Sterner v. Department of Army
| Decision Date | 05 July 1983 |
| Docket Number | No. 60-82,60-82 |
| Citation | 711 F.2d 1563 |
| Parties | Stanley STERNER, Petitioner, v. DEPARTMENT OF the ARMY, Respondent. Appeal |
| Court | U.S. Court of Appeals — Federal Circuit |
Peter B. Broida, Washington, D.C., for petitioner.
Robert A. Reutershan, Washington, D.C., for respondent. J. Paul McGrath, Asst. Atty. Gen., David M. Cohen, Director, Sandra P. Spooner and Judith E. Cohn, Washington, D.C., were on brief for respondent. Curt Schmauder, Army Corps of Engineers, of counsel.
Before RICH, MILLER and SMITH, Circuit Judges.
Petitioner appeals from the decision of the Merit Systems Protection Board (board) denying his petition for attorney's fees under the Civil Service Reform Act of 1978. We affirm.
Petitioner was a computer operator with the Department of the Army. He was removed, effective February 23, 1981, on the basis of five charges of misconduct. Petitioner admitted two of the charges--falsely using his superior's name to obtain priority for a project and briefly leaving the computer center unattended in connection with a Christmas party--and he denied the other three.
In an exhaustive opinion, the presiding official found that the Army had failed to prove the three contested charges. On the basis of the two admitted charges she ordered the penalty reduced to a 16-day suspension, the maximum permitted by the Army's Table of Penalties. No petition for review was filed and the field office decision became final on July 30, 1981.
On August 19, 1981, petitioner filed for attorney's fees pursuant to the Civil Service Reform Act. 1 Under the guidelines set out by the board in Allen v. United States Postal Service, 2 the presiding official identified three issues to be considered prior to award of fees: (1) whether petitioner was the prevailing party, (2) whether attorney's fees were warranted in the interest of justice, and (3) whether the requested fees were reasonable. She held that petitioner was "technically the prevailing party in that the removal action was reversed," but concluded that since petitioner "was not found to be 'substantially innocent' of the charges * * * the interests of justice would not be served by awarding him attorney fees." The issue of the reasonableness of the claimed fees was not reached. The board denied review on July 26, 1982, and petitioner appealed to this court.
Two issues are presented on appeal. First, the Government questions whether petitioner was a prevailing party and so even eligible for attorney's fees. Second, petitioner contests the board's finding that an award would not be warranted in the interest of justice. We hold that petitioner was a prevailing party, but that the board did not abuse its discretion in declining to award attorney's fees.
Before turning to the precise questions raised, we must establish the statutory framework in which they appear. Section 7701(g)(1), the attorney's fees provision in the Civil Service Reform Act, reads:
* * * the Board, or an administrative law judge or other employee of the Board designated to hear a case, may require payment by the agency involved of reasonable attorney fees incurred by an employee or applicant for employment if the employee or applicant is the prevailing party and the Board, administrative law judge, or other employee (as the case may be) determines that payment by the agency is warranted in the interest of justice, including any case in which a prohibited personnel practice was engaged in by the agency or any case in which the agency's action was clearly without merit.
This provision obviously establishes the prerequisites to award of attorney's fees. Just how many prerequisites there are and how they fit together is less clear--the board sets out the three noted above; 3 this court has noted in addition that the fees must be actually incurred; 4 and the presiding official found it necessary to discuss the existence of an attorney-client relationship. We therefore take this opportunity to clarify the analysis of attorney's fees petitions.
We hold that an award of attorney's fees under section 7701(g)(1) has two prerequisites both of which must be fulfilled, both of which must be considered in all cases, and as to both of which the petitioner bears the burden of proof: (1) the petitioner must be a prevailing party, and (2) the award must be warranted in the interest of justice. 5 The reasonableness of the fee is a subsidiary (though no less crucial) issue which need only be addressed after entitlement is established. Other factors, like existence of an attorney-client relationship and actual payment of the fees, are of course also necessary ingredients. However, we prefer the two-prerequisite analysis because it emphasizes the two factors which were made express conditions by the statute 6 while actual payment and the attorney-client relationship, like the requirement that the petitioner be an employee or applicant, are implicit conditions and likely to be given in most cases.
The present case is no oddity in this respect. There has never been any dispute that petitioner was an employee and that he hired and paid an attorney. The reasonableness of the fees has never needed to be reached. So we turn to the two issues in this case: whether petitioner meets the two prerequisites to an award of attorney's fees.
The Government contends that petitioner is ineligible for an award of fees in that he is not a prevailing party within the meaning of the first prerequisite because he was not substantially innocent of the charges against him.
The meaning of "prevailing party" in section 7701(g)(1) is an issue of first impression for this court. The board has considered it and in the Hodnick case said: 7
An appellant may be deemed a "prevailing party" for purposes of such an award if he or she has obtained all or a significant part of the relief sought in petitioning for appeal * * *.
The board supported its position by reference to other attorney's fees and costs statutes. The general rule under the Civil Rights Act of 1964, 8 the Civil Rights Attorney's Fees Awards Act of 1976, 9 and the Freedom of Information Act 10 is that a party need not have completely prevailed on every issue, but only have substantially prevailed or have prevailed on a significant portion of his claims. This is a sensible basis for determining the interpretation of prevailing party here, as there is no indication that Congress uses that term in different ways in different contexts. We would only add that the Equal Access to Justice Act, to which we have in the past turned for guidance in interpreting section 7701(g)(1), 11 has also been interpreted to require less than total victory to satisfy the requirement of prevailing. 12 We therefore approve the board's formulation of the standard, quoted above, for determining who is a prevailing party. 13
In applying this standard, it should be borne in mind that determining who prevails is really no more than a totaling up of who won and who lost. It is a practical matter: for example, if a penalty is imposed against an employee and, as a result of his appeal, it is reduced, then that employee may be deemed to have prevailed. 14 The determination of who prevailed is, after all, only a threshold test of eligibility; the more difficult question of entitlement is reserved for the second prerequisite, "warranted in the interest of justice." 15 Eligibility is broad but the entitlement standard operates to limit it.
Given this analysis, petitioner's lack of substantial innocence is not controlling at the first, eligibility, stage. Whether a party prevails is not a question of merit or justice, 16 but a practical test designed to determine as an initial matter who is eligible for attorney's fees. However, the extent of a party's victory is clearly relevant generally to the justice of his cause. Therefore, corollary to our holding with respect to prevailing party, we also hold that the de minimis nature of the victory obtained by a prevailing employee may be considered by the board under the aegis of the second, "interest of justice," prerequisite. 17 This consideration is entirely consistent with the board's guidelines in the Allen case in that it concentrates on the magnitude of the injustice done the employee and in that the Allen guidelines do not purport to exclude other factors relevant to the interest of justice. 18
This factor should not be used by the board as a "litmus test." 19 It may carry great weight in a particular case, but it is not automatically dispositive. Furthermore, the reversal of a penalty of removal will in all cases not be de minimis under this standard. Removal is the most serious penalty available to the agency and the most harmful to the employee, so the avoidance of removal should be considered a sufficient degree of success to overcome use of this factor to deny fees.
In the present case, petitioner appealed three of the five charges against him and the penalty of removal based thereon. The board reversed all three charges and reduced the penalty to a suspension. Thus, as a practical matter, petitioner prevailed. The presiding official was right on the mark in saying that petitioner prevailed--"technically" or otherwise--"in that the removal action was reversed." The fact that petitioner got everything he asked for makes this an easy case; he has never contested the two charges upon which the board based the suspension penalty. Petitioner having established his eligibility for an award, we now turn to the question of his entitlement.
Petitioner asks that we remand the case to the board for reconsideration of entitlement. The board, petitioner claims, has interpreted the interest of justice standard solely to punish governmental misconduct and has consequently failed to consider the compensatory purpose of the provision for award of attorney's fees.
Our first task is to reaffirm what is...
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