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Former U.S. Trustee Linda Ekstrom Stanley has mounted a legal challenge to her surprise ouster earlier this year by U.S. Attorney General John Ashcroft. In an appeal filed with a federal administrative agency July 31, the former top government watchdog overseeing bankruptcy cases in much of California and Nevada alleges she was removed from her job because of gender and age discrimination. She also argues that in firing her without cause, the Department of Justice improperly treated her post as a political position. The appeal seeks reinstatement of her job through the end of her term in 2004, as well as damages including lost salary and benefits. The resulting legal skirmish, which has quietly proceeded within the confines of the U.S. Merit Systems Protection Board, underscores the contested nature of the U.S. Trustee’s role. The Department of Justice contends that Stanley doesn’t even have grounds to appeal the case: Because her position was of a policy-making nature, she is not entitled to the same due process protections as other federal employees, the DOJ says. “Under current law, United States trustees are appointed by the attorney general for a term of five years, but each United States trustee is subject to removal by the attorney general at any time without cause,” writes the DOJ in its briefs to the U.S. Merit Systems Protection Board, which it claims has no jurisdiction over Stanley’s claim. In his most recent order involving the case, Administrative Judge Philip Arnaudo, sitting in San Francisco, has requested more information from Stanley. He then is expected to rule on whether the board has jurisdiction over the matter. The U.S. Merit Systems Protection Board, whose western regional office is based in the same downtown San Francisco building as the U.S. Trustee’s Office, is an independent, quasi-judicial agency in the government’s executive branch that decides complaints involving adverse actions against federal employees. According to Stanley’s appeal to the board, her dismissal is part of a pattern of discriminatory actions taken against female U.S. Trustees by the Bush administration. The two female U.S. Trustees whose first terms have expired have been replaced, according to the appeal, while no male U.S. Trustees at the end of their terms have been replaced. And of the three female U.S. Trustees in their second term, two have been asked to resign, and one (Stanley) was ordered removed. All three successors are male. Stanley, 68, also alleges age discrimination on the grounds that she was the oldest U.S. Trustee. “By an unprecedented order by the attorney general on June 18, 2002, I was removed in the middle of my second term as United States trustee,” reads Stanley’s appeal to the board. “I was given 11-day notice of this action in a phone call from the principal deputy of the Executive Office for United States Trustees in Washington. The action improperly terminated my statutory term appointment and was improperly based on gender discrimination.” A spokesman from the Department of Justice declined to comment on the case. In its briefs to Judge Arnaudo, the DOJ says Stanley was removed from her position “because of a case-by-case review of United States trustees conducted on account of the change in administration, not because of her age or gender.” But changes in administrations are not meant to affect U.S. Trustees, contends Stanley. The position was established with five-year terms, purposely overlapping the presidential four-year term, she says, so that the job would not be politicized. “I am the first UST ever ordered removed without cause,” says Stanley in her appeal to the board. “USTs do not hold a political position; USTs do not determine policy; they administer cases.” According to the DOJ, however, that changed with a 1996 order by then-Attorney General Janet Reno, which declared that the role of a U.S. Trustee was “of a confidential, policy-determining, policy-making or policy-advocating character.” As a result of this decree, U.S. Trustees are no longer considered the same as standard employees who receive due process protections, including appeal rights to the protection board, argues the DOJ. In briefs filed on behalf of Stanley, Oakland, Calif., attorney Howard Moore Jr. has called Reno’s order regarding U.S. Trustees “arbitrary and unreasonable.” “Attorney General Reno’s determination was and is contrary to the statutory language which defines the duties of the position,” wrote Moore. Appointed by former U.S. Attorney General Janet Reno, Stanley was the U.S. Trustee for the Northern and Eastern Districts of California and the District of Nevada, where she oversaw all the regions’ Chapter 7, 11 and 13 bankruptcy cases. She was well liked and respected by many in the bankruptcy bar, but was also a controversial figure as a result of the proactive stances she took in many bankruptcy cases. In the high-profile Pacific Gas & Electric Co. Chapter 11 case in particular, Stanley raised eyebrows by objecting to more than $1 million in professional fee requests and by endorsing the creation of a special ratepayers committee. Her second, five-year term was cut short in June by means of a terse, two-sentence order signed by Ashcroft, which summarily removed Stanley from office. William Neary, the U.S. Trustee for the Northern and Eastern Districts of Texas, is currently filling in for Stanley as interim trustee.

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