United States v. Alder Creek Water Co.

No. 79-1090-JU (D. Or. July 29, 1983)

ELR Digest

The court declines to grant further compensation to an environmental receiver who failed to bring defendant water company into compliance with the Safe Drinking Water Act (SDWA). The United States won a preliminary injunction against the Alder Creek Water Company in November 1979 to force compliance with the SDWA. In September 1980, when the company was still not in compliance, the court appointed an equitable receiver, Ginther, who ran the company until July 1982. Then, the court appointed a second receiver, the Alder Creek Water Authority (ACWA), which ran the company until February 1983. Both receivers and their counsel seek fees.

The court rules that the fee is up to the discretion of the court. However, the court should properly consider the results achieved, the receiver's professional qualities, the size of the estate, and the duration of the receivership. Also important are the fair value of the receiver's time and the degree of activity, integrity, and dispatch with which the receiver proceeds. The court also holds that the receiver has the burden of proving expenses through production of careful records. All expenditures must be for the benefit of the estate; time spent in proving fees is noncompensable.

The court finds that Ginther slipped from a promising beginning to less effective administration hampered by single-minded concern with benefits to his engineering consulting firm, which he had hired to help run the company. Ginther's time records were not conscientiously kept, and it is impossible to determine if much of the time spent was necessary or beneficial to the company. Ginther's consulting firm received three EPA contracts related to the receivership. Ginther retrieved at least $34,000 in expense money from the company accounts while receiver. Considering the size of the company, the results achieved, and the value of services, the court declines to further compensate Ginther. The court awards $8,000 of a claimed $17,437 to Ginther's counsel, subtracting an estimate of fees for work not directly beneficial to the company.

The court notes that the second receiver, ACWA, acted economically and expeditiously and kept detailed expense records. With minor exceptions, the court awards ACWA the fees it requests. The court also grants the fee request of ACWA's counsel, minus fees for time spent on fee recovery and time spent writing letters to the court that should have properly been filed as motions or briefs.

The full text of this opinion is available from ELR (25 pp. $3,75, ELR Order No. C-1319).

Counsel for Receiver Ginther
S. Ward Greene
500 Morgan Pk. Bldg., 729 SW Alder St., Portland OR 97205
(503) 226-6600

Counsel for Receiver Alder Creek Water Auth.
Ed Sullivan, Thomas L. Mason, Stephen Crew
O'Donnell, Sullivan & Ramis
1727 NW Hoyt St., Portland OR 97209
(503) 222-4402

Counsel for Plaintiff
Thomas C. Lee, Ass't U.S. Attorney
312 U.S. Cthse., 620 SW Main St., Portland OR 97205
(503) 221-2101

Barbara Lither
Office of Regional Counsel
Environmental Protection Agency, 1200 6th Ave., Seattle WA 98101
(206) 442-1152

Counsel for Defendant
Brian W. O'Brien
4036 NE Sandy Blvd., Suite 217, Portland OR 97212
(503) 288-7056

Dennis Yates
825 Country Club Rd., Brightwood OR 97011
(503) 622-4803

Juba, Mag.

[OPINION OMITTED BY PUBLISHER IN ORIGINAL SOURCE]