In Sacco v. United States, No. 05-5066 (Fed. Cir. 6/21/06), the U.S. Court of Appeals for the Federal Circuit held that the Merit Systems Protection Board (MSPB or Board), not the Court of Federal Claims, had jurisdiction to adjudicate claims for attorney fees under the Back Pay Act. Appellants had filed MSPB appeals challenging the adverse actions, and in each case the employing agency voluntarily rescinded the adverse action while the appeal was pending. The MSPB then dismissed both appeals as moot. Subsequently, both appellants requested attorney fees and expenses from the Board.

The Board denied both requests, concluding that under Buckhannon Board & Care Home, Inc. v. West Virginia Department of Health & Human Resources, 532 U.S. 598 (2001), because the agency had voluntarily rescinded the alleged adverse actions in both cases, there was no “prevailing party” entitled to attorney fees. The Federal Circuit upheld the Board, finding that Buckhannon applied to 5 USC 7701(g), the statutory provision for obtaining attorney fees under the Back Pay Act. Sacco v. Dept. of Justice, 317 F.3d 1384, 1387 (Fed. Cir. 2003). Both appellants then filed suit in the Court of Federal Claims seeking attorney fees for their Board appeals. The Court of Federal Claims dismissed the claims for lack of subject matter jurisdiction as it “has no jurisdiction to entertain actions seeking monetary remedies stemming from adverse personnel actions over which the [Board] and the Federal Circuit have jurisdiction.” Sacco v. United States, 63 Fed. Cl. 424, 430 (2004).

The Federal Circuit concluded that the Back Pay Act does not provide for an award of attorney fees on a catalyst theory. That theory would provide entitlement to fees because the employee achieved the desired result as the lawsuit brought about a voluntary change in the employer’s conduct. While this is a common-sense approach to achieving success in litigation, the court held that it doesn’t meet the “prevailing party” requirement as well as the “interest of justice.” The court noted that the Supreme Court in Buckhannon had determined that the “prevailing party” language in the Fair Housing Amendments Act and the Americans with Disabilities Act means that a party can only recover attorney fees after obtaining an enforceable judgment on the merits or a court-ordered consent decree.

Therefore, an agency will be able to continue to avoid liability for attorney fees if it completely rescinds an adverse action prior to the MSPB issuing its decision. This requires that the agency restore the status quo ante by placing the employee in the same position that he was in prior to the litigation. As a practical matter, this doesn’t happen very often in adverse action cases because the agency would have to bring the employee back to work with retroactive back pay, interest, and benefits. However, it is a bigger problem in retirement cases where the Office of Personnel Management can grant benefits prior to a decision on the merits, thereby avoiding attorney fees and expenses.

* This information is provided by the attorneys at Passman & Kaplan, P.C., a law firm dedicated to the representation of federal employees worldwide. For more information on Passman & Kaplan, P.C., go to http://www.passmanandkaplan.com.

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