Personnel Manual (BUPERSMAN), Article C-1407. The Plaintiffs presented their complaints to the Bureau of Naval Personnel, the body which set the policy for cancellation of enlistment contracts. Through that body, the defendant has given its interpretation of the contract, and denied the cancellation request after reviewing the facts. The matter is appropriately before the Court, whether one views it as a review of an administration's determination of a question of law or in light of 28 U.S.C. § 1346 which gives this Court original jurisdiction over contract questions.
VI. THE PLAINTIFFS ARE ENTITLED TO A VRB WHICH WAS PAYABLE WHEN THEY SIGNED THEIR CONTRACTS FOR THE TWO-YEAR EXTENSION
Turning to the contracts involved in this suit, the Defendants argue that the two contracts should be viewed as one -- a six-year obligation in exchange for specialized training only. The Court does not see the contracts as one entity, however. They are two separate documents in form and substance. The first is for the regular four-year enlistment which any person desiring to enlist signs as a matter of course. This contract makes no promises. The second, the reenlistment contract, does make a promise -- in exchange for two additional years' obligation, the Navy would provide special schooling leading to a critical military skill rating.
There is no argument that the Plaintiffs have received the benefits of training because they signed reenlistment contracts long before their original enlistment contracts expired. The question is, however, whether these reenlistment contracts also provide for a VRB, in addition to the training, in exchange for the six-year obligation.
As the Court stated, supra, in Section IV of this Opinion, the statutory definition of the term "pay" as it applies to the military does include the variable reenlistment bonus. See 37 U.S.C. § 101(21) and § 308. The VRB was intended to induce first term reenlistment among those with such classified skills to insure the Navy maintained an adequate number of personnel in these areas. At the time the Plaintiffs signed their reenlistment contracts, the Navy was paying the VRB for this purpose. The Navy was thus benefiting from a guaranteed supply of personnel in critical areas. The Plaintiffs committed themselves to a total of six years in one of these critical skills which was receiving the VRB. If the Plaintiffs were bound to the reenlistment contract from the moment of its execution, then mutuality of agreement requires that the Defendants be likewise bound.
The cardinal rule of contract law that comes into play when analyzing the language of a written instrument is that the document must be considered in light of the situation and relationship of the parties, the circumstances surrounding them at the time of the contract, and the nature of the subject-matter and the apparent purpose of the contract. E.g., Fox v. Johnson & Wimsatt, Inc., 75 U.S.App.D.C. 211, 127 F.2d 729 (1942); Aronson v. K. Arakelian, Inc., 154 F.2d 231 (7th Cir. 1946).
Applying this rule to the facts of this case there can be no dispute that the Navy was using the VRB at the time the Plaintiffs signed their extension, to induce reenlistment in critical skill areas. The Plaintiffs committed themselves to six-year obligations in critical skill areas "in consideration for pay . . ." that the Defendants were paying all other critical skill first term enlistees. The Defendants cannot suspend the VRB's in a retroactive fashion, not after the Defendants have obtained their full bargained-for exchange under the contract, i.e., an obligated work force. Their suspension of the VRB payment can apply only to those first term reenlistments which were signed after July 1, 1972.
If the Defendants did not want to be committed to the payment of a VRB, they should have made a self-evident provision in the contract. The printed form contract, after all, was drafted solely by the Defendants; its language was entirely within their control.
In addition, it is elemental that a contract must be construed most strongly against the authors which in this case was the government. E.g., Alcoa S.S. Co. v. United States, 338 U.S. 421, 70 S. Ct. 190, 94 L. Ed. 225 (1950); John W. Johnson, Inc. v. Basic Construction Co., 139 U.S.App.D.C. 85, 429 F.2d 764 (1970).
Therefore, the Court holds that the Plaintiffs are entitled to recover the variable reenlistment bonus applicable to their critical skill rating which was in effect at the time they signed their reenlistment contract.
VII. THE AWARD OF ATTORNEY'S FEES MUST BE DETERMINED BY KISER CLASS ACTION STANDARD
Plaintiffs' counsel requests $175,000.00 as an appropriate award of attorney's fees. Counsel derived the figure of their proposed award both by a fee of $200 per hour or 25% of the estimated class recovery. Counsel have received a retainer of $2,700.00 from the representative Plaintiffs and have a contract for legal fees designating charges of $125 to $200 per hour for partners and counsel and $40 to $60 per hour for law clerks.
Counsel have submitted time records and a disbursement sheet. Counsel's affidavit filed August 29, 1973 indicates 378 1/2 hours of partner time and 221 hours of clerk time has been expended on this case. This sum is the total for both the New York and Washington offices.
Since this case was filed on March 30, 1973, Plaintiffs' counsel have appeared in court twice: the first appearance was on a motion for a temporary restraining order, to prevent the transfer of the Plaintiffs from their duty stations in the Washington area pending a determination of the case, and second, on a hearing on the cross motions for summary judgment. At the second court appearance, counsel was granted leave to file an amended complaint to prevent the case from being dismissed on a technicality -- a lack of subject matter jurisdiction. Upon filing their amended complaint, counsel submitted a memorandum on the question of attorney's fees as the Court had requested.
As this is a class action, the Court finds the appropriate standard for the determination of attorney's fees is the standard and policy considerations set out by this Court in the case of Kiser v. Miller, et al., 364 F. Supp. 1311, (1973). Applying that standard to the facts of this case, the Court has determined that an award of $14,729.00 is appropriate in this case.
In making this determination, the Court finds that $40 an hour is an appropriate reflection of the effort and skill expended in this case as well as the result achieved. The Court also finds that an hourly rate of $6.00 per hour is an appropriate fee for law clerks, considering the prevailing wage for their services.
Upon examination of the time records, the Court noted that a majority of the New York counsel's time was spent solely in telephone conferences with Washington counsel and that consisted of over 60 hours of the partner's recorded 82 hours. It also appears that there was a great amount of duplication of law clerk research effort between the two offices. Therefore, the Court has reduced the number of hours expended by the New York partner to 22 hours and has reduced the amount of clerk time recorded in each office by one-half, producing a total of 110 hours of clerk time. The total number of partners' time used to compute the fee was 318 1/4 hours. The total hourly fee then is $13,390.00 -- $12,730.00 for partner's time and $660.00 for clerk's time. In addition, the Court has added a 10% premium as an incentive fee, bringing the total award to $14,729.00. This award does not include the $2,700.00 retainer fee which will be dealt with infra.
The payment of attorney's fees will be made from the class recovery. Each class member's individual recovery will be taxed for his pro-rata share of the attorney's fee. In addition, counsel must refund the $2,700.00 in retainer fees to the representative plaintiffs, since counsel has received a Court award of attorneys' fees.
Section 2412 of Title 28 of the United States Code does not permit the Court to enter a judgment for costs against the United States government unless it is expressly authorized to do so by statute. Section 2412 expressly excludes the taxing of attorney's fees and expenses. See 6 Moore, Federal Practice, para. 54.75 [3.2] at 1558 (1972). H.R.Rep.No.1535, 1966 U.S.Code Cong. and Admin.News 2527, 2531. Therefore, although equity would require taxing of attorney's fees to the defendants in this case, the statute precludes this Court from so doing.
As to the matter of costs and expenses, the Court finds $7,137.75 to be grossly excessive and not normally taxed, and, accordingly, disallows the same. Stenographic services and xeroxing are matters counsel should provide as of course in connection with the rendition of legal services. The Court notes that there was no discovery of depositions taken in this case, and that kind of expense which would be allowable is not pertinent here. Although the Court is not in a position to dictate to counsel how to run their offices with the greatest economy and efficiency, the Court will not permit these costs to be taxed to the class. The costs listed in the disbursement record are to be absorbed by counsel.