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. 00-cv-02325-MSK-MEH (consolidated with 01-cv-02307-MSK- MEH) SIERRA CLUB and MINERAL POLICY CENTER, Plaintiffs, v. CRIPPLE CREEK & VICTOR GOLD MINING COMPANY, ANGLOGOLD ASHANTI (COLORADO) CORPORATION, ANGLOGOLD ASHANTI NORTH AMERICA, INC. and GOLDEN CYCLE GOLD CORPORATION Defendants. ______________________________________________________________________________ PLAINTIFFS' COMBINED RESPONSE IN OPPOSITION TO DEFENDANTS' MOTIONS FOR ATTORNEY FEES ______________________________________________________________________________ Plaintiffs Sierra Club and Mineral Policy Center file this Combined Response in Opposition to the motions for attorney fees filed by the AnglGold Defendants [#314] (Cripple Creek & Victor Gold Mining Company, AngloGold Ashanti (Colorado) Corporation, and Anglogold Ashanti North America, Inc.) and by Golden Cycle Gold Corporation [#315-322 and #326] (jointly referred to herein as "Defendants"). Defendants should not be awarded attorney fees, expert witness fees, or litigation costs because: 1) this case was not brought for an improper purpose; 2) there was an evidentiary basis for all factual contentions; 3) there was a good faith basis for all legal contentions; 4) some of the legal conclusions in this Court's trial ruling concern novel, unresolved issues; and, 5) a balancing of the equities does not favor an aaward. Finally, in the event the Court assesses any litigation expenses, the amount of any such award should be significantly reduced as provided herein.

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I. FACTUAL AND PROCEDURAL BACKGROUND Plaintiffs sent their initial notice of violation letter to Defendants in September 2000. [#1, Exh. A]. Plaintiffs immediately offered to conduct settlement discussions in an effort to resolve their claims without protracted litigation. The parties used the services of a mediator in an attempt to resolve this case. Plaintiffs filed their initial lawsuit in November 2000. Rather than serve the Defendants immediately, Plaintiffs delayed service for nearly the maximum time period allowed by law in an attempt to give the negotiations time for success. [#3]. Although the negotiations were not successful, Plaintiffs participated in good faith.1 At the time Plaintiffs brought suit in November 2000, neither the U.S. Environmental Protection Agency ("EPA") nor the State of Colorado Water Quality Control Division ("WQCD") were prosecuting any of the claims alleged by Plaintiffs. After issuance of the notice letters, EPA requested a meeting with Plaintiffs to learn more about the allegations. In April 2001, EPA sent a Notice of Violation to the Defendants and the WQCD agreeing with Plaintiffs that there were violations of the CWA. Trial Exh. 535 & 536. EPA "overfiled" because the WQCD was not enforcing the law. EPA also sent a formal request for information to Defendants, to which they objected and initially refused to sign a statement of truthfulness under penalty of perjury. Trial Exh. 71, Bates 2221-2246. In September 2001, the EPA and WQCD conducted inspections of Defendants' facility. Trial Exh. 514. These inspections and EPA's information request confirmed many of the violations alleged here.
1 Defendants'

suggestion that Plaintiffs negotiated in bad faith is untrue and Defendants offer no proof to support their allegation. Their motion consists largely of argumentative hearsay that mischaracterizes Plaintiffs' prior statements and conduct, which Plaintiffs have moved to strike separately. Plaintiffs also object, under FRE 408, to the introduction of any evidence or testimony regarding the substance of any settlement discussions. However, in the event the court considers Defendants' characterization of these discussions, it is important to recogize there is no evidence that Plaintiffs were negotiating in bad faith. Contrary to Defendants suggestion, Plaintiffs never requested that Defendants close the mine or reduce its size. Instead, Plaintiffs' positions in litigation and settlement were always properly focused on water quality at discharge locations located within the mine permit boundary. Moreover, none of the mediators ever suggested Plaintiffs were negotiating in bad faith. 2

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Meanwhile, Plaintiffs learned that the EPA, WQCD and Defendants had commenced negotiations to resolve some of the issues in Plaintiffs' complaint and EPA's notice of violation. Plaintiffs immediately sent a certified letter to EPA and the WQCD requesting participation as a stakeholder in the settlement discussions in an attempt to reach a global settlement. Exh. 1 hereto. EPA and WQCD completely failed to respond to Plaintiffs' letter. Plaintiffs later learned that Defendants objected to their participation in the administrative settlement. Exh. 2 hereto. In 2003, as a direct result of this lawsuit, Defendants entered into separate settlement agreements with the WQCD and EPA in which the regulatory agencies agreed with the Plaintiffs and determined that: 1) Defendants were illegally discharging pollutants from the Carlton Tunnel Ponds/Waste Rock pile in violation of the CWA and ordered the Defendants to obtain a permit for this discharge location. Defendants finally obtained a permit for this discharge location shortly after the conclusion of the trial in this case. [# 301, Trial Exh. 616 & 617]; 2) Defendants illegally discharged zinc, TSS, and flow from the Carlton Tunnel Outfall 002 in violation of their permit and also violated the effluent limitation for Whole Effluent Toxicity ("WET"). Defendants paid a civil penalty for these violations to the EPA. Further injunctive relief was not imposed because Defendants had taken remedial actions at the Carlton Tunnel Ponds in 2001-after the filing of Plaintiffs' complaint. These post-complaint remedial measures included installing the Carlton Pond baffle system which provided for additional retention time of the water flowing through the ponds. Defendants' environmental manager testified at trial that no remedial measures were taken at the Carlton Tunnel between March 1996 and the time Plaintiffs filed their complaint, despite numerous violations during this time frame; 3) Defendants illegally discharged cyanide from Arequa Gulch Outfall 001A in violation of their discharge permit and failed to perform WET testing. Defendants paid a civil penalty for these violations to the EPA.
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Again, there was no "on-the-ground" injunctive relief because Defendants had again taken remedial measures at Arequa Gulch Outfall 001A--after the filing of Plaintiffs' complaint. These remedial measures included construction of a "pump back system" in late 2002 to essentially eliminate the discharge at Arequa Gulch Outfall 001A. As part of the settlement, the WQCD required Defendants to submit an Arequa Gulch Operating Plan for the pump back system to ensure that there would be no future violations; and, 4) the WQCD and EPA are continuing to investigate legal responsibility for the discharge from the Roosevelt Tunnel. Trial Exh. 57 & 73. At no time has either regulatory agency specifically exonerated the Defendants from liability for the Roosevelt Tunnel discharge. In 2003, Defendants finally obtained a final discharge permit for Arequa Gulch Outfall 001A. Trial Exh. 509. Defendants had been contesting whether they needed a permit for this discharge point since 1996. Trial Exh. 592. In fact, in their motion to dismiss Case No. 00-MK2325, they argued to this Court that no discharge permit was required. [#19]. Defendants' acquisition of the Arequa Gulch permit in 2003 was in direct response to Plaintiffs' claim that they were discharging without a permit at Arequa Gulch. These actions by the EPA, WQCD, and Defendants prove that Plaintiffs' claims were well supported in fact and law. Any award of attorneys fees is inappropriate when a defendant takes an action consistent with the plaintiff's claims after the case was filed. See, Morris-Smith v. Moulton Niguel Water District, 44 F.Supp.2d 1084, 1086 (C.D.Cal. 1999).2
2 Under the catalyst theory, a court could find that Plaintiffs are entitled to their attorneys fees and litigation expenses because Defendants took the following post-complaint actions in direct response to Plaintiffs' claims: 1) they obtained two final and unappealable discharge permits (Carlton Tunnel Ponds/Waste Rock discharge and Arequa Gulch Outfall 001A); 2) they paid civil penalties to the EPA for many of the violations alleged by Plaintiffs at Carlton Tunnel Outfall 002 and Arequa Gulch Outfall 001A; and, 3) they installed post-complaint remedial measures at the Carlton Tunnel Ponds and Arequa Gulch Outfall 001A to eliminate future violations . "[T]here is unambiguous evidence that Congress intended the 'whenever . . . appropriate' fee provisions of the Clean Air Act and the Clean Water Act to allow fee awards to plaintiffs who do not obtain court-ordered relief but whose suit has a positive catalytic effect." Loggerhead Turtle v. County Council of Volusia County, 307 F.3d 1318, 1326 (11th Cir. 4

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After entering into the WQCD/EPA settlements and obtaining the final unappealable Arequa Gulch permit, the Defendants filed motions for summary judgment arguing that the administrative settlements with the regulatory agencies were res judicata and all claims should be dismissed in the original action. [#131]. Instead of granting summary judgment for Defendants, this Court granted summary judgment in favor of Plaintiffs and concluded that the settlements did not require dismissal of the claims and that the case could proceed to trial. [#164]. In fact, during the course of the consolidated cases, defendants filed three motions to dismiss, three motions for summary judgment, and even sought interlocutory appeal to the Tenth Circuit Court of Appeals. All of these motions were denied by the Court. Collectively, all of these motions contained the same arguments Defendants made at trial. Thus, the procedural history of this case also proves that Plaintiffs' claims were not frivolous. Had Plaintiffs' claims been frivolous, this case would have been dismissed by the Court long before trial. Shortly before trial, the Court recognized that the parties were unable to agree on the elements of liability. Thus, the Court ordered the parties to submit "element briefs" identifying the elements of liability to be proven at trial. [#225 & #226]. With regard to the unpermitted discharge claims (Moffat Tunnel Cribbing Wall, Squaw Gulch Pond, Carlton Tunnel Pond/Waste Rock, Roosevelt Tunnel, and alternatively, Arequa Gulch Outfall 001A) Defendants argued that Plaintiffs needed to prove that the pollution in the discharge came from the "outside world" and that Defendants had somehow "added" the pollutants to the discharge. In contrast, Plaintiffs argued that the CWA is a strict liability scheme which simply required proof that any pollutants were discharged from any point source into any navigable water without a permit.

2002). The Tenth Circuit has also applied the catalyst theory to "whenever. . . appropriate" statutes. See Center for Biological Diversity v. Norton, 262 F.3d 1077, 1080 & n.2 (10th Cir. 2001) (catalyst theory applies to Endangered Species Act). See also Atlantic States Legal Foundation v. Eastman Kodak, 933 F.2d 124, 128 (2nd Cir. 1999)(plaintiff entitled to fees when defendants settles with government on same claims). 5

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This matter was resolved in the Final Pretrial Order, which recites the elements of liability proposed by Plaintiffs and contains no language requiring proof that the pollution was "from the outside world", that Defendants affirmatively "added" the pollution to the discharge, the pollution was caused by "human activities", or the point source must be the cause of the pollution in the discharge.3 [#276]. Plaintiffs proceeded to try the case by presenting evidence of an ongoing flow of polluted water from man-made point sources on Defendants' mine site which flow into navigable waters without authorization under the CWA.4 At trial, Plaintiffs offered substantial evidence on all of the elements identified by the Court in the Final Pretrial Order and Court Exhibit 1 for each unpermitted discharge point.5 It was not until the April 13, 2006 trial ruling that this Court stated, that as an element of liability under the CWA, Plaintiffs must prove that the pollution in the unpermitted discharge locations was caused by "human activities". As discussed below, it appears that the Court's findings regarding the "human activity" element centers around a novel and unresolved interpretation of the CWA that has been the focus of two very recent Supreme Court decisions. Because they relied on the elements of liability as stated in the Final Pretrial Order and Court Exhibit No. 1, Plaintiffs were not aware that this Court

Support for Plaintiffs' legal and factual positions are contained in, inter alia, their Motion for Partial Summary Judgment in Case No. 01-MK-2307 [#], Trial Brief [#281] , Proposed Findings of Fact [#304] and Closing Argument [#305] which are all incorporated herein by reference. 4 The EPA and WQCD agreed with Plaintiffs on two of the discharge points--Carlton Tunnel Ponds/Waste Rock and Arequa Gulch Outfall 001A and required Defendants to obtain final discharge permits for these point sources after commencement of this action. The EPA and WQCD did not require proof that the pollutants were caused by "human activities" for these discharges. Instead, the regulatory agencies required permitting because there was a discharge of pollutants from these man-made point sources that reached navigable waters. 5 For each unpermitted discharge point, Plaintiffs presented evidence at trial proving that there was polluted water emanting from a man-made mining structure located on Defendants' mining operation that was flowing into navigable waters. Plaintiffs also presented water sampling data collected by Defendants and Plaintiffs establishing the hydrological connection of water and pollutants from the point source to the navigable water. 6

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would require proof of human "causation" as an element of liability for an unpermitted discharge. Based on this "big picture," it is clear that Plaintiffs had a good faith basis in fact and law for their alleged violations of the CWA. For these reasons and the reasons stated below, Defendants' motions for attorney fees should be denied. II. LEGAL BACKGROUND AND STANDARD OF REVIEW A. Congress and the Courts Disfavor Defendants' entitlement to litigation expenses In enacting the attorneys fees provision found in 33 U.S.C. § 1365(d) of the CWA, Congress stated that attorneys fees should only be awarded against a citizen suit plaintiff if the case was "obviously frivolous or harassing". S.Rep.No. 92-414, at 7 (1971), reprinted in U.S.C.C.A.N. 3668, 3674. Correspondingly, the Supreme Court has set a very "high bar" for assessing attorneys fees against a public interest plaintiff. Christiansburg v. Garment Co. v. E.E.O.C., 434 U.S. 412, 416 n.7 (1978) (citing CWA's section 505 as an analogous provision to an employment discrimination fee statute). See also, Browder v. City of Moab, 427 F.3d 717, 724 (10th Cir. 2005, Tymkovich, CJ, concurring) (applying Christiansburg standard to deny a defendant's request for attorney fees and costs under the CWA and stating that "The Supreme Court ... has established a high bar based on frivolousness"). The Christiansburg decision recognized that there are important reasons for distinguishing between fee awards to plaintiffs and defendants. More specifically, the Court held that while a prevailing plaintiff "is ordinarily to be awarded attorney's fees in all but special circumstances", a prevailing defendant should not be awarded fees "unless a court finds that [the plaintiff's] claim was frivolous, unreasonable, or groundless..." 434 U.S. at 417 and 422. The Court justified this strict standard by identifying two equitable considerations supporting awards to a prevailing plaintiff "that are wholly absent" in the case of a prevailing defendant: (1) the
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plaintiff is the "chosen instrument of Congress to vindicate 'a policy that Congress considered of the highest priority'", 434 U.S. at 418; and (2) "when a district court awards counsel fees to a prevailing plaintiff, it is awarding them against a violator of federal law." Id. Under Christiansburg, the terms "frivolous", "unreasonable" and "without foundation" are essentially interchangeable. See, Thomas v. Bible, 983 F.2d 152, 154 n.2 (9th Cir. 1993). In Christiansburg, the Supreme Court also cautioned courts not 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." 434 U.S. at 421-22. The Tenth Circuit recently adopted the Christiansburg standard of "frivolousness" in denying an award of attorneys fees to a defendant in a CWA case. See, Browder, 427 F.3d at 723 ("Defendants may only be awarded attorney's fees if the district court finds that either of the claims were `frivolous, unreasonable, or groundless, or that the plainitff continued to litigate after it clearly became so.' Christiansburg, 434 U.S. at 422."). In Hughes v. Rowe, 449 U.S. 5, 14 (1980), the Supreme Court further defined the standard by stating, "[t]he plaintiff's action must be meritless in the sense that it is groundless or without foundation. The fact that the plaintiff may lose his case is not in itself a sufficient justification for the assessment of fees" (emphasis added). See also, Houston v. Norton, 215 F.3d 1172, 1174-75 (10th Cir. 2000)(applying Hughes standard). Other circuit courts have also been very reluctant to assess attorneys fees against an unsuccessful plaintiff. The Ninth Circuit addressed this issue in Mitchell v. Office of Los Angeles County, 805 F.2d 844 (9th Cir. 1986). In Mitchell, the Ninth Circuit reversed a fee award to a defendant noting "[o]nly in exceptional cases did Congress intend that defendants be awarded attorney's fees under Title VII....The chilling effect upon civil rights plaintiffs would be

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disproportionate to any protection defendants might receive against the prosecution of meritless claims." Mitchell, 805 F.2d at 848. These same rigorous standards have been applied to environmental statutes such as the CWA. See, Razore v. Tualip Tribes of Washington, 66 F.3d 236 (9th Cir. 1995); Morris-Smith v. Moulton Niguel Water District, 44 F.Supp.2d 1084, 1086 (C.D.Cal. 1999); National Wildlife Federation v. Consumers Power Co., 729 F.Supp. 62, 65 (W.D. Mich. 1989); Consolidated Edison Co. v. Realty Investment Assoc., 524 F.Supp. 150, 153 (S.D.N.Y. 1981)("prevailing defendants may recover fees under Section 7604(d) [of the Clean Air Act] only where the action may be fairly characterized as frivolous or harassing."); Marbled Murrelet v. Babbitt, 182 F.3d 1091, 1095-96 (9th Cir. 1999), cert. denied 528 U.S. 1115 (2000)(denying fees to a defendant under the Endangered Species Act); Fisher v. Chestnut Mountain Ski Corp., 2002 WL 1794238 (N.D. Ill. 2002); Atlantic States v. Onondaga, 899 F. Supp. 84 (N.D.N.Y. 1995); Morris-Smith v. Moulton Niguel, 234 F.3d 1277 (9th Cir. 2000). In Razore, the court denied attorneys fees to a defendant despite the fact that plaintiffs' claims were dismissed for lack of jurisdiction. Razore, 66 F.3d at 239. Similarly, a court in this district did not impose attorneys fees, or costs, against an unsuccessful CWA plaintiff after dismissing a case at summary judgment for lack of jurisdiction. See, Sierra Club v. Colorado Refining Co., 852 F.Supp. 1476, 1486 (D.Colo. 1994). Because the outcome of any suit is uncertain, assessing expert witness and attorneys' fees against a public interest plaintiff "would greatly discourage citizens from bringing citizen suits to enforce federal statutes of paramount importance." Painewebber Income Properties Three Limited Partnership v. Mobil Oil Corp., 916 F.Supp. 1239, 1243 (M.D.Fla. 1996) ("Painewebber"). See also, Dias, "Morris-Smith v. Moulton Niguel Water District: The Double Standard for Attorney Fees Under the Clean Water Act," 27 N.Ky.L.Rev., 549 (2000)(detailing
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the public interest goals of the CWA and the application of the Christiansburg standard to the CWA). Unlike "plaintiffs in traditional civil actions, plaintiffs in environmental suits do not seek to vindicate personal rights and they obtain no financial benefit if they win." National Wildlife Federation v. Hanson, 859 F.2d 313, 317 (4th Cir. 1988). In summary, "the federal government does not have the time and resources to effectively police all federal statutes vigorously. Citizens' suits are a valuable supplement to federal resources and imposing attorneys' fees and costs on a citizens' plaintiff for a technical error and dismissal would seriously impede the effectiveness of these federal statutes." Painewebber, 916 F.Supp. 1243-44. This is precisely the case here--at the time Plaintiffs brought their suit neither the federal or state government were policing the CC&V gold mine to require compliance with the CWA. Three years after this case was commenced, the regulatory agencies agreed with many of the violations alleged by Plaintiffs. B. The Court's Opinion Concerns Unsettled Legal Issues Claims are not frivolous when a case involves unsettled questions of law, or issues not directly resolved by a circuit court. U.S. ex. rel. Chunie v. Ringrose, 788 F.2d 638, 648 (9th Cir. 1986)(denying fee award to defendant where plaintiff raised "issues not previously addressed by the courts"). See also Cooper v. Dupnik, 924 F.2d 1520, 1537 (9th Cir. 1991)(same). This is also true when a plaintiff's claims present "difficult issues not previously resolved" by the circuit court. Dooley v. Reiss, 736 F.2d 1392, 1396 (9th Cir. 1984). Further, attorney fees should not be awarded to a defendant when a complaint raised unsettled questions of state law. See,ONRC Action v. Columbia Plywood, 286 F.3d 1137, 1144 (9th Cir. 2002). An award of attorneys fees is also inappropriate under Colorado law where plaintiffs' claims were based largely on federal law and involved novel questions of law upon which there was no determinative law in this state and where the evidence presented by the plaintiff arguably
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supported the plaintiffs' claims. Kemp v. State Bd. of Agric., 790 P.2d 870, 873 (Colo. App. 1989); Pedlow v. Stamp, 819 P.2d 1110, 1112 (Colo. App. 1991). Further, conclusory statements by a party that a claim is frivolous is insufficient evidence to support a claim for attorneys fees. In re Aldrich, 945 P.2d 1370, 1379 (Colo. 1997). As discussed below, the law surrounding liability for a discharge from a point source has been the subject of no less than two recent Supreme Court opinions, and this Court's trial findings appear bound up with some of the unresolved issues in those cases. Accordingly, Plaintiffs' claims are not frivolous. C. The bad faith exception is very narrow and not applicable here -

A court may only award attorneys fees as a sanction under its inherent power against a party who has "acted in bad faith, vexatiously, wantonly or for oppressive reasons. In this regard, if a court finds `that fraud has been practiced upon it, or that the very temple of justice has been defiled,' it may assess attorney's fees against the responsible party, as it may when a party `shows bad faith by delaying or disrupting the litigation or by hampering enforcement of a court order.'" Chambers v. NASCO, Inc., 501 U.S. 32, 45-46 (1991)(citations omitted). "Moreover, `this circuit requires more than merely a finding that a claim was frivolous when brought.... [T]he bad faith exception is drawn very narrowly and may be resorted to `only in exceptional cases and for dominating reasons of justice.'" Autorama Corp. v. Stewart, 802 F.2d 1284, 1287 (10th Cir. 1986) quoting Sterling Energy, Ltd. v. Friendly National Bank, 744 F.2d at 1437, quoting Cornwall v. Robinson, 654 F.2d 685, 687 (10th Cir. 1981). See also, Roadway Express, Inc. v. Piper, 447 U.S. 752, 765 (1980)(courts may award fees under the bad faith exception only "in narrowly defined circumstances"). The Tenth Circuit has made clear that "the standard for bad faith awards is stringent." Sterling Energy, Ltd. v. Friendly National Bank, 744 F.2d 1433, 1435 (10th Cir. 1984). "Hence,
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it is not surprising that attorneys' fees are awarded only when there is `clear evidence' that challenged actions are taken entirely without color and are pursued for reasons of harassment or delay." F.D.I.C. v. Schumann, 319 F.2d 1247, 1250 (10th Cir. 2003) quoting Autorama Corp. v. Stewart, 802 F.2d 1284, 1287 (10th Cir. 1986). D) Defendants cite no direct precedent for awarding defendants fees under the CWA Defendants cite a number of cases in support of the proposition that they should be entitled to fees under Section 1365 of the CWA. [#314, pp. 16-17]. However, none of these cases are CWA cases. Instead, the majority of cases cited in Defendants' motions concern employment discrimination claims in which the plaintiff was seeking monetary damages. Blue v. United States Department of Army, 914 F.2d 525 (4th Cir. 1990)(employment case); Coleman v. General Motors Corp., 667 F.2d 704 (8th Cir.)(employment case); Carrion v. Yeshiva University, 535 F.2d 722 (2nd Cir. 1976)(employment case); and, Introcaso v. Cunningham, 857 F.2d 965, 967 (4th Cir. 1988)(employment case). This fact is important --for the reasons cited herein, courts have almost uniformly declined to award fees to defendants under Section 1365 of the CWA because the plaintiffs do not receive monetary damages as does the employment discrimination plaintiff. Accordingly, the cases relied upon by Defendants are distinguishable. In summary, only in "rare circumstances" is a suit "truly frivolous so as to warrant an award of attorneys' fees to the defendant." Clajon Production Corp. v. Petera, 70 F.3d 1566, 1581 (10th Cir. 1995). Defendants bear the strict burden of proving that Plaintiffs' claims were obviously frivolous. For the reasons argued below, Defendants has failed to meet their burden and the motions should be denied in their entirety. III. ARGUMENT A. THIS CASE WAS NOT BROUGHT FOR AN IMPROPER PURPOSE

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Defendants' motions allege that this case was brought in bad faith because the real "goal was to extract from the AngloGold Defendants what they could not obtain when their objections to the mine's expansion failed." [#314, pp. 4-5]. Defendants' motions fail to present any evidence to support this fiction. Defendants also failed to develop any evidence at trial or in discovery to support this theory. At trial, Defendants' opening statement and closing argument fail to make any reference to this theory. Instead, this is clearly a case where Defendants are employing "hindsight logic." As a threshold matter, Defendants' motion should be largely stricken and denied because it contains predominantly inadmissible hearsay. See Plaintiffs' Motion to Strike. Perhaps the best evidence disproving Defendants' "bad faith" theory is the Confidential Settlement Communication that Defendants inappropriately attach to their motion.6 Defendants allege that the Communication is "probative of Plaintiffs' disregard for the merits of their claims and continuance of this case in bad faith." [#314, p. 10, ftn. 3]. There is nothing in this Communication supporting this theory that Plaintiffs' real "goal was to extract from the AngloGold Defendants what they could not obtain when their objections to the mine's expansion failed." If that was true, Plaintiffs would have been asking the Defendants to close the mine or reduce its size. Plaintiffs have never asked for this type of relief in settlement or at trial. Instead, Plaintiffs' settlement positions and the relief requested from the Court were directly related to the CWA violations alleged in the complaints. The Communication also reveals why the parties were unable to resolve this case for over 5 years--namely that "Defendants have only been

6 Plaintiffs object to the admissibility and consideration of Plaintiffs' Confidential Settlement Communication. Defendants claim that the document is not being submitted to prove liability. This is not true. The document is being submitted in an attempt to impose liability for $1.4 million dollars of litigation expenses on Plaintiffs. Plaintiffs request that the Court make a specific finding that Exhibit 2 to #314 is inadmissible for any purpose. If the Court makes such a ruling, the Court can disregard any discussion of this document by Plaintiffs. See Plaintiffs' Motion to Strike filed contemporaneously with this Response. 13

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willing to settle this case if all claims were resolved as a whole". [#314, Exhibit 2, p. 4]. In contrast, Plaintiffs were willing to minimize expense to all parties by resolving individual claims. Thus, Defendants' "all or nothing" settlement position ensured that this case would not be resolved absent a trial. B. THERE WAS EVIDENTIARY SUPPORT FOR THE FACTUAL CONTENTIONS

This is not a case where there was no evidentiary support for Plaintiffs' factual contentions. In fact, in their opening statement at trial, Defendants admitted that the evidentiary support for Plaintiffs' factual contentions was largely undisputed. 1. Permit violation claims

With regard to the permit violation claims, Defendants stipulated that the relevant permits were issued, that the permits contained certain effluent limits and conditions, and that they exceeded the limits in those permits. [#276] and Court Exh. 1.The trial ruling also supports many of Plaintiffs' factual contentions. The main area of factual disagreement was whether there were ongoing violations of the permits in November 2000. This is a mixed question of fact and law. a. Carlton Tunnel Outfall 002 ongoing violations Defendants admitted at trial that there are no treatability studies to determine the effectiveness of the Carlton Tunnel ponds in treating pollutants in the discharge. Defendants had experienced seasonal summer time violations at Carlton Tunnel Outfall 002 for several years prior to the filing of the complaint in November 2000. See, Trial Exh. 291, Bates 4799 & 4807. In September 1996, Defendants stated under oath that "CC&V does not consider these ponds to have been installed for treatment of water under current conditions." Trial Exh. 289, Bates 4788. The condition of the ponds did not change between September 1996 and November 2000. In June 2001, the WQCD recognized "the efficacy of removal of solids and metals in the settling
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ponds is unknown." Trial Exh. 512, p. 11. This is not a case Defendants operated a mechanical treatment plant to meet effluent limits. Rather, Defendants were relying on a passive system which they admit could not control the flow or pollution in the discharge. Despite numerous violations after March 1996, Defendants' environmental manager testified at trial that they did not undertake any remedial actions between March 1996 and November 2000 specifically designed to eliminate the cause of the violations at Carlton Tunnel Outfall 002.7 Defendants violated the zinc, flow, total suspended solids, and WET limits in the Carlton Tunnel permit both before and after March 1996. It was not until August 2001 that they undertook post-complaint remedial activity to address the violations alleged by Plaintiffs between March 1996 and November 2000. Further, Defendants experienced WET exceedences both before and after the filing of the complaint. Trial Exh. 243, last page; Exh. 253.8 Thus, there was ample evidentiary support for Plaintiffs'ongoing violation claim at Carlton Tunnel 002. b. Arequa Gulch Outfall 001A ongoing violations With regard to Arequa Gulch Outfall 001A, evidence was admitted at trial establishing post-complaint violations of the pH, cyanide, manganese, and aluminum effluent limits and the WET testing requirements in the 1996 Arequa Gulch Permit. See, Trial Exh. 186, Bates 28843907 and Trial Exh. 206, Bates 4109-4121. See also, #305, Exh. 1. Moreover, despite the fact that Defendants undertook certain remedial actions at Arequa Gulch Outfall 001A prior to commencement of the case, Defendants' environmental manager testified: 1) the remedial

7 Defendants'

environmental manager testified at trial that vegetation was removed from a transmittal trough in 1998 but this activity was not designed to remediate the violations at the Carlton Tunnel Outfall 002. 8 The Court rejected Plaintiffs' claims of WET violations at both Carlton and Aerqua Gulch locations based on its reading of the applicable permit, which imposes a "Compliance Schedule" of additional monitoring if the one-time WET test is failed. Plaintiffs read this same permit to mean that one WET exceedance does constitute a permit violation, i.e.a "compliance schedule" presupposes a failure to comply. 15

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measures were not specifically designed or engineered to resolve the alleged violations; 2) there were no treatability studies to ensure the measures would meet the permit limits; and 3) there was no available water quality data in November 2000 to determine whether the remedial measures were in fact resolving the alleged violations. In fact, post-complaint water quality data revealed that the pollution limits in the 1996 Arequa Gulch permit were not being met in Defendants' experimental ponds. See, Trial Exh. 212. See also, # 305, pp. 21-22, ftn 21. Again, it wasn't until December 2002 that Defendants installed a post-complaint "pump back system" to eliminate the flow at Arequa Gulch Outfall 001A. While the Court ultimately gave great deference to a letter by the WQCD regarding Defendants' claim of the "upset defense" at the Carlton Tunnel Outfall 002 and Arequa Gulch Outfall 001A, Plaintiffs had a good faith basis for its ongoing violation claim because: 1) the Defendants never raised the upset defense as an affirmative defense to liability in this case; 2) as per 40 C.F.R. §122.41(n)(3), the upset defense is not available for violations of water quality based effluent limits which were imposed in these permits; 3) the WQCD letter did not grant an upset defense at Arequa Gulch Outfall 001A or and did not address any pollutant other than zinc at the Carlton Tunnel, Trial Exh. 546; 4) Defendants bears the burden of proof and any administrative statement by WQCD regarding the "upset defense" is not final agency action, Trial Exh. 237 & 502; and, 5) the WQCD rejected the upset defense in 2003 by prosecuting many of the violations Defendants claim are excused by the defense, Trial Exh. 57 & 73. Accordingly, Plaintiffs again had ample evidentiary support for their factual contentions regarding ongoing violations at Arequa Gulch Outfall 001A. 2. Unpermitted discharge claims

With regard to the unpermitted discharge claims, Defendants again largely admitted at trial that polluted water was flowing into navigable waters from man-made mining structures on
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their mining operation. In some cases, such as the Roosevelt Tunnel, Defendants admitted that the discharge was coming from a "point source." Plaintiffs submitted evidence at trial proving that EPA and the WQCD considered these type of mining structures to be "point sources" subject to CWA liability. Trial Exh. 56, Bates 2072-2074 and Trial Exh. 72, Bates 2203-2212. The Court's ruling turned largely on whether the pollutants in the discharge were the result of "human activity." As noted below, there is a good faith legal argument that proving "human activity" was the cause of the pollution is not an element of liability under section 402 of the CWA. C. THERE IS A GOOD FAITH BASIS FOR THE LEGAL CONTENTIONS

Under the Rule 11 standard, a case is not frivolous if the legal contentions are warranted by existing law or a nonfrivouous argument for the extension, modification, or reversal of exiting law or the establishment of new law. Fed.R.Civ.P. 11(b)(2). For the reasons stated below, there was a good faith basis for all of Plaintiffs' legal contentions. 1. "Addition of Pollution" Defendants argue that the law clearly requires Plaintiffs to prove that the pollutants in a point source discharge is caused by "human activity." To the contrary, there are many cases that do not require such proof. Section 402 of the CWA imposes strict liability. United States v. Earth Sciences, Inc., 599 F.2d 368, 374 (10th Cir. 1979). Thus, there is no need to prove intentional human activity was the cause of the pollution in the discharge. The term "discharge" is defined as "any addition of any pollutant to navigable waters from any point source". 33 U.S.C. § 1362(12). The Tenth Circuit recently noted that "[t]he Act does not otherwise define the term `addition,' and the legislative history is silent on the matter." Sierra Club v. El Paso Gold Mines, Inc., 421 F.3d 1133, 1143 (10th Cir. 2005). The law is
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unclear on this element of liability and for this reason alone Defendants' motions for attorney fees should be denied. For example, in El Paso the defendant on appeal likewise argued that the term "addition" requires "affirmative conduct by some actor before liability attaches."Id. The Tenth Circuit rejected this argument noting that "it is apparent the liability and permitting sections of the Act focus on the point of discharge, not the underlying conduct that lead to the discharge." Id. at 1143. The other CWA mining decision in the Tenth Circuit noted that "escape of polluted water from a sump pit, through overflow or from a fissure in the dirt berm" constitutes addition of pollutants from a point source under the CWA, without proof that the pollutants in the discharge were the result of human activity. Earth Sciences, 599 F.2d at 373-74. See also, Sierra Club v. Abston Constr. Co., Inc. 620 F.2d 41, 46 (5th Cir. 1980). Plaintiffs' good faith legal contention is also supported by the U.S. Supreme Court which recently clarified that, " a point source need not be the original source of the pollutant, it need only convey the pollutant to `navigable waters', which are, in turn, defined as `the waters of the United States'...[t]hat definition includes within its reach point sources that do not themselves generate pollutants". South Florida Water Management District v. Miccosukee Tribe of Indians, 541 U.S. 95, 105 (2004). The Miccosuke Court remanded to the parties for a dertermination of whether a discharge into a distinct waterbody was occurring. Id. Just days ago, the U.S. Supreme Court rendered yet another decision reinforcing the good faith of Plaintiffs' position. In S.D. Warren, Co. v. Maine Board of Environmental Protection, --S.Ct. ----, 2006 WL 1310684 (May 15, 2006), a dam operator asserted that the discharge of water diverted upstream of the dam back into a river downstream of the dam was not a discharge covered by section 401 of the CWA. The Court unanimously rejected this argument and upheld the CWA's applicability to the dam's discharge. While S.D. Warren focused on section 401 of the CWA and does not govern section 402, the provision at issue in the case at bar, two aspects
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of the ruling are relevant, First, the Court observed that the overriding purpose of the CWA is the control of pollution of any kind, not the "addition" of pollutants. Id. at *8. Second, the Court referenced the dispute in Miccosukee regarding whether the transfer of already-polluted water from one location to another constituted a "discharge," and then observed that Miccosukee "says nothing about whether the transfer of polluted water from the canal to the impoundment constitutes a "discharge." Id. at *6, n.6. In other words, the very core of Plaintiffs' claims regarding unpermitted discharges from Defendants' mine has just been recognized as an unsettled legal issue by the Supreme Court. In summary, to the extent the CWA requires proof of intentional "human activity," that element could be satisfied by the fact that Congress only imposed liability on discharges from "point sources" --which are normally man-made structures. When read together, the El Paso, Earth Sciences, Miccosukee and S.D. Warren decisions, which are all binding on this Court, offer support for Plaintiffs' good faith legal contention that the CWA does not require proof that pollutants in a discharge are "caused by human activity" to establish liability under Section 402. 2. "Ongoing Violations" The law on "ongoing violations" is also unsettled in the Tenth Circuit. This Court's ruling recognizes that the "Tenth Circuit has discussed Gwaltney in various decisions, but has not yet addressed this specific issue" at issue in the instant case. [#309, p. 30]. As this Court recognized, some courts have applied the rule that one post-complaint violation establishes an on-going violation. [#309, p. 31 ftn 25]. While this Court did not apply this rule in its trial ruling, Plaintiffs' legal contention had a good-faith basis in the law. Given the lack of clarity in this area of law, Defendants' motions for attorney fees should be denied. Further, the Court's ruling on the issue of "ongoing" violations in Arequa Gulch stemmed from the Court's acceptance of new, more lenient effluent limits listed on the
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Discharge Monitoring Reports ("DMRs")--not those contained in the permit. A source of confusion may be the fact that the DMRs contained the modified effluent limits, and so the good faith question remains, as discussed below, of whether the modifications were legal, an issue this Court declined to resolve. 3. The Stipulated Stays of the Arequa Gulch Permit Plaintiffs alleged that the effluent limits in the 1996 Arequa Gulch permit could not be modified without pubic notice or comment. The evidentiary support for Plaintiffs' factual contentions is found in the 1996 Arequa Gulch Permit itself which specifically prohibits any relaxation of the effluent limits in the 1996 permit without public notice or comment. Trial Exh. 502, Part II, p. 31, ¶d. This Court's trial ruling also recognizes that there is extensive legal support for Plaintiffs' argument that a discharge permit cannot be effectively modified without public notice and comment. [#309, pp. 34-35]. While the Court pointed to C.R.S. §25-8-404 as support that the Arequa Gulch permit could be modified without public notice or comment, this provision only applies to unilateral administrative orders, and not to permits. The collolary provision for permits is C.R.S. §25-8-406 which only allows a stay of a renewal permit--not a new permit like the 1996 Arequa Gulch permit. Thus, Plaintiffs' legal argument again had a good faith basis in law. 4. Defendants' request for fees based on standing should be denied Defendants also argue that they should be awarded all of their litigation expenses because Mineral Policy Center ("MPC") was denied standing. This argument ignores that Sierra Club was granted standing and that the Court reached the merits of the case. The Supreme Court has held in at least seven cases that if one party has standing, other parties may prosecute the litigation without an inquiry into standing. Clinton v. City of New York, 524 U.S. 417 (1998); U.S. Dep't Labor v. Triplett, 494 U.S. 715, 719 (1990); Bowsher v. Synar, 478 U.S. 714, 721
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(1986); Watt v. Energy Action Educational Foundation, 454 U.S. 151, 160 (1981); Arlington Heights v. Metropolitan Housing Dev. Corp., 429 U.S. 252, 264 n.9 (1977); Carey v. Population Services International, 431 U.S. 678, 682 (1977); Buckley v. Valeo, 424 U.S. 1, 12 (1976). Thus, the fact that MPC was denied standing is largely immaterial and is not a basis for awarding fees. Moreover, there was also an evidentiary basis in fact and a good faith legal argument for MPC's claim of standing. As the Court noted in the trial ruling, an organization that lacks traditional voluntary members can, in certain circumstances, have standing. [#309, p. 27]. For example, a number of other courts have concluded that non-membership organizations similar to MPC can establish associational standing. See,Oregon Advocacy Center v. Mink, 322 F.3d 1101 (9th Cir. 2003)(constituents need not possess all indicia of membership); Research Group v. Magnesium Elektron, 123 F.3d 111, 119 (3rd Cir. 1997) (grants standing to PIRG and FOE despite the fact that "their charters prohibit them from having members"); Friends of the Earth v. Chevron, 120 F.3rd 826, 828 (5th Cir. 1997) (non-members confer associational standing because they possessed the following indicia of membership, among others: they testified at trial that they were members; they voluntarily associated with the group; they helped finance the group; and, they elected the group's governing body). Regarding the factual support for MPC's standing, the evidence at trial established that MPC's bylaws allowed it to have non-voting members. Kirby Hughes and Marilyn Fay also testified to their indicia of membership in MPC. These witnesses indicated that they provided financial support to MPC. They also testified that they were able to influence MPC to work on issues related to CC&V's gold mine. They also testified that they received other benefits of membership. While the Court did not consider these adequate "indicia" to establish membership, there was an evidentiary basis for MPC's claim of associational standing. 5. Plaintiffs have a good faith basis for their "owners/operators" contentions.
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Golden Cycle Gold Corporation ("GCGC") argues that this case was frivolous because Plaintiffs did not present evidence that GCGC had any management authority over the mine. However, it is not necessary to prove management authority if the defendant is an "owner or operator" of the point source. El Paso, 421 F.3d at 1144. In this case, GCGC stipulated that they possess a 33% ownership interest in CC&V--the joint venture which operates the CC&V gold mine. Moreover, the joint venture management agreement states that the joint venture is operated as a partnership under Colorado law. Trial Exh. 533. A partnership is specifically listed as the type of entity that can be liable as a "person" under the Act. 33 U.S.C. § 1362(5). The joint venture management agreement also states that GCGC is allowed to vote on CC&V management decisions. Trial Exh. 533, p. 24. The evidence at trial revealed that GCGC attended all CC&V management committee meetings and voted on management decisions. Trial Exhs. 80 & 420. The fact that GCGC does not have a majority vote on the management committee does not negate the fact that it is a partner in CC&V, an "owner/operator" of the CC&V gold mine, and thus a proper defendant in this case. The AngloGold Defendants argue that AngloGold Ashanti North America ("ANGA") was not a proper defendant because it is not an "owner/operator" and did not participate in the management of the CC&V gold mine. At trial, Plaintiffs admitted evidence revealing that ANGA employees were appointed to the CC&V management committee, negotiated discharge permits on behalf of CC&V, conducted land acquisitions on behalf of CC&V, and participated in environmental issues surrounding the discharge locations at issue in this case. Trial Exh. 80, Bates 2687-88; Trial Exh. 423. Thus, even though the Court did not find liability against AGNA or any other defendant, Plaintiffs' claim that AGNA was an "owner/operator" defendant under U.S. v. Best Foods, 118 S.Ct. 1876 (1998) had an evidentiary basis in fact and was also grounded in a good faith legal argument.
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IV. THE EQUITIES DO NOT FAVOR AN AWARD OF ATTORNEY FEES A. THE EPA/WQCD AGREED WITH SEVERAL OF PLAINITFFS' CLAIMS As noted above, three years after this case was filed, EPA and the WQCD vindicated the positions taken by Plaintiffs by requiring permits for two unpermitted discharge locations (Carlton Ponds/Waste Rock and Arequa Gulch 001A) and agreeing with many of the permit violation claims. Trial Exhs. 57 & 73. Under the circumstances, it would be inequitable to assess attorneys fees against Plaintiffs given that many of their claims were affirmed by postcomplaint determinations by the regulatory agencies. Moreover, Plaintiffs attempted to resolve the issues raised in this case by participating in the negotiations with the Defendants and the regulatory agencies. Ex. 1 hereto. However, the Defendants specifically excluded the Plaintiffs from those settlement discussions. Exh. 2 hereto. Had the Defendants involved the Plaintiffs in those discussions, it is possible that all issues could have been resolved at that time. Thus, Defendants refusal to include Plaintiffs in their settlement negotiations contributed to the expenses of which they now complain. B. DEFENDANTS CAN RE-COUP THEIR LITIGATION EXPENSES

Gold is approaching record high prices. Defendants are for-profit corporations and can pass the costs of this litigation on to its customers. To the contrary, Plaintiffs are non-profit corporation that can not re-coup their litigation expenses. Needless to say, a $1.5 million award of attorney fees will severely harm Plaintiffs. Given that Defendants can re-coup their litigation expenses, the balance of the equities disfavors a fee award. C. DEFENDANTS' QUESTIONABLE PERMITTING STRATEGY

Defendants waited until long after this case was brought to secure final unappealable discharge permits for two of the discharge locations at issue in this case. Defendants did not accept a discharge permit at Arequa Gulch Outfall 001A until 2003 and did not obtain a
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discharge permit for the Carlton Tunnel Ponds/Waste Rock until after the conclusion of the trial. Defendants also amended the 1996 permit without any public notice or comment and then relied on those illegal modifications for over seven years--without ever completely prosecuting the Arequa Gulch permit appeal which served as the predicate for the permit modifications. It is also important to recognize that Defendants employed an unconventional and unprecedented strategy for these point source discharges. As such, the balance of the equities does not favor rewarding Defendants with attorneys fees. D. DEFENDANTS' INVALID RULE 68 OFFER DOES NOT SUPPORT AN AWARD Defendants did not move for an award under Rule 68 of the Federal Rules of Civil Procedure. Nevertheless, Defendants attach a purported January 30, 2006 Rule 68 offer of judgment to its motion. [#314, Exh. 1]. By its terms, Rule 68 requires that the offer be in writing, be properly served, specify a definite sum or other relief for which judgment may be entered, and include "costs then accrued." The actual application of the rule to shift accrued costs only occurs when the plaintiffs obtain a judgment that is "not more favorable than the offer." Therefore, it does not apply when judgment is entered in favor of the defendant. Delta Air Lines, Inc. v. August, 450 U.S. 346, 352 (1980), cited in Landon v. Hunt, 938 F.2d 450, 451 n.1 (3d Cir. 1991); Carillon Square v. Ernst Home Center, Inc., 34 F.3d 1076, p. 4 n.3 (10th Cir. 1994) (unreported). Several court have also noted that Rule 68 is inapplicable to citizen suits under the CWA. In this case, as with all CWA citizen suits, plaintiffs "stand in the shoes of government and perform a public service", and as such Rule 68 has been held to be "incompatible with the purposes of Congress in enacting the CWA" and "inappropriate in CWA citizen suits." North Carolina Shellfish Growers Association v. Holly Ridge Associates LLC, 278 F.Supp.2d 654 (E.D.N.C. 2003). See also Public Interest Research Group of New Jersey (PIRG) v. Struthers24

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Dunn, 1988 U.S. Dist. LEXIS 17182 (D.N.J. 1988), 28 Env't Rep. Cases (BNA) 1218 (D.N.J. 1988) (Rule 68 contrary to Congressional intent that CWA enforcement be immediate and that citizens should be unconstrained to bring such actions [citing legislative history]); Friends of the Earth v. Chevron Chemical Co., 885 F.Supp. 934 (E.D.Tex. 1995)("FOE")(hazard of paying defendant's attorney fees would have a chilling effect on citizen enforcement and eviscerate effectiveness of CWA citizen suit provision). The Tenth Circuit has also recognized in the civil rights litigation context that the application of Rule 68 "is particularly problematic in the context of [civil rights litigation], because it may impede private actions, which Congress has relied upon for enforcement of the statute's guarantees and advancement of the public's interest." H.R.Rep. No. 102-40(I) at 82, 1991 U.S.C.C.A.N. at 620." Gudenkauf v. Stauffer Communications, Inc., 158 F.3d 1074, 1084 (10th Cir. 1998). These cases, and the Tenth Circuit's rationale in the civil rights context, apply directly to this citizen suit under the CWA with similar public interest goals and incentives for citizen suits, and thus preclude the effect of the Rule 68 Offer of Judgment altogether. The court in FOE, rejecting applicability of Rule 68 to CWA citizen suits, stated further that "[c]ivil actions of this nature [CWA citizen suits] are substantially different from common civil actions, and offers of judgment would have an irregular dynamic effect upon litigants in these actions." Id. Moreover, a Rule 68 offer of judgment is invalid if it does not include payment of costs expended up to the time of the offer. Defendants' Offer of Judgment unequivocally states that "Notwithstanding anything to the contrary in the Clean Water Act and/or any other statute or rule, all parties will bear their own litigation and pre-litigation fees and costs including without limitation attorneys and expert witness fees." [#314, Exh. 1]. The U.S. Supreme Court and the Tenth Circuit have stated that a Rule 68 Offer of Judgment is not valid if it explicitly or impliedly does not include payment of costs expended up to the time of the Offer. Marek v.
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Chesny, 473 U.S. 1, 6 (1985). Similarly, the Tenth Circuit has held, citing the Marek case, that, "Rule 68 expressly requires that the offer include, either as a part of or in addition to the sum stated, reasonable costs then accrued." Knight v. Snap-On Tools Corp., 3 F.3d 1398, 1405 (10th Cir. 1993). See also Scheriff v. Beck, 452 F.Supp. 1254, 1259-60 (D.Colo. 1978)(offer of judgment that does not include costs is not valid). Thus, given the express language in Defendants' Offer to not include any costs in the Offer, the Offer is not valid and is of no effect. V. THE FEE AWARD REQUESTED BY DEFENDANTS IS NOT REASONABLE As shown above, Defendants are not entitled to any award of litigation expenses. However, if this Court reviews the specifics of the claimed hours and costs, much of Defendants' 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 District 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." Case, 157 F.3d at 1250. Counsel requesting fees should make a good faith effort to exclude from a fee request hours that are excessive, redundant, or otherwise unnecessary. Hensely v. Eckerhart, 461 U.S. 424, 437 (1983). Attorney rates should not be billed for tasks that could have been performed by someone other than an attorney or that are not properly compensable at any rate. New Mexico Citizens for Clean Air and Water, 72 F.3d 830, 835 (10th Cir. 1996). When a lawyer spends time on tasks that are easily delegable to nonprofessional assistants, legal service rates are not applicable. New Mexico Citizens, 72 F.3d at 835. Further, attorney fees should not be recovered for time spent communication with the press
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or press releases. Id. a. Defendants' billing statements are impreciseDefendants' billing statements are imprecise because they do not contain an itemization of the time spent on each task. Instead, all tasks performed each day are bundled together-- making it impossible to determine how much time was spent on each task. See, #314, Exh B to Exh. 3. Moreover, Defendants bulk billing statements are imprecise because they repeatedly contain vague descriptions, such as "conference with EJR" or "phone call with Peter O" thus lacking the necessary precision. See, #314, Exh B to Exh. 3. This occurs regularly throughout the billing. A table listing some of these vague billing references is attaced hereto as Exh. 3. b. Defendants should not be awarded fees for unsuccessful motions Defendants are seeking attorney fees for three motions to dismiss, three motions for summary judgment, and one motion for interlocutory appeal--all of which were completely unsuccessful. Defendants obtained no benefit, other than delay, in filing these motions. Thus, the Court should specifically exclude all legal fees associated with these unsuccessful motions. c. Time spent on regulatory matters should not be awarded Defendants are also attempting to recoup attorney fees for time spent on regulatory matters. For example, Mr. Riordan is seeking reimbursement for time associated with addressing the EPA/WQCD enforcement actions and permitting matters. Mr. Riordan regularly seeks attorney fees for meetings and phone calls with State and EPA employees--including Jerry Goad (State), John Moscato (DOJ), Elyana Sutin (EPA), and others. A table listing some of the inappropriate fees associated with regulatory agencies is attached hereto as Exhibit 4. d. Time spent on other cases should be excluded .

Mr. Riordan also regularly seeks attorney fees for telephone calls, meetings, and expenses related to work on other cases, such as the El Paso Gold Mines litigation. Mr. Riordan
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regularly had telephone calls and meetings with Jim Merrill, Steve Harris and Connie King-- who are counsel for El Paso Gold Mines. The El Paso case is separate litigation and Mr. Riordan should not be billing Plaintiffs for time spent on that matter. Mr. Riordan is also seeking attorney fees for attending El Paso hearings, one El Paso deposition, and reviewing El Paso litigation documents. Mr. Riordan also seeks attorney fees for other unrelated cases--such as a Boulder County Commissioners hearing, the New Cardinal litigation, the Old Timer litigation, and the Young Life litigation. Fees for working on other separate litigation should be denied. A table listing some of the inappropriate fees is attached hereto as Exhibit 5. e. Time spent on non-legal clerical matters should be excluded Mr. Riordan is also seeking reimbursement for non-legal clerical work and clerical overtime. For example, Defendants are seeking reimbursement for copying, travel, and other non-legal work. A table listing some of the inappropriate fees is attached hereto as Exhibit 6. f. Time spent on "press" issues should be excluded Defendants inappropriately seek fees for time spent on "press" and public relations matters. Exhibit 6 also lists inappropriate fees charged for press matters. Exh. 6 (01/06/01, 08/03/01, 08/09/01). g. The expert witness billing records are vague and excessive Defendants are attempting to charge Plaintiffs for the work of six expert witnesses when none of these experts testified at trial and only one of the experts (Adrian Brown) ever testified in the case (at the Rule 702 hearings). Gary Thompson, Gary Lacy, Fred Banta, and John Christy were all identified as primary experts (not rebuttal experts) regarding the liability phase of the case. However, none of them testified in the Rule 702 hearings or at trial. These witnesses account for $16, 262.24 of the total expert witness bill. Several of these experts were retained to testify that the streams at issue in this case were not "navigable waters".
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Ultimately, Defendants abandon this defense because it had no support in fact or law. Likewise, the proposed expert testimony of the other witnesses were irrelevant to the issues in this case and was likewise abandoned by Defendants. Thus, Defendants' claim that these witnesses were "necessary" should be rejected. Defendants also seek $37, 534.73 in reimbursement for Adrian Brown. Mr. Brown testified for approximately 3 total hours in the Rule 702 hearing and did not testify at trial. The amount charged is not reasonable in light of the time he testified and his overall role in this case. Kevin Conroy was identified as a remedial expert and did not testify at trial or a Rule 702 hearing due to bifurcation of the case. Further, as highlighted in Exhibit 7 hereto, the invoices submitted by most of the experts are vague and contain little or no detail of what work was performed. Thus, it is impossible to determine what tasks were performed and how much time was spent on each task. Thus, based on the information submitted by Defendants, the Court cannot make a determination of "reasonableness" for any of the expert witnesses. Moreover, Defendants are even attempting to recoup charges for expert witnesses incurred in 2006--years after preparation of expert reports and for witnesses that never testified at any time during this case. See, [#314, Ex. B to Ex. 3, part 17, pp. 26-28]. Clearly, there is simply no reasonable basis for these expert witness expenses. In summary, in the event the Court imposes litigation expenses on Plaintiffs, all of the expert witness expenses should be excluded with the limited exception of Mr. Brown's reasonable and necessary expenses related to his rebuttal expert reports and testimony at the Rule 702 hearings. In the event the Court assessed expert witness fees, the amount should be

reduced significantly. VI. CONCLUSION Defendants' accusations of frivolousness and bad faith are conclusory and unsupported
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by evidence. Until this Court's trial ruling, Defendants never argued to this Court that Plaintiffs'claims were frivolous or in bad faith. Instead, Plaintiffs' litigation and settlement positions were closely focused on the alleged water quality violations. The stipulations and evidence presented at trial provide ample evidentiary support for Plaintiffs' factual contentions. Plaintiffs' legal contentions were well founded in law. For the reasons stated herein, Defendants' motions should be denied in their entirety. In the alternative, Defendants' fee request should be significantly reduced for the reasons outlined herein.

Respectfully submitted this 17th day of May, 2006.

Respectfully Submitted, s/ John Barth John M. Barth Attorney at Law P.O. Box 409 Hygiene, CO 80533 (303) 774-8868 [email protected] Jeffrey C. Parsons Roger Flynn Western Mining Action Project 2260 Baseline Road, Suite 101A Boulder, CO 80302 303) 473-9618 [email protected] Randall M. Weiner, Atty. No. 23871 1942 Broadway, Suite 408 Boulder, Colorado 80302 Tel: 303-938-3773 Fax: 303-442-6622
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[email protected]

CERTIFICATE O