U.S. Merit Systems Protection Board 
Case Report for October 9, 2015 

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Note:  These summaries are descriptions prepared by individual MSPB employees. They do not represent official summaries approved by the Board itself, and are not intended to provide legal counsel or to be cited as legal authority.  Instead, they are provided only to inform and help the public locate Board precedents.

BOARD DECISIONS

Petitioner:  Gerald I. Krafsur
Agency:  Social Security Administration
Decision Number:  2015 MSPB 55
Docket Number:  CB-7521-13-0182-A-1
Issuance Date:  October 6, 2015
Appeal Type:  Actions Against ALJ's
Action Type:  Attorney Fee Request

Attorney Fees
 - Prevailing Party

The petitioner filed a petition for review of an addendum initial decision that denied his motion for attorney fees.  The petitioner is an administrative law judge (ALJ) in the the agency's Office of Disability and Adjudication Review.  In April 2013, the the agency filed a complaint with the  Board seeking to suspend the petitioner for 120 days based on charges of neglect of duty and conduct unbecoming an ALJ.  Approximately a year later, the agency submitted an amended complaint proposing to suspend the petitioner for only 45 days.  The ALJ assigned to adjudicate the case dismissed the amended complaint as prejudicial to the petitioner.  The agency then filed a pleading indicating that it wished to withdraw the original complaint or, in the alternative, dismiss it without prejudice.  The ALJ granted the motion to dismiss the complaint without prejudice.  The petitioner filed a petition for review in which he argued that the ALJ should have dismissed the complaint with prejudice and awarded him attorney fees.  The Board issued a final order affirming the initial decision as modified to dismiss the complaint as withdrawn, and declined to reach the issue of whether the petitioner was entitled to attorney fees because it had not yet issued a final decision in the proceeding.  The petitioner subsequently filed a motion for attorney fees, which the ALJ denied on the ground that the agency's voluntary withdrawal of the complaint and the Board's final order dismissing the complaint as withdrawn did not render the petitioner a prevailing party.  This petition for review followed.
   
Holdings:  The Board affirmed the initial decision, finding that the petitioner was not entitled to attorney fees because he was not a prevailing party.

1. In proceedings involving actions against ALJs under 5 U.S.C.  7521, the Board may award attorney fees pursuant to the Equal Access to Justice Act.  To establish entitlement to attorney fees under that Act, the petitioner must demonstrate that his is a "prevailing party."

2. Under Buckhannon Board & Care Home, Inc. v. West Virginia Dep't of Health & Human Resources, 532 U.S. 598 (2001), an appellant is considered to have prevailed and to be entitled to attorney fees only if he obtains an enforceable order resulting in a "material alteration of the legal relationship of the parties."  A party prevails when actual relief on the merits of his claim materially alters the legal relationship by modifying one party's behavior in a way that directly benefits the other.  

3. The petitioner claimed that he was a prevailing party because the agency withdrew the complaint without demonstrating that it had good cause to take disciplinary action against him.  In Buckhannon, the Supreme Court specifically rejected the "catalyst theory" whereby a party could be found to have prevailed based upon the opposing party's voluntary change of conduct after the filing of a lawsuit.  The Board has applied that principle in its proceedings where an agency voluntarily and unilaterally rescinds an adverse action after an appellant files an appeal.  Here, the agency's withdrawal of its complaint seeking to discipline the petitioner is analogous to an agency's decision to rescind an adverse action. The Board rejected the petitioner's contention that a different "prevailing party" standard should apply in proceedings under 5 U.S.C.  7521 under the theory that the petitioner is equivalent to a defendant rather than a plaintiff.  The Board also rejected the petitioner's contention that he was a prevailing party because the Board modified the initial decision to dismiss the agency's complaint was withdrawn rather than dismissed without prejudice.  Whether a party is a prevailing party depends on the relief ordered in the Board's final decision.  Here, the Board's final order did not award the petitioner any relief on the merits or materially alter the legal relationship between the parties, as it did not prohibit the agency from refiling a new complaint based on the same charges.  



Appellant:  John Doe
Agency:  Pension Benefit Guaranty Corporation
Decision Number:  2015 MSPB 57
Docket Number:  DC-0752-09-0881-A-1
Issuance Date:  October 7, 2015
Appeal Type:  Adverse Action by Agency
Action Type:  Attorney Fee Request

Attorney Fees
 - Prevailing Party

The appellant petitioned for review of an addendum initial decision that denied her motion for an award of attorney fees incurred in connection with a petition for enforcement.  In the merits appeal, the Board reversed the agency's action placing the appellant on two periods of enforced leave and remanded the case to the administrative judge to further adjudicate her affirmative defenses.  The Board did not, however, order the agency to provide the appellant back pay for the two periods of enforced leave.  The appellant then filed a petition for enforcement in which she alleged that the agency improperly failed to provide her with back pay for the periods of time she was on enforced leave that the Board had reversed. The administrative judge issued a compliance initial decision finding that the agency was in compliance because the Board's decision did not order the agency to pay the appellant any lost back pay. The appellant filed a petition for review of the compliance initial decision challenging the judge's finding of agency compliance and alternatively requesting the Board to reopen its prior decision and "order immediate relief in the form of the 20 weeks back pay . . . for the improper suspensions."  The Board denied the petition for review, but reopened and modified its prior Opinion and Order to order the agency to pay the appellant the correct amount of back pay for the periods of time she was on enforced leave.  The appellant then filed the present motion for attorney fees incurred during the compliance proceeding as a prevailing party.  The administrative judge ruled that the appellant was not a prevailing party, because the Board affirmed the denial of the petition for enforcement on the merits and found the agency in compliance.  
   
Holdings:  The Board affirmed the addendum initial decision, finding that the appellant was not a prevailing party and therefore not entitled to an award of attorney fees.  

1.  The appellant did not meet the requirement for prevailing party status established by the Supreme Court in Buckhannon that the party must have "obtained an enforceable judgment" resulting in a "material alteration of the legal relationship" between the parties.  The appellant did not meet this standard in the compliance proceeding, as distinguished from the merits phase of the proceeding, because she did not achieve any degree of relief in the compliance proceeding.  

2. To the extent the appellant secured some degree of relief in persuading the Board to reopen its prior Opinion and Order to require the agency to provide back pay, she should seek an award of attorney fees from the administrative judge after the Board issues a final decision in the merits phase of her appeal, which has not yet occurred.  



Appellant:  Samuel Montalvo, Jr.
Agency:  United States Postal Service
Decision Number:  2015 MSPB 56
Docket Number:  AT-0752-13-0418-A-1
Issuance Date:  October 7, 2015
Appeal Type:  Adverse Action by Agency
Action Type:  Attorney Fee Request

Attorney Fees
 - Prevailing Party
 - Interest of Justice
 - Reasonableness

The agency petitioned for review of an addendum initial decision that awarded the appellant $9,500 in attorney fees incurred in connection with the compliance proceedings in this appeal. The underlying removal appeal had been resolved in a settlement agreement that provided that the appellant could request that the agency issue retired law enforcement credentials pursuant to 18 U.S.C.  926C(c)(1)-(5) upon his submission of documentation sufficient to establish that he was eligible to receive them.  In his petition for enforcement, the appellant contended that the agency breached the agreement when it denied his request for retired law enforcement credentials based on the statement of a physician retained by the agency, because the physician was not qualified to make the medical determination in question.  The administrative judge agreed with this contention in his compliance initial decision.  He found that the agency had an obligation to process the appellant's request in good faith, and the statute required that the medical determination be made by a "qualified medical professional," which the judge construed to mean a medical professional who is qualified to determine whether an individual's mental health would render him unqualified to carry a concealed firearm.  In the absence of evidence that the physician retained by the agency had the requisite expertise and training to make that determination, the judge concluded that the agency's decision to deny the appellant's request was not based on an official finding by a "qualified medical professional," and that the agency therefore had breached its duty to perform its contractual obligations in good faith.  Because the agency did not timely file either evidence of compliance or a petition for review as required by 5 C.F.R.  1201.183(a)(6), the administrative judge's finding of noncompliance became final, and the matter was referred to the Board for processing under the enforcement provisions of section 1201.183(c).  Subsequently, the agency submitted evidence that it had obtained an assessment of the appellant's mental status from a forensic psychologist, who determined that the appellant was not mentally qualified to carry a firearm, and therefore was ineligible for law enforcement retirement credentials.  The Board then dismissed the petition for enforcement, finding that the agency had complied with the administrative judge's order and thereby cured its breach of the agreement.  

The appellant filed a request for attorney fees incurred in connection with the compliance proceedings.  Based on the parties' written submissions, the administrative judge found that the appellant was entitled to an award of $9,500 out of the $10,500 requested.  On review, the agency contended that the appellant was not the prevailing party, that an award of attorney fees is not warranted in the interest of justice, and that the award was unreasonable.  
   
Holdings:  The Board affirmed the initial decision and its award of $9,500 in attorney fees.

1. The appellant was a prevailing party because he met the requirement of Buckhannon that he obtain an "enforceable order" resulting in a "material alteration of the legal relationship of the parties."  The Board has held that its oversight provides the enforcement process with sufficient Board imprimatur to allow an appellant to qualify as a prevailing party even in the absence of a Board order finding the agency in noncompliance or an agreement settling compliance matters.  In any event, the appellant in this case did obtain an order finding the agency in noncompliance, which became final when the agency failed to submit evidence of compliance or a petition for review by the finality date of the initial decision.  The Board did not reverse that finding in its final decision, but rather found that the agency had subsequently cured its breach.  

2. Attorney fees were warranted under the third Allen prong because the finding of noncompliance was explicitly based on a finding that the agency failed to comply with the settlement agreement in good faith.  

3. The award of $9,500 in attorney fees was reasonable.  




COURT DECISIONS

The U.S. Court of Appeals for the Federal Circuit issued nonprecedential decisions in the following cases:

Landell v. Department of Defense, No. 2015-3045 (Oct. 5, 2015) (affirming the Board's decision, which terminated Landell's employment after the agency revoked his security clearance)

Holleman v. Merit Systems Protection Board, No. 2015-3108 (Oct. 7, 2015) (affirming the Board's decision, which dismissed the appellant's appeal as moot after the agency rescinded its removal action)
     

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