Gavette v. Office of Personnel Management

• Decision Date: 11 March 1986
• Docket Number: Appeal No. 84-1286.
• Citation: 808 F.2d 1456
• Parties: Charles E. GAVETTE, Petitioner, v. OFFICE OF PERSONNEL MANAGEMENT and Department of the Treasury, Respondents.
• Court: U.S. Court of Appeals — Federal Circuit

808 F.2d 1456

Charles E. GAVETTE, Petitioner, v. OFFICE OF PERSONNEL MANAGEMENT and Department of the Treasury, Respondents.

Appeal No. 84-1286.

United States Court of Appeals, Federal Circuit.

February 28, 1986.

As Amended March 11, 1986.

Dennis A. Peppler, Gropman & Peppler, P.C., Southfield, Mich., argued, for petitioner.

Robert A. Reutershan, Commercial Litigation Branch, Dept. of Justice, Washington, D.C., argued, for respondent. With him on the brief were Richard K. Willard, Acting Asst. Atty. Gen. and David M. Cohen, Director, and M. Susan Burnett. Murray Meeker, Office of the General Counsel, Office of Personnel Management, of counsel.

Before MARKEY, Chief Judge, FRIEDMAN, RICH, DAVIS, BALDWIN, BENNETT, SMITH, NIES, NEWMAN, BISSELL, and ARCHER, Circuit Judges.

EDWARD S. SMITH, Circuit Judge.

This is an application under the Equal Access to Justice Act¹ (EAJA) for attorney fees and expenses incurred by petitioner Charles E. Gavette (Gavette) in proceedings before the Merit Systems Protection Board (board)² and in the subsequent appeal to the United States Court of Appeals for the Federal Circuit (Federal Circuit).³

With respect to services rendered in connection with the board proceedings, the EAJA does not apply, but the application is granted under the Back Pay Act, and the application is remanded to the board for determination of the amount of reasonable fees (but not expenses) to be awarded.

With respect to attorney services rendered in connection with the appeal, Gavette's application under the EAJA is granted and the application is referred to the original panel of three judges who decided the merits for determination of the amount of reasonable fees and expenses to be awarded in connection with appeal.

Issues

Three issues are presented: (1) whether either the EAJA or the Back Pay Act is applicable to attorney fees and expenses incurred in proceedings before the board in this case; (2) whether the EAJA is applicable to fees and expenses incurred in the appeal to the Federal Circuit; and (3) what is the standard that must be met for an award of fees and expenses under the EAJA.

Background

Gavette, a GS-12 revenue agent with the Internal Revenue Service (agency) for 18 years, successfully applied to be placed on the promotion roster for GS-13 positions in April 1979. Despite the fact that he had consistently received performance ratings of satisfactory or better, he was placed at the bottom of the promotion roster. Dissatisfied, he filed a grievance through his union steward. He claimed that his group manager (supervisor) had not evaluated his work fairly and he requested a reevaluation.

After this grievance was filed, tension developed between Gavette and his supervisor. Gavette then began to suffer increasingly from an emotional disturbance he had had since 1976. In August 1979 the agency determined that he should undergo a psychological fitness-for-duty examination.

When Gavette was determined to be unfit for duty, the agency notified him that it intended to file an application with the Office of Personnel Management (OPM) for his disability retirement. Gavette opposed the application, and it was rejected by OPM in April 1981 on the ground that the agency failed to document either a deficiency in service caused by a medical condition or the incompatibility of Gavette's medical condition with useful service in his position.

In June 1981 the agency filed a request for reconsideration of the OPM decision, in which it set forth contentions to the effect that Gavette's performance in 1979 demonstrated that his emotional problems rendered him unfit for service. The agency attached a number of memoranda written by Gavette's supervisor in support of the request. On reconsideration, OPM granted the request for disability retirement in February 1982.

Also in June 1981, Gavette requested that the agency furnish him copies of its request for reconsideration and attached documents. The agency refused, citing provisions of the Freedom of Information Act and of the Privacy Act applicable to interagency memoranda and documents prepared in anticipation of litigation. It was not until March 1982, after OPM granted the application for disability retirement, that the agency furnished Gavette with the documents he had requested.

Gavette appealed the OPM decision to the board. The presiding official found that a preponderance of the evidence supported the agency's contention that Gavette's psychological problems rendered him totally unfit for Government service, and that the agency's decision did not involve harmful procedural error.

On appeal to this court, the board's decision was reversed.⁴ The agency's refusal to provide Gavette with the material submitted in its request for reconsideration of the OPM decision was found to constitute harmful procedural error. It was noted that if Gavette had had access to this material at the time he requested it, he might have been able to persuade OPM not to grant the application for disability retirement. Additionally, the record indicated that the transfer of Gavette to an alternative position was feasible. Thus, it was found that the agency's failure to certify that no positions were available to which he could be reassigned also constituted harmful procedural error. The case was remanded to the board with instructions that Gavette be awarded back pay. However, the question of his entitlement to attorney fees was not decided.

On March 4, 1985, Gavette filed an application with this court for fees and other expenses under the Equal Access to Justice Act.

Timeliness

The party seeking an award under the EAJA must submit the application to the court within 30 days of the date when the judgment becomes "final and not appealable."⁵ Although the Federal Circuit decided Gavette's appeal on the merits on February 1, 1985, the time for filing a petition for certiorari did not expire until 90 days later.⁶ Gavette had an additional 30 days, or a total of 120 days from February 1, to file his application for fees and expenses.⁷ Gavette timely filed the application with the Federal Circuit on March 4, 1985.

Purpose of the EAJA

Generally, there are four situations to which the EAJA applies. Section 2412(b) of 28 U.S.C. extends the common law and statutes which made private parties liable for fees and expenses, so that the United States is liable to the same extent that the private party would be liable. Section 504 of 5 U.S.C. authorizes an agency that conducts an "adversary adjudication" to award fees and expenses incurred in connection with that proceeding. Section 2412(d)(1) of 28 U.S.C. authorizes a court to award fees and expenses incurred in a "civil action," i.e., in court proceedings. Finally, section 2412(d)(3) of 28 U.S.C. authorizes a court in "any action for judicial review of an adversary adjudication" to award fees and expenses incurred in connection with the adversary adjudication.

The 1980 EAJA rested on the premise that individuals and small businesses "may be deterred from seeking review of, or defending against unreasonable governmental action because of the expense involved in securing the vindication of their rights."⁸ The purpose of the EAJA was to "reduce the deterrents and disparity by entitling certain prevailing parties to recover an award of attorney fees, expert witness fees and other expenses against the United States."⁹

Prior to the EAJA, under the "American rule," each party was "responsible for the payment of his own attorney fees and other expenses incurred during litigation."¹⁰ "The `American rule,' however, had both common law and statutory exceptions."¹¹ The common law, however, did not hold the United States liable for attorney fees, costs, or expenses unless a statute specifically made the United States liable.¹² Many statutes prior to the EAJA contained specific exceptions as to the liability of the United States.¹³ Section 2412 of 28 U.S.C. was enacted to provide a "uniform rule" which would "make such specific exceptions unnecessary."¹⁴

The 1980 EAJA made two primary changes in the existing law in order to accomplish its purpose.¹⁵ First, in 28 U.S.C. § 2412(b), the EAJA extended the common law and statutory exceptions to make the United States liable for attorney fees to the same extent that private parties would be liable.¹⁶ Section 2412(b) states:

(b) Unless expressly prohibited by statute, a court may award reasonable fees and expenses of attorneys, in addition to the costs which may be awarded pursuant to subsection (a), to the prevailing party in any civil action brought by or against the United States or any agency and any official of the United States acting in his or her official capacity in any court having jurisdiction of such action. The United States shall be liable for such fees and expenses to the same extent that any other party would be liable under the common law or under the terms of any statute which specifically provides for such an award.

The House Committee on the Judiciary stated:¹⁷

Section 2412(b) permits a court in its discretion to award attorney fees and other expenses to prevailing parties in civil litigation involving the United States to the same extent it may award fees in cases involving other parties. * * * Thus, under this subsection, cases involving the United States would be subject to the "bad faith", "common fund" and "common benefit" exceptions to the American rule against fee-shifting. The United States would also be liable under the same standards which govern awards against other parties under Federal statutory exceptions, unless the statute expressly provides otherwise. * * *

Second, in 5 U.S.C. § 504 and in 28 U.S.C. § 2412(d), the EAJA made a "significant change in the existing law regarding attorney fees by establishing a general statutory exception for an award of fees against the Government."¹⁸

Section 504 of 5 U.S.C. authorizes the award of attorney fees and...