EAJA “Substantial Justification” Can Be Shown by Genuine, Widespread Judicial Disagreement Over a Novel Statutory Question

1. Introduction

Gun Owners of Am., Inc. v. Pamela Bondi (Sixth Circuit, Mar. 2, 2026) addresses attorney’s fees under the Equal Access to Justice Act (EAJA), 28 U.S.C. § 2412(d)(1)(A), after successful challenges to the Bureau of Alcohol, Tobacco, Firearms and Explosives’ (ATF) 2018 “bump stock” rule.

The plaintiffs—Gun Owners of America, related organizations, and individual challengers (collectively, “Gun Owners”)—prevailed on the merits after the Supreme Court held that the statutory definition of “machinegun” unambiguously excludes bump stocks. See Garland v. Cargill, 602 U.S. 406 (2024). The present appeal, however, concerned a different question: whether, despite losing on the merits, the government’s position was “substantially justified,” which would bar an EAJA fee award.

The key issues were (1) the meaning of “substantially justified” under EAJA, (2) how much deference appellate courts owe district courts on that question, and (3) whether the extensive division among courts and judges over the bump-stock statutory question made the government’s litigating position reasonable enough to avoid fees.

2. Summary of the Opinion

The Sixth Circuit affirmed the district court’s denial of attorney’s fees. While Gun Owners were the “prevailing party,” EAJA does not require fees if the “position of the United States” was “substantially justified.” Applying the deferential abuse-of-discretion standard mandated by Pierce v. Underwood, 487 U.S. 552 (1988), the court held the district court acted reasonably in finding substantial justification.

The court emphasized the novelty of the statutory issue and the breadth of judicial disagreement—including dissents, split panels, an evenly divided en banc Sixth Circuit, and a circuit split later resolved 6–3 by the Supreme Court—concluding these were strong “objective indicia” that the government’s position could satisfy a “reasonable person.”

3. Analysis

A. Precedents Cited

1) EAJA’s “substantially justified” standard and deference

  • Pierce v. Underwood, 487 U.S. 552 (1988)
    This was the centerpiece. The Sixth Circuit relied on Pierce for:
    • The definition of “substantially justified” as “justified in substance or in the main,” i.e., sufficient to satisfy a reasonable person.
    • The idea that substantial justification is more demanding than non-frivolousness under Rule 11 but does not require the government to be correct.
    • The instruction to consider “objective indicia” (e.g., other courts’ reactions, dissents, strings of successes/losses).
    • The standard of review: substantial-justification determinations are reviewed for abuse of discretion, with deference.
    In effect, Pierce framed the appeal as one where the challengers needed to show not merely that the government lost, but that the district court acted unreasonably in finding the government’s position reasonable.
  • Gen. Elec. Co. v. Joiner, 522 U.S. 136 (1997)
    Cited to underscore what abuse-of-discretion review means in practice: appellate courts must be highly deferential and cannot substitute their judgment simply because they would have ruled differently.
  • Griffith v. Comm'r of Soc. Sec., 987 F.3d 556 (6th Cir. 2021) and United States ex rel. Wall v. Circle C Constr., LLC, 868 F.3d 466 (6th Cir. 2017)
    Used to operationalize Pierce in Sixth Circuit doctrine: focus on “actual merits,” avoid hindsight bias, and consider the government’s position “as a whole.”
  • Amezola-Garcia v. Lynch, 835 F.3d 553 (6th Cir. 2016) (order)
    Reinforced that courts evaluate the government’s “position as a whole,” meaning an unreasonable sub-argument does not necessarily defeat substantial justification if the overall stance remained reasonable.
  • Lackey v. Stinnie, 604 U.S. 192 (2025) and Hensley v. Eckerhart, 461 U.S. 424 (1983)
    These cases supplied background on the American Rule and contrasted EAJA with 42 U.S.C. § 1988(b) fee-shifting in civil-rights litigation. The Sixth Circuit emphasized that EAJA is not interpreted with the same pro-plaintiff presumption that often animates § 1988 doctrine.

2) Bump-stock statutory interpretation and the split landscape

  • Garland v. Cargill, 602 U.S. 406 (2024)
    The merits decision held the machinegun definition, 26 U.S.C. § 5845(b), unambiguously excludes bump stocks. In the fee context, the Sixth Circuit treated Cargill not as dispositive of reasonableness (a losing position can be substantially justified), but as evidence of judicial division (6–3, with a detailed dissent) supporting the district court’s finding.
  • Gun Owners of Am., Inc. v. Garland (Gun Owners I), 992 F.3d 446 (6th Cir. 2021) and Gun Owners of Am., Inc. v. Garland (Gun Owners II), 19 F.4th 890 (6th Cir. 2021) (en banc) (order)
    These cases showcased the internal Sixth Circuit disagreement. Particularly important was the evenly divided en banc court in Gun Owners II, which the Sixth Circuit treated as powerful “objective indicia” that the question was close.
  • Hardin v. ATF, 65 F.4th 895 (6th Cir. 2023)
    The panel relied on Hardin as an “objective” marker, because Hardin itself characterized the bump-stock issue as a “close one on which reasonable jurists have disagreed,” supporting the conclusion that the government’s position could satisfy a reasonable person.
  • Guedes v. ATF (Guedes II), 45 F.4th 306 (D.C. Cir. 2022), Guedes v. Bureau of Alcohol, Tobacco, Firearms & Explosives (Guedes I), 920 F.3d 1 (D.C. Cir. 2019) (per curiam), and Aposhian v. Barr, 958 F.3d 969 (10th Cir. 2020)
    These decisions were used to demonstrate the government’s “string of successes” and the existence of appellate authority upholding the rule (often through Chevron USA, Inc. v. Nat. Res. Def. Council, Inc., 467 U.S. 837 (1984)). Even where courts relied on Chevron, the Sixth Circuit reasoned that Chevron’s framework still required the agency interpretation to be “reasonable,” thus supporting substantial justification.
  • Cargill v. Garland, 57 F.4th 447 (5th Cir. 2024) (en banc)
    Referenced as part of the broader split and as evidence of intense judicial engagement on both sides.
  • Loper Bright Enterprises v. Raimondo, 603 U.S. 369 (2024)
    Used to explain that Chevron is now overruled and that statutory interpretation is framed as having a “single, best meaning.” The Sixth Circuit nevertheless rejected the idea that EAJA fees should follow automatically whenever the government’s reading is not the “best meaning,” warning that would collapse “substantial justification” into a correctness test.

3) “Novel question” leeway and related citations

  • Perez v. Jaddou, 31 F.4th 267 (4th Cir. 2022) (Wilkinson, J.), Michel v. Mayorkas, 68 F.4th 74 (1st Cir. 2023), Medina Tovar v. Zuchowski, 41 F.4th 1085 (9th Cir. 2022), and W.M.V.C. v. Barr, 926 F.3d 202 (5th Cir. 2019)
    These cases supported the proposition that the government is afforded more leeway to litigate matters of first impression without being penalized in fees, reinforcing the district court’s “novel question” rationale.

4) Limited prior guidance on the machinegun definition

  • Staples v. United States, 511 U.S. 600 (1994)
    The court treated Staples as non-controlling on the bump-stock meaning question; its footnote description of automatic versus semiautomatic weapons did not “necessarily foreclose” the ATF’s interpretation.
  • Akins v. United States, 312 F. App'x 197 (11th Cir. 2009) (per curiam)
    Though unpublished, it supported the view that “single function of the trigger” could mean “single pull of the trigger,” showing the ATF’s reading was not invented without judicial support.

B. Legal Reasoning

  1. Start from EAJA’s structure and Pierce’s threshold: EAJA mandates fees to prevailing parties unless the government’s position is substantially justified. “Substantially justified” is a reasonableness standard, not a correctness standard.
  2. Apply deferential review: The court repeatedly anchored the analysis in abuse-of-discretion review, emphasizing that the appellate role is limited—Gun Owners had to show the district court’s finding was outside the range of reasonable outcomes.
  3. Identify the interpretive difficulty in the underlying merits dispute: The court framed the merits as resting on two interpretive questions under 26 U.S.C. § 5845(b):
    • Whether “function of the trigger” refers to the trigger’s mechanics or the shooter’s act (the “mechanical process” vs. “human process”).
    • What “automatically” requires regarding human intervention (e.g., whether maintaining forward pressure is incompatible with “automatic” fire).
    The court concluded that even though the Supreme Court eventually found the answers unambiguous, the government’s contrary arguments were facially plausible at the time and sufficiently grounded to be “reasonable.”
  4. Use “objective indicia” to avoid hindsight bias: The court treated the circuit split, dissents, and mixed outcomes as strong objective evidence that the government’s reading was part of a “genuine dispute,” which Pierce indicates is typically enough for substantial justification.
  5. Reject attempts to convert “best meaning” into fee entitlement: The court warned against a rule that would award fees whenever the government loses a pure statutory interpretation case—especially after Loper Bright Enterprises v. Raimondo—because it would effectively erase EAJA’s “substantially justified” limitation.
  6. Neutralize collateral attacks: Gun Owners’ arguments about ATF’s change in position after Las Vegas were treated as, at most, relevant to arbitrary-and-capricious review, but not developed or presented as a basis for fees here; the court declined to transform the fee dispute into a new merits litigation.

C. Impact

  • EAJA fee exposure is reduced in “close” statutory-interpretation cases: Even a clear loss on the merits (including a Supreme Court holding of unambiguous text) does not compel fees if the government’s position was reasonably arguable when presented.
  • Judicial disagreement becomes especially salient evidence: Circuit splits, evenly divided en banc outcomes, and Supreme Court dissents can serve as powerful “objective indicia” supporting substantial justification.
  • Post-Chevron litigation incentives: The decision explicitly addresses the post-Loper Bright world, resisting a regime where the government must pay fees whenever it did not adopt the “single, best meaning.” This may encourage agencies and DOJ to continue litigating unsettled statutory questions without automatic fee penalties.
  • Limits of “agency flip-flop” arguments in fee proceedings: The opinion suggests that challenges based on agency inconsistency (e.g., Encino Motorcars, LLC v. Navarro-style reasoning, cited via Kentucky v. EPA) must be properly developed on the merits; they are not easily repurposed as EAJA fee cudgels.

4. Complex Concepts Simplified

“Prevailing party”
The party that wins meaningful relief in court (here, Gun Owners obtained a final declaration that the rule was unlawful).
EAJA “substantially justified”
Not “more likely than not correct,” and not “actually correct,” but “reasonable enough” that a reasonable person could think the government’s position was justified. Losing does not automatically mean fees.
Abuse-of-discretion review
An appellate court gives the district court significant leeway. The question is not whether the appellate judges would have awarded fees, but whether the district judge made an unreasonable call.
“Objective indicia”
External signals that help measure reasonableness—like other judges agreeing, dissents, or the government winning in some courts before ultimately losing.
Chevron deference
A former doctrine (from Chevron USA, Inc. v. Nat. Res. Def. Council, Inc.) under which courts often deferred to reasonable agency interpretations of ambiguous statutes; it was overruled in Loper Bright Enterprises v. Raimondo. The Sixth Circuit held that even Chevron-era wins can still show an agency’s view was “reasonable.”
Rule of lenity
A canon instructing that ambiguity in criminal statutes is resolved in the defendant’s favor. The Sixth Circuit referenced Hardin v. ATF to show that the bump-stock issue was viewed as close enough that lenity became relevant.
Textualism vs. purposivism
Competing interpretive approaches: textualism emphasizes statutory text and limits; purposivism more readily reads text in light of statutory purpose. The court reasoned that, for EAJA purposes, advancing a purposive reading is not inherently unreasonable, especially given the interpretive environment when EAJA was enacted.

5. Conclusion

The Sixth Circuit’s central contribution is to clarify—within the bump-stock litigation aftermath and in the post-Loper Bright era—that EAJA’s “substantially justified” standard remains a robust shield for the government in novel, heavily contested statutory-interpretation disputes. Where the underlying legal question produced a genuine, widespread split among reasonable jurists (including dissents and circuit divergence), a district court acts within its discretion in denying attorney’s fees—even when the challengers ultimately vindicate the “best meaning” of the statute at the Supreme Court.