Before me for review is the Recommended Decision and order
Approving Settlement and Dismissing Complaint (R.D. and O.)
issued, on April 4, 1989, by Administrative Law Judge (ALJ) Paul
H. Teitler in the above-captioned case, which arises under the
employee protection provision of the Clean Air Act, 42 U.S.C.
§ 7622 (1982). The ALJ finds that a settlement entered into by
the parties at the conclusion of the hearing is "fair, adequate
and reasonable", and recommends that the settlement be approved
and the complaint be dismissed. R.D. and O. at 3.
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Upon a careful review of the record in this case, I find
that I cannot accept the ALJ's recommendation, and I remand this
case to him for appropriate action as indicated below.
My primary reason for not accepting the ALJ's recommendation
is that it appears from the record in this case that the parties
have not entered into a final settlement. While the terms of a
settlement were read into the record by counsel for the
Respondent and these terms were agreed to by Complainant and the
building manager who testified for Respondent, it appears that
it was not the intention of the parties or the ALJ that the
stipulation on the record would constitute the actual settlement
agreement. See Hearing Transcript (T.) at 152-4. This is
evidenced by the following discussion, which took place after
the terms of the agreement were read into the record.
JUDGE TEITLER: Okay, accordingly, it is now four
o'clock and we have concluded the proceedings on this
particular case, with a settlement. The attorneys may
submit, on notice to each other, a proposed settlement,
any provisions of a proposed settlement.
I have to wait until I get the transcript before I
can write the order, in any event. So the transcript
will be here in about two weeks and then I will write
the order but, in any event, by that time you should
send me a stipulation that you both agree and signed by
the parties and if you're going to exchange releases,
you should do that too and I should get a copy of the
releases.
T. at 154. The record, however, does not contain any written
document, either a stipulation or release, which was signed by
the parties and which indicated that the parties were settling
the case on the basis of the terms proposed at the hearing.
Furthermore, it is not clear whether Al Schwadel, the
building manager for Respondent, has the authority to settle the
case for Respondent. Mr. Schwadel testified that he is an
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employee of E.J. Investments which manages the property located
at 179 South Harrison Street, East Orange, New Jersey, and that
he is the "general overseer of everything that goes on there."
T. at 73. Neither his testimony nor anything else in the record
reveals whether the relationship between Mr. Schwadel or E.J.
Investments with Respondent, 179 South Street Venture,
encompasses the authority to settle this complaint against
Respondent.
Accordingly, I remand this case to the ALJ for receipt of a
settlement agreement signed by Complainant and by an authorized
representative of Respondent. Upon receipt of such agreement,
the ALJ should evaluate its terms and submit to me a
recommendation as to whether in his view it is fair, adequate and
reasonable. Should the parties fail to submit an agreement of
settlement, I direct the ALJ to issue a recommended decision and
order on the merits of this case.
One further note. The ALJ, under the guise of including an
attorney fee award in the settlement, approved the amount of the
attorney fee which Complainant would pay to his counsel. T. at
154. Where attorney fees are incorporated in an agreement, the
ALJ does not approve the fee amount. If, however, the parties
submit an agreement providing for Complainant to pay his
attorney, the ALJ must take into consideration whether the net
amount to be received by Complainant is fair, adequate and
reasonable.
Moreover, the ALJ's approval of the attorney fee appears to
have been based solely on the fact that Complainant and his
counsel had a prior fee arrangement whereby Complainant was to
pay his counsel one-third of the amount recovered. Should the
ALJ issue a recommended decision on the merits of this case
finding that Respondent violated the CAA, the ALJ is required, if
requested by Complainant, to assess against Respondent such fees
as were "reasonably incurred." 42 U.S.C. § 7622 (b) (2) (B). In
such case, the fee arrangement between Complainant and his
counsel would not control. Rather Complainant would have the
burden to establish the reasonableness of the fee, and, to
accomplish this, would need to submit to the ALJ a fee petition
detailing the work performed, the time spent on such work, and
the hourly rate of those performing the work. On review of the
fee petition and objections, if any, raised by Respondent, the
ALJ would determine a reasonable fee to be paid by Respondent to
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Complainant's attorney. See Lindy Bros. v. American Radiator and
Standard Sanitary Corp., 540 F.2d 102 (3rd Cir. 1976); Lindy
Bros. v. American Radiator and Standard Sanitary Corp., 487 F.2d
161 (3rd Cir. 1973); and Nat. Ass'n of Concerned Veterans v. Sec.
of Defense, 675 F.2d 1319 (D.C. Cir. 1982) for applicable
standards for award of attorney fees.
SO ORDERED.
ELIZABETH DOLE
Secretary of Labor
Washington, D.C.
[ENDNOTES]
1 Messrs. Maguire and Affaunt are
counsel for Respondent and
Complainant, respectively.
