Federal Circuits, D.C. Cir. (August 04, 1982)
Docket number: 81-1752
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US Code - Title 28: Judiciary and Judicial Procedure - 28 USC 1331 - Sec. 1331. Federal question
US Code - Title 28: Judiciary and Judicial Procedure - 28 USC 292 - Sec. 292. District judges
U.S. Court of Appeals for the 8th Cir. - Devils Lake Sioux Tribe, Appellant, v. State of North Dakota; the Garrison Diversion Conservancy District; the United States of America; 101 Ranch, a North Dakota Partnership; Steve Ward; Imogene Christensen; Claire Engelhardt; Carlyle Brye; Arnold and Vernyll Yri; Ernest and Ruby Martinson; Miles Maddock and Dorothea Maddock; Olaf Solheim and Mabel Solheim; Leo Johnston and Minnie Johnston; Francis P. Schneider and Gloria Schneider, Appellees., 917 F.2d 1049 (8th Cir. 1990) Appellant, v. State of North Dakota; the Garrison Diversion Conservancy District; the United States of America; 101 Ranch, a North Dakota Partnership; Steve Ward; Imogene Christensen; Claire Engelhardt; Carlyle Brye; Arnold and Vernyll Yri; Ernest and Ruby Martinson; Miles Maddock and Dorothea Maddock; Olaf Solheim and Mabel Solheim; Leo Johnston and Minnie Johnston; Francis P. Schneider and Gloria Schneider, Appellees.
Appeals from the United States District Court for the District of Columbia (D.C. Civil Action Nos. 79-3216, 79-3193 and 79-3199).
Kathryn A. Oberly, Sp. Lit. Counsel, Dept. of Justice, Washington, D. C., for appellants in Nos. 81-1752, 81-1753 and 81-1774.Bruce J. Terris, with whom James M. Hecker, Nathalie V. Black and Robert S. Blacher, Washington, D. C., were on the brief, for North Slope Borough, et al., appellees in No. 81-1753.Clifton E. Curtis, Washington, D. C., was on the brief for Village of Kaktovik, et al., appellees in No. 81-1752.Patrick A. Parenteau, Washington, D. C., was on the brief for Nat. Wildlife Federation, et al., appellees in No. 81-1774.E. Edward Bruce and Richard A. Meserve, Washington, D. C., were on the brief for amici curiae Atlantic Richfield Co., et al., urging reversal of the attorneys' fees orders in Nos. 81-1752, 81-1753 and 81-1774.Before ROBB and WILKEY, Circuit Judges, and HAROLD H. GREENE,* United States District Judge for the District of Columbia.Opinion for the Court filed by Circuit Judge WILKEY.Opinion concurring in part and dissenting in part filed by United States District Judge GREENE.WILKEY, Circuit Judge:This is an action for attorneys' fees and costs brought by plaintiffs/appellees, the Alaskan Village of Kaktovik, the Alaskan governmental entity of North Slope Borough, and the National Wildlife Federation. Plaintiffs challenged the decision of defendant/appellant Secretary of the Interior to conduct the Beaufort Sea Outer Continental Shelf lease sale, alleging that the proposed sale would violate the Outer Continental Shelf Lands Act (OCSLA),1 the Endangered Species Act (ESA),2 other federal statutes and treaties protecting arctic marine resources, and a special "trust responsibility" to Alaskan Native Americans.We conclude that plaintiffs/appellees are not entitled to an award of attorneys' fees. Part I considers the plaintiffs' claim to an award under the OCSLA and ESA. Part II addresses the enforceability of a settlement agreement reached by the plaintiffs with the Department of Justice prior to litigation on the merits of the attorneys' fees issues. Because we find an award inappropriate on either ground, we reverse the decision of the district court awarding plaintiffs in excess of $230,000 in attorneys' fees and costs.3* Plaintiffs ultimately lost on all issues,4 but, some may be surprised to find, this need not bar the award of attorneys' fees and costs under the relevant provisions of OCSLA5 and ESA.6 However, we think it inappropriate for such an award to be made in today's case.Our decision today in no way reflects on plaintiffs' counsel, whom the trial judge described as "excellent,"7 and of "ability rarely presented ... (and) the most exacting skill."8 He concluded that they "could not have served their clients better."9 We, too, were impressed with the quality of counsel, both on the merits and on the attorneys' fees issue. Nonetheless the statutes, their legislative histories, and the recent case law in this area all lead us to conclude that an award here would be inconsistent with congressional intent. Put in simplest terms, plaintiffs' litigation here was not so "exceptional"10 and such a "substantial contribution( ) to the statutory goals"11 of the underlying acts that an award is appropriate.The Supreme Court, in Alyeska Pipeline Service Co. v. Wilderness Society,12 limited the opportunity to obtain public interest fees in the federal courts to those situations where there is specific statutory authority. Plaintiffs argue that the attorneys' fees provisions in both OCSLA and ESA contain such authority for an award to them here. Both statutes authorize awards "whenever the court determines such award is appropriate."13 The issue, then, is whether an award in this case is "appropriate" within the meaning of the statutes.Last February this court published a trilogy of decisions involving the interpretation of the word "appropriate" in attorneys' fees statutes like the ones before us today. It is hardly necessary for us to retrace the analysis so painstakingly undertaken in those cases, and we will simply restate the principles we can glean from them.14 Thus, Sierra Club v. Gorsuch15 stated that courts are allowed "to award attorneys' fees to parties who have 'substantially contributed' to the goals" of the underlying statute.16 Whether such a substantial contribution was made is to hinge on the importance, complexity, and novelty of the issues raised, and on the aid rendered in interpreting and implementing the act.17 Environmental Defense Fund, Inc. (EDF) v. EPA18 quoted approvingly from the remarks made by Senator Tunney during the passage of the attorneys' fees provision of the Toxic Substances Control Act that, while "a successful plaintiff 'should ordinarily recover in (sic) attorneys' fee unless special circumstances would render such an award unjust,' " awards might also be appropriate "where such award is in the public interest without regard to the outcome of the litigation."19 Senator Tunney was also quoted to the effect that "appropriate" was "a word which should (be) liberally construed to effectuate the purposes of this act."20 Finally, in Alabama Power Co. v. Gorsuch,21 we embraced the "valuable guidance ... abundantly afford(ed)" by Sierra Club and EDF, concluding that in determining whether an award is appropriate "the dominant consideration is whether litigation by that party has served the public interest by assisting the interpretation or implementation"22 of the underlying statute.Applying these principles to the matter today convinces us that the district judge-who did not have the advantage of the illumination afforded by these cases at the time he made his award-erred in his decision to grant attorneys' fees and costs. No substantial contribution was made to the goals of ESA or, especially, OCSLA. The public interest was not, on balance, appreciably furthered by the claims. The issues raised lacked the required importance, novelty, and complexity, and the suit helped little in the interpretation and implementation of these statutes. The contributions to the statutory goals in the case before us differ from those made in the February trilogy both because the statutory goals here were different and because the contributions were less.Turning first to the statutory goals involved, we note that the Clean Air Act and Toxic Substances Control Act-the statutes involved in the cases last February-were enacted solely for environmental protection. One of the two acts central to our claim, however,-OCSLA-has as its primary goal expediting the development of our offshore resources, the very end plaintiffs blocked. As a unanimous Supreme Court recently stated:The "basic purpose" of the 1978 Amendments (to OCSLA) was to "promote the swift, orderly and efficient exploitation of our almost untapped domestic oil and gas resources in the Outer Continental Shelf," H.R.Rep.No.95-590, p. 53 (1977), ... and the Amendments were broadly designed to achieve that aim.23Litigation and, especially, delay from litigation were to be discouraged-particularly at the pre-development, pre-exploration leasing stage, where the chances of harm to the environment are slim.24This is not to say that OCSLA was insensitive to environmental concerns, or that the aims of ESA do not to some degree weigh against the pro-development aims of OCSLA.25 But the statutory language and history and the Supreme Court's comment do place this case in a statutory context different from those governed by the Clean Air Act or the Toxic Substances Control Act alone. Where the statutes differ, the criteria for a substantial contribution to the statutory goals must differ, too. We must conclude that the contributions made to the underlying purposes of the statutes and to the public interest were less here than in Sierra Club, EDF, and Alabama Power. Indeed, given the specific aims of OCSLA, we cannot say that plaintiffs' action merits an award of attorneys' fees.The inappropriateness of an award is particularly manifest when we weigh-as we think we must-the costs as well as the benefits to the statutory goals and the public interest which resulted from plaintiffs' litigation. It would of course be unwise for judges to weigh too finely the two. But here we must note that the adverse effects of the lawsuit on the expedited development of the nation's energy resources-an explicit aim of OCSLA-and the public treasury were considerable and the benefits to the public meager.The Government asserts that the six-month delay caused by plaintiffs' suit cost $30 million-the sum which would have accumulated, at 15% interest, on the $400 million whose use the Government lost for six months.26 Considering the other "adverse impacts on our national security and our economy," the Government further estimates a cost to the nation of $50-60 million.27 It was in fact such considerations that prompted us to issue our order-vacating the district court's injunction against the Secretary's acceptance of bids and issuance of leases-without delay, while the opinion on the merits was being written.28Turning to the contributions made by the suit, we must conclude again that we have a situation considerably different from the cases of last February. As we discussed before, contributions are to be weighted according to, inter alia, the importance, novelty, and complexity of the issues raised.29 Obviously, while we do not wish to trivialize the claims of plaintiffs here, the focus and importance of their action is rather narrower than the national pollution standards at issue in Alabama Power and Sierra Club and the "broad rules governing the disposal, marking, manufacture, processing, distribution, and use of a class of chemicals" in EDF.30 In Sierra Club, the court devoted a separate section in its decision awarding costs and fees to emphasizing the "importance," " 'magnitude' " and " 'critical implications,' " "across the nation," of the matters at issue-and not only for the environment but for human health and the economy as well.31 The issues in EDF were characterized as "critically important":32 " 'Human beings have finally come to recognize that they must eliminate or control life threatening chemicals ... if the miracle of life is to continue and if earth is to remain a living planet.' "33 As a non-political branch we are reluctant to rank too precisely the nation's priorities, but we can conclude that the admittedly marginal threat to the bowhead whale does not rise to the level of importance the court described in Sierra Club and EDF.Likewise, the issues in the three February cases were decidedly of first impression; in the matter now before us, similar or directly analogous claims had already been adjudicated elsewhere.34 Finally, while it cannot be said that the OCSLA and ESA issues raised by plaintiffs and dispatched in seven pages in our opinion on the merits35 were simple, they were at least simpler than those raised in, for example, the 122-page opinion in Sierra Club36 or the ninety pages we wrote on the merits in Alabama Power.37 It is difficult to give objective evidence for why a given case is or is not complex, and we recognize that the number of pages devoted to it is at best an uncertain barometer. Still, we have confidence in our evaluation of the relative complexities of these cases since members of this panel were also on the merits panel of North Slope Borough, Sierra Club, and Alabama Power.Thus, with respect to the importance, novelty, and complexity of the issues raised, an award here is less appropriate than in the controlling cases where such an award was made. The contributions were less, enough less that we cannot characterize them as substantial. This is not to say that the issues raised were trivial or uninteresting, or that the country is in no way better off with the resolution of plaintiffs' claims. But it was clear from plaintiffs' briefs and oral argument that despite their counsel's considerable skill it was difficult for them to list any contributions of substance from their suit.38Plaintiff North Slope Borough argues that nonetheless "any benefit, consistent with the intent of Congress in enacting the statute authorizing the fee award, is sufficient to warrant an award of fees."39 We disagree. It is clear from last February's trilogy that something more than that is required. The contribution must be more than visible, it must be "substantial,"40 even "exceptional."41 Compared to the claims resolved in Sierra Club, EDF, and Alabama Power, the results from today's litigation are relatively insubstantial and unexceptional. Sierra Club emphasized that "the standard we have applied amounts to much more than a 'non-frivolous' standard."42 Were an award made to plaintiffs today this assurance of Sierra Club would be effectively denied.Another gauge of the substance of the plaintiffs' contribution is the interpretive and implemental value of their suit.43 Since, as we have already discussed, the issues raised were less than novel, we must discount the aid the suit afforded to statutory interpretation. We also note here that, although the fact that plaintiffs failed to prevail on any issue is of course not dispositive, it is nonetheless a fact which we may consider in assessing the value of their lawsuit, placed by the District Court at over $230,000 in attorneys' fees and costs.44 The failure to prevail may undercut the interpretive and implemental usefulness of the suit: the interpretation urged was incorrect, the implementation sought inconsistent with the law.More generally, when an action is ultimately disallowed by the judiciary's construction of a statute, the contribution of that action to the statute's goals is, ceteris paribus, diminished. So is the contribution to the public interest, since we must assume that the statute is in that interest. In Sierra Club -the only one of the three February cases to make an award to a party who had not prevailed on the majority of the issues it brought-we concluded that "the occasions upon which non-prevailing parties will meet such criteria (entitling them to an award) may be exceptional ..., (but this) is such an occasion."45 Earlier we had quoted approvingly from Delaware Citizens for Clean Air, Inc. v. Stauffer Chemical Company46 that "an award of counsel fees to a losing party should be reserved for those cases in which either the litigation, though ultimately unsuccessful, serves the objectives of the Act in some substantial way or in which other exceptional circumstances tip the balance of the equities decidedly in the losing party's favor."47 This suit, while brought in good faith and skillfully argued, was not exceptional.We reiterate that in no way does our denial of an award disparage the good faith of plaintiffs or the excellence of their counsel. And we reemphasize also that the mere fact that a plaintiff is unsuccessful should not blind a court to the possibility that his efforts may nonetheless make an award of attorneys' fees and costs appropriate. Each case, each plaintiff must be judged individually. But having reviewed the claims made by today's plaintiffs and the statutes under which they were brought, it is our conclusion that they did not so substantially contribute to the goals of those statutes and the public interest that an award is appropriate.IIIn the alternative plaintiffs argue that, even if not deserving of an attorneys' fees award under the applicable statutory standards, they are entitled to the award agreed upon in their prior settlement with defendants.48To determine whether that settlement agreement is now enforceable, we must first view the course of the negotiations which preceded it. These negotiations began in August 1980, shortly after the district court ruled that plaintiffs were entitled to an attorneys' fees award.49 A stipulation fixing attorneys' fees at $60,000 was filed in the district court on 21 January 1981.50 Shortly thereafter, however, the government filed a Notice of Withdrawal from Stipulation.51 The Notice asserted that the Justice Department had entered into the agreement without proper consultation with the Department of the Interior, that the Interior Department strongly objected to the stipulation, and that the Government therefore withdrew from the stipulation and objected to any reward based upon it. Plaintiffs in response urged the district court to enforce the stipulation.52The district court awarded plaintiffs the stipulated amount.53 The court explicitly did not reach the issue whether the settlement agreement was an enforceable contract. Rather, it held that an award of attorneys' fees was appropriate;54 and, because it assumed that plaintiffs wished to avoid further litigation over the amount of attorneys' fees, it awarded the stipulated sum.55Subsequently, in response to the Government's request for time to consider seeking an appeal,56 plaintiffs altered their position. Although still "willing( ) to accept the (stipulated) amounts" if paid immediately, plaintiffs urged that "in view of the possibility that the government may appeal the February 3 decision and refuse to honor the stipulation, ... (the court) should reconsider its decision (on the amounts to be paid)."57 Plaintiffs also submitted records which purported to demonstrate plaintiffs' entitlement to an award more than three times the stipulated amount.58 In short, the record shows uncontrovertibly that plaintiffs no longer insisted on enforcement of the settlement agreement.59 It was thus at the instance of both parties that the court vacated its earlier order and proceeded to try the merits of the attorneys' fees issues.60Plaintiffs argue that the settlement agreement entitles them to an award equal to the previously stipulated amount.61 Having decided against plaintiffs on the merits, we must reach the issue whether the prior settlement is now enforceable. We hold that it is not.An agreement to settle a legal dispute is a contract.62 Each party agrees to extinguish those legal rights it sought to enforce through litigation in exchange for those rights secured by the contract.63 When plaintiffs assented to the settlement with the Government, they gave up their legal right to determination on the merits of an award of attorneys' fees. In exchange, they received the Government's binding promise to pay a sum certain.The enforceability of settlement agreements is governed by familiar principles of contract law.64 A settlement contract may not be unilaterally rescinded.65 Upon breach by one party, the other party may obtain damages or specific performance as appropriate.66 Both parties to the contract may, of course, agree to rescind the contract. Willingness to rescind the contract may be inferred from the behavior of the parties.67Applying these principles to the present case, we note that, when the Government attempted to withdraw from the agreement, plaintiffs could have enforced it by requesting the district court to enter the appropriate order.68 They chose not to do so. Instead, they sought to litigate the merits of the dispute the contract had purported to settle.69 Plaintiffs' hopes for recovery were certainly raised by the district court, which described the $60,000 settlement as "modest,"70 and by this courts' decision in Metropolitan Washington Coalition for Clean Air v. District of Columbia,71 which came down between the time of the settlement and plaintiffs' request for reconsideration. Plaintiffs had every reason to think that they could get much more than $60,000 by abandoning the contract and litigating the merits-which is what they proceeded to do. Only now, because they have lost on the merits, do they request enforcement of the settlement agreement.We hold that, by requesting an opportunity to litigate the merits of the attorneys' fees issues and by then proceeding to do so, plaintiffs consented to rescission of the settlement contract. The plaintiffs then took the same position as the government: forget the settlement agreement; decide this claim for attorneys' fees on the merits. A live and enforceable settlement simply cannot coexist with a party's efforts to acquire a court determination of the very issues the settlement was supposed to resolve without litigation.72 Any other rule would subvert the policies underlying the enforcement of settlement agreements. "Judges and lawyers alike strive assiduously to promote amicable adjustments of matters in dispute .... When the effort is successful, the parties avoid the expense and delay incidental to litigation of the issues; the court is spared the burdens of a trial, and the preparation and proceedings that must forerun it."73 If the plaintiffs' position were adopted, to the contrary, settlement would simply engender further litigation: rather than enforcing a breached settlement, the other party would seek to obtain a better ruling on the merits, and fall back on the settlement only after losing at trial. Plaintiffs' conduct here exemplifies this danger. By reasserting their substantive rights under the relevant statutes, plaintiffs undercut the entire purpose of the settlement-to do away with the need for litigation on the merits.Moreover, if plaintiffs could fall back on a settlement after losing on the merits, this would create a substantial windfall for attorneys whose fee claims are decided against them. In the present case, the plaintiffs would win $60,000 although this court has held them entitled to nothing. Such excessive fee awards drain the public treasury and encourage unnecessary and burdensome litigation. We decline to fashion a rule which gives litigants an undue advantage in negotiating settlements of these issues with the government.Upon anticipatory breach of a settlement contract, therefore, the non-breaching party must choose either to enforce the agreement and perhaps also recover damages resulting from its breach or to litigate the merits.74 As noted above, plaintiffs received the government's promise of payment of $60,000 in exchange for waiver of their right to litigate the merits. There is no justification for now giving them both the guarantee of $60,000 and an opportunity to litigate the merits, simply because of the government's attempted withdrawal from the settlement. Contractual remedies, including consequential damages, adequately protect parties' rights against breach.75 Had the plaintiffs wished to enjoy the benefits of the settlement contract, they should have sought to enforce it.76IIIBecause we find the plaintiffs entitled to an award of attorneys' fees neither under the relevant statutes nor under their prior settlement agreement, the decision of the district court isReversed.HAROLD H. GREENE, United States District Judge, concurring in part and dissenting in part:I concur in the result reached in Part I of the court's opinion. Under statutory provisions such as these, a losing party seeking attorneys' fees bears the burden of showing that it has brought an "exceptional" case.1 These actions fail to meet that test. Not only did appellees lose on every point they raised, but the adjudication of the litigation they initiated added little new to the law.Most of the basic legal issues had been decided by this and other courts before these actions were ever instituted.2 To be sure, these issues acquired a slightly different cast here because different statutes were involved than those which had been the subject of earlier litigation. But that altered statutory context was ultimately irrelevant: notwithstanding the change in the underlying statutes, the rules of law which were found to be controlling turned out to be the same rules which governed the earlier cases. Any remaining doubt on that score was dissipated when the Court of Appeals for the First Circuit, one month after the filing of the complaint here, and long before the bulk of the attorneys' fees had been expended, resolved most of the questions here involved in the context of the very statutes at issue in these cases.3 Appellees certainly had a right to continue to maintain their litigation in this Circuit notwithstanding all the precedents against them; but they have no right to receive attorneys' fees for their efforts.These considerations are dispositive of appellees' claim, and it is therefore not necessary to reach the further question of the extent to which the two statutes protect various goals. Clearly, economic as well as environmental concerns are implicated in both the Outer Continental Shelf Lands Act and the Endangered Species Act;4 I see no need for deciding the difficult question5 of how much a particular statutory objective sought by a plaintiff must predominate over other purposes of the same law in order to entitle him to attorneys' fees, when such a decision is not necessary to the outcome.6In Part II of the opinion the court concludes that the attorneys' fee stipulation entered into by the parties is of no effect and that appellees are not entitled to enforce it. I believe that this conclusion is based upon an erroneous interpretation of the record and that it allows the government excessive freedom to repudiate binding agreements in future cases.The district court properly characterized this fee litigation as having a "sordid history." The parties began to negotiate in August, 1980, and on November 19, 1980, the government made a firm settlement proposal. Further negotiations ensued, and on January 19, 1981, the acting Assistant Attorney General approved a settlement worked out between counsel for the two sides. Two days later, the government filed the settlement papers with the court in the form of a stipulation.7 On January 30, 1981, without any further contact between the parties, the government notified the court that it would not honor its agreement, stating as a basis only that the Department of Justice had previously failed to consult with the Department of the Interior and that Interior now interposed an objection.There is no question that a settlement agreement is a contract which, like any other contract, may not be unilaterally rescinded. Autera v. Robinson, 419 F.2d 1197, 1201 n.17 (D.C.Cir.1969). See also Dacanay v. Mendoza, 573 F.2d 1075, 1079 (9th Cir. 1978). That principle applies to the government as to any other party,8 and it applies irrespective of whether or not the agreement has yet been approved by the court.9 Thus, unless there is some reason why this general rule should be held inapplicable to these particular facts, appellees are entitled to enforce the agreement.It has been suggested that the government's obligation may be voided, first, because the Department of Justice lacked authority to enter into the settlement, and second, because appellees consented to the government's rescission of the agreement.The Justice Department's suggestion, implicit in its January 30, 1981, notification, that absent Interior Department concurrence it was without legal authority to enter into the settlement agreement, is patently without merit.Executive Order No. 6166 states that with respect to any case referred to the Department of Justice "the function of decision whether and in what manner to prosecute, or to defend, or to compromise ... is transferred to (that) Department." Executive Order 6166, § 5 (June 10, 1933). The Executive Order has been interpreted in two Opinions of the Attorney General as vesting in the Department plenary power to settle or to compromise any case on such terms as the Attorney General sees fit. 38 Op.Att.Gen. 98 (1934); 38 Op.Att.Gen. 124 (1934). Thus, "there resides in (another department) no discretion to review on the merits the action of the Attorney General in accepting an offer in compromise." 38 Op.Att.Gen. at 127. Indeed, the Department of Justice's own regulations authorize the Assistant Attorney General in charge of each division to accept offers in compromise of $750,000 or less even when the agency involved is opposed to the proposed compromise. See 28 C.F.R. §§ 0.160, 0.164 (1981).Court decisions have confirmed these unambiguous directives. In United States v. McInnes, supra, 556 F.2d at 441, the court stated:We find clear authorization in 28 CFR § 0.160 for the Assistant Attorney General to compromise and settle the appellees' claims against the United States .... If the Navy objected to the settlement, as the government suggests, then that was for the Assistant Attorney General to consider.See also Halbach v. Markham, 106 F.Supp. 475, 480 (D.N.J.1952), aff'd, 207 F.2d 503 (3d Cir. 1953), cert. denied,Try vLex for FREE for 3 days
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