Yorkshire v. Merit Systems Protection Bd., 84-896

• Decision Date: 29 October 1984
• Docket Number: No. 84-896,84-896
• Citation: 746 F.2d 1454
• Parties: Jerome YORKSHIRE, Petitioner, v. MERIT SYSTEMS PROTECTION BOARD, Respondent. Appeal
• Court: U.S. Court of Appeals — Federal Circuit

Page 1454

746 F.2d 1454

Jerome YORKSHIRE, Petitioner, v. MERIT SYSTEMS PROTECTION BOARD, Respondent.

Appeal No. 84-896.

United States Court of Appeals Federal Circuit.

Oct. 29, 1984.

Peter B. Broida, Washington, D.C., argued for petitioner.

Robert A. Reutershan, Washington, D.C., argued for respondent.

Richard K. Willard, Asst. Atty. Gen., David M. Cohen, Director, Sandra P. Spooner, Asst. Director and Joseph T. Casey, Jr., Washington, D.C., were on the brief for respondent.

Before DAVIS, BENNETT and MILLER, Circuit Judges.

DAVIS, Circuit Judge.

Petitioner Jerome Yorkshire successfully appealed a removal decision of his employer, the Veterans Administration (VA) (MSPB Doc. No. DC0752811216). Following the Merit Systems Protection Board's favorable decision on the merits, petitioner moved for an award of attorney's fees under the Civil Service Reform Act, 5 U.S.C. Sec. 7701(g)(1) (1982) (Reform Act), and corresponding Board regulations, 5 C.F.R. Sec. 1201.37(a) (1984). The Board denied petitioner's motion, and he now seeks review in this court. Because attorney's fees in this case are, in the words of the statute, "warranted in the interest of justice," we reverse the decision of the Board and remand for further proceedings on the amount of the award.

I

Petitioner is a nursing assistant at a VA hospital in Washington, D.C. In March 1982 the VA removed petitioner from government service, alleging that he had physically and verbally abused a patient in his care. The patient, William Young, suffered from brain damage and semi-paralysis. Mr. Young was occasionally violent to the point where he required restraints.

The VA charged petitioner with three separate instances of misconduct. The first two charges alleged that, on separate occasions, petitioner struck Mr. Young. The VA also alleged that, during the second episode, petitioner called Mr. Young "white boy."

After a Board hearing before Presiding Official Stephanie Marks, it was held that the VA failed to prove any of its charges. To substantiate its first charge, the VA presented the testimony of Neil Hadley, Mr. Young's hospital roommate. At first, Mr. Hadley's testimony was unclear as to whether he had actually seen petitioner strike Mr. Young. ¹ When questioned by the presiding official, however, Mr. Hadley stated definitively that he did not see petitioner strike Mr. Young, but only heard a slapping noise which he assumed was the sound of petitioner striking the patient. Petitioner explained the slapping sound by demonstrating that, when Mr. Young became violent, the effort to place him in restraints required sharp physical contact. Presiding Official Marks called this "a clear and convincing demonstration." ²

The VA also introduced notes, written by Mr. Young, stating that he had been hit and that he feared for his life. The notes were largely unintelligible and contradictory. Moreover, they never mentioned petitioner specifically.

In support of the second charge of physical abuse, the presiding official heard the testimony of Nurse Juanita Davis, a co-worker of petitioner. ³ At the time of the hearing, Nurse Davis was under a psychiatrist's care. She was prone to fabricating outlandish tales, e.g., that she was involved in the Watergate scandal. Presiding Official Marks found Nurse Davis' testimony to be self-contradictory, often incoherent, and utterly incredible.

The only evidence regarding the verbal abuse was a statement by Nurse Davis to a VA investigator. The presiding official assigned the investigator's hearsay testimony "little weight."

Presiding Official Marks dismissed all of the charges against petitioner and ordered him reinstated. The VA did not appeal this decision either to the full MSPB or to this court.

Petitioner then presented the Board with a motion for an award of $3,587.09 in attorney's fees. The VA did not initially contest the motion. Prior to a decision, Presiding Official Marks resigned her position with the Board. The motion therefore went before a substitute presiding official, William C. Jenkins.

Presiding Official Jenkins reviewed the record of the hearing on the merits and concluded that petitioner failed to demonstrate proper grounds for an award of attorney's fees. Petitioner sought review by the Board, which the VA then contested. The Board issued an order refusing to review the decision below, stating that it could find no error in Presiding Official Jenkins' reasoning.

II Under the Reform Act, the Board

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 ... 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.

5 U.S.C. Sec. 7701(g)(1) (1982). The Board's regulations reiterate the pertinent portions of the statute. 5 C.F.R. Sec. 1201.37(a) (1984). In Sterner v. Department of the Army, 711 F.2d 1563, 1565-66 (Fed.Cir.1983), we ruled that an employee is entitled to attorney's fees under the statute if two prerequisites are established: (1) the employee is a prevailing party on the merits of the case, and (2) the award is warranted in the interest of justice. The Board does not contest here that petitioner prevailed on the merits. The sole issue, therefore, is whether the second prerequisite has been satisfied.

The parties correctly cite Allen v. U.S. Postal Service, 2 M.S.P.B. 582 (1980), as embodying the MSPB's prevailing standard for interpretation of the "warranted in the interest of justice" part of Sec. 7701(g)(1). Allen began with the proposition that the two examples in the statute concerning when an award would be warranted in the interest of justice are illustrative and not exclusive. Id. at 587. The Board then reviewed the legislative history of the statute to glean other instances in which an award would be appropriate.

The Board in Allen found very illuminating the comments of Senator Mathias, author of the "interest of justice" language and member of the Reform Act's conference committee. Senator Mathias described four situations in which the Board might appropriately award attorney's fees:

[W]here he [the employee] is substantially innocent of the charges that are leveled against him, or where the agency acted in bad faith, or where there was some gross procedural error, or where the agency knew or should have known that it couldn't prevail on the merits when it brought the proceeding.

Id. at 589, quoting Transcript of Senate Committee on Governmental Affairs' Mark-up Session on S. 2640, 95th Cong., 2d Sess. 124-25 (1978). With the statutory examples and Senator Mathias' illustrations as a base, the Board developed a set of five broad categories of cases in which an award of attorney's fees fits within the statutory framework:

1. Where the agency engaged in a "prohibited personnel practice" (Sec. 7701(g)(1));

2. Where the agency's action was "clearly without merit" (Sec. 7701(g)(1)), or was "wholly unfounded," or the employee is "substantially innocent" of the charges brought by the agency;

3. Where the agency initiated the action against the employee in "bad faith," including:

a. Where the agency's action was brought to "harass" the employee;

b. Where the agency's action was brought to "exert improper pressure on the employee to act in certain ways";

4. Where the agency committed a "gross procedural error" which "prolonged the proceeding" or "severely prejudiced" the employee;

5. Where the agency "knew or should have known that it would not prevail on the merits" when it brought the proceeding.

Id. at 593 [footnotes omitted]. The Board dubbed these headings "directional markers toward 'the interest of justice' " rather than conclusive or fixed definitions. Id. We confirmed the validity of the Allen guidelines in Sterner, supra, 711 F.2d at 1570.

The petitioner focuses on category 2 and category 5 to support his request for attorney's fees. The parties' briefs on the standards contained in these categories reveal two points: first, there is confusion as to the difference between category 2 and category 5; second, a concern exists (particularly on the Board's part) that the substantially innocent standard is merely a restatement of the prerequisite that the employee prevail. We turn to these matters.

Category 5 requires a sensitive evaluation of the agency's original action, i.e., whether the agency "knew or should have known" that it would not prevail on the appeal. In analyzing a request for fees under category 5, therefore, the appropriate procedure is to appraise the agency's decision to carry through the action against the employee. If the agency never possessed trustworthy, admissible evidence, or if the agency was negligent in its conduct of the investigation, then the agency "knew or should have known" not to take the action. Attorney's fees are then warranted in the interest of justice. ⁴

Category 2, on the other hand, refers to the result of the case in the Board, not to the evidence and information available prior to the hearing. Because this category encompasses the Board's decision (on the merits) in this particular case, we need not decide whether fees could also be awarded under category 5, supra. It is plain that petitioner prevailed on all the charges against him, and that the original presiding official considered (on the basis of the hearing record) that the VA's charges were "wholly unfounded"--based on incredible or unspecific evidence fully countered by appellant.

The Government's arguments and the MSPB's fee decision muddy the waters by seeking to excuse the VA, as if the only fee criteria were contained in category 5. For instance, it is argued that Mr. Hadley's testimony that he had not actually seen petitioner strike Mr. Young...