dissenting:
I dissent because I believe the majority has applied a microscope to an inquiry which Congress meant to be conducted with the naked eye. We are authorized to set aside this agency action if it is “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.” 5 U.S.C. § 7703(c)(1) (Supp.V 1981). Every branch of that test requires, either expressly or implicitly, that we take into account the degree of discretion Congress intended the agency to enjoy with regard to the determination at issue. Thus, even an agency decision arrived at by lot would be neither arbitrary, capricious, an abuse of discretion nor (constitutional questions aside) otherwise contrary to law if the governing statute authorized the agency to decide in random fashion.
With regard to the award of attorneys’ fees, the degree of discretion conferred upon the MSPB is particularly high. That is apparent from the very language of the award provision, which states that the Board “may require payment by the agency involved of reasonable attorney fees incurred by an employee ... if the employee ... is the prevailing party and the Board . .. determines that payment by the agency is warranted in the interest of justice.” 5 U.S.C. § 7701(g)(1) (Supp.V 1981). The use of the permissive “may” (rather than the mandatory “shall”); the inherently judgmental standard “warranted in the interest of justice”; and the specification “if ... the Board .. . determines that payment ... is warranted in the interest of justice” (emphasis added); all suggest that the agency is to be given broad leeway in deciding whether to award fees in a particular case. This conclusion is supported by the scant legislative history applicable to the provision. The Report of the Conference Committee which adopted the provision in its final form is not helpful with regard to this issue, see H.R.Rep. No. 1717, 95th Cong., 2d Sess. 142 (1978), U.S.Code Cong. & Admin.News, p. 2723; but the Senate Committee Report, addressing a version that was, if anything, less suggestive of agency discretion, said that “[t]he circumstances justifying the award of attorney’s fees is [sic] left to the discretion of the Board to develop in light of its experience.” S.Rep. No. 969, 95th Cong., 2d Sess. 61 (1978), U.S.Code Cong. & Admin.News, p. 2783.
In the face of this statutory language and legislative history, it would be unreasonable to believe that Congress meant to go from the general denial of attorneys’ fees, which has been the traditional “American Rule,” see, e.g., Alyeska Pipeline Co. v. Wilderness Society, 421 U.S. 240, 247, 95 S.Ct. 1612, 1616, 44 L.Ed.2d 141 (1975), to a regime in which the agency’s refusal to award fees will be subject to close judicial scrutiny and *1408thus provoke frequent litigation. A pragmatic consideration pointing in the same direction is that the MSPB’s fear of judicially mandated fees against the agency might induce it to be less generous in making substantive determinations favoring the employee. One must conclude, in short, that the agency’s discretion in this matter is broad, and the scope of our review correspondingly narrow. Application of such a standard should not produce reversal in the present case.
Assuming that the Board’s test for awarding attorneys’ fees — whether the agency “should have known that it would not prevail on the merits” — with its accompanying obligation of further investigation, applied even at the very last stages of the agency proceeding,* I nonetheless find it impossible to say that the MSPB was arbitrary or capricious in declining to award fees here. What it found crucial was the fact that the principal evidence ultimately vindicating Steger on the unauthorized absence and unauthorized use of vehicle charges had, through Steger’s action, been withheld from the agency’s deciding official. The 11 exculpatory statements never became part of the record on which that official made the agency decision, because Steger himself had declined the request of the initial hearing officer to retain or copy them, claiming he did not have the witnesses’ permission. (That explanation is either implausible — the statements were all in writing and signed, and some of them were under oath — or else indicates a high degree of negligence on Steger’s part. He was able to obtain the requisite “permission” at the MSPB stage of the proceedings.) As a consequence, the deciding officer had to rely upon the hearing officer’s brief summary of these documents, and was given reason to doubt the declarants’ willingness to stand behind what they had said.
It should be noted, moreover, that although the MSPB found that these documents, when finally submitted and viewed in their entirety, tipped the scales in favor of Steger, they far from demolished the agency’s case. All of the declarants denied seeing Steger at home, or him or his agency car at his place of business during working hours. But with two exceptions, none of them claimed to have observed the premises continuously — so that their evidence did not flatly contradict the agency witnesses. The two exceptions were Steger’s daughter and his former employee, whose testimony could be deemed less reliable than the more disinterested witnesses on the agency side (who included two couples who were neighbors of Steger’s home and business, and one of the agency’s warrant officers). Two of the statements also alleged that the two couples giving evidence against Steger bore him a grudge — but, even if true, that would not conclusively disprove their testimony. In other words, it could not be said that, despite the second-hand and unverified fashion in which this information was brought to the deciding officer’s attention, DIS was on notice of allegations from reliable sources that utterly destroyed its case.
In these circumstances, it seems to me not at all “arbitrary, capricious [or] an abuse of discretion” for the MSPB to conclude, as it did, that since Steger’s own failure to complete the record was partly to blame for the agency’s erroneous decision, he should bear his own attorneys’ fees. None of the cases cited by the majority in which the Board awarded fees against the agency because of its failure to investigate involved a situation in which it appeared that the employee had the exculpatory evi*1409dence in his possession and declined the agency’s request to produce it. To make the agency investigate further is one thing; but to make it duplicate evidence which the employee already possesses (and which, but for his negligent failure to obtain permission, if that is to be believed, he could turn over to the agency at once) is quite something else.
The majority opinion, as I understand it, does not reject this basis of distinction, but reverses the Board for not expressly stating that this was the reason the earlier “duty to investigate” cases were inapplicable. That imposes a degree of refinement which I find inappropriate for such discretionary decisions. I think it no more arbitrary for the Board to fail to distinguish its arguably but not clearly inconsistent precedent when it makes fee-award determinations, than it is arbitrary for us to fail to do so when we award or deny attorneys’ fees, e.g., Order, Greene v. Gibralter Mortgage Investment Co., No. 82-1391 (D.C.Cir. May 31, 1983); or when we deny a motion for stay, e.g., Order, Defenders of Wildlife v. The Endangered Species Scientific Authority, No. 83-1019 (D.C.Cir. Jan. 27, 1983). For agencies, no less than for courts, it is unnecessary to provide the same high degree, not merely of consistency, but of explicit justification for all determinations. For highly discretionary judgments such as the present one it suffices, I think, that there are in fact valid grounds relied upon by the agency for treating the case differently from earlier cases. To require that the agency not merely allude to those grounds (which it did here) but also identify them as the specific reason for departing from arguably applicable precedent, is to impose intricacies of process reserved for more important and less discretionary determinations. In holding otherwise, the court continues the progressive complication of agency process and encourages the progressive trivialization of the business of appellate courts.
The Board seems to have adopted that assumption here and in several other cases. Batcher v. Department of Treasury, No. BN07528010020 AD (Nov. 22, 1982); O’Donnell v. Department of Interior, 2 MSPB 604 (1980); Stout v. Postal Service, 3 MSPB 440 (1980). I cannot avoid observing, however, (1) that Alien v. Postal Service, 2 MSPB 582 (1980), which established the test, explicitly limited its application to the point of time “when [the agency] brought the proceeding”; and (2) that applying such a test at the conclusion rather than the outset of the proceeding will produce the award of attorneys’ fees whenever the MSPB reverses the agency action, unless new evidence is introduced before the MSPB — since the agency “should have known” how to apply the law to the facts as well as the MSPB. I leave it to the MSPB to work out this puzzle in the future.