1998 Decisions

Opinions of the United

States Court of Appeals

for the Third Circuit

4-27-1998

Morgan v. Perry

Precedential or Non-Precedential:

Docket 96-3314

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Recommended Citation

"Morgan v. Perry" (1998). 1998 Decisions. Paper 93.

http://digitalcommons.law.villanova.edu/thirdcircuit_1998/93
Filed April 27, 1998 

UNITED STATES COURT OF APPEALS 

FOR THE THIRD CIRCUIT 

No. 96-3314 

TERENCE D. MORGAN, 

 Appellant 

v. 

WILLIAM PERRY, in his capacity as Secretary of Defense; 

JOHN DALTON, in his capacity as Secretary of the Navy; 

GENERAL C. E. MUNDY, in his capacity as Commandant 

of the Marine Corps; BRIGADIER GENERAL J.W. CLIMP, 

in his capacity as Commanding General, Marine Corps

Recruit Depot, Eastern Recruiting Region, Parris Island. 

On Appeal from the United States District Court 

for the Western District of Pennsylvania 

(Civil No. 91-1064) 

Argued: April 30, 1997 

Before: MANSMANN and McKEE, Circuit Judges, and 

VANARTSDALEN, Senior District Judge* 

(Opinion Filed: April 27, 1998) 

 JAMES B. LIEBER, ESQ. (Argued) 

 M. JEAN CLICKNER, ESQ. 

 Lieber & Hammer, P.C. 

 5528 Walnut Street 

 Pittsburgh, PA 15232 

 Attorneys for Appellant 

_________________________________________________________________ 

*The Honorable Donald W. VanArtsdalen, United States District Court 

Judge for the Eastern District of Pennsylvania, sitting by designation. 
 FREDERICK W. THIEMAN, ESQ. 

 United States Attorney 

 BONNIE R. SCHLUETER, ESQ. 

 Assistant U.S. Attorney 

 ALBERT W. SCHOLLAERT, ESQ. 

 (Argued) 

 Assistant U.S. Attorney 

 633 U.S. Post Office & Courthouse 

 Pittsburgh, PA 15219 

 Attorneys for Appellees 

 SAMUEL J. CORDES, ESQ. 

 MICHAEL A. MURPHY, ESQ. 

 Ogg, Jones, Cordes & Igenlzi, LLP 

 245 Fort Pitt Boulevard 

 Pittsburgh, PA 15222 

 Attorneys for Amicus, The Allegheny 

 County Bar Association 

 JOHN PUSHINSKY, ESQ. 

 1808 Law & Finance Building 

 Pittsburgh, PA 15219 

 WITOLD J. WALCZAK, ESQ. 

 American Civil Liberties Union, 

 Greater Pittsburgh Chapter 

 237 Oakland Avenue 

 Pittsburgh, PA 15213 

 Attorneys for Amicus, The American 

 Civil Liberties Union of PA 

OPINION OF THE COURT 

McKEE, Circuit Judge 

We are asked to determine whether the district court 

abused its discretion in denying attorney's fees and costs to 

a "prevailing party" under the Equal Access to Justice Act 

("EAJA"), 28 U.S.C. S 2412. Terence D. Morgan, a former 

Master Sergeant in the United States Marine Corps,filed a 

civil action seeking declaratory and injunctive relief against 

the defendants for alleged violations of his constitutional 

rights. 

 2 
After a non-jury trial, the district court found that all but 

one of his claims were without merit, and awarded Morgan 

declaratory and equitable relief based upon the single 

meritorious claim. However, in a subsequent fee application 

under the EAJA, the court held that the government's 

position in defending Morgan's due process claim was 

substantially justified and denied Morgan's claim for 

attorney's fees and costs. This appeal followed. For the 

reasons that follow, we will affirm. 

I. FACTUAL BACKGROUND 

The circumstances leading up to this suit are as complex 

as they are intricate. The district court correctly stated that 

"[t]he factual allegations of plaintiff's complaint are too 

lengthy to summarize. However, the essence of the 

complaint is a wide-ranging conspiracy among various 

officers of the United States Marine Corps to `ruin

[plaintiff's] reputation.' " Dist. Ct. EAJA Op. at 2. The 

government's investigation of Morgan centered upon 

allegations of recruiting fraud; however, our analysis must 

focus on the agency decision that resulted in this appeal. 

That decision resulted from a military prosecutor's

assertion that he had a "gray book" that purportedly 

contained evidence that Morgan was involved in illegal 

gambling. In order to understand the significance of the 

"gray book" and its impact on Morgan's claim for costs and 

fees under the EJAJ it is necessary to detail the events 

leading up to this appeal and the structure of the Marine 

Corps' recruiting efforts at some length.1 

A. 

Terence D. Morgan joined the United States Marine Corps 

in September, 1973. After receiving various promotions, he 

was ordered to the Greensburg substation of Pittsburgh, 

Pennsylvania Recruiting Station ("RS") in June of 1980. RS 

Pittsburgh is part of the 4th Marine Corps District, 

_________________________________________________________________ 

1. Morgan did not appeal from the district court's decision on the merits 

of his claim. Consequently, the recitation of the facts is taken from the 

district court's merits opinion. 

 3 
headquartered in Philadelphia, Pennsylvania. The 4th 

Marine Corps District in turn is part of the Eastern 

Recruiting Region, which is headquartered at Parris Island, 

South Carolina. Major General Jarvis D. Lynch, Jr., became 

the Commanding General of the Eastern Recruiting Region 

and Parris Island on October 5, 1988. Colonel David A. 

Jones was then the Director of the 4th Marine Corps

District, which encompasses nine recruiting stations in 

seven states. 

A recruiting station is operated by a Command Group. 

During the periods relevant to this appeal, Major George A. 

Eberhart, Jr., was the Commanding Officer. A recruiting 

station is organized around recruiting substations, which 

are recruiting facilities manned by one or more full-time 

recruiters. A recruiting substation is under the direct 

operational and administrative control of the recruiting 

station and is supervised by a Non-Commissioned Officer in 

Charge ("NCOIC"). A Command Group's main concern is

ensuring that the recruiting station makes its "mission", 

i.e., procures a specified number of new recruits who are 

willing and eligible to enlist, and to ship a specified number 

of these new recruits for basic training. Recruiters are rated 

largely by the number of recruits they enlist in the Marines. 

Normally, an applicant must have a high school diploma 

to enlist in the Marine Corps. A General Equivalency 

Diploma ("GED") is not acceptable. Recruiters are permitted 

to place eligible recruits who are willing to ship to basic 

training within 365 days of signing the enlistment contract 

into the Delay Entry Program ("DEP"). High school seniors 

who anticipate graduating within one year are also 

permitted to sign enlistment contracts and enter the DEP 

pool. These "poolees" sign a contract evidencing their intent 

to be subject to the Uniform Code of Military Justice 

("UCMJ"). In addition, people with temporary medical 

conditions that preclude immediate shipment for basic 

training, and people with other non-permanent 

disqualifications, are allowed to sign enlistment contracts 

and enter the DEP pool. A large DEP pool enhances a

recruiting station's ability to meet its monthly shipping 

mission. A DEP pool containing poolees who are not 

qualified to join the Corps for some reason, such as the 

 4 
lack of a high school diploma or a disqualifying medical 

condition, is referred to as a "dirty pool". 

A recruiter prepares a package for each "poolee" 

including inter alia, a high school diploma, social security 

card, birth certificate and medical form. Recruit packages 

are the direct responsibility of the individual recruiter, the 

NCOIC of the recruiting substation, the Commanding 

Officer, the Operations Officer and the "MEPS" liaison.2 

Morgan was selected "Rookie Recruiter of the Year" after 

his first year of recruiting duty in 1983, and promoted to 

the rank of NCOIC of the Greensburg substation of RS 

Pittsburgh. In 1984, he was named "Non-Commissioned

Officer (`NC0') of the Year." In late 1985, Morgan was 

promoted to the rank of Assistant Recruiting Instructor for 

RS Pittsburgh. Master Sergeant ("MSG") Eugene Zuro was 

then the Recruiting Instructor of RS Pittsburgh; however, 

Morgan replaced him in January of 1986. The Recruiting 

Instructor is the most senior professional recruiter in a 

recruiting station, but need not be the most senior NCO 

within the recruiting station. The Recruiting Instructor 

travels throughout the recruiting station to train recruiters 

in sales techniques and the completion of paperwork, and 

provides assistance to recruiters who are having trouble 

making "mission." For our purposes, it is important to note 

that the Recruiting Instructor has no duty to verify recruit 

packages. 

B. 

In 1984 and 1985, RS Pittsburgh ranked first in the

nation in recruiting. It was then under the command of 

Major J. P. Walsh. In 1986, Major Eberhart became the 

Commanding Officer and he was determined to continue 

_________________________________________________________________ 

2. "MEPS" is the abbreviation for Military Entrance Processing System, 

which is a service shared by all branches of the military that recruit 

applicants. It conducts medical exams, administers tests and otherwise 

processes applicants. The MEPS liaison is the quality control person for 

the Commanding Officer of a recruiting station. He or she is not a 

member of the Command Group and does not have to make "mission". 

Rather, the MEPS liaison's prime concern is to ensure adherence to 

military regulations. Dist. Ct. Merits Opn. at 6. 

 5 
that success. This created tremendous pressure to"make 

mission." 

Despite Eberhart's determination to continue the 

Recruiting Station's success, RS Pittsburgh barely made its 

mission in September, 1988, and by October 1, 1988, RS 

Pittsburgh was in serious trouble. In response to the 

decreasing number of recruits, the station began enlisting 

and shipping qualified recruits to Parris Island for basic 

training within 30 days of their enrollment. This procedure 

was known as "direct ship mode." However, it is difficult for 

a recruiting station to meet its monthly mission by

operating in "direct ship mode." 

Morgan began inspecting recruit packages that had been 

prepared at RS Pittsburgh and he discovered that 350 

documents were missing from those packages, including 

high school diploma verifications.3 The Marine Corps has 

strict regulations regarding education verification, and 

recruiters are required to obtain a high school counselor's 

signature or a school seal on a copy of the applicant's 

transcript or diploma before an applicant is processed for 

shipping to Parris Island. The large number of missing 

documents caused Morgan to ask Eberhart to conduct an 

inspection, but Eberhart merely responded by assuring 

Morgan that he would "take care of [the recruiter in 

question]," and refused to make an inspection. 

Despite Eberhart's assurances, Morgan called Zuro, the 

former Recruiting Instructor of RS Pittsburgh, and a 

member of the Contact Team for the 4th Marine Corps 

District.4 Morgan told Zuro that RS Pittsburgh was in 

"direct ship" mode; that documents were missing from 

recruit packages; that Eberhart was submitting false 

_________________________________________________________________ 

3. Testimony at trial established that all recruiting stations have 

documents missing from recruit packages. However, it was unusual to 

have 300 to 400 missing documents unless the size of the DEP pool was 

very large. 

4. Contact Teams are comprised of a small group of individuals who are 

experts in the field of recruiting. The Team provides guidance to 

recruiting stations and is required to visit each recruiting station twice 

a year. They conduct investigations, and also provide guidance. Dist. Ct. 

Merits Opn. at 10, n.9. 

 6 
information to the 4th Marine Corps District concerning the 

number of DEP pool discharges and the need for direct ship 

applicants; and that he was having serious arguments with 

Eberhart. Zuro told Morgan that he would visit RS 

Pittsburgh at the end of October, 1988, which was 

apparently the Contact Team's next regularly scheduled 

visit to RS Pittsburgh. 

C. 

At the end of October, 1988, the Contact Team visited RS 

Pittsburgh. Morgan and First Lieutenant Brown, the 

Operations Officer of RS Pittsburgh, compiled a list of 

pending DEP pool discharges, missing documents and 

other problems. Morgan informed the Team of numerous 

improprieties and/or problems, including Eberhart's refusal 

to discipline recruiters, Eberhart's use of threats to 

enhance recruiting and his practice of requiring that 

recruiters be in their offices from 6:00 a.m. to 11:00 p.m. 

Zuro responded by telling Morgan that the Contact Team 

would not conduct an inspection of RS Pittsburgh during 

the visit. Zuro apparently believed it was more important to 

provide additional training. 

On November 1, 1988, Captain Hoffman, the officer in 

charge of the Contact Team, prepared a memorandum for 

Colonel David A. Jones, Director of the 4th Marine Corps 

District, concerning the Contact Team's October visit to RS 

Pittsburgh. The memo discussed the DEP pool problems at 

RS Pittsburgh and described the training that was provided 

by the Contact Team. A reorganization of the structure of 

the substations of RS Pittsburgh was "highly recommended 

to avoid further turmoil and maximize prospecting." In early 

November, 1988, Colonel Jones called Eberhart to discuss 

his concern about the number of discharges in the DEP 

pool. Eberhart acknowledged that he had to take some 

discharges, but said that the DEP pool would be"cleaned 

up" in the next few months. 

Nevertheless, Colonel Jones remained concerned about 

the problems in RS Pittsburgh and sent Colonel 

Niewenhous, Executive Officer of the 4th Marine Corps 

District, to talk to Eberhart. Niewenhous met with 

 7 
Eberhart, but Eberhart vehemently denied that there were 

problems in RS Pittsburgh. 

When General Lynch became the Commanding General of

the Eastern Recruiting Region and Parris Island in early 

October, 1988, he had no experience in recruiting, and he 

requested a briefing on the subject. He subsequently 

received, and reviewed, a detailed briefing, but was not sure 

that the problems at RS Pittsburgh were caused by 

misconduct or ineptitude. Accordingly, he ordered Colonel 

C.R. Casey, his Deputy Chief of Staff for Recruiting, to 

investigate the situation and remedy it. The ensuing 

investigation stemmed solely from the detailed briefing 

General Lynch had received from his staff and was totally 

unrelated to Morgan's complaints about missing 

documents, and the high rate of discharges from the DEP 

pool maintained by RS Pittsburgh. In fact, Lynch did not 

know Morgan and had never been informed about Morgan's 

complaints. 

D. 

About the same time that Lynch was being briefed, 

George Sens, a new recruit from RS Pittsburgh, was 

shipped to Parris Island for basic training. After he 

reported, Sens admitted that he had a bleeding ulcer. That 

medical condition should have precluded his enlistment in 

the Marines. Sens said that he had informed his recruiter 

of his medical condition, and had been told not to tell the 

doctors at Parris Island. Based on Sens' statement, other 

recruits who had been shipped for basic training from RS 

Pittsburgh were interviewed. During those interviews, 

approximately 80 recruits made allegations of recruiting 

misconduct at RS Pittsburgh. 

On Friday, January 27, 1989, Colonel Jones, Director of 

the 4th Marine Corps District, received a telephone call 

from Colonel Casey, General Lynch's Deputy Chief of Staff 

for Recruiting, regarding the allegations of recruiting 

misconduct by RS Pittsburgh's recruiters. Jones was

instructed to send out a team to investigate, and, on 

Saturday, January 28, 1989, he assembled an investigating 

team. The Senior Investigating Officer was Lieutenant 

 8 
Colonel John Spencer Evans, and the team included 

Captain D.J. Koleos, a lawyer who was assigned to provide 

legal advice to the investigating team. Koleos was Deputy 

Staff Judge Advocate for the Eastern Recruiting Region, and 

it is his actions that would later be the basis for the relief 

the district court afforded Morgan. 

Lieutenant Colonel Evans team began its investigation in 

Pittsburgh on the morning of Monday, January 30, 1989. 

Captain Evans,5 who was a member of Lieutenant Colonel 

Evans investigation team, read each individual who was 

interviewed, his or her rights under Article 31 of the UCMJ, 

10 U.S.C. S 831. Those rights are similar to Miranda 

warnings. No allegations of recruiting misconduct had been 

made against Morgan prior to the Evans investigation. 

Indeed, Morgan was initially elated because he assumed the 

investigation was in response to his complaints. 

However, an applicant named Michael Lockwood was 

processed at RS Pittsburgh during Evans' investigation. 

When Lockwood was confronted with a false high school 

diploma that was part of his recruit package, he said that 

Morgan had procured the false diploma for him. Lockwood 

then identified Morgan's picture from a group photograph of 

the members of RS Pittsburgh. He also identified Morgan in 

Colonel Evans' presence, and stated that Morgan was the 

Marine who had sold him the false diploma. 

Morgan denied this allegation and told Colonel Evans 

that he had never seen Lockwood before. Another member 

of the investigating team, Master Sergeant Cawman, then 

accused Morgan of having a printing press in his basement. 

Morgan said that allegation was ludicrous, and requested 

legal counsel. Captain Evans responded by telling Morgan 

that he was a legal advisor. Morgan then talked to Captain 

Evans for 30 to 45 minutes.6 During that conversation 

_________________________________________________________________ 

5. There are two officers named Evans who figure in this case. 

Lieutenant Colonel John Spenser Evans was the head of the 

investigating team and Captain John E. Evans was a member of that 

team. To avoid any possible confusion, we will indicate each Evans by 

rank when reference is made to him. 

6. Captain Evans was not an attorney. Apparently, he served as an 

advisor to the Commanding Officer in the area of personnel 

 9 
Morgan told Evans that he never met Lockwood and that he 

had not created any false high school diplomas. On 

February 2, 1989, Morgan made a written statement to that 

effect in response to a request from Evans that he do so. 

Morgan was not provided independent legal counsel. 

E. 

Colonel Evans completed his investigation and prepared 

a report for Colonel Jones. Evans' report concluded that 

administrative procedures were not in place at RS 

Pittsburgh to insure that quality control of recruits received 

as much emphasis as recruiting and shipping them. The 

report alluded to the existence of various factions of 

"cliques" at RS Pittsburgh, concluded that Morgan was the 

leader of one of these "cliques," and that his "clique" 

appeared to be at the center of the bulk of recruiter 

malpractice there. Colonel Evans opined that Morgan, "[i]n 

his capacity as the senior expert on enlisted recruiting, . . . 

bears a tremendous amount of responsibility for the

problems in Pittsburgh." Although Colonel Evans was not 

personally convinced that Morgan had made a false 

diploma as alleged by Lockwood, he did not doubt that 

Morgan knew that diplomas and other documents were 

being falsified. The report rejected Morgan's claim that he 

lacked the training and experience to identify and deal with 

the problems in RS Pittsburgh. 

Colonel Evans recommended various forms of discipline 

for 29 Marines at RS Pittsburgh, including members of the 

Command Group and recruiters. The recommended 

discipline ranged from nonjudicial punishment ("NJP")7 

_________________________________________________________________ 

administration, and advised the Commanding Officer on legal matters. 

Evans claims that he never represented himself to Morgan as an 

attorney. However, Morgan's testimony to the contrary was corroborated 

by other recruiters of RS Pittsburgh who also testified that Captain 

Evans led them to believe that he was acting as their legal counsel 

during the investigation. Moreover, although the district court did not 

make a specific finding of fact as to this conflict in the testimony, it 

is 

clear from the court's opinion that it credited Morgan's testimony on this 

point despite Evans' denial. See Dist. Ct. Opn. at 16-17, n.19. 

7. Nonjudicial punishment is governed by Article 15 of the UCMJ, 10 

U.S.C. S 815. It is a summary procedure designed to allow a commander 

to quickly impose minor punishment for minor offenses committed by 

members of his command. See generally, DAVID A. SCHLUETER, MILITARY 

CRIMINAL 

JUSTICE: PRACTICE AND PROCEDURE, SS 3-1 to 3-8 (4th ed. 1996). 

 10 
such as letters of caution, to summary8 and special courtmartials.9 Evans also recommended that Major Eberhart be 

relieved of duty despite Evans' belief that Eberhart did not 

intentionally direct the enlistment of any unqualified 

applicant into the Marine Corps. 

Evans' report contained findings of fact with respect to 

members of the Command Group and the recruiters for

whom Evans recommended disciplinary action. Colonel

Evans found that Morgan was involved in the procurement 

of false diplomas for several recruits. The allegations as to 

one recruit, Wayne Bellew, were corroborated by Bellew's 

civilian wife, Tracey. Another recruiter stated that Morgan 

was responsible for the improper education verification for 

a recruit named Angela Robinson. Evans also found that 

Morgan improperly administered the Armed Services 

Vocational Aptitude Battery test ("ASVAB") to two Marine 

Corps personnel and that he routinely used his 

government-owned car for personal business. The report 

noted that Morgan denied all of the allegations. 

General Lynch was not satisfied with the report because 

it did not address the failure of the Command Group of RS 

Pittsburgh to fulfill its responsibilities. Consequently, he 

directed his Deputy Chief of Staff for Recruiting, Colonel 

Casey, to go to RS Pittsburgh to conduct a further 

investigation focusing on the Command Group. The Casey 

investigation team conducted numerous interviews at RS 

Pittsburgh, and issued a report noting the numerous

allegations of misconduct against persons in the recruiting 

station. However, most were not corroborated by 

independent facts, and, typically, the allegations were 

_________________________________________________________________ 

8. A summary court-martial is designed to dispose of minor offenses in 

a simplified proceeding. SCHLUETER, supra note 9, S 1-8(D)(1). The 

maximum punishment that may be imposed includes confinement at 

hard labor for one month, forfeiture of two-thirds of one month's pay for 

one month, hard labor without confinement for 45 days or restriction for 

two months. 10 U.S.C. S 820. 

9. A special court-martial is the intermediate court in the military's 

judicial structure. 10 U.S.C. S 816; SCHLUETER, supra note 9, S 1-8(D)(2). 

Maximum punishments include confinement at hard labor for 6 months 

and forfeiture of two-thirds of one month's pay for 6 months. A bad 

conduct discharge may also be assessed. 10 U.S.C.S 819. 

 11 
refuted by the alleged perpetrator. To further complicate the 

situation, the accusers were often biased. Accordingly, 

Casey resolved uncorroborated allegations in favor of the 

accused. Though there was evidence of criminal conduct 

and dereliction of duty, Colonel Casey was convinced that 

the problems in RS Pittsburgh were the result of leadership 

failure. 

Casey did, however, believe that Morgan deliberately 

helped recruiters falsely enlist high school juniors into the 

DEP; that Morgan created high school diplomas for the 

purpose of unlawfully enlisting unqualified applicants into 

the Marine Corps; that Morgan solicited a man named

Jerry L. Williams to join in his criminal enterprise; that 

Morgan communicated a threat to Williams; and that 

Morgan gave a false statement to Colonel Evans during his 

investigation of RS Pittsburgh. Based on his findings, 

Colonel Casey recommended that Morgan's alleged 

recruiting misconduct be investigated pursuant to Article 

32 of the UCMJ, 10 U.S.C. S 832, the military counterpart 

to a civilian grand jury. 

Jerry L. Williams was a civilian who owned a printing 

shop called Precision Printing in Bedford, Pennsylvania. 

During the Evans investigation, several recruiters alleged 

that the services of Precision Printing had been utilized to 

make false diplomas for certain recruiters. Because these 

allegations were unsubstantiated in the Evans' 

investigation, Major Kelley, the legal advisor for the Casey 

investigation, directed Captain Koleos to contact Williams. 

Koleos did so and prepared a "Results of Interview of Mr. 

Jerry Williams, Owner of Precision Printing" which was 

made part of Colonel Casey's report. 

In his report, Koleos stated that Williams accused 

Morgan of coercing him to create fraudulent documents for 

recruits who were not qualified for the Marine Corps. 

According to Koleos' report, Williams said that Morgan paid 

him to alter the names on original diplomas. Koleos' report 

stated that Williams, his wife and other employees could 

positively identify Morgan and the corporal who 

accompanied him when Morgan visited Williams' print shop.10 

_________________________________________________________________ 

10. At trial, Koleos contradicted the information contained in his 

"Results". Koleos testified that Williams could not remember the name of 

 12 
F. 

When Morgan learned of these allegations he called 

Captain Louis J. Puleo, a defense attorney at Parris Island. 

In March, 1989, Puleo assigned himself to be Morgan's 

defense counsel. On March 22, 1989, Corporal Palmer, one 

of the two recruiters who had implicated Morgan in 

recruiting fraud, told Puleo that the statements he had 

given to the Evans' investigating team regarding Morgan's 

involvement in recruiting fraud were false. 

On March 27, 1989, numerous charges were preferred 11 

against Morgan for violations of various provisions of the 

UCMJ.12 He was charged with engaging in fraudulent 

recruiting practices on several, enumerated occasions 

(Charges I & III), improper administration of the ASVAB test 

(Charge III), making false statements regarding drug use of 

members of a recruiting substation (Charge IV), presenting 

a false claim for travel expenses (Charge V), and making a 

false statement under oath (Charge VI). 

On March 28, 1989, Koleos interviewed Palmer, and 

Palmer told him that the statements he gave during the 

Evans' investigation were false. Koleos responded by telling 

Palmer that he would have to call Colonel Evans and

Captain Evans. However, Palmer exercised his Article 31 

rights under the UCMJ and spoke with his defense counsel, 

First Lieutenant Ansa. After speaking with Ansa, Palmer 

decided to remain silent. In response, Koleos implied that 

Palmer's record would suffer and Palmer may be disciplined 

if Palmer said anything against Colonel Evans or Captain 

Evans. 

Nonetheless, despite Koleos purported threat, Palmer 

_________________________________________________________________ 

the Marine who had come to his shop for a false diploma. However, 

Koleos did testify that William's description of the Marine who came to 

his shop fit Morgan's description. 

11. The preferring of charges is the first formal step in prosecuting a 

criminal case under the UCMJ. For a discussion of the process, see 

SCHLUETER, supra note 9, S 6-1. 

12. Specifically, Articles 80, 81, 84, 92 and 134 of the UCMJ. 10 U.S.C. 

SS 880, 881, 884, 892 and 934. 

 13 
made a statement on March 29, 1989. In that statement 

Palmer declared: 

 I was interviewed by Captain Koleos. During my 

 conversation with the Captain, I made it clear that I 

 was going to say things in court that would incriminate 

 LtCol. Evans and Capt Evans, because I recanted my 

 statements [to them]. The reason I recanted my 

 statement is that they were made under pressure and 

 I was cohersed (sic) and told by [both] Evans what to 

 say there-for (sic), making them false statements. 

 During my conversation with. . . Koleos he made it 

 unmistakably (sic) clear that if I did not stick with my 

 first two statements (which were false), that the 

 sentence of my February 24, 1989 NJP would be 

 vacated, which means a reduction in rank and

 forfeiture (sic) in pay. This came across to me as a 

 threat. 

 I am making this statement because I know that I 

 will eventually have to make these statements in court 

 and I know that they will vacate my sentence. And I 

 want to have record of my knowledge of this prior to it 

 happening. 

 What I am saying is true and I do not feel an 

 innocent man should be judged on statements that 

 someone was pressured into making. 

This statement was incorporated into a Stipulation for 

Morgan's upcoming Article 32 hearing.13 

Similarly, Williams (the owner of Precision Printing whose 

accusations are set forth above) testified at a deposition 

and denied ever incriminating Morgan. He stated that 

_________________________________________________________________ 

13. An Article 32 Investigation, 10 U.S.C. S 832, is, as noted earlier, 

the 

military counterpart to the civilian grand jury. According to the Manual 

for Courts-Martial (MCM), United States (1995 Edition), "[t]he primary 

purpose of [the Article 32 Investigation] is to inquire into the truth of 

the 

matters set forth in the charges, the form of the charges, and to secure 

information on which to determine what disposition should be made of 

the case." See Rules for Courts-Martial ("R.C.M.") 405(a), Discussion. No 

charge may be referred to a general court-martial for trial until an 

Article 

32 investigation has been conducted. 10 U.S.C. S 832(a). 

 14 
investigators were trying to "get the goods" on Morgan, but 

that he, Williams, could not assist them because he did not 

know Morgan and had never seen him. He flatly denied ever 

making the inculpatory statements against Morgan that 

Koleos had reported. On the contrary, Williams swore that 

he could not link Morgan to any fraudulent diplomas. 

Williams testified that, on the contrary, it was the 

investigators who did the threatening. They purportedly told 

Williams that he was also under investigation; that he 

could be charged as a result of the investigation; and that 

the FBI might be notified of his conduct. Williams also 

testified that he had refused to sign a statement that Koleos 

had prepared which identified Morgan as the Marine who 

was coming into his shop for false diplomas. 

Puleo was able to interview several key witnesses before 

the Article 32 hearing. The majority of them were Marine 

Corps applicants, who not only absolved Morgan of 

wrongdoing, but also identified other Marines who were 

involved in the recruiting fraud. In addition, they either 

stated that they had been pressured into implicating 

Morgan or denied making statements that had been 

credited to them in which they purportedly accused Morgan 

of improper conduct. 

G. 

The Article 32 investigation took place in Pittsburgh, 

Pennsylvania, on April 2 and 3, 1989. Major Ellen B. Healy 

was designated the Investigating Officer,14 Captain Koleos 

was the government's counsel, and Captain Puleo was

Morgan's counsel. Much of the testimony at that hearing 

exonerated Morgan. At the conclusion of the investigation, 

Major Healy prepared a report in which she stated that the 

government was not able to present key testimony, and 

that, with the exception of allegations relating to Charge III 

(the wrongful enlistment of a particular recruit), the 

charges against Morgan were not supported by the 

_________________________________________________________________ 

14. The Investigating Officer is appointed by the commanding officer. 

R.C.M. 405(d)(1). He or she conducts the investigation and makes a 

report of conclusions and recommendations. Id. 

 15 
evidence. Moreover, the testimony as to even that charge 

was equivocal. The prosecution had produced testimony 

that Morgan directed a recruiter to fill out a false education 

verification. However, the witness stated that Morgan 

directed him to verify it the following day. 

Based on the evidence at that hearing, Healy 

recommended that Morgan be subjected to NJP, the lowest 

form of punishment under the UCMJ. On April 6, 1989, 

Morgan was ordered to report to Parris Island. 

Puleo was initially unable to interview Lockwood, the 

recruit who had first implicated Morgan in the scheme to 

falsify diplomas. However, Puleo finally was able to 

interview Lockwood after the Article 32 hearing, and 

Lockwood told him that he had lied to the investigating 

team. Lockwood said that Master Sergeant Cawman, a 

member of the Evans investigating team, told him that he 

(Lockwood) would have to implicate Morgan and Cawman 

told him what to say. 

Based on Lockwood's allegations, Puleo preferred charges 

against Cawman.15 Puleo gave the charge sheet to Koleos to 

be forwarded to the Commanding General. Koleos later told 

Puleo that the charge sheet had been sent through 

channels, but Puleo subsequently found it in a waste 

basket. Cawman was never prosecuted. 

As these disclosures were occurring, General Lynch was 

reviewing Healey's recommendation that Morgan receive 

only an NJP. However, Lynch rejected that recommendation 

and ordered yet another investigation. Consequently, the 

Article 32 hearing was reopened. Staff Sergeant Cummings 

testified for the government at the reopened hearing under 

a grant of immunity. As a result, new charges were brought 

against Morgan and a new charge sheet was prepared that 

contained the original charges plus two new ones.16 One of 

_________________________________________________________________ 

15. Anyone subject to the UCMJ may serve as an "accuser" and prefer 

charges against someone else. 10 U.S.C. S 801(9). 

16. Under Article 32, the investigating officer may, subject to certain 

conditions, investigate other, uncharged offenses, if the evidence 

indicates that the accused may have committed those offenses. 10 

U.S.C. S 832(d). 

 16 
the new charges was an allegation that Morgan was 

engaging in an illegal bookmaking operation in RS 

Pittsburgh. 

Following that reopened investigation, Major Healy 

prepared another report in which she noted that Cummings 

testified under a grant of immunity, that he had previously 

lied, and that he admitted to using cocaine while on 

recruiting duty. Healey also noted that the government 

called witnesses who negated Cummings' testimony against 

Morgan. Nonetheless, she recommended that Morgan be

tried by general court-martial.17 

H. 

Morgan's general court-martial18 was scheduled for 

Tuesday, August 8, 1989, in Parris Island. However, one 

week before the scheduled trial, Koleos19 suggested to Puleo 

_________________________________________________________________ 

17. After Healey filed her second report, Morgan wrote to then 

Pennsylvania Senator John Heinz and complained about the conduct of 

the government, and the charges brought against him. That letter formed 

the substance of Morgan's "whistleblower" claim. However, the district 

court found that General Lynch did not know of the letter and that no 

action was taken against Morgan because of it. Thatfinding of fact is not 

clearly erroneous. 

18. A general court-martial is the highest trial court in military law. 

Article 16 of the UCMJ, 10 U.S.C. S 816. Articles 22 through 29 of the 

UCMJ, 10 U.S.C. SS 822-29, establish the mechanics of convening a 

court-martial and the composition of its members. For a detailed 

discussion of the entire process, see SCHLUETER , supra note 9, SS 8-1 

through 8-6. 

19. Koleos had by this time been assigned to be the prosecutor for 

Morgan's general court-martial. In military jurisprudence, the prosecutor 

is called "trial counsel." HOMER E. MOYER, JR., JUSTICE AND THE MILITARY, 

S 2-306; 10 U.S.C. S 827(a)(1). 

Koleos occupied a number of positions in this case. He was the Deputy 

Staff Judge Advocate for the Eastern Recruiting Region and the legal 

advisor to the Evans' investigation. At the request of Major Kelley, legal 

advisor to the Casey investigation, he interviewed Jerry Williams, the 

printer accused of printing false high school diplomas for applicants. 

Further, he was government counsel in Morgan's Article 32 investigation 

conducted by Major Healey. 

 17 
that Morgan should opt for an Other Than Honorable 

("OTH") discharge in lieu of a general court-martial.20 Puleo 

declined the offer on behalf of his client. Koleos then asked 

Puleo if his position would be different if the government 

had a notebook in which Morgan had recorded his 

bookmaking. Cummings had allegedly taken this "gray

book" from Morgan's car, and Koleos purportedly allowed 

Cummings to travel to Pittsburgh to retrieve it. 

Later that week, on Thursday or Friday, Koleos told Puleo 

that Cummings was bringing the gray book to Parris Island 

for Morgan's court-martial. On Saturday, August 5, Koleos 

again told Puleo that Cummings had the gray book; but 

claimed that he did not know where Cummings was. That 

afternoon, Puleo went to Koleos' office. Koleos happened to 

be speaking to Cummings on the telephone when Puleo

arrived, and Puleo told Koleos he wanted to speak with 

Cummings. However, as soon as Koleos finished his 

conversation he hung up the phone. Koleos told Puleo that 

Cummings was on his way to Parris Island with the gray 

book and that the offer to allow Morgan to take the OTH 

discharge was only open until Cummings and the gray

book arrived at Parris Island. 

On Monday morning, August 7, 1989, Puleo spoke to 

Koleos again about the gray book and Koleos indicated that 

Cummings had the gray book. Based on Koleos' 

representations about the gray book, Morgan decided to 

accept the government's offer of an OTH discharge in lieu of 

trial by general court-martial. Accordingly, Morgan

submitted a request for administrative discharge under 

other than honorable conditions in lieu of a general courtmartial. In the request, which he prepared with defense 

counsel Puleo, Morgan pleaded guilty to wrongfully 

participating in gambling activity while on duty as the 

Recruiting Instructor -- the least serious offense that 

Morgan had been charged with. General Lynch approved 

the request the same day. Consequently, Morgan was 

administratively reduced in rank to lance corporal with a 

_________________________________________________________________ 

20. The regulations of the various armed services permit an enlisted 

accused to apply for an administrative discharge rather than face a trial 

by court-martial. SCHLUETER, supra note 9, S 9-4. 

 18 
corresponding reduction in pay, and he became ineligible to 

serve in the Marine Corps Reserve. 

However, after the request for the OTH discharge was 

approved, Cummings informed Puleo that he did not have 

the gray book, that he never did have it, and that he had 

been in constant touch with Koleos the previous weekend. 

Cummings told Puleo that he had only stated that he was 

looking for the gray book, and denied ever telling Koleos 

that he actually had it. Cummings also told Puleo that 

Koleos had promised him a general discharge in exchange 

for his testimony against Morgan. 

Thereupon, Puleo filed a motion to dismiss the charges 

against Morgan based on prosecutorial and governmental 

misconduct. Puleo based the motion upon the numerous 

attempts to falsely implicate Morgan by named Marines, 

including Koleos, and members of the Evans' investigation 

team, and the evidence of coercion and perjury that were 

part of that alleged scheme. However, the request to 

dismiss the charges against Morgan was denied. 

Puleo also prepared a request for Morgan to withdraw his 

OTH discharge and that was submitted to General Lynch 

on April 9, 1989. The request was based on Morgan's prior 

reliance on the government's representations that it had the 

gray book in its possession, and his subsequent discovery 

that the government could not produce that evidence. If 

Morgan's request had been granted, his trial by general 

court-martial would have proceeded.21 

_________________________________________________________________ 

21. Under military criminal procedure, an accused must be tried within 

120 days of the date the charges are preferred, pretrial restraint in the 

form of confinement, arrest or restriction in lieu of arrest or the 

accused 

is brought on active duty. R.C.M. 707(a)(1), (2), (3). In Morgan's case, 

the 

last day of his "speedy trial" time was August 8, 1989, the date of his 

scheduled trial. Puleo testified that he expected that Morgan's request to 

withdraw the OTH discharge would be treated as a defense delay, which 

would toll the speedy trial clock. R.C.M. 707(c). However, there is no 

indication that Morgan was willing to waive his speedy trial rights. 

Furthermore, the filing of the request would not by itself have stopped 

the clock from running. R.C.M. 707(c)(1) and Discussion. By August 9, 

1989, Morgan's speedy trial time would have expired. 

 19 
After Morgan submitted his request to withdraw the OTH 

discharge, the Staff Judge Advocate, Colonel Jones,

interviewed Koleos and Puleo. On August 9, 1989, Jones 

sent a memo to General Lynch, recommending disapproval 

of Morgan's request. The memo states in part: 

 3. The evidence in question, a grey book consistin g of 

 memorandum records of respondent's gambling 

 transactions with customers, was never in the 

 possession of government counsel nor was it ever 

 represented to be so. The government counsel

 indicated to respondent's counsel that a government 

 witness had taken the book from the respondent's 

 vehicle in December, 1988, claimed that he possessed 

 it, and was making efforts to bring it under the control 

 and custody of the government counsel by the close of 

 business of August 7, 1989. 

 4. Whether or not the representations of governmen t 

 counsel were the causal factor in the submission of the 

 request is speculative at best. It should be noted 

 however, that the respondent did not indicate in his 

 request for separation that he considered the book to 

 be the dispositive factor in his decision to avoid trial by 

 court-martial. Furthermore, the government was not 

 relying upon its production to obtain a conviction but 

 rather the testimony of six witnesses and other 

 corroborative documentary evidence. 

On August 9, 1898, General Lynch denied Morgan's request 

to withdraw the OTH discharge. He offered no explanation 

for doing so. That same day, General Lynch dismissed the 

charges against Morgan in light of the OTH discharge. On 

August 31, 1989, Morgan was discharged from the Marine 

Corps on an "other than honorable" basis. 22 

_________________________________________________________________ 

22. Following his discharge, Morgan sent a letter to Congressman 

Murtha complaining of his treatment. Morgan subsequently argued 

before the district court that his Constitutional rights were violated 

because the Marines retaliated against him for writing that letter. 

However, the district court properly rejected that argument as the letter 

was written after he had been discharged from the Marine Corps, and 

could not, therefore, have been the basis for any retaliation. 

 20 
II. 

In 1991, Morgan filed a complaint in the United States 

District Court for the Western District of Pennsylvania 

seeking declaratory and equitable relief against the 

Secretary of Defense, the Secretary of the Navy, the 

Commandant of the Marine Corps, and the Commanding 

General of Parris Island. The six counts of the Complaint 

alleged violations of the Constitution, including violations of 

free speech, cruel and unusual punishment,23 equal 

protection and due process. The court rejected all but one 

of Morgan's claims24 after a nonjury trial. The court did not 

_________________________________________________________________ 

23. Morgan did not pursue his eighth amendment claim at trial. 

24. The following is a synopsis of each claim and of the district court's 

holding on each. 

1. First Amendment Claim. -- Morgan claims he was a

"whistleblower" who was retaliated against for blowing the whistle on 

recruiting fraud. However, the district court rejected this claim because 

it found the testimony of General Lynch credible. Thus, Lynch ordered 

Colonel Casey, to investigate and fix the RS Pittsburgh problem. Lynch 

testified that he did not know Morgan; that he was never informed that 

Morgan had complained about the problems in RS Pittsburgh to Master 

Sergeant Zuro; and that his investigation was not the result of any 

"whistleblowing" by Morgan. District Court Opinion, Conclusions of Law 

P 52. 

2. Sixth Amendment right to counsel claim.-- Morgan claimed that 

he was mislead by Captain Evans into believing that Evans was an 

attorney and thus, his right to counsel was violated. Captain Evans 

indicated that he was a legal advisor and Morgan talked to Captain 

Evans for about 30 to 45 minutes. However, Captain Evans is not an 

attorney. 

The district court rejected this claim by holding that Morgan failed to 

establish that he sustained any harm as a result of Evan's 

misrepresentation. Id. at P 53. 

3. Claim under the Equal Protection component of the Fifth 

Amendment. -- Morgan claims that gambling is tolerated in the Marine 

Corps and, by preferring gambling charges against him, the government 

was engaging in selective prosecution. The district court rejected this 

selective prosecution claim by finding that, although gambling in the 

form of football pools, raffle tickets and the Pennsylvania Lottery took 

place in RS Pittsburgh, Morgan was not being prosecuted for this type of 

gambling. Rather, Morgan was being prosecuted for running a 

bookmaking operation at RS Pittsburgh. Id. at P 54.

 21 
discuss Morgan's claim that his right to substantive due 

process had been violated, but it did conclude that Koleos' 

conduct "during the week preceding [Morgan's] scheduled 

trial by general court-martial. . . ." had denied Morgan's 

right to due process of the law. Dist. Ct. Op. atP 55. The 

court wrote: 

 Specifically, the court finds that Captain Koleos 

 engaged in deceptive conduct in connection with the 

 availability of Staff Sergeant Cummings and the 

 availability of the government to gain possession of the 

 gray book. The court further finds that such deception 

 was improper, and that it was the determining factor in 

 [Morgan's] decision to request an OTH discharge in lieu 

 of trial by general court-martial, violating his right for 

 an opportunity to be heard on the charges against him. 

 Accordingly, [Morgan] is entitled to a declaratory 

 judgment that defendants violated his right to 

 procedural due process of law under the Fifth 

 Amendment. 

Id. The court also noted other allegations of misconduct 

alleged against Koleos and others, including the alleged 

attempts to falsely accuse Morgan of procuring fraudulent 

diplomas. However, the court was "unpersuaded that these 

incidents of misconduct were factors in [Morgan's] decision 

to request the OTH discharge. . . ." Thus, the district court 

"decline[d] to find that such misconduct also violated 

[Morgan's] Fifth Amendment right to due process." Id. at 

P 55 n.62. 

Despite ruling in Morgan's favor on his procedural due 

process claim, the court concluded that it could give only 

limited relief. The court determined that it is"impracticable 

to vacate General Lynch's August 9, 1989 decision, which 

denied [Morgan's] request to withdraw his request for an 

OTH discharge, and to order the Marine Corps to proceed 

with [Morgan's] trial by general court-martial," as he had 

requested. Id. at P 56, The court also rejected Morgan's 

request for reinstatement in the Corps. "[I]t is undisputed 

that there is no vested property right in future reenlistment 

in the Marine Corps." Id.. The court reasoned that the 

Marines would not have permitted Morgan to reenlist upon 

the expiration of his last reenlistment period on February 5, 

 22 
1990. Thus, the district court directed the Marines to 

reinstate Morgan for the limited period of time between 

August 31, 1989, the date of his OTH discharge, and

February 5, 1990, the date of the expiration of his last 

reenlistment. Id. The Marine Corps was also directed to 

expunge Morgan's military records insofar as they reflected 

a reduction in rank and the OTH discharge, to restore him 

to his status as a Master Sergeant, and to recharacterize 

his discharge as honorable or general using the standards 

applicable to those discharged at the expiration of their 

normal term of service. Finally, the district court denied 

Morgan's claim for back pay under Hubbard v. 

Administrator, Environmental Protection Agency, 982 F.2d 

531 (D.C.Cir. 1991), which held "that the waiver of

sovereign immunity in Section 702 of the Administrative 

Procedure Act for `relief other than money damages' does 

not waive sovereign immunity for an award of backpay." Id. 

III. 

Morgan did not appeal the district court's merits 

decision. However, on September 28, 1995, he filed an 

application to the district court for an award of attorney's 

fees and costs under the Equal Access to Justice Act EAJA. 

Under the EAJA, a prevailing party25 in non-tort litigation 

against the United States is entitled to attorney's fees and 

costs, unless the court finds that the position taken by the 

government "was substantially justified or that special 

circumstances make an award unjust." 28 U.S.C. 

S 2412(D)(1)(A). In a Memorandum and Order, dated May 3, 

1996, the district court found that the government's 

position was substantially justified and, denied Morgan's 

application for attorney's fees and costs. This appeal 

followed. 

IV. 

The district court's determination of substantial 

justification in a suit under the EAJA is reviewed for abuse 

_________________________________________________________________ 

25. The government concedes that Morgan is the prevailing party for 

purposes of the EAJA. 

 23 
of discretion. Pierce v. Underwood, 487 U.S. 552, 560 

(1988). An abuse of discretion arises when the district 

court's decision "rests upon a clearly erroneousfinding of 

fact, an errant conclusion of law or an improper application 

of law to fact." Hanover Potato Products, Inc. v. Shalala, 989 

F.2d 123, 127 (3d Cir. 1993). An abuse of discretion can 

also occur "when no reasonable person would adopt the 

district court's view." Id. Therefore, we will not interfere 

with the district court's exercise of discretion"unless there 

is a definite and firm conviction that the court. . . 

committed a clear error of judgment in the conclusion it 

reached upon a weighing of the relevant factors." Id. 

Finally, as a part of our abuse of discretion review, we 

examine the district court's factual findings for clear error. 

Id. Our task in this regard is more difficult because the 

factual underpinnings of the EAJA claim are not set forth 

in the district court's opinion denying fees and costs, but in 

its decision on the merits. There, the district court notes 

the numerous instances of conflicting testimony but makes 

very few findings of fact or credibility determinations. 

Although our task is thus complicated, the issue before us 

is sufficiently narrow that we can proceed with our analysis 

based upon our review of the record and the findings that 

the district court made along with those that are implicit in 

that court's decision. 

V. 

Although our inquiry must be controlled by the language 

of the statute in question, our analysis is aided by the 

Supreme Court's statement of the policy underlying the 

EAJA: 

 Concerned that the Government, with its vast

 resources, could force citizens into acquiescing to 

 adverse Government action, rather than vindicating 

 their rights, simply by threatening them with costly 

 litigation, Congress enacted the EAJA, waiving the 

 United States' sovereign and general statutory 

 immunity to fee awards and creating a limited 

 exception to the `American Rule' against awarding 

 attorneys fees to prevailing parties. 

 24 
Pierce v. Underwood, 487 U.S. at 575 (Brennan, J., 

concurring in part and concurring in the judgment). The 

section of the EAJA applicable here26 provides as follows: 

 Except as otherwise specifically provided by statute, a 

 court shall award to a prevailing party other than the 

 United States fees and other expenses, in addition to 

 any costs awarded pursuant to subsection (a), incurred 

 by that party in any civil action (other than cases 

 sounding in tort), including proceedings for judicial 

 review of agency action, brought by or against the 

 United States in any court having jurisdiction of that 

 action, unless the court finds that the position of the 

 United States was substantially justified or that special 

 circumstances make an award unjust. 

28 U.S.C. S 2412(d)(1)(A). "Fees" include "reasonable 

attorney fees." 28 U.S.C. S 2412 (d)(2)(A). The question of 

whether the position of the United States was "substantially 

justified shall be determined on the basis of the record 

(including the record with respect to the action or failure to 

act by the agency upon which the civil action is based) 

_________________________________________________________________ 

26. Morgan argues that his fee application can also be considered under 

section 2412(b) of the EAJA which provides: 

 Unless expressly prohibited by statute, a court may award 

 reasonable fees and expenses of attorneys, in addition to the costs 

 which may be awarded pursuant to subsection (a), to the prevailing 

 parties in any civil action brought by or against the United States 

or 

 any agency or any official of the United States acting in his or 

her 

 official capacity in any Court having jurisdiction of such action. 

The 

 United States shall be liable for such fees and expenses to the 

 extent that any other party would be liable under the common law 

 or the terms of any statute which would specifically provide for 

such 

 an award. 

28 U.S.C. S 2412(b). This section of the EAJA does not relieve the 

government of liability for attorney's fees to the prevailing party even 

in 

a case where the government's position was substantially justified. 

However, it does require that the prevailing party identify some other 

statute or rule of common law which specifically provides for an award 

of attorney's fees. Morgan has not identified any such statute or rule of 

common law and, therefore, his argument that a fee award can be made 

under 2412(b) is without merit. 
 25 
which is made in the civil action for which fees and other 

expenses are sought." 28 U.S.C. S 2412(d)(1)(B). 

The Supreme Court has defined substantial justification 

under the EAJA as "justified in substance or in the main -- 

that is, justified to a degree that could satisfy a reasonable 

person." Pierce v. Underwood, 487 U.S. at 565. That is to 

say, the government's position is substantially justified "if it 

has a reasonable basis in both law and fact." Hanover 

Potato Products, Inc. v. Shalala, 989 F.2d at 128. The 

government has the burden of establishing that there is 

substantial justification for its position. Id. at 128. In order 

to do so, the government must show: (1) a reasonable basis 

in truth for the facts alleged; (2) a reasonable basis in law 

for the theory it propounded; and (3) a reasonable 

connection between the facts alleged and the legal theory 

advanced. Id. 

The government's position under the EAJA includes "not 

only the position taken in the litigation but the agency 

position that made the litigation necessary in thefirst 

place." Id. Thus, unless the government's pre-litigation and 

litigation positions have a reasonable basis in both law and 

fact, the government's position is not substantially justified. 

Id.; see also Taylor v. Heckler, 835 F.2d 1037, 1040 (3d Cir. 

1988) ("[T]he government is deemed to have two positions 

for EAJA purposes, both [of which] must be substantially 

justified. . . . [I]f either government position does not bear 

scrutiny, the prevailing party should be awarded attorneys' 

fees [and other reasonable fees and expenses]."). 

VI. 

In denying Morgan's fee application, the district court 

noted that Morgan raised six claims against the defendants 

alleging violations of the First, Fifth, Sixth, Eighth and 

Fourteenth Amendments and that the relief Morgan sought 

was (1) a declaration that the constitutional rights 

guaranteed under those provisions were violated; (2) an 

injunction providing for his reinstatement into the Marine 

Corps, with restitution of all financial losses and other 

benefits and the expungement of his record of his OTH 

discharge; (3) costs, expenses and attorneys fees; and (4) 

 26 
other just and equitable relief. Dist. Ct. EAJA Opn. at 3. 

The district court then noted that Morgan prevailed on only 

one of his claims, i.e., that Koleos' conduct during the week 

preceding the scheduled court-martial violated his Fifth 

Amendment procedural due process rights, and failed to 

prove any of his other constitutional claims. Thus, "the 

relief awarded to plaintiff was very limited in relation to the 

requested relief." Id. at 12. 

We must emphasize, however, that the limited nature of 

the relief fashioned by the district court does not in anyway 

obscure the seriousness of even the single instance of 

misconduct that the court found. Koleos was appointed to 

prosecute this matter for the Marine Corps. He conducted 

himself in a manner that violated rights afforded under the 

very constitution he had sworn to uphold as an attorney 

and as an officer in the Marine Corps. 

The ABA Rules of Professional Conduct and the ABA 

Standards for Criminal Justice: Prosecution Function and 

Defense Function, are applicable to Marine Corps judge 

advocates. United States v. Pack, 9 M.J. 752, 754 (C.M.A. 

1980). Rule 4.1 of the Rules of Professional Conduct 

requires that a lawyer "shall not knowingly . . . make a 

false statement of material fact . . . to a third person." 

MODEL RULES OF PROFESSIONAL CONDUCT Rule 4.1. A "third 

person" within the meaning of the rule includes opposing 

counsel. Id., Legal Background. Criminal Justice Standard 

3-4.1 provides that it is "unprofessional conduct for a 

prosecutor knowingly to make false statements or 

representations in the course of plea discussions with 

defense counsel or the accused." STANDARDS FOR CRIMINAL 

JUSTICE: THE PROSECUTION FUNCTION, Standard 3-4.1. 

Accordingly, Koleos' fabrications about the gray book 

constituted a gross ethical violation of his duty and 

responsibility as a lawyer as well as government prosecutor. 

Koleos' conduct is also "conduct unbecoming an officer and 

a gentleman" which is prohibited by Article 133 of the 

UCMJ, 10 U.S.C. S 933.27 The military demands that its 

officers comport themselves in accordance with a strict 

moral standard, a deviation from which can be a 

_________________________________________________________________ 

27. See Parker v. Levy, 417 U.S. 733 (1974). 

 27 
punishable offense under the UCMJ. See M.C.M., Part IV, 

P 59(c)(2). Counsel for the government in this appeal deems 

it advantageous to dwell upon Morgan's limited victory in 

its attempt to defeat his petition for fees under the EJAJ. 

However, Koleos' utter disregard for his duties and

responsibilities as an attorney and as a commissioned 

officer, coupled with his contempt for the constitutional 

rights of Master Sergeant Morgan, affords the government 

little room to trumpet the limited scope of Morgan's victory. 

We are thus guided not by Koleos' misconduct, but by the 

extent to which the government's position in defending 

itself against Morgan's claim was substantially justified. 

VII. 

"[D]etermining whether the government's position is

substantially justified for the resolution of an EAJA claim 

has proved to be an issue of considerable conceptual and 

practical difficulty." Roanoake River Basin Association v. 

Hudson, 991 F.2d 132, 138 (4th Cir. 1993). We cannot 

assume that the government must pay Morgan's attorney's 

fees merely because it did not successfully defend against 

Morgan's suit on the merits in its entirety. The EAJA is not 

a "loser pays" statute.28 Thus, a court cannot assume that 

the government's position was not substantially justified 

simply because the government lost on the merits. "[T]he 

inquiry into reasonableness for EAJA purposes may not be 

collapsed into [the] antecedent evaluation of the merits, for 

EAJA sets forth a distinct legal standard." Cooper v. United 

States Railroad Retirement Board, 24 F.3d 1414, 1416 (D.C. 

Cir. 1994). Furthermore, as previously noted, we must 

scrutinize both the government's prelitigation position and 

its litigation position. Both positions must be substantially 

_________________________________________________________________ 

28. It has been argued persuasively, however, that where the government 

acts in bad faith or acts dishonestly, the government's conduct 

"undermines the `substantial justification' for the government's position" 

and an award of attorney's fees should follow. Gregory C. Fisk, The 

Essentials of the Equal Access to Justice Act: Court Awards of Attorney's 

Fees for Unreasonable Government Conduct (Part Two) , 56 La. L. R. 1, 54 

(1995). Fee-shifting in such a case is " `automatic' only in the circular 

sense that fee-shifting occurs automatically when the government acts 

unreasonably." Id. at 41. 

 28 
justified and if either is not, attorney's fees should be 

awarded to the prevailing party. 

A. 

The usual conceptual difficulties inherent in resolving an 

EAJA claim are further complicated here because Morgan 

and the government have a fundamental disagreement over 

what the district court should have examined in 

determining whether the government's prelitigation position 

was substantially justified. Morgan argues that because he 

alleged a number of constitutional claims involving a 

number of military personnel, the district court"should 

have taken a broader view and consider[ed] not only

General Lynch's decision, and subjective knowledge, but 

also that of his advisors and other government agents, 

especially the actions and intent of Captain Koleos, 

Morgan's Marine Corps prosecutor." Reply Br. at 2. Morgan 

would have us revisit his merits claim and consider

whether General Lynch's decision was reasonable in light of 

all of the constitutional violations Morgan alleged in his 

complaint, including allegations of misconduct during the 

Evans' investigation, allegations against Cawman and 

allegations about the fabrication of William's statement. See 

Appellant's Br. at 23-34. In essence, Morgan argues that 

the district court ignored the numerous constitutional 

violations which caused him to file his civil action by 

limiting the focus of the EAJA inquiry to the 

reasonableness of General Lynch's decision, which only 

addressed Koleos' fabrications about the gray book.

Not unexpectedly, the government urges us to focus only 

upon General Lynch's reasons for refusing to allow Morgan 

to withdraw his request for the OTH discharge in lieu of 

court-martial. The government argues that we cannot look 

beyond Lynch's refusal and examine every instance of 

misconduct alleged by Morgan. 

Although we have detailed some (though by no means all) 

of the allegations surrounding the Marine Corps 

investigation into recruiting fraud in RS Pittsburgh, the 

deceit purportedly perpetrated by Marine Corps personnel, 

and by Morgan himself, we do not suggest that this 

 29 
backdrop controls our substantial justification analysis. 

Rather, as noted above, we state it only because it is 

impossible to understand Morgan's EJAJ petition in a 

vacuum. 

The Marine Corps' investigation of Morgan had two parts. 

One involved recruiting fraud and one involved bookmaking 

charges. Koleos' misconduct in regard to the gray book, 

which the district court found was the decisive factor in 

Morgan's decision to opt for the OTH discharge, 29 has 

nothing to do with the recruiting fraud charges leveled 

against Morgan. In fact, Morgan was willing to be tried by 

the general court-martial until Koleos lead him to believe 

that the government had solid proof of Morgan's gambling 

activities in the form of the gray book. Once Morgan was 

informed that the government had his gray book, he 

requested an OTH discharge. And once he learned that 

Koleos did not have the gray book, he immediately 

attempted to withdraw that request. Further, Morgan did 

not plead guilty to any charge that arose from the 

recruiting fraud investigations. He did plead guilty to 

charges of bookmaking. Thus, we can not allow the 

government's conduct during the recruiting fraud 

investigations to guide our analysis of its position with 

regard to Morgan's requested discharge or his attempt to 

withdraw the request.30 

Morgan also insists that Koleos' misconduct is relevant to 

determining substantial justification even if we focus solely 

_________________________________________________________________ 

29. Koleos also engaged in misconduct in the recruiting fraud aspect of 

the case when he misstated the results of his conversation with 

Williams, the printer, about Morgan's complicity in the scheme involving 

the preparation of false high school diplomas. However, the district court 

found that Koleos"s misconduct in regard to the Williams conversation 

was not relevant to Morgan's request for an OTH discharge. Dist. Ct. 

Opn. at P 55 n.62. 

30. For a discussion of the extent to which the EAJA inquiry focuses 

only upon the narrow issue on which a party prevailed or upon the 

entire litigation of which that issue may have been only a small part, see 

Ronoake River Basin Associates v. Hudson et al. 991 F.2d 132 (4th Cir. 

1993). There, the narrow issue that the prevailing party relied upon for 

its fee request under the EAJA had a much closer nexus to the 

government's overall action than the challenged action here. 

 30 
upon Lynch's refusal to allow Morgan to withdraw his 

requested discharge. We disagree. Although we in no way 

minimize the gravity or impropriety of Koleos' conduct, it is 

clear to us that Koleos' conduct is not the issue before us. 

Rather, the issue is General Lynch's refusal to allow 

Morgan to withdraw his request of an OTH discharge and 

proceed to a general court martial. The fact that Morgan's 

request was triggered by Koleos' conduct does not elevate 

that conduct to the level of agency action under the facts 

before us nor transform his conduct into the decision that 

was challenged in court.31 Morgan challenged General 

Lynch's decision, and that is the agency action that must 

be substantially justified32 if Morgan is to be denied fees 

under the EAJA even though Koleos' conduct formed the 

basis of Morgan's relief in the district court. Therefore, the 

district court's exclusive focus on the reasonableness of 

General Lynch's decision was proper.33 After reviewing this 

_________________________________________________________________ 

31. We need not determine under what circumstances the unlawful 

actions or misconduct of an agency employee who is not responsible for 

the challenged action can amount to agency action for purposes of an 

EAJA fee petition. It has been held that, as general rule, an agency 

employee's unauthorized conduct, which is not subject to judicial review, 

cannot be regarded as agency action. Chiu v. United States, 948 F.2d 

711, 716 (Fed. Cir. 1991). However, where the agency acts based upon 

the misconduct of its employee, agency action can be found. Id. 

(supervisory employee's unlawful motivation in recommending 

elimination of plaintiff 's government position was deemed agency action 

where the agency official implementing the reduction-in-force decision 

acted on supervisor's recommendation). 

32. In opposing Morgan's fee application in the district court, the 

government argued not only that its position was substantially justified 

but also that special circumstances made a fee award unjust. However, 

the district court did not address the government's special 

circumstances argument because it found that the government's position 

was substantially justified. Dist. Ct. EAJA Op. at 5 n.3. In this appeal, 

the government is not arguing that special circumstances make a fee 

award unjust. 

33. Had Lynch allowed Morgan to withdraw his OTH request, Morgan 

would have faced a general court martial where he could have raised all 

of the constitutional claims he litigated in the district court. Military 

tribunals have the same responsibilities to protect a person from 

constitutional violations as do federal courts. In re Kelly, 401 F.2d 211 

 31 
record, we cannot say that the district court abused its 

discretion in finding that the government's prelitigation 

position (General Lynch's refusal to allow Morgan to 

withdraw his request for an OTH) was substantially 

justified. 

The district court believed that General Lynch's reliance 

on Colonel Jones' recommendation was reasonable. 

Admittedly, Jones' report appears to contain a factual error. 

Jones wrote that "[w]hether or not the representations of 

government counsel were the causal factor in the 

submission of the request is speculative at best." Supp. 

App. at 33. However, it is obvious that Koleos' 

representations did cause Morgan to request discharge just 

as the district court concluded. 

However, the district court's finding about Morgan's 

reasons for seeking to withdraw his request for the OTH 

discharge does not mean that either Jones or Lynch had to 

accept Morgan's explanation. Jones made his own 

credibility determination and Lynch relied on it. The fact 

that the district court made a different determination does 

not make Lynch's reliance on Jones' report unreasonable. 

While General Lynch did not give any reason for denying 

Morgan's request, his testimony at trial suggests that his 

primary concern was avoiding the expense and 

inconvenience of flying witnesses to Parris Island for a 

court martial. 

 When he first brought [the request for OTH discharge] 

 in, . . . I was disinclined to approve it. 

_________________________________________________________________ 

(5th Cir. 1968). Simply stated, if Lynch had allowed Morgan to withdraw 

his OTH request, there would have been no district court litigation and 

no consequent EAJA fee application. 

Further, Lynch's decision, made in his capacity as the Commanding 

General of the MCRD, Parris Island, is the agency action we are 

examining here. The Marine Corps is within the Department of the Navy, 

Neal v. Secretary of the Navy, 639 F.2d 1029, 1033 n.4 (3d Cir. 1981, 

and each branch of the military is an agency within the meaning of the 

Administrative Procedures Act, 5 U.S.C. S 551 et seq. See Id. at 1036 

and Jaffee v. United States, 592 F.2d 712, 719 (3d Cir. 1979). 

 32 
* * * 

 Because I thought that justice would be better served 

 if Master Sergeant Morgan stood trial by court-martial, 

 . . . 

 And the point was made in general terms that if it 

 went to court-martial, it would be a great expense to 

 the government, we would probably have to bring 

 witnesses in on a worldwide basis, and whatever, and 

 we were serving the needs or requirements of justice 

 just as well by acceding to Master Sergeant Morgan's 

 request. 

 Having been convinced on that score, I then

 approved the request. 

App. at 38. General Lynch also explained that he did not 

allow Morgan to withdraw the OTH once it was granted 

because "nothing had changed, nothing that is in terms of 

what had prompted the initial decision to accept his 

request had changed. There was discussion on this book, 

this gambling book." App. at 40. Lynch added:"Any 

decision to do anything other than continue on the course, 

we were going, would have had to have been influenced by 

a change in circumstances and there was no change." App. 

at 41. 

We must disagree that "nothing had changed." Morgan

had learned that the government did not have his gray 

book, and apparently believed that the Corps' case against 

him was seriously compromised without it. Furthermore, 

when Morgan sought to withdraw his request for the OTH 

discharge, Lynch knew that Koleos had been accused of 

misconduct and he knew that the government did not have 

the gray book in its possession. App. at 40, 105. However, 

Lynch's erroneous belief that "nothing had changed" does 

not compel a finding that denial of Morgan's request was 

without substantial justification. The government's

"position can be justified even though it is not correct." 

Pierce v. Underwood, 487 U.S. at 566 n.2. 

When Morgan sought to withdraw his request for the 

OTH discharge and proceed to trial by general court

martial, he never recanted his admission of guilt. He never 

 33 
claimed that he was innocent of the gambling charge. 34 

Morgan had the benefit of defense counsel when he made 

the admission in his request for an OTH discharge. 

Moreover, the wording of his request to withdraw his OTH 

discharge reaffirms that evidence existed that would prove 

that he was guilty of the gambling offense to which he had 

pleaded guilty. When Morgan learned that the government 

did not have the gray book, he decided that he wanted to 

force the Marine Corps to conduct a general court-martial 

to determine the truth of the gambling charge as well as the 

other charges against him. He was willing to risk that the 

government could not prove the gambling charge without 

the gray book, and the other charges against him were 

based in large part upon testimony that had since been 

recanted, and witnesses who were either biased, or who 

were willing to testify that they had been coerced into 

falsely accusing him of various recruiting irregularities. 

Since Morgan never sought to withdraw his admission of 

guilt, Lynch's belief that the ends of justice would be served 

by simply accepting the still pending admission of guilt and 

giving Morgan the OTH discharge that he requested a day 

earlier was eminently reasonable. Accordingly, the district 

court's finding that the government's prelitigation position 

was substantially justified was not an abuse of discretion.35 

_________________________________________________________________ 

34. Although Morgan claimed that the gray book never existed, that 

claim is not credible. See Dist. Ct. EAJA Opn. at 11 n.5. Had there been 

no gray book, Morgan would not have been persuaded to request the 

OTH discharge when Puleo told him of Koleos' representation that the 

government had such a book. 

35. We also note that Morgan's request to rescind his requested OTH was 

submitted to General Lynch on August 8, 1989. Under the UCMJ, the 

military had 120 days to bring Morgan to court martial. See note 21 

supra. August 8th was the last possible day that he could have been 

tried consistent with that limitation. Although Captain Puleo testified 

that he assumed that the request to withdraw the OTH discharge and 

proceed to court martial would act as a waiver of Morgan's "speedy trial" 

rights, Morgan did not waive those rights in the request he submitted on 

August 9. However, since General Lynch was apparently unaware of this 

possible legal hurdle, it is not a factor in our analysis. 

 34 
B. 

Morgan argues that the government's repeated attacks on 

the jurisdiction of the district court in his merits suit 

demonstrate the complete lack of justification for the 

government's litigation position. We disagree. The 

government argued that Morgan's complaint failed to assert 

any waiver of its sovereign immunity. Absent such waiver, 

Morgan could not bring an action against his superior 

officers. 

In its EAJA opinion, district court indicated that its 

jurisdiction to hear Morgan's claims was "far from clear and 

presented a close question of law" and noted that the 

jurisdictional issue presented a "substantial question of 

law." Dist. Ct. EAJA Opn. at 6 and n.4. Further, the district 

court noted that "government counsel would have been 

remiss in not strenuously pursuing its argument that[the] 

court lacked jurisdiction to hear [Morgan's] claims." Id. at 6 

n.4. 

Ultimately, that court held that it had jurisdiction over 

Morgan's claims under Section 702 of the Administrative 

Procedures Act ("APA"), 5 U.S.C. S 702. 36 See Jaffee v. 

_________________________________________________________________ 

36. Section 702 of the APA provides as follows: 

 A person suffering legal wrong because of agency action, or 

 adversely affected or aggrieved by agency action within the meaning 

 of a relevant statute, is entitled to judicial review thereof. An 

action 

 in a court of the United States seeking relief other than money 

 damages and stating a claim that an agency or an officer or 

 employee thereof acted or failed to act in an official capacity or 

 under color of legal authority shall not be dismissed nor relief 

 therein be denied on the ground that it is against the United 

States 

 or that the United States is an indispensable party. The United 

 States may be named as a defendant in any such action, and a 

 judgment or decree may be entered against the United States: 

 Provided, That any mandatory or injunctive decree shall specify the 

 Federal officer or officers (by name or by title), and their 

successors 

 in office, personally responsible for compliance. Nothing herein 

(1) 

 affects other limitations on judicial review or the power or duty 

of 

 the court to dismiss any action or deny relief on any other 

 appropriate legal or equitable ground; or (2) confers authority to 

 grant relief if any other statute that grants consent to suit 

expressly 
 or impliedly forbids the relief which is sought. 

5 U.S.C. S 702. 

 35 
United States, 592 F.2d 712, 719 (3d Cir. 1979). However, 

in its EAJA opinion the district court expressly noted that 

Morgan "exacerbated the jurisdictional controversy by 

failing to allege the appropriate waiver of sovereign 

immunity under the APA" in his complaint or subsequent 

filings and that Morgan "specifically disregarded the court's 

specific instruction to file an amended complaint alleging 

the appropriate waiver of sovereign immunity under the 

APA." EAJA Op. at 6. 

Even if we disagreed with the district court's assessment 

of the difficulty of the jurisdictional issue, we cannot 

conclude that the government's actions in challenging 

jurisdiction were unreasonable, especially in light of 

Morgan's failure to plead a waiver of sovereign immunity. 

Moreover, although Morgan argues that jurisdiction was 

clear from the very beginning and that the challenges to 

jurisdiction were therefore unreasonable, he was given an 

opportunity to clarify any jurisdictional uncertainty when 

the district court instructed him to amend his complaint to 

plead waiver under the APA. Consequently, we believe that 

the government's litigation position was substantially 

justified. 

VIII. 

Our holding that the government's position in the 

underlying litigation was substantially justified and that the 

denial of attorney's fees was appropriate does not end our 

inquiry. Morgan argues that he is entitled to costs under 

the EAJA even if he is not entitled to attorney's fees, and in 

support of that argument he relies on Section 2412(a)(1) of 

the EAJA which provides, in relevant part, as follows: 

 Except as otherwise specifically provided by statute, a 

 judgment for costs, as enumerated in section 1920 of 

 this title, but not including the fees and expenses of 

 attorneys, may be awarded to the prevailing party in 

 any civil action brought by or against the United States 

 or any agency or any official of the United States acting 

 in his or her official capacity in any court having 

 jurisdiction of such action. 

 36 
28 U.S.C. S 2412(a)(1). He notes that, unlikeS 2412(d)(1)(A), 

which requires a finding that the government's position was 

not substantially justified before a district court can award 

attorney's fees, S 2412(a)(1) does not require such a finding 

as a condition to the award of costs. Thus, he argues that 

because he was the prevailing party, he is entitled to costs 

without regard to the reasonableness of the government's 

position in defending against his claims. 

However, we do not believe it necessary to reach the 

merits of Morgan's argument. Section 2412(a)(1) specifically 

refers to costs as enumerated in 28 U.S.C. S 1920, which 

provides as follows: 

 A judge or clerk of any court of the United States may 

 tax as costs the following: 

 (1) Fees of the clerk and marshal; 

 (2) Fees of the court reporter for all or any part of the 

 stenographic transcript necessarily obtained for use in 

 the case; 

 (3) Fees and disbursements for printing and witnesses; 

 (4) Fees for exemplification and copies of papers 

 necessarily obtained for use in the case; 

 (5) Docket fees under section 1923 of this title; 

 (6) Compensation of court appointed experts,

 compensation of interpreters, and salaries, fees, 

 expenses, and costs of special interpretation services 

 under section 1828 of this title. 

 A bill of costs shall be filed in the case and, upon 

 allowance, included in the judgment or decree. 

28 U.S.C. S 1920 (emphasis added). It is clear that such 

costs are an incident of judgment. Rude v. Buchhalter, 286 

U.S. 451, 459 (1931); see also Fed.R.Civ.P. 54. 

Morgan inserted a prayer for costs in his complaint, but 

the district court did not address it in its merits disposition. 

See App. at 410-11. The award or non-award of costs is 

inherent to, and appealable from, the initial judgment. See 

Gonzales v. Fairfax-Brewster School, Inc., 569 F.2d 1294 

(4th Cir. 1978). However, Morgan did not appeal from any 

part of the district court's merits decision. Consequently, 

his failure to appeal from the district court's failure to 

 37 
award costs makes that aspect of the judgment afinal 

decision which Morgan cannot now attack. Id. at 1297. 

IX. 

In closing, we wish to reiterate that although we affirm 

the denial of relief to Morgan under the EJAJ, we do not 

intend to minimize the seriousness of the misconduct that 

has been attributed to Captain Koleos, or various other 

Marine Corps officers, nor do we minimize or ignore the 

seriousness of the allegations of violations of Morgan's 

constitutional rights. Indeed, in the usual case, a

constitutional violation will preclude a finding that the 

government's conduct was substantially justified. See U.S. 

v. $12,248 U.S. Currency, 957 F.2d 1513, 1517 (9th Cir. 

1991) ("[T]he government's position was not substantially 

justified because the government violated the claimant's 

Fifth Amendment Due Process rights . . ."). Rather, we 

merely state, that on this record, the district court did not 

abuse its discretion in finding the government's position 

was substantially justified. Thus, for all of the above 

reasons, we will affirm the decision of the district court. 

A True Copy: 

Teste: 

 Clerk of the United States Court of Appeals 

 for the Third Circuit 

 38