Owens v. Brock

• Citation: 860 F.2d 1363
• Decision Date: 10 November 1988
• Docket Number: No. 87-5524,87-5524
• Parties: , 57 USLW 2316 Carlton L. OWENS, Plaintiff-Appellant, v. William BROCK, Secretary of Labor, Defendant-Appellee.
• Court: United States Courts of Appeals. United States Court of Appeals (6th Circuit)

Page 1363

860 F.2d 1363

96 A.L.R.Fed. 323, 57 USLW 2316

Carlton L. OWENS, Plaintiff-Appellant, v. William BROCK, Secretary of Labor, Defendant-Appellee.

No. 87-5524.

United States Court of Appeals, Sixth Circuit.

Argued May 18, 1988.

Decided Nov. 10, 1988.

Eugene C. Gaerig (argued), Memphis, Tenn., for plaintiff-appellant.

W. Hickman Ewing, U.S. Atty., Joe A. Dycus, Memphis, Tenn., William Kanter, Atty., Appellate Staff Dept. of Justice, Wendy M. Keats (argued), Washington, D.C., for defendant-appellee.

Before ENGEL, Chief Judge, and NELSON and RYAN, Circuit Judges.

ENGEL, Chief Judge.

Appellant Carlton L. Owens appeals the dismissal of his action for attorney fees under EAJA brought in the United States District Court for the Western District of Tennessee Western Division.

Owens's appeal requires us to consider whether benefit determinations under the Federal Employees Compensation Act (FECA), 5 U.S.C. Sec. 8101 et seq. constitute "adversary adjudications" for the purpose of qualifying as appropriate proceedings for the application of the Equal Access to Justice Act (EAJA), 5 U.S.C. Sec. 504. We are also presented with the novel question of whether a federal district court has jurisdiction of an appeal from an order of the Employment Compensation Appeals Board (ECAB) denying a petition for attorney fees under the EAJA arising out of a claim for FECA benefits. We conclude that the district court was correct in holding that FECA proceedings are not adversary adjudications. More important, we hold that the district court was without jurisdiction to consider the action in the first place.

Owens, a former federal employee at the Defense Logistics Agency in Memphis, Tennessee sustained back injuries at work during 1977 and 1978. Since he was no longer capable of continuing in his job, he was terminated and given temporary total disability benefits which were thereafter terminated on June 24, 1978 by the Department of Labor's Office of Worker's Compensation Programs (OWCP). Owens challenged the termination, then requested and received a hearing. The OWCP upheld the denial of benefits. However, on appeal to the ECAB, that agency remanded the case to the OWCP for further factual findings. After the OWCP reaffirmed the denial of benefits, the ECAB reversed the OWCP and ordered the benefits restored. After the ECAB's decision in his favor, Owens sought an order determining the appropriate attorney fee and further requested that the fee should be paid by the government under the EAJA. The ECAB approved a fee of $11,300 but stated that the EAJA did not apply to benefit proceedings under the FECA. Presumably the attorney fee was left to be recovered from the employee, through deduction from the benefits or otherwise, but not from funds allocable under the EAJA.

The district court affirmed. The court noted that under 5 U.S.C. Sec. 504(a)(1) the government will pay a party's attorney fees only if the fees result from an "adversary adjudication." This term is defined by 5 U.S.C. Sec. 504(b)(1)(C), which provides that:

"adversary adjudication" means an adjudication under section 554 of this title in which the position of the United States is represented by counsel or otherwise, but excludes an adjudication for the purpose of establishing or fixing a rate or for the purpose of granting or renewing a license....

The court then stated that a provision of the FECA, 5 U.S.C. Sec. 8124(b)(2), specifically excludes workers' compensation proceedings from coverage under section 554. ¹ Thus, the court dismissed Owens's action for fees. Owens now contends that the ECAB proceedings were, in fact, adversary proceedings. He argues that the court below adopted a narrow reading of the statute that is contrary to the statutory purpose of the EAJA.

I. Adversary Adjudication

Owens can muster little support for his claim that FECA determinations are, in fact, adversary adjudications. He relies almost exclusively upon Escobar Ruiz v. INS, 838 F.2d 1020 (9th Cir.1988) (en banc). In Escobar Ruiz, the Ninth Circuit held that INS deportation proceedings were adversary adjudications, even though Congress did not require that they be directly governed by section 554. The court stated that:

The dispute centers around the meaning of the phrase "an adjudication under section 554." The government asserts that "under" is the same thing as "conducted under" or "governed by." The petitioner contends that "under" means "as defined by" or "under the meaning of." Both interpretations are plausible; because the statutory language is unclear, we are justified in looking to the legislative history and purpose of the EAJA in order to ascertain the correct reading.

Id. at 1023.

The Escobar Ruiz court concluded that the legislative history favored the "defined by" or "under the meaning of" standard. The court cited to language in the House Conference report stating that "[t]he conference substitute defines adversary adjudication as an agency adjudication defined under the Administrative Procedures Act where the agency takes a position through representation by counsel or otherwise." H.R.Conf.Rep. No. 1434, 96th Cong., 2d Sess. 23 (1980), reprinted in 1980 U.S.Code Cong. & Admin.News 5003, 5012. The court interpreted this language to mean that it should determine whether the hearing in question was an adversary adjudication by "look[ing] at the procedures by which deportation hearings are actually conducted, rather than determining whether such hearings are technically governed by the APA." Escobar Ruiz, 838 F.2d at 1023.

Turning to the actual procedures employed by the INS, the Escobar Ruiz court found that "[t]he hearing provisions of the INA and the APA are now fundamentally identical. There is therefore no question that the deportation process conforms to the APA's requirements and constitutes an adversary adjudication as defined under the APA." Id. at 1025. The court found that this holding was in accord with the underlying purpose of the EAJA, to permit litigants who prevail after expensive and time-consuming proceedings to be compensated for their efforts. Id. at 1026. Thus, the court held that INS deportation proceedings were covered by the EAJA. Id. at 1030.

We believe that the Escobar Ruiz decision ignored an important rule of statutory construction and further misinterpreted the legislative history of the EAJA. The EAJA, by permitting a plaintiff to recover attorney fees from the United States, constitutes a waiver of the government's sovereign immunity. The Supreme Court has recently stated that "[i]n analyzing whether Congress has waived the immunity of the United States, we must construe waivers strictly in favor of the sovereign." Library of Congress v. Shaw, 478 U.S. 310, 318, 106 S.Ct. 2957, 2963, 92 L.Ed.2d 250 (1986). This represents the Court's traditional view of the waiver of sovereign immunity. See e.g. Ruckelhaus v. Sierra Club, 463 U.S. 680, 685-86, 103 S.Ct. 3274, 3277-78, 77 L.Ed.2d 938 (1983); McMahon v. United States, 342 U.S. 25, 27, 72 S.Ct. 17, 19, 96 L.Ed. 26 (1951). The Escobar Ruiz court ignores this rule.

The Ninth Circuit's abandonment of the principle that waiver of immunity is to be construed narrowly is particularly troubling in this case, where the legislative support for that court's position is so ephemeral. The use of the words "defined under" by the House Conference report is not particularly instructive. There is no evidence in the legislative history to indicate that the conference committee understood the term "defined under" to include within EAJA coverage those proceedings that are not governed by section 554 but instead are merely conducted in a similar manner. In fact, the use of a concrete term such as "defined" leads us to believe it probable that Congress intended precisely the opposite interpretation of section 504(b)(1)(C) from the one taken by the Ninth Circuit.

The Escobar Ruiz court's reliance on the model rules for the implementation of the EAJA issued by the Administrative Conference of the United States (ACUS), 46 Fed.Reg. 32,900 (1981), is also misplaced. The court stated that the ACUS rules proposed a broad interpretation of adjudications under section 554. Escobar Ruiz, 838 F.2d at 1024. However, the ACUS also stated that "[w]e are concerned, however, that the liberal interpretation of the draft model rules may provide for broader applicability than Congress intended." 46 Fed.Reg. at 32,901. The result of this concern was the elimination of EAJA coverage for agency proceedings that voluntarily use section 554 procedures. However, in discussing the standard to be used for determining EAJA coverage of other cases, the ACUS stated that "[t]here remains, however, the difficult question of what proceedings are 'under section 554.' Where it is clear that certain categories are governed by this section, agencies should list the types of proceedings in their rules." Id. Thus, the ACUS rules both eschew a broad interpretation of 504(b)(1)(C) and embrace the "governed under" standard rejected in Escobar Ruiz. Given the principle that waiver of immunity is to be narrowly construed, the Ninth Circuit's decision, in light of this contrary legislative history, cannot withstand scrutiny. ²

Escobar Ruiz is also factually distinguishable from this appeal. That case occurred in the deportation context. It is evident that the Ninth Circuit's decision was influenced in some degree by the fact that potential deportees lacking language skills have a particular need for legal assistance in complicated INS proceedings. Escobar Ruiz, 838 F.2d at 1026 ("deportation proceedings are difficult for aliens to fully comprehend, let alone conduct, and individuals subject to such proceedings frequently require the assistance of counsel"). Also, the INS does not operate under a provision similar to 5 U.S.C. Sec. 8124(b)(2) and its procedures are not specifically excepted from section 554. Thus, both the factual...