Devine v. Sutermeister

• Decision Date: 04 May 1984
• Docket Number: No. 83-813,83-813
• Citation: 733 F.2d 892
• Parties: 116 L.R.R.M. (BNA) 2501 Donald J. DEVINE, Director, Office of Personnel Management, Petitioner, v. R.A. SUTERMEISTER, Arbitrator; United States Customs Service, San Francisco Region; and National Treasury Employees Union, Respondents. Appeal
• Court: U.S. Court of Appeals — Federal Circuit

Page 892

733 F.2d 892

116 L.R.R.M. (BNA) 2501

Donald J. DEVINE, Director, Office of Personnel Management, Petitioner, v. R.A. SUTERMEISTER, Arbitrator; United States Customs Service, San Francisco Region; and National Treasury Employees Union, Respondents.

Appeal No. 83-813.

United States Court of Appeals Federal Circuit.

May 4, 1984.

Lenore C. Garon, Washington, D.C., argued for petitioner. With him on the brief were J. Paul McGrath, Asst. Atty. Gen. and David M. Cohen, Washington, D.C., Director.

Kerry L. Adams, Washington, D.C., argued for respondent. With him on the brief were Robert M. Tobias, General Counsel, Lois G. Williams, Washington, D.C., Director of Litigation and David Handsher, San Francisco, Cal.

Before KASHIWA, BENNETT and MILLER, Circuit Judges.

BENNETT, Circuit Judge.

The National Treasury Employees Union (NTEU) brings this application for an award of attorney fees under the Equal Access to Justice Act (EAJA), 28 U.S.C. Sec. 2412 (1982), for its successful defense against the Office of Personnel Management's (OPM) appeal before this court in the above-titled action, 724 F.2d 1558 (Fed.Cir.1983). OPM opposes the application on the following grounds: (1) OPM's litigating position before this court was substantially justified; (2) there are special circumstances which would render an award of attorney fees unjust; and (3) assuming that NTEU is entitled to an award of fees for its defense on the merits, no award should be granted for work relating to certain discrete phases of the litigation where OPM's position was substantially justified or where OPM was the prevailing party. We grant the application for attorney fees as modified by this opinion.

BACKGROUND

The facts relevant to our decision on the merits can be found at 724 F.2d at 1560-61, and need not be repeated at length here. For purposes of this attorney fee request, a brief outline will suffice.

On March 5, 1982, the grievant, Richard Walton, was removed from his position as Customs Entry Aide on the charge of intentional falsification of his employment application and security data form. Walton chose to contest his removal under the grievance and arbitration procedure of the National Agreement between the Customs Service and NTEU.

The parties submitted the unresolved grievance to binding arbitration, and selected R.A. Sutermeister as the arbitrator. In a decision dated June 30, 1982, the arbitrator found that only some of the charges of falsification were sustained, and that Walton's removal would not promote the efficiency of the service. As a consequence of these findings, the arbitrator mitigated the penalty to a 30-day suspension. The arbitrator denied NTEU's request for attorney fees on the basis that the agency had acted in good faith, and this denial was not contested on appeal.

On November 17, 1982, OPM filed its discretionary petition for review with this court pursuant to 5 U.S.C. Sec. 7703(d) (1982). ¹ In our decision dated December 14, 1983, we upheld the arbitrator's award in all respects. On January 13, 1984, NTEU filed this application for attorney fees under the EAJA, relating exclusively to fees incurred in defending against OPM's appeal before this court.

DISCUSSION

The EAJA provides that a prevailing party shall be awarded attorney fees in any civil action 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. Sec. 2412(d)(1)(A). The "position of the United States" for purposes of determining substantial justification is the position of the government in the judicial proceeding in which the fees were incurred. Broad Avenue Laundry and Tailoring v. United States, 693 F.2d 1387, 1391 (Fed.Cir.1982). In this case, it is OPM's position on appeal to this court which is relevant for our determination of NTEU's entitlement to fees. It is well-established that the burden is on OPM to prove substantial justification. See Ellis v. United States, 711 F.2d 1571, 1575 (Fed.Cir.1983), and citations; see also Bailey v. United States, 721 F.2d 357, 359 (Fed.Cir.1983).

I

We have little difficulty in concluding that OPM was not substantially justified in its appeal on the merits, as both of its alternative arguments in favor of reversal of the arbitrator's award were forcefully rejected by the court. OPM's main argument, that an appointment obtained through fraud or material misrepresentation is a "nullity," was held to be wholly without merit, as OPM offered no relevant support for its position. Nothing in the governing statute, the Civil Service Reform Act of 1978, supported its position, and OPM's position was contradicted by its own regulations, the actions of the employing agency, and Court of Claims case law. 724 F.2d at 1563-64. OPM's alternative argument, that the arbitrator applied the wrong standard in his mitigation of the penalty, fared no better. OPM's assumption that an arbitrator must follow Merit Systems Protection Board (MSPB) precedent was not adequately supported; the purported conflict between the arbitrator's opinion and the MSPB's decision in Douglas v. Veterans' Administration, 5 MSPB 313 (1981), was found to be illusory; the arbitrator's award was held to be based on the collective bargaining agreement and in accordance with law; and the appropriateness Another factor supporting an award of fees to NTEU for its defense on the merits is the fact that, unlike an adversely affected employee, there is no appeal as of right by OPM. See 5 U.S.C. Sec. 7703(d) and discussion at 724 F.2d at 1561-62; Devine v. Nutt, 718 F.2d 1048, 1052 (Fed.Cir.1983), petition for cert. filed, (U.S. Apr. 13, 1984) (No. 83-1673). Although this is only one factor to be considered in awarding fees, this case presented a situation where NTEU had to defend a meritless appeal where OPM had a special obligation to determine whether it should exercise its discretionary right of appeal. ² While there should be no presumption in favor of an award of fees for unsuccessful OPM appeals under section 7703(d), the fact that these appeals are discretionary is properly a factor that the court may consider in weighing the general equities of an award.

                of OPM's challenge to this essentially factual issue was questioned.  Id. at 1564-66.  Based on the foregoing, we hold that OPM's appeal of the arbitrator's award did not have a reasonable basis both in law and fact, and thus was not substantially justified.    See Broad Avenue, 693 F.2d at 1391
                

OPM's main argument in opposition to an award of fees is that the appeal presented issues of first impression and thus "defines the position of the United States as 'substantially justified.' " See Cherry v. United States, 4 Cl.Ct. 20, 23 (1983). While some of OPM's arguments on appeal might be characterized as "novel," this characterization does not detract from the fact that its positions were simply insupportable given the great weight of statutory, regulatory, and judicial authority to the contrary. In some contexts, the novelty or importance of the issues presented may validate, for purposes of substantial justification, an otherwise marginal appeal by the government. But see Spencer v. NLRB, 712 F.2d 539, 558-59 (D.C.Cir.1983), where it is suggested that the government should bear the expense of litigation in a long-shot "test case." In this case, however, the novelty of the government's position cannot compensate for the paucity of support in favor of that position. A prevailing party's entitlement to fees under the EAJA should not depend on the creativity of the government in fashioning novel, but meritless, arguments.

OPM also reminds this court that the justification for the government's litigating position must be measured against the law as it existed at the time of the appeal, and not against the new law enunciated by the court in its opinion. Kay Manufacturing Co. v. United States, 699 F.2d 1376, 1379 (Fed.Cir.1983); Broad Avenue, 693 F.2d at 1392. As the opinion made clear, the court's rejection of OPM's arguments was not made on the basis of "new law," but on the basis of the law extant at the time of the appeal. What "new law" that may have been established by the opinion did not relate to the merits of OPM's appeal.

Finally, OPM asserts that there are no "special circumstances" warranting an award of attorney fees to NTEU. The legislative history of the EAJA elaborates on the purpose of the provision that an award of fees to a prevailing party should be made unless the court finds "that special circumstances make an award unjust." 28 U.S.C. Sec. 2412(d)(1)(A).

This "safety valve" helps to insure that the Government is not deterred from advancing in good faith the novel but credible extensions and interpretations of the law that often underlie vigorous enforcement efforts. It also gives the court H.R.REP. NO. 1418, 96th Cong., 2d Sess. 11, reprinted in 1980 U.S.CODE CONG. & AD.NEWS 4984, 4990.

discretion to deny awards where equitable considerations dictate an award should not be made.

First, OPM turns the above standard on its head when it argues that NTEU must show "special circumstances" warranting an award of fees. The statutory language clearly sets out the "special circumstances" test as an exception to an award of fees, as is the "substantial justification" test where the government has the burden of proof. Whether the government must prove "special circumstances," or the court, sua sponte, raises this exception in weighing the equities, is unimportant: the fact remains that a prevailing party need not prove a negative, i.e., that an award of fees would not be unjust.

Second, there are no "special circumstances" here that weigh in favor of a denial of fees. The "safety valve" for the government's advancement of novel but credible interpretations of law is unavailable to OPM for precisely the same reasons that led us to conclude that OPM...