[ v56 p644 ]
56 FLRA No. 103
U.S. DEPARTMENT OF DEFENSE
FORT MCCLELLAN SCHOOLS
FORT MCCLELLAN, ALABAMA
September 15, 2000
Before the Authority: Donald S. Wasserman, Chairman and Dale Cabaniss, Member.
Decision by Chairman Wasserman for the Authority.
I. Statement of the Case
This matter is before the Authority on exceptions to an award of Arbitrator Cary J. Williams filed by the Union under section 7122(a) of the Federal Service Labor-Management Relations Statute (the Statute) and part 2425 of the Authority's Regulations. The Agency filed an opposition to the Union's exceptions.
The Arbitrator directed the Agency to provide certain bargaining unit employees with back pay. The Arbitrator also awarded attorney fees to the Union's counsel, at a reduced hourly rate. For the following reasons, we conclude that the Union has failed to establish that the award is deficient under section 7122(a) of the Statute. Accordingly, we deny the Union's exceptions.
II. Background & Arbitrator's Award
The Arbitrator directed the Agency to provide certain unit employees with back pay to remedy the Agency's improper refusal to provide them "longevity pay." Award at 1. Subsequently, the Union requested attorney fees from the Agency and, when the request was not resolved, the Union submitted the attorney fee request to the Arbitrator.
As relevant here, the Union's counsel claimed 94.2 hours of work at $250 per hour. The counsel submitted billing records to support the number of hours claimed and, to support the requested hourly rate, the counsel submitted the retainer agreement with the Union and two retainer agreements with other, private clients. The retainer agreements with the private clients provided for an hourly rate of $250. The retainer agreement with the Union provided that the "appropriate hourly rate is $250 per hour," but that the Union would be granted a discount of $50 per hour for any matter in which the Union was required to pay fees. Exceptions, Tab B. The Union also submitted: (1) a declaration from the Union president and others that the $250 hourly rate was reasonable; and (2) the Department of Justice's "Laffey" Matrix for the Washington D.C. area. [n1]
The Agency filed a response that did not challenge the entitlement to fees, but contended that the hourly rate should be $150, that the hours claimed were excessive, and that travel time related to the arbitration hearing should be reimbursed at a reduced hourly rate. With respect to the contested rate, the Agency submitted recent arbitration awards in which Union staff counsel had been awarded fees at rates ranging from $175 per hour to $220 per hour. The Agency also submitted declarations from attorneys in the Fort McClellan area, claiming lower billing rates than that requested by the Union's counsel in this case.
As relevant here, [n2] the Arbitrator concluded that the requested hourly rate should be reduced. The Arbitrator based his conclusion on a comparison between the Union's requested rate and rates billed by or awarded to other attorneys. In particular, the Arbitrator found that the Union's counsel had less experience than other attorneys who set lower hourly rates. Based on the Union counsel's advanced degree in labor law as well as his experience, the Arbitrator concluded that, although a rate higher than $175 was reasonable, "the claimed rate of $250 per hour is too high." Award at 5. Accordingly, the Arbitrator awarded fees to the Union's counsel at the rate of $200 per hour.
III. Positions of the Parties
A. Union's Exceptions
The Union asserts that the Arbitrator's award is "contrary to law." Exceptions at 3. The Union contends, in this connection, that the Arbitrator failed to provide any "rationale, articulation, or explanation" for [ v56 p645 ] his decision to reduce the hourly fee, and that the record is "completely void" of evidence that the requested rate was unreasonable. Id. at 6-7. The Union also contends that the record shows that, as a matter of law, the fee award should be modified to reflect $250 as the reasonable hourly rate. Citing Department of the Air Force Headquarters, 832D Combat Support Group DPCE, Luke Air Force Base, Arizona, 32 FLRA 1084, 1111-12 (1988) (Luke AFB), the Union asserts that, where an applicant for attorney fees has a prior billing history, the reasonable hourly rate is the established rate. According to the Union, its retainer agreement with the Union's counsel, as well as the retainer agreements between the Union's counsel and other, private clients, demonstrate that $250 per hour is reasonable.
B. Agency's Opposition [n3]
The Agency asserts that the award is fully articulated and reasoned. In this regard, the Agency argues that the Arbitrator expressly addressed the evidence submitted by the Union's counsel. The Agency also asserts that the relevant geographic area for determining the prevailing market rate for attorney fees is normally the place of hearing. According to the Agency, evidence shows that the appropriate prevailing market rate is between $85 and $200 per hour, and the Union has not demonstrated that the Union's counsel is entitled to an enhanced fee.
IV. Analysis and Conclusions
The Union claims that the Arbitrator's reduction in the requested hourly rate is contrary to law. When a party's exceptions involve an award's consistency with law, we review the questions of law raised by the arbitrator's award and the party's exceptions de novo. National Treasury Employees Union, Chapter 24 and U.S. Department of the Treasury, Internal Revenue Service, 50 FLRA 330, 332 (1995) (citing U.S. Customs Service v. FLRA, 43 F.3d 682, 686-87 (D.C. Cir. 1994)). In applying a de novo standard of review, the Authority assesses whether the arbitrator's legal conclusions are consistent with the applicable standard of law. See National Federation of Federal Employees, Local 1437 and U.S. Department of the Army, Army Research, Development and Engineering Center, 53 FLRA 1703, 1710 (1998). In making that assessment, the Authority defers to the arbitrator's underlying factual findings. See id.
A. Statutory Requirements for Attorney Fees
The threshold requirement for entitlement to attorney fees under the Back Pay Act, 5 U.S.C. § 5596, is a finding that the grievant was affected by an unjustified or unwarranted personnel action, which resulted in the withdrawal or reduction of the grievant's pay, allowances, or differentials. See U.S. Department of Defense, Defense Distribution Region East, New Cumberland, Pennsylvania and American Federation of Government Employees, Local 2004, 51 FLRA 155, 158 (1995). Once such a finding is made, the Act requires that an award of fees must be: (1) in conjunction with an award of backpay to the grievant on correction of the personnel action; (2) reasonable and related to the personnel action; and (3) in accordance with the standards established under 5 U.S.C. § 7701(g), which pertains to attorney fee awards by the Merit Systems Protection Board (MSPB). See id.
Section 7701(g)(1), which applies to all cases except those involving allegations of employment discrimination, applies in this case. The prerequisites for an award of attorney fees under section 7701(g)(1) are: (1) the employee must be the prevailing party; (2) the award of fees must be warranted in the interest of justice; (3) the amount of the fees must be reasonable; and (4) the fees must have been incurred by the employee. See id. An award resolving a request for attorney fees under section 7701(g)(1) must set forth specific findings supporting determinations on each pertinent statutory requirement. See id. Where an award does not sufficiently explain the determinations, the Authority will examine the record to see if it permits the Authority to resolve the matter. If so, the Authority will modify the award or deny the exception as appropriate. If not, the award will be remanded for further proceedings. See U.S. Department of Agriculture, Animal and Plant Health Inspection Service, Plant Protection and Quarantine and National Association of Agriculture Employees, 53 FLRA 1688, 1695 (1998).
An agreed-upon fee between client and counsel is presumptively the "maximum reasonable fee which may be awarded absent clear evidence to the contrary." Luke AFB, 32 FLRA at 1108 (citing O'Donnell v. Department of the Interior, 2 MSPB 445, 455 (1980) (O'Donnell)). The presumption is rebuttable by convincing evidence that the counsel's customary rate for similar work is higher and either the agreed-upon rate was not based on marketplace considerations or was provided only because of the client's inability to pay. [ v56 p646 ] See Gensberg v. Department of Veterans Affairs, 85 MSPB 198, 206 (2000) (Gensberg). To establish a higher customary billing rate, the applicant must furnish specific evidence concerning billing rates during the relevant time periods. Such evidence can include retainer agreements, court awards, fees agreed upon in settlements, and affidavits. See Luke AFB, 32 FLRA at 1111-12; see also U.S. Department of Health and Human Services, Social Security Administration and American Federation of Government Employees, Local 1923, 48 FLRA 1040, 1053 (1993) (citations omitted).
B. The Award Is Not Contrary to Law
The Union correctly points out that the Arbitrator did not specifically address the Union's claim that $250 per hour was, as a matter of law, the presumptive rate. However, for the reasons that follow, we conclude that de novo application of applicable law to the facts of this case reveals that $200 per hour is the presumptive, reasonable hourly rate, and that there is insufficient evidence to rebut the presumption. As such, the award is not contrary to law.
As set forth above, Luke AFB and relevant MSPB precedent establish that the presumptive reasonable rate is that actually billed to the client. Here, that rate is evidenced by the retainer agreement between the Union and the Union's counsel. Although the retainer agreement contains a statement that the counsel's "appropriate" rate is $250 per hour, the retainer agreement itself provides that the Union is to be charged $200 per hour. Accordingly, $200 is presumptively the maximum reasonable fee.
In this connection, the Union has not addressed the rate it was charged or provided evidence sufficient to overcome the presumption that $200 per hour is the maximum reasonable rate. Specifically, there is no evidence that the reduced rate was premised on the Union's inability to pay a higher amount. See Gensberg, 85 MSPB at 206. There also is no evidence that the $200 per hour charged the Union is not a reflection of marketplace considerations. In fact, the record supports the conclusion that the reduced rate is a product of marketplace considerations. In this regard, the Union president stated that the reduced rate was "in recognition of providing [the Union's counsel] with an `anchor' client as he was starting his law practice." Exceptions at Tab F, 9.
In these circumstances, we conclude that the award reducing the requested hourly fee is not contrary to law. In so doing, we note that, in O'Donnell, as here, the attorney charged a reduced fee to a union client. In awarding fees based on the actual, reduced fee, the MSPB noted that a reduced fee "is a normal commercial billing practice for legal practitioners with clients such as labor unions [that] are commonly expected, if not explicitly understood, to produce a high volume of legal business." O'Donnell, 2 MSPB at 455 n.11. The MSPB stated that "ordinary experience warrants the presumption that private law firms do not operate as [charitable] institutions, and that a bill rendered by such a firm accurately reflects the . . . maximum fee that is commercially reasonable under the circumstances." Id. at 455. No reason is argued that the O'Donnell rationale does not also apply here.
The Union's exceptions are denied.
Footnote # 1 for 56 FLRA No. 103
The Laffey Matrix is used by courts to determine reasonable prevailing rates for attorneys in the Washington, D.C. area. See U.S. Department of the Treasury, Internal Revenue Service, Washington, D.C. and National Treasury Employees Union, 48 FLRA 931, 932 n* (1993) (citations omitted).
Footnote # 2 for 56 FLRA No. 103
The Arbitrator also found that the hours claimed were not excessive, and that travel time should be reimbursed at the same rate as other hours. As the Agency did not except to these findings, they will not be addressed further.
Footnote # 3 for 56 FLRA No. 103
In addition to its other arguments, the Agency claims that the Authority should modify the award to provide an hourly rate of $150. This contention constitutes an exception to the Arbitrator's award and, as it was raised for the first time in the opposition, is dismissed as untimely. See, e.g., Picatinny Arsenal, U.S. Army Armament Research and Development Command, Dover, New Jersey and National Federation of Federal Employees, Local 1437, 7 FLRA 703, 703 n.2 (1982).