Aqua Water Supply Corp. v. City of Elgin
| Decision Date | 07 February 2014 |
| Docket Number | A-11-CV-885-LY |
| Parties | AQUA WATER SUPPLY CORP. v. CITY OF ELGIN, et al. |
| Court | U.S. District Court — Western District of Texas |
Before the Court are: TCEQ Defendants' Preliminary Motion for Attorney's Fees, Motion for Extension of Time, and Motion to Set Briefing Schedule (Dkt. No. 103); Aqua Water Supply Corporation's Objection and Response to the TCEQ Defendants' Preliminary Motion for Attorney Fees, Motion for Extension of Time and Motion to Set Briefing Schedule (Dkt. No. 105); and TCEQ Defendants' Reply in Support of Preliminary Motion for Attorney's Fees, Motion for Extension of Time, and Motion to Set Briefing Schedule (Dkt. No. 108). The parties also filed various Motions for the Court to Consider Supplemental Authority (Dkt. Nos. 111, 118, and 119). The District Court referred these Motions to the undersigned Magistrate Judge for report and recommendation.
I. BACKGROUND
Plaintiff Aqua Water Supply Corporation ("Aqua") possesses a Certificate of Convenience and Necessity ("CCN"), which allows it to be the exclusive water service provider over a specifically defined geographic territory. In September 2011, Austin Community College ("ACC") filed a petition with the Texas Commission on Environmental Quality ("TCEQ"1) under Texas Water Code§ 13.254(a-5) to have its property removed from Aqua's CCN area. When TCEQ granted the petition, Aqua appealed TCEQ's order to the Travis County District Court, and also filed suit in this court, alleging that § 13.254 is preempted by 7 U.S.C. § 1926(b) and requesting an injunction against its future enforcement. In its federal suit, Aqua asserted claims under the Supremacy Clause of the United States Constitution, U.S. Const. Art. VI, cl. 2, the Federal Declaratory Judgment Act, 28 U.S.C. §§ 2201, and 42 U.S.C. § 1983. Aqua also asserted a claim for attorney's fees against the TCEQ Defendants pursuant to 42 U.S.C. § 1988.
Thereafter, in March of 2012, Aqua settled all its claims with ACC and ACC was dismissed from the federal litigation. (Dkt. No. 72). On June 18, 2012, Aqua filed a Motion for Summary Judgment regarding its claims that Texas Water Code § 13.254 violate the Sepremacy Clause of the United States Constitution. (Dkt. No. 82). On July 5, 2012, the TCEQ filed a Motion to Abstain (Dkt. No. 83) and a Motion to Dismiss (Dkt. No. 84). In February of 2013, the TCEQ consented to an order entered by the state court which vacated the Decertification Order. That order was entered on February 15, 2013. After a hearing on February 19, 2013, Judge Yeakel entered an order on February 28, 2013, granting in part the TCEQ's Motion to Dismiss, finding that the resolution of the Aqua-ACC dispute, along with the state court's vacating of the decertification order, mooted Aqua's preemption claim. Dkt. No. 96. At that time, however, Elgin and Aqua's claims, though settled, had not been dismissed, as their settlement agreement was conditioned on the TCEQ approving the changes to Aqua's CCN acreage agreed to between Aqua and Elgin. Eventually, on April 18, 2013, shortly after TCEQ approved the modifications, Aqua and Elgin filed a motion to approve their settlement (Dkt. No. 99), which Judge Yeakel did on April 22, 2013 (Dkt. No. 101). A final judgment was then entered in the case on that same date. Dkt. No. 102.
Shortly thereafter, on May 6, 2013, the TCEQ filed the motion now before the court, seeking an award of $250,000 for the attorney's fees the TCEQ contends it incurred defending not only this case, but also the state court appeal from the TCEQ's order approving ACC's application to remove property from Aqua's certificated acreage. The parties appeared for a hearing on the motions on January 23, 2014.
III. ANALYSIS2
TCEQ filed its Preliminary Motion for Attorney's Fees on May 6, 2013. In this Motion, it notes that Motion at p. 2. Based on this comment to the 1993 version of Rule 54, the TCEQ submitted no evidentiary support with its motion, and requested that it be permitted to conduct discovery and submit evidentiary materials after preliminary rulings on its motion. The TCEQ's approach in this regard is inconsistent with thiscourt's local rules. Local Rule CV-7(j) plainly states what must be filed with a request for attorney's fees:
Unless the substantive law requires a claim for attorney's fees and related nontaxable expenses to be proved at trial as an element of damages to be determined by a jury, a claim for fees shall be made by motion not later than 14 days after entry of judgment pursuant to Federal Rule of Civil Procedure 54(d)(2) and pursuant to the following provisions. Counsel for the parties shall meet and confer for the purpose of resolving all disputed issues relating to attorney's fees prior to making application. The application shall certify that such a conference has occurred. If no agreement is reached, the applicant shall certify the specific reason why the matter could not be resolved by agreement. The motion shall include a supporting document organized chronologically by activity or project, listing attorney name, date, and hours expended on the particular activity or project, as well as an affidavit certifying (1) that the hours expended were actually expended on the topics stated, and (2) that the hours expended and rate claimed were reasonable. Such application shall also be accompanied by a brief memo setting forth the method by which the amount of fees was computed, with sufficient citation of authority to permit the reviewing court the opportunity to determine whether such computation is correct. The request shall include reference to the statutory authorization or other authority for the request.
TCEQ has failed to comply with any of the requirements of this rule. It has failed to confer with opposing counsel and failed to note the result of such a conference. It did not submit evidence of the hours expended and the reasonableness of the rate requested, or any description of the work it is seeking to be compensated for, notwithstanding that 8 months have passed since it made its request for fees. For this reason alone, the TCEQ's request for attorney's fees should be denied.
In a claim brought under § 1983 claim, the district court may grant "the prevailing party . . . a reasonable attorney's fee as part of the costs." 42 U.S.C. § 1988. A defendant may be awarded its fees under § 1988 only where the plaintiff's complaint was frivolous, unreasonable, or groundless, or if the plaintiff continued to litigate after the complaint was found so. Myers v. City of West Monroe, 211 F.3d 289, 292 (5th Cir. 2000); Brown v. Borough of Chambersburg, 903 F.2d 274, 277(3d Cir. 1990); see also Christiansburg Garment Co. v. E.E.O.C., 434 U.S. 412, 422 (1978). The Supreme Court has explained that:
Meritless is to be understood as meaning groundless or without foundation, rather than simply that the plaintiff has ultimately lost his case. . . . In applying these criteria it is important that a district court resist the understandable temptation to engage in post hoc reasoning by concluding that because a plaintiff did not ultimately prevail, his action must have been unreasonable or without foundation. This kind of hindsight logic could discourage all but the most airtight claims, for seldom can a prospective plaintiff be sure of ultimate success.
Christiansburg, 434 U.S. at 421-22. The high standard applied to defendants under § 1988 is designed to "ensure that plaintiffs with uncertain but arguably meritorious claims are not altogether deterred from initiating litigation by the threat of incurring onerous legal fees should their claims fail." Aller v. N.Y. Bd. of Elections, 586 F.Supp. 603, 605 (S.D. N.Y. 1984).
The factors a court should consider in deciding whether a claim is frivolous or groundless, are: (1) whether the plaintiff established a prima facie case; (2) whether the defendant offered to settle; and (3) whether the court dismissed the case or held a full trial. Myers v. City of W. Monroe, 211 F.3d 289, 292 (5th Cir. 2000). See E.E.O.C. v. L.B. Foster Co., 123 F.3d 746, 751 (3d Cir. 1997). "Allegations that, upon careful examination, prove legally insufficient to require a trial are not, for that reason alone, 'groundless' or 'without foundation' as required by Christiansburg." Hughes v. Rowe, 449 U.S. 5, 15-16 (1980). TCEQ asserts that Aqua's claims qualify as groundless or frivolous on three bases. First, it asserts that Aqua's § 1983 claim was barred by well-settled law because Aqua could not state a § 1983 claim that the state statue was preempted. Second, it asserts that there was no basis for Aqua to continue litigating with TCEQ after Aqua settled with ACC. Third, TCEQ asserts that Aqua should haveconceded the arguments in the Motion to Abstain, but continued to litigate despite the obvious merits of the abstention arguments. As will be seen, none of these arguments have merit.
TCEQ first asserts that Aqua's § 1983 claims were based on an "undisputably meritless legal theory," and failed to state a claim upon which relief could be granted, and thus were legally groundless. Doe v. Silsbee Independent School District, 440 Fed. App'x 421, 425, 2011 WL 4056739 at *3 (5th Cir. 2011). At the hearing, to support this assertion, TCEQ relied on Citizens for Honesty & Integrity in Reg'l Planning v. Cnty. of San Diego, 258 F.Supp.2d 1132,...
To continue reading
Request your trial