Sierra Club v. City of Little Rock ( 2003 )

United States Court of Appeals
FOR THE EIGHTH CIRCUIT
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No. 03-1160
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Sierra Club, *
*
Appellee, *
* Appeal from the United States
v. * District Court for the
* Eastern District of Arkansas.
City of Little Rock, *
* [PUBLISHED]
Appellant. *
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Submitted: June 11, 2003
Filed: December 12, 2003
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Before MELLOY, HANSEN, and SMITH, Circuit Judges.
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HANSEN, Circuit Judge.
The City of Little Rock appeals the district court's award of attorney fees to the
Sierra Club in Sierra Club's action against the City and against the Little Rock
Sanitary Sewer Committee1 under the Clean Water Act, 33 U.S.C. §§ 1251-1387.
The City also appeals the district court's denial of its request for expert fees. We
reverse the grant of attorney fees and affirm the denial of expert fees.
1
The district court ordered that both the City and the Little Rock Sanitary
Sewer Committee pay attorney fees to Sierra Club. The Little Rock Sanitary Sewer
Committee does not appeal its order.
I.
The City of Little Rock ("the City") operates a Municipal Separate Storm
Sewer System in the city of Little Rock, Arkansas, pursuant to a National Pollutant
Discharge Elimination System (NPDES) permit issued by the Arkansas Department
of Environmental Quality (ADEQ).2 The permit authorizes the City to discharge
storm water runoff into the Arkansas River. The permit requires the City to
effectively prohibit non-storm water discharges (i.e., sewage) into the Storm Sewer
System. The storm water permit also requires the City to operate a Storm Water
Quality Management Program, which includes controls necessary to reduce the
discharge of pollutants to the maximum extent practicable, a defined term under the
permit. The permit further requires the City to utilize "a comprehensive master
planning process" related to reducing the discharge of pollutants from areas of new
development. (Appellant's App. at 394.)
The City has delegated the operation of the Little Rock Sanitary Sewer
Collection System to the Little Rock Sanitary Sewer Committee (hereinafter "Sewer
Committee") pursuant to Arkansas statute. See Ark. Code Ann. § 14-235-
206(a)(1)(A) ("The construction, acquisition, improvement, equipment, custody,
operation, and maintenance of any works for the collection, treatment, or disposal of
sewage and the collection of revenue from it for the service rendered by it, shall be
effected and supervised by a committee to be designated for that purpose by the
municipal council."). The Sewer Committee has control over the operation and
maintenance of the Sanitary Sewer Collection System and control over revenues
collected from the use of the system. To the extent funds in excess of the revenues
generated from use of the system are needed to operate and maintain the Sanitary
2
The permit was issued to the City and the State Highway Department as co-
permittees, but we refer only to the City throughout our opinion, as the State Highway
Department is not a party to this suit.
2
Sewer Collection System, the City retains authority to issue bonds or authorize rate
increases. The Sewer Committee likewise operates pursuant to a NPDES permit.
The Sierra Club, a national non-profit public interest organization, brought a
citizens' complaint against the City and the Sewer Committee, alleging that the
defendants violated the Clean Water Act and their respective permits by allowing
untreated sewage from the Sanitary Sewer Collection System to overflow (referred
to throughout the litigation as sanitary sewer overflows) on numerous occasions and
enter Arkansas rivers and streams. The Sierra Club's second cause of action alleged
that the City failed to follow the comprehensive master planning process mandated
by the City's NPDES permit. The Sierra Club alleged in its third cause of action that
the sanitary sewer overflows also violated the Resource Conservation and Recovery
Act, 42 U.S.C. § 6901 et seq. ("RCRA"), by creating imminent and substantial
endangerment to the environment. The district court granted partial summary
judgment to Sierra Club against the Sewer Committee, finding that it had violated the
Clean Water Act, a strict liability statute, by allowing the sanitary sewer overflows.
See 33 U.S.C. § 1311(a). The Sewer Committee and Sierra Club entered into a
Settlement Agreement to address the sanitary sewer overflows. Sierra Club dismissed
the other counts against the Sewer Committee pursuant to the Settlement Agreement.
Sierra Club pursued its claims against the City following the Settlement
Agreement with the Sewer Committee. On cross-motions for summary judgment, the
district court found that "the City [wa]s in violation of the portion of its permit which
relates to sanitary sewer overflows into the municipal storm sewer system"
(Appellant's App. at 265), but refused to enter an injunction or order any other
remedy against the City. The court retained jurisdiction "to resolve any issues which
may develop regarding remedies for permit violations." (Id.) The court subsequently
held a bench trial, found for the City on Sierra Club's other claims, and ordered the
case closed. (Id. at 400.)
3
Following the district court's disposition of the case, Sierra Club moved for an
award of attorney fees against the Sewer Committee and the City. The City sought
an award of expert witness fees against Sierra Club related to its successful defense
of the comprehensive master planning process portion of the case. The district court
denied the City's request, holding that as a prevailing defendant, the City had failed
to establish that Sierra Club's action was frivolous, unreasonable, or without
foundation. The court granted Sierra Club the full amount of attorney fees ($92,635)
sought against the Sewer Committee, which award is not involved in this appeal, and
granted 50% of the fees sought against the City to reflect the City's partially
prevailing status. The City appeals the district court's denial of its motion for expert
witness fees and its judgment ordering the City to pay $50,308.09 in attorney fees to
Sierra Club.
II.
The Clean Water Act allows "any citizen to commence a civil action on his
own behalf" against any governmental entity that has allegedly violated the Clean
Water Act. 33 U.S.C. § 1365(a). The district court is authorized to enforce the
violated standard or limitation and order civil penalties. Id. The Clean Water Act
also provides that "[t]he [district] court, in issuing any final order in any action
brought pursuant to this section, may award costs of litigation (including reasonable
attorney and expert witness fees) to any prevailing or substantially prevailing party,
whenever the court determines such award is appropriate." § 1365(d). While we
review the district court's decision regarding an award of costs and fees under the
Clean Water Act for an abuse of discretion, the issue of whether a party is a
"prevailing or substantially prevailing party" is an issue of law we review de novo.
See Armstrong v. ASARCO, Inc., 138 F.3d 382, 388 (8th Cir. 1998).
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A. Sierra Club's Motion for Attorney Fees
The City appeals the district court's award of $50,308.09 in attorney fees to
Sierra Club, arguing that Sierra Club is not a substantially prevailing party. In
granting partial summary judgment in favor of Sierra Club on the issue of whether the
City violated its permit in allowing the sanitary sewer overflows to occur unabated,
the court determined that the regulations under the Clean Water Act required the
operator of a storm sewer system ultimately to either entirely eliminate non-storm
water discharges into the storm sewers or seek a permit allowing a certain number of
non-storm water discharges. The court found that the City was "technically in
violation of its permit" (Appellant's App. at 333), given the length of time and the
number of sanitary sewer overflows that had continued unabated. Despite the
violation, the district court declined to award any of the relief Sierra Club sought,
which included in relevant part: a declaration that the City was in violation of the
Clean Water Act; an injunction ordering the City to comply with its permit, to cease
all unlawful discharges, and to clean up prior unlawful discharges; and civil penalties
up to $25,000 per day. (Id. at 33-35.) In denying Sierra Club's request for an
injunction, the court noted that there was no evidence that the City would not
cooperate with the Sewer Committee in carrying out the Sewer Committee's
obligations under the Settlement Agreement, as the only record evidence showed that
the City had always complied with the Sewer Committee's reasonable requests in the
past. (Id. at 333-34.)
Under the American Rule, parties to a lawsuit generally foot their own attorney
fees "absent explicit statutory authority" to the contrary. Buckhannon Bd. & Care
Home, Inc. v. W.V. Dep't of Health & Human Res., 532 U.S. 598, 602 (2001). The
Clean Water Act explicitly allows an award of attorney fees to "a prevailing or
substantially prevailing party." 33 U.S.C. § 1365(d). A party prevails either by
"obtain[ing] an enforceable judgment . . . or comparable relief through a consent
decree or settlement . . . [that] directly benefit[s the plaintiff] at the time of the
judgment or settlement." Farrar v. Hobby, 506 U.S. 103, 111 (1992) (internal
5
citations omitted). The Supreme Court has made clear "'that a plaintiff [must] receive
at least some relief on the merits of his claim before he can be said to prevail,'"
Buckhannon, 532 U.S. at 603-04 (quoting Hewitt v. Helms, 482 U.S. 755, 760
(1987)), such that the relief "materially alters the legal relationship between the
parties by modifying the defendant's behavior in a way that directly benefits the
plaintiff." Farrar, 506 U.S. at 111-12. Further, the change in the relationship must
be "judicially sanctioned;" a voluntary change in the relationship between the parties
as a result of a lawsuit is insufficient to trigger a shift in the general rule that parties
pay their own fees. Buckhannon, 532 U.S. at 605 (rejecting catalyst theory of
awarding attorney fees under prevailing party fee-shifting statutes).
Sierra Club can point to no "actual relief on the merits" as against the City.
While the Sewer Committee entered a Settlement Agreement and agreed to address
the sanitary sewer overflows, the City was not party to the agreement. Although the
district court granted summary judgment in Sierra Club's favor, all Sierra Club
received was a declaration that the City had violated its permit. The court declined
to grant any of the relief that Sierra Club sought, not even a requested order enjoining
the City from future violations of its permit. "A declaratory judgment . . . will
constitute relief . . . if, and only if, it affects the behavior of the defendant toward the
plaintiff." Rhodes v. Stewart, 488 U.S. 1, 4 (1988) (reversing attorney fee award in
42 U.S.C. § 1988 case in which court found that prison officials violated prisoners'
procedural rights in denying request for magazine subscription, where only relief was
in form of changed prison policies that did not benefit either plaintiff as neither were
in custody at time judgment was entered). "[A] judicial pronouncement that the
defendant has violated the law, . . . without an enforceable judgment on the merits,
cannot render [the plaintiff] a prevailing party." Pedigo v. P.A.M. Transp. Inc., 98
F.3d 396, 398 (8th Cir. 1996) (reversing attorney fee award where plaintiff received
no damage award and no longer worked for the defendant, making any equitable
relief unavailable). Sierra Club can point to no effect that the judicial declaration had
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on the City's behavior toward Sierra Club. Further, without any relief to enforce,
Sierra Club did not receive an "enforceable judgment" and was not a prevailing party.
Sierra Club argues that the City's subsequent approval of a 42% sewer rate
increase, in response to a request by the Sewer Committee for funding to fulfill the
Sewer Committee's obligations under its Settlement Agreement with Sierra Club,
constitutes the necessary relief to support an award of attorney fees. It argues that the
district court's judgment declaring the City in violation of its permit was necessary
to convince the City to approve the rate increase, inferring that "but for" the court's
judgment that the City had violated its permit, the City would not have granted the
rate increase, and the court's retention of jurisdiction supplies the requisite "judicial
imprimatur" required by Buckhannon. See 532 U.S. at 605. The facts of the case do
not support Sierra Club's conclusion. The relief that Sierra Club sought against the
City was an assurance that the City would cooperate with the Sewer Committee to
ensure that the Settlement Agreement was implemented. (Appellant's App. at 312.)
The district court found that the City had always cooperated with the Sewer
Committee in the past and that there was no reason to believe it would not continue
to do so. The district court explicitly refused to grant the requested injunction for this
very reason. (Id.) Sierra Club cannot rely on the City's subsequent conduct in
cooperating with the Sewer Committee as judicially sanctioned relief when the court
specifically refused to require the City to take the subsequent action. The facts of this
case demonstrate that the Sewer Committee's request was the source of the rate
increase, not the district court's finding that the City had violated its permit. Cf. Peter
v. Jax, 187 F.3d 829, 835-36 (8th Cir. 1999) (holding that plaintiff was not prevailing
party where state defendant agreed to a stipulated injunction based on change in
Supreme Court precedent rather than pending litigation), cert. denied, 529 U.S. 1098
(2000).
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The district court's retention of jurisdiction over issues concerning permit
violation remedies does not aid Sierra Club.3 If the City had declined to implement
the requested rate increase, the court could not have held the City in contempt under
its retained jurisdiction because the City would not have been in violation of any
court order. The court order merely declared the City in violation of its permit and
the court retained jurisdiction "to resolve any issues which may develop regarding
remedies for permit violations." (Appellant's App. at 265 (emphasis added).) The
court did not address what action, if any, the City was required to take in relation to
the Sewer Committee's Settlement Agreement. In short, the judgment did not change
the relationship between Sierra Club and the City. "[T]he district court's [retained]
jurisdiction alone is not enough to establish a judicial 'imprimatur'" where the court's
jurisdiction does not provide the court with contempt power. Christina A. ex rel.
Jennifer A. v. Bloomberg, 315 F.3d 990, 993-94 (8th Cir. 2003) (holding that district
court's retained jurisdiction over private settlement agreement did not elevate
agreement to consent decree sufficient to establish prevailing party status; dismissal
order approving of settlement agreement and retaining enforcement jurisdiction did
not incorporate any settlement terms and at most provided avenue for parties to seek
enforcement as a breach of contract, not as violation of a court order). At the end of
the day, "the judgment . . . afforded [Sierra Club] no relief whatsoever," Rhodes, 488
U.S. at 4, and the district court erred in ordering the City to pay attorney fees.
B. The City's Motion for Expert Witness Fees
Where a statute allows an award of litigation fees to a prevailing party, the
"district court may in its discretion award [litigation] fees to a prevailing defendant
3
The City argues that the district court's retained jurisdiction ended when it
ordered the case closed with the entry of its judgment following the bench trial. The
closing order does not mention its effect on the court's previously retained
jurisdiction. Our disposition of this argument makes it unnecessary to resolve the
extent of the district court's retained jurisdiction.
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. . . upon a finding that the plaintiff's action was frivolous, unreasonable, or without
foundation, even though not brought in subjective bad faith." Christiansburg
Garment Co. v. E.E.O.C., 434 U.S. 412, 421 (1978) (emphasis added). There is no
dispute that the City was the prevailing party on the comprehensive master planning
process issue. The district court denied the City's request for expert fees, however,
because it found that Sierra Club's claims on that issue were "not frivolous,
unreasonable or without foundation." (Add. at 39.) Because the district court applied
the proper standard, we review its denial of the City's request for expert fees for an
abuse of discretion.
Sierra Club claimed that the City violated its permit by failing to implement "a
comprehensive master planning process to develop, implement, and enforce controls
to reduce, to the [maximum extent practicable], the discharge of pollutants from areas
of new development and significant redevelopment after construction is completed."
(Appellant's App. at 32 (internal marks omitted).) In denying Sierra Club's motion
for summary judgment on this issue, the district court noted "that there [wa]s going
to be conflicting evidence by experts as to whether the City has or has not addressed
the quality of the discharge into the . . . storm sewer system." (Appellant's App. at
331.) During the bench trial, Sierra Club's expert testified that in his opinion the City
had addressed only the quantity of discharge into the storm system but had failed to
address whether any of the City's processes would reduce pollutants to the maximum
extent practicable. Sierra Club forwarded its theory that the City, as a permittee, was
required to perform a thorough review for the explicit purpose of determining
whether and to what extent the City's procedures would reduce pollutants in areas of
new development. It argued that a conglomeration of policies and ordinances that
only tangentially affected water issues was not sufficient to meet the permit
requirement.
Although the district court ultimately concluded that "[t]he City has done
exactly what the City stated would be done in its storm water application and storm
9
water permits" (Appellant's App. at 399), we cannot say that Sierra Club's action was
frivolous, unreasonable, or without foundation. As noted by the district court, the
EPA has provided tremendous flexibility to permittees "relative to the exact form the
required comprehensive master planning process may take." (Id.) Nowhere does the
EPA define what constitutes a comprehensive master planning process. The City's
comprehensive master planning process has evolved over a period of several years
and encompasses a variety of different ordinances, plans, codes, standards, and
related processes. Although the permit does not require the comprehensive master
planning process to be incorporated into a single document, the City's failure to do
so made it difficult to determine the City's compliance when Sierra Club originally
brought this suit. The district court did not abuse its discretion in denying the City's
motion for litigation costs as the prevailing defendant.
III.
The district court's judgment ordering the City to pay attorney fees to Sierra
Club is reversed, and its judgment denying litigation costs to the City is affirmed.
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