We
have
previously held that the preliminary order provision encompasses ALJ recommended attorney's
fee
awards. See e.g., Varnadore II, P.O., September 11, 1995. We now conclude
that
the plain meaning as well as the purposes of the whistleblower provision of the ERA requires
that the
P. O. be rescinded based upon our Final Consolidated Decision and Order, which dismissed all
of
Varnadore's claims against LMES.
Subsection 5851(b)(2)(A) of the ERA does not explicitly require that
a preliminary award of attorney's fees be rescinded if the complainant does not prevail on the
merits
of his or her case. However, that is a reasonable conclusion based upon the language of the
ERA's
whistleblower provision. To frame the issue most clearly it is necessary first to discuss the
meaning
of the ERA's attorney's fee award provision.
Pursuant to § 5951(b)(2)(B), if the Secretary (now the Board)
determines that "a violation" of the ERA whistleblower provision "has
occurred," the Secretary shall issue an order prescribing relief. If such an order is issued
the
Secretary "shall assess" reasonable costs and expenses, including attorney's
and
expert witness fees, incurred by the complainant in bringing the complaint, 'against the person
against
whom the order is issued." This provision is unusual in that it does not contain the typical
standard for the award of attorney's fees, such as "prevailing," or "substantially
prevailing," or "successful." See, e.g. Ruchelshaus v. Sierra Club,
463 U.S. 680, 683 (1983). However, for purposes of deciding this case we needn't explore
whether the ERA's attorney's fees provision is broader than those provisions which use these
more
common terms. At a minimum the ERA provision requires that the Secretary (now the Board)
must
have determined that a violation of the ERA whistleblower provision occurred in order to award
attorney's fees to the complainant. As the Supreme Court has noted, "the consistent rule is
that
complete failure will not justify shifting fees from the losing party to the winning party."
Ruchelshaus v. Sierra Club, 463 U.S. at 683. "Put simply, ordinary conceptions of
just
returns reject the idea that a party who wrongly charges someone with violations of the law
should
be able to force that defendant to pay the costs of the wholly unsuccessful suit against
it."
Ruchelshaus v. Sierra Club, 463 U.S. at 683. Thus, we think it is clear that Varnadore would
have
no grounds upon which to seek attorneys fees now that he has lost on all claims pending before
the
Department of Labor.
It is also the case that where a party has been awarded attorney's fees
below, but the judgment upon which the fee award was based is reversed, the award falls with the
judgment. See Palmer v. City of Chicago, 806 F.2d 1316, 1319 (7th Cir. 1989). Courts
have
applied the same principle to interim orders. Thus, for example, in NAACP v. Detroit Police
Officers Assoc., 46 F.3d 528, 529 (6th Cir. 1995), the court held that "[w]hen a
plaintiff has no valid theory of recovery and is entirely unsuccessful in its suit on the merits, it
may
not thereafter recover attorneys' fees based on interim orders that provided plaintiff some
benefit." Thus, the fact that Varnadore prevailed on some issues before the ALJ and
received
some preliminary relief, such as the expungement of his 1992 performance appraisal, would not
justify
the award of fees at this point in the case.
Therefore, it is abundantly clear that Varnadore would not now be
entitled to an award of attorney's fees. The question presented here, however -- whether, having
been
preliminarily awarded attorney's fees, Varriadore (or Varnadore's counsel) must be ordered to
return
them consistent with our final decision on the merits of Varnadore II -- is more
problematic.
Assuming, as we must, that Varnadore would not now be entitled to an award of attorney's fees,
the
question becomes do we have the authority to order the recision of the P. O. granting such fees
and
the repayment of them to LMES? We conclude that we do have such authority.
First, the only stated purpose of the preliminary order provision is
contained in remarks of Congressman Ford, on the floor of the House of Representatives, as he
explained the preliminary order provision as reported by the conference committee:
To remedy the long delays in obtaining relief for complainants with meritorious
cases, the conference agreement amends section 210(b)(2)(A) of the Energy Reorganization
Act to require the Secretary to order interim relief for any complainant who prevails at the
hearing level. Once an Administrative Law Judge determines that the complaint has merit,
the Secretary must, without delay, order the employer to abate the violation and reinstate the
complainant to his or her former position together with the compensation, including [b]ack
pay, terms, conditions, and privileges of his or her employment. No award of compensatory
damages may issue, except as a final order of the Secretary.
138 Cong. Rec. H 11445 (daily ed. Oct. 5, 1992). Thus, the explicit
purpose
of the preliminary were not harmed by order provision was to assure that complainants with
meritorious claims any delay between the issuance of the ALJ's recommended decision and
the
Secretary's final decision. That goal was achieved in this case when the Secretary issued his P.O.
However, the Board has now determined that Varnadore's claims are not meritorious. Therefore,
it
would make no more sense to allow Varnadore (or his counsel) to retain the benefits of the
preliminary order than that it would to issue a preliminary order in the first place if Varnadore
had not
prevailed at all before the ALJ. The logical and statutory underpinnings of the preliminary order
have
now been removed, as we have ruled that Varnadore was not retaliated against for engaging in
activity
protected by the ERA whistleblower provision. Therefore the "consistent rule"
regarding
attorney's fees applies: "complete failure will not justify shifting fees from the losing party
to
the winning party." Ruchelshaus v. Sierra Club, 463 U.S. at 683.
Citing Macktal v. Brown and Root, Inc., Case No. 86-ERA-23,
Sec. Ord., July 11, 1995, Varnadore argues that the Secretary and the Board "have no
statutory powers to order return
of vision allowing such attorney fees from the preliminary order because there is no statutory pro
an order." Letter Response to Motion re: Attorney Fees, July 31, 1996 at 1.6 Varnadore's reliance is misplaced. In
Macktal the parties had purported to settle an ERA whistleblower claim, and Brown and
Root had paid Complainant Macktal $35,000. However, the Secretary refused to enter into the
settlement, because it included a term which the Secretary found was against public policy, and
remanded the case for further proceedings. The ALJ then recommended dismissal because
Macktal failed to comply which his order to repay the $35,000 before proceeding to a hearing.
On
review, the Secretary rejected the ALJ's recommended dismissal. The Secretary concluded that,
in
the absence of a broad statutory delegation of rulemaleing authority, "neither an ALJ nor
the
Secretary has the power to enter" an order that Macktal return the $35,000. Macktal,
Sec. Ord. at 3.
Macktal is readily distinguishable from the present case. As
Macktal held, the ERA does not grant the Secretary authority "to rectify
inequitable
bargains or order restitution of monies unfairly retained simply because the parties' dispute
concerns, among other things, the whistleblower provision of the ERA." Macktal,
Sec. Ord. at 6. Here, we are not dealing with the consequences of a private agreement
between
the parties to a complaint. We are dealing with the continuing validity of an order issued by the
Secretary pursuant to explicit statutory authority. Common sense dictates that, as the Secretary
has been given explicit statutory authority to issue preliminary orders under the ERA, the
Secretary has also been given the authority to rescind such orders when they are no longer
justified. With such power of recision comes the authority to order that the parties be returned to
the status quo which existed prior to the issuance of the preliminary order.
This decision should come as no surprise to the parties. In the
Preliminary Order issued on September 11, 1995, the Secretary explicitly addressed LMES'
concern that it might not be able to recoup the attorney's fees award if it were determined that no
violation of the ERA whistleblower provision had occurred. In response the Secretary
emphasized
that, "given the authority contained in 29 C.F.R. § 18.36 (1994) to exclude an
attorney
from appearing before an ALJ for refusal to comply with directions, it is unlikely that
recoupment
of attorney's fees will present a significant problem."
CONCLUSION
For the foregoing reasons the preliminary order, issued on
September 11, 1995, is rescinded, and counsel for Complainant is ordered to repay the attorney's
fees and costs paid to him pursuant to that order.
SO ORDERED.
DAVID A. O'BRIEN
Chair
KARL J. SANDSTROM
Member
JOYCE D. MILLER
Alternate Member
[ENDNOTES] 1 Varnadore II. See Varnadore v. Oak Ridge National Laboratories and Lockheed
Martin Corporation, Case Nos. 92-CAA-2, 92-CAA-5, 93-CAA-1, 94-CAA-2, 94-CAA-3,
95-ERA- 1, Final Consolidated Decision and Ord.. June 14, 1996. at 3.
2
Upon the conclusion of [a public hearing before an ALJ] and the issuance of a
recommended decision that the complaint has merit. the Secretary shall issue a preliminary
order providing the relief prescribed in subparagraph (B), but may not order compensatory
damages pending a final order.
Subparagraph 5851(b)(2)(B) describes the various kinds of relief that are available should the
Secretary determine that there has been a violation of the ERA whistleblower provision.
3 Varnadore II, R. O. at 11. The Secretary's P. O. also included these provisions. P.O. at
11.
4
Secretary's Order 2-96 contains a comprehensive list of the statutes,
executive order, and regulations under which the Administrative Review Board now issues final
agency decisions. The final procedural revisions to the regulations implementing this
reorganization are found at 61 Fed. Reg. 19982.
5
(B) If, in response to a complaint filed under paragraph (1), the Secretary
determines that a violation of subsection (a) of this section has occurred, the Secretary shall
order the person who committed such violation to (I) take affirmative action to abate the
violation, and (ii) reinstate the complainant to his former position together with the
compensation (including back pay), terms, conditions, and privileges of his employment,
and the Secretary may order such person to provide compensatory damages to the
complainant. If an order is issued under this paragraph, the Secretary, at the request of the
complainant shall assess against the person against whom the order is issued a sum equal to
the aggregate amount of all costs and expenses (including attorneys' and expert witness
fees) reasonably incurred, as determined by the Secretary, by the complainant for, or in
connection with, the bringing of the complaint upon which the order was issued.
6
