version of events before firing him, or (c) treat other employee errors as harshly, created a sufficient inference of anti-union animus to establish reasonable cause to believe that Mahoney's discharge was unlawful. We rejected the Board's contention, under the standards applicable to a section 10(j) petition, because of the nature of Mahoney's error and the severity of its consequences. We did not, however, find the Board's position unreasonable for purposes of the EAJA. The Tenth Circuit's decision in United States v. 2,116 Boxes of Boned Beef, Weighing Approximately 154,121 Pounds, 726 F.2d 1481 (10th Cir. 1984), is instructive. In that case, the district court denied the government's petition to seize a quantity of beef pursuant to the Meat Inspection Act, 21 U.S.C. §§ 601-695. The court not only found insufficient evidence of adulteration, but made "objurgatory remarks about the government's evidence" such as characterizing "the Secretary of Agriculture's § 601(m)(2)(A) order ... as arbitrary, capricious and irrational .... [and making] similar comments about proof of adulteration." Id. at 1487-88. The district court nonetheless denied the defendant's EAJA petition because, after a hearing and specific findings regarding the fee application, it found the government's position substantially justified. Reasoning that the government's litigation position was subjected to the EAJA substantial justification test only in the latter proceeding, the Tenth Circuit upheld the denial of fees. Id. at 1488.
Thus, after careful consideration of the submissions of the parties concerning this Application and the evidentiary record in this case, we specifically find that the Board's position regarding Mahoney's discharge, and thus the petition as a whole, was substantially justified within the meaning of the EAJA. We find that the Board has met its burden to avoid the imposition of fees and costs because the following position was reasonable, though not correct: that evidence of (1) prior unlawful threats and discipline against Mahoney, (2) allegedly mitigating circumstances surrounding his paint-mixing error, and (3) Encor's failure to (a) discipline Miller, (b) hear directly from Mahoney regarding his version of events before firing him, or (c) treat other employee errors as harshly, created a sufficient inference of anti-union animus to establish reasonable cause to believe that Mahoney's discharge was unlawful. In so holding, we draw no adverse inference either from the Board's failure to appeal our decision or from the ultimate settlement of the underlying charges. In fact, in Pierce, the Supreme Court expressly rejected the argument that "the lack of substantial justification for the Government's position was demonstrated by its willingness to settle the litigation on unfavorable terms." Pierce, 487 U.S. at 568. The Court reasoned that "the unfavorable terms of a settlement agreement, without inquiry into the reasons for settlement, cannot conclusively establish the weakness of the Government's position. To hold otherwise would not only distort the truth but penalize and thereby discourage useful settlements." Id.
Finally, we are not persuaded by the authority to which Encor has directed us. The opinion in Pascarell v. Dock Builders Local Union 1456, 150 L.R.R.M. 2454, 1995 WL 661212 (D.N.J. 1995), contains no factual analysis. In Silverman v. Ehrlich Beer Corp., 687 F. Supp. 67 (S.D.N.Y. 1987), an NLRB contempt proceeding, the court awarded fees where the government's case constituted a "total failure of proof" and did not even satisfy the requirements of Rule 11. Id. at 71. In Phil Smidt & Son, Inc. v. N.L.R.B., 810 F.2d 638 (7th Cir. 1987), an action for backpay initiated by the Board, the government's position as to the amount of backpay owed lacked a reasonable basis in fact because the agency ignored "affirmative evidence, in the form of tax returns, which clearly indicated ... interim earnings" and additional evidence suggesting that these earnings were actually understated. Id. at 643. No such easily quantifiable, directly contradictory evidence was disregarded in this case. Finally, in Enerhaul, Inc. v. N.L.R.B., 710 F.2d 748 (11th Cir. 1983), the Board's legal theory found no support in the law of that Circuit, which also was not the case here. Id. at 751.
Instead, we are influenced by the reasoning of the administrative law judge (ALJ) whose decision was adopted by the Board in Bouley. In that case, the ALJ ruled that the respondent company had not unlawfully discharged an employee for his union activities, but rather had done so justifiably for cause. Nonetheless, the ALJ declined to award fees and costs under the EAJA because he found the government's contention reasonable. An EAJA award would be inappropriate because "these types of cases, requiring a determination of another person's motivation, (i.e. state of mind), are not susceptible to a scientific and quantifiable evaluation. The ALJ, like anyone else must use his own experience, knowledge and to some degree intuition, to evaluate the record evidence in order to attempt to ascertain someone else's state of mind." 308 N.L.R.B. 653, 1992 WL 217956 at *3. Likewise, in this case, we were called on to decide whether circumstantial evidence created a sufficient inference of unlawful motivation to establish reasonable cause to believe that Encor had in fact acted with such motivation. We concluded that it did not. That does not, however, make the Board's contrary position unreasonable.
Thus, we deny Encor's Application for Attorneys' Fees and Costs Pursuant to the EAJA. An appropriate Order follows.
AND NOW, this 16th day of June, 1997, upon consideration of Respondent's Application for Attorneys' Fees and Costs Pursuant to the Equal Access to Justice Act, Petitioner's response, and Respondent's reply thereto, it is hereby ORDERED that the Application is DENIED.
BY THE COURT:
J. CURTIS JOYNER, J.