[CITE: Hoosier Environmental Council v. DNR, 11 CADDNAR 295 (2008)]
[VOLUME 11, PAGE 295]
Cause #: 97-065R
Caption: Hoosier
Environmental Council v. DNR
Administrative Law Judge:
Jensen
Attorneys: Mullett; Boyko
Date: March 20, 2008
[NOTE: THIS FINAL ORDER RESULTED FROM MARION COUNTY
SUPERIOR COURT DECISION IN HEC v. DNR /
DNR v. HEC. CONSOLIDATED CASE NUMBERS 49F12-0609-MI-39929 /
49F12-0610-MI-40714, WHICH VACATED THE NRC’S AUGUST 20, 2006 FINAL ORDER (SEE HOOSIER ENVIRONMENTAL COUNCIL v. DNR, 10
CADDNAR 324 (2006)). ON APRIL 28, 2008, HEC SOUGHT JUDICIAL REVIEW IN THE MARION SUPERIOR COURT IN CAUSE NO. 49F12-0804-PL-018489. ON DECEMBER 8, 2008, THE COURT ENTERED FINAL ORDER GRANTING SUMMARY JUDGMENT AND ADDITIONAL AWARD OF ATTORNEY'S FEES AND LITIGATION EXPENSES WITH REMAND. SEE ORDERS. SUBSEQUENT TO THE ISSUANCE OF THE MARION SUPERIOR COURT'S DECEMBER 8, 2008 ORDER, THE PARTIES FILED "NOTICE OF SETTLEMENT AND STIPULATION OF DISMISSAL, WITH PREJUDICE". A FINAL ORDER OF DISMISSAL WAS ISSUED ON SEPTEMBER 17, 2009.]
FINAL ORDER FOLLOWING ORDER OF REMAND ISSUED OCTOBER
11, 2007
The
Department is ordered to pay to HEC, the total sum of ninety-nine thousand, one
hundred fifty-four dollars and fifty-seven cents, $99,154.57, in costs and
expenses, including reasonable attorney fees.
FINDINGS OF FACT AND
CONCLUSIONS OF LAW
I. PROCEDURAL
BACKGROUND
1. This matter comes before the
Natural Resources Commission (Commission) on remand from judicial review of the
Commission’s previous determination that HEC should receive no award of fees
with respect to the Commission Objection Phase and the Judicial Review Phase of
Hoosier Environmental Council v. DNR and
Foertsch Construction Company, Inc., 7
CADDNAR 162, February 1997 (“Foertsch
Litigation”).
A. FOERTSCH LITIGATION
2. The Foertsch Litigation was
initiated by HEC on June 9, 1995 with the filing of its petition for
administrative review following the Department of Natural Resources’ (Department) May 10, 1995 approval of
Foertsch’s application for amendment of its existing Indiana Surface Mining
Control and Reclamation Act (I-SMCRA) permit.
3. Administrative Law Judge
Teeguarden, who was appointed by the Commission to preside over the Foertsch
Litigation, issued a non-final order (Teeguarden
Non-Final Order) on October 10, 1996.
4. HEC, Foertsch and the
Department, each filed objections to the Teeguarden Non- Final Order and the
Commission issued its Final Order (Commission
Order) pursuant to IC 4-21.5-3-29 on February 19, 1997.
[VOLUME 11, PAGE 296]
5. On March 21, 1997 HEC and
Foertsch sought judicial review of the Commission Order in the Daviess County
Circuit Court.
6. The Daviess County Circuit
Court issued an order affirming the Commission Order on September 13, 1999.
7. No further judicial review
was pursued by any party.
B. FEE PROCEEDING
8. During the pendency of
judicial review on the Foertsch Litigation, HEC filed with the Commission its
Petition for Fees pursuant to IC 14-34-15-10 and 312 IAC 3-1-13[1].
9. The Commission initially
appointed Administrative Law Judge Rider to preside over the Fee Proceeding. As a consequence of a change in ALJ Rider’s
employment it became necessary for him to withdraw as the presiding
administrative law judge and the Commission appointed Special Administrative
Law Judge Penrod.
10. SALJ Penrod issued his
Findings of Fact, Conclusions of Law and Non-Final Order (Penrod Non-Final Order) on February 20, 2003 awarding to HEC a
full award of all sought fees relating to the Foertsch Litigation and the
prosecution of its fee petition for costs incurred through May 31, 2002.
11. The Department filed
objections to the Penrod Non-Final Order with the Commission, as the ultimate
authority pursuant to IC 4-21.5-3-29, on March 7, 2003. The Commission entered its Final Order (Commission Fee Order) on July 22, 2003,
vacating the Penrod Non-Final Order and determining that HEC was not eligible for
any award of fees and thus did not reach the issue of HEC’s entitlement to a
fee award.
12. HEC sought judicial review
of the Commission Fee Order in the Marion Superior Court, which entered its
final order on May 24, 2004. The Marion
Superior Court determined that HEC was both eligible for an award of fees and
further that HEC was entitled to the full fee award as previously determined in
the Penrod Non-Final Order.
13. The Department initiated an
appeal of the Marion Superior Court Order and on July 26, 2005 the Indiana
Court of Appeals, in a published opinion, affirmed in part and reversed in
part, the Order of the Marion Superior Court.
Department of Natural Resources v.
Hoosier Environmental Council (“IDNR v. HEC”), 831 N.E.2d 804 (Ind. App. 2005).
[VOLUME 11, PAGE 297]
14. The Indiana Court of Appeals
held that “the question of eligibility is a matter of law that could be
determined by the trial court, the entitlement question was a factual question
that was inappropriate for determination by the trial court on judicial
review.” Id., citing West
Virginia Highlands Conservancy v. Norton (“WVHC”), 343 F,3d 239, 248, (4th
Cir. 2003). In so holding the Indiana
Court of Appeals further stated;
[t]he NRC is the “ultimate
authority” of the DNR, subject to certain exceptions not applicable here… In
this case the NRC dissolved the special ALJ’s non-final order and made its own
findings and conclusions, ultimately deciding that HEC was not eligible for
fees under Indiana Code Section 14-34-15-10, a decision the DNR now concedes
was erroneous. Thus, the NRC never
reached the issue of whether HEC is entitled to fees under I-SMCRA. Rather than remanding the matter to the NRC,
the trial court substituted its judgment for the NRC and essentially adopted
the special ALJ’s findings and conclusions.
The trial court erred in so doing.
Id., citing West Virginia Highlands Conservancy v. Norton (“WVHC”), 343 F.3d 239, 248, (4th Cir.
2003).
15. Consequently, the Indiana
Court of Appeals affirmed the Marion Superior Court’s determination that HEC is
eligible for an award of fees, but reversed and remanded to the Commission for
further proceedings that portion of the trial court’s order that determined HEC
was entitled to an award of fees. Id.
16. The Marion Superior Court
issued its “Order of Remand” consistent with the Indiana Court of Appeals
opinion on December 15, 2005.
17. The Commission appointed
Administrative Law Judge Jensen to preside over the fee proceeding on remand.
18. On February 17, 2006 ALJ
Jensen issued Findings of Fact and Conclusions of Law with Non-Final Order (Jensen Non-Final Order) to which both
HEC and the Department filed Objections with the AOPA Committee of the Commission.
19. Following oral argument on
March 21, 2006, the AOPA Committee sought augmentation of the record by ALJ
Jensen and the parties with respect to specific issues contained within the Jensen
Non-Final Order. Thereafter, the AOPA
Committee reconvened for further consideration of the parties’ objections on
July 13, 2006.
20. The Commission’s Findings of
Fact and Conclusions of Law with Final Order (Second Commission Fee Order) was officially entered on August 30,
2006.
21. As pertinent to the issue at
hand, the Commission determined in the Second Commission Fee Order that HEC
would be awarded a total of $90,107.39, which constituted an award of 100% of
fees sought and not disallowed for the Administrative Review Phase and an award
of 51% of fees sought and not disallowed for the Fee Petition Phase, but would
be awarded no fees for its participation in either the Commission Objection or
Judicial Review Phases of the Foertsch Litigation.
[VOLUME 11, PAGE 298]
22. Both HEC and the Department
filed Petitions for Judicial Review, which resulted in the issuance of an Order
of Remand by the Marion County Superior Court on October 11, 2007 ordering the
Commission to conduct further proceedings consistent with Findings of Fact,
Conclusions of Law, and Order entered on July 6, 2007.
23. The Findings of Fact,
Conclusions of Law, and Order issued by the Marion Superior Court affirms the Second
Commission Fee Order in all respects except as to the Commission’s
determination to award no compensation to HEC for its participation in the
Commission Objections Phase and the Judicial Review Phase of the underlying
Foertsch Litigation.
24. In so doing, the Marion
Superior Court vacated, in its, entirety, the Commission’s Final Order issued
on August 30, 2006.
II. REMAND
25. Following receipt of
the
26. HEC was invited to supplement its fee petition to
address additional fees incurred between May 31, 2002 and the present with
respect to its prosecution of its fee petition.
HEC indicated its continuing desire to address any additional fees
through a separate and distinct proceeding.
27. The parties each availed themselves of the opportunity
to file briefs expounding upon their interpretation of the Marion Superior
Court’s July 6, 2007 Findings of Fact and Conclusions of Law and Order.
28. The most expeditious manner of addressing the matter
at issue on remand is to revise the Second Commission Fee Order to address,
consistent with the Marion Superior Court’s July 6, 2007 Findings of Fact and
Conclusion and Order, HEC’s sought fees associated with the Commission
Objection Phase and the Judicial Review Phase of the Foertsch Litigation.
29. To that end, the individual findings contained within
the Second Commission Fee Order are unchanged within the instant Findings of
Fact and Conclusions of Law with Non-Final Order Following Order of Remand
Issued October 11, 2007 except for findings contained within Sections I.A.,
I.B., II., VI.B., VI.C., VIII., and Appendix B.
A “Findings Deletion, Addition, Modification and Numerical Conversion
Table” follows as Appendix C.
[VOLUME 11, PAGE 299]
III.. ISSUES FOR DETERMINATION ON REMAND
30. The determination of an
award of fees under I-SMCRA involves a two-prong analysis. IDNR v.
HEC, and WVHC, including first a determination of the petitioner’s eligibility for such fee award and
second the petitioner’s entitlement
to an award of fees.
31. The Marion Superior Court
previously determined that HEC is eligible to receive an award of fees herein
and the Indiana Court of Appeals affirmed that determination. IDNR v.
HEC. As such, further analysis of
HEC’s eligibility will not be undertaken here.
32. Remaining, however, is a
determination as to the second prong of the analysis, or HEC’s entitlement to
an award of fees.
33. If the issue of HEC’s
entitlement is answered in the affirmative, the task of ascertaining the proper
amount of such fee award must then be undertaken.
34. Fees associated with the
entirety of the Foertsch Litigation are at issue herein, however, HEC has opted
to have only those fees associated with its Fee Proceeding accruing up to May
31, 2002 considered.
IV. FRAMEWORK FOR DETERMINING FEE PETITIONER’S ENTITLEMENT
TO FEES[2]
35. The instant proceeding presents
an issue of first impression for the Commission and the State of
36. IC 14-34-15-10 states:
Sec. 10.
Whenever an order is issued:
(1) under this chapter or under IC 13-4.1-11 (before its repeal); or
(2) as a result of an administrative proceeding under this article or
under IC 13-4.1 (before its repeal) instituted at the request of a person;
the court, resulting from judicial review, or the commission may assess against
either party to the proceeding an amount of money, determined by the
commission, equal to the aggregate amount of all costs and expenses, including
attorney's fees, reasonably incurred by the person for or in connection with
the person's participation in the proceedings, including any judicial review of
agency actions.
[VOLUME 11, PAGE 300]
37. 312 IAC 3-1-13 states in relevant part:
Sec. 13 (a)
This section governs an award of costs and expenses reasonably incurred,
including attorney fees, under … IC 14-34-15-10.
…
(d)
Appropriate costs and expenses, including attorney fees, may be awarded under
IC 14-34-15-10 only as follows:
…
(2) To a
person from the department, other than to a permittee or the permittees’
authorized representative, who initiates or participates in a proceeding and
who prevails in whole or in part, achieving at least some degree of success on
the merits, upon a finding that the person made a substantial contribution to a
full and fair determination of the issues.
…
38. One purpose of I-SMCRA is to
“[i]mplement and enforce the federal Surface Mining Control and Reclamation Act
of 1977 (30 U.S.C. 1201 through 1328).” IC 14-34-1-3(1).
39. Within the federal Surface Mining Control and
Reclamation Act (F-SMCRA) a similar
fee shifting statute states:
Whenever an
order is issued under this section, or as a result of any administrative proceeding under this chapter, at the request of any person,
a sum equal to the aggregate amount of all costs and expenses (including attorney fees) as determined by the Secretary to have been reasonably incurred by such person for or in connection with his participation in such proceedings, including any judicial review of agency actions, may be assessed against either party as the court, resulting from judicial review or the secretary,resulting from administrative proceedings, deems proper.
30 U.S.C. 1275(e).
40. Under the “American Rule”
absent statutory authority there is ordinarily no entitlement for the
successful litigant to collect attorneys’ fees from another party. WVHC,
supra.
41. Pursuant to 30 U.S.C.
1275(e), and similarly IC 14-34-15-10, there is an express statutory ability to
award fees to successful parties for the purpose of assuring “public
participation in the “development, revision and enforcement of regulations,
standards, reclamation plans, or programs established by the Secretary or any
State under [the Act].” Id at 242.
[VOLUME 11, PAGE 301]
42. Because the instant
proceeding is one of first impression in Indiana the parties have, and the
Commission must, look to F-SMCRA and decisions rendered thereunder in deciding
the instant proceeding. IDNR v. HEC, supra citing Peabody Coal
Company v. Indiana Department of Natural Resources, 629 N.E.2d 925, (Ind.
Ct. App. 1994) and Indiana Department of Natural Resources v.
Krantz Brothers Construction Corporation, 581 N.E.2d 935, (Ind. Ct. App.
1991).
43. Three federal cases, WVHC, supra, Kentucky Resources Council,
Inc. v Babbitt (“Babbitt”), 997
F. Supp. 814, (E.D. Ky. 1998) and Utah International, Inc. v. Department of
Interior (“Utah International”), 643
F. Supp. 810, (D. Utah 1986), involving varying aspects of the fee shifting
provisions contained within F-SMCRA are integral to understanding the
equivalent provisions of I-SMCRA.
44. In WVHC, the plaintiffs sought an award of fees relating to their
initiation of and participation in underlying litigation involving F-SMCRA from
the Interior Board of Land Appeals (IBLA). The IBLA denied the plaintiffs’ request on
the basis that the plaintiffs were not eligible for an award of fees. The United States District Court for the
Southern District of West Virginia, on appeal brought by the plaintiffs,
reversed the IBLA’s determination, finding that the plaintiffs were both
eligible and entitled to an award of fees.
On further appeal by the IBLA, the United States Court of Appeals for
the Fourth District affirmed the District Courts’ finding that the plaintiffs
were eligible for an award of fees but vacated and the District Court’s finding
that the plaintiffs were entitled to those fees and remanded the entitlement
issue back to the IBLA. Similar to the
instant case, the Court of Appeals determined that the IBLA had not, in
rendering its denial of the plaintiffs’ fee petition, made findings with
respect to the plaintiffs’ entitlement to an award of fees and that the
District Court’s determination of that issue was improper as the issue of
entitlement must first be addressed by the IBLA.
45. WVHC
discusses the established framework for determining an entity’s entitlement to
a fee award under F-SMCRA but fails to reach issues relating to the application
of that framework to a particular factual situation.
46. Application of the F-SMCRA
fee-shifting framework is discussed at some length, however, in Utah International and Babbitt, in which the issue of
entitlement was ripe for review.
47. In WVHC the fee shifting provisions of F-SMCRA are categorized as
“whenever appropriate” statutes, or statutes that “allow the award of fees to
any party whenever the court or agency determines an award to be
appropriate.” at 244.
48. An agency is not however,
entitled to exercise unfettered discretion in determining the appropriateness
of a fee award. WVHC, at 244.
49. A determination of a party’s
eligibility for an award of fees does not mandate an affirmative conclusion
with respect to that party’s entitlement to such fee award. Utah
International, supra, citing Hensley v. Eckerhart, 461 U.S. 424.
[VOLUME 11, PAGE 302]
50. In nearly identical fashion
to regulations adopted to implement F-SMCRA’s fee shifting provision in a
manner consistent with Ruckelshaus,
312 IAC 3-1-13(d)(2) allows the Commission to order the Department to pay fees
to a party, other than the permittee, when it is determined that (1) the party
“prevails in whole or in part, achieving at least some degree of success on the
merits, and (2) “upon a finding that such person made a substantial
contribution to a full a fair determination of the issues.” WVHC, at 245 citing Ruckelshaus, 43
C.F.R. 4.1294(b).
51. Based upon the language of
43 C.F.R. 4.1294(b), and similarly 312 IAC 3-1-13(d)(2), the fee petitioners
establishment of “achieving at least some degree of success on the merits” is
determinative of the first prong, or the eligibility requirement, of the test. Id at 245.
52. The second prong of the
test, or a fee petitioners’ entitlement to a fee award, however relies upon a
determination that the petitioner “made a substantial contribution to a full
and fair determination of the issues.” Id at 247.
53. Following the affirmation
that a fee petitioner has achieved some degree of success on merits (establishing
eligibility) and that the fee petitioner substantially contributed to the full
and fair determination of the litigation (establishing entitlement), it is
necessary to evaluate the reasonableness of the fees sought as compared to the
actual successes of the fee petitioner in the underlying litigation. Utah International, Save Our Cumberland
Mountains, Gateway, Natural Resources Defense Council, and Sierra Club, supra.
54. WVHC
explains that the IBLA which serves, for the United States Department of the
Interior’s Office of Surface Mining Reclamation and Enforcement (OSM) under F-SMCRA, a function similar
to that of the Commission for the Department’s Division of Reclamation under
I-SMCRA, has previously held that “the key to a finding of substantial
contribution is ‘the existence of a causal nexus between petitioners’ actions
in prosecuting the Board appeal and the relief obtained.’” WVHC at
247, citing W. Va. Highlands Conservancy, 152 I.B.L.A. 66, 74, (2000) and
Babbitt, supra.
55. The causal relationship
necessary to a determination of entitlement is clarified through a review of Babbitt and Utah International.
56. In Babbitt, the plaintiff citizens organizations sought, through
citizens’ complaints filed with OSM, to require OSM to take enforcement action
relating to coal mining activities violative of
[VOLUME 11, PAGE 303]
the investigation of citizen complaints remained
unresolved. Following issuance of its
policy memorandum, OSM issued an informal review determination that reiterated
their earlier conclusion that the investigation had taken an excessively
lengthy time to complete, but indicating only their “consideration” of issuing
a more detailed field office directive.
The citizen organizations then filed an appeal with the IBLA indicating
the inadequacy of OSM’s “promise to consider” additional guidance relative to
the investigation of citizen complaints.
Following the initiation of the
appeal, but during the pendency of that action, OSM issued its second
policy memorandum relating to the efficiency of the agency’s response to
citizen complaints. Because the second policy memorandum issued by OSM
satisfied the procedural concerns raised by the citizen organizations, the
appeal was voluntarily dismissed.
57. The citizen organizations
filed their petition for fees citing the success of their complaint and appeal
in addressing OSM’s shortcoming with respect to the timeliness and efficiency
in conducting investigations of citizens’ complaints. Initially, the IBLA determined that the
plaintiffs were eligible for an award of fees but had failed to establish a
causal nexus between the policy changes adopted by OSM and the plaintiffs’
appeal. Babbitt, supra.
58. On appeal, in reversing
IBLA’s entitlement decision the court states,
A comparison of the First
and Second Memoranda issued by OSM reveals a striking dissimilarity. Far more extensive procedural relief was
obtained by the plaintiffs through the issuance of the Second Memorandum. To say that this relief was foreshadowed by
the First Memorandum or the subsequent informal review decision, which promised
only to “consider” unspecified additional relief, gives OSM too much and
plaintiff to little. Nor can the
procedural relief obtained by the plaintiffs after they filed their appeal be
said to be inconsequential merely because the substantive issues had previously
been resolved. The procedural relief
outlined in the Second Memorandum is far-reaching in both scope and
application. The timing alone of the
issuance of the Second Memorandum raises an inference that plaintiffs’ appeal
was causally related to the relief obtained.
…
What should have been a
prompt investigation by the LFO (OSM’s Lexington Field Office) of an easily
determinable fact (Branham & Baker’s ownership interest in
Babbitt at 820.
59. The Babbitt case having resulted from an appeal of the IBLA’s
determination that the plaintiffs were not entitled to an award of fees, a
decision by IBLA regarding an appropriate fee award had not been determined and
the matter was remanded for this sole purpose.
[VOLUME 11, PAGE 304]
60. Utah International relates to an initial determination as to the plaintiffs’ eligibility
for and entitlement to an award of fees as well as the determination as to the
proper fee to be awarded.
61. In Utah International, the Secretary of the Interior issued a
decision, supported by environmental organizations, designating a land area
unsuitable for mining operations.
Judicial review challenging the Secretary’s decision followed, during
which the government and the environmental organizations were, in part,
aligned. A part of the judicial review
included cross-claims and counter claims filed by the environmental organizations
seeking that a larger land area be included in the unsuitability
designation. During the pendency of the
judicial review the government moved for the unsuitability designation to be
remanded to the Secretary for reconsideration to which the environmental
organizations filed objections.
Additional litigation and negotiations, which ultimately yielded results
consistent with the majority of the claims raised by the environmental
organizations, resulted in the voluntary dismissal of most of the claims.
62. The environmental
organizations sought an award of fees for their work during the entirety of the
administrative proceedings in which they supported the Secretary’s initial
unsuitability designation and the judicial review challenging that designation. Matters at issue upon which the environmental
organizations differed from the government involved their cross claims and
counterclaims and their opposition to the government’s sought remand to the
Secretary for reconsideration of the unsuitability designation.
63. While the court in Utah International, does not clearly
express the two-prong test involving the eligibility and entitlement of a fee
petitioner, the analysis is consistent with the application of that framework.
64. Again relying upon Ruckelshaus, supra, the court determined
that “absent ‘some degree of success on the merits by the claimants’” a fee
petitioner is not eligible for such an award. [3]
Utah International, supra at 817.
65. With respect to the fee
petitioners’ entitlement to an award, the court relies upon Hensley, supra and its’ holding that
eligibility for an award of fees does not mandate an affirmative determination
of entitlement. Utah International at 826.
However the court notes “[o]ne of the considerations identified by the (Hensley) court was that, in cases where
a plaintiff succeeds on only some its claims for relief, fees should not be
awarded for work on unsuccessful claims which are unrelated to the successful
ones. This leaves us with the difficult
task of determining which of the petitioners claims were sufficiently related
to their successful claims to warrant an award for the time spent on them.” Id.
[VOLUME 11, PAGE 305]
66. It was determined that the
environmental organizations were “successful in their role as defendants, in
that they successfully maintained the existing unsuitability designation. They were not successful in their
cross-claims and counterclaims in that those claims were all dismissed.” The ultimate outcome being the execution of a
settlement in which “the status quo was essentially maintained” it was
determined that an award of fees for those efforts would be improper. Utah
International at 827.
67. However, the Court
determined that during judicial review the environmental organizations did
successfully defeat the government’s motion to remand the unsuitability
designation back to the Secretary for reconsideration and as such were entitled
to fees for that portion of the proceeding.
Id at 828.
68. The method employed for
determining entitlement to an award of fees in both Utah International and Babbitt
involved of the division of the litigation into phases and the separate
consideration as to the causal nexus of the fee petitioner’s activities and the
outcomes of each phase. Utah International at 825 and Babbitt at 821.
69. If it is determined that a
fee petitioner is entitled to an award of fees, the difficult task of assessing
the reasonableness of the fee award must be undertaken. Natural
Resources Defense Council, Inc., et al v. Office of Surface Mining Reclamation
and Enforcement, et al., 107 IBLA 339, (1989), Utah International, supra, Gateway Coal Co. v. Office of Surface
Mining Reclamation and Enforcement, 131 IBLA 212, (1994).
V. HEC’S
ENTITLEMENT TO A FEE AWARD
70. The determination of HEC’s
entitlement to an award of fees relating to its initiation of and participation
in the Foertsch Litigation begins with a review of HEC’s actions in the
prosecution of those proceedings and the final outcomes achieved as a result of
those actions.
71. At issue was Foertsch’s
permit amendment, designated by the Department as S-312-1. The Department’s approval of S-312-1
authorized Foertsch to dispose of coal combustion waste (CCW) from a power company on the Little Sandy #10 Mine in
monofills and layered with spoil. The
permit amendment allowed for CCW to be disposed of at a tonnage equal to the
tonnage of coal removed, or a rate of 1:1.
[VOLUME 11, PAGE 306]
72. HEC, based upon various
allegations of error in approving S-312-1, sought revocation of the permit and
a stay of effectiveness of the permit.
73. HEC’s allegations of error
relating to the approval of S-312-1 were set forth in detail it its petition
for review as follows:
…
7) The permit fails to meet the
requirements of ISMCRA (IC 13-4.1) and its regulations and does not comply with
requirements to supply information, characterize the site and its interactions
with CCW and monitor the disposal of CCW that are found in Memorandum 92-1.
8) The permit fails to define
or characterize the premining hydrologic balance as required by ISMCRA and its
regulations. The premining hydrologic
balance has also not been defined or characterized by the mining permit,
#S-00312, that is being amended by this permit.
9) Three aquifers have been
identified by monitoring wells in the permit area, but the permit fails to
characterize any of them as required by ISMCRA and its regulations. Bail tests done for the permit revealed
sufficient water in these aquifers to readily provide domestic water supply for
multiple residences making them aquifers that must be characterized and
protected under ISMCRA.
10) The permit does not provide
adequate site specific data about the permeability of strata in the mine or the
hydrology of the mine area as required by Memorandum 92-1 and ISMCRA. The extent of aquifers, direction of ground
water flow and rate of flow of ground water has not been determined correctly
or to any degree in most instances as required by Memorandum 92-1 and
ISMCRA. The permit fails to place
monitoring wells in positions that will monitor down gradient or up gradient
water from the CCW disposal areas as required by Memorandum 92-1 and
ISMCRA. The permit does not include six
months of baseline ground water monitoring data as required by Memorandum 92-1 and
ISMCRA.
11) The permit will deliberately
place millions of tons of toxic-forming material into direct contact with
ground water in the Little Sandy #10 Mine in violation of ISMCRA and its
regulations which prohibit such contact.
12) The permit provides no
analysis, detailed approximations or even projections of the leachate that will
form in the coal combustion waste (CCW) disposal areas. The permit has no detailed discussion of the
geochemistry that will take place as a result of CCW disposal as required by Memorandum
92-1 and ISMCRA.
13) The permit provides no plan
to monitor and avoid impacts to the offsite hydrologic balance as required by
ISMCRA and its regulations. Such a plan
would include monitoring groundwater at this mine down gradient from the
disposal sites once the postmining equilibrium of groundwater
[VOLUME 11, PAGE 307]
flow has been established so
that monitoring wells on the perimeter of the disposal areas will monitor more
than just ground water flowing into the mine.
The permit does not attempt to determine when this point in time will
occur and hence provides for no monitoring of groundwater at the Little Sandy
#10 Mine at this point in time. Evidence
from other mine dewatering operations implies that a much greater length of
time will be needed to monitor down gradient water from the disposal areas at
this mine than the period provided by the release of bonds for surface
revegetation.
14) The permit includes no plan
to minimize or remediate adverse impacts to the offsite hydrologic balance as
required by ISMCRA and its regulations. The permit establishes no levels of
contamination of ground water which if surpassed will trigger or require any
remedial activity.
15) The permit is not
complete. ISMCRA and its regulations
require that only administratively and technically complete permits be issued
so that a determination can be made that the protection of the hydrologic
balance has been assured and all other requirements of ISMCRA are being adhered
to by the permit. The following are
examples of the permit’s violation of this requirement:
·
The permit does not include any current ash leaching data from the
generators of ash that will be disposed at this site.
·
The copy of this permit provided to HEC by the Division of Reclamation
after the permit was issued, (which copy was paid for by HEC) includes no
information that characterizes the combustion and pollution control processes
that produce the ash from one of the generators.
·
Additionally the permit does not include data from six months of
baseline ground water quality monitoring, or any information about the
background water quality or water levels to have been measured by the
monitoring well that was to be installed near drill hole #3. All of this information and much additional
information which was requested as modifications to the permit in a letter
dated January 17, 1995 and signed by Michael Sponsler, Director of Division of
Reclamation, is not in the final permit as issued on May 10, 1995.
·
Similarly rather than committing to final drainage ways and surface
land contours required under ISMCRA and its regulations to be shown on a final
contour map, the permit states that disposal needs and requirements will allow
the operator to alter (to an unspecified extent) final contours, post mining
drainage ways and even the locations of monofills as the CCW disposal operation
proceeds.
16) The permit is based upon
statements and data known to be inaccurate in violation of ISMCRA and its
regulation. For example IDOR staff
concede that much of the baseline ground water quality monitoring data in the
permit for CCW monitoring wells #2 and #3 is of very questionable value and
probably resulted from improper methods and procedures being used to take
samples from the wells. The permit is
replete with other examples of inaccurate and/or completely incorrect
statements or assertions.
…
[VOLUME 11,
PAGE 308]
HEC’s Petition for Review, filed June 9, 1995, pages
2-4.
74. The Teeguarden Non-Final
Order summarized the issues to be determined as follows:
a. Whether or not the petition
for review was timely filed.
b. Whether or not collateral
estoppel applies to a number of issues.
c. Whether or not there is an
adequate characterization of pre-existing geological and hydrological
conditions.
d. Whether or not the
monitoring wells are sufficient in number, construction, and design.
e. Whether or not there is
adequate isolation and separation of the CCW to prevent damage from occurring.
f.
Whether or not the lack of compliance criteria should invalidate the
permit.
g. Whether or not there should
be a mechanism in the permit to restrict further land use or caution future
buyers.
h. Whether or not the amount of
CCW to be back filled should bear some relationship to the amount of coal
extracted.
i.
Whether or not some mechanism must be in place to require long term
monitoring of the site.
j.
Whether or not the testing of the proposed waste was adequate.
Teeguarden Non-Final Order,
page 4.
75. The administrative review of
S-312-1 continued for a period of sixteen (16) months, eventually requiring a
twelve (12) day administrative hearing, the testimony of numerous “highly
qualified biologists, hydrogeologists, chemists, geochemists and toxicologists
and approximately 275 pages of briefs.” Teeguarden Non-Final Order and HEC v. DNR
and Foertsch Construction Company, Inc., 7 CADDNAR 162, (February 1997).
76. It is not disputed that HEC
was the sole complaining party in the action, which was adverse to both the
Department and Foertsch, who were aligned in defense of S-312-1.
77. Whether one considers HEC’s
allegations regarding the impropriety of the Department’s approval of S-312-1
as stated in its original petition for review or as the substantive and
procedural issues were summarized in the Teeguarden Non-Final Order, it is
clear that HEC’s primary concerns related to the impacts of disposal of CCW
upon ground water and surface water within the area of the Little Sandy #10
Mine.
[VOLUME 11, PAGE 309]
78. ALJ Teeguarden included the
following four additional conditions on S-312-1, each of which involves surface
water and ground water issues raised by HEC:
·
…Place a condition on the permit requiring the mine to record an
affidavit with respect to the fact that CCW has been stored on the property
after storage has commenced for every coal lease involved in the disposal.
·
…Disposal pursuant to 92-1 should be restricted to an amount
approximately equal to the ash created by the coal removed or in this case,
approximately 25% of the total disposal tonnage approved in this permit.
·
…Include a condition in the permit which requires complete recharge of
the groundwater in and near the permit area and stabilized post-mining flow
before any petition for final bond release can be considered.
·
…Include a condition that no CCW may be stored until consistent,
meaningful, baseline data on groundwater for six separate months has been provided
to the department.
Teeguarden Non-Final Order, findings 165, 185, 194
and 223 and Part IV.
79. Each of the four conditions
established in the Teeguarden Non-Final Order resulted from HEC’s initiation of
and participation in the Administrative Review Phase.
80. HEC’s intent in initiating
its administrative review of S-312-1 was to establish the amendment’s failure
to meet the requirements of F-SMCRA or I-SMCRA in order to achieve its
revocation.
HEC
Post Hearing Brief, page 87, HEC Petition for Review.
81. HEC obviously did not
achieve one hundred percent (100%) success during the litigation associated
with S-312-1.
82. The Teeguarden Non-Final
Order was subsequently modified after the parties filed objections with the
AOPA Committee of the Commission.
83. The AOPA Committee’s
substantive modifications increased the amount of CCW that could be disposed to
fifty percent (50%), by tonnage, of the coal removed.
84. To establish entitlement,
HEC must only prove that its actions are causally related to the outcomes. WVHC,
Babbitt, Utah International, supra.
85. Without doubt HEC’s actions
of initiating and participating in the Foertsch Litigation bears a direct
causal nexus with the four conditions imposed upon S-312-1.
[VOLUME 11, PAGE 310]
86. Thus, HEC is entitled to an
award of fees.
VI. REASONABLENESS OF HEC’S SOUGHT FEES
87. Consistent with Utah International and Babbitt the entire proceeding for which
HEC is seeking fees is divided into the following four phases:[4]
·
“Administrative Review Phase,” which commenced on June 9, 1995
and concluded with the issuance of the Teeguarden Non-Final Order on October 6,
1996.
·
“Commission Objections Phase,” which commenced on October 7,
1996 and concluded with the issuance of the Commission Order on February 19,
1997.
·
“Judicial Review Phase,” which commenced on February 20, 1997
and concluded on September 13, 1999.
·
“Fee Petition Phase,” which commenced on March 24, 1997 and
continues herein. However, at HEC’s
request, only those fees incurred on or before May 31, 2002, associated with
this phase will be considered.
88. The instant proceeding
involves a situation in which HEC was only partially successful on the merits
of the Foertsch Litigation. Dissimilar
to Save Our Cumberland Mountains, supra,
but similar to Utah International, supra, and Sierra Club, et al. v. U.S.
Environmental Protection Agency, et al., 769 F.2d 796, (1985).
89. That HEC was partially
successful on the merits of the Foertsch Litigation says “little about whether
the expenditure of counsel’s time was reasonable in relation to the success
achieved.” Utah International, supra,
citing Hensley v. Eckerhart, 461 U.S. 424, 436-437.
90. Herein, while HEC is
entitled to fees for each phase of the Foertsch Litigation, the method
undertaken in determining the reasonableness of the fees sought by HEC is to
consider HEC’s success, or lack of success, with respect to each identified phase.
91. The theory of success based
determination of reasonable fees to be awarded is explained, on the basis of Hensley, in Sierra Club, supra,
Where a petitioner obtains excellent results, his
attorneys’ fees should be “fully compensate” for the hours worked; where the
petitioner has obtained only partial or limited success, his attorneys should
not be fully compensated.
In the instant case, the petitioners achieved a
modicum of success on some but not all of the issues that they raised, and thus
were granted some but not all of the relief they requested. The petitioners therefore deserve attorneys’
fees for some but not all of the time that they have expended in this
litigation.
at 802.
[VOLUME 11,
PAGE 311]
92. The administrative law
judge, at oral argument held on February 7, 2006, cited Farrar v. Hobby, 506 U.S.
103, 114 (1992) for the premise that “’the degree of the plaintiff’s overall
success goes to the reasonableness’ of a fee award…”
93. HEC, in its “Further Written
Response of Hoosier Environmental Council, Inc. To Questions and Comments at
Oral Argument of Presiding Administrative Law Judge” attempts to distinguish Farrar because at issue there was
a Section 1983 action. HEC states that
“Farrar has simply not been applied by either the United States Supreme Court
or the lower federal courts in the context of “whenever appropriate”
fee-shifting statutes such a SMCRA…”
94. While HEC is accurate that Farrar has not been directly applied to
F-SMCRA fee-shifting provisions, Hensley’s,
like Farrar’s, degree of success
based reasonableness of fee determination is based, is cited routinely in
F-SMCRA precedent setting cases. Utah International, Save Our Cumberland
Mountains, Inc., supra.
95. A discussion of HEC’s
overall success, or lack thereof, with respect to each separate issue relating
to each phase of the Foertsch Litigation is relevant to a determination of the
reasonableness of a fee award to HEC. Sierra Club, supra.
A. ADMINISTRATIVE REVIEW PHASE
96. The Department argues that
it should not be responsible for HEC’s fees associated with item “a,”
identified in the Teeguarden Non-Final Order, because Foertsch, not the
Department, initiated and solely prosecuted the claim that HEC’s petition for
administrative review was untimely filed.[5]
97. The Department’s contention
is well taken and is supported by decisions of the Interior Board of Land
Appeals. Gateway Coal Co. v. Office of Surface Mining Reclamation and
Enforcement, 131 IBLA 212,
(1994).
98. However, within the context
of previous Commission decisions, such an outcome would work an injustice
because while Foertsch raised the issue of timeliness relating to HEC’s
petition for review, as the regulatory authority over I-SMCRA, the Department
would have benefited from a dismissal of the proceeding on Foertsch’s motion if
Foertsch had succeeded. Hazelett, et al. v. Walbridge, et al. and
Department of Natural Resources, 10
CADDNAR 39,42, (2005) and Wheeler, et al. v. Peabody, Department of
Natural Resources and Town of Zionsville, 9 CADDNAR 193, 194, (2004).
[VOLUME 11, PAGE 312]
99. The Department additionally
argues that items “a” and “b,” as identified in the Teeguarden Non-Final Order,
are merely “procedural victories” that do not justify an award of fees pursuant
to Ruckelshaus as affirmed by Utah International.
100.
Contrary to the Department’s position, Utah International actually supports the award of fees for
procedural victories, where those victories are “integral” to a party’s
achievement of success on the merits of its claim. at 828.
101.
“It is often the case that one or more procedural victories are behind
a substantive victory,” thus the Department’s challenge to an award of fees to
HEC for its success in overcoming the challenge to the timeliness of HEC’s
petition for review and challenges based upon collateral estoppel is without
merit. Utah International at 828.
102.
HEC’s success as to the procedural attacks allowed for full
administrative review on the merits, which resulted in the modification to
S-312-1. As such HEC’s procedural
victories were integral to HEC’s success on the merits.
103.
At the heart of HEC’s substantive issues associated with the Foertsch
Litigation is the disposal of CCW, a solid waste regulated by the Environmental
Protection Agency (EPA). Teeguarden Non-Final Order. While CCW had not be characterized as a
hazardous waste by EPA, “HEC’s major concerns deal with the effect of stored
CCW on area ground water and surface water,” Id at 164, and it was determined that an “examination of CCW
storage must consider the following: a)
What RCRA metals and other water quality degrading materials are present? b)
What quantity of each potentially harmful element is present? c) What is the mobility of the potentially
harmful materials: and d) Are any materials present in the spoil that will
react with the CCW in such a way as to cause a problem?” Id.
104.
HEC’s petition for review can be generally encapsulated as seeking the 100%
prohibition of CCW disposal under S-312-1 in light of the possible interaction
of CCW with existing conditions and the relationship of these events to
identified aquifers readily able to provide domestic water supplies.
105.
Without question, the most significant of HEC’s victories with respect
to the Administrative Review Phase was the determination that the tonnage of
CCW disposed be restricted to approximately one-quarter of the tonnage of coal
removed. This determination, while modified
during the Commission Objection Phase (discussed
infra), resulted in a material alteration of the Department’s policy with
respect to its review of all CCW disposal permit applications.
[VOLUME 11, PAGE 313]
106.
Secondary substantive victories achieved by HEC were the requirement
that Foertsch record an affidavit advising future landowners of the CCW
disposal activity, the delay of final bond release until Foertsch has allowed a
complete recharge of the groundwater in and near the permit area and stabilized
post-mining flow, and the addition of a condition that no CCW may be stored
until consistent, meaningful, baseline data on groundwater had been provided by
Foertsch to the Department.
107.
However, HEC achieved absolutely no success in its efforts directed
towards the sufficiency of Foertsch’s characterization of pre-existing
geological and hydrological conditions, the sufficiency of monitoring wells,
the adequacy of isolation and separation of the CCW, the need for long-term
site monitoring and failed to achieve a 100% prohibition on the disposal of CCW.
108.
The difficulty with the determination of reasonableness of the fees
sought by HEC for the Administrative Review Phase is a determination whether
the individual issues upon which HEC achieved success are related to the
individual issues on which HEC was entirely unsuccessful.
109.
“Where a plaintiff presents in one lawsuit ‘distinctively different
claims for relief that are based on different facts and legal theories’, the
court cannot allow a plaintiff to recover fees on the unsuccessful claims: ‘The congressional intent to limit awards to
prevailing parties requires that these unrelated claims be treated as if they
had been raised in separate lawsuits, and therefore no fee may be awarded for
services on the unsuccessful claim.” Sierra Club, supra at 801.[6]
110.
There is no question that all of HEC’s claims in the Foertsch
Litigation involve the same legal theory, however it must be examined whether
each of HEC’s raised issues involves the same facts.
111.
To accomplish this task, a review of HEC’s substantive victories as
identified in the Teeguarden Non-Final Order is particularly enlightening.
112.
In determining that pre-mining geological and hydrological data
provided with the application for Permit S-312-1 was adequate, ALJ Teeguarden considered
in great detail the manner in which natural groundwater flows through strata of
varying degrees of permeability and the consideration that mining of any form
destroys those strata. In post mine
areas the material originally contained within the strata, be it sandstone,
limestone, etc., remain present but in boulder form thereby allowing
groundwater flow to occur more easily through faults and fissures between the
boulders instead of through permeable strata existing before mining occurred.
[VOLUME 11, PAGE 314]
113.
In determining that the number, design and construction of the
groundwater monitoring system applicable to S-312-1 was adequate, ALJ
Teeguarden continued his exploration of groundwater flow through post-mined
land areas and concluded that an “active mine site will destroy the
(groundwater) zone in the area of active mining.”
114.
ALJ Teeguarden, in furtherance of his determination relating to the
sufficiency of the groundwater monitoring system further concluded that the
massive pumping of groundwater from active mine operations allows old mine
areas to resaturate or “recharge.”
“Until total recharge occurs, the groundwater flow will be towards the
sink created by the pumping…” It was
concluded that total “recharge” of the groundwater is measured in “decades
rather than months or years” and may be continually impacted by other ongoing
mining or even large scale agricultural irrigation.
115.
In essence, ALJ Teeguarden agreed that a monitoring system surrounding
the mine area was more appropriate than the “zone” monitoring supported by HEC.
116.
A comparison of the evidence considered on HEC’s unsuccessful claims,
reveals that the considerations made by ALJ Teeguarden are directly related to
his conclusions on the issues to which HEC lays victorious.
117.
It is clearly the case that ALJ Teeguarden, while determining that
S-312-1 allowed for sufficient isolation and separation of the CCW from
groundwater exposure, such isolation and separation techniques were adequate
only when the amount of CCW disposal was reduced.
118.
The evidence discussed by ALJ Teeguarden with respect to groundwater
“recharge” obviously bears a direct connection to the imposition of a condition
that final bond release not be authorized until full “recharge” had occurred.
119.
ALJ Teeguarden, in reducing the amount of CCW disposal authorized by
S-312-1, acknowledges the “potential long term hazard” and “open invitation to
a problem” caused by placing CCW waste at a rate of 1:1 by tonnage with the
coal that was removed. In essence the
evidence in the Administrative Review Phase revealed that allowing CCW disposal
in the ratio approved by S-312-1 authorized the placement of four times the
solid waste than was extracted with the coal removal. Id. In so doing, ALJ Teeguarden refers back
to testimony regarding water quality and the flow of groundwater through both
mined and unmined areas that were discussed in the Teeguarden Order relating to
issues on which HEC was not successful.
[VOLUME 11, PAGE 315]
120.
Again, similar to the interrelationship between issues upon which HEC
achieved success and issues that HEC failed to gain victory is ALJ Teeguarden’s
determination that S-312-1 was approved absent “meaningful” baseline
groundwater monitoring data. In footnote
14, ALJ Teeguarden explains that “[t]he importance of baseline monitoring data
for RCRA metals and other substances of interest is that it is necessary to
have a good idea of the normal levels in the groundwater prior to CCW
disposal. Only then does the CCW
monitoring plan have validity in that groundwater samples after storage can be
compared to samples before CCW is present.
This line of analysis clearly correlates to the evidence presented
regarding the potential harmful effects of CCW upon groundwater that was more
extensively discussed in the sections of the Teeguarden Order associated with
the adequacy of the groundwater monitoring system.
121.
No person can dispute the conclusion that every issue HEC raised,
whether it succeeded on that individual issue or not, was interrelated involving
considerations of groundwater flow through mined and unmined land areas and the
long term impact of introducing CCW into that environment.
122.
As such there is no means by which the issues raised by HEC can be
characterized as “distinctively different” such that a fee award for the
Administrative Review Phase should be reduced on the basis of the number of or the
significance of HEC’s success versus lack of success with respect to any
individual issue.
B. COMMISSION OBJECTION PHASE
123.
Following issuance of the Teeguarden Non-Final Order, HEC, Foertsch,
and the Department filed objections with the Commission as authorized at IC
4-21.5-3-29. Foertsch’s Statement of Specific Objections; Foertsch’s Memorandum in
Support of Objections to More Restrictive CCW Volume Limits (Issue H); DNR’s
Request for Consideration and Partial Objections to the Report, Findings of
Fact, and Nonfinal Order of the Administrative Law Judge; DNR’s Summary of
Objections to Nonfinal Order; Objections of Hoosier Environmental Council to Findings
and Order of Administrative Law Judge.
124.
Foertsch sought to have the Commission strike twenty-three individual
findings thereby eliminating three of the
four (4) conditions, identified in finding #69, that were imposed upon S-312-1 by the
Teeguarden Non-Final Order. Foertsch’s Statement of Specific Objections,
page 17. Specifically, Foertsch
filed objections relating to (a) the imposition of a restriction in the volume
of CCW allowed for disposal, (b) the requirement to record a land use affidavit
revealing the disposal of CCW, and (c) the prohibition on its ability to seek
bond release until complete recharge of groundwater had occurred. Despite the fact that Foertsch had succeeded
in convincing ALJ Teeguarden that the techniques proposed to insure isolation
and separation of the CCW were adequate, Foertsch, filed objections with
respect to certain isolated findings relating to this issue as well.
[VOLUME 11, PAGE 316]
125.
The Department sought to have the Commission provide guidance relating
to Condition A [filing of affidavits in the property records revealing the
disposal of CCW] and Condition B [the limitation of CCW that may be disposed]
as well as have eight (8) identified findings and a footnote stricken from the
Teeguarden Non-Final Order. DNR’s
Request for Consideration and Partial Objections to the Report, Findings of
Fact, and Nonfinal Order of the Administrative Law Judge, page 15. Success by the Department at the Commission Objections
Phase would have effectively eliminated the restriction as imposed by the
Teeguarden Non-Final Order on the volume of CCW that could be disposed of at
the Little Sandy #10 Mine.
126.
HEC cites approximately seventy (70) findings and various footnotes
contained within the Teeguarden Non-Final Order with which it objected. Each of these findings represented matters
associated with each issue upon which HEC failed to achieve success during the
Administrative Review Phase as well as matters associated with issues upon
which HEC achieved partial success. HEC
concluded that the Teeguarden Non-Final Order “improperly allows the permit to
be approved subject to conditions, rather than denying the permit until the
application is accurate and complete as required by I-SMCRA….” The intent of HEC’s objections is a clear
and continuing effort to obtain revocation of S-312-1 and the 100% prohibition
on CCW disposal. Objections of Hoosier Environmental Council to Findings and Order of
Administrative Law Judge.
127.
More specifically, despite its success in having four (4) additional
restrictions imposed upon S-312-1, HEC filed objections alleging the
insufficiency of three (3) of those four (4) conditions (1. The added restriction
on the volume of CCW allowed for disposal. 2. The prohibition on Foertsch’s ability to
seek bond release until complete recharge of groundwater had occurred. 3. The requirement that Foertsch provide
meaningful baseline groundwater date before commencing storage of CCW). Additionally, HEC filed objections relating
to ALJ Teeguarden’s conclusions relating to Foertsch’s pre-mine site
characterization, the number and type of monitoring wells, the isolation and
separation of the CCW, and the failure to apply primary or secondary drinking
water standard to well water.
128.
After the conclusion of oral argument on the parties’ objections, the
Commission Final Order, which modified the Teeguarden Non-Final Order in two
areas, was entered on February 19, 1997.
Commission Final Order, page 1.
129.
The Commission Final Order deleted footnote #16, as requested by the
Department but more importantly modified the 75% restriction of CCW disposed by
increasing the total tonnage of CCW that may be disposed to fifty percent
(50%), or one-half the tonnage of coal being removed. Commission
Final Order, page 1.
130.
The increase in the amount of CCW disposal is directly contradictory to
HEC’s position with respect to its objections before the Commission and
directly in favor of Foertsch.
[VOLUME 11, PAGE 317]
131.
While in all other respects the Teeguarden Non-Final Order was affirmed
by the Commission, the largest victory achieved by HEC in the Administrative
Review Phase was undoubtedly struck a diminishing blow by the Commission.
132.
HEC failed to succeed with respect to any one of the issues upon which
it filed objections to the Teeguarden Non-Final Order and
as a result accomplished no additional achievements through its objections
filed with the Commission.
133.
In Save Our Cumberland Mountains,
the court recognizes that “Section 307(f) of the Clean Air Act, 42 U.S.C. §
7607(f), in language almost identical to 30 U.S.C. § 1270(d), allows the court
to award reasonable attorneys’ fees “whenever
it determines that such award is appropriate.”[7] Id at
1533, fn1, (emphasis added).
134.
HEC, in the Commission Objections Phase, set out not only to defend its
successes achieved in the Administrative Review Phase but it also filed its own
objections.
135.
HEC’s objections were far more extensive than either Foertsch’s or the
Department’s objections.
136.
Yet, HEC failed to achieve any additional accomplishments through its
own objections and was even unsuccessful in fully defending its previous success
accomplished in the Administrative Review Phase.
137.
In light of the numerous bases upon which HEC filed objections to the
Teeguarden Non-Final Order and its utter failure to achieve any success
whatsoever with respect to those objections combined with HEC’s further
inability to even maintain entirely the seventy-five percent (75%) reduction in
CCW disposal it achieved during the Administrative Review Phase, while HEC is
entitled to an award of fees for its participation in the Commission Objection
Phase, a determination to award 100% of the fees sought by HEC would be
inappropriate. Save Our Cumberland Mountains, supra.
138.
Of the total of eight (8) issues upon which objections were filed by
one or more of the parties, HEC was defending its earlier successes as well as
seeking further affirmative relief with respect to three issues upon which HEC
and Foertsch had filed objections that, with respect to one issue was joined by
the Department.
139.
HEC was entirely successful in defending its previous success with
respect to two (2) of the issues but failed to completely maintain the benefit
received on the third, arguably most important, accomplishment, which was the
limitation on the amount of CCW disposal that could occur.
[VOLUME 11, PAGE 318]
140.
While both HEC and Foertsch filed objections relating to the isolation
and separation of the CCW, Foertsch had succeeded in defending against HEC’s
challenge on this issue on the Administrative Review Phase and was merely
seeking the correction of certain isolated findings whereas HEC, who failed to
prevail on this issue in the Administrative Review Phase, was seeking to have
the Commission overturn ALJ Teeguarden’s ultimate conclusions on this
issue. Neither HEC, nor Foertsch,
accomplished anything with respect to their respective objections on this
issue.
141.
With respect to the remaining five (5) issues presented to the
Commission on objections, all were raised by HEC who achieved nothing with
respect to any of them.
142.
HEC successfully, either wholly or partially, defended against
Foertsch’s and the Department’s objections on three of eight issues but
achieved no additional successes with respect to matters it raised.
143.
Mathematically, success on three of eight issues warrants an award of
37.5% of the fees sought by HEC for the Commission Objections Phase.
144.
HEC did not totally succeed in defending the most important of its
three previous victories that were subject to objections and thus the 37.5%
award might arguably be subject to a reduction.
Conversely, it can also be posited that HEC’s arguments provided with
respect to objections upon which it failed to prevail were beneficial in the
Commission’s consideration of the three issues upon which HEC did prevail in
the Commission Objections Phase. Mindful
of these realities it is determined that an award to HEC of 37.5% of the total
fees sought for the Commission Objections Phase is appropriate.
C. JUDICIAL
REVIEW PHASE
145.
Foertsch and HEC each filed petitions for judicial review of the
Commission Order in the Daviess County Circuit Court on March 21, 1997. HEC’s
Verified Petition for Judicial Review and Foertsch’s Petition for Judicial
Review of Agency Action and for Other Relief.
146.
The Department, while being a party of necessity to the judicial
review, did not actively pursue judicial review of the Commission Order.
147.
HEC sought through judicial review to have the Commission’s actions
identified as arbitrary, capricious and an abuse of discretion for the reasons
set forth in its Objections before the Commission and because the “maximum
allowable volume of coal combustion waste adopted by the Commission is contrary
to the Commission’s findings.” HEC’s Verified Petition for Judicial Review,
paragraph 6.a. HEC more specifically alleged, in pertinent part, as
follows:
[VOLUME 11, PAGE 319]
1. Without waiving any of the
errors preserved by HEC’s objections, the most basic errors of the Commission
and of the Department of Natural Resources in modifying and approving permit
S-312-1, each of which require reversal, are summarized as follows:
a
The Commission arbitrarily doubled the maximum amount of coal
combustion waste which the Administrative Law Judge’s findings and recommended
order would allow to be dumped in the Little Sandy No. 10 Mine….
b
The Commission erroneously found…that the permit application adequately
characterized the pre-existing geology and hydrology of the area which would be
affected by the permitted waste-dumping. …
c
The Commission erroneously found that the monitoring wells are adequate
in number, construction and design to determine whether waters outside the
permit area are being or will be degraded by the coal combustion waste dump. …
d
The Commission erroneously held that federal SMCRA and I-SMCRA allow
the placing of coal combustion waste in direct contact with ground water, and
erroneously found that spoil is a “barrier” which will isolate coal combustion
waste from ground water or will minimize any ground water contamination.
e
The Commission erroneously held that the permit could not prohibit
lowering the quality of well water so much that it violates primary drinking
water standards, and, further, that the permit could not set any standards for
compliance, failure of which would constitute a permit violation requiring
corrective action. …
f
The Commission erroneously issued the permit with conditions, instead
of denying the permit until the application is accurate and complete as
required by I-SMCRA, and until the application demonstrates that surface and
ground water will be protected from pollution and will be degraded to the
minimum possible extent.
HEC’s Verified Petition for Judicial Review, pages
4-6.
148.
Again HEC contested the Commission’s findings with respect to each and
every issue upon which it had failed during the Administrative Review Phase and
the Commission Objection Phase and once again set out to obtain a complete
revocation of S-312-1 and 100% prohibition on CCW disposal.
[VOLUME 11, PAGE 320]
149.
Foertsch, while specifically identifying certain areas of error
committed by ALJ Teeguarden and the Commission, sought for the Daviess County
Circuit Court “to set aside the erroneous findings of fact and/or conclusions
of law and orders contained in the ALJ Report and affirmed by the Commission;
to declare the ALJ Report, as affirmed by the Commission, to be null, void,
unenforceable, and of no effect with respect to the errors identified above; to
set aside the erroneous findings of fact and/or conclusions of law and orders
made by the Commission as a consequence of the Commission Action; to declare
the Commission Action to be null, void, unenforceable, and of no effect with
respect to the errors identified above; …”
Foertsch’s Petition for Judicial
Review of Agency Action and for Other Relief, page 14. The errors identified by Foertsch, on
judicial review, were identified by incorporation of its objections
filed with the Commission.
150.
With HEC’s and Foertsch’s claims in the Judicial Review Phase being the
same as their respective claims in the Commission Objections Phase, HEC’s claims
on judicial review were again far more extensive than Foertsch’s and the total
number of issues remained the same.
151.
The Daviess County Circuit Court denied the petitions for judicial
review filed by both Foertsch and HEC and affirmed, in all respects, the
Commission Final Order.
152.
HEC, during judicial review, did succeed entirely in defending against
Foertsch’s claims of error but was entirely unsuccessful in accomplishing any of its additional
objectives on judicial review.
153.
The Department notes that it was not an
active party and argues that it should not be obligated to pay fees associated
with litigation between private parties. While Gateway Coal Co., supra and Natural Resources Defense Council, Inc., et
al. v. Office of Surface Mining Reclamation and Enforcement, et al, 107
IBLA 339, (1989) and Natural Resources
Defense Council v. Administrator, EPA, 595 F. Supp. 65, (D.C.D.C. 1984) do
offer some support for the Department’s position, in each of those cases the denied
portions of the fees related to segments of the litigation in which the private
party was actually aligned with the government.
In this instance HEC was never aligned with the Department.
154.
The rationale set
forth in findings 143 and 144 are equally applicable here.
155.
HEC is entitled
to an award of 37.5% of the fees sought for the Judicial Review Phase.
D. FEE PETITION PHASE:
156.
An award of fees under F-SMCRA, and thus I-SMCRA, may include payment
for costs incurred in the preparation and prosecution of a petition for
fees. Save Our Cumberland Mountains, Inc. v. Hodel, 651 F. Supp. 1528,
1536, (D.D.C. 1986) and Utah
International, at 831, citing Hernandez v. George, 793 F.2d 264, 269, (10th
Cir. 1986).
[VOLUME 11, PAGE 321]
157.
Consequently, it is reasonable to grant an award of reasonable fees
incurred by HEC in prosecuting the Fee Proceeding.
158.
However, in situations, such as this, where fee petitioners are
successful in obtaining a “fraction of the fee award originally sought” they
are also not “entitled to an award for all of the time spent prosecuting the
fee petition.” Utah International at 831.
159.
Therefore, HEC’s award of fees for the Fee Petition Phase is
determinable by awarding fees consistent with the percentage of the fees
recovered in the Foertsch Litigation. Utah
International, supra.
VII. HEC’S CLAIMED COSTS AND EXPENSES, INCLUDING
ATTORNEY FEES:
160.
A review of HEC’s fee submissions reveals that fees associated with the
Administrative Review Phase, the Commission Objection Phase, the Judicial
Review Phase and Fee Petition Phase are commingled and must be separated to
ascertain the fees associated with the phases to which HEC is entitled to an
award, the Administrative Review Phase and the Fee Petition Phase.
161.
First the total amount of fees sought by HEC must be calculated. The amount of fees sought are calculated at
the maximum amount sought, despite HEC’s subsequent reductions or withdrawals
of certain fees, and at the maximum hourly rate sought.
162.
Monetary amounts correlating to the following discussion are summarized
at Appendix B.
163.
The total amount, including expenses and attorney fees, requested by
HEC for the Foertsch Litigation and Fee Petition Phase is reasonably
ascertainable from HEC’s various affidavits and statements. Tender
of Affidavits in Support of Fee Petition, filed May 23, 2000; Tender of
Affidavit of Hendrik Haitjema in Support of Fee Petition, filed June 13, 2000;
Verified Statement of Chris A. Wrede, filed June 13, 2002; Verified Statement
of Tim Maloney Re: HEC Payments for Employee Time and Expenses, filed June 24,
2002; Verified Statement of Tim Maloney Re: HEC Payments for Time and Expenses
of Charles Norris, filed June 24, 2002; Verified Statement of Tim Maloney Re:
HEC Payments for Vendor Expenses, filed June 24, 2002, Verified Statement of Michael A. Mullett, filed November 5, 2001;
Verified Statement of June M. Lyle, filed November 5, 2001; Supplemental
Verified Statement of Michael A. Mullett, filed November 15, 2001; Supplemental
Verified Statement of June M. Lyle, filed November 15, 2001; Second
Supplemental Verified Statement of Michael A. Mullett, filed June 13,
2002.
[VOLUME 11, PAGE 322]
Total
Sought Attorney Fees and Salaries of HEC Employees:
164.
Max E. Goodwin (Goodwin), of
the Mann Law Firm who served as HEC’s counsel of record throughout the Foertsch
Litigation and a portion of the Fee Proceeding, submitted his affidavit dated
May 23, 2000. Tender of Affidavits in Support of Fee Petition. Goodwin stated that he had committed four
hundred fifty eight (458) hours and incurred expenses of $2,704.82.
165.
Goodwin stated in his affidavit that “in noncontingent fee cases my standard
hourly rate for my services has since the early 1990’s, been $150.00 per
hour…plus various hourly rates for the services of other attorneys and
paralegals in my law firm who assist me.
I have also used a rate of $225.00 per hour, payable at the successful
conclusion of a case, which includes an allowance for the assistance I receive
from my paralegal assistant and other attorneys in my firm and the lack of any
compensation until the conclusion of the case.”
Id.
166.
Chris A. Wrede, an associate in the Mann Law Firm, modified the
expenses incurred to a total of $3,057.59 and provided billing records in
confirmation of Goodwin’s commitment of 458 hours. Verified
Statement of Chris A. Wrede.
167.
Goodwin further acknowledges that Robert C. Fry, an attorney under
employment by HEC, performed most of the legal work in the years 1999 and 2000
and that Jeffrey Stant and Matt Waldo, both of whom are also employees of HEC,
were involved in “marshaling the documentary evidence and expert witnesses, and
helping me to organize HEC’s full participation throughout the administrative
proceedings.” Tender of Affidavits in
Support of Fee Petition.
168.
Robert C. Fry (Fry) confirms
that as counsel for HEC, he “assisted HEC’s attorney with legal research,
writing and document review through the entire judicial review process….” Tender
of Affidavits in Support of Fee Petition.
169.
Jeffrey Stant (Stant), HEC’s Executive Director, states that his
involvement commenced in June 1995 throughout which time he “assisted HEC’s
attorney in every aspect of this permit challenge, including permit review,
witness preparation, and preparation of legal pleadings.” Id.
170.
Matt Waldo (Waldo), who was for all relevant times HEC’s Solid
Waste Policy Director, “assisted HEC’s attorney with expert witness preparation
and review of hearing testimony in HEC’s challenge to the coal combustion waste
disposal permit…” Id.
171.
It is appropriate to “award fees based on the rates applicable at the
time the services were provided.” Save Our Cumberland Mountains, Inc., supra
at 1537.
[VOLUME 11, PAGE 323]
172.
According to billing records provided by the Mann Law Firm, Goodwin’s
applicable rate was $150.00 per hour. Verified Statement of Chris A. Wrede.
173.
Important to the determination that Goodwin was charging HEC at his
lower rate is Goodwin’s acknowledgement that his increased rate of $225.00 per
hour included paralegal services, which according to Goodwin was provided by
Fry, Stant and Waldo. Tender of Affidavits in Support of Fee
Petition.
174.
It is generally recognized that an award of fees for the use of
paralegals and law clerks is reasonable and fiscally responsible due to the
performance of tasks that might otherwise be performed by attorneys at greatly
increased hourly rates. Shell Oil Co. v. Meyer, 684 N.E.2d 504,
(Ind. App. 1997).
175.
There exists a distinct split of authority with respect to awarding
fees for the salaries of an entity’s employees for assistance provided to
outside counsel. Compare Salisbury Laboratories, Inc. v. Merieux Laboratories, Inc., 908
F.2d 706, (11th Cir. 1990),
which authorized an award of fees for employees assisting outside counsel; and
Burger King v. Mason, 710 F.2d 1480, (11th Cir. 1983), which refused to award fees for the
salaries of employees providing assistance to outside counsel.
176.
Without attempting to opine in general on the split regarding the award
of salaries for employees assisting outside counsel, in this particular
situation discretion dictates that HEC’s employees’ salaries be allowed.
177.
HEC’s evidentiary submission relating to Fry, Stant and Waldo confirm
that the services they provided equivocated the services of a paralegal. Tender
of Affidavits in Support of Fee Petition and Verified Statement of Tim
Maloney Re: HEC payments for Employee Time and Expenses.
178.
Goodwin’s billing records indicate that Goodwin charged HEC his lower
hourly rate, which did not include charges for paralegal services.
179.
Consequently, an award of fees to Goodwin at $150.00 (as opposed to his
$225.00 rate, which includes paralegal fees) requires that, in fairness, HEC be
compensated the salaries of those employees who fulfilled that paralegal
function. (see discussion infra)
180.
However, this rationale is inapplicable to the Fee Petition Phase
following the appearance of Mullett, Polk & Associates in March 2001.
181.
HEC has included within its evidence in support of fees relating to the
Fee Petition Phase, expenses associated not only with Michael A. Mullett (Mullett)
but also a paralegal, law clerks, legal interns, graduate law clerks and an office
administrator. Verified Statement of
Michael A. Mullett, Verified Statement of June M. Lyle, Supplemental Verified
Statement of Michael A. Mullett, Supplemental Verified Statement of June M.
Lyle, Second Supplemental Verified Statement of Michael A. Mullett.
[VOLUME 11, PAGE 324]
182.
It is not reasonable to conclude that the services of HEC employees
were necessary or reasonable in light of the team of actual legal professionals
and paraprofessionals assembled after the appearance of Mullett, Polk &
Associates. Therefore, any fees
requested by HEC related to Fry, Stant and Waldo for the Fee Petition Phase
that were incurred after March 2001 will be excluded.
183.
In March 2001, Michael A. Mullett (Mullett) of Mullett, Polk
& Associates, replaced Goodwin as the attorney of record and incurred fees
and expenses relating solely to the Fee Petition Phase.
184.
Mullet and his paralegal, June M. Lyle (Lyle) submitted a total
of five verified statements and supplemental verified statements with billing
records as evidence of attorney fees, costs and expenses.
185.
The final verified statement filed by Mullett “supersedes and replaces”
the previous verified statements and includes tabulation of all fees “from
March, 2001 (when Mullett & Associates first appeared in this matter),
through May, 2002. Second
Supplemental Verified Statement of Michael A. Mullett.
186.
While Mullett’s final verified statement claims a total of $29,825.56
in reasonable attorneys fees, costs and expenses, simple calculation of the
itemized fees equals only $24,825.56, a five thousand dollar ($5,000.00)
difference.
187.
The $5,000.00 discrepancy is undoubtedly the result of a retainer in
that exact amount identified by Mullett in his first verified statement. Verified Statement of Michael A. Mullett,
paragraph 8.
188.
The $5,000.00 retainer has been strenuously objected to by the
Department and has been a topic of countless briefs and debated at length. The Department’s objection is premised upon
the Indiana Rules of Professional Conduct, Rule 1.16(d), which requires that
all attorney fees be earned. The
Department supports its position by citing decisions requiring the refund of
any advance fee that has not been earned.
See Jennings v. Backmeyer, 569 N.E.2d 689, (Ind. App.1 Dist. 1991).
189.
Conversely, at oral argument and in HEC’s post oral argument brief, it
describes the $5,000.00 retainer as essentially a flat-fee for hours expended
in advance of entering an appearance in the instant proceeding and as such was
earned.
190.
Oral argument is not a forum for the receipt of evidentiary material
and evidentiary material on remand is restricted solely to that submitted by
the parties before issuance of the Penrod Non-Final Order. Entry
Regarding “Clarification of Position
on Remand of Petitioner Hoosier Environmental Council, Inc.,” paragraph 5,
issued December 13, 2005.
[VOLUME 11, PAGE 325]
191.
It is obvious from the billing records provided by Mullett with the
five verified and supplemental verified statements, that Mullett, Polk &
Associates maintains highly detailed records of billable hours.
192.
However, no billing records have been presented as evidence of hours
expended in advance of Mullett’s appearance in this proceeding.
193.
Affidavits of a fee petitioner’s counsel are generally insufficient to
establish prevailing market rates. Gateway, supra at citing Blum v. Stenson, 465
U.S. 886, (1984).
194.
Mullett’s affidavit with respect to the retainer is the only evidence
in the record by which it may be ascertained that a retainer of this type is
customary within the area’s legal profession and that evidentiary material is
simply insufficient to support an award of $5,000.00 to HEC.
195.
Fees properly awarded pursuant to 312 IAC 3-1-13(a) are only those
“costs and expenses reasonably incurred.”
196.
It is the case that fee shifting statutes are intended to promote
citizen participation, which in many instances may require the expertise of an
attorney. Save Our Cumberland Mountains, supra.
197.
However it is also necessary to avoid an award of fees that amounts to
a “windfall” for the attorney. Farrar v. Hobby, 506 U.S. 103 (1992).
198.
An award of attorneys fees based upon a “lodestar” calculation is
presumptively adequate. Save Our Cumberland Mountains and Utah
International, supra.
199.
“The determination of an appropriate award begins with the calculation
of a “’lodestar’ – the number of hours reasonably expended multiplied by a
reasonable hourly rate.” Save Our Cumberland Mountains, supra at 1532
and Utah International, supra.
200.
By its very definition, the “lodestar” does not contemplate the award
of fees in the form of retainers because there are no hours set forth to which a reasonable hourly rate may be applied.
201.
Awarding attorneys fees associated with a retainer is not only
contraindicated by the “lodestar” concept but would open the door for potential
abuse in such a manner as to produce windfalls for attorneys.
[VOLUME 11, PAGE 326]
202.
Furthermore, awarding fees in the form of a retainer circumvents the
fee petitioner’s burden to provide a detailed record of billable hours that
facilitates the opposing parties’ appraisal of the fee request. Save
Our Cumberland Mountains, supra at 1532.
203.
Mullett, Polk and Associates began representation of HEC while the Fee
Petition Phase was underway following the withdrawal of Max Goodwin, HEC’s
previous attorney of record. It is
reasonable that Mullett was required to conduct file review, client
consultation, research and other professional tasks before commencing
representation of HEC.
204.
It is not believed that Mullett set out to abuse the fee shifting
provisions of 312 IAC 3-1-13(a) by seeking fees associated with the retainer.
205.
Extensive review of applicable caselaw is void of any reference to an
award of fees associated with a retainer.
Gateway Coal Co., Natural
Resources Defense Council, Inc., Sierra Club, Utah International, Save Our
Cumberland Mountains.
206.
HEC cites Save Our Cumberland
Mountains as support for a fee award associated with its retainer. In fact, the Save Our Cumberland Mountains’ Court held only that “[if] and attorney
is involved in private practice the
hourly rate charged for his or her services is presumptively a reasonable
rate.” Emphasis added.
207.
Despite HEC’s numerous filings in support of an award of fees
associated with the retainer, it has produced no case specifically discussing
the concept of awarding fees for a retainer.
208.
Had Mullett, instead of seeking a fee award for pre-appearance
activities by means of a retainer, presented billing records as evidence of
hours associated with those pre-appearance activities, fees for those hours
multiplied by the reasonable hourly rate arguably could have been awarded
utilizing the “lodestar” formula.
209.
The Department maintains that Mullett’s $5,000.00 retainer amounts to a
violation of Rule 1.16(d) of the Indiana Rules of Professional Conduct. That is not decided here and is not a factor
in this analysis.
210.
It is determined that HEC simply failed to present evidence relating to
Mullett’s pre-appearance work hours in a manner that comports to the
requirements of Save Our Cumberland
Mountains.
211.
HEC’s invitation to expand the lodestar concept to allow recovery of a
retainer is declined.
[VOLUME 11, PAGE 327]
212.
Finding no means available to apply the “lodestar” formula to the $5,000.00
retainer sought by HEC it is determined that HEC has failed to bear its burden of proof with respect
to the $5,000.00 retainer and an award of fees relating to that amount must be
denied.
213.
HEC’s request for fees relating to Mullett, Polk and Associates’
representation during the Fee Proceeding Phase is reduced to $24,825.56.
214.
Expenses associated with Mullett, Polk & Associates’ representation
of HEC in the Fee Proceeding Phase equal $375.31.
215.
The remainder, $24,450.25 is attributed to 48.5 hours at $180.00 per
hour for Mullett, 142 hours at $100.00 per hour for Lyle (paralegal), 11.75
hours at 22.50 per hour for legal interns, 1.5 hours at $21.00 per hour for
legal interns, 6 hours at $37.50 for graduate law clerks, 19.5 hours at $35.00
per hour for law clerks and 9.75 hours at $32.50 for office administration.
216.
HEC initially sought fees for the services of Fry for 246 hours at
$16.67 for a total of $4,100.82 and expenses of $347.25. Tender
of Affidavits in Support of Fee Petition.
However, HEC modified that request on June 24, 2002 to reduce the
expenses to $298.50 and increase the hours to 254.75, for a total of
$4,246.68. Verified Statement of Tim Maloney Re: HEC Payments for Employee Time
and Expense.
217.
HEC initially sought fees relating to the services of Stant including
590 hours at $20.00 per hour for a total of $11,800.00 and $1027.40 in
expenses. On June 24, 2002 the hours
attributed to Stant’s work were confirmed but the expenses were reduced to
$672.90. Id.
218.
Sought fees associated with the services of Waldo were initially sought
at 60 hours and included $335.00 in expenses.
On June 24, 2002, Waldo’s hours were increased to 73.65 hours at $13.00
per hour, or $957.45, and his expenses reduced to $35.00.
Total
of Sought Fees for Unpaid Experts:
219.
Hendrik Haitjema (Haitjema),
Joseph Hailer (Hailer), Russell
Boulding (Boulding) and Anne Spacie (Spacie), each tendered affidavits in
support of an award of fees to HEC as follows.
Haitjema $2,850.00
Hailer $2,152.24
Boulding $4,065.60
Spacie $ 287.60
Tender of Affidavits
in Support of Fee Petition and Tender of Affidavit of Hendrik Haitjema in
Support of Fee Petition.
[VOLUME 11, PAGE 328]
220.
Each of these individuals provided expert testimony during the twelve
day administrative hearing, but did so on a voluntary, unpaid, basis. Transcript
of Objections Hearing, January 23, 1997, page 27.
221.
The Department objects to the award to HEC for fees relating to the
services of Haitjema, Hailer, Boulding or Spacie for the reason that HEC did
not “incur” any costs or expenses associated with these experts.
222.
HEC’s numerous evidentiary filings are devoid of evidence indicating
any actual expenses incurred by the involvement of Haitjema, Hailer, Boulding
or Spacie.
223.
The Department is correct with respect to HEC’s unpaid experts in that
an award would not constitute reimbursement for expenses “reasonably incurred.”
224.
Fees associated with Haitjema, Hailer, Boulding and Spacie are excluded
from further consideration.
Total
of Sought Fees for Paid Expert:
225.
HEC submitted the Affidavit of Charles Norris dated May 8, 2000 (Norris Affidavit), in which Mr. Norris
states that HEC compensated him the total amount of $12, 675.25 and reimbursed
expenses in the amount of $2,429.90. Tender of Affidavits in Support of Fee
Petition. However, on June 24, 2002,
HEC filed supplementation to the Norris Affidavit, which includes a
billing/payment ledger for “Foertsch Expense HEC.” Verified
Statement of Tim Maloney Re: HEC Payments for Time and Expenses of Charles
Norris. Therein, Tim Maloney,
increased the amount sought for HEC’s payments to Norris for services rendered
to $14,402.01, exclusive of expenses.
226.
Careful review of HEC’s billing/payment ledger relating to Norris
reveals however that on four occasions (4/17/96, 5/24/96, 12/30/96, 2/17/97) of
payment the “full amount of check is listed – includes payment for work on
other cases in addition to Foertsch.”
HEC provides no data upon which Norris’ compensation for the Foertsch
Litigation may be separated from other matters with respect to these four
incidents.
227.
Obviously, HEC’s modified claim of $14,402.01 is inflated and must be
ignored.
228.
However, nothing exists upon which to question the Norris’ affidavit
and as such $12,675.25 in hourly compensation and $2,429.90 for expenses must
be considered accurate.
[VOLUME 11, PAGE 329]
VIII. TOTAL FEES REASONABLY AWARDED TO HEC:
229.
A determination that a fee petitioner is both eligible for and entitled
to an award does not necessitate a determination that the total amount of fees
sought are reasonable. Natural Resources Defense Council v. Office
of Surfacing Mining Reclamation and Enforcement , 107 IBLA 339, (1989) determining that partially successful fee
petitioner was reasonably compensated for 763.75 hours, or 31%, of 2,428.61
hours claimed; Sierra Club v. Environmental Protection Agency, 769 F.2d
796, (1985) awarding partially successful
fee petitioner with compensation for 559 hours of the requested 800 hours; Save
Our Cumberland Mountains v. Hodel, 651 F.Supp. 1528, awarding completely successful fee petitioner with a full award of
sought fees minus twenty-five percent (25%) for the fee petitioner’s failure to
exercise billing judgment with respect to
work on the appeal portion of the case; Gateway Coal Co. v. Office of
Surface Mining Reclamation and Enforcement, 131 IBLA 212, (1994) determining that a fully successful fee
petitioner was entitled to fees for 311 hours of the total 339.5 hours claimed.
230.
It cannot be concluded that HEC obtained excellent results
substantiating an award of all of its fees.
See Hensley and Sierra Club,
supra; Finding 85.
231.
Similarly, it cannot be determined, as the Department proposes, that
HEC’s success was so dismal as to afford it only twenty-five percent (25%)
credit for the Administrative Review Phase and eight percent (8%) credit for
the Fee Petition Phase. Respondent DNR’s Proposed Findings of Fact
and Conclusions of Law with Final Order of the Natural Resources Commission.
232.
There exists no exacting method by which the reasonableness of a fee
award is to be determined. Natural Resources Defense Council, Inc.,
supra.
233.
However, the method utilized must consider the significance of the
issues upon which the fee petitioner prevails.
Id.
234.
The Interior Board of Land Appeals expressly stated that “[a] comparison
of total issues to those prevailed upon would not give weight to the relative
significance of issues. For example, if
a case presented 10 issues and the party seeking attorneys’ fees prevailed on
only one of them, a pure mathematical approach would dictate that the party was
only 10 percent successful, regardless of the relative importance of the
issues.” Id at 386.
235.
Methods utilized and accepted by the Interior Board of Land Appeals have
included a “page-counting method” by which the total number of pages devoted to
issues upon which a fee petitioner enjoyed success is identified in significant
pleadings and divided by the overall total number of pages within those same
pleadings in order to establish a percentage.
Id.
[VOLUME 11, PAGE 330]
236.
The Interior Board of Land Appeals, while accepting the “page-counting
method” as a useful aid in the particular case being considered, recognized the
“deficiencies inherent in such a method” and stated that it “expressly declines
to adopt the page-counting method for all cases.” Id at
386.
237.
An award of fees associated with I-SMCRA must be “reasonably
incurred.” 312 IAC 3-1-13(a).
238.
The fee petitioner bears the burden of documenting time and expenses
sufficiently to allow for appraisal by the court and opposing counsel. Save Our Cumberland Mountains, supra at
1532.
239.
The fee petitioner is also responsible for the subtraction of
unproductive or excessive time and expenses.
Id citing Copeland v. Marshall, 641 F.2d 880, 891, (D.C. Cir. 1980).
240.
The commonly favored method of computing reasonable fees is to commence
with an examination of the lodestar, or the number of hours reasonably expended
multiplied by a reasonable hourly rate. Utah International, at 828, citing Hensley
v. Eckerhart, 461 U.S. 424, 433.
241.
Consistent with the theory of degree of success based fees is the
determination that where fee petitioners enjoy only limited success in
obtaining the full award of fees sought, a fee petitioner’s award for the
prosecution of a fee petition should be restricted to the percentage of the fee
actually awarded for the underlying litigation.
Utah International at 831.
242.
The Commission Objections Phase commenced on October 11, 1996 and ended
with the issuance of the Commission’s Final Order on February 19, 1997. The Judicial
Review Phase began immediately thereafter and terminated
on September 13, 1999.
243.
It is relatively simple to separate fees claimed for the Administrative
Review Phase and the Commission Objection Phase from
those claimed for other phases of the Foertsch Litigation. However, HEC’s Petition for Fees was filed on
March 27, 1997, during the pendency of the Judicial Review Phase and was
contested actively until placed in abeyance on December 2, 1997.
244.
HEC bears the burden of identifying the sought fees associated with
each phase of the Foertsch Litigation and Fee Petition Phase. Utah
International, footnote at 831, citing Ramos v. Lamm, 713 F.2d 546, 553,
(10th Cir. 1983). Where this
has not been done and hours cannot reasonably be attributed to phases for which
HEC is entitled to fees, those hours must be disallowed. Utah
International.
[VOLUME 11, PAGE 331]
245.
For those fees and expenses incurred during the overlapping period
associated with the Fee Petition Phase and the Judicial Review Phase, the
administrative law judge has, consistent with Utah International, endeavored to estimate fees and expenses
associated with each respective phase. At 831.
246.
Goodwin’s billing records and affidavit allow for relative ease in
separating those fees associated with hours worked between October 11, 1996 and
September 13, 1999. Tender of Affidavits in Support of Fee Petition and Verified Statement
of Chris A. Wrede. According to the
billing records, Goodwin expended 98.5 hours on the Foertsch Litigation between
October 24, 1996 and June 2, 1998, which includes 2.75 hours in 1998. Verified
Statement of Chris A. Wrede.
Additionally, Goodwin’s affidavit states that he expended a minimum of
ten (10) hours in 1998 and a minimum of twenty (20) hours in 1999. Tender
of Affidavits in Support of Fee Petition.
247.
A portion of Goodwin’s hours during this period relate to HEC’s
Petition for Fees, which was filed on March 24, 1997. A review of Goodwin’s billing records for
hours between October 11, 1996 and September 13, 1999 relating to the fee
petition have been identified as a total of two (2) hours occurring on March
19, 1997 and September 12, 1997. Verified Statement of Chris A. Wrede.
248.
Therefore, Goodwin will be credited with two hours in 1997 and twenty
(20) hours in 2000 at $150.00 per hour, or $3300.00 for work relating to the
Fee Petition Phase.
249.
Goodwin does not provide any specificity regarding the twenty hours of
work in 1999. While the twenty (20)
hours would relate to either the Judicial Review Phase or the Fee Petition
Phase, the hours cannot be reasonably separated in order to apply the
appropriate award percentage.
Consequently, the full twenty (20) hours must be excluded.
250.
Of Goodwin’s
total hours expended, or 458 hours, it is determined that 312.25 hours amounting to $46,837.50, is applicable
to the Administrative Review Phase. Goodwin
is also attributed with spending 70.75 hours on the Commission Objection Phase
and 23 hours on the Judicial Review Phase for a total claim of $14,062.50, of
which total amount an award of 37.5%, or $5,273.44, is appropriate.
251.
Goodwin also
provided an expense report, which reveals that between August 25, 1995 and July
25, 1996, during the Administrative Review Phase, he incurred expenses of $1,027.31.
Verified Statement of Chris A.
Wrede.
252.
Goodwin’s expense report indicates that
expenses incurred relating to HEC’s Petition for Fees were incurred on March
21, 1997, August 19, 1997, September 12, 1997, April 6, 2000, May 23, 2000 and
June 13, 2000 totaling $364.63. Id.
[VOLUME 11, PAGE 332]
253.
The remainder of
expenses reflected on Goodwin’s expense report for the period between October
11, 1996 and September 13, 1999 are identified as $568.21 being clearly related to the Commission Objections Phase and
$1,097.44 associated with the Judicial Review
Phase.
254.
Consequently, HEC is also entitled to an award of $624.62, which
represents 37.5% of Goodwin’s expenses of $1,665.65 associated with the
Commission Objections and Judicial Review Phases.
255.
HEC provided time
sheets for its employees, Fry, Stant and Waldo, from which time expended with
respect to the four phases of the Foertsch Litigation can be reasonably
ascertained. Verified Statement of Tim Maloney Re: HEC Payments for Employee Time
and Expenses.
256.
The totality of Fry’s time was expended between June 4, 1998 and April
28, 2000.
257.
Because the Administrative Review Phase concluded with the issuance of
the Teeguarden Non-Final Order on October 10, 1996, it is clearly ascertainable
that none of Fry’s time or claimed expenses relate to the Administrative Review
Phase.
258.
While Fry’s hours
were accumulated while both the Judicial Review Phase and the Fee Petition
Phase were underway, the Fee Petition Phase was
placed in abeyance from December 2, 1997 until January 3, 2000. NRC
Hearings Docket. Therefore, it is
reasonable to infer that the purpose of the 203 hours
expended between June 4, 1998 and August 26, 1999 on
“file review,” “responses to Foertsch motions,” “motions to stay,” “briefs” and
“hearings in
259.
The time sheet expressly states that hours expended by Fry on August
26, 1999 did relate to HEC’s fee petition.
It can therefore be assumed, since judicial review had concluded and the
only matter remaining was the Fee Petition Phase that all hours expended by Fry
after August 26, 1999 also related to HEC’s fee petition. Fry’s billable hours cease on April 28, 2000,
before the appearance of Mullett, Polk & Associates.
260.
Consequently, 51.75 of Fry’s claimed hours at a rate of $16.67 per
hour, or $862.67 will be included for the Fee Petition Phase and 203 hours will
be included for the Judicial Review Phase.
261.
Fry’s expenses reasonably related to the Fee Petition Phase include
$118.00 for mileage and $180.50 associated with the Judicial Review Phase.
[VOLUME 11, PAGE 333]
262.
With respect to Fry’s claimed hourly fees of $3,384.01 and expenses of
$180.50 for the Judicial Review Phase, which total $3,564.51, HEC is awarded
$1,336.50, or 37.5%.
263.
Time sheets provided for Waldo, reveal that all hours, with the
exception of six (6) hours on July 2, 1998, relate to the time between March
14, 1996 and August 30, 1996, thus indicating they relate solely to the
Administrative Review Phase. The
Administrative Review Phase was concluded before July 2, 1998 and these hours
for Waldo accrued while the Fee Petition Phase
was in abeyance, thus six (6) hours, or $78.00, of HEC’s claimed fees for Waldo’s
services are reasonably determined to have related to the Judicial Review Phase.
264.
Expenses of $35.00 claimed for Waldo
also relate to activities on the Judicial
Review Phase. Consequently, HEC is entitled to an award of
37.5% of Waldo’s total Judicial Review Phase claim, or $42.38.
265.
Stant’s time sheet reveals that of the 590 total hours, 527 hours
related to the time extending up to October 10, 1996, the end of the
Administrative Review Phase.
266.
Sixty one and one half (61.5) of Stant’s remaining claimed hours were
expended between October 26, 1999 and June 4, 1999 during the overlap of the
Judicial Review Phase and the Fee Proceeding Phase.
267.
Stant’s time sheets provide insufficiently detailed information by
which to ascertain how many, if any, of those 61.5 hours relates to the Fee
Proceeding Phase or the Judicial Review Phase such that appropriate percentage
calculations may be made. Therefore,
these hours must be disallowed.
268.
Stant’s remaining 1.5 hours were expended on December 27, 1999 and April
21, 1999 following the conclusion of the Judicial Review Phase and may
reasonably be inferred to relate to the Fee Proceeding Phase. Those hours were also billed before the
appearance of Mullett, Polk & Associates in March 2001.
269.
Consequently, 61.5 hours, or $1230.00 is disallowed. Of the allowed hours, 527 are attributed to
the Administrative Review Phase and 1.5 hours are attributed to the Fee
Proceeding Phase.
270.
Stant’s expenses are all incurred during the Administrative Review
Phase and are therefore not subject to reduction.
271.
With respect to fees sought relating to Charles Norris, it is clear
that all fees paid by HEC, that have been allowed for consideration (see discussion supra), were incurred by
HEC before the Teeguarden Non-Final Order was issued on October 10, 1996 and as
such all fees and expenses are related to the Administrative Review Phase.
[VOLUME 11, PAGE 334]
272.
Here, HEC initially sought fees totaling $144,683.42[8]
for its involvement in the Administrative Review Phase, the Commission Objection
Phase and the Judicial Review Phase of the Foertsch Litigation. See
Exhibit A, attached, for breakdown of fees.
273.
Pursuant to the previous discussion, HEC will be awarded $75,061.95 for
the Administrative Review Phase as well as $7,277.13, which amount represents
37.5% of HEC’s total claim associated with the Commission Objections Phase and
the Judicial Review Phase. HEC’s total
award for the three phases of the Foertsch Litigations equals $82,339.08.
274.
The actual award to HEC represents fifty seven percent (57%) of its
original claim for fees for its initiation of and participation in the Foertsch
Litigation.[9]
275.
While HEC has never, and does not now, waiver in its contention that
the total amount of fees incurred throughout all phases of the Foertsch
Litigation and the Fee Proceeding Phase should be awarded, it did through a
word-counting method (counting the words contained within the Teeguarden
Non-Final Order applicable to issues upon which it achieved success divided by
the total number of words contained within the Teeguarden Non-Final Order)
ascertain that if SALJ Penrod determined that it was entitled to “recovery of
the percentage of Mr. Goodwin’s costs and expenses related only to issues upon
which HEC substantially prevailed, HEC would be entitled to recover $49,175.99”
of Goodwin’s total sought fee of $105,754.82.
Brief in Support of Proposed
Findings of Fact, Conclusions of Law and Order of Claimant Hoosier
Environmental Council, filed November 5, 2001.
276.
In Natural Resources Defense
Council, Inc., the page-counting method, similar to the word-counting
method undertaken by HEC, was applied to the entirety of the substantive issues
and would be equally applicable to not only Goodwin’s fee but to all phases of
the Foertsch Litigation.
277.
An award of $49,175.99 of $105,754.82 amounts to only a forty-six
percent (46%) recovery rate.
278.
However, the Teeguarden Non-Final Order clearly indicated that evidence
discussed with respect to issues upon which HEC failed to succeed was also
important to a determination of those issues upon which HEC did succeed. With that in mind, arguably, on one hand, HEC’s
word-counting method utilizing the Teeguarden Non-Final Order gives HEC insufficient
credit. However, on the other hand the
word-counting method involving the Teeguarden Non-Final Order may provide to
HEC too much credit in that this method fails to consider the reduction in
HEC’s success following the Commission Objection Phase during which the amount
of CCW authorized for disposal was increased over HEC’s objections.
[VOLUME 11, PAGE 335]
279.
While the means undertaken herein to calculate the reasonable fees to
which HEC is entitled are entirely different than the method undertaken by HEC,
a fifty-seven percent (57%)[10]
fee recovery is greater than HEC’s own success based calculations.
280.
It is believed that the method utilized herein more accurately reflects
the true degree of HEC’s success and accommodates HEC in a manner consistent
with its accomplishments.
281.
This result improves by eleven percent (11%)[11]
HEC’s own calculations for determining a partial fee recovery using the
word-counting method.
282.
Pursuant to Utah International,
HEC’s award for fees relating to the Fee Petition Phase must be reduced by
forty-three percent (43%)[12].
283.
The total amount claimed by HEC, and not disallowed, for the Fee
Petition Phase is $29,500.86.
284.
HEC’s award for its prosecution
of the Fee Petition Phase is $16,815.49.
[VOLUME 11, PAGE 336]
285.
The following table represents the total award of fees reasonably
awarded to HEC[13].
|
Administrative Review Phase |
Fee Proceeding Phase |
||
|
Hour Based Fees |
Expenses |
Hour Based Fees |
Expenses |
Fry |
------------------ |
------------------- |
$ 862.67 |
$118.00 |
Stant |
$10,540.00 |
$ 672.90 |
$ 30.00 |
---------------- |
Waldo |
$ 879.45 |
------------------- |
------------------- |
---------------- |
Norris |
$12,675.00 |
$ 2,429.90 |
------------------- |
---------------- |
Goodwin |
$46,837.50 |
$ 1,027.31 |
$ 3,300.00 |
$364.63 |
Mullett |
-------------------- |
------------------- |
$24,450.25 |
$375.31 |
SUB-TOTAL |
$70,931.95 |
$4130.11 |
$28,642.92 |
$857.94 |
TOTAL |
$75,061.95 |
$16,815.49 ($29,500.86 reduced by 43%) |
|
COMMISSION OBJECTION PHASE |
JUDICIAL REVIEW PHASE |
||
|
Hour Based Fees |
Expenses |
Hour Based Fees |
Expenses |
Fry |
--------------------- |
----------------- |
$ 3,384.01 |
$ 180.50 |
Waldo |
--------------------- |
----------------- |
$ 78.00 |
$ 35.00 |
Norris |
--------------------- |
----------------- |
--------------------- |
----------------- |
Goodwin |
$10,612.50 |
$ 568.21 |
$ 3,450.00 |
$ 1,097.44 |
Mullett |
--------------------- |
----------------- |
--------------------- |
----------------- |
SUB-TOTAL |
$10,612.50 |
$ 568.21 |
$ 6,912.01 |
$ 1,312.94 |
TOTAL |
$4,192.77 ($11,180.71
reduced by 62.5%) |
$3,084.36 ($8,224.95
reduced by 62.5%) |
||
GRAND TOTAL $99,154.57 |
[VOLUME 11, PAGE 337]
IX. ADJUSTMENTS TO THE LODESTAR:
286.
The reasonableness of fees sought must be determined from the basis of
a “strong presumption that the lodestar represents the reasonable fee to which
counsel is entitled.” Utah International, supra, citing Blum v.
Stenson, 465 U.S. 886, 897, (1984).
287.
From that base, adjustments, either upward or downward, may be made
based upon the specific evidence. Id citing Pennsylvania v. Delaware Valley
Citizens’ Council, 478 U.S. 546, (1986).
288.
Various factors, including the achievement of exceptional results, the
novelty or difficulty of the issues involved, the degree of skill required by
counsel, the contingent nature of a fee award, as well as the delay in payment
of the award, have been argued as a basis for upward adjustments to the
lodestar. Utah International, supra, Save Our Cumberland Mountains, Inc., supra.
289.
Hensley has been cited as “explicit”
authority in support of an upward adjustment of the lodestar for exceptional
success on the merits. Save Our Cumberland
Mountains, Inc. supra at 1542.
290.
Put simply, if Hensley
provides authority for an upward adjustment of the lodestar based upon
“exceptional success” in F-SMCRA proceedings, and F-SMCRA decisions rely upon Hensley for that upward adjustment,
logic dictates that Hensley also
provides authority for a downward adjustment of the lodestar for limited
success. Id.
291.
An upward or downward adjustment to the lodestar may only be granted if
the party seeking such adjustment provides justification through specific
evidence. Utah International, supra at 828, citing Pennsylvania v. Delaware, supra.
292.
The lodestar relating to the Administrative Review Phase of the
Foertsch Litigation, and the amount strongly presumed to be reasonable for an
award to HEC, is $75,061.95.
293.
As might be expected HEC contends that certain fees should be increased
from the lodestar, while the Department seeks a reduction from the lodestar.
HEC’s
Request for Upward Adjustment to Lodestar:
294.
HEC has, throughout its briefings in the Fee Petition Phase, sought an
award of fees for Goodwin at his increased rate of $225.00 per hour.
[VOLUME 11, PAGE 338]
295.
In the Department’s mind this would be tantamount to the application of
a 50% multiplier applied to the “rate level” reflected in Goodwin’s billing
records. Verified Statement of Chris A. Wrede. While the determination has
been previously made to allow certain portions of Goodwin’s fee associated with
the Administrative Review Phase and the Fee Petition Phase at $150.00, it is
important to discuss the inapplicability of HEC’s sought 50% multiplier with
respect to Goodwin’s fee.
296.
HEC’s support of awarding Goodwin’s fee at the higher $225.00 per hour
rate is partially speculative. HEC
states, “in all likelihood, the
$225.00 per hour rate is less than the market rate of recovery Mr. Goodwin is
entitled” under Save Our Cumberland
Mountains, which supports the premise that in certain situations attorneys
fees should be awarded based upon market rate.
Goodwin, himself states that he is only “reasonably certain” his $225.00 rate is less than the fee charged
by similarly skilled attorneys in similar types of litigation. Brief
in Support of Proposed Findings of Fact, Conclusions of Law and Order of
Claimant, Hoosier Environmental Council, filed November 5, 2001 (emphasis added),
Tender of Affidavits in Support of Fee Petition.
297.
HEC’s reliance upon Save Our
Cumberland Mountains is misplaced here.
298.
Involved in Save Our Cumberland
Mountains was the proper hourly rate applicable to an attorney whose primary
practice involved public interest litigation for which rates were reduced but
which attorney also maintains some private practice clients who are billed at
market rates. Under that scenario, it
was concluded that the attorneys should be compensated at customary market
rates as opposed to the reduced public interest billing rate.
299.
What HEC fails to address is the holding by Save Our Cumberland Mountains that “if an attorney is involved in
private practice the hourly rate charged for his or her services is
presumptively a reasonable rate.” The
court further determined that even with respect to “private public-interest
attorneys,” as they were characterized by the court, that “in almost every
case, a firm’s established billing rate is the ‘reasonable’ rate.” At 1537
and 1540. See also Laffey v. Northwest Airlines, Inc., 572 F.2d.4, 16-17.
300.
There is no evidence in the record of this proceeding that Goodwin’s
practice involved primarily litigation of public interest matters for which he
charged decreased hourly rates.
301.
Nothing contained in the record reveals that the “rate level” of
$150.00 indicated in Goodwin’s own billing records was anything other than his
customary market rate, which excluded paralegal services.
[VOLUME 11, PAGE 339]
302.
This is especially true since there is no evidence to support even an
inference that Goodwin’s firm dedicated paralegal support to the Foertsch
Litigation or the Fee Petition Phase.
Instead, what is clearly evidenced in the record is that HEC employees
served in that role.[14]
303.
The other justification for application of Goodwin’s $225.00 per hour
rate is to accommodate for the “lack of compensation until the conclusion of
the case.” Brief in Support of Proposed
Findings of Fact, Conclusions of Law and Order of Claimant, Hoosier
Environmental Council, filed November 5, 2001 (emphasis added), Tender of
Affidavits in Support of Fee Petition.
304.
Goodwin’s affidavit is clear and undisputed that his customary rate is
$150.00, exclusive of paralegal fees, and $225.00, inclusive of paralegals and
for extra compensation for delayed payment.
305.
Accommodating for delay in compensation through an upward adjustment of
the lodestar was rejected in Utah
International, supra at 830. In its
determination, the court likened an upward adjustment of an attorney fee as an
adjustment for delayed compensation to an award of interest, which had been
previously denied. See Library of Congress v. Shaw, 478
306.
HEC does not provide any
evidence sufficient to overcome the presumption that Goodwin’s “rate level” of
$150.00 is reasonable.
307.
Thus, HEC’s request for a 50% upward adjustment for the services
rendered by Goodwin is denied.
Department’s
Request for Downward Adjustment to Lodestar:
308.
The Department, in support of its position that the lodestar should be
reduced cites primarily HEC’s limited success in obtaining the addition of
conditions to S-312-1 in combination with the Department’s own limited success
in defending the issuance of S-312-1.
309.
This presents an interesting question that has not exactly presented
itself in any F-SMCRA decision previously cited[15]
except in the context of an award for prosecution of a petition for fees.[16]
[VOLUME 11, PAGE 340]
310.
However, the concept of a downward adjustment has been discussed in Hensley, supra, which has been cited as
support in F-SMCRA proceedings for an upward adjustment and thus will be used
to analyze the Department’s downward adjustment request.
311.
Hensley recognizes that a critical
factor in evaluating a fee awards’ reasonableness is “the degree of success
obtained.” At 436.
312.
However, unlike proceedings involving strictly money damages, consideration
must be given to the effect of the litigation on policy changes when the matter
at issue involves public policy and governmental regulation. See Babbitt, at 821.
313.
In the Administrative Review Phase of the Foertsch Litigation it is
conceded by HEC that they did not achieve 100% success. In addition to HEC’s failure to obtain the
revocation of S-312-1, HEC also failed to prevail on its claims that the
Department’s approval was based upon insufficient site characterization data,
that the number, location and depth of monitoring wells was insufficient, that
the CCW was insufficiently isolated from contact with ground and surface water
(with the exception of the gains regarding the restriction on amount of CCW
disposed), or that the Department should impose an enforceable water quality
standard to protect against water quality degradation.
314.
However, HEC did succeed on two procedural matters that were integral
to the Foertsch Litigation reaching a decision on the merits. Those procedural triumphs lead to the
imposition of four additional substantive conditions to S-312-1. Specifically, HEC succeeded in obligating the
coal company to provide notification to future real estate purchasers of the
existence of CCW waste, in requiring six months of accurate and useable water
quality to be collected in advance of any disposal of CCW, delaying any
possibility of full bond release until long term monitoring of the site was
possible and gaining restrictions on the disposed CCW to 50% of the tonnage of
coal removed.[17]
315.
Even the Commission recognized that the issue of CCW disposal had been
a topic of great concern and debate for “many years.” Transcript
of the Objections Hearing, January 23, 1997.
316.
While three of HEC’s achievements pertained solely to S-312-1, the CCW
disposal restriction has, without dispute, materially altered the Department’s
evaluation of all applications for CCW disposal permits since the Foertsch
Litigation concluded.
[VOLUME 11, PAGE 341]
317.
The CCW disposal restriction can only be characterized as a major
success by HEC in the Foertsch Litigation.
318.
While HEC did not obtain revocation of S-312-1 or all of the conditions
relating to the disposal of CCW that it set out to obtain, the successes it did
achieve were legally significant and materially altered certain policies of the
Department.
319.
It is inappropriate to award fees for time spent on claims that were
unsuccessful to the extent they can be separated from successful claims. Utah
International, at 826.
320.
However, the issues presented by HEC in the Foertsch Litigation,
largely, if not exclusively, related to ground water and surface water
protection. The Department has not,
through specific evidence, identified any issue undertaken by HEC in the
Foertsch Litigation for which the evidence, legal briefing or other activity related
solely to HEC’s unsuccessful claims such that expenses relating to the
unsuccessful claims may be separated from the expenses relating to claims upon
which it achieved success.
321.
The Department has failed to sustain its burden in overcoming the
presumption of reasonableness of the lodestar with respect to the
Administrative Review Phase.
322.
The Department’s sought downward adjustment of the lodestar is
similarly denied.
[VOLUME 11, PAGE 342]
APPENDIX A[18]
Total Fees Sought By HEC For
Foertsch Litigation:[19]
Goodwin
436 hours at $225.00 $98,100.00
Expenses $ 2,692.96
Fry
254.75 hours at $16.67 $ 4,246.68
Expenses $ 229.25
Waldo
73.65 hours at $13.00 $ 957.45
Expenses $ 335.00
Stant
588.5 hours at $20.00 $11,770.00
Expenses $ 1,027.40
Haitjema
Total Claim $ 2,850.00
Hailer
Total Claim $ 2,152.24
Boulding
Total Claim $ 4,065.60
Spacie
Total Claim $ 287.60
Norris
Total Claim $16,831.91
HEC’S TOTAL “FOERTSCH
LITIGATION” CLAIM $144,683.42
[VOLUME 11, PAGE 343]
APPENDIX B
Total Fees By Phase Sought
By HEC:[20]
|
ADMINISTRATIVE REVIEW PHASE |
FEE PROCEEDING PHASE |
||
|
Hour Based Fees |
Expenses |
Hour Based Fees |
Expenses |
Fry |
------------------ |
------------------- |
$ 862.67 |
$118.00 |
Stant |
$10,540.00 |
$ 672.90 |
$ 30.00 |
---------------- |
Waldo |
$ 879.45 |
------------------- |
------------------- |
---------------- |
Norris |
$12,675.25 |
$ 2,429.90 |
------------------- |
---------------- |
Goodwin |
$70,256.25 |
$ 1,027.31 |
$ 4,950.00 |
$364.63 |
Mullett |
-------------------- |
------------------- |
$24,450.25 |
$375.31 |
SUB-TOTAL |
$94,350.95 |
$4130.11 |
$30,292.92 |
$857.94 |
TOTAL |
$98,481.06 |
$31,150.86 |
|
COMMISSION OBJECTION PHASE |
JUDICIAL REVIEW PHASE |
||
|
Hour Based Fees |
Expenses |
Hour Based Fees |
Expenses |
Fry |
--------------------- |
----------------- |
$ 3,384.01 |
$ 180.50 |
Waldo |
--------------------- |
----------------- |
$ 78.00 |
$ 35.00 |
Norris |
--------------------- |
----------------- |
--------------------- |
----------------- |
Goodwin |
$15,918.75 |
$ 568.21 |
$ 5,175.00 |
$ 1,097.44 |
Mullett |
--------------------- |
----------------- |
--------------------- |
----------------- |
SUB-TOTAL |
$15,918.75 |
$ 568.21 |
$ 8,637.01 |
$ 1,312.94 |
TOTAL |
$16,486.96 |
$9,087.28 |
DISSALLOWED FEES |
||
|
Hour Based Fees |
Expenses |
Fry |
|
$ 48.75* |
Stant |
$ 1,230.00[21] |
$ 354.50* |
Waldo |
|
$ 300.00* |
Goodwin |
$ 6,750.00 |
|
Mullett |
$ 5,000.00 |
|
Haitjema |
$ 2,850.00* |
|
Hailer |
$ 1,820.00* |
$ 332.24* |
Boulding |
$ 3,975.00* |
$ 90.60* |
Spacie |
$ 200.00* |
$ 87.60* |
Norris |
$ 1,726.76 |
|
SUB-TOTAL |
$23,551.76 |
$ 1,213.69 |
TOTAL |
$24,765.45 |
[VOLUME 11, PAGE 344]
APPENDIX C
Findings Deletion, Addition,
Modification and Numerical Conversion Table
Finding Number Commission Second Fee Order Issued August 30, 2006 |
Finding Number Findings of Fact and Conclusions of Law
with Non-Final Order Following Order of Remand Issued October 11, 2007 |
Description of Change to Identified
Finding |
1 |
1 |
Modified |
|
17 - 24 |
Added |
17 |
25 |
Modified |
18 |
26 |
Modified |
19 |
27 |
Modified |
20 |
|
Deleted |
|
28 - 29 |
Added |
115 |
124 |
Modified |
116 |
|
Deleted |
117 |
125 |
Modified |
118 |
126 |
Modified |
|
127 |
Added |
123 |
132 |
Modified |
124 - 126 |
|
Deleted |
127 |
133 |
Modified |
131 |
137 |
Modified |
|
138 - 144 |
Added |
136 |
149 |
Modified |
137 |
150 |
Modified |
139 |
152 |
Modified |
140 |
|
Deleted |
141 |
153 |
Modified |
142 |
|
Deleted |
|
154 – 155 |
Added |
229 |
|
Deleted |
230 |
242 |
Modified |
231 |
|
Deleted |
232 |
243 |
Modified |
238 |
249 |
Modified |
239 & 240 |
250 |
Modified |
243 |
253 |
Modified |
244 |
254 |
Modified |
245 |
255 |
Modified |
248 |
258 |
Modified |
250 |
260 |
Modified |
251 |
|
Deleted |
252 |
261 |
Modified |
|
262 |
Added |
253 |
263 |
Modified |
254 |
264 |
Modified |
257 |
267 |
Modified |
263 |
273 |
Modified |
264 |
274 |
Modified |
Footnote 9 |
Footnote 9 |
Modified |
269 |
279 |
Modified |
Footnote 10 |
Footnote 10 |
Modified |
270 |
|
Deleted |
271 |
280 |
Modified |
272 |
281 |
Modified |
Footnote 11 |
Footnote 11 |
Modified |
273 |
282 |
Modified |
Footnote 12 |
Footnote 12 |
Modified |
275 |
284 |
Modified |
276 |
285 |
Modified |
Final Order |
Final Order |
Modified |
Appendix B |
Appendix B |
Modified |
|
Footnote 21 |
Added |
[1] Previously 310 IAC 0.6-1-13
[2] For purposes of a full discussion of the fee shifting provisions under F-SMCRA and I-SMCRA, certain references are made to the issue of a fee petitioner’s eligibility to receive an award of fees. It is understood however, that HEC’s eligibility for an award of fees is not at issue herein.
[3] It was determined that in “non-enforcement, non-adversarial” processes authorized by F-SMCRA, such as the process of seeking an unsuitability designation, the government is not a “party” and thus the environmental organizations’ were not eligible for a fee award for that phase of the process. Utah International at 822. For portions of the judicial review, in which the environmental organizations were aligned with the government, both were successful. It was determined that the fee petitioners as a successful party during that phase of the underlying litigation were disallowed an award from the government, another successful party. Id at 820.
[4] The Administrative Review Phase, Commission Objection Phase and Judicial Review Phase are collectively referred to as the Foertsch Litigation.
[5] Before commencement of the Foertsch Administrative Review, the Commission had determined in an unrelated proceeding that a lay person was entitled to represent a different person in a proceeding before it. This issue was, during the pendency of the Foertsch Administrative Review, a matter under judicial review and Foertsch sought to preserve the issue pending the outcome of that judicial review because, HEC’s director, who was not an attorney, had executed and filed the petition for administrative review on behalf of HEC.
[6] In Sierra, the court recognized that its citation from Hensley refers to “prevailing parties” and provides a footnote recognizing the less demanding standard “criterion of success,” which is equally applicable here.
[7] Fee shifting provisions of 307(f) of the Clean Air Act have routinely been evaluated on the same basis as the fee shifting provisions contained with fSMCRA.
[8] This amount represents all hours, including disallowed hours, charged at the highest rate argued applicable by HEC in the Fee Petition Phase.
[9] If the percentage of HEC’s fee recovery were calculated utilizing HEC’s amended fee claims the total amount awarded, $82,339.08, would be divided by the amended total amount sought, $134,624.73, to yield a 61% recovery. See finding276 and footnote 11.
[10] Sixty-one percent (61%) if calculated utilizing HEC’s amended fee claims. See footnote 9, finding 267 and footnote 11.
[11] Fifteen percent (15%) if calculated utilizing HEC’s amended
fee claims. See footnote 9, finding267 and footnote 11.
[12] HEC’s initial submissions in support of its fee petition were made between May and June of 2000, claiming fees for certain unpaid voluntary experts, HEC employees, one paid expert and Goodwin. Over two (2) years later, HEC submitted amended affidavits modifying the fees associated with HEC employees and its one paid expert as well as withdrawing its fee request associated with the unpaid voluntary experts. During the intervening two (2) years HEC and the Department through numerous briefs debated the appropriateness of awarding fees for unpaid voluntary experts. The amendment of the submissions associated with fees for HEC employees, of necessity resulted in additional attorneys fees that would not have been required but for the errors contained within HEC’s initial submissions. Compare Tender of Affidavits in Support of Fee Petition, filed May 23, 2000; Tender of Affidavit of Hendrik Haitjema in Support of Fee Petition, filed June 13, 2000; Verified Statement of Chris A. Wrede, filed June 13, 2002; Verified Statement of Tim Maloney Re: HEC Payments for Employee Time and Expenses, filed June 24, 2002; Verified Statement of Tim Maloney Re: HEC Payments for Time and Expenses of Charles Norris, filed June 24, 2002; Verified Statement of Tim Maloney Re: HEC Payments for Vendor Expenses, filed June 24, 2002, Verified Statement of Michael A. Mullett, filed November 5, 2001; Verified Statement of June M. Lyle, filed November 5, 2001; Supplemental Verified Statement of Michael A. Mullett, filed November 15, 2001; Supplemental Verified Statement of June M. Lyle, filed November 15, 2001; Second Supplemental Verified Statement of Michael A. Mullett, filed June 13, 2002.
HEC did not exercise billing judgment by subtracting time for the litigation expenses associated with the debate regarding the unpaid experts or for the duplicitous attorney fees associated with the erroneous claims as required by Save Our Cumberland Mountains, supra.
The submissions presented by HEC associated with the Fee Proceeding Phase are insufficient to allow the administrative law judge to clearly ascertain and deduct the number of hours spent by attorneys and paraprofessionals on the endeavors associated with these erroneous or ultimately withdrawn claims. To address a similar situation the United States District Court for the District of Columbia applied a twenty-five percent (25%) reduction in the sought fees associated with one phase of the litigation in Save Our Cumberland Mountains, supra at 1537. Instead of arbitrarily reducing the amount of fees awarded for the Fee Petition Phase, a more reasoned approach was utilized to address HEC’s failure to exercise billing judgment with respect to the duplicitous work and withdrawn claims associated with the Fee Petition Phase.
Based upon HEC’s initial claims for the Foertsch Litigation (the Administrative Review Phase, the Commission Objection Phase and the Judicial Review Phase) the total amount sought is $144,624.42. HEC’s amended submissions, which withdrew claims associated with the unpaid experts and decreased the amounts claimed for HEC employees (See Appendix B), would total $134,624.73. HEC’s award for the Foertsch Litigation based upon the amended submissions, ($82,339.08 divided by $134,624.73) equals 61% of the total fees sought, while a calculation of HEC’s fee award based upon the initial submission ($82,339.08 divided by $144,624.42) results in 57% of the total sought fees.
HEC’s award of fees associated with the Fee Petition Phase is appropriately proportioned with the percentage of fees awarded for the underlying litigation. Awarding fees for the Fee Petition Phase based upon 57%, instead of 61%, in application imposes a four percent (4%) reduction in the award to address HEC’s failure to exercise billing judgment. Application of this method results in a reduction of the award by only $1,180.03.
[13] The table presented here is identical to the corresponding table contained within Appendix B, with the exception that here, fees associated with Goodwin’s representation of HEC is calculated using his $150.00 per hour rate.
[14] There is no question that Goodwin intended for any fee award obtained through this proceeding to be his full compensation. Verified Statement of Chris A. Wrede. It is reasonable to infer from the evidence presented that Goodwin’s use of HEC staff for paralegal services was an effort to protect himself and his firm from increasing losses that might result from the dedication of firm paralegal staff to the Foertsch Litigation.
[15] Utah International and Save Our Cumberland Mountains the fee petitioners were deemed to have achieved complete success in the phase for which they were awarded a fee.
[16] Utah International explicitly authorizes a downward adjustment of fees compensable on a fee proceeding where only a fraction of the originally sought fee relating to the underlying litigation is actually awarded.
[17] This restriction following the Administrative Review Phase was 75% of the tonnage of coal removed but was modified to 50% during the Commission Objection Phase.
[18] The fee calculations used in this section identify the total of all fees claimed by HEC calculated at the highest rate sought. Certain fees, as indicated “*” (categorized as “disallowed) are actually fees that were reduced or withdrawn by HEC through amended pleadings filed over two years after the initial fees were claimed.
[19] “Foertsch Litigation” refers collectively to the Administrative Review Phase, Commission Objection Phase and Judicial Review Phase.
[20] The fee calculations used in this section identify the total of all fees claimed by HEC calculated at the highest rate sought. Certain fees, as indicated “*” (categorized as “disallowed”) are actually fees that were reduced or withdrawn by HEC through amended pleadings filed over two years after the initial fees were claimed.
[21] The identification of $1,230.00, which amounts to 61.5 hours of work by Stant, as work associated with the Judicial Review Phase was an error in Appendix B of the Commission Fee Order issued on August 30, 2006. This amount should have correctly been identified as a “disallowed fee.” The disallowance of this amount is documented in present findings numbered 267 and 269, findings numbered 257 and 259 of the Commission Fee Order. For reasons stated in present finding # 267, which differs slightly from the rationale stated in previous finding #257, this amount must continue to be disallowed. This footnote is added as explanation for the correction of a previous error.