Washington Chemical, Inc. v. U.S. Environmental Protection Agency

No. CS-92-78-FVS (E.D. Wash. June 28, 1992)

The court holds that a chemical company is not a prevailing party entitled to attorneys fees in its complaint to enjoin the Environmental Protection Agency (EPA) from enforcing a compliance order under § 3008(c) of the Resource Conservation and Recovery Act (RCRA) against the company. After the company received EPA's complaint and compliance order, which provided that RCRA's violations "shall subject" the company to civil penalties up to $ 25,000 per day of violation, the company filed a due process complaint claiming the order denied them an opportunity to be heard prior to imposition of [23 ELR 20226] penalties and obtained a restraining order barring assessment of any penalties pending a hearing. Before the hearing, the parties agreed to amend EPA's complaint to provide that EPA "may assess" daily civil penalties for noncompliance. The court holds that the amended order merely clarifies the "shall subject" language of the first order without altering the legal relationship between the parties, which is required under U.S. Supreme Court precedent. For that standard to be accomplished, the "shall subject" language in the first complaint would have to be interpreted as notice that a $ 25,000 daily fine was already accruing against the company.

Counsel for Plaintiff
Les Weatherhead, Brian T. Rekoske
Weatherspoon, Kelley, Davenport & Toole
1100 U.S. Bank Bldg., Spokane WA 99201
(509) 624-5265

Counsel for Defendant
Allen D. Greenberg
Environment and Natural Resources Division
U.S. Department of Justice, Washington DC 20530
(202) 514-2000
Robin Juni
U.S. Environmental Protection Agency
401 M St. SW, Washington DC 20460
(202) 260-2090

Sickle, J.

Sickle, J.:

Order Re: Attorney's Fees

BEFORE THE COURT is Plaintiff's Motion for Attorney's Fees, Ct. Rec. 10, heard with oral argument. Leslie Weatherhead represents the Plaintiff, Washington Chemical Inc. ("WCI"). Robin Juni represents the Environmental Protection Agency ("EPA"). Having reviewed the record, listened to counsel, and being fully advised in this matter, the Court enters this order to memorialize its ruling.

Facts

Plaintiff makes this motion pursuant to 28 U.S.C. § 2412 and 5 U.S.C. § 504, for attorney's fees incurred in connection with a Complaint and Compliance Order issued to WCI by the EPA on February 3, 1992. Plaintiffs contend that the EPA violated their due process rights by issuing an order that levied a fine prior to providing Plaintiff an opportunity to comply with the order or an opportunity to be heard. Defendant contends that the Complaint and Compliance Order merely gave notice that a fine could be levied, along with notice of procedures that Plaintiff could pursue to avoid the fine and challenge the order.

Plaintiff filed a complaint in this Court seeking declaratory relief, a preliminary injunction, and a temporary restraining order. (Ct. Rec. 1.) The Court issued a temporary restraining order on February 21, 1992, barring assessment of a daily penalty aganist WCI until after a hearing scheduled for February 26, 1992. (Ct. Rec. 6.) The parties agreed to extend the temporary restraining order until March 13, 1992, when the hearing was rescheduled. (Ct. Rec. 7.)

Before the hearing occurred, parties submitted a proposed order dismissing Plaintiff's claims. (Ct. Rec. 8.) The parties also agreed that paragraph 25 of the EPA's Complaint and Compliance Order would be amended. Paragraph 25 of the initial order states:

In accordance with Section 3008(c) of RCRA, 42 U.S.C. § 6928(c), as amended, violation of any portion of this Compliance Order shall subject Respondent to a civil penalty of up to $ 25,000 per day, per violation.

(February 3, 1992, EPA Complaint and Compliance Order.) The amended order states:

In accordance with Section 3008(c) of RCRA, 42 U.S.C. § 6928(c), as amended, "[i]f [WCI] fails to take corrective action within the time specified in [this] compliance order, the Administrator may assess a civil penalty of not more than $ 25,000 for each day of continued noncompliance with the order and the Administrator may suspend or revoke any permit issued to [WCI] (whether issued by the Administrator or the State)."

(March 13, 1992, Agreed Order.)

Plaintiff claims to be the prevailing party and moves for attorney's fees arising from their participation in this action. Defendants contest that Plaintiff qualifies as a prevailing party for purposes of receiving attorney's fees pursuant to 28 U.S.C. § 2412.

Discussion

A court may award costs and reasonable attorney fees to the prevailing party in any civil action brought against the United States. 28 U.S.C. §§ 2412(a), (b). In order to qualify for the award, the party must have prevailed in the action in which the costs occurred. Id.

It is not essential for the prevailing party to win on all issues of a case in order to be a prevailing party for purposes of fee shifting statutes. Texas State Teachers v. Garland Indep. School Dist., 489 U.S. 782, 792-93 (1989). The prevailing party must have succeeded on some significant issue and achieved "some of the benefit the parties sought in bringing suit" in order to receive any fee award. Id. However, a "technical victory may be so insignificant . . . as to be insufficient to support prevailing party status." Id. The Supreme Court noted:

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. Where such a change has occurred, the degree of the plaintiff's overall success goes to the reasonableness of the award under Hensley, not to the availability of a fee award vel non.

Id.

WCI contends that they are the prevailing party because the original Complaint and Compliance Order stated that failure to comply with the order "shall subject" WCI to a $ 25,000/day fine and the Amended Order states that the EPA "may assess" a $ 25,000/day fine for noncompliance. WCI argues that the change in language preserves WCI's right to a hearing prior to any determination of liability.

In order for WCI to be the prevailing party, the "shall subject" language in the initial Complaint and Compliance Order would have to be interpreted to be [sic] notice that a $ 25,000 daily fine was already accruing against WCI. The language and facts surrounding the first Complaint and Compliance Order do not support that interpretation.

The EPA argues that WCI should not receive attorney's fees because it is not the prevailing party. EPA contends the change in the language from the first Complaint and Compliance Order to the Amended Order merely clarifies the intent that was the same in both orders: that if WCI did not comply by submitting a closure plan to EPA, a $ 25,000 per day fine "could be assessed" against WCI. The EPA's interpretation is supported both by a common sense reading of the order and by other sections of the order that inform WCI of procedures available to challenge the Complaint and Compliance Order and the imposition of any fine.¹

The "shall subject" language should be interpreted as providing notice of a future fine. The amended order merely clarified the language of the first order without altering the legal relationship between the parties. WCI is not a prevailing party in this motion and an award of attorney's fees is not warranted.

IT IS HEREBY ORDERED: Plaintiff's Motion for Attorney's Fees, Ct. Rec. 10, is DENIED.

IT IS SO ORDERED. The Clerk is hereby directed to enter this Order and furnish copies to counsel.

1. For example, page 2, paragraph 4, provides for a hearing on request if WCI "wishes to contest any material fact . . . including the amount of the penalty demand . . ." February 3, 1992, Complaint and Compliance Order. Page 12, paragraph 25, includes the "shall subject" language. Id. Page 13, paragraph 27 provides for a hearing on request "on the issues raised in the document." Id.