Public Interest Research Group of New Jersey, Inc. v. Windall
| Decision Date | 10 April 1995 |
| Docket Number | No. 94-5059,94-5059,No. 93-5771,Nos. 93-5771,93-5771,s. 93-5771 |
| Citation | 51 F.3d 1179 |
| Parties | , 25 Envtl. L. Rep. 20,837 PUBLIC INTEREST RESEARCH GROUP OF NEW JERSEY, INC., Friends of the Earth, Inc., Pennsylvania Public Interest Research Group, Inc. v. Sheila E. WINDALL, as Secretary of the Air Force, Appellant atPublic Interest Research Group of New Jersey, Inc., Friends of the Earth, Inc., Appellants at |
| Court | U.S. Court of Appeals — Third Circuit |
Andrew C. Mergen, (argued), U.S. Dept. of Justice, Washington, DC, for Sheila E. Windall, as Secretary of the Air Force.
Present: STAPLETON, HUTCHINSON and ROSENN, Circuit Judges
We have before us an appeal and a cross-appeal from an order of the United States District Court for the District of New Jersey awarding counsel fees to the appellants, the Public Interest Research Group of New Jersey, Inc., Friends of the Earth, Inc. and the Pennsylvania Public Interest Research Group, Inc. (collectively "PIRG"), as prevailing parties under the attorney fee shifting provision of the Clean Water Act, 33 U.S.C.A. Sec. 1365(d) (West Supp.1994). PIRG questions the fifty percent negative multiplier the district court applied to its initial fee request and the denial of its application for counsel fees and expenses incurred in litigating the initial fee request. Appellee, the United States Air Force ("Air Force"), cross-appeals. It argues that the district court used an incorrect market to calculate PIRG's award and failed to deduct duplicative, unreasonable and excessive time in determining the lodestar. 1
The principles governing attorney fee awards are set out in Hensley v. Eckerhart, 461 U.S. 424, 103 S.Ct. 1933, 76 L.Ed.2d 40 (1983). Applying them, we conclude that the district court erred in adopting a flat fifty percent negative multiplier. We will therefore vacate its award of attorney fees and remand for further proceedings consistent with this opinion. Because the district court's order denying PIRG any of the fees it incurred in litigating the fee dispute was premised on the amount it awarded in the underlying citizens' suit, we will also vacate that order and direct the district court to reconsider this fee request after it recalculates the amount due PIRG for legal services it incurred in the underlying citizens' suit.
On the Air Force's cross-appeal, we will affirm the district court's determination that the relevant legal market for calculating the lodestar is the District of New Jersey, and its conclusion that attorneys' time reasonably spent in preparing a statutorily required notice of intent is reimbursable. Finally, we suggest that the district court, on remand, should consider the Air Force's objections to PIRG's time charges, determine whether they are reasonable and make appropriate findings to support that determination.
In May 1990, PIRG filed a citizens' suit against the Air Force in the district court, located in Trenton, New Jersey. The Washington, D.C. public interest law firm of Terris, Pravlik & Wagner represented PIRG. PIRG claimed that the Air Force violated the National Pollutant Discharge Elimination System and New Jersey Pollutant Discharge Elimination System ("NPDES/NJPDES") permits 2 for McGuire Air Force Base. PIRG sought: (1) a declaratory judgment that the Air Force had violated and continued to violate the Federal Water Pollution Control Act, 33 U.S.C.A. Secs. 1311, 1318, 1342 (West 1986 & Supp.1994); (2) injunctive relief restraining the Air Force from continuing to operate McGuire Air Force Base in violation of its NPDES permit; (3) an order that the Air Force comply with, and provide PIRG with copies of, discharge monitoring reports and similar documents; and (4) civil monetary penalties pursuant to 33 U.S.C.A. Secs. 1319(d), 1365(a) (West 1986 & Supp.1994). 3
While PIRG's suit was pending, the Air Force and the Environmental Protection Agency ("EPA") agreed to a consent order in a separate EPA action against both the Air Force and Army. 4 The district court approved this order. Under the consent order, the Air Force promised to design and construct a tertiary sewage treatment plant by July 31, 1994. 5 It also promised to "attain compliance with the final effluent limitations the NJPDES permit(s)" required by November 30, 1994. Appendix ("App.") at 246. In addition, the consent order imposed interim effluent discharge limitations and required the Air Force to submit progress reports on compliance to the EPA and the New Jersey Department of Environmental Protection ("NJDEP"). The consent order stated it "[did] not constitute a waiver from compliance with or a modification of the effective terms and conditions of the [Air Force's] permits, which remain in full force and effect." Id.
After entry of the EPA consent order, the Air Force offered to settle with PIRG, but never made a formal settlement offer under Rule 68 of the Federal Rules of Civil Procedure. 6 PIRG rejected the Air Force's offer because it failed to provide all the relief PIRG wanted and did not admit liability. PIRG did make a counteroffer that would have required the Air Force to pay civil penalties for every future permit violation. The Air Force contends that PIRG's primary reason for declining its offer was the Air Force's refusal to pay civil penalties or restitution for the environmental damage PIRG claimed was the result of the Air Force's noncompliance with its discharge permits.
Following oral argument, the district court granted PIRG's motion for summary judgment on liability and issued a permanent injunction against the Air Force. See Public Interest Research Group of New Jersey, Inc. v. Rice, 774 F.Supp. 317, 318 (D.N.J.1991). It ordered the Air Force to: (1) comply with the EPA consent order; (2) maximize compliance with its current NJPDES permit, including applicable effluent limitations; (3) complete all remedial measures proposed by the Air Force in response to one of PIRG's interrogatories; (4) undertake all necessary maintenance and repairs at the existing plant to continue its level of operation; (5) comply with all reporting and monitoring requirements to the EPA and NJDEP; and (6) give PIRG copies of all reports and operating logs submitted to the NJDEP and EPA for four years after entry of the court's order. Id. at 330-31. The district court then determined that the consent order in the EPA's action did not fully vindicate the citizens' rights that PIRG asserted because the consent order did not require the Air Force to comply with its permits. Id. at 327. It stated: "[This order] represents the vindication of the plaintiffs' right to bring suit when the [EPA] cannot or will not protect the environment." Id. at 326.
The district court stayed the Air Force's motion for summary judgment on PIRG's claim for civil penalties on the defense of sovereign immunity pending decision in Department of Energy v. Ohio, 503 U.S. 607, 112 S.Ct. 1627, 118 L.Ed.2d 255 (1992). After the Supreme Court held that sovereign immunity barred recovery of monetary penalties from the United States in citizens' suits under the Clean Water Act, the Air Force renewed its motion to deny PIRG's claim for civil penalties. Id. at 617-21, 112 S.Ct. at 1635-36. Instead of deciding the motion, the court allowed PIRG voluntarily to withdraw its claim for civil penalties, pursuant to Federal Rule of Civil Procedure 41(a)(2), and thereafter denied reconsideration.
In the meantime, PIRG and the Air Force began negotiations over counsel fees and costs. During them, the Air Force made a Rule 68 offer of $130,000 for attorneys' fees and expenses. The parties did not reach agreement, and PIRG submitted a fee application to the district court. It attempted to segregate the legal fees and costs it incurred in pursuing declaratory and injunctive relief from those incurred in pursuing civil penalties or restitution.
PIRG suggested three legal service markets whose hourly rates might be used: (1) Washington, D.C.; (2) the District of New Jersey; and (3) southern New Jersey. Depending on the market chosen, PIRG's claim for fees and expenses ranged from $166,946.50 to $240,897.50.
The district court referred the fee issue to a magistrate judge. The magistrate judge recommended awarding attorneys' fees of $108,247.38 and a total award of $118,875.08 for fees and costs. The magistrate judge's market for setting PIRG's attorneys' hourly rate was the District of New Jersey.
The magistrate judge did not fully consider the Air Force's contention that the hours PIRG claimed were inadequately documented, excessive or duplicative; but, because PIRG succeeded on only one of the two issues litigated, recommended a fifty percent negative multiplier. The magistrate judge classified the remedies sought into two categories: injunctive relief and monetary damages. A fifty percent negative multiplier was recommended because PIRG obtained no monetary damages, the relief sought, on one of the two claims. The magistrate judge noted that the injunctive relief granted to PIRG was substantially identical to the relief in the consent order between the EPA and Air Force, but nevertheless concluded that PIRG achieved "limited" success on this issue. 7 Finally, the magistrate judge recommended adding $11,136.12 in fees to cover half the attorney time charged to PIRG's demand for a civil penalty, for a total award of $130,011.20 for fees and expenses incurred in the underlying citizens' suit.
PIRG had also filed an application for the attorneys' fees and expenses it incurred in the dispute over the fee award. The magistrate judge recommended this application be...
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