Augustine v. Department of Veterans Affairs

• Decision Date: 15 November 2005
• Docket Number: No. 04-3162.,04-3162.
• Citation: 429 F.3d 1334
• Parties: Cassandra A. AUGUSTINE, Petitioner, v. DEPARTMENT OF VETERANS AFFAIRS, Respondent.
• Court: U.S. Court of Appeals — Federal Circuit

429 F.3d 1334

Cassandra A. AUGUSTINE, Petitioner, v. DEPARTMENT OF VETERANS AFFAIRS, Respondent.

No. 04-3162.

United States Court of Appeals, Federal Circuit.

November 15, 2005.

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Michael J. Kator, Kator, Parks & Weiser P.L.L.C., of Washington, DC, argued for petitioner.

Kent G. Huntington, Attorney, Commercial Litigation Branch, Civil Division, United States Department of Justice, of Washington, DC, argued for respondent. With him on the brief were Peter D. Keisler, Assistant Attorney General, David M. Cohen, Director, and Kathryn A. Bleecker, Assistant Director.

Before RADER, Circuit Judge, FRIEDMAN, Senior Circuit Judge, and DYK, Circuit Judge.

DYK, Circuit Judge.

Petitioner Cassandra Augustine was successful in her appeal to the Merit Systems Protection Board ("Board"). The Board held that the Department of Veterans' Affairs ("VA") violated Augustine's right to a veterans' preference under the Veterans' Preference Act, 5 U.S.C. § 3309, by not selecting her for a competitive civil service position. As the prevailing party Augustine moved for attorney's fees under 5 U.S.C. § 3330c(b). The Board held that Augustine could not recover fees because her attorney was not licensed to practice in the state in which the services were rendered. We vacate the Board's decision and remand for further proceedings.

BACKGROUND

Many federal agencies, including the Board, permit both attorneys and non-attorneys to represent clients in administrative proceedings. See, e.g., 5 C.F.R. § 1201.31(b) (2004) (Merit Systems Protection Board); 37 C.F.R. § 1.31 (2004) (Patent and Trademark Office); 29 C.F.R. § 18.34 (2004) (Department of Labor); 20 C.F.R. § 410.685(b) (2004) (certain claims before the Social Security Administration). Typically, non-attorney representatives are not entitled to an award of fees. Even when the private party is represented by an attorney, under the "American Rule," the prevailing party is generally responsible for his own attorney's fees. Indep. Fed'n. of Flight Attendants v. Zipes, 491 U.S. 754, 758, 109 S.Ct. 2732, 105 L.Ed.2d 639 (1989). However, Congress has created several exceptions to this rule, allowing prevailing parties before federal courts or agencies to recover attorney's fees.¹ The Veterans Employment Opportunities Act of 1998 ("VEOA"), Pub.L. No. 105-339, 112 Stat. 3182 (codified at 5 U.S.C. § 3330a, et seq. (2000)), is such an exception. The VEOA provides that veterans who prevail in certain employment actions "shall be awarded reasonable attorney fees, expert witness fees, and other litigation expenses." 5 U.S.C. § 3330c(b) (2000). This case presents the question as to what, if any, role state law should play in determining who is an "attorney" for purposes of section 3330c(b).

The petitioner in this case, Augustine, filed a pro se appeal with the Board, arguing that the VA violated her right to a veterans' preference under the Veterans' Preference Act by not selecting her for the position of "Veterans Service Representative." On March 14, 2000, the administrative judge ("AJ") rendered an initial decision concluding that the VA had violated the Veterans' Preference Act and ordering the VA to appoint Augustine to the Service Representative position retroactively and to compensate her for any loss of wages or benefits. The AJ also awarded liquidated damages for violations of the statute. The VA sought review by the full Board. The full Board then vacated the initial decision, and directed the parties to submit additional briefing to the full Board on various issues.

By August 13, 2001, Augustine retained an attorney, Wild Chang, to represent her. Augustine herself was a resident in California. Chang, who was also located in California, represented Augustine in the subsequent proceedings before the full Board as well as in a mediation conducted in August 2001. The VA moved to withdraw its petition for review on September 7, 2001. On September 22, 2003, the Board entered an order stating: "we DISMISS the agency's petition for review as withdrawn. And, in light of this disposition, we also VACATE the Board's Opinion and Order at 88 M.S.P.R. 407.... the once-vacated initial decision is now revived, entitling the appellant to all the relief ordered therein. The initial decision of the administrative judge is now final." J.A. at 34.

As the prevailing party, Augustine moved for attorney's fees and costs of $39,124.34 under the VEOA's attorney's fees provision, 5 U.S.C. § 3330c(b). In an initial decision, the AJ agreed that the petitioner was a prevailing party but denied the fee request. Although Chang was licensed to practice law in both Massachusetts and New York, he was not licensed in California, where the services were performed. The AJ held that "although [Chang] could appear in the proceeding as a nonlawyer representative pursuant to Board regulations," he could not appear as an attorney unless California law permitted him to appear. J.A. at 9. The AJ reasoned that "[a]n attorney appearing before the Board, whether representing a private party or an agency, will be expected to conform to the applicable state rules governing attorney conduct." J.A. at 3-4. Concluding that "all services were evidently performed while counsel was in California," the AJ then determined that, as part of the rules governing attorney conduct in California, "a non-member of the California State Bar ... is [ ] forbidden to `practice law in California,'" and may not "recover compensation for services as an attorney at law in California ...." J.A. at 4.

While recognizing that the California prohibition had not applied to regulate practice in federal courts, the AJ explained that the Board was not a court. "As neither the California Legislature nor the courts have expressly created an exception" for practice before federal agencies, the AJ "decline[d] to create a new exception" here. J.A. at 8 (internal quotation marks omitted). The AJ noted that the Board did not "have its own rules as to admission and professional conduct.... Thus, there is no conflict between Board law and state rules; indeed, the one incorporates the other." Id. Because Augustine did not seek full Board review, the AJ's decision became the final decision of the Board pursuant to 5 C.F.R. § 1201.113. Augustine then sought review by this court under 5 U.S.C. § 7703(b)(1).

DISCUSSION

As this appeal concerns only the Board's legal determination regarding who may be awarded fees under 5 U.S.C. § 3330c(b), we review the Board's decision without deference. Kievenar v. Office of Pers. Mgmt., 421 F.3d 1359, 1362 (Fed.Cir.2005). We have jurisdiction pursuant to 28 U.S.C. § 1295(a)(9) (2000).

The Board's decision here is not entirely clear. It could be read as holding that California law controls the right to practice as an attorney before the Board and the right to fees for performing such service. Alternatively, it could be read as holding that the federal attorney's fee statute incorporates state law. We conclude that neither ground for the decision is tenable.

I

We first address the theory that state law is controlling. Section 6125 of California Code provides that: "No person shall practice law in California unless the person is an active member of the State Bar." Cal. Bus. & Prof.Code § 6125 (2003). This "prohibition against unauthorized law practice is ... designed to ensure that those performing legal services do so competently." Birbrower, Montalbano, Condon & Frank v. Superior Court, 17 Cal.4th 119, 70 Cal.Rptr.2d 304, 949 P.2d 1, 5 (1998).² Accordingly, a violation of section 6125 is considered a misdemeanor, and "[n]o one may recover compensation for services as an attorney at law in [California] unless the person was at the time the services were performed a member of The State Bar." Id. (quoting Hardy v. San Fernando Valley Chamber of Commerce, 99 Cal.App.2d 572, 222 P.2d 314, 317 (1950)) (alterations omitted).

California courts have yet to fully articulate the scope of what constitutes "practicing law in California" under section 6125. They have made clear that section 6125 covers representation before California courts. Birbrower, 70 Cal.Rptr.2d 304, 949 P.2d at 5. On the other hand, section 6125 "does not regulate practice before United States courts," id. at 6, and therefore does not restrict the receipt of attorney's fees for services related to federal court proceedings. Cowen v. Calabrese, 230 Cal.App.2d 870, 872-73, 41 Cal.Rptr. 441 (Cal.Ct.App.1964). In Z.A. v. San Bruno Park School District, 165 F.3d 1273 (9th Cir.1999), the Ninth Circuit determined that section 6125 covered practice before state agencies even when the state agencies are enforcing federal law. Id. at 1276.

Although the Ninth Circuit applied section 6125 to practice before state administrative agencies, our attention has not been directed to any instance in which section 6125 has been applied to restrict attorney practice before a federal administrative agency. To the contrary, a 1994 memorandum issued by the Office of Professional Competence, Planning & Development of the State Bar of California indicated that the bar at least does not view section 6125 as covering federal administrative proceedings:

The State Bar takes the general position that where a non-member is permitted to practice before a federal court (district, appellate, admiralty) or a federal agency (INS, Patent Office), such individual is not engaged in the unauthorized practice of law while performing activities before such federal courts or agencies in California on behalf of clients.

J.A. at 44.

The parties vigorously dispute whether the activities of petitioner's counsel violated California law. Whether or not California law applies, it is quite clear that state law purporting to govern practice before a federal administrative agency would be invalid. It is long established that any state or local law which attempts to impede or control the federal...