Friends of Columbia Gorge v. Energy Fac. Siting Coun.

258

On petitions for attorney fees and for costs and disbursements filed

November 12, 2019, considered and under advisement on April 14;

attorney fees and costs awarded December 10, 2020

FRIENDS OF THE COLUMBIA GORGE,

Northwest Environmental Defense Center,

Oregon Natural Desert Association,

Oregon Wild,

Hood River Valley Residents Committee,

Columbia Riverkeeper,

Wildlands Defense,

Greater Hells Canyon Council, and

Oregon Coast Alliance,

Petitioners,

v.

ENERGY FACILITY SITING COUNCIL

and Oregon Department of Energy,

Respondents.

(EFSC 52017) (SC S065478)

477 P3d 1191

Petitioners previously challenged rules adopted by Energy Facility Siting

Council. Petitioners prevailed on two of the five challenges that they had raised:

one procedural challenge and one substantive challenge. As a result of those

successful challenges, this court invalidated the council’s rules. Petitioners, as

the prevailing party in an administrative rules challenge, sought $541 in costs

and $299,325.64 in attorney fees. Held: (1) Petitioners are entitled to manda-

tory attorney fees for work asserting their substantive challenge to the council’s

rules because, in adopting those challenged rules, the council “acted without a

reasonable basis in fact or law,” ORS 183.497(1)(b); (2) petitioners were not enti-

tled to either mandatory or discretionary fees for work asserting their success-

ful procedural challenge to the council’s rules, because the council asserted a

reasonable argument and undertook its public participation obligations in good

faith; (3) petitioners’ fees should be limited to their fee-generating claim because

that claim is sufficiently discrete and distinct from petitioners’ other claims; and

(4) the court awarded petitioners the prevailing markets rate for the value of

their attorneys’ time, including their in-house counsel.

Attorney fees and costs awarded.

En Banc

Gary K. Kahn, Reeves, Kahn, Hennessy & Elkins,

Portland, submitted the petition for attorney fees and

the reply to the objection to petition for attorney fees for

Cite as 367 Or 258 (2020) 259

petitioners. Also on the filings were Nathan J. Baker and

Steven D. McCoy, Friends of the Columbia Gorge, Portland,

and Peter M. Lacy, Oregon Natural Desert Association,

Portland.

Nathan J. Baker, Friends of the Columbia Gorge,

Portland, submitted the petition for costs and disburse-

ments and the reply to the objection to the petition for costs

and disbursements for petitioners.

Denise G. Fjordbeck, Assistant Attorney General, Salem,

submitted an objection to the petition for attorney fees and

an objection to the petition for cost and disbursements for

respondents. Also on the filings were Ellen F. Rosenblum,

Attorney General, and Benjamin Gutman, Solicitor General.

BALMER, J.

Nakamoto, J., filed a dissenting opinion, in which Nelson, J.,

joined.

Attorney fees and costs awarded.

260 Friends of Columbia Gorge v. Energy Fac. Siting Coun.

BALMER, J.

This is an attorney fee dispute arising out of an

administrative rules challenge. Petitioners successfully

challenged rules adopted by the Energy Facility Siting

Council that amended the process for reviewing requests for

amendment (RFAs) to site certificates. Friends of Columbia

Gorge v. Energy Fac. Siting Coun., 365 Or 371, 446 P3d 53

(2019). Petitioners now seek $299,325.64 in attorney fees

under ORS 183.497. The council asks the court to award no

fees. For the reasons explained below, we award petitioners

$31,633 in attorney fees.1

I. BACKGROUND

Petitioners challenged the council’s rules on three

procedural grounds and two substantive grounds. The court

rejected two of the procedural challenges that petitioners

raised, which addressed whether the council had to respond

to certain comments and whether the council had adequately

circulated copies of the proposed rules. 365 Or at 378-87. The

court, however, agreed with petitioners’ third procedural

challenge, concluding that the council had not substantially

complied with ORS 183.335(3)(d) when it failed to state how

it would determine whether the rules were accomplishing

the council’s rulemaking objectives. Id. at 387-90. Because,

in adopting the rules, the council had failed to substantially

comply with a procedural requirement in ORS 183.335, the

court held that all the rules were invalid. Id. at 390.

To provide appropriate direction to the parties for

any future rulemaking, the court then addressed petition-

ers’ two substantive objections. First, the court rejected peti-

tioners’ claim that the council had exceeded its statutory

authority by permitting its staff to determine, with respect

to RFAs, whether there would be a public hearing and

whether the public could request a contested case proceed-

ing. Id. at 390-94. Second, the court agreed with petitioners

that the council had adopted rules improperly limiting judi-

cial review of RFAs that were not subject to contested case

proceedings. Id. at 394-95.

1

The court also awards petitioners $541 in costs, which are undisputed.

Cite as 367 Or 258 (2020) 261

Thus, petitioners prevailed on two of the five chal-

lenges that they raised: one procedural challenge (fail-

ing to state how the council would determine whether the

rules accomplished the its rulemaking objectives) and one

substantive challenge (limiting judicial review). Based on

petitioners’ successful challenges, the court invalidated the

rules.

II. ANALYSIS

A petitioner who successfully challenges the valid-

ity of an administrative rule, as petitioners have done in

this case, may obtain mandatory or discretionary reason-

able attorney fees under ORS 183.497(1). Petitioners argue

that they are entitled to mandatory fees and, in the alter-

native, to discretionary fees. The council contests both

arguments.

A. Mandatory Fees

Mandatory fees are available if “the state agency

acted without a reasonable basis in fact or in law.” ORS

183.497(1)(b). That provision is subject to an exception, how-

ever, allowing the court to deny fees if it “finds that the state

agency has proved that its action was substantially justified

or that special circumstances exist that make the allowance

of all or part of the attorney fees unjust.” Id. Petitioners con-

tend that, as to the two issues on which it prevailed, the

council took positions without a reasonable basis in law. The

council disagrees, noting that, although it lost on two issues

in this court, not every losing position taken by an agency

is an unreasonable one. See 1000 Friends v. LCDC, 293 Or

440, 443, 649 P2d 592 (1982) (“The use of the word ‘rea-

sonable’ reflects a legislative recognition that agencies, like

others, can make reasonable mistakes of law.”). The coun-

cil maintains that the positions that it took with respect

to the two issues on which it lost were reasonable, even if

unavailing.

We agree with the council that its position on the

procedural issue was reasonable. As noted above, this court

held that the council failed to substantially comply with ORS

183.335(3)(d), which, under certain circumstances, requires

an agency to provide “a statement of how the agency will

262 Friends of Columbia Gorge v. Energy Fac. Siting Coun.

subsequently determine whether the rule is in fact accom-

plishing [its] objective.”

The council did not dispute that it was required

to provide such a statement. Instead, the council main-

tained that it substantially complied with that require-

ment because, at a rulemaking hearing, council members

discussed potential options for tracking whether the rules

were accomplishing their objectives. For example, council

members asked staff how they might track whether the

new amendment processes were serving their intended pur-

pose of enhancing efficiency and public participation. Staff

informed the council that it would be able to observe how

staff is handling requests for amendment as they are pro-

cessed and that, after some time, staff could gather input

from those affected by the rules and report that input to the

council. Friends of Columbia Gorge, 365 Or at 388.

The council contended that, although it never took

the next step of affirming the staff’s proposal, those discus-

sions at the hearing were sufficient to substantially comply

with the statute. The council based that contention on the

fact that the staff suggestions were the most obvious way to

track the success of the rules, that no participants, including

petitioners, offered (nor did the council seek) other ways of

assessing the new rules, and that those two facts combine to

impliedly suggest the council’s intentions, which amounts to

substantial compliance. This court rejected that argument,

but that was not an unreasonable position for the council to

advance, particularly in the absence of any prior appellate

court decision on the scope of ORS 183.335(3)(d) and given

the “substantial compliance” standard that applies to that

provision. As a result, petitioners are not entitled to man-

datory fees based on the council’s failure to substantially

comply with ORS 183.335(3)(d).

With regard to the second issue—the council’s

rules that improperly limited judicial review of amendment

orders—we agree with petitioners and conclude that the

council acted without a reasonable basis in law. The chal-

lenged rules had stated that, as to orders on RFAs that did

not go through contested case proceedings, the right to seek

judicial review was limited to those who provided comments

Cite as 367 Or 258 (2020) 263

during the council’s consideration of an application and only

as to issues on which they provided comment. Friends of

Columbia Gorge, 365 Or at 394.

The council offered no statutory basis for its author-

ity to limit judicial review in that way. Although the chal-

lenged rules applied to the review of orders that had not gone

through contested case proceedings, the council relied only

on ORS 469.403(2), a statute that similarly limited review

of orders that had gone through contested case proceedings.

The council maintained that contested cases are usually

more complicated than noncontested cases. So, according

to the council, it would not make sense to limit the avail-

ability of review in complicated contested cases, but not

also limit the availability of review in less complicated non-

contested cases. The council, therefore, relied on the stat-

ute limiting the availability of review for contested cases

to similarly limit the availability of review for noncontested

cases.

Regardless of what makes sense to the council or

what it thinks would be more reasonable, it is not possible to

read the statute that way. The statutory provision that the

council relied on expressly applies to “contested case proceed-

ings” and does not address noncontested case proceedings.

No specific statutory provision expressly addresses who may

seek judicial review of noncontested case proceedings involv-

ing an RFA. As a result, the judicial review of noncontested

case proceedings involving RFAs is governed by the catch-

all provision, ORS 469.403(6), which provides that, unless

otherwise indicated, “the review by the Supreme Court shall

be the same as the review by the Court of Appeals described

in ORS 183.482.” And ORS 183.482 allows judicial review to

be sought by, among others, “a person adversely affected or

aggrieved by the agency order.” ORS 183.482(2). That stat-

utory text is not susceptible to an interpretation that could

justify the council’s rules limiting the availability of judi-

cial review beyond that. As we noted in our initial decision,

the council’s position lacked any “grounding in the statutory

text, context, or legislative history[.]” Friends of Columbia

Gorge, 365 Or at 395. We therefore conclude that the coun-

cil’s position had no reasonable basis in the law and, as a

264 Friends of Columbia Gorge v. Energy Fac. Siting Coun.

result, hold that petitioners are entitled to mandatory attor-

ney fees based on that substantive objection.2

B. Discretionary Fees

Although petitioners are not entitled to mandatory

fees based on their successful procedural objection, petition-

ers alternatively contend that the court should award dis-

cretionary fees based on that objection. Under 183.497(1)(a),

“[T]he court * * * [m]ay, in its discretion, allow a petitioner

reasonable attorney fees and costs if the court finds in favor

of the petitioner.” The court assesses whether to award dis-

cretionary attorney fees, authorized by statute, by apply-

ing the nonexclusive factors set out in ORS 20.075(1).3 The

2

As noted above, there is an exception to mandatory fees. Even if the coun-

cil took an unreasonable position that would otherwise justify mandatory fees,

the court may decline to award such fees if the agency proves “that its action

was substantially justified or that special circumstances exist that make the

allowance of all or part of the attorney fees unjust.” ORS 183.497(1)(b). Although

the council asserts that such “special circumstances exist” in this case, it does

not identify what those circumstances are and presents no argument for why

those circumstances should qualify as “special circumstances,” for the purpose of

interpreting ORS 183.497(1)(b). See, e.g., Johnson v. Employment Division, 64 Or

App 276, 286, 668 P2d 416, rev den, 296 Or 120 (1983) (“[T]he category ‘special

circumstances’ defies further definition until concrete fact situations arise. The

legislative history does not further define it. We suggest—but do not hold—that

one such special circumstance could be the fact that, if awarded, the full fee

would absorb a large part of an agency’s budget. We have already indicated that,

where it appears from the record before us that the agency’s action was substan-

tially justified, we shall award little or no fee. Indeed, there comes a point when

the petitioner’s victory is so small that he cannot even be said to prevail. This,

too, may have been viewed as a ‘special’ circumstance.”). We, therefore, reject the

council’s effort to rely on that exception.

3

ORS 20.075(1) provides:

“A court shall consider the following factors in determining whether to award

attorney fees in any case in which an award of attorney fees is authorized

by statute and in which the court has discretion to decide whether to award

attorney fees:

“(a) The conduct of the parties in the transactions or occurrences that

gave rise to the litigation, including any conduct of a party that was reckless,

willful, malicious, in bad faith or illegal.

“(b) The objective reasonableness of the claims and defenses asserted by

the parties.

“(c) The extent to which an award of an attorney fee in the case would

deter others from asserting good faith claims or defenses in similar cases.

“(d) The extent to which an award of an attorney fee in the case would

deter others from asserting meritless claims and defenses.

“(e) The objective reasonableness of the parties and the diligence of the

parties and their attorneys during the proceedings.

Cite as 367 Or 258 (2020) 265

statute itself simply lists the factors; it does not tell a court

which factors may be more or less important in a particu-

lar case or how much weight to assign to the relevant fac-

tors. The salience of various factors and the weight to be

given them will vary from case to case, and making those

determinations is part of the “discretion” that must be exer-

cised by the court that is tasked with “decid[ing] whether to

award attorney fees.” ORS 20.075(1).

In applying those statutory factors to determine

whether to award attorney fees against an agency under

ORS 183.497(1)(a), the reasonableness of the agency’s

claims and defenses is central. Not only is “reasonableness”

its own statutory factor, ORS 20.075(1)(b), it also informs

at least two other statutory factors: whether awarding fees

will deter asserting good faith claims and defenses (ORS

20.075(1)(c)), and whether awarding fees will deter asserting

meritless claims and defenses (ORS 20.075(1)(d)).4 Awarding

attorney fees against an agency that has asserted a rea-

sonable claim or defense “could easily make administrative

agencies timorous about pursuing reasonable positions as

to what the law is or ought to be,” which would not serve

the public interest. McKean-Coffman v. Employment Div.,

314 Or 645, 650, 842 P2d 380 (1992); see also Necanicum

Investment Co. v. Employment Dept., 345 Or 518, 523, 200

P3d 129 (2008) (explaining that, although McKean-Coffman

predates ORS 20.075(1), the “key consideration” of that deci-

sion now appears in ORS 20.075(1)). Nevertheless, award-

ing fees where an agency has taken an unreasonable and

meritless position could advance one of the statutory pur-

poses of the fee-shifting statute, which is to deter agencies

from taking such positions. See Van Gordon v. Ore. State Bd.

of Dental Examiners, 63 Or App 561, 565-66, 666 P2d 276

“(f) The objective reasonableness of the parties and the diligence of the

parties in pursuing settlement of the dispute.

“(g) The amount that the court has awarded as a prevailing party fee

under ORS 20.190.

“(h) Such other factors as the court may consider appropriate under the

circumstances of the case.”

4

And, of course, the “objective reasonableness” of the parties and their

attorneys during the proceeding and in pursuing settlement are explicitly rec-

ognized as factors in determining whether fees should be awarded. ORS 20.075

(1)(e) - (f).

266 Friends of Columbia Gorge v. Energy Fac. Siting Coun.

(1983) (so stating). As described above, the council asserted a

reasonable defense to petitioners’ claim that it failed to state

how it would determine whether the rules accomplished

the council’s rulemaking objectives. The reasonableness

of the council’s defense weighs heavily against awarding

fees.

The statutory factors in ORS 20.075(1) go beyond

the reasonableness of the agency’s claims and defenses. See

Necanicum Investment Co., 345 Or at 523 (“Other factors

are listed as well, so that McKean-Coffman is now explicitly

augmented by the statute.”). The most relevant remaining

statutory factor is the conduct of the parties giving rise to

the litigation. ORS 20.075(1)(a).5 As to that factor, we also

find no support for a fee award. Leading up to the adop-

tion of the rules, the council undertook its public partici-

pation obligations in good faith. “[Between January and

October 2017], the council issued six public notices about

the rulemaking process, extended the comment period four

times, held three public hearings, circulated three draft

versions of the proposed rules, and considered more than

150 written comments.” Friends of Columbia Gorge, 365

Or at 374. Further, at the public hearing during which the

council discussed how it might determine whether the rules

accomplished the council’s rulemaking objectives, petition-

ers did not object that the council’s discussion was inade-

quate to substantially comply with ORS 183.335(3)(d) nor

did it make any suggestions as to how the council should

evaluate whether the rules were meeting those objectives.

Under those circumstances, we decline to exercise our dis-

cretion to award attorney fees based on the council’s failure

to substantially comply with a procedural requirement in

ORS 183.335(3)(d).

C. Reasonableness of the Fee Award

Having concluded that petitioners are entitled to

attorney fees for successfully challenging the council’s rules

limiting judicial review, we must determine what a rea-

sonable amount of attorney fees is. See ORS 183.497(1)(b)

5

The other remaining statutory factors do not weigh for or against either

party.

Cite as 367 Or 258 (2020) 267

(allowing “reasonable attorney fees”). In determining a rea-

sonable amount of fees to award “in any case in which an

award of attorney fees is authorized or required by statute,”

ORS 20.075(2) requires the court to “consider the factors in

subsection (1) of this section”—the factors used to determine

whether to award discretionary fees in the first place—as

well as other statutory factors contained in subsection (2).6

Those factors are frequently captured by the “lodestar”

approach, under which a fee award is “based on a reason-

able hourly rate, multiplied by a reasonable number of hours

devoted to work on the case, with certain adjustments poten-

tially made to that amount for factors such as the risk of loss

and the quality of the attorney’s work.” Strawn v. Farmers

Ins. Co., 353 Or 210, 217, 297 P3d 439 (2013). What consti-

tutes reasonable attorney fees is within the sound discretion

of the court ordering the fee award. See ORS 20.075(3) (pro-

viding that “the decision of the court as to the amount of the

award” is reviewed for “abuse of discretion”).

Petitioners are seeking $299,325.64 for 660.75 hours

of attorney time and 33.9 hours of paralegal time, with attor-

ney rates ranging from $325 to $550 per hour. That total

represents petitioners’ work on the challenge in this court,

including work on all of petitioners’ claims as well as work

done preparing its fee petition. The council challenges both

the time that may be compensated and the rates sought by

petitioners.

6

The factors set out in ORS 20.075(2) are:

“(a) The time and labor required in the proceeding, the novelty and dif-

ficulty of the questions involved in the proceeding and the skill needed to

properly perform the legal services.

“(b) The likelihood, if apparent to the client, that the acceptance of the

particular employment by the attorney would preclude the attorney from

taking other cases.

“(c) The fee customarily charged in the locality for similar legal services.

“(d) The amount involved in the controversy and the results obtained.

“(e) The time limitations imposed by the client or the circumstances of

the case.

“(f) The nature and length of the attorney’s professional relationship

with the client.

“(g) The experience, reputation and ability of the attorney performing

the services.

“(h) Whether the fee of the attorney is fixed or contingent.”

268 Friends of Columbia Gorge v. Energy Fac. Siting Coun.

1. Time

The council first objects to the time for which peti-

tioners may receive compensation. As noted above, peti-

tioners are seeking compensation for all the work devoted

to the preparation, briefing, and argument challenging the

rules in this court. The council maintains that petitioners

are entitled only to fees for time devoted to the claim upon

which this court is awarding fees—namely, fees for work on

petitioners’ claim challenging the council’s rules on judicial

review. In response, petitioners point out that a prevailing

party is not necessarily limited to fees for work on only fee-

generating claims. A prevailing party may be awarded fees

on non-fee-generating claims that are sufficiently related to

a fee-generating claim. See, e.g., Moro v. State of Oregon, 360

Or 467, 487, 384 P3d 504 (2016) (“[W]hen the successful and

unsuccessful claims involve a common core of facts or are

based on related legal theories, then attorney fees incurred

in the presentation of unsuccessful claims are recoverable on

the theory that they contributed to the plaintiff’s ultimate

success.” (Internal citation and quotation marks omitted.)).

In this case, as an exercise of discretion, we agree

with the council that petitioners’ fee-generating claim—

that is, the claim challenging the council’s rules on judicial

review—is sufficiently discrete and distinct from petition-

ers’ other claims that petitioners’ fees should be limited

to that claim. Petitioners’ claim challenging the council’s

rules on judicial review sought the invalidation of only those

rules and did not rest on a legal theory that was related

to petitioners’ other claims. The only point of commonality

between petitioners’ claim on judicial review and petition-

ers’ other claims is that all the claims arose out of the same

rulemaking proceeding. But that commonality reflects only

the procedural posture of the claims, which we have found

insufficient in other circumstances to justify an award of

fees for work on non-fee-generating claims. See id. at 487-88

(denying fees for non-fee-generating claims challenging the

same legislation as fee-generating claims).

As a result, petitioners are entitled to fees for work

reasonably necessary to challenge the council’s rules on judi-

cial review but not for the work on other claims. Petitioners

Cite as 367 Or 258 (2020) 269

additionally are entitled to a reasonable amount for prepar-

ing their fee petition. See TriMet v. Aizawa, 362 Or 1, 3, 403

P3d 753 (2017) (“[A] party entitled to recover attorney fees

incurred in litigating the merits of a fee-generating claim

also may receive attorney fees incurred in determining the

amount of the resulting fee award.”).

2. Rates

Petitioners seek attorney fees based on the pre-

vailing market rates for the services provided and the

experience, reputation, and ability of petitioners’ counsel.

According to petitioners, the prevailing market rate—that

is, the hourly rate that the attorneys could earn for their

work—represents the “reasonable attorney fees” to which

they are entitled. ORS 183.497(1)(b). That method for calcu-

lating attorney fees is frequently referred to as the “market-

value approach.”

The council does not dispute that the rates sought

reflect the prevailing market rates. Instead, the council

notes that four of the seven attorneys who worked on this

case are in-house staff attorneys for petitioners. The coun-

cil asserts that awarding market rates for those attorneys

could provide petitioners with more money than the costs

that they actually incurred in this litigation. Based on that

fact, the council asserts that petitioners should be awarded

only their actual costs for those attorneys, such as salary

and benefits, plus a proportion of overhead. That method

for calculating attorney fees is frequently referred to as the

“cost-plus approach.”

In its briefing to this court, the council fails to fully

develop its position, cite any legal authority, or argue for

why the costs incurred by petitioners in this litigation must

limit the amount that petitioners may recover as “reason-

able attorney fees.” ORS 183.497(1)(b). The reasons for using

the cost-plus approach are not obvious. After all, the costs

incurred by the prevailing party is not one of the statutory

factors that courts must consider in calculating attorney

fees. ORS 20.075(1) - (2). In contrast, the statutory factors

that a court must consider include factors used to determine

the market rate for an attorney’s services, such as “[t]he

fee customarily charged in the locality for similar legal

270 Friends of Columbia Gorge v. Energy Fac. Siting Coun.

services,” ORS 20.075(2)(c), and “[t]he experience, reputation

and ability of the attorney performing the services,” ORS

20.075(2)(g).7 Although the council does not say so expressly,

we understand the council to argue that the court should

consider petitioner’s actual costs under ORS 20.075(1)(h),

which provides the court with the discretion to consider

“[s]uch other factors as the court may consider appropriate

under the circumstances of the case.”

The council appears concerned that awarding peti-

tioners fees that are based on the market value of their attor-

neys could result in a windfall for petitioners. Conversely,

however, awarding fees at less than the market rate could

result in a windfall for the council. See Serrano v. Unruh, 32

Cal 3d 621, 642, 652 P2d 985 (1982) (so stating). In-house

counsel for nonprofit public interest organizations, like peti-

tioners, often accept less than the market value for their

services because they support the organization’s mission. In

doing so, the in-house counsel are, in effect, donating a por-

tion of their services to the organization. Reducing the coun-

cil’s attorney-fee liability based on that fact would transfer

that donation to the council and away from the intended

organization. See Cent. States, Se. & Sw. Areas Pension

Fund v. Cent. Cartage Co., 76 F3d 114, 117 (7th Cir 1996)

(“[T]he value of that gift belongs to the [employer].”).

Such a windfall for the council in this case would

be inconsistent with the purpose of the fee-shifting statute,

which is not only to “redress individuals who have borne

unfair financial burdens defending against groundless

charges or otherwise attempting to right mistakes that

agencies should never have committed,” but also to “serve

as [a] deterrent[ ] to groundless or arbitrary agency action.”

Van Gordon, 63 Or App at 565-66; see also Brown v. Adult

and Family Services, 293 Or 6, 11, 643 P2d 1266 (1982) (rec-

ognizing that, in granting courts the authority to award

attorney fees in actions that successfully contest agency

actions, the legislature “intended the authority to serve as a

deterrent to agency error”).

7

Because parties often hire attorneys at normal market rates, the costs

incurred by parties are frequently evidence of the market value for those legal

services.

Cite as 367 Or 258 (2020) 271

Further, the council fails to grapple with the diffi-

culty of accurately assessing the cost of employing in-house

counsel as it relates to this case. The council suggests that

it simply requires looking at the overall cost of employing

the in-house counsel and then dividing that by the time the

in-house counsel spent working on this matter. But the cost-

benefit analysis is not so simple when an employer decides

to hire a permanent salaried in-house counsel. Although the

employer might determine that, over the long term, the ben-

efit of the in-house counsel will exceed the costs, in-house

counsel are likely to perform a variety of tasks on a variety

of matters that an employer will value at different rates.

Dividing the costs across each task evenly might result in

overpaying for some tasks and underpaying for others. As

a result, it is not easy to determine the per hour cost of an

attorney on a particular matter when the attorney does not

charge his or her client per hour or per matter.

In awarding attorney fees for salaried in-house

attorneys, the “modern trend” has been to use the market-

value approach. Milgard Tempering, Inc. v. Selas Corp. of

Am., 761 F2d 553, 558 (9th Cir 1985); see AMX Enterprises,

L.L.P. v. Master Realty Corp., 283 SW3d 506, 518 (Tex App

2009) (adopting the market-value approach and collect-

ing cases); see also Blum v. Stenson, 465 US 886, 104 S Ct

1541, 79 L Ed 2d 891 (1984) (allowing a litigant represented

by a nonprofit legal organization to recover fees using the

market-value approach, even if that rate exceeded the sala-

ries and expenses of the organization’s attorneys).

Courts adopting the cost-plus approach have fre-

quently done so in cases in which the attorney-fee award

was limited by statute to costs “incurred” by the prevail-

ing party and have emphasized that the purpose of such

an attorney-fee award is to indemnify the prevailing party.

See, e.g., Softsolutions, Inc. v. Brigham Young Univ., 1 P3d

1095, 1107 (Utah 2000); see also Lacer v. Navajo Cty., 141

Ariz 392, 396, 687 P2d 400, 404 (Ct App 1984) (applying

the cost-plus approach under a statute requiring that the

amount awarded “ ‘not exceed the amount paid or agreed to

be paid’ ” (quoting ARS § 12-341.01(B))). Neither limitation

applies in this case.

272 Friends of Columbia Gorge v. Energy Fac. Siting Coun.

But, even when an attorney-fee provision is limited

to the costs incurred, some courts still have used the market-

value approach in assessing the fees for salaried in-house

attorneys: “[T]he market value approach has the virtue of

being predictable for the parties and easy to administer. By

contrast, the cost-plus approach, in addition to being cum-

bersome, intrusive, and costly to apply, may distort the incen-

tives for settlement and reward inefficiency.” PLCM Grp. v.

Drexler, 22 Cal 4th 1084, 1097, 997 P2d 511, 520, as modified

(June 2, 2000). Courts additionally have noted that, when

done properly, the cost-plus approach is likely to result in an

amount that is similar to the market-value approach. See

Cent. States, Se. & Sw. Areas Pension Fund, 76 F3d at 116

(“Opportunity cost, rather than cash outlay, is the right way

to value legal services. The going rate for comparable legal

services in the market reveals that cost directly, avoiding a

complex inquiry that is in the end likely to produce a com-

parable figure.” (Internal citations omitted.)); see also ORS

20.075(2)(b) (court determining a reasonable attorney fee is

to consider “[t]he likelihood, if apparent to the client, that

the acceptance of the particular employment by the attorney

would preclude the attorney from taking other cases”).

This court has never addressed the question of how

to assess statutory attorney fees for in-house counsel. In

other contexts, the court has taken different approaches to

weighing the relevance of the costs incurred by the prevailing

party. For example, in the context of a contractual attorney-fee

provision, this court stated that a prevailing party “is not

entitled to more than it spent on attorney fees.” Associated

Oregon Veterans v. DVA, 308 Or 476, 481, 782 P2d 418 (1989).

But, later, this court affirmed a contractual attorney-fee

award where the prevailing party incurred no costs at all

because the attorney was provided by a third party. Domingo

v. Anderson, 325 Or 385, 389, 938 P2d 206 (1997); id. at 390

n 7 (citing with approval numerous Court of Appeals deci-

sions awarding attorney fees for pro bono representation). In

Domingo, the court emphasized that the contract authorizing

the attorney-fee award did “not contain any condition or qual-

ification” limiting the reasonable attorney-fee award to the

costs incurred by the prevailing party. Id. at 389.

Cite as 367 Or 258 (2020) 273

More recently, in Colby v. Gunson, 349 Or 1, 238

P3d 374 (2010), this court affirmed a statutory attorney-fee

award to an attorney who represented himself, noting that

the statutory provision included “no requirement that the

prevailing party, or anyone else, be obligated to pay for the

legal services rendered in the suit.” Id. at 6. As this court

explained, “[T]he term ‘attorney fees,’ as used in the con-

text of attorney fee awards, means the reasonable value of

services performed by an attorney, whether or not anyone

incurs an obligation to pay for those services.” Id. Attorney-

fee awards that exceed the costs incurred by the prevail-

ing parties have also been justified as restitution under the

substantial-benefit and common-fund doctrines. See Moro,

360 Or at 484, 492 (using a market rate for an attorney’s

services, rather than the rate that the attorney charged

the prevailing party, which received a substantial discount

as a long-term client, and enhancing the award with a fee

multiplier to account for a contingency-fee arrangement).

Although the substantial-benefit and common-fund doc-

trines can present different policy considerations than those

that arise when applying fee-shifting statutes, as in this

case, or contract provisions, awards under those doctrines

are similarly “limited to a reasonable fee.” Id. at 483 (so

stating); see also Strawn, 353 Or at 217 (“For an attorney

fee awarded either pursuant to a fee-shifting statute or the

common-fund doctrine, the touchstone for the amount of the

award is the same—reasonableness.”).

We need not decide whether the market-value

approach always is appropriate or whether the cost-plus

approach is never appropriate for assessing statutory attor-

ney fees for in-house counsel. As noted above, in the context

of a statutory fee award, what counts as “reasonable attor-

ney fees” is an exercise of judicial discretion based on the

statutory factors in ORS 20.075(1) to (2). As an exercise of

discretion in this case, we conclude that the market-value

approach is appropriate for assessing the fees of petitioners’

in-house counsel.

3. Application

Having concluded that petitioners may receive

an award at market rates for only their counsel’s work on

274 Friends of Columbia Gorge v. Energy Fac. Siting Coun.

one claim and the fee petition, we must calculate petition-

ers’ fee award. Petitioners’ fee petition, however, makes

that task difficult. Although petitioners have filed exten-

sive records demonstrating the work that their attorneys

have performed, those records generally fail to identify the

claim on which the attorney was working. Of all the entries

describing the work performed by petitioners’ counsel,

which total 660.75 hours, the entries expressly identifying

work on the judicial review claim total only 8.5 hours, rep-

resenting $4,428.00. That work was performed by Nathan

Baker and Peter Broderick. Petitioners bear “the burden

of establishing the reasonableness of the fee amount” that

they seek to recover. Strawn, 353 Or at 225. It could be

argued that the award should be limited to the 8.5 hours

on this issue that are identified in their records. However,

Baker’s declaration reflects the fact that petitioners’ lead

attorney, Gary Kahn, reviewed and edited the briefing on

that claim. There were certainly other tasks not specifically

identified as related to the judicial review claim that con-

tributed to the briefing and presentation of that claim, such

as compilation and review of the record, briefing on the

background and procedural history, research on the Siting

Act, and preparation for, and presentation of, oral argu-

ment. In our view, it is reasonable to allow fees for some of

that time, even though the records submitted by petitioners

do not, on their face, tie that work to the judicial review

claim.

In the end, the most relevant statutory factor here

in resolving the parties’ dispute is “[t]he time and labor

required in the proceeding, the novelty and difficulty of the

questions involved in the proceeding and the skill needed

to properly perform the legal services.” ORS 20.075(2)(a).

The judicial review claim was a small, discrete part of this

case that did not require extensive time and effort to pres-

ent to this court. The judicial review claim was relatively

simple compared to petitioners’ other claims. In fact, as

described above, we are awarding petitioners attorney fees

on that claim because the council’s rule limiting the avail-

ability of judicial review was without a reasonable basis in

law. Petitioners were not required to—and, as their filing

indicates, did not—devote substantial hours to establishing

Cite as 367 Or 258 (2020) 275

that the council exceeded its statutory authority when it

adopted the rule that limited the availability of judicial

review in a way that was inconsistent with the applica-

ble statute. If this case had been only about the judicial

review claim, it would not have justified the use of seven

attorneys, the hundreds of hours of research and brief-

ing, or the extensive oral argument preparation. The work

needed to prepare a fee petition would have been similarly

limited.

Nevertheless, it does require attorney time and

effort to defeat even meritless arguments, like the council’s

argument on this issue. Having carefully reviewed petition-

ers’ filing, and based on other fee petitions recently filed in

this court and our experience with appellate briefing and

argument as judges and lawyers, we conclude that it is rea-

sonable to compensate petitioners for 70 hours of work for

briefing the claim on judicial review and preparing a fee

petition for work on that claim.8 We divide that time between

attorneys Kahn, Baker, and Broderick. Based on their over-

all contributions to the presentation of this case, we allocate

10.5 hours to Kahn, 48.3 hours to Baker, and 11.2 hours

to Broderick. The reasonable rates for those attorneys are

$550 per hour for Kahn, $460 per hour for Baker, and $325

per hour for Broderick.9 That results in an award of $5,775

for work performed by Kahn, $22,218 for work performed

by Baker, and $3,640 for work performed by Broderick. In

total, petitioners are entitled to an attorney fee award of

$31,633.

Attorney fees and costs awarded.

8

The dissent characterizes this result as “ad hoc.” 367 Or at 277 (Nakamoto, J.,

dissenting). Although our determination rests on a judgment about what is rea-

sonable in this particular case, it is not ad hoc. The statute directs courts to make

reasonableness determinations, ORS 183.497(1), and, in doing so, to consider

the “time and labor required” for a party to present its case, ORS 20.075(1)(a).

That is what we have done. In reaching a different result, the dissent similarly—

and appropriately—relies on its own judgment about the time and labor rea-

sonably required for petitioners to present their claim. Our disagreement is not

about methodology. It is instead merely a disagreement about what is reasonable

in this case.

9

Baker and Broderick are each in-house counsel for one of the petitioners

and are entitled to market rates for their work, as explained above. Kahn is out-

side counsel. The council did not object to the rates sought for work performed by

Kahn.

276 Friends of Columbia Gorge v. Energy Fac. Siting Coun.

NAKAMOTO, J., dissenting.

Nine organizations working on land use and envi-

ronmental protection issues in Oregon1 successfully chal-

lenged administrative rulemaking by respondent the Energy

Facility Siting Council, a state agency. Friends of Columbia

Gorge v. Energy Fac. Siting Coun., 365 Or 371, 446 P3d 53

(2019). Now, the court has awarded 10.5 percent of the attor-

ney fees that petitioners requested. The majority explains

that the undersized amount is for work on one of petition-

ers’ winning arguments: that the council lacked authority to

adopt rules purporting to limit the scope of judicial review

of requests for amendment to site certificates (RFAs) that

were not subject to contested case proceedings. Then, based

on “other fee petitions recently filed” and “experience with

appellate briefing and argument as judges and lawyers,” the

majority awards fees for 70 hours of work in this appeal. 367

Or at 275. I respectfully dissent.

First, I disagree with the majority’s refusal to

award fees for petitioners’ work on their second winning

argument, which resulted in an invalidation of the coun-

cil’s new rules. The winning argument was that, pursuant

to ORS 183.335(3)(d), the council was required, but failed,

to prepare a written statement identifying the objectives

of the council’s rules and how the council would determine

whether its rules were accomplishing those objectives. The

court should have awarded attorney fees to petitioners for

that work, either because the award was mandated or as a

matter of discretion, as provided in the statute for awarding

fees and costs when a court finds in favor of a petitioner

in defined administrative or judicial proceedings brought

against a state agency.

Second, even if the majority has correctly deter-

mined that petitioners should be awarded fees based only

on their successful argument relating to the scope of judicial

review of RFAs, I have more fundamental disagreements

with how the majority applies ORS 20.075 and arrives at the

1

Petitioners are Friends of the Columbia Gorge, Northwest Environmental

Defense Center, Oregon Natural Desert Association, Oregon Wild, Hood River

Valley Residents Committee, Columbia Riverkeeper, Wildlands Defense, Greater

Hells Canyon Council, and Oregon Coast Alliance.

Cite as 367 Or 258 (2020) 277

awarded amount of fees. In large part, that is because the

opinion provides little explanation of how the court reached

its decision that petitioners should receive fees for 70 hours

of work and offers only limited guidance for litigants and

other Oregon courts on how the court (and, therefore, Oregon

courts generally) should apply ORS 20.075. The majority’s

approach illustrates—and, thus, tacitly approves—an ad hoc,

“I know it when I see it” conclusion about what constitutes a

reasonable fee for partial success.

FEES FOR RULEMAKING CHALLENGE

BASED ON ORS 183.335(3)(d)

As the majority has explained, in accordance with

petitioners’ argument, we held that the council was required

by ORS 183.335(3)(d) to provide a written statement of how

it would determine whether the rule was accomplishing

its objective, but the council failed to do that. Friends of

Columbia Gorge, 365 Or at 388-89 (noting that “we agree

with petitioners that the council never decided how it would

track the success of the rules” and that “the statement

must be in some storable and retrievable form, whether

the statement is in a tangible written document or in some

stored version of a writing”).2 The council took the position

that it had satisfied the requirement in ORS 183.335(3)(d)

through talking about how the council might track success

of the rules at a council meeting; no writing was required.

365 Or at 387-88. However, that position was divorced from

the text of the statute—like the position that the council

took on the scope of judicial review. Petitioners, on the other

hand, advanced a statutory construction argument that we

accepted. We considered the related statutory provision in

ORS 183.335(3)(e)(D) requiring a state agency to “maintain

a record” of statements provided under paragraph (3)(d) as

determinative context. 365 Or at 389. We also invalidated

2

ORS 183.335(3)(d) provides:

“If requested by at least five persons before the earliest date that the rule

could become effective after the agency gives notice pursuant to subsec-

tion (1) of this section, the agency shall provide a statement that identi-

fies the objective of the rule and a statement of how the agency will sub-

sequently determine whether the rule is in fact accomplishing that

objective.”

278 Friends of Columbia Gorge v. Energy Fac. Siting Coun.

the council’s new administrative rules based on that deficit.

Id. at 390.

As it did based on petitioners’ argument concern-

ing the council’s disregard of the scope of review under the

Oregon Administrative Procedures Act for other than con-

tested cases, the court should have awarded petitioners fees

for their successful argument concerning the requirement

set out in ORS 183.335(3)(d). That is because the council

acted “without a reasonable basis in fact or in law” on both

issues on which petitioners prevailed. See ORS 183.497(1)(b)

(requiring a mandatory fee award).

As I see it, the rationale that the majority provides

to distinguish the council’s position on ORS 183.335(3)(d)

from the council’s position on its rule limiting the scope of

judicial review is unpersuasive. The majority states that

the council acted reasonably by arguing that it had sub-

stantially complied with ORS 183.335(3)(d) by talking

about “potential options for tracking whether the rules were

accomplishing their objectives.” 367 Or at 262. But the coun-

cil’s initial position—that oral statements by agency repre-

sentatives during a discussion constituted the “statement”

of the means by which an agency will evaluate whether its

rules meet the agency’s objectives—is irreconcilable with

the requirement in ORS 183.335(3)(d), as petitioners pointed

out and as this court agreed in our opinion on the merits.

The council’s disregard of the statutory requirement in

ORS 183.335(3)(d) is no less stark than its disregard of the

statute providing for the scope of judicial review in other

than contested cases, which the majority concludes was

unreasonable.

Thus, this case is like Kaib’s Roving R.Ph. Agency v.

Employment Dept., 338 Or 433, 111 P3d 739 (2005), which I

would follow here. In that case, the court decided an attor-

ney fee dispute arising after the company, which provided

relief pharmacists to work in pharmacies in Oregon, suc-

cessfully challenged the department’s assessment of unem-

ployment taxes and interest in the Court of Appeals. In

reversing the Court of Appeals, which denied the compa-

ny’s request for attorney fees, this court observed that the

agency had not proffered an interpretation of the governing

Cite as 367 Or 258 (2020) 279

statutes that would have permitted the agency to take its

disputed action and, therefore, had acted without a reason-

able basis in law. Id. at 446. Although the council in this

case makes a “substantial compliance” argument, which

the majority concludes “was not an unreasonable position

for the council to advance” in this court, 367 Or at 262,

the council took an unreasonable position regarding what

ORS 183.335(3)(d) required. Like the agency in Kaib’s, the

council in this case failed to offer an interpretation of ORS

183.335(3)(d)—as opposed to a post-rulemaking explana-

tion for its failure to provide a written statement—that

would permit a court to understand the statute as allow-

ing oral statements during a meeting to satisfy the require-

ment. Petitioners rightly sought this court’s interpretation

of the statutory requirement, and that interpretation will

be of benefit to members of the public and other agencies

participating in rulemaking in the future. Accordingly,

in line with the holding and reasoning in Kaib’s, I would

conclude that petitioners are entitled to a mandatory

fee award for their work on the statutory requirement in

ORS 183.335(3)(d).

But even if the council could be said to have asserted

a reasonable position, in this court, that it had substantially

complied with the requirement for rulemaking contained in

ORS 183.335(3)(d), the court also could have awarded fees

for petitioners’ work on the requirement of ORS 183.335

(3)(d) as a matter of discretion. Under ORS 183.497(1)(a),

the court “[m]ay, in its discretion, allow a petitioner reason-

able attorney fees and costs if the court finds in favor of the

petitioner.” Unlike the majority, I would award fees for peti-

tioners’ work related to what ORS 183.335(3)(d) requires of

an agency during rulemaking, because the council took an

unreasonable position by choosing to omit part of required

rulemaking: Although the council recognized that it had to

prepare a statement regarding how it would assess its new

rules, it simply did not do it.

The majority explains its refusal to award discre-

tionary fees, first by way of the factors in ORS 20.075(1).

The majority emphasizes ORS 20.075(1)(b), stating that

“the reasonableness of the agency’s claims and defenses is

280 Friends of Columbia Gorge v. Energy Fac. Siting Coun.

central” to an assessment of whether to award fees against

the agency under ORS 183.497(1)(a), and it also notes ORS

20.075(1)(c) and (d), relating to the effects of a fee award on

deterrence of good faith and meritless claims and defenses.

367 Or at 265. Although I agree with the majority that a

court exercising its discretion and evaluating whether to

award attorney fees against a state agency can and should

take into account whether the agency took reasonable posi-

tions before it and whether a fee award will deter assert-

ing good faith or meritless claims, courts must consider

all the factors in ORS 20.075(1), regardless of whether the

potentially liable party is a state agency. Although a court

may consider certain factors not significant in a particular

case, a court must initially consider all the factors in ORS

20.075(1)—regardless of whether a state agency is poten-

tially liable for fees—because that statute provides that

a court “shall” consider the listed factors “in determining

whether to award attorney fees in any case in which an

award of attorney fees is authorized by statute and in which

the court has discretion to decide whether to award attorney

fees.”

The factors in ORS 20.075(1) are the following:

“(a) The conduct of the parties in the transactions or

occurrences that gave rise to the litigation, including any

conduct of a party that was reckless, willful, malicious, in

bad faith or illegal.

“(b) The objective reasonableness of the claims and

defenses asserted by the parties.

“(c) The extent to which an award of an attorney fee

in the case would deter others from asserting good faith

claims or defenses in similar cases.

“(d) The extent to which an award of an attorney fee

in the case would deter others from asserting meritless

claims and defenses.

“(e) The objective reasonableness of the parties and

the diligence of the parties and their attorneys during the

proceedings.

“(f) The objective reasonableness of the parties and

the diligence of the parties in pursuing settlement of the

dispute.

Cite as 367 Or 258 (2020) 281

“(g) The amount that the court has awarded as a pre-

vailing party fee under ORS 20.190.

“(h) Such other factors as the court may consider

appropriate under the circumstances of the case.”

Thus, those statutory factors cover more ground than an

assessment of the plausibility of the council’s arguments

advanced in this court. The majority focuses on the council’s

contentions that it advanced in this court, but that leaves

out the importance of the council’s actions during rulemak-

ing and petitioners’ contributions to Oregon law.

Petitioners offer arguments on all the factors in

ORS 20.075(1). In this case, the “conduct of the parties in the

transactions or occurrences that gave rise to the litigation,”

ORS 20.075(1)(a), and the “objective reasonableness of the

parties and the diligence of the parties and their attorneys

during the proceedings,” ORS 20.075(1)(e), are significant. In

that regard, the council took a shortcut during the rulemak-

ing process by omitting a required statement and adopted

a rule that was contrary to the Administrative Procedures

Act. Further, even in this court, the council had little to

offer in terms of statutory construction that would account

for those actions. The conduct of the council in the transac-

tions or occurrences that gave rise to the litigation was in

part unreasonable and willfully so through its “persistence

in pursuing an objectively unreasonable position during the

litigation.” Ellison v. Dept. of Rev., 362 Or 148, 170, 404 P3d

933 (2017), adh’d to as modified on recons, 362 Or 527, 412

P3d 201 (2018) (emphasis in original). I further agree with

petitioners regarding the objective reasonableness of their

attempts to ensure that the council complied procedurally

and substantively with administrative rulemaking require-

ments and that a fee award would have salutary effects by

deterring unreasonable conduct by state agencies during

rulemaking and encouraging the public to participate in

rulemaking. As petitioners argue with respect to the fac-

tor in subsection (1)(d), a fee award “would encourage other

agencies to comply with the applicable law in the future,

would deter them from shirking their rulemaking duties

under the APA, [and] would deter them from attempting

to unlawfully restrict judicial review of their own decisions

* * *.” Thus, I would award some fees to petitioners for their

282 Friends of Columbia Gorge v. Energy Fac. Siting Coun.

work on the requirement of ORS 183.335(3)(d) as a matter of

discretion in light of those factors in ORS 20.075(1).

In addition to the emphasized factor in ORS 20.075

(1)(b), the majority quotes McKean-Coffman v. Employment

Div., 314 Or 645, 842 P2d 380 (1992), warning of the danger

of awarding fees to an agency that has asserted a reason-

able claim or defense, which could make agencies fearful of

asserting legal positions about what the law is or should be.

See 367 Or at 265. But the concern that this court expressed

in McKean-Coffman should not drive the court’s decision

regarding discretionary fee awards in an administrative

rulemaking case like this one, because the case at hand is

unlike McKean-Coffman.

The underlying case leading to the disputed request

for attorney fees in McKean-Coffman concerned whether,

as provided by statute and in one of the agency’s rules, the

claimant was disqualified from receiving unemployment

benefits because she had “received” retirement benefits, even

though she promptly had rolled the retirement money into

an IRA. The agency, thus, had earlier construed the statute

and developed a rule in accordance with its understanding

of the statute, and it applied that rule to the claimant. When

the claimant prevailed on her contrary understanding of the

statute, she sought attorney fees under ORS 183.497.

This court explained in McKean-Coffman that the

underlying case involved a legitimate dispute about what

the statute meant, and the agency reasonably had relied

on “the plain meaning of the pivotal term, ‘received[.]’ ” 314

Or at 649. It explained its decision to deny a discretionary

award of fees this way:

“The underlying controversy, while hard-fought, was

nonetheless a common variety of administrative contest

that involved reasonable positions on both sides and that

required a significant amount of independent effort by this

court to resolve. An award of attorney fees under such cir-

cumstances, while certainly encouraging to individual lit-

igants such as petitioner, could have the undesirable effect

of discouraging agencies from vigorously advocating rea-

sonable policy positions in the courts.”

Id. at 650-51.

Cite as 367 Or 258 (2020) 283

The present case is different; it is no “common variety

of administrative contest.” In McKean-Coffman, the claim-

ant challenged the application of an established agency rule

based on the agency’s understanding of the related statute.

In this case, the council was developing new rules, and, as

this court held, the council not only adopted a rule that was

substantively countermanded by the judicial review process

set out in the Administrative Procedures Act; it failed to fol-

low all of the requirements of the rulemaking process that

the legislature developed. The significance of that failure

should not be underestimated.

In his seminal article, Dave Frohnmayer, a

scholar of administrative law, described Oregon’s proce-

dures for agency rulemaking as “probably the most all-

encompassing of any state.” David B. Frohnmayer, The

Oregon Administrative Procedure Act: An Essay on State

Administrative Rulemaking Procedure Reform, 58 Or L Rev

411, 421 (1980). The purpose of the procedures prescribed in

Oregon for agency rulemaking are to facilitate public par-

ticipation in rulemaking. As the Court of Appeals said in its

leading administrative law case about rulemaking,

“[t]he policies of an agency in a democratic society must

be subject to public scrutiny. Published standards are essen-

tial to inform the public. Further, they help assure public

confidence that the agency acts by rules and not from whim

or corrupt motivation. In addition, interested parties and

the general public are entitled to be heard in the process of

rule adoption under the Administrative Procedures Act.”

Sun Ray Dairy v. OLCC, 16 Or App 63, 71, 517 P2d 289 (1973).

Petitioners in this case not only had a view of what the new

rules ought to look like that differed from the council’s view,

but petitioners also rightly sought to hold the council to its

obligations during rulemaking and, therefore, to hold the

council accountable to the general public. Because I would

award fees to petitioners for their work on both arguments

on which they prevailed, I would award a significantly larger

amount of fees than the majority awards in this case.

LODESTAR APPROACH

I also would hold expressly that Oregon courts

should use the lodestar approach as the starting point for

284 Friends of Columbia Gorge v. Energy Fac. Siting Coun.

determining the amount of a reasonable fee award in an

administrative rulemaking case like this one. The majority

uses the lodestar approach in its analysis of the amount of

the fee award. See 367 Or at 266-67 (noting the lodestar

approach and examining time and rates). This court, how-

ever, has never approved the general use of the lodestar

approach. In Strawn v. Farmers Ins. Co., 353 Or 210, 221

n 7, 297 P3d 439 (2013), the court observed that the lode-

star approach is not “mandated” but is “potentially permis-

sible” under ORS 20.075(2). The court explained the general

lodestar approach (albeit in the context of a case involving a

common fund recovery) as follows:

“In determining what amount of fee is reasonable, two

basic methods of calculation are generally available. One

is the so-called ‘lodestar’ method, by which the attorney

is awarded a fee based on a reasonable hourly rate, multi-

plied by a reasonable number of hours devoted to work on

the case, with certain adjustments potentially made to that

amount for factors such as the risk of loss and the quality

of the attorney’s work. See Conte & Newberg, 4 Newberg on

Class Actions § 14:5 at 541-42.”

353 Or at 217; accord Moro v. State of Oregon, 360 Or 467,

472, 384 P3d 504 (2016) (applying the lodestar approach to

award attorney fees).

The parties in this case have accepted the lodestar

approach in their briefing, and for good reason: The fac-

tors set out in ORS 20.075(2) for determining a reasonable

amount of fees, standing on their own, are imprecise and,

unlike the lodestar approach, do not create an anchoring

point for determining an amount of fees. As one commenta-

tor has observed of the factors, “[b]ecause the factor method

does not weigh or prioritize the factors, it does not give the

judge an objective place to begin the fee analysis.” Comment,

Randall Paul Sutton, The Lodestar Method: An Objective

Solution to the Unreasonable Way in Which Reasonable Fees

are Calculated in Oregon, 29 Willamette L Rev 801, 811

(1993) (“The Lodestar Method”). This court should approve

the lodestar method for statutory fee-shifting cases like this

one, an approach that is commonly used and accepted in

other jurisdictions.

Cite as 367 Or 258 (2020) 285

FEE AMOUNT

Petitioners argue why fees should be awarded for the

work performed, addressing the factors in ORS 20.075. The

majority does not address those individual factors and their

arguments. Instead, the majority points to ORS 20.075(2)(a)

as the most relevant statutory factor in determining the

amount of the fee award. 367 Or at 274. That factor directs

a court to consider the time and labor required in the pro-

ceeding, the novelty and difficulty of questions involved, and

the skill needed to perform the legal work.

Although it is more time-consuming, this court

should discuss how it is evaluating the factors in ORS 20.075

in a particular case and whether or how the factors apply in

determining the fee award. This court expects lower courts

to adhere to that model, even though it has fallen short in

its own fee cases. See, e.g., Chalmers v. Oregon Auto. Ins.

Co., 263 Or 449, 455-56, 502 P2d 1378 (1972) (noting fac-

tors for determining the amount of a reasonable fee award,

citing former DR 2-106, but then focusing on the length of

the briefing and summarily concluding that “$750 is a rea-

sonable fee”). Indeed, the court’s historical lack of focus on

the legislatively mandated factors is remarkable. In The

Lodestar Method, the author examined how Oregon courts

“arbitrarily and inconsistently” applied the DR 2-106 factors.

Sutton, 29 Willamette L Rev at 803. The author noted that

Oregon courts did not employ a systematic analysis when

considering the factors for determining a reasonable attor-

ney fee, nor were there any Oregon cases that explain how

the factors should be applied. Id. at 804. No cases since that

comment was published over 25 years ago have attempted

to flesh out the factors in any systematic way. This court’s

explicit consideration and application of the factors in ORS

20.075 as fee cases come before the court can provide lit-

igants and other Oregon courts with practical guidance

regarding the process of how to evaluate the ORS 20.075(2)

factors.3

3

The factors in ORS 20.075(2) are derived from factors in former DR 2-106,

a disciplinary rule regarding reasonable attorney fees that was part of the ABA

Model Code of Professional Conduct, which Oregon adopted in 1971. See Dockins

v. State Farm Ins. Co., 330 Or 1, 5-6 n 7, 997 P2d 859 (2000) (recognizing the

factors were the same in the statute and the disciplinary rule); UTCR 5.080

286 Friends of Columbia Gorge v. Energy Fac. Siting Coun.

Ultimately, the court lands on 70 hours as a reason-

able amount of time spent in this case, relying on “other fee

petitions recently filed in this court” and their “experience

with appellate briefing and argument as judges and law-

yers.” 367 Or at 275. It is not clear to me what recent fee peti-

tions form the reference point for the 70-hour determination,

and, based on my experience, I disagree that 70 hours is a

reasonable fee in this case. Even assuming that the major-

ity correctly limits an award of fees to work performed to

obtain the invalidation of the rules that pertain solely to the

scope of judicial review, the majority insufficiently accounts

for the time spent by petitioners’ lawyers to accomplish that

through the filing of a brief, appearing for and present-

ing oral argument, and presenting its request for attorney

fees.

In regard to their petition for fees, as petitioners

summarize it, their attorneys

“have spent hundreds of hours litigating this appeal, includ-

ing closely evaluating Respondents’ rulemaking actions,

researching and developing the claims for relief, preparing

and filing the petition for review, reviewing and ensuring

the completeness of the administrative record, fully brief-

ing and arguing the merits of the appeal at the Supreme

Court on an expedited timetable, monitoring Respondents’

actions implementing the challenged rules during the pen-

dency of the appeal, communicating with and providing

legal advice to Petitioners’ representatives, and preparing

and filing this petition for attorney fees.”

Petitioners also explain that the lead appellate attorney,

Nathan Baker, managed the appeal so that there was not

duplicative effort; that multiple lawyers were needed due

to the statutorily expedited nature of the appeal; and that

the petition only includes time since the challenged rules

were adopted—not the administrative rulemaking process

(when adopted in the 1980s, the rule required attorneys to file a statement of

attorney fees that included the substance of the factors that were in DR 2-106

and that are now in ORS 20.075). But as one attorney has pointed out, in the

context of preventing professional discipline, the factors in DR 2-106(B) provided

“somewhat contradictory assistance” given that “there is no method of determin-

ing in advance how a lawyer should interpret these factors and apply them in a

particular matter.” Jeffrey M. Smith, Keep Your Career Intact, 9 Barrister 4, 7

(1982).

Cite as 367 Or 258 (2020) 287

time. Petitioners have also argued that the factors in ORS

20.075(2) justify the amount that they seek, and they have

provided itemized billing records to justify the fees.

The council argues that it is not possible to under-

stand from the submissions what claims each lawyer

worked on and that petitioners should not be awarded any

fees at all. I disagree that it is impossible to discern what

the lawyers were working on at all, although I do agree that

sometimes—or, in some instances, even much of the time—

entries by an attorney lack enough information that would

prompt me to award fees for the claimed time. An item that

merely refers to time for “legal research” or to “prepare

brief” or “email co-counsel” is insufficient.

However, petitioners’ lawyers did provide time

entries specifically describing some of their work, and the

majority fails to specify how it picked 70 hours as the cor-

rect number of those hours of work submitted by those

lawyers. In my view, a court should explain what time is

being awarded when it is relevant, as it is in this case. See

McCarthy v. Oregon Freeze Dry, Inc., 327 Or 185, 191, 957

P2d 1200 (1998), adh’d to on remand, 158 Or App 654, 976

P2d 566 (1999), rev’d, 334 Or 77, 46 P3d 721 (2002) (on recon-

sideration) (vacating order of Court of Appeals awarding fees

and remanding for the court to identify relevant facts and

legal criteria on which it relies for award that would enable

“meaningful appellate review”).

I would award the senior lead lawyer for the case,

Gary Kahn, time for specific entries involving the prepara-

tion of the record, argument scheduling, brief preparation,

and oral argument. For Nathan Baker, I would award time

spent on preparing the petition for judicial review, includ-

ing research about standing and jurisdiction; reviewing the

administrative or judicial review record; drafting the state-

ment of the case; correspondence with opposing counsel and

the court; correcting the record; work on background and fee

sections of the brief; work on preservation of errors section

of brief; reviewing transcripts and recordings of meetings;

work on any successful assignments of error; APA legislative

history research and APA procedural requirements; edit-

ing of briefs; preparation of excerpt of record and appendix;

288 Friends of Columbia Gorge v. Energy Fac. Siting Coun.

preparation of reply brief; attending oral argument; review

of the court’s opinion; and preparing the fee petition. Based

on the amount of nonspecific time descriptions, Baker would

be entitled to an award on no more than 40% of the time he

has listed.

For Steve McCoy, I would award fees for all time

spent regarding APA legislative history. That amounts,

however, to a very small slice of what he billed.

Peter Lacy’s declaration is relatively detailed com-

pared to other declarations submitted in this case. I would

award fees for time spent considering the legal issues to be

raised and whether his client would be joining the litigation;

work on opening/reply briefs; preparation for moot argu-

ments; attending oral argument; communication with the

court; review of the opinion and communication with his cli-

ent regarding the same; and preparing his part of fee peti-

tion. That amounts to approximately half of his requested

time.

Peter Broderick also prepared a relatively detailed

declaration supporting his portion of the work. He primarily

worked on the successful third assignment of error regard-

ing the scope of judicial review. But he also researched ORS

183.335, helped prepare other parts of briefs, helped with

moot argument, and prepared his part of the fee petition. I

would award fees for all that work.

Bryan Telegin claims fees for work on the briefs and

the fee petition. I would award fees for that work.

Finally, David Becker provided expert testimony

regarding the fees in the case and assisted counsel in pre-

paring for oral argument. I would award all his fees except

for time for attendance at oral argument. The majority pro-

vides no rationale for why it provides no fees for any time

Becker spent to establish the reasonableness of the rates

claimed by the lawyers in the case.

As that summary reflects, I would find that peti-

tioners’ attorneys had to spend considerably more than

70 hours of time just to bring their contention that the coun-

cil improperly had limited the scope of judicial review by

rule to this court. But, as noted earlier, I disagree that that

Cite as 367 Or 258 (2020) 289

is the sole part of their case for which petitioners are enti-

tled to an award of fees.

In conclusion, the majority has misapplied ORS

183.497(1) by concluding that petitioners are not entitled to

a mandatory fee award for their work on the issue that led

to the invalidation of the council’s new rules and by promot-

ing a unique emphasis on one factor in ORS 20.175(1)—an

emphasis that does not inhere in the statutory scheme—to

conclude that petitioners should not be awarded fees on a

discretionary basis. In my view, the majority’s approach to

the fee petition in this case engenders unpredictable out-

comes, and that kind of unpredictability will tend to prolong

litigation about attorney fees and may depress the avail-

ability of counsel to take cases in which the legislature has

decided that it is important to permit awards of attorney

fees to successful parties.

I respectfully dissent.

Nelson, J., joins in this dissent.