Don't Waste Arizona Incorporated v. Hickman's Egg Ranch Incorporated

Filing 164

ORDER granting in part and denying in part 145 Motion for Attorney Fees. Pursuant to 42 U.S.C. § 11046(f), Plaintiff is awarded attorneys' fees in the amount of $ 55,184.75, and taxable and non-taxable costs in the amount of $13,654.80. The Clerk shall enter judgment accordingly. Signed by Chief Judge G Murray Snow on 2/27/19. (DXD)

1

WO

2
3
4
5
6

IN THE UNITED STATES DISTRICT COURT

7

FOR THE DISTRICT OF ARIZONA

8
9

Don’t Waste Arizona Incorporated,
Plaintiff,

10

No. CV-16-03319-PHX-GMS
ORDER

11

v.

12

Hickman’s Egg Ranch Incorporated,

13

Defendant.

14
15

Pending before the Court is Plaintiff’s Motion for Award of Attorneys’ Fees and

16

Costs. (Doc. 145). For the following reasons, the Court will grant the motion in part and

17

deny in part.

18

BACKGROUND

19

In 2016, Plaintiff Don’t Waste Arizona filed a complaint alleging that Defendant

20

Hickman’s Egg Ranch was violating the Emergency Planning and Community Right to

21

Know Act (“EPCRA”), 42 U.S.C. §§ 11001–50. On June 9, 2017, Defendant made an

22

offer of judgment to Plaintiff, which contained an offer of attorneys’ fees not to exceed

23

$100,000, a direct payment to Plaintiff of $250,000, an agreement to submit continuous

24

reporting requirements, and an entry of judgment against Defendant for violating EPCRA.

25

(Doc. 147 Ex. A). Plaintiff rejected this offer and proceeded to a bench trial. Following

26

the bench trial, this Court found that Hickman’s failed to comply with the written notice

27

requirement of EPCRA, and directed Hickman’s to make a payment to the U.S. Treasury.

28

(Doc. 151). Plaintiff now files a motion for attorneys’ fees.

1
2

DISCUSSION
I.

Analysis

3

EPCRA provides that “[t]he court, in issuing any final order in any action brought

4

pursuant to this section, may award costs of litigation (including reasonable attorney and

5

expert witness fees) to the prevailing or the substantially prevailing party whenever the

6

court determines such an award is appropriate.” 42 U.S.C. § 11046(f). Before awarding

7

attorneys’ fees under this provision, the Court must make two findings. First it must find

8

that the party who seeks fees is the “prevailing or substantially prevailing party.” Saint

9

John’s Organic Farm v. Gem County Mosquito Abatement Dist., 574 F.3d 1074, 1058 (9th

10

Cir. 2009). Then, it must find that an award of attorney’s fees is “appropriate.” Id.

11

Once a request for attorneys’ fees is deemed appropriate, the Court must determine

12

whether the amount requested by Plaintiff is reasonable. Haworth v. State of Nevada, 56

13

F.3d 1048, 1052 (1995).

14

A.

15

In the Ninth Circuit, an award of fees is “appropriate” unless “special circumstances

16

exist that would render such an award unjust.” Saint John’s Organic Farm, 574 F.3d at

17

154. Under this standard, “the court’s discretion to deny a fee award to a prevailing party

18

is narrow.” N.Y. Gaslight Club Inc. v. Carey, 447 U.S. 54, 68 (1980). And Ninth Circuit

19

has emphasized that denials of attorneys’ fees due to special circumstances are “extremely

20

rare.” St. John’s Organic Farm, 574 F.3d at 1064.

“Appropriate”

21

For example, “a defendant’s good faith belief that it was following the law does not

22

qualify as a ‘special circumstance.’” Teitelbaum v. Sorenson, 648 F.2d 1248, 1250–51 (9th

23

Cir. 1981). And in the context of an citizen’s enforcement suit, the Ninth Circuit has held

24

that “a lack of evidence of economic benefit” by the defendant, “a lack of evidence of

25

actual pollution,” and the fact that defendant was not “forced to cease polluting or

26

potentially polluting activities,” did not qualify as a special circumstances where the Court

27

found the Defendant failed to comply with permitting requirements. See Resurrection Bay

28

Conservation Alliance, 640 F.3d at 1093. Demonstrating special circumstances is not

-2-

1

impossible, and the Ninth Circuit has held that special circumstances exist where the

2

prevailing party “failed to adequately brief the issues he presented, thereby requiring the

3

court to engage in independent research.” Borunda v. Richmond, 885 F.2d 1384, 1392 (9th

4

Cir. 1988).

5

No special circumstances exist in this case. While Hickman’s violations here were

6

minor, the Court is barred from finding that constitutes a special circumstance by

7

controlling Ninth Circuit precedent. See Resurrection Bay Conservation Alliance, 640

8

F.3d at 1093. Thus, awarding fees here is appropriate.

9

B.

Rule 68 Does Not Apply In This Context

10

Hickman’s argues that even if the Court determines that Plaintiff is entitled to

11

attorneys’ fees under EPCRA, it should limit the fees to those accrued before Defendant

12

made an Offer of Settlement. But because Rule 68 does not apply in this context, the Court

13

will not limit Plaintiff’s fee request by applying Rule 68.

14

Unlike many other types of lawsuits, citizen suits brought under EPCRA are

15

designed to primarily benefit the public interest: “[a]ny benefit from the lawsuit, whether

16

injunctive or monetary, inures to the public or to the United States . . . . The citizen suit

17

provision was designed to supplement administrative enforcement, not to provide a private

18

remedy.” Sierra Club v. Chevron, 834 F.2d 1517, 1522 (9th Cir. 1987). Thus, EPCRA’s

19

citizen suit provision is substantially different from a typical private action where Rule 68

20

applies. Every court that has directly confronted this issue has found that Rule 68 does not

21

apply to the citizen suit provisions of environmental statutes, because applying Rule 68 in

22

this context would eviscerate EPCRA’s citizen suit provision.1 See North Carolina

23

Shellfish Growers Ass’n v. Holly Ridge, 278 F.Supp.2d 654, 668 (E.D. N.C. 2003); Friends

24

of the Earth v. Chevron Chem. Co., 885 F. Supp 934, 939-940 (E.D. Tex. 1995) (“To place

25
1

26
27
28

Hickman’s asserts that Interfaith Community Organization v. Honeywell Intern.
Inc., 726 F.3d 403, (3d Cir. 2013), found Rule 68 does not apply in environmental citizen
suits. But Interfaith’s holding is not so broad. Interfaith involved a dispute over fees
incurred by a law firm for monitoring work performed after judgment was entered and did
not involve a pre-judgment offer of settlement. Id. at 407. In its opinion, the Third Circuit
suggested that Rule 68 would apply generally to environmental citizen suits, but that
question was not directly before the panel. Id. at 411 n.4.
-3-

1

upon the citizen plaintiffs the speculative hazard of paying a defendant’s attorney’s fees

2

and costs would likely have an undesirable effect. Such a hazard would have a chilling

3

effect upon citizens bringing enforcement actions. . . . Indubitably, this would eviscerate

4

the effectiveness of section 1365.”).

5

C.

6

Where Rule 68’s fee shifting provision does not apply, but the defendant has made

7

a Rule 68 offer before judgment, the Court “must take into consideration the amount of the

8

Rule 68 offer, the stage of the litigation at which the offer was made, what services were

9

rendered thereafter, the amount obtained by judgment, and whether it was reasonable to

10

continue litigating the case after the Rule 68 offer was made,” when determining whether

11

the fee award is reasonable. Haworth v. Nevada, 56 F.3d 1048, 1052 (9th Cir. 1995)

12

(emphasis added). “The private attorney general theory lets the attorneys recover more than

13

the benefit to their client would make reasonable, because they also confer benefits on

14

others throughout society . . . [b]ut the benefit is not infinite.” McGinnis v. Kentucky Fried

15

Chicken of California, 51 F.3d 805, 810 (1995). Even though there is an additional public

16

benefit in these cases, a court awarding fees must “reduce the attorneys fees award so that

17

it is commensurate with the extent of the plaintiff's success.” Id.; see also Saint John’s

18

Organic Farm, 574 F.3d at 1059–60 (9th Cir. 2009) (acknowledging that even where a

19

plaintiff is deemed the prevailing party and fees are appropriate, “the nature and quality of

20

relief may affect the amount of the fees awarded.”). When considering the relevant public

21

benefit here, the Court must keep in mind the purpose of EPCRA, which is “to inform the

22

public about the presence of hazardous and toxic chemicals.” See Steel Co. v. Citizens for

23

a Better Environment, 523 U.S. 83, 86 (1998).

The Court Will Reduce Fee Amount Requested By Plaintiff

24

Here these factors weigh in favor of substantially reducing Plaintiff’s fee request.

25

Hickman’s offer of settlement was generous; it contained an offer of attorneys’ fees not to

26

exceed $100,000, a direct payment to Plaintiff of $250,000, an agreement to submit

27

continuous reporting requirements, and an entry of judgment against Defendant for

28

violating EPCRA. (Doc. 147, Ex. A). Plaintiff argues that this settlement was null and

-4-

1

void because direct payments are not contemplated by the statute, however, under Ninth

2

Circuit precedent environmental groups are free to negotiate settlement offers that contain

3

direct payments. See Sierra Club, Inc. v. Electronic Controls Design Inc., 909 F.2d 1350,

4

1354 (9th Cir. 1990) (“When a defendant agrees before trial to make payments to

5

environmental organizations without admitting liability, the agreement is simply part of an

6

out-of-court settlement which the parties are free to make.”).

7

The primary public benefit Don’t Waste Arizona obtained here—requiring

8

Hickman’s to submit compliance reports under EPCRA that disclose the amount of

9

ammonia its facilities emit—was already offered by Hickman’s in its settlement proposal.

10

The astronomical civil penalty Plaintiff sought in this case, and the lack of sufficient

11

justification for it, suggests that Plaintiff’s motives would not be within the core public

12

benefit that EPCRA is designed to provide—especially where Plaintiffs presented no

13

evidence that Hickman’s obtained any economic benefit from failing to submit these

14

reports. State and federal environmental entities monitored Hickman’s for compliance

15

with substantive environmental requirements pertaining to their operations wholly apart

16

from the EPCRA requirements and the public certainly was not ignorant of ammonia

17

generated by Hickman’s operations. Thus, there was no ignorance of the ammonia

18

emissions that would be attributable to Hickman’s failure to provide daily reports as

19

Plaintiff alleges Hickman’s was required to do. The reporting standards which were then

20

unclear, were clarified when Congress passed the FARM Act to not require reporting on

21

emissions of this type. Thus, the Court cannot say Plaintiff acted reasonably by pursuing

22

excessive remedies under the facts of this case. After the bench trial, this Court directed

23

Hickman’s to make a payment of $3,000.00 to the U.S. Treasury. (Doc. 151). While this

24

money provides some public benefit that was not contemplated by the settlement

25

agreement, it does not make Plaintiff’s decision to proceed to trial after the generous

26

settlement offer a reasonable one. The Court will thus award attorneys’ fees in the amount

27

of $55,184.75 and taxable and non-taxable costs in the amount of $13,654.80.

28

///

-5-

1

IT IS THEREFORE ORDERED the Motion for Attorneys’ Fees and Costs (Doc.

2

145) is granted in part and denied in part. Pursuant to 42 U.S.C. § 11046(f), Plaintiff is

3

awarded attorneys’ fees in the amount of $ 55,184.75, and taxable and non-taxable costs in

4

the amount of $ 13,654.80.

5
6
7

IT IS FURTHER ORDERED directing the Clerk of Court enter judgment
accordingly.
Dated this 27th day of February, 2019.

8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28

-6-