Sunday, May 01, 2011

May 1, 2011 Judge Greer Orders City of Morristown To Pay $489,674 in Attorney Fees Plus $56,629 in Litigation Costs to the Law Firm Representing Witt Residents

Background: Witt residents complained to the City about sewer odors almost from the moment that Koch Foods began operation in the East Tennessee Progress Center in 2005. The City did nothing. Complaints continued and stonewalling continued. The residents obtained the services of an environmental law firm and sued Koch Foods. The Witt residents and Koch Foods eventually reached a compromise and a Consent Decree was entered.  During the Koch Foods suit, a related suit was filed against the City of Morristown over its sewer operations and the Witt sewer line. In that suit, the U.S. District Court in Greeneville assessed the City with $105,000.00 in civil penalties for violations of the Clean Water Act [Click here] and ordered the City to repair the Witt Sewer Line. A jury awarded $8,500 in damages to two of the Plaintiffs. Then less than a week ago, Federal Judge Ronnie Greer ordered that in addition to the civil penalties, the City has to pay $489,674.26 in attorney fees and $56,629.00 in costs to the law firm that represented the Witt residents.  I haven't blogged in a while but several people have asked about is the most recent Order with footnotes and cites eliminated [ ] to make it easier to read.



This matter is before the Court on plaintiffs’ Supplemental Motion for an Award of Costs of Litigation, [Doc. 309]. The plaintiffs move this Court to award them $479,579.06 in fees and $102,629.00 in litigation costs against the City pursuant to Title 33 United States Code section 1365(d), the citizen suit provision of the Clean Water Act. The defendant City has replied, and the matter is ripe for review. For the reasons that follow, the motion will be GRANTED IN PART.


To review, at the trial of this matter, which took place from November 3-25, 2009, and prior to the jury retiring to deliberate, the Court ruled that Koch Foods, LLC (“Koch Foods”) violated the compatible pollutant limits in its Industrial User Permit 1017 (“IUP”) based on the Court’s interpretation of the permit’s
unambiguous, plain language as setting a ceiling, rather than a surcharge level, for biochemical oxygen demand (“BOD”) and total suspended solids (“TSS”). The Court also ruled that plaintiffs’ state law trespass claims for the intangible odors would be dismissed.

The jury found 72 daily violations of the IUP by Koch Foods for prohibited discharges c. and d.. The jury also found that the City violated its NPDES permit by failing to enforce the [IUP] for Koch Foods or by failing to prevent prohibited discharges from Koch Foods into the Morristown Sewer System. The jury determined that this violation occurred on 72 days. The jury did not find that the City violated its NPDES permit regarding the July 19, 2007 overflow, and the jury did not find that the City violated its NPDES permit by "failing to properly maintain and operate the Witt Sewer Line, including pump stations and pipes." See Verdict Form Questions 3 and 6,

However, the Court subsequently found in its Memorandum Opinion and Order, [Doc. 304], that the evidence at trial did not raise a genuine issue of fact with respect to the July 19, 2007 overflow and that the plaintiffs were entitled to judgment as a matter of law, notwithstanding the jury’s verdict, on that issue.

As to the state law claims, the jury found liability as to three of the 39 plaintiffs on the nuisance claim, awarding a total of $8,500.00 in damages to two of them, and allocating 100 percent of the fault to the City. The jury did not find that the City of Morristown committed inverse condemnation, and it did not find that Koch Foods was negligent.

On February 17, 2010, the Court entered a Consent Decree between plaintiffs and Koch Foods. The Consent Decree reflected a compromise between the plaintiffs and Koch Foods regarding plaintiffs’ outstanding claims for injunctive relief, civil penalties, costs and fees. Then on May 11, 2010, the Court held a motion hearing on several pending motions between plaintiffs and the City. The Court also heard evidence on the issue of civil penalties against the City.

On August 31, 2010, the Court denied the City’s Rules 50(b) and 59 motion, [Doc. 306].  On February 18, 2011, this Court entered an Enforcement Order based on the City's CWA violations. In that Order, the Court ordered that the City rehabilitate the Witt Sewer line as specified by Trial Exhibit 379 by June 30, 2011; and that the City install odor filters on the manhole covers on the gravity line between Witt 2 and Witt 3 pump stations within 30 days after the entry of the Order. Then, on March 1, 2011, this Court issued a Memorandum Opinion and Order which assessed $105,000.00 in civil penalties against the City for its CWA violations, [Doc.311]. Judgment was also entered on March 1, 2011. On April 25, 2011, this Court denied the City’s Rules 59(e) and 60 motion to alter or amend the Judgment to reduce or waive the amount of civil penalties.


Again, the plaintiffs move this Court to award them $479,579.06 in fees and $102,629.00 in litigation costs against the City pursuant to Title 33 United States Code section 1365(d), the citizen suit provision of the Clean Water Act.3 They support these figures with many filings, the most important of which is a detailed
Declaration of Lead Counsel Gary A. Davis.4 Section 1365(d) states, in pertinent part: The court, in issuing any final order in any action brought pursuant to this section, may award costs of litigation (including reasonable attorney fees and expert witness fees) to any prevailing or substantially prevailing party, whenever the court determines such an award is appropriate. Id.

The plaintiffs argue that the amounts requested should be awarded because (1) the request is timely; (2) they are the prevailing or substantially prevailing parties; (3) the fees are reasonable and have been apportioned in an equitable manner; (4) the expert fees and other costs were reasonably incurred and are equitably apportioned; and (5) the award is appropriate. See [Doc. 310, page 2-3].

The City argues that the plaintiffs were not substantially prevailing parties, and it challenges the reasonableness and the apportionment of the fees and costs.

Specifically, the City argues that (1) the plaintiffs triple or quadruple billed; (2) the hourly fees are unreasonable; (3) the charges for meals and mileage are unreasonable; (4) all costs related to expert Roger Cameron should be denied; (5) the City should pay no more than Koch Foods; and (6) the total should be reduced by 50 percent to reflect the level of plaintiffs’ success. In sum, the City seeks to pay no more than $93,713.38 in fees and $17,629.72 in costs and argues that, in any event, it should pay no more than the $214,000.00 paid by Koch Foods in compliance with the Consent Decree.

The City argues that the plaintiffs are not substantially prevailing parties because they only prevailed on a portion of their claims. As stated above, the plaintiffs were not successful on their state law trespass and inverse condemnation claims. Only three plaintiffs were successful on their nuisance claims, and the total award was $8,500.00. Thus, the City contends that they were not prevailing parties.

When considering a petition for attorney fees, the court must first determine whether the petitioning party was the prevailing party. [ ] “In the context of § 1365(d), a plaintiff is said to have ‘prevailed’ if he has succeeded on any significant issue in the litigation, which achieves some of the benefits sought in bringing suit.” [ ]

While it is true that the plaintiffs did not succeed on most of their state law claims, they did, however, succeed on a majority of their CWA claims. More importantly, they achieved what was probably their main goal, i.e. an order to abate the nuisance. The Court ordered the City to rehabilitate the Witt Sewer Line and install odor control filters on the manhole covers. The City presented evidence that rehabilitation would cost $1.6 million dollars. In addition, the City is ordered to pay $105,000.00 in civil penalties. Finally, Koch Foods and the plaintiffs entered into an agreement regarding injunctive relief. These “victories” are more than enough to show that the plaintiffs are prevailing parties.

The City argues that the plaintiffs’ requested fees are not reasonable and that the plaintiffs triple or quadruple billed. Now that the Court has determined that plaintiffs are prevailing parties, this Court must determine what fee is reasonable. [ ] A reasonable fee is “one that is ‘adequate to attract competent counsel, but ... [does] not produce windfalls to attorneys.’” [ ] The fee applicant bears the burden of proving a reasonable fee, documenting the appropriate hours expended, and exercising appropriate “billing judgment.” [ ] The starting point is to calculate the “lodestar” amount, which is “the number of hours reasonably expended on the litigation multiplied by a reasonable hourly rate.” [ ]  This resulting sum may need to be adjusted to reflect factors such as the “results obtained.” [ ].

The factors the Court must consider include: (1) the time and labor required by a given case; (2) the novelty and difficulty of the questions presented; (3) the skill needed to perform the legal service properly; (4) the preclusion of employment by the attorney due to acceptance of the case; (5) the customary fee; (6) whether
the fee is fixed or contingent; (7) time limitations imposed by the client or the circumstances; (8) the amount involved and the results obtained; (9) the experience, reputation, and ability of the attorneys; (10) the “undesirability” of the case; (11) the nature and length of the professional relationship with the client; and (12) awards in similar cases. [ ]  In addition, the Court should assess the “prevailing market rate in the relevant community” when determining the reasonable hourly rate. [ ]

Here, the plaintiffs argue for a rate of $300.00 per hour for Mr. Davis, $200.00 an hour for his associates, and $75.00 for his paralegal. The plaintiffs attached affidavits from practicing environmental and litigation attorneys in the area, and they state that these rates are reasonable. The City, however, argues for lower rates. It argues for a rate of $200.00 per hour for Mr. Davis and $150.00 to $165.00 an hour for his associates. The City does not address the paralegal rate. It, too, attaches affidavits of practicing attorneys. However, these attorneys do not focus on environmental law.

This Court has considered all of the factors listed above, and it concludes that the hourly rates requested by the plaintiffs are reasonable. This Court will not adjust the fees upwards or downwards based on any of the factors listed above. This case was complex, the pretrial motions were extensive, the trial was lengthy, and the post-trial motions have been numerous as well. The litigation has been on-going for over four years. The trial lasted approximately one month; there were over 50 witnesses and 210 exhibits.

Mr. Davis supports his request with time sheets generated by him and his staff from legal billing software. There is nothing in the record to indicate that he did not use reasonable billing judgment. His declaration establishes that he equitably divided the billable time and litigation expense into three reasonable categories: (1) time and expenses that applied to claims against both Morristown and Koch Foods that cannot reasonably be allocated separately; (2) time and expenses that applied principally to the Morristown case; and (3) time and expenses that applied principally to the Koch Foods case. Category three is not included in the plaintiffs’ request. Furthermore, his declaration establishes that he did not double, triple, or quadruple bill.

In addition, Mr. Davis is very experienced in his specialty practice of environmental law, and the rate for his associates adequately reflects their experience. Plaintiffs’ counsel represented numerous clients in this complex case, and the time requirements were demanding on such a small firm. Also, the firm had to advance the costs because Mr. Davis took the case on a contingency fee basis, which most attorneys, this Court opines, would not likely do with this type of case. This Court notes the City’s argument that the recovery, in its view, was only $8,500.00, but this Court has previously discussed and rejected this contention. It will not do so again.  Moreover, most of the work and evidence used for the CWA claims was the same as that for the state law claims, with a few exceptions.

In sum, when considering all the factors and evidence of the record, the rates proposed by the plaintiffs are reasonable and will not be adjusted. In addition, the time expended was reasonable. These reasonable rates will be multiplied by the reasonable number of hours worked to reach the total amount of fees. Thus, the plaintiffs’ motion is GRANTED in that the City is hereby ORDERED to pay $479,579.06 in fees. See [Doc. 310-1, ¶ 22-26] for detailed breakdown of hours and rates. It is also ORDERED that the City shall pay $10,095.20 in fees, which were incurred in pursuing recovery of attorney fees. See e.g., Coulter v. State of Tenn., 805 F.2d 146, 151 (6th Cir. 1986) (stating fees incurred in pursuit of collecting attorney fees are recoverable). Accordingly, the total amount of fees the City is ORDERED to pay is $489,674.26.

The City also objects to the plaintiffs request for costs. Mr. Davis’s declaration and the information attached thereto is adequate proof of the costs incurred. The City specifically challenges three types of the claimed costs: (1) meals during trial, (2) mileage travel during trial, (3) and Roger Cameron’s expert fees. The City also makes the blanket argument that the fees should be reduced to reflect the level of plaintiffs’ success.

The Sixth Circuit has stated that a plaintiff can recover “those reasonable out-of-pocket expenses incurred by the attorney which are normally charged to a fee-paying client, in the course of providing legal services.” [ ] Meals and mileage qualify as such expenses. Therefore, they will be included in the amount of costs.

Roger Cameron’s expert fees present a different question. While expert fees are recoverable, 33 U.S.C. § 1365(d), they should be reasonable. In addition, these fees are specifically authorized by the CWA citizen suit statute. Thus, it logically follows that the expert fees must be incurred in proving a CWA violation. This Court remembers Mr. Cameron’s testimony at trial quite well. He testified extensively as to the amount of property damage sustained by each land-owning plaintiff as a result of the foul odors emitted from the sewer system. The plaintiffs are correct in that this type of testimony is related to plaintiffs’ standing under the CWA, to claims that Koch Foods had violated its permit by discharging substances that would cause a public nuisance, and to the claim that the City had failed to enforce permit provisions. The claim as to Koch Foods, however, is not relevant to the expert fees incurred as to the City. It is clear to this Court that there was much overlap in Mr. Cameron’s testimony as to the City and to Koch Foods.

Considering all of this, the particular testimony of Mr. Cameron, and the requested fee, this Court determines that the amount sought is not reasonable. Not all of Mr. Cameron’s testimony supported the CWA violations. The majority of his testimony was evidence presented to prove the state law claims. In addition, most of the work for which Mr. Cameron billed applies to the state claims and not standing or CWA violations. As such, the amount of the fee should be reduced to reflect the percentage of his testimony that applied to standing under the CWA and as to the CWA violations of the City. The costs incurred by counsel for travel and a meal for Mr. Cameron’s deposition, deposition costs, postage costs, and Mr. Cameron’s expert fee and travel for trial testimony will not be reduced because it clearly relates to all claims and cannot reasonably be separated. See [Doc. 310-7]. His expert fees, however, should be adjusted to a reasonable level.

For the reasons stated above, the plaintiffs’ motion for costs is GRANTED IN PART. It is hereby ORDERED that the City pay a total of $56,629.00.

Finally, this Court declines to grant the City’s request to reduce any award based on the “amount of success.” This Court addressed that above. Also, this Court notes that all figures reasonably apportioned the fees and costs between Koch Foods and the City as explained in Mr. Davis’s declaration. See [Doc. 310-1]. Lastly, this Court refuses to restrict the amounts to be paid by the City to the same amount paid by Koch Foods as a result of the Consent Decree. The City was determined to be more culpable by the jury. Also, the Consent Decree was a result of a negotiated settlement between the plaintiffs and Koch Foods. The City has continued to litigate matters well past the trial. Thus, the plaintiffs have continued to incur fees and costs.


For the reasons stated above, the plaintiffs’ motion, [Doc. 309], is GRANTED IN PART. The City is ORDERED to pay $489,674.26 in fees and $56,629.00 in costs.



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