In the Matter of the Petition by

LINDA R. SHIRES
3307 Willow Lane Drive
at
Montgomery, AL 36109-3531
P.S. Docket No. DCA-137

APPEARANCE FOR PETITIONER:
John L. Capell, III, Esq.
57 Adams Avenue
Post Office Box 2069 Montgomery, AL 36102-2069

APPEARANCES FOR RESPONDENT:
Fred G. Ott
Labor Relations Representative
6701 Winton Blount Boulevard
Montgomery, AL 36119-9401

James A. Friedman, Esq.
Robert P. Sindermann, Jr., Esq.
Law Department
United States Postal Service
Washington, DC 20260-1132

FINAL DECISION ON APPLICATION
UNDER EQUAL ACCESS TO JUSTICE ACT

            Petitioner Linda R. Shires has filed an application for fees and expenses under the Equal Access to Justice Act (5 U.S.C. § 504 (hereafter EAJA)).  Respondent United States Postal Service contends there is no authority for an EAJA award in proceedings under section 5 of the Debt Collection Act of 1982, as amended (5 U.S.C. § 5514 (a) (hereafter DCA)).  Alternatively it contends that the amount sought by the Petitioner is excessive.

Background

            Respondent issued to Petitioner a Notice of Involuntary Administrative Salary Offset to recover $5,151 which an audit revealed was the amount of a shortage in the main stock of the Montgomery, Alabama Post Office, for which

Petitioner was responsible as the main stock custodian.  Petitioner asserted her right to a hearing under the DCA.  Following the hearing, in a final decision dated July 16, 1992, the Petition was sustained and it was held that Petitioner was not required to repay the $5,151 demanded in the Notice.  Thereafter Petitioner timely filed an application under EAJA to recover attorney fees and expenses in the amount of $10,786.76.  Of that amount $9,424 is for 56.6 hours for attorney fees, including 4.5 hours for the EAJA application; expert accountant fees in the amount of $1,200; and out-of-pocket expenses for photocopying and long-distance telephone calls of $162.76.

            During the course of the DCA proceeding, the presiding administrative judge called to the attention of the parties a decision of the Associate Judicial Officer in an earlier case under the DCA, Coral S. Vellocido, P.S. Docket No. DCA-47 (January 24, 1990), affirmed on Motion for Reconsideration (May 16, 1990).  Rejecting objections by the Postal Service, the Associate Judicial Officer ruled in Vellocido that EAJA was applicable to proceedings under the DCA.

Respondent’s Jurisdictional Objections
To the Application

Respondent reiterates some arguments made in Vellocido, and for the first time contends that cases relied on therein and the rationale in that case have been overruled by an opinion of the Supreme Court which was issued after the Vellocido decisions, Ardestani v. Immigration and Naturalization Service,

60 U.S.L.W. 4035 (U.S. December 10, 1991).  Petitioner’s response to Respondent’s objections has been considered but the controlling issue concerns the effect of the Ardestani opinion on the applicability of EAJA to this DCA proceeding.

            In Ardestani a six-member majority of the Supreme Court ruled that EAJA did not authorize the award of attorney’s fees and costs for administrative deportation proceedings before the Immigration and Naturalization Service (INS).  In reaching this decision, the Court interpreted language in EAJA authorizing awards, namely:  “[a]n agency that conducts an adversary adjudication shall award, to a prevailing party other than the United States, fees and other expenses . . .”  (5 U.S.C. § 504(a) (1)) and the definition of “adversary adjudication” as “an adjudication under section 554 of this title in which the position of the United States is represented by counsel or otherwise.”  5 U.S.C.

§ 504(B)(1)(C)(i).

            The Court relied on a prior Court ruling that the statutorily-required INS administrative hearing before an alien could be deported is not governed by the formal adjudication requirements of the Administrative Procedure Act (APA) (5 U.S.C. §§ 556, 557).  The Court concluded that the EAJA language, “adjudication under section 554” etc., was applicable only to proceedings governed by APA procedures (particularly those in 5 U.S.C. §§ 556, 557) and not to other administrative adjudicative proceedings even though required by statute to be determined on the record after a hearing.  In reaching this conclusion the Court emphasized the “plain meaning” of the words “under section 554” as defining the type of proceeding to be that provided by the APA and the statutory construction principle of construing partial waivers of sovereign immunity strictly in favor of the United States.

            Although the precise holding of the Court pertained to the INS administrative deportation proceedings, the reasoning of the majority is broader

in scope and compels reconsideration of the applicability of EAJA to DCA proceedings in light of that rationale. 

            Section 5 of the DCA expressly provides for “an opportunity for a hearing” on agency determinations of employee indebtedness and repayment schedules.  5 U.S.C. § 5514 (1) (2) (D).  A timely petition for a hearing must be filed under procedures prescribed by the head of the agency.  The Act provides that the hearing “may not be conducted by an individual under the supervision or control of the head of the agency, except that nothing in this sentence shall be construed to prohibit the appointment of an administrative law judge.”  The hearing official is to issue a final decision no later than sixty days after the filing of the petition requesting the hearing.  Id.

            Although ALJs appointed under the APA may be designated as hearing officials under the DCA, the DCA provides for other persons to conduct hearings.  In comparison, the APA provides for hearings to be conducted by the agency (or one or more members of an agency) or an ALJ appointed under that Act.  It also provides for review of an ALJ’s initial decision by the agency (5 U.S.C. §§ 556, 557).  The DCA procedure is different.  A fair hearing is assured because the DCA requires that the hearing official not be under the supervision or control of the head of the agency.  The DCA provides that the decision of the hearing official is final.  Thus, it differs from the APA by not being subject to further review by the head of the agency or any delegated reviewing official(s).

            That the DCA authorizes the appointment of ALJs as hearing officials does not bring the procedure within the APA procedures because DCA authorizes other persons to be hearing officials as well.  Also, the finality of the hearing official’s decision and the lack of statutory language which would bring the DCA proceeding within the ambit of the APA, leads to the conclusion that DCA proceedings are not APA adjudications.  Thus, DCA proceedings are not within EAJA’s coverage of adversary adjudications under section 554 of the APA, as interpreted by the Supreme Court in Ardestani.  It is regrettable that the Ardestani opinion did not come to the attention of the hearing official before Respondent’s objection to the EAJA application was filed.  Nevertheless, the effect of the Ardestani ruling must govern here.  Therefore, despite prior statements of the hearing official, the Vellocido decisions issued prior to Ardestani will not be followed as to the applicability of EAJA to DCA proceedings.

            Petitioner’s EAJA application is denied because EAJA is not applicable to DCA proceedings under the controlling Supreme Court rationale in Ardestani[1].

Joan B. Thompson
Administrative Judge

[1] Even if EAJA were applicable to this proceeding, it is noted that any recovery of attorney fees would be limited to the $75 per hour prescribed by the statute and implementing regulation, 39 C.F.R. §960.6(b)