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Pennsylvania Envtl. Defense Found. v. Canon-McMillan Sch. Dist.

Citation: 28 ELR 21506
No. 97-3136, 152 F.3d 228/(3d Cir., 08/11/1998)

The court holds that a district court should have used the lodestar approach in awarding an environmental group attorneys fees under Federal Water Pollution Control Act § 505. The court first holds that the district court has not made an independent judgment in its award of attorneys fees. The district court dispensed with the lodestar approach and determined in advance to adopt the findings and conclusions of one party or the other without modification. In effect, the district court conducted a variation of a silent auction, with the parties bidding against themselves. While there is nothing wrong with encouraging a party who seeks a fee to compromise its request, there is no justification for the use of the silent auction procedure in setting a statutory fee, and no party has cited any authority that would allow it. Nevertheless, the mere fact that a district court adopts a party's factual findings verbatim does not itself indict them. However, because the circumstances underlying the entry of order are clear from the record, the court cannot presume that the district court made an independent judgment about the law and then decided that one party's proposed findings of fact and conclusions of law precisely expressed its judgment. Instead, because the district court announced in advance that it would use this procedure, the court cannot discount the possibility that the district court may not have agreed in totality with the findings of fact or legal conclusions in either of the proposals, but chose one simply because it came closest to its own view.

The court then holds that the district court's ruling is plain error. Because the manner in which the order was entered goes to the heart of the judicial process, the court addresses the procedure, notwithstanding the environmental group's lack of objection. There can be no serious dispute that the environmental group qualified as a prevailing party. It follows that the district court should have first decided the reasonable hourly rate based on the prevailing market rate rule and multiplied that rate by the time reasonably expended to obtain the lodestar. The court should have then made adjustments, if any, based at least in part on the degree of success of the litigation. Therefore, the court reverses the order of the district court awarding attorneys fees to the environmental group and remands the case for further proceedings consistent with its opinion.

A dissenting judge fears that the ramifications of the court's opinion transcend the issue of attorneys fees and may have the effect of stifling innovative and nontraditional approaches to case and issue management in the district courts. The dissenting judge believes that the environmental group acquiesced to the district court's procedure and, therefore, waived its right to raise this issue on appeal. And by holding that the lodestar formula must be employed even in the absence of an objection, the majority effectively holds that the lodestar approach must be utilized in every attorneys fee application that comes before the district courts.

Counsel for Appellant
John E. Childe Jr.
Law Offices of John E. Childe Jr.
606 Pine Rd., Palmyra PA 17078
(717) 520-1510

Counsel for Appellee
Steven M. Petrikis
Rose, Schmidt, Hasley & DiSalle
900 Oliver Bldg., Pittsburgh PA 15222
(412) 434-8600

Before Lewis* and Garth, JJ.