District Court Awards Fees to ESA Defendant, Ordering Plaintiffs Jointly and Severally Liable

On March 29, 2013, after more than 11 years of litigation, the United States District Court for the District of Columbia held that a defendant, as the prevailing party, was entitled to attorneys' fees under the Endangered Species Act's fee shifting provision.  See Animal Welfare Institute v. Feld Entertainment, Inc., No. 03-2006 (D.D.C. Mar. 29, 2013) (pdf).

The fee provision states, in relevant part, "in issuing any final order in any suit brought" under the citizen suit provision of the Endangered Species Act, a court, in its discretion, "may award costs of litigation, (including reasonable attorney and expert witness fees) to any party, whenever the court determines such award is appropriate."  The district court first found, relying on a 1983 Supreme Court decision analyzing the Clean Air Act's fee shifting provision, that a fee award is only "appropriate" when the requesting party is also the "prevailing party."  In addition to being a prevailing party, however, the district court also found that for a defendant to be entitled to fees under the Endangered Species Act, one of the following criteria had to be satisfied: (i) the action must have been frivolous, unreasonable, or without foundation; or (ii) plaintiffs must have continued the litigation after it became clear that the action was frivolous, unreasonable, or without foundation.

Because the action was dismissed with prejudice after it was determined that plaintiffs lacked standing, the district court found that the defendant was a prevailing party.  As for the second element, the district court found that because it was "conclusively determined that" the key plaintiff for purposes of standing "was a paid plaintiff, hired by the other plaintiffs and their counsel," the case "was groundless and unreasonable from its inception, and, therefore, that [defendant] should recover the attorneys' fees it incurred when it was forced to defend itself in litigation."

Because of the egregious nature of the facts, the district court also took the remarkable step of ordering plaintiffs jointly and severally liable for the fee award.

D.C. Circuit Rejects Challenge to Controversial ESA Settlement

On January 4, 2012, the United States Court of Appeals for the District of Columbia held (pdf) that Safari Club International (Safari Club) lacked standing to intervene as a matter of right in the litigation that resulted in two stipulated judgments establishing procedures and deadlines for reviewing listing and critical habitat determinations for 251 candidate species, thereby affirming the decision of the district court.  (A short discussion of the history leading up to these settlements can be found here and here.) 

The Safari Club asserted that it had a procedural interest in the settlements because they "establish an illegal procedure - the elimination of the Service's statutory authority to find that a proposal to list a species is warranted but precluded by higher priorities."  As for injury, the Safari Club asserted that it had a concrete interest in the litigation because its members hunted three of the candidate species and, so long as the species remained on the candidacy list, its members would be able to continue to hunt the species without fear of violating the Endangered Species Act.  The D.C. Circuit rejected these arguments, finding that there was nothing in the settlement agreements that forced the Service to violate the ESA, and that the Safari Club's interest in delaying the listing of a species to benefit hunting activities was not a protected interest under the ESA.  

As for the alleged procedural injury, the D.C. Circuit found, interpreting the ESA, that there was nothing in the ESA requiring "the Service to find that listing a species is precluded under any specific circumstances."  And, Congress did not authorize judicial review of a warranted finding; "[i]nstead, a person aggrieved by a warranted finding may challenge the Service's final rule listing the species."  In light of these findings, the Court held that the Safari Club could not demonstrate a procedural injury arising from the settlements.

The D.C. Circuit also found that the warranted but precluded process established by the ESA was not intended to promote the take of a candidate species.  Instead, it was intended to be a safety valve for an overburdened agency.  Therefore, because the asserted interest (continued hunting) was contrary to the ESA's statutory purpose (protection of the species), the Safari Club could not establish a concrete injury for purposes of Article III standing.

Accordingly, the D.C. Circuit affirmed the denial of the Safari Club's motion to intervene as a matter of right.  While the Safari Club also moved for permissive intervention, the D.C. Circuit declined to address that issue on appeal, noting that it was an open question as to whether Article III standing is required for permissive intervention.

Earlier this month we reported that the National Association of Home Builders, the Olympia Master Builders, the Home Builder Association of Greater Austin, and the Texas Salamander Coalition, Inc. filed a lawsuit in the District of Columbia challenging the ESA settlements.  While the lawsuit raises many of the same arguments recently rejected by the D.C. Circuit, there do appear to be additional arguments pertaining to the procedural process which the D.C. Circuit did not address.  However, because of the substantial overlap, we do anticipate that motion practice will be forthcoming.