Katherine Coffman v. Special Counsel ( 2022 )

UNITED STATES OF AMERICA
MERIT SYSTEMS PROTECTION BOARD
2022 MSPB 18Docket No. CB-1215-14-0012-A-1
Katherine Coffman,
Petitioner,
v.
Office of Special Counsel and Department of Homeland Security,
Respondents.
June 29, 2022
Debra L. Roth, Esquire and Julia H. Perkins, Esquire, Washington, D.C.,
for the petitioner.
Emilee Collier, Esquire, Rachel A. Venier, Esquire and Mariama
Liverpool, Esquire, Washington, D.C., for the Office of Special Counsel.
Lindsay K. Solensky and Philip Carpio, Washington, D.C., for the
Department of Homeland Security.
BEFORE
Cathy A. Harris, Vice Chairman
Raymond A. Limon, Member
Tristan L. Leavitt, Member
Member Leavitt recused himself and
did not participate in the adjudication of this appeal.
OPINION AND ORDER
¶1 The Office of Special Counsel (OSC) has filed a petition for review, and the
petitioner has filed a cross petition for review of an addendum initial decision,
which granted the petitioner’s request for attorney fees and ordered OSC to pay
her $490,503.58 in fees and expenses. For the reasons set forth below, we
2
AFFIRM the administrative law judge’s (ALJ’s) findings that the petitioner is a
prevailing party and that fees are warranted in the interest of justice. We
MODIFY the initial decision to find that $517,506.19 in attorney fees and
expenses were reasonable and incurred in the petitioner’s defense of OSC’s
disciplinary action against her. We GRANT OSC’s petition for review, VACATE
the ALJ’s finding that OSC must pay these fees, and FIND INSTEAD that the
Department of Homeland Security (DHS), as the petitioner’s employing agency,
is obligated to pay these fees pursuant to 5 U.S.C. § 1204(m)(1) (2012). We also
DENY the petitioner’s cross petition for review.
BACKGROUND
¶2 On April 8, 2014, OSC filed an eight-count complaint seeking disciplinary
action against the petitioner, a Deputy Assistant Commissioner for Human
Resources Management at Customs and Border Protection (CBP), DHS, for
allegedly violating 5 U.S.C. § 2302(b)(1)(E) 1 and 5 U.S.C. § 2302(b)(6) 2 when
she participated in CBP’s efforts to hire three candidates for career appointments
who were favored by the then-recently appointed CBP Commissioner. Special
Counsel v. Coffman, 124 M.S.P.R. 130, ¶¶ 2-5 (2017); Special Counsel v.
Coffman, MSPB Docket No. CB-1215-14-0012-T-1, Complaint File (CF), Tab 1.
After a 6-day hearing, the ALJ found that OSC did not prove any of the counts in
its complaint and imposed no discipline on the petitioner. Coffman, 124 M.S.P.R.
130, ¶¶ 6-17; CF, Tab 95. On review, the Board affirmed the ALJ’s conclusions
that OSC did not prove that the petitioner intentionally committed any unlawful
1
Section 2302(b)(1)(E) prohibits discriminating for or against an employee or applicant
on the basis of marital status or political affiliation.
2
Section 2302(b)(6) prohibits the granting of any preference or advantage not
authorized by law, rule, or regulation to any employee or applicant for the purpose of
improving or injuring the prospects for employment of any particular person.
3
hiring practice and that no discipline was warranted. Coffman, 124 M.S.P.R. 130,
¶¶ 18-57.
¶3 The petitioner timely filed a motion for attorney fees. Coffman v. Office of
Special Counsel, MSPB Docket No. CB-1215-14-0012-A-1, Attorney Fees File
(AFF), Tab 3. The ALJ issued an order that added DHS as a party to the fee
matter. AFF, Tab 6. The ALJ made the following interim findings: (1) the
petitioner was a prevailing party; (2) fees should be awarded in the interest of
justice; and (3) an award of $475,106.97 was reasonable and incurred by the
petitioner in her defense of OSC’s disciplinary action. AFF, Tab 19. The ALJ
directed the parties to brief the issue of which agency should pay her fees, and the
parties responded. AFF, Tab 19 at 13-14, Tabs 24-26.
¶4 The ALJ subsequently issued an addendum initial decision in which he
made the following findings of fact: (1) OSC presented no evidence that the
petitioner intentionally committed a prohibited personnel practice (PPP) as
described in the eight counts in its complaint; (2) the petitioner incurred attorney
fees and expenses in the amount of $490,503.58; (3) her attorneys’ hourly rates
were reasonable; and (4) it was in the interest of justice to award her fees because
she was substantially innocent of the charges and OSC knew or should have
known that it would not prevail on the merits. AFF, Tab 27, Initial Decision (ID)
at 1-14. In pertinent part, the ALJ applied the 2011 version of 5 U.S.C.
§ 1204(m)(1), which required payment by the “agency involved,” and he
determined OSC was “solely” responsible for the payment of the petitioner’s
attorney fees and expenses. ID at 14-18.
¶5 OSC has filed a petition for review, the petitioner and DHS have each filed
responses, and OSC has filed a reply. Petition for Review (PFR) File, Tabs 6,
12-13, 19-20. On review, OSC contends that the petitioner was not entitled to an
award of fees and expenses in the interest of justice; alternatively, OSC contends
that the ALJ erred because 5 U.S.C. § 1204(m)(1) was modified in 2012 to
require the petitioner’s employing agency to pay fees. PFR File, Tab 6. DHS
4
does not contest that awarding fees is in the interest of justice, but it asserts that
OSC should pay. PFR File, Tab 12.
¶6 In her cross petition for review, the petitioner asserts that the Board should
apportion the awarded fees between OSC and DHS by applying the 2011 and
2012 versions of section 1204(m)(1) successively. PFR File, Tab 13 at 24-25.
The petitioner also supplements her claim for fees and expenses to include an
additional $26,692.50 in fees and $310.11 in expenses, which would bring the
total attorney fees and expenses to $517,506.19. Id. at 25-27.
ANALYSIS
¶7 In the initial decision, the ALJ stated that the following requirements must
be established in order to grant a request for attorney fees: (1) the petitioner must
be a prevailing party; (2) the award of fees must be warranted in the interest of
justice; and (3) the fees awarded must be reasonable. ID at 5-6. None of the
parties disputes the applicability of this standard to this matter, and we address
each of the requirements herein.
We affirm the ALJ’s finding that the petitioner was a prevailing party.
¶8 None of the parties challenges on review the ALJ’s finding that the
petitioner was a prevailing party. ID at 6-7; PFR File, Tab 6 at 15 n.12, Tab 12
at 4-5. Because the ALJ found, and the Board affirmed, that OSC proved none of
the eight charges against the petitioner, we affirm the ALJ’s conclusion that she
is a prevailing party. See Santella v. Special Counsel, 86 M.S.P.R. 48, ¶ 21
(2000) (finding that the petitioners were prevailing parties because, among other
things, OSC alleged that they violated 5 U.S.C. § 2302(b)(8) four times, and the
Board agreed with the petitioners that none of the counts should be sustained),
aff’d on recons., 90 M.S.P.R. 172 (2001), aff’d sub nom. James v. Santella,
328 F.3d 1374 (Fed. Cir. 2003).
5
We find that the petitioner reasonably incurred $517,506.19 in attorney fees and
expenses in her defense of OSC’s disciplinary action.
¶9 None of the parties disputes the ALJ’s finding that the petitioner incurred
attorney fees and expenses in her defense of OSC’s disciplinary action and that
her attorneys’ hourly rates were reasonable. ID at 4, 13-14; PFR File, Tab 6 at 15
n.12, Tab 12 at 4-5. We have reviewed the petitioner’s supplemental information,
PFR File, Tab 13 at 25-38, and we find that she reasonably incurred an additional
$26,692.50 in fees and $310.11 in expenses, thereby bringing the total fee award
to $517,506.19.
We agree with the ALJ that the payment of fees is warranted in the interest of
justice.
¶10 An attorney fee award by the Board may be warranted in the interest of
justice in circumstances such as the following: (1) the agency engaged in a PPP;
(2) the agency’s action was clearly without merit or wholly unfounded, or the
employee was substantially innocent of the charges; (3) the agency initiated the
action in bad faith; (4) the agency committed a gross procedural error; or (5) the
agency knew or should have known that it would not prevail on the merits. Allen
v. U.S. Postal Service, 2 M.S.P.R. 420, 434‑35 (1980). None of the parties
challenges the ALJ’s use of the Allen factors to evaluate whether an award of fees
is warranted in the interest of justice in this matter. 3
¶11 In the initial decision, the ALJ determined that payment of fees and
expenses was warranted in the interest of justice because the petitioner was
substantially innocent of the charges (Allen factor 2) and OSC knew or should
have known that it would not prevail on the merits (Allen factor 5). ID at 8-13.
OSC contends that the ALJ’s findings regarding Allen factors 2 and 5 were
3
Although Allen involved the general fee provision at 5 U.S.C. § 7701(g)(1), the U.S.
Court of Appeals for the Federal Circuit affirmed the Board’s finding that the
substantially innocent Allen factor also applies to cases arising under 5 U.S.C.
§ 1204(m)(1). Santella, 328 F.3d at 1376-84.
6
erroneous. 4 PFR File, Tab 6 at 16-34. For the following reasons, we find that the
petitioner was substantially innocent of the charges against her, and we affirm the
ALJ’s conclusion that fees are warranted in the interest of justice. 5
¶12 In his analysis of the substantial innocence factor, the ALJ noted that OSC
did not prove any of the eight charges against the petitioner. ID at 8. The ALJ
criticized OSC’s decision to call the petitioner as a witness in its case in chief; he
noted that OSC’s decision to do so resulted in the petitioner “affirmatively
disprov[ing]” any intentional violation because her testimony “clearly established
that she played no role, either directly or indirectly, in either the creation of the
three vacancy announcements, position descriptions, resumes, and/or the . . .
application packages” at issue. Id. The ALJ also found that the petitioner’s
testimony “established her good faith reliance upon professionals within her
agency’s human resource function” and “refuted any notion that her actions in the
case were motivated by either politics or a desire to grant an unlawful
preference.” ID at 8-9. The ALJ further found that, “[l]ong before the hearing,”
OSC knew that agency witness J.N. was “unbiased,” had “nearly unassailable
credibility,” “had direct personal knowledge of many essential facts,” and would
provide testimony that was “highly exculpatory” of the petitioner. ID at 9.
Similarly, the ALJ found that, “[l]ong before the hearing,” OSC knew that agency
witness A.H. would “exculpate” the petitioner. ID at 9-10.
4
DHS does not challenge the ALJ’s finding that fees were warranted in the interest of
justice. PFR File, Tab 12 at 5.
5
In his interim findings, attached to the addendum initial decision, the ALJ stated that
“OSC’s conduct is tantamount to bad faith, as identified in Allen Factor 3.” ID at 41.
Because we agree with the ALJ that the petitioner was substantially innocent (Allen
factor 2), we need not address OSC’s arguments regarding Allen factor 5 or the ALJ’s
reference to bad faith in his interim findings. PFR File, Tab 6 at 16-28, 34-35; see
Miller v. Department of the Army, 106 M.S.P.R. 547, ¶ 11 n.* (2007) (concluding that
because attorney fees were warranted under the fifth Allen factor, the Board need not
consider the appellant’s remaining arguments that she is entitled to fees under other
Allen factors).
7
¶13 In challenging the ALJ’s finding that the petitioner was substantially
innocent of the charges, OSC makes the following assertions: (1) it had a
reasonable basis for filing the complaint against the petitioner; (2) the ALJ
misconstrued its litigation strategy and erroneously criticized OSC for focusing
on the petitioner’s “improbable” and shifting narrative; (3) the ALJ improperly
conflated the petitioner’s status as a prevailing party and his conclusion that she
was substantially innocent of the charges; and (4) the petitioner’s “fault” must be
taken into account in analyzing substantial innocence. PFR File, Tab 6 at 28-34.
These arguments are unavailing.
¶14 OSC’s first two arguments concern the ALJ’s criticism of its decision to file
the complaint against the petitioner and its legal strategy. Our reviewing court
has directed that the standard in Allen factor 2 (substantial innocence) “refers to
the result of the case [before] the Board, not to the evidence and information
available prior to the hearing.” Yorkshire v. Merit Systems Protection Board,
746 F.2d 1454, 1457 (Fed. Cir. 1984). However, both the Board and the court
have recognized that Allen factors 2 and 5 are related and may sometimes overlap.
Id. at 1457 n.5; Social Security Administration v. Goodman, 33 M.S.P.R. 325, 332
n.5 (1987). Indeed, the court in Yorkshire noted that, if an agency “possesses no
credible evidence prior to the hearing before the Board ([Allen factor] 5), the
result of the case will usually be in favor of the employee ([Allen factor] 2).”
Yorkshire, 746 F.2d at 1457 n.5 (emphasis in original). The ALJ’s criticism of
OSC’s legal strategy and his focus on what OSC knew before the hearing in his
analysis of substantial innocence does not constitute prejudicial error and does
not provide a basis for reversing the initial decision, Panter v. Department of the
Air Force, 22 M.S.P.R. 281, 282 (1984), because the ALJ’s finding that OSC did
not prove any of the charges, which was affirmed by the Board, supports the
conclusion that the petitioner was substantially innocent. See, e.g., Yorkshire,
746 F.2d at 1458 (finding that an employee “must prevail on substantially all the
charges to be found ‘substantially innocent’”).
8
¶15 OSC also contends that the ALJ “made no meaningful distinction” between
the petitioner’s status as a prevailing party and the conclusion that she was
substantially innocent; thus, the ALJ’s improper conflation of these concepts
renders the Allen factors “superfluous.” PFR File, Tab 6 at 29. This is not a
novel argument. In James, 328 F.3d at 1381-82, the U.S. Court of Appeals for
the Federal Circuit rejected the Office of Personnel Management’s nearly
identical argument in this regard. First, the James court noted that OSC may
bring multiple charges against an employee, and it is possible or probable that “at
least some charges will sometimes be sustained when others are not, resulting in
only a partial victory for the charged employee” that would not “automatically”
result in prevailing party status or a finding that the employee was substantially
innocent. Id. Second, the James court noted that there are circumstances when a
prevailing party might not be substantially innocent, and it cited Sterner v.
Department of the Army, 711 F.2d 1563 (Fed. Cir. 1983), in which the employee
confessed to two of five charges, and Wise v. Merit Systems Protection Board,
780 F.2d 997 (Fed. Cir. 1985), in which the employee “deliberately withheld
exculpatory evidence from his employing agency.” James, 328 F.3d at 1382.
¶16 The circumstances of Sterner are not present here. However, we have
considered OSC’s assertion that its charges against the petitioner were reasonable
and were the direct result of her inconsistent statements and lack of candor. PFR
File, Tab 6 at 31-32; see Wise, 780 F.2d at 1000 (explaining that the
“substantially innocent” standard is not satisfied by a petitioner who knows that
he was substantially innocent of the charges, can prove that substantial innocence,
and “deliberately does not communicate all the facts to the deciding official
which would lead the deciding official to rule against the removal action”). OSC
asserts in this regard that the petitioner claimed for the first time at the hearing
that two of the hiring packages that she had certified were in a state of disarray
when she received them, and the Board used this testimony to reconcile an
inconsistency between her OSC interview and testimony during the merits phase.
9
PFR File, Tab 6 at 32. OSC also asserts that the petitioner stated in her testimony
before the ALJ that she reviewed one of the application packages in the presence
of knowledgeable subordinates so she could ask questions; however, in her OSC
testimony, which was closer in time to the events at issue, she said that she
reviewed the application package alone. Id. OSC contends that, because the
information that the petitioner withheld would have given it an opportunity to
conduct further investigation of her defense, her failure to disclose such
information precludes an award of fees. Id. We find this argument unavailing.
¶17 In the merits initial decision, the ALJ rejected OSC’s efforts to prove the
petitioner’s culpability through the transcripts of two interviews conducted by
OSC before it filed the complaint in this matter. CF, Tab 95 at 59. The ALJ gave
“more weight” to the petitioner’s in-court testimony than to the transcript of the
OSC interview because the petitioner had the benefit of legal counsel and the
fruits of prehearing discovery from which she could prepare herself. Id. at 59-60.
The Board acknowledged a potential discrepancy in the petitioner’s testimony
relating to her recognition of certain names in connection with the hiring process,
but it reconciled the discrepancy because she received certain application
packages in a state of disarray. Coffman, 124 M.S.P.R. 130, ¶ 25. The Board
stated that it fully considered the petitioner’s OSC interview testimony that the
ALJ found was outweighed by her hearing testimony, and it found that a different
outcome was not warranted because OSC did not establish that the petitioner
intentionally committed an unlawful hiring practice. Id., ¶¶ 22-25. We are not
persuaded that the inconsistencies cited by OSC on review, individually or taken
together, amount to withholding exculpatory evidence. Moreover, it is hard to
imagine what, if any, additional investigatory work OSC would have conducted if
it had this information. Indeed, OSC’s petition for review acknowledges that it
“interviewed 38 individuals and reviewed several thousand documents during the
course of its investigation.” PFR File, Tab 6 at 14. OSC offers no persuasive
evidence that it would not have sought disciplinary action against the petitioner if
10
it had this information. Accordingly, we agree with the ALJ that the petitioner
was substantially innocent of the charges.
¶18 OSC asserts that, even if the petitioner was substantially innocent, the
Board should exercise its discretion and not award fees because of OSC’s “unique
role in protecting the merit system.” PFR File, Tab 6 at 33-34. In this regard,
OSC asserts that it “must be permitted to bring challenging, even controversial
cases, in an effort to define and develop the prohibitions set forth in 5 U.S.C.
§ 2302(b).” Id. at 33. We are not persuaded by this argument. Both versions of
5 U.S.C. § 1204(m)(1) state that fees “may” be awarded if the petitioner is a
prevailing party and an award is warranted in the interest of justice, but we
decline OSC’s invitation to invoke our discretion and not award fees in this
matter. Importantly, there is nothing inconsistent between OSC’s authority to
initiate disciplinary action against Federal employees whom it believes committed
a PPP, 5 U.S.C. § 1215(a)(1)(A), and Congress’s clear intent to allow employees
in unsuccessful disciplinary actions to recoup attorney fees pursuant to 5 U.S.C.
§ 1204(m)(1). See, e.g., James, 328 F.3d at 1383 (“We agree with the Board that
Congress’s intent to invigorate OSC enforcement [through the OSC
Reauthorization Act] in no way categorically precludes a separately manifested
intent that employees who successfully defend an OSC disciplinary action recoup
attorney fees [under the earlier version of 5 U.S.C. § 1204(m)(1)].”). The
petitioner is a prevailing party, we have affirmed the ALJ’s determination that she
is substantially innocent, and we find it appropriate to award fees to the petitioner
pursuant to 5 U.S.C. § 1204(m)(1) in this matter.
Pursuant to 5 U.S.C. § 1204(m)(1) (2012), DHS, as the agency where the
petitioner was employed, is obligated to pay the petitioner’s attorney fees and
expenses.
¶19 Having decided that the petitioner is entitled to an award of fees in the
interest of justice, there is one issue left to resolve: in an OSC disciplinary action
11
arising under 5 U.S.C. § 1215, 6 which agency should pay the petitioner’s fees? A
brief discussion of 5 U.S.C. § 1204(m)(1) is instructive.
¶20 In 1994, Congress created 5 U.S.C. § 1204(m)(1), which stated, in relevant
part, that the Board or an ALJ designated to hear a case arising under
section 1215 “may require payment by the agency involved of reasonable attorney
fees incurred by an employee . . . if the employee . . . is the prevailing party and
the Board [or ALJ] . . . determines that payment by the agency is warranted in the
interest of justice.” United States Office of Special Counsel, Merit Systems
Protection Board: Authorization, Pub. L. No. 103-424, § 2, 108 Stat. 4361 (1994).
In Santella, 86 M.S.P.R. 48, ¶¶ 2-3, 12-18, the Board addressed the applicability
of section 1204(m)(1) in a fee matter that, like this matter, stemmed from an OSC
disciplinary action. The Board reviewed the legislative history of 5 U.S.C.
§ 1204(m)(1), determined that OSC was the “agency involved,” and ordered OSC
to pay the petitioners’ fees. Id., ¶¶ 12-18, 20-40. The Board’s decision was
affirmed by the U.S. Court of Appeals for the Federal Circuit in Santella,
328 F.3d 1374.
¶21 In 2012, Congress made a significant change to section 1204(m)(1) when it
struck the term “agency involved” and replaced it with “agency where the
prevailing party was employed.” Whistleblower Protection Enhancement Act of
2012 (WPEA), Pub. L. No. 112-199, § 107(a), 126 Stat. 1465, 1469 (2012). The
Senate Report for the WPEA explained that the change in section 1204(m)(1) was
necessary because of the Board’s decision in Santella and the corresponding
financial burden on OSC, “a small agency with a limited budget,” to pay fees in
disciplinary actions. S. Rep. No. 112-155, at 15-16 (2012), as reprinted in
2012 U.S.C.C.A.N. 589, 603-04. The Senate Report articulated the concern that
“[s]hould the [Santella] case remain valid law, the OSC would be subject to
6
The provision at 5 U.S.C. § 1215(a)(1)(A) authorizes OSC to take disciplinary action
against an employee if it determines that the employee committed a PPP.
12
heavy financial penalties unless it can predict to a certainty that it will prevail
before bringing a disciplinary action.” Id. at 16. The Senate Report further
stated that such a financial burden on OSC “hinders [its] use of disciplinary
action as an enforcement mechanism and threatens the OSC’s ability to
implement and enforce the [whistleblower protection statutes].” Id. To correct
this problem, section 107(a) of the WPEA modified section 1204(m)(1) to state
that, in a case arising under 5 U.S.C. § 1215, the Board or ALJ,
may require payment by the agency where the prevailing party was
employed . . . at the time of the events giving rise to the case of
reasonable attorney fees incurred by an employee . . . if the
employee . . . is the prevailing party and the Board [or ALJ] . . .
determines that payment by the agency is warranted in the interest of
justice.
5 U.S.C. § 1204(m)(1) (2012) (emphasis supplied). This change to
section 1204(m)(1) became effective December 27, 2012. WPEA, § 202, 126
Stat. at 1476.
¶22 In the initial decision, the ALJ determined that the WPEA did not apply
because the petitioner’s case did not involve the whistleblower protection
statutes, and OSC instituted its investigation of the petitioner in 2011, well before
the December 27, 2012 effective date of the WPEA. ID at 15-16. The ALJ found
instead that the 2011 version of 5 U.S.C. § 1204(m)(1) applied, and he relied on
Santella to find that OSC, as the agency involved, was solely responsible for
payment of the petitioner’s fees. ID at 14-17. Alternatively, the ALJ held that,
even if the WPEA applied, the Allen principles of justice “clearly exonerate
[DHS] and indict OSC” because, among other things, DHS did not participate in
the investigation or prosecution of the petitioner (its employee), the evidence
revealed that OSC “was the exclusive and driving force behind [the petitioner’s]
prosecution,” and “OSC’s investigation and prosecution were clearly without
merit, were wholly unfounded, and likely the product of bad faith.” ID at 16.
13
¶23 In their petition for review submissions, the parties offer different answers
to the question of which agency should pay the petitioner’s fees and which
statutory provisions are applicable. For instance, OSC contends that, based on
the legislative history and the date that the complaint was filed, the 2012 version
of 5 U.S.C. § 1204(m)(1) applies. PFR File, Tab 6 at 4-11. By contrast, DHS
and the petitioner both assert that the ALJ properly applied the 2011 version of
section 1204(m)(1). PFR File, Tab 12 at 7-9, Tab 13 at 8-9, 20-24. DHS argues
in the alternative that 5 U.S.C. § 7701(g)(1), a general fee provision, is applicable
to a fee award in an OSC disciplinary action. PFR File, Tab 12 at 9-17. Finally,
the petitioner asserts in her cross petition that the Board should apportion fees by
applying the 2011 version of 5 U.S.C. § 1204(m)(1) for fees that she incurred up
until the December 27, 2012 effective date of the WPEA and by applying the
2012 version of 5 U.S.C. § 1204(m)(1) to fees incurred starting on that date. PFR
File, Tab 13 at 24-25.
¶24 For the reasons described herein, we find that the ALJ erred when he relied
on the 2011 version of 5 U.S.C. § 1204(m)(1), and we are not persuaded that it is
appropriate to use section 7701(g)(1) or the petitioner’s suggestion of
apportionment to resolve the issue of which agency is responsible to pay the
petitioner’s fees.
The ALJ erred when he applied the 2011 version of 5 U.S.C. § 1204(m)(1)
to this matter.
¶25 On review, OSC asserts, among other things, that the ALJ ignored the plain
language of 5 U.S.C. § 1204(m)(1) and disregarded Congressional intent to
insulate OSC from liability to pay fees. PFR File, Tab 6 at 4-10. We grant
OSC’s petition for review because, based on our review of the 2011 version of
section 1204(m)(1), the legislative history underlying Congress’s decision to
amend this section in 2012, the effective date of this change, and the date the
complaint was filed, the 2012 version of section 1204(m)(1) controls the outcome
of this matter.
14
¶26 We have considered the petitioner’s assertion that the earlier version of
section 1204(m)(1) applies because OSC began its investigation of her, and she
incurred fees, in 2011, before the December 27, 2012 effective date of the WPEA.
PFR File, Tab 13 at 21-24. However, we find that the operative event in this
matter is the date that OSC filed its complaint, April 8, 2014, which is well after
the December 27, 2012 effective date of the WPEA. CF, Tab 1; see 5 U.S.C.
§ 1215(a)(1)(A) (authorizing OSC to prepare and file with the Board a complaint
against the employee if it determines that disciplinary action should be taken
against the employee for having committed a PPP). Importantly, OSC’s
complaint for disciplinary action constitutes “a case arising under section 1215”
as described in 5 U.S.C. § 1204(m)(1), and the petitioner could only achieve
prevailing party status after such a complaint has been filed and adjudicated in
her favor. Cf. Krafsur v. Social Security Administration, 122 M.S.P.R. 679,
¶¶ 7-13 (2015) (finding that the respondent ALJ was not a prevailing party, a
prerequisite to obtain attorney fees under the Equal Access to Justice Act, 7
because the agency withdrew its complaint for disciplinary action against him and
the Board dismissed the complaint as withdrawn).
¶27 We are not persuaded by the ALJ’s attempt to distinguish OSC disciplinary
actions taken pursuant to 5 U.S.C. § 1215 and whistleblower appeals. ID
at 15-16. Rather, the Whistleblower Protection Act of 1989, Pub. L. No. 101-12,
103 Stat. 16 (1989), amended 5 U.S.C. § 1206(g) to incorporate the language of
that section concerning the presentment of a complaint into a new
section 1215(a). Special Counsel v. Santella, 46 M.S.P.R. 99, 101 n.1 (1990).
7
The provision at 5 U.S.C. § 504(a)(1) states that “[a]n agency that conducts an
adversary adjudication shall award, to a prevailing party other than the United States,
fees and other expenses incurred by that party in connection with that proceeding,
unless the adjudicative officer of the agency finds that the position of the agency was
substantially justified or that special circumstances make an award unjust.”
15
Thus, OSC disciplinary actions taken pursuant to 5 U.S.C. § 1215 fall under the
same statutory scheme as whistleblower appeals.
¶28 Accordingly, because the 2012 version of section 1204(m)(1) requires
payment by the employing agency, we vacate the initial decision in this regard,
and we find that DHS is solely responsible for the payment of the petitioner’s
fees.
The general fee provision at 5 U.S.C. § 7701(g)(1) does not apply to this
matter.
¶29 Although DHS did not file a petition for review or cross petition for review,
it asserts that the Board may exercise discretion to determine under which
remedial statute to award fees. PFR File, Tab 12 at 9-17. In this regard, DHS
asserts, among other things, that the general fee provision at 5 U.S.C.
§ 7701(g)(1) authorizes the Board to award fees in “any case” involving PPPs,
and the Board may grant a remedy under a statute of general application even
when there is a specific remedial provision. Id. We are not persuaded by these
arguments.
¶30 Under 5 U.S.C. § 7701(g)(1), the Board or an ALJ “may require payment by
the agency involved of reasonable attorney fees incurred by an employee . . . if
the employee . . . is the prevailing party” and the Board or ALJ “determines that
payment by the agency is warranted in the interest of justice, including any case
in which a [PPP] was engaged in by the agency or any case in which the agency’s
action was clearly without merit.” Importantly, the “payment by the agency
involved” language of section 7701(g)(1) is identical to the language in the
2011 version of section 1204(m)(1). Santella, 328 F.3d at 1376-78.
¶31 Section 7701(g)(1) is an attorney fee provision that is generally applicable
to Board appeals, Jacobsen v. Department of Justice, 101 M.S.P.R. 134, ¶ 6
(2006), whereas section 1204(m)(1) is a specific statutory fee provision that is
aimed at cases “arising under section 1215.” There is well-settled precedent that
specific statutory language aimed at a particular situation ordinarily controls over
16
general statutory language. Biogen MA, Inc. v. Japanese Foundation for Cancer
Research, 785 F.3d 648, 656 (Fed. Cir. 2015); Almond Brothers Lumber Company
v. United States, 651 F.3d 1343, 1354 (Fed. Cir. 2011); Jacobsen, 101 M.S.P.R.
134, ¶ 7 (finding that the administrative judge erred in applying the attorney fee
criteria under 5 U.S.C. § 7701(g)(1), which were generally applicable to Board
appeals, rather than the attorney fees criteria under 38 U.S.C. § 4324(c)(4), which
were specifically applicable to appeals under Uniformed Services Employment
and Reemployment Rights Act of 1994); Lee v. Department of Justice,
99 M.S.P.R. 256, ¶ 25 (2005). DHS acknowledges this longstanding precedent.
PFR File, Tab 12 at 13. However, it distinguishes cases like Jacobsen and others
by asserting that the Board has authority to grant a remedy under a statute of
general application, even when the statute under which an appeal is brought
contains a specific remedial provision. Id. at 12-14. DHS notes that, in Auker v.
Department of Defense, 86 M.S.P.R. 468 (2000), the Board found that
section 7701(g)(1) applied to individual right of action (IRA) appeals, even
though the whistleblower protection statutes contained a specific fee provision
tailored to such appeals in 5 U.S.C. § 1221(g). PFR File, Tab 12 at 12-14.
¶32 DHS’s argument is not persuasive because this matter is distinguishable
from Auker. Mr. Auker filed an IRA appeal, alleging that his 1-day suspension
for misconduct was taken in reprisal for his whistleblowing disclosures. Auker,
86 M.S.P.R. 468, ¶ 2. Mr. Auker and the agency subsequently entered into a
settlement agreement, the administrative judge dismissed the appeal without
making any findings on the merits, and Mr. Auker filed a motion for attorney
fees. Id., ¶¶ 2-3. The administrative judge granted the motion, finding that
Mr. Auker was entitled to an award under 5 U.S.C. § 1221(g)(2), which stated
that an appellant in an IRA appeal is entitled to an award of attorney fees and
costs “[i]f [he] is the prevailing party before the [Board], and the decision is
based on a finding of a [PPP].” Id., ¶¶ 3-4. On review, however, the Board found
that section 1221(g)(2) did not apply because, among other things, there was no
17
finding of a PPP. Id., ¶¶ 4-6. The Board held instead that attorney fees may be
awarded to Mr. Auker under section 7701(g)(1). Id., ¶¶ 8-14.
¶33 In reaching this conclusion, the Board in Auker relied on a decision from
the U.S. Court of Appeals for the D.C. Circuit, which held that the reference in
5 U.S.C. § 7701(g)(1) to “‘any case’ involving prohibited practices plainly
extends to all proceedings in which action is sought to identify and correct such
practices.” Auker, 86 M.S.P.R. 468, ¶ 9 (quoting Frazier v. Merit Systems
Protection Board, 672 F.2d 150, 169 (D.C. Cir. 1982)). The Board in Auker
concluded that an IRA appeal constitutes such a proceeding because it is a case in
which an appellant is seeking a finding that he has been affected by a particular
kind of PPP (reprisal for whistleblowing disclosures under 5 U.S.C. § 2302(b)(8))
and in which he is seeking an order correcting the effects of that practice. Auker,
86 M.S.P.R. 468, ¶ 10. The Auker Board’s reliance on Frazier is understandable
because, similar to an IRA appeal seeking corrective action against an agency,
Frazier involved an OSC corrective action proceeding, and the Board “permitted
the [employees against whom reprisal allegedly occurred], through their attorneys
‘fully [to] participate in this proceeding as any other party.’” Frazier, 672 F.2d
at 153, 155, 168. Relevant to this matter, however, the Frazier court limited its
decision regarding the broad applicability of section 7701(g)(1) in fee matters.
Although the court first stated that section 7701(g)(1) provides the Board
authority to award fees “in any case in which an employee . . . appears as a
party,” it later noted that Congress granted the Board the authority to award such
fees “in all cases within its jurisdiction in which complaining employees appear
as parties.” Id. at 169-70 (emphasis added). In contrast to an OSC corrective
action or an IRA appeal, the petitioner is not a complaining employee in an OSC
disciplinary action. Thus, we do not find Auker or its reliance on the language
from Frazier applicable in an OSC disciplinary action.
¶34 Moreover, the legislative history of the relevant statutory provisions
distinguishes this matter from Auker. In Auker, 86 M.S.P.R. 468, ¶ 11, the Board
18
remarked that the legislative history of 5 U.S.C. § 1221 indicated that the drafters
considered 5 U.S.C. § 7701(g)(1) to be a basis for awarding attorney fees in IRA
appeals. Moreover, the Board found that Congress intended in 5 U.S.C.
§ 1221(g) to make it easier for appellants who prevail in IRA appeals to recover
attorney fees. Id., ¶ 12. By contrast, the application of section 7701(g)(1) to this
matter, which would obligate OSC, as the agency involved, to pay the petitioner’s
fees, runs counter to Congress’s clear intent in the WPEA not to burden OSC with
such liability. Supra, ¶ 21. Indeed, if Congress wanted 5 U.S.C. § 7701(g)(1) to
apply to the petitioner’s request for fees in an OSC disciplinary action, there
would have been no reason for it to have modified 5 U.S.C. § 1204(m)(1) in the
WPEA.
¶35 We have considered DHS’s remaining arguments in support of its assertion
that 5 U.S.C. § 1204(m)(1) is not the exclusive remedy in this matter, but none
warrant a different outcome. For example, DHS asserts that 5 U.S.C. § 1222 and
5 C.F.R. § 1201.202(a) give the Board discretion to award fees under
section 7701(g)(1). PFR File, Tab 12 at 9, 14, 16-17. Section 1222 states that,
with exceptions not relevant to this matter, “nothing in this chapter or chapter 23
shall be construed to limit any right or remedy available under a provision of
statute which is outside of both this chapter and chapter 23.” The regulation at
5 C.F.R. § 1201.202(a) identifies various statutory authorities for awarding fees,
“includ[ing], but [] not limited to,” 5 U.S.C. § 1204(m). Even if section 1222 or
5 C.F.R. § 1201.202(a) gives us discretion to award fees under
section 7701(g)(1), we decline to rely on this authority because both provisions
directly contravene the specific statutory language of the 2012 version of
5 U.S.C. § 1204(m)(1) and the corresponding congressional intent. See, e.g.,
supra, ¶ 31 (discussing the precedent that specific statutory language aimed at a
particular situation ordinarily controls over general statutory language); Johnson
v. Department of Justice, 71 M.S.P.R. 59, 67 (1996) (stating that the provisions of
19
a statute will prevail in any case in which there is a conflict between a statute and
an agency regulation).
We decline the petitioner’s request to apportion payment of her fees
between OSC and DHS.
¶36 In her cross petition, the petitioner suggests that OSC should pay for the
portion of her fees and expenses incurred before the effective date of the WPEA,
and DHS should pay for the fees and expenses incurred starting on the
December 27, 2012 effective date of the WPEA. PFR File, Tab 13 at 24-25; AFF,
Tab 26 at 12-13. The petitioner has identified no persuasive legal precedent to
support her request to apportion payment of her fees in this manner. Moreover,
the 2012 version of 1204(m)(1), which is applicable to this matter for the reasons
discussed above, does not support her request for apportionment. Therefore, we
deny the petitioner’s cross petition for review.
Conclusion
¶37 We recognize that an agency like DHS, which likely had little to no
involvement in OSC’s decision to pursue disciplinary action against the
petitioner, 8 is obligated to pay the petitioner’s substantial fees, which now total
more than half a million dollars. The adverse impact of 5 U.S.C. § 1204(m)(1) on
an agency with a small budget could be significant. However, the Board’s role as
an adjudicatory agency is not to set or debate policy, and Congress has spoken
clearly on this issue. See King v. Jerome, 42 F.3d 1371, 1375-76 (Fed. Cir. 1994)
(“[I]t is not for the [Merit Systems Protection] [B]oard to supplant the remedies
Congress expressly provided or create new remedies which it believes Congress
8
In its petition for review, OSC states that DHS asked it to “take the lead” in pursuing
discipline against the petitioner and two other agency officials whom OSC deemed to be
“culpable,” PFR File, Tab 6 at 15, but DHS did not address OSC’s assertion in its
response. Because the statements of a party’s representative in a pleading do not
constitute evidence, Hendricks v. Department of the Navy, 69 M.S.P.R. 163, 168 (1995),
we do not address OSC’s assertion in this regard.
20
overlooked.”). We are therefore bound to follow the “unambiguously expressed
intent of Congress,” Chevron, U.S.A., Inc. v. Natural Resources Defense Council,
467 U.S. 837, 842-43 (1984), as set forth in the WPEA version of 5 U.S.C.
§ 1204(m)(1).
¶38 Accordingly, for the reasons described in this Opinion and Order, we affirm
the ALJ’s findings that the petitioner is a prevailing party and that payment of her
fees and expenses are warranted in the interest of justice. We further find that
$517,506.19 is a reasonable amount of fees and expenses that were incurred in
her defense of OSC’s disciplinary action. We vacate the ALJ’s finding that OSC
should pay the petitioner’s fees, and we find instead that DHS is solely obligated
to pay these fees pursuant to 5 U.S.C. § 1204(m)(1) (2012).
ORDER
¶39 This is the final decision of the Merit Systems Protection Board in this
matter. Title 5 of the Code of Federal Regulations, section 1201.113 (5 C.F.R.
§ 1201.113).
¶40 We ORDER DHS to pay the petitioner attorney fees and expenses totaling
$517,506.19. DHS must complete this action no later than 20 days after the date
of this decision. See generally title 5 of the United States Code,
section 1204(m)(1) (5 U.S.C. § 1204(m)(1)).
¶41 We also ORDER DHS to tell the petitioner and the attorney promptly in
writing when it believes it has fully carried out the Board’s Order and of the
actions it took to carry out the Board’s Order. We ORDER the petitioner and the
attorney to provide all necessary information that the agency requests to help it
carry out the Board’s Order. The petitioner and the attorney, if not notified,
should ask DHS about its progress. See 5 C.F.R. § 1201.181(b).
¶42 No later than 30 days after DHS tells the petitioner and the attorney that it
has fully carried out the Board’s Order, the petitioner or the attorney may file a
petition for enforcement with the Office of the Clerk of the Board, if the
21
petitioner or the attorney believes that DHS did not fully carry out the Board’s
Order. The petition should contain specific reasons why the petitioner or the
attorney believes DHS has not fully carried out the Board’s Order, and the
petition should include the dates and results of any communications with DHS.
See 5 C.F.R. § 1201.182(b).
NOTICE OF APPEAL RIGHTS 9
You may obtain review of this final decision. 5 U.S.C. § 7703(a)(1). By
statute, the nature of your claims determines the time limit for seeking such
review and the appropriate forum with which to file. 5 U.S.C. § 7703(b).
Although we offer the following summary of available appeal rights, the Merit
Systems Protection Board does not provide legal advice on which option is most
appropriate for your situation and the rights described below do not represent a
statement of how courts will rule regarding which cases fall within their
jurisdiction. If you wish to seek review of this final decision, you should
immediately review the law applicable to your claims and carefully follow all
filing time limits and requirements. Failure to file within the applicable time
limit may result in the dismissal of your case by your chosen forum.
Please read carefully each of the three main possible choices of review
below to decide which one applies to your particular case. If you have questions
about whether a particular forum is the appropriate one to review your case, you
should contact that forum for more information.
(1) Judicial review in general. As a general rule, an appellant seeking
judicial review of a final Board order must file a petition for review with the U.S.
Court of Appeals for the Federal Circuit, which must be received by the court
9
Since the issuance of the initial decision in this matter, the Board may have updated
the notice of review rights included in final decisions. As indicated in the notice, the
Board cannot advise which option is most appropriate in any matter.
22
within 60 calendar days of the date of issuance of this decision. 5 U.S.C.
§ 7703(b)(1)(A).
If you submit a petition for review to the U.S. Court of Appeals for the
Federal Circuit, you must submit your petition to the court at the
following address:
U.S. Court of Appeals
for the Federal Circuit
717 Madison Place, N.W.
Washington, D.C. 20439
Additional information about the U.S. Court of Appeals for the Federal
Circuit is available at the court’s website, www.cafc.uscourts.gov. Of particular
relevance is the court’s “Guide for Pro Se Petitioners and Appellants,” which is
contained within the court’s Rules of Practice, and Forms 5, 6, 10, and 11.
If you are interested in securing pro bono representation for an appeal to
the U.S. Court of Appeals for the Federal Circuit, you may visit our website at
http://www.mspb.gov/probono for information regarding pro bono representation
for Merit Systems Protection Board appellants before the Federal Circuit. The
Board neither endorses the services provided by any attorney nor warrants that
any attorney will accept representation in a given case.
(2) Judicial or EEOC review of cases involving a claim of
discrimination. This option applies to you only if you have claimed that you
were affected by an action that is appealable to the Board and that such action
was based, in whole or in part, on unlawful discrimination. If so, you may obtain
judicial review of this decision—including a disposition of your discrimination
claims—by filing a civil action with an appropriate U.S. district court (not the
U.S. Court of Appeals for the Federal Circuit), within 30 calendar days after you
receive this decision. 5 U.S.C. § 7703(b)(2); see Perry v. Merit Systems
Protection Board, 582 U.S. ____ , 137 S. Ct. 1975 (2017). If you have a
representative in this case, and your representative receives this decision before
23
you do, then you must file with the district court no later than 30 calendar days
after your representative receives this decision. If the action involves a claim of
discrimination based on race, color, religion, sex, national origin, or a disabling
condition, you may be entitled to representation by a court‑appointed lawyer and
to waiver of any requirement of prepayment of fees, costs, or other security. See
42 U.S.C. § 2000e-5(f) and 29 U.S.C. § 794a.
Contact information for U.S. district courts can be found at their respective
websites, which can be accessed through the link below:
http://www.uscourts.gov/Court_Locator/CourtWebsites.aspx.
Alternatively, you may request review by the Equal Employment
Opportunity Commission (EEOC) of your discrimination claims only, excluding
all other issues. 5 U.S.C. § 7702(b)(1). You must file any such request with the
EEOC’s Office of Federal Operations within 30 calendar days after you receive
this decision. 5 U.S.C. § 7702(b)(1). If you have a representative in this case,
and your representative receives this decision before you do, then you must file
with the EEOC no later than 30 calendar days after your representative receives
this decision.
If you submit a request for review to the EEOC by regular U.S. mail, the
address of the EEOC is:
Office of Federal Operations
Equal Employment Opportunity Commission
P.O. Box 77960
Washington, D.C. 20013
If you submit a request for review to the EEOC via commercial delivery or
by a method requiring a signature, it must be addressed to:
Office of Federal Operations
Equal Employment Opportunity Commission
131 M Street, N.E.
Suite 5SW12G
Washington, D.C. 20507
24
(3) Judicial review pursuant to the Whistleblower Protection
Enhancement Act of 2012. This option applies to you only if you have raised
claims of reprisal for whistleblowing disclosures under 5 U.S.C. § 2302(b)(8) or
other protected activities listed in 5 U.S.C. § 2302(b)(9)(A)(i), (B), (C), or (D).
If so, and your judicial petition for review “raises no challenge to the Board’s
disposition of allegations of a prohibited personnel practice described in
section 2302(b) other than practices described in section 2302(b)(8), or
2302(b)(9)(A)(i), (B), (C), or (D),” then you may file a petition for judicial
review either with the U.S. Court of Appeals for the Federal Circuit or any court
of appeals of competent jurisdiction. 10 The court of appeals must receive your
petition for review within 60 days of the date of issuance of this decision.
5 U.S.C. § 7703(b)(1)(B).
If you submit a petition for judicial review to the U.S. Court of Appeals for
the Federal Circuit, you must submit your petition to the court at the
following address:
U.S. Court of Appeals
for the Federal Circuit
717 Madison Place, N.W.
Washington, D.C. 20439
Additional information about the U.S. Court of Appeals for the Federal
Circuit is available at the court’s website, www.cafc.uscourts.gov. Of particular
relevance is the court’s “Guide for Pro Se Petitioners and Appellants,” which is
contained within the court’s Rules of Practice, and Forms 5, 6, 10, and 11.
10
The original statutory provision that provided for judicial review of certain
whistleblower claims by any court of appeals of competent jurisdiction expired on
December 27, 2017. The All Circuit Review Act, signed into law by the President on
July 7, 2018, permanently allows appellants to file petitions for judicial review of
MSPB decisions in certain whistleblower reprisal cases with the U.S. Court of Appeals
for the Federal Circuit or any other circuit court of appeals of competent jurisdiction.
The All Circuit Review Act is retroactive to November 26, 2017. Pub. L. No. 115-195,
132 Stat. 1510.
25
If you are interested in securing pro bono representation for an appeal to
the U.S. Court of Appeals for the Federal Circuit, you may visit our website at
http://www.mspb.gov/probono for information regarding pro bono representation
for Merit Systems Protection Board appellants before the Federal Circuit. The
Board neither endorses the services provided by any attorney nor warrants that
any attorney will accept representation in a given case.
Contact information for the courts of appeals can be found at their
respective websites, which can be accessed through the link below:
http://www.uscourts.gov/Court_Locator/CourtWebsites.aspx.
FOR THE BOARD:
/s/
Jennifer Everling
Acting Clerk of the Board
Washington, D.C.