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*fn1
The opinion of the court was delivered by: 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. § 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.
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.
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.*fn2
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, 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 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.*fn3
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.
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 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.*fn4 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.*fn5 Morgan told Zuro that RS Pittsburgh was in "direct ship" mode; that documents were missing from recruit packages; that Eberhart was submitting false 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.
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
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.
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
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,*fn6 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. § 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.*fn7 During that conversation 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.
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 non-judicial punishment ("NJP")*fn8 such as letters of caution, to summary*fn9 and special court-martials.*fn10 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 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. § 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 ...