In the

United States Court of Appeals
               For the Seventh Circuit
                          ____________

No. 07-3406

F IVE P OINTS R OAD JOINT V ENTURE , an
Illinois general partnership, JOHN
B AENZIGER, C INDY B AENZIGER, et al.,
                                                 Plaintiffs-Appellees,
                                  v.

M ICHAEL O. JOHANNS, Secretary
of Agriculture, United States
Department of Agriculture, Office
of Secretary, and R OGER K LURFELD,
Director, National Appeals
Division, a Division of the United
States Department of Agriculture,
                                             Defendants-Appellants.
                          ____________
             Appeal from the United States District Court
        for the Northern District of Illinois, Western Division.
              No. 06 C 50145—Frederick J. Kapala, Judge.
                          ____________

     A RGUED A PRIL 7, 2008—D ECIDED S EPTEMBER 8, 2008
                          ____________
2                                                     No. 07-3406

    Before R IPPLE, W ILLIAMS and SYKES, Circuit Judges.
  R IPPLE, Circuit Judge. In April 2005, the Farm Service
Agency, an agency of the United States Department of
Agriculture (“USDA”), ordered the plaintiffs (collectively,
“Five Points”) to refund certain benefits that they had
received from it. Five Points appealed the decision to
the National Appeals Division (“NAD”), which reversed
the Farm Service Agency’s determination in its entirety.
Five Points then applied to the NAD for attorney’s fees
and costs under the Equal Access to Justice Act, 5 U.S.C.
§ 504 (“EAJA”), but the NAD denied the request on the
ground that the EAJA did not apply to NAD adjudica-
tions. Five Points petitioned for review of the agency’s
denial of its EAJA request to the district court.1 The
district court held that the EAJA did apply to NAD adjudi-
cations and remanded for consideration of whether the
requirements of the EAJA were met in this case. The Gov-
ernment now appeals the decision of the district court.2
  For the reasons stated in this opinion, we affirm the
judgment of the district court.



1
  The district court had jurisdiction under 7 U.S.C. § 6999
to review the National Appeals Division Director’s deter-
mination.
2
   We have jurisdiction over this appeal under 28 U.S.C. § 1291.
See Aageson Grain & Cattle v. USDA, 

, 1040-41 (9th
Cir. 2007); see also Fortney v. Apfel, 

(1998); Sullivan
v. Finklestein, 

(1990); Horn Farms, Inc. v. Johanns,

(7th Cir. 2005).
No. 07-3406                                              3

                             I
                    BACKGROUND
  In April 2005, the Farm Service Agency, an agency of
the USDA, ordered Five Points to refund certain fed-
eral farm program benefits that it had received for the
years 2003 and 2004. Five Points appealed that decision
to an NAD hearing officer. The hearing officer reversed
the Farm Service Agency’s determination in its entirety.
The Director of the NAD then affirmed the hearing
officer’s decision in favor of Five Points.
  Following its successful appeal of the merits of its
dispute, Five Points applied to the NAD Director for
attorney’s fees and costs under the EAJA, 5 U.S.C. § 504.
The NAD Director denied Five Points’ application be-
cause, in the Director’s view, the EAJA did not apply to
NAD adjudications. Five Points’ request for reconsidera-
tion also was denied by the Director. Five Points sought
review of that determination in the district court.
   In the district court, Five Points and the Government
filed cross-motions for summary judgment. Following
the decision of the Eighth Circuit in Lane v. USDA, 

(8th Cir. 1997), the reasoning of which also
was applied by the Ninth Circuit in Aageson Grain &
Cattle v. USDA, 

(9th Cir. 2007), it held that
proceedings before the NAD are subject to the EAJA. The
district court therefore granted Five Points’ motion for
summary judgment; it held that the NAD proceedings
were “under” section 554 of the Administrative Procedure
Act of 1946, 5 U.S.C. § 701 et seq. (“APA”), and that
the plaintiffs, as the prevailing party in the agency pro-
4                                                   No. 07-3406

ceeding, were entitled to attorney’s fees and costs under
the EAJA. The Director had erred, therefore, in refusing
to consider the plaintiffs’ application. The case was re-
manded to the agency for appropriate consideration of
Five Points’ application under the EAJA. The Govern-
ment appealed.


                                II
                        DISCUSSION
  We review de novo the district court’s grant of sum-
mary judgment. Foskett v. Great Wolf Resorts, Inc., 

, 522 (7th Cir. 2008). On cross-motions for sum-
mary judgment, we construe all facts and inferences
therefrom in favor of the party against whom the motion
under consideration was made. 

is
appropriate when “there is no genuine issue as to any
material fact and . . . the movant is entitled to judgment
as a matter of law.” Id.; Fed. R. Civ. P. 56(c).
  This case presents a single issue: whether the EAJA
applies to administrative proceedings before the NAD.
This issue presents a question of statutory interpretation.3



3
   In an introductory section of its brief, the Government urges
us to keep in mind principles of sovereign immunity in inter-
preting the statutes at issue. It contends that the EAJA should
not be interpreted as applying to proceedings conducted
under the NAD because “[t]he EAJA renders the United States
liable for attorney’s fees for which it would not otherwise be
                                                    (continued...)
No. 07-3406                                                      5

The EAJA “provides that prevailing parties in certain
adversary administrative proceedings may recover attor-
ney’s fees and costs from the Government.” Ardestani v.
INS, 

, 132 (1991). In pertinent part, the EAJA
states:
    An agency that conducts an adversary adjudication
    shall award, to a prevailing party other than the
    United States, fees and other expenses incurred by that
    party in connection with that proceeding, unless the
    adjudicative officer of the agency finds that the posi-
    tion of the agency was substantially justified or that
    special circumstances make an award unjust.
5 U.S.C. § 504(a)(1); see also 

. The
EAJA defines an “adversary adjudication” as “an adjudica-
tion under section 554 of this title in which the position
of the United States is represented by counsel or other-
wise.” 5 U.S.C. § 504(b)(1)(C)(i). Here, the Government


3
   (...continued)
liable, and thus amounts to a partial waiver of sovereign
immunity.” Ardestani v. INS, 

, 137 (1991). The
Government contends, rightly, that “[a]ny such waiver must
be strictly construed in favor of the United States.” 

“once Congress has waived sovereign immunity over
certain subject matter, [a court] should be careful not to ‘assume
the authority to narrow the waiver that Congress intended.’ ” 

States v. Kubrick, 

, 118 (1979)). As
we point out in our statutory analysis, here, Congress ex-
pressly has waived sovereign immunity with respect to attor-
ney’s fees and costs to a prevailing party in an adversarial
adjudication under section 504.
6                                                        No. 07-3406

concedes that it was represented by counsel in the appeal
before the NAD; the only question, then, is whether an
NAD proceeding is “an adjudication under section 554.” 

of Title 5 delineates the scope of pro-
ceedings governed by the formal adjudication require-
ments of the APA. See 

-33. By
its terms, section 554 “applies . . . in every case of an
adjudication required by statute to be determined on the
record after opportunity for an agency hearing.” 4 5 U.S.C.
§ 554(a). An adjudication is defined as an “agency process
for the formulation of an order.” 5 U.S.C. § 551(7). Section
554 therefore will apply if the proceeding meets three re-
quirements: (1) there must be an adjudication, an agency



4
  There are five exceptions to this definition, none of which are
at issue here; specifically, section 554 does not apply
    to the extent there is involved—
      (1) a matter subject to a subsequent trial of the law and the
      facts de novo in a court;
      (2) the selection or tenure of an employee, except a [sic]
      administrative law judge appointed under section 3105 of
      this title;
      (3) proceedings in which decisions rest solely on inspec-
      tions, tests, or elections;
      (4) the conduct of military or foreign affairs functions;
      (5) cases in which an agency is acting as an agent for a court;
      or
      (6) the certification of worker representatives.
5 U.S.C. § 554(a).
No. 07-3406                                                  7

process for the formulation of an order, that is required
by statute; (2) it must be on the record; and (3) there
must be an opportunity for an agency hearing. 

.
  The review of agency determinations by the NAD
clearly meets the definition of an adjudication, the first
criterion. The governing statute provides for a hearing to
determine disputed facts and requires that, after that
hearing, the hearing officer must issue a determination.
7 U.S.C. § 6997. The NAD statutes also meet the third
section 554 requirement: that there be an opportunity for
a hearing. Such a hearing is mandatory once requested
by a participant. 7 U.S.C. § 6997(b); cf. Smedberg Mach. &
Tool, Inc. v. Donovan, 

, 1092-93 (7th Cir. 1984)
(holding that section 554 is inapplicable to a proceeding
that “gives the administrative law judge the discretion
rather than the obligation to conduct a review hearing”).
  The only remaining requirement for a proceeding to
be under section 554 is that it must be on the record. The
NAD statutes do not require expressly the hearing to be
on the record; nonetheless, Congress’ intent is clear.
“Although Section 554 specifies that the governing statute
must satisfy the ‘on the record’ requirement, those three
magic words need not appear for a court to determine
that formal hearings are required.” City of W. Chicago, Ill. v.
U.S. Nuclear Regulatory Comm’n, 

, 641 (7th Cir.
1983). Congress need only “clearly indicate its intent to
trigger the formal, on-the-record hearing provisions of
the APA.” 

07-3406

  Here, Congress has indicated clearly its intent to
trigger the formal hearing provisions of the APA. See 

statutes provide that a participant who appeals
an adverse decision shall be given an evidentiary hearing.
7 U.S.C. § 6996(a). The evidentiary hearing consists of a
procedure in which the hearing officer has the power to
administer oaths and to subpoena witnesses and evidence.

The hearing officer and interested parties
are prohibited from ex parte communications. 

The hearing officer is not bound by
prior factual findings. 

The appellant
carries the burden of proving that the agency’s decision
was erroneous, 

and the hearing officer
must leave the record open for additional information
in response to new facts and evidence presented at the
hearing, 

The appellant or the agency may
request that the Director review the hearing officer’s
determination. 

The Director’s review is
based on the case record (all material related to the ad-
verse decision), 

the record from the eviden-
tiary hearing under 7 U.S.C. § 6997 and any other argu-
ments or evidence that the Director chooses to accept.

Judicial review is available upon issuance
of a final determination. 

  The language of the text, especially the repeated refer-
ences to the record and the provision for trial-type pro-
cedures, as well as the structure of the NAD statutes,
makes clear that Congress intended for NAD proceedings
to be governed by section 554 of the APA. 

. Indeed, the Government concedes that NAD
proceedings are “on the record.” Appellants’ Br. at 15
No. 07-3406                                               9

(“7 U.S.C. §§ 6996-6998 required the hearing officer’s
decision to be on the record.”).
  The Government nevertheless contends that, despite
meeting the statutory definition for proceedings to
which the EAJA applies, an administrative appeal pro-
ceeding before the NAD is not one to which the EAJA
applies because it is a “comprehensive, freestanding
scheme that supersedes 5 U.S.C. § 554.” Appellants’ Br. at
16 (comparing 7 U.S.C. § 6997(a)(2)(A) with 5 U.S.C.
§ 554(d)). In essence, the Government argues that the
NAD statutes have amended by implication section 554
of the APA, despite the language in section 554 that
makes it applicable to all adjudications required by
statute to be determined on the record after an oppor-
tunity for an agency hearing.
  As our colleagues in the Eighth Circuit have pointed out,
“[t]he primary flaw in the agency’s argument is that the
APA specifically states that a ‘subsequent statute may
not be held to supersede or modify this subchapter . . .
except to the extent that it does so expressly.’ ” 

(quoting 5 U.S.C. § 559). There is nothing
in the NAD statutes that expressly states that the APA is
inapplicable. See 

[section] 559, Congress
made it clear that the APA would apply unless there
was some expression by Congress that the APA was
being superseded.” 

Section 559
therefore prevents a statute from amending the APA by
implication. 

section 559, Congress adopted
a reasonable approach to ensure that, given the variety
of issues and forums covered by the APA, Congress
10                                             No. 07-3406

would not adopt inadvertently a provision that conflicted
with the APA or repeat a provision contained in the
APA. Id.; 

. Indeed, any variation
here between the NAD procedures and those in the APA
merely “highlight[s] the confusion that would occur[ ] but
for § 559[,] which forbids amendments of the APA by im-
plication.” 

.
  As the Eighth Circuit made very clear, the situation
before us here is not controlled by the Supreme Court’s
decision in Marcello v. Bonds, 

(1955). There,
the Supreme Court held that the APA did not apply to
deportation hearings because, in crafting deportation
procedures, Congress had departed from the procedures
of the APA and had created different and unique proce-
dures to govern those proceedings. None of the varia-
tions from the APA in the NAD statutes are of the magni-
tude described in Marcello. These deviations simply
provide no basis for holding, in the face of the Supreme
Court’s warning in Marcello, that “[e]xemptions from
the terms of the [APA] are not lightly to be presumed.” 

Nor are they sufficient to justify holding, in the
face of section 559, that the NAD is a freestanding
scheme. See 

; cf. W. 

(noting that if the proceeding was one “under
section 554,” then it must conform with section 554’s
requirements “despite [the Nuclear Regulatory Com-
mission’s] interpretation of the regulations”).
 The Government also contends that the holdings in
Ardestani and Marcello foreclose the possibility that an
NAD proceeding is one “under section 554.” The Gov-
No. 07-3406                                              11

ernment submits that the statute creating the NAD must
state unambiguously that the NAD proceeding is subject
to section 554 or the EAJA for the proceeding to qualify
as one “under” section 554.
  This understanding of Ardestani and Marcello was
rejected by the Eighth and Ninth Circuits in precisely the
circumstances before this court. Our sister circuits held
that section 554 applies to any proceeding that is “re-
quired by statute to be determined on the record after
opportunity for an agency hearing,” 5 U.S.C. § 554, unless
a subsequent statute expressly opts out of the EAJA, see
5 U.S.C. § 559. We agree. Marcello simply held that the
Immigration and Nationality Act (“INA”) did create
expressly a proceeding that was entirely separate from
section 554; the Supreme Court so held because the
INA states that it “shall be the sole and exclusive pro-
cedure for determining deportability of an alien.”

. Ardestani held that the
mere incorporation by the INA of some of the APA pro-
ceedings was insufficient, in the face of the express state-
ment in the INA that it was entirely an separate proceed-
ing, to make the INA proceeding one “under” section
554. 

The decisions of our sister circuits,
which we follow today, are entirely consistent with the
Supreme Court’s holdings in these cases; the Court
simply concluded that section 554 did not apply to the
INA even if the INA otherwise met the conditions in
section 554 because Congress had exempted expressly
the INA from it. Here, by contrast, no such express state-
ment in the NAD exempts its proceedings from section
554 and the APA. 

.
12                                                     No. 07-3406

  Additionally, the Government’s understanding of
Ardestani conflicts with this court’s precedents regarding
the application of section 554 to a particular proceeding.
See W. 

. In West Chicago, this court
considered whether section 554 applied to a hearing
provided by the Nuclear Regulatory Commission. The
statute provided that the “Commission shall grant a
hearing upon the request of any person whose interest
may be affected by the proceeding.” 

outcome in West Chicago differed from that in Aageson
and Lane, this court engaged in the same analysis. We
held that a hearing was required by the statute, leaving
only the third element—whether the hearing was “on the
record”—in dispute. 

concluded that
formal hearings, or hearings on the record, were not
required by the statute, and therefore that section 554
did not apply to the proceedings. 

we en-
gaged in precisely the inquiry that was conducted by
the Ninth Circuit in Aageson and by the Eighth Circuit in
Lane; we did not, however, examine whether the statute
creating the hearing unambiguously stated that it was
subject to section 554 or the EAJA, as the Government
suggests is required by Ardestani.5


5
  As a fall-back position, the Government submits that the result
reached in Lane and Aageson conflicts with two cases from the
District of Columbia Circuit, which held that a proceeding was
not “under section 554” even though the proceeding was not
excluded expressly from the APA. See Friends of the Earth v.
Reilly, 

(D.C. Cir. 1992); St. Louis Fuel & Supply Co. v.
                                                       (continued...)
No. 07-3406                                                    13

  The Government also points to the legislative history
of the NAD statutes, which, it contends, supports its
conclusion that the NAD is not “under” the APA. It
submits that one version of the NAD statutes would have
stated expressly that the NAD was under section 554, but
the final version omitted that language. Resort to the
legislative history, however, is only necessary if the
language of the statue is ambiguous; if the statutory
language is clear, then the legislative history is only
relevant if it shows a clear intent to the contrary. See
United States v. Shriver, 

, 901 (7th Cir. 1992).
Here, there is no ambiguity that requires resort to the
legislative history. Moreover, the legislative history to
which the Government points does not create the clear
intent, contrary to the express language of the statute,
that is necessary to overcome a clear statute. See 

03. In light of the statutory scheme as a whole, specifically
considering section 559, the legislative history does not
clearly contradict the express statutory language. See 

5
  (...continued)
FERC, 

(D.C. Cir. 1989). In those cases, however, as
in West Chicago, the holdings were based on a determination that
the requirements of section 554 were not met at the outset: the
proceedings at issue did not require formal hearings “on the
record,” and therefore they did not meet the standard for a
proceeding “under section 554.” See Friends of the 

; St. 

. The case before us, however,
meets the statutory requirements for proceedings “under section
554”; this case is therefore distinguishable from St. Louis Fuel
and Friends of the Earth.
14                                               No. 07-3406

  The Government takes its legislative history analysis
a step further. It points to the national budget prepara-
tion process as evidence that Congress did not intend
section 554, and thus the EAJA, to apply to the NAD. It
submits that approximately 13,000 appeals are docketed
annually with the NAD, yet the Congressional Budget
Office’s cost estimates do not include potential EAJA
costs. The Government does not rely on any source of
authority for the proposition that budget estimates can
overcome statutory language or influence a court’s statu-
tory interpretation, however, and we see no reason in
this case to be persuaded by them.


                        Conclusion
  A proceeding before the NAD is an “adjudication
required by statute to be determined on the record after
opportunity for an agency hearing.” See 5 U.S.C. § 554(a);
see also 

; 

. The
NAD does not establish a freestanding scheme of the
sort that prevents it from being governed by the APA.
See 5 U.S.C. § 559. Therefore, the EAJA applies to pro-
ceedings before the NAD. 

For the foregoing
reasons, we affirm the judgment of the district court.
                                                   A FFIRMED




                            9-8-08