Student Public Interest Research Group of New Jersey, Inc. v. Anchor Thread Co.

No. 84-320 (28 ERC 1302) (D.N.J. September 9, 1988)

The court holds that plaintiffs that prevailed in a Federal Water Pollution Control Act (FWPCA) citizen suit are entitled to receive interest on their attorneys fees award at the rate specified in the federal post-judgment interest statute, and supplemental fees are inappropriate. The court rejects plaintiffs' formula for calculating the interest rate based on prime rates and interest rates on certificates of deposit during the period of litigation. Enhancement multipliers are within the court's discretion. There is no evidence of bad faith by defendant, and plaintiffs' fee submissions have become excessive. Although the federal post-judgment interest statute, 28 U.S.C. § 1961, does not control this FWPCA case, there is no reason to apply an interest rate greater than specified by that statute. The court approves a rate of 6.18 percent, the rate in effect when the consent decree was entered in 1986. The court also holds that supplemental fees are inappropriate under FWPCA § 505(d). The inquiry into fees has dwarfed the case in chief, and much of the fees and expenses requested in the supplemental application could have been presented with the original fee application.

[Other decisions in this litigation are published at 19 ELR 20665 and 20671.]

Counsel are listed at 19 ELR 20665.

[19 ELR 20670]

Brown, J.:

On October 1, 1984, this Court entered an Opinion and Order granting summary judgment in favor of plaintiffs Student Public Interest Research Group of New Jersey, Inc. ("SPIRG") and Friends of the Earth ("FOE") and against defendant Anchor Thread Co. On August 11, 1986, the parties entered into a Consent Decree which provided that Anchor Thread pay a civil penalty to the United States Treasury in the total amount of $ 25,000 in equal installments over a period of four consecutive years. The Consent Decree set forth that plaintiffs filed this complaint against defendant on January 24, 1984 alleging certain environmental violations, and that on May 10, 1984, Anchor Thread tied its wastewater outfall into a publicly owned treatment works and sewer system. The Decree also acknowledged that Anchor Thread "ha[d] suffered severe financial losses for many years and ha[d] laid off most of the employees at its Groveville plant." Finally, the Consent Decree preserved plaintiffs' "right to apply for any claimed costs and fees pursuant to 33 U.S.C. § 1365(d) within 30 days of the entry of [the Consent] Decree."

Plaintiffs subsequently applied for an award of fees and expenses in the amount of $ 116,847.11, which consisted of an initial application in the amount of $ 99,092.56 and two supplemental applications in the amounts of $ 2,286.16 and $ 15,468.39.

On May 12, 1988, this Court, after initial consideration by Magistrate John W. Devine, entered an Opinion and Order providing that plaintiffs be awarded a fee of $ 84,239.23, plus a delay-in-payment adjustment calculated at the prevailing rate of interest.

Plaintiffs now come before this Court with two applications. First, plaintiffs have filed a motion for a determination of the delay-in-payment adjustment; second, plaintiffs have filed a supplemental application for an award of attorneys' fees and expenses in the amount of $ 16,489.01.

1. Determination of Delay-In-Payment Adjustment

Plaintiffs have gone to great length in submitting various calculations of interest to this Court. Plaintiffs contend that their calculations stem from the methodology employed by the Third Circuit in Institutionalized Juveniles v. Secretary of Public Welfare, 758 F.2d 897, 922 (3d Cir. 1985). First, plaintiffs calculated the prime rates of interest of a major Philadelphia bank for each quarter during the period of the litigation; second, plaintiffs calculated the rates of interest on six-month certificates of deposit of a major Philadelphia bank for each quarter during the period of litigation; and third, plaintiffs calculated the rate of interest using an average of the prime rates and certificate of deposit rates for each quarter during the period of litigation.

Defendant contends that plaintiffs have intentionally confused the concept of delay damages with that of increases to the attorneys' fees lodestar. Defendant also contends: "the Court need not concern itself with plaintiffs' exotic interest calculation methods. Notwithstanding the myriad of calculations and minutia of detail provided throughout the computer runs annexed to plaintiffs' motion, calculation of interest is a straightforward matter. . . . Again, plaintiffs' tortured analysis is typical of their approach to litigation, with [the] end result that expenses have been unduly multiplied. Those expenses should not be foisted upon defendant." Defendant urges this Court to apply the federal post-judgment rate provided for in 28 U.S.C. § 1961.

This Court will not award the enhancement multiplier awarded by the Third Circuit in Institutionalized Juveniles. There the court held that "[t]he decision to award a multiplier for delay in payment and the amount of such a multiplier are determinations within the discretion of the district court." Institutionalized Juveniles, 758 F.2d at 922 (emphasis added).

It is true that plaintiffs have lost the use of the fees awarded by this Court pending this application process. It is also true that allowing awards of attorneys' fees to bear interest serves to deter parties against whom such awards have been entered from seeking artificial appeals or otherwise delaying payment. See R.W.T. v. Dalton, 712 F.2d 1225, 1227 (8th Cir. 1983). However, absent a finding of bad faith, defendant should not be penalized for oppossing plaintiffs' applications. Indeed, upon the parties' objections to the Report and Recommendations of Magistrate Devine, this Court reduced the award recommended by Judge Devine.

Further, this Court notes that it was only with great reluctance that this Court adopted Judge Devine's Report and Recommendation and awarded a delay-in-payment adjustment. Plaintiffs' several fee applications have taken on a life of their own. In making the present motion for interest, plaintiffs submitted thirteen exhibits and an eighteen-page reply brief in response to defendant's opposition to the calculations. This, however, pales in comparison to plaintiffs' previous fee submissions: On September 25, 1986, plaintiffs filed a nineteen-page brief and thirty-four exhibits; on October 8, 1986, plaintiffs filed a two-page brief and three exhibits requesting additional awards; on November 21, 1986, plaintiffs filed a forty-three [19 ELR 20671] page reply brief and ten exhibits; that same day plaintiffs filed a two-page brief with three exhibits requesting additional fee awards; on December 18, 1987, plaintiffs filed a seven-page brief in support of their motion for a determination of a delay in payment adjustment and included ten exhibits; and on June 10, 1988, plaintiffs filed a supplemental application for awards which consisted of ten pages and fifteen exhibits.

The Third Circuit has continuously held that "the inquiry into the proper fee should not 'assume massive proportions . . . dwarfing the case in chief.'" Blum v. Witco Chemical Corp., 829 F.2d 367, 377 (3d Cir. 1987) (quoting Lindy Bros. Builders, Inc. v. American Radiator & Standard Sanitary Corp., 540 F.2d 102, 116 (3d Cir. 1976)). Despite the Third Circuit's admonition, plaintiffs state in their reply brief that they are entitled to the delay adjustment ordered by this Court and "after this Court has issued a final judgment, interest on this judgment." Plaintiffs' statement to this Court reveals their insensitivity to the Third Circuit's holding; this Court agrees with defendant — plaintiffs must be told that enough is enough.

In light of the above, this Court will order interest on plaintiffs' fee award at the rate provided for in 28 U.S.C. § 1961, the federal post-judgment interest statute. Though that statute does not control here, this Court sees no reasons to award an amount greater than the federal post-judgment rate. Accordingly, the rate will be 6.18%, the applicable rate in effect on the day of entry of the Consent Decree as provided to this Court by the Administrative Office of the United States Courts, and is to be calculated daily from August 27, 1986, the date of entry of the Consent Decree, to May 17, 1988, the date of entry of this Court's Opinion and Order.

2. Supplemental Application for Fees and Expenses

Plaintiffs have also filed a supplemental application for an award of attorneys' fees and expenses. Plaintiffs' request a supplemental fee award of $ 15,505 for attorneys' fees and $ 984.01 for expenses, for a total award of $ 16,489.01. Plaintiffs' request will be denied in its entirety.

Section 505(d) of the Federal Water Pollution Control Act, pursuant to which plaintiffs bring the present application, provides in relevant part:

The court, in issuing any final order in any action pursuant to this section, may award costs of litigation (including reasonable attorney and expert witness fees) to any party, whenever the court determines such award is appropriate.

33 U.S.C. § 1365(d) (emphasis added).

No award is appropriate here. This Court's inquiry into the proper fee to be awarded to plaintiffs has dwarfed the case in chief. Much of the fees and expenses requested by plaintiffs could easily have been presented to this Court earlier when this Court was faced with the parties' objections to Magistrate Devine's Report and Recommendation. Instead, plaintiffs have chosen "to keep the meter running" as defendant puts it and expect this Court to conduct a thorough analysis of each of their applications. Were this Court to allow the present application, it may well be that there would be no end to this litigation as plaintiffs have already stated that they would move for interest on this Court's judgment. Enough is enough.

Accordingly, for the reasons set forth above, it is ORDERED, that interest be awarded on plaintiffs' fee award of $ 84,239.23 at the rate of 6.18% and calculated daily from August 27, 1986 to and including May 18, 1988; and it is

FURTHER ORDERED that plaintiffs' application for supplemental fees and expenses be and is hereby denied.