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ESAblawg is an educational effort by Keith W. Rizzardi. Correspondence with this site does not create a lawyer-client relationship. Photos or links may be copyrighted (but used with permission, or as fair use). ESA blawg is published with a Creative Commons License.

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florida gators... never threatened!

If you ain't a Gator, you should be! Alligators (and endangered crocs) are important indicator species atop their food chains, with sensitivity to pollution and pesticides akin to humans. See ESA blawg. Gator blood could be our pharmaceutical future, too. See ESA musing.

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Follow the truth.

"This institution will be based on the illimitable freedom of the human mind. For here we are not afraid to follow truth wherever it may lead, nor to tolerate any error so long as reason is left free to combat it." -- Thomas Jefferson to William Roscoe, December 27, 1820.

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Thanks, Kevin.

KEVIN S. PETTITT helped found this blawg. A D.C.-based IT consultant specializing in Lotus Notes & Domino, he also maintains Lotus Guru blog.

Is $21 million in attorney's fees the best way to spend conservation dollars?

06/28/2012

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Attorney's fees play a significant role in Endangered Species Act litigation and the shaping of federal environmental policy. But for years, ESAblawg has openly questioned whether the fee-shifting provision are beneficial policy or a financial lubricant for a counterproductive environmental litigation industry.  With the federal debt exceeding $15 trillion, the matter of money management deserves at least some of the scrutiny it is currently receiving from the U.S. House of Representatives Natural Resources Committee.

To the dismay of some Congressmen, laws such as the Equal Access to Justice Act (EAJA), and various citizen suit provisions of environmental laws such as Section 11 of the ESA, require litigants to recover attorneys fees (and sometimes costs, too) from the federal government.  Some statutes require the litigants to be a prevailing party, others merely require that the litigation be a catalyst for governmental action. Either way, however, the government pays millions of dollars to lawyers who succeed in persuading the courts to order something that the government did not do, or did not want to do.

But one of the thorniest complications with any effort to understand how much (or how little) is gained from these laws is simply the data.  Sadly, we do not know quite how much is spent, on what, or why. According to an April 2012 Government Accountability Office review of the amount of attorney's fees paid by the Departments of Agriculture and Interior:

Most USDA and Interior agencies did not have readily available information on attorney fee claims and payments made under EAJA and other fee-shifting statutes for fiscal years 2000 through 2010. As a result, there was no way to readily determine who made claims, the total amount each department paid or awarded in attorney fees, who received the payments, or the statutes under which the cases were brought for the claims over the 11-year period. Both USDA and Interior officials stated that given the decentralized nature of their departments and the absence of an external requirement to track or report on attorney fee information, decisions such as whether to track attorney fee data and the manner in which to do so are best handled at the agency level. Specifically, officials from 65 of the 75 USDA and Interior agencies we contacted told us that they did not track or could not readily provide us with this information. The remaining 10 USDA and Interior agencies either had mechanisms to track information on attorney fees or were able to compile this information manually using hard copy files or directed us to publicly available information sources where we could obtain the information. However, the extent to which these agencies had attorney fee information available for the 11-year period varied. Given this difference among these 10 agencies as well as various limitations—such as 5 USDA and Interior agencies not maintaining data about claims for attorney fees that were filed but denied—it is difficult to comprehensively determine the total number of claims filed for attorney fees, who received payments, in what amounts, and under what statutes.

The table below reflects GAO's best efforts to analyze Treasury data, but given the conclusion above, Congressional desire to reform laws related to fee shifting of attorney's fees seems understandable.

Table 5: Statute under Which Case Was Brought, Amount Paid, and Number of Payments Paid by Treasury
from the Judgment Fund on Behalf of Interior, March 2001 through September 2010
Statute under which case was broughta Attorney fees and costs # of payments
Endangered Species Act, 16 U.S.C. § 1540
$21,298,971b
238
Civil Rights Act Title VII, 42 U.S.C. § 2000e-16
1,243,194
38
Tucker Act (inverse condemnation & other claims), 28 U.S.C. § 1491
1,086,185
2
Privacy Act, 5 U.S.C. § 552a
953,180
1
Freedom of Information Act, 5 U.S.C. § 552
658,561
26
Age Discrimination In Employment Act, 29 U.S.C. § 633a
565,029
2
Outer Continental Shelf Lands Act, 43 U.S.C. § 1349
390,000
1
Clean Water Act, 33 U.S.C. § 1365
252,947
6
Surface Mining Control and Reclamation Act, 30 U.S.C. § 1270
240,825
4
Fair Labor Standards Act, 29 U.S.C. § 216
228,413
5
American Indian Trust Fund Management Reform Act of 1994, 25 U.S.C. §§ 4011, 162a
149,014
1
Alaska National Interest Lands Conservation Act, 16 U.S.C. § 3117
134,544
3
National Historic Preservation Act, 16 U.S.C. § 470w-4
110,661
4
Resource Conservation and Recovery Act, 42 U.S.C. § 6972
60,952
1
Payments for which statute could not be determined
52,087
4
Rehabilitation Act (disability discrimination), 29 U.S.C. §§ 791, 794a
25,523
1
Tucker Act (tort claim), 28 U.S.C. § 1346
7,774
1
Total
$27,457,860
338


Table from U.S. Government Accountability Office, Letter to Congressional Requesters (April 12, 2012)
Subject: Limited Data Available on USDA and Interior Attorney Fee Claims and Payments
___

Ideally, if reform comes, it will be across the board, not just a political exercise in limiting environmental litigation. But the current leader of the dialogue for reform is Congressman Doc Hastings, who the environmental community insists is no friend of the ESA. See Endangered Species Coalition. Mr. Hastings recent support of protection for Columbia River salmon by allowing take of salmon-feasting sea lions adds nuance to the analysis. But then again, the title of the most recent hearing -- Oversight Hearing on "Taxpayer-Funded Litigation: Benefitting Lawyers and Harming Species, Jobs and Schools" (June 19,2012) -- is anything but nuanced.

Nuance (and a sense of irony) seems to be lacking from the Center for Biological Diversity, too. Reacting to the calls for reform, CBD recently declared that "Hastings Relies on False Information in Attacks on Endangered Species Cases." See press release.  The CBD press release also contains distortions. To begin with, in an effort to minimize the $553,000 collected by CBD, they compare the figure their one organization received to the amounts collected by "industry groups."  (Mr. Hastings, in reply, claims that CBD ignored the costs of the payments to third party lawyers who represented CBD.) But suspect accounting is not the only failure in CBD's logic.

In an effort to substantiate the overall benefits of the ESA, CBD developed a report on the recovery trends of endangered and threatened species. In the analysis, CBD explained that recovery takes as long as 46 years, and concluded 90 percent of species are recovering on time. See CBD report. Just give it time, they argue, and thus CBD rejects criticism that the ESA hasn't achieved its goals of species recovery. But that logic applies equally to CBD; its lawsuits usually seek instantaneous action by the government because of delayed responses to CBD's demands. Aren't those lawsuits equally premature, and subject to the same "give it time" response? Indeed, of the 100 representative species considered in CBD's own report, 67 of them were listed before CBD even existed. In other words, these species were put on their path towards recovery without the need for attorney's fees or environmental lawsuits filed by CBD.  Perhaps the litigation (and the attorney's fees payments) are not as necessary as CBD (founded in 1989) would have us believe?

Ignore CBD for a moment. (Yes, that's hard for ESA-watchers like me.) Any debate over the shifting of attorney's fees needs to recognize that the issue involves more than just the direct payment of dollars from the federal treasury to a single litigant. Every lawsuit filed by a non-profit group (or an industry group) also requires the federal government to pay for the Department of Justice lawyers, agency staff, and the federal court system that supports the case. And that raises another problem: the perverse incentive of the fee-shifting provisions, and its potential to interfere with settlement of lawsuits. Many laws require the litigant to be a "prevailing party." So, given the choice of a settlement without fees, or a roll-of-the-dice for a court order resulting in the payment of attorney's fees, many litigants will choose the latter. And as a result, in the absence of a settlement, the taxpayers keep paying, not only for the plaintiff litigant, but also for the DOJ lawyers, the agency staff, and the courts. See, e.g. "Settlement Offers Conditioned Upon Waiver of Attorney's Fees: Policy, Legal and Ethical Considerations," 131 U. Pa. L. Rev. 793 (1983).

Furthermore, if and when attorney's fees are paid, they are not paid at actual cost. For example, assume that a CBD lawyer is paid $70,000 annually. If CBD receives an attorney's fees award, the fees gained by are not based on a pro-rated portion of that attorney's time. Instead, a "lodestar" calculation of (actual hours) x (billable hourly rate) is performed to determine the payment. CBD (and every other litigant) has an incentive to file in the jurisdictions with the highest possible attorney's fees hourly rate, and to provide "proof" of the local "market rate" which may be subject to "enhancement" for expertise, culminating in rates exceeding $450 per hour. (San Francisco is home of the Sierra Club, and New York City is home of Natural Resources Defense Council.) The result: 40 hours of work by a Tucson, AZ based senior staff attorney, estimated (probably overestimated) as costing CBD approximately $2000 in salary and benefits, can earn an attorney's fees award of as much as $18,000.  It's just math.

As the New York Times notes in discussing this issue, there is room for argument by both critics and supporters of attorney's fees payments for environmental litigation. Indeed, there is reason for caution. In his testimony before Congress, Lewis & Clark law professor Dan Rohlf (a worthy adversary, by the way) testified that "Litigation does not harm species, jobs, or schools; indeed, quite the opposite is true." He went on to explain that taxpayer-funded ESA litigation helps fund clinics and train new lawyers who advocate for species and other worthy causes, who protect the public interest, and who ensure that government abuses are caught by citizen watchdogs. The concept of fee shifting has especially noble origins, seeking to ensure that the poor had access to justice when government wrongdoing was proven in court. See Congressional debate discussed on ESAblawg.

To maintain those ideals and values, and to preserve the fairness of EAJA, any reform of fee shifting laws could also include exceptions for the isolated individual in certain types of cases -- the elderly lady forced to hire a lawyer over a social security disability claim, or the special needs child suing over educational access, or maybe even an environmental watchdog who discovers an egregious government error.  See GAO Report on fee shifting statutes. But many reasonable reforms could still be pursued, such as (a) setting a lower, fixed, inflation adjusted hourly rate paid for all federal cases, (b) eliminating fee "enhancements" for expertise, (c) restricting the criteria for various types of organizations to even be eligible for seeking fees, (d) capping the total amount that can be collected by a litigant, both on an annual and on a longer-term basis, and (e) increasing the government's ability to argue that a decision was "substantially justified" as a basis for denying attorney's fees.

As CBD said in its own press release: "If we’re going to have a real discussion about the best way to save endangered species, it has to be based on facts."  True enough. So consider this fact: of the dollars it could account for, GAO reported that $21,298,971 in attorney's fees was paid in Endangered Species Act related cases against Interior during the period from 2001-2010. Those dollars, in the context of federal funding for conservation, are significant. By comparison, the proposed 2013 budget for the Department of Interior's entire listing program is $22,431,000 (a figure that has dramatically increased in recent years).   These numbers cannot be ignored. When federal debt management is part of the discussion, eliminating the payout of attorney's fees to multi-million dollar enterprises -- for-profit and non-profit alike -- seems like an easy choice. The Sierra Club has a $100 million budget in 2012. See New York Times. NRDC has a $95 million budget. See Marc Gunther. Even niche player CBD has a operating budget of $5.4, and $10 million in assets. See CBD Annual Report (2011).  Given these figures, reform of attorney's fee shifting provisions is not the outlandish idea that the environmental community suggests.  

But perhaps the most important fact is this: environmental groups like CBD, Sierra Club, NRDC and many more have already proven themselves to be capable voices for endangered and threatened species. These well financed groups, and their lawyers, will not disappear, even if the amount paid pursuant to fee shifting statutes were reduced. If the environmental advocates actually had to watch their own dollars, and lacked the incentive of attorney's fees payouts in every case, then many lawsuits might not be filed, and perhaps only the most deserving cases would make it to court. In the end, the species these groups hope to protect would be better served if our federal conservation dollars were spent on something other than environmental lawyers. As Professor Rohlf, an advocate for fee shifting, admitted in his written Congressional testimony: "the single most effective step that can be taken to recover threatened and endangered species – and thereby increase the pace of delistings – is to support more funding for recovery efforts."  

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While statutes requiring the government to pay attorney's fees have their flaws, as explained in this musing, and while reasonable minds may differ over some of the policy choices at issue, any suggestion that the non-profit environmental lawyers are getting wildly rich on taxpayer dollars is off the mark. The Executive Director's annual salary is $123,961, and other Director salaries range from $47,000 to  $102,000 annually. See CBD Form 990. Even the CBD headquarters is thrifty; as reported in the Tucson Citizen (source of the CBD "in action" headquarters meeting photo above), the Center for Biological Diversity headquarters is a small warehouse, borrowed from a gem dealer. CBD even exits the facility for three weeks each winter for a gem, mineral & fossil show.

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Keith Who?

Keith W. Rizzardi, a Florida lawyer, is board certified in State & Federal Administrative Practice. A law professor at St. Thomas University near Miami and Special Counsel at Jones Foster Johnston & Stubbs in West Palm Beach, he previously represented the U.S. Department of Justice and the South Florida Water Management District. A two-time Chair of The Florida Bar Government Lawyer Section, he currently serves as Chair of the Marine Fisheries Advisory Committee

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16 U.S.C. §1531 et. seq.

"The Congress finds and declares that -

(1) various species of fish, wildlife, and plants in the United States have been rendered extinct as a consequence of economic growth and development untempered by adequate concern and conservation;

(2) other species of fish, wildlife, and plants have been so depleted in numbers that they are in danger of or threatened with extinction;

(3) these species of fish, wildlife, and plants are of aesthetic, ecological, educational, historical, recreational, and scientific value to the Nation and its people."

16 U.S.C. §1531(a)

The purpose of the Endangered Species Act is "to provide a means whereby the ecosystems upon which endangered species and threatened species depend may be conserved."

16 U.S.C. §1531(b)

Reasons for the ESA

1. ECOLOGICAL: Species have a role in the web of life. Who knows which missing link causes the collapse?

2. ECONOMICAL: Species have actual, inherent, and potential value -- some as food, others as tourist attractions. As Congress said, these species have "aesthetic, ecological, educational, historical, recreational, and scientific value to the Nation." 16 U.S.C. §1531(a).

3. MEDICAL: Although perhaps a subset of economics, medical reasons for the ESA deserve special note, because today's listed species could be tomorrow's cure for cancer.

4. MORAL: With each extinction, we take something from others. We must prevent "the tragedy of the commons."

5. THEOLOGICAL: Even the Bible instructed Noah to save God's creatures, male and female, two by two.

Reasons for ESA Reform

1. ECOSYSTEM (MIS)MANAGEMENT. The ESA encourages selective review of individual species needs, even though nature pits species needs against one another. Furthermore, the ESA's single-species focus detracts from efforts to achieve environmental restoration and ecosystem management.

2. SCIENTIFIC UNCERTAINTY: While the ESA requires consideration of the "best available science," sometimes the best is not enough, forcing decisions under great uncertainty. The ESA, however, is generally proscriptive, regulatory, and absolute; as a result, it insufficiently allows for adaptive management.

3. LITIGATION: ESA implementation is at the mercy of the attorneys. Cases involving one listed species can serve as a proxy for hidden agendas, especially land use disputes, and regardless of actual species needs, litigation and judicial orders set agency priorities. In the end, realistic solutions disappear amidst court-filings, fundraising, and rhetoric.

4. PRIVATE LANDS: Up to 80% of ESA-listed species habitat is on privately owned lands. While the ESA can place reasonable restrictions on private property rights, there are limits. But the best alternatives have limits too, such as Federal land acquisition and the highly controversial "God Squad" exemptions.

5. FUNDING: Protecting species is expensive, but resources appropriated by Congress are limited. An overburdened handful of federal agency biologists cannot keep pace with the ESA's procedural burdens, nor court-ordered deadlines (see #3 above). Provisions requiring agencies to pay attorney's fees to victorious litigators -- who challenge the hastily written documents prepared by overworked bureaucrats -- simply exacerbate the problem.

"Every species is part of an ecosystem, an expert specialist of its kind, tested relentlessly as it spreads its influence through the food web. To remove it is to entrain changes in other species, raising the populations of some, reducing or even extinguishing others, risking a downward spiral of the larger assemblage." An insect with no apparent commercial value may be the favorite meal of a spider whose venom will soon emerge as a powerful and profitable anesthetic agent. That spider may in turn be the dietary staple of a brightly colored bird that people, who are notoriously biased against creepy crawlers and in favor of winsome winged wonders, will travel to see as tourists. Faced with the prospect that the loss of any one species could trigger the decline of an entire ecosystem, destroying a trove of natural and commercial treasures, it was rational for Congress to choose to protect them all. -- Alabama-Tombigbee Rivers Coalition v. Kempthorne, 477 F.3d 1250, 1274-75 (11th Cir.2007), cert. denied, 128 S.Ct. 8775 (2008), quoting Edward O. Wilson, The Diversity of Life 308 (1992).

"This case presents a critical conflict between dual legislative purposes, providing water service for agricultural, domestic, and industrial use, versus enhancing environmental protection for fish species whose habitat is maintained in rivers, estuaries, canals, and other waterways that comprise the Sacramento-San Joaquin Delta… This case involves both harm to threatened species and to humans and their environment. Congress has not nor does TVA v. Hill elevate species protection over the health and safety of humans... No party has suggested that humans and their environment are less deserving of protection than the species. Until Defendant Agencies have complied with the law, some injunctive relief pending NEPA compliance may be appropriate, so long as it will not further jeopardize the species or their habitat." -- The Consolidated Delta Smelt Cases, 2010 WL 2195960 (E.D.Cal., May 27, 2010)(Judge Wanger)(addressing the need for further consideration of the human consequences of ESA compliance).

Notable quotables

"A nation, as a society, forms a moral person, and every member of it is personally responsible for his society." – Thomas Jefferson (1792)

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"The destruction of the wild pigeon and the Carolina parakeet has meant a loss as sad as if the Catskills or Palisades were taken away. When I hear of the destruction of a species, I feel as if all the works of some great writer had perished."

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"Conservation means development as much as it does protection. I recognize the right and duty of this generation to develop and use the natural resources of our land; but I do not recognize the right to waste them, or to rob, by wasteful means, the generations that come after us." – Theodore Roosevelt (Aug. 31, 1910)

Noah's orders

GENESIS, Chapter 6: [v 20] "Of the birds according to their kinds, and of the animals according to their kinds, of every creeping thing of the ground according to its kind, two of every sort shall come in to you, to keep them alive. [v 21] Also take with you every sort of food that is eaten, and store it up; and it shall serve as food for you and for them."

GENESIS, Chapter 9: [v12] "And God said, This is the token of the covenant which I make between me and you and every living creature that is with you, for perpetual generations"

"The power of God is present at all places, even in the tiniest leaf … God is currently and personally present in the wilderness, in the garden, and in the field." – MARTIN LUTHER