Free Brief in Opposition to Motion - District Court of Colorado - Colorado

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO Civil Action No. 01-cv-2163-BNB-MEH SIERRA CLUB and MINERAL POLICY CENTER, Plaintiffs, v. EL PASO PROPERTIES, INC., Defendant.

PLAINTIFFS' RESPONSE IN OPPOSITION TO EL PASO'S MOTION FOR ATTORNEY FEES AND LITIGATION EXPENSES

I.

INTRODUCTION Plaintiffs Sierra Club and Mineral Policy Center (collectively "Sierra Club"), by their

counsel Lori Potter and Brooke McKinley of Kaplan Kirsch & Rockwell LLP, submit this opposition to El Paso's Motion for Attorney Fees and Litigation Expenses ("Motion") [Doc. # 255], filed June 19, 2007. On July 5, 2007, the parties filed a joint motion for extension of time, requesting until July 30, 2007, to file this response. El Paso contends that it should be awarded fees under 33 U.S.C. § 1365(d) as a prevailing defendant in a citizen suit under the Clean Water Act ("CWA"). Because El Paso has not met the stringent standard of proving that Sierra Club's case was frivolous or groundless, the Court should deny El Paso's motion. What the Court ultimately determined at trial was that Plaintiffs introduced less than a preponderance of the evidence on one of the elements of their case. As explained below, Sierra Club presented substantial evidence at trial and proceeded with a good faith belief that the case had a strong legal and factual basis. Although Plaintiffs ultimately fell

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short of meeting their evidentiary burden, they could not have known in advance that they would fail. El Paso's motion ignores the factors that the Tenth Circuit has deemed probative of whether a case was truly groundless: the evidence that Plaintiffs introduced at trial, the careful consideration the Court gave the issues presented, and the long procedural history of the case. El Paso also disregards the Tenth Circuit case law, which demonstrates how rarely a court actually finds the high standard met and awards fees to a prevailing defendant. Finally, El Paso misinterprets the policy considerations supporting awarding fees to prevailing plaintiffs and posits that it is deserving of its attorney's fees because it is insolvent. Consequently, El Paso has not shown that Sierra Club's case was frivolous as required to be awarded its fees. In the event the Court assesses any attorney's fees, the amount claimed should be significantly reduced, as discussed below. II. FACTUAL BACKGROUND The history of this case reflects Sierra Club's diligent efforts to remedy water quality degradation from toxic mine runoff at the Roosevelt Tunnel between Cripple Creek and Victor through vigorous enforcement of the CWA. The Roosevelt Tunnel is a six-mile long, man-made tunnel constructed to drain water from mines in the Cripple Creek Mining District. [Doc. 253, Findings of Fact ¶ 1] El Paso owns approximately 100 acres of inactive mining claims and surface rights known as the El Paso mine, located between Cripple Creek and Victor. Id. at ¶ 2. El Paso's property includes the El Paso shaft, which extends from the land surface and connects underground to the Roosevelt Tunnel. Id. at ¶ 3.

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A.

History of this litigation

Sierra Club sent an initial notice of violation letter to El Paso in September 2001, alerting Defendant, the EPA and the Colorado Department of Public Health and Environment of El Paso's unpermitted discharge of pollutants. Ex. 1 hereto. El Paso then filed an application with the Water Quality Control Division ("WQCD") asking that a discharge permit for the Roosevelt Tunnel portal flows be issued to a newly created entity named "Roosevelt Tunnel, LLC," whose corporate representative was El Paso President Dennis Schoger. Ex. 2 hereto. In the cover letter transmitting the discharge permit application, El Paso's counsel stated that El Paso had "no reason to believe that its property is the sole source of the Roosevelt Tunnel discharge," impliying that El Paso certainly was one of the sources of the discharge. Id. at 2 (emphasis added). El Paso never obtained a discharge permit for the Roosevelt Tunnel portal flows, however. Sierra Club filed this action on November 5, 2001. El Paso filed a motion to dismiss or stay the federal lawsuit, which the Court denied. [Doc. # 47] After discovery, the parties filed cross motions for summary judgment. U.S. Magistrate Judge Coan entered summary judgment for Sierra Club after finding that El Paso was discharging water and pollutants from the El Paso shaft to the Roosevelt Tunnel portal. [Doc. # 95] Magistrate Judge Coan denied El Paso's motion for summary judgment (id.) and awarded Plaintiffs their attorney's fees and costs. [Doc. # 111] El Paso moved to stay the Court's award of a civil penalty. [Doc. # 121] Magistrate Judge Coan denied the motion unless El Paso could obtain a supersedeas bond in the amount of $94,900 within 15 days. [Doc. # 135] In the same order, dated April 21, 2003, Magistrate Judge Coan granted Plaintiffs' motion to require El Paso to post a bond securing Plaintiffs' attorney's fees and costs on appeal and ordered El Paso to post that bond within 15 days. Id. El Paso concedes that it never obtained either of the ordered bonds. Motion at 13. 3

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On April 1, 2003, El Paso President Dennis Schoger filed an affidavit representing that "EPGM lacks any current, liquid assets with which to post a bond during the appeal of this case." Ex. 3 hereto. El Paso nonetheless made significant payments to its law firm after April 1, 2003--including one such payment on April 2, 2003. Ex. 4 hereto (filed under seal). El Paso appealed Magistrate Judge Coan's rulings to the Tenth Circuit Court of Appeals. Plaintiffs prevailed on three of the four issues raised. Sierra Club v. El Paso Gold Mines, Inc., 421 F.3d 1133 (10th Cir. 2005). First, the Tenth Circuit found that Plaintiffs had alleged in good faith that El Paso's discharge was continuous or intermittent and that jurisdiction over the matter was proper. Id. at 1141. Second, the Tenth Circuit rejected El Paso's argument that the CWA did not apply to owners of inactive mines, holding that "point source owners can be liable under Sections 301(a) and 402 of the CWA for unpermitted discharges that occur from their land even if they are not actively mining their property." Id. at 1146. Third, the court affirmed Judge Coan's opinion in that water from the El Paso shaft made its way through the Roosevelt Tunnel to the portal at the tunnel's terminus. However, the court held as to the fourth issue that "Plaintiffs have failed to establish the absence of fact issues" necessary to show that the pollutants discharged from the El Paso shaft reach the portal and are discharged into Cripple Creek. Id. at 1149-1151. The Tenth Circuit remanded on the factual issue of whether pollutants from the El Paso shaft were discharged at the portal. Id. at 1151. El Paso filed a motion in the Tenth Circuit for costs, which was denied. Ex. 5 hereto. On remand, both parties requested additional discovery. In November 2006, El Paso identified Arthur O'Hayre as an expert witness for trial. At Dr. O'Hayre's deposition in January, 2007, El Paso for the first time produced the documents Dr. O'Hayre relied upon in formulating his newly disclosed expert opinion.

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The Court entered a Final Pretrial Order on December 5, 2006. [Doc. # 219] El Paso asserted three defenses: (1) that Mineral Policy Center lacked standing to prosecute the action, which the court rejected in a ruling dated January 5, 2007 [Doc. # 226]; (2) that Dr. Ann Maest's expert opinions could not be admitted at trial, which the court rejected in the trial ruling dated June 4, 2007 [Doc. #253 at 11-19]; and (3) that Plaintiffs could not prove that Defendant discharged pollutants from the El Paso shaft to the Roosevelt Tunnel portal and into Cripple Creek. The case was scheduled for trial the week of February 5, 2007. On January 30, 2007, El Paso filed a Rule 11 motion for sanctions [Doc. # 233], arguing that Dr. Maest's expert opinions were inadmissible and that Plaintiffs were proceeding to trial in bad faith and for an improper purpose. [Doc. # 233 at p. 1] The court denied the motion without prejudice. [Doc. # 234] At trial, Plaintiffs presented their prima facie case. El Paso did not move to dismiss or for a Rule 52 judgment after the close of Plaintiffs' evidence. B. Plaintiffs' evidence at trial

El Paso contends that "Plaintiffs have known since long before they filed their citizen's suit that there was not sufficient evidence regarding the hydrology of or the flow of pollutants in the Roosevelt Tunnel to prove El Paso is responsible for a discharge of pollutants." Motion at 9. The test for groundlessness is not "sufficient evidence ... to prove" liability, however. Plaintiffs introduced considerable evidence on point, which ultimately was less than 50.1% of the evidence but surely gave them an evidentiary basis for going to trial. 1. Testimonial Evidence To show that pollutants at the Roosevelt Tunnel portal originate, at least in part, from the El Paso shaft, Plaintiffs introduced the expert opinion of Dr. Ann Maest. Ex. 6 hereto (excerpts of direct testimony of Dr. Ann Maest). The admission of Dr. Maest's expert testimony at trial is

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a key distinction between this case and the parallel citizen suit against Cripple Creek & Victor Mining, Sierra Club, et al. v. Cripple Creek and Victor Gold Mining Co., et al., Civil Action No. 00-cv-2325 (D.Colo.) El Paso's Motion relies on the post-trial finding by Judge Krieger in Cripple Creek in 2006 that Plaintiffs should have known they could not prove the origins of a discharge, motion at 5-6, but fails to mention that Judge Krieger actually found that Plaintiffs should have known they could not prove that Anglo-Gold caused a discharge after she disallowed the introduction of Plaintiffs' experts' testimony. Order Granting, in Part, Motion for Attorney Fees at 11 (Dec. 20, 2006). In this case, Plaintiffs advisedly proceeded to trial and presented several experts. Dr. Maest testified that mine drainage from the highly mineralized and fractured El Paso mine and shaft would be high in sulfate. Ex. 6 at Day 2, 116:1-3. If the drainage was high in sulfate, that would allow the Court to trace it to El Paso. This position was supported by the El Paso shaft water quality data (Declaration of John Barth, Ex. 8 hereto (citing Tr. Ex. 16 [Bates # 291], Tr. Ex. 23, Tr. Ex. 24, Tr. Ex. 60)), scientific papers and articles on concentration of sulfate in mine drainage (Ex. 8 (citing Tr. Ex. 76, Tr. Ex. 94, Tr. Ex. 98)), and Dr. Maest's extensive experience as an expert in mine drainage. Dr. Maest also testified that seepage from less mineralized and undisturbed granite between the El Paso shaft and the portal would be low in sulfate. Ex. 6 at Day 2, 116:3-5. This position was supported by the water quality sample from October 14, 1994 (Ex. 8 (citing Tr. Ex. 16 [Bates # 291], Tr. Ex. 23, Tr. Ex. 24, Tr. Ex. 60)), the "chemical signature" of the discharge at the portal by CC&V (Ex. 8 (citing Trial Ex 16)), water quality information found in CC&V's mine permit application (Ex. 8 (citing Tr. Ex. 61, Tr. Ex. 90 [Bates # 1703 and 1709])), ground water data from other locations in the Cripple Creek Mine District (Ex. 8 (citing Tr. Ex. 61)), and Dr. Maest's extensive experience in mine drainage. Finally, Dr. Maest testified that the concentrations of sulfate at the portal were due at least in part to the high contribution of sulfate from the El Paso shaft. Ex. 6 at Day 2, 117:22-25. 6

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Kenneth Klco also testified at trial. Ex. 7 hereto (direct testimony of Kenneth Klco). Mr. Klco is a geologist with experience in flow of water in mine drainage tunnels. Id. at 2:23-25­ 3:1-8. Mr. Klco conducted an interior inspection of the Roosevelt Tunnel on August 21, 2001 (id. at 3:9-16), where he observed continuous water flow from the El Paso shaft to the Roosevelt Tunnel. Id. at 11:21-25. Further, there was no contribution of flow above the El Paso shaft to the Roosevelt Tunnel portal. Id. at 12:24-5­13:1-13. 2. Documentary Evidence Plaintiffs also introduced numerous exhibits as evidence that pollutants from the El Paso shaft reach the Roosevelt Tunnel portal. Declaration of John Barth, Ex. 8 hereto. C. History of State and EPA proceedings against El Paso

The State of Colorado and the EPA have also charged El Paso with discharging from the Roosevelt Tunnel portal without a permit. On July 25, 2002, the WQCD issued a Notice of Violation ("NOV") to El Paso for precisely this discharge. Ex. 9 hereto. El Paso administratively appealed this NOV. Administrative Law Judge ("ALJ") Norwood ruled that the state failed to produce sufficient evidence that El Paso was responsible for discharging pollutants at the portal. However, ALJ Norwood ordered that El Paso must obtain a permit for the discharge from the El Paso shaft into the Roosevelt Tunnel, implying that he was persuaded that El Paso discharged pollutants at the shaft. Ex. 10 hereto at p. 11. El Paso argues that the result in the State's NOV proceeding casts doubt on Plaintiffs' proof in this case. See Motion at 10. Yet none of Plaintiffs' expert witnesses in this case--Dr. Ann Maest, Dr. Jim McCord, or Kenneth Klco--testified in the administrative hearing.1 Additionally, El Paso ignores that ALJ

To the extent that any of these experts' writings on the matter were considered by the ALJ, the ALJ did not have the benefit of the experts' testimony to explain and elaborate on their writings. 7

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Norwood found that El Paso was discharging a pollutant into state waters and must obtain a permit for that discharge. This matter is currently pending before the WQCD. During the pendency of the present case, El Paso filed litigation against the WQCD in state court seeking a ruling in mandamus directing the state to issue a discharge permit to El Paso Gold Mine and its newly formed corporation, Roosevelt Tunnel, LLC, for the discharge from the Roosevelt Tunnel portal. Ex. 11 hereto. El Paso did not prevail on this theory in state district court or on appeal to the Court of Appeals or Supreme Court. EPA has indicated its belief that El Paso is liable for the discharge from the Roosevelt Tunnel portal. In a May 6, 2002, letter, Department of Justice attorney John Moscato, representing the EPA, stated "Based on a review of documents provided by EPGM and others, we have concluded that a significant contribution to the Roosevelt Tunnel flows originates in the El Paso Shaft. It follows that those parties that discharge through the El Paso shaft into the Roosevelt Tunnel may be liable under the Clean Water Act ("CWA") for unpermitted discharges to a water of the United States." Ex. 12 hereto. EPA has deferred the resolution of this matter to the State. III. TO AVOID CHILLING CITIZEN ENFORCEMENT OF THE CLEAN WATER ACT, A DEFENDANT BEARS A HEAVY BURDEN OF PROVING THAT A PLAINTIFF'S CASE WAS FRIVOLOUS OR GROUNDLESS The CWA allows and encourages citizens to serve the public as "private attorneys general" to abate pollution which the government fails to address. See Gwaltney of Smithfield, Ltd. v. Chesapeake Bay Found., Inc., 484 U.S. 49, 60-62 (1987). A citizen who brings suit pursuant to these provisions does not personally obtain a monetary award; rather, any penalty assessed against a defendant is paid to the U.S. Treasury. See Friends of the Earth, Inc. v. Laidlaw Envtl. Servs, Inc., 528 U.S. 167, 175 (2000). The "citizen suit provisions evince a

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legislative intent that `citizen[s] are not to be treated as nuisances or troublemakers but rather as welcome participants in the vindication of environmental interests.'" Proffitt v. Comm'rs, Bristol Township, 754 F.2d 504, 506 (3d Cir. 1985) (quoting Friends of the Earth v. Carey, 535 F.2d 165, 172 (2d Cir. 1976)). The section of the statute that permits citizen enforcement actions also permits prevailing parties under the CWA to recover attorney's fees and costs at the discretion of the district court. The statute provides: The 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. . . . 33 U.S.C. § 1365(d). "It is the general rule in the United States that in the absence of legislation providing otherwise, litigants must pay their own attorney's fees. . . . Congress has provided only limited exceptions to this rule under selected statutes granting or protecting various federal rights." Christiansburg Garment Co. v. EEOC, 424 U.S. 412, 415 (1978) (internal citations omitted). The Clean Water Act is one of those statutes. While the statute itself does not make a distinction between an award of fees to plaintiffs and defendants, case law interpreting it and other, similar attorney's fees provisions requires a different analysis depending on which party prevails. See id. at 418-20. Additionally, in enacting the attorney's fees provision found in 33 U.S.C. § 1365(d), Congress stated that attorney's fees should only be awarded against a citizen suit plaintiff if the case was "obviously frivolous or harassing." S. Rep. No. 92-414 (1971) reprinted in 1972 U.S.C.C.A.N. 3668, 3747.

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In the case of a prevailing plaintiff, where the plaintiff is cast in the role of a "private attorney general," the courts typically award fees. Christiansburg Garment, 424 U.S. at 416-17; Browder v. City of Moab, 427 F.3d 717, 721 (10th Cir. 2005). This is due to two important equitable considerations. First, "the plaintiff is the chosen instrument of Congress to vindicate `a policy that Congress considered of the highest priority.'" Christiansburg Garment, 424 U.S. at 418 (quoting Newman v. Piggie Park Enterprises, Inc., 390 U.S. 400, 402 (1968)). The second is that "when a district court awards counsel fees to a prevailing plaintiff, it is awarding them against a violator of federal law." Id. These equitable considerations are absent in the case of a prevailing defendant. Id. at 418-19. Accordingly, the Supreme Court held in Christiansburg Garment that "a plaintiff should not be assessed his opponent's attorney's fees unless a court finds that his claim was frivolous, unreasonable, or groundless, or that the plaintiff continued to litigate after it clearly became so." Id. at 422. The Tenth Circuit has recognized that the Supreme Court "has established a high bar based on frivolousness or meritlessness." Browder, 427 F.3d at 724 (Tymkovich, C.J., concurring). The Supreme Court has cautioned district courts to "resist the understandable temptation to engage in post hoc reasoning by concluding that, because a plaintiff did not ultimately prevail, his action must have been unreasonable or without foundation. This kind of hindsight logic could discourage all but the most airtight claims, for seldom can a prospective plaintiff be sure of ultimate success." Christiansburg Garment, 434 U.S. at 421-22. Consequently, only in rare circumstances is a lawsuit so lacking in substance as to warrant the imposition of an award of attorney's fees to a prevailing defendant. Clajon Prod. Corp. v. Petera, 70 F.3d 1566, 1581

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(10th Cir. 1995); see EEOC v. L.B. Foster Co., 123 F.3d 746, 751 (3d Cir. 1997) (attorney's fees to a prevailing defendant "are to only be sparingly awarded"). The Tenth Circuit and other Courts of Appeal have extended the Christiansburg Garment standard to other statutes, including the Clean Water Act (see Browder, 427 F.3d at 720), but Plaintiffs are unaware of a case, other than the CC&V case, in which a court has ever awarded fees to a prevailing defendant in a CWA citizen suit.2 Cf. Sierra Club v. City of Little Rock, 351 F.3d 840 (8th Cir. 2003) (finding that plaintiff's action under the Clean Water Act was not frivolous, unreasonable or without foundation and that district court did not abuse its discretion in denying defendant's motion for litigation costs); Razore v. Tulalip Tribes of Washington, 66 F.3d 236 (9th Cir. 1995) (CWA claims were not frivolous or unreasonable where case presented novel question, and district court did not abuse discretion in denying defendant's request for fees). The CC&V case is distinguishable from the present case in a number of ways. In CC&V, Judge Krieger specifically pointed to the fact that Plaintiffs should have known they could not prove that Anglo-Gold caused a discharge after she excluded Plaintiffs' experts' testimony. Order Granting, in Part, Motion for Attorney Fees at 11 (Dec. 20, 2006). In this case, Plaintiffs presented several experts at trial, and the Court specifically considered the admissibility of these experts' opinions. In considering Dr. Ann Maest's expert opinion, the Court recognized that Dr. Maest reviewed visual inspection reports of water flows in the tunnel and at the portal and that El Paso's expert, Robert Brogden, agreed this was a sound scientific methodology. Memorandum

Although Judge Krieger found Defendants were entitled to their fees in the CC&V case, the parties settled the matter, and no fees were actually paid to Defendants. Declaration of Stephen D'Esposito, Ex. 18 hereto. 11

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Opinion and Order (June 4, 2007) at 13-14. After reviewing Dr. Maest's background and methodologies, the Court held that Dr. Maest's opinion was based on a sound scientific methodology and admitted her testimony. Id. at 16-19. In considering the admissibility of Robert Brogden's testimony, the Court stated that Plaintiffs presented "strong evidence" to counter Mr. Brogden's opinion. Id. at 22. Additionally, the history and posture of the present case are very different than the CC&V case. Here, Magistrate Judge Coan initially ruled in favor of Plaintiffs in the summary judgment phase and assessed a civil penalty against El Paso after holding a trial on the issue of remedy. The Tenth Circuit then considered the case and ruled in favor of Plaintiffs on three of the four issues, ultimately remanding the case for further consideration. The history of the case when it finally went to trial in February is important in distinguishing it from the CC&V case. IV. DEFENDANT HAS NOT SHOWN THAT PLAINTIFFS' CASE WAS FRIVOLOUS Defendant cannot meet the stringent standard of Christiansburg Garment. Defendant's success in this Court does not justify an award of fees, because a finding of frivolousness cannot be predicated on the fact that Plaintiffs' case ultimately was not proven. Christiansburg Garment, 424 U.S. at 422. Defendant has not carried its heavy burden of proving that in addition to being unsuccessful, Plaintiffs' suit also was frivolous. In its motion, Defendant rehashes the basis on which the Court ultimately found Plaintiffs fell short of proving their claim by a preponderance of the evidence, but does not provide any argument that Plaintiffs' claims were groundless, frivolous or without merit. El Paso also states that it could not cease or modify its actions so as to mitigate or abate flows into Cripple Creek (motion at 13), and that it could not have borne the cost of water

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treatment or civil penalties had they been assessed in this case.3 Id. In making this argument, El Paso ignores the Tenth Circuit's ruling in this case that owners of inactive mines can be liable under the CWA for unpermitted discharges that occur from their land. Sierra Club v. El Paso Gold Mines, Inc., 421 F.3d at 1146. As laid out in section II above, Sierra Club presented considerable evidence in support of its case at trial and proceeded with a good faith belief that it had a strong legal and factual basis for its case. Plaintiffs fell short of meeting their evidentiary burden, but could not have known in advance that they would fail and cannot, under Christiansburg Garment, have been expected to proceed only if certain their case was "airtight." Christiansburg Garment, 424 U.S. at 422. In arguing that Sierra Club's claims were unreasonable, El Paso disregards the factors that the Tenth Circuit has deemed probative of whether a case is groundless: the evidence that Plaintiffs introduced at trial, the careful consideration the Court gave the legal and factual issues presented, the lengthy procedural history of the case, and the case law in this Circuit. Additionally, in arguing that equity favors an award of fees, El Paso misinterprets the policy considerations supporting awarding fees to prevailing plaintiffs and posits that it is deserving of its attorney's fees because it is insolvent. We discuss each of these considerations in turn below.

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Magistrate Judge Coan's Order following the remedy trial in this case assessed a $94,000 civil penalty against El Paso and considered whether the penalty should be adjusted, taking into consideration the economic burden of a penalty and El Paso's ability to pay as one of the factors. There, the Court stated that El Paso did not provide evidence of its financial status and found that "the evidence reflects that El Paso has access to additional monies from the Schoger family corporations and has paid substantial amounts to its attorneys in this matter." [Doc. # 111] 13

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A.

This Court carefully considered Plaintiffs' claims, which militates against a finding of frivolousness.

A district court's careful consideration of a case is strong indication that a plaintiff's claims are not frivolous or groundless. See Hughes v. Rowe, 449 U.S. 5, 15-16 (1980) (recognizing that courts may consider the fact that a claim received careful consideration from the district court in determining whether the claim was frivolous); Jane L. v. Bangerter, 61 F.3d 1505, 1513 (10th Cir. 1995) (Even claims dismissed under Rule 12(b)(6) motions "that receive `careful consideration,' especially when evidenced by lengthy, detailed, reasoned orders or opinions are not `groundless' or `without foundation.'").4 This Court carefully considered Sierra Club's case, as evidenced by the five-day bench trial and the Court's request for trial briefs, post-trial briefs, and proposed findings of fact and conclusions of law. If a case is frivolous, groundless or meritless, a court does not need hundreds of pages of briefing in order to see that. What the Court ultimately determined here was that Plaintiffs fell short of introducing a preponderance of the evidence on one of the elements of their case. In Jane L., the Tenth Circuit determined that the plaintiffs' claims challenging the Utah Abortion Act were not frivolous, stating that the parties' arguments were given "more than cursory review" and that if the claims "were truly frivolous, the district court would have no need to engage in prolonged and fact-specific inquiries." 61 F.3d at 1514. Accordingly, the court reversed the district court's award of attorney's fees to defendants. Id. at 1517.

The Tenth Circuit, in interpreting the attorney's fee provision of the Clean Water Act and the Resource Conservation Recovery Act, 42 U.S.C. § 6972(e), noted "the Supreme Court's general recognition of the interchangeability of the case law interpreting similar attorney's fees statutes, e.g., § 6972(e), § 1988(b), § 2000e-5(k), and § 7604(d)." Browder, 427 F.3d at 720. Thus, cases interpreting these statutes are helpful to the analysis in the present case.

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Following its decision in Jane L., the Tenth Circuit again found that careful consideration of the issues presented--this time at trial--militated against finding a case frivolous. Pascouau v. Martin Marietta Corp., 1999 WL 495621 (10th Cir. 1999) (Ex. 13 hereto). In Pascouau, plaintiff appealed the district court's award of partial summary judgment dismissing some of her claims, the dismissal of the remainder of her claims following a bench trial, and the award of attorney's fees to defendant. Id. at *1. The Tenth Circuit held, "Although the district court ultimately rejected her claims and discredited her testimony, such findings alone do not mean her lawsuit was devoid of any legitimacy. On the contrary, the issues and evidence presented in this case called for careful consideration of several questions at trial, especially with regard to the severity and pervasiveness of the alleged sexually-harassing conduct in the workplace." Id. at *10.5 See Fry v. Bd. of County Comm'rs of the County of Baca, 7 F.3d 936, 943 (10th Cir. 1993) (Tenth Circuit found no abuse of discretion in denying attorney's fees to defendants where "the insufficiency of plaintiffs' evidence did not become clear until all of their case was presented."). Other Circuits have followed this approach. See, e.g., Jones v. Texas Tech Univ., 656 F.2d 1137, 1146 (5th Cir. 1981) ("[T]he careful consideration given to the case by the district court is some indication that the suit was not frivolous. It is important to note that the court did not dismiss the case prior to trial . . . ; rather, it held a full-blown trial on the merits . . . ."); EEOC v. Kenneth Balk & Assocs., Inc., 813 F.2d 197, 198 (8th Cir. 1987) (district court's request for post-trial briefs as well as proposed findings of fact and conclusions of law was indication that the EEOC's claims were not frivolous). Pascouau, although unpublished, is cited because its facts and reasoning have much in common with this case and the opinion therefore is persuasive on the issue before the Court. See 10th Cir. R. 32.1(A) (citation of unpublished opinions permissible where persuasive in a particular case). 15
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The Eighth Circuit has held that in the Title VII context "[s]o long as the plaintiff has `some basis' for the discrimination claim, a prevailing defendant may not recover attorney's fees." Kenneth Balk, 813 F.2d at 198 (emphasis added). There, the court found "[h]owever unpersuasive the EEOC's evidence ultimately proved to be, this evidence provided `some basis' for the EEOC's claim." Id. The court thus reversed the district court's award of fees to the defendant. Id. In the present case, this Court carefully considered Sierra Club's case. The Court requested that the parties submit trial briefs prior to trial and then held a five-day bench trial, where two expert witnesses and a lay witness testified for Plaintiffs, and one expert testified for Defendant. The Court devoted a large portion of its order to considerations of the parties' experts' opinions and ultimately determined that the experts' opinions were admissible. On the last day of trial, this Court requested that the parties submit post-trial briefs and proposed findings of fact and conclusions of law. This illustrates the Court's careful consideration of the issues and shows that Plaintiffs' claims were not frivolous. B. The procedural history of the case indicates that Plaintiffs' claims had a basis in fact and law.

In addition to a district court's careful consideration of a case, the lengthy procedural history of a case also demonstrates that a case is not without foundation. See, e.g., Kenneth Balk, 813 F.2d at 198; EEOC v. L. B. Foster Co., 123 F.3d 746, 751 (3d Cir. 1997). Early in the litigation, the Court denied four dispositive motions filed by Defendant and granted two filed by Plaintiffs. Magistrate Judge Coan then held a trial on the issue of remedy, ruling in favor of Plaintiffs and granting their attorney's fees as the prevailing party. El Paso appealed Magistrate Judge Coan's rulings to the Tenth Circuit, which affirmed in part, reversed in part, and remanded

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the case. El Paso then filed a motion for judgment on the basis of collateral estoppel and a motion to dismiss Plaintiff MPC for lack of standing; the Court denied both these motions. The case then proceeded to a five-day trial on the merits, after which the Court ruled in favor of Defendant. The lengthy procedural history of this case indicates that Plaintiffs' claims were not groundless or without merit. In Kenneth Balk, the Eighth Circuit pointed to the fact that the defendant did not move for a directed verdict during the four-day trial and that the district court requested post-trial briefs and proposed findings of fact and conclusions of law before taking the case under submission as evidence that the case was not frivolous. 813 F.2d at 198. The Third Circuit has recognized that cases found to be frivolous have "typically been decided in the defendant's favor on a motion for summary judgment or a motion for involuntary dismissal." L. B. Foster Co., 123 F.3d at 751. The court pointed to the Kenneth Balk opinion, noting that "[t]he procedural history of the case suggested that the EEOC's claim was not baseless . . . ." Id. at 752. The court went on to consider the sex discrimination claim in the case before it and stated, "It can hardly be said that the EEOC's claim was frivolous merely because the court (sitting as fact finder) rejected the EEOC's evidence." Id. In the present case, Plaintiffs' case survived multiple rounds of dispositive motions and advanced to a trial on the merits, indicating it had sufficient merit to proceed and that there were factual issues to be resolved by the Court. See id. at 751 (noting the court held a "full-blown" trial on the merits). Further, following the presentation of Plaintiffs' evidence, Defendant did not move for dismissal or for a directed verdict--i.e., did not move on the issue of insufficient evidence on the element the court ultimately found lacking. See, e.g., Nulf v. Int'l Paper Co.,

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656 F.2d 553, 564 (10th Cir. 1981) (claims were not "so groundless that the trial court felt confident enough to immediately grant the Rule 41(b) dismissal motion made at the close of Nulf's case"); Robinson v. Monsanto Co., 758 F.2d 331, 336 (8th Cir. 1985) (motion for directed verdict denied "indicating that the case had sufficient merit to proceed to the jury"). The procedural history of the case is also important because it highlights the opportunities that Defendant had--but did not exercise--to argue that Plaintiffs' claims lacked foundation and were unsupported by evidence. Defendant's motion requesting attorney's fees goes to great lengths to discredit Plaintiffs' claims, asserting that "Plaintiffs continued to litigate after becoming aware they had insufficient evidentiary support for their claim." Motion at 3. Yet it was not until Defendant had an opportunity to request its fees that it made this argument. Defendants did not argue this at summary judgment or in a motion for judgment at the close of Plaintiff's case. C. Plaintiffs' case is distinguishable from those in which courts have awarded fees to prevailing defendants.

As the Supreme Court has cautioned, "[H]indsight logic could discourage all but the most airtight claims, for seldom can a prospective plaintiff be sure of ultimate success." Christiansburg Garment, 434 U.S. at 422. Accordingly, only in rare circumstances is a lawsuit so lacking in substance as to warrant the imposition of an award of attorney fees. Clajon Prod. Corp. v. Petera, 70 F.3d 1566, 1581 (10th Cir. 1995). The "rare" cases in which the Tenth Circuit has upheld awards of fees to prevailing defendants are distinguishable from the present case. For instance, in a § 1983 suit, the Tenth Circuit found that an award of fees was appropriate where plaintiffs sued a judge despite the protection of absolute immunity and based

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on a property interest that both a state court and federal bankruptcy court had determined did not exist. Crabtree v. Muchmore, 904 F.2d 1475, 1477-78 (10th Cir. 1990). In a later case, the Tenth Circuit noted that "Crabtree underscores the rare circumstances in which a suit is truly frivolous as to warrant an award of attorneys' fees to the defendant." Clajon Prod. Corp., 70 F.3d at 1581. In another § 1983 action, the Tenth Circuit upheld an award of attorney's fees to a prevailing defendant where it found the claims "were grounded in baseless allegations and insinuations of conspiracy and wrongdoing. . . . Having failed to come forward with credible, non-speculative evidence, plaintiff, and not these defendants should bear the cost of risk associated with bringing these unsubstantiated claims to trial." Dill v. City of Edmond, Oklahoma, 1998 WL 740962, *2 (10th Cir. 1998) (Ex. 14 hereto). The court also questioned the plaintiff's motive in adding the defendants to the complaint, suggesting that bad faith was present. Id. Recognizing the "stringent nature of the standard for prevailing defendants," the court nevertheless found the claims against the defendants "present[ed] the rare circumstances justifying the award of attorney's fees to civil rights defendants." Id. at *3. In a case in which the district court dismissed claims that defendants had conspired with a state court judge to deprive plaintiffs of their civil rights, the court stated, "The record shows that Plaintiffs brought suit in federal court after repeated failed attempts to get relief in state court. The district court did not abuse its discretion in awarding reasonable attorney's fees to Defendants." Chavez v. Bennett Propp, 2000 WL 702309, *2 (10th Cir. 2000) (Ex. 15 hereto). Finally, in a Title VII case where the district court granted defendant's motion for summary judgment and awarded attorney's fees to defendant, the court found that the plaintiff's

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affidavit and deposition testimony were contradictory and that "much of his proffered evidentiary matter was `hearsay,' and not based on personal knowledge." Chestand v. Med. Tech. and Research Auth., 2000 WL 804609, *2 (10th Cir. 2000) (Ex. 16 hereto). The Tenth Circuit found that the district court did not abuse its discretion in awarding defendant attorney's fees. Id. Notably, not only are Tenth Circuit decisions awarding fees against plaintiffs rare, they also are generally not officially reported, meaning that the Tenth Circuit regards them as nonprecedential. See 10th Cir. R. 32.1(A) (unpublished decisions may be cited if "persuasive" or to show estoppel). See Chestand, Chavez, and Dill, supra. El Paso has not argued that any of these cases are persuasive. The upshot is that there is virtually no Tenth Circuit precedent for awarding fees to a prevailing defendant. D. El Paso's "equity argument" lacks merit.

In its motion, El Paso states, "The policy considerations for refusing to award fees to prevailing defendants do not apply to the circumstances of this case." Motion at 15. El Paso seems to believe that because the court did not find it in violation of federal law, it deserves its fees. Defendant confuses the policy consideration behind awarding fees to a prevailing plaintiff with the standard for awarding fees to a prevailing defendant. When a court awards fees to a prevailing plaintiff, it is awarding them against a violator of federal law. However, this consideration is not present when a defendant prevails. Instead, Defendant must show that Plaintiffs' case was frivolous.

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The other reasons El Paso cites for its equitable argument are irrelevant under Christiansburg Garment. Defendant argues that "[o]ther than the property at issue in this case, El Paso has no assets or cash flow." Motion at 13.6 The fact that El Paso has not paid its attorneys and expert witnesses does not entitle it to fees, and Defendant's bald assertion that the Sierra Club has "enormous financial resources" is irrelevant to this inquiry. Roth v. Green, 466 F.3d 1179, 1194 (10th Cir. 2006) (unsuccessful plaintiff's ability to pay is not a proper factor in determining whether to award fees against it); Wolfe v. Perry, 412 F.3d 707, 723-24 (6th Cir. 2005) (same); Alizadeh v. Safeway Stores, Inc., 910 F.2d 234, 238 (5th Cir. 1990) (same). Rather, only a showing that Plaintiffs' case was frivolous or groundless would support an award of fees. El Paso has not made such a showing, and the Court should not penalize Plaintiffs because Defendant is insolvent and has failed to pay its attorneys for several years. Further undermining El Paso's argument that the equities favor it are the facts showing that it has failed to do equity itself. When this Court ordered El Paso to pay Plaintiffs' attorney's fees in 2003, not only did El Paso fail to pay the fees as ordered, it failed to seek a stay of the award in district court, post a surety bond, or provide sufficient evidence of its inability to comply with these orders. El Paso filed a motion to stay the civil penalty awarded by Magistrate Judge Coan, but the Court denied the motion unless El Paso could obtain a supersedeas bond in the amount of $94,900 within 15 days. [Doc. # 135] In the same order, Magistrate Judge Coan El Paso also asserts that it "has borrowed hundreds of thousands of dollars to defend itself from Plaintiffs' citizen suit and is unable to repay these loans. . . . Other than reimbursement for actual costs incurred, the last payment from El Paso to its attorneys was made nearly three years ago, on July 16, 2004. . . . El Paso presently owes its attorneys and expert witnesses substantial sums for services rendered." Motion at 14.
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granted Plaintiffs' motion to require El Paso to post a bond securing Plaintiffs' attorney's fees and costs on appeal and ordered El Paso to post that bond within 15 days as well. Id. El Paso never obtained either of the ordered bonds. Motion at 13. Reviewing the history of the case, it is apparent that El Paso has previously acted inequitably in matters relating to attorney's fees by failing to secure ordered bonds or otherwise obtain a stay of Magistrate Judge Coan's order pending appeal. Consequently, El Paso should be precluded from seeking its fees now because it does so with unclean hands. The clean hands doctrine is the modern interpretation of a fundamental maxim of equitable remedy. This maxim--"he who seeks equity must do equity" or "he who comes into equity must come with clean hands"--requires that the rights of a party seeking equitable relief not be enforced unless that party has recognized the equitable rights of its opponent. See Mfr's Fin. Co. v. McKey, 294 U.S. 442, 449 (1935); Worthington v. Anderson, 386 F.3d 1314, 1319 (10th Cir. 2004). Under this doctrine, a court may refuse to award equitable relief to a party "whose conduct in relation to the litigation matter has been unlawful, unconscionable, or inequitable." Houston Oilers, Inc. v. Neely, 361 F.2d 36, 42 (10th Cir. 1966); see also United States v. Grover, 119 F.3d 850, 852 (10th Cir. 1997). Although El Paso ignored the Court's orders to pay fees and penalties and post bonds previously, it now comes to the Court seeking its own fees and costs. Where fees may be awarded pursuant to a discretionary fee shifting provision, like § 1365(d) of the CWA, the court is vested "with the power to grant or withhold fees according to the equities of a lawsuit or circumstances surrounding litigation." DERFNER & WOLF, COURT AWARDED ATTORNEY FEES § 5.02(4) (1998); see Gibbs v. Clements Food Co., 949 F.2d 344, 345 (10th Cir. 1991) (court's

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determination of amount of attorney's fees to be awarded is an "equitable decision"). To permit El Paso to recover attorney fees would essentially be to ignore El Paso's previous conduct at the expense of the Plaintiffs. See Grover, 119 F.3d at 852 ("[The plaintiff] is asking the court to ignore his own breach of the agreement, while at the same time asking the court to treat the [defendant's breach of the same agreement] as if it nullifies any of the obligations he had under the agreement."). El Paso comes to the court with unclean hands and should not be permitted to recover its fees. V. THE FEES CLAIMED BY DEFENDANT EL PASO ARE NOT REASONABLE As shown above, El Paso is not entitled to any award of attorney's fees or costs because it has not shown that Sierra Club's case was frivolous under Christiansburg Garment. Assuming, however, that this Court reviews the specifics of the claimed hours and costs, much of El Paso's request should be rejected. The first step in calculating fee awards requires the court to determine the number of hours reasonably spent by counsel for the party seeking fees. Ramos v. Lamm, 713 F.2d 546, 553 (10th Cir. 1983). After examining the specific tasks and whether they are properly chargeable, the court should look at the hours expended on each task to determine if they are reasonable. Case v. Unified School Dist. No. 233, 157 F.3d 1243, 1250 (10th Cir. 1998). "A district court is justified in reducing the reasonable number of hours if the attorney's time records are `sloppy and imprecise' and fail to document adequately how he or she utilized large blocks of time." Id. Counsel requesting fees should make a good faith effort to exclude from a fee request hours that are excessive, redundant, or otherwise unnecessary. Hensley v. Eckerhart, 461 U.S. 424, 434 (1983).

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A.

Fees should only be awarded after August 26, 2006, and only for time actually billed to El Paso.

If the Court determines that any attorney's fees are appropriate, fees should only be awarded after August 26, 2006--the date on which discovery ended. Because El Paso asserts in its motion that Plaintiffs should have known they did not have sufficient evidence to prove their case, the close of discovery is the earliest that Sierra Club could have known all the evidence and what the balance of the evidence would be. El Paso states that its attorneys billed 656.4 hours, representing $117,559.50 in fees from August 26, 2006 to June 19, 2007, when El Paso filed its motion for fees. However, Defendant's attorneys only billed El Paso $114,349.50 in fees during that period.7 See Motion at Ex. 4 and Ex. 5. Consequently, $114,349.50 is the most that could be charged to Sierra Club, because "[h]ours that are not properly billed to one's client also are not properly billed to one's adversary . . . ." Hensley v. Eckerhart, 461 U.S. at 434 (emphasis in original); Case, 157 F.3d at 1250. The fees labeled "no charge" on El Paso's bills are for working lunches, travel to and from the district court, Michael Gustafson's time spent at hearings and trial, telephone conferences with the client, conferences between attorneys, and other items for which El Paso's attorneys exercised "billing judgment" and determined the costs were not properly charged to their client. Case, 157 F.3d at 1250 ("Billing judgment consists of winnowing the hours actually expended down to the hours reasonably expended."). Accordingly, these fees cannot now be recovered from Plaintiffs.

El Paso also states that from the inception of the case, its attorneys "expended a total of 3,325.5 hours defending this case, including 469.8 hours of compensable time that was not billed to the client." Motion at 18-19. If the Court decides to award fees to Defendant for a time period other than what Plaintiffs are requesting, the award should be reduced by 14% to account for time not actually billed to El Paso. Hensley, 461 U.S. at 434.

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B.

The Court should not assess fees incurred for unsuccessful motions.

Of the $114,349.50 charged to El Paso after August 26, 2006, approximately $13,709.50 was expended on unsuccessful motions, including El Paso's Motion to Dismiss Mineral Policy Center for Lack of Standing, filed on November 17, 2006 [Doc. # 216] and El Paso's Motion for Sanctions, filed on January 30, 2007 [Doc. # 233]. See Ex. 17 hereto (noting on El Paso's bills all the time entries for "unsuccessful motions").8 El Paso's attorneys spent about 35.6 hours on the motion to dismiss and about 54 hours on the motion for sanctions. Id. The Court denied both of these motions. [Doc. # 226 and # 234] The Court denied the motion for sanctions only two days after it was filed. [Doc. # 226] In ruling on El Paso's motion to dismiss for lack of standing, the Court found that Magistrate Judge Coan had already ruled on the issue. Additionally, because El Paso did not dispute Magistrate Judge Coan's ruling that Sierra Club had standing and because Plaintiffs presented their claims jointly, the Court determined "there [was] no need to revisit the issue of Mineral Policy Center's standing." [Doc. # 234] Moreover, this motion to try to knock out one plaintiff was unnecessary in view of U.S. Supreme Court precedent that if one plaintiff has standing, all have standing. Clinton v. City of New York, 524 U.S. 417, 431 n.19 (1998). El Paso's attorneys spent an extensive amount of time researching, drafting, editing and conferencing about these motions that had no impact on the outcome of the case (see Ex. 17), and the Court should decline to award fees associated with them. See Case, 157 F.3d at 1252 ("The district court was well within bounds to consider lack of success on the standing issues and its inability to segregate Where time spent on an unsuccessful motion was part of a larger billing entry and the exact amount of time spent on the motion was unclear, Plaintiffs reduced the amount of hours and fees by 50%. Where the entire billing entry was for time spent on an unsuccessful motion, Plaintiffs believe the entire amount of fees for that entry should be subtracted from the request. 25
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appellants' billing records for time spent on the issues to support a general reduction in time."); id. at 1250 (unnecessary hours may be reduced by the district court). C. If the Court were to award any expert fees, these should be limited to fees incurred after August 26, 2006, and only for documented time by El Paso's experts.

For the reasons stated above, El Paso should only be awarded any expert fees and costs after August 26, 2006. Defendant requests $22,919.50 in fees for Robert Brogden and $17,200.05 in fees for Dr. Arthur O'Hayre after this date. If the Court determines that Defendant is entitled to Dr. O'Hayre's expert fees, the Court should not award fees for the time that is not documented by Dr. O'Hayre in his bills. While many of Dr. O'Hayre's entries include hours, rate and total amounts for his services, they do not include itemized task descriptions of his time.9 This amounts to 100.5 hours and $13,065 for which there is no description of services. D. The Court should not award fees where El Paso's counsel failed to specifically document how they used of large blocks of time.

As stated above, an attorney must adequately document how he or she utilized large blocks of time. Case, 157 F.3d at 1250. In many of their billing entries, El Paso's attorneys spent large amounts of time on numerous tasks, making it impossible to determine how much time was spent on a specific task. See Ex. 17 (noting on El Paso's bills the "block billing" entries). Consequently, the Court cannot evaluate the reasonableness of the time spent or whether the hours were excessive, redundant or unnecessary.

These entries include Dr. O'Hayre's time on September 20, 21, 22, 25, 26, 27, and 29 (23 hours/$2,990); October 2, 5, 13 (10.5 hours/$1,365); December 26, 27, 28 (5.5 hours/$715); January 8, 23, 29, 30, 31 (10 hours/$1,300); February 1, 2, 5, 6, 7, 8, 9 (51.5/$6,695). See Motion at Ex. 5. 26

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Where this is the case, the court may consider a general reduction of the compensable hours. "A general reduction of hours claimed in order to achieve what the court determines to be a reasonable number is not an erroneous method, so long as there is sufficient reason for its use." Case, 157 F.3d at 1250 (quoting Mares v. Credit Bureau of Raton, 801 F.2d 1197, 1203 (10th Cir. 1986)). See Jane L., 61 F.3d at 1510 ("district court's 35% reduction of the hours requested fell within its realm of discretion" where plaintiff's "imprecise time records failed to document adequately how plaintiffs' attorneys utilized large blocks of time"). Plaintiffs believe that a general reduction in hours is appropriate in this case due to El Paso's attorney's use of block billing and suggest that the Court reduce the fees requested by 15%. Taking these reasonable reductions together, if the Court were to consider any award of fees, that award should be no more than $85,544 for attorney's fees and $27,054.55 for expert fees, as set forth in this section. VI. CONCLUSION For the foregoing reasons, Plaintiffs respectfully request that the Court deny El Paso's Motion for Attorney Fees and Litigation Expenses. El Paso has failed to carry its heavy burden of establishing that Plaintiffs' case was frivolous under Christiansburg Garment. While Plaintiffs were not ultimately successful in their CWA case, it would not serve the interests of justice or Congress' intent that citizens vigilantly enforce the CWA for this Court to award El Paso its attorney's fees. The evidence that Plaintiffs proceeded with was sufficient to move both the State and the EPA to take enforcement action against El Paso. Consequently, this Court should reject El Paso's request for fees. If the Court were to assess any fees, the amount should be significantly reduced, as shown above.

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CERTIFICATE OF SERVICE I hereby certify that on this 30th day of July, 2007, a copy of the foregoing Plaintiffs' Response in Opposition to El Paso's Motion for Attorney Fees and Litigation Expenses was sent electronically via ECF to the following: John M. Barth Attorney at Law P.O. Box 409 Hygiene, CO 80533 Roger Flynn Jeffrey C. Parsons Western Mining Action Project 412 High Street Lyons, CO 80540 James L. Merrill Stephen D. Harris Michael J. Gustafson Merrill, Anderson & Harris, LLC 20 Boulder Crescent Colorado Springs, CO 80903 s/Lynda Lovett

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