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    "ocrText": "Ronald Reagan Presidential Library\nDigital Library Collections\nThis is a PDF of a folder from our textual collections.\nCollection: Roberts, John G.: Files\nFolder Title: Attorney's Fees (3 of 3)\nBox: 5\nTo see more digitized collections visit:\nhttps://reaganlibrary.gov/archives/digital-library\nTo see all Ronald Reagan Presidential Library inventories visit:\nhttps://reaganlibrary.gov/document-collection.\nContact a reference archivist at: [email protected]\nCitation Guidelines: https://reaganlibrary.gov/citing\nNational Archives Catalogue: https://catalog.archives.gov/\nWITHDRAWAL SHEET\nRonald Reagan Library\nDOCUMENT\nNO. AND TYPE\nSUBJECT/TITLE\nDATE\nRESTRICTION\n1. memo\nRoberts to the File, re draft SBA testimony\n4/24/85\nP5\nCCts 12/14/00\nCOLLECTION:\nROBERTS, JOHN G.: Files\ndlb\nFILE FOLDER:\nAttorneys Fees [3 of 3] OA 12657 10017\n3/1/96\nRESTRICTION CODES\nPresidential Records Act [44 U.S.C. 2204(s)]\nFreedom of Information Act [5 U.S.C. 552(b)]\nP-1 National security classified information [(a)(1) of the PRA).\nF-1 National security classified information [(b)(1) of the FOIA].\nP-2 Relating to appointment to Federal office [(a)(2) of the PRAJ.\nF-2 Release could disclose internal personnel rules and practices of an agency [(b)(2) of the\nP-3 Release would violate a Federal statute [(a)(3) of the PRA].\nFOIA).\nP-4 Release would disclose trade secrets or confidential commercial or financial\nF-3 Release would violate a Federal statute [(b)(3) of the FOIA].\ninformation ((a)(4) of the PRA].\nF-4 Release would disclose trade secrets or confidential commercial or financial information\nP-5 Release would disclose confidential advice between the President and his advisors, or\n[(b)(4) of the FOIA].\nbetween such advisors [(a)(5) of the PRA.\nF-6 Release would constitute 0 clearly unwerranted invasion of personal privacy [(B](6) of\nP-6 Release would constitute 6 clearly unwarranted invesion of personal privacy [(e)(6) of\nthe FOIA]\nthe PRA).\nF-7 Release would disclose information compiled for law enforcement purposes [(b)(7) of\nthe FOIA].\nC.\nClosed in accordance with restrictions contained in donor's deed of gift.\nF-8 Release would disclose information concerning the regulation of financial institutions\n[(b)(8) of the FOIA].\nF-9 Release would disclose geological or geophysical information concerning wells [(b)(9) of\nthe FOIA].\nWITHDRAWAL SHEET\nRonald Reagan Library\nDOCUMENT\nNO. AND TYPE\nSUBJECT/TITLE\nDATE\nRESTRICTION\n1. memo\nRoberts to the File, re draft SBA testimony\n4/24/85\nP5\nCOLLECTION:\nROBERTS, JOHN G.: Files\ndlb\nFILE FOLDER:\nAttorneys Fees [3 of 3] OA 12657\n3/1/96\nRESTRICTION CODES\nPresidential Records Act [44 U.S.C. 2204(a))\nFreedom of Information Act [5 U.S.C. 552(b)]\nP-1 National security classified information [(a)(1) of the PRA).\nF-1 National security classified information [(b)(1) of the FOIA].\nP-2 Relating to appointment to Federal office [(a)(2) of the PRAI.\nF-2 Release could disclose internal personnel rules and practices of an agency [(b)(2) of the\nP-3 Release would violate a Federal statute [(a)(3) of the PRA].\nFOIAL.\nP-4 Release would disclose trade secrets or confidential commercial or financial\nF-3 Release would violate a Federal statute [(b)(3) of the FOIA).\ninformation [(a)(4) of the PRA].\nF-4 Release would disclose trade secrets or confidential commercial or financial information\nP-5 Release would disclose confidential advice between the President and his advisors, or\n[(b)(4) of the FOIA].\nbetween such advisors ((a)(5) of the PRA.\nF-6 Release would constitute a clearly unwarranted invasion of personal privacy [(B)(6) of\nP-8 Release would constitute a clearly unwarranted invasion of personal privecy [(a)(6) of\nthe FOIA]\nthe PRA).\nF-7 Release would disclose information compiled for law enforcement purposes ((b)(7) of\nthe FOIA].\nC.\nClosed in accordance with restrictions contained in donor's deed of gift.\nF-8 Release would disclose information concerning the regulation of financial institutions\n[(b)(8) of the FOIA).\nF-9 Release would disclose geological or geophysical information concerning wells [(b)(9) of\nthe FOIA].\nTHE WHITE HOUSE\nWASHINGTON\nApril 22, 1985\nMEMORANDUM FOR BRANDEN BLUM\nLEGISLATIVE ATTORNEY\nOFFICE OF MANAGEMENT AND BUDGET\nFROM:\nJOHN G. ROBERTS JJR\nASSOCIATE COUNSEL TO THE PRESIDENT\nSUBJECT:\nDOJ Draft Testimony Concerning the\nAward of Attorney's Fees in Tax Cases\nCounsel's Office has reviewed the above-referenced draft\ntestimony, and finds no objection to it from a legal\nperspective.\nID #\nCU\nWHITE HOUSE\nCORRESPONDENCE TRACKING WORKSHEET\nO - OUTGOING\nH . INTERNAL\nI . INCOMING\nDate Correspondence\nReceived (YY/MM/DD)\n/\n/\nName of Correspondent:\nJames C. murr.\nMI Mail Report\nUser Codes: (A)\n(B)\n(C)\nSubject:\nDOJ druft Testimous concerning the\naward of attarney's fees in tax cases\nROUTE TO:\nACTION\nDISPOSITION\nTracking\nType\nCompletion\nAction\nDate\nof\nDate\nOffice/Agency\n(Staff Name)\nCode\nYY/MM/DD\nResponse\nCode\nYY/MM/DD\nCUHOLL\nORIGINATOR\n85,04,22\n/\n/\nReferral Note:\nCUAT 18\nR 85,04,22\n5 85,04,23\nReferral Note:\n4pm\n/ /\n/\n/\nReferral Note:\n/\n/\n/\n/\n-\nReferral Note:\n/\n/\n/\n/\n-\nReferral Note:\nACTION CODES:\nDISPOSITION CODES:\nA Appropriate Action\nI Info Copy Only/No Action Necessary\nA Answered\nC Completed\nC Comment/Recommendation\nR - Direct Reply w/Copy\nB - . Non-Special Referral\nS Suspended\nD Draft Response\nS For Signature\nF - Furnish Fact Sheet\nX * Interim Reply\nto be used as Enclosure\nFOR OUTGOING CORRESPONDENCE:\nType of Response = Initials of Signer\nCode = \"A\"\nCompletion Date = Date of Outgoing\nComments:\nKeep this worksheet attached to the original incoming letter.\nSend all routing updates to Central Reference (Room 75, OEOB).\nAlways return completed correspondence record to Central Files.\nRefer questions about the correspondence tracking system to Central Reference, ext. 2590.\n5/81\nEXECUTIVE OFFICE OF THE PRESIDENT\nOFFICE OF MANAGEMENT AND BUDGET\nTHE\nWASHINGTON, D.C. 20503\nSPECIAL\nApril 22, 1985\nLEGISLATIVE REFERRAL MEMORANDUM\nTO:\nLEGISLATIVE LIAISON OFFICER\nDepartment of the Treasury - Art Schissel (566-8523)\nSmall Business Administration - Janine Perrignon (653-7581)\nSUBJECT: Department of Justice draft testimony concerning the\naward of attorney's fees in tax cases.\nThe Office of Management and Budget requests the views of your\nagency on the above subject before advising on its relationship\nto the program of the President, in accordance with OMB Circular\nA-19.\nPlease provide us with your views no later than 4:00 p.m., 4/23/85.\n(Note -- A hearing is scheduled before a subcommittee of the House\nWays & Means Committee for 4/25/85.)\nDirect your questions to Branden Blum (395-3454), the legislative\nattorney in this office.\nJames Ucm C. Mort for\nAssistant Director for\nLegislative Reference\nEnclosure\ncc: Rick Irby\nPat Szervo\nBarbara Flickinger\nFred Fielding\nRob Veeder\nJohn Donahue\nRoger Greene\nKaren Wilson\nApril 19, 1985\nDraft\nSTATEMENT\nOF\nGLENN L. ARCHER, JR.\nASSISTANT ATTORNEY GENERAL\nCIVIL DIVISION\nBEFORE\nTHE\nCOMMITTEE ON WAYS AND MEANS\nSUBCOMMITTEE ON SELECT REVENUE MEASURE\nCONCERNING\nTHE AWARD OF ATTORNEY'S FEES IN TAX CASES\nON\n-MARCH 25, 1985\nApril\nI am pleased to appear at the invitation of the Subcommittee\nto discuss the award of attorneys' fees in tax cases. The\noperative statutory provision--Section 7430 of the Internal\nRevenue--is the subject of a December 31, 1985, sunset provision\nand it is important that the Subcommittee familiarize itself with\nthe effect and impact of Section 7430, as well as with inter-\npretative problems currently in litigation. The primary focus of\nmy testimony is on tax litigation before the district courts, the\nClaims Court and the courts of appeal--the courts in which the\nJustice Department represents the United States.\nStatutes authorizing the award of attorneys' fees in tax\ncases are a phenomenon of the last decade. The two enactments\nof greatest significance are the Equal Access to Justice Act\n(EAJA) and Internal Revenue Code Section 7430.\nThe EAJA was enacted in 1980 as the result of a\ncongressional concern that the cost of litigation deters some\nindividuals and small businesses from challenging unreasonable\ngovernmental actions. The Congress felt that government\naccountability would be promoted by authorizing the courts to\naward attorneys' fees. Similar concerns underlay the enactment\nof Internal Revenue Code Section 7430 by the Tax Equity and\nFiscal Responsibility Act of 1982.\nThe EAJA was effective on October 1, 1981, and applied to\ncases pending on or filed after that date and prior to October 1,\n- 2 -\n1984. It currently applies only to cases pending as of September 30,\n1984. The Administration supports reauthorization of the EAJA\nand President Reagan's veto last year of legislation reauthorizing\nthe EAJA was based upon objectionable substantive amendments. The\nAdministration likewise supports the reauthorization of Section\n7430 with appropriate clarifying and technical amendments.\nThe EAJA provides for the award of attorneys' fees to a\nprevailing party against the United States unless the court finds\nthat the position of the United States was substantially\njustified or that special circumstances would make an award\nunjust. The burden of proof is on the United States. In order\nto be eligible for an award, the prevailing party must meet\ncertain net worth requirements. In general, awards of attorneys'\nfees are limited to $75 per hour. The court has authority to\nreduce or deny an award because of conduct which unduly and\nunreasonably protracted the proceeding. An application for an\naward must be filed no later than 30 days after a final judgment\nis entered.\nWhile the EAJA authorized attorneys' fee awards in tax cases\nlitigated before the Article III courts, it did not apply to\ncases brought in the Tax Court. During pendency of the EAJA\nbefore the Congress, the tax-writing committees began to study\nthe implications of authorizing attorneys' fee awards in tax\ncases, particularly cases brought in the Tax Court. Concern\n- 3 -\nwas expressed that unless the statute was carefully crafted,\nlegislation providing for the award of attorneys' fees in the Tax\nCourt would have a serious adverse impact on the backlog of the\ncourt. Another potential problem having significant implications\ninvolved the IRS system of administrative appeals which results\nin the settlement of thousands of cases annually without resort\nto litigation.\nAs a result of these concerns, Section 7430 departs from the\nEAJA in several respects because of special problems inherent in\ntax litigation, particularly litigation before the Tax Court.\nThus, Section 7430 differs from the Equal Access to Justice Act\nby placing the burden of proof on the taxpayer and the applicable\nstandard is phrased in terms of reasonableness. This approach is\ntailored to the Tax Court's stipulation process, which is the\nbackbone of practice before the Tax Court. Indeed, Tax Court\nRule 232 (b) provides for a conference in 7430 proceedings, the\npurpose of which is the same as the stipulation conference--to\nreach an agreement concerning the allegations supporting the\nclaims for attorneys' fees. If the burden of proof remains on\nthe taxpayer, as it does for practically every substantive tax\nissue, taxpayers will have an incentive to work with government\ncounsel in an effort to resolve issues pertaining to attorney\n- 4 -\nfee awards expeditiously and with as little court involvement as\npossible.\nOne obvious question is whether any significant difference\nin outcome exists as a result of the variations between Section\n7430 and the EAJA regarding the applicable standard and the\nburden of proof. In our view, the results in the cases litigated\nunder Section 7430 would likely have been the same under the\nEAJA. Little, if any, difference exists between positions that\nare \"reasonable\" and positions that are \"substantially\njustified.\" Indeed, the term \"substantial justification\" has\nbeen defined by reference to reasonableness. Moreover, the\nburden of proof generally does not affect the outcome in these\ncases; the placement of the burden of proof on the taxpayer under\nSection 7430 primarily serves to further the Tax Court's\nprocedures regarding the stipulation of cases. The general focus\nof the courts has been on whether the government is guilty of\noverreaching rather than on the niceities of the burden of proof.\nA second major difference between Section 7430 and the EAJA\nis that Section 7430 requires an exhaustion of administrative\nremedies. The exhaustion requirement was enacted to ensure that\ntaxpayers, in their haste to recover attorneys' fees, would not\nignore opportunities to resolve their disputes administratively.\nThus, in order to prevent widespread avoidance of administrative\nsettlement procedures, Section 7430 properly requires exhaustion\n- 5 -\nof administrative remedies as a condition precedent for obtaining\nan attorneys' fee award.\nA third significant difference involves standards for\neligibility. The Congress believed that eligibility standards\nbased on net worth would result in factual disputes further\nburdening the courts. Inasmuch as taxpayers of modest means can\ngenerally resolve their tax disputes in a relatively inexpensive\nmanner, Section 7430 does not limit eligibility by reference to\nthe net worth of the taxpayer, but simply caps the amount\nrecoverable at $25,000.\nSection 7430 was effective on March 1, 1983, for cases filed\non or after that date. Only a small number of cases have been\ndecided by the trial courts and we have received only two\ndecisions from the courts of appeals, one of which involved the\nnarrow issue of whether denial of an award could be appealed in\nlight of the prohibition on appeal of actions under Code Section\n7429 (relating to review of jeopardy determinations).\nThe most litigated legal issue is whether the focus of the\ncourt in determining \"reasonableness\" should be on the position\ntaken in litigation or rather on the position taken by the IRS\nprior to the litigation. In Kaufmann v. Egger, 85-1 U.S.T.C.\npara. 9278 (decided Mar. 19, 1985) the Court of Appeals for the\nFirst Circuit rejected the holdings of several district courts\nand the Tax Court and held that the position of the IRS prior to\n- 6 -\nlitigation must be taken into account. In most cases, it makes\nno difference whether one considers the conduct of the IRS before\nthe trial or the position defended in court. However, looking to\nthe position of the United States in litigation as the basis for\nthe determination of reasonableness conserves judicial resources.\nThe court has merely to review the arguments already made in the\ncase before it. If the court were required to consider IRS\nconduct which was not the subject of the trial or argument before\nthe court, the attorneys' fees proceeding could become\nessentially another trial.\nAnother significant advantage of considering \"reasonableness\"\nin the context of the litigation posture is that it encourages\nsettlement. Obviously, the government will be more likely to\nsettle a case if it can dispose of the case without having to\nlitigate the merits in an attorneys' fee proceeding. However, if\nthe court must look behind the settlement and consider the\nconduct of the IRS, essentially the entire case will have to be\ntried.\nIn our view, the Kaufmann decision misread Section 7430.\nThe relevant statutory language is that \"the position of the\nUnited States in the civil proceeding was unreasonable.\" Section\n7430 (c) (2) (A) (1). The Congress could hardly have used any\nclearer language to indicate that the position taken prior to\nthe proceeding is not relevant. Nevertheless, in an effort\n- 7 -\nto eliminate unnecessary litigation over this issue, the\nSubcommittee should consider a legislative clarification.\nAnother issue that deserves attention is of a more technical\nnature and involves the time limit in which attorneys' fee\napplications must be filed. Section 7430 (e) provides that an\norder granting or denying an award of attorneys' fees shall be\nincorporated in the judgment or decision in the case, thus\nsuggesting that an application is untimely if filed after the 10\ndays in which a motion to amend a judgment may be filed under\nRule 59 (e) of the Federal Rules of Civil Procedure. We have\ntaken that position in litigation under Section 7430, but have no\ndecisions to date. The difficulty is that the Supreme Court and\nnumerous courts of appeal have held that Rule 59 (e) is generally\ninapplicable to attorneys' fee awards. E.g., White V. New\nHampshire Dept. of Employment Security, 455 U.S. 445 (1982), ; and\nFCC V. League of Women Voters, 52 U.S.L.W. 5008, 5010-5011, note\n10 (1984).\nIn Tax Court cases and refund suits, a significant amount of\ntime normally elapses between the date of the court's holding on\nthe merits and the date the judgment is entered in order to make\nthe necessary computations. In other types of cases, such as\nsummons enforcement litigation, bankruptcy cases, and injunction\nsuits, the judgment may be entered at the same time as the case\nis decided. To clarify the intent and effect of Section\n- 8 -\n7430 on the timing issue, we recommend that Section 7430 be\namended to provide that an attorneys' fee application should be\nfiled in accordance with any applicable court rules, but no later\nthan 30 days following entry of a judgment from which an appeal\nmay be taken as a matter of right.\nIn its press release, the Subcommittee asked for information\nabout the cases in which awards have been made under Section\n7430. Awards have been entered in only\ncases handled by the\nJustice Department; and amounts awarded have been ranged as low\nas\nand as high as $25,000. The types of cases in which\nawards have been made include refund suits, bankruptcy cases,\nproceedings under Code Section 7429 to review jeopardy\nassessments, a collection suit, and a suit to enjoin collection\nof taxes. In view of the small number of decisions to date, it\nis difficult to draw any meaningful conclusions regarding the\ntypes of cases which the government is most vulnerable to an\naward.\nThe Subcommittee also requested information about the costs\nof the government in defending claims for attorneys' fees and the\nadditional time entailed. We do not have information responsive\nto that request because we do not isolate the attorneys' fee\nsegment of litigation as a separate element in our timekeeping\nsystem; nor do we otherwise account in a special manner for\nrelated costs.\n- 9 -\nFinally, I would like to bring to the attention of the\nSubcommittee a somewhat related problem--cases involving the\naward of attorneys' fees to the government. Within the last two\nor three years, the courts have become increasingly exasperated\nover the increasing volume of frivolous suits brought by tax\nprotestors and others who abuse the judicial system. The\nCongress recognized the seriousness of this problem in the Tax\nEquity and Fiscal Responsibility Act of 1982 by authorizing the\nTax Court to impose damages of up to $5,000 against persons who\nbring frivolous suits. The Tax Court in consonance with the\ndesire of Congress has shown no hesitation in applying this\nsanction in appropriate cases.\nThe district courts and the courts of appeals are also\naggravated with tax protestor suits, particularly frivolous suits\ncontesting imposition of the frivolous return penalty, and also\nare regularly imposing sanctions to the point where awards are\nbeing made to the government in about five cases a week on\naverage. The system for collecting amounts awarded as sanctions\nby the district courts and the courts of appeal, however, is much\nmore cumbersome than the system for collecting damages awarded by\nthe Tax Court under Code Section 6673, in that regular judgment\ncollection procedures must be followed. We would like to suggest\nthat the Subcommittee consider an amendment authorizing sanctions\nimposed by any court in a tax case to be collected in the same\nmanner as a tax, as in the case of damages awarded under Rule\n6673.\n- 10 -\nI will be pleased to respond to any questions that the\nSubcommittee may have.\nTHE WHITE HOUSE\nWASHINGTON\nApril 23, 1985\nMEMORANDUM FOR BRANDEN BLUM\nLEGISLATIVE ATTORNEY\nOFFICE OF MANAGEMENT AND BUDGET\nFROM:\nJOHN G. ROBERTS\nASSOCIATE COUNSEL TO THE PRESIDENT\nSUBJECT:\nIRS Draft Testimony Concerning the\nAward of Attorney's Fees in Tax Cases\nCounsel's Office has reviewed the above-referenced draft\ntestimony, and finds no objection to it from a legal\nperspective.\nID #\nCU\nWHITE HOUSE\nCORRESPONDENCE TRACKING WORKSHEET\no . OUTGOING\nH . INTERNAL\nI . INCOMING\nDate Correspondence\nReceived (YY/MM/DD)\n/\n/\nName of Correspondent: James mun\nMI Mail Report\nUser Codes: (A)\n(B)\n(C)\nSubject: IRS draft Testimany concerning the\naward of attorney's fees in tax cases\nROUTE TO:\nACTION\nDISPOSITION\nTracking\nType\nCompletion\nAction\nDate\nof\nDate\nOffice/Agency\n(Staff Name)\nCode\nYY/MM/DD\nResponse\nCode\nYY/MM/DD\nCUHOLL\nORIGINATOR 85,04,23\n/\n/\nReferral Note:\nCUAT 18\nR\n85,04,23\nS 585,04,23\nReferral Note:\nCOB\n/ /\n/ /\n-\nReferral Note:\n/\n/\n/\n/\n-\nReferral Note:\n/ /\n/ /\n-\nReferral Note:\nACTION CODES:\nDISPOSITION CODES:\nA * Appropriate Action\nI - Into Copy Only/No Action Necessary\nA Answered\nC Completed\nC - Comment/Recommendation\nR - Direct Reply w/Copy\nB - Non-Special Referral\nS Suspended\nD Draft Response\nS For Signature\nF Furnish Fact Sheet\nX . Interim Reply\nto be used as Enclosure\nFOR OUTGOING CORRESPONDENCE:\nType of Response = Initials of Signer\nCode = \"A\"\nCompletion Date = Date of Outgoing\nComments:\nKeep this worksheet attached to the original incoming letter.\nSend all routing updates to Central Reference (Room 75, OEOB).\nAlways return completed correspondence record to Central Files.\nRefer questions about the correspondence tracking system to Central Reference, ext. 2590.\n5/81\nTHE WHITE HOUSE\nWASHINGTON\nApril 24, 1985\nMEMORANDUM FOR THE FILE\nFROM:\nASSOCIATE COUNSEL 03R TO THE PRESIDENT\nJOHN G. ROBERTS\nSUBJECT:\nDraft SBA Testimony Concerning the\nAward of Attorney's Fees in Tax Cases\nI advised Branden Blum orally that the draft SBA testimony\nwas inconsistent with that of Justice and GSA. Blum agreed,\nbut indicated that those agencies considered it best to go\nforward with the SBA testimony, with an appropriate\ndisclaimer.\nID #\nCU\nWHITE HOUSE\nCORRESPONDENCE TRACKING WORKSHEET\no - OUTGOING\nH - INTERNAL\nI - INCOMING\nDate Correspondence\nReceived (YY/MM/DD)\n/\n/\nName of Correspondent:\ngames C. mum\nMI Mail Report\nUser Codes: (A)\n(B)\n(C)\nSubject: Draft SBA testimony concerning\nthe amard of attarneips fees in tax\ncases\nROUTE TO:\nACTION\nDISPOSITION\nTracking\nType\nCompletion\nAction\nDate\nof\nDate\nOffice/Agency\n(Staff Name)\nCode\nYY/MM/DD\nResponse\nCode\nYY/MM/DD\nCUHOLL\nORIGINATOR 85,04,24\n/\n7\nReferral Note:\nCUAT 18\nR 85,04,24\n5 85,04,24\nReferral Note:\n12N\n/ /\n/\n/\n-\nReferral Note:\n/\n/\n/ /\n-\nReferral Note:\n/\n/\n/\n/\nI\n-\nReferral Note:\nACTION CODES:\nDISPOSITION CODES:\nA - Appropriate Action\n1. Info Copy Only/No Action Necessary\nA. Answered\nC Completed\nC - Comment/Recommendation\nR. Direct Reply w/Copy\nB - Non-Special Referral\nS Suspended\nD - Draft Response\nS. For Signature\nF - Furnish Fact Sheet\nX . Interim Reply\nto be used as Enclosure\nFOR OUTGOING CORRESPONDENCE:\nType of Response = Initials of Signer\nCode = \"A\"\nCompletion Date = Date of Outgoing\nComments:\nKeep this worksheet attached to the original incoming letter.\nSend all routing updates to Central Reference (Room 75, OEOB).\nAlways return completed correspondence record to Central Files.\nRefer questions about the correspondence tracking system to Central Reference, ext. 2590.\n5/81\nTHE WHITE HOUSE\nWASHINGTON\nDecember 10, 1984\nMEMORANDUM FOR FRED F. FIELDING\nFROM:\nJOHN G. ROBERTS\n028\nSUBJECT:\nSection 1988 -- Liability of Judges\nfor Attorneys Fees; Pulliam V. Allen\nSection 1983 -- Liability of Public\nDefenders; Tower V. Glover\nCircuit Judge Cecil J. Burrows of the Circuit Court of the\nEighth Judicial Circuit of Illinois has written the Presi-\ndent, forwarding a copy of two resolutions passed by the\njudges of the Eighth Judicial Circuit. The two thoughtful\nresolutions express concern over the Supreme Court decisions\nlast term in Pulliam V. Allen, 104 S. Ct. 1970 (1984) and\nTower V. Glover, 104 S. Ct. 2820 (1984). In Pulliam a 5-4\nCourt ruled that judicial immunity does not bar the award of\nattorneys fees against judges in Section 1983 actions. In\nTower the Court unanimously ruled that public defenders are\nnot immune from Section 1983 suits alleging that they\nconspired with other state officials to deprive their\nclients of Federally protected rights. (The United States\ndid not participate in either case.) The resolutions call\nupon Congress to amend 42 U.S.C. §§ 1983 and 1988 to reverse\nthe effect of these two decisions.\nI recommend referring the resolutions to Justice, and so\nadvising Burrows. Appropriate drafts are attached.\nAttachments\nTHE WHITE HOUSE\nWASHINGTON\nDecember 10, 1984\nMEMORANDUM FOR CAROL E. DINKINS\nDEPUTY ATTORNEY GENERAL\nU.S. DEPARTMENT OF JUSTICE\nFROM:\nFRED F. FIELDING Orig., signed by FFF\nCOUNSEL TO THE PRESIDENT\nSUBJECT:\nSection 1988 -- Liability of Judges\nfor Attorneys Fees; Pulliam V. Allen\nSection 1983 -- Liability of Public\nDefenders; Tower V. Glover\nAttached for your review and whatever other action you\nconsider appropriate is a letter to the President from Judge\nCecil J. Burrows. Judge Burrows forwarded two resolutions\nadopted by the judges of the Eighth Judicial Circuit of\nIllinois, criticizing the Supreme Court's recent decisions\nin Pulliam V. Allen and Tower V. Glover. I have also\nattached a copy of my response.\nAttachments\nFFF:JGR:aea 12/10/84\nCC: FFFielding/JGRoberts/Subj/Chron\nTHE WHITE HOUSE\nWASHINGTON\nDecember 10, 1984\nDear Judge Burrows:\nThank you for your letter of November 28 to the President.\nAlong with that letter you forwarded copies of two\nresolutions adopted by the judges of the Eighth Judicial\nCircuit of Illinois, calling upon Congress to amend 42\nU.S.C. §§ 1983 and 1988 to reverse the effect of the Supreme\nCourt's recent decisions in Pulliam V. Allen, 104 S. Ct.\n1970 (1984) and Tower V. Glover, 104 S. Ct. 2820 (1984).\nI have taken the liberty of forwarding your correspondence\nand the resolutions to the Department of Justice, in order\nthat the Department may be aware of the concerns of you and\nyour colleagues as it considers the impact of those decisions.\nWe appreciate having the benefit of your informed views.\nSincerely,\nOrig. signed by FFF\nFred F. Fielding\nCounsel to the President\nThe Honorable Cecil J. Burrows\nCircuit Judge, Circuit Court\nof the Eighth Judicial Circuit\nof Illinois\nPike County Courthouse\nPittsfield, IL 62363\nFFF:JGR:aea 12/10/84\nbcc: FFFielding/JGRoberts/Subj/Chron\nTHE WHITE HOUSE\nWASHINGTON\nDecember 10, 1984\nDear Judge Burrows:\nThank you for your letter of November 28 to the President.\nAlong with that letter you forwarded copies of two\nresolutions adopted by the judges of the Eighth Judicial\nCircuit of Illinois, calling upon Congress to amend 42\nU.S.C. §§ 1983 and 1988 to reverse the effect of the Supreme\nCourt's recent decisions in Pulliam V. Allen, 104 S. Ct.\n1970 (1984) and Tower V. Glover, 104 S. Ct. 2820 (1984).\nI have taken the liberty of forwarding your correspondence\nand the resolutions to the Department of Justice, in order\nthat the Department may be aware of the concerns of you and\nyour colleagues as it considers the impact of those decisions.\nWe appreciate having the benefit of your informed views.\nSincerely,\nFred F. Fielding\nCounsel to the President\nThe Honorable Cecil J. Burrows\nCircuit Judge, Circuit Court\nof the Eighth Judicial Circuit\nof Illinois\nPike County Courthouse\nPittsfield, IL 62363\nFFF:JGR:aea 12/10/84\nbcc: FFFielding/JGRoberts/Subj/Chron\nTHE WHITE HOUSE\nWASHINGTON\nDecember 10, 1984\nMEMORANDUM FOR CAROL E. DINKINS\nDEPUTY ATTORNEY GENERAL\nU.S. DEPARTMENT OF JUSTICE\nFROM:\nFRED F. FIELDING\nCOUNSEL TO THE PRESIDENT\nSUBJECT:\nSection 1988 -- Liability of Judges\nfor Attorneys Fees; Pulliam V. Allen\nSection 1983 -- Liability of Public\nDefenders; Tower V. Glover\nAttached for your review and whatever other action you\nconsider appropriate is a letter to the President from Judge\nCecil J. Burrows. Judge Burrows forwarded two resolutions\nadopted by the judges of the Eighth Judicial Circuit of\nIllinois, criticizing the Supreme Court's recent decisions\nin Pulliam V. Allen and Tower V. Glover. I have also\nattached a copy of my response.\nAttachments\nFFF: JGR:aea 12/10/84\nCC: FFFielding/JGRoberts/Subj/Chror\n279934\nID #.\nCU\nWHITE HOUSE\nJL002\nCORRESPONDENCE TRACKING WORKSHEET\no OUTGOING\nH INTERNAL\nI . INCOMING\nDate Correspondence\nReceived (YY/MM/DD)\n/\n/\nName of Correspondent:\nCecil J. Burrows\nMI Mail Report\nUser Codes: (A)\n(B)\n(C)\nSubject: Section 1988 - Biobility of Judges for\nAttorneys Jees Pulliam V. allen\nSection 1983 - Liability of Public\nDefenders Power V. Beover\nROUTE TO:\nACTION\nDISPOSITION\nTracking\nType\nCompletion\nAction\nDate\nof\nDate\nOffice/Agency\n(Staff Name)\nCode\nIMM/DD\nResponse\nCode\nYY/MM/DD\nCU Holland\nORIGINATOR 841207\n/\n/\nReferral Note:\nWAT18\nR 28/1/2007\nS 84/1/2117\nReferral Note:\n/\n/\n/\n/\nReferral Note:\n/\n/\n/\n/\n-\nReferral Note:\n/\n/\n/\n/\n-\nReferral Note:\nACTION CODES:\nDISPOSITION CODES:\nA Appropriate Action\nI * Info Copy Only/No Action Necessary\nA Answered\nC Completed\nC * Comment/Recommendation\nR Direct Reply w/Copy\nB Non-Special Referral\nS Suspended\nD Draft Response\nS. For Signature\nF - Furnish Fact Sheet\nX Interim Reply\nto be used as Enclosure\nFOR OUTGOING CORRESPONDENCE:\nType of Response = Initials of Signer\nCode = \"A\"\nCompletion Date = Date of Outgoing\nComments:\nKeep this worksheet attached to the original incoming letter.\nSend all routing updates to Central Reference (Room 75, OEOB).\nAlways return completed correspondence record to Central Files.\nRefer questions about the correspondence tracking system to Central Reference, ext. 2590.\n5/81\nCIRCUIT COURT OF THE EIGHTH JUDICIAL CIRCUIT OF ILLINOIS\nPIKE COUNTY COURTHOUSE\nPITTSFIELD. ILLINOIS 62363\nCECIL J. BURROWS\nJR-dul AREA CODE 217\nTELEPHONE\n285-2025\nCIRCUIT JUDGE\nNovember 28, 1984\n279934 CU\nHonorable Ronald Reagan\nPresident of the United States\nWhite House\nWashington, D.C. 20013\nIn re: Section 1988 -- Liability of Judges for Attorneys fees,\nPulliam V. Allen\nSection 1983 -- Liability of Public Defenders,\nTower V. Glover\nDear Mr. President:\nI am herewith sending to you two resolutions passed by the Judges\nof the Eighth Judicial Circuit of Illinois in meeting assembled.\nThe case of Pulliam V. Allen relative to Judges being liable for\nattorneys fees under Section 1988 has received considerable notice\nand is of much concern to the judiciary.\nThe problem created by Tower V. Glover, a recent United States\nSupreme Court case, has probably not received as much attention;\nand I am, therefore, enclosing a copy of the opinion of Justice\n'Connor. The problem created by this Section 1983 interpretation\nis particularly onerous to smaller population jurisdictions which\nmore frequently utilize specially appointed counsel in criminal\ncases. In Pike County we have insurance coverage for our Public\nDefenders who receive a salary, but not for the others.\nWith best regards, I remain\nSincerely yours,\nCecil J. Burrows\nCircuit Judge\nCJB/slb\nenc. (3)\nI, Cecil J. Burrows, a Judge of the Eighth Judicial\nCircuit of Illinois, do hereby certify that the foregoing is a\ntrue and correct copy of a resolution passed by the Judges of the\nEighth Judicial Circuit of Illinois in meeting assembled on the\n24th day of October, 1984.\nLgg\nDATED: November 28, 1984\nRESOLUTION OF THE JUDGES OF THE\nEIGHTH JUDICIAL CIRCUIT OF ILLINOIS\nWHEREAS, on May 14, 1984, the United States Supreme Court\nrendered its decision in Pulliam V. Allen, No. 82-1432, and\ntherein held that judicial immunity does not bar the personal\nliability of Judges for attorney fees under 42 USC 1988, and\nWHEREAS, personal liability for attorney fees cannot\nmeaningfully be distinguished from damages liability in its\nthreat to judicial independence and impartiality, and\nWHEREAS, Pulliam represents a significant departure from\nthe common laws long standing protection of Judges from personal\nfinancial liability for conduct in their judicial capacity, and\nWHEREAS, the availability of attorney fees can serve only to\nencourage vexatious and unfounded actions against Judges, and\nWHEREAS, the burdens and risks of defending such actions\nin and of itself constitutes an unacceptable threat to judicial\nindependence and impartiality, and\nWHEREAS, Pulliam is one of a series of recent decisions by\nthe Court signifying an accelerating erosion of the protections\nafforded Judges by the doctrine of judicial immunity, and\nWHEREAS, it is of crucial importance to the public to preserve\nthe impartiality and independence of its Judges and to relieve\nthem of burdens of defending vexatious and groundless actions.\nNOW, therefore, be it Resolved by the Judges of the Eighth\nJudicial Circuit of Illinois in meeting assembled that:\n1. Congress amend Title 42 USC Section 1988 so as to\nexclude from its provisions members of the judiciary\nacting in their judicial capacity.\nRESOLUTION OF THE JUDGES OF THE\nEIGHTH JUDICIAL CIRCUIT OF ILLINOIS\nWHEREAS, on the 25th day of June, 1984, the Supreme Court\nof the United States decided the case of Bruce Tower, etc., et al,\nPetitioner VS. Billy I. Glover, No. 82-1988, 104 Supreme Court\nReporter 2820, and determined that public defenders are not immune\nfrom liability under Title 42 USC Section 1983 for intentional\nmisconduct by virtue of alleged conspiratorial actions with state\nofficials which deprive their clients of federal rights and,\nWHEREAS, although the case concerned a public defender of\nthe State of Oregon, its holding embraces all persons appointed to\nrepresent indigents accused of violations of the Criminal Code, and\nWHEREAS, the Court stated that appointed counsel in a state\ncriminal prosecution does not act \"under color of\" state law in\nthe normal course of conducting a defense, citing Polk County VS.\nDodson, 454 U.S. 312, 102 S. Ct. 445, 70 L.E.D. 2nd 509, and other-\nwise private person acts \"under color\" of state law when engaged in\na conspiracy with state officials to deprive another of federal\nrights, Dennis VS. Sparks, 449 U.S. 24, 101 S. Ct. 183, 66 L.E.D.\n2nd 185, and\nWHEREAS, appointed counsel have responsibilities similar to.\nthose of a Judge or prosecutor, and therefore should enjoy similar\nimmunities, and\nWHEREAS, the threat of Section 1983 actions based on alleged\nconspiracies among defense counsel and other state officials may\ndeter counsel from engaging in activities that require some degree\nof cooperation with prosecutors, such as negotiating pleas,\nexpediting trials and appeals, and so on, and\nWHEREAS, many counsel, having in mind the multitude of\nfrivolous and vexatious proceedings instituted by penitentiary\ninmates and the tendency to file every possible action, may not\nwish to accept criminal appointments, which are of necessity\npartially pro bono publico, unless the abberation to the immunity\ndoctrine is eliminated,\nNOW, therefore, be it Resolved by the Judges of the Eighth\nJudicial Circuit of Illinois meeting in meeting assembled that:\n1. Congress amend Title 42 USC 1983, to exclude from\nits provisions all appointed counsel in criminal cases\nin all circumstances.\nWHITE HOUSE LAW LIBRARY\nROOM 528 OEOB\n(202) 395-3397\nDate 6-28-85\nTo John Rolures\nRoom No.\nFrom Pat\nTo Keep\nTo Borrow (Date Due\nPer Your Request/Per Our\nConversation\nFYI\nMessage:\nSUPREME COURT OF THE UNITED STATES\nNo. 83-1437\nJEFFREY MAREK, THOMAS WADYCKI AND LAW-\nRENCE RHODE, PETITIONERS v. ALFRED W.\nCHESNY, INDIVIDUALLY AND AS ADMINISTRATOR OF\nTHE ESTATE OF STEVEN CHESNY, DECEASED\nON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF\nAPPEALS FOR THE SEVENTH CIRCUIT\n[June 27, 1985]\nJUSTICE REHNQUIST, concurring.\nIn Delta Airlines V. August, 450 U. S. 346 (1981), I ex-\npressed in dissent the view that the term \"costs\" in Rule\n68 did not include attorney's fees. Further examination of\nthe question has convinced me that this view was wrong, and\nI therefore join the opinion of THE CHIEF JUSTICE. Cf.\nMcGrath V. Kristensen, 340 U.S. 162, 176 (1950) (Jackson, J.\nconcurring).\nNOTE: Where it is feasible, a syllabus (headnote) will be released, as is\nbeing done in connection with this case, at the time the opinion is issued.\nThe syllabus constitutes no part of the opinion of the Court but has been pre-\npared by the Reporter of Decisions for the convenience of the reader. See\nUnited States V. Detroit Lumber Co., 200 U. S. 321, 337.\nSUPREME COURT OF THE UNITED STATES\nSyllabus\nMAREK ET AL. v. CHESNY, INDIVIDUALLY, AND AS\nADMINISTRATOR OF THE ESTATE OF CHESNY\nCERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR\nTHE SEVENTH CIRCUIT\nNo. 83-1437. Argued December 5, 1984-Decided June 27, 1985\nPetitioner police officers, in answering a call on a domestic disturbance,\nshot and killed respondent's adult son. Respondent, in his own behalf\nand as administrator of his son's estate, filed suit against petitioners in\nFederal District Court under 42 U. S. C. § 1983 and state tort law.\nPrior to trial, petitioners made a timely offer of settlement of $100,000,\nexpressly including accrued costs and attorney's fees, but respondent did\nnot accept the offer. The case went to trial and respondent was\nawarded $5,000 on the state-law claim, $52,000 for the § 1983 violation,\nand $3,000 in punitive damages. Respondent then filed a request for\nattorney's fees under 42 U. S. C. § 1988, which provides that a prevail-\ning party in a § 1983 action may be awarded attorney's fees \"as part of\nthe costs.\" The claimed attorney's fees included fees for work per-\nformed subsequent to the settlement offer. The District Court declined\nto award these latter fees pursuant to Federal Rule of Civil Procedure\n68, which provides that if a timely pretrial offer of settlement is not ac-\ncepted and \"the judgment finally obtained by the offeree is not more fa-\nvorable than the offer, the offeree must pay the costs incurred after the\nmaking of the offer.\" The Court of Appeals reversed.\nHeld: Petitioners are not liable for the attorney's fees incurred by re-\nspondent after petitioners' offer of settlement. Pp. 2-9.\n(a) Petitioners' offer was valid under Rule 68. The Rule does not re-\nquire that a defendant's offer itemize the respective amounts being ten-\ndered for settlement of the underlying substantive claim and for costs.\nThe drafters' concern was not so much with the particular components of\noffers, but with the judgments to be allowed against defendants.\nWhether or not the offer recites that costs are included or specifies an\namount for costs, the offer has allowed judgment to be entered against\nI\nII\nMAREK v. CHESNY\nSyllabus\nthe defendant both for damages caused by the challenged conduct and for\ncosts. This construction of Rule 68 furthers its objective of encouraging\nsettlements. Pp. 3-5.\n- (b) In view of the Rule 68 drafters' awareness of the various federal\nstatutes, which, as an exception to the \"American Rule,\" authorize an\naward of attorney's fees to prevailing parties as part of the costs in par-\nticular cases, the most reasonable inference is that the term \"costs\" in\nthe Rule was intended to refer to all costs properly awardable under the\nrelevant substantive statute. Thus, where the underlying statute de-\nfines \"costs\" to include attorney's fees, such fees are to be included as\ncosts for purposes of Rule 68. Here, where § 1988 expressly includes\nattorney's fees as \"costs\" available to a prevailing plaintiff in a § 1983\nsuit, such fees are subject to the cost-shifting provision of Rule 68.\nRather than \"cutting against the grain\" of § 1988, applying Rule 68 in the\ncontext of a § 1983 action is consistent with § 1988's policies and objec-\ntives of encouraging plaintiffs to bring meritorious civil rights suits; Rule\n68 simply encourages settlements. Pp. 5-9.\n720 F. 2d 474, reversed.\nBURGER, C. J., delivered. the opinion of the Court, in which WHITE,\nPOWELL, REHNQUIST, STEVENS, and O'CONNOR, JJ., joined. POWELL\nand REHNQUIST, JJ., filed concurring opinions. BRENNAN, J., filed a dis-\nsenting opinion, in which MARSHALL and BLACKMUN, JJ., joined.\nNOTICE: This opinion is subject to formal revision before publication in the\npreliminary print of the United States Reports. Readers are requested to\nnotify the Reporter of Decisions, Supreme Court of the United States, Wash-\nington, D. C. 20543, of any typographical or other formal errors, in order\nthat corrections may be made before the preliminary print goes to press.\nSUPREME COURT OF THE UNITED STATES\nNo. 83-1437\nJEFFREY MAREK, THOMAS WADYCKI AND LAW-\nRENCE RHODE, PETITIONERS v. ALFRED W.\nCHESNY, INDIVIDUALLY AND AS ADMINISTRATOR OF\nTHE ESTATE OF STEVEN CHESNEY, DECEASED\nON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF\nAPPEALS FOR THE SEVENTH CIRCUIT\n[June 27, 1985]\nCHIEF JUSTICE BURGER delivered the opinion of the\nCourt.\nWe granted certiorari to decide whether attorney's fees\nincurred by a plaintiff subsequent to an offer of settlement\nunder Federal Rule of Civil Procedure 68 must be paid by the\ndefendant under 42 U. S. C. § 1988, when the plaintiff recov-\ners a judgment less than the offer.\nI\nPetitioners, three police officers, in answering a call on a\ndomestic disturbance, shot and killed respondent's adult son.\nRespondent, in his own behalf and as administrator of his\nson's estate, filed suit against the officers in the United\nStates District Court under 42 U. S. C. § 1983 and state tort\nlaw.\nPrior to trial, petitioners made a timely offer of settlement\n\"for a sum, including costs now accrued and attorney's fees,\nof ONE HUNDRED THOUSAND ($100,000) DOLLARS.\"\nRespondent did not accept the offer. The case went to trial\nand respondent was awarded $5,000 on the state-law \"wrong-\nful death\" claim, $52,000 for the § 1983 violation, and $3,000\nin punitive damages.\n83-1437-OPINION\n2\nMAREK v. CHESNY\nRespondent filed a request for $171,692.47 in costs, includ-\ning attorney's fees. This amount included costs incurred\nafter the settlement offer. Petitioners opposed the claim for\npost-offer costs, relying on Federal Rule of Civil Procedure\n68, which shifts to the plaintiff all \"costs\" incurred subse-\nquent to an offer of judgment not exceeded by the ultimate\nrecovery at trial. Petitioners argued that attorney's fees are\npart of the \"costs\" covered by Rule 68. The District Court\nagreed with petitioners and declined to award respondent\n\"costs, including attorney's fees, incurred after the offer of\njudgment.\" 547 F. Supp. 542, 547 (ND Ill. 1982). The par-\nties subsequently agreed that $32,000 fairly represented the\nallowable costs, including attorney's fees, accrued prior to pe-\ntitioner's offer of settlement.¹ Respondent appealed the de-\nnial of post-offer costs.\nThe Court of Appeals reversed. 720 F. 2d 474 (CA7 1983).\nThe court rejected what it termed the \"rather mechanical\nlinking up of Rule 68 and section 1988.\" Id., at 478. It\nstated that the District Court's reading of Rule 68 and § 1988,\nwhile \"in a sense logical,\" would put civil rights plaintiffs and\ncounsel in a \"predicament\" that \"cuts against the grain of sec-\ntion 1988.\" Id., at 478, 479. Plaintiffs' attorneys, the court\nreasoned, would be forced to \"think very hard\" before reject-\ning even an inadequate offer, and would be deterred from\nbringing good faith actions because of the prospect of losing\nthe right to attorney's fees if a settlement offer more favor-\nable than the ultimate recovery were rejected. Id., at\n478-479. The court concluded that \"[t]he legislators who en-\nacted section 1988 would not have wanted its effectiveness\nblunted because of a little known rule of court.\" Id., at 479.\nWe granted certiorari, 466 U. S.\n-\nWe reverse.\nII\nRule 68 provides that if a timely pretrial offer of settlement\nis not accepted and \"the judgment finally obtained by the\n\"The District Court refused to shift to respondent any costs accrued by\npetitioners. Petitioners do not contest that ruling.\n83-1437-OPINION\nMAREK v. CHESNY\n3\nofferee is not more favorable than the offer, the offeree must\npay the costs incurred after the making of the offer.\" Fed.\nRule Civ. Proc. 68 (emphasis added). The plain purpose of\nRule 68 is to encourage settlement and avoid litigation. Ad-\nvisory Committee Note on Rules of Civil Procedure, Report\nof Proposed Amendments, 5 F. R. D. 433, 483 n.1 (1946);\nDelta Air Lines, Inc. V. August, 450 U. S. 346, 352 (1981).\nThe Rule prompts both parties to a suit to evaluate the risks\nand costs of litigation, and to balance them against the likeli-\nhood of success upon trial on the merits. This case requires\nus to decide whether the offer in this case was a proper one\nunder Rule 68, and whether the term \"costs\" as used in Rule\n68 includes attorney's fees awardable under 42 U. S. C.\n§ 1988.\nA\nThe first question we address is whether petitioners' offer\nwas valid under Rule 68. Respondent contends that the\noffer was invalid because it lumped petitioners' proposal for\ndamages with their proposal for costs. Respondent argues\nthat Rule 68 requires that an offer must separately recite the\namount that the defendant is offering in settlement of the\nsubstantive claim and the amount he is offering to cover ac-\ncrued costs. Only if the offer is bifurcated, he contends, so\nthat it is clear how much the defendant is offering for the sub-\nstantive claim, can a plaintiff possibly assess whether it\nwould be wise to accept the offer. He apparently bases this\nargument on the language of the Rule providing that the de-\nfendant \"may serve upon the adverse party an offer to allow\njudgment to be taken against him for the money or property\nor to the effect specified in his offer, with costs then accrued.\"\n(emphasis added).\nThe Court of Appeals rejected respondent's claim, holding\nthat \"an offer of the money or property or to the specified ef-\nfect is, by force of the rule itself, 'with'-that is, plus 'costs\nthen accrued,' whatever the amount of those costs is.\" 720\nF. 2d, at 476. We, too, reject respondent's argument. We\ndo not read Rule 68 to require that a defendant's offer itemize\n83-1437-OPINION\n4\nMAREK v. CHESNY\nthe respective amounts being tendered for settlement of the\nunderlying substantive claim and for costs.\nThe critical feature of this portion of the Rule is that the\noffer be one that allows judgment to be taken against the\ndefendant for both the damages caused by the challenged con-\nduct and the costs then accrued. In other words, the draft-\ners' concern was not so much with the particular components\nof offers, but with the judgments to be allowed against de-\nfendants. If an offer recites that costs are included or speci-\nfies an amount for costs, and the plaintiff accepts the offer,\nthe judgment will necessarily include costs; if the offer does\nnot state that costs are included and an amount for costs is\nnot specified, the court will be obliged by the terms of the\nRule to include in its judgment an additional amount which in\nits discretion, see Delta Air Lines, Inc. V. August, supra, at\n362, 365 (POWELL, J., concurring), it determines to be suffi-\ncient to cover the costs. In either case, however, the offer\nhas allowed judgment to be entered against the defendant\nboth for damages caused by the challenged conduct and for\ncosts. Accordingly, it is immaterial whether the offer\nrecites that costs are included, whether it specifies the\namount the defendant is allowing for costs, or for that mat-\nter, whether it refers to costs at all. As long as the offer\ndoes not implicitly or explicitly provide that the judgment not\ninclude costs, a timely offer will be valid.\nThis construction of the Rule best furthers the objective of\nthe Rule, which is to encourage settlements. If defendants\nare not allowed to make lump sum offers that would, if ac-\ncepted, represent their total liability, they would under-\nstandably be reluctant to make settlement offers. As the\nCourt of Appeals observed, \"many a defendant would be un-\nwilling to make a binding settlement offer on terms that left\nit exposed to liability for attorney's fees in whatever amount\nthe court might fix on motion of the plaintiff.\" 720 F. 2d,\nat 477.\n83-1437-OPINION\nMAREK v. CHESNY\n5\nContrary to respondent's suggestion, reading the Rule in\nthis way does not frustrate plaintiffs' efforts to determine\nwhether defendants' offers are adequate. At the time an\noffer is made, the plaintiff knows the amount in damages\ncaused by the challenged conduct. The plaintiff also knows,\nor can ascertain, the costs then accrued. A reasonable\ndetermination whether to accept the offer can be made by\nsimply adding these two figures and comparing the sum to\nthe amount offered. Respondent is troubled that a plaintiff\nwill not know whether the offer on the substantive claim\nwould be exceeded at trial, but this is SO whenever an offer\nof settlement is made. In any event, requiring itemization\nof damages separate from costs would not in any way help\nplaintiffs know in advance whether the judgment at trial will\nexceed a defendant's offer.\nCuriously, respondent also maintains that petitioner's\nsettlement offer did not exceed the judgment obtained by\nrespondent. In this regard, respondent notes that the\n$100,000 offer is not as great as the sum of the $60,000 in\ndamages, $32,000 in pre-offer costs, and $139,692.47 in\nclaimed post-offer costs. This argument assumes, however,\nthat post-offer costs should be included in the comparison.\nThe Court of Appeals correctly recognized that post-offer\ncosts merely offset part of the expense of continuing the liti-\ngation to trial, and should not be included in the calculus.\nId., at 476.\nB\nThe second question we address is whether the term\n\"costs\" in Rule 68 includes attorney's fees awardable under\n42 U. S. C. § 1988. By the time the Federal Rules of Civil\nProcedure were adopted in 1938, federal statutes had author-\nized and defined awards of costs to prevailing parties for\nmore than 85 years. See Act of Feb. 26, 1853, 10 Stat. 161;\nsee generally Alyeska Pipeline Service Co. V. Wilderness So-\nciety, 421 U. S. 240 (1975). Unlike in England, such \"costs\"\ngenerally had not included attorney's fees; under the \"Ameri-\n83-1437-OPINION\n6\nMAREK v. CHESNY\ncan Rule,\" each party had been required to bear its own at-\ntorney's fees. The \"American Rule\" as applied in federal\ncourts, however, had become subject to certain exceptions by\nthe late 1930's. Some of these exceptions had evolved as a\nproduct of the \"inherent power in the courts to allow attor-\nney's fees in particular situations.\" Alyeska, supra, at 259.\nBut most of the exceptions were found in federal statutes\nthat directed courts to award attorney's fees as part of costs\nin particular cases. 421 U.S., at 260-262.\nSection 407 of the Communications Act of 1934, for exam-\nple, provided in relevant part that, \"[i]f the petitioner shall\nfinally prevail, he shall be allowed a reasonable attorney's\nfee, to be taxed and collected as a part of the costs of the\nsuit.\" 47 U.S. C. § 407. There was identical language in\nSection 153(p) of the Railway Labor Act, 45 U. S. C. § 153(p)\n(1934 ed.). Section 40 of the Copyright Act of 1909, 17\nU. S. C. § 40 (1934 ed.), allowed a court to \"award to the pre-\nvailing party a reasonable attorney's fee as part of the costs.\"\nAnd other statutes contained similar provisions that included\nattorney's fees as part of awardable \"costs.\" See, e. g., the\nClayton Act, 15 U. S. C. § 15 (1934 ed.); the Securities Act of\n1933, 15 U. S. C. § 77k(e) (1934 ed.); the Securities Exchange\nAct of 1934, 15 U. S. C. §§ 78i(e), 78r(a) (1934 ed.).\nThe authors of Federal Rule of Civil Procedure 68 were\nfully aware of these exceptions to the American Rule. The\nAdvisory Committee's Note to Rule 54(d) contains an exten-\nsive list of the federal statutes which allowed for costs in par-\nticular cases; of the 25 \"statutes as to costs\" set forth in the\nfinal paragraph of the Note, no fewer than 11 allowed for at-\ntorney's fees as part of costs. Against this background of\nvarying definitions of \"costs,\" the drafters of Rule 68 did not\ndefine the term; nor is there any explanation whatever as to\nits intended meaning in the history of the Rule.\nIn this setting, given the importance of \"costs\" to the Rule,\nit is very unlikely that this omission was mere oversight; on\n83-1437-OPINION\nMAREK v. CHESNY\n7\nthe contrary, the most reasonable inference is that the term\n\"costs\" in Rule 68 was intended to refer to all costs properly\nawardable under the relevant substantive statute or other\nauthority. In other words, all costs properly awardable in\nan action are to be considered within the scope of Rule 68\n\"costs.\" Thus, absent Congressional expressions to the-con-\ntrary, where the underlying statute defines \"costs\" to include\nattorney's fees, we are satisfied such fees are to be included\nas costs for purposes of Rule 68. See, e. g., Fulps V. City of\nSpringfield Tenn., 715 F. 2d 1088, 1091-1095 (CA6 1983);\nWaters V. Heublein, Inc., 485 F. Supp. 110, 113-117 (ND\nCal. 1979); Scheriff V. Beck, 452 F. Supp. 1254, 1259-1260\n(D Colo. 1978). See also Delta Air Lines Inc. V. August, 450\nU. S., at 362-363 (1981) (POWELL, J., concurring).\nHere, respondents sued under 42 U. S. C. § 1983. Pursu-\nant to the Civil Rights Attorney's Fees Awards Act of 1976,\n42 U. S. C. § 1988, a prevailing party in a § 1983 action may\nbe awarded attorney's fees \"as part of the costs.\" Since\nCongress expressly included attorney's fees as \"costs\" avail-\nable to a plaintiff in a § 1983 suit, such fees are subject to the\ncost-shifting provision of Rule 68. This \"plain meaning\" in-\nterpretation of the interplay between Rule 68 and § 1988 is\nthe only construction that gives meaning to each word in both\nRule 68 and § 1988.2\nUnlike the Court of Appeals, we do not believe that this\n\"plain meaning\" construction of the statute and the Rule will\n2 Respondents suggest that Roadway Express, Inc. V. Piper, 447 U. S.\n752 (1980), requires a different result. Roadway Express, however, is not\nrelevant to our decision today. In Roadway, attorney's fees were sought\nas part of costs under 28 U. S. C. § 1927, which allows the imposition of\ncosts as a penalty on attorneys for vexatiously multiplying litigation. We\nheld in Roadway Express that § 1927 came with its own statutory defini-\ntion of costs, and that this definition did not include attorney's fees. The\ncritical distinction here is that Rule 68 does not come with a definition of\ncosts; rather, it incorporates the definition of costs that otherwise applies\nto the case.\n83-1437-OPINION\n8\nMAREK v. CHESNY\nfrustrate Congress' objective in § 1988 of ensuring that civil\nrights plaintiffs obtain \"effective access to the judicial proc-\ness.\" Hensley V. Eckerhart, 461 U. S. 424, 429 (1983), quot-\ning H. R. Rep. No. 94-1558, p. 1 (1976). Merely subjecting\ncivil rights plaintiffs to the settlement provision of Rule 68\ndoes not curtail their access to the courts, or significantly\ndeter them from bringing suit. Application of Rule 68 will\nserve as a disincentive forthe plaintiff's attorney to continue\nlitigation after the defendant makes a settlement offer.\nThere is no evidence, however, that Congress, in considering\n§ 1988, had any thought that civil rights claims were to be on\nany different footing from other civil claims insofar as settle-\nment is concerned. Indeed, Congress made clear its concern\nthat civil rights plaintiffs not be penalized for \"helping to\nlessen docket congestion\" by settling their cases out of court.\nSee H. R. Rep. No. 94-1558, p. 7 (1976).\nMoreover, Rule 68's policy of encouraging settlements is\nneutral, favoring neither plaintiffs nor defendants; it ex-\npresses a clear policy of favoring settlement of all lawsuits.\nCivil rights plaintiffs-along with other plaintiffs-who re-\nject an offer more favorable than what is thereafter recov-\nered at trial will not recover attorney's fees for services per-\nformed after the offer is rejected. But, since the Rule is\nneutral, many civil rights plaintiffs will benefit from the\noffers of settlement encouraged by Rule 68. Some plaintiffs\nwill receive compensation in settlement where, on trial, they\nmight not have recovered, or would have recovered less than\nwhat was offered. And, even for those who would prevail at\ntrial, settlement will provide them with compensation at an\nearlier date without the burdens, stress, and time of litiga-\ntion. In short, settlements rather than litigation will serve\nthe interests of plaintiffs as well as defendants.\nTo be sure, application of Rule 68 will require plaintiffs to\n\"think very hard\" about whether continued litigation is\nworthwhile; that is precisely what Rule 68 contemplates.\nThis effect of Rule 68, however, is in no sense inconsistent\n83-1437-OPINION\nMAREK v. CHESNY\n9\nwith the congressional policies underlying § 1983 and § 1988.\nSection 1988 authorizes courts to award only \"reasonable\" at-\ntorney's fees to prevailing parties. In Hensley V. Eckerhart,\n461 U. S. 424 (1983), we held that \"the most critical factor\" in\ndeterming a reasonable fee \"is the degree of success ob-\ntained.\" Id., at 436. We specifically noted that prevailing\nat trial \"may say little about whether the expenditure of\ncounsel's time was reasonable in relation to the success\nachieved.\" Ibid. In a case where a rejected settlement\noffer exceeds the ultimate recovery, the plaintiff-although\ntechnically the prevailing party-has not received any mone-\ntary benefits from the post-offer services of his attorney.\nThis case presents a good example: the $139,692 in post-offer\nlegal services resulted in a recovery $8,000 less than petition-\ner's settlement offer. Given Congress' focus on the success\nachieved, we are not persuaded that shifting the post-offer\ncosts to respondent in these circumstances would in any\nsense thwart its intent under § 1988.\nRather than \"cutting against the grain\" of § 1988, as the\nCourt of Appeals held, we are convinced that applying Rule\n68 in the context of a § 1983 action is consistent with the poli-\ncies and objectives of § 1988. Section 1988 encourages plain-\ntiffs to bring meritorious civil rights suits; Rule 68 simply\nencourages settlements. There is nothing incompatible in\nthese two objectives.\nIII\nCongress, of course, was well aware of Rule 68 when it en-\nacted § 1988, and included attorney's fees as part of recover-\nable costs. The plain language of Rule 68 and § 1988 subjects\nsuch fees to the cost-shifting provision of Rule 68. Nothing\nrevealed in our review of the policies underlying § 1988 con-\nstitutes \"the necessary clear expression of congressional in-\ntent\" required \"to exempt\n[the] statute from the opera-\ntion of\" Rule 68. Califano V. Yamasaki, 442 U. S. 682, 700\n(1979). We hold that petitioners are not liable for costs of\n83-1437-OPINION\n10\nMAREK V. CHESNY\n$139,692 incurred by respondent after petitioners' offer of\njudgment.\nThe judgment of the Court of Appeals is\nReversed.\nSUPREME COURT OF THE UNITED STATES\nNo. 83-1437\nJEFFREY MAREK, THOMAS WADYCKI AND LAW-\nRENCE RHODE, PETITIONERS v. ALFRED W.\nCHESNY, INDIVIDUALLY AND AS ADMINISTRATOR OF\nTHE ESTATE OF STEVEN CHESNEY, DECEASED\nON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF\nAPPEALS FOR THE SEVENTH CIRCUIT\n[June 27, 1985]\nJUSTICE POWELL, concurring.\nIn Delta Airlines, Inc. V. August, 450 U. S. 346 (1981), the\noffer under Rule 68 stated that it was \"in the amount of $450,\nwhich shall include attorney's fees, together with costs ac-\ncrued to date.\" Id., at 365. In a brief concurring opinion, I\nexpressed the view that this offer did not comport with the\nRule's requirements. It seemed to me that an offer of judg-\nment should consist of two identified components: (i) the sub-\nstantive relief proposed, and (ii) costs, including a reasonable\nattorney's fee. The amount of the fee ultimately should be\nwithin the discretion of the court if the offer is accepted. In\nquestioning the form of the offer in Delta, I was influenced in\npart by the fact that it was a Title VII case. I concluded\nthat the \"costs' component of a Rule 68 offer of judgment\nin a Title VII case must include reasonable attorney's fees\naccrued to the date of the offer.\" Id., at 363. My view,\nhowever, as to the specificity of the \"substantive relief\" com-\nponent of the offer did not depend solely on the fact that\nDelta was a Title VII case.\nNo other Justice joined my Delta concurrence. The\nCourt's decision was upon a different ground. Although I\nthink it the better practice for the offer of judgment ex-\npressly to identify the components, it is important to have a\n83-1437-CONCUR\n2\nMAREK v. CHESNY\nCourt for a clear interpretation of Rule 68. I noted in Delta\nthat \"parties to litigation and the public as a whole have an\ninterest-often an overriding one-in settlement rather than\nexhaustion of protracted court proceedings.\" Ibid. The\npurpose of Rule 68 is to \"facilitat[e] the early resolution of\nmarginal suits in which the defendant perceives the claim to\nbe without merit, and the plaintiff recognizes its speculative\nnature.\" Ibid. See also ibid., n. 1. We have now agreed\nas to what specifically is required by Rule 68.\nAccordingly, I join the opinion of the Court.\natterneys fees\nbile\nSUMMARIES OF SIGNIFICANT\nATTORNEY FEE AWARD\nDECISIONS\nPrepared By:\nAppellate Policies Division\nOffice of Employee, Labor, and Agency Relations\nU.S. Office of Personnel Management\nNovember 1985\nTABLE OF CONTENTS\nPage\nI.\nBASIC AUTHORITY TO AWARD ATTORNEY FEES\nA. Judicial Phase of MSPB Appeal: Lizut V. Dept. of the Army\n1\nB. Frivolous Awards Filed in Court: Moir V. Dept. of the Treasury\n1\nC. Arbitrator Awards of Attorney Fees: Army and IBEW\n2\nII.\nSERVICES FOR WHICH FEES ARE AVAILABLE\nA. Services Provided Prior to an Appeal: McBride V. Agriculture\n3\nB. Attorney-Client Relationship Required: O'Donnell V. Interior\n3\nC. Petition For Review: Langenbach V. U.S. Postal Service\n4\nD. Petition For Attorney Fees: LaMorge V. Agriculture\n4\nE. Obtaining Enforcement of an MSPB Order: Alfaro V. Transportation\n4\nIII. DETERMINING WHETHER THE APPELLANT IS A\nPREVAILING PARTY\nA. Definition of Prevailing Party: Hodnick V. FMCS\n5\nB. Prevailing Party/Interest of Justice Distinction: Sterner V. Army\n5\nC. As Result of Settlement Agreement: Carpenter V. BATF\n6\nIV. APPLICATION OF THE INTEREST OF JUSTICE STANDARD\nA. Basic Criteria: Allen V. U.S. Postal Service\n7\nB. Based Independently on PFR: Keely V. MSPB\n8\nC. Factually Close Cases: Thomson V. MSPB\n8\nD. Substantially Innocent: Yorkshire V. MSPB\n9\nE. Failure to Grant Opportunity Period: Grant V. Transportation\n9\nF. Negligent Case Presentation: Trowell V. U.S. Postal Service\n10\nV. DETERMINING WHETHER THE FEES REQUESTED\nARE REASONABLE\nA. Factors Used: Kling V. Dept. of Justice\n11\nB. Determination of Market Rate: Mitchell V. HHS\n11\nC. Union Attorneys: Powell V. Dept. of the Treasury\n12\nD. Reimbursement for Costs: Bennett V. Navy\n12\nALPHABETICAL LISTING OF CASES\n13\nI. BASIC AUTHORITY TO AWARD ATTORNEY FEES\nIntroduction - The primary authority under which attorney fees are awarded in cases involving\nFederal employees is found at 5 U.S.C. 7701(g) which authorizes MSPB to award fees in any action\nwhich is appealable to the Board. The Board may also award fees under the Back Pay Act (5 U.S.C.\n5596). Nevertheless, attorney fees claimed under that statute in adverse action cases are subject to\nthe same guidelines and limitations as fees awarded under 5 U.S.C. 7701(g). Note also that while\nFederal Courts, under various circumstances, may award attorney fees against an employee, 5\nU.S.C. 7701(g) only authorizes the Board to award attorney fees in favor of prevailing employees.\nA. Fees may be awarded in connection with judicial phase of MSPB appeal\nLizut V. Dept. of the Army, PH07528110266ADD (1985)\nMr. Lizut appealed his removal to MSPB which upheld the agency's action. He then filed an\nappeal with the U.S. Court of Appeals for the Federal Circuit which vacated the Board's decision\nand remanded his case back to MSPB for further proceedings. On remand, the Board reversed the\nagency's action. Mr. Lizut then petitioned for attorney fees. The MSPB presiding official granted\nan award of fees incurred in challenging his removal before the Board but denied an award for\nservices provided in the judicial phase of the appellant's case.\nIn considering the case on review, the full Board first noted that the Federal Circuit had recently\nheld that 5 U.S.C. 7701(g) is limited to fees incurred in MSPB proceedings and does not authorize\nthe Board to award fees for services rendered in connection with judicial review of a Board\ndecision (Olsen V. Dept. of Commerce, 735 F.2d 558 (1984)). The Board went on, however, to\nhold that the Back Pay Act (5 U.S.C. 5596) authorizes an award of fees incurred for the services of\nan appellant's attorney before the Court as well as before the Board. Mr. Lizut was therefore\nawarded fees for work in obtaining the Court's order vacating the Board's decision which had\nupheld his removal. (Further discussion in OPM Significant Cases, No. 49, 9/85.)\nB. Frivolous appeals filed in Court may result in fee award against employee\nMoir V. Dept. of the Treasury, 754 F.2d 341 (1985)\nMSPB originally dismissed Mr. Moir's appeal of his removal pursuant to a stipulation by the\nparties that it was being withdrawn to permit Mr. Moir to seek reconsideration of OPM's denial of\nhis request for disability retirement. The order of dismissal specifically stated that \"the appeal\nmay be refiled within twenty days of a reconsideration by OPM.\" In July 1982, OPM denied his\napplication for disability retirement and that decision was upheld in an order which became final\nin October 1982. In November 1983, or over a year later, Mr. Moir filed a motion to reinstate his\noriginal appeal of his removal. When MSPB denied that motion as untimely, he filed suit in the\nCourt of Appeals for the Federal Circuit. The Court stated that \"the petitioner has offered no\npossible justification for that substantial delay, and we discern none.\"\nNoting that \"the petitioner has not even come close to showing that the Board committed a legal\nerror or abused its discretion,\" the Court found the appeal to be frivolous and assessed court costs\nand fees of $500 in favor of the Government against the appellant and his attorney. (Further\ndiscussion in OPM Significant Cases, No. 45, 3/85.)\nAs of 11/85\nI\nC. Arbitrator awards of attorney fees must comply with 5 U.S.C. 7701(g)\nArmy and IBEW, 14 FLRA 90 (1984)\nAn arbitrator may award attorney fees in connection with the resolution of an appeal filed under\na negotiated grievance procedure. The authority for such an award is the Back Pay Act (5 U.S.C.\n5596). This decision was issued by the Federal Labor Relations Authority (FLRA) in response to\nthe agency's claim that the arbitrator's award of attorney fees was not authorized. The FLRA\nlisted the several requirements that must be met in such a case. First, it must be shown that the\ngrievant has been affected by an unwarranted or unjustified personnel action which has resulted\nin the withdrawal or reduction in his pay. Second, any award of attorney fees must be in\nconjunction with an award of backpay and both reasonable and related to the personnel action.\nFinally, the Authority made it clear that any award must be in accordance with 5 U.S.C. 7701(g)\nand cited several key MSPB decisions as providing criteria as to what is permitted. Furthermore,\nit was held that arbitrators' awards must contain a \"fully articulated, reasoned decision setting\nforth the specific findings supporting the determination on each pertinent statutory\nrequirement.\" Thus an arbitrator's award of attorney fees is ultimately subject to the guidelines\ndiscussed in the various MSPB cases covered in this issuance.\nAs of 11/85\n2\nII. SERVICES FOR WHICH FEES ARE AVAILABLE\nIntroduction - Fees may normally be awarded for legal services provided at all stages of the\nprocessing of an appeal SO long as the work is performed: 1) within the context of an attorney-client\nrelationship and 2) in connection with a matter which is appealed to MSPB. The five cases below deal\nwith application of these two criteria. Cases dealing with specific types of expenses and the degree to\nwhich they may be included in an attorney fee award are provided under Section V., \"Determining\nWhether the Fees Requested Are Reasonable.\"\nA. An award may compensate for services provided prior to an appeal, so long as they were\nprovided in connection with an action subject to MSPB jurisdiction\nMcBride V. Dept. of Agriculture, SF043209006 (1980)\nMs. McBride apparently retained the services of legal counsel prior to the issuance of her agency's\nfinal decision to remove her for unacceptable performance. Upon MSPB reversing her dismissal,\nshe included in her motion for attorney fees, 15 hours of services provided by her attorney in\ncontesting the action before the agency issued its decision. The Board overruled the presiding\nofficial's initial addendum decision and stated that it had jurisdiction to award attorney fees for\nservices rendered prior to issuance of the agency's final decision, SO long as two prerequisites are\nmet. Those perquisites are: 1) that the Board have jurisdiction over the appeal (5 U.S.C 7701) and\n2) that the services rendered were in connection with an appealable agency action.\nB. Awards are limited to those fees actually incurred within an attorney-client relationship\nO'Donnell V. Dept. of the Interior, NY075299058 (1980)\nIn this case the Board defined the meaning of the phrase in 5 U.S.C. 7701(g)(1) that provides that\nlimits awards to those \"attorney fees incurred by an employee or applicant\". Mr. O'Donnell's\nattorney was not retained directly by him but rather by his union in his behalf. The attorney\nattested that rather than billing the union at his customary rate which would have resulted in a\ncharge of $12,829, he billed at a reduced rate which resulted in an actual charge of $6,100. The\npresiding official determined that a reasonable award in this case would be an amount midway\nbetween the sum produced by applying the normal rate and that actually billed to the union.\nThe full Board first considered the potential argument that the fees were not actually \"incurred\"\nby the appellant since counsel was retained by appellant's union and it was undisputed that he\nhad no contractual obligation to pay his counsel. The Board ruled that the fact that the appellant\nwas not personally obligated to compensate his counsel did not affect his right to an award. It\nstated that \"attorney fees are 'incurred' within the ambit of 7701(g)(1) where an attorney-client\nrelationship exists and counsel has rendered legal services on behalf of the appellant in an appeal\nbefore this Board.\" It may be useful here to note that the the Board in a number of cases has held\nthat the requirement of an attorney-client relationship means that representation by a non-\nattorney is not covered under 5 U.S.C. 7701(g)(1).\nThe Board then addressed the question of whether the amount awarded could exceed the fee\nactually charged the appellant's union, i.e., $6,100. Noting that fee awards must not provide a\nwindfall to counsel at the expense of the public treasury, the Board ruled that \"where it is agreed\nthat a specific fee be paid to counsel for services rendered on behalf of an appellant in a case before\nthe Board, we will presume that the amount agreed upon represents the maximum reasonable fee\nwhich may be awarded.\"\nAs of 11/85\n3\nC. Fees may be awarded for time spent on a petition for review\nLangenbach V. U.S. Postal Service, NY07528090142ADD (1982)\nIn the initial processing of his case, Mr. Langenbach was represented by two individuals who\nwere not attorneys. After its removal action was reversed in an initial MSPB decision, the agency\nfiled a petition for review with the full Board. Mr. Langenbach then retained a licensed attorney\nwho provided legal services in connection with the Board's consideration of the agency PFR. The\nBoard first noted that since the appellant's first two representatives were not attorneys, no\nattorney-client relationship existed and no reimbursement was due for services rendered by those\npersons. It then went on to hold that an attorney may be compensated for services in connection\nwith a petition for review. (Unfortunately for Mr. Langenbach, it was determined that the facts\nin his case did not warrant a finding that such a award would be in the \"interests of justice.\")\nD. A fee award may include time spent on a petition for attorney fees\nLamorge V. Dept. of Agriculture, BN075209027 (1981)\nIn this case, the appellant's attorney submitted a motion for attorney fees which was granted by\nthe MSPB presiding official. The agency filed a petition for review of this attorney fee award\nwhich the full Board denied, upholding an award of $5,995. In his response to the agency PFR,\nthe appellant's attorney noted that the fees awarded by the presiding official did not cover the\nwork done in relation to the agency's objections to that award because the work was done after the\ninitial fee motion was submitted and it was not clear whether a supplementary motion could be\nmade. The Board, reasoning that it would not be fair to allow an agency to force an appellant to\nrespond to general objections to a fee request, stated that time spent on the preparation of a fee\npetition and on the successful appeal of a fee award is compensable under 5 U.S.C. 7701(g)(1). The\nappellant's attorney was permitted to submit the information necessary to determine what a\nreasonable fee would be for work \"done in relation to the fee award and the agency's objections\nthereto.\"\nE. Fees may be recovered for services provided in obtaining enforcement of an MSPB order\nAlfaro V. Dept. of Transportation, NY075281F0428ADD2d (1985)\nThe agency, after having its removal action reversed (and attorney fees assessed based on their\nnegligent case preparation), sought a stay of compliance pending a decision on an OPM petition\nfor reconsideration. MSPB denied the request for a stay and ordered the agency to submit proof of\ncompliance. Eventually, but not until after the Board had denied OPM's petition for\nreconsideration, the agency did submit proof of compliance. In a second addendum decision, the\npresiding official awarded additional attorney fees to the appellant's attorney for services\nperformed during the enforcement proceedings.\nThe agency argued that such an award was not in the interest of justice since its failure to timely\ncomply resulted from its attempt to obtain a stay of reinstatement. The Board noted that its\nregulations do not provide for a stay of the agency's duty to comply pending disposition of an OPM\npetition for reconsideration. Thus it concluded that the agency's stated reason for its delay in\ncompliance was not persuasive and also noted that the agency further delayed in complying with\nthe Board's order even after the final denial of its request for a stay. As a result, the Board held\nthat \"counsel for a prevailing appellant may be compensated for time spent working on\nenforcement proceedings and in reference to an agency's petition for review of an addendum\ndecision awarding attorney fees to counsel for enforcement proceedings.\" (Further discussion in\nOPM Significant Cases, No. 45, 3/85.)\nAs of 11/85\n4\nIII. DETERMINING WHETHER THE APPELLANT IS A PREVAILING PARTY\nIntroduction - 5 USC 7701(g) allows only those employees who \"prevail\" to apply for attorney fees.\nAs applied by MSPB and the Courts, all that is required is that the appellant obtain all or a\nsignificant part of the relief sought and that such relief be related to the initiation of the appeal. As\nseen in the several cases below, this definition may be met in situations where an agency cancels its\nproposed action, where there is substantial mitigation of the original penalty proposed, or pursuant to\na settlement agreement.\nA. An appellant may be a prevailing party if they obtain all or a significant part of the relief\nsought\nHodnick V. FMCS, SF531D09004 (1981)\nAfter a hearing on Mr. Hodnick's appeal of the denial of his within-grade increase (WIGI) had\nbeen scheduled, his agency cancelled its action and granted the WIGL The agency indicated that\nthe cancellation was solely due to procedural errors which occurred during the within-grade\ndetermination process. When Mr. Hodnick subsequently moved for an award of attorney fees, the\nagency argued that for him to be a \"prevailing party\" to whom fees could be awarded, a final\ndecision must have been entered. In an initial decision, the presiding official agreed, specifically\ndistinguishing the definition of \"prevailing party\" in discrimination cases provided for in 5 USC\n7701(g)(2) from that in non-discrimination cases covered in 5 USC 7701(g)(1).\nThe full Board disagreed, reasoning that the same interpretation of \"prevailing party\" is\napplicable under either section of the statute. It held that attorney fees may be awarded if the\nappellant obtains \"all or a significant part of the relief sought in petitioning for appeal, regardless\nof whether a final decision has been issued\". It further noted, however, that if an agency grants\nall or part of the relief sought before a judgment is entered, it must be shown that relief was\ngranted as a result of the institution of the appeal. To permit agencies to avoid liability for fees\nmerely by conceding an appeal before a final decision had been rendered was seen as contrary to\nthe purpose of the fee provision as well as tending to discourage settlements. It is useful to note,\nhowever, that the Board ultimately denied Mr. Hodnick any attorney fees, finding that although\nhe was a \"prevailing party,\" he had failed to establish that an award would be \"in the interest of\njustice.\" Thus it is clear that \"prevailing party\" and \"interest of justice\" are two separate tests\nthat must be met before an award may be made.\nB. Distinction between being a prevailing party and meeting the interest of justice test\nSterner V. Dept. of the Army, 711 F.2d 1563 (1983)\nThis case is a judicial affirmation of the Board's analysis and conclusion in Hodnick. Mr. Sterner\nwas removed based on five charges of misconduct, two of which he admitted. In a hearing before\nMSPB, the agency was unable to prove the three contested charges and his removal was reduced\nto a 16-day suspension. In considering his appeal from the Board's denial of attorney fees, the\nCourt explicitly set out two prerequisites for an award of attorney fees under 5 USC 7701(g)(1),\nfor which the employee bears the burden of proof: the employee must be a prevailing party and\nthe award must be warranted in the interest of justice.\nThe Court agreed that the first prerequisite is met if an appellant obtains all or a significant part\nof the relief sought. It went on to note that \"the determination of who prevailed is, after all, only a\nthreshold test of eligibility; the more difficult question of entitlement is reserved for the second\nprerequisite, 'warranted in the interest of justice.\" Since Mr. Sterner's removal was reversed, he\nAs of 11/85\n5\nclearly was a prevailing party. However, as to the second prerequisite, the Court agreed with\nMSPB that there was no showing that an award was warranted in the interest of justice and the\nBoard's denial of any award of fees was affirmed. This case is also cited for two subsidiary points\nthe Court made: 1) its statement that it will accord the Board's determinations on attorney fees\ngreat deference and 2) its indication that generally speaking, economic hardship is not a relevant\ncriteria in awarding attorney fees.\nC. An appellant may be a prevailing party if as result of a settlement agreement they obtain\nthe relief sought\nCarpenter V. Bureau of Alcohol, Tobacco, and Firearms, 5 MSPB 432 (1981)\nMr. Carpenter appealed his reduction in grade based on misconduct to MSPB. Subsequently, the\nSpecial Counsel intervened, claiming that the agency action constituted or was taken as a result\nof a prohibited personnel practice. Following the initiation of a hearing but prior to a\ndetermination on the merits of the action, the parties entered into a stipulated settlement of the\nappeal. The settlement agreement provided that instead of being downgraded from GS-13, step 4,\nto GS-12, step 1, he would only be downgraded to GS-12, step 10; and that his records would show\nthat the action was taken for the efficiency of the service. The Board restated its holding in\nHodnick, that a final determination on the merits is not required, so long as the appellant\nobtained all or part of the remedy sought. Thus an employee may be the prevailing party as a\nresult of a settlement agreement. Nevertheless, in Mr. Carpenter's case, the Board found that the\ntoken concession he received in the settlement agreement was insufficient to qualify him as a\nprevailing party and his motion for attorney fees was denied.\nAs of 11/85\n6\nIV. APPLICATION OF THE INTEREST OF JUSTICE STANDARD\nIntroduction - Easily the most controversial area in any discussion of attorney fees involves the\ninterpretation and application of the requirement in 5 U.S.C. 7701(g)(1) that an award may be made\nonly after a determination that it is \"warranted in the interest of justice.\" Any review in this area\nmust begin with Allen V. USPS discussed immediately below. Nearly all attorney fee decisions\nfollow the analytical framework first discussed in Allen and all attorney fee cases involving the\napplication of the 'interest of justice' standard are ultimately based on one or more of the five\ncategories of circumstances listed in that case. Recent Court decisions in this area, as seen below,\nhave tended to broaden the circumstances under which an award may be determined to be \"in the\ninterest of justice.\"\nA. Establishment of criteria under which interest of justice standard is applied\nAllen V. U.S. Postal Service, AT075299011 (1980)\nThe agency's removal of Mr. Allen was reversed after a finding by MSPB that the agency had\nfailed to establish that his purported falsification of his time card was intentional. Along with\nreversing the agency action, the presiding official, in his initial decision, found that \"because the\nappellant is the prevailing party, he is entitled, in the interest of justice, to reasonable attorney\nfees.\"\nIn reviewing this decision, the full Board began by setting out the framework under which\nattorney fee motions should be analyzed. It stated:\nThus in awarding attorney fees that have been 'incurred' in appeals under\n7701(g)(1), the statutory language demands that each of the following\nrequirements be met: 1. The appellant must be the 'prevailing party; 2. The\naward must be 'warranted in the interest of justice'; and 3. The fees must be\n'reasonable.'\nAfter reviewing the legislative history of 5 U.S.C. 7701(g)(1), the Board then set out a non-\nexhaustive list of circumstances in which the \"interest of justice\" standard would be met. The\nexamples listed, which have subsequently come to be referred to as the \"Allen categories\" are:\n1. Where the agency engaged in a 'prohibited personnel practice';\n2. Where the agency's action was 'clearly without merit', or was 'wholly\nunfounded', or the employee is 'substantially innocent' of the charges\nbrought by the agency;\n3. Where the agency initiated the action against the employee in 'bad\nfaith,' including:\na. Where the agency's action was brought to 'harass' the employee;\nb. Where the agency's action was brought to 'exert improper\npressure on the employee to act in certain ways;'\n4. Where the agency committed a 'gross procedural error' which 'prolonged\nthe proceeding' or 'severely prejudiced' the employee;\n5. Where the agency 'knew or should have known that it would not prevail\non the merits' when it brought the proceeding.\nAs of 11/85\n7\nThe Board then noted that under its regulations, a request for award of attorney fees must be\nmade by separate motion, with the burden of entitlement to such an award resting on the\nappellant. The case was remanded back to the presiding official to determine whether, in light of\nthe above guidance, an award of attorney fees was \"warranted in the interest of justice.\"\nB. An award may be independently based on a finding that an agency's petition for review\nis clearly without merit\nKeely V. MSPB, 760 F.2d 246 (1985)\nMr. Keely successfully appealed his separation during a reduction-in-force. His agency had\nrefused to reassign him to another position because he did not meet the requirements of a special\nselective factor for that position. The MSPB presiding official found that the selective factor cited\nby the agency had not been approved by OPM and reversed the separation action. The agency\npetitioned for review, citing newly discovered evidence that OPM had indeed approved the\nselective factor in question. The Board denied this petition, indicating that the agency appeal\nlacked merit since the documents in question had been the agency's possession for several years\nbefore the hearing.\nMr. Keely's motion for attorney fees was denied by the presiding official who stated that the\nagency's initial decision that Mr. Keely could not be reassigned was a narrow but tenable\ndetermination under the circumstances. The full Board subsequently upheld this denial of\nattorney fees. Mr. Keely then took his case to the Federal Circuit Court. The Court overruled\nMSPB, stating that \"the determination of whether an award is warranted\nis not limited to\nexamination of the agency's initial action.\" It stated that \"an award of attorney fees is proper\nwhere an agency brings an appeal that is clearly without merit.\" In reviewing the facts of the\ncase, the Court concluded that the agency knew or should have known that it had no chance of\nobtaining a rehearing before MSPB on the basis of the supposed new evidence, that its appeal was\ntherefore without merit, and that an award of attorney fees was warranted from the date the\nagency filed its petition for review.\nC. Factually close cases do not per se fall into a class in which fees are not available\nThomson V. MSPB, 772 F.2d 879 (1985)\nMr. Thomson's agency sought to remove him for threatening his supervisors and sleeping on duty.\nOn appeal to MSPB, it was determined, on conflicting evidence, that while there was insufficient\nevidence to prove that he had threatened his supervisors, the charge of sleeping on duty was\nsustained. The removal action was therefore reversed and a five day suspension imposed. MSPB\nsubsequently denied Mr. Thomson's petition for attorney fees, holding that: 1) there was no\nshowing that the agency did not act reasonably in bringing the charges given the evidence before\nit and 2) that cases decided primarily on the basis of credibility do not warrant fee awards nor are\nthe interest of justice served by a fee award in \"factually close cases.\"\nThe denial of attorney fees was appealed to Federal Court which took exception to both of MSPB's\nholdings. The Court noted that in his motion for an award of attorney fees, Mr. Thomson asserted\nthat he was \"substantially innocent\" of the charges of threatening his supervisor based on the\nevidence presented at the MSPB hearing. The Court restated its holding in Yorkshire that when\nconsidering whether the \"substantially innocent\" criteria is met, the reasonableness of the\nagency's action at the time the removal was taken is \"irrelevant.\" Second, the Court explicitly\nrejected the notion that there is any general rule against fee awards either in cases decided\nprimarily on the basis of credibility or in \"factually close\" cases. While the closeness of the\nAs of 11/85\n8\nevidence can be considered as one factor in determining whether the appellant was substantially\ninnocent of the charges, there is no automatic denial of fee awards in such cases.\nD. If an appellant is determined to be substantially innocent, an award may be made\nregardless of the agency's original fault in bringing the action\nYorkshire V. MSPB, 746 F.2d 1454 (1984)\nThis case focuses specifically on the second Allen category discussed above, when the appellant is\n\"substantially innocent of the charges brought by the agency.\" In the initial MSPB decision, the\npresiding official found no evidence supporting any of the agency's charges against the appellant\nand dismissed the agency's action removing Mr. Yorkshire for striking a patient under his care.\nAt the hearing, the agency's principal witness had changed her testimony and admitted not\nhaving actually seen the alleged incident, and the testimony of the agency's other witness was\ndetermined to be totally lacking in credibility. In ruling on the motion for attorney fees, the\npresiding official determined that nothing in the record suggested that the agency knew or should\nhave known that its principal witness would change her account of the incident and noted that\nfurther investigation would not necessarily have revealed to the agency that it could not\nreasonably expect to prevail on the merits. Therefore Mr. Yorkshire's motion for attorney fees\nwas denied upon a finding that on the basis of the facts available to the agency, its action was not\n\"clearly without merit.\" The full Board upheld this decision.\nThe Appeals Court overturned MSPB's decision, stating that \"when dealing with the\n'substantially innocent' standard for award of attorney fees, the question of the agency's original\nfault need never arise.\" It held that an examination of whether the agency knew or should have\nknown that it would not prevail on the merits is irrelevant to the issue of whether the\n\"substantially innocent\" criteria had been met. The Court drew a clear distinction between the\nfifth Allen category (which deals with whether the agency knew or should have known that it\nwould not prevail when it brought the action) which it said requires a \"sensitive evaluation of the\nagency's original action\" and the \"substantially innocent\" criteria which \"refers to the result of\nthe case in the Board, not to the evidence and information available prior to the hearing.\" Since\nthe presiding official in the initial MSPB hearing found no credible evidence that the appellant\nhad engaged in any misconduct, the \"substantially innocent\" standard was met and an award of\nattorney fees was warranted.\nThe Court went on to indicate that its ruling did not mean that every prevailing employee will be\nentitled to an award of attorney fees, noting that an employee must prevail on substantially all\nthe charges to be found \"substantially innocent.\" It further noted that the degree of fault on the\nemployee's part should be taken into account in assessing whether he is \"substantially innocent.\"\n(Further discussion in OPM Significant Cases, No. 43, 1/85.)\nE. Failure to afford an opportunity period may warrant an award of fees\nGrant V. Dept. of Transportation, AT04328410145ADD (1985)\nMr. Grant's removal based on unacceptable performance was reversed by the Board upon a\nfinding that his agency had failed to afford him a reasonable opportunity to improve as required\nby statute and first recognized by MSPB in its Sandland decision. Mr. Grant then petitioned for\nattorney fees, arguing that he was \"substantially innocent\" of the charges and that an award was\nwarranted in the interest of justice. The presiding official denied his motion, finding that: 1) he\nwas not substantially innocent since the Board did not reverse the finding. that his performance\non at least one critical element was unacceptable as charged and 2) since the Sandland decision\nwas issued after the agency effected the action, the agency therefore had no reason to know that it\nwould not prevail when it took the action.\nAs of 11/85\n9\nThe full Board reversed this ruling and granted the motion for an award of attorney fees. It noted\nthat when considering whether an agency's action was \"clearly without merit\" (or whether an\nemployee is \"substantially innocent\"), the relevant focus is on the result before the Board, not on\nthe information available to the agency prior to the hearing. Since the agency did not present\ncredible evidence that it had afforded the appellant an opportunity to improve, the agency's action\nwas determined to be clearly without merit. The Board went on, however, to find that the both\nthe statute itself as well as OPM guidance made it clear that agencies must afford employees an\nopportunity to improve prior to taking action based on unacceptable performance. Hence the fact\nthat the Sandland decision was issued after the agency action took place was irrelevant. The\nlesson here is that failure to provide a key substantive right provided in the statute (such as a\nreasonable opportunity to improve) may result in an award of attorney fees based upon a finding\nthat the agency action was \"clearly without merit.\"\nF. Negligent presentation of an agency's case may lead to an attorney fee award\nTrowell V. U.S. Postal Service, 3 MSPB 117 (1980)\nIn this case, the MSPB presiding official reversed the agency's dismissal of Mr. Trowell, finding\nthat the agency failed to support the charge with any evidence. In subsequently granting an\naward of attorney fees, he specifically noted that the agency's representative's \"apparent\nunfamiliarity with prosecuting an appeal amounted to negligence. This negligence clearly\nexisted to such a degree as to unconscionably taint the entire proceeding.\" Both the agency and\nOPM contended in their petition for review before the full Board that the award of attorney fees\ncannot be warranted \"in the interest of justice\" simply because the agency's presentation of its\ncase before the Board was negligent.\nThe Board disagreed with this argument, stating that while agencies are not required to be\nrepresented by legal counsel, \"the assignment of totally unskilled, inexperienced, and unprepared\nagency representatives who are utterly lacking in familiarity with the essentials of presenting\nthe agency's case before the Board\" is not permitted. It noted that \"If an agency is not prepared to\ntake a removal action seriously enough to present its case with at least a minimal degree of\ncompetence, then in the interest of justice to all concerned it should not initiate the action to begin\nwith.\" Attorney fees were awarded, based on the reasoning that the fifth Allen category, \"where\nthe agency knew or should have known it would not prevail on the merits when it brought the\nproceeding,\" includes instances where the agency presented its case SO negligently that the action\ncould not possibly be sustained on the record established before the Board.\nAs of 11/85\n10\nV. DETERMINING WHETHER THE FEES REQUESTED ARE REASONABLE\nIntroduction - Once it has been determined that the prerequisites of 5 USC 7701(g)(1) as to\n\"prevailing party\" and \"interest of justice\" have been met, the final significant statutory requirement\nis that only \"reasonable\" attorney fees be awarded. As seen in the cases below, there has been\nconsiderable effort at establishing an analytical framework by which a determination whether the\nfees requested are \"reasonable\" may be made. In actual practice, decisions in this area often turn on\nthe individual facts in each case. The Board's holding in O'Donnell (discussed earlier at p. 3), the\nfirst significant decision which addressed reasonableness of attorney fees, has been substantially\nexpanded in the following cases.\nA. Factors used in determining reasonableness of fees\nKling V. Dept. of Justice, AT075299048 (1980)\nIn this case the agency did not contest the amount of the fees which Mr. Kling's attorney claimed,\ninstead challenging whether the award was in the interest of justice. Nevertheless, after\nupholding the initial decision as to the merits of the award, the Board took the time to discuss at\nsome length the pertinent factors to be considered in determining the amount of a \"reasonable\"\nattorney fee and the analytical framework for considering these factors. The Board indicated that\nthe two most critical factors are the lawyer's customary billing rate and the number of hours\ndevoted to the case. Once these two factors have been scrutinized and multiplied to obtain their\nproduct, presiding officials may take into account other factors not adequately reflected in the\ntime and hourly rate charged. Such factors, the Board suggested, might include the \"quality of\nprofessional performance, unusual time restraints, an unusually unpopular cause, and a\ncontingency factor when the attorney has agreed to be paid only if successful.\"\nThe Board emphasized that the presiding official must carefully scrutinize the hours and billing\nrates claimed by attorneys seeking fee awards. In particular, the billing rate must be evaluated\naccording to the individual attorney's professional standing, specialized experience, and status.\nPresiding officials must include in their decision information sufficient to substantiate not only\nthe billing rate and hours charged, but also any adjustment to this amount, even if the agency\nfails to contest the amount claimed. The Board concluded that: \"The particular facts and\ncircumstances of the parties and attorneys will necessarily vary from case to case, but the method\nof determining a reasonable fee award should not vary. A reasoned analysis with factual support\nin the record is always required.\"\nB. Importance of market rate in determining reasonable fees\nMitchell V. Dept. of Health and Human Services, DA07528110152ADD (1984)\nThe Board in this case focused specifically on the determination of the appropriate billing rate\nused in the Kling formula to arrive at a reasonable attorney fee award. Recognizing that the\nactual rate which was billed is not necessarily the appropriate rate, it stated that the rate that an\nattorney can command in the market is \"important substantiating evidence of the prevailing\ncommunity rate\". However, the Board went on to require: 1) that attorneys who vary their rates\naccording to the kind of case should state the average rate charged in cases similar to the one for\nwhich an award is being sought, and 2) that fee applications should provide information to show\nthat the attorney has billed sufficient work to establish that their rate reflects a market value for\nhis services. If an attorney either does not bill clients or has not billed sufficient work to establish\na market rate, the Board indicated that they could introduce other evidence, such as affidavits of\nattorneys with similar experience as to the rate at which they charge clients.\nAs of 1185\n11\nIn addressing the question of whether the same rate should be billed for different types of legal\nwork, the Board held that while the applicable rate is presumed to be the same for all types of\nlegal work, such a rate should not be used for work \"which is normally done by nonlegal personnel\nsuch as clerical or paralegal workers\". Similarly, the time spent in travel is not legal work and\nshould be compensated at a lower rate. Finally, with regard to recovery of costs (as opposed to\nattorney fees) the Board noted that its authority under 5 USC 7701(g)(1) is limited to those\nexpenses normally included within attorney fees. This is in contrast to fees authorized as a result\nof a finding of discrimination (5 USC 7701(g)(2)), where in addition to attorney fees, the costs of\nexpert witnesses, transcripts, depositions, subpoenas, and duplicating may be recovered.\nC. Compensation of union and other salaried attorneys\nPowell V. Dept. of the Treasury, DC075299039 (1981)\nThe issue in this case was how to arrive at a reasonable billing rate when legal services are\nprovided by a union attorney who is compensated on the basis of an established salary. In this\ncase, the appellant was represented by union counsel who sought to have the attorney fee award\nbased on prevailing rates in the community, rather than on his actual salary. OPM intervened in\nthis case to argue that a fee award to a salaried union attorney must be limited to the actual cost\nto the union of providing the legal services. The problem in this area is that disciplinary rules\ncovering attorneys prohibit their splitting their fees with non-attorneys. If a salaried union\nattorney was reimbursed at a rate exceeding their salary and the excess reimbursement was\nturned over to the union, a violation of such rules would occur.\nThe Board agreed with OPM and held that the reasonable attorney fee recoverable by a salaried\nunion attorney may consist of no more than the actual cost to the union of providing legal services\nto the appellant. This actual cost may include, in addition to the attorney's hourly salary, an\nallowance of 100% of the salaried attorney's compensation for overhead. However, if the fee is to\nbe retained by the attorney, rather than turned over to the union (as when a union hires outside\ncounsel), then the establishment of a reasonable fee may be set based on the prevailing rate in the\ncommunity.\nD. Degree to which \"costs\" may be included in a fee award\nBennett V. Dept. of Navy, 699 F.2d 1140 (1983)\nThe question of the degree to which \"costs\", as opposed to attorney fees,may be covered in an\nattorney fee award was addressed by the Court in this case. The Court ruled that since 5 USC\n7701(g)(1) only authorizes the MSPB to award attorney fees, \"costs\" may not be covered. The\nproblem, of course, is distinguishing between fees and costs. The Court agreed with the Board's\ndefinition in O'Donnell that fee awards may include \"reimbursement for the attorney's out-of-\npocket disbursements for incidental and necessary expenses incurred in furnishing effective and\ncompetent representation.\" The Court indicated that certain \"costs\" were clearly not covered,\nincluding witness fees and expenses, fees for stenographic transcripts, compensation of expert\nwitnesses, and investigation expenses. Properly included in an award are an attorney's travel\nexpenses, postage, and long distance telephone costs. The Court stated that such charges are\n\"directly related to the services performed by the attorney, are not charges that are normally\nsubsumed within the hourly rate figure, and yet may fairly be described as part of the fee for\nservices rendered.\"\nAs of 11/85\n12\nALPHABETICAL INDEX TO ATTORNEY FEE CASES\nCASE\nPAGE\nAlfaro V. Dept. of Transportation\nNY075281F0428ADD2d (1985)\n4\nAllen V. U.S. Postal Service\nAT075299011 (1980)\n7\nArmy and IBEW\n14 FLRA 90 (1984)\n2\nBennett V. Dept. of Navy\n699 F.2d 1140 (1983)\n12\nCarpenter V. Bureau of Alcohol, Tobacco,\nand Firearms\n5 MSPB 432 (1981)\n6\nGrant V. Dept. of Transportation\nAT04328410145ADD (1985)\n9\nHodnick V. FMCS\nSF531D09004 (1981)\n5\nKeely V. MSPB\n760 F.2d 246 (1985)\n8\nKling V. Dept. of Justice\nAT075299048 (1980)\n11\nLamorge V. Dept. of Agriculture\nBN075209027 (1981)\n4\nLangenbach V. U.S. Postal Service\nNY07528090142ADD (1982)\n4\nLizut V. Dept. of the Army\nPH07528110266ADD (1985)\n1\nMcBride V. Dept. of Agriculture\nSF043209006 (1980)\n3\nMitchell V. Dept. of Health and\nHuman Services\nDA07528110152ADD (1984)\n11\nMoir V. Dept. of the Treasury\n754 F.2d 341 (1985)\n1\nO'Donnell V. Dept. of the Interior\nNY075299058 (1980)\n3\nPowell V. Dept. of the Treasury\nDC075299039 (1981)\n12\nSterner V. Dept. of the Army\n711 F.2d 1563 (1983)\n5\nThomson V. MSPB\n772 F.2d 879 (1985)\n8\nTrowell V. U.S. Postal Service\n3 MSPB 117 (1980)\n10\nYorkshire V. MSPB\n746 F.2d 1454 (1984)\n9\nAs of 11/85\n13"
}