Morgan v. Perry

Opinions of the United

1998 Decisions 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Precedential or Non-Precedential: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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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 court-

martials.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 court-

martial. 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