Imagine you’ve purchased some land and plan to build your dream home. You know you need several government approvals, and your contractor says this includes something called a “Chapter 102″ permit. No problem. The folks at the Department of Environmental Protection (DEP) are helpful. You provide them with everything they ask for, and the permit is issued. Then, you get a “notice of appeal.” A neighbor does not want you to build and has challenged DEP’s permitting decision. After several months of litigation, DEP tweaks an error it made in the permit and then settles the lawsuit. Now your neighbor wants you to pay for his lawyer’s fees in that litigation. Can they do that? Following a recent decision from Pennsylvania’s Supreme Court, the answer is probably yes. If you’re thinking that feels unfair—maybe even unconstitutional—you may be right.

Third-party litigation in environmental law is not new. Congress, as well as many state legislatures, have authorized third-party suits to buttress the enforcement of environmental laws. And, as part of this effort, legislatures have specifically authorized recovery of attorney fees by third parties from the entity shown to be in violation of the law. This is a statutorily authorized departure from the “American Rule,” which requires parties to pay their own attorney fees absent bad faith or vexatious conduct. In contrast, attorney fees arising out of the permitting process have, traditionally, been limited to an assessment against the government because it is the government that makes permitting decisions.

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