672 F. 2d 33 - Sierra Club v. M Gorsuch

The Sierra Club and the Environmental Defense Fund ("EDF"), petitioners in Sierra Club v. Costle, 657 F.2d 298 (D.C.Cir.1981) (hereinafter Sierra Club ), seek an award of attorneys' fees for their participation in an unsuccessful appeal of certain Environmental Protection Agency ("EPA") regulations, 44 Fed.Reg. 33580 (June 11, 1979), promulgated pursuant to the Clean Air Act, 42 U.S.C. §§ 7401 et seq. (1979 Supp. III). We find that under section 307(f) of the Clean Air Act, 42 U.S.C. § 7607(f), this is an "appropriate" case for the court to award attorneys' fees.

Prior to August, 1981 (when EPA apparently adopted a policy of blanket opposition to all petitions for attorneys' fees by non-prevailing parties1), Sierra Club and EDF were actively engaged in negotiations with EPA over the amount of attorneys' fees. Therefore, we hold here only that attorneys' fees may be awarded to non-prevailing parties under Section 307(f) and that such an award to Sierra Club and EDF in this case is appropriate, and we suggest that the parties resume their negotiations over the amount. If settlement proves impossible, the parties may return here for resolution of this matter.2

I. AUTHORITY UNDER SECTION 307(f) TO GRANT ATTORNEYS' FEES

Section 307(f) of the Clean Air Act provides that

In any judicial proceeding under this section, the court may award costs of litigation (including reasonable attorney and expert witness fees) whenever it determines that such an award is appropriate.

42 U.S.C. § 7607(f) (emphasis added). An award of attorneys' fees under the Clean Air Act is not limited to "substantially prevailing" parties. Compare 42 U.S.C. § 7607(f) with 5 U.S.C. § 552(a)(4)(E) (awards in FOIA cases available only to a complainant who has substantially prevailed). On its face, the statutory provision clearly permits the court to award attorneys' fees to prevailing, substantially prevailing, or non-prevailing parties in "appropriate" cases.

The legislative history of section 307(f) confirms this reading and offers guidance in identifying "appropriate" cases. The House Report, H.R.Rep.No.95-294, 95th Cong., 1st Sess. 337 (1977), reprinted in 1977 U.S.Code Cong. & Adm.News 1077, 1416, states:In the case of the section 307 judicial review litigation, the purposes of the authority to award fees are not only to discourage frivolous litigation, but also to encourage litigation which will assure proper implementation and administration of the act or otherwise serve the public interest. The committee did not intend that the court's discretion to award fees under this provision should be restricted to cases in which the party seeking fees was the "prevailing party." In fact, such an amendment was expressly rejected by the committee, largely on the grounds set forth in NRDC v. EPA, 484 F.2d 1331, 1388 (1st Cir. 1973).3

The passage from Judge Campbell's opinion in National Resources Defense Council v. Environmental Protection Agency, 484 F.2d 1331, 1338 (1st Cir. 1973) (hereinafter NRDC), endorsed in the House Report, reads:

The purpose of an award of costs and fees is not mainly punitive. It is to allocate the costs of litigation equitably, to encourage the achievement of statutory goals. When the government is attempting to carry out a program of such vast and uncharted dimensions, there are roles for both the official agency and a private watchdog. The legislation is itself complex and novel. Given the implementation dates, its early interpretation is desirable.

For Judge Campbell, and apparently for Congress, it was not enough merely to consider "who won." The benefits conferred by the litigation were an equally important consideration.4

The government here seeks to distinguish Sierra Club from NRDC, and thereby to pull this case beyond the purview of the plain language and the intent of the statutory provision, by arguing that the party awarded attorneys' fees in NRDC prevailed on some, although not on all issues. See Brief For The United States On The Issue of Attorneys' Fees For Losing Parties Under 42 U.S.C. 7607(f) at 11. The passage from NRDC reprinted above cannot, however, be read so narrowly. It indicates that the relevant inquiry is whether the litigation-successful or not-furthered the goals of the Act. It was this general policy which Congress sought to codify in the 1977 Amendments of the Clean Air Act.5

Our reading of the legislative history is supported by recent decisions of this court and the district court for the District of Columbia. In Metropolitan Washington Coalition for Clean Air v. The District of Columbia, 639 F.2d 802 (D.C.Cir.1981) (hereinafter Washington Coalition), this court reversed a decision of the district court, which, although acknowledging that unsuccessful parties may be awarded attorneys' fees under the Clean Air Act, found no public benefit from the lawsuit because the challenged operation of a municipal incinerator was ultimately determined not to endanger public health. The district court also found that the suit had "questionable legitimacy" because EPA was already considering revisions of the District of Columbia implementation plan and therefore the non-prevailing party's efforts "did not serve to expedite the Administrator's decision." This court reversed and remanded because:

the District Court incorrectly focused its attention on the outcome and practical effects of the litigation, to the exclusion of a more relevant consideration: whether the suit was of the type that Congress intended to encourage when it enacted the citizen-suit provision.... Quite obviously, the legislature, when it called for citizen-suits, considered a fee recovery to be consonant with the public interest whenever the underlying suit was a prudent and desirable effort to achieve an unfulfilled objective of the Act. The attorneys' fee feature was offered as an inducement to citizen-suits, which Congress deemed necessary; and if the hope Congress had for such suits is to become a reality, decisions of fee allowance cannot make wholesale substitutions of hindsight for the legitimate expectations of citizen plaintiffs.

Id. at 804. It is true that in Washington Coalition we noted that at the time the suit began there may have been "a well founded expectation that the suit would bring about a more timely compliance with the (implementation) plan, and in that fashion an observance of the (Clean Air) Act." Id. at 805. The government therefore suggests that we read Washington Coalition to permit awards of attorneys' fees to "non-prevailing parties" only in those situations where, except for intervening events, the litigation would have been successful. Although the government's reading is snugly fit to the facts of Washington Coalition, that reading is not properly tailored to the case's rationale. We find the rationale of Washington Coalition to be broad enough to cover a case like Sierra Club where the non-prevailing parties had a "well-founded expectation" of success when their suit was brought-the issues were not frivolous but substantial-and where the appeal furthered the goals of the Act by facilitating the prompt resolution of the important and complex issues confronting this court involving the Act's interpretation. Moreover, by assisting judicial interpretation of the Clean Air Act, Sierra Club and EDF aided agency implementation and Congressional reevaluation6 of the Act.

Our decision in Washington Coalition took note of Judge Richey's opinion in Citizens Association of Georgetown v. Washington, 383 F.Supp. 136 (D.D.C.1974), rev'd on other grounds, 535 F.2d 1318 (D.C.Cir.1976) (hereinafter Citizens Ass'n). The issue presented there was "whether Plaintiffs, who were unsuccessful in a suit brought under the Clean Air Act, 42 U.S.C. §§ 1857 et seq., should be awarded costs and attorneys' fees." Id. at 143. After trial, the district court concluded that the plaintiffs had not successfully proved a violation of the Act. Nevertheless, understanding Congress to have intended courts to award attorneys' fees in appropriate cases to unsuccessful as well as successful parties, the district court granted plaintiffs' request because the litigation had furthered the Act's purpose of encouraging citizen suits to accelerate enforcement of the Clean Air Act. In support of its holding the court noted that the case was one of first impression in the circuit, extensive preparation was required, non-frivolous claims were raised, and the suit was brought in the face of a clean air regulatory vacuum in the District of Columbia.7

It is clear from the foregoing review that whether Sierra Club and EDF are entitled to attorneys' fees turns not on whether they have prevailed in whole or in part, but on whether they have served the goals of the Clean Air Act. The government's current position, that non-prevailing parties are not entitled to attorneys' fees, conflicts with the language and history of section 307 and judicial precedent. Under the government's position, there would have been no need to abandon the "substantially prevailing" standard commonly used to guide judicial awards of attorneys' fees. See pp. 34-35 supra; n. 8 infra. Clearly Congress meant something more by the provision in the Clean Air Act: it intended to encourage the participation of "public interest" groups in resolving complex technical questions and important and difficult questions of statutory interpretation, and in monitoring the prompt implementation of the Act.

We hasten to alleviate the government's concern that because implementation of the Clean Air Act is so complex, no challenge will appear frivolous and so all non-prevailing parties will automatically be awarded attorneys' fees. We believe that courts confronted with complex cases will be able to distinguish appropriate cases.8 In this case, although the parties awarded fees did not substantially prevail, they did substantially contribute to the goals of the Act: the issues they addressed were important, complex and novel; their assistance in the resolution of the issues was substantial and not duplicative of the efforts of other parties; and the caliber of their written and oral presentations was exemplary. While the occasions upon which non-prevailing parties will meet such criteria may be exceptional, see American Petroleum Institute v. Costle, No. 79-1104 (D.C.Cir. October 27, 1981) (denial of request for attorneys' fees), Sierra Club is such an occasion.

II. THE APPROPRIATENESS OF AN AWARD OF ATTORNEYS' FEES

A. The Importance of the Case and the Issues Involved

Sierra Club was a significant case involving an EPA rule governing sulfur dioxide and particulate emissions from fossil-fueled electric utility plants across the nation. We described its impact in our opinion as follows:

The importance of the challenged standards arises not only from the magnitude of the environment and health interests involved, but also from the critical implications the new pollution controls have for the economy-at the local and national levels. Further heightening the significance of this controversy is the crucial role coal burning power plants are expected to play in our nation's effort to cope with the problems associated with energy scarcity.8

Sierra Club, 657 F.2d at 313. Our assessment of the case's importance to the national welfare was shared by all parties in the case.9 The technical complexity of the case necessitated extensive preparation by the parties and the court. In formulating the regulation, EPA had prepared 120 studies, collected 400 items of reference literature, received almost 1,400 comments, written 650 letters and 200 interagency memoranda, held over 50 meetings and substantive telephone conversations with the public, and conducted four days of public hearings. The statement accompanying the regulation took up to 43 pages with triple columns and single-spaced type. Approximately 700 pages of briefs were submitted to this court on the merits of the case. The joint appendix contained 5,620 pages, bound in twelve volumes. The certified index to the record listed over 2,520 submissions. Seven months after oral argument, this court emerged with a 250 page opinion upholding the agency's regulations.

Among the serious questions presented or addressed by Sierra Club and EDF in the appeal were: (1) Whether section 111 of the Clean Air Act as amended in 1977 authorized EPA to promulgate a variable percentage reduction standard rather than a uniform reduction standard, and if so whether variability could be based upon the sulfur content of the coal burned. (Sierra Club provided the first major occasion for judicial interpretation of this newly revised provision in the 1977 Amendments to the Clean Air Act, and so demanded not only a microscopic examination of the legislative history but also a detailed review of the practical effects of a variable standard.) (2) Whether a variable standard could be issued in order to encourage new technology, i.e., dry scrubbing. (This issue required extensive analysis of the record, as well as statutory interpretation of the relationship among several newly amended sections of the Clean Air Act.) (3) Whether EPA's econometric computer model, used to forecast the future impacts of alternative standards, was reliable, and whether the assumptions underlying the model were valid. (Our ruling on this question will inevitably affect agency procedures in a number of substantive contexts.) (4) Whether a 90% reduction of sulfur dioxide was technologically feasible. (A challenge to feasibility was brought by the utilities and defended by the environmental groups as well as EPA.) (5) Whether EPA's adoption of a 1.2 lbs./MBtu emissions ceiling was procedurally defective because of post-comment period contacts. (This was the first comprehensive judicial application of section 307(d) of the Clean Air Act, which legislated a complete set of guidelines for rulemaking under that Act.) None of these issues was remotely frivolous; all deserved to have been aired, and having been aired will contribute both to the agency's future efforts to implement the Clean Air Act and to Congress' ongoing review of the Act.

B. The Substantial Nature of the Petitioners' Assistance

Although it seems almost inconceivable that a major review of the rule could have been conducted without questioning EPA's authority and evidentiary basis for promulgating a variable percentage reduction standard, an issue that the EPA Administrator had referred to at the start of the rulemaking as the "main" issue in the proceeding, Sierra Club was the only party to raise it. The court was thus totally dependent upon Sierra Club to brief and advocate the opposition to a variable standard. Without Sierra Club, an issue conceded by EPA to be critically important would not have been raised or decided during the first judicial challenge to the statutory provision. The absence of debate on the issue, moreover, could have affected the outcome of other related issues in the case, e.g., the proper level of total emissions (the so-called 1.2 lbs./ MBtu standard), since individual standards of section 111 operate interdependently. And the argument pressed most intensely by the utilities, that a 90% reduction in sulfur emissions was technologically infeasible given the state of antipollution technology, would have been far less completely aired without Sierra Club's participation. The various parts of a complex rule like this one do not travel alone, and the court's education on each part of the rule informed its decisions on other parts.

Similarly, the critical role played by EDF in the court's premiere interpretation of the new rulemaking procedures laid down in the 1977 Amendments must be recognized. This first comprehensive judicial interpretation of section 307(d) of the Clean Air Act consumed 60 pages of the court's opinion and involved detailed challenges to several facets of the rulemaking. EDF's contribution involved factual research into meetings and communications between agency officials, White House personnel, members of Congress and industry representatives, as well as a legal analysis of the propriety of such meetings under the new section 307 and existing case law on ex parte contacts in rulemaking. Several documents pertaining to these contacts, proffered by EPA for the first time on appeal, were consulted by the court. See Sierra Club, 657 F.2d at 389-90 n.450; cf. Citizens Ass'n, 383 F.Supp. at 145 (benefits from public exposure). We have little doubt that without EDF's substantial contribution to this aspect of the case, our deliberations would have been less enriched and more time consuming. We note too that EDF's procedural challenges not only clarified how the new section 307(d) would operate, but apparently provided fuel for discussion about appropriate restrictions on ex parte comments in other administrative proceedings. See Stockman Memorandum For Heads of Executive Departments and Agencies 2 (June 13, 1981). Again, it was EDF's challenge that instigated the first major judicial inquiry into how section 307's rulemaking procedures would operate-a review that was necessary in order to resolve close questions of interpretation for future rulemaking under the Act.

In conclusion, we find that the express goals of the Clean Air Act-prompt resolution of serious questions of statutory interpretation and citizen participation in monitoring administration of the Act through enforcement suits-require that substantial contributions to significant litigation in furtherance of these goals be compensated. It was absolutely essential in a case of this dimension that this court have expert and articulate spokesmen for environmental as well as industrial interests. The rulemaking process not only involved highly technical and complex data, but controversial considerations of public policy. Given the complexity of the subject matter, without competent representatives of environmental interests, the process of judicial review might have been fatally skewed.

The questions raised by Sierra Club and EDF needed to be resolved; yet no other party had a sufficient economic interest at stake to represent them. Sierra Club and EDF were required to expend great efforts to perform their advocacy tasks well in matters of such technical complexity; their contribution to the court's prompt disposition of all issues raised in the case was substantial. As Congress recognized in enacting the citizen suit/cost provision of section 307, one cannot expect that contributions as substantial as those made by Sierra Club and EDF would be made by public interest groups without some form of compensation.III. INSTRUCTIONS TO THE LITIGANTS

We postpone consideration of the amount of compensation to be awarded in order to allow the parties to resume their abruptly ended negotiations. We commend to the parties the guidelines for attorneys' fees set out in Environmental Defense Fund v. Environmental Protection Agency, 672 F.2d 42 (D.C.Cir.1982); Alabama Power Company v. Gorsuch, 672 F.2d 33, (D.C.Cir. 1982); Anderson v. United States Department of the Treasury, 648 F.2d 1 (D.C.Cir.1979); Copeland v. Marshall, 641 F.2d 880 (D.C.Cir.1980), and Evans v. Sheraton Park Hotel, 503 F.2d 117 (D.C.Cir.1974). Finally, the same statutory language that allows us to make attorneys' fees awards in cases such as Sierra Club, limits our power to judicial proceedings. Cf. New York Gaslight Club, Inc. v. Carey, 447 U.S. 54, 62, 100 S.Ct. 2024, 2030, 64 L.Ed.2d 723 (1980); Parker v. Califano, 561 F.2d 320, 327 (D.C.Cir.1977) (interpretation of statutes not containing limitations to administrative or judicial proceedings). Sierra Club and EDF are, therefore, not entitled to an award of attorneys' fees for their participation in the administrative proceedings preceding their appeal.

The parties are expected to keep this court abreast of the progress of their negotiations by filing a report within three months of the date this opinion issues. If at that time it is clear that settlement is impossible, this court will fix an award for attorneys' fees.10

So Ordered.