Ryan Whaley Coldiron Shandy

In the Clean Air Act, Congress broadly authorized courts to award reasonable attorney fees to any party whenever the court determines such award is “appropriate.” 42 U.S.C §§ 7604(d) (Citizen Suits), 7607(f) (Administrative Proceedings and Judicial Review).

Nearly thirty years ago, however, the United States Supreme Court decided that, notwithstanding the apparent authority conferred by the Act, a court could not award attorney fees to Sierra Club and Environmental Defense Fund in a case where they lost on all of their claims. Ruckelshaus v. Sierra Club, 463 U.S. 680, 694 (1983). In other words, absent some degree of success on the merits, it is not “appropriate” for a federal court to award attorney’s fees under Sections 304 and 307 of the Act.

But while a party must have some degree of success on the merits of its Clean Air Act case to obtain attorney fees, the Court did not explain how much success would be enough.

In a recent opinion called Southern Alliance v. Duke Energy Carolinas, the Fourth Circuit Court of Appeals addressed the question of “how much” success on the merits is “some.”

First, the court acknowledged two situations in which the amount of success triggered attorney fees:

1. A plaintiff will have sufficient success to support attorney fees where it persuades a court to order an agency, e.g., EPA, to carry out one of its regulatory duties. For example, in Nat’l Wildlife Fed’n v. Hanson, 859 F.2d 313 (4th Cir. 1988), environmental groups’ successful demonstration that the Army Corps of Engineers did not undertake necessary investigation to determine whether a tract of land was wetlands entitled them to attorney fees regardless whether the Corps ultimately determined that the tract of land was wetlands.  
2. A plaintiff also has sufficient success if it is the “catalyst” that, through settlement or otherwise, obtains substantial relief prior to adjudication on the merits. For example, in Ohio River Valley Envtl. Coal., Inc. v. Green Valley Coal Co., 511 F.3d 407 (4th Cir. 2007), an environmental group’s lawsuit caused the defendant to withdraw a permit application, so the plaintiff was entitled to attorney fees even though it voluntarily dismissed its claims after the defendant withdrew its application.

Then, the Fourth Circuit added a third basis for recovery of attorney fees in its Southern Alliance opinion. In that case, Duke Energy obtained a construction permit for a new EGU, but the plaintiffs sued for a declaration that construction of the new unit without a MACT determination violated the Clean Air Act. The district court agreed, and ordered Duke Energy to obtain a MACT applicability determination for the new unit from the state permitting authority. Then the plaintiffs dismissed the rest of their claims.

While Duke Energy went through the MACT applicability determination process at the state agency, the plaintiffs asked the district court for attorney fees. The district court awarded attorney fees to the plaintiffs on the grounds that they prevailed when the court held that the new unit was subject to the Clean Air Act and required Duke Energy to participate in a MACT proceeding, regardless the ultimate outcome of the applicability determination.

The Fourth Circuit affirmed the attorney fees award, holding that the district court’s order:

1. Included substantive determinations and imposed a real burden on Duke Energy, which had up till then denied that the MACT program applied to its new unit;  
2. Forced Duke Energy to participate in formal administrative evaluations pursuant to the Clean Air Act, and those evaluations were one of the plaintiffs’ goals; and
3. Ultimately resulted in emissions limits being placed on the new unit, as well as additional monitoring, testing, and record-keeping requirements.

According to the court, even though the plaintiffs’ victory merely required a new applicability determination for the new unit, that degree of success on the merits was enough under the Clean Air Act to obtain attorney fees.

The Fourth Circuit’s opinion in S. Alliance for Clean Energy v. Duke Energy Carolinas, LLC, 08-2370, 2011 WL 1421794 (4th Cir. Apr. 14, 2011), can be found here: http://pacer.ca4.uscourts.gov/opinion.pdf/082370.P.pdf.