Vari-Form Services, Inc.,  No. MSB-570 (April 23, 1997)
Docket No. MSBE-96-12-2-25

                    UNITED STATES OF AMERICA
                  SMALL BUSINESS ADMINISTRATION
                 OFFICE OF HEARINGS AND APPEALS
                        WASHINGTON, D.C.

_______________________________
                               )
IN THE MATTER OF:              )
                               )   Docket No. MSBE-96-12-2-25
Vari-Form Services, Inc.       )
______________________________ )

                             DIGEST

A recusal motion must be accompanied by a timely and sufficient
affidavit of personal bias or other disqualification.  An
affidavit by a party's attorney does not meet this requirement.

Motions must include citations of authority supporting the issues
raised.

In a recusal motion, bias or prejudice must be directed toward a
party, not counsel. 

Counsel's mere dissatisfaction with a judge's orders or rulings
cannot support a claim of bias, prejudice, or partiality.

A judge has an obligation to resolve allegations of counsel
misconduct.

Claims of bias, prejudice, or partiality generally must stem from
an extrajudicial source.  They cannot be based upon how the judge
fulfills his responsibility overseeing the progress of a case.

       MEMORANDUM OPINION AND ORDER DENYING RECUSAL MOTION

                         April 23, 1997

ARKOW, Administrative Law Judge:

     On April 4, 1997, counsel[1] for the SBA moved, pursuant to
the Administrative Procedure Act (APA), for my recusal from this
case "because the ALJ's [Administrative Law Judge's] ability to
impartially decide the appeal has become impaired."  

                           Background

     On November 23, 1996, Petitioner Vari-Form Services, Inc.
(VFS), appearing pro se, appealed Respondent Small Business
Administration's (SBA) decision denying it entry into the 8(a)
program.  The Appeal Petition did not contain a certificate of
service establishing service upon appropriate SBA officials. 
Therefore, I ordered VFS to serve those officials.  In compliance
with that Order, VFS filed a certificate of service establishing
service of the Appeal Petition upon the Associate General Counsel
for General Law (OGL) by mail on December 13, 1996.[2]  VFS also
filed a certificate of service establishing that it had, in fact,
served the SBA's Office of the General Counsel (OGC) and
Associate Administrator for Minority Enterprise Development by
mail on November 23, 1996.  Thus, VFS served the SBA but
neglected to file a certificate of service reflecting the
November 23rd mailing.

     Regulations require the SBA to file its Answer in 8(a) cases
"within 45 days after the service of a petition."  13 C.F.R.
Section 134.206(a).  Service is complete and the time to file an
Answer commences when an Appeal Petition is postmarked.  13
C.F.R. Sections 134.204(e)(2); 134.206(a).  Thus, the SBA's
Answer appeared to be due 45 days from November 23, 1996, which
is January 7, 1997.[3]  As the SBA did not file its Answer by
January 7, 1997, I ordered it to show cause why it should not be
held in default.

     In a timely Response to my Order to Show Cause, the SBA
asserted OGL was not properly served until December 13, 1996,
although it actually received the OGC copy of the Appeal Petition
on December 3, 1996.  Thus, the SBA contended that its Answer was
due January 17, 1997 (45 days after its actual receipt of the
Appeal Petition on December 3, 1996), not January 7, 1997.

     Resolution of this dispute over the timeliness of the SBA's
Answer required the development of a record of the facts
concerning service, rather than relying upon the bare assertions
of the parties. Accordingly, on January 22, 1997, I ordered the
SBA to present evidence of the facts I believed to be relevant to
the service issue no later than February 7, 1997.  My Order
specified, in great detail, what I believed, at the time, to be
relevant facts on the issue.

     The SBA filed its Response by personal delivery to the
Office of Hearings and Appeals (OHA) at 4:52 p.m., February 7,
1997.[4]  The following business day, the staff attorney assigned
to assist the OHA judges informed me that irregularities may have
occurred in the filing of the Response.  She initially reported
that the original counsel possibly returned to OHA after the
Response was filed and, upon examining the filing, discovered
something was missing.  He left and then returned and inserted
additional material into the Response.  This appeared to have
occurred after the 5:00 p.m. filing deadline.  It further
appeared that the material, which could not be readily
identified, was not date-time-stamped.  I requested the staff
attorney to obtain statements from the witnesses to this
incident.  I received statements from the staff attorney, a
volunteer legal intern, and an OHA staff employee.

     These statements raised serious concerns about the propriety
of the original counsel's actions.  Of particular concern was
that the original counsel may have gained access to OHA, after it
was closed for filing, using his electronic pass card allowing
all SBA employees unrestricted access to OHA's suite at all
hours,[5] and that he inserted material into the earlier filing
without it being date-time-stamped.  On February 18, 1997, I
issued a Notice and Order which provided copies of the statements
to the parties and provided them the opportunity to take any
action they deemed appropriate and, if they desired, to file a
response to those statements. 

     The original counsel elected to respond and disputed the
suggestion that he returned after the 5:00 p.m. deadline for
filing.  He also asserted he had permission from an OHA employee
to insert the material.  Thus, there was a conflict in the
evidence which was necessary to resolve before I could decide
whether there was an impropriety to be addressed.  Unfortunately,
this caused a necessary digression from resolving the timeliness
issues and deciding the case on its merits.  

     Later, I learned that there was a computer record available
which lists each entry into the OHA suite.  The record lists the
date, time, and identity of the passholder entering OHA.  This, I
believed, could shed light on one of the unresolved issues. 
Therefore, on February 26, 1997, I ordered those records
produced. 
     
     At this point, the current counsel filed a Notice of
Appearance on March 4, 1997.  On March 10, 1997, with my
permission, the original counsel withdrew from the case. 

     Counsel submitted the SBA's Response to my February 26,
1997, Order and included its rebuttal to VFS's Response to my
February 18, 1997 Order. The Response contains a computer
printout of the individuals who entered the OHA suite.  It
reflects that the original counsel entered the OHA suite at
4:51:20, 4:55:48, and 4:59:25, and, thus, supports the original
counsel's assertion that he returned before 5:00 p.m.  The
Response takes issue with VFS's contention that the original
counsel acted improperly, reiterates the claim that he entered
OHA prior to 5:00 p.m., and that he followed the instructions of
OHA personnel when he inserted the additional material into the
earlier filing.  Counsel argues that, as the material in question
is "in essence inconsequential to the outcome of the case," the
record should be closed and the case decided as soon as
practicable.

     A conflict still existed, however, in the evidence
concerning the February 7th filing.  In an attempt to resolve the
conflict and avoid the necessity of having a costly and time
consuming hearing to reach closure on whether there was
misconduct, I sought and received interrogatories from the OHA
employee whose statement is at odds with the original counsel's.
I provided copies of the interrogatories to all parties.

     Next, I turned my attention to the issue of timeliness and
determined that the evidence showing when the SBA mailroom
received the Appeal Petition was unclear, and that the SBA's
Response did not fully address all of my questions concerning the
issue.  On March 26, 1997, I ordered the SBA to present the
evidence I originally requested.  The SBA replied on     March
31, 1997.[6]  Included in the reply was a document establishing
that the Appeal Petition was delivered to the SBA mailroom on
December 2, 1996.  This supported the SBA's argument that the
Appeal Petition was handled expeditiously by mailroom
personnel.[7]

     Finally, the SBA elected to file the original counsel's
Response to the interrogatories.

     To date, there has been no ruling, finding, conclusion, or
expression of opinion regarding either the timeliness of the
SBA's Answer or the suggestion of impropriety by the original
counsel.

                           The Motion

     On April 4, 1997, the SBA moved for recusal because "the
ALJ's ability to impartially decide the appeal has become
impaired."  The "SBA maintains that because [my] own Orders are
at issue, [I] no longer possess[ ] the required impartiality
necessary to decide the case." 

     Counsel advances the following rationale to support his
claim of partiality:

     (1) the ALJ "continuously defers a decision on the case, and
     repeatedly questions the Agency about the insertion of a
     single, irrelevant, duplicative sheet of paper.  His
     actions in this regard indicate that he has lost proper
     perspective of the case;"

     (2) regarding the inserted page, "[t]here is no reason to
     ask such questions other than Judge Arkow's personal animus
     against the Agency Representative, the Agency, or both. 
     His fixation on this minutiae is seriously troubling, and
     his insistence on additional evidence regarding the
     single sheet of paper directly contradicts 5 U.S.C.
     Section 556(d);"

     (3) the ALJ "has tried to discredit the veracity of the
     former Agency Representative, and thus apparently to lay
     a foundation for striking the Agency's substantive 
     Response to the appeal;"

     (4) the ALJ "has asked the Agency to present evidence
     [necessary to determine when the Appeal Petition arrived
     at the SBA] despite the absence of any dispute as to the
     date the appeal was mailed or the date that it was
     received by the Office of General Counsel or the Office
     of General Law;"

     (5) the ALJ "continued to focus his attention on the non-
     consequential issue of the single sheet filing.  Such
     actions suggest a desire, or at least a willingness, to
     damage the reputation of the former Agency Representative,
     and to needlessly prolong the proceeding;" and

     (6) the ALJ "is clearly personally involved in the
     proceeding as an advocate.  . . .  [H]e has made the
     credibility of individuals under his 'authority' an issue in
    this proceeding."  

                           Discussion

     Counsel relies upon Section 556(b) of the APA as authority
for my disqualification for partiality and bias.  Section 556(b)
provides, in pertinent part, "[o]n the filing in good faith of a
timely and sufficient affidavit of personal bias or other
disqualification of a presiding or participating employee, the
agency shall determine the matter as a part of the record and
decision in the case."

     The APA requires an ALJ to conduct proceedings in an
impartial manner.  APA Section 556(b).  The Supreme Court
"repeatedly has recognized due process demands that impartiality
on the part of those who function in judicial or quasi-judicial
capacities."  Schweiker v. McClure, 456 U.S. 188, 195 (1982). 
Judges are presumed to be unbiased; however, this "presumption
can be rebutted by a showing of conflict of interest or some
other specific reason for disqualification."  Id.  At a hearing,
"the burden of establishing a disqualifying interest rests on the
party making the assertion."[8]  Id.  But, "a judge has as strong
a duty to sit when there is no legitimate reason to recuse as he
does to recuse when the law and facts require."  Nichols v.
Alley, 71 F.3d 347, 351 (10th Cir. 1995).

     The SBA's Motion fails to meet the statutory and regulatory
prerequisites for consideration on the merits.  In addition, it
fails to address the pertinent criteria and case authority as
follows:

     First, a recusal motion must be accompanied by a "timely and
sufficient" affidavit justifying the request.[9]  APA Section
556(b).  The affidavit must be by a party, not counsel.  In re
Cooper, 821 F.2d 833, 838 (1st Cir. 1987).  Here, counsel has not
submitted an affidavit of a party with his Motion.  This omission
alone can be a sufficient ground for denying the Motion. Keating
v. Office of Thrift Supervision, 45 F.3d 322, 327 (9th Cir.
1995).  As stated in Keating:

     The requirement of affidavits [for recusal motions] . .
     . is not an empty formality to be cast aside unilaterally
     by a party to a[n administrative] proceeding.  There are
     many reasons for such a requirement.  An affidavit
     provides an exact, sworn recitation of facts, collected
     in one place . . . . [T]he affidavit requirement serves
     not only to focus the facts underlying the charge, but to
     foster an atmosphere of solemnity commensurate with the
     gravity of the claim.  [The] failure to submit affidavits
     is thus an independently sufficient basis to deny [the]
     petitions in this respect.

Keating at 327 (quoting with alterations Gibson v. Federal Trade
Comm'n, 682 F.2d 554, 565 (5th Cir. 1982).  
     
     Second, motions before OHA Judges must be accompanied by
citations of authority addressing the criteria necessary to
establish impartiality.  See 13 C.F.R. Section 134.211(a).  This
Motion cites Section 556(b) of the APA, which only prescribes the
procedure for the disqualification of an ALJ.  It does not
address the substantive grounds for disqualification, which can
be found in the case law. Counsel does not present any precedent
to support the Motion and, accordingly, does a disservice to his
client.  In addition, it is contrary to long and well-established
practice in these types of proceedings.  Matter of Information
Sciences Corp., SBA No. 558 (1996).  See generally, Size Appeal
of Rebmar, Inc., No. 4173 at 4 (1996). 

     Despite these deficiencies, I will, in the interest of
judicial economy, decide this Motion.  I can decide this Motion
without the need for an affidavit because the Motion itself does
not allege facts sufficient to conclude that I have been partial,
biased, or prejudiced against the SBA. 

     There has been no showing of partiality.  I have yet to rule
on any of the issues before me.  My Orders have been directed
towards gathering the facts to decide these issues.  That I have
required or permitted counsel to present evidence in order to
decide whether the SBA's Answer was timely, and whether there was
an impropriety by the original counsel, is not evidence of
partiality.  It demonstrates that I will not decide issues
critical to the SBA's case until I am satisfied I have all the
facts.  In fact, the evidence submitted by the SBA in response to
my Orders revealed facts favorable to the SBA's positions.  It
was one of my Orders that resulted in the submission of proof
that the original counsel entered OHA prior to 5:00 p.m.  It was
another of my Orders that revealed the Appeal Petition, which was
mailed on  November 23, 1996, was received in the SBA mailroom on
December 2, 1996, and delivered to the Office of the General
Counsel the same day.  Thus, my Orders do not demonstrate
partiality, but an open-mindedness to consider all of the
relevant facts before reaching a decision.

     The Motion alleges that I am biased against the SBA's
original counsel.  That allegation lacks merit for two reasons. 
First, the original counsel has withdrawn from the case.  Second,
the alleged bias is against counsel and his actions, not against
the SBA.  In order to sustain a claim of bias or partiality, the
claim must be against a party, not the party's attorney. Gilbert
v. City of Little Rock, 722 F.2d 1390, 1398 (8th Cir. 1983)
("Antipathy to an attorney is insufficient grounds for
disqualification of a judge because it is not indicative of
extrajudicial bias against a 'party.'").

     The Motion alleges I am biased and partial because I have
issued too many Orders without deciding the case.  Counsel's
dissatisfaction with my Orders and efforts to gather the facts
before deciding the issues cannot support a claim of bias or
partiality. N.L.R.B. v. Honaker Mills, 789 F.2d 262, 265-66 (4th
Cir. 1986).

     Counsel complains that I am fixated on minutiae because the
original counsel's insertion of additional material in a
submission made earlier in the day is of no importance since it
is inconsequential, duplicative, and irrelevant.  Counsel misses
the seriousness of this event.  What transpired raised questions
of possible counsel misconduct, casting doubt on the integrity of
the proceedings.  An ALJ has an obligation to resolve allegations
of counsel misconduct.  In re Cooper 821 F.2d 833, 843 (1st Cir.
1987).  Such an obligation cannot be taken lightly.  It is just
as important to find this allegation unfounded, as it is to
confirm it.  Accordingly, I would be derelict in my duties if I
ignored what transpired. 

     Counsel further asserts that I have a personal animus
against the original counsel.  That is simply untrue.  Whatever
has transpired in this case deals with the facts of the case and
has no extrajudicial source.  Thus, it is not disqualifying. 
Liteky v. United States, 510 U.S. 540, 544-46 (1994).  I am
dissatisfied with the way this case has been handled.  There have
been repeated errors in judgment and in the "lawyering" by SBA's
counsel.  As the presiding ALJ, it is my judicial responsibility
to oversee the progress of the proceeding and to ensure that the
applicable laws, regulations, and ethical standards are strictly
adhered to.  Fulfilling that responsibility cannot be considered
bias, prejudice, or partiality that requires my recusal.  See
First Nat'l Monetary Corp. v. Weinberger, 819 F.2d 1334, 1337
(6th Cir. 1987). 

     Counsel's Motion that I disqualify myself is without merit. 
Recusal is not called for under these circumstances.

     The Motion for Recusal is DENIED.

                              ______________________________
                              RICHARD S. ARKOW
                              Administrative Law Judge

______________________

1 References to "counsel" are to the current SBA counsel. 
Counsel who originally represented the SBA, and subsequently
withdrew from this case, will be referred to as "original
counsel."
2 SBA regulations require service in 8(a) eligibility appeals to
be made upon the Associate General Counsel for General Law and
what is now called the Associate Administrator for Minority
Enterprise Development.  See 13 C.F.R. Section  124.210(b). 
Further, although 13 C.F.R. Section  134.204(a)(3) advises
parties that service should be made on the Office of General
Counsel, elsewhere in part 134 the regulations state that if
there is a conflict between part 124 and part 134, part 124
controls.  13 C.F.R. Section  134.201.  The SBA, however, advised
VFS that it should serve its appeal on the General Counsel not
the Associate General Counsel for General Law. VFS followed the
SBA's written instructions.  The SBA should not now complain that
a party followed its instructions.
3 The SBA contests this conclusion.
4 Filing by personal delivery "must be accomplished between the
hours of 8:30 a.m. and 5:00 p.m."  13 C.F.R. Section
134.204(b)(2).
5 Access to OHA has since been restricted to OHA employees during
non-business hours.
6 I ordered the SBA to reply by 1:00 p.m.  The reply was
date-time-stamped in at 1:01 p.m.  Later in the day counsel moved
to correct a mistake he made in his Response.  The Motion also
states that the Order to Show Cause was not received in OGL until
3:54 p.m. on Thursday, March 27, 1997.  The Docket File, however,
reflects that a copy of the Order was sent by facsimile and
received by the OGC at 4:10 p.m., March 26, 1997 at facsimile
number 205-6846 after it was unsuccessfully faxed to 205-6873.
7 An earlier submission established that the Appeal Petition was
delivered to OGC on December 2, 1996.
8 Upon appeal, however, the party claiming disqualification must
show a clear abuse of discretion which amounts to an usurpation
of judicial authority by the judge.   Nichols v. Alley, 71 F.3d
347, 350 (10th Cir. 1995).
9 Compare 13 C.F.R. Section 134.218(c), which does not address
the requirement for an affidavit with 13 C.F.R. Section 
134.18(d) (1995), which sets forth the affidavit requirement in
detail.  In an attempt to streamline the regulations, the
drafters of the current regulation chose to summarize the recusal
provisions, not change them.  60 Fed. Reg. 58,284 (1995).  In
doing so, they omitted the affidavit requirement. The omission
did not, therefore, eliminate the statutory requirement for an
affidavit but may have led to confusion over this requirement. 
The requirement is statutory, not regulatory, and despite its
absence in the current regulation, it is a  necessary part of a
recusal motion in APA proceedings.