       NOTE: This disposition is nonprecedential.

  United States Court of Appeals
      for the Federal Circuit
              __________________________

                RICKY L. HILLIARD,
                    Petitioner,

                           v.
       UNITED STATES POSTAL SERVICE,
                 Respondent.
              __________________________

                      2009-3291
              __________________________

   Petition for review of the Merit Systems Protection
Board in CH0752080376-A-1.
              ___________________________

              Decided: November 15, 2010
             ___________________________

   NATHANIEL M. JONES, Law Offices of Nathaniel M.
Jones, of Oak Park, Illinois, for petitioner.

    ALEX P. HONTOS, Trial Attorney, Commercial Litiga-
tion Branch, Civil Division, United States Department of
Justice, of Washington, DC, for respondent. With him on
the brief were TONY WEST, Assistant Attorney General,
JEANNE E. DAVIDSON, Director, and TODD M. HUGHES,
Deputy Director.
HILLIARD   v. USPS                                        2


                 __________________________

    Before NEWMAN, CLEVENGER, and BRYSON, Circuit
                      Judges.
PER CURIAM.

                         DECISION

    Ricky L. Hilliard appeals from a decision of the Merit
Systems Protection Board denying his request for attor-
ney fees. We affirm.

                       BACKGROUND

     Mr. Hilliard was employed in the position of Manager,
Maintenance, at a Postal Service facility in Palatine,
Illinois. In March 2008, he was demoted to a lower-
paying position and reassigned to another Postal Service
facility in suburban Chicago. His demotion resulted from
charges of insubordination and failure to properly per-
form the duties of his position. The insubordination
charge was based on Mr. Hilliard’s alleged disregard of a
superior officer’s instructions to order a subordinate, Mr.
Perry, to report for an interview with the Postal Service’s
Office of Inspector General. The charge that Mr. Hilliard
failed to properly perform his duties contained three
specifications: (1) he allowed one of his subordinates to be
awarded extra compensation paid for working on Sunday
when that employee, Mr. Perry, was actually working on
other days; (2) he improperly recorded annual leave of
another subordinate, Mr. Baran, resulting in extra com-
pensation; and (3) he improperly disciplined a third
subordinate, Mr. Harris, for being absent without leave
for hours that the employee was actually working.
3                                          HILLIARD   v. USPS


     Mr. Hilliard appealed his demotion to the Merit Sys-
tems Protection Board. Following a hearing, the adminis-
trative judge who was assigned to the case found that the
charge of insubordination was not supported by prepon-
derant evidence. In particular, the administrative judge
concluded that although the evidence showed that Mr.
Hilliard had refused to obey the order of his superior
officer, his refusal was not “willful and intentional.” See
Phillips v. Gen. Servs. Admin., 878 F.2d 370, 373 (Fed.
Cir. 1989). As to the charge of failing to properly perform
duties of his position, the administrative judge sustained
that charge, finding that the first two specifications were
supported by preponderant evidence. The Postal Service
dropped the third specification during the hearing, and
the administrative judge did not address it. The adminis-
trative judge rejected two affirmative defenses raised by
Mr. Hilliard.

     In light of the agency’s failure to prove all of the
charges, the administrative judge mitigated the penalty to
the maximum penalty that could be reasonably imposed
based on the sustained charge alone: a letter of warning
in lieu of a 14-day suspension. The administrative judge
then ordered that Mr. Hilliard be reinstated in his previ-
ous position and awarded back pay sufficient to compen-
sate him for the pay he lost as a consequence of the
demotion.

    Mr. Hilliard then petitioned the Board for attorney
fees. After analyzing Mr. Hilliard’s submission under the
applicable statutory fee provision, 5 U.S.C. § 7701(g)(1),
the administrative judge denied the petition. On Mr.
Hilliard’s petition for review, the two Board members
were unable to agree on the proper disposition. By Board
rule, the decision of the administrative judge therefore
became the final decision of the Board. See 5 C.F.R.
HILLIARD   v. USPS                                         4


§ 1200.3(b). Mr. Hilliard now petitions for review by this
court.

                        DISCUSSION

    The Board may, in its discretion, order the payment of
attorney fees to an appellant if the appellant is a “prevail-
ing party” and the Board “determines that payment by
the agency is warranted in the interest of justice.” 5
U.S.C. § 7701(g)(1). There is no dispute that Mr. Hilliard
was a prevailing party in the underlying Board proceed-
ings, so the sole question presented is whether the Board
abused its discretion in concluding that an award of fees
was not warranted in the interest of justice.

    In making the fee award determination, the Board
looks to five non-exclusive considerations. Those consid-
erations, known as the “Allen factors,” call on the Board
to address whether
       (1) the agency engaged in a prohibited
           personnel practice;
       (2) the agency’s action was clearly with-
           out merit or wholly unfounded, or the
           employee is substantially innocent of
           all charges;
       (3) the agency initiated the action in bad
           faith;
       (4) the agency committed gross proce-
           dural error that prolonged the pro-
           ceeding or severely prejudiced the
           employee; or
       (5) the agency knew or should have
           known that it would not prevail on the
           merits when it brought the proceed-
           ing.
5                                          HILLIARD   v. USPS


See Allen v. U.S. Postal Serv., 2 M.S.P.R. 420, 434-35
(1980). This court has frequently cited the Allen factors
with approval. See, e.g., Price v. Soc. Sec. Admin., 398
F.3d 1322, 1325 (Fed. Cir. 2005); James v. Santella, 328
F.3d 1374, 1376-78 (Fed. Cir. 2003). Mr. Hilliard does not
argue that the first Allen factor is applicable. He con-
tends, however, that each of the other factors was present
in this case.

     1. Mr. Hilliard argues that the insubordination
charge and the third specification of the charge of failure
to perform duties were clearly without merit and wholly
unfounded. The administrative judge rejected his claim
as to the insubordination charge, holding that the Postal
Service had offered credible, probative, and unrefuted
evidence that Mr. Hilliard had not obeyed the order of his
superior officer. We agree with the Board that the Postal
Service’s failure to meet its burden of proof with respect
to the issue of willfulness does not undermine the credi-
bility of the evidence as to the conduct that provided the
basis for that charge.

    With respect to the charge of failure to perform du-
ties, the administrative judge likewise found the Postal
Service’s charge not to be wholly unfounded. It is true, as
Mr. Hilliard points out, that Postal Service counsel with-
drew the third specification of that charge during the
hearing. However, the charge was sustained based on the
remaining two specifications, and for that reason, we
sustain the administrative judge’s conclusion that the
charge was not wholly unfounded.

    Mr. Hilliard points to the mitigation of his penalty
from a demotion to a letter of warning as evidence that he
was substantially innocent of all the charges. Penalty
mitigation alone, however, “does not create a presumption
HILLIARD   v. USPS                                        6


in favor of satisfaction of any of the Allen factors.” Dunn
v. Dep’t of Veterans Affairs, 98 F.3d 1308, 1313 (Fed. Cir.
1996).     While charges are not necessarily weighted
equally when assessing whether an employee was sub-
stantially innocent of the charged conduct, see Van Fossen
v. Merit Sys. Prot. Bd., 788 F.2d 748, 750 (Fed. Cir. 1986),
the administrative judge in this case found that the
charge of failure to perform duties was “a serious matter”
and not “‘minor’ in comparison to the charge of insubordi-
nation.” In order to satisfy the “substantially innocent”
standard, the employee must show that he was “essen-
tially without fault for the charges alleged and was need-
lessly subjected to attorney fees in order to vindicate
himself.” Massa v. Dep’t of Def., 833 F.2d 991, 993 (Fed.
Cir. 1987). The administrative judge did not find Mr.
Hilliard to be essentially without fault; to the contrary,
the administrative judge found that he was negligent in
failing to perform the duties of his position. We hold that
substantial evidence supports that finding, and that the
Board was therefore justified in concluding that Mr.
Hilliard was not substantially innocent of the charges
against him.

     2. Mr. Hilliard contends that the Postal Service acted
in bad faith and committed gross procedural error in the
manner in which it conducted the investigation and
litigation in this case. In particular, he complains about
the agency’s failure to ask Mr. Perry whether he had
received Mr. Hilliard’s order to report to a scheduled
interview and its failure to provide Mr. Hilliard with a
copy of the letter of warning that he issued to Mr. Harris
until the date of the hearing.

    To be sure, it appears that the Postal Service did not
thoroughly investigate the circumstances surrounding
Mr. Hilliard’s alleged insubordination prior to the hear-
7                                           HILLIARD   v. USPS


ing. However, the agency did have credible, probative
evidence that he disobeyed the order that he was given.
That evidence and the absence of other evidence of bad
faith on the part of the agency supports the administra-
tive judge’s conclusion that the insubordination charge
was not brought in bad faith. See Allen, 2 M.S.P.R. at
432.

     As to the agency’s failure to provide Mr. Hilliard with
a copy of the letter of warning to Mr. Perry, Mr. Hilliard
argues that having a copy of the letter earlier would have
been helpful to him in preparing his case. Yet the delay
in producing the letter to Mr. Harris, even if contrary to
the Postal Service’s discovery obligations, does not estab-
lish that the Postal Service intentionally engaged in
dilatory conduct in order to “groundlessly prolong[ ]
litigation” against him. Allen, 2 M.S.P.R. at 432. In light
of the evidence, there is no basis for overturning the
administrative judge’s conclusion to the contrary.

    3. Finally, Mr. Hilliard argues that the Postal Service
knew or should have known at the time of the notice of
proposed adverse action that the insubordination charge
and the third specification of the failure to perform duties
charge would not withstand challenge. In support of that
contention, Mr. Hilliard points to the agency’s withdrawal
of the specification relating to Mr. Harris as well as
testimony from Mr. Baran and Mr. Perry regarding the
insubordination charge.

    To establish that the agency knew or should have
known that it would not prevail on the merits, Mr. Hil-
liard was required to show that the Postal Service did not
have credible, probative evidence to support the charges.
See, e.g., Griffith v. Dep’t of Agric., 96 M.S.P.R. 251, 258
(2004). As we have noted, the agency had credible, proba-
HILLIARD   v. USPS                                        8


tive evidence with regard to the conduct alleged in both
charges, even though the insubordination charge ulti-
mately failed for lack of a sufficient showing of intent and
the government was unable to support one of the specifi-
cations of the failure to perform duties charge. In light of
the evidence at the hearing, and in light of the fact that
the administrative judge supervised the proceedings
before him and therefore was well positioned to assess
whether the agency was proceeding on grounds that it
knew or should have known were baseless, we hold that
the administrative judge did not abuse his discretion in
finding that Mr. Hilliard failed to show that the agency
“knew or should have known that it would not prevail on
the merits when it brought the proceeding.” Allen, 2
M.S.P.R. at 432.

    As the Board has explained, the Allen factors are not
an exhaustive list of circumstances in which attorney fee
awards may be granted, but Mr. Hilliard has not pointed
to any other factors that would require an award of fees in
this case. While the Board’s analysis suggests that the
Postal Service should have conducted a more thorough
investigation of the circumstances surrounding the charge
and the specification that were dismissed during or after
the hearing, the Board nonetheless found as a factual
matter that the agency had credible, probative evidence
supporting the charges against Mr. Hilliard and that the
case against him was not clearly without merit. In light
of the great deference we give to the Board in fee deter-
minations under 5 U.S.C. § 7701(g), see Grubka v. Dep’t of
Treasury, 924 F.2d 1039, 1041 (Fed. Cir. 1991), we sus-
tain the Board’s order denying attorney fees.

   No costs.

                       AFFIRMED
