An adult greenback cutthroat trout.
An adult greenback cutthroat trout. (Credit: Rosenlund Bruce/U.S. Fish and Wildlife Service)

When the Center for Biological Diversity sued the U.S. Forest Service in Colorado in 2012 for violating the Endangered Species Act, government lawyers didn’t put up a fight.

Rather than answering the complaint, U.S. Department of Justice lawyers promptly settled the case, involving the greenback cutthroat trout, Colorado’s state fish, and handed the center a victory. As part of the deal, the government agreed to pay the center’s attorney fees: $40,000 for work by two in-house lawyers that, at least on paper, consisted mainly of filing a notice of intent to sue, a complaint and motions for extensions of time.

The award was justified because the case was so complicated, the Justice Department said. But the suit also gave the government what Timothy Ream, one of the lawyers for the center, termed “political cover” to ban all-terrain vehicles from trails that cross four miles of a creek that’s the only place in the world where the fish live.

In some ways, the case looks like a classic example of “sue and settle.” In recent years, business groups and landowners have alleged that federal agencies are settling environmental suits on sweetheart terms as a means of back-door regulation, then paying attorney fees to help fund another round of suits.

Still, a closer look at this case and similar others shows that “sue and settle” cases are rarely as simple as they seem.

In 2013, the federal government settled more than 50 suits filed under the three main statutes at issue: the Endangered Species Act, the Clean Air Act and the Clean Water Act. The feds paid about $3 million in legal fees to the groups that brought the suits, according a review by The National Law Journal of records in the Judgment Fund, a Treasury Department database that tracks government payments to resolve lawsuits. In 2012, the tally was about 60 cases and more than $4 million in fees.

Because the statutes entitle prevailing plaintiffs to recover litigation costs, including fees, “every lawsuit is a profit-making enterprise,” said William Kovacs, the U.S. Chamber of Commerce’s senior vice president for the environment, technology and regulatory affairs.

But U.S. Environmental Protection Agency (EPA) general counsel Avi Gar­bow said settling is often a better deal for taxpayers. Garbow wrote in the agency’s blog last month that attorney fees in cases the agency recently litigated and lost were 400 percent more than in settled cases.

“The practice of resolving cases through a negotiated settlement can have great value in reducing unnecessary litigation, as well as the costs associated with litigation and potential attorneys’ fees if EPA does not win the case,” Garbow wrote. As for the notion of sue and settle, he called it a “wholly invented accusation that gets no more true with frequent retelling.”

‘COMPLEX CLAIMS’

Court records show many of the cases settled in the past two years were hard-fought battles with mixed results for the plaintiffs and modest fee awards—for example, $15,500 for about 55 hours of work in a case challenging the EPA’s water quality standards in Missouri. The lawyer, Elizabeth Hubertz, a lecturer at Washington University in St. Louis School of Law, billed $300 an hour for her work in the case, which lasted more than a year. Other cases, like the greenback-trout case, are more lucrative. Ream said the $40,000 award was appropriate given the complexity of the subject matter: “It required us to dive into the science” for an in-depth study of the fish and its circumscribed habitat—Bear Creek in Colorado’s Pike and San Isabel National Forest. The center in its suit alleged that dirt bikes and other off-road vehicles were causing creek-side erosion and smothering spawning beds.

“The agency I think understood it was breaking the law … but didn’t feel it had political cover to change its policy without a lawsuit,” Ream said. The basic settlement was hammered out within nine weeks—negotiations began before the suit was filed—and included a deal to close the trails pending further study.

The Justice Department’s Environ­ment and Natural Resources Division in a written statement defended the fee award. The case “did not address a straightforward missed mandatory duty claim, but more complex claims,” according to DOJ. “Due to this complexity, more attorney time was reasonably incurred on the case.”

The Colorado Motorized Trail Riders Association, the Colorado Off Highway Vehicle Coalition and the Trails Preser­vation Alliance intervened, but had no success in derailing the settlement.

“The train was pretty much leaving the station before we ever showed up,” said Paul Turcke, a partner at Moore Smith Buxton & Turcke in Boise, who represented the groups. As for the size of the center’s fee, Turcke said, “I’ve had fully litigated cases that stretched over two years and not billed $40,000.”

Expanding the role of third parties in environmental suits has become a rallying point for the Chamber of Commerce and others.

In most cases, “there are only three people involved in the suits—the court, the environmental group and the agency. Everyone else is left out—we’re not parties,” Kovacs said. “Our arguments are all about transparency. We’re not saying you shouldn’t be able to sue, but that [the process] should be open.”

Members of Congress also have taken up the issue. On Feb. 27, the House of Representatives passed a bill sponsored by Rep. Doug Collins, R-Ga., that would require federal agencies to give notice when they learn of an impending lawsuit and provide all affected parties the opportunity to intervene. The measure is pending in the Senate.

SEEKING A VOICE

“Everyone—not just special interests—deserves a seat at the table,” Collins said in a statement.

As rhetoric, it sounds compelling. But on a practical level, it’s not clear whether it makes sense to routinely bring third parties into the suits.

Consider a motion to intervene by the American Forest & Paper Association Inc. in a suit brought by the Center for Biological Diversity. The center sued the EPA in U.S. District Court for the Northern District of California in 2011, challenging what it said were ­outdated air pollution standards for kraft pulp mills. The mills “cook” wood chips into a reduced form to make paper.

The trade group wanted to join the suit. As its counsel Martin Lawler of Lawler & Lawler pointed out, association members “already had to spend large sums” to comply with EPA rules and have a “significant interest in the outcome of this case.”The court said no. U.S. District Judge Yvonne Gonzalez Rogers reasoned that the question was narrow: Did the EPA do what it was supposed to do under the law? If the answer was yes, then the association had no grievance—the status quo remained. If the court said no, then the EPA would do a new rulemaking and the association could weigh in then—its “role in any future administrative process is not in jeopardy.”

The case settled in early 2013. The EPA agreed to review the standards, the association went on to file 499 pages of comments with the agency, and the center got $90,000 in fees.

“It’s good that citizens have a right to sue to force the government to follow the law, and it’s good that the government has the option to settle,” Ream said. “You wouldn’t want to tie one hand behind [the government's] back and say ‘You can’t settle.’ ” Further, he said, in his experience the agencies “ are not doing anything like rolling over” when hit with environmental lawsuits.

The single largest attorney fee awarded in an environmental dispute last year went to a group of cities in Iowa that successfully sued to weaken EPA water-treatment regulations.

The cities, including Des Moines, complained that the EPA exceeded its authority when it imposed a new process for handling wastewater, and that compliance would have cost them hundreds of millions of dollars.

In March, a three-judge panel from the U.S. Court of Appeals for the Eighth Circuit ruled in favor of the cities.The firm asked for more than $1 million in fees. The court initially said no because the suit “did not advance the objective” of the Clean Water Act—to restore the integrity of the nation’s waters. But the judges reconsidered and ultimately approved $526,138 in fees.

“The lawsuit assisted in the proper implementation” of the Clean Water Act, the court said in an unsigned order.

Contact Jenna Greene at jgreene@alm.com.