State of NEW JERSEY, et al., Petitioners v. ENVIRONMENTAL PROTECTION AGENCY, Respondent Utility Air Regulatory Group, et al., Intervenors.
Nos. 05-1097, 05-1104, 05-1116, 05-1118, 05-1158, 05-1159, 05-1160, 05-1162, 05-1163, 05-1164, 05-1167, 05-1174, 05-1175, 05-1176, 05-1183, 05-1189, 05-1263, 05-1267, 05-1270, 05-1271, 05-1275, 05-1277, 06-1211, 06-1220, 06-1231, 06-1287, 06-1291, 06-1293, 06-1294.
United States Court of Appeals, District of Columbia Circuit.
Dec. 20, 2011.
662 F.3d 1279
Matthew R. Oakes, Attorney, U.S. Department of Justice, was on the opposition to the Tribal Intervenors’ motion.
Before: ROGERS, TATEL, and BROWN, Circuit Judges.
Opinion for the Court filed by Circuit Judge TATEL.
Dissenting opinion filed by Circuit Judge BROWN.
TATEL, Circuit Judge:
This is a motion for fees and costs under
Tribal Intervenors, who also pressed for vacatur, albeit on the basis of different arguments that we never reached, now ask us to order EPA to pay their fees and costs. EPA objects, claiming that Tribal Intervenors are ineligible for fee shifting. EPA also argues that even were Tribal Intervenors eligible, the size of their fee request is unreasonable and should be reduced by more than two-thirds. For the reasons explained below, we conclude that Tribal Intervenors merit a fee award. We decline, however, to weigh in now on the appropriate amount; instead, we direct the parties to our Appellate Mediation Program.
I.
In supрort of its argument that Tribal Intervenors are ineligible for fees, EPA relies on two cases, Donnell v. United States and Alabama Power Co. v. Gorsuch, in which we limited intervenor fee recovery to circumstances where intervenors had influenced the outcome of the
This case is very different. Here, the Tribes intervened on the side of petitioners, not the government, and they offered two substantial arguments based on EPA‘s alleged failure to consider intervenors’ treaty rights, arguments that petitioners lacked standing to make. True, we never reached the Tribes’ arguments, but that is immaterial. By giving us alternative bases for resolving the case—bases petitioners were unable to offer—Tribal Intervenors contributed to the “proper implementation and administration of the act or otherwise serve[d] the public interest.” Sierra Club v. EPA, 322 F.3d 718, 722 (D.C. Cir. 2003) (quoting Ruckelshaus v. Sierra Club, 463 U.S. 680, 687 (1983)). Indeed, if petitioners had been able to make the Tribes’ arguments, the fact that we never reached them would provide “no basis for reducing the[ir] fee.” Kennecott Corp. v. EPA, 804 F.2d 763, 766 (D.C. Cir. 1986) (per curiam); see also Hensley v. Eckerhart, 461 U.S. 424, 435 (1983) (explaining that “[l]itigants in good faith may raise alternative legal grounds for a desired outcome, and the court‘s ... failure to reach certain grounds is not a sufficient reason for reducing a fee“); Am. Petroleum Inst. v. EPA, 72 F.3d 907, 911 (D.C. Cir. 1996) (awаrding fees to petitioners for all arguments supporting “the invalidity of the regulation at issue” where the court reached only one of the five arguments).
EPA‘s view, embraced by the dissent—that we should allow fee shifting only where an intervenor affected the outcome of a case as determined after the fact—would discourage interventions that play a useful role. “It is usually impossible to determine in advance of trial which issues will be reached or which parties will play pivotal roles in the course of the litigation. To retrospectively deny attornеy‘s fees because an issue is not considered or because a party‘s participation proves unnecessary would have the effect of discouraging the intervention of what in future cases may be essential parties.” Seattle Sch. Dist. No. 1 v. Washington, 633 F.2d 1338, 1349 (9th Cir. 1980), aff‘d on other grounds, 458 U.S. 457 (1982); see also Am. Petroleum Inst., 72 F.3d at 912 (“It is not necessary that a fee-petitioning client and its attorney have acted with the 20/20 acuity of hindsight in
Of course, while incentivizing interventions that contribute to the proper administration of the Act, we want to be sure that we are not simultaneously encouraging fee-seeking interventions. But we believe that courts have all the tools they need to prevent that from happening. First, to intervene a party must have standing in its own right, see Military Toxics Project v. EPA, 146 F.3d 948, 953 (D.C. Cir. 1998), and thus be able to file directly as petitioner. Fee seekers who have standing can already file their own suits, so our decision, at most, encourages them to participate as intervenors rather than as petitioners. See Massachusetts v. Microsoft Corp., 373 F.3d 1199, 1235 (D.C. Cir. 2004) (“[E]fficiency gains ... ordinarily make intervention worthwhile when there are common issues[.]“); see also King v. Ill. State Bd. of Elections, 410 F.3d 404, 421 (7th Cir. 2005) (“[A]warding attorneys’ fees to the intervenors promotеs judicial efficiency. Parties ... should be encouraged to intervene in suits such as this one, rather than bringing their own claims in subsequent suits.“). Second, once in the litigation, intervenors may recover fees only insofar as they avoid wasteful duplication of effort. As we have said about awards of costs pursuant to
II.
The dissent argues that Tribal Intervenors’ challenge was “based on a different claim for relief.” Dissenting Op. at 1287. The dissent is mistaken. Petitioners challenged two regulations, the Delisting Rule,
Under American Petroleum, these arguments are all in support of a single claim. There, petitioners challenged EPA regulations on five separate grounds. Am. Petroleum Inst., 72 F.3d at 911. Much like the parties here, they argued that EPA violated the Clean Air Act, failed to consider certain environmental impacts, and acted arbitrarily and capriciously. See Am. Petroleum Inst. v. EPA, 52 F.3d 1113, 1116 (D.C. Cir. 1995). In the end, we reached only one of their arguments, invalidating the regulations under the statute‘s plain meaning. Am. Petroleum Inst., 72 F.3d at 911. Rejecting EPA‘s contention that the non-dispositive arguments were in fact distinct claims, we explained: “Petitioners did not raise any claims distinct and separate from the one on which they prevailed. They pursued only one claim for relief—the invalidity of the regulation at issue. They argued five defensible bases for that invalidity.” Id. That is precisely the case here. Petitioners and Tribal Intervenors “pursued only one claim for relief—the invalidity of the regulation at issue,” id., and, as in American Petroleum, they offered several “defensible bases for that invalidity,” id.
According to the dissent, “[i]t is difficult to see how an argument is especially helpful ... when it in no way contributes to the resolution of a case.” Dissenting Op. at 1287 (internal quotation marks omitted). But our case law is to the contrary. In American Petroleum, we awarded fees for each argument not reached, including the narrowest, finding that none was “so frivolous that all time spent on it was unreasonable.” 72 F.3d at 912. In doing so, we recognized that alternative arguments, though ultimately not dispositive, may nonetheless be helpful to the judicial process and thus to “the proper implementation and interpretation of the Act.” Id. at 911. In Alabama Power, we even awarded fees for an argument petitioners withdrew because “had it remained in the case, [the argument‘s] resolution would have contributed importantly to the administration of the Act.” 672 F.2d at 4-5 & n.18. “[W]e will not use hindsight to deny an otherwise appropriate recovery.” Id. at 5 n.18. Indeed, “narrow” arguments of the kind belittled by the dissent, Dissenting Op. at 1287, can be especially helpful, offering the court a basis for a disposition that makes as little law as possible, best preserves agency discretion, or otherwise promotes the purposes of the Clean Air Act. We cannot imagine why we would want to discourage that kind of assistance by drawing an arbitrary line between petitioners and intervenors.
Here, had we not disposed of the case on the basis of petitioners’ contentions, the Tribes’ arguments, which sought to force EPA to comply with its Clean Air Act obligations, would, like petitioners’ withdrawn arguments in Alabama Power, have “contributed importantly to the administration of the Act,” 672 F.2d at 5 n.18. And rather than summarily dismissing
Further attempting to marginalize Tribal Intervenors’ contribution, the dissent criticizes them for “br[inging] a narrow, fact-based challenge to an ancillary regulation,” unlikely to “play a critical role in this case.” Dissenting Op. at 1287. But this conflates the Tribes’ role as intervenors, in which they challenged thе Delisting and Mercury Rules, and their role as petitioners, in which they challenged a third regulation, the ancillary Reconsideration Rule. Tribal Intervenors seek no fees for the latter. They seek fees only with respect to the vacatur of the Delisting and Mercury Rules—the regulations lying at the very heart of this case. See Tribal Fees Br. 3-4.
The dissent claims that today‘s decision takes an “extraordinary step.” Dissenting Op. at 1284. Again, the dissent is mistaken. Other courts have awarded fees in similar circumstances. For instance, the Fourth Circuit rejected an outcome-based rule (likе the one urged by the dissent), awarding fees to intervenors who, though ultimately found to lack standing, had nonetheless “play[ed] an active role” in the litigation. Shaw, 154 F.3d at 163. The Ninth Circuit likewise awarded fees to intervenors whose arguments it never reached. Seattle Sch. Dist. No. 1, 633 F.2d at 1350. In that case, in which plaintiffs challenged an initiative banning race-conscious school desegregation, the district court bifurcated the litigation: Phase I would consider plaintiffs’ argument that the initiative was unconstitutional, and Phase II would consider a separate argument—made by intervenors—that the school districts were operating racially dual school systems. Id. at 1341. Because plaintiffs prevailed at trial, the court never even had to hear intervenors’ Phase II arguments. The court nonetheless awarded fees for the “substantial time and effort” intervenors spent “prepar[ing] for trial on the Phase II issues,” declining to “retrospectively deny attorney‘s fees” solely because intervenors’ participation ultimately “prove[d] unnecessary.” Id. at 1349-50.
III.
Tribal Intervenors seek a total of $305,389 in fees and costs. EPA insists that the request is excessive and should be reduced to $64,793. Rather than sorting thrоugh the parties’ competing claims, we direct the question to our Appellate Mediation Program. See, e.g., Clifton Power Corp. v. FERC, No. 94-1775 (D.C. Cir. Feb. 12, 1997) (per curiam order referring consideration of motion for attorney fees to the Appellate Mediation Division).
So ordered.
BROWN, Circuit Judge, dissenting:
In today‘s decision, the court takes the extraordinary step of awarding fees to Tribal Intervenors, who intervened on the side of a petitioner in a Clean Air Act challenge and offered an argument that other petitioners lacked standing to make. As the court acknowledges, we never reached the Tribal Intеrvenors’ claim and their argument had no effect on the out-
In Shaw, for example, the court concluded that a fee award was appropriate in the exceptional circumstances where intervenors, deprived of standing during the course of the litigation, had taken an active, unique role in the litigation and contributed to its success. Shaw, 154 F.3d at 166. However, the court emphasized the narrowness of its holding: “Moreover—and this is a point we stress—it is not every permissive intervenor who will be entitled to fees. Courts should deny fees to intervenors who have failed to play a ‘significant role in the litigation.‘” Id. at 168. Similarly, in Seattle School Dist. No. 1 v. Washington, 633 F.2d 1338, 1341 (9th Cir. 1980), plaintiff school districts and intervenors challenged Initiative 305, an anti-busing initiative. Although the court concluded that a fee award was permissible for an issue that had not been fully litigated, it pointedly avoided making any broad generalization about the propriety of such an award under different circumstances. In fact, the court declined to award fees for intervenors’ participation in Phase I of the litigation—during which the case was resolved—because the school districts were fully capable of litigating the unconstitutionality of Initiative 305 and the intervenors’ role was de minimis. Id. at 1349. By contrast, the court found intervenors’ substantial time and effort spent preparing for Phase II could be compensated because the intervenors’ essential role in that phase of the litigation was “apparent from the onset of [the] case.” Id. If Initiative 350 was found to be constitutional in Phаse I, which was a “substantial likelihood,” the school districts would be unwilling to argue they were operating discriminatory school districts. Id. at 1349-50. In that case, the entire burden of litigating Phase II would have fallen on intervenors. Id. at 1349. Tellingly, no other court has ever determined an intervenor merited a fee award for the sort of anemic effort the court rewards today. After more than two decades, the “all-but-
Apparently, the court opts for such a radical departure simply because it can. The court says our precedent—which has consistently imposed the more exacting “significant role” standard—is distinguishable. That much is true. In Alabama Power v. Gorsuch, 672 F.2d at 4, we rejected a fee request under
The broad grant of statutory discretion in
We have held that the court need not parse the success of each separate argument in support of a single claim when determining eligibility for fees. See Am. Petroleum Inst. v. EPA, 72 F.3d 907, 912 (D.C. Cir. 1996). But that does not mean every separate claim—even one completely unrelated to the successful strategy—must be deemed a success beсause it sought the same remedy. New Jersey and fourteen additional states and environmental organizations challenged the “Delisting Rule,” which had removed power plants from the list of sources whose emissions are regulated under Section 7412. See
The court attempts to justify its decision by claiming that denying attorneys’ fees to Tribal Intervenors would discourage future intervenors from bringing “useful” claims (Op. at 1281). Its concern is overblown. While it is admittedly impossible for parties to determine in advance what issues will be reached by the court, it is entirely possible for a litigant to make a reasonable estimation of how large an impact his issue is likely to have on the litigation, in light of the other challenges being raised. See Seattle Sch. Dist. No. 1, 633 F.2d at 1349-50 (noting there was a “substantial likelihood” that the initiative at issue would be found constitutional and that intervenors’ role would therefore be critical). In this case, the petitioners raised a sweeping challenge to the EPA‘s authority to administer and implement the Delisting Rule—a claim that, if successful, would resolve all of Tribal Intervenors’ issues. The likelihood that Tribal Intervenors, who brought a narrow, fact-based challenge to an ancillary regulation, would play a critical role in this case was infinitesimally small from the outset. Refusing to reward them for their decision to pile onto the petitioners’ different—and much more substantial—claim would cause little danger of discouraging “useful” interventions in the future. It would merely force potential intervenors to conduct a basic cost-benefit analysis to determine whether their claim is sufficiently likely to make an actual impact to justify the risk they will bear their own costs. While “20/20 acuity of hindsight” isn‘t required, Am. Petroleum Inst., 72 F.3d at 912, willful blindness should not be permitted.
The court also claims that Tribal Intervenors assisted the process by providing an alternative basis for its disposition (Op. at 1283). It is difficult to see how an argument is “especially helpful,” however, when it in no way contributes to the resolution of a case. In fact, tangential arguments piled on by self-interested intervenors force the agency—and the court—to waste valuable resources evaluating and addressing arguments that will have no impact on the court‘s ultimate decision. The Court seems to forget that the EPA must respond to all arguments lest it be deemed to have conceded them. Here, the EPA spent twenty-four pages of its reply brief addressing arguments made by Tribal Intervenors, wasting valuable resources that might otherwise have been devoted to rebuttal of the petitioners’ much more substantial—and ultimately victorious—claims. Were Tribal Intervenors’ arguments costless, it might be tempting to grant their request. However, “wе live in a world of scarce resources and the question inevitably becomes how best to allocate them.” Alabama Power, 672 F.2d at 29 (Wilkey, J., dissenting). In this case, it was clear from the outset that Tribal Intervenors’ fact-based objection to the ancillary Reconsideration Rule would not play a substantial role in petitioners’ sweeping and substantial challenge to the overarching Delisting Rule. Moreover, allowing all but the most frivolous or duplicative intervenors to recover attorneys’ fees encourages “additional filings of dubious value in
The court seeks to reassure us that its holding will not encourage fee-seeking interventions, pointing out “all the tools” courts have to prevent that from happening (Op. at 1282). The tools, though, turn out to be few and frail. The majority overstates the value of the standing requirement because it fails to recognize the substantial practical difference between participating in litigation as a petitioner or as an intervenor. Our litigation system forces the petitioner to literally “put his money where his mouth is” by bearing all costs associated with his suit. Even where Congress departs from the “American rule” by allowing recovery of attorneys’ fees, a petitioner must attain some success on the merits of its claim to warrant reimbursement. Ruckelshaus, 463 U.S. at 682-84. Thus, a rational plaintiff will bring suit if and only if the expected judgment would be at least as large as his expected legal costs, i.e. the total legal costs discounted by his probability of losing at trial. See Steven Shavell, Suit, Settlement, and Trial: A Theoretical Analysis Under Alternative Methods for the Allocation of Legal Costs, 11 J. Legal Stud. 55, 58 (1982). Because intervenors bear far fewer costs—and thus shoulder far less risk—than petitioners, a party with a marginal claim would be substantially more likely to intervene than it would be to file suit in its own right. The majority skews the calculus even further by allowing an intervenor to hitch its completely unrelated claim to a promising challenge to the same regulation. Its holding encourages parties to pile on claims that are not sufficiently meritorious to justify filing in their own right.
The majority conflates, and ultimately eviscerates, the bar against “frivolous” litigation and the court‘s discretion to determine what is “appropriate.” Under the court‘s newly minted standard, it is no impediment to a fee awаrd that an intervenor‘s argument is irrelevant to the outcome, nonsubstantive, and does nothing to strengthen the primary legal position. The court defines “appropriate” so broadly that an intervenor is now entitled to fees unless the challenge is patently frivolous.
It is hard to see what is inappropriate about requiring intervenors to carefully consider what is likely to enhance and promote the purposes of any given litigative effort. Creating a risk—even a small one—that intervenors will be required to bear their own costs will at least force them tо undertake a basic cost-benefit analysis to determine when to avoid spending money. See Richard L. Revesz and Michael A. Livermore, Retaking Rationality 12 (2008) (“In the absence of an obvious endpoint [for spending], we need a mechanism that tells us when to stop spending money. Cost-benefit analysis is that mechanism[.]“). And if parties want to pile on just for the sake of piling on—to pursue some frolic of their own—why would it be inappropriate to require them to pay the costs of that indulgence?
Since preserving the public fisc from unreasonable depredations also serves the public interest, I would not be so eager to find new ways to waste Other People‘s Money.
I dissent.
