Fedweek Legal

In Price v. SSA, (Fed. Cir., Feb. 17, 2005), the U.S. Court of Appeals affirmed the decision of the Merit Systems Protection Board which denied attorney fees to a successful appellant in a case before the Board. The court denied fees even though the agency suspended the employee without affording her due process rights.


In this case, Ms. Price, an administrative law judge with the Social Security Administration, was convicted of perjury and making a false statement for use in determining social security benefits. Based on the conviction, the State Bar of California suspended Ms. Price’s license to practice law. The SSA then placed Ms. Price on absent without official leave (AWOL). Ms. Price appealed to the MSPB, claiming that her placement of AWOL involuntarily was a “constructive suspension” obtained without prior Board approval. The Board’s Chief Administrative Law Judge agreed with Ms. Price and awarded her back pay with interest. Subsequently, the judge ordered the agency to reimburse Ms. Price’s attorney fees. The agency appealed to the Board and the Board reversed the judge’s grant of fees, holding that reimbursement of her attorney fees was not warranted “in the interest of justice.” On appeal to the Federal Circuit, the court affirmed the denial of fees.


Several theories were advanced as to why Ms. Price was entitled to reimbursement of fees for her successful litigation before the Board. All were rejected. Ms. Price first claimed entitlement to fees on the grounds the agency committed a “prohibited personnel practice” when it denied her due process. The court rejected this theory, stating that if accepted, any due process violation would give rise to an automatic entitlement to fees and that that would be contrary to the discretionary nature of the MSPB’s fee determinations. Because there was some doubt in the administrative judge’s mind as to whether a suspension hearing was required and that the suspension had some merit and was founded on some reasonable legal basis, the Board’s exercise of discretion to deny fees would not be disturbed.


The next theory for recovering attorney fees was that that the agency’s action was “clearly without merit.” The court denied this basis for fees saying that the suspension had some merit and had “at least a chance” of being sustained on appeal because OPM had advised the SSA that Ms. Price was not “ready, willing and able” to work.


The third basis on which fees were sought was that SSA committed “gross procedural error.” Under that theory, fees are awarded if the procedural error prolonged the proceeding or severely prejudiced the employee. The court held that under this basis, current MSPB case law permits the Board to balance the agency’s error and the prejudice and burden inflicted on the employee. The court sustained the Board’s holding that the error here was not a gross procedural error because the suspension was only for three months and Ms. Price recovered the lost pay with interest; therefore, Ms. Price was no more prejudiced than any other litigant before the Board. The court ignored the fact that Ms. Price was prejudiced by having to file an appeal to the Board because of the wrongful suspension, thus incurring attorney fees which she should not have had to incur.


This case clearly involved an employee who had committed misconduct but also involved a case where no required procedural safeguards were afforded the employee. It is possible that the Board and the court were aiming for ways to avoid requiring the agency to reimburse fees to someone who was so obviously guilty of both criminal conduct and misconduct in the job.


In a dissenting opinion, the court’s senior judge would have remanded the case back to the MSPB to make a determination of whether there had been a prohibited personnel practice.


** 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 www.passmanandkaplan.com. **