner from the original location of Auto Trade. The new corporation was called Jarina, Inc.

On June 28, 1982, Mr. Tichy, as president of Auto Trade, who had petitioned the INS for Mr. Kopunec's sixth and last visa, wrote the INS to inform the authorities that Mr. Kopunec was no longer employed by Auto Trade. The INS interpreted this information as a formal notification of withdrawal of the visa petition. Accordingly, on November 30, 1982, the INS automatically revoked Mr. Kopunec's visa.

Mr. Kopunec sought administrative relief from the INS. He requested reopening the issue of whether the visa should have been automatically revoked. And, he asserted that the last visa should continue in force because he was employed by Jarina, Inc., a successor company of Auto Trade and essentially the same business under another name. The INS would not reopen the issue of the revocation nor did it recognize Jarina, Inc. as a successor corporation to Auto Trade.

On June 28, 1983, Mr. Kopunec turned to the district court. He brought suit against the INS seeking, inter alia, injunctive relief from deportation and declaratory relief on the issues of whether Auto Trade had requested the revocation of his visa and whether Jarina, Inc. succeeded Auto Trade as the petitioner.

On August 8, 1983, the district court conducted a one-and-a-half-day hearing, issued a preliminary injunction against deportation and remanded the case to the INS for further proceedings. The court found that the letter from Auto Trade did not constitute either a request to withdraw the visa petition or a formal notice of withdrawal as required by the regulations to invoke automatic revocation.1 The court also found that the INS did not follow established revocation procedures. The court did not decide whether Jarina, Inc. was the successor to Auto Trade.

Plaintiff then moved the district court for attorneys' fees under the Equal Access to Justice Act (referred to hereafter as EAJA), 28 U.S.C. Sec. 2412 et seq. On August 3, 1984, the district court awarded the plaintiff attorneys' fees and costs in the amount of $14,078 and found that the INS's position was "unreasonable in both fact and law" and was not "substantially justified" for purposes of applying the EAJA.2

APPELLATE CONTENTIONS

The appeal involves only the award of attorneys' fees and costs. The INS contends that Mr. Kopunec was not entitled to attorneys' fees under the EAJA because he was not yet a "prevailing party." The INS argues that the case was remanded for ultimate determination of the issues and no final judgment has been entered in favor of Mr. Kopunec. The appellant also contends that the INS's position was "substantially justified" which under the EAJA precludes the award of attorneys' fees. The appellant argues that the scope of review should have been limited to the administrative record and that the fees granted were excessive. Mr. Kopunec cross appeals claiming the district court abused its discretion by reducing the award below the amounts he requested for attorneys' fees, legal assistants' fees and costs.

DECISION

The incomplete record in this case constrains the court from fully addressing these issues. Rule 10(b)(2) of the Federal Rules of Appellate Procedure states as follows:

If the appellant intends to urge on appeal that a finding or conclusion is unsupported by the evidence or is contrary to the evidence, the appellant shall include in the record a transcript of all evidence relevant to such finding or conclusion.

The appellate record fails to include a complete transcript of the district court proceedings. The transcript submitted covers only the court's concluding remarks and omits the substance of the lengthy hearing upon which the judge's conclusions were based. The court, therefore, lacks the record necessary to examine either the scope of review applied by the district court or the district court's conclusion that the INS's position relative to the automatic revocation was not substantially justified in law or fact.

However, the court is able, on the basis of the outcome and the record, to determine whether Mr. Kopunec was a "prevailing party" under the Equal Access to Justice Act. Although the term "prevailing party" is not defined in the act, legislative history makes clear Congressional intent to allow awards of attorney's fees prior to final judgment. The legislative history states:

Under existing fee-shifting statutes, the definition of prevailing party has been the subject of litigation. It is the committee's intention that the interpretation of the term in S. 265 be consistent with the law that has developed under existing statutes. Thus, the phrase "prevailing party" should not be limited to a victor only after entry of a final judgment following a trial on the merits.... A fee award may thus be appropriate where the party has prevailed on an interim order ... which was central to the case, or where an interlocutory appeal is "sufficiently significant and discrete to be treated as a separate unit".

S.R. No. 253, 96th Cong., 1st Sess. 7 (1979), H.R.Rep. No. 1418 96th Cong.2d Sess. 11, reprinted in 1980 U.S.Code Cong.Ad.News at 4990 (citations omitted). A plaintiff prevails for attorney fee purposes if success on a significant issue of litigation achieves some of the benefit the plaintiff sought in bringing the suit. Hensley v. Eckerhart, 461 U.S. 424, 103 S. Ct. 1933, 1939, 76 L. Ed. 2d 40 (1983) (quoting Nadeau v. Helgemoe, 581 F.2d 275, 278-279 (1st Cir.1978)). The court looks to the substance of the litigation to determine whether an applicant has substantially prevailed in its position, and not merely the technical disposition of the case or motion. See Austin v. Department of Commerce, 742 F.2d 1417, 1420 (Fed.Cir.1984) (citing Devine v. Sutermeister, 733 F.2d 892, 898 (Fed.Cir.1984)).

This inquiry is made against the backdrop of the purpose of the Equal Access to Justice Act. The Congress recognized that the expense of litigation sometimes deters aggrieved parties from seeking review of, or defending against, unreasonable governmental action. EAJA was enacted to diminish this deterrent effect. The Equal Access to Justice Act, Pub.L. No. 96-481, Sec. 202, 94 Stat. 2325 (1980).