CASE NO: 84-ERA-5

In the Matter of

SHERRILL J. NOLDER
    Complainant

v.

RAYMOND KAISER ENGINEERS, INC.
    Respondent

Stephen T. Cox, Esq.
Barbara A. Zuras, Esq.
Hoberg, Finger, Brown, Cox and Molligan
Central Tower
703 Market Street
San Francisco, CA 94103
    For the Complainant

J. Patrick Hickey, Esq.
Shaw, Pittman, Potts and Trowbridge
1800 M. Street, N.W.
Washington, D.C. 20036

Gary R. Siniscalco, Esq.
Orrick, Herrington and Sutcliffe
600 Montgomery Street
San Francisco, CA 94111
    For the Respondent

Before: HENRY B. LASKY
    Administrative Law Judge

    This case arises out of a complaint alleging discriminatory employment practices on the part of Raymond Kaiser Engineers, Incorporated (Respondent) in violation of 42 U.S.C. §5851 of the Energy Reorganization Act, 42 U.S.C. §5801, et seq. and the implementing regulations found at 29 C.F.R. Part 24.

    Complainant Sherrill J. Nolder filed her complaint with the Wage and Hour Division of the Employment Standards Administration of the United States Department of Labor on March 15, 1983. A hearing was set in due course for May 22, 1984. However, on March 5, 1984, Complainant filed a letter requesting withdrawal of the March 15, 1983 complaint and Respondent filed an opposition to the withdrawal on March 7, 1984. Argument on Complainant's withdrawal motion was held on April 5, 1984. On May 25,1984, the undersigned issued a Recommended Decision and Order allowing Complainant to withdraw her complaint as registered and recommending dismissal with prejudice according to 29 C.F.R. §24.5(e)(4)( ii). I further noted that nothing in this Recommended Decision and Order was to be construed to impair Complainant's right to bring and prosecute any claims she may have based on state law or other Federal law besides 42 U.S.C. §5851 and its implementing regulations. In addition, the Recommended Decision and Order vacated the findings of the Wage and Hour Division of the Employment Standards Administration as embodied in the December 22, 1983 letter of Area Director Frank A. Conte, denied Complainant's motion to compel production of additional documents, and denied Respondent's motion for sanctions.

    On June 28, 1985, the Secretary of Labor issued a Final Decision and Order and concluded that Complainant must be allowed to withdraw her complaint without prejudice and remanded the matter to the undersigned to address whether or not the dismissal without prejudice be subject to conditions.

    On July 29, 1985, a conference call between counsel for the parties and the undersigned was held and the parties were instructed to file briefs with the undersigned on or before September 6, 1985 addressing the issues raised by the Final Decision and Order of the Secretary of Labor dated June 28, 1985 and for which the matter was remanded to the undersigned. In addition, oral argument was requested and scheduled for September 26, 1985 in San Francisco, California.

    On September 26, 1985, the parties appeared and the matter was fully argued and submitted for Recommended Decision and Order. Based on the arguments and representations of counsel, both oral and documentary, and all the evidence presented I make the following recommended findings of fact and conclusions of law and order as directed by the Secretary of Labor pursuant to his Final Decision and Order dated June 28, 1985. The Secretary of Labor has concluded that Complainant is entitled to withdraw her complaint and have her complaint dismissed without prejudice. With reference to whether conditions should be imposed, Respondent and the Complainant both agree to the condition that all discovery heretofore accomplished in this proceeding can be freely used in the pending State Court proceeding which is in the Superior Court of the State of California. Complainant seeks to pursue her remedies in the pending State Court matter.

    It is within the Administrative Law Judge's discretion to condition dismissal of the complaint without prejudice on Complainant's reimbursing Respondent for expenses incurred in these proceedings. Hamilton v. Firestone Tire and Rubber Co., Inc., 679 F.2d 143, 145 (9th Cir. 1982).

    In this case, Respondent requests that I impose a condition that Complainant pay to counsel for Respondent $58,460.37 in fees and costs expended by the Respondent for services rendered by counsel for Respondent in connection with this proceeding. Respondent argues that the imposition of such a condition is an ordinary practice of courts for the purpose of fully compensating Respondent for reasonable expenses incurred before dismissal and to deter vexatious litigation.

    At the outset, it is clear to the undersigned that the filing of complaints both before the Department of Labor and the Superior Court of the State of California was the conscientious decision of counsel for Complainant to preserve his client's remedies in the

two available forums when it was unclear which forum was the more appropriate or whether Complainant was limited to pursuit of her remedies before the Department of Labor. The good faith filing by counsel for Claimant in the two forums is of significance in this matter because there is no credible evidence to suggest that the proceeding instituted before the Department of Labor was in any way an attempt to file a vexatious claim against the Respondent. Even after the Superior Court determination that the proceeding in the Department of Labor was not an exclusive remedy there was some legal uncertainty with reference to this issue until the U.S. Supreme Court decided Silkwood v. Kerr-McGee Corp., 104 S.Ct. 615 (Jan 11, 1984); rehearing denied 104 S.Ct. 1430 (Feb. 27, 1984). Following that decision counsel for Complainant felt somewhat more secure in pursuing the Superior Court remedy and decided on February 28, 1984 to withdraw the complaint pending before the Department of Labor. Certainly, the uncertain legal position of the Complainant in pursuing a state court remedy prior to the Silkwood decision necessitated the action of counsel for Complainant in filing both proceedings and he acted not only in good faith, but was required to do so in consideration of the best interests of his client. Counsel for Complainant has been precluded from proceeding with the Superior Court remedy because of the existence of a Stay Order issued by the California Superior Court requiring either a final determination or dismissal of the proceeding pending before the Department of Labor as a condition precedent for the prosecution of Complainant's remedies in the State proceeding. It is quite apparent that counsel for Respondent has been successful in blocking Complainant from pursuing her State remedies as evidenced by his successful obtaining of the Stay Order from the Superior Court of the State of California, and by his successful resistance to the attempted removal of this Stay Order sought by counsel for Complainant. It is abundantly clear to the undersigned that Respondent prefers to have the matter litigated before the Department of Labor' whereas Complainant seeks to litigate the matter in the State Court forum and has been blocked from doing so by the successful legal maneuverings of counsel for Respondent.

    In the case of McLaughlin v. Cheshire, 676 F.2d 855, (D.C. Cir. 1982), the court clearly stated that in deciding a motion to dismiss without prejudice subject to conditions, the court's discretion is limited to imposing conditions that will alleviate harm (other than tactical disadvantage) that a Respondent will suffer on dismissal. A Respondent is not entitled to reimbursement

of expenses incurred in preparing work product that has been or will be useful in the continuing litigation in another forum between the parties. GAF Corporation v. Transamerican Insurance Co., 665 F.2d 364, 369 (D.C. Cir. 1981). Therefore, a Complainant should not be required to pay more than the difference between the Respondent's reasonable expenses and those they would have incurred had the Complainant filed the single proceeding in the State forum where the litigation will proceed. The central considerationin deciding issues such as this is the protection of the Respondent from undue prejudice or inconvenience caused by Complainant's dismissal.

    In the case at bar, Respondent seeks $58,460.37 in fees and costs for work performed by counsel for the Respondent relating to the Department of Labor investigation; obtaining a Stay Order of the Superior Court action; resisting attempts of the Complainant to lift the Superior Court's Stay Order; preparation of cancelled depositions; services in connection with the Complainant's Motion to Withdraw; expenses incurred in resisting Complainant's second attempt to lift the State Court stay of proceedings; services in connection with the hearing on remand before the undersigned held on September 26, 1985, and requested by Respondent; and services in connection with the preparation of the fee application to the undersigned seeking the $58,460.37 in fees.

    With the exception of some unnecessary work performed by counsel for Respondent in connection with depositions cancelled by the Claimant on February 28, 1984, I find that Respondent is not entitled to the imposition of fees and costs for the itemized services claimed as a condition for the withdrawal of the complaint without prejudice. Certainly, the work done by counsel for Respondent in connection with the Department of Labor investigation assists him in the acquisition of information which will be equally useable in the pending State Court proceeding. The services rendered by counsel for Respondent in obtaining the Superior Court Stay Order and resisting the Complainant's attempt to lift the Superior Court Stay Order on two occasions was all work done in the Superior Court of the State of California in connection with that proceeding and was work resulting in the successful blocking by Respondent of the Complainant from pursuing her State Court remedies. It would be grossly unfair to impose such costs on Complainant as such proceedings were initiated by the Respondent and Respondent has not suffered any undue prejudice, but to the contrary has benefited in the delay and blocking of the Complainant

from pursuing her State remedies. Similarly, and for the same reason, the services rendered by counsel for Respondent in connection with the Complainant's Motion to Withdraw before the undersigned and for the hearing of this matter on remand has not resulted in any undue prejudice to the Respondent, but has perpetuated the Respondent's delay and blocking of the Complainant's remedies in the State proceeding. Of significance is the fact that if the matter proceeded before the Department of Labor and Respondent were totally successful in its defense, Respondent would not be entitled to any award of attorneys fees and costs against the Complainant. Consequently, the ultimate success of the Respondent in having the Complainant subject to conditions for the withdrawal of her Department of Labor complaint should not be something for which the Complainant is assessed. Similarly, the fees claimed for preparation of the fee application are equally inappropriate as the preparation of fees and billing are a normal part of overhead and normally accomplished by administrative personnel, not warranting the extensive services of an attorney as claimed. The imposition of fees for such services upon the Complainant would amount to a penalty and would not protect a Respondent such as herein from undue prejudice.

    The amount claimed by Respondent of $58,460.37 is so excessive as to constitute an attempt to penalize the Complainant for withdrawing her complaint in this forum and force her to forego her remedies in the State forum where she prefers to litigate the matter. The bulk of Respondent's efforts have been to block Complainant's State Court remedies. The criteria which must be applied is to impose a condition for withdrawal which will alleviate Respondent's harm, not to punish Complainant or aid Respondent in its pre-trial tactics.

    As stated earlier, with reference to the services claimed by Respondent for preparation of cancelled depositions, counsel for Respondent seeks $12,391.53 for 62.75 hours of work preparation by two attorneys in preparing three witnesses for depositions which were cancelled the night before the depositions were scheduled in February, 1984, when Complainant elected to withdraw her Department of Labor proceeding. Respondent's counsel seeks $8,752.50 in fees and $3,639.03 in actual costs allegedly spent between February 26th and February 29th, 1984 in connection with the preparation of these cancelled depositions of Respondent's witnesses. I find that much of the time spent in connection with preparing Respondent's own witnesses for these depositions was not wasted, but assisted

Respondent in acquiring further knowledge and details of the case, which will be useable in the pending State Court proceeding. I further find that the need for two attorneys to perform the deposition preparations was unnecessary and could be accomplished by one attorney. I further find that the amount of time spent was patently excessive and allegedly included time spent in airplane flight from Washington D.C. to Oakland, California, during which counsel reviewed documents in connection with the matter. Certainly such study would aid the attorneys for Respondent in the future State Court proceeding. With reference to the claimed costs and expenses of $3,639.03, such an amount was for two attorneys, one of whom was unnecessary in my judgment, and it involves an excessive amount. While I do not dispute that such amounts were spent, as apparently such expenses were authorized by the corporate Respondent for its attorneys, such expenses were in excess of what was reasonable and necessary.

    The two counsel for Respondent travelled on first class air fares and obviously ate and enjoyed living accommodations for which their client was willing to pay. However, such an amount of money is in excess of appropriate, reasonable and necessary expenditures for which Complainant should be assessed as a result of her cancellation of the depositions. I find that at most eight hours for preparation of the witnesses, whose depositions were cancelled, is a generous and appropriate amount of time to be spent for such purposes and was unnecessarily incurred by the Respondent as a result of Complainant's late cancellation of the depositions. Such an amount of time spent by one attorney paid at counsel's hourly rate of $150.00 amounts to ,200.00 in fees for which Complainant should be assessed. A reasonable air fare of $600.00 for one attorney to travel from Washington, D.C. to Oakland, California is appropriate. Food and hotel accommodations for three days on February 26th, 27th, and 28th, 1984, at the rate of $150.00 per day amounts to an additional $450.00 in expenses for which Complainant should be assessed as a result of the deposition cancellations. It should be noted that the per diem of $150.00 per day is twice that which is payable by the Federal government for food and hotel accommodations to its employees while travelling on government service. While the amount authorized by the government is clearly inadequate, twice that amount as allowed herein is adequate, and constitutes a reasonable and necessary expense incurred by the Respondent as a result of the cancelled depositions. Consequently, ,050.00 in travel expenses and ,200.00 in unnecessary time reasonably required for the preparation of the deposition witnesses

should be paid by Complainant for her last minute cancellation of the depositions. Such an amount reasonably compensates Respondent for the time and expenses incurred by the Respondent from which there will be no benefit derived in the future State Court proceeding. Any deposition preparation will have to be redone in connection with depositions taken in the State Court proceeding. Any additional amount of time spent by counsel for Respondent in preparing for the depositions constitutes a part of the overall educational process of counsel for Respondent in this matter. The knowledge and information gained as a result of this preparation will be useable and beneficial in the future State Court proceeding.

    1. It is ORDERED that Sherrill J. Nolder's complaint filed March 15, 1983 under the Energy Reorganization Act, specifically under 42 U.S.C. §5851 and the implementing regulations found at 29 C.F.R. Part 24, is dismissed without prejudice subject to the following conditions:

    a. That all discovery acquired in connection with this proceeding by the parties can be used freely in the State Court proceeding as has been agreed by both parties to this proceeding;

    b. That Complainant pay to Respondent reasonable fees and expenses incurred in this proceeding in the generation of work product that will not be useful in the pending State Court litigation, in the amount of $2,250.00, resulting from the cancellation of depositions in February, 1984 pursuant to Complainant's election to withdraw her complaint before the Department of Labor;

    c. That Complainant has the option not be dismiss, and to proceed herein if the aforesaid conditions are deemed too onerous, and has thirty days from the date of this Recommended Decision and Order to advise the Secretary of Labor of her election with reference thereto.

    d. Should the Complainant decide not to withdraw her complaint herein the matter will be remanded to the undersigned for the purpose of expeditiously completing all outstanding discovery and setting the matter for hearing as contemplated by the applicable statutes and regulations.

       HENRY B. LASKY
       Administrative Law Judge

Dated: 09 OCT 1985
San Francisco, California

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