B-183304, AUGUST 31, 1976, 55 COMP.GEN. 1418

B-183304: Aug 31, 1976

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FEES - ATTORNEYS - GRIEVANCE PROCEEDINGS - EMPLOYEE ENTITLEMENT TO FEES TWO STATE DEPARTMENT EMPLOYEES WERE NAMED AS DEFENDANTS IN GRIEVANCE BROUGHT UNDER SECTION 1820 OF VOLUME 3. STATE DEPARTMENT REFUSED TO PROVIDE LEGAL COUNSEL TO SUPERVISORS AT GRIEVANCE HEARING DUE TO PERSONAL NATURE OF GRIEVANT'S ALLEGATIONS AND SINCE PURPOSE OF HEARING WAS FACT FINDING FOR ULTIMATE DECISION BY DIRECTOR OF PERSONNEL. 1976: THIS ACTION IS IN RESPONSE TO A REQUEST FOR RECONSIDERATION OF THE SETTLEMENTS ISSUED BY OUR CLAIMS DIVISION ON FEBRUARY 6. WHERE THE ACTION WAS DISMISSED ON NOVEMBER 12. WHERE THE SUBSEQUENT APPEAL WAS DISMISSED ON NOVEMBER 15. WHILE THE DISTRICT COURT'S DECISION WAS ON APPEAL.

B-183304, AUGUST 31, 1976, 55 COMP.GEN. 1418

FEES - ATTORNEYS - GRIEVANCE PROCEEDINGS - EMPLOYEE ENTITLEMENT TO FEES TWO STATE DEPARTMENT EMPLOYEES WERE NAMED AS DEFENDANTS IN GRIEVANCE BROUGHT UNDER SECTION 1820 OF VOLUME 3, FOREIGN AFFAIRS MANUAL, BY EMPLOYEE THEY SUPERVISED. STATE DEPARTMENT REFUSED TO PROVIDE LEGAL COUNSEL TO SUPERVISORS AT GRIEVANCE HEARING DUE TO PERSONAL NATURE OF GRIEVANT'S ALLEGATIONS AND SINCE PURPOSE OF HEARING WAS FACT FINDING FOR ULTIMATE DECISION BY DIRECTOR OF PERSONNEL. ABSENT EXPRESS STATUTORY AUTHORITY, THE TWO SUPERVISORS MAY NOT BE REIMBURSED FEES OF PRIVATE COUNSEL RETAINED TO REPRESENT THEM AT THE HEARING.

IN THE MATTER OF MANZANO AND MARSTON-- CLAIM FOR ATTORNEY'S FEES, AUGUST 31, 1976:

THIS ACTION IS IN RESPONSE TO A REQUEST FOR RECONSIDERATION OF THE SETTLEMENTS ISSUED BY OUR CLAIMS DIVISION ON FEBRUARY 6, 1976, OF THE CLAIMS OF MRS. MARIA MANZANO AND DR. ALICE T. MARSTON, EMPLOYEES OF THE DEPARTMENT OF STATE (HEREINAFTER REFERRED TO AS THE CLAIMANTS), FOR REIMBURSEMENT OF ATTORNEY'S FEES.

THE RECORD INDICATES THAT IN FEBRUARY 1971, TWO EMPLOYEES UNDER THE SUPERVISION OF THE CLAIMANTS IN THE MEDICAL DIVISION LABORATORY FILED GRIEVANCES UNDER THE PROVISIONS OF DEPARTMENT OF STATE REGULATIONS CONTAINED IN VOLUME 3 OF THE FOREIGN AFFAIRS MANUAL (FAM), SECTION 1820. ON OCTOBER 20, 1971, THESE TWO EMPLOYEES FILED SUIT IN UNITED STATES DISTRICT COURT SEEKING DECLARATORY AND INJUNCTIVE RELIEF AGAINST NINE NAMED DEFENDANTS (INCLUDING THE CLAIMANTS) AND THE DEPARTMENT OF STATE. BY LETTER DATED OCTOBER 22, 1971, THE DEPARTMENT OF STATE REQUESTED THAT THE DEPARTMENT OF JUSTICE REPRESENT THE DEFENDANTS SINCE THE ACTS ALLEGED IN THE SUMMONS AND COMPLAINT AROSE IN THE PERFORMANCE OF OFFICIAL DUTIES. IT APPEARS FROM THE RECORD THAT THE DEPARTMENT OF JUSTICE DID PROVIDE REPRESENTATION FOR THE DEFENDANTS IN THE UNITED STATES DISTRICT COURT, WHERE THE ACTION WAS DISMISSED ON NOVEMBER 12, 1971, AND IN THE UNITED STATES COURT OF APPEALS, WHERE THE SUBSEQUENT APPEAL WAS DISMISSED ON NOVEMBER 15, 1974.

WHILE THE DISTRICT COURT'S DECISION WAS ON APPEAL, THE DEPARTMENT OF STATE PROCEEDED WITH A HEARING ON THE GRIEVANCE OF ONE OF THE EMPLOYEES, MS. CECILIA L. P. THIEMAN. THE OFFICE OF LEGAL ADVISER OF THE DEPARTMENT OF STATE DENIED THE REQUESTS OF THE CLAIMANTS FOR DEPARTMENTAL COUNSEL SINCE THIS WOULD BE "AN ADMINISTRATIVE PROCEEDING WHERE (THE) LEGAL LIABILITY OF (THE) EMPLOYEES WAS NOT AT ISSUE" AND SINCE "THE PURPOSE OF THE HEARING WOULD BE TO BRING OUT THE FACTS BEARING ON THE GRIEVANCE FOR THE BENEFIT OF THE DIRECTOR OF PERSONNEL, WHO WOULD MAKE A DECISION." THE DEPARTMENT OF STATE WAS REPRESENTED AT THE GRIEVANCE HEARING BY THE OFFICE OF LEGAL ADVISER, BUT THE CLAIMANTS CHOSE TO OBTAIN PRIVATE COUNSEL TO REPRESENT THEIR INTERESTS AT THE HEARING IN THE BELIEF THAT THEIR "REPUTATIONS AND CAREERS WERE AT STAKE." THE GRIEVANCE COMMITTEE WHICH CONSIDERED THE CASE FOUND NO WRONGDOING ON THE PART OF THE CLAIMANTS AND RECOMMENDED THAT THE DEPARTMENT OF STATE REIMBURSE THE CLAIMANTS FOR LEGAL FEES AND EXPENSES. HOWEVER, THE DIRECTOR OF PERSONNEL DENIED THE CLAIM ON THE BASIS OF A DECISION OF OUR OFFICE IN 52 COMP.GEN. 859 (1973), HOLDING THAT THE DEPARTMENT OF STATE HAD NO LEGAL AUTHORITY TO REIMBURSE THE LEGAL FEES INCURRED BY AN EMPLOYEE IN A GRIEVANCE HEARING.

THE CLAIMANTS WERE ISSUED SETTLEMENT CERTIFICATES DATED FEBRUARY 6, 1976, HOLDING THAT, IN THE ABSENCE OF EXPRESS STATUTORY AUTHORITY PROVIDING FOR REIMBURSEMENT OF ATTORNEY'S FEES IN A NONJUDICIAL PROCEEDING SUCH AS A GRIEVANCE HEARING, THERE IS NO BASIS FOR ALLOWING THE CLAIMS. THE SETTLEMENTS DISTINGUISHED THOSE CASES FROM THAT INVOLVED IN 55 COMP.GEN. 408 (1975), WHERE OUR OFFICE HELD THAT A FORMER GOVERNMENT EMPLOYEE COULD BE REIMBURSED HIS LEGAL EXPENSES INCURRED IN DEFENDING A LAWSUIT ARISING OUT OF ACTIONS WITHIN THE SCOPE OF HIS EMPLOYMENT WHERE THE UNITED STATES ATTORNEY WITHDREW FROM THE ACTION FOR ADMINISTRATIVE REASONS BUT WHERE THE GOVERNMENT'S INTEREST IN DEFENDING THE EMPLOYEE CONTINUED THROUGHOUT THE PROCEEDINGS.

ON APPEAL THE CLAIMANTS ARGUE THAT THE SETTLEMENTS TURN ON A DISTINCTION BETWEEN AN ADMINISTRATIVE PROCEEDING AND LITIGATION BEFORE A STATE OR FEDERAL COURT, A DISTINCTION WHICH THE CLAIMANTS CONSIDER IS INAPPROPRIATE. THEY STATE THAT SINCE THE PARTIES ARE USUALLY BOUND BY ADMINISTRATIVE FINDINGS OF FACT WHEN A CASE IS LATER BROUGHT BEFORE A UNITED STATES DISTRICT COURT OR APPELLATE COURT, DENIAL OF COUNSEL "DURING THESE CRUCIAL STAGES OF FACT FINDING WOULD NOT BE DISSIMILAR TO DENIAL OF COUNSEL IN A CIVIL PROCEEDING DURING THE PRETRIAL PROCEEDINGS, BUT ALLOWING COUNSEL AT TRIAL." THE CLAIMANTS ARGUE FURTHER THAT THEIR CAREERS COULD HAVE BEEN DESTROYED AND THEIR REPUTATIONS TARNISHED WITHOUT ASSISTANCE OF COUNSEL TO REPRESENT THEM AT THE ADMINISTRATIVE HEARING. FINALLY, THEY CLAIM THAT A "REVERSAL OF ROLES" TOOK PLACE IN THAT BY ATTACKING THE MERITS OF THE GRIEVANT'S CASE, THEY WERE REPRESENTING THE INTERESTS OF THE DEPARTMENT OF STATE, AND, THUS, REIMBURSEMENT OF LEGAL EXPENSES SHOULD LIE ON A QUASI CONTRACTUAL THEORY OF PROVIDING A NECESSARY SERVICE TO THE GOVERNMENT.

OUR OFFICE HAS LONG HELD THAT THE HIRING OF AN ATTORNEY IS A MATTER BETWEEN THE ATTORNEY AND THE CLIENT, AND THAT ABSENT EXPRESS STATUTORY AUTHORITY, REIMBURSEMENT OF ATTORNEY'S FEES MAY NOT BE ALLOWED. COMP.GEN. 859 (1973); B-184200, APRIL 13, 1976; B-178551, JANUARY 2, 1976; AND B-156482, JUNE 23, 1975. IN 52 ID. 859, SUPRA, WE HELD THAT THERE WAS NO AUTHORITY FOR THE REIMBURSEMENT OF LEGAL FEES TO AN EMPLOYEE OF THE DEPARTMENT OF STATE WHO BROUGHT A GRIEVANCE UNDER THE PROVISIONS OF 3 FAM 1820, AND WE ARE SIMILARLY UNAWARE OF ANY AUTHORITY PROVIDING FOR REIMBURSEMENT OF LEGAL FEES TO AN EMPLOYEE, SUPERVISOR, OR MANAGEMENT OFFICIAL NAMED AS A DEFENDANT IN THE GRIEVANCE ACTION. IN 55 ID. 408, SUPRA, REFERRED TO BY THE CLAIMANTS AS A "HADLEY CASE," WE ALLOWED REIMBURSEMENT OF LEGAL EXPENSES WHERE A FORMER SMALL BUSINESS ADMINISTRATION (SBA) EMPLOYEE WAS SUED IN STATE COURT FOR ACTIONS COMMITTED WHILE ACTING WITHIN THE SCOPE OF HIS EMPLOYMENT. IN THAT CASE SBA REQUESTED THE DEPARTMENT OF JUSTICE TO PROVIDE LEGAL REPRESENTATION IN ACCORDANCE WITH THE PROVISION OF 5 U.S.C. 3106 (1970), AND THE UNITED STATES ATTORNEY WAS DIRECTED TO REPRESENT THE EMPLOYEE'S INTERESTS. HOWEVER, EFFECTIVE REPRESENTATION WAS NOT FORTHCOMING, AND, EVENTUALLY, THE UNITED STATES ATTORNEY WITHDREW AS ATTORNEY FOR THE DEFENDANT- EMPLOYEE. WE NOTED THAT THE STATUTES PROVIDE AND THE COURTS HAVE HELD THAT UNLESS AUTHORIZED BY LAW, ONLY THE ATTORNEY GENERAL OR THE UNITED STATES ATTORNEY CAN REPRESENT THE GOVERNMENT'S INTEREST IN A COURT ACTION. THE DEPARTMENT OF JUSTICE STATED IN THAT CASE THAT ITS POLICY WAS TO AFFORD REPRESENTATION TO EMPLOYEES SUED FOR ACTS TAKEN IN THE PERFORMANCE OF THEIR OFFICIAL DUTIES. WE HELD, THEREFORE, THAT WHERE REPRESENTATION WAS SOUGHT, BUT WAS UNAVAILABLE, AND WHERE A DETERMINATION HAD NOT BEEN MADE THAT THE UNITED STATES WAS NO LONGER OFFICIALLY INTERESTED IN THE EMPLOYEE'S DEFENSE, WE WOULD HAVE NO OBJECTION TO SBA REIMBURSEMENT OF REASONABLE LEGAL FEES.

IN THE PRESENT CASE, WHEN THE CLAIMANTS WERE NAMED AS DEFENDANTS IN THE SUIT IN FEDERAL COURT BY THE GRIEVANTS, THE DEPARTMENT OF STATE REQUESTED THAT THE DEPARTMENT OF JUSTICE PROVIDE LEGAL REPRESENTATION, AND THE RECORD INDICATES THAT THE DEPARTMENT OF JUSTICE DID SO REPRESENT THE DEFENDANTS IN THE DISTRICT COURT AND ON APPEAL. HOWEVER, WHEN THE GRIEVANCE HEARING WAS HELD, THE OFFICE OF LEGAL ADVISER DECIDED THAT, DUE TO THE PERSONAL CHARACTER OF THE ALLEGATIONS IN THE GRIEVANCE, AGENCY OFFICIALS WOULD NOT REPRESENT THE INDIVIDUAL EMPLOYEES. WITH REGARD TO THE ALLEGATIONS CONTAINED IN THE GRIEVANCE, THE ASSISTANT LEGAL ADVISER FOR MANAGEMENT, DEPARTMENT OF STATE, WRITES:

AT THAT TIME, NO CHARACTERIZATION OF THE ACTS OF DR. MARSTON OR MRS. MANZANO AS OFFICIAL OR UNOFFICIAL WAS MADE; NOR HAS THAT BEEN DONE SINCE IN THE ABSENCE OF REINSTITUTION OF A SUIT IN WHICH PERSONAL LIABILITY WOULD BE AT ISSUE.

THUS, THE PRESENT CASE IS CLEARLY DISTINGUISHABLE FROM OUR DECISION IN 55 ID. 408, SUPRA, IN THAT THE LEGAL LIABILITY OF THE CLAIMANTS WAS NOT AN ISSUE IN THE GRIEVANCE HEARING. THEREFORE, THERE WAS NO OBLIGATION ON THE PART OF THE DEPARTMENT OF STATE TO SUPPLY COUNSEL TO REPRESENT THEIR INTEREST IN A MANNER ADVERSARY TO THE GRIEVANT SINCE THE PURPOSE OF THE HEARING WAS TO BRING OUT THE FACTS BEARING ON THE GRIEVANCE FOR THE BENEFIT OF THE DIRECTOR OF PERSONNEL WHO WOULD MAKE A DECISION. IN VIEW OF THE DISCUSSION ABOVE, WE FURTHER FIND THAT THERE IS NO BASIS FOR ALLOWING THIS CLAIM ON A "QUASI-CONTRACT" THEORY. ACCORDINGLY, THE ACTION OF OUR CLAIMS DIVISION IS SUSTAINED.