Opinion
Case No. 1:09-cv-63.
February 22, 2011
ORDER
This matter is before the Court on the following motions: (1) City of Monroe's Motion for Costs (doc. 77); (2) City of Monroe's Motion for Attorney's Fees (doc. 84); (3) Defendants' Motion to Dismiss for Lack of Subject Matter Jurisdiction and Alternative Motion for Leave to Engage in Discovery (doc. 86); and (4) City of Monroe's Motion for Discovery (doc. 88). Plaintiff, the City of Monroe, Ohio, seeks attorney fees and costs pursuant to § 304(d) of the Clean Air Act, 42 U.S.C. § 7604(d), which authorizes the Court to award the costs of litigation to a party "whenever the court determines such award is appropriate." Id. Defendants, Middletown Coke Company, Inc. and SunCoke Energy, Inc., jointly referred to herein as MCC, move to dismiss Monroe's Motions on the grounds that Monroe is not legally entitled to attorney fees and costs. Both Monroe and MCC seek discovery to resolve factual disputes if the Court determines that an attorney fees and costs award is appropriate.
For the reasons that follow, the Court holds that it is not appropriate under § 304(d) of the Clean Air Act to award Monroe attorney fees or costs in this action. Accordingly, the Court will DENY Monroe's Motion for Costs and Motion for Attorney's Fees. The Court will GRANT IN PART AND DENY IN PART AS MOOT Defendants' Motion to Dismiss and Alternative Motion for Leave to Engage in Discovery insofar as the Court agrees that attorney fees and costs will not be awarded, and therefore, no discovery is warranted. Finally, the Court will DENY AS MOOT Monroe's Motion for Discovery.
I. BACKGROUND
MCC is constructing a heat recovery coke plant in Butler County, Ohio on property immediately north of the City of Monroe. Monroe and MCC dispute which type of permit MCC was required to obtain from the Ohio EPA pursuant to the Clean Air Act in order to lawfully construct and operate the coke plant. The parties have engaged in contemporaneous proceedings regarding their dispute both in the federal courts and through Ohio administrative processes. The Court explained the requirements of the Clean Air Act in the Order Granting Motions to Dismiss ("Abstention Order") (doc. 73) issued on August 20, 2009. In this Order, the Court simply will provide a relevant chronology of events.
On October 10, 2008, Monroe sent MCC a notice of intent to file suit if MCC did not seek a new source review ("NSR") permit for its construction of the new coke plant. On November 25, 2008, MCC obtained a "minor source" or "netting" permit instead from the Ohio EPA. (Doc. 87-1 at 3.) Monroe appealed the issuance of the minor source permit to MCC by filing an appeal with the Ohio Environmental Review Appeals Commission ("Ohio ERAC") on December 3, 2008. ( Id.)
On January 28, 2009, Monroe filed the instant suit in this Court. Monroe filed an Amended Complaint on February 20, 2009 and a Motion for Preliminary Injunction on February 23, 2009. (Docs. 8 and 11.) On February 27, 2009, MCC moved to dismiss this suit alleging that the Court lacked subject matter jurisdiction, or in the alternative, should abstain from exercising jurisdiction.
Following these events in this federal suit, MCC stopped construction on the coke plant and applied to the Ohio EPA for an NSR permit on April 6, 2009. (Doc. 86-1.) MCC stated the following it its application for the NSR permit:
On November 25, 2008, [MCC] received from your office a [minor source] permit to install authorizing it to construct and operate a heat recovery cokemaking facility adjacent to AK Steel Corporation's Middletown Works in Middletown, Ohio. Certain challenges to that permit are on-going. While MCC possess a valid [minor source permit], it hereby applies to obtain a major new source permit [the NSR permit] should MCC determine that such a permit is preferable to the [minor source permit.]
( Id.)
On August 20, 2009, in this suit, the Court issued the Abstention Order granting MCC's Motion to Dismiss. The Court held that it had subject-matter jurisdiction, but the Court declined to exercise jurisdiction on the grounds of the abstention doctrine set forth in Burford v. Sun Oil Co., 319 U.S. 315 (1943). (Doc. 73 at 20-28.) On September 16, 2009, Monroe filed an appeal with Sixth Circuit challenging the Abstention Order.
On February 9, 2010, in the state proceedings, the Ohio EPA granted MCC's application and issued an NSR permit to MCC. (Doc. 86-2.) Monroe filed an appeal of the issuance of the NSR permit with the Ohio ERAC on March 10, 2010. (Doc. 86-3.)
After the Ohio EPA issued the NSR permit, MCC moved to dismiss the pending Sixth Circuit appeal of the Abstention Order on the grounds of mootness. (Doc. 76.) On April 20, 2010, the Sixth Circuit dismissed the appeal, vacated this Court's Abstention Order, and remanded the case to this Court. ( Id.) The Sixth Circuit stated in its Order:
The City of Monroe appeals the dismissal of its action under the Clean Air Act challenging the construction and operation of a metallurgical coke manufacturing plant by the defendants prior to the issuance of a major [NSR] permit. On February 9, 2010, the Ohio Environmental Protection Agency issued a NSR Permit for the facility. The defendants move to dismiss the appeal as moot. The City concedes that the issuance of the NSR Permit moots this litigation.
Generally, when an action becomes moot during an appeal, the judgment of the lower court is vacated and the case is remanded to the district court with instructions to dismiss. . . . Because the mootness in this litigation was not caused by a settlement or any other voluntary action of the losing party, the judgment of the district court should be vacated.
. . . We express no opinion as to whether the City has the right to seek an award of attorney fees, but will permit that issue to be addressed by the district court in the first instance.
( Id. at 1-2 (citations omitted).) Thereafter, in this Court, Monroe moved for attorney fees and costs and MCC filed its responsive motion and briefs.
The Ohio permit review processes have continued. On June 30, 2010, the Ohio ERAC issued a Decision dismissing Monroe's appeal of the minor source permit. (Doc. 87-1.) The Ohio ERAC stated that the NSR permit superceded the earlier-issued minor source/netting permit and that "the Netting Permit is replaced and effectively nullified." ( Id. at 9.) Monroe filed a Motion for Expedited Clarification on July 9, 2010 requesting that the Ohio ERAC clarify that the minor source permit cannot be reinstated if the Ohio ERAC vacates the NSR permit in the parallel NSR permit appeal. (Doc. 89-2.) The parties have not provided the Court additional information concerning the status of the minor source permit appeal or the NSR permit appeal.
MCC states in its brief that the Ohio ERAC denied the Motion for Expedited Clarification in the minor source permit proceedings and that Monroe has filed an appeal with an Ohio Court of Appeals. However, MCC did not submit the relevant papers as exhibits to substantiate its statements, nor has MCC identified in which Ohio Court of Appeals the appeal is pending.
II. ANALYSIS A. Should the Court Abstain from Adjudicating the Attorney Fees and Costs Issues?
Before determining whether an award of attorney fees and costs is appropriate, the Court must address MCC's preliminary argument that the Court should abstain from adjudicating the attorney fees and costs motions. The analysis for determining whether Burford abstention is proper is as follows:
Where timely and adequate state-court review is available, a federal court sitting in equity must decline to interfere with the proceedings or orders of state administrative agencies: (1) when there are difficult questions of state law bearing on policy problems of substantial public import whose importance transcends the result in the case then at bar; or (2) where the exercise of federal review of the question in a case and in similar cases would be disruptive of state efforts to establish a coherent policy with respect to a matter of substantial public concern.New Orleans Pub. Serv., Inc. v. Council of City of New Orleans (NOPSI), 491 U.S. 350, 361 (1989) (internal quotations and citations omitted).
In the Abstention Order, the Court found the facts in this case to be analogous to those in Ellis v. Gallatin Steel Co., 390 F.3d 461 (6th Cir. 2004), and dismissed on the grounds of Burford abstention. (Doc. 73 at 21-24.) As in Gallatin Steel, Monroe argued here that the state agency erred when it issued a minor source permit to MCC. As in Gallatin Steel, the Ohio state implementation plan ("SIP") is fully approved by the United States EPA. And as in Gallatin Steel, Monroe asked the Court to revisit the state agency's decision that MCC did not require an NSR permit. The Gallatin Steel court held that under such circumstances abstention was proper. 390 F. 3d at 481. Accordingly, this Court abstained from adjudicating the merits of Monroe's claims.
MCC contends that the Court, likewise, should abstain from exercising its jurisdiction to adjudicate the attorney fees and costs motions. The Court does not agree. The procedural posture of this case and the state proceedings have materially changed. After the Court issued its Abstention Order on August 20, 2009, the Ohio EPA issued an NSR permit, the Ohio ERAC issued a decision declaring that the NSR permit superceded the earlier-issued minor source permit, and Monroe continued to appeal both the NSR and the minor source permits in Ohio proceedings. In this federal case, the Abstention Order has been vacated by the Sixth Circuit. The only issues pending before the Court are attorney fees and costs. The Court is not required to evaluate the merits of the minor source permit or the NSR permit to determine whether attorney fees and costs are warranted. MCC points out that Monroe continues to argue at this stage that a new coke plant will have a negative environmental impact. However, those arguments are not material to resolution of the pending motions and the Court makes no findings as to the merits of such arguments. Therefore, adjudicating the attorney fees and costs issues "would [not] be disruptive of state efforts to establish a coherent policy with respect to a matter of substantial public concern" NOPSI, 491 U.S. at 361. The Court need not abstain from adjudicating the attorney fees and costs motions on the grounds of Burford abstention.
Relatedly, the Court will not abstain from adjudicating the attorney fees and costs motion on the basis of Robinson Rubber Products, Co. v. Hennepin County, 12 F. Supp. 2d 975, 979 (D. Minn. 1998). The Robinson Rubber Products case was dismissed for lack of prudential standing, but the plaintiffs sought attorney fees based on the catalyst theory. The court found that "standing, including both the constitutional and prudential dimensions, is a prerequisite to jurisdiction." 12 F. Supp. 2d at 980. The Court held that the jurisdictional defects of the plaintiffs' claims precluded the issuance of attorney fees under a catalyst theory. Id. at 981.
This case is distinguishable in a material respect. The Court held here that it had subjectmatter jurisdiction. (Doc. 73 at 20.) The Court's decision to abstain did not override the finding that subject-matter jurisdiction existed. ( Id. at 28.) The Court retains subject-matter jurisdiction to adjudicate the attorney fees and costs motions.
B. Is the City of Monroe Entitled to Attorney Fees and Costs Under the Catalyst Theory as Applied to the Clean Air Act?
The Clean Air Act § 304(d) authorizes a district court to award attorney fees and costs to a party whenever appropriate.
The court, in issuing any final order in any action brought pursuant to subsection (a) of this section, may award costs of litigation (including reasonable attorney and expert witness fees) to any party, whenever the court determines such award is appropriate. The court may, if a temporary restraining order or preliminary injunction is sought, require the filing of a bond or equivalent security in accordance with the Federal Rules of Civil Procedure.42 U.S.C. § 7604(d) (emphasis added). Monroe contends that it is entitled to attorney fees and costs under § 304(d) pursuant to the "catalyst theory." The catalyst theory "allows an [attorney fees] award where there is no judicially sanctioned change in the legal relationship of the parties." Buckhannon Bd. and Care Home, Inc. v. W. Va. Dep't of Health and Human Resources, 532 U.S. 598, 605 (2001). Courts award attorney fees and costs under the catalyst theory to a party who has "achieved the desired result because the lawsuit brought about a voluntary change in the defendant's conduct." Id. at 601. "In other words, the theory applies when the defendant voluntarily changes its conduct so as to moot the plaintiff's claims." Hatfield v. Oak Hill Banks, 222 F. Supp. 2d 988, 991 (S.D. Ohio 2002). Courts have awarded attorney fees under an analogous provision of the Clean Air Act and under other statutes with similar language authorizing fees when "appropriate." See e.g., Ohio River Valley Envir. Coalition, Inc. v. Green Valley Coal Co., 511 F.3d 407, 413-17 (4th Cir. 2007) (Surface Mining Control and Reclamation Act); Ass'n of Cal. Water Agencies v. Evans, 386 F.3d 879, 881-87 (9th Cir. 2004) (Endangered Species Act); Sierra Club v. EPA, 322 F.3d 718 (D.C. Cir. 2003) (Clean Air Act § 307(f)).
Clean Air Act § 307(f) provides: "In any judicial proceeding under this section, the court may award costs of litigation (including reasonable attorney and expert witness fees) whenever it determines that such award is appropriate." 42 U.S.C. § 7607(f).
In order to qualify for attorney fees under the catalyst theory: (1) the plaintiff must demonstrate that the lawsuit "was causally related to securing the relief obtained;" and (2) the plaintiff must establish "a minimum basis in law for the relief secured" to show that the defendant's act was not gratuitous. Owner-Operator Ind. Drivers Ass'n, Inc. v. Bissell, 210 F.3d 595, 597-98 (6th Cir. 2000). As to the factual prong, "[c]hronological evidence is a factor in determining whether a plaintiff's lawsuit is the catalyst for the defendant's changed conduct." Id. As to the legal prong, the plaintiff's lawsuit must not be "frivolous, unreasonable, or groundless." Farrell v. Int'l Bhd. Of Teamsters, Chauffers, Warehousement Helpers of Am., No. 89-1425, 1990 WL 38176, at *2 (6th Cir. Apr. 4, 1990) (citations omitted).
Beginning with the factual prong of the catalyst theory analysis, the parties dispute whether this federal suit filed by Monroe was a catalyst for MCC to apply for the NSR permit from the Ohio EPA. The fact that MCC did not apply for the NSR permit until after Monroe initiated this suit is evidence indicating that Monroe's suit was a catalyst. See Bissell, 210 F.3d at 597-98 (accepting chronological evidence). However, the parties dispute whether the relief sought by Monroe was for MCC to apply for NSR permit or for the Ohio EPA to issue the NSR permit. If the latter, MCC contends that this suit cannot be considered a catalyst to a decision made by the Ohio EPA. The Court holds the factual questions in abeyance for now.
Turning to the legal prong of the catalyst theory, Monroe must establish a "minimum basis in law for the relief secured." Bissell, 210 F.3d at 598. Monroe cannot meet that burden here. MCC points out that Monroe did not prevail on any claim on the merits and did not survive MCC's dismissal motion. Although this Court's Abstention Order dated August 20, 2009 was vacated by the Sixth Circuit on procedural grounds, (doc. 76), the Sixth Circuit did not refute the analysis that abstention was proper when the suit was filed.
To be clear, the Court would abstain again in this case or future cases so as to not interfere with the Ohio permit review processes if presented with similar factual circumstances. The Ohio General Assembly has established procedures for obtaining permits which are approved by the United States EPA. The Ohio EPA applies Ohio regulations to determine what type of permit an entity requires. These permit decisions are appealable to the Ohio ERAC, and then to the Ohio Court of Appeals. See Ohio Rev. Code §§ 3745.04, 3745.06. The relief sought by Monroe in its First Amended Complaint necessarily would have required federal review of Ohio permitting decisions and would have been "disruptive of state efforts to establish a coherent policy with respect to a matter of substantial public concern." (Doc. 73 at 28 (quoting NOPSI, 491 U.S. at 361).) Monroe sought a declaration that MCC could not proceed with the construction of the new coke plant without an NSR permit and an injunction enjoining MCC from constructing or operating the coke plant without an NSR permit. (Doc. 8 at 28-29.) This Court abstained from adjudicating the merits in this case, and would abstain again in the same circumstances, to avoid interfering with the Ohio permit review processes.
Because the Court would not exercise jurisdiction to grant Monroe relief on the merits, MCC's decision to apply for the NSR permit after this case was initiated was "not required by law[,]" but instead is more appropriately considered to have been a "gratuitous" act. "If it has been judicially determined that defendants' conduct, however beneficial it may be to plaintiffs' interests, is not required by law, then defendants must be held to have acted gratuitously and plaintiffs have not prevailed in a legal sense." Bissell, 210 F.3d at 598 (quoting Johnston v. Jago, 691 F.2d 283, 286 (6th Cir. 1982)). Monroe has not established that its suit was the legal catalyst for MCC's action under the Bissell standard. The Court concludes that it would not be appropriate under the Clean Air Act § 304(d) to award Monroe attorney fees and costs under the catalyst theory.
The Court's conclusion is consistent with Ruckleshaus v. Sierra Club, 463 U.S. 680 (1970), which analyzes when attorney fees are appropriate under § 307(f) of the Clean Air Act. Similar to § 304(d), § 307(f) authorizes fees "whenever [the court] determines fees are appropriate[.]" 42 U.S.C. § 7607(f). The Supreme Court in Ruckelshaus stated that § 307(f) requires the fee claimant to attain "some degree of success on the merits[,]" even if not "major success[,]" in order to obtain attorney fees. 463 U.S. at 688, 694; see also Hardt v. Reliance Standard Life Ins. Co., 130 S. Ct. 2149, 2157 (2010) (citing Ruckelshaus for the proposition that the party seeking attorney fees "must have achieved some litigating success to be eligible"). The Court further stated that the legislative history of Clean Air Act § 307(f) "does not give any real support to the view that Congress meant to depart from the long-established rule that complete winners need not pay complete losers for suing them." Ruckelshaus, 463 U.S. at 690 (explaining Senate Report 252).
Nonetheless, even under Ruckelshaus, attorney fees are appropriate in "suits that forced defendants to abandon illegal conduct, although without a formal court order." 463 U.S. at 686 n. 8. Courts have interpreted the Ruckelshaus footnote to authorize attorney fees as "appropriate" in situations where the parties settled their lawsuit, without a formal court order, after the defendant provided the plaintiff with at least some of the relief which the plaintiff had sought. See, e.g., Sierra Club v. E.P.A. 322 F.3d 718, 725 (D.C. Cir. 2003) ("By comparison, Ruckelshaus's footnote eight analysis . . . interprets section 307(f) to authorize fee awards for `suits that forced defendants to abandon illegal conduct, although without a formal court order.'") (quoting Ruckelshaus, 463 U.S. at 686 n. 8.). This suit cannot be said to have achieved a result analogous to "forc[ing] defendants to abandon illegal conduct" because, as explained above, the Court would not exercise subject matter jurisdiction to interfere in the Ohio permit review processes by adjudicating whether MCC, or any other defendant, was required to apply for an NSR permit.
C. Motions for Discovery
III. CONCLUSION
DENIED. GRANTED IN PART DENIED IN PART AS MOOT. DENIED AS MOOT.
IT IS SO ORDERED.