A newly appointed Secretary of HUD (D) settled with the plaintiffs in most of the cases related to the implementation of an operational subsidy program. In 1980, while the settlement was being administered, Congress passed the EAJA. The District Court granted P's motion for an award of attorney's fees under the statute, concluding that D's decision not to implement the operating subsidy program had not been 'substantially justified.' The court determined that P’s attorneys had provided 3,304 hours of service, and that 'special factors' justified applying hourly rates ranging from $80 for work performed in 1976 to $120 for work performed in 1982. This produced a base or 'lodestar' figure of $322,700 which the court multiplied by three-and-one-half (again because of the 'special factors'), resulting in a total award of $1,129,450. The Ninth Circuit held that the District Court had not abused its discretion in concluding that D's position was not substantially justified. The Court of Appeals also held that the special factors relied on by the District Court justified increasing the hourly rates of the attorneys, but did not justify applying a multiplier to the lodestar amount. It, therefore, reduced the award to $322,700. D appealed, and the Supreme Court granted certiorari.