Sierra Club v. UNITED STATES ARMY CORPS OF ENG., 81 Civ. 3000.

• Decision Date: 27 June 1984
• Docket Number: No. 81 Civ. 3000.,81 Civ. 3000.
• Citation: 590 F. Supp. 1509
• Parties: SIERRA CLUB, The City Club of New York, Business for Mass Transit, Committee for Better Transit, Inc., NYC Clean Air Campaign, Inc., West 12th Street Block Association, Hudson River Fishermen's Association, Hudson County Citizens for Clean Air, Seymour Durst, Otis Burger, Mary Rowe, and Howard Singer, Plaintiffs, v. UNITED STATES ARMY CORPS OF ENGINEERS, John Marsh, as Secretary of the Army of the United States, Joseph K. Bratton, as Chief of Engineers, Walter M. Smith, Jr., as New York District Engineer of the United States Army Corps of Engineers, William C. Hennessy, as Commissioner of the New York State Department of Transportation, United States Department of Transportation, Andrew L. Lewis, Jr., as Secretary of Transportation, of the United States, Federal Highway Administration, Raymond A. Barnhart as Administrator of the Federal Highway Administration, The City of New York, Defendants, and City of New York, Defendant-Intervenor.
• Court: U.S. District Court — Southern District of New York

590 F. Supp. 1509

SIERRA CLUB, The City Club of New York, Business for Mass Transit, Committee for Better Transit, Inc., NYC Clean Air Campaign, Inc., West 12th Street Block Association, Hudson River Fishermen's Association, Hudson County Citizens for Clean Air, Seymour Durst, Otis Burger, Mary Rowe, and Howard Singer, Plaintiffs, v. UNITED STATES ARMY CORPS OF ENGINEERS, John Marsh, as Secretary of the Army of the United States, Joseph K. Bratton, as Chief of Engineers, Walter M. Smith, Jr., as New York District Engineer of the United States Army Corps of Engineers, William C. Hennessy, as Commissioner of the New York State Department of Transportation, United States Department of Transportation, Andrew L. Lewis, Jr., as Secretary of Transportation, of the United States, Federal Highway Administration, Raymond A. Barnhart as Administrator of the Federal Highway Administration, The City of New York, Defendants and City of New York, Defendant-Intervenor.

No. 81 Civ. 3000.

United States District Court, S.D. New York.

June 27, 1984.

COPYRIGHT MATERIAL OMITTED

Butzel & Kass by Albert K. Butzel, Mitchell S. Bernard, New York City, for plaintiffs.

Rudolph W. Giuliani, U.S. Atty. by Howard Wilson, Marc H. Rosenbaum, New York City, for Federal defendants.

Kaye, Scholer, Fierman, Hays & Handler by Paul J. Curran, Thomas A. Smart, Kelley

J. Newton, New York City, for State defendant-intervenor.

OPINION

GRIESA, District Judge.

Plaintiffs have applied for an award of attorneys' fees and disbursements.¹ The application is made against all defendants except the defendant-intervenor, City of New York.

Defendants fall into three categories — (1) the United States Army Corps of Engineers and certain officials connected with the Corps; (2) the Federal Highway Administration, the United States Department of Transportation and certain officials connected with those agencies; and (3) William C. Hennessy, who was Commissioner of the New York State Department of Transportation at the relevant times. These groups of defendants will sometimes be referred to as the "Corps defendants," the "FHWA defendants," and the "State defendant."

Plaintiffs assert two grounds for the award they seek.

First, plaintiffs seek to recover against all defendants under the common law. In connection with the federal defendants, plaintiffs rely upon a provision of the Equal Access to Justice Act ("EAJA"), 28 U.S.C. § 2412(b), which in effect waives sovereign immunity as to the United States and its agencies and officials in an application for attorneys' fees and expenses under the common law.

Second, they seek to recover against the Corps defendants and the FHWA defendants under another provision of the EAJA, 28 U.S.C. § 2412(d), which allows recovery of attorneys' fees and other expenses by a prevailing party against the United States in a civil action, other than a tort action, unless the court finds that the position of the United States "was substantially justified or that special circumstances make an award unjust."

Summary of Rulings

The court concludes that plaintiffs are entitled to recover certain amounts for attorneys' fees and disbursements under the common law. As will be explained, certain issues were tried and appealed regarding which the defendants who were involved had no colorable basis for their positions. Attorneys' fees are awarded in the amount of $261,205 plus disbursements of $29,049, or a total of $290,254. This entire amount is assessed against the State defendants. However, for reasons to be described, the various federal defendants are only liable for part of this sum. The Corps defendants are liable for $155,870 fees and $21,245 disbursements, or a total of $177,115. The FHWA defendants are liable for $76,335 fees plus $5,004 disbursements, or a total of $81,339.

Plaintiffs' application under 28 U.S.C. § 2412(d) is denied. Although plaintiffs were prevailing parties on the major issue in the litigation and the court finds that on this issue the positions of the federal defendants were not substantially justified, it appears that plaintiffs include a person whose net worth exceeds $1,000,000. Therefore, recovery under this statutory provision is precluded by 28 U.S.C. § 2412(d)(2)(B).

The Proceedings

The relevant proceedings in this litigation are described in the following opinions: Action for Rational Transit v. West Side Highway Project, 536 F.Supp. 1225 (S.D.N. Y.1982); Sierra Club v. United States Army Corps of Engineers, 541 F.Supp. 1367 (S.D.N.Y.1982); Sierra Club v. United States Army Corps of Engineers, 701 F.2d 1011 (2d Cir.1983).

The first of the above captions was handed down on March 31, 1982. This opinion actually dealt with two actions, Action for Rational Transit v. West Side Highway Project, and Sierra Club v. United States Army Corps of Engineers. Part of the opinion contained rulings dismissing the Action for Rational Transit case on motion. The present fee application does not relate to that action or these rulings.

The March 31, 1982 opinion also dealt with the Sierra Club action, in which the present fee application is made. That opinion confirmed that a number of the claims made by plaintiffs had been dismissed on motion. However, a trial ("the first trial") had been held on plaintiffs' claim regarding alleged violations of law by the Corps defendants and the State defendant in regard to the impact of Westway on fisheries and the alleged improper grant of a landfill permit by the Corps to the State. In the March 31, 1982 opinion the court nullified the landfill permit subject to further administrative proceedings.

There was a second trial dealing with the fisheries issues as they related to funding approvals granted by FHWA to the State. The June 30, 1982 opinion nullified the basic funding approvals, again subject to further administrative proceedings.

The various parties appealed and cross-appealed. The Corps defendants and the FHWA defendants did not appeal from the basic rulings of the district court on the merits, although they appealed in respect to certain terms of the judgments. The State defendant appealed on the merits. The Court of Appeals affirmed the district court decision in all essential respects as to the merits, although it reversed on certain of the points related to the terms of the judgments.²

Plaintiffs' application for attorneys' fees and disbursements was originally made on May 12, 1982. A number of events occurred which caused the decision on the fee motion to be deferred, including the second trial, the appeal, litigation in 1982 and 1983 regarding design and engineering activity during the further administrative proceedings, and unsuccessful efforts to resolve the fee application by settlement.

Moreover, in January of this year the court determined that the various papers submitted on the motion, while extensive, did not satisfactorily address the issues. Consequently the court requested new briefs.

Legal Standard Under the Common Law

What is referred to as the normal American Rule is that the prevailing party in a litigation may not recover his attorneys' fees from the loser. Normally each litigant pays his own attorneys' fees. Alyeska Pipeline Service Co. v. Wilderness Society, 421 U.S. 240, 245, 247, 257, 95 S.Ct. 1612, 1615, 1616, 1621, 44 L.Ed.2d 141 (1975). However, certain exceptions have been recognized. In Vaughan v. Atkinson, 369 U.S. 527, 82 S.Ct. 997, 8 L.Ed.2d 88 (1962), the Court held in an admiralty action that the libellant, the prevailing party, was entitled to recover counsel fees. The Court stated that such an award should be considered as part of the damages, since respondents had refused to honor an obligation to libellant which "was plainly owed him." The Court commented that respondents had been callous and recalcitrant in their approach to libellant's claim, had failed to investigate it, and had committed a willful and persistent default. Id. at 530-31, 82 S.Ct. at 999. In F.D. Rich Co. v. Industrial Lumber Co., 417 U.S. 116, 129, 94 S.Ct. 2157, 2165, 40 L.Ed.2d 703 (1974), the Court stated:

We have long recognized that attorneys' fees may be awarded to a successful party when his opponent has acted in bad faith, vexatiously, wantonly, or for oppressive reasons, ...

Vaughan v. Atkinson, supra, was cited as authority for this proposition. The Supreme Court again discussed the various exceptions to the American Rule in Alyeska, supra, citing Vaughan and quoting the language from F.D. Rich about an award of attorneys' fees being proper where the losing party has "acted in bad faith, vexatiously, wantonly, or for oppressive reasons." 421 U.S. at 258-59, 95 S.Ct. at 1622.

The "bad faith" exception to the American Rule can apply to either pre-litigation bad faith or to conduct in the course of the litigation. In Hall v. Cole, 412 U.S. 1, 15, 93 S.Ct. 1943, 1951, 36 L.Ed.2d 702 (1973), the Court stated:

It is clear, however, that "bad faith" may be found, not only in the actions that led to the lawsuit, but also in the conduct of the litigation.

It is obvious that bad faith conduct by a party prior to litigation may be part of a pattern of misconduct which carries forward into the litigation. However, it is the law that a party's bad faith, either prior to or during the litigation, may be the basis for an award of attorneys' fees under the common law rule. In the Second Circuit, Class v. Norton, 505 F.2d 123 (2d Cir.1974), and Stolberg v. Board of Trustees, 474 F.2d 485 (2d Cir.1973), were cases where the court awarded attorneys' fees to the successful plaintiffs on the ground that willful violations of obvious rights of the plaintiffs had required the bringing of unnecessary lawsuits. See also Republic of Cape Verde v. A & A Partners, 89 F.R.D. 14 (S.D.N.Y.1980).

Certain leading Second Circuit decisions illustrate how the bad faith rule is applied to conduct occurring during litigation. In Browning Debenture Holders' Committee v....