Interfaith Cmty. Org. v. Honeywell Int'l, Inc.
| Decision Date | 22 July 2013 |
| Docket Number | 11–3814.,Nos. 11–3813,s. 11–3813 |
| Citation | 726 F.3d 403 |
| Court | U.S. Court of Appeals — Third Circuit |
| Parties | INTERFAITH COMMUNITY ORGANIZATION; Lawrence Baker; Martha Webb Herring; Margaret Webb; Winston Clarke; Margarita Navas; Hackensack Riverkeeper, Inc.; William Sheehan v. HONEYWELL INTERNATIONAL, INC, F/K/A AlliedSignal, Inc; Roned Realty of Jersey City, Inc.; Roned Realty of Union City, Inc.; W.R. Grace & Co; Ecarg Inc; W.R. Grace Ltd; *Kellogg Street 80 Property; *Kellogg Street 440 Property, LLC.; *Kellogg Street 60 Property, LLC Honeywell International, Inc., Kellogg Street 80 Property, LLC, Kellogg Street 440 Property, LLC, Kellogg Street 60 Property, LLC, Appellants in No. 11–3813. * (Pursuant to Fed. R.App. P. 12(a)). Jersey City Municipal Utilities Authority; Elizabeth Rosario; Rafael Rosario; Hackensack Riverkeeper, Inc.; William Sheehan; Winston Clarke; Lawrence Baker; Jersey City Incinerator Authority v. Honeywell International Inc; Paul Trenk; Steve Gallo; Bob Ciasulli; Degen Oil and Chemical Co; Inland Southeast Jersey City, LLC; Kellogg Street 60 Property, LLC; Kellogg Street 80 Property, LLC; Kellogg Street 440 Property, LLC; 100 Kellogg Street, LLC; New Jersey City University; Jerramiah T. Healy; Oren Dabney, In his official capacity as Director of Jersey City Incinerator Authority; John Yurchak, In his official capacity as Director of Jersey City Department of Public Works; Daniel Becht, Executive Director of Jersey City Municipal Utilities Authority; Bayonne Municipal Utilities Authority; Carlos M. Hernandez, In his official capacity as President of New Jersey City University Honeywell International, Inc., Kellogg Street 80 Property, LLC, Kellogg Street/440 Property, LLC, Kellogg Street 60 Property, LLC, Appellants in 11–3814. |
OPINION TEXT STARTS HERE
Lisa S. Blatt, Esq. [argued], Michael D. Daneker, Dirk C. Phillips, R. Stanton Jones, Arnold & Porter, Washington, D.C., for Appellants.
Bruce J. Terris, Carolyn Smith Pravlik, Esq. [argued], Michelle Weaver, Terris, Pravlik & Millian, LLP, Washington, D.C., for Appellees.
Before: McKEE, Chief Judge, SLOVITER and VANASKIE, Circuit Judges.
“A request for attorney's fees should not result in a second major litigation.” Hensley v. Eckerhart, 461 U.S. 424, 437, 103 S.Ct. 1933, 76 L.Ed.2d 40 (1983). Regrettably, requests for attorneys' fees in this protracted environmental clean-up case have resulted not only in a second major litigation, but a third as well. An earlier multi-million dollar fee award previously brought before us was vacated and remanded for additional review by the District Court. Interfaith Cmty. Org. v. Honeywell Int'l, Inc. ( ICO II ), 426 F.3d 694 (3d Cir.2005). We are now confronted with a challenge to another multi-million dollar award. This latest appeal calls upon us to decide whether offers of judgment pursuant to Fed.R.Civ.P. 68 may be made in the context of attorney's fee disputes under the fee-shifting provisions of the Resource Conservation and Recovery Act (“RCRA”), 42 U.S.C. §§ 6901, et seq. We are also called upon once again to determine whether the fee award is excessive. Because we conclude that Rule 68 offers of judgment may be made in this context, we will reverse the District Court's declaration that the offers of judgment in this case are null and void as well as its decision to bar any further offers of judgment. And, while we uphold as not clearly erroneous the District Court's decisions with respect to the appropriate hourly rates in this case, we are unable to sustain its conclusions with respect to the number of hours claimed by counsel because the District Court's findings lack sufficient explanation. Accordingly, we will vacate the fee award and remand for further proceedings.
Mutual Chemical Company of America (“Mutual”) operated a chrome manufacturing plant in Jersey City, New Jersey from 1895 to 1954. During that time, the company deposited approximately 1.5 million tons of industrial waste residue containing hexavalent chromium into wetlands along the Hackensack River. In 1954, Allied Corporation purchased the plant and ended the dumping. Allied Corporation was succeeded by AlliedSignal, Inc., and later by Honeywell International, Inc. (“Honeywell”). Although the dumping stopped, the contaminated area was not cleaned up.
In 1995, the Interfaith Community Organization and five residents of the nearby community (collectively, “ICO”), represented by the Washington, D.C. law firm of Terris, Pravlik & Millian, LLP (“Terris”), filed the original suit against AlliedSignal, then the owner of the site, seeking the cleanup of a contaminated area designated “Study Area 7.” ICO sued AlliedSignal under the citizen suit provision of RCRA, which allows individuals to bring a civil action against any person “who has contributed or who is contributing to the past or present handling, storage, treatment, transportation, or disposal of any solid or hazardous waste which may present an imminent and substantial endangerment to health or the environment....” 42 U.S.C. § 6972(a)(1)(B).
The District Court entered judgment for ICO in 2003, ordering Honeywell (which had succeeded AlliedSignal) to clean up Study Area 7. Interfaith Cmty. Org. v. Honeywell Int'l Inc., 263 F.Supp.2d 796, 802 (D.N.J.2003). This Court affirmed. See399 F.3d 248, 252 (3d Cir.2005).
In 2004, the District Court awarded ICO more than $4.5 million in fees and expenses for litigating the 1995 action, and also required Honeywell to pay the future fees and costs incurred by ICO in monitoring Honeywell's cleanup. Interfaith Cmty. Org. v. Honeywell Int'l, Inc. ( ICO I ), 336 F.Supp.2d 370, 403–04 (D.N.J.2004). We affirmed in part and vacated in part. ICO II, 426 F.3d 694, (3d Cir.2005). Specifically, we sustained as not clearly erroneous the District Court's decision with respect to the hourly rates sought by ICO's counsel, id. at 707–10, but rejected as inadequate the District Court's review of the hours for which compensation was claimed. Id. at 711–14. Accordingly, we vacated the fee award and remanded for further proceedings.
In 2005, Hackensack Riverkeeper (“Riverkeeper”), also represented by Terris, filed companion cases against Honeywell stemming from the same contamination but relating to areas adjacent to Study Area 7, designated as “Study Area 5” and “Study Area 6.” (J.A. 1140.) The parties entered into a number of consent decrees in which Honeywell conceded responsibility, and agreed to remediate the additional contaminated sites. As part of the consent decrees, Honeywell also agreed to pay $5 million in fees and costs for the expenses incurred prior to the decrees, and to pay “reasonable” future fees and expenses incurred in connection with monitoring Honeywell's remediation efforts. (J.A. 334–35.)
Initially, the parties were able to reach agreement on fees and expenses. Beginning in the fall of 2009, however, Honeywell, on the one hand, and ICO and Riverkeeper (collectively, “Appellees”) on the other, failed to reach agreement with respect to the fees sought for monitoring Honeywell's work.
Terris subsequently filed two separate fee applications, totaling more than $700,000, for its monitoring work performed in 2009 and the first half of 2010 in connection with both cases. Terris filed a separate application, seeking almost $2.5 million, for work performed on the 2005 litigation. Honeywell filed objections to the fee applications. Specifically, Honeywell renewed its previously-rejected arguments that the forum rate rule should be applied so that the hourly rates sought by Terris should be based upon the rates charged by New Jersey lawyers as opposed to Washington, D.C. lawyers, and that, even if D.C. rates were used, Appellees applied the wrong method for calculating prevailing D.C. market rates. In addition, Honeywell once again contested the reasonableness of the hours and expenses claimed by counsel. Honeywell also served offers of judgment pursuant to Rule 68 for the disputed fees. In response, Appellees asked the District Court to issue a declaratory judgment that Honeywell's Rule 68 offers are null and void in the context of RCRA citizen suits.
On September 8, 2011, the District Court issued an opinion that substantially upheld the Appellees' fee request. First, the District Court once again ruled that the forum-rate rule need not be applied in this case so that Terris could be paid Washington, D.C. rates for work relating to a dispute in New Jersey. Interfaith Cmty. Org. v. Honeywell Int'l, Inc. ( ICO III ), 808 F.Supp.2d 744, 749–50 (D.N.J.2011). Second, the District Court evaluated two different methods for calculating prevailing D.C. market rates, and approved the method requested by Appellees. Id. at 750–51. Third, the District Court rejected most of the challenges to the reasonableness of the hours expended by Appellees' counsel. Id. at 751–55. And, finally, the District Court held that Rule 68 offers of judgment cannot be made in citizen suits filed under RCRA, concluding that application of Rule 68 to RCRA citizen suits would violate the Rules Enabling Act, 28 U.S.C. § 2072, by discouraging the very citizen suits that Congress intended to promote. Id. This appeal followed.
The District Court had jurisdiction under 42 U.S.C. § 6972(a), the citizen suit provision of RCRA, and we have appellate jurisdiction under 28 U.S.C. § 1291. We “review the legal interpretation of procedural rules de novo.” United Auto. Workers Local 259 Soc. Sec. Dep't v. Metro Auto Ctr., 501 F.3d 283, 286 (3d Cir.2007). The standard the district court should “apply in calculating a fee award is a legal question subject to plenary review,” Evans v. Port Auth. of N.Y. & N.J., 273 F.3d 346, 358 (3d Cir.2001), but “[t]he determination of the appropriate billing rate is a factual...
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