Macktal v. Chao

IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT
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m 01-60195
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JOSEPH J. MACKTAL, JR.,

Petitioner,

VERSUS

ELAINE CHAO,
Secretary, United States Department of Labor,

Respondent.

_________________________

Petition for Review of a Final Order of
the United States Department of Labor
_________________________
April 8, 2002

Before SMITH and DeMOSS, Circuit Judges, and LAKE,* District Judge.

SIM LAKE, District Judge:

This is the last chapter in a long saga between petitioner

Joseph J. Macktal, Jr., his former employer, Brown & Root, and the

United States Department of Labor. In this appeal Macktal

petitions the Court to review and vacate a decision and order of

the Administrative Review Board of the Department of Labor (ARB)

*
District Judge of the Southern District of Texas, sitting by designation.
denying Macktal’s Petition for Attorney’s Fees and Costs because

the ARB did not have authority to reconsider its earlier decision

awarding him fees and costs. Because we conclude that the ARB had

such authority, and that the ARB’s exercise of that authority was

reasonable, we deny the petition for review and affirm the decision

of the ARB.

I.

To put the current issue in context a brief history of the

case is necessary. In 1986 Macktal filed a complaint with the

Secretary of Labor alleging that his resignation as an electrician

at Brown & Root's Comanche Peak Nuclear Power Plant was a

constructive discharge in retaliation for protected whistleblower

activities under the Energy Reorganization Act (ERA), 42 U.S.C.

§ 5851. After an investigation the Department of Labor Wage and

Hour Division found that Brown & Root did not retaliate against

Macktal.

Macktal and Brown & Root later entered into a settlement

agreement. Macktal agreed to dismiss his whistleblower complaint

with prejudice and not to appear voluntarily as a witness or party

in any judicial or administrative proceeding involving Brown &

Root. In return, Brown & Root agreed to pay $35,000 to Macktal and

his attorneys. Brown & Root paid the agreed amount following the

execution of a joint motion to dismiss. Although the administra-

tive law judge (ALJ) recommended that the Secretary grant the

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motion, Macktal, now represented by new counsel, asked the

Secretary not to approve the settlement and to remand the case for

a determination on the merits.

The Secretary approved the settlement agreement except for the

restriction on Macktal's participation as a witness or party in

other proceedings involving Brown & Root. Macktal appealed the

Secretary’s order to this Court, and we vacated the order and

remanded it to the Secretary. Macktal v. Secretary of Labor, 923

F.2d 1150 (5th Cir. 1991). We held that the Secretary could either

approve the settlement agreement or reject it, but that the

Secretary could not modify a material term of the agreement without

the consent of the parties. On remand the Secretary issued an

order disapproving the entire settlement agreement and remanding

the case to the ALJ for further proceedings.

In 1996, after a hearing on the merits, the ALJ recommended

that the complaint be dismissed because Macktal failed to prove all

the elements of his case. On January 6, 1998, the ARB issued a

Final Decision and Order. The ARB found against Macktal on the

merits, concluding that he had not engaged in protected activity

when he indicated that he intended to file complaints with

government agencies or when he asked to be relieved of his duties.

But the ARB concluded that Macktal was nevertheless entitled to

attorney's fees and costs for his successful litigation over the

restrictive terms of his settlement agreement. The ARB remanded

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the case to the ALJ to determine the amount of fees and costs.1

Macktal petitioned this court to review the ARB’s denial of his ERA

claim.

On March 30, 1998, the ALJ issued an Initial Decision and

order recommending the attorney's fees and costs to be awarded to

Macktal. Both Brown & Root and Macktal timely filed challenges to

the Initial Decision and order. The ARB then issued a briefing

schedule. On October 16, 1998, the ARB, noting that Brown & Root

had not filed a brief, accepted the ALJ's recommended amounts and

ordered Brown & Root to pay Macktal’s attorney's fees and costs.

On October 26, 1998, Brown & Root filed a motion for

reconsideration. The motion established that Brown & Root had

filed a brief, addressed to Tom Shepherd, Clerk of the ARB,

opposing the ALJ's award of attorney's fees. Shepherd was the

clerk for the Benefits Review Board, however, a different

adjudicatory body within the Department of Labor. As a result,

Brown & Root's brief was delivered to Mr. Shepherd, not to the ARB.

Brown & Root’s brief complained of the amount of attorney’s fees

and costs awarded and the ARB’s lack of authority under the ERA to

award fees and costs to Macktal for his successful challenge of the

1
Because the January 6, 1998, order did not establish the
amount of fees and costs owed, it was not final for purposes of
appellate review. When a district court awards attorney’s fees,
that order is not final for appellate review until the court sets
the amount of the award. Southern Travel Club, Inc. v. Carnival
Air Lines, Inc., 986 F.2d 125, 130-131 (5th Cir. 1993). In this
respect, agency orders are analogous to court orders, and we thus
apply the same rule.

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settlement agreement.

On November 20, 1998, the ARB entered an Order Granting

Reconsideration. The ARB concluded that it had the inherent

authority to reconsider its decision within a reasonable time as

long as the reconsideration would not interfere with the purposes

of the ERA. The ARB determined that reconsideration was appro-

priate because it would give the ARB an opportunity to correct an

error (misdelivery of a brief), and because Brown & Root had

requested reconsideration within a reasonable time. The ARB

allowed Macktal and Brown & Root to file additional reply briefs

not provided for in the original briefing schedule.

While the ARB was reconsidering the issue of attorney’s fees

and costs, this Court denied Macktal’s petition for review and

affirmed the ARB's January 6, 1998, Final Decision and Order.

Macktal v. United States Department of Labor, 171 F.3d 323 (5th Cir.

1999). Although the Court concluded that Macktal’s expression of

intent to file a complaint was protected activity under the ERA,

the court concluded that this protected activity was not the likely

reason for Macktal’s termination.

On January 9, 2001, the ARB issued its Decision and Order on

Reconsideration. The ARB concluded that the ERA did not permit

Macktal to recover attorney's fees and costs related to his

successful challenge to the settlement. Macktal filed a timely

Petition for Review of the ARB's decision and order.

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 II.

Macktal argues that the ARB erred in reconsidering its earlier

order granting him attorney’s fees and costs. The question of the

ARB’s inherent authority to reconsider its decisions is an issue of

law, which we review de novo. See Harris v. Railroad Retirement

Board, 3 F.3d 131, 133 (5th Cir. 1993).

Macktal also argues that the ARB abused any authority it may

have had to reconsider its earlier order granting him attorney’s

fees and costs. Review on the merits is governed by the standard

of review established in the Administrative Procedure Act, 5 U.S.C.

§ 706(2). Under that standard we will affirm the ARB’s decision

and order unless it is “arbitrary, capricious, an abuse of

discretion, or otherwise contrary to law, or unless it is not

supported by substantial evidence.” 5 U.S.C. § 706(2)(A); Macktal,

171 F.3d at 326.

III.

The ERA does not mention reconsideration by the ARB of its

orders. From this statutory silence Macktal argues that allowing

the ARB to reconsider its order would be contrary to Congress’s

delegation of authority to the Secretary of Labor.

The Secretary acknowledges that the ERA is silent as to the

ARB’s right to reconsider, but argues that since reconsideration is

not prohibited by the statute, the ARB has inherent authority to

reconsider its decisions. The Secretary argues that the ARB

correctly determined that reconsideration of its earlier order

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would not frustrate the goals of the whistleblower provision of the

ERA and would give the ARB an opportunity to protect the integrity

of the review process by correcting errors.

A.

Although this Court has never expressly so held, it is

generally accepted that in the absence of a specific statutory

limitation, an administrative agency has the inherent authority to

reconsider its decisions. See, e.g., Belville Mining Co. v.

United States, 999 F.2d 989, 997 (6th Cir. 1993); Dun & Bradstreet

Corp. v. United States Postal Service, 946 F.2d 189, 193 (2d Cir.

1991); Gun South, Inc. v. Brady, 877 F.2d 858, 862 (11th Cir. 1989);

Iowa Power & Light Co. v. United States, 712 F.2d 1292, 1297 (8th

Cir. 1983); Trujillo v. General Electric Co., 621 F.2d 1084, 1086

(10th Cir. 1980); United States v. Sioux Tribe, 616 F.2d 485, 493

(Ct. Cl. 1980); Albertson v. FCC, 182 F.2d 397, 399 (D.C. Cir.

1950).

This is not a case in which the agency acted contrary to a

statutory mandate limiting further review of an agency order. In

Brennan v. Occupational Safety & Health Review Commission (OSHRC),

502 F.2d 30 (5th Cir. 1974), which Macktal urges us to follow, we

held that the OSHRC did not have authority to reconsider an order

that had become final under the Occupational Safety and Health Act.

That Act provided that a hearing examiner’s report shall become the

final order of the Commission unless within thirty days after the

report is issued a member of the Commission directs that the

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Commission review the report. Under that statutory scheme we held

that once the thirty-day review period had expired and the order

had become final, no further consideration by the Commission was

allowed. Unlike the statute at issue in Brennan, however, the ERA

does not contain any limitation on discretionary review; the ERA is

silent on the matter. See 42 U.S.C. § 5851(b). In this case we

are persuaded that the ARB correctly concluded that it had the

inherent authority to reconsider its earlier ruling awarding

attorney’s fees and costs.

B.

The reasonableness of an agency’s reconsideration implicates

two opposing policies: “the desirability of finality on one hand

and the public’s interest in reaching what, ultimately, appears to

be the right result on the other.” Civil Aeronautics Board v.

Delta Airlines, Inc., 367 U.S. 316, 321, 81 S.Ct. 1611, 1617

(1961). An agency’s inherent authority to reconsider its decisions

is not unlimited. An agency may not reconsider its own decision if

to do so would be arbitrary, capricious, or an abuse of discretion.

5 U.S.C. § 706(2)(A). Reconsideration must also occur within a

reasonable time after the first decision, and notice of the

agency’s intent to reconsider must be given to the parties. See

Dun & Bradstreet Corp., 964 F.2d at 193; Bookman v. United States,

453 F.2d 1263, 1265 (Ct. Cl. 1972).

The Court is persuaded that the ARB’s decision to reconsider

in this case based on the circumstances surrounding the misdelivery

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of Brown & Root’s brief was reasonable. The ARB also acted

promptly and allowed additional briefing by the parties. On

October 16, 1998, the ARB accepted the ALJ’s recommendation

regarding attorney’s fees only after noting that Brown & Root had

not filed a brief. Ten days later, on October 26, 1998, Brown &

Root filed its Motion for Reconsideration. On November 20, 1998,

the ARB notified the parties of its intent to reconsider the case

and allowed additional briefing from both parties.

IV.

We conclude that the ARB had the inherent authority to

reconsider its decision and order awarding Macktal attorney’s fees

and costs. We also conclude that the ARB did not abuse its

discretion in reconsidering its decision and order. Macktal’s

Petition for Review is DENIED, and the ARB’s Decision and Order on

Reconsideration is AFFIRMED.

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