206 F.3d 1205 (D.C. Cir. 2000)
Paul D. Halverson, et al.,Appellantsv.Rodney E. Slater, Secretary, United States Department of Transportation, Appellee
No. 99-5115
United States Court of AppealsFOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued February 23, 2000Decided March 31, 2000

Appeal from the United States District Court for the District of Columbia(No. 96cv00028)
John Longstreth argued the cause for appellants.  With  him on the briefs were Donald A. Kaplan and Mark Ruge.
Rudolph Contreras, Assistant U.S. Attorney, argued the  cause for appellee.  With him on the brief were Wilma A.  Lewis, U.S. Attorney, R. Craig Lawrence, Assistant U.S. Attorney, and Dale C. Andrews, Deputy Assistant General  Counsel for Litigation, U.S. Department of Transportation.
Before:  Edwards, Chief Judge, Tatel and Garland, Circuit  Judges.
Opinion for the Court filed by Circuit Judge Tatel.
Tatel, Circuit Judge:


1
After a previous panel of this court  invalidated a final rule issued by the Department of Transportation, the prevailing parties, appellants herein, filed an  application for attorneys' fees and costs pursuant to the  Equal Access to Justice Act.  The district court denied the  application, finding the Department's defense of the rule,  though unsuccessful, "substantially justified" within the  meaning of the Act.  Because the district court failed adequately to explain its decision, and because we find unpersuasive the Department's argument that its position was substantially justified, we grant appellants' application for fees and  expenses and remand for the district court to calculate the  precise amount due.


2
* The Great Lakes Pilotage Act of 1960, 46 U.S.C. SS 9301 et  seq., requires that foreign ships traveling the Great Lakes  take on an experienced American or Canadian pilot.  Id.  S 9302(a).  The Act directs the Secretary of Transportation  to set standards for pilot qualifications, selection, registration,  training, and working conditions.  Id. S 9303.


3
Until 1995, the Secretary had delegated Pilotage Act responsibilities to the United States Coast Guard as permitted  by 46 U.S.C. S 2104(a):  "The Secretary may delegate the  duties and powers conferred by this subtitle [Subtitle II,  titled 'Vessels and Seamen'] to any officer, employee, or  member of the Coast Guard, and may provide for the subdelegation of those duties and powers."  Pilotage Act responsibilities are among the Secretary's Subtitle II duties.  Pursuant to a final rule issued on December 11, 1995, the Secretary  transferred certain Great Lakes pilot responsibilities from the  Coast Guard to the St.Lawrence Seaway Development Corporation.  Organization and Delegation of Powers and Duties;  Transfer of Great Lakes Pilotage Authority From  the Coast Guard to the Saint Lawrence Seaway Development  Corporation, 60 Fed. Reg. 63,444 (Dec. 11, 1995).  In support  of this transfer, the Secretary invoked his general delegation  authority under 49 U.S.C. S 322(b):  "The Secretary may  delegate, and authorize successive delegations of, duties and  powers of the Secretary to an officer or employee of the  Department."


4
Troubled by the safety implications of the transfer, appellants, two Great Lakes pilots and two associations of Great  Lakes pilots, filed suit in the United States District Court for  the District of Columbia claiming that the delegation exceeded the Secretary's authority under section 2104(a).  According to the Pilots, that provision permits the Secretary to  transfer Pilotage Act responsibilities only to the Coast Guard,  not to the St. Lawrence Seaway Development Corporation.The Department responded that section 2104(a) does not limit  the Secretary's general authority to delegate responsibilities  pursuant to section 322(b).  Granting summary judgment for  the Department, the district court found section 2104(a) "fully  consistent with [section 322(b)'s] broader language."  Halverson v. Pena, 1996 WL 217885, *6 (D.D.C. 1996).


5
This court reversed.  Halverson v. Slater, 129 F.3d 180  (D.C. Cir. 1997).  Applying step one of the Chevron framework, see Chevron, U.S.A., Inc. v. Natural Resources Defense  Council, Inc., 467 U.S. 837, 842 (1984), the panel "conclude[d]  that the plain meaning of section 2104(a) limits delegation of  [Pilotage Act] functions to the United States Coast Guard and  that section 322(b) cannot fairly be construed to expand the  limitation."  129 F.3d at 181.  The panel found that the  Secretary's interpretation of section 2104(a) violated three  separate canons of construction:  it "plainly violates the familiar doctrine that the Congress cannot be presumed to do a  futile thing," id. at 185;  it "runs afoul of the cardinal canon of  statutory construction that '[w]e must read the statutes to  give effect to each if we can do so while preserving their  sense and purpose,' " id. (quoting Watt v. Alaska, 451 U.S.  259, 267 (1981));  and it is "irreconcilable with the statutory  construction principle, expressio unius est exclusio alterius, that is, the 'mention of one thing implies the exclusion of  another thing,' " 129 F.3d at 185 (quoting Ethyl Corp. v. EPA,  51 F.3d 1053, 1061 (D.C. Cir. 1995)).  The Secretary's assertion that section 2104(a) has wartime significance, the panel  said, was "patently erroneous."  129 F.3d at 185.  Concluding  that "even if section 322(b)'s scope is ambiguous, requiring  recourse to Chevron step two, we would be compelled to  reject the Secretary's interpretation as unreasonable because  it 'would deprive [section 2104(a)] of virtually all effect,' " the  panel remanded to the district court with instructions to  vacate the final rule.  Id. at 189 (quoting American Fed'n of  Gov't Employees v. FLRA, 798 F.2d 1525, 1528 (D.C. Cir.  1986)) (alternation in original).


6
The Pilots then applied for attorneys' fees and expenses  under the Equal Access to Justice Act, 28 U.S.C. § 2412(d).The EAJA provides that "a court shall award to a prevailing  party other than the United States fees and other expenses  ... incurred by that party in any civil action (other than  cases sounding in tort), including proceedings for judicial  review of agency action, brought by or against the United  States ... unless the court finds that the position of the  United States was substantially justified or that special circumstances make an award unjust."  28 U.S.C.  § 2412(d)(1)(A).  The Secretary neither contested the Pilots'  status as prevailing parties nor claimed the existence of  "special circumstances."  Instead, the Secretary argued that  his interpretation of section 322(b) as authorizing the delegation of Pilotage Act responsibilities to the St. Lawrence  Seaway Development Corporation was "substantially justified."  The district court agreed.  Describing the issue asa "straightforward, almost textbook, administrative law problem that was resolved by using well-established general principles of statutory interpretation," it denied the Pilots' EAJA  application.  Halverson v. Slater, No. 96-0028, Mem. Op. at 9  (D.D.C. Apr. 6, 1999).  The Pilots now appeal.

II

7
Standards for resolving EAJA fee applications have  emerged from a growing body of case law.  The Government has the burden of proving that its position, including both the  underlying agency action and the arguments defending that  action in court, was "substantially justified" within the meaning of the Act.  See Wilkett v. ICC, 844 F.2d 867, 871 (D.C.  Cir. 1988).  "Substantially justified" means "justified in substance or in the main--that is, justified to a degree that could  satisfy a reasonable person.  That is no different from ...  [having] a reasonable basis both in law and fact."  Pierce v.  Underwood, 487 U.S. 552, 565 (1988) (internal quotation  marks and citation omitted).  While a court's "merits reasoning may be quite relevant to the resolution of the substantial  justification question," we have cautioned that "[t]he inquiry  into the reasonableness of the Government's position ... may  not be collapsed into our antecedent evaluation of the merits,  for the EAJA sets forth a distinct legal standard."  F.J.  Vollmer Co., Inc. v. Magaw, 102 F.3d 591, 595 (D.C. Cir.  1996) (internal quotation marks omitted).  For example, "because 'unreasonable' may have different meanings in different  contexts, even the presence of that term or one of its synonyms in the merits decision does not necessarily suggest  that the Government will have a difficult time establishing  that its position was substantially justified."  Id.  "The relevance of a court's reasoning on the merits to the reasonableness inquiry under the Equal Access Act thus depends on the  nature of the case."  Id.


8
Appellate courts review district court EAJA decisions for  abuse of discretion.  See Pierce, 487 U.S. at 563.  Giving  substantial deference to the district court, we will reverse if  we have "a definite and firm conviction that the court below  committed a clear error of judgment in the conclusion it  reached upon a weighing of the relevant factors."  Vollmer,  102 F.3d at 596 (internal quotation marks and citations omitted).  In exercising our appellate responsibility, we recognize  the awkward position in which the EAJA sometimes places  our district court colleagues.  Where, as here, the district  court originally accepts the Government's position and is then  reversed on appeal, the EAJA requires the district court to  determine whether the very Government argument it previously accepted was not substantially justified, i.e., unreasonable. Yet district courts have awarded fees just in such  delicate circumstances.  See, e.g., Kooritzky v. Herman,  6 F. Supp.2d 1, 4 (D.D.C. 1997), rev'd in part on other  grounds, 178 F.3d 1315 (D.C. Cir. 1999).


9
With these considerations in mind, we turn first to an  examination of the reasons the district court gave in support  of its finding that the Department's position at the agency  level was substantially justified.  The district court attributed  great significance to the Department's reasons for transferring Pilotage Act functions to the St. Lawrence Seaway  Development Corporation, pointing out that two studies, one  by the Department's Inspector General, had raised serious  questions about the Coast Guard's stewardship.  See Halverson, Mem. Op. at 4.  The district court also relied heavily on  the process that led to the promulgation of the final rule:


10
Thus, what this rather extended discussion of the Secretary's delegation decision shows is a history of wide-spread criticism from internal staff studies, as well as members of Congress and the industry, of the failure of the Coast Guard to carry out its responsibilities under [the Pilotage Act], administrative changes to remedy the problem, of thefailure of those administrative changes to improve the situation, formation of an interagency task force to study the issue, recommendations by that task force (concurred in by the Coast Guard) to delegate certain functions to [the St. Lawrence Seaway Development Corporation], and a formal rule-making process noticed in the Federal Register with submission of more than 100 comments, before the Secretary made the final decision to transfer functions, which was then challenged by Plaintiffs in this lawsuit.


11
Id. at 6.  Had the Pilots prevailed on a claim that the transfer  was arbitrary and capricious, such factors would indeed have  been relevant to whether the Department's position was  substantially justified.  But the merits panel invalidated the  final rule at Chevron step one, so neither the policy reasons  motivating the transfer nor the process by which the decision  was made has anything at all to do with evaluating the strength of the Department's claim that section 322(b) authorized the delegation.


12
Also in support of its conclusion that the Department's  position at the agency level was substantially justified, the  district court said that "there was virtually no question raised  about the legal authority of the Secretary to proceed with the  delegation of functions, and certainly no serious legal question  raised by the Plaintiffs themselves."  Id. at 7.  Of course, had  no one questioned the Department's authority, that fact might  well have been relevant to the substantial justification analysis.  But that isn't what happened.  True, the Pilots did not  file written comments challenging the Department's legal  authority, but two groups of Congressmen did, and the Department discussed the issue at some length in the final rule. See Organization and Delegation of Powers and Duties; Transfer of Great Lakes Pilotage Authority From the Coast  Guard to the Saint Lawrence Seaway Development Corporation, 60 Fed. Reg. at 63,448-49.


13
Turning to the second stage of the EAJA analysis--the  district court's evaluation of the Department's position before  the merits panel--we are guided by our decision in Vollmer. There, we concluded that the district court, having "[s]imply  repeat[ed] arguments made ... before the merits panel without offering any explanation why those arguments showed the  [Government's] position was reasonable," had "largely failed  to grapple with the reasoning underlying this court's merits  decision."  Vollmer, 102 F.3d at 596.  In this case, the district  court explained the issue before the merits panel:  "The  question to be decided in the case was whether the broad  grant of authority in Section 322(b) was limited by the specific  provisions of Section 2104(a)...."  See Halverson, Mem. Op.  at 8.  The district court repeated the Department's position  before the merits panel:  "The Secretary argued, in essence,  that Section 322(b) should be read expansively to give him  largely unfettered discretion to delegate duties and powers to  agency officers and employees."  Id.  The district court  characterized the issue:  "[T]his case presented a rather  straightforward, almost textbook, administrative law problem...."  Id. at 9.  The district court described the panel's holding: "In its opinion, the Court of Appeals then engaged  in a rather lengthy, detailed Chevron analysis, concluding,  under both step one and step two of Chevron, that 'the  language of section 2104(a) compels the conclusion that the  Congress did not intend to authorize the delegation of [Pilotage Act] functions to a non-Coast Guard official.' "  Id. (quoting Halverson, 129 F.3d at 185).  But Vollmer requires that  the district court do more than explain, repeat, characterize,  and describe the merits panel decision.  Under Vollmer, the  district court must analyze the merits panel's reasoning to  determine whether the Department's position, though rejected, was substantially justified.


14
The closest the district court comes to such an analysis are  three observations:  "There was no existing case law as to the  interpretation of either [section 322(b) or section 2104(a)].""[T]he legislative historywas sparse and not dispositive.""There was nothing egregious, extreme, frivolous, or foolish  in the positions taken by either party."  Halverson, Mem. Op.  at 7, 9.  Although each of these observations may well be  true, none answers the question before the district court-was the Department's position before the merits panel substantially justified within the meaning of EAJA?


15
Take the district court's first point.  Had contrary case law  existed, that fact certainly would have been relevant to the  issue before the district court, for the Department's position  most likely would not have been substantially justified.  But  the absence of contrary case law does not necessarily lead to  the opposite conclusion, i.e., that the Department's position  was substantially justified.  There may be no contrary case  law for reasons having nothing at all to do with whether the  Department's position had merit.  Perhaps until now secretarial delegations under sections 2104(a) or 322(b) had never  been challenged.  Or perhaps it had never occurred to the  Department to argue that section 2104(a) permitted delegation to any agency other than the Coast Guard.


16
The district court's observation about the sparseness of  legislative history likewise tells us nothing about whether the  Department's position was substantially justified.  Recall that the merits panel's decision rested on its conclusion that "the  plain meaning of Section 2104(a) limits delegation of [Pilotage  Act] functions."  Halverson, 129 F.3d at 181.  As we have  explained, "[c]ryptic" legislative history "surely is not enough  to overcome the plain meaning of the statute."  Ethyl Corp.,  51 F.3d at 1063.  Although at the Department's urging the  merits panel did consider section 2104(a)'s legislative history,  it concluded that "[t]he Secretary's attempts to overcome the  plain meaning of section 2104(a) by reference to its legislative  history are equally unsuccessful."  Halverson, 129 F.3d at  187.


17
Finally, a Government position that is neither "foolish,"  "egregious," "extreme," nor "frivolous" is not necessarily  substantially justified.  For EAJA purposes, substantially  justified means "justified in substance or in the main--that is,  justified to a degree that could satisfy a reasonable person."Pierce, 487 U.S. at 565 (internal quotation marks and citation  omitted).  Although a frivolous Government argument is obviously neither reasonable nor substantially justified, the opposite is not necessarily true:  an unreasonable--not substantially justified--argument need not be frivolous.  Words like  "foolish," "egregious," and "extreme" are equally weak measures of EAJA fee liability.


18
For all of these reasons, we cannot sustain the district  court's finding that the Department's position either at the  agency level or in litigation was substantially justified.  We  thus turn to our own analysis of the Department's argument  that its reliance on section 322(b) was substantially justified.  See Jacobs v. Schiffer, 204 F.3d 259, 264 (D.C. Cir. March 7, 2000)("Because the question of whether the  Department's position was substantially justified can be answered as a matter of law, a remand is unnecessary....").


19
In its brief here and in the district court, the Department  identified three factors it claims show that its position was  reasonable.  Two of these--the absence of previous challenges to the Secretary's delegation authority and section  2104(a)'s legislative history--were unsuccessfully relied on by  the district court.  For its third justification, the Department states that "the interpretation the government espoused with  respect to the meaning of section 2104(a) was supported  under the precedent cited in the Federal Register notice and  also argued in Court."  What precedents?  Reviewing the  final rule ourselves, we can find no citations to relevant  decisions of either this court or any other court.  If the  Department means to refer to precedents cited in its brief  before the merits panel, the Department should have identified the cases and explained why they show that its position  was substantiallyjustified.  Having done neither, and falling  far short of sustaining its burden of proof, the Department's  brief simply repeats in summary fashion the arguments made  before the merits panel.


20
The Department has failed to demonstrate that its position  was substantially justified for a very good reason:  the merits  panel, as even a cursory review of its opinion reveals, found  the Department's position entirely without merit.  Rejecting  the Department's section 322(b) argument on Chevron step  one grounds, the panel held that "the plain meaning of section  2104(a) limits delegation of [Pilotage Act] functions to the  United States Coast Guard and that section 322(b) cannot  fairly be construed to expand the limitation."  Halverson, 129  F.3d at 181.  The panel reached this conclusion through an  elementary application of three standard canons of statutory  construction, finding resort to other tools of statutory construction or legislative history entirely unnecessary.  "[E]ven  if section 322(b)'s scope is ambiguous, requiring recourse to  Chevron step two," the panel concluded, it was "compelled to  reject the Secretary's interpretation as unreasonable because  it 'would deprive [section 2104(a)] of virtually all effect.' "  Id.  at 189 (quoting American Fed'n of Gov't Employees, 798 F.2d  at 1528).


21
Put simply, not only did the merits panel think the issue  before it was easy, but we can find not even a wisp of a  suggestion that it gave any credence to the Department's  argument that section 322(b) authorized delegation of Pilotage Act responsibilities to the St. Lawrence Seaway Development Corporation.  And most important, the Department has  offered us no persuasive reason for believing that this was an issue over "which reasonable minds could differ."  Halverson,  Mem. Op. at 9.  If the Department's position in this case was  substantially justified, we can hardly imagine an EAJA case  that the Government will ever lose.


22
In reaching our conclusion, we emphasize that we have not  relied solely on the fact that the merits panel resolved this  case on Chevron step one grounds.  As we made clear in  Vollmer, because the EAJA has its own standard, "[t]he  inquiry into the reasonableness of the Government's position  ... may not be collapsed into our antecedent evaluation of  the merits...."  Vollmer, 102 F.3d at 595 (internal quotation  marks omitted);  see also Cooper v. United States R.R. Retirement Bd., 24 F.3d 1414, 1417 (D.C. Cir. 1994) (finding an  agency's decision, which was overturned as unsupported by  substantial evidence, not substantially justified because it  "lacked a reasonable factual basis") (emphasis omitted);Wilkett, 844 F.2d at 871 (noting that some arbitrary and  capricious agency actions, such as an agency's "failure to  provide an adequate explanation for its actions or failure to  consider some relevant factor in reaching its decision, may  not warrant a finding that an agency's action lacked substantial justification") (citing Federal Election Comm'n v. Rose,  806 F.2d 1081, 1089 (D.C. Cir. 1986)).  Just as Vollmer's  EAJA determination did not rest entirely on the merits  panel's conclusion that the agency's position was unreasonable, we have not based our EAJA determination solely on  the merits panel's conclusion that Congress has "directly  spoken to the precise question at issue."  Chevron, 467 U.S.  at 842.  While this Chevron case turned out to be quite easy,  other Chevron step one cases have presented quite difficult  issues and involved "substantially justified" arguments on  both sides.  A prime example is our decision in Martini v.  Federal National Mortgage Ass'n, 178 F.3d 1336 (D.C. Cir.  1999).  A Title VII case in which the Government ultimately  prevailed, Martini considered whether the statute requires  complainants to wait one hundred eighty days after filing a  complaint with the Equal Employment Opportunity Commission before suing in federal court.  Finding that it did, we considered the relevant statute and surrounding provisions,  evaluated the legislative history, found inconclusive the application of several canons of construction, and inquired into the  purpose of the statutebefore resting our decision on an  ancillary provision that made Congress's intent sufficiently  clear to resolve the case at Chevron step one.  Id. at 1340-48.By comparison, the merits panel's rejection of the Department's argument in this case rested on the easily ascertainable plain meaning of one provision, section 2104(a).


23
A final point about our analysis of the merits panel's  decision.  The panel characterized the Department's position  in various ways, including "patently erroneous" and "irreconcilable with" canons of construction.  Halverson, 129 F.3d at  185.  Of course, not all panels use language the same way. Another panel equally unpersuaded by the Department might  have used words like "unsupported," "unconvincing," or simply "without merit."  We thus think it would be unwise for a  prevailing party's eligibility for EAJA fees to turn solely on  the particular words a particular merits panel uses to describe the Government's position.  Thus in Vollmer, although  we took account of the merits panel's characterization of the  Government's position as "incredible," we ultimately rested  our award of EAJA fees on our own conclusion that the  Government had offered nothing to demonstrate that its  position was substantially justified.  Here too we have certainly considered the merits panel's words, but our EAJA  conclusion rests primarily on our view, informed by an analysis of the merits panel's opinion, that the case was easy and  the Department's arguments worthy of little credence, as well  as on the Department's failure to offer any convincing reasons for believing that its interpretation of section 322(b) was  substantially justified.


24
The decision of the district court is reversed, and the case  is remanded for the district court to calculate the amount of  fees and expenses the Department must pay to the Pilots.


25
So ordered.

