B. J. Heating & Air Conditioning, Inc.

National Labor Relations Board - Board Decisions

Dec 14, 1984

273 N.L.R.B. 329 (N.L.R.B. 1984)

B J HEATING, INC 329
B. J. Heating & Air Conditioning, Inc. and Sheet
Metal Workers' Union, Local No. 162, Sheet
Metal Workers' International Association,
AFL-CIO. Case 20-CA-16621(E)
14 December 1984
SECOND SUPPLEMENTAL DECISION
AND ORDER
BY CHAIRMAN DOTSON AND MEMBERS-
ZIMMERMAN AND HUNTER
On 13 July 1984 Administrative Law Judge Rus-
sell L. Stevens issued the attached second supple-
mental decision. The Applicant filed exceptions
and a supporting brief and the General Counsel
filed an answering brief in support of the judge's
second supplemental decision.
The National Labor Relations Board has delegat-
ed its authority in this proceeding to a three-
member panel.
• The Board has considered the second supplemen-
tal decision and the record in light of the excep-
tions and briefs and has decided to affirm the
judge's rulings, findings,' and conclusions 2 and to
adopt the recommended Order.
ORDER
The National Labor Relations Board adopts the
recommended Order of the administrative law
judge and orders that the application of the Appli-
cant, B. J. Heating & Air Conditioning, Inc.,
Woodland, California, for an award under the
Equal Access to Justice Act be dismissed.
1 The judge creates a misimpression by stating that "severance and
subsequent dismissal of the case were based upon refusal of witnesses
to appear at trial in answer to subpoena" Actually, the General Counsel
was unsuccessful in his attempts to serve subpoenas, and therefore needed
witnesses could not be produced at the trial
2 Because Member Hunter agrees that the General Counsel's handling
of this case was substantially justified and that the Applicant is not enti-
tled to an award of fees and expenses under the Equal Access to Justice
Act, he finds It unnecessary to pass on the question of whether the Appli-
cant has adequately demonstrated its eligibility for an award
SUPPLEMENTAL DECISION
(Equal Access to Justice Act)
STATEMENT OF THE CASE
RUSSELL L. STEVENS, Administrative Law Judge. This
matter arose from preliminary proceedings and trial in
three cases consolidated December 30, 1981, by the Re-
gional Director for Region 20 of the National Labor Re-
lations Board (the Board). Cases 20-CA-16449 and 20-
CA-16451 involved Perrin Heating and Air Condition-
ing, River City Mechanical and Sheet Metal Workers
Union Local 162, Sheet Metal Workers International As-
sociation, AFL-CIO (the Union). Case 20-CA-16621 in-
volved B. J. Heating & Air Conditioning, Inc. (B.J.) and
the Union. At trial on August 31, 1982, prior to taking
any testimony and prior to introduction of substantive
evidence, the General Counsel moved to sever Case 20-
CA-16621 from the other two cases, and that motion
was granted by the administrative law judge (judge).
The complaint in Case 20-CA-16621 later wa'S with-
drawn by the aforesaid Regional Director for Region 20.
On October 12, 1982, B. J. Heating & Air Condition-
ing, Inc. (Applicant) filed with the Board an application
for award of fees and expenses under EAJA 1 and the
Board's Rules and Regulations, 2 alleging entitlement to
an award following withdrawal of the complaint against
it. On October 18, 1982, the Board referred the applica-
tion to , me for appropriate action. On November 10,
1982, counsel for the General Counsel moved to dismiss
the application, and set forth nine separate reasons in
support of the motion. The first- reason urged by the
General Counsel was that the application was not timely
filed. On November 29, 1982, Applicant filed a response
to the General Counsel's motion to dismiss. On January
11, 1983, I issued a supplemental decision dismissing the
application - for lack of jurisdiction because it had not
been timely filed The remaining eight arguments' ad-
vanced by the General Counsel were not reached by the
dismissal, as they were procedural in nature. On January
26, 1984, the Board reversed the dismissal, held that the
application lithely was filed, and remanded the matter to
me for further action, including the issuance of a deci-
sion on the merits of the application.
On March 6, 1984, Applicant filed a Motion for Sum-
mary Judgment, --and on March 8, 1984, the General
Counsel filed a response opposing Applicant's motion.
Because of several apparent discrepancies and uncertain-
ties disclosed by the record, I held an informal confer-
ence of the parties on April 16, 1984. Iri response to an
Order dated April '16, 1984, issued following the confer-
ence, Applicant stibmitted explanatory material on April
27, 1984, and General Counsel submitted a supplemental
memorandum in support of the Motion to Dismiss, dated
June 15, 1984 The Order of April 16, 1984, provided,
inter aim, that Applicant had 15 days in which to submit
its affidavit response to the General Counsel's supple-
mentary support of its motion to dismiss the application.
That response, dated July 3, 1984, was filed July 5, 1984
Findings and conclusions relative to Applicant's
Motion for Summary Judgment, and to the General
Counsel's eight arguments in support of the motion to
dismiss, are discussed below.
I. MOTION FOR SUMMARY JUDGMENT
Applicant argues "By failing to file an answer to the
application within 30 days of the Board's January 26,
1984 order denying the Motion to Dismiss, the General
Counsel has consented to the award requested by the
Applicant herein."
That argument is based on an erroneous presumption.
The Board's Order to this judge did not deny the Genet-
1 Equal Access to Justice Act, 5 USCA §504
2 Sec 102 143 et seq
273 NLRB No. 49
330 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
al Counsel's Motion to dismiss. The Order remanded
"this proceeding," "for such further action as is required
in light of our decision to accept as timely filed the ap-
plication of' the Applicant, "including the issuance of a
decision on the merits of the application." -
Whether or not further proceedings ensue after the
General Counsel's motion is disposed of is irrelevant to'
the proceedings herein. The only matter presently before
this judge is the General Counsel's argument relative to
items 2 through 9, set forth in the motion to dismiss.
Applicant's Motion for Summary Judgment is denied.
II. ELIGIBILITY REQUIREMENTS
The General Counsel argues that the application does
not show the net ' worth of 'Applicant as of Dec&nber 30,
1981, the date of the complaint, as required by Section
102 143(d) of the -Board's rules; that the application does
not shomi the number of Applicant's employee on De-
cember 30, 1981, as required by Section 102 143(d) of the
Board's' rules, and that the application does not include
accompanying notes and the accOuntant's review report
referred to in Applicant's financial statement, as required
by Section 102.147 of the Board's rules.
Section 102.144(6 provides that, for the purpose of
eligibility, the net worth and number of employees' of an
applicant shall be determined as of the date of the com-
plaint in an unfair labor practice proceeding. The date of
the complaint in this proceeding is December 30, 1981.
Applicant's balance sheet, submitted with the applica-
tion, is dated March 31, 1982, 3 months after the date of
the complaint., Total assets are shown as $442,744. Total
stockholders' equity is shown as $296,221 Total cost of
property and equipment is shown as $295,256, with a net
value of $90,412. Nothing in the record casts doubt on
those figures, and no reason is shown for assuming that
Applicant's net worth changed so .greatly (more than
$4.5 million) within a 3-month period as to place Appli-
cant outside the purview of EAJA
So far as the number of employees is concerned, it is
apparent from the complaint and Applicant's balance
sheet that far fewer than the 500 criteria of EAJA were
employed as of December 30, 1981. As of March 31,
1982, Applicant's cash totaled $60,063, and its total re-
ceivables were $114,196. A weekly payroll for 500 em-
ployees, even at the minimum wage of less than $4 per
hour, would be far more than Applicant's total cash on
hand Further,- the application states, as required by Sec-
tion 102.147(a) of EAJA, that Applicant employed 12
full- and part-time employees as of October 7, 1982.
There is nothing in the record to indicate or show a pre-
cipitous drop in the employee complement within the 3-
month period just prior to March 31, 1982, and the infer-
ence is drawn that, as of December 30, 1981, Applicant
had employees totaling substantially fewer than 500 If
there was any doubt concerning Applicant's eligibility on
the basis of net worth or number of employees, that
doubt could be resolved pursuant to Board rules 3 There
is no such doubt
3 Sec 102 147(f) and Sec 102 152(a)
So far as failure of the application to include the ac-
countant's notes and review report is concerned, there is
no basis in the record to indicate that the balance sheet is
not within the 'requirements of EAJA and Board rules.
Section 102 147(0 provides, inter aim, that the financial
statement "may be in any form convenient to the appli-
cant that provides full disclosure of the applicant's and
its affiliates' assets and liabilities and is sufficient to deter-
mine whether the applicant qualifies under the standards
in this part."
The General Counsel's arguments relative to this issue
are found to be without merit.
III. FEES FOR WORK ON OTHER CASES
The General Counsel argues that, the application
"clearly contravenes the stated purposes of EAJA," in
that it claims fees related to other litigation and matters
between the parties
In the application, Applicant claims fees for time de-
voted 'to an RM petition, and to cases consolidated with
Case 20-CA-16621
In its explanatory memorandum of April 27, 1984,4
Applicant's counsel states, inter alia:
In view of the Region's consolidation of these
cases, there were certain portions Of pre-trial prepa-
ration that were common to all three 'respondents.
Accordingly, all time spent on trial preparation ac-
tivities that were in the common benefit of all three
respondents were billed out at 1/3 the total costs
for each respondent. For example, on August 9,
1983, 4 8 hours were spent reviewing case files and
conducting research on legal defenses available to
all three respondents For billing purposes, each re-
spondent was billed 1/3 the total, or 1 6 hours This
method of proration is reflected in the Documenta-
tion of Fees and Expenses attached as Exhibit D to
the Application for Award of Fees and Expenses
Under the Equal Access to Justice Act in B J Heat-
ing & Air Conditioning, Inc (Sheet Metal Workers
Union, Local No. 162) in Case No. 20-CA-16621.
It is also reflected in the Amended Documentation
of Fees and Expenses—B.J Heating & Air Condi-
tioning, attached hereto and incorporated herein by
reference. All other expenses listed were attributa-
ble solely to work on Case No 20-CA-16621 and
were billed 100% to B.J. Heating & Air Condition-
ing.
It appears that Applicant is not claiming fees for time
spent on other cases that were not related to Case 20-
CA-16621 It is clear from affidavits submitted by the
General Counsel (discussed infra), and from Applicant's
explanation, that the claim by Applicant covers prorated
time spent on matters that were common' to all three Re-
spondents involved in the consolidated cases. This claim
does not appear unreasonable or improper. The General
4 The General Counsel states in the supplemental memorandum of
June 15 that Applicant's explanatory memorandum was not received by
the General Counsel Applicant's letter of June 20, 1984. remedies that
matter •
B J HEATING, INC

331
Counsel's argument on this point is found to be without
merit.
IV. EXCESSIVE FEES
As discussed during the informal conference of April
16, 1984, Exhibit D , attached to the application for fees
award was not clear and readily understandable. The re-
vised claim submittea , by Applicant on April 27, 1984,
which accords with Applicant's oral explanation of April
16, 1984, indicates that the amounts claimed are on the
basis of $75 per hour as permitted by EAJA, or on lesser
computations if actual billings to clients were at less than
$75 per hour.
The General Counsel's argument that fees in excess of
$75 per. hour are claimed by Applicant is not supported
by the record.
V. FEES AND EXPENSES INCURRED PRIOR TO
OCTOBER 1, 1981
Applicant claims $60 for time expended on RM mat-
ters on August 14 and 26, 1981. The General Counsel
submitted lengthy argument against such fees, contend-
ing, "it is clear that Congress did not intend to apply the
statute retroactively so as to include fees and expenses
incurred before the effective date of the statute," while
acknowledging that EAJA is silent so far as that 'proposi-
tion is concerned.
The General Counsel makes the same argument that
was made in Tyler Business Services v NLRB. 5 There, the
U.S. Court of Appeals for the Fourth Circuit stated,
inter aim.
The Act's test for recovery of attorney's fees is
whether the case was pending on or after 'October
1, 1981, and not when the fees were incurred. The
Supreme Court previously has approved fee awards
for work performed before the effective date of the
applicable authorizing statute. See Hutto v. Finney,
437 U.S. 678, 694 n. 23 (1978) (Civil Rights -Attor-
ney's Fees Awards Act); Bradley v. School Board of
the City of Richmond, 416 US 696 711-21. (1974)
(Educational Acts Amendments of 1972). Because
the statutes involved in ,those cases and the Equal
Access to Justice Act address similar concerns, the
rationale of Bradley and Hutto applies here. See Un-
derwood v. Pierce, No. 79-1318-HP, slip op: at 7-8
(C D. Cal Mar. 25, 1982); Photo Data, Inc. v.
Sawyer, 533 F Supp. 348, 351-52 (D D C 1982)
The test, therefore, is whether or not the case for which
Applicant claims fees and expenses, i.e., Case 20-CA-
16621, was pending as of October 1, 1981 It was not so
pending—it was issued December 30, 1981, when it was
consolidated with Cases 20-CA-16449 and 20-CA-
16451, neither of which involved Applicant.
This argument by the General Counsel is meritorious,
and the amount of $60, discussed above, is not eligible
for an award under EAJA.6
5 iii LRRM 3001, 3003 (4th Cm 1982)
6 Moholland v Schweiker, 546 F Supp 383 (1982)
, ,VI. FEES AND EXPENSES INCURRED PRIOR TO
DECEMBER 30, 1981
Applicant claims fees and expenses totaling $668 in-
curred prior to December 30, 1981, for preparing one
letter concerning an RM petition and for conferences
with B. J. Heating personnel and NLRB representatives.
The General Counsel argues that "only fees and ex-
penses that are incurred in 'adversary adjudication' are
feaoverable, and that; under Section 102.143(a) of the
Board's Rules and Regulations, "adversary adjudication"
begins with the issuance of a complaint.
The General Counsel's summary of pertinent portions
of Board rules is correct The language -of the rules is
plain. No fees or expenses incurred prior to issuance of a
complaint are eligible for award The General Counsel is
required by law to investigate all charges, and there is no
basis on which to conclude that fees and expenses in-
curred during the investigatory stage of the controversy
were intended by Congress to be cornpensable.
This argument by the General Counsel has merit, and
the above-mentioned $668 portion of Applicant's claim is
found not to be eligible for award.7
VII FEES AND EXPENSES INCURRED IN DRAFTING
THE EAJA APPLICATION
Applicant seeks an award of no less than $1576 for
fees and expenses "according 'to proof incurred in the
within application."
General Counsel argues that no fees and expenses in-
curred "after the adversary 'adjudication has been com-
pleted" are eligible for award. .
The General Counsel's position is considered incor-
rect, since denial of such fees and expenses would have
the effect of discouraging litigants who have established
eligibility for an award from filing claims. 8 Claiming
such an award, however, properly is for consideration
only after an award has been made. The claim is not sub-
ject to a motion to dismiss. As found below, General
Counsel was justified in proceeding herein, and the appli-
cation is found to be without merit. Therefore, this por-
tion of the claim for .no more than $1576 is found to be
an includable item in the total claim, but not eligible for
an award because Applicant is not entitled to any of the
fees and expenses set forth in the application
VIII FAILURE TO SHOW HOW APPLICANT
"PREVAILED"
The General Counsel argues that "Respondent has
failed to identify the Particulars in which it has prevailed
and has failed to identify the positions of the General
Counsel which were not substantially justified"
This argument is without merit. The application de-
votes approximately five of its pages, to a detailed
review of the history of the case and, in another four
pages states with considerable particularity the basis for
See, for a summary of this Issue, Administrative Law Judge Shapiro's
decision in Evergreen Lumber Co, JD-(SF)-108-83, adopted by the
Board December 7, 1983, in the absence of exceptions
8 Tyler Business Services, supra
332 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
concluding that the case was initiated and pursued with-
out "substantial justification."
The issue of "substantial justification" is a separate
matter, which is discussed below.
SUBSTANTIAL JUSTIFICATION -
It is noted at the outset, that this motion to dismiss
raises a two-faceted issue One facet relates to the inves-
tigative stage of the controversy; the other relates , to the
litigation stage. The Government's position must he
found to have been substantially justified at both stages,
in order for the General Counsel to prevail in this
motion.9
So far as the investigative stage is concerned, it is
quite clear that the General Counsel proceeded in a 'rea-
sonable manner. The investigation was exhaustive and
detailed." Possible violations of the Act reasonably dis-
closed by the investigation were not novel or unusual—
they included several possible 8(a)(1) violations (interro-
gations, circulation of unlawful petitions, and unlawful
solicitation of employees) and 8(a)(5) violations (discon-
tinuance of contractual contributions to trust funds).
B.J.'s attorneys were present during much of the investi-
gative stage (taking of affidavits), and during several ne-
gotiations involved in the three consolidated cases There
is no indication of any surprise on the part of, or of any
advantage taken of, or of any false or misleading state-
ments by investigators addressed to, B.J or its attorneys.
There is no indication, however slight, that the General
Counsel's attorneys or investigators were motivated by
antagonism, dislike; or vindictiveness so far as B.J. or its
representatives were concerned. Issuance of a complaint
based on the investigation was reasonable and proper.
So far as the litigation stage is concerned, there is no
'indication that the General Counsel's initial severance,
and later dismissal, of the case against B.J. improperly
was motivated or was . based on last-minute recognition
that a prima facie case was out of grasp. Counsel for the
General Counsel , represented at trial, and later in memo-
randa, that severance and subsequent dismissal of the
case against B.J. were based upon refusal of witnesses to
appear at trial 'in answer to subpoena. A copy of the sub-
poena for David Gladwill was submitted to the judge by
9 Moholland v Schweiker, supra
'° The record Includes pretrial affidavits of B J s president and several
of B J employees, as well as extensive documentary evidence such as
letters and statements
counsel for the General Counsel, pursuant to the judge's
request for subpoena copies. Gladwill was a key witness
for the General Counsel's case Without witnesses, a case
could not be made Pretrial affidavits, of which there
were many, cannot be used as substantive proof of viola-
tions of the Act. If there had been no pretrial investiga-
tion, subsequent failure to litigate-the issues possibly may
have provided the predicate for an award. However, that
is net this case. Possibly the General Counsel could have
gone further, , and asked a U.S. district court to enforce
the subpoenas. However, that would have involved
lengthy and costly procedures, and it muk be assumed,
in light of the General Counsel's generally reasonable ap-
proach to the case, that good reason existed for abandon-
ing further efforts . to get witnesses, whose affidavit evi-
dence already had been obtained, to trial. There is no
evidence that the General Counsel acted arbitrarily or
improperly during the litigation stage of these proceed-
ings.
Applicant's principal argument is that, had the case
gone to trial, it would have prevailed on the merits. That
may be true, but it is beside the point. The question is
whether or not the General Counsel substantially was
justified in initiating action against B.J. and in pursuing
that action to the point of trial As noted above, such
justification is apparent The General Counsel's eviden-
tiary support disintegrated through , no fault of his own,
and that fact cannot now be used to negate the' justifica-
tion that existed prior to that time
Based on the foregoing, it is concluded that there was
reasonable basis and substantial justification, both in law
and in fact, for the General Counsel's pretrial and trial
conduct. It will, therefore, be recommended that the ap-
plication be denied.
On these findings of fact and conclusions of law and
on' the entire record, I issue the following recommend-
ed"
ORDER
It is ordered that the application of B. J. Heating &
Air Conditioning, Inc. for an award of fees and expenses
under the Equal Access to Justice Act is denied.
" If no exceptions are filed as provided by Sec 102 46 of the Board's
Rules and Regulations, the findings, conclusions, and recommended
Order , shall, as provided in Sec 102 48 of the Rules, be adopted by the
Board and all objections to them shall be deemed waived for all pur-
poses