Armstrong v. ASARCO, Inc.

Decision Date22 April 1998
Docket NumberNo. 96-3277,96-3277
Citation138 F.3d 382
Parties, 28 Envtl. L. Rep. 21,001 John ARMSTRONG; Heather Potter, Plaintiffs-Appellees, v. ASARCO, INC., a New Jersey Corporation, Defendant-Appellant. UNITED STATES of America, Plaintiff-Appellee. John Armstrong; Heather Potter, Intervenor Plaintiffs-Appellees, v. ASARCO, INC. Defendant-Appellant.
CourtU.S. Court of Appeals — Eighth Circuit

Peter J. Nickles, Washington, DC, argued (Neil A. Riemann, Lawrence J. Jensen and Steven E. Guenzel, on the brief), for Defendant-Appellant.

David K. Rees, Denver, CO, argued (Richard A. DeWitt, Robert S. Lannin and Kimberly J. Graber, on the brief), for Plaintiffs-Appellees.

Before McMILLIAN, ROSS and FAGG, Circuit Judges.

McMILLIAN, Circuit Judge.

ASARCO, Inc. (ASARCO), a New Jersey corporation which owns and operates a lead refinery in Omaha, Nebraska, appeals from a final order entered in the United States District Court 1 for the District of Nebraska, awarding litigation costs to citizen plaintiffs John Armstrong and Heather Potter (plaintiffs) in their action against ASARCO pursuant to the federal Clean Water Act, 33 U.S.C. §§ 1251-1387. Armstrong v. ASARCO, Inc., No. 8:CV9400138 (D.Neb. July 30, 1996) (modifying and adopting the report and recommendation of the magistrate judge, 2 id. (June 5, 1996)). For reversal, ASARCO challenges the district court's designation of plaintiffs as prevailing parties and argues that the district court abused its discretion in awarding plaintiffs their litigation costs associated with their motion for a preliminary injunction and litigation costs related to the consent decree between ASARCO and the United States Environmental Protection Agency (EPA). Alternatively, ASARCO asserts that the district court's decision to award litigation costs should be reversed and the case remanded with directions to the district court to provide a better explanation for the award. For the reasons discussed below, we affirm in part, reverse in part, and remand the case to the district court for further proceedings consistent with this opinion.


Jurisdiction in the district court was proper based upon 33 U.S.C. § 1365. Jurisdiction on appeal is proper based upon 28 U.S.C. § 1291. The notice of appeal was timely filed pursuant to Rule 4(a) of the Federal Rules of Appellate Procedure.


ASARCO's lead refinery (hereinafter "the facility") is located on the Missouri River in downtown Omaha and has been in operation since the 1870s. The facility historically discharged wastewater containing lead and other pollutants directly into the river. In 1982, ASARCO filed with the Nebraska Department of Environmental Quality (NDEQ) an application for a permit under the National Pollutant Discharge Elimination System (NPDES), as required by the Clean Water Act. Meanwhile, the facility continued to discharge wastewater into the river. 3

During the 1980s, NDEQ and ASARCO entered into two stipulations which provided that, while NDEQ was processing ASARCO's permit application, NDEQ would not pursue any enforcement actions against ASARCO so long as ASARCO was complying with NDEQ's request for monitoring reports. On December 29, 1989, ASARCO timely filed a report containing data that NDEQ had requested. No further actions were taken by NDEQ for the next four years.

By 1993, over ten years after ASARCO filed its permit application, the application was still pending with NDEQ. In August 1993, the EPA wrote a letter to NDEQ advising NDEQ that the EPA was considering taking enforcement action.

In October 1993, counsel for plaintiffs filed, under the Freedom of Information Act, a request for information regarding the facility from NDEQ and the EPA. On January 13, 1994, plaintiffs provided ASARCO with a 60-day notice of their intent to sue, a prerequisite to filing a citizen suit under the Clean Water Act, 33 U.S.C. § 1365.

On January 28, 1994, NDEQ issued a notice allowing public comment on ASARCO's NPDES permit application. On March 8, 1994, NDEQ held a public hearing on the pending permit application. 4 On June 6, 1994, NDEQ issued a NPDES permit which established limitations on the levels of pollutants ASARCO was permitted to discharge into the river.

Meanwhile, on March 15, 1994, plaintiffs filed the present citizen suit under the Clean Water Act in federal district court. On March 31, 1994, the EPA filed a similar suit against ASARCO alleging virtually the same violations as those alleged by plaintiffs. The two lawsuits were consolidated.

ASARCO and the EPA began negotiations for a settlement. On September 21, 1994, ASARCO and the EPA represented to the district court that they had tentatively agreed upon a proposed consent decree and asked for a stay of all discovery. According to plaintiffs, they (plaintiffs) "continued to urge the United States not to proceed with the proposed settlement until more discovery had been conducted." Brief for Appellees at 13. The magistrate judge stayed some discovery, but specifically allowed the deposition of one ASARCO witness and ordered the completion of written discovery. Thereafter, the consent decree was not lodged with the district court.

In December of 1994, ASARCO responded to one of plaintiffs' discovery requests by disclosing monitoring reports for the time period since 1989 (when ASARCO had last submitted monitoring reports to NDEQ). The newly disclosed reports revealed, among other things, that the volume of wastewater and the amount of lead being discharged had increased significantly. 5 After receiving the new monitoring reports, plaintiffs, on January 11, 1995, moved for a preliminary injunction enjoining ASARCO's operation of the facility. On the same date, the magistrate judge granted plaintiffs' request to lift the partial stay of discovery. The magistrate judge also set the case for trial in October of 1995.

On June 28, 1995, one day before the preliminary injunction hearing was scheduled to begin, the EPA lodged a proposed consent decree with the district court and provided notice for public comment. In addition to requiring ASARCO to pay a $3.25 million fine, this new proposed consent decree contained provisions for interim treatment and required ASARCO to pay $1 million for Supplemental Environmental Projects, neither of which had been terms of the consent decree that the EPA and ASARCO negotiated in September 1994 but never lodged with the district court.

The hearing on plaintiffs' motion for a preliminary injunction occurred on June 29 and 30, 1995. ASARCO produced evidence to show that newly-installed wastewater treatment equipment had significantly reduced the amount of toxic metals being discharged into the river. That treatment equipment became operational after plaintiffs filed their motion for a preliminary injunction. Although ASARCO conceded it was still violating applicable effluent limitations, it argued that plaintiffs could not show irreparable harm. The magistrate judge took the motion for a preliminary injunction under advisement.

The period for public comment on the proposed consent decree expired on August 13, 1995. On October 3, 1995, the EPA moved for the district court to enter the consent decree as a final judgment, and ASARCO joined in that motion. Plaintiffs opposed the motion on the ground that the consent decree did not go far enough to address ASARCO's violations. Following a hearing on December 22, 1995, the district court granted the EPA's motion and entered the consent decree as a final judgment concerning all issues except the remaining attorney fees issue under 33 U.S.C. § 1365(d). Armstrong v. ASARCO, Inc., slip op. at 11 (Jan. 5, 1996) (district court order). The district court found the consent decree to be "fair, reasonable and adequate in light of the purposes of the Clean Water Act." Id. at 10-11. The district court never ruled on the motion for a preliminary injunction because, the district court explained, it "ha[d] taken the motion for a preliminary injunction under advisement, pending [its] decision on the motion for entry of the Consent Decree." Id. at 4.

Pursuant to 33 U.S.C. § 1365(d), 6 plaintiffs applied for litigation costs (including attorney fees) totaling $879,579.81. 7 The matter was initially submitted to the magistrate judge, who concluded, among other things:

ASARCO can hardly consider itself vindicated after the entry of the consent decree (Filing No. 262) on January 5, 1996. That consent decree required ASARCO to pay a $3.25 million civil penalty, to comply with monitoring requirements, to establish an interim treatment system, and to pay $1 million in environmental enhancement projects. Considering the original objective of the citizen plaintiffs in bringing suit against ASARCO, and weighing the relief ultimately obtained, the court finds that the citizen plaintiffs are prevailing parties within the meaning of 33 U.S.C. § 1365(d) and an award of attorney's fees would be appropriate. Whether or not the citizen plaintiffs desired for stiffer penalties to be levied against ASARCO or for more stringent protection against future damage to the environment, they received essentially what was sought in the complaint--a cessation of pollution by, and a substantial civil fine levied against, the defendant.

Slip op. at 8 (June 5, 1996) (magistrate judge's report and recommendation). The magistrate judge rejected ASARCO's argument that plaintiffs should be treated as having achieved only limited success. The magistrate judge concluded "the citizen plaintiffs have accomplished virtually everything they set out to do. Accordingly, on the issue of success on the merits, the court finds that the fees of the attorneys should not be reduced for lack of success." Id. at 9. The magistrate judge then proceeded to consider each item requested by plaintiffs, reducing some as exceeding a reasonable amount. Id. at...

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