Court Opinion

ID: 9478006
Source: CourtListenerOpinion
Date Created: 2023-08-05 06:36:43.194979+00
Date Added: 2024-06-11T17:39:35.493761
License: Public Domain

RALPH B. GUY, Jr., Circuit Judge,
dissenting.
I respectfully dissent from the court’s opinion which affirms the Secretary’s disal-lowance of attorney’s fees incurred during the course of proceedings challenging the Grant Officer’s disallowance of expenditures of CETA funds. As the majority points out, the Secretary struck down the Grant Officer’s disallowance of $2,649.00 in attorney’s fees because those fees were incurred during the course of legal representation which took place prior to the final determination of the Grant Officer. Conversely, the Secretary upheld the disallowance of $7,365.00 in attorney’s fees incurred during the course of legal representation which took place before the AU because those fees were incurred subsequent to and in order to challenge the Grant Officer’s final determination. According to the Secretary, the $2,649.00 in *444fees were allowable legal expenses required in the administration of [the] grant program[],” 41 C.F.R. § 1-15.711-16, while the $7,365.00 in fees were not allowable because they were “[l]egal expenses for the prosecution of claims against the Federal Government.” Id.
In interpreting 41 C.F.R. § 1-15.711-16, the Secretary turned to the law dictionary definitions of the terms “claims” and “prosecution” and determined that the $7,365.00 in attorney’s fees were indeed expenses incurred in the prosecution of a claim against the government and therefore unallowable under 41 C.F.R. § 1-15.711-16. Although the majority concludes that the Secretary’s ultimate determination is reasonable and should be accorded deference, I feel that the Secretary’s approach ignores the true nature of the proceedings. The government awarded CETA funds to the Oakland County Board of Commissioners. Thereafter, Labor’s Grant Officer investigated the grant expenditures, disallowed certain payments, and demanded repayment of those expenditures out of non-federal funds. It is only logical to conclude that by filing, pursuant to 20 C.F.R. § 676.88(f), a request for hearing on the Grant Officer’s determination, the grantee was defending against the government’s claim for repayment of CETA funds. The grantee was not prosecuting a claim against the government but, rather, the grantee was defending against the government’s claim for repayment.
The rationale supporting the principal of deference normally accorded to an agency’s interpretation of its own regulation is not compelling in this instance for two reasons. First, the matter of attorney’s fees is not one which falls within Labor’s particular area of expertise, and the regulation at issue merely incorporates the general cost principle for federal grant programs codified at 41 C.F.R. § 1-15.7. Second, Labor’s Office of Administrative Law Judges has not interpreted this regulation consistently. For example, another AU in Labor’s Office of Administrative Law Judges recently found that attorney’s fees like those at issue here were not costs incurred in the prosecution of a claim against the government:
URDC [the petitioner] was not “prosecuting” a claim against the government. Although URDC was the party who requested a hearing, it was merely defending itself against charges brought by DOL [Department of Labor]. URDC was entitled to have the “findings” of the Grant Officer adjudicated in an administrative hearing. It would be a different issue if URDC had initiated proceedings for some claim of its own; it might then be properly considered as prosecuting a claim and thus not able to assess legal fees. From the documentary and testimonial facts presented, in this instance I conclude that ... it would be inequitable to deny payment of these pri- or legal fees because URDC was in need of expert legal assistance so that it could continue to operate the programs and carry out the purposes of the Act.
Department of Labor v. Utah Rural Development Corp., 1 Decisions Off.Admin.L. Judges & Admin.Appeals 60 (No. 86-CTA-25, April 30, 1987) (footnote omitted).1
What I am opposed to is the “pre-Grant Officer determination/post-Grant Officer determination” bright line rule which the Secretary has adopted in the case before this court. I would suggest that when making the determination of whether the legal fees incurred in proceedings before the AU qualify as expenses required in the administration of the grant program, an approach should be followed which considers the totality of the circumstances surrounding the challenge to the Grant Officer’s determination.
For the reasons stated above, I respectfully conclude that this case should be REVERSED and REMANDED for proceedings not inconsistent with this dissent.

. This case is presently pending on appeal before the Secretary.