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UNITED STATES v. CITY OF SAN DIEGO

June 30, 1998

UNITED STATES OF AMERICA, Plaintiff,
v.
CITY OF SAN DIEGO, STATE OF CALIFORNIA, Defendants, SIERRA CLUB, EMILY DURBIN and BRUCE HENDERSON, Intervenors.



The opinion of the court was delivered by: BREWSTER

ORDER GRANTING PLAINTIFF-INTERVENOR SIERRA CLUB'S MOTION FOR ATTORNEY'S FEES

 I. INTRODUCTION

 Plaintiff-intervenor Sierra Club filed a motion for attorney's fees in this action pursuant to 33 U.S.C. § 1365(d) on June 20, 1997. The United States Environmental Protection Agency (the United States or EPA), the State of California (State), and the City of San Diego (City) opposed the motion. This matter came on for hearing on April 24, 1998. Upon due consideration of the moving and responding papers and the arguments of counsel, the Court hereby GRANTS Sierra Club's motion for attorney's fees.

 II. BACKGROUND

 During the 1980s, the City of San Diego was a chronic violator of the Federal Water Pollution Control Act (Clean Water Act or CWA), 33 U.S.C. §§ 1251-1387. The City's violations ranged from wastewater overflows along City sewer lines to the City's failure to treat raw sewage to secondary treatment standards before discharging it into the Pacific Ocean. In 1988, the United States and the State of California *fn1" (State) instituted a CWA civil enforcement action against the City. By 1989, the parties were in the process of negotiating a proposed Consent Decree that would have required the City to build a number of new sewage treatment and water reclamation facilities. The new facilities purportedly would have increased the City's wastewater treatment and disposal system to adequate capacity and enabled the City to implement secondary treatment standards. As the negotiations gained momentum, the Sierra Club, which had been monitoring the progress of the case, sought to intervene as a plaintiff and block entry of the proposed Consent Decree. The Sierra Club argued that the agreement being reached between the parties violated the public interest for the following reasons:

 (1) Sierra Club believed that secondary treatment standards could be attained at a lower cost and with less environmental impact by using experimental "physical-chemical" treatment methods at the existing Point Loma Wastewater Treatment Facility (the Point Loma plant), the City's main sewage treatment facility, rather than building new treatment facilities as required by the Consent Decree;

 (2) The Consent Decree contained no water conservation measures, which Sierra Club believed would obviate the need for new wastewater treatment facilities;

 (3) The Consent Decree required seven new water reclamation facilities but did not provide for the distribution and re-use of the reclaimed water; and

 (4) The Consent Decree required effluent to be treated with chlorine before being discharged into the ocean.

 Sierra Club's motion to intervene was granted on September 20, 1989. After extensive evidentiary hearings, the Court deferred approval of the Consent Decree on June 18, 1991.

 On September 11, 1991, Sierra Club filed a motion for interim attorney's fees pursuant to 33 U.S.C. § 1365(d). The Court granted this motion in part on February 6, 1992, finding that § 1365(d) allowed intervening plaintiffs in CWA actions to receive attorney's fees.

 To determine an appropriate fee award, the Court placed Sierra Club's work on the case in three categories. The first category of work, for which the Court awarded fees, involved water reclamation issues. The second category of work, for which the Court held that a fee request was premature, involved the experimental use of physical-chemical treatment methods at the Point Loma plant. The Court found the test results too inconclusive at that time to justify a fee award. Finally, the Court declined to award fees for work on the penalty phase of the litigation because it found that Sierra Club had not made a beneficial contribution to that portion of the case.

 The Court awarded Sierra Club an amount equal to 15% of its total reasonable fees and costs accrued as of June 18, 1991. The United States, the State of California, and the City of San Diego were held jointly and severally liable for 67 2/3 % of the interim fee award, and the City of San Diego was solely liable for 33 1/3 %. The parties eventually stipulated to a $ 375,406.24 lodestar, of which Sierra Club received 15%, or $ 56,310.93. The award was made without prejudice to future fee motions.

 The Court certified the interim award of attorney's fees for interlocutory appeal pursuant to 28 U.S.C. § 1292(b). The United States and the City of San Diego appealed on the ground that as an intervenor, Sierra Club could not receive fees. Sierra Club cross-appealed the amount of the award. The Ninth Circuit, without reaching the merits of this Court's decision, held that it lacked jurisdiction over the appeals under either 28 U.S.C. §§ 1291 or 1292(b), and the appeals were dismissed without prejudice.

 After deferral of the Consent Decree, the Sierra Club devoted extensive efforts to developing alternate resolutions to this matter. It researched water reclamation and re-use possibilities and the effects of water conservation on wastewater volumes at the Point Loma plant. It also monitored the pilot testing of physical-chemical treatment methods at the Point Loma plant. In September 1993, Sierra Club requested that the Court hold a final hearing on the Consent Decree and that the Consent Decree be disapproved. Although the United States and the State continued to favor approval of the Consent Decree, the City changed positions and opposed the decree. The parties participated in extensive discovery, followed by thirteen days of evidentiary hearings. On March 31, 1994, the Court rejected the Consent Decree.

 Subsequently, the Court issued an interim order on August 26, 1994 to address all remedial phase issues in the case pending final judgment. That order provided, among other things, construction dates for a number of projects, including the North City Water Reclamation Plant (North City plant). However, the order did not require completion of a distribution system for reclaimed water by the start-up date of the North City Plant. Without distribution pipelines, Sierra Club asserted, the reclaimed water would be wastefully discharged into the ocean. Sierra Club therefore moved to amend the interim order to provide for "distribution pipelines adequate to market not less than 9,000 acre feet per year." The Court did amend the interim order, but it did not adopt the Sierra Club's proposed amendment. Instead, the Court adopted the City's suggestion that the amended order incorporate a map setting out a backbone distribution pipeline system and specify completion dates for each segment of the pipeline project. It did not require a specific distribution pipeline capacity.

 One of the most significant issues remaining in the case after rejection of the Consent Decree was whether the City should be required to treat effluent to secondary treatment standards at the Point Loma plant before discharging it into the ocean. Despite substantial improvements at the Point Loma plant, due in part to the use of physical-chemical treatment methods, secondary treatment standards could not be reached. Before 1994, the EPA was allowed to waive one or more secondary treatment standards under § 301(h) of the CWA if no environmental injury would result. The parties and the Court were convinced that under the circumstances, a § 301(h) waiver would be appropriate. *fn2" Unfortunately, the City's prior § 301(h) request had been withdrawn years before, and by 1995, the § 301(h) waiver provision had expired. *fn3" Without a waiver, the City would have been forced to build an expensive and unnecessary new sewage treatment plant to comply with the CWA. To avoid this result, the parties drafted, lobbied for, and obtained passage of a bill by Congress, the Ocean Pollution Reduction Act (OPRA), which allowed the City to apply for a § 301(h) waiver. The City applied for the waiver and, with the Sierra Club's help, established in waiver permit hearings before the EPA that the Point Loma plant had achieved an 85% suspended solids removal rate, and that due to this, the City's effluent discharges did not injure the ocean environment. The City obtained a § 301(h) waiver on November 9, 1995.

 The resolution of the secondary treatment issue removed a major obstacle to settling the case. The parties negotiated a complex settlement, and the final Stipulated Judgment was entered on June 6, 1997.

 Sierra Club now moves for a final award of attorney's fees. It seeks $ 866,628.83, which represents all work done on the case, less the interim fee award. It also requests a 25% enhancement.

 III. DISCUSSION

 A. Standard of Law

 Under the CWA, a district court may award "costs of litigation . . . to any prevailing or substantially prevailing party whenever the court determines such award is appropriate." 33 U.S.C. § 1365(d).

 The threshold determination is whether the moving party is a "prevailing party." Earth Island Inst., Inc. v. Southern Cal. Edison Co., 838 F. Supp. 458, 463 (S.D. Cal. 1993) (citing Hensley v. Eckerhart, 461 U.S. 424, 433-37, 76 L. Ed. 2d 40, 103 S. Ct. 1933 (1983)). A prevailing party "must have succeeded on 'any significant issue in the litigation which achieves some of the benefit'" sought. Earth Island, 838 F. Supp. at 464 (quoting Hensley, 461 U.S. at 433).

 Second, the hours claimed and the hourly rate charged must be reasonable. See Hensley, 461 U.S. at 434.

 Third, even if the party seeking fees has prevailed, the court must consider the results obtained by the moving party in light of the amount of fees sought and, if appropriate, adjust the amount of the award. See id. "This factor is particularly crucial where a plaintiff is deemed 'prevailing' even though he succeeded on only some of his claims for relief." Id. However, when a court adjusts a fee award, it must provide a "concise but clear explanation" for its decision. Id. at 437.

 Finally, an attorney's fee applicant seeking an enhancement of the lodestar amount must show that the enhancement is "necessary to the determination of a reasonable fee." Blum v. Stenson, 465 U.S. 886, 898, 79 L. Ed. 2d 891, 104 S. Ct. 1541 (1984).

 B. Sierra Club Is Not Entitled to a Blanket Fee Award.

 Sierra Club argues that because the Consent Decree was rejected, it has prevailed in the case and should receive attorney's fees for all of its work. The Sierra Club objects to an issue-by-issue consideration of its fee award. It cites Hensley for the proposition that

 
where a plaintiff has obtained excellent results, his attorney should recover a fully compensatory fee. Normally this will encompass all hours reasonably expended on the litigation . . . . In these circumstances the fee award should not be reduced simply because the ...

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