U.S. Department of Labor Administrative Review Board
200 Constitution Avenue, N.W.
Washington, D.C. 20210
ARB CASE NO. 96-150 ALJ CASE NOS. 87-ERA-6 87-ERA-40 DATE: January 7, 1997
In the Matter of:
JOHN C. REX,
COMPLAINANT,
v.
EBASCO SERVICES, INC.,
RESPONDENT,
and
THE SOLICITOR OF LABOR
on behalf of
THE ADMINISTRATOR, WAGE AND
HOUR DIVISION, EMPLOYMENT
STANDARDS ADMINISTRATION,
PARTY IN INTEREST.
BEFORE: THE ADMINISTRATIVE REVIEW BOARD
DECISION AND ORDER
This is an application for attorney's fees under the Equal
Access to Justice Act (EAJA), 5 U.S.C. § 504 (1988), for the defense of an
attorney disciplinary proceeding under 29 C.F.R. § 18.34(g)(3) (1996). That
proceeding arose out of alleged improper conduct by the attorneys for the Complainant
in the above captioned whistleblower case under the Energy Reorganization Act of
1974 (ERA), as amended, 42 U.S.C. § 5851 (1988).
After recommending dismissal of the ERA complaint, the
Administrative Law Judge (ALJ) in the whistleblower proceeding recommended taxing
the Respondent's attorney's fees and costs to the Complainant and his attorneys under
Rule 11 of the Federal Rules of Civil Procedure for pursuit of "this groundless
action." ALJ Recommended Decision and Order, May 12, 1989, slip op. at 12.
The Secretary rejected the ALJ's recommendation on fee shifting, finding that the
Department of Labor only had the authority under the ERA to order a Respondent to
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pay the Complainant's attorney's fees where the Secretary found a violation of that act.
But taking into consideration the ALJ's detailed recitation of counsel's "baseless
and willful conduct which amounted to an abuse of the administrative process,"
id. at 12, the Secretary ordered that a hearing be held to determine
counsel's fitness to practice before the Department of Labor Office of Administrative
Law Judges. See Secretary's Orders of March 4, 1994 and October 3,
1994. 29 C.F.R. § 18.34(g)(3). The disciplinary matter was assigned to another
ALJ but was settled. The attorney respondents in the disciplinary proceeding (the
applicants) now seek attorney's fees under the EAJA for the services of attorneys who
represented them in that proceeding.
The ALJ in this fee application proceeding held that the
EAJA does not apply to the attorney disciplinary proceeding because it was not an
"adversary adjudication" as that term is defined in the EAJA.
Recommended Decision and Order Denying Attorney Fees, Nov. 29, 1995 (Order
Denying Fees) slip op. at 6. The EAJA requires payment of attorney's fees to the
prevailing party, other than the United States, in an "adversary
adjudication," 5 U.S.C. § 504(a), which is defined as "an
adjudication under section 554 of [Title 5, Administrative Procedure Act,
(APA)]." 5 U.S.C. § 504(b)(1). The adjudication provisions of the APA,
5 U.S.C. § 554, apply to an "adjudication required by statute to be
determined on the record after an opportunity for an agency hearing . . . ." 5
U.S.C. § 554(a). The ALJ held that the ERA requirement of a hearing applies
only to the merits of Rex's whistleblower complaint and does not apply to the attorney
disciplinary proceeding. Order Denying Fees at 6; 42 U.S.C. § 5851(b)(2)(A).
We agree, and for the reasons discussed below, reject the applicants' exceptions to the
ALJ's Order Denying Fees.
The applicants point out that orders of the Secretary under
the ERA must be made "on the record after notice and opportunity for public
hearing," 42 U.S.C. § 5851(b)(2)(A). They assert that the disciplinary
proceeding was an "adversary adjudication" covered by the EAJA because
it arose as part of the hearing on the whistleblower complaint filed by Rex under the
ERA. We do not agree. The only hearings required by the ERA to be held on the
record after notice are those upon which an "order" of the Secretary may be
made under that act. "An order" of the Secretary under the ERA is one
which "either provide[s] the relief prescribed by subparagraph (B) or den[ies] the
complaint." The relief prescribed by subparagraph (B) is limited to an order
requiring a person found to have violated the Act to take affirmative action to abate the
violation, to reinstate the complainant with back pay, and to pay the complainant
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compensatory damages. The ERA is simply silent on any other agency proceedings
which may arise out of or be related to a whistleblower complaint.
This construction of the statute is consistent with the
Secretary's interpretation of other language utilizing the word "order" in
the ERA. Both in this case and in others, the Secretary has held that his authority to
require payment of attorney's fees is limited to cases in which "an order is
issued" finding a violation of the ERA and fees may only be assessed
"against the person against whom the order is issued." Rex v.
Ebasco, Mar. 4, 1994 Final Decision and Order, slip op. at 5; Rogers v.
Multi-Amp Corp.,Case No. 85-ERA-16, Sec'y. Dec. Dec. 18, 1992, slip op. at
2; cf. Abrams v. Roadway Express, Inc., Case No. 84-STA-2, Sec'y. Dec.
May 23, 1985, slip op. at 1-2; 42 U.S.C. § 5851(b)(2)(B). In addition, the
Secretary has held that only orders for relief under 42 U.S.C. § 5851(b)(2) are
enforceable in federal District Courts under 42 U.S.C. § 5851(d), but an ALJ's
orders relating to discovery are not. Malpass and Lewis v. General Electric
Co., Case Nos. 85-ERA-38 and 39, Sec'y. Dec. March 1, 1994, slip op at 21-22. These cases
reinforce our conclusion that the only hearings required by the ERA to
be made on the record are those upon which an order for relief to the complainant may
be based. Any collateral orders are not required by statute to be made on the record
after notice and opportunity for hearing.
The applicants also assert that the disciplinary proceeding
was an adversary adjudication under the APA because the regulations under which it
was conducted, the Rules of Practice and Procedure for Hearings Before the Office of
Administrative Law Judges, 29 C.F.R. § 18.26, require hearings to be held
"in conformance with the Administrative Procedure Act, 5 U.S.C. §
554." Consistent interpretations of EAJA have held, to the contrary, that
adoption of APA procedures by regulation does not meet the requirement for EAJA
coverage that an adversary adjudication "under section 554 [of the
APA]" must be "required by statute" to be held on the
record. 5 U.S.C. § 504 (emphasis added). Ardestani v. Immigration &
Naturalization Service, 502 U.S. 129, 133, 135 (1991) (regulations adopting
APA-type procedures do not establish EAJA coverage of proceeding; only proceedings
"subject to" or "governed by" APA meet EAJA requirements);
Friends of the Earth v. Reilly, 966 F.2d 690, 695 (D.C. Cir. 1992) (agency
decision to add protections matching APA and fact that proceeding is functional
equivalent of APA hearing irrelevant for EAJA coverage); Owens v.
Brock, 860 F.2d 1363, 1367 (6th Cir. 1988) (hearing must be governed by APA,
not just substantially equivalent, for EAJA coverage); Smedberg Machine & Tool
Co. v. Donovan, 730 F.2d 1089, 1092 (7th Cir. 1984) (agency regulations which
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permit hearings do not trigger EAJA coverage absent statutory provision for hearing).
1 In view of our finding on the
EAJA coverage issue, we need not address the questions of whether the government's position
was
substantially justified or whether special circumstances would have made an award of fees
unjust.
5 U.S.C. § 504(a)(1).