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APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MAINE [Hon. Gene Carter, U.S. District Judge]

After six years of litigation challenging the Secretary of Labor’s attempt to bar them from government contracting because of irregular payroll practices, appellants Dantran, Inc., and its principal, Robert C. Holmes, prevailed. This court ruled that, given the circumstances, “debarment would be a punishment totally out of proportion to the offense (and, therefore, contrary to the regulations).” See Dantran v. U.S. Dep’t of Labor, 171 F.3d 58, 74-75 (lst Cir. 1999). Having achieved that outcome, appellants came back to court seeking attorney’s fees under the Equal Access to Justice Act (EAJA), 28 U.S.C. � 2412(d)(1)(A), which entitles litigants who prevail against the government to attorney’s fees unless the position of the United States was “substantially justified.” The district court concluded that the government’s position had sufficient merit and rejected the fee request. Our review of the record and relevant legal principles persuades us that the court erred in its assessment of the latter phase of the government’s case. We therefore reverse its judgment and remand for calculation of fees covering the appropriate portions of the litigation, as discussed in Section III below.

I. Background

 
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