Ward v. United States Postal Serv.

• Citation: 672 F.3d 1294
• Decision Date: 12 March 2012
• Docket Number: No. 2010–3021.,2010–3021.
• Parties: Thomas O. WARD, Petitioner, v. UNITED STATES POSTAL SERVICE, Respondent.
• Court: U.S. Court of Appeals — Federal Circuit

672 F.3d 1294

Thomas O. WARD, Petitioner,

v.UNITED STATES POSTAL SERVICE, Respondent.

No. 2010–3021.

United States Court of Appeals, Federal Circuit.

March 12, 2012.

Matthew J. Dowd, Wiley Rein LLP, of Washington, DC, filed an application for attorney fees for petitioner. With him on the application were Robert J. Scheffel; of counsel was Joseph J. Chester, Caplan & Chester, of Pittsburgh, PA.

Shari A. Rose, Trial Attorney, Commercial Litigation Branch, Civil Division, United States Department of Justice, of Washington, DC, filed a response to the application for respondent. With her on the opposition were Tony West, Assistant Attorney General, Jeanne E. Davidson, Director, and Deborah A. Bynum, Assistant Director. Of counsel was Michael J. Elston, Appellate Counsel, Office of the General Counsel, United States Postal Service, of Washington, DC.

Before RADER, Chief Judge, DYK and PROST, Circuit Judges.

Concurring opinion filed by Circuit Judge PROST, in which Chief Judge

RADER joins. Opinion concurring in the judgment filed by Circuit Judge DYK.

ON APPLICATION FOR ATTORNEY FEES

PER CURIAM.

ORDER

Thomas O. Ward applies for an award of attorney's fees and expenses under the Equal Access to Justice Act, 28 U.S.C. § 2412. Because Mr. Ward qualifies as a “prevailing party,” we grant his request.

I

On August 19, 2008, Mr. Ward, a maintenance mechanic for the U.S. Postal Service (“Agency”), was involved in an incident with a supervisor in which he shouted, acted in a manner perceived as threatening, and disobeyed instructions to remain in the supervisor's office. After this incident, the Agency asserted an “Improper Conduct” charge against Mr. Ward and issued a Notice of Proposed Removal letter. The letter referenced no other misconduct aside from that associated with the August 19, 2008 event.

A deciding official subsequently issued a final decision letter removing Mr. Ward from his position as a maintenance mechanic. Mr. Ward appealed from this decision to the Merit Systems Protection Board (“Board”). At a hearing before the administrative judge, it became clear for the first time that the deciding official, in issuing his removal penalty, relied on other instances of misconduct by Mr. Ward not associated with the August 19, 2008 incident. In particular, the deciding official testified that he had ex parte communications with three of Mr. Ward's supervisors and one manager, learning from those communications that Mr. Ward had previously exhibited “loud, belligerent, [and] intimidating behavior.” Moreover, the deciding official represented that he considered these past instances of misconduct in his Douglas factor analysis and that these past actions influenced his decision to remove Mr. Ward.¹

While the Board found error in the deciding official's consideration of the past instances of misconduct, it ultimately sustained the removal penalty. In particular, the Board performed an independent Douglas factor analysis in its final decision without considering the past misconduct, concluding that the removal penalty was still reasonable. Mr. Ward appealed the Board's final decision to this court, arguing that because the Notice of Proposed Removal letter only addressed the August 19, 2008 incident, he was not provided an opportunity to rebut the other misconduct allegations.

On appeal, this court vacated, concluding that the Board committed two errors. “First, the Board erred in failing to address the due process concerns arising out of the Deciding Official's ex parte communications regarding Ward's alleged prior instances of misconduct, which ... played a role in [the] penalty determination.” Ward v. U.S. Postal Serv., 634 F.3d 1274, 1279 (Fed.Cir.2011). Specifically, the Board was required to “analyze the Deciding Official's ex parte communications under the Stone framework to determine whether Ward's due process rights were violated” but failed to do so. Id. Therefore, we remanded the case to the Board for that purpose, stating that “[i]f the Board finds that the [ex parte] communications did introduce new and material information in violation of Ward's due process rights, Ward must be afforded a ‘constitutionally correct removal procedure.’ ” Id. at 1280.

The Board committed its second error when it attempted to cure an underlying Agency procedural error (i.e., an error committed by the U.S. Postal Service). Specifically, the Agency initially erred by improperly considering Ward's alleged past instances of misconduct without referencing those incidents in the Notice of Proposed Removal. Id. at 1281. “Despite recognizing this procedural error, the Board erred in concluding that it could ‘remedy the error’ by performing an independent analysis of the Douglas factors to determine whether the ‘removal [was] within the bounds of reasonableness.’ ” Id. “Instead, the Board was required to run a harmless error analysis to determine whether the procedural error required reversal.” Id. On remand we instructed the Board to analyze whether the Agency's procedural error was harmful, but only if the Board first found that the deciding official's reliance on the ex parte communications caused a due process violation. Id. at 1282–83.

After our remand, the Board remanded the case to the administrative judge for further factual findings. The proceedings were subsequently suspended because the parties entered into settlement discussions.² Mr. Ward now seeks attorney's fees under 28 U.S.C. § 2412(d) for the expenses incurred solely in relation to his prior appeal before this court. He properly filed his application here in the first instance. Fed. Cir. R. 47.7; see also Ramos v. Dep't of Justice, 552 F.3d 1356 (Fed.Cir.2009).

II

Under our legal system, parties ordinarily bear their own attorney's fees (i.e., the prevailing party is not automatically entitled to collect from the loser). Buckhannon Bd. & Care Home, Inc. v. W. Va. Dep't of Health & Human Res., 532 U.S. 598, 602, 121 S.Ct. 1835, 149 L.Ed.2d 855 (2001). Congress, however, has statutorily authorized an award of attorney's fees to a prevailing party in some instances. For example, in the Equal Access to Justice Act (“EAJA”), Congress authorized prevailing parties to collect fees in actions against the United States provided that certain requirements are met. 28 U.S.C. § 2412(d)(1)(A).

Specifically, § 2412(d) states:

[e]xcept as otherwise specifically provided by statute, a court shall award to a prevailing party other than the United States fees and other expenses, in addition to any costs awarded pursuant to subsection (a), incurred by that party in any civil action (other than cases sounding in tort), including proceedings for judicial review of agency action, brought by or against the United States in any court having jurisdiction of that action, 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. § 2412(d)(1)(A). Thus, fees can only be awarded to “prevailing part[ies]” under EAJA if the government's position in the case was not “substantially justified,” if no “special circumstances make an award unjust,” and if the party seeking the award timely files its application for fees to the court. Comm'r, INS v. Jean, 496 U.S. 154, 158, 110 S.Ct. 2316, 110 L.Ed.2d 134 (1990). Only the “prevailing party” element is at issue in this appeal, as the government does not dispute Mr. Ward's contention that the other elements are met. In his application for attorney's fees, Mr. Ward asserts that he is a “prevailing party” under EAJA based on the remand he obtained from this court to the Merit Systems Protection Board. Whether Mr. Ward qualifies as a “prevailing party” under EAJA is a question of law. See Former Emps. of Motorola Ceramic Prods. v. United States, 336 F.3d 1360, 1363 (Fed.Cir.2003) (Rader, J., dissenting).

The Supreme Court provided guidance on the meaning of the “prevailing party” term in Buckhannon, 532 U.S. at 598, 121 S.Ct. 1835. In particular, the Court explained that “ ‘[r]espect for ordinary language requires that a plaintiff receive at least some relief on the merits of his claim before he can be said to prevail.’ ” Id. at 603, 121 S.Ct. 1835 (quoting Hewitt v. Helms, 482 U.S. 755, 760, 107 S.Ct. 2672, 96 L.Ed.2d 654 (1987)). According to the Court, the extent of this relief must rise to the level of “enforceable judgments on the merits and court-ordered consent decrees creat[ing] [a] ‘material alteration of the legal relationship of the parties.’ ” Id. at 604, 121 S.Ct. 1835. Under this rule, neither “an interlocutory ruling that reverses a dismissal for failure to state a claim” nor a “reversal of a directed verdict” qualifies a plaintiff for prevailing party status. Id. at 605, 121 S.Ct. 1835.

In reaching the conclusion that it did, Buckhannon explicitly overruled what had become known as the “catalyst theory.” Id. at 610, 121 S.Ct. 1835. Under this theory, parties “could obtain a fee award if their suit acted as a ‘catalyst’ for the change they sought, even if they did not obtain a judgment or consent decree” in their favor. Id. at 625–26, 121 S.Ct. 1835 (Ginsburg, J., dissenting). Federal courts had been applying the catalyst theory to hold that a party could qualify as “prevailing” so long as its ends were accomplished because of the litigation. The rule created by the majority in Buckhannon dismantled the catalyst theory by requiring enforceable judgments on the merits or court-ordered consent decrees.

Notably, EAJA was not specifically at issue in Buckhannon, as that case involved the “prevailing party” term from a different attorney's fees statute. This court has concluded, however, that Buckhannon applies with equal force in the EAJA context. Brickwood Contractors, Inc. v. United States, 288 F.3d 1371, 1379 (Fed.Cir.2002); see also Former Employees, 336 F.3d at 1364 (explaining that the Supreme Court “has interpreted the phrase ‘preva...