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FITZGERALD v. HAMPTON

March 31, 1982

A. ERNEST FITZGERALD, Plaintiff,
v.
ROBERT E. HAMPTON, et al., Defendants



The opinion of the court was delivered by: BRYANT

 This case is before the court on plaintiff A. Ernest Fitzgerald's motion for attorney's fees. For the reasons set forth in this memorandum, the court grants plaintiff's motion.

 I. HISTORY OF THE CASE

 Plaintiff A. Ernest Fitzgerald was severed from his Air Force job in 1970, after he testified before Congress concerning costs of the C-5A transport plane. *fn1" Fitzgerald appealed his dismissal to the Civil Service Commission ("CSC"). The CSC concluded that Fitzgerald's dismissal resulted from "reasons that were personal to" Fitzgerald and directed the Air Force to restore Fitzgerald to his previous position as Deputy Assistant Secretary for Management Systems or to a position of equivalent grade, salary, tenure and qualifications. Decision on the Appeal of A. Ernest Fitzgerald, Sept. 18, 1973 at 20.

 On December 3, 1973, the Air Force appointed Fitzgerald Deputy for Productivity Management in the office of the Assistant Secretary of the Air Force for Financial Management. Fitzgerald appealed to the CSC, claiming his new position violated the specific terms of the CSC decision of September 1973. The CSC upheld the Air Force decision to appoint Fitzgerald Deputy for Productivity Management. In the Matter of A. Ernest Fitzgerald, CSC Board of Appeals & Review, April 28, 1974. Fitzgerald filed an action in 1974, seeking review of the CSC's determination. Fitzgerald v. Civil Service Commission, C.A., No. 74-686 (D.D.C. July 15, 1974), reconsideration denied, 383 F. Supp. 823 (D.D.C. 1974). In response to a discovery motion in that case, the court, having before it the complete administrative record, decided to remand the case to the CSC "with direction to hold further hearings in accord with this order." Id., slip op. at 10. The CSC conducted further hearings and again upheld the Air Force's decision to appoint Fitzgerald Deputy for Productivity Management. Decision on the Appeal of A. Ernest Fitzgerald, June 18, 1976. Fitzgerald filed the present action to seek review of the CSC's 1976 determination.

 On March 3, 1981, the court found that the CSC's failure to find that Fitzgerald had actually suffered a reduction in rank was arbitrary and capricious. The court directed the Air Force to reinstate Fitzgerald to his prior position or to a position of equivalent status, and to submit to the court, no later than 30 days from the date of the order, the official job description for any position proposed for the plaintiff. Memorandum and Order, March 3, 1981 at 22.

 In its March 3, 1981 order, the court stayed Plaintiff's Request for Production of Documents and Plaintiff's Motion for Entry of an Order to Prevent Destruction of Documents pending submission of supplemental briefs on the question of sanctions and the award of costs and attorney's fees. Memorandum and Order, March 3, 1981 at 22. *fn2" After review of the submitted briefs, the court concludes that Air Force officials' bad faith flouting of a clear CSC mandate to restore Fitzgerald to an equivalent position warrants an award of attorney's fees to Fitzgerald. *fn3" As the following discussion indicates, the conduct warranting an attorney's fees award was that of Air Force officials, not of individual Air Force counsel or the CSC, *fn4" so that the award granted in this case is against the Air Force alone. See 28 U.S.C. § 2412(c)(2).

 II. JURISDICTION FOR A FEE AWARD

 Until October 1, 1981, 28 U.S.C. § 2412 prohibited the imposition of expenses and attorney's fees upon the United States, except as authorized by other statutes. The Equal Access to Justice Act, Pub. L. No. 96-481, Title II, § 204(a), 94 Stat. 2327 (October 21, 1980), amended § 2412 to authorize recovery of expenses and attorney's fees from the United States in certain circumstances. This amendment affects civil actions and adversary adjudications which were pending on, or commenced on or after October 1, 1981.

 III. THE BAD FAITH STANDARD FOR A FEE AWARD

 The Equal Access to Justice Act permits attorney's fees awards in actions against the United States in two different circumstances. Section 2412(b) renders the United States liable for attorney's fees "to the same extent that any other party would be liable under the common law or under the terms of any statute which specifically provides for such an award." *fn6" Section 2412(d) renders the United States liable for attorney's fees "unless the court finds that the position of the United States was substantially justified or that special circumstances make an award unjust." *fn7" Since Fitzgerald has not applied for § 2412(d) fees, this court may consider only whether the United States is liable to Fitzgerald under 28 U.S.C. § 2412(b). *fn8"

 The general "American rule" bars prevailing litigants from recovering attorney's fees from the losing party. Alyeska Pipeline Co. v. Wilderness Society, 421 U.S. 240, 247, 44 L. Ed. 2d 141, 95 S. Ct. 1612 (1974). There are four exceptions to this rule. Attorney's fees may be recovered when specifically authorized by statute or contract; when a party has conferred a common benefit by recovering a fund or property; when a party has willfully disobeyed a court order; and when the losing party has "acted in bad faith, vexatiously, wantonly, or for oppressive reasons." Id. at 257-59. 28 U.S.C. § 2412(b) was enacted so that the United States would no longer be exempt from an attorney's fee award in these four situations. H.R. REP. NO. 1418, 96th Cong., 2d Sess. 9 (1980), reprinted in [1980] U.S. Code Cong. & Ad. News 4984, 4987.

 Usually the "bad faith" exception to the "American rule" is triggered by conduct which occurs during the course of the litigation and constitutes "insult added to injury." See, e.g., Adams v. Carlson, 521 F.2d 168 (7th Cir. 1975); Townsend v. Edelman, 518 F.2d 116 (7th Cir. 1975); Lichtenstein v. Lichtenstein, 481 F.2d 682 (3d Cir. 1973), cert. denied, 414 U.S. 1144, 94 S. Ct. 895, 39 L. Ed. 2d 98 (1974); Kahan v. Rosenstiel, 424 F.2d 161 (3d Cir.), cert. denied, 398 U.S. 950, 26 L. Ed. 2d 290, 90 S. Ct. 1870 (1970). In a few cases the award has been for activity which formed the basis for the suit. See, e.g., Rolax v. Atlantic Coast Line R. Co., 186 F.2d 473 (4th Cir. 1951); Schlein v. Smith, 82 U.S. App. D.C. 42, 160 F.2d 22 (D.C. Cir. 1947). And in some instances awards have been made for vexatious conduct which occurred before litigation actually commenced. See, e.g., Vaughan v. Atkinson, 369 U.S. 527, 8 L. Ed. 2d 88, 82 S. Ct. 997 (1962); Fairley v. Patterson, 493 F.2d 598, 606 (5th Cir. 1974); Sims v. Amos, 340 F. Supp. 691 (M.D. Ala.), aff'd summarily, 409 U.S. 942, 93 S. Ct. 290, 34 L. Ed. 2d 215 (1972). *fn9"

 Prelitigation conduct provides the basis for an award of attorney's fees when a party, confronted with a clear statutory or judicially-imposed duty towards another, is so recalcitrant in performing that duty that the injured party is forced to undertake otherwise unnecessary litigation to vindicate plain legal rights. In Vaughan v. Atkinson, the seminal case allowing recovery of fees for prelitigation vexation, a seaman was hospitalized for tuberculosis shortly after he stopped working on the respondent shipowner's vessel. Although the seaman forwarded his hospital record to the shipowner, the owner's only investigation of the seaman's claim for maintenance and cure was an interrogation of the vessel's Master and Chief Engineer. The owner did not conduct any further investigation and did not bother even to admit or deny the validity of the seaman's claim. Although the seaman suffered no damages from the owner's failure to pay maintenance until ordered to do so by the court, the Court allowed attorney's fees because:

 
In the instant case respondents were callous in their attitude, making no investigation of libellant's claim and by their silence neither admitting nor denying it. As a result of that recalcitrance, libellant was forced to hire a lawyer and go to court to get what was plainly owed him under laws that are centuries old . . . . It is difficult to imagine a clearer case of damages suffered for failure to pay maintenance than this one. [ 369 U.S. at 531]

 Courts have extended the Vaughan principle to nonadmiralty cases which present many different factual situations. *fn10" The most common extension has occurred in suits which charge that a policy of a large governmental institution, such as a school system or a prison, violates the constitutional rights of a number of citizens. In those cases courts have awarded attorney's fees when the institution, in clear default of constitutional duty, contested liability or submitted compliance plans which could not meet judicial guidelines. E.g., Fairley v. Patterson; Bradley v. School Board, 53 F.R.D. 28 (E.D. Va. 1971), rev'd on other grounds, 472 F.2d 318 (4th Cir. 1972), vacated on other grounds, 416 U.S. 696, 94 S. Ct. 2006, 40 L. Ed. 2d 476 (1974); Gates v. Collier, 371 F. Supp. 1368 (N.D. Miss. 1973); Sims v. Amos. See also Red School House, Inc. v. Office of Economic Opportunity, 386 F. Supp. 1177 (D. Minn. 1974).

 The Vaughan principle has also been applied to suits involving individual plaintiffs forced to sue to redress injury unique to the individual. In Burnaman v. Bay City Independent School District, 445 F. Supp. 927 (S.D. Texas 1978), a teacher, entitled by regulation to an annual evaluation performed on the basis of "definite, objective standards," id. at 929, was notified that his contract would not be renewed because of an evaluation which the court characterized as "inaccurate, non-factual, not objective, grossly unfair and not prepared in compliance with . . . policies' relating to evaluations." Id. at 930. The court found that the evaluation contained false and inaccurate information which the defendants knew or should have known was false and inaccurate. The court held that the teacher was entitled to compensatory and punitive damages for wrongful termination of his employment, and also awarded attorney's fees because the litigation was compelled in part by the defendants' bad faith conduct of the evaluation.

 IV. THE BAD FAITH IN THIS CASE

 Defendants' conduct in this case includes the types of vexatious and obstructive actions described in Vaughan, in Bradley, and in Burnaman. When this suit began, Air Force officials were under an unambiguous CSC order to "restore [Fitzgerald] retroactively . . . to the position from which he was improperly separated, or to any other position of like grade, salary and tenure in the Excepted Service and with the same or similar qualifications requirements as his former position." Decision on the Appeal of A. Ernest Fitzgerald, Sept. 18, 1973 at 20. At the time of that decree, according to William W. Woodruff, Assistant Secretary of the Air Force for Financial Management, it would have been possible to place Fitzgerald in the identical position that he had had prior to the alleged reduction-in-force. Deposition testimony of William W. Woodruff in Fitzgerald v. Butterfield, C.A. No. 74-178 (D.D.C., filed January 25, 1974), reproduced in Plaintiff's Third Supplemental Response to Defendants' Opposition to Motion to Strike, Exhibit 2 at 160 ("Woodruff deposition"), Record, Vol. IV at 467-82. Woodruff, without comparing Fitzgerald's responsibilities in the old and new jobs, made a recommendation to Secretary of the Air Force McLucas that Fitzgerald be assigned to the newly-created GS-17 position of Deputy for Productivity Management ("DPM"), outside the area of major weapons systems acquisitions. Thomas Moran, the Principal Deputy Assistant Secretary for Financial Management who wrote Fitzgerald's new job description, had no first-hand knowledge of Fitzgerald's actual work in his old position, id. at 168-79; had never talked to Fitzgerald about his old job assignments, id. at 184-85; and had made no written comparison of the old and new jobs, id. at 191-202.

 This conduct by Air Force officials assigned to prepare Fitzgerald's job assignment was not mere bureaucratic oversight. Contemporaneous notes of Air Force officials' meetings, as well as subsequent deposition testimony, show that the real reason Fitzgerald was assigned a new position was that Air Force officials felt that "clouds" hanging over Fitzgerald required that they try to "start [Fitzgerald] on a new slate". Woodruff deposition at 59. Indeed, Air Force officials told Fitzgerald that he would not have "any major involvement in major weapons systems until [he had] convinced Moran [and] Woodruff and most of all John [McLucas] that [he] intended to be a 'good' Air Force employee." Memorandum and Order, March 3, 1981 at 5. While the CSC order did not preclude assignment of Fitzgerald to a new equivalent position, the findings underlying that order clearly prohibited the Air Force from conditioning Fitzgerald's assignments upon "good behavior" as determined by the very officials who had attempted to remove Fitzgerald from the Air Force in the first place.

 Although Air Force officials did not themselves seek to compare Fitzgerald's old and new positions, they did take extraordinary steps to insure that the CSC would approve their actions. Before formally appointing Fitzgerald to the DPM position, Air Force officials wrote to the Bureau of Executive Manpower of the CSC requesting approval of the appointment, and seeking concurrence that the appointment would satisfy the CSC's September 1973 decision. Record, Vol. I at 120. The Bureau of Executive Manpower certified the proposed DPM position as GS-17 and determined that plaintiff was qualified for the position. The Bureau refused, however, to concur that the position satisfied the September 1973 order on the grounds that such a determination fell within the jurisdiction of the CSC's Appeals Examining Office, if and when plaintiff appealed his appointment. Id. at 149.

 Rebuffed by the CSC's refusal to render an advisory opinion, Air Force officials resorted to more unconventional tactics to gain CSC approval of their plan. A memo to the file written by CSC employee Thomas H. Meyer on October 25, 1973 reveals that on October 23, 1973, Eldin McColl, an aide to the Secretary of the Air Force, contacted Meyer and "asked for a reaction . . . whether the proposed submission satisfies the Air Force's obligations to Fitzgerald." Plaintiff's Second Supplemental Response to Defendants' Opposition to Plaintiff's Motion to Strike, Exhibit B. Meyer's appraisal, contained in the memo to the file, was that "the job is somewhat weak for a GS-17 and should probably be reevaluated if vacated by Fitzgerald." Meyer nevertheless told McColl that the CSC would likely seek GS-17 as the grade for the position proposed. Id.

 A second Meyer memorandum, dated October 26, 1973, shows that on that date, McColl himself contacted Meyer and informed him that Secretary McLucas had made a firm decision to locate Fitzgerald in the proposed DPM position; that the Secretary wanted to expedite the case as much as possible; and that the Secretary wanted "a specific response from [the CSC] to the effect that this position satisfies the CSC's verdict resulting from Fitzgerald's appeal." Id. at Exhibit C. Meyer contacted Herman Staiman, the hearing officer on the Fitzgerald case, to see whether Staiman might furnish an advance determination concerning the job description proposed for Fitzgerald. Staiman replied that although "he would prefer not to have a specific letter sent to [the Air Force] in advance certifying that the criteria of the appeal verdict are satisfied" "he [Staiman] would accept . . . [the CSC Bureau of Executive Manpower] determ[ination] that ...


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