UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF CALIFORNIA
September 17, 1998
UNITED STATES OF AMERICA, Plaintiff,
CITY OF SAN DIEGO, STATE OF CALIFORNIA, et al., Defendants. SIERRA CLUB, EMILY DURBIN and BRUCE HENDERSON, Intervenors
The opinion of the court was delivered by: BREWSTER
ORDER (1) DENYING CITY OF SAN DIEGO'S MOTION FOR RECONSIDERATION, (2) DENYING SIERRA CLUB'S MOTION FOR RECONSIDERATION, AND (3) CLARIFYING THE COURT'S JUNE 30, 1998 ORDER.
On July 28, 1998, Defendant City of San Diego ("City") filed a motion for reconsideration and/or clarification of the Court's June 30, 1998 order ("the Order") granting Plaintiff-intervenor Sierra Club's motion for attorney's fees under 33 U.S.C. § 1365(d). Sierra Club filed its own motion for reconsideration of the Order on July 30, 1998. Upon due consideration of the moving and responding papers and for the reasons set forth below, the Court hereby DENIES the City's motion for reconsideration and DENIES the Sierra Club's motion for reconsideration. However, the Court will clarify the Order.
The complete background of this case is set forth in the Order and need not be rehashed here. On June 20, 1997, Plaintiff-intervenor Sierra Club filed a motion for attorney's fees pursuant to 33 U.S.C. § 1365(d). After full briefing, the Court held a hearing on April 24, 1998. At the hearing, the Court announced that it would grant Sierra Club's motion, but that it would adjust the fee requested to reflect a reasonable fee in light of the unique and complex resolution reached in this case.
Sierra Club requested a total fee of $ 866,628.83, which represented all of its work on the case, minus the interim fee award that it received in 1992. Additionally, Sierra Club sought a 25% enhancement to reflect the quality of the results that it obtained in the case, plus a "delay enhancement" to reflect the interest attributable to the elapsed time between the accrual and award of its fees.
Unfortunately, some of the issues that the Court considered essential to its ruling were not discussed, i.e., precisely why the Court was using an issue-by-issue method for adjusting Sierra Club's fee and which specific work was to be emphasized in calculating the total. The Court stated at the hearing that it would decrease the $ 866,628.83 requested by the Sierra Club by the amounts attributable to work on the following issues: (1) Sierra Club's application for a temporary restraining order to enjoin the Mexican-American outfall pipe,
(2) appellate work, and (3) non-water conservation work during the penalty phase of the case. The parties were ordered to meet and confer to review Sierra Club's billing records and submit a final amount to the Court. The Sierra Club subsequently informed the Court that the parties had agreed to a total of $ 781,306. Although the City sent the Court a letter stating that it did not consent to that number, it did not file a formal objection.
At the hearing, the Court initially stated that it wanted to make the parties jointly and severally liable for the judgment in the following proportions: City--75%, State/United States--25%. Later in the hearing, counsel asked the Court how whether its allocation of liability was affected by the City's agreement to indemnify the State for any fees awarded against it. The Court answered that it intended to ensure that the City was ultimately responsible for 75% of Sierra Club's fees and that the United States was ultimately responsible for 25% of the fees. Therefore, the Court stated that liability would be allocated severally, 62.5% to the City, 12.5% to the State, and 25% to the United States.
On June 30, 1998, the Court issued its Order granting Sierra Club's motion for attorney's fees in the amount of $ 781,306. However, the Order stated that Sierra Club's requested fee was being decreased to reflect work on the following issues: (1) water reclamation and reuse, (2) disinfection/Ocean Plan, (3) motion to amend the Court's August 1994 interim order, (4) Regional Water Quality Control Board administrative proceedings, (5) appellate work, and (6) a state law "water brief" drafted to oppose the original Consent Decree. The award was also to include an amount equal to 15% of Sierra Club's reasonable attorney's fees for work on the 1992 interim fee petition and all of its fees for work on the final fee petition.
The City moves to reconsider (1) the amount of the award in light of the additional issues targeted for deduction in the Order and (2) the allocation of liability in the Order. The Sierra Club moves to reconsider the Court's implied ruling that it would not receive an enhancement for delay.
A. Standard of law
Rule 60(b) of the Federal Rules of Civil Procedure permits relief from a judgment or order for:
(1) mistake, inadvertence, surprise, or excusable neglect; (2) newly discovered evidence which by due diligence could not have been discovered in time to move for a new trial under Rule 59(b); (3) fraud (whether heretofore denominated intrinsic or extrinsic), misrepresentation, or other misconduct of an adverse party; (4) the judgment is void; (5) the judgment has been satisfied, released, or discharged, or a prior judgment upon which it is based has been reversed or otherwise vacated, or it is no longer equitable that the judgment should have prospective application; or (6) any other reason justifying relief from the operation of the judgment.
The Ninth Circuit has instructed that "in determining whether Rule 60(b) applies, courts should be mindful that the rules are to be construed to achieve the just determination of every action." Rodgers v. Watt, 722 F.2d 456, 459 (9th Cir. 1983). However, there is also a compelling interest in the finality of judgments that should not be disregarded lightly. Id. Reconsideration under Rule 60(b) is appropriate if "the district court (1) is presented with newly discovered evidence, (2) committed clear error or the initial decision was manifestly unjust, or (3) if there is an intervening change in controlling law." School Dist. No. 1J, Multnomah County v. ACANDS, Inc., 5 F.3d 1255, 1263 (9th Cir. 1993), cert. denied, 512 U.S. 1236, 114 S. Ct. 2742, 129 L. Ed. 2d 861 (1994). Here, the parties have presented no new evidence or intervening changes in the controlling law. Thus, the Court must determine whether it has committed clear error or created a manifestly unjust result.
B. The City's Motion for Reconsideration
The City moves to reconsider the total amount of the fee award and the allocation of liability among the parties.
1. Adjustment to fee award
The Order stated that the Court wished to exclude from Sierra Club's fee award all amounts reflecting work done on five issues that were not mentioned during the hearing: (1) water reclamation and re-use, (2) disinfection/Ocean Plan, (3) motion to amend the Court's August 1994 interim order, (4) Regional Water Quality Control Board administrative proceedings, and (5) the state law "water brief." The City asks the Court to decrease Sierra Club's fee award further to exclude the work on these issues.
The Sierra Club opposes any further adjustment of its fee award, arguing that it should have received its entire fee request, plus enhancements for delay and quality of results and that therefore, a further decrease of its award would add insult to injury. The Sierra Club opposes the Court's issue-by-issue analysis of Sierra Club's fee request set forth in the Order. However, even under the issue-by-issue analysis used in the Order, the Sierra Club alleges that it prevailed on some of the issues identified by the Court as grounds for deduction. For the Sierra Club's benefit, the Court will clarify the logic behind the Court's issue-by-issue determination of Sierra Club's fee. The Court will further explain why it does not choose to make any further downward adjustments to Sierra Club's fee despite the additional issues discussed in the Order.
a. Clarification of the Court's methodology
In the Order, the Court held that the Sierra Club was not entitled to a blanket fee award reflecting all of its work on the case. The logic behind this holding was that although the Sierra Club was a prevailing party, it was not the only prevailing party. In fact, as the Court stated at the hearing and in the Order, all parties in this case prevailed to some extent because all benefitted from and contributed to the settlement reached. In light of the atypical outcome in this case, the Court has determined that a fee reflecting all of Sierra Club's work in the case would not be reasonable. The Court further decided to set a reasonable fee by evaluating the Sierra Club's level of success on various portions of the litigation, awarding fees based on work that the Court found contributed to the final result and adjusting Sierra Club's fee request downward to reflect work that either contradicted or did not promote the resolution reached. This seemed to the Court to be a more thoughtful, albeit more difficult, method of adjustment than reducing Sierra Club's fee by an arbitrary percentage.
The Sierra Club opposes the issue-by-issue method because it mistakenly thinks that the Court is conflating the issues of whether Sierra Club prevailed in the litigation as a whole and whether the time expended by its attorneys on various tasks was reasonable. The Court fully recognizes that Sierra Club is one of the prevailing parties in this litigation and that all of its attorneys' work on this case may properly be submitted as part of its fee request. The Court is simply adjusting that total request to reflect Sierra Club's relative success in the case. The issue-by-issue method set forth in the Order is the way that the Court has chosen to make that adjustment.
Sierra Club states that the Court's method for determining a reasonable fee in this matter is "fundamentally contrary to the Supreme Court's seminal decision in Hensley v. Eckerhart, 461 U.S. 424, 76 L. Ed. 2d 40, 103 S. Ct. 1933 (1983)," its progeny, and "the purposes of the Clean Water Act's fee-shifting statute." Contrary to Sierra Club's accusations, the Court is not "bucking" precedent in this matter. Rather, it is doing exactly what Hensley and its progeny require and the Sierra Club repeatedly urges: assessing the reasonableness of the fee request in light of Sierra Club's overall success in the litigation. The Court's adjustment method does not seem to the Court to be an abuse of discretion; no published decisions either advocate or warn against such a process, probably because no published decisions involve a case quite like this one. Therefore, the Court will not alter the methodology behind its fee award. However, the Court is equally disinclined to make any additional downward adjustments to Sierra Club's award.
b. The excluded issues do not affect the Court's determination of a reasonable fee
In the process of ruling on the City's motion for reconsideration, the Court has reexamined the five issues discussed in the Order but not mentioned in the hearing. Although the Court stands by its evaluation of Sierra Club's success on the various issues presented in this case, it feels that the $ 781,306 fee award stated in the Order is still a reasonable fee. The Court admits surprise at this number given its initial inclination to award a much smaller amount, perhaps one-third the size of the fee stated in the Order. However, given the Sierra Club's success on the macro-issue of whether the Consent Decree would be rejected, it feels that a larger fee is merited despite the fact that Sierra Club's input on a number of micro-issues did not help the Court to reach the outcome ultimately attained in this case.
It was never the Court's intention to create a war of the balance sheets with its issue-by-issue analysis of Sierra Club's relative success. Rather, the Court was aiming for a number that generally reflected its impression of Sierra Club's performance in the case, a number that seemed, in the words of the Clean Water Act's fee-shifting statute, "appropriate." The Court believes that the whole of Sierra Club's work in this case is worth more than the sum of its parts. In other words, although the mathematical total of the dollar values attributable to the work upon which the Court has based its fee award is less than $ 781,306, the Court feels that $ 781,306 is an appropriate fee under the circumstances. It is simply impossible to force a subjective impression of Sierra Club's influence in this litigation to be accurately reflected in an objective tally of numbers. Therefore, the Court will not make any further adjustments to the fee award stated in the Order. However, for purposes of clarification, the Court will briefly re-visit the issues that Sierra Club so bitterly argues should have been included in the Court's estimation of its fee.
i. Water reclamation and reuse
In the Order, the Court stated that Sierra Club had already been compensated via the 1992 interim fee award for all relevant work on water reclamation and reuse issues. This was not quite accurate. The Court recognizes that after approval of the Consent Decree was deferred in 1991, Sierra Club continued to research water reclamation and reuse issues. However, in the Court's view, this work was not nearly as helpful to the Court as the water reclamation and reuse work done prior to deferral. Once the Court was convinced of the merits of Sierra Club's water reclamation and re-use arguments, further advocacy on these issues did not substantially change the course of the litigation. The work was not irrelevant, but neither was it very helpful.
ii. Disinfection/Ocean Plan compliance
The Consent Decree would have required the City to disinfect its effluent through a chlorination/dechlorination process before discharging it into the ocean. The Sierra Club sought to stop the use of chlorine for disinfection. The issue was resolved by allowing the City to extend its ocean outfall into deeper water, obviating the need for disinfection. The Sierra Club sought to require the City to use an ozonization disinfection process until the extension was completed, but the Court held that disinfection during completion was unnecessary. In the Order, the Court excluded the Sierra Club's work on this issue for fee adjustment purposes because it perceived the Sierra Club's focus to have been on requiring ozonization rather than on the solution reached, the ocean outfall extension.
The Sierra Club now submits declarations saying that it supported the City's request to extend the ocean outfall, that it merely wished to require ozonization until the extension was completed, and that its main goal was stopping chlorination, which it succeeded in doing. Although the Court recognizes that Sierra Club did support the outfall extension, it still does not think that Sierra Club's support made any difference in terms of its decision to allow the outfall. The Court was inclined to allow the outfall before the Sierra Club chimed in. Furthermore, the Court directly rejected Sierra Club's position that ozonization disinfection should be required before completion of the outfall. Therefore, the Court stands by its evaluation of Sierra Club's work on the disinfection/outfall issue.
iii. 1995 motion to amend the interim order
In 1995, the Sierra Club became concerned that the interim order issued after the Court denied approval of the Consent Decree did not require a distribution system for the reclaimed water recovered by the North County Reclamation Plant. It tried to persuade the City to stipulate to an amendment that required the construction of "distribution pipelines adequate to market not less than 9,000 acre feet per year." The City did not stipulate, so Sierra Club made a motion to amend the interim order. The Court amended the interim order, but not with the specific language sought by the Sierra Club. Rather, it adopted an amendment suggested by the City that incorporated a map of the proposed distribution system and completion dates for various segments of the project. The Court stated in the Order that it would not include fees for Sierra Club's work on the motion to amend the interim order because it did not feel that the Sierra Club prevailed on that issue.
The Court stands by its finding, with a minor modification. Although the Court is aware that the incorporation of a distribution system into the interim order was more important to the Sierra Club as a general principle than the specific language that it advocated, the Court does not believe that Sierra Club's intervention on this issue appreciably changed the outcome of the case. The City had already planned the North County Reclamation Plant and its accompanying distribution system. Although the system was not part of the interim order, the City did not change its plans based on any actions taken by the Sierra Club. The Sierra Club's motion was superfluous, so Sierra Club's work on the motion has not been emphasized in the Court's fee determination calculus.
iv. State administrative proceedings
The Court held that Sierra Club should be compensated for appearances in EPA administrative proceedings, which it made to encourage the EPA to grant the City a waiver of secondary treatment standards. However, the Court specifically excluded Sierra Club's appearances before the Regional Water Quality Control Board (RWQCB) from the basis of its fee award. Sierra Club submits declarations that its RWQCB appearances were motivated by the same impetus as its EPA appearances.
The Court continues to maintain that the RWQCB proceedings were distinguishable from the EPA proceedings and that, therefore, the same justification for awarding fees for the EPA work does not exist for the RWQCB work. The RWQCB proceedings were conducted for the purpose of deciding whether the City would be fined for operating a sewage treatment plant that did not comply with all secondary treatment standards without a permit from the EPA. The City was in the process of taking the steps necessary to obtain its permit. In the interim, the City and the Sierra Club appeared before the RWQCB to oppose any attempt by the RWQCB to fine the City. This goal differs from that underlying Sierra Club's work before the EPA. Whereas before the EPA., the Sierra Club was urging an administrative body to change its regulatory requirements for the specific purpose of attaining the outcome reached in this case, the RWQCB proceedings involved persuading the Board not to punish the City under its existing regulations. The Court feels that this goal, unlike the goal of the EPA work, was not inextricable from the outcome reached in this litigation and for that reason should not be a factor in the Court's determination of a reasonable fee.
v. Water brief
The "water brief" was prepared by Sierra Club to set forth an alternative state law theory as a potential ground for rejecting the Consent Decree. Essentially, the state law grounds were that the California Constitution sets forth a general policy that conserving water is a priority of the state. See Cal. Const. Art. X § 2. Sierra Club asserts that its work on the water brief should have been included in the Court's fee determination because the brief was reasonably submitted as an alternative ground for promoting a successful claim: Sierra Club's bid to reject the Consent Decree.
The Court acknowledges that "litigants in good faith may raise alternative legal grounds for a desired outcome, and the Court's rejection of or failure to reach certain grounds is not a sufficient reason for reducing a fee." Hensley v. Eckerhart, 461 U.S. 424, 435, 76 L. Ed. 2d 40, 103 S. Ct. 1933 (1983). However, the Court does not discount the water brief because the state law grounds asserted therein were rejected or not reached. Rather, the Court believes that the water brief was at most tangentially relevant to the Court's decision because it merely stated the obvious: in a region where water is scarce, wasting water is not in the public interest. The Court knew this as a matter of common sense before the Sierra Club ever wrote the water brief. Therefore, the Court did not emphasize the water brief in its determination of Sierra Club's fee.
2. Allocation of liability
The Court will rectify the discrepancy between the allocation of liability described at the hearing and set forth in the Order by making the following correction. The City, the State, and the United States shall be jointly and severally liable for Sierra Club's entire fee. The allocation of liability among the parties shall be 62.5% to the City, 12.5% to the State, and 25% to the United States. This allocation fully reflects the Court's final intent.
C. Sierra Club's Motion for Reconsideration
Sierra Club moves the Court's failure to address in the Order the issue of whether Sierra Club should receive a "delay enhancement" to account for the time lapse between when the attorneys rendered their services and when they receive payment. The Court stated in the April 24, 1998 hearing that it would not award a delay enhancement on top of Sierra Club's fee award, but it did not elaborate further. The Court wishes to clarify that after the April 24, 1998 hearing but before issuing the June 30, 1998 Order, it gave further consideration to Sierra Club's position expressed in its moving papers and at the hearing that it should receive a delay enhancement. The Court's final fee of $ 781,306 incorporates an appropriate enhancement for delay. Finally, although interest may not be awarded against the federal government, see Library of Congress v. Shaw, 478 U.S. 310, 316, 92 L. Ed. 2d 250, 106 S. Ct. 2957 (1986), the Court determined the United States proportionate liability for Sierra Club's fee in light of the fact that the United States cannot be charged for any interest.
The City's and the Sierra Club's motions for reconsideration of the Court's June 30, 1998 Order are both DENIED.
The Court hereby changes the allocation of liability described in the June 30, 1998 Order to joint and several liability, 62.5% to the City, 12.5% to the State, and 25% to the United States.
The Court notes that its $ 781,306 fee award to the Sierra Club includes the prior interim fee award of $ 56,310.93, along with reasonable fees for Sierra Club's work on the interim and final fee petitions. Furthermore, the Court recognizes that the Sierra Club has had to expend additional attorney hours in opposing the City's unsuccessful motion for reconsideration and in obtaining clarification of the Court's intention regarding whether Sierra Club's fee award includes a delay enhancement. Accordingly, the Court will add a reasonable fee of $ 10,000 to Sierra Club's total fee to reflect work done on the instant motions for reconsideration. Thus, Sierra Club's total fee award stands at $ 791,360.
IT IS SO ORDERED.
UNITED STATES DISTRICT JUDGE