The opinion of the court was delivered by: DAVID G. LARIMER
Plaintiff, William J. Ward, brought this action under the Administrative Procedure Act ("APA"), 5 U.S.C. §§ 701-706 (1988), to review a decision by the defendant Secretary of Veterans Affairs ("Secretary"). Plaintiff, a registered nurse at a Veterans Administration ("VA") hospital, had been discharged for verbally abusing a patient. Plaintiff alleged that both the finding of verbal abuse, and the penalty of discharge, were arbitrary and capricious. He sought reversal of the Secretary's decision, reinstatement, back pay, redaction of his personnel record, costs and attorney's fees.
The Secretary appealed, and on May 2, 1994, the Court of Appeals for the Second Circuit affirmed the decision as modified. The Court of Appeals agreed with this court that the Secretary's decision on the penalty was arbitrary and capricious, though for slightly different reasons. Rather than finding that the penalty was not similar to those imposed for similar offenses, the court held that the Secretary had simply failed to consider the similar-penalty policy at all. The court remanded to the Secretary for a determination of the appropriate penalty under its stated policy.
On remand, the Secretary determined that termination was not the proper penalty under the circumstances, and reduced the penalty to a suspension. Plaintiff was reinstated and, therefore, entitled to back pay.
Prior to the Secretary's decision, plaintiff had moved for attorney's fees under the Equal Access to Justice Act ("EAJA"), 28 U.S.C. § 2412. After the Secretary's decision reducing the penalty to a suspension, plaintiff added a request for fees under the Back Pay Act ("BPA"), 5 U.S.C. § 5596(b), which, unlike EAJA, has no statutory maximum hourly rate. Both sides now agree that the BPA is the appropriate statute for determining attorneys fees.
Plaintiff seeks an award of $ 3700 to the American Federation of Government Employees ("AFGE") Local 3306, plaintiff's union, as reimbursement for fees paid by the union to Susan Cooney, Esq. Cooney had represented plaintiff during the administrative proceedings that occurred prior to commencement of this action.
Plaintiff also requests an award of $ 42,282.16 to the AFGE Legal Representation Fund, for work performed by Martin R. Cohen, Esq., a salaried attorney employed full-time by AFGE. Cohen represented plaintiff in the instant litigation. His requested rate is $ 171.82 per hour, based on alleged prevailing rates in the Philadelphia area where Cohen practices.
Defendants raise four objections to the fee request. First, defendants contend that the motion should be denied completely because of plaintiff's failure to supply contemporaneous time records. Defendants also contend that any award that is made should be reduced for three reasons: that the award should be limited to actual costs, i.e. Cohen's salary plus overhead expenses, rather than to prevailing market rates; that the hours claimed are excessive; and that the award should be reduced to reflect what defendants contend was plaintiff's limited success on the merits.
I. Standard for Attorney's Fees Under Back Pay Act
There is no dispute about the standard for determining whether a party is entitled to attorney's fees under the BPA. Pursuant to 5 U.S.C. § 5596(b)(1)(A), an employee who is found to have been subjected to an unjustified personnel action resulting in a loss of pay is entitled to receive reasonable attorney fees related to the personnel action.
Section 5596(b)(1)(A)(ii) provides that attorney's fees are to be awarded in accordance with standards established under 5 U.S.C. § 7701(g). The latter section in turn states that if an employee is a prevailing party, attorney's fees may be awarded in any case in which "payment by the agency is warranted in the interest of justice, including any case in which a prohibited personnel practice was engaged in by the agency or any case in which the agency's action was clearly without merit."
Courts have considered various factors in making these assessments, including "agency bad faith, action which is clearly without merit or wholly unfounded, gross procedural error, and whether the agency knew or should have known ab initio that it would not prevail on the merits." Knight v. United States, 982 F.2d 1573, 1583 (Fed. Cir. 1983). Courts have also looked to some of the same factors applied under EAJA, which requires a determination of whether the agency's position in the litigation was substantially justified. See e.g., American Fed'n of Gov't Employees, Local 3882 v. Federal Labor Relations Auth., 301 U.S. App. D.C. 293, 994 F.2d 20, 23 (D.C. Cir. 1993).
II. Whether a Fee Award Is Warranted in the Interest of Justice
I find that some award of attorney's fees is warranted in this case. As the Court of Appeals noted, "there is no evidence ... that the [VA's Disciplinary] Board considered--much less applied--the policy of like penalties for like offenses." The Secretary's own regulations required consideration of that policy, and it was arbitrary and capricious for the Board not to do so. Likewise, the Secretary, upon review of the Board's findings, also failed to consider this policy. This failure to follow VA regulations violated the APA and deprived plaintiff of a meaningful review. A fee award is therefore warranted in the interest of justice for the time reasonably spent by plaintiff's counsel in prosecuting this action.
Defendants contend that any award should be limited to reflect plaintiffs' limited success. Defendants contend that because plaintiff initially sought not only reinstatement, but also reversal of the finding of patient abuse, plaintiff did not achieve everything that he sought. Defendants note that although the penalty was reduced, the abuse finding remains on plaintiff's record.
Although the plaintiff's degree of success is an important factor in determining the proper size of the award see Hensley v. Eckerhart, 461 U.S. 424, 431-32, 76 L. Ed. 2d 40, 103 S. Ct. 1933 (1984), I do not believe that the award should be reduced in the instant case simply because the abuse finding was not overturned. Although that was one of the objects of the suit, it is clear that plaintiff's main goal was reinstatement, which he achieved. In light of plaintiff's victory on that major issue, his failure to prevail on the lesser matter of the abuse finding does not significantly detract from his overall success. ...