Black Mesa Water Coalition v. Jewell: The Ninth Circuit Defines Co-Party Entitlement to Fees Under an Administrative Fee-Award Provision

By Collin McCarthy, GGU 3rd Year Law Student

On January 26,2015, the Ninth Circuit issued a ruling on a question of first impression for the court: whether a party may recover fees under the Surface Mining Control and Reclamation Act

(SMCRA) when its administrative challenge to a permit is declared moot as a result of a co-party’s success on a substantially similar motion for summary judgment. While the issue was not resolved in its entirety, the court concluded that such parties may be eligible to recover their fees and costs, provided they achieved some degree of success on the merits and made a substantial contribution to a full and fair determination of the issues. Significantly, although it remains uncertain exactly what amounts to a “substantial contribution” to a determination, it is clear that achieving “success on the merits” is not determined solely based on the captions and docket number attached to the motion granted.

In Black Mesa Water Coalition v. Jewell, No. 12-16980, 2015 WL 305261 (9th Cir. Jan. 26, 2015), Black Mesa, a group of environmental and community organizations, sought recovery of costs and fees incurred during an administrative proceeding challenging a coal mining permit revision granted to Peabody Western Coal Company for its mining operations in northeast Arizona. While normally such administrative fee petitions are relatively straightforward, the question here was complicated by the fact that ten separate challenges to the permit revision had been consolidated in the appeal, and it wasn’t actually Black Mesa’s motion the ALJ granted. Rather, Black Mesa’s motion for summary judgment was dismissed as moot, because a co-party was successful in having the permit vacated earlier in the proceedings – the outcome all parties were seeking.

Among the ten consolidated challenges to Peabody’s permit revision was the issue of NEPA compliance, a matter raised by both Black Mesa and co-party Kendall Nutumya. Ultimately concluding that the agency, the Office of Surface Mining Reclamation and Enforcement (OSM), failed to prepare supplemental NEPA analysis and include an adequate range of alternatives in the Final Environmental Impact Statement (FEIS), the ALJ vacated the permit award, and remanded to OSM. However, it was Nutumya’s motion that the ALJ relied on, and subsequently granted.  All other challenges, including Black Mesa’s, were then dismissed as moot. Because the ALJ already vacated OSM’s decision to grant the permit revision, no additional relief could be granted to the remaining parties.

Following the decision, Black Mesa filed a petition with OSM seeking to recover costs and expenses incurred, including attorney’s and expert witness fees, under the Surface Mining and Reclamation Act’s (SMCRA) “whenever appropriate” fee award provision, as one court has characterized it.  The statute actually refers to fees and costs “reasonably incurred” as a court “deems proper.”  30 U.S.C. §1275(e). US Department of Interior (DOI) regulations interpreting the statute set up a two-pronged test, whether a party is eligible because it “participates” and “prevails in whole or in part,” and whether the party is entitled because it “made a substantial contribution to a full and fair determination of the issues.”  43 C.F.R.§4.1294(b). The ALJ dismissed the fee request, concluding Black Mesa was neither “eligible” for, nor “entitled” to fees under the SMCRA and the Department of Interior’s regulatory guidance. The ALJ listed several justifications for reaching this conclusion, but in essence, viewed the parties’ challenges as distinct despite raising substantially similar issues and arguments, meaning only Nutumya was actually successful. The ALJ’s decision was affirmed on appeal at the Interior Board of Land Appeals (IBLA), who added that although Black Mesa spent some 1,065 hours on the litigation, just 5 hours were spent conferring with Nutumya’s legal team on the NEPA issues.  The District Court then affirmed the IBLA determination as supported by substantial evidence.

On appeal, the Ninth Circuit came to a different conclusion. Looking to DOI’s regulatory guidance on the SMCRA fee provision, the court focused on eligibility.  The court found that because Black Mesa had raised the NEPA arguments during both the Request for Review before the agency and the public comment period for the EIS, they did sufficiently participate in the administrative proceedings with respect to the NEPA issues. Furthermore, as the NEPA issues proved dispositive, Black Mesa did achieve success on the merits, and was therefore eligible for fees. The court emphasized that the relief granted on Nutumya’s NEPA motion was the same relief sought by Black Mesa, and the mere fact the two included different case captions and docket numbers does not establish “separate, distinct character.”

With respect to the second “entitlement” prong of the analysis – whether Black Mesa made a substantial contribution to a full and fair determination of the issues – the Court remanded this question of fact to OSM. However, responding to the argument that Black Mesa chose to make different NEPA arguments than those submitted by Nutumya, the court did suggest the determination should not result in a situation where parties must either agree to fight a fully coordinated battle or else duplicate one another’s arguments in order to preserve entitlement to fees. Other case law on the issue of “entitlement” to fees under the SMCRA has held “the key to a finding of substantial contribution is ‘the existence of a causal nexus between petitioner’ actions in prosecuting the Board appeal and the relief obtained.’” West Virginia Highlands Conservancy, Inc. v. Norton, 343 F. 3d 239, 247 (4th Cir. 2003)(quoting W. Va. Highlands Conservancy, 152 I.B.L.A. 66, 74 (2000)).

In sum, it appears to be “successful on the merits” in a multi-party administrative proceeding under the SMCRA is not a question of party, but rather the issue. So long as a party can show it meaningfully participated in the proceedings for that issue, for example, by raising the issue at the outset or arguing the issue prior to consolidation, that party may recover expenses reasonably incurred and commensurate with its contribution to a successful result. The fact that the relief sought is granted to co-party raising the same issue and relying on the same or similar arguments will not bar recovery, at least in cases involving similar “whenever appropriate” fee statutes like that of the SMCRA.  Whether this ruling applies to citizen suits with multiple parties under such laws as the Federal Clean Water Act, which awards fees “to any prevailing or substantially prevailing party whenever the court determines such award is appropriate”, remains to be seen, but the breadth of those “whenever appropriate” statutes suggests the Ninth Circuit could very well do so.

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