Case Report for July 22, 2016
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.
Appellant: Elissa Rumsey
Agency: Department of Justice
Decision Number: 2016 MSPB 28
Docket Number: DC-1221-11-0466-A-1
Issuance Date: July 21, 2016
Appeal Type: Individual Right of Action (IRA)
Action Type: Attorney Fee Request
Whistleblower Protection Act
- Authority to Award
- Reasonableness - Degree of Success
The appellant petitioned for review of an addendum initial decision that awarded her $2,801 in costs and $7,084 in attorney fees to one of her three attorneys but denied any attorney fees for the services of her two other attorneys. The appellant is a Compliance Monitoring Coordinator in the agency's Office of Juvenile Justice and Delinquency Prevention. In its decision on the merits, 120 M.S.P.R. 259 (2013), the Board found that the appellant reasonably believed that she disclosed that one of the grantees submitted fraudulent data in connection with its program compliance and that agency managers were covering up this fraud. The Board determined that the agency unlawfully retaliated against the appellant for making these protected disclosures and ordered the agency to take corrective action with respect to the cancellation of her telework agreement with the agency and her 2007 performance rating. The appellant subsequently filed a motion for attorney fees in which she sought attorney fees for all three of the attorneys who had represented her: Beth Slavet, who represented her before the Office of Special Counsel, as well as through the hearing in the IRA appeal; the DiMauroGinsberg firm, which represented her during June and July 2011, including at the hearing; and Robert Burka, who represented her on petition for review to the Board and in this attorney fee (addendum) proceeding. The administrative judge granted attorney fees of $7,084, which was limited to the representation by the DiMuroGinsberg firm, plus costs of $2,081. The administrative judge found that the lodestar amount (hourly rate multiplied by the number of reasonable hours) for this firm must be reduced by 80% because of the appellant's limited degree of success in her IRA appeal.
Holdings: The Board affirmed the addendum initial decision insofar as it found that attorney fees were due for the legal services of the DiMuroGinsberg law firm, and that no attorney fees were due for the legal services of Beth Slavet, reversed the addendum initial decision insofar as it found that no attorney fees were due for the legal services of Robert Burka, and modified the addendum initial decision concerning the amount of attorney fees awardable to the appellant, awarding attorney fees totalling $104,264.78, which represented a 60% reduction to the lodestar figure:
1. The appellant is not entitled to an award of attorney fees for Ms. Slavet's legal services.
a. Although the appellant submitted copies of Ms. Slavet's invoices, she stated that she was engaged in a fee dispute with Ms. Slavet and did not vouch for the reasonableness of the itemized charges listed on the invoices. In fact, the appellant acknowledged that much of Ms. Slavet's work was "excessive" and that her invoices were "full of meritless, unrecoverable, and frivolous legal work."
b. The Board agreed with the administrative judge that Ms. Slavet's invoices do not adequately document the legal services provided, and the Board had no factual basis to conclude that any amount of fees claimed were reasonable.
2. Because the controlling legal authority for this proceeding is 5 U.S.C. § 1221(g)(1)(B), it is the appellant, not her attorney, who is entitled to an award of attorney fees.
a. Two of the statutes that authorize the Board to award attorney fees are 5 U.S.C. § 7701(g)(1), which applies when the appellant is a prevailing party in an appeal under 5 U.S.C. § 7701 and an award is warranted in the interest of justice, and 5 U.S.C. § 1221(g)(1)(B), which applies when the Board orders corrective action in a whistleblower appeal to which 5 U.S.C. § 1221 applies. Subsection (g)(1)(B) of section 1221 applies in this case because the Board ordered corrective action in the merits proceeding based on its finding of a prohibited personnel practice.
b. In analyzing the motion for attorney fees and costs, the administrative judge cited both 5 U.S.C. §§ 7701(g) and 1221(g). These provisions are similar in several respects, but there are at least two significant differences. First, an award of attorney fees under 5 U.S.C. § 7701(g)(1) must be "warranted in the interest of justice." No such requirement exists for the award of attorney fees under 5 U.S.C. § 1221(g)(1)(B). The second difference relates to whether it is the party or the attorney who is entitled to receive an award. It is the attorney who is entitled to receive an award under section 7701; it is the party who is entitled to receive an award under section 1221. the administrative judge erred in ruling that it is the attorney who is entitled to an award of attorney fees in an IRA appeal.
3. It was undisputed that the appellant is entitled to an award of attorney fees for the legal services of the DiMuroGinsberg law firm.
4. The appellant is entitled to an award of attorney fees for the legal services of Robert Burka.
a. Under the oral agreement between Mr. Burka and the appellant, (1) his work on the petition for review would cost the appellant nothing; (2) if his efforts were successful, he would apply for an award of attorney fees; (3) he would give the appellant any fees he was awarded up to the amount she already had paid to the other attorneys; (4) the same understanding applied to addendum proceedings such as this one; and (5) if any funds for Mr. Burka's services were left over, they would be donated to charity after consultation with the appellant. Mr. Burka agreed to these arrangements "to ameliorate [the appellant's] undoubtedly difficult financial situation caused by paying various counsel and litigation support vendors approximately $140,000."
b. In finding that the appellant was not entitled to an award of attorney fees for Mr. Burka's legal services, the administrative judge cited legal authority for the proposition that the agreed-upon rate ($0 in this case) is presumed to be reasonable, and this presumption can be rebutted only by convincing evidence that the agreed-upon rate was not based on marketplace considerations and that the attorney's rate for similar work was customarily higher, or by showing that the attorney agreed to such a rate only because of the individual's reduced ability to pay. The judge found that the presumption was not rebutted because Mr. Burka agreed not to charge the appellant any attorney fees.
c. Both prongs of the cited legal authority apply in this case. Mr. Burka's customary rate for legal services was higher than the zero rate he charged the appellant, and he agreed to the fee arrangement because of the appellant's "undoubtedly difficult financial situation."
d. During the adjudication of the appellant's petition for review, the Board issued a Briefing Order on the issue of whether fees were "incurred" for Mr. Burka's legal services within the meaning of 5 U.S.C. § 1221(g)(2). The Board concluded that fees were incurred because Mr. Burka and the appellant had "an express or implied agreement that the fee award would be paid over to the legal representative." There is no requirement that the attorney retain attorney fees for himself.
5. It was undisputed that the "lodestar" (hours reasonably spent on the litigation multiplied by a reasonable hourly rate) for the DiMuroGinsberg law firm was $35,419.44.
6. The lodestar for Mr. Burka's legal services was 111,097.
a. Calculating a reasonable hourly rate for Mr. Burka was difficult because: Mr. Burka was "retired" when he undertook representation of the appellant, but has continued to practice on a voluntary, nonfee basis; his published rate as an active partner in his law firm was $850 per hour when he retired in 2010; his Laffey rate was $495 per hour in 2011-2012; this is the first case he has litigated before the MSPB, but he has litigated administrative appeals in other forums, as well as in the U.S. Supreme Court and several Federal courts of appeal; and he has experience in cases involving disputes over attorney fees.
b. Under the unique circumstances of this case, in which it was not feasible to show an hourly rate actually billed other clients for similar work during the period at issue, and using the Laffey rate was inappropriate because Mr. Burka had never litigated a Board appeal, the Board found it appropriate to use the rate charged by one of the appellant's other experienced legal counsel (the DiMuroGinsburg firm), which was $350 per hour.
c. There are two distinct periods of legal representation involved here: preparing the petition for review of the merits decision; and prosecuting the present motion for attorney fees. As to the former, the agency had agreed that 100 hours of work was reasonable, and the Board used that figure to calculate the lodestar for that work at $35,000.
d. The Board found that the reasonable number of hours devoted to the attorney fees proceeding was 217.42, which represented about a 25% reduction in the hours claimed by Mr. Burka. Accordingly, the lodestar for the attorney fees proceeding was $76,097.
7. The lodestar must be reduced by 60% to account for the appellant's limited success in this litigation.
a. When, as here, a prevailing party makes more than one claim for relief, and the claims involve a common core of facts or are based on related legal theories, the fee determination should reflect the overall relief obtained in relation to the hours reasonably expended. In a case in which the party seeking fees obtains only partial or limited success, the tribunal awarding fees has discretion to make an equitable adjustment as to what reduction is appropriate. The appellant's success in this appeal was only partial or limited, in that she claimed that she was subjected to many more retaliatory personnel actions than the two actions found by the Board to be retaliatory.
b. In doing an equitable adjustment of attorney fees on account of a prevailing party's limited success, the tribunal may adjust the lodestar downward by identifying specific hours that should be eliminated, or it may reduce the overall award to account for the limited degree of success. Although the former method is preferred, the administrative judge determined that it was not practicable to segregate the hours devoted to unsuccessful claims, and neither party questioned that determination.
c. That the Board found that "only" two of the disputed personnel actions were retaliatory does not control how much the lodestar should be reduced. The Board rejected this notion in a previous decision, observing that the most significant measures of the appellant's success were that the Board made a public finding that the agency engaged in illegal whistleblower reprisal and that it referred the matter to OSC for investigation and possible disciplinary action against the responsible agency officials.
d. Here, the appellant disclosed her reasonable belief that the agency failed in its obligation to ensure that recipients of Federal aid use grant money in accordance with the terms of their grants, and the agency failed to show by clear and convincing evidence that it did not take retaliatory actions against the appellant for her protected disclosures. An attorney fees award serves the public interest in that it may encourage employees and attorneys to pursue remedies for acts of whistleblowing reprisal. Not only did the Board make a referral to the Special Counsel regarding its findings of reprisal, both the Special Counsel and members of Congress have pursued investigations regarding the disclosures made by the appellant and others at her agency. Indeed, the appellant has submitted evidence that members of Congress have specifically recognized her efforts in bringing problems to their attention and helping provide the impetus for corrective legislative action.
e. Under all the circumstances of this case, an appropriate equitable adjustment for the limited degree of the appellant's success in this IRA appeal is a 60% reduction to the lodestar amount.
8. The Board approved the administrative judge's determination that the appellant's costs should be reduced by 80%.
9. The Board forwarded the appellant's allegation that she is intitled to a higher performance appraisal and award for 2007 for adjudication as a petition for enforcement.
Petitioner: Daniel A. Grover
Respondent: Office of Personnel Management
Tribunal: U.S. Court of Appeals for the Federal Circuit
Docket Number: 2015-3160
Issuance Date: July 15, 2016
Retirement - Calculation of Annuity
At issue in this case was the proper calculation of Mr. Grover's retirement annuity.
Holdings: The court vacated the Board's decision and remanded for further adjudication. The reasons for those actions are summarized in the first three paragraphs of the court's decision:
Daniel Grover applied for a retirement annuity under the Civil Service Retirement System after he retired as a customs officer. By statute, the annuity must reflect the highest average annual pay based on three consecutive years of specified service, and for a customs officer like Mr. Grover in the years in question, the calculation must include overtime pay up to $17,500. The Office of Personnel Management, in calculating Mr. Grover’s pay for the years in question, did not include anything close to $17,500 in overtime pay, although Mr. Grover asserted that he received more than $17,500 in overtime pay in those years. The Merit Systems Protection Board rejected Mr. Grover’s challenge to OPM’s calculation.
OPM relied on a particular official record for its calculation. But neither OPM nor the Board recognized that the record is internally contradictory about what overtime pay Mr. Grover received. Accordingly, neither OPM nor the Board sought further information—such as pay stubs—that might definitively resolve the uncertainty and determine what overtime pay Mr. Grover actually received. Moreover, the Board and OPM relied on a legal ground that seems to make the factual issue immaterial even in the face of internally conflicting information in the official record used by OPM for its calculation.
That ground, as OPM now agrees, is incorrect, and the key official record, OPM also now agrees, is in fact internally inconsistent. Although OPM points to a regulation as independently supporting the result challenged in this appeal, by authorizing it to rely on the official record it used, that regulation does not address what to do when the record is internally contradictory. In this case, moreover, we have been shown no reason why objective documentation (pay stubs) should not be available to resolve the issue (the amount of overtime pay) definitively. At least in this circumstance, the regulation does not permit the Board to affirm OPM’s calculation without resolving the amount-of-overtime-pay factual issue. We vacate the Board’s decision and remand for a determination of that issue.
The U.S. Court of Appeals for the Federal Circuit issued nonprecedential decisions in the following case:
Williams v. U.S. Postal Service, No. 2015-3163 (July 19, 2016) (MSPB Docket No. DE-0752-13-0322-I-1) (affirming per Rule 36 the Board's decision, which affirmed a demotion for unacceptable performance)