[ v55 p432 ]
55 FLRA No. 71
AMERICAN FEDERATION OF GOVERNMENT
EMPLOYEES, LOCAL 987
53 FLRA 364 (1997)
DECISION AND ORDER
ON APPLICATION FOR ATTORNEY FEES
April 30, 1999
Before the Authority: Phyllis N. Segal, Chair; Donald S. Wasserman and Dale Cabaniss, Members [n1]
I. Statement of the Case
This application for attorney fees under the Equal Access to Justice Act (EAJA), 5 U.S.C. § 504(a), was filed by the Respondent American Federation of Government Employees, Local 987 (Union). The Administrative Law Judge (Judge) found that the position of the General Counsel in the underlying unfair labor practice (ULP) case was not substantially justified and granted the fee application in the amount of $9,937.50. The General Counsel has filed exceptions to the Judge's ruling and the Union has opposed those exceptions.
On consideration of the attached decision of the Judge and the entire record, we adopt the Judge's findings, conclusions, and recommendations only to the extent consistent with this decision. Contrary to the Judge, we conclude that the position of the General Counsel was substantially justified and thus deny the Union's fee petition.
II. Background and Judge's Decision
In American Federation of Government Employees, Local 987, Warner Robins, Georgia and Nedra T. Bradley, 46 FLRA 1048 (1992) (AFGE Local 987 I), the Authority held that the Union violated section 7116(b)(1) and (8) of the Federal Labor-Management Relations Statute (Statute) by denying readmission to membership to the Charging Party, Nedra Bradley. The Union had refused membership due to certain alleged improprieties by Bradley while she was Union president and Bradley resigned from the Union before discipline was brought against her. In its remedial order, the Authority ordered the Union, among other things, to "unconditionally offer to admit [Bradley] to full membership in the Union, and make her whole, consistent with applicable laws and regulations, for any loss of benefits she may have suffered by reason of its denial of membership to her." Id. at 1049-50. The manner in which the Union complied with this order led to a second ULP complaint which was eventually dismissed in American Federation of Government Employees, Local 987 and Nedra T. Bradley, 53 FLRA 364 (1997) (AFGE Local 987 II), prompting the Union's current petition in this case for attorney fees.
1. The Union's Discipline of Bradley
In February 1993, a little more than a month after the Authority issued the remedial order in AFGE Local 987 I, the Union initiated disciplinary proceedings against Bradley based on the alleged improprieties. At the time it initiated disciplinary action, the Union had not complied with the Authority's remedial order by reinstating Bradley to membership.
In August 1993 the Union found Bradley culpable on the charges. Bradley had been given notice of the charges and an opportunity to respond, but declined to appear at the disciplinary hearing. She was ordered to repay the money she was found to have misappropriated from the Union's treasury, and thereafter serve a 5 year suspension from membership. In September 1993 Bradley filed a second ULP charge attacking this Union discipline.
On December 15, 1993, the General Counsel issued a complaint based on Bradley's ULP charge. The complaint alleged in relevant part that the Union violated the Statute by disciplining and suspending Bradley from Union membership at a time when the Union was obliged, pursuant to the Authority's remedial order in AFGE Local 987 I, to have reinstated Bradley to Union membership. The complaint alleged that by so doing, the Union denied Bradley the right to Union membership in violation of sections 7116(b)(8) and 7116(c) of the Statute. The complaint also alleged that the Union interfered with her rights under section 7102, thereby violating section 7116(b)(1). [ v55 p433 ]
2. Judicial Review by the 11th Circuit
In February 1993, subsequent to initiating disciplinary action against Bradley, the Union appealed the Authority's ruling in AFGE Local 987 I to the United States Court of Appeals for the Eleventh Circuit. The Authority filed a cross-application for enforcement of its order.
However, on December 10, 1993, prior to the Court acting on its judicial petition, the Union moved the court of appeals to dismiss its appeal. In support of its motion, the Union claimed that its August 1993 discipline of Bradley, and other actions such as its retroactive reinstatement of Bradley to membership, made further court proceedings on enforcement of the Authority's order unnecessary. The court granted the Union's motion to dismiss its petition for review.
On January 28, 1994, in an unpublished memorandum opinion, the Eleventh Circuit granted the Authority's cross-application for enforcement in AFGE Local 987 I. AFGE v. FLRA, 15 F.3d 1097 (11th Cir. 1994). The court specifically noted, however, that its ruling should not be construed as governing any issues raised by the Union's disciplinary action against Bradley that were then pending in the ULP proceeding brought by the General Counsel.
3. The Authority's Decision in AFGE Local 987 II
In AFGE Local 987 II, the Authority dismissed the second complaint against the Union. In reaching this determination, the Authority concluded that an allegation of noncompliance with an Authority order does not constitute a separate ULP violation. 53 FLRA at 369. Additionally, the Authority held that under section 7116(c) of the Statute, a union can discipline a nonmember for conduct occurring while the employee was a member of the union. Id. at 370. In this regard, the Authority made two observations addressing the General Counsel's assertion that the Union was obliged to reinstate Bradley before taking disciplinary action against her. First, the Authority noted that events can occur after issuance of a remedial order that excuse or render moot compliance with the order. The Union's taking lawful discipline against Bradley was such an event. Second, the Authority stated that no good purpose would be served by requiring the Union to rescind the discipline, readmit Bradley to membership, and then rerun the disciplinary action. Id.
B. The Union's Application for Attorney Fees and the General Counsel's Opposition Thereto
The Union filed a fee application asserting that it was the prevailing party in AFGE Local 987 II and that the General Counsel's position in prosecuting the complaint was not substantially justified under the EAJA. More specifically, the Union argued that the General Counsel based its prosecution of the complaint solely on the theory that the Union had failed to comply with the Authority's order in AFGE Local 987 I. Further, the Union argued that the General Counsel never established a theory for why the Union could not lawfully discipline a former member. The Union sought a total of $17,057 in fees and costs from the General Counsel under the EAJA.
The General Counsel responded that there was a reasonable basis in law and fact for maintaining the litigation. Noting that the dismissal of the complaint in itself does not establish lack of substantial justification, the General Counsel pointed to several factors demonstrating that he acted reasonably in prosecuting the complaint. Specifically, and as relevant here, the General Counsel argued that the complaint did not rely solely on the theory that the Union had failed to comply with the Authority's order in AFGE Local 987 I. Rather, the complaint relied on new conduct arising after the Authority issued its order, that is, the August 1993 discipline of Bradley.
C. The Judge's Decision on the Fee Application
The Judge noted that there was no dispute that the Union was the prevailing party in the case, and that the Union met the eligibility requirements as a party entitled to an award of fees under the EAJA. Rather, the sole issue to be resolved was whether the General Counsel's litigating position was "substantially justified" within the meaning of the EAJA.
The Judge rejected the General Counsel's claim that the violation in this case involved the Union's taking discipline against Bradley while it was subject to an Authority order to unconditionally reinstate her. In the Judge's view, the purpose of the General Counsel's ULP complaint was to enforce the Authority's order in AFGE Local 987 I and "the failure to comply with an Authority remedial order is not itself an unfair labor practice and it most assuredly does not become an unfair labor practice because Respondent takes action authorized by the Statute[.]" Judge's decision at 6. Noting the established private sector law permitting a union to discipline a nonmember for conduct that occurs while a member, the Judge also rejected the General Counsel's [ v55 p434 ] claim that Bradley should have been a member of the Union when discipline was brought.
The Judge then considered whether the exception to fee liability under the EAJA, for litigation of a novel or untested legal theory, warranted denial of the application. In this connection, the Judge stated that the theory that a union's right to discipline may be subjugated to a prior Authority order directing unconditional reinstatement of an individual to membership, "has no reasonable basis in law." Judge's decision at 9. In support of this conclusion, the Judge again referenced the requirement that the Authority enforce its orders in the courts of appeals, not in new ULP proceedings.
Having concluded that the position of the General Counsel was not substantially justified, the Judge analyzed the Union's fee petition. After excluding several hours of work claimed by Union counsel and declining to adopt the higher hourly rate sought by the Union, the Judge awarded the Union fees in the amount of $9,937.50.
III. Positions of The Parties
A. The General Counsel's Exceptions
As pertinent here, the General Counsel argues that there was a reasonable basis, in fact and law, for litigating the complaint in AFGE Local 987 II. As for the facts, the General Counsel relies on: the Authority's finding and order in AFGE Local 987 I; the Union's failure to admit Bradley to membership prior to imposing discipline; and, the 11th Circuit's explicit statement that its order was not intended to resolve the then pending disciplinary action.
As for a sufficient basis in law for pursuing the complaint in AFGE Local 987 II, the General Counsel points out that the precedent relied on by the Union and the Judge to support the Union's discipline did not involve the facts at issue here, i.e., discipline taken against a nonmember while the Union was the subject of a reinstatement order concerning the nonmember. In the General Counsel's view, a union's right to discipline in these novel factual circumstances is appropriately addressed by the Authority. The General Counsel then argues that the Judge erred in finding there was no substantial justification for the litigation in AFGE Local 987 II based on the need to pursue a contempt proceeding in AFGE Local 987 I. Rather, the reasonableness of the position must be determined solely with respect to the facts in AFGE Local 987 II.
B. The Union's Opposition
The Union, in its opposition, argues that the General Counsel never had a credible theory on which to proceed, much less a "substantially justified" one. The Union asserts in this connection that the facts and law clearly establish that the Union acted lawfully and the General Counsel lacked a basis for pursuing the complaint.
As for pertinent facts here, the Union notes that the General Counsel dismissed other ULP charges filed by Bradley concerning the Union's investigation leading up to the discipline of Bradley and this is inconsistent with issuing the complaint because of the discipline taken. Further, the General Counsel "blurred" the compliance issue in AFGE Local 987 I and the merits issues in AFGE Local 987 II. In this regard, the Union argues that it was found to have complied with AFGE Local 987 I and the General Counsel therefore cannot claim that the Union failed to take steps to comply with the Authority's reinstatement order. In the Union's view, the 11th Circuit's statement does not serve as a justification for the General Counsel pursuing this complaint.
The Union asserts that the General Counsel has failed to enunciate a legal theory supporting its actions. In the Union's view, the Authority clearly upheld the Union's right to take disciplinary action against Bradley in this case. Moreover, the Union claims that there was nothing novel about the General Counsel's legal theory.
IV. Analysis and Conclusions
A. Applicable Principles Under the EAJA
Pursuant to the EAJA (5 U.S.C. § 504(a)(1)), and the Authority's regulations implementing the EAJA (5 C.F.R. §§ 2430.1 et seq.), an eligible entity may receive an award of attorney fees when it is the prevailing party in an unfair labor practice proceeding. However, notwithstanding eligibility and success, an eligible entity may not receive an award of attorney fees if "the General Counsel's position in the proceeding was substantially justified, or special circumstances make an award unjust." 5 C.F.R. § 2430.1. See Temp Tech Industries v. NLRB, 756 F.2d 586, 589 (7th Cir. 1985).
The determination of whether the position of the General Counsel is "substantially justified" depends on whether the position has a "reasonable basis both in law and fact[,]" or put another way, whether it is "justified to a degree that could satisfy a reasonable person." American Federation of Government Employees, Local 1857, 48 FLRA 900, 901 (1993) (AFGE Local 1857), quoting Pierce v. Underwood, 487 U.S. 552, 565 [ v55 p435 ] (1988). The General Counsel has the burden of establishing the reasonableness of the position on the law and the facts. AFGE Local 1857, 48 FLRA at 901; See Hess Mechanical Corp. v. NLRB, 112 F.3d 146, 149 (4th Cir. 1997); Phil Smidt & Son, Inc. v. NLRB, 810 F.2d 638, 641 (7th Cir. 1987). However, the failure to prevail in the litigation does not necessarily mean that the position asserted was not substantially justified. Pierce v. Underwood, 487 U.S. at 565-66. Indeed, if the General Counsel's mere failure to prevail triggered the right to attorney fees under the EAJA, then the statute's "substantially justified" requirement would be rendered superfluous.
Additionally, substantial justification has been found and fee awards have thus been denied where the government has "advanc[ed] in good faith the novel but credible extensions and interpretations of the law that often underlie vigorous enforcement efforts." H.R. Rep. No. 1418, 96th Cong., 2nd Sess. at 11, reprinted in 1980 U.S. Code Cong. & Ad. News 4953, 4990. This provision was intended as a "safety valve" for government agencies bringing actions against private parties, to allow for such "vigorous enforcement efforts." Id. See, e.g., Marcus v. Shalala, 17 F.3d 1033, 1037 (7th Cir. 1994) ("novelty of the question weighs in the government's favor" when deciding whether the government's position was substantially justified); Timms v. United States, 742 F.2d 489, 492 (9th Cir. 1984) (government can show its position was substantially justified by showing that it advance a novel, yet credible position). The Authority has also considered the novelty of the General Counsel's legal theory in resolving a fee application, holding that novelty will not, in and of itself, substantially justify a prosecution or serve as a special circumstance that will render a fee award unjust. American Federation of Government Employees, Local 495, AFL-CIO (Veterans Administration Medical Center, Tucson, Arizona) 22 FLRA 966, 977 (1986) (AFGE, Local 495) (awarding fees where the General Counsel put forth a novel legal theory, but did not make out a prima facie case under the novel theory pursued).
The "special circumstances" that make a fee award unjust are not specifically described in the EAJA. As a result, courts have concluded "that the statutory language expresses a congressional directive for courts `to apply traditional equitable principles' in determining whether a prevailing party should receive a fee award under EAJA." Air Transport Association of Canada v. F.A.A., 156 F.3d 1329, 1333 (D.C. Cir. 1998), quoting Oguachuba v. Immigration and Naturalization Svc., 706 F.2d 93, 98 (2nd Cir. 1983) (Oguachuba).
B. EAJA Considerations in This Case
1. Prevailing Party and Eligibility Status
There is no dispute that the Union was the prevailing party in the AFGE Local 987 II proceeding. 5 C.F.R. § 2430.2(b). There is also no dispute that the Union here meets the eligibility requirements to receive an award under the EAJA. 5 C.F.R. § 2430.2(b)(1)-(4).
2. Factual Predicate of AFGE Local 987 II
The pertinent facts in this case are undisputed. The Union was found to have improperly denied Bradley membership in June 1991. To remedy this violation, in December 1992 the Authority ordered the Union to unconditionally reinstate her to membership. AFGE Local 987 I, 46 FLRA at 1049-50. Prior to complying with the Authority's remedial order to reinstate, however, the Union disciplined Bradley in August 1993. As a result, rather than reinstating Bradley to membership before effecting any discipline, the [U]nion instead disciplined her as a nonmember and, after discipline had been imposed, advised her that "the Union considered her to have been retroactively reinstated to membership" from the June 1991 to the effective date of the disciplinary action. AFGE Local 987 II, 53 FLRA at 367.
The General Counsel filed a complaint (AFGE Local 987 II) alleging, inter alia, that the Union violated the Statute by disciplining Bradley prior to complying with the Authority's remedial order. Subsequent to the lodging of the ULP complaint, in enforcing the Authority's decision in AFGE Local 987 I, the 11th Circuit noted that its order was "not intended to resolve any of the issues involving the Union's subsequent disciplinary action against Nedra Bradley that are currently pending in the related unfair labor practice proceeding." AFGE v. FLRA, 15 F.3d 1097.
3. Legal Predicate of AFGE Local 987 II
Prior to the AFGE Local 987 I decision, the Authority had not previously determined whether the mere failure to comply with an Authority remedial order was an unfair labor practice. Additionally, the Authority had not determined whether it was violative of the Statute for a labor organization to discipline a nonmember for conduct occurring while the individual was a member. Finally, the Authority had never considered whether a labor organization is entitled to discipline a nonmember when under an extant order to reinstate her to membership. [ v55 p436 ]
C. EAJA Determinations in this Case
We find in the circumstances of this case, where the Authority had not previously ruled on dispositive issues it decided in AFGE Local 987 II, that the General Counsel had a reasonable basis in fact and law to pursue the litigation. Accordingly, we conclude that the position of the General Counsel was substantially justified. Additionally, the special circumstances of this case make an award of fees unjust.
The factual predicate substantially justified the General Counsel's pursuit of the litigation in this case. The Union here only obeyed the Authority's order after it had effected its disciplinary action against Bradley. As a result, Bradley was never actually admitted to full membership in accord with the Authority's order in AFGE Local 987 I, but was instead only retroactively readmitted after she had been suspended from membership. Additionally, the 11th Circuit, cognizant of the General Counsel's pending unfair labor practice proceeding concerning this discipline, specified that its enforcement of the Authority's decision in AFGE Local 987 I was not to be construed as governing any issues in the disciplinary case. These facts raise legitimate questions concerning the propriety of the disciplinary action taken by the Union and thus provide a reasonable basis for the General Counsel's actions in AFGE Local 987 II.
The General Counsel's legal position also substantially justified the prosecution of the complaint in AFGE Local 987 II. Prior to the Authority's decision in AFGE Local 987 II, the Authority had never determined whether noncompliance with an Authority remedial order was an unfair labor practice, nor had the Authority considered whether a union could permissibly discipline a nonmember for actions taken while a member. Although the Authority, following private sector and Executive Order precedent, concluded that neither of these actions constituted a ULP 53 FLRA at 369, this does not mean that the General Counsel "blurred" the compliance issue in AFGE Local 987 II with the merits issue, as alleged by the Union, and was therefore not substantially justified in putting the matter before the Authority for resolution in the first instance. Similarly, the Authority's observation that no purpose would be served in requiring the union to rescind the discipline, readmit Bradley to membership, and then rerun the disciplinary action was an exercise of remedial discretion rather than a reflection of the Authority's opinion of whether the General Counsel was substantially justified in pursuing the case.
Moreover, even if the General Counsel should reasonably have surmised that neither of these previously unaddressed legal theories, independently and of themselves constituted a ULP, it was not unreasonable for him to have pursued the separate theory that together these actions violated the Statute. Notwithstanding the Authority's rejection of this argument and dismissal of the complaint, we conclude that the General Counsel had a reasonable basis for pursuing the novel theory that the Union was not permitted to discipline Bradley as a nonmember at a time when it was under an Authority order to unconditionally reinstate her. Several considerations support this conclusion.
First, this was a matter of first impression requiring the balancing of the Union's right to take disciplinary action against the Union's obligation to comply with the Authority's order concerning Bradley. The case presented novel questions and it was "reasonable for the General Counsel to question the applicability of existing Authority law to the facts of the case[.]" AFGE Local 1857, 48 FLRA at 907. As such, "this is not a case [where] the General Counsel decided to `take a long shot' by, for example, arguing that controlling precedent should be overruled." Teamsters Local Union No. 741, 321 NLRB 886, 890 n.17 (1996) (denying fees under the EAJA).
Second, the case is clearly distinguishable from precedent where attorney fees have been awarded under the EAJA. For example and as noted earlier, in AFGE Local 495 the Authority held that the General Counsel's pursuit of a novel theory did not justify his failure to have established even a prima facie case under the novel legal theory pursued. 22 FLRA at 977. The General Counsel's case suffers from no such infirmity here. As noted above, no controlling Authority precedent in existence prior to the merits decision in AFGE Local 987 II governed resolution of the matter. We have been presented with no instance where an agency was found to have acted without substantial justification under the EAJA in circumstances like these.
Third, the purpose of permitting a recovery of attorney fees under the EAJA is "to deter the government from bringing unfounded suits or engaging in arbitrary or unjust administrative behavior." Oguachuba, 706 F.2d at 98. We do not find the General Counsel to have engaged in any such behavior in this case. Indeed, the Union acknowledges that the General Counsel dismissed other charges Bradley filed against the Union during this period. Rather than proving inconsistency, as the Union asserts, in our view this demonstrates that the General Counsel was exercising independent prosecutorial discretion concerning the relative merits of Bradley's charges against the Union. This conduct is entirely consistent with the General Counsel's autonomous, stat- [ v55 p437 ] utory role of filing and prosecuting complaints. 5 U.S.C. § 7104(f)(2)(B). As a public prosecutor, it is appropriate that the General Counsel, as in this case, "is not deterred from advancing in good faith credible extensions and interpretations of the law[.]" H.R. Rep. No. 1418, 96th Cong., 2nd Sess. at 11, reprinted in 1980 U.S. Code Cong. & Ad. News 4953, 4990.
We note and agree with our dissenting colleague's assertion that the Union had an institutional interest in addressing Bradley's alleged breach of fiduciary responsibilities. (p.3). Indeed the Authority recognized the Union's right to discipline Bradley for these alleged offenses in AFGE Local 987 II. However, we do not agree that it should have been apparent to the General Counsel that the Union's right to discipline Bradley necessarily predominated over its obligation to comply with the Authority's order in AFGE Local 987 I. In this respect, it should be noted that in Local 987 I, the Authority directed only that Bradley be returned to membership -- not to the fiduciary position she had previously held and allegedly abused.
Finally, in addition to our conclusion that the General Counsel's position in this case was substantially justified, we note that the special circumstances of this case would, if necessary, lead us to deny the Union attorney fees under the EAJA. This entire litigation was precipitated by the Union's insistence on disciplining Bradley prior to complying with the Authority's order on reinstatement. The course of action chosen by the Union raised legitimate questions under the Statute. Had the Union reinstated Bradley as required by the Authority's order in AFGE Local 987 I and thereafter disciplined Bradley, there would have been no theory, novel or otherwise, on which to issue a complaint. As a result, the prosecution in AFGE Local 987 II and ensuing current litigation over attorney fees could have been avoided while, at the same time, the Union's interest in taking disciplinary action against Bradley could have been satisfied. Although the Authority found that the Union's actions did not violate the Statute, in applying the traditional general principles of equity, we would deny counsel fees in this case.
The application for attorney fees is dismissed.
Footnote # 1 for 55 FLRA No. 71 - Authority's Decision