Sierra Club v. United States Department of Energy

No. 89-B-978 (D. Colo. September 18, 1991)

The court holds that an environmental organization is entitled to $ 23,864.29 in attorneys fees and litigation costs as a substantially prevailing party in a citizen suit under the Resource Conservation and Recovery Act (RCRA) to close two fluidized bed incinerators at the Department of Energy's (DOE's) Rocky Flats Nuclear Weapons Plant. The organization's citizen suit culminated in a consent decree entered without prejudice to the organization's recovery of attorneys fees, which requires the DOE to obtain a permit before operating the fluidized bed incinerators. The court holds that as a matter of law, the organization is a substantially prevailing party because the consent decree materially alters the legal relationship of the parties. Although the organization did not win closure of the fluidized bed incinerators, the consent decree order forecloses the DOE from operating the fluidized beds under interim status. The court concludes that operating under interim status for years is perhaps allowed by the letter of the law, but clearly violates the spirit. The court further concludes that the change in the parties' relationship is material at a more practical level, since the DOE cannot operate the fluidized bed incinerators during the time it takes to obtain a permit, and the permit procedure provides for public hearings, whereas operation under interim status would avoid such hearings. The court also holds that the organization is a prevailing party because it achieved the RCRA objective of protecting the environment and human health prospectively. The court holds that the organization's hourly rates are reasonable in light of prevailing local rates and the skill demonstrated in the organization's filings. The court holds that the hours expended are reasonable, except time spent on matters involving a private corporate defendant and on a motion for consideration of supplemental authority. The court rejects DOE's argument that the aggressive manner in which the organization sought settlement precludes an award of discovery costs and holds that diligent prosecution of the case during settlement negotiations was reasonable. The court also holds that time spent researching novel issues concerning interim status and closure was not mere background as the DOE contends, but essential research. The court observes that litigants should be encouraged to file polished pleadings and holds that time spent drafting and revising the organization's complaint and notice of intent to sue were reasonable. The court holds that time spent in conferences between the organization's attorneys and its representatives was reasonable because attorneys have an ethical duty to keep their clients informed on the progress of a case. The court holds that minimal supervision and review activities were an essential component in light of the complexity of issues raised in the complaint. The court holds that a reduction of fees is not necessary. The court concludes that the organization achieved only partial success, not excellent results, but that its success was legally and practically significant. Further, the court observes that the success was achieved after a settlement and not after a trial on the merits, and a reduction of fees would discourage settlement, because public interest groups might not be willing to drop some initial demands for fear of losing litigation costs. Last, the court holds that time spent by the organization's volunteer coordinator is not recoverable.

Counsel for Plaintiff
Adam Babich
1515 Arapahoe St., Tower 3, Ste. 1100, Denver CO 80202
(303) 820-4497

Counsel for Defendant
Mary Elizabeth Ward
Environment and Natural Resources Division
U.S. Department of Justice, Washington DC 20530
(202) 514-2000

William G. Pharo, Ass't U.S. Attorney
633 17th St., Ste. 1600, Denver CO 80202
(303) 294-1300

[22 ELR 20076]

Babcock, J.:

Order

Before me is plaintiff Sierra Club's objection to the Magistrate Judge's recommendation that Sierra Club's application for attorney fees and costs be denied. Because Sierra Club was the prevailing or substantially prevailing party in this case, I do not accept the recommendation and award Sierra Club $ 23,864.29 in attorney fees and costs.

I. Facts

Sierra Club brought this citizen enforcement action to stop defendants from maintaining two Fluidized Bed Incinerators (FBs) at the Rocky Flats Nuclear Weapons Plant in violation of the Resource Conservation and Recovery Act (RCRA), 42 U.S.C. §§ 6901-6991i. FBs are designed to incinerate waste using a flameless combustible process. Sierra Club alleged that DOE had used the FBs to incinerate hazardous waste and that DOE did not have either "interim status" or a permit as required by RCRA. Sierra Club sought: (1) an order requiring defendants to submit a plan for closure of the incinerators to the Colorado Department of Health (CDH) within 29 days and to complete closure of the incinerators within 90 days after CDH approves the plan; (2) a declaration that the incinerators do not have "interim status" under RCRA; (3) an award of civil penalties to be paid by defendants to the U.S. Treasury; and (4) litigation costs.

On July 19, 1991, I entered an order adopting the parties' stipulated consent decree (the consent decree). Among other things, this decree ordered that: (1) defendants shall not operate the FBs under authority of RCRA interim status, (2) defendants shall not operate either of the FBs at the Rocky Flats plant until operation of the FB is subject to and complies with a RCRA permit issued by the Environmental Protection Agency (EPA) or the State of Colorado after a public hearing; (3) defendants shall not use any radioactive material as feed in either FB any earlier than 45 days after DOE has complied with the National Environmental Policy Act with respect to the use of such feed, and has prepared and delivered to Sierra Club an Environmental Assessment; and (4) DOE shall comply with the terms of a stipulation signed in a related case, Sierra Club v. United States Department of Energy, No. 87-F-706 (D. Colo.) (the 87-F-706 stipulation).

Under this consent decree, Sierra Club's claims arising out of past RCRA violations in connection with the FBs were dismissed with prejudice. However, the consent decree was entered without prejudice to Sierra Club's right to seek an award of litigation costs under 42 U.S.C. § 6972(e).

Sierra Club filed a motion for an order requiring DOE to pay plaintiff its litigation costs and attorney fees, which I referred to Chief Magistrate Judge Donald E. Abram for a recommendation. After extensive briefing and oral argument, the Magistrate Judge recommended that the motion be denied. The Magistrate Judge concluded that Sierra Club was not a "substantially prevailing party" because "there was no evidence that Sierra Club succeeded in any significant issue in the complaint." Recommendation at 6.

II. Statutory Background

Congress enacted RCRA to promote the protection of human health and the environment and to conserve valuable resources by providing for comprehensive regulation of hazardous waste. See 42 U.S.C. § 6902(a). If hazardous waste is generated, it "should be treated, stored, or disposed of so as to minimize the present and future threat to human health and the environment." 42 U.S.C. § 6902(b). Because "the placement of inadequate controls on hazardous waste management will result in substantial risks to human health and the environment," 42 U.S.C. § 6901(b)(5), RCRA and its implementing regulations establish a cradle-to-grave regulatory scheme for hazardous waste management. 42 U.S.C. §§ 6901-6991; 40 C.F.R. Pts. 260-80.

RCRA requires all facilities treating, storing, or disposing of hazardous waste (TSD facilities) to obtain a permit. 42 U.S.C. § 6925(a). . . . A TSD facility that was in existence on or before November 19, 1980, or the effective date of statutory or regulatory changes under RCRA that render that facility subject to RCRA, can "be treated as having been issued a permit until such time as final administrative disposition of such application is made. . . ." 42 U.S.C. § 6925(e)(1). Facilities treated as having been issued a permit are deemed to have "interim status." 42 U.S.C. § 6925(e).

[22 ELR 20077]

While operating under interim status, a TSD facility is subject to EPA or state regulations, including facility requirements. 40 C.F.R. Pt 265; 6 Colo. Code Regs. Pt. 265. These regulations contain numerous protections, including design requirements for storage facilities, separation of incompatible wastes, security procedures, personnel training, and routine inspections. However, because they apply to a wide variety of TSD facility, the regulations are necessarily generic. A permit insures more effective safeguard of human health and the environment because it can be tailored narrowly to the particular facility. The permit is the linchpin of RCRA's regulatory scheme.

Federally owned TSD facilities are subject to all RCRA requirements, "including any requirement for permits or . . . any provision for injunctive relief. . . ." 42 U.S.C. § 6961. However, "[t]he President may exempt any [executive branch TSD facility] from such a requirement if he determines it to be in the paramount interest of the United States to do so." Id.

Sierra Club v. United States Department of Energy, No. 89-B-181, slip. op. at 2-5 (D.Colo. Aug. 13, 1991).

III. Discussion

A. Standards of Review

1. Review of the Magistrate Judge's Recommendation

It is unclear whether I should review the Magistrate Judge's recommendation under a clearly erroneous/contrary to law standard or a de novo standard. Compare Major v. Treen, 700 F. Supp. 1422 (E.D. La. 1988) ("[g]enerally, a determination by the magistrate of nondispositive motions . . . will not be modified by the district court unless clearly erroneous or contrary to law. However, a district judge is not limited to a clearly erroneous standard when reviewing a magistrate's recommendations on the issue of attorney fees") (citations omitted) with Martin v. Bowen, 670 F. Supp. 295, 296 (E.D. Cal. 1987) (magistrate's recommendation on an award of attorney fees reviewed de novo). I cannot accept the recommendation under either standard.

2. Standard for "Prevailing Party"

Under 42 U.S.C. section 6972(e), "[t]he court, in issuing any final order in any [RCRA citizen suit], may award costs of litigation (including reasonable attorney and expert witness fees) to the prevailing or substantially prevailing party, whenever the court determines such an award is appropriate."

Under environmental citizen suit statutes, "plaintiffs may be considered 'prevailing parties' for attorney's fees purposes if they succeed on any significant issue in litigation which achieves some of the benefit the parties sought in bringing the suit." Hensley v. Eckerhart, 461 U.S. 424, 433 (1983); see id. at n.7. "The touchstone of the prevailing party inquiry must be the material alteration of the legal relationship of the parties in a manner which Congress sought to promote in the fee statute." Texas State Teachers Ass'n v. Garland Indep. School Dist., 489 U.S. 782, 792-93 (1989).

B. Is Sierra Club a Prevailing Party?

As a matter of law, Sierra Club is a substantially prevailing party under 42 U.S.C. § 6972(e) because the consent decree materially alters the legal relationship of the parties.

Before this lawsuit, DOE had operated the FBs without a RCRA permit. During the pendency of the suit, DOE left open the possibility that it would operate the FBs under interim status. However, under the consent decree the FBs may not be operated without a permit. As the consent decree acknowledges, the permit requirement forecloses DOE from operating the FBs under interim status. I hold that this is a material alteration in the parties' legal relationship.

The Magistrate Judge apparently did not consider this result because the relief obtained under the consent decree was not the specific relief requested in Sierra Club's complaint or amended complaint. This was erroneous. "A plaintiff may be considered a prevailing party even though the relief ultimately obtained is not identical to the relief demanded in the complaint, provided the relief obtained is of the same general type." Koster v. Perales, 903 F.2d 131, 134-35 (2d Cir. 1990); see Armster v. United States Dist. Court, 817 F.2d 480, 482 (9th Cir. 1987); Institutionalized Juveniles v. Secretary of Public Welfare, 758 F.2d 897, 912 (3d Cir. 1985). Here, Sierra Club sought to assure that the FBs would be maintained in compliance with RCRA. Although Sierra Club sought closure of the FBs, an order requiring DOE to obtain a permit before operating the FBs is relief of the same general type because a permit assures compliance with RCRA.

DOE argues that the change in the parties' relationship is not material. First, DOE maintains that the change is not material because the FBs were always subject to RCRA's interim status regulations. This argument underscores DOE's fundamental misunderstanding of RCRA. Interim status by definition is temporary. The status is "interim" so that facilities may operate while a RCRA permit is obtained. Although operating under interim status for years is perhaps allowed by the letter of the law, it clearly violates the spirit. Congress intended facilities to operate with permits. The reason is simple. The regulations governing interim status facilities are generic. A permit, on the other hand, can be tailored to the dangers of a particular facility, thus providing enhanced protections. Sierra Club, supra, slip op. at 4. Thus, requiring a permit before operating the FBs, instead of allowing operation under interim status, is a material change.

Indeed, this change is material at a more practical level. It takes time to obtain a permit. In the meantime under the consent decree, DOE cannot operate the FBs. Moreover, the consent decree provides for public hearing. Operation under interim status would avoid such hearings. Finally, CDH or EPA could deny the permit application, thus eliminating the FBs operation altogether.

DOE's argument that the change is not material because even before this suit DOE was required to conduct a trial burn after obtaining EPA and CDH approval is patently meritless. A trial burn and full-scale ongoing operations are materially different.

DOE next contends that the change is not material because it was required in any event to comply with the National Environmental Policy Act of 1969 (NEPA), 42 U.S.C. §§ 4321-4370b. However, the protections provided by NEPA complement rather than supplant RCRA's permit requirement. Again, the change is material.

DOE also argues that an award is not justified because it was never demonstrated that DOE intended to operate the FBs under interim status. However, it is undisputed that "DOE did try to keep open the option of operating under interim status in the future." DOE Response at 5. Foreclosing this option materially changes the parties' legal relationship and was one of the primary objectives Sierra Club sought to achieve in this lawsuit.

DOE contends that Sierra Club's action was premature and that this suit should not have been brought until DOE announced plans to operate the FBs. Under the circumstances here, Sierra Club's preemptive citizen enforcement action more effectively assures that the environment and human health are protected prospectively. This is, after all, RCRA's beneficient purpose. In obtaining a significant part of their objective, assuring that the FBs will be operated only with a permit, Sierra Club is a prevailing party.

DOE next asserts that Sierra Club did not succeed on all of its claims. However, because Sierra Club has materially altered the parties' legal relationship, they have crossed the threshold for litigation costs. That they did not achieve all that they sought is merely a factor to be considered in deciding the amount of fees to be awarded. See Ramos v. Lamm, 713 F.2d 546, 556 (10th Cir. 1983).

Finally, although an award of attorney fees was denied in Sierra Club v. United States Department of Energy, No. 87-F-706, the relief obtained and the means of enforcement there are less significant than what Sierra Club achieved here.

C. The Amount of Litigation Costs

Because Sierra Club was a substantially prevailing party, it is entitled to litigation costs, including reasonable attorney fees. 42 U.S.C. § 6972(e). Although DOE suggests that I return this matter to the Magistrate Judge for this determination, I decline to do so. Sierra Club's motion has been pending for some time and can be determined on the papers before me.

Sierra Club seeks $ 26,994.12 in litigation costs. This amount can be broken down into three categories: (1) $ 25,534.75 in attorney and paralegal fees; (2) $ 989.12 in costs; and (3) $ 470.25 in charges for Dr. DeMayo's time. I consider each of these in turn.

1. Attorney Fees

In determining what constitutes reasonable attorney fees, I apply the lodestar approach and general principles stated in Ramos v. Lamm, [22 ELR 20078] 713 F.2d 546 (10th Cir. 1983). Under this analysis a court initially determines the number of actual hours expended on the case, hours reasonably expended, and a reasonable hourly rate. The latter two elements are multiplied together to establish the "lodestar." Thereafter the court may adjust the lodestar up or down based on certain factors.

a. Reasonable Hourly Rate

To simplify matters in this case, I first consider the reasonableness of the hourly rate. The great majority of hours were spent by Sierra Club's lead counsel Adam Babich, who charged $ 135 per hour. His supervising partner charged $ 150 per hour. Debra S. Unger, a contract attorney, charged $ 110 per hour. First year associate Carol Flowers charged $ 70 per hour. Legal assistants Rebecca Greben and Laurie Brainard charged $ 60 and $ 50, respectively.

In light of prevailing rates in Denver and in light of the considerable skill demonstrated in Sierra Club's court filings, I find that these rates are reasonable.

b. Hours Reasonably Expended

I next consider the reasonableness of the hours expended. Sierra Club is seeking $ 25,534.75, which reflects approximately 190 hours spent on this case. All but 17.85 hours are reasonable.

I first deduct 15.25 hours (and $ 2058.75) from the claim. Four of these hours were spent in conferences only with Rockwell and 11.25 spent in responding to discovery requests, without differentiating among the various defendants. Although the claims against DOE and Rockwell were interrelated, I conclude that DOE should not pay for this time.

I also deduct 2.6 hours (and $ 351) that Mr. Babich spent preparing a motion for consideration of supplemental authority. The matters raised in that pleading were at best tangentially related to this litigation. I conclude that an award of litigation costs fees for the supplemental authority motion is not justified.

Aside from these deductions, I conclude that the time spent by Sierra Club's attorney's on this case was reasonable. Accordingly, $ 23,125.00 are reasonable. The record reflects that Sierra Club's attorneys have deducted other unnecessary fees and have exercised "billing judgment."

DOE makes a number of arguments concerning the reasonableness of the remaining fees. These arguments are without merit.

DOE first contests Sierra Club's claim for 18.5 hours related to plaintiff's discovery and 3.25 hours spent on legal research after the complaint was filed. DOE claims that because of the aggressive manner in which Sierra Club sought settlement, this amount is unreasonable. I disagree. Diligent prosecution of the case during settlement negotiations was reasonable.

DOE also contests 11.5 hours spent researching RCRA regulations, claiming that these should be deleted as "start-up" time. RCRA and its accompanying regulations are complex. Moreover, this was not a generic RCRA complaint. Instead, it involved novel issues concerning interim status and closure. Mr. Babich's research of the regulations before filing this complaint was not mere background, but was essential research.

Next, DOE argues that 22.75 hours spent in drafting and revising Sierra Club's complaint and notice of intent to sue letter are excessive as is the 15.48 hours spent in researching, drafting, and revising Sierra Club's fee petition. I find both to be reasonable. DOE's principal contention is that it should not be charged for revisions. In this case, I disagree. Litigants should be encouraged to file polished pleadings. Moreover, contrary to DOE's assertions, the complaint was not a rehash of other complaints Sierra Club has filed. Again, the issues raised in the complaint were novel. The lucid, well-drafted complaint made clear that which was complicated.

As to Mr. Babich's fees, DOE's final argument is that 11 hours spent in conferences with representatives of Sierra Club should be denied. To the contrary, attorney's have an ethical duty to keep their clients informed on the progress of a case. Thus, I find the time spent was reasonable.

DOE next contests a number of hours attributed to others aside from Mr. Babich. DOE argues that the work of others in reviewing Mr. Babich's work is duplicative or unnecessary. Again, I disagree. Supervision and review are essential components in a relatively complicated and important case such as this. Moreover, in light of the complexity of the issues raised in the complaint, the amount of supervision and review here was minimal.

c. Adjustment

"If a plaintiff does not prevail on all claims for relief, the court must determine whether an adjustment is necessary." Ramos v. Lamm, 713 F.2d at 556. Here, all the claims involve a common core of facts and are based on related legal theories.

In such cases the court must focus on the significance of the overall relief obtained by the plaintiff. If the plaintiff has obtained "excellent results," the attorney's fees should encompass all hours reasonably expended; no reduction should be made because the plaintiff failed to prevail on every contention: "The result is what matters." [Hensley v. Eckerhart, 461 U.S. at 435] (footnote omitted). If a plaintiff has achieved "only partial or limited success, then even though the plaintiff's claims were "interrelated, nonfrivolous, and raised in good faith," an award determined by multiplying the hours reasonably expended on the whole litigation by a reasonable hourly rate may be excessive.

Id.

Although Sierra Club gained a significant victory, I cannot say that it achieved "excellent results." It sought closure of the FBs. It obtained an order assuring that the FBs would operate only after a RCRA permit is obtained. Although this effectively forecloses full operation of the FBs until a permit is obtained and assures that the FBs will not be operated except under the protections provided by a permit, I conclude that Sierra Club achieved only partial success.

However, although partial, Sierra Club's success was legally and practically significant. Moreover, the success was achieved after a settlement and not after a trial on the merits. Settlement should be encouraged. A reduction of fees here would discourage settlement because public interest groups might not drop some of their initial demands for fear of losing a portion of their litigation costs.

On balance, I conclude that the attorney fees of $ 23,125.00 are not excessive and should not be reduced.

2. Costs

Sierra Club also requests $ 989.12 in costs. DOE first argues that the following expenses must be denied: $ 29.45 for postage; $ 35.50 for messenger services; $ 92.00 for telecopier expenses; and $ 45.38 for telephone costs. I decline to award these costs in the exercise of my discretion. I also deduct an additional $ 15 charged for delivery of plaintiff's Reply in Support of its Motion.

Because I have concluded that litigation costs associated with the Motion for Consideration of Supplemental Authority should not be awarded, I also deduct the $ 32.50 in costs associated with that motion.

DOE argues that Sierra Club's request for photocopying should be denied because Sierra Club did not provide receipts. I am content "to rely upon the integrity of counsel, and allow these expenses." Alabama Power Co. v. Gorsuch, 672 F.2d 1, 5 (D.C. Cir. 1982).

Finally, DOE states that its review of the petition has identified $ 123.15 in unaccounted costs and expenses. However, I have reviewed the petition and found no unaccounted costs and expenses. Accordingly, I conclude that $ 739.29 in costs are reasonable.

4. Dr. DeMayo's Time

Sierra Club seeks $ 470.25 in time spent by its volunteer coordinator. I conclude that the time of Sierra Club's volunteer coordinator should not be recoverable as a litigation expense in this case.

IV. Conclusion

Under 42 U.S.C. section 6972(e), Sierra Club is the prevailing or substantially prevailing party and is entitled to $ 23,125.00 in attorney fees and $ 739.29 in costs for a total of $ 23,864.29.

Accordingly, It is ORDERED that:

(1) the Magistrate Judge's recommendation that Sierra Club's Application for Attorney Fees' and Costs be denied is NOT ACCEPTED;

(2) Sierra Club's Motion for an Order Requiring the United States Department of Energy to Pay Plaintiff its Litigation Costs Including Attorney Fees is GRANTED;

(3) the United States Department of Energy shall pay Sierra Club $ 23,864.29.