Opposition Brief — Trident Seafoods Corp. v. United States

Supreme Court, U.S,

MD tes FS oo

No. 96-725

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In the Supreme Court of the Gnited States

OCTOBER TERM, 1996

TRIDENT SEAFOODS CORPORATION,

PETITIONER

U.

UNITED STATES OF AMERICA

ON PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

BRIEF FOR THE UNITED STATES IN OPPOSITION

WALTER DELLINGER

Acting Solicitor General

LOIS J. SCHIFFER

Assistant Attorney General

ANNE S. ALMY

LISA E. JONES

Attorneys

Department of Justice

Washington, D.C. 20530-0001

(202) 514-2217

QUESTION PRESENTED

Whether Fed. R. Civ. P. 68 operates to shift attor-

neys’ fees in an enforcement action reasonably

brought by the United States under Section 113 of the

Clean Air Act, 42 U.S.C. 7413.

(1)

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TABLE OF CONTENTS

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TABLE OF AUTHORITIES

Cases:

Marek v. Chesny, 473 U.S. 1 (1985) ...ccccccceccecsccecceee 6, 8

United States v. Idaho, 508 U.S. 1 | ARCA s

United States v. Nordic Village, Inc., 503 U.S. 30

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United States v. Trident Seafoods Corp., 60 F.3d

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Statutes, rule and regulation:

Clean Air Act, 42 U.S.C. 7401 et seq.:

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§ 112(e)(5), 42 U.S.C. 7412(e)(5) o...cecceseeccscessceeceees 2

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Equal Access to Justice Act:

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Jn the Supreme Court of the United States

OCTOBER TERM, 1996

No. 96-725

TRIDENT SEAFOODS CORPORATION,

PETITIONER

v.

UNITED STATES OF AMERICA

ON PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

BRIEF FOR THE UNITED STATES IN OPPOSITION

OPINIONS BELOW

The opinion of the court of appeals (Pet. App. la-

20a) is reported at 92 F.3d 855. The order of the dis-

trict court (Pet. App. 21a-28a) is unreported.

JURISDICTION

The judgment of the court of appeals was entered on

August 7, 1996. The petition for a writ of certiorari

was filed on November 5, 1996. The jurisdiction of

this Court is invoked under 28 U.S.C. 1254(1).

STATEMENT

1. The Clean Air Act (Act) requires the Environ-

mental Protection Agency (EPA) to prescribe Na-

(1)

2

tional Emission Standards for Hazardous Air Pollut-

ants (NESHAP) at levels providing an ample margin

of safety to protect public health. 42 U.S.C. 7412(c).

The EPA establishes reporting requirements for

owners and operators of emissions sources subject to

regulation under the Act. 42 U.S.C. 7414(a). Owners

and operators that intend to renovate a facility in-

volving the stripping or removal of certain asbestos

materials are required to provide the EPA with a

timely, advance, written notice of intent to renovate a

facility. 40 C.F.R. 61.145, 61.146. A violation of that

notice requirement is a violation of the Clean Air Act.

42 U.S.C. 7412(e)(5). Section 113 of the Act author-

izes the EPA to bring enforcement actions for civil

penalties and injunctive relief to remedy violations of

the Act. 42 U.S.C. 7413.

2. Petitioner is a seafood processing corporation

that, in May 1988, began renovating an abandoned fish

cannery in Anacortes, Washington. Pet. App. 2a. The

renovation included the removal of asbestos insula-

tion. Petitioner hired a general contractor, James

Hinton, who subcontracted with a friend, Thomas

Stakkeland, to conduct the work. Over the course of

five days in August and September 1988, Stakkeland,

who was not certified at the time to remove asbestos,

performed renovation work involving asbestos. Stak-

keland’s 11-year-old son, who had no prior experience

in asbestos removal, assisted in the work. After the

work was supposedly completed, at least five bags of

asbestos were left at the facility. Jd. at 2a-3a.

On September 26, 1988, an inspector for the state

regulatory agency, the Northwest Air Pollution Con-

trol Authority (NWAPCA), learned of the asbestos

removal. The state inspector subsequently inspected

the facility and removed samples of the suspected

3

asbestos for analysis. The analysis revealed that all

samples contained more than one percent asbestos.

NWAPCA collected further samples, all of which

tested positive for asbestos. On September 30, 1988,

petitioner notified the State of its intent to remove

asbestos from the Anacortes facility. In October,

1998, a consulting firm hired by petitioner disposed of

the five remaining bags of asbestos. Petitioner even-

tually hired a new asbestos contractor who, on Octo-

ber 14, 1988, removed an additional 25 bags of asbestos.

Pet. App. 3a. NWAPCA ultimately fined petitioner

$250 for failing to notify the State of the planned as-

bestos abatement. Jbid.

In August 1989, the EPA served petitioner with a

request for information regarding petitioner’s asbes-

- tos removal activities. In April 1992, the Department

of Justice informed petitioner that the asbestos re-

moval activities had been referred to it for enforce-

ment pursuant to Section 113 of the Clean Air Act, 42

U.S.C. 7413. The government also advised petitioner

that it had the opportunity to settle the matter before

the Department filed suit under Section 113. Pet.

App. 4a. Ensuing negotiations did not result in settle-

ment and, on June 29, 1992, the United States brought

an action under Section 113 against petitioner, Stak-

keland, and Hinton alleging one notice violation and

four work practice violations of the Act. Pet. App. 4a-

5a. On May 3, 1993, petitioner made an offer of judg-

ment under Fed. R. Civ. P. 68, which included a

$30,000 civil penalty and a consent decree agreeing to

various abatement-related activities. Pet. App. 5a.

On May 19, 1993, the United States rejected that

offer. On July 3, 1993, petitioner made a second offer

of judgment that was identical to the previous offer,

except that petitioner offered to pay a $50,000 civil

4

penalty. The United States also rejected that offer.

Ibid.

On July 22, 1998, the district court granted sum-

mary judgment in favor of the United States on the

claim that petitioner unlawfully failed to provide

notice of its asbestos removal, and the court set the

remaining four work practice claims for trial. Pet.

App. 5a-6a. Shortly before trial, the United States

made a settlement offer of $125,000, which petitioner

rejected. Jd. at 6a. After trial, the jury returned a

verdict in favor of petitioner on the work practice

violations. The district court assessed a $65,000 pen-

alty against petitioner for the notice violation. Peti-

tioner appealed that assessment, and the Ninth Cir-

cuit reversed.’ Ibid.; United States v. Trident Sea-

foods Corp., 60 F.3d 556, 557 (1995). On remand, the

district court imposed a penalty of $25,000 less the

$250 previously paid. Pet. App. 6a.

3. On January 24, 1994, petitioner moved for an

award of its costs and attorneys’ fees pursuant to (1)

Fed. R. Civ. P. 68% (2) the Equal Access to Justice

1 The court of appeals held that the district court erred in

finding that petitioner’s notice violation was continuous.

United States v. Trident Seafoods Corp., 60 F.3d 556, 559

(1995). The court remanded to the district court to impose a

fine of no more than the statutory maximum amount of $25,000

for a one-day violation of the Act. Ibid.

2 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,

5

Act (EAJA), 28 U.S.C. 2412(d)(1)(A)*s and (3) Section

113(b) of the Clean Air Act.* Pet. App. 21a. The dis-

trict court granted petitioner’s motion for costs, but

denied petitioner’s request for attorneys’ fees. Jd. at

21a-28a.

The court rejected petitioner’s contention that it

was entitled to an award of attorneys’ fees under

EAJA and the Clean Air Act because the government

was unreasonable in bringing suit. Pet. App. 26a-27a.

The court concluded that “({uJnder the facts of this

case and given the clear dictates of the law,” the

government was reasonable “in going to trial.” Jd. at

27a. The court also rejected petitioner’s claim that

Fed. R. Civ. P. 68 required an award of attorneys’

fees, because petitioner’s offer of judgment exceeded

either party may then file the offer and notice of accep-

tance 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 admissi-

ble except in a proceeding to determine costs. If the judg-

ment 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 (emphasis added).

3 28 U.S.C. 2412(d)(1)(A) provides, that, except as otherwise

specifically provided by statute, fees shall be awarded to a

prevailing party other than the United States in an action

brought by or against the United States “unless the court finds

that the position of the United States was substantially justified

or that special circumstances make an award unjust.”

4 Section 113(b) of the Act provides that “{iJn 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 government’s recovery at trial. Pet. App. 22a-26a.

The court reasoned that “Rule 68 * * * 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 Con-

gress in the Clean Air Act, and will not be expanded

here.” Pet. App. 26a.

Over the government’s objection, the district, court

awarded petitioner its costs under EAJA, 28 U.S.C.

2412(a), which permits a prevailing party to recover

the costs enumerated in 28 U.S.C. 1920. Pet. App.

27a-28a. Petitioner appealed the denial of attorneys’

fees, and the government appealed the award of costs.

Id. at 2a.

4. The court of appeals affirmed the district

court’s decision denying petitioner’s request for at-

torneys’ fees. Pet. App. 2a-14a.° The court of appeals

observed that, under this Court’s decision in Marek v.

Chesny, 473 U.S. 1 (1985), “[t]he term ‘costs’ in Rule

68 is intended to refer to all costs properly awardable

under the relevant substantive statute.” Pet. App. 8a.

Noting that “[t]he Clean Air Act indicates that

Congress did not intend to award attorneys’ fees

unless the action was unreasonable,” the court

concluded that “[t]he only interpretation that gives

meaning to every word in both Rule 68 and the Clean

Air Act is the ‘costs’ in Rule 68 include attorneys’

fees only if the action was unreasonable.” Jd. at 8a-9a.

5 The court of appeals also affirmed the district court’s

award of costs under EAJA. Pet. 14a-20a. The court of ap-

peals rejected the government’s contention that costs could not

be awarded against the government unless the government was

found to have been unreasonable under Section 113 of the Clean

Air Act. Pet. App. 17a-19a. That issue is not before the Court.

ae

The court found unpersuasive petitioner’s conten-

tion that limiting Rule 68 fee awards to only those

fees allowable under Section 113(b) would deprive

Rule 68 of “any independent operative force.” Pet.

App. 9a. The court explained that “Rule 68 is not in-

tended to expand the bases for recovery of attorneys’

fees.” Ibid. The court also reasoned that its inter-

pretation of Rule 68 would continue to “force the

government to scrutinize more closely the reason-

ableness of its action when faced with an offer of

judgment,” because “[i]f 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.” Ibid.

The court also upheld the district court’s finding

that the government was reasonable in bringing the

action against petitioner under the Clean Air Act.®

Pet. App. 12a-14a. After reviewing the evidence, the

court concluded that “although the government may

not deserve commendation for the manner in which

the action was maintained, its legal and factual foun-

dation cannot reasonably be disputed.” Jd. at 13a.

ARGUMENT

The court of appeals’ decision is correct and does

not conflict with any decision of this Court or any

other court of appeals. Further review is not war-

ranted.

The court of appeals correctly determined that in

an action brought by the government under Section

113 of the Clean Air Act, a defendant is not entitled to

® The court did not consider the reasonableness of the gov-

ernment’s conduct prior to filing the action. Pet. App. 12a n.4.

That question is not before the Court.

8

attorneys’ fees under Rule 68, unless that action is

unreasonable. This Court in Marek v. Chesny, 473

U.S. 1 (1985), held that “costs” subject to shifting

under Rule 68 include attorneys’ fees only “where the

underlying statute defines ‘costs’ to include attor-

ney’s fees.” 473 U.S. at 9. The Court explained that

“Rule 68 does not come with a definition of costs” but

“rather * * * incorporates the definition of costs

that otherwise applies to the case.” Jd. at 9-10 n.2.

Thus, Rule 68 shifts attorneys’ fees to the rejecting

offeree only if those fees are “properly awardable un-

der the relevant substantive statute.” Jd. at 9.

Petitioner contends that, because Section 113 de-

fines “costs” awardable under that Section to include

attorneys’ fees, “such fees are subject to the cost-

shifting provision of Rule 68.” Pet. 10 (quoting

Marek, 473 U.S. at 9). That argument, however, ig-

nores the express limitation in Section 113 that those

fees are awardable against the government only if the

government’s “action was unreasonable.” 42 U.S.C.

7413(b). That limited waiver of sovereign immunity is

strictly construed. See United States v. Idaho, 508

U.S. 1, 7 (1993); United States v. Nordic Village, Inc.,

503 U.S. 30, 34 (1992).

Petitioner concedes that the courts of appeals are

“in accord” that “attorney fees [a]Jre not subject to

Rule 68 unless the substantive requirements of the

underlying statute [aJre satisfied.” Pet. 9 n.6 (collect-

ing cases). Nor does petitioner challenge the court of

appeals’ ruling (Pet. App. 13a) that the government’s

action under Section 113 of the Clean Air Act “cannot

reasonably be disputed.” See Pet. 6 n.5. Accordingly,

the court of appeals was correct in concluding that

petitioner’s attorneys’ fees are not within the scope of

9

Rule 68, because those fees are not “properly award-

able” under Section 113.

Petitioner also argues (Pet. 7) that the court of

appeals’ decision “renders Rule 68 completely inop-

erative” and “frustrates” the settlement purposes of

Rule 68, because a Rule 68 defendant can never re-

cover attorneys’ fees unless the defendant is already

entitled to those fees under Section 113 of the Clean

Air Act. As the court of appeals explained, however,

when the government is faced with a Rule 68 offer of

judgment in an action under the Clean Air Act, it

must “scrutinize more closely the reasonableness of

its action” before declining an offer of judgment

before trial. Pet. App. 9a. Thus, Rule 68 does have

force in actions brought under Section 113 of the Act.

CONCLUSION

The petition for a writ of certiorari should be

denied.

Respectfully submitted.

WALTER DELLINGER

Acting Solicitor General

LOIS J. SCHIFFER

Assistant Attorney General

ANNE S. ALMY

LISA E. JONES

Attorneys

JANUARY 1997