Cornish v. United States , 2014 U.S. Claims LEXIS 715 ( 2014 )


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  •      In the United States Court of Federal Claims
    No. 12-861C
    (Filed: July 30, 2014)
    ************************
    THOMAS R. CORNISH,
    Plaintiff,
    v.
    THE UNITED STATES,
    Defendant.
    ************************
    ORDER
    We entered judgment for plaintiff on September 30, 2013. Cornish v.
    United States, 
    112 Fed. Cl. 801
     (2013). Pending is plaintiff’s post-judgment
    motion under 
    28 U.S.C. § 2412
    (b) (2012) for attorney fees in the amount of
    $189,108 and litigation expenses totaling $5,387.64. The matter is fully
    briefed. Oral argument was held on July 18, 2014. Because plaintiff has not
    identified a basis on which fees can be awarded, the motion is denied.
    The facts surrounding this case are set out in this court’s September 30,
    2013 opinion, 
    112 Fed. Cl. 801
    . Plaintiff was successful on the merits and
    now claims he is entitled to fees and expenses pursuant to 
    28 U.S.C. § 2412
    (b),
    which states, “[T]he United States shall be liable for fees and expenses to the
    same extent that any other party would be liable under the common law or
    under the terms of any statute which specifically provides for such an award.”
    Plaintiff relies on the “common benefit” and “bad faith” exceptions to the
    traditional American rule that each party bears its own litigation expense.
    Plaintiff also cites the Back Pay Act, 
    5 U.S.C. § 5596
    , as an example of a
    statute that could provide him with a fee award.
    A. Common Benefit
    The “common benefit” exception allows attorney fees to be awarded
    when: “(1) the plaintiff shows that it has conferred a substantial benefit on
    members of an ascertainable class, and (2) the jurisdiction of the court permits
    an award that will operate to spread the costs proportionately among them.”
    MVM, Inc. v. United States, 
    47 Fed. Cl. 361
    , 364 (2000) (citing Mills v. Elec.
    Auto-Line Co., 
    396 U.S. 375
    , 393 (1970)). The cost of litigation may be
    spread to all of the benefitted parties by assessing a charge for attorney fees
    directly against the recovered assets. Knight v. United States, 
    982 F.3d 1573
    ,
    1583 (Fed. Cir. 1993). The common benefit exception evolved from the
    “common fund” exception to the American rule that each party bears its own
    litigation expense. See Aquinoga v. United Food & Workers Int’l Union, 
    993 F.2d 1480
    , 1482 (1993). Under the common fund exception, a successful
    plaintiff is awarded attorney fees because his suit “creates a common fund, the
    economic benefit of which is shared by all members of the class.” 
    Id.
     Plaintiff
    did not cite nor were we able to find any case applying the common benefit
    exception without the existence of a fund created by the litigation and
    common to all of the other benefitted litigants.
    Plaintiff argues that he benefitted and advanced the interests of all non-
    Article III judges by establishing liability and allowing expedited treatment to
    be given to all of the bankruptcy judges in Houser v. United States. See Houser
    v. United States, No. 13-706C, 
    2013 U.S. Claims LEXIS 2112
    , at *2-3 (Fed.
    Cl. Sept. 30, 2013) (citing opinion in Cornish to establish liability). Plaintiff
    suggested at oral argument that his fees and expenses case can be charged
    against the United States and paid from the United States’ Judgment Fund as
    a way of reflecting that other Article I judges in different proceedings have
    benefitted from the work done by Judge Cornish in this case.
    Defendant disputes the factual assertion underlying the request, namely
    that there was a direct connection between recoveries by judges in other
    lawsuits because of the result of this suit. It is unnecessary to consider that
    question, however, because we are persuaded that, even if others benefitted by
    being able to rely on the result here, the common fund rationale for shifting
    fees does not apply. The Judgment Fund is a general fund set up to pay the
    United States’ litigation liabilities. It is not a common fund created by
    plaintiff’s successful suit, and it certainly is not available to the court in this
    suit, other than to order payment with respect to Judge Cornish. Congress adds
    to the judgment fund when necessary, but that need is triggered by judgments
    in other, separate proceedings. We agree, in addition, with the decision in
    Grace v. Burger, 
    763 F.2d 457
    , 459-60 (D.C. Cir. 1985), cert. denied, 
    474 U.S. 1026
     (1985), that assessing taxpayers generally is not a legitimate
    extension of the common fund doctrine. The common fund doctrine assumes
    a particularized pot of money available to the court against which to spread the
    2
    cost of generating that fund. Amortizing the cost over millions of taxpayers
    breaks the connection between benefit and cost sharing. Nor would we be
    authorized in this suit to reach into other litigation and siphon from awards in
    favor of other judges for the purpose of extracting a payment for the perceived
    proportionate share of benefit derived from this action. Even if those suits are
    in this court, they are insulated from this action. Plaintiff cannot recover under
    the common benefit exception.
    B. Bad Faith
    Plaintiff also claims he is entitled to fees because of defendant’s bad
    faith conduct in this litigation. The bad faith exception is narrow and invoked
    in cases of “vexatious, wanton, or oppressive conduct.” N. Star Alaska Hous.
    Corp. v. United States, 
    85 Fed. Cl. 241
    , 244 (2009) (quoting F.D. Rich Co. v.
    United States ex rel. Indus. Lumber Co., 
    417 U.S. 116
    , 129 (1974)). “Such an
    award is punitive in nature and should be imposed only in exceptional cases
    and for dominating reasons of justice.” 
    Id.
     at 244 (citing Hall v. Cole, 
    412 U.S. 1
    , 5 (1973)).
    Plaintiff argues that, after the Article III judges in Beer v. United States
    were awarded back pay and correction of their pay records to reflect
    previously denied cost of living adjustments (“COLAs”), defendant should
    have known that all judges whose pay was statutorily linked to the pay of
    Article III judges would also be entitled to an increase in salary and back pay.
    According to plaintiff, defendant should have taken corrective action
    immediately, and because it did not, plaintiff was forced to file suit. Plaintiff
    quotes our ruling in the September 30, 2012 opinion that plaintiff had a
    “perfectly straightforward statutory claim,” offered a “more apt line of
    statutory construction principles,” and that “it would approach absurdity to
    unscramble that superstructure [of judicial pay statutes] in pursuit of a
    chimerical congressional intent with respect to a piece of unconstitutional
    legislation.” Cornish, 112 Fed. Cl. at 805. Defendant’s interpretation would
    have resulted in administrative confusion and inconsistency with the linkage
    between Article I and Article III salaries. Plaintiff concludes that defendant’s
    position was therefore unworkable and arbitrary and could justify an award of
    attorney fees.
    Defendant answers that its litigation position was justified because the
    issues presented were of first impression. Accordingly, it could not have been
    proceeding in bad faith.
    3
    Plaintiff responded at oral argument that this case did not present an
    issue of first impression because Congress has already spoken on the issue.
    Plaintiff’s point was that 
    28 U.S.C. § 153
    (a) was enacted to ensure that
    bankruptcy judges were treated equally with respect to COLAs. Plaintiff
    pointed to the amicus brief of the National Conference of Bankruptcy Judges
    (“NCBJ”), filed during the liability phase of this case, wherein the NCBJ
    explained that 
    28 U.S.C. § 153
    (a), which guarantees each bankruptcy judge a
    salary equal to 92 percent of that of a district judge, was enacted after United
    States v. Will held that a different set of COLA denials for Article III judges
    were unconstitutional, 
    449 U.S. 200
    , 226-30 (1980). The brief explained that
    there was a general understanding in the judiciary that the Will holding did not
    apply to Article I judges, and thus 
    28 U.S.C. § 153
    (a) was enacted after Will
    to correct this general imbalance and insure the same salary protection for
    bankruptcy judges. Therefore, plaintiff argues, Congress’ intent with the pay
    parity statute was already known, and this case was not one of first impression.
    Thus, in plaintiff’s view, defendant unnecessarily opposed applying the
    COLAs to bankruptcy judges.
    Although we agreed with plaintiff and the NCBJ that 
    28 U.S.C. § 153
    (a) was intended to create permanent parity in pay for bankruptcy judges,
    that does not resolve the question of whether the application of that statute to
    the facts of this case presented a novel question. Congress was not deciding
    the issue litigated in this case, nor could it. The courts are entrusted with
    resolving cases and controversies. There existed no prior judicial precedent
    that addressed the issue precisely litigated in this case. That is what is meant
    by a case of first impression. Although that may not ipso facto preclude a
    finding of bad faith, it makes proving bad faith more difficult. Indeed, it is not
    surprising that the Department of Justice would prefer to have a judicial ruling
    before taking it upon itself to accede to extending the Beer decision to Article
    I judges. The fact that we thought the statutory implications of Beer were plain
    does not mean that it was unreasonable to suggest that the constitutional
    protections for Article III salaries create principled differences. Except for
    arguing that defendant should not have opposed liability, plaintiff has not
    alleged any vexatious or oppressive conduct or shown that “dominating
    reasons of justice” dictate an award of fees in this case. Therefore, we find no
    bad faith on the part of defendant to warrant fee shifting.
    C. Back Pay Act
    Plaintiff also cited the Back Pay Act as illustrative of a statute that
    could provide him with fees under section 2412(b), in its reference to “any
    4
    statute which specifically provides for such an award.” The Back Pay Act
    provides that:
    An employee of an agency . . . who is found by appropriate
    authority under applicable law, rule, regulation, or collective
    bargaining agreement, to have been affected by an unjustified or
    unwarranted personnel action which has resulted in the
    withdrawal or reduction of all or part of the pay, allowances, or
    differentials of the employee--
    (A) is entitled, on correction of the personnel action, to
    receive for the period for which the personnel action was
    in effect--
    ....
    (ii) reasonable attorney fees related to the
    personnel action which, with respect to any
    decision relating to an unfair labor practice or a
    grievance processed under a procedure negotiated
    in accordance with Chapter 71 of this title, or
    under Chapter 11 of Title I of the Foreign Service
    Act of 1980, shall be awarded in accordance with
    standards established under section 7701(g) of
    this title . . . .
    
    5 U.S.C. § 5596
    (b)(1) (2012).
    The Back Pay Act, however, cannot be what section 2412(b) was
    referencing as a statute that provides for an award of fees. Section 2412(b)
    intended to place the Government in the same shoes as “any other party,” as
    in, “any party other than the United States.” Gavette v. Office of Pers. Mgmt.,
    
    808 F.3d 1456
    , 1466 (Fed. Cir. 1986). The Back Pay Act itself directly makes
    the United States liable to possible fee shifting. Section 2412(b) thus can refer
    only to statutes that make parties other than the United States liable for fees.
    
    Id.
    We agree with defendant, moreover, that it is too late, after entry of
    final judgment, to invoke the Back Pay Act. The act is a source of potential
    liability against the United States for payment of back wages when wages have
    been determined to have been improperly withheld. Only as an incident to that
    5
    return of wages are fees allowed as an additional remedy. Plaintiff did not
    invoke the Back Pay Act in its complaint. It did not need to. The court has
    authority under the Tucker Act, 28 U.S.C.§ 1491 (2012), both to adjudicate
    liability pursuant to the pay statutes and to order the return of improperly
    withheld wages. Plaintiff has not asked to amend its complaint to include the
    Back Pay Act, and we agree with defendant that it is too late, after judgment
    has been entered, to amend the complaint to add it now. See generally Stueve
    Bros. Farms, LLC v. United States, 
    107 Fed. Cl. 469
    , 476 (2012) (discussing
    amendment after judgment). Finally, we also agree with defendant that the
    circumstances permitting an award of fees and expenses under the Back Pay
    Act (bad faith, egregious behavior, gross procedural error, etc.) are not present
    here.
    In sum, the court does not have authority to shift fees to the United
    States. Accordingly, plaintiff’s motion for attorney fees and litigation expenses
    is denied.
    s/ Eric G. Bruggink
    ERIC G. BRUGGINK
    Judge
    6
    

Document Info

Docket Number: 1:12-cv-00861

Citation Numbers: 117 Fed. Cl. 555, 2014 U.S. Claims LEXIS 715, 2014 WL 3735854

Judges: Bruggink

Filed Date: 7/30/2014

Precedential Status: Precedential

Modified Date: 11/7/2024