# Petition for Writ of Certiorari — Trident Seafoods Corp. v. United States

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Petition for Writ of Certiorari
- **Published:** January 1, 1997
- **Citation:** 519 U.S. 1109

## Text

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; OF THE CLERK
In The .

Supreme Court of the Anited States
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October Term, 1996

TRIDENT SEAFOODS CORPORATION,
Petitioner,
VS.
UNITED STATES OF AMERICA,
Respondent.

Petition for Writ of Certiorari to the United States
Court of Appeals for the Ninth Circuit

PETITION FOR WRIT OF CERTIORARI-

JOSEPH T. PLESHA
Counsel of Record
ROBERT D. NELSON
5303 Shilshole Avenue N.W.
Seattle, Washington 98107-4021
(206) 783-3818

MATTHEW P. BERGMAN

LAW OFFICES OF

JAMES D. BURNS, P.S.
2200 Fourth Avenue
Seattle, Washington 98121-2087
(206) 448-2200

Attorneys for Petitioner

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QUESTION PRESENTED

This appeal raises the question of when attorney fees are
subject to the cost-shifting provisions of Federal Rule of Civil
Procedure 68.

Rule 68 mandates that when a defendant’s Offer of
Judgment exceeds the amount recovered by the plaintiff at trial,
the plaintiff must pay the “costs” incurred by a defendant after
the offer was served. In Marek v. Chesny, 473 U.S. 1 (1985), this
Court held that the definition of “costs” under Rule 68 was
controlled by the underlying statute on which the particular
litigation was brought. Under Marek, whenever a statute
includes attorney fees as awardable costs, such fees are subject
to cost-shifting under Rule 68.

While Marek held that attorney fees could constitute
“costs” subject to Rule 68, it did not address the nature and
circumstances under which such fees could be awarded. This
Petition asks the Court to set forth the circumstances under
which a defendant may recover its attorney fees under Rule 68
and presents the following question of first impression:

Are the cost-shifting provisions of Rule 68 abrogated by
the terms of an underlying statute which provides separate
criteria for recovery of costs?

ii
PARTIES TO THE PROCEEDING

United States Environmental Protective Agency,
Respondent.

RULE 29.6 LISTING

Pursuant to Rule 29.6 Petitioner Trident Seafoods
Corporation is a private corporation registered in the State of
Washington with no parents or subsidiaries (other than those
that are wholly owned). James Hinton and Tom Stakkland were
co-defendants with Trident Seafoods at trial, but were not
parties to the Ninth Circuit appeal giving rise to this Petition.

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TABLE OF CONTENTS

Page

TOES TEP OEE Pe NT Tee aD i
Pattiostothe Proceeding .........ccccccccccccccee ii
IE ae oa. bin eeceviee¥seepire. ii
NE Mis oak v5 5 os 606 b 0 creeks, iii
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Ne aco odd dick oes d bce sudeecdiacdve l
Statement ofJurisdiction ............sccccccscccce l
Statutory Provision and Rule Involved .............. l
PN aioe ouvk sb d's céceceeeecacaes 3
TE a a 3

B. District Court PD CSN s he ve eueinss a

©. Appeal Ninth Circule .........ccccccccces 6
Reasons for Granting the Writ ..................... 7

I. The Ninth Circuit’s decision frustrates the
purpose of Rule 68 and undermines this Court’s
holding in Marek v. Chesny. ............0005. 7

iv

Contents
Page
II. Trident’s attorney fees are “properly awardable”

WU BEE, os vk nce cesbeavsasedecsivauses 9
COUNION 5 00s evceudsus han bencsne ce pease ees vol 11
TABLE OF CITATIONS

Cases Cited:
Crossman v. Marcoccio, 806 F.2d 329 (ist Cir. 1986),

cert. denied, 481 U.S. 1029(1987) ............... 9,10
Delta Air Lines, Inc. v. August, 450 U.S.346(1981) ... 8
Gay v. Waiters’ and Dairy Lunchmen’s Union Local 30,

S6FP.R.D. SOO(N.D. Cal. 1966) 2.0 cccccvcsscccess 8
Gustafson v. Alloyd Co.,___ U.S. __, 115 S. Ct. 1061

CRPOG). dwanadecickussndcddpaved ashes 8
Hopper v. Euclid Manor Nursing Home, 867 F.2d 291

CR FE an cen eA FS 8 ee ae eueeheess 10
Marek v. Chesny, 473 U.S. 1(1985) ........... i, 6,7,8,9, 10
O’Brien v. City of Greers Ferry, 878 F.2d 1115 (8th Cir.

SORE) s vnccno aes cone canes y Vedas heceeedeaese 10
Sheppard v. Riverview Nursing Center, Inc., 88 F.3d 1332

COURGEE: TOES ook Kae wunccbedes sakeesivesoeues 10

Sibbach v. Wilson & Co.,312U.S.1(1941) .......... 8

Contents

Page
Statutes Cited:
a da a ae) II er ATE Gilacy ker eee ]
ent cate Lead. RO PO IRS Te Le ic 5,6
UB EIOUED ooo ciicecriseeds ele 10
Oe te E SUE hres 665 kb0ekdds SelEAL UR 9
Tene PROUD 05 5 ib shins s Cs ak te 10
Te Pe TIO. « sn conn neo ioikekn ns. 1,2, 5,6, 7,9, 10
5S BAS PAIN oon vcvecccesccc 10
Ta mee PROMO) © 50k boii ve Re os heen 10
Tes BN os gn ob 6b cae chee 10
pinches cc hg ig POPE LOT ET OBR I EOE tier! 10
Termes EIN 6 Gio bi bx v ovadlbo vhs ccs 10
Rule Cited:
Federal Rule of Civil Procedure68 ....... i, 1,5,6,7,8,9, 10
Other Authority Cited:

TO GR aMic Shy FOOLITOD 6 oso k vid ohn d¥ecncden lk. 3

vi

Contents

APPENDIX

Appendix A — Opinion of the United States Court of
Appeals for the Ninth Circuit Filed August 7, 1996 ..

Appendix B — Order of the United States District Court
for the Western District of Washington at Seattle Filed
PE UPPER ohn cnicnesencdddesnkenitntanece

Appendix C — Offer of Judgment of the United States
District Court for the Western District of Washington
at Seattle Dated May 2, 1993 .....cccccccescsccee

Appendix D — Offer of Judgment of the United States
District Court for the Western District of Washington
at Seattle Dated July 2, 1993 .......ccceccccccces

Page

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29a

1
Petitioner, Trident Seafoods Corporation (“Trident”),
respectfully petitions for a Writ of Certiorari to review the
judgment of the United States Court of Appeals for the Ninth
Circuit.

OPINION BELOW

The findings of fact and conclusions of law of the Unites
States District Court for the Western District of Washington are
unreported and are reprinted in Appendix B. The United States
Court of Appeals for the Ninth Circuit issued a published
opinion in this matter on August 7, 1996 reprinted in Appendix
A.

STATEMENT OF JURISDICTION
The Ninth Circuit judgment and opinion were rendered on

August 7, 1996. This Court’s jurisdiction is invoked under 28
U.S.C. § 1254(1).

STATUTORY PROVISION AND RULE INVOLVED
This Petition asks the Court to determine the relationship
between Federal Rule of Civil Procedure 68 and Section 1 om
of the Clean Air Act.

Rule 68 provides as follows:

At any time more than 10 days before the
trial begins, a party defending against a
claim may serve upon the adverse party an
offer to allow judgment to be taken against
the defending party for the money or
property or the effect specified in the offer,
with costs then accrued. If within 10 days

2

after the service of the offer the adverse
party serves written notice that the offer is
accepted, either party may then file the offer
and notice of acceptance together with proof
of service thereof and thereupon the clerk
shall enter judgment. An offer not accepted
shall be deemed withdrawn and evidence
thereof is not admissible except in a |
proceeding to determine costs. If the ;
judgment finally obtained by the offeree is
not more favorable than the offer, the offeree
must pay the costs incurred after the making
of the offer. When the liability of one party ?
to another has been determined by verdict or
order or judgment, but the amount or extent
of the liability remains to be determined by
further proceeding, the party adjudged
liable may make an offer of judgment, which
shall have the same effect as reasonable time
not less than 10 days prior to the
commencement of hearings to determine the
amount or extent of liability.

Section 113(b) provides in pertinent part as follows:

In the case of any action brought by the
administrator under this subsection, the
court may award costs of litigation
(including reasonable attorney and expert
witness fees) to the party or parties against
whom such action was brought if the court
finds that such action was unreasonable.

42 U.S.C. § 7413(b).

3

STATEMENT OF THE CASE
A. Factual Summary

In 1988, Trident purchased an abandoned fish cannery ina
small town approximately 90 miles north of Seattle and hired a
local general contractor who employed a subcontractor to
remove asbestos from the facility. The asbestos abatement
attracted the attention of the Washington State air pollution
authority which cited Trident’ and the general contractor for
failing to provide written notice of the asbestos removal.
Trident paid a $250 fine for this offense.

The Environmental Protection Agency (“EPA”) learned
that state officers had inspected Trident’s facility in September
1988, but did not notify Trident of its interest until one year
later. Trident responded to EPA’s inquiries in 1989, and heard
nothing until 1992 when it was informed that the 1988 incident
had been referred to the Department of Justice for enforcement
of federal asbestos regulations promulgated under the Clean
Air Act.?

Trident met with attorneys representing Respondent before
the case was filed in an attempt to settle the dispute.
Respondent's attorneys demanded $346,000 in civil penalties, a
figure ten times greater than the average settlement that the
Government reached in similar cases around the country.
Trident objected to the Respondent’s valuation of its case, but
was told that $346,000 was a reasonable settlement since it
would cost Trident more to litigate the case through trial.

1. Both state and federal asbestos regulations impose strict liability on
any property owner that contracts for asbestos removal on its property.

2. These work practice standards govern any “renovation” or
“demolition” activity involving asbestos, and are codified at 40 C.F.R. 61,
146 (1988).

4

In subsequent settlement discussions, Trident’s president
was informed that the reason the Government was focusing on
Trident was because the company had “deep pockets.”
Respondent’s motivation was even more candidly expressed in
a Statement by a Department of Justice attorney to one of the co-
defendants that “Trident made $30 million in sales last year and
I want a piece of it!”

B. District Court Proceedings

Following the breakdown of settlement negotiations, the
United States’ brought suit against Trident and the two
contractors who performed the asbestos abatement.
Respondent alleged four substantive violations of the federal
asbestos regulations and one notice violation identical to the
offense that had previously been charged by the State of
Washington. The district court granted summary judgment to
the United States on the notice violation, but found factual
questions on the four substantive charges.

At the close of discovery, Trident served Respondent with
an Offer of Judgment consisting of a$30,000 cash payment and
acomprehensive asbestos compliance and abatement program.*
This offer was rejected by Respondent. Later, the parties
engaged into mediation with a neutral mediator proposed by
Respondent’s counsel. The mediator analyzed the case and
issued a letter to all parties recommending that Trident increase
its Offer of Judgment to $50,000. Trident served the United
States with a second Offer of Judgment identical to the

3. Trident’s initial Offer of Judgment committed the company to (1)
pay a $30,000 civil penalty; (2) institute a $141,000 compliance program;
and (3) spend $100,000 on asbestos abatement over the next 18 months. See
Appendix C.

5

settlement package recommended by the mediator.‘
Respondent rejected the offer and pushed the case to trial.

Following a jury trial, a defense verdict was rendered on all
four remaining counts. Trident was assessed a $64,000 civil
penalty for the notice violation and appealed this judgment to
the Ninth Circuit. The Ninth Circuit reversed the penalty and,
on remand, the district court reduced its judgment to $25,000.
Thus, the judgment ultimately rendered in this case was
substantially less than the cash component of the two Offers of
Judgment that Trident served on Respondent before trial.

Trident filed motions at the district court level to recover its
costs, including attorney fees, under Rule 68, Section 113(b) of
the Clean Air Act and 28 U.S.C. § 2412. The district court held
Trident could not recover its attorney fees under Rule 68,
reasoning as follows:

This Court concludes that Rule 68 (Offer of
Judgment) does not apply to the United
States as a plaintiff in an action brought
under the Clean Air Act. The basis for
awarding attorney’s fees has been laid out by
Congress in the Clean Air Act, and will not
be expanded here.

The district court faulted Respondent for pushing the case
to trial with excessive settlement demands, but concluded that
the Government’s conduct was not so unreasonable to warrant
an award of attorney fees under Section 113(b). Nevertheless,
the district court held that Trident was entitled to recover its
statutory costs under 28 U.S.C. § 2412 and taxed costs against
the United States in the amount of $21,000.

4. Trident’s second Offer of Judgment was identical to the previous
offer, except that it increased the civil penalty to $50,000. See Appendix D.

C. Appeal to Ninth Circuit

Trident appealed the denial of its motion for attorney fees
to the United States Court of Appeals for the Ninth Circuit.*
The United States cross-appealed, assigning error to the district
court’s taxation of costs.

The Ninth Circuit affirmed the district court, holding that
Trident could not recover its attorney fees under Rule 68. In
reaching this conclusion, the Ninth Circuit held that Marek only
mandates fee-shifting where the defendant satisfies the
substantive criteria for attorney fee awards set forth in the
underlying statute. The Ninth Circuit held that since Section
113(b) of the Clean Air Act provides for an award of costs,
including attorney fees, in cases where the government’s
conduct was “unreasonable,” Trident could not recover its
costs, including attorney fees, under Rule 68 absent a finding of
unreasonableness. Because the Ninth Circuit concluded that the
district court had acted within its discretion in concluding that
Respondent was not unreasonable, Trident could not recover its
costs, including attorney fees, under Rule 68.

Although the Ninth Circuit held that the Clean Air Act was
the only vehicle under which Trident could recover its attorney
fees, the court nevertheless affirmed the district court’s award
of statutory costs. In contrast to the reasoning used to deny
Trident’s request for attorney fees under Rule 68, the Ninth
Circuit found that Section 113(b) does not specifically prohibit
cost awards under 28 U.S.C. § 2412.

5. Trident sought review of both the district court’s denial of attorney
fees under Rule 68 and Section 113(b) of the CleanAirAct. This Petition is
only addressed toTrident’s right to attorney fees under Rule 68.

7
REASONS FOR GRANTING THE WRIT

This Petition presents an important question of federal law
which has not been, but should be, settled by this Court: Are the
cost-shifting provisions of Rule 68 abrogated by an underlying
statute that provides separate criteria for the recovery of costs?

I.

THE NINTH CIRCUIT’S DECISION FRUSTRATES
THE PURPOSE OF RULE 68 AND UNDERMINES
THIS COURT’S HOLDING IN MAREE V. CHESNY.

The Ninth Circuit’s holding renders Rule 68 completely
inoperative since there could never be a situation where a
defendant would be able to recover costs, including attorney
fees, under Rule 68 where the defendant was not already
entitled to costs and fees under Section 1 13(b) of the Clean Air
Act. If this Court allows the Ninth Circuit’s ruling to stand,
Clean Air Act defendants will have no incentive to make Offers
of Judgment and plaintiffs will have no incentive to accept such
offers.

Federal Rule of Civil Procedure 68 provides:

At any time more than 10 days before the
trial begins, a party defending against a
claim may serve upon the adverse party an
offer to allow judgment to be taken against
the defending party for the money or
property or to the effect specified in the
offer, with costs then accrued.... If the
judgment finally obtained by the offeree is
not more favorable than the offer, the offeree
must pay the costs incurred after the making
of the offer.

The Federal Rules of Civil Procedure have “the force of a
federal statute.” Sibbach v. Wilson & Co.,312 U.S. 1, 13 (1941).
When construing the interrelationship between two statutory
provisions, courts must give the statutes a sensible reading that
avoids redundancy or surplusage. Gustafson v. Alloyd Co., __
U.S. __, 115 S. Ct. 1061, 1065 (1995). The Ninth Circuit’s
analysis, however, completely undermines this Court’s holding
in Marek and robs Rule 68 of any independent operative force.

“The plain purpose of Rule 68 is to encourage settlement
and avoid litigation.” Marek, 473 U.S. at 4. See also Delta Air
Lines, Inc. v. August, 450 U.S. 346, 352 (1981). Rule 68
“prompts both parties to a suit to evaluate the risks and costs of
litigation, and to balance them against the likelihood of success
upon trial on the merits.” Marek, 473 U.S. at 4. “Application of
Rule 68 will serve as a disincentive for the plaintiff’s attorney to
continue litigation after the defendant makes a settlement
offer” and forces plaintiffs and their attorneys to “think very
hard about whether continued litigation is worthwhile.” Jd. at
10-11.A plaintiff who rejects an offer of judgment “assume(s]
the risk that the outcome of the case will be less favorable than
the offer, on pain of having to pay the costs subsequently
incurred by the offeror.” Gay v. Waiters’ and Dairy Lunchmen’s
Union Local 30, 86 F.R.D. 500, 502 (N.D. Cal. 1980).

This case represents the type of litigation practices Rule 68
was designed to prevent. From the outset of this litigation,
Justice Department attorneys inflated the value on their case
against Trident. In an effort to extract a“piece” out of Trident’s
“deep pockets,” Respondent demanded that Trident reach a
settlement ten times above the national average for similar
cases. Respondent justified their settlement demands to
Trident based upon the costsTrident would incur to litigate the
case through trial. Trident responded by serving Offers of
Judgments on the United States to encourage a serious

i aia

9

evaluation of the risk and costs of litigation and to balance them
against the likelihood of success at trial. Respondent rejected
each of these offers and ignored the advice of its proposed
mediator, thereby pushing the case to acostly and unnecessary
trial. Application of Rule 68 to this case will encourage
reasonable settlements and deter unnecessary litigation by
holding the Respondent to the consequence of its actions.

Il.

TRIDENT’S ATTORNEY FEES ARE “PROPERLY
AWARDABLE” UNDER MAREK.

Although Rule 68 explicitly shifts costs to the plaintiff, the
rule does not specify which litigation expenses are cognizable
as “costs.” In Marek, this Court considered for the first time
whether attorney fees were subject to cost-shifting in a civil
rights action brought under 42 U.S.C. § 1983. After evaluating
the purpose of Rule 68, this Court held that the term “costs”
encompasses “all costs properly awardable under the relevant
substantive statute .. .” Marek, 473 U.S. at 9-10. Where the
underlying statute includes attorney fees as recoverable costs,
such fees are subject to the cost-shifting provisions of Rule 68.

In holding that Trident could not recover attorney fees
under Rule 68, the Ninth Circuit concluded that, in Clean Air
Act cases, attorney fees are only “properly awardable” where
the defendant satisfied the substantive requirements of Section
113(b). Because Respondent had not been sufficiently
“unreasonable” to warrant an award of attorney fees under
Section 113(b), the Ninth Circuit concluded that Trident could
not recover its attorney fees under Rule 68.°

6. The Ninth Circuit's analysis was in accord with the First Circuit's
holding in Crossman v. Marcoccio, 806 F.2d 329 (1st Cir. 1986), cert. denied,
(Cont'd)

10

Throughout the Clean Air Act, costs are defined in the
following manner: “costs of litigation (including reasonable
attorney and expert witness fees).” 42 U.S.C. §§ 300j-8(d),
7413(b), 7413(d)(5)(B), 7524(c)(6), 7604(d), 7607(f),
7622(b)(2)(B). Because Congress expressly included
attorney’s fees as“costs of litigation” awardable in a CleanAir
Act suit, “such fees are subject to the cost-shifting provision of
Rule 68.” Marek, 473 U.S. at 9. The Ninth Circuit therefore
erred in affirming the district court’s denial of Trident’s motion
for attorney fees.

(Cont'd)

481 U.S. 1029 (1987), a civil rights case in which the Court held that attorney
fees were not subject to Rule 68 unless the substantive requirements of the
underlying statute were satisfied. The Court reasoned that since a plaintiff's
action must be “frivolous, unreasonable or without foundation” to warrant
attorney fees under 42 U.S.C. § 1988, such fees could not be awarded under
Rule 68 unless that same standard was satisfied. Jd. at 333. Similar holdings
have also been reached by the Fourth Circuit in Sheppard v. Riverview
Nursing Center, Inc., 88 F.3d 1332 (4th Cir. 1996), the Sixth Circuit in
Hopper v. Euclid Manor Nursing Home, 867 F.2d 291, 296 (6th Cir. 1989),
and by the Eighth Circuit in O’Brien v. City of Greers Ferry, 878 F.2d 1115,
1120 (8th Cir. 1989).

11

CONCLUSION

For these reasons a writ of certiorari should issue to review
the judgment and Opinion of the Ninth Circuit.

Respectfully submitted,

JOSEPHT. PLESHA
Counsel of Record

ROBERT D. NELSON

5303 Shilshole Avenue N.W.
Seattle, Washington 98107
(206) 783-3818

MATTHEW P. BERGMAN
LAW OFFICES OF

JAMES D. BURNS, PS.

2200 Fourth Avenue

Seattle, Washington 98121-2087
(206) 448-2200

Attorneys for Petitioner

la

APPENDIX A — OPINION OF THE UNITED STATES
COURT OF APPEALS FOR THE NINTH CIRCUIT
FILED AUGUST 7, 1996

UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT

Nos. 94-35989
95-35074

D.C. No. CV 92-1025-CRD

UNITED STATES OF AMERICA,
Plaintiff-Appellee-Cross-Appellant,
v.
TRIDENT SEAFOODS CORPORATION,
Defendant-Appellant-Cross-Appellee.

Appeals from the United States District Court for the Western
District of Washington
Carolyn R. Dimmick, District Judge, Presiding

Argued and Submitted
April 10, 1996 — Seattle, Washington

Filed August 7, 1996

Before: Eugene A. Wright, Harry Pregerson and A. Wallace
Tashima, Circuit Judges.

Opinion by Judge Tashima

2a
Appendix A
OPINION

COUNSEL

Lois J. Schiffer, Assistant Attorney General, Lisa E. Jones,
United States Department of Justice, Washington, D.C., for the
plaintiff-appellee-cross-appellant.

Ralph H. Palumbo, Heller, Ehrman, White & McAuliffe,
Seattle, Washington, for the defendant-appellant-cross-
appellee.

Daniel T. Fitzpatrick, Pacific Legal Foundation, Sacramento,
California, for the amicus curiae.

TASHIMA, Circuit Judge:

The United States brought an action against Trident
Seafoods Corporation (Trident) for violating the Clean Air Act.
Trident made an offer of judgment before trial, which the
United States rejected. Because the offer of judgment exceeded
the final judgment, Trident moved for an award of attorneys’
fees and costs pursuant to Fed. R. Civ. P. 68. The district court
denied Trident an award of fees, but granted an award of costs.
Trident appeals the order denying fees, and the United States
cross-appeals the order awarding costs. We affirm.

BACKGROUND

Trident is a seafood processing corporation. In May 1988,
the company purchased and began to renovate an abandoned
fish cannery in Anacortes, Washington. To remove asbestos
insulation from the facility, Trident hired James Hinton, a

3a
Appendix A

general contractor. He in turn hired a subcontractor, Thomas
Stakkeland, who removed over five tons of asbestos during five
days in August and September 1988. Stakkeland, who was not
certified at the time to remove asbestos, used his eleven-year-
old son and a person with no prior experience in asbestos
removal to assist in the clean-up. After the clean-up was
supposedly completed, at least five bags of asbestos were left at
the facility.

On September 26, 1988, an asbestos inspector for a state
agency, the Northwest Air Pollution Control Authority
(NWAPCA), learned of the asbedstos removal and inspected
the facility. During the inspection, he removed samples of
suspected asbestos for analysis. The results showed that all
samples contained more than one percent asbestos.

On September 30, 1988, Trident notified the government
of its intent to remove the asbestos. On October 5, 1988, the five
bags of asbestos left by Stakkeland were removed from the
Anacortes facility. The inspector also returned and removed
additional samples from the facility, which again tested positive
for asbestos.

Trident eventually hired a new asbestos contractor to
remove the remaining asbestos at the Anacortes facility.
Twenty-five bags were removed on October 14, 1988.
NWAPCA cited Trident for failing to provide advance written
notice of the planned asbestos abatement. As a result, Trident
paid a $250 fine to the State of Washington.

The Environmental Protection Agency (EPA) also learned
of the asbestos abatement of the Ancortes facility. The Clean
Air Act authorizes the EPA to develop National Emission

4a
Appendix A

Standards for Hazardous Air Pollutants (NESHAP). 42 U.S.C.
§§ 7412(c) and 7414(a) (1988).' The asbestos NESHAP
provides notice requirements and work practice standards that
must be met when renovating or demolishing a facility that
contains asbestos. 40 C.F.R. pt. 61, subpt. m (1988). A violation
of NESHAP constitutes a violation of the Act. 42 U.S.C.
§§ 7412(c) and (e) (1988).

In August 1989, the EPA served Trident with a request for
information regarding the abatement of asbestos at the
Anacortes facility. Trident responded that same month. Nearly
three years later, on April 8, 1992, the United States Department
of Justice (DOJ) notified Trident that the EPA had referred the
asbestos abatement matter to the DOJ, which intended to file an
action against Trident for violations of § 7413(b) of the Clean
Air Act, 42 U.S.C. § 7413(b). The DOJ explained that its
purpose in notifying Trident was to give the company an
opportunity to settle the matter before it filed a complaint.

According to Trident, settlement negotiations took place in
April 1992, during which the DOJ stated that it was pursuing the
action because “Trident has deep pockets” and because the
United States wanted “a piece” of $30 million Trident earned in
sales the previous year. The government contended that Trident
would likely incur more than $346,000 in litigation expenses
and risk a liability judgment of more than $3 million, if the
company proceeded to trial. The government, therefore,
offered to settle the action for $346,886. Trident rejected the
offer. Its research indicated that the average settlement in 1992
for alleged violations of NESHAP was between $20,000 and
$35,000.

1. Because this action arose in 1988, the 1988 versions of the Clean
Air Act and related regulations govern these proceedings.

Sa
Appendix A

On June 29, 1992, the DOJ filed an action on behaif of the
United States against Trident. The complaint alleged one notice
violation and four work practice violations of the asbestos
NESHAP as aresult of the asbestos abatement at the Anacortes
facility. Stakkeland and Hinton were named as individual
defendants.

During discovery, the government noticed depositions of
Trident’s President and Vice President to take place during the
Christmas holidays. These depositions were rescheduled,
however, when the trial date was continued. The government
also caused Trident employees and officers to be served at their
homes by United States Marshals, even though Trident’s in-
house counsel agreed to accept trial subopenas on behalf of all
company employees.

On May 3, 1993, Trident served the government with an
offer of judgment pursuant to Fed. R. Civ. P. 68. The offer
included acivil penalty of $30,000, as well as aconsent decree
to; (1) conduct a survey of all Trident vessels and shore
facilities; (2) institute a company-wide asbestos control
program; and (3) expend at least $100,000 on asbestos
abatement within two years. The government rejected the offer
on May 19, 1993.

On July 3, 1993, Trident served the government with a
superseding Rule 68 offer of judgment, which was identical to
the previous offer, except that it increased the civil penalty to
$50,000. The government again rejected the offer.

On July 22, 1993, the district court granted summary
judgment in the government's favor on the claim that Trident
violated the NESHAP notice requirement by failing to provide

6a
Appendix A

advance written notice to the EPA of its intent to remove
asbestos.

Shortly before trial, the government made a settlement
demand in the amount of $125,000, which Trident rejected. The
trial, which began in August 1993, resulted in a jury verdict in
favor of Trident on all four charges of work practice violations.
The district court assessed a penalty for the NESHAP notice
violation in the amount of $65,000, finding that the violation
was continuous with mitigating factors.”

Trident moved for an award of attorney’s fees and costs
pursuant to (1) Rule 68, (2) the Equal Access to Justice Act
(EAJA), and (3) the Clean Air Act. The court denied the motion
for attorney’s fees, but granted the motion for statutory costs
pursuant tothe EAJA.

Trident appealed the $65,000 penalty and we reversed,
finding that the violation was singular rather than continuous.
United States v. Trident Seafoods Corp., 60 F.3d 556, 557 (9th
Cir. 1995). We remanded the action and directed the district
court to impose a new penalty not to exceed $25,000. On
remand, the district court entered judgment imposing a penalty
of $25,000, less $250 already paid.

Trident now appeals the order denying attorneys’ fees. Ina
consolidated appeal, the government seeks review of the order
awarding costs. We have jurisdiction over these timely appeals
under 28 U.S.C. § 1291, and we affirm.

2. Smaller penalties were also assessed against Hinton ($2,500) and
Stakkeland ($5,000).

7a
Appendix A
DISCUSSION

I. ATTORNEYS’ FEES

Trident contends that is entitled to attorneys’ fees as part of
the costs awardable under Rule 68. We review the issue de
novo. Erdman v. Cochise County, 926 F.2d 877, 879 (9th Cir.
1991) (citing Simon v. Intercontinental Transp. (ICT) B.V., 882
F.2d 1435, 1439 (9th Cir. 1989)). Under Rule 68, if a plaintiff
rejects a defendant’s offer of judgment, and the judgment
finally obtained by plaintiff is not more favorable than the offer,
the plaintiff must pay the costs incurred subsequent to the
offer.? Liberty Mut. Ins. Co. v. EEOC, 691 F.2d 438, 442 (9th

3. Rule 68 provides, in relevant part:

At any time more than 10 days before the trial begins,
a party defending against a claim may serve upon the
adverse party an offer to allow judgment to be taken
against the defending party for the money or property
or to the effect specified in the offer, with costs then
accrued. If within 10 days after the service of the offer
the adverse party serves written notice that the offer is
accepted, either party may then file the offer and
notice of acceptance together with proof of service
thereof and thereupon the clerk shall enter judgment.
An offer not accepted shall be deemed withdrawn and
evidence thereof is not admissible except in a
proceeding to determine costs. If the judgment finally
obtained by the offeree is not more favorable than the
offer, the offeree must pay the costs incurred after the
making of the offer.

Fed. R. Civ. P. 68.

8a
Appendix A

Cir. 1982). The award is mandatory; Rule 68 leaves noroom for
the court’s discretion. Id.

The minimum value of Trident’s offer of judgment is
indisputably $50,000. On December 18, 1995, the district court
entered a final judgment imposing a penalty of 25,000 against
Trident. Thus, the offer of judgment exceeds the final judgment.

The term “costs” in Rule 68 is intended to refer to all costs
properly awardable under the relevant substantive statute.
Marek v. Chesny, 473 U.S. 1,9 (1985). Absent congressional
expressions to the contrary, where the underlying statute
defines “costs” to include attorney’s fees, such fees are to be
included as costs for purposes of Rule 68. Id. To determine the
interplay between Rule 68 and the Clean Air Act, the Court
must construe the “plain meaning” interpretation of both the
Rule and the statute in a manner that gives meaning to every
word in each. Id. at 3017.

The Clean Air Act indicates that Congress did not intend to
award attorneys’ fees unless the action was unreasonable. The
Act provides:

In the case of any action brought by the
Administrator under this subsection, the
court may award costs of litigation
(including reasonable attorney and expert
witness fees) to the party or parties against
whom such action was brought if the court
finds that such action was unreasonable.

42 U.S.C. § 7413(b). The only interpretation that gives meaning
to every word in both Rule 68 and the Clean Air Act is the

9a
Appendix A

“costs” in Rule 68 include attorneys’ fees only if the action was
unreasonable.

Trident contends that this interpretation frustrates the
purpose of Rule 68 by robbing it of any independent operative
force. According to Trident, if attorneys’ fees are awardable
under Rule 68 only if the action was unreasonable, there could
never be a case where attorney’s fees would be awarded under
Rule 68 when such fees were not already awardable under the
Clean Air Act. Rule 68 is not intended to expand the bases for
recovery of attorneys’ fees. Rather, the purpose of Rule 68 is to
encourage settlement by forcing the parties “to ‘think very
hard’ about whether continued litigation is worthwhile... .”
Marek, 473 U.S. at 5, 11. An interpretation of Rule 68 “costs”
that includes attorneys’ fees if the government brings an
unreasonable § 7413(b) action is likely to force the government
to scrutinize more closely the reasonableness of its action when
faced with an offer of judgment. If the government concludes
that the court is likely to find that the action is unreasonable, the
offer of judgment is more likely to be accepted.

Trident also cites numerous cases for the proposition that
the EAJA allows a party to recover attorneys’ fees under Rule
68 in a § 7413(b) action. See Thomas v. Peterson, 841 F.2d 332,
334 (9th Cir. 1988); Natural Resources Defense Council, Inc. v.
United States EPA, 703 F.2d 700 (3rd Cir. 1983);
Environmental Defense Fund, Inc. v. EPA, 716 F.2d 915, 918
(D.C. Cir. 1983); Gavette v. Office of Personnel Management,
808 F.2d 1456, 1464-65 (Fed. Cir. 1986). Each of these cases is
distinguishable, however, on the ground that it concerned
§ 2412(d)(1)(A) of the EAJA —a provision not relevant here
for the purpose of determining whether attorneys’ fees should
be awarded. The EAJA does not define “costs” to include

10a
Appendix A

attorneys’ fees. See 28 U.S.C. § 2412(a)(1). Fees instead are
defined separately. 28 U.S.C. §§ 2412(d)(1)(A) & (C)(2)(A).
Thus, because attorneys’ fees are not properly awardable as
“costs” under § 2412(d)(1)(A), they are not within the scope of
Rule 68. See Marek, 473 U.S. at 9 (Rule 68 “costs” include
attorneys’ fees only where “underlying statute defines ‘costs’
to include attorney’s fees”).

Accordingly, Trident is entitled to attorneys’ fees only if
the action was unreasonable.

A. Standard of Review

The district court found that the action against Trident was
reasonable. The standard of review to be applied to such a
finding under § 7413(b) is an issue of first impression. We
review a similar determination by the district court under the
EAJA for an abuse of discretion. Kali v. Bowen, 854 F.2d 329,
334 (9th Cir. 1988). The EAJA permits a prevailing party to
recover attorneys’ fees “unless the court finds that the position
of the United States was substantially justified.” 28 U.S.C.
§ 2412(d)(1)(A).

We apply an abuse of discretion standard to the court’s
determination under § 2412(d)(1)(A) whether or not the United
States’ position was “substantially justified” in accordance
with the Supreme Court’s decision in Pierce v. Underwood,
487 U.S. 552 (1988). In determining the proper standard to
be applied the Supreme Court noted in Pierce that
§ 2412(d)(1)(A) explicitly requires the district court to make
the determination whether the position was substantially
justified. Id. at 559. The Court reasoned, moreover, that
deference should be accorded to the district court because it is

i i NIC bi ace tases ali

lla
Appendix A

better positioned to decide the issue, given its full knowledge of
the factual setting and insights not conveyed by the record. Id.
Finally, the Court considered the impracticality of formulating
a rule of decision for determining whether the government’s
position was “substantially justified.” The Court concluded
that “the question whether the Government's litigating position
has been ‘substantially justified’ is ... a multifarious and
novel question, little susceptible, for the time being at least, of
useful generalization, and likely to profit from the experience
that an abuse-of-discretion rule will permit to develop.” Id. at
562.

The same considerations as in Pierce persuade us that an
abuse of discretion standard should be applied to a district
court’s determination of whether an action is unreasonable
under § 7413(b). As in Pierce, deference should be accorded to
the district court because § 7413(b) explicitly requires the
district-court to determine the issue. And again, as in Pierce, the
government's reasonableness in bringing the action is at issue.
Thus, the district court is better positioned to determine the
issue, and a formulaic rule is not likely to be helpful.

We find an abuse of discretion if the district court bases its
decision on an erroneous conclusion of law or on an irrational
interpretation of the evidence. Williams v. Bowen, 966 F.2d
1259, 1260-61 (9th Cir. 1991) (quoting Kali v. Bowen, 854 F.2d
329, 331 (9th Cir. 1988)).

B. The Law
We begin our review with an analysis of the applicable law.

Courts also have yet to articulate a test for determining whether
an action is unreasonable under § 7413(b). The district court

12a
Appendix A

applied the Ninth Circuit’s test for determining whether the
government’s position was “substantially justified” under the
EAJA. Applying this test was not erroneous because it requires
a finding that the action had a reasonable basis both in law and
fact. See Wilderness Soc’ y v. Babbitt, 5 F.3d 383, 388 (9th Cir.
1993) (“[w]here the Government can show that its case had a
reasonable basis both in law and fact, no award will be made”)
(quoting League of Women Voters v. FCC, 798 F.2d 1255, 1257
(9th Cir. 1986)). Section 7413(b) provides for an award of
attorneys’ fees “if the court finds that such action was
unreasonable.” 42 U.SC. § 7413(b). Thus, the district court
applied a test properly based on the plain language of the
Statute.

The district court concluded that the action was reasonable
based on “the facts of this case and given the clear dictates of
the law.” In so concluding, the court correctly reasoned that a
strict liability standard applied to NESHAP violations. See
United States v. Sealtite Corp., 739 F. Supp. 464, 468 (E.D. Ark
1990); United States v. Hugo Key and Son, Inc., 731 F. Supp.
1135, 1137 (D.R.I. 1989); United States v. Ben’s Truck and
Equip. Inc., 25 Env’t Rep. Cas. (BNA) 1295, 1298 (E.D. Cal.
1986); see also H.R. Rep. No. 294, 95th Cong., Ist Sess. 70
(1977), reprinted in 1977 U.S.C.C.A.N. 1077, 1148 (“[P]ersons
who own or operate pollution sources in violation of . . . health
regulations must be held strictly accountable. . . . Thus, the
committee believes that the remedial and deterrent purposes of
the civil penalty provision would be better served by not
limiting its application to ‘knowing’ violations.”) Thus, given
the governing law, the district court correctly concluded that the
action had a reasonable legal basis.‘

4. Another potential issue of first impression is whether the
_ government's conduct prior to filing the action should also be considered in

(Cont'd)

13a
Appendix A
C. The Evidence

The district court also based its decision on a rational
interpretation of the evidence. In finding that the action was
reasonable, the court considered the government’s manner of
pursuing the action. For example, the court noted the
government’s ten-month delay in notifying Trident of the
NESHAP violations and its nearly four-year delay in
prosecuting the action. The court also noted the government’s
“excessive” litigation tactics and that its settlement position
exceeded the average settlement in a Clean Air Act case by ten
times. Analysis of the government’s conduct caused the court to
remark that it could “well understand Trident’s frustration with
the Government’s pursuit of this case and its failure to settle.”

Trident’s methods for asbestos abatement were
undoubtedly inadequate. The undisputed facts show that
Trident failed to provide advance written notice to the EPA of
the planned asbestos abatement. It is also undisputed that, after
the abatement was supposedly completed, bags of asbestos still
remained at the Ancortes facility; samples taken from the
facility still tested positive for asbestos; and Trident ultimately
hired new contractors to complete the clean-up. Thus, although
the government may not deserve commendation for the manner
in which the action was maintained, its legal and factual
foundation cannot reasonably be disputed. Therefore, the

(Cont'd)

determining if the action is reasonable. We need not reach that question here,
however, because the district court explicitly considered the government's
pre-filing conduct in finding that the action was reasonable. Thus, there is no
issue whether failure to consider the government’s conduct prior to filing the
action resulted in an erroneous application of the law.

l4a
Appendix A

district court’s finding that the action was reasonable should not
be disturbed. See Arizona v. Thomas, 824 F.2d 745, 749 (9th
Cir. 1987) (courts have been “careful to defer to EPA’s choice of
methods to carry out its ‘difficult and complex job’ so long as
that choice is reasonable and consistent with the Clean Air
Act”) (quoting Connecticut Fund for Env’t, Inc. v. EPA, 672
F.2d 998, 1006 (2nd Cir.), cert. denied, 103 S. Ct. 445 (1982)).

II. COSTS

The district court awarded Trident its statutory costs as the
prevailing party pursuant to § 2412(a)(1) of the EAJA, with
provides in relevant part:

Except as otherwise specifically provided
by statute, a judgment for costs, as
enumerated in section 1920 of this title, but
not including the fees and expenses of
attorneys, may be awarded to the prevailing
party in any civil action brought by or
against the United States or any agency...
of the United States . . . in any court having
jurisdiction of such action.

28 U.S.C. § 2412(a)(1). The United States contends that this
provision of the EAJA is preempted by § 7413(b) of the Clean
Air Act, which permits an award of costs only if the district
court finds that the action was unreasonable. According to the
government, the Clean Air Act provides the sole basis for an
award of costs because the EAJA is displaced where “otherwise
specifically provided by statute.” 28 U.S.C. § 2412(a)(1).

We review questions of statutory construction de novo,
based upon the following guidelines:

15a
Appendix A

First, if the statutory language is clear, we need look no
further than that language itself in determining the meaning of
the statute. Certainly that is true if there is no clearly expressed
congressional intent to the contrary. Second, to the extent that
statutes can be harmonized, they should be, but in case of an
irreconcilable inconsistency between them the later and more
specific statute usually controls the earlier and more general
one. Finally, Congress must be presumed to have known of its
former legislation and to have passed new laws in view of the
provisions of the legislation already enacted. Hellon & Assoc.,
Inc. v. Phoenix Resort Corp., 958 F.2d 295, 297 (9th Cir. 1992)
(citations and quotations omitted).

We begin our analysis with the plain language of Clean Air
Act § 7413(b) and EAJA § 2412(a)(1). Hellon; Pacific Mut.
Life Ins. Co. v. American Guar. Life Ins. Co., 722 F.2d 1498,
1500 (9th Cir. 1984) (“primary rule is to ascertain and give
effect to the plain meaning of the language used”) (citing
Hughes Air Corp. v. Public Util. Comm'n, 644 F.2d 1334, 1337
(9th Cir. 1981)). According to the EAJA’s plain language, costs
are recoverable for the prevailing party in all actions against the
United States, unless “otherwise specifically provided by
statute.” 28 U.S.C. § 2412(a)(1). The Clean Air Act’s plain
language provides that a party defending against the United
States in an action under the Clean Air Act may recover costs if
the government’s action is unreasonable. 42 U.S.C. § 7413(b).
Whether these statutes provide alternative or mutually
exclusive bases for costs awards is not made clear by their plain
words. We are, therefore, unable to end our analysis here.

The next step is to determine whether the statutes may be
read harmoniously. Hellon, 958 F.2d at 297; see also Pacific
Mut., 722 F.2d at 1500 (“The words of a statute must be

16a
Appendix A

construed in context and the statutes must be harmonized, both
internally and with each other to the extent possible.”) These
statutes may be harmonized if they are interpreted to provide
independent bases for the recovery of costs. Thus, a defendant
may recover costs (including attorney and expert witness fees)
under § 7413(b), if the government’s action was unreasonable,
whether or not the defendant prevails. This interpretation is not
new. See Pierce, 487 U.S. at 569 (“Conceivably, the
Government could take a position that is not substantially
justified, yet win; even more likely, it could take a position that
is substantially justified, yet lose.”)

In contrast, a prevailing plaintiff or defendant may recover
costs (but no attorney or expert witness fees) under the EAJA,
whether or not the action was reasonable, unless costs are
specifically precluded by another statute. See SEC v. Kaufman,
835 F. Supp. 157, 159 (S.D.N.Y. 1993) (“Costs are available
under EAJA § 2412(a)(1) only when not specifically precluded
by another statute.”) (denying costs under EAJA in action
brought under Securities Exchange Act of 1934, which
provides that “[n]Jo costs shall be assessed for or against the
Commission in any proceeding under this chapter” (15 U.S.C.
§ 78aa)); see also Tulalip Tribes v. FERC, 749 F.2d 1367 (9th
Cir. 1984) (denying costs under EAJA in action brought under
Federal Power Act, which provides that “no costs shall be
assessed against the commission in any judicial proceeding
under this chapter.” (16 U.S.C. § 825p)), cert. denied, 474 U.S.
900 (1985). The more specific statute barring costs awards
creates an irreconcilable inconsistency and thus trumps the
more general EAJA. See Hellon, 958 F.2d at 297. Section
7413(b) does not specifically preclude costs; it simply provides
that costs may be awarded if the court finds that the action was
unreasonable. Thus, there is no irreconcilable inconsistency.

17a
Appendix A

The government contends that the two statutes are not
intended to be read harmoniously. Specifically, the government
argues that § 2412(d)(1)(A)’s exception clause, “[e]xcept as
otherwise specifically provided by statute,” indicates that
EAJA’s cost-shifting provision is intended only as a “gap-
filler”; therefore, it should not be applied here because the
Clean Air Act’s more restrictive cost-shifting provision already
applies.

However, the purpose of the EAJA is to “reduce the
deterrents and disparity” in contesting government action. H.R.
Rep. No. 96-1418, 96th Cong., 2nd Sess. 6 (1980), reprinted in
1980 U.S.C.C.A.N. 4984. An interpretation of the EAJA that
permits costs awards in actions under the Clean Air Act only if
the government was unreasonable undermines the EAJA’s
purpose. If a private party is not assured of recovering its costs
even when it prevails in an action against the government, its
incentive to adjudicate its rights is likely to be deterred by the
perception that it is more practical to endure an injustice than
contest it.

An analogous provision in the EAJA also belies any
congressional intent to award costs only if the government was
unreasonable, regardless of whether the private litigant
prevails. The EAJA’s provision for shifting attorneys’ fees
(Section 2412(d)(1)(A)) begins with the identical exception
clause “[e]xcept as otherwise specifically provided by statute.”
To determine the purpose of this exception clause, several
Circuits have looked to the provision’s legislative history.° See

5. Section 2412(d)(1)(A) states:

Except as otherwise specifically provided by statute,

acourt shall award to a prevailing party other than the
(Cont'd)

18a
Appendix A

Gavette, 808 F.2d at 1464); Environmental Defense Fund, Inc.,
716 F.2d at 917-19; United States v. 329.73 Acres of Land, 704
F.2d 800, 805-06 (5th Cir. 1983); Natural Resources Defense
Council, 703 F.2d at 704-06. A House Report on the EAJA
states:

[SJection [2412(d)(1)(A)] is not intended to
replace or supercede any existing fee-
shifting statutes such as the Freedom of
Information Act, the Civil Rights Acts, and
the Voting Rights Act in which Congress has
indicated a specific intent to encourage
vigorous enforcement, or to alter the
standards or the case law governing those
Acts. It is intended to apply only to cases
(other than tort cases) where fee awards
against the government are not already
authorized.

H.R. Rep. No. 96-1418, 96th Cong., 2nd Sess. 189 (1980),
reprinted in 1980 U.S.C.C.A.N. at 4997.

Given the purpose of the EAJA, there is no reason not to

(Cont'd)

United States fees and other expenses, in addition to
any costs awarded pursuant to subsection (a),
incurred by that party in any civil action (other than
cases sounding in tort). . . unless the court finds that
the position of the United States was substantially
justified or that special circumstances make an award
unjust.

28 U.S.C. 2412(d)(1)(A).

19a
Appendix A

give the exception clause in the EAJA’s cost-shifting provision
the same meaning as in its free-shifting provision. Neither the
legislative history nor the language of the EAJA justifies an
interpretation of the EAJA that expands the bases for recovery
of attorneys’ fees but restricts the availability of costs awards.
The Clean Air Act and the EAJA may be read harmoniously if
they are interpreted to provide alternative bases for the
recovery of costs. Under this construction, the exception clause
in the EAJA’s cost-shifting provision precludes application of
the statute only if another statute allows costs even if the litigant
does not prevail, or specifically bars costs awards, thus creating
an irreconcilable conflict.

We finally observe that “Congress must be presumed to
have known of its former legislation and to have passed new
laws in view of the provisions of the legislation already
enacted.” Hellon, 958 F.2d at 297. Since Congress waived the
United States’ immunity to liability for costs awards long
before § 7413(b) was enacted in its present form, Congress is
presumed to have been aware that costs were already
recoverable for prevailing parties in actions against the
government when it provided that the government’s
unreasonableness was a basis for recovery in actions under the
Clean Air Act. Id. Yet, the Clean Air Act does not state that costs
are available only if the Government was unreasonable, nor
does it state that costs may not be recovered unless the
Government was unreasonable. Rather, the Clean Air Act
provides that “the court may award costs. . . if the court finds
that such action was unreasonable.” Thus, nothing in the
language indicates an intent to preclude application of the
previously enacted EAJA.

20a
Appendix A

Ill. SOVEREIGN IMMUNITY

The government argues that the Clean Air Act provides a
narrow waiver of sovereign immunity which governs the award
of costs in this action. Waivers of immunity must be strictly
construed in favor of the sovereign. Ruckelshaus v. Sierra Club,
463 U.S. 680, 685-86 (1983); United States Dep’t of Energy v.
Ohio, 503 U.S. 607, 615 (1992); Ardestani v. I.N.S., 502 U.S.
126, 137 (1991). They must not be “enlarged beyond what the
language requires.” Ruckelshaus, 463 U.S. at 686. “Neither,
however, should we assume to narrow the waiver that Congress
intended.” United States v. Idaho, ex rel. Director, Idaho Dep’t
of Water Resources, 113 S. Ct. 1893, 1896 (1993) (quoting
Smith v. United States, 507 U.S. 197, 203 (1993)).

This argument merely reiterates the government’s
argument that the Clean Air Act’s more limited waiver should
trump the general waiver of the EAJA, given the latter’s
exception clause. However, here, as explained above, Congress
has left no doubt that it intended to waive the government’s
iramunity to costs awards. On this basis we have concluded that
Congress intended that the costs provision of the EAJA apply to
§ 7413(b) actions. Therefore, the district court did not err in
taxing costs against the government.

AFFIRMED.

2la

APPENDIX B — ORDER OF THE UNITED STATES
DISTRICT COURT FOR THE WESTERN DISTRICT OF
WASHINGTON AT SEATTLE FILED AUGUST 2, 1994

UNITED STATES DISTRICT COURT WESTERN
DISTRICT OFWASHINGTON
AT SEATTLE

No. C92-1025D

UNITED STATES OFAMERICA,
Plaintiff,

Vv.

TRIDENT SEAFOODS CORPORATION JAMES HINTON,
andTOM STAKKELAND,

Defendants.

ORDER DENYING TRIDENT’S MOTION
FORATTORNEY’S FEES

THIS MATTER is before the Court on two motions of
defendant Trident Seafoods Corporation (“Trident”) for costs
and attorneys’ fees pursuant to (1) Fed. R. Civ. P. 68 (offer of
judgment) for costs incurred after May 3, 1993; and (2) to the
Equal Access to Justice Act (EAJA) and the Clean Air Act.
After full consideration of the briefs and declarations filed by
counsel, the Court denies Trident’s motions as unsupported by
law and fact under the circumstances of this case.

This case has already had a rather protracted history before
this Court. In the spring of 1993, the United States moved for
summary judgment on all of its claims against Trident for

22a
Appendix B

violation of the National Emission Standards for Hazardous Air
Pollutants (NESHAP), 40C.F.R. pt. 61, subpt. m, in its removal
of asbestos from its facilities. NESHAP was promulgated
pursuant to the Clean Air Act (42 U.S.C. §§ 7412(c) and
7414(a)). Trident countermoved for summary judgment on all
but one claim. On July 22, 1993, the Court granted summary
judgment in favor of the United States on one of its claims —
failure to follow the written notice requirement — and denied
the remainder as involving factual issues. Trident’s motion was
denied.

The case was tried to a jury in August 1993, with the jury
returning a verdict in favor of defendants. Subsequently, the
Court assessed a NESHAP penalty against Trident for the
failure to follow the NESHAP notice requirement in the amount
of $65,000.

FEDERAL RULE OF CIVIL PROCEDURE 68

Trident argues for application of Fed. R. Civ. P. 68 to its
offer of judgment on May 3, 1993.'

1. Rule 68 reads as follows:

At any time more than 10 days before the trial begins,
a party defending against a claim may serve upon the
adverse party an offer to allow judgment to be taken
against the defending party for the money or property
or to the effects specified in the offer, with costs then
accrued... .If the judgment finally obtained by the
offeree is not more favorable than the offer, the
offeree must pay the costs incurred after the making
of the offer.

23a
Appendix B

On May 3, 1993, Trident made an offer of judgment to the
United States which included a $30,000 civil penalty. In
addition, Trident offered a consent decree to (a) institute a
company-wide asbestos control program; (b) conduct an
asbestos survey of all vessels and shore facilities; and (c)
expend at east $100,000 on asbestos abatement. Trident valued
this offer at $271,181.25. On July 2, 1993, Trident offered
$50,000 in civil penalty and offered a consent decree essentially
the same as the May 3 offer. Trident valued this offer at
$291,181.25. The government accepted neither offer.

Trident, therefore, contends that its offers exceeded the
amount plaintiff ultimately gained, and thus, Trident is entitled
to attorneys’ fees and costs. Trident relies on the provision in
the Equal Access to Justice Act (28 U.S.C. § 2412(b)) stating
that the United States is liable to the same extent as any other
party under common law or statute, to apply Rule 68 to the
United States.

The United States opposes the Rule 68 motion on three
grounds:

1. Waiver of sovereign immunity should be read narrowly
and does not apply where a more specific waiver exists;

2. Rule 68 does not fall under common law or statute as
required in the EAJA; and

3. Trident’s offer of judgment was vague and
unquantifiable.

Because the Clean Air Act at 42 U.S.C. 7413 limits an award of
attorneys’ fees or costs to an action brought by the

24a
Appendix B

Administrator which was “unreasonable”, the government
argues that Rule 68 was not intended to apply to cases in which
the United States was the plaintiff. A waiver of sovereign
immunity is narrowly construed in favor of the United States
and will not expanded beyond the statute’s language. Any
waiver of the National Government’s sovereign immunity must
be explicit. See United States v. Mitchell, 445 U.S. 535, 538-
539 (1980).

Waivers of immunity must be “construed
strictly in favor of the sovereign,” McMahon
v. United States, 342 U.S. 25, 27 (1951), and
not “[enlarged] ... beyond what the
language requires.” Eastern Transportation
Co. v. United States, 272 U.S. 675, 686
(1927).

Ruckelshaus v. Sierra Club, 463 U.S. 680, 685-86 (1983).

On its second point, the United States argues that the
provision in the EAJA that the “United States shall be liable. . .
to the same extent that any other party would be liable under the
common law or under the terms of any statute which
specifically provides for such an award” by its very terms, does
not apply toa Rule.

Trident cites to only one case in which a Rule 68 claim
against the United States was recognized. Washington v. United
States, 8 Cl. Ct. 693 (1985). The issue there was a motion to
extend the ten-day period for consideration of an offer of
settlement. The court declined to do so. There was no
discussion of whether or not Rule 68 applied to the United
States as a plaintiff.

25a
Appendix B

This Court found only one other case discussing Rule 68 in
conjunction with the United States’ rejection of an offer of
judgment. United States v. American Commercial Barge Line
Company, 988 F.2d 860 (8th Cir. 1993). In this admiralty case,
the court discussed Rule 68 with regard to a denial by the trial
court of prejudgment interest for the United States for the
period after the United States rejected an offer of judgment.
The Eight Circuit reversed and remanded, concluding that the
rejection of the offer would not eliminate prejudgment interest,
which is a part of damages in an admiralty action. There was no
discussion of Rule 68’s application to the United States.
Interestingly, the Eighth Circuit did note that Rule 68 only
provided for a reimbursement of costs, with costs limited to
such items as “filing fees or witness fees”. Jd. at 864.

Trident contends that its request for an award of attorneys’
fees in addition to costs is supported by Marek v. Chesny, 473
U.S. 1 (1985). The Merek court held that Rule 68 “costs”
included attorneys’ fees where the underlying civil rights
statute provided for attorneys’ fees for the prevailing party.
Merek, however, was not a case involving the United States, nor
was it a case brought under the Clean Air Act. The Clean Air
Act, under which this case was brought, does not provide for an
award of attorneys’ fees to the prevailing party. Rather, as noted
above, an award of attorneys’ fees requires unreasonable
conduct by the government. This will be discussed further in the
next section.

In its final argument, the government contends that with
the exception of the civil penalties, it was impossible to value
the two Trident offers. Most of the consent decree offers were
merely an agreement to do what Trident was required to do
under the law or had already undertaken to do. The value of this
offer to the United States was marginal.

26a
Appendix B

This Court concludes that Rule 68 (offer of judgment) does
not apply to the United States as the plaintiff in an action
brought under the Clean Air Act. The basis for awarding
attorneys’ fees has been laid out by Congress in the Clean Air
Act, and will not be expanded here.

EQUAL ACCESS TO JUSTICE ACT
AND CLEAN AIR ACT

On an alternative theory, Trident argues that it is entitled to
attorneys’ fees and costs pursuant to EAJA (28 U.S.C.
§ 2412(d)(1)(A)* or the Clean Air Act (42 U.S.C. § 413(b)°
These statutes provide for an award against the United States
where its position was not substantially justified (EAJA)or was
unreasonable (Clean Air Act). Trident insists that the
government was unreasonable in its notification (ten months
delay); its prosecution (nearly four years delay before filing

2. Except as otherwise specifically provided by statute, a court shall
award to a prevailing party other than the United States fees and other
expenses, in addition to any costs awarded pursuant to subsection (a),
incurred by that party in any civil action (other than cases sounding in tort),
including proceedings for judicial review of agency action, brought by or
against the United States in any court having jurisdiction of that action,
unless the court finds that the position of the United States was substantially
justified or that special circumstances make an award unjust.

3. In the case of any action brought by the Administrator under this
subsection, the court may award costs of litigation (including reasonable
attorney and expert witness fees) to the party or parties against whom such
action was brought if the court finds that such action was unreasonable.

42 U.S.C. § 7413(b).

27a
Appendix B

complaint); its litigation tactics (excessive discovery, etc.); and
its settlement position (approximately ten times higher than the
average Clean Air case).

This Court has concluded that the Clean Air Act applies
here, but the standard is essentially the same as for EAJA. See,
e.g., Commissioner, Immigration and Naturalization Service v.
Jean, 496 U.S. 154, 163 (1990) (purpose of EAJA to permit
challenge to “unreasonable governmental actions”). Where
“the Government can show that its case had a reasonable basis
both in law and fact, no award will be made.” Wilderness
Society v. Babbitt, 5 F.3d 383, 388 (9th Cir. 1993), quoting
League of Women Voters v. FCC, 798 F.2d 1255, 1257 (9th Cir.
1986). The Court can well understand Trident’s frustration with
the government’s pursuit of this case and its failure to settle.
The futility of trial is, of course, more readily determined after
trial than before. Trident also has had to pay a high penalty for
what were primarily the faults of others. But the law applies a
strict liability standard to violations of NESHAP, and Trident is
liable for the actions and inactions of the persons it hired to
remove asbestos. Under the facts of this case and given the clear
dictates of the law, the Court cannot conclude that the
government was unreasonable in going to trial.

Trident, as an alternative, requests its statutory costs
pursuant to EAJA (28 U.S.C. § 2412(a)). That section provides
for an award of costs to a prevailing party as set out in 28 U.S.C.
§ 1920. The government opposes on the grounds that the Clean
Air Act is the exclusive remedy here. This Court agrees that
where Congress has specifically addressed the award of
attorneys’ fees for unreasonable governmental action, that
remedy is exclusive. The Clean Air Act, however, is silent on
the issue of statutory fees to the prevailing party. The Court of

28a
Appendix B

Appeals for the District of Columbia has recognized that such
costs are routinely awarded against the government even when
the government’s position has been substantially justified.
Groce v. Burger, 763 F.2d 457, 458 n.4 (D.C. Cir. 1985). This
Court will thus permit the taxing of costs against the
government pursuant to 28 U.S.C. § 1920.

THEREFORE, Trident’s motions for award of attorneys’
fees is DENIED, but Trident will be awarded costs pursuant to
28 U.S.C. § 1920. 7

The Clerk of the Court is directed to send copies of this
Order to all counsel of record.

DATED this 1 day of August, 1994.

s/ Carolyn R. Dimmick
CAROLYN R. DIMMICK
United States District Judge

RO ae a Cath

29a
APPENDIX C — OFFER OF JUDGMENT OF THE
UNITED STATES DISTRICT COURT FOR THE

WESTERN DISTRICT OF WASHINGTON AT
SEATTLE DATED MAY 2, 1993

Honorable Caroiyn R. Dimmick
UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF WASHINGTON
AT SEATTLE
No. C92-1025

UNITED STATES OF AMERICA,
Plaintiff,
v.

TRIDENT SEAFOODS CORPORATION, JAMES HINTON,
TOM STAKKELAND,

Defendants.
OFFER OF JUDGMENT

TO: UNITED STATES OF AMERICA

AND: WILLIAM W. WESTERFIELD, III
Trial Attorney
Environmental Enforcement Section
Environment and Natural Resources Division
United States Department of Justice
1425 New York Avenue, N.W., Suite 10011
Washington, D.C. 20005

30a
Appendix C

Pursuant to Rule 68 of the Federal Rules of Civil
Procedure, Defendant Trident Seafoods hereby offers to allow
the following judgment to be taken against it in the above-
captioned cause:

I. Trident will pay a civil penalty in the amount of Thirty
Thousand Dollars ($30,000);

II. Trident will enter into a Consent Decree with the
United States obliging itself to do the following:

A. Institute a company-wide asbestos control
program identical to the control program set forth
in Section V. of the Consent Decree approved by
this Court in United States v. Farwest Fisheries,
Inc., et al.,No. C60-864D (W.D. Wash.), acopy of
which is attached hereto as Exhibit A.

B. Conduct an asbestos survey of all vessels and
shore facilities and develop a company-wide
asbestos abatement plan. A schedule and budget
for this program is attached hereto as Exhibit B.

C. Expend at least One Hundred Thousand Dollars
($100,000) on asbestos abatement within the two
years following entry of this Consent Decree.

The value of this Offer of Judgment is $271,181.25, inclusive of
Plaintiff’s costs. This Offer is made for the purpose specified in
Rule 68 and is not to be construed either as an admission that
Trident is liable in this action, or that the United States has
suffered any damage.

3la
Appendix C
DATED this 3rd day of May, 1993.

Respectfully submitted,

HELLER, EHRMAN, WHITE & McAULIFFE

Ralph H. Palumbo
Washington State Bar #4751
Matthew P. Bergman

: Bys/ Ralph H. Palumbo
Washington State Bar # 20894
:
j
:
:

32a
APPENDIX D — OFFER OF JUDGMENT OF THE
UNITED STATES DISTRICT COURT FOR THE
WESTERN DISTRICT OF WASHINGTON AT
SEATTLE DATED JULY 2, 1993

Honorable Carolyn R. Dimmick
UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF WASHINGTON
AT SEATTLE
No. C92-1025
UNITED STATES OF AMERICA,
Plaintiff,

Vv.

TRIDENT SEAFOODS CORPORATION, JAMES HINTON,
TOM STAKKELAND,

Defendants.
OFFER OF JUDGMENT

TO: UNITED STATES OF AMERICA

AND: WILLIAM W. WESTERFIELD, III
Trial Attorney
Environmental Enforcement Section
Environment and Natural Resources Division
United States Department of Justice
1425 New York Avenue, N.W., Suite 10011
Washington, D.C. 20005

33a
Appendix D

Pursuant to Rule 68 of the Federal Rules of Civil
Procedure, Defendant Trident Seafoods hereby offers to allow
the following judgment to be taken against it in the above-
captioned cause:

I. Trident will pay a civil penalty in the amount of Fifty
Thousand Dollars ($50,000);

Il. Trident will enter into a Consent Decree with the
United States obliging itself to do the following:

A. Institute a company-wide asbestos control
program identical to the control program set forth
in Section V. of the Consent Decree approved by
this Court in United States v. Farwest Fisheries,
Inc., et al.,No. C60-864D (W.D. Wash.), a copy of
which is attached hereto as Exhibit A.

B. Conduct an asbestos survey of all vessels and
shore facilities and develop a company-wide
asbestos abatement plan. A schedule and budget
for this program is attached hereto as Exhibit B.

C. Expend at least One Hundred Thousand Dollars
($100,000) on asbestos abatement within the two
years following entry of this Consent Decree.

The value of this Offer of Judgment is $291,181.25, inclusive of
Plaintiff’s costs. This Offer is made for the purpose specified in
Rule 68 and is not to be construed either as an admission that
Trident is liable in this action, or that the United States has
suffered any damage.

34a
Appendix D
DATED this 2nd day of July, 1993.
Respectfully submitted,

HELLER, EHRMAN, WHITE & McAULIFFE

Bys/ RalphH. Palumbo
Ralph H. Palumbo
Washington State Bar #4751
Matthew ?. Bergman
Washington State Bar # 20894
Robert D. Nelson

Washington State Bar # 19473

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386018_1750%3A1. Public record. Not legal advice.