Goeke and Bottini v. Department of Justice ( 2016 )

UNITED STATES OF AMERICA
MERIT SYSTEMS PROTECTION BOARD
GOEKE AND BOTTINI, DOCKET NUMBER
Appellants, CB-0752-15-0228-A-1 1
v.
DEPARTMENT OF JUSTICE, DATE: August 12, 2016
Agency.
THIS FINAL ORDER IS NONPRECEDENTIAL 2
Bonnie Brownell, Esquire, Donald R. DePriest, Esquire, and Christopher
Landrigan, Esquire, Washington, D.C., for appellant Goeke.
Kenneth L. Wainstein, Esquire, and David J. Leviss, Esquire, Washington,
D.C., for appellant Bottini.
Robin M. Fields, Esquire, Charles M. Kersten, Evan Harry Perlman, and
Joanne Fine, Washington, D.C., for the agency.
1
This matter is a consolidation of two attorney fees cases, James A. Goeke v.
Department of Justice, MSPB Docket No. SF-0752-12-0598-A-1, and Joseph W. Bottini
v. Department of Justice, MSPB Docket No. SF-0752-12-0600-A-1. The administrative
judge consolidated the underlying matters, MSPB Docket No. SF-0752-12-0598-I-1 and
MSPB Docket No. SF-0752-12-0600-I-1, for adjudication, but adjudicated the attorney
fees cases separately. Nonetheless, because the issues on review in the attorney fees
matters are substantially identical, we have consolidated the cases under the docket
number indicated above. 5 C.F.R. § 1201.36(a).
2
A nonprecedential order is one that the Board has determined does not add
significantly to the body of MSPB case law. Parties may cite nonprecedential orders,
but such orders have no precedential value; the Board and administrative judges are not
required to follow or distinguish them in any future decisions. In contrast, a
precedential decision issued as an Opinion and Order has been identified by the Board
as significantly contributing to the Board’s case law. See 5 C.F.R. § 1201.117(c).
2
BEFORE
Susan Tsui Grundmann, Chairman
Mark A. Robbins, Member
FINAL ORDER
¶1 The agency has filed petitions for review of the initial decisions which
awarded the appellants attorney fees and costs in the amount of $384,565.04 to
appellant Goeke, Goeke v. Department of Justice, MSPB Docket No.
SF-0752-12-0598-A-1, Goeke Attorney Fee Initial Decision (Goeke AFID) at 8
(July 17, 2015), and $224,873.27 to appellant Bottini, Bottini v. Department of
Justice, MSPB Docket No. SF-0752-12-0600-A-1, Bottini Attorney Fee Initial
Decision (Bottini AFID) at 8 (July 17, 2015). Generally, we grant petitions such
as these only when: the initial decision contains erroneous findings of material
fact; the initial decision is based on an erroneous interpretation of statute or
regulation or the erroneous application of the law to the facts of the case; the
administrative judge’s rulings during either the course of the appeal or the initial
decision were not consistent with required procedures or involved an abuse of
discretion, and the resulting error affected the outcome of the case; or new and
material evidence or legal argument is available that, despite the petitioner’s due
diligence, was not available when the record closed. See title 5 of the Code of
Federal Regulations, section 1201.115 (5 C.F.R. § 1201.115). After fully
considering the filings in these appeals, we conclude that the petitioners have not
established any basis under section 1201.115 for granting the petitions for review.
Therefore, we DENY the petitions for review. Except as MODIFIED to award
appellant Bottini additional requested fees and costs of $33,988.33, we AFFIRM
the initial decisions.
3
BACKGROUND
¶2 In 2008, the appellants, Assistant United States Attorneys, participated in
the 2008 Federal prosecution of a then-United States Senator for failing to report
gifts and liabilities on his financial disclosure statements. After he was
convicted, the Government moved to vacate the conviction because its
prosecution team had failed to disclose certain information to which the defense
was constitutionally entitled. The agency issued final decisions to suspend
appellant Goeke for 15 days, and appellant Bottini for 40 days, for professional
misconduct. The appellants appealed those decisions. After a hearing, the
administrative judge issued an initial decision reversing both actions based on
harmful procedural error. Goeke and Bottini v. Department of Justice, MSPB
Docket No. SF-0752-12-0598-I-1, Initial Decision (ID) at 2, 22 (Apr. 5, 2013).
He found that the agency erred by designating the Professional Misconduct
Review Unit (PMRU) Chief as the proposing official in the suspension actions
because the agency’s disciplinary process required a PMRU attorney to serve in
that role, ID at 7-9, and that the error was harmful because, had the original
proposing official not been replaced by the PMRU Chief, the appellants likely
would have received a lesser level of discipline, ID at 16.
¶3 The agency filed petitions for review in both cases, arguing that the
administrative judge erred in concluding that the agency’s disciplinary process
did not permit the PMRU Chief to serve as the proposing official. The full Board
affirmed the initial decision as modified, agreeing with the administrative judge
that the agency committed harmful procedural error when it appointed a member
of management, rather than a rank-and-file attorney, to serve as the proposing
official. Goeke and Bottini v. Department of Justice, 122 M.S.P.R. 69, ¶ 22
(2015). The Board further found that the agency committed a second procedural
error when it replaced the originally designated proposing official after he
authored a memorandum explaining why he believed that findings of reckless
professional misconduct were not supported by preponderant evidence, and that
4
that error also was harmful because, had the PMRU process been properly
followed, the PMRU attorney likely would have proposed some level of discipline
less than that imposed by the PMRU Chief, or no discipline at all. Id., ¶¶ 14-20.
¶4 Both appellants then filed motions for attorney fees for legal work
performed beginning in 2012. Goeke v. Department of Justice, MSPB Docket No.
SF-0752-12-0598-A-1, Attorney Fee File (Goeke AFF), Tab 1; Bottini v.
Department of Justice, MSPB Docket No. SF-0752-12-0600-A-1, Attorney Fee
File (Bottini AFF), Tab 1. Appellant Goeke sought fees and costs in the amount
of $390,292.88, 3 Goeke AFF, Tab 1, and appellant Bottini sought fees and costs
in the amount of $236,012.31 for services provided by two different law firms,
Bottini AFF, Tab 1.
¶5 The administrative judge found in both cases that the appellants were
prevailing parties, and that they incurred attorney fees. Goeke AFF, Tab 13,
Goeke AFID at 3; Bottini AFF, Tab 11; Bottini AFID at 3. The administrative
judge further found that an award of fees was warranted in the interest of justice
because the agency’s decision to suspend the appellants without following the
proper procedures for doing so was clearly without merit and because the agency
should have known that it would not prevail before the Board. Goeke AFID at
4-5; Bottini AFID at 4-5. In considering the reasonableness of the fees requested
in appellant Goeke’s case, the administrative judge found that the hourly rates
sought for lead counsel, associates, and paralegals were equal to or less than their
standard billing rates and consistent with what they have received in comparable
cases, that the agency did not specifically challenge the rates, and that, upon the
administrative judge’s review, they were reasonable. Goeke AFID at 5. The
administrative judge further found that the nearly 1200 hours for which appellant
Goeke sought reimbursement was reasonable under the circumstances, Goeke
AFID at 5-6, and that he was entitled to the full amount of fees sought, Goeke
3
That amount includes $7,080 for time spent by appellant Goeke’s counsel in
responding to the agency’s response to his fee petition. Goeke AFF, Tab 10 at 17 n.6.
5
AFID at 6-7. As such, the administrative judge awarded appellant Goeke
$384,565.04. 4 In considering the reasonableness of the fees requested in
appellant Bottini’s case, the administrative judge found that the hourly rate
sought for counsel was the rate to which counsel agreed with appellant Bottini’s
professional liability insurance carrier, that it was far less than their standard
billing rate, that the agency did not object to it, and that it was reasonable.
Bottini AFID at 5. The administrative judge found, however, that the prevailing
rate for paralegal work was $145 per hour for the period at issue, that neither
party objected to his decision to reduce the paralegal rate sought to $145 per
hour, and that it was reasonable. Bottini AFID at 5-6. The administrative judge
further found that the 777.56 hours, including 70.2 hours of paralegal work, for
which appellant Bottini sought reimbursement was reasonable under the
circumstances, as was the amount sought for costs. Bottini AFID at 6-7.
Accordingly, the administrative judge awarded appellant Bottini $224,873.27.
¶6 The agency has filed petitions for review in both attorney fee matters.
Goeke Petition for Review (PFR) File, Tab 3; Bottini Petition for Review (PFR)
File, Tab 3. The agency acknowledges that the sole issue before the Board is
whether fees are warranted in the interest of justice. Goeke PFR File, Tab 3 at 8;
Bottini PFR File, Tab 3 at 8. The appellants have responded, Goeke PFR File,
Tab 7; Bottini PFR File, Tab 7, and the agency has replied to those responses, 5
Goeke PFR File, Tab 10; Bottini PFR File, Tab 10.
4
During processing, appellant Goeke withdrew his request for $5,727.84, representing
costs for depositions and transcripts, Goeke AFF, Tab 12, after the administrative judge
advised him that such costs were not reimbursable and would be disallowed, id.,Tab 11.
5
Appellant Goeke has objected to the agency’s reply to his response to its petition for
review on the grounds that, by his count of the number of words, the reply exceeds the
length limitations set forth in the Board’s regulations. Goeke PFR File, Tab 11. We
have nonetheless considered the entirety of the agency’s reply.
6
ANALYSIS
Fees are warranted in the interest of justice under Allen category 5 because the
agency knew or should have known that it would not prevail on the merits and
under category 2 because the agency actions were clearly without merit.
¶7 An attorney fee award by the Board may be warranted in the interest of
justice when, e.g.: (1) the agency engaged in a prohibited personnel practice;
(2) the agency 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). For category 5, the Board
must carefully evaluate the agency’s original action to determine whether it
“knew or should have known” that it would not prevail on the appeal. “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.” Yorkshire v. Merit Systems Protection
Board, 746 F.2d 1454, 1457 (Fed. Cir. 1984). On the other hand, category 2,
“clearly without merit,” refers to the results of the case before the Board, rather
than the evidence and information available prior to the hearing. Id. Our
reviewing court has noted that, “[a]s a practical matter, if the agency possesses no
credible evidence prior to the hearing before the Board (category 5), the result of
the case will usually be in favor of the employee (category 2),” and that,
therefore, category 5 can merge into category 2. Id. at 1457 n.5.
¶8 Finding that the two categories overlap, the administrative judge deemed it
appropriate to consider them together. Goeke AFID at 3; Bottini AFID at 3. He
relied on the Board’s finding that the agency committed two errors in designating
the proposing official, either of which alone would have required reversal of the
actions. Goeke AFID at 4; Bottini AFID at 4; Goeke and Bottini,
122 M.S.P.R. 69, ¶ 6. The administrative judge found that the errors were
apparent from information the agency had before it at the time of its actions,
7
specifically, the language of its disciplinary policy, which he found unambiguous,
and well-settled precedent from the U.S. Court of Appeals for the Federal Cricuit
prohibiting an agency from replacing a proposing official after he had made a
decision about the level of discipline that is warranted. The administrative judge
further found that, when the agency switched proposing officials, it was aware of
the legal risks involved, and finally, that the agency’s arguments defending its
position were weak such that it should have been apparent that the agency was
unlikely to succeed before the Board. Goeke AFID at 4; Bottini AFID at 4.
¶9 On review, the agency first argues that the administrative judge erred by
conflating the appellant’s prevailing party status with a determination of whether
the payment of attorney fees is warranted in the interest of justice. Goeke
PFR File, Tab 3 at 11-12; Bottini PFR File, Tab 3 at 12. On the contrary, the
administrative judge first found that the appellants were prevailing parties
because their suspensions were reversed by enforceable orders that changed the
legal relationship between the parties, Goeke AFID at 3; Bottini AFID at 3; see
Sanchez v. Department of Homeland Security, 116 M.S.P.R. 183, ¶ 10 (2010), and
he then undertook a separate analysis to determine whether fees were warranted
in the interest of justice, finding that they were, based on two of the five Allen
categories, Goeke AFID at 3-5; Bottini AFID at 3-5. We find, therefore, that the
administrative judge did not improperly conflate the prevailing party and interest
of justice issues.
¶10 The agency also argues on review that the administrative judge erred in
concluding that fees are warranted in the interest of justice based on the Board’s
finding of harmful procedural error. The agency points out that, to establish fees
as warranted in the interest of justice, an appellant must show that the error or
errors constituted gross procedural error, a higher standard than harmful error,
and a separate Allen category (category 4). Goeke PFR File, Tab 3 at 13-14;
Bottini PFR File, Tab 3 at 13-15; see McIver v. Department of the Interior,
52 M.S.P.R. 644, 649 (1992). The agency misreads the attorney fees initial
8
decisions. The administrative judge considered harmful procedural error because
that was the basis for his, and the Board’s, reversal of the appellants’
suspensions. In awarding fees, however, he did not make any findings as to
whether the agency committed gross procedural error. Goeke AFID at 5; Bottini
AFID at 4. Nor was he required to do so since he found that attorney fees are
warranted under Allen categories 2 and 5, and, if fees are warranted in the interest
of justice under one Allen category, then the Board need not address whether fees
are warranted in the interest of justice under any of the other Allen categories.
Payne v. U.S. Postal Service, 79 M.S.P.R. 71, 72 n.* (1998).
¶11 In challenging the administrative judge’s finding that fees are warranted in
the interest of justice under the “clearly without merit” Allen category, the agency
argues on review that he failed to undertake a proper analysis, which includes an
examination, inter alia, of two factors, the degree of fault on the employee’s part
and the existence of any reasonable basis for the agency’s action. Goeke PFR,
Tab 3 at 15-20; Bottini PFR, Tab 3 at 15-21; Griffith v. Department of
Agriculture, 96 M.S.P.R. 251, ¶ 14 (2004). Because the administrative judge
decided this case on the grounds of harmful procedural error, he did not reach the
merits of the charges against the appellants. ID at 2. Neither did the Board,
although it did reference the appellants’ “reckless behavior” that “publicly
compromised the justice system with the consequence of interfering with the
electoral process.” Goeke and Bottini, 122 M.S.P.R. 69, ¶ 23. To the extent that
the Board’s language may be considered a reflection on the appellants’ degree of
fault, we find that it is outweighed by the second factor, the existence of any
reasonable basis for the agency’s action. Here, the basis for the actions must be
considered in the context of the means by which the agency effectuated those
actions. In that regard, the Board found that the agency committed not one but
two significant errors, both of which were harmful to the appellants, and that
either error, standing alone, would have justified reversing the actions. Id., ¶ 6.
Moreover, as noted, the “clearly without merit” category refers to the results of
9
the case before the Board, Yorkshire, 746 F.2d at 1457, and, in the initial
decision as affirmed by the Board, the appellants received fully favorable results
in that their suspensions were reversed. 6 We therefore agree with the
administrative judge that the agency’s actions in these cases were clearly without
merit, justifying an award of attorney fees on that basis.
¶12 In challenging the administrative judge’s finding that fees are warranted in
the interest of justice because the agency should have known that it would not
prevail before the Board, the agency argues that the administrative judge drew a
number of inappropriate and unreasonable inferences. Goeke PFR File, Tab 3
at 24-28; Bottini PFR File, Tab 3 at 25-30. First, the agency disputes the
administrative judge’s finding that the procedural errors were apparent from
information it had before it at the time of its action, specifically, the language of
its disciplinary policy and well-settled Federal Circuit precedent. Goeke PFR
File, Tab 3 at 24; Bottini PFR File. Tab 3 at 25. In so arguing, the agency posits
that the agency, in good faith, simply interpreted the language in the policy
differently than did the administrative judge. However, the administrative judge
considered other interpretations as argued by the agency but found no ambiguity
in the PMRU procedures requiring a PMRU attorney to be the proposing official.
ID at 13, 15. In affirming that decision, the Board upheld the administrative
judge’s finding that no express provision or any other reasonable reading of the
procedures allowed for anyone else besides a PMRU attorney to serve as
proposing official. Goeke and Bottini, 122 M.S.P.R. 69, ¶ 22. The Board does
not, in attorney fees proceedings, reconsider the administrative judge’s findings,
as upheld by the Board in the prior proceeding, Matthews, 104 M.S.P.R. 130, ¶ 8,
and we will not do so here.
6
In so finding, we find unavailing and therefore reject the agency’s argument that, in
this proceeding, we should reweigh the evidence. Goeke PFR File, Tab 3 at 18; Bottini
PFR File, Tab 3 at 19; see Matthews v. Social Security Administration, 104 M.S.P.R.
130, ¶ 8 (2006).
10
¶13 The agency also disputes the administrative judge’s finding that, when it
switched proposing officials, it was aware of the legal risks involved, and it
challenges the administrative judge’s reliance on the deciding official’s
acknowledgment at the hearing that “we understood that it wasn’t perfectly clear
that the procedure we were following was consistent with the law.” AFID at 4;
Hearing Transcript, September 29, 2012, at 59. The agency points out the
deciding official went on to state that “but we thought that it was consistent with
the law and that’s why we went forward.” Goeke PFR File, Tab 3 at 25; Bottini
PFR File, Tab 3 at 26; Hearing Transcript, September 29, 2012, at 59. At best,
the agency’s argument goes to whether the agency knew, at the time it took the
actions, that it was unlikely to succeed before the Board. However, the
administrative judge found that the agency should have known, based on its
unambiguous disciplinary policy and well-established Federal Circuit precedent, 7
that it would not prevail, Goeke AFID at 4, Bottini AFID at 4, and that finding is
sufficient to support an award of fees under Allen category 5.
ORDER
¶14 We ORDER the agency to pay attorney fees in the amount of $384,565.04
by check made payable to appellant Goeke’s counsel. Payment must be made no
7
The agency does not, in its petitions for review, dispute the administrative judge’s, or
the Board’s, reliance on specific Federal Circuit precedent. See ID at 14; see also
Goeke and Bottini, 122 M.S.P.R. 69, ¶¶ 14-18 citing Bross v. Department of Commerce,
389 F.3d 1212, 1218 (Fed. Cir. 2004) (finding that the agency did not commit harmful
error when it replaced the original proposing official because he “had not yet reached a
decision as to the appropriate penalty” when he was removed from this role); Boddie v.
Department of the Navy, 827 F.2d 1578, 1579-81 (Fed. Cir. 1987) (explaining that the
agency committed harmful error when it did not follow its internal disciplinary
procedure, which established that “[d]iscipline of employees is a line management
responsibility and should be effected at the lowest practical supervisory level”). Only
in its replies to the appellants’ responses to its petitions for review at the attorney fees
stage does the agency suggest that its understanding of the parameters of what
constituted a “final decision” was uncertain under the leading case law. Goeke PFR
File, Tab 10 at 5; Bottini PFR File, Tab 10 at 6.
11
later than 20 calendar days after the date of this decision. See generally 5 U.S.C.
§ 1204(a)(2).
¶15 We ORDER the agency to pay attorney fees in the amount of $258,861.60
to appellant Botttini’s counsel: $226,822.14 to O’Melveny & Myers LLP 8 and
$32,039.46 to Cadwalader, Wickersham & Taft LLP. Payment must be made no
later than 20 calendar days after the date of this decision. See generally 5 U.S.C.
§ 1204(a)(2).
¶16 We also ORDER the agency to tell the appellants and their attorneys
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 appellants
and their attorneys to provide all necessary information that the agency requests
to help it carry out the Board’s Order. The appellants, and their attorneys, if not
notified, should ask the agency about its progress. See 5 C.F.R. § 1201.181(b).
8
Along with appellant Bottini’s response to the agency’s petition for review, he
submitted a request for a supplemental award of $33,988.33 in attorney fees and costs
incurred by O’Melveny and Myers LLP in responding to the agency’s petition for
review. Bottini PFR File, Tab 7 at 14-15. While acknowledging that attorney time
spent preparing a response to an agency’s petition for review is compensable, see, e.g.,
Johnston v. Department of the Treasury, 104 M.S.P.R. 527, ¶ 3 (2007), the agency
requests that the Board deny or significantly reduce the additional fees and costs sought
because they concern work that reportedly dates back to 7 months before the agency
filed its petition for review and appear to concern substantive work that is unrelated to
the issues on appeal in the petition for review. Bottini PFR File, Tab 10 at 15-18. In
support of its request for a supplemental award, appellant Bottini has submitted a
declaration under penalty of perjury by counsel, who clarifies that the supplemental
request is for time spent in connection with the motion for fees, the agency’s
subsequent opposition, and the response to the agency’s petition for review. Bottini
PFR File,., Tab 7 at 18. The billing records submitted support appellant Bottini’s
position, as they reflect already approved hourly rates for counsel and paralegals, and,
based on our review, are not duplicative, padded, or excessive. Id. at 21-25. While
counsel might have submitted his request for fees incurred in the preparation of the fee
request when he filed the fee request, we see no basis upon which to deny the request
on that or any other basis. Hart v. Department of Transportation, 115 M.S.P.R. 10, ¶
14 (2010) (recognizing that the computation of a reasonable attorney fees award
analyzes two objective variables: the attorney’s customary billing rate; and the number
of hours reasonably devoted to the case). We therefore find it appropriate to, and do,
award the fees and costs requested in the supplemental motion.
12
¶17 No later than 30 days after the agency tells the appellants or their attorneys
that it has fully carried out the Board’s Order, the appellants or their attorneys
may file a petition for enforcement with the office that issued the initial decisions
on this appeal, if the appellants or their attorneys believe that the agency did not
fully carry out the Board’s Order. The petition should contain specific reasons
why the appellants or their attorneys believe the agency has not fully carried out
the Board’s Order, and should include the dates and results of any
communications with the agency. See 5 C.F.R. § 1201.182(a).
NOTICE TO THE APPELLANTS REGARDING
YOUR FURTHER REVIEW RIGHTS
You have the right to request review of this final decision by the U.S.
Court of Appeals for the Federal Circuit. You must submit your request to the
court at the following address:
U.S. Court of Appeals
for the Federal Circuit
717 Madison Place, N.W.
Washington, DC 20439
The court must receive your request for review no later than 60 calendar days
after the date of this order. See 5 U.S.C. § 7703(b)(1)(A) (as rev. eff. Dec. 27,
2012). If you choose to file, be very careful to file on time. The court has held
that normally it does not have the authority to waive this statutory deadline and
that filings that do not comply with the deadline must be dismissed. See Pinat v.
Office of Personnel Management, 931 F.2d 1544 (Fed. Cir. 1991).
If you need further information about your right to appeal this decision to
court, you should refer to the Federal law that gives you this right. It is found in
title 5 of the U.S. Code, section 7703 (5 U.S.C. § 7703) (as rev. eff. Dec. 27,
2012). You may read this law as well as other sections of the U.S. Code, at our
website, http://www.mspb.gov/appeals/uscode.htm. Additional information is
available at the court’s website, www.cafc.uscourts.gov. Of particular relevance
13
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, 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
Merit Systems Protection Board neither endorses the services provided by any
attorney nor warrants that any attorney will accept representation in a given case.
FOR THE BOARD: ______________________________
Jennifer Everling
Acting Clerk of the Board
Washington, D.C.