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44:1084(87)CO - - AFGE Local 2391 and Robert M. Wangeman - - 1992 FLRAdec CO - - v44 p1084

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[ v44 p1084 ]
44:1084(87)CO
The decision of the Authority follows:


44 FLRA No. 87

FEDERAL LABOR RELATIONS AUTHORITY

WASHINGTON, D.C.

AMERICAN FEDERATION OF GOVERNMENT EMPLOYEES

LOCAL 2391, AFL-CIO

(Respondent/Union)

and

ROBERT M. WANGEMAN

(Charging Party)

9-CO-70014

DECISION AND ORDER

ON APPLICATION FOR ATTORNEY FEES

April 30, 1992

Before Chairman McKee and Members Talkin and Armendariz.

I. Statement of the Case

This case is before the Authority on exceptions filed by the Union to the attached decision of the Administrative Law Judge. The General Counsel did not file an opposition.

The Judge awarded attorney fees to the Union, based on the "cost-plus" formula,(1) under 5 C.F.R Part 2430 of the Authority's Regulations, which implement the Equal Access to Justice Act (EAJA) of 1980, Pub. L. No. 96-481, codified at 5 U.S.C. § 504.

For the following reasons, we find that it is appropriate to award the Union attorney fees at market rates. We will modify the Judge's order accordingly.

II. Background and Judge's Decision

In the underlying unfair labor practice proceeding, the Judge concluded that the Union did not commit an unfair labor practice under section 7116(b)(1) of the Statute when the Union's president refused to rent an apartment to the charging party. As no exceptions were filed to the Judge's decision, the Authority adopted the findings, conclusions, and recommendations set forth therein and dismissed the complaint.

A Union-employed attorney represented the Union in the proceeding. Subsequently, the Union filed an application for attorney fees, based on market rates, and expenses. The General Counsel moved to dismiss the Union's application and argued, among other things, that attorney fees should be calculated based on the cost-plus formula rather than market rates.

The Judge found that the Union met the requirements of Part 2430 of the Authority's Regulations for an award of attorney fees and expenses under the EAJA. However, citing HHS, Region IV, the Judge concluded that the Union could not be awarded fees based on market rates and, instead, awarded fees based on the cost-plus formula.

III. Exceptions

The Union argues that the Judge erred by failing to award attorney fees based on market rates. The Union acknowledges that fees under the EAJA are capped at $75 per hour(2) but requests an "inflation adjustment" resulting in an award calculated at $84 per hour:

While [the Union's] submittal to the [Judge] did not ask for an inflation adjustment . . . [the Union] does here ask the FLRA to invalidate the FLRA's "rule making requirement" regarding the "removal" of said cap . . . and to declare that a reasonable inflation adjustment must be made available to any EAJA fee applicant . . . by the entity granting the EAJA fee award.

Exceptions at 9 n.7.(3) The Union also requests interest on the award.

IV. Analysis and Conclusions

Initially, we note that the EAJA provides that attorney fee awards shall be based upon prevailing market rates. 5 U.S.C. § 2412(d)(2)(A). In denying attorney fees based on market rates, the Judge relied on the Authority's decision in HHS, Region IV. In that case, the Authority concluded, as relevant here, that market-rate fees could not be awarded a union under the Back Pay Act, 5 U.S.C. § 5596, even if the union maintained a separate legal representation fund into which such fees would be paid. For this proposition the Authority cited, among other decisions, Goodrich v. Department of the Navy, 733 F.2d 1578, 1580 (Fed. Cir. 1984), cert. denied 469 U.S. 1189 (1985) (Goodrich), where the Court of Appeals for the Federal Circuit held that ethical concerns were raised by awards to union representation funds of market-rate fees because "the payment to the fund of legal fees that exceed the union's expenses . . . would result in the union's indirectly utilizing legal fees for its ordinary expenses."

In American Federation of Government Employees, AFL-CIO, Local 3882 v. FLRA, 944 F.2d 922 (D.C. Cir. 1991) (AFGE, Local 3882), the court held that attorney fee awards under the Back Pay Act may be based on market rates for union-employed attorneys where the union maintains a separate legal representation fund. Although the court acknowledged Goodrich, among other decisions, the court rejected the argument that the payment of market-rate fees in these circumstances raises ethical concerns. The court found that the fees received by the union's attorneys in AFGE, Local 3882 would be placed in the union's legal representation fund, an account which was separate from the union's general treasury, controlled solely by the union's general counsel, and used only for legal work. The court concluded that the fund was "the very sort [it had] approved as a bulwark against unethical practice." Id. at 935 (footnote omitted).

Although the application for attorney fees in this case was filed under the EAJA, there is no reason for us to reach a different conclusion here than the court in AFGE, Local 3882 reached under the Back Pay Act. Indeed, as noted previously, the EAJA specifically provides for market-based fees. Further, the Union asserts, without contradiction, that at all times pertinent to this case it maintained the same representation fund as that in AFGE, Local 3882. Accordingly, consistent with AFGE, Local 3882, we will award attorney fees to the Union at market rates.

In the absence of exceptions by the General Counsel, we find, consistent with the Judge's decision, that 38.8 hours of legal representation were reasonably expended in the unfair labor practice proceeding. We also find, in the absence of any assertion to the contrary, that the $75 per hour cap, set forth in 5 U.S.C. § 504(c)(1)(A), is a reasonable market rate for San Francisco in 1987 and 1988. Finally, there is no dispute that an award of $1,021.84 in expenses is appropriate. Accordingly, we will order that $2,910 in attorney fees (38.8 hours multiplied by $75 per hour) and $1,021.84 in expenses be paid to the AFGE Legal Representation Fund.

As noted previously, the EAJA provides that fees may not be awarded in excess of $75 per hour unless "the agency determines by regulation" that a cost-of-living or other increase is necessary. 5 U.S.C. § 504(b)(1)(A). Consistent with this provision, section 2430.5 of the Authority's Regulations provides for the filing of petitions for rulemaking in these matters. As there is no basis on which to conclude that the Authority's Regulation is improper, we deny the Union's request that we invalidate it and, as the Union did not comply with the regulation in requesting a cost-of-living adjustment, we deny its request for such adjustment. Finally, we also reject the Union's request for interest on the attorney fee award. There is no statutory provision authorizing interest on fee awards under the EAJA. International Woodworkers of America, AFL-CIO v. Donovan, 792 F.2d 762, 766-67 (9th Cir. 1986).

V. Order

As provided in 5 C.F.R. § 2430.14, the Authority grants an award to Respondent in the amount of $2,910 in attorney fees and $1,021.84 in expenses. To obtain payment, the Union must follow the procedures set forth in 5 C.F.R. § 2430.14.




FOOTNOTES:
(If blank, the decision does not have footnotes.)
 

1. Under the cost-plus formula, the gross hourly compensation of a union-employed attorney is doubled to provide an allowance for overhead costs. See generally, Department of Health and Human Services, Health Care Financing Administration, Region IV, Atlanta, Georgia and National Treasury Employees Union, Chapter 210, 21 FLRA 910, 915-16 (1986) (HHS, Region IV).

2. 5 U.S.C. § 504(b)(1)(A) provides, in pertinent part:

(The amount of fees awarded . . . shall be based upon . . . market rates . . . except that . . . (ii) attorney or agent fees shall not be awarded in excess of $75 per hour unless the agency determines by regulation that an increase in the cost of living or a special factor . . . justifies a higher fee.)[.]

3. The Union refers to section 2430.5 of our Regulations, which provides:

Any person may file with the Authority a petition under § 2429.28 of these rules for rulemaking to increase the maximum rate for attorney fees. The petition should specify the rate the petitioner believes should be established and explain fully the reasons why the higher rate is warranted.

Section 2429.28 of the Regulations provides:

Petitions for amendment of regulations.

Any interested person may petition the Authority . . . in writing for amendments to any portion of these regulations. Such petition shall identify the portion of the regulations involved and provide the specific language of the proposed amendment together with a statement of grounds in support of such petition.