DOT spent almost $11 million fighting successful victims of retaliation and discrimination since 2004

According to the U.S. Department of Transportation’s No FEAR Act Annual Reports from 2004-2011, DOT spent $10.8 million reimbursing prevailing litigants in discrimination and retaliation suits for damages and attorneys’ fees. This figure does not include the cost of government attorneys’ salaries, cost of investigations, and litigation costs for non-prevailing litigants.

Sources:

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WPEA under the Spotlight: OSC Attorney Fees

WPEA under the Spotlight is a new running feature that will explore the provisions of the Whistleblower Protection Enhancement Act, currently being debated in Congress. This entry covers the OSC attorney fees section of Senate Committee Report No. 112-155, which accompanies S. 743RS.

Background

F. Office of Special Counsel Attorney’s Fees

The OSC has authority to pursue disciplinary actions against managers who retaliate against whistleblowers. Currently, if the OSC loses such a case, it must pay the legal fees of those against whom it initiated the action. Because the OSC’s budget is small and the amounts involved could significantly deplete its resources, requiring the OSC to pay attorney’s fees undermines the OSC’s ability to enforce the WPA and defend the merit system by protecting whistleblowers.

Illustrative of the problem and the importance of S. 743’s solution is Santella v. Special Counsel.61 In a 2-1 decision, the MSPB held that the OSC could be held liable to pay attorney’s fees, even in cases where its decision to prosecute was a reasonable one, if the accused agency officials were ultimately found “substantially innocent” of the charges brought against them.

The OSC argued that its decision to prosecute the supervisors was a reasonable one, and an award of fees would not be in the interests of justice. Indeed, the OSC contended that awarding fees under the circumstances would be counter to the public interest and contrary to congressional intent that the OSC vigorously enforce the Whistleblower Protection Act by seeking to discipline supervisors who violate the Act. The OSC also argued, in the alternative, that if the supervisors were entitled to be reimbursed for their attorney’s fees, then their employing agency, the IRS, rather than the OSC, should bear the cost of reimbursement. The Board majority rejected the OSC’s arguments and held that the OSC, and not the IRS, should be liable for any award of fees.62 Vice Chair Slavet dissented.

The Committee believes that the OSC’s disciplinary action authority is a powerful weapon to deter whistleblowing retaliation. Should the Santella case remain valid law, the OSC would be subject to heavy financial penalties unless it can predict to a certainty that it will prevail before bringing a disciplinary action. Because the OSC is a small agency with a limited budget, this burden hinders the OSC’s use of disciplinary action as an enforcement mechanism and threatens the OSC’s ability to implement and enforce the WPA. To correct this problem, section 107 of S. 743 would require the employing agency, rather than the OSC, to reimburse any attorney’s fees the manager is entitled to recover.

[61] 86 M.S.P.R. 48 (2000).

[62] Id. at 64-65.

Section by Section Analysis

Section 107—Remedies

This section requires that, in disciplinary actions brought by OSC, the agency where the prevailing party was employed or had applied for employment at the time of the events giving rise to the case would reimburse any attorney’s fees awarded. Current law imposes the burden on the OSC. Section 107 also permits corrective action awarded to whistleblowers to include reasonable and foreseeable compensatory damages.

FOIA: U.S. Department of Health and Human Services is in violation of the No FEAR Act of 2002

Last week, fellow advocate site Whistlewatch.org made a FOIA request to the Department of Health and Human Services and all of its operating divisions, seeking all No FEAR Act annual reports to Congress since the law’s passage in 2002, as required by section 203 of that law. Now, the following response came back from HHS’ Office of Inspector General, claiming that no such reports can be found:

Which means that HHS is in violation of the No FEAR Act, and the public won’t get to know how much litigation damages and attorney fees HHS has spent reimbursing meritorious whistleblowers and victims of discrimination.

See also:

MSPB: $225/hr is a reasonable rate for employment attorneys

From this week’s MSPB Case Report:

Appellant:  Michael S. Guy
Agency:  Department of the Army
Decision Number:  2012 MSPB 54
Docket Number:  DE-1221-10-0115-A-1
Issuance Date:  April 16, 2012
Appeal Type:  Individual Right of Action (IRA)
Action Type:  Attorney Fee Request

Attorney Fees – Reasonableness

The agency petitioned for review of an addendum initial decision in which the administrative judge awarded the appellant $27,373.50 in attorney fees.  The appellant, a GS-7 Paramedic, filed an IRA appeal in which he alleged that the agency took several personnel actions in retaliation for an email he wrote raising concerns about patient safety and possible rule violations.

In an initial decision that became the Board’s final decision, the administrative judge found that the appellant made a protected disclosure, and that one of the personnel actions — a counseling memorandum — was taken in retaliation for the protected disclosure.

In his motion for attorney fees, the appellant listed 166.16 attorney hours at $225 per hour, for a total of $37,386.  In addition to the hours devoted to the IRA proceeding before the Board, the appellant claimed time spent in connection with the preceding compaint before the Office of Special Counsel (OSC), a subsequent petition for enforcment, and hours devoted to the attorney fee petition itself. He reduced his fee request by $5,400 to account for 19 hours devoted to personnel actions on which he did not prevail, and 5 hours devoted to compliance issues and a nonselection that was not at issue in the underlying IRA appeal.

The administrative judge found that the appellant was a prevailing party and therefore entitled to an award of attorney fees under 5 U.S.C. § 1221(g)(2).  She further found that the claimed hourly rate of $225 was reasonable, but that the award should be reduced to account for the appellant’s limited success in the underlying IRA appeal.

Having determined that it was possible to do so by eliminating specific hours devoted to unsuccessful claims, she reduced the award by an additional 8 hours for time spent on nonselections.  In addition, she reduced 5.5 hours spent on compliance issues, and reduced the 21 hours claimed for the appellant’s jurisdictional response to 14 hours.  Over the agency’s objection, she found that the appellant was entitled to compensation for all time spent filing a complaint with OSC, as the complaint was a jurisdictional prerequisite for the IRA appeal.

In its petition for review, the agency argued that the judge erred in finding that $225 was a reasonable rate, and failed to eliminate all of the hours devoted to the appellant’s unsuccessful claims.  The agency argued that the judge should have either attempted to segregate additional hours, or else reduced the award by a percentage to account for the appellant’s limited success.  In either event, it contends that the award of $27,373.50 is unreasonable, and renders its memorandum “the most expensive counseling memorandum in history.”

Holdings:  The Board affirmed the initial decision as modified, still awarding $27,373.50 in attorney fees:

1.  In awarding an attorney fee, the starting point is to take the hours reasonably spent on the litigation multiplied by a reasonable hourly rate, which results in the “lodestar” which the Board uses in determining the fee award.  The initial calculation should exclude hours for which the prevailing party failed to provide adequate documentation, and should also exclude hours that were not reasonably expended.  In the second phase of the analysis, the lodestar may be adjusted upward or downward based on other considerations, including the crucial factor of the “results obtained.”

2.  $225 per hour was a reasonable rate for the legal services performed.

3.  The Board found that 134.66 hours were reasonably spent on the OSC and IRA proceedings, yielding an initial lodestar figure of $30,298.50.  The appellant was entitled to attorney fees for time spent on the OSC complaint because exhaustion of administrative remedies before OSC is a jurisdictional prerequisite for filing an IRA appeal, and that work contributed significantly to the appellant’s success before the Board.

4.  If, as was the case here, a party has achieved only “partial or limited success,” an award based on the hours reasonably spent on the litigation as a whole times an hourly rate may be an excessive amount, even when the claims were interrelated, nonfrivolous, and raised in good faith.

In this cirumstance, the tribunal awarding fees may make an equitable adjustment as to what reduction is appropriate by identifying specific hours that should be eliminated or, in the alternative, reducing the overall award by a percentage to account for the limited degree of success.  The former method is preferred where it is practicable to segregate the hours devoted to related but unsuccessful claims.

The judge correctly determined that it was possible to eliminate specific hours devoted to unsuccessful claims.  The Board discerned no error in the judge’s decision to eliminate 27 hours as devoted exclusively to personnel actions on which the appellant did not prevail.

5.  The resulting figure of $24,223.50 does not so shock the conscience that the Board should second-guess the judge’s considered judgment that the amount fairly reflects the appellant’s limited degree of success.  While the counseling memorandum alone may not be of great import, that is not the only measure, or even the most significant measure, of the appellant’s success in this appeal.  The Board did not merely order the agency to rescind that memorandum; it also made a public finding that the agency engaged in illegal whistleblowing reprisal, and referred the matter to OSC for investigation and possible disiplinary action.

The award of attorney fees in this or any other successful IRA appeal serves the public interest insofar as it may encourage employees and attorneys to pursue remedies for action of whistleblowing resprisal, thereby discouraging agencies from engaging in such acts, which in turn serves the goal of eliminating government wrongdoing.

6.  The appellant is entitled to compensation for reasonable fees incurred with respect to his successful attorney fee petition.

See also:

New FOIA Requests: No FEAR Reports to determine total cost of federal whistleblower defense

In 2002, Congress passed the Notification and Federal Employee Antidiscrimination and Retaliation Act of 2002 (No FEAR Act), which mandated several things:

  • any damages or attorneys’ fees required to be paid to prevailing complainants would come out of agencies’ budgets, rather than the general U.S. Treasury Judgment Fund;
  • agencies must report to Congress statistics about discrimination and retaliation complaints;
  • these reports must also include the amount of money agencies must pay to complainants who prevail, including attorneys’ fees;
  • and agencies must post online statistics (but not money paid) in connection with equal employment opportunity discrimination complaints.

Recently, fellow advocate site whistlewatch.org highlighted a report that the California State University spent $9 million to defend itself against seven whistleblower suits since 2008. This triggered an inquiry: how much does the federal government spend each year to defend itself against whistleblower complaints?

The dollar amount is surprisingly difficult to ascertain. Because the law does not require agencies to post this information online, it must be FOIA’ed. In addition, the No FEAR Act applies to “federal agencies,” which includes the 15 executive departments and numerous independent agencies. There are also untold number of agencies within the departments, but it is unclear at this point if department-level reports contain statistics for their subordinate agencies. (DOT’s 2010 report, which is also available here, does not cover its agencies FAA, FTA, FRA, etc.)

To that end, I have begun with two agencies and one department:

  • MSPB FOIA No. 2012-04-019: MSPB’s No FEAR Act Annual Reports to Congress, for 2009 to present, as required under section 203 of Pub. L. 101-474.
  • FAA FOIA No. : FAA’s No FEAR Act Annual Reports to Congress, for 2009 to present, as required under section 203 of Pub. L. 101-474.
  • DOT FOIA No. : DOT’s No FEAR Act Annual Reports to Congress, since 2002 but excluding 2010, as required under section 203 of the No FEAR Act of 2002.

How much does it cost to file a whistleblower suit against the federal government?

If you have to hire a private attorney, expect to pay tens of thousands of dollars, if not more. A recent quote I received was for $250 an hour, with a $2,500 retainer, and a 40% “contingency fee” out of any settlement (minus fees already paid). The Government Accountability Project charges $40-60 an hour (if they don’t take the case on pro bono), but recoups full market rate if the whistleblower prevails at MSPB. The law firm affiliated with the National Whistleblowers Center, Kohn, Kohn & Colapinto, charges market rates. The Employment Law Group requires $20,000 or so up front, I’m told $7,000 up front, followed by $20,000.

As far as I know, no federal whistleblower lawyer operates strictly on contingency. This might have something to do with the fact that federal whistleblowers have only a 2-3% chance of succeeding.

A topic for a future post is how much federal agencies spend defending themselves against whistleblower suits.