American Petroleum Institute v. U.S. E.P.A.
| Decision Date | 09 January 1996 |
| Docket Number | 94-1590 and 94-1654,94-1540,Nos. 94-1502,s. 94-1502 |
| Citation | 72 F.3d 907 |
| Parties | , 315 U.S.App.D.C. 268, 26 Envtl. L. Rep. 20,559 AMERICAN PETROLEUM INSTITUTE and National Petroleum Refiners Association, Petitioners, v. UNITED STATES ENVIRONMENTAL PROTECTION AGENCY and Carol M. Browner, Administrator, United States Environmental Protection Agency, Respondents, Renewable Fuels Association, Intervenor. District of Columbia Circuit |
| Court | U.S. Court of Appeals — District of Columbia Circuit |
On Motion for Award of Attorneys' Fees.
Michael F. McBride and Rita M. Theisen for petitioners, with whom G. William Frick, David T. Deal, John E. Reese, and Maurice H. McBride were on the motion for award of attorneys' fees.
Lois J. Schiffer, Assistant Attorney General, and Timothy Burns, Trial Attorney, Environmental Defense Section, United States Department of Justice, for respondents.
Before WILLIAMS, SENTELLE, and RANDOLPH, Circuit Judges.
Opinion for the Court filed by Circuit Judge SENTELLE.
American Petroleum Institute and National Petroleum Refiners Association (hereinafter "petitioners" or "API") move for an award in the amount of $334,755 for attorneys' fees incurred in connection with their successful petition for review of an Environmental Protection Agency ("EPA") regulation. See American Petroleum Inst. v. EPA, 52 F.3d 1113 (D.C.Cir.1995). After considering petitioners' motion, we find that they are entitled to an award of reasonable attorneys' fees but that they have not carried their burden with respect to the full amount for which they seek reimbursement. For reasons that we will discuss in detail below, we conclude that petitioners are entitled to attorneys' fees in the amount of $237,997.03.
In the underlying litigation, petitioners challenged EPA's regulations implementing the Reformulated Gasoline ("RFG") program established by Congress in Sec. 211(k), (42 U.S.C. Sec. 7545(k)), of the Clean Air Act ("CAA"), 42 U.S.C. Sec. 7401, et seq. (1988 & Supp. V 1993). That program mandated the promulgation of regulations to achieve clean air goals through reformulation of conventional gasolines and specified minimum percentages of oxygen for such fuels, thus requiring the use of oxygenates. 42 U.S.C. Sec. 7545(k)(1), (2). The EPA regulations at issue required, inter alia, that 30 percent of the oxygen required to be used in RFG comes from renewable oxygenates, as opposed to non-renewable oxygenates such as those produced by petitioners. Regulation of Fuels and Fuel Additives: Renewable Oxygenate Requirement in Reformulated Gasoline, 59 Fed.Reg. 39,258 (1994).
Petitioners sought review in the proceeding which underlies the present fee petition. The facts and decision are set forth in our prior opinion, American Petroleum Institute v. EPA, 52 F.3d at 1115-21. Petitioners argued the invalidity of the regulations on five bases. In the end, we needed to reach only one of them: under the plain meaning of section 7545(k), EPA had no power to adopt the rules in question as they were not directed toward the reduction of volatile organic compounds and toxic emissions and EPA improperly interpreted the statute as giving it broader power to adopt the Renewable Oxygenate Rule ("ROR"), which would not provide for additional reductions in those emissions. Id. at 1119.
Petitioners now move for attorneys' fees under 42 U.S.C. Sec. 7607(f), which provides that for judicial proceedings on petitions for review of EPA's regulations under the CAA "the court may award costs of litigation (including reasonable attorney and expert witness fees) whenever it determines that such award is appropriate." There are two primary tests for determining when an award of attorneys' fees is "appropriate" under section 7607(f): 1) whether the party prevailed on the merits; and 2) whether the party's litigation furthered the purposes of the statute and the proper implementation and interpretation of the Act. See Sierra Club v. EPA, 769 F.2d 796, 799-800 (D.C.Cir.1985). It is clear and the government concedes that petitioners meet this test and are entitled to an award of reasonable attorneys' fees under Sec. 7607(f).
The government, however, challenges the reasonableness of portions of the award prayed. Though some of the government's arguments are without merit, some correctly suggest grounds on which we should disallow portions of the fees sought.
The government argues that we should disallow a portion of the fees prayed because petitioners argued five grounds for the invalidity of the regulations and the court based its decision on only one of them. In the government's view, this means that we should eliminate fees attributable to the other arguments under the theory that where a party raises "distinctly different claims for relief that are based on different facts and legal theories," in seeking fees the party must establish an entitlement to fees for each subset of claims separately. See Hensley v. Eckerhart, 461 U.S. 424, 434-35, 103 S.Ct. 1933, 1939-41, 76 L.Ed.2d 40 (1983). That is of course an accurate statement of law. It simply has no applicability to the present case.
Petitioners did not raise any claims distinct and separate from the one on which they prevailed. They pursued only one claim for relief--the invalidity of the regulation at issue. They argued five defensible bases for that invalidity. Even the government concedes that the merits panel accepted the soundness of not only the principal argument upon which we based our holding, but also, in dicta, of the second and third arguments raised by petitioners. See 52 F.3d at 1119-21. The government does argue that the "fourth and fifth claims" were fundamentally different from the others. But there were no fourth and fifth claims. There were only fourth and fifth arguments for the one claim. Specifically, those arguments were that EPA acted arbitrarily and capriciously in promulgating the rule, an obviously defensible argument in a case in which EPA was acting beyond its statutory authority. It is not necessary that a fee-petitioning client and its attorney have acted with the 20/20 acuity of hindsight in developing their arguments in order to collect attorneys' fees. As there are no "separate claims" but only separate arguments in support of the same claim, Hensley v. Eckerhart has no applicability. See Sierra Club, 769 F.2d at 801-04; Kennecott Corp. v. EPA, 804 F.2d 763, 765-66 (D.C.Cir.1986) (per curiam). We do not suggest the implausibility of an argument in some case that some issue might be so frivolous that all time spent on it was unreasonable, but that is not the government's argument in this case. The argument the government does make is inapposite.
We state at the outset that in evaluating the reasonableness of all the elements of billing, items of expense or fees that may not be "unreasonable between a first class law firm and a solvent client, are not [always] supported by indicia of reasonableness sufficient to allow us justly to tax the same against the United States." In re North (Shultz Fee Application), 8 F.3d 847, 852 (D.C.Cir.1993) (per curiam). While we do "not 'pass judgment on the propriety' of professional decisions of counsel or the wisdom of their client's decision in its contract, ... we are duty bound to recall that Congress required us to exercise our independent judgment on the reasonableness of fees requested before taxing them against the United States." In re Donovan, 877 F.2d 982, 996 (D.C.Cir.1989) (per curiam). We also note that petitioners bear the burden of demonstrating the reasonableness of each element of their fee request. In re North (Bush Fee Application), 59 F.3d 184, 189 (D.C.Cir.1995) (per curiam). We conduct our review of petitioners' fee request with those principles in mind.
1. Questions of Reasonableness of Specific Items
Petitioners' request employs the familiar formula of professional hours expended multiplied by the hourly rate of the billing professional, which is often called the lodestar. See, e.g., National Ass'n of Concerned Veterans v. Secretary of Defense, 675 F.2d 1319, 1323 (D.C.Cir.1982) (per curiam). They state that their attorneys' hourly rates ($300 for partner Michael McBride, $250 for partner Rita Theisen, $200 for associates, $30-$80 for paralegals, and $100 for a law clerk) are based on reasonable hourly rates that are consistent with the market rate "prevailing in the community for similar work." Copeland v. Marshall, 641 F.2d 880, 892 (D.C.Cir.1980). Petitioners have provided support for the reasonableness of their rates through affidavits and a survey of rates and we hold that these rates are reasonable.
In the second step of lodestar analysis, we must determine whether petitioners have carried their burden of demonstrating that each time block billed at the reasonable rates was itself a reasonable expenditure of time. We first note that the petition reflects an apparent arithmetic error of $1,000. The fee request seeks fees of $287,370 for representation from June, 1994, to February, 1995. Monthly billing statements for that time period document only $286,370. We therefore first deduct $1,000 to correct the apparent error in calculation.
Next, we will make adjustments in the petition for several items as to which petitioners have not carried their burden of establishing sufficient reasonableness to warrant taxing fees against the United States. See Bush Fee Application, 59 F.3d at 189. First, as the government points out, there are numerous instances in which billing professionals describe their work as preparing and "filing" certain documents. Petitioners explain that most of these instances refer to the attorney having the documents actually filed by someone else, and we accept this explanation. There are a few billing entries, however, where it is clear...
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