Save San Francisco Bay Ass'n v. U.S. Dept. of the Interior

Full title: SAVE SAN FRANCISCO BAY ASSOCIATION, et al., Plaintiffs, v. UNITED STATES…

Court: United States District Court, E.D. California

Date published: Mar 29, 2006

CIV-F-97-6140 OWW/DLB, CIV-F-98-5261 OWW/DLB (E.D. Cal. Mar. 29, 2006)

Opinion

CIV-F-97-6140 OWW/DLB, CIV-F-98-5261 OWW/DLB.

March 29, 2006

MEMORANDUM DECISION AND ORDER RE ENVIRONMENTAL PLAINTIFFS' APPLICATION FOR FEES AND COSTS UNDER THE EQUAL ACCESS TO JUSTICE ACT, 28 U.S.C. 12(d)(1)(A) (DOC. 573)

OLIVER WANGER, District Judge

I. INTRODUCTION

The Bay Institute of San Francisco, Environmental Defense,

II. PROCEDURAL HISTORY

Plaintiffs provided notice of its intention to move for attorneys' fees and costs at the same time as they filed their memorandum in support of its motion. Doc. 573. Plaintiff initially filed five declarations in support of its motion. Doc. 574, Declaration of Antonio Rossmann; Doc. 575, Declaration of Trent Orr; Doc. 576, Declaration of Philip Atkins-Pattenson; Doc. 577, Declaration of Linda M Dardarian; Doc. 578 Declaration of Cynthia Koehler; Doc 579, Declaration of Jeremy L Friedman, all filed May 24, 2004. The Federal Defendants filed an opposition to this motion, see Defendants' Opposition, while San Luis Delta-Mendota Water Authority and Westlands Water District filed a limited opposition to the Environmental Plaintiff's fee request, Doc. 595, filed August 9, 2004. Plaintiff replied to Defendants' opposition, Doc. 602, filed November 4, 2004, attaching the supplemental declaration of Jeremy L. Friedman, Doc. 603.

In an effort to clarify the parties positions on these issues, environmental plaintiffs were asked at the hearing on the instant fee petition to submit a supplemental brief summarizing the record on this question. See Doc. 610. The federal defendants and the water authority plaintiffs filed responsive documents. See Docs. 611 613.

On October 24, 2005, the water authority plaintiffs moved for leave to file a supplemental complaint concerning the Interior's accounting of the 2004 water year. (Doc. 623, Motion; Doc. 634, Joinder.) The federal defendants and environmental plaintiffs opposed. (Docs. 629 and 630.) In their opposition, the federal defendants suggested that it might be inappropriate to rule on this fee petition if the court granted leave to file a supplemental complaint. However, at oral argument on the motion to supplement, all parties agreed that it is appropriate to resolve the instant fee petition, in part because it concerns claims that have reached final judgment.

III. FACTUAL AND PROCEDURAL BACKGROUND

This case has a long and complicated history. The underlying action involves the United States Department of Interior ("Interior") Bureau of Reclamation's ("Bureau") administration of the Central Valley Project ("CVP"), "the country's largest federal water reclamation project,"¹ and Interior's 1999 water year implementation of section 3406(b)(2) of the Central Valley Project Improvement Act ("CVPIA") in such a way as to allegedly misinterpret and misapply the definition of "CVP yield" to cause an incorrect amount of CVP water to be diverted from the water-districts and the environment.

1 O'Neill v. United States, 50 F.3d 677, 680-83 (9th Cir. 1995); see also United States v. Westlands Water Dist., 134 F. Supp. 2d 1111, 1116 (E.D. Cal. 2001).

The CVPIA took effect October 30, 1992, with the express primary purposes to: (1) protect, restore, and enhance fish, wildlife, and associated habitats in the Central Valley and Trinity River Basins; and (2) address the impact of the CVP on fish, wildlife, and their associated habitats. See Pub.L. No. 102-575, Title 34, §§ 3402, 3406(b)(2), 106 Stat. 4600, 4706, 4715-16 (1992). Section 3406(b)(2) requires the Bureau to dedicate and manage annually 800,000 acre-feet of CVP yield for fish and wildlife purposes. See id. at § 3406(b)(2).

On November 20, 1997, Interior issued its final administrative proposal ("AP"), "CVPIA Administrative Proposal, Management Section 3406(b)(2) Water (800,000 acre feet)," which adopted a plan to simultaneously implement CVPIA Sections 3406(b)(1)-(3).

The next day, on November 21, 1997, San Luis-Delta Mendota Water Authority filed this case in the Eastern District of California to challenge the method adopted by Interior in its 1997 AP to implement Section 3406(b)(2). San Luis argued that Interior adopted the AP without considering whether its environmental actions (in Appendix A) would result in dedication of more than 800 TAF for (b)(2) purposes, in direct violation of Section 3602(b)(2). See Doc. 1.

The environmental plaintiffs separately challenged the same 1997 Interior AP in a February 4, 1998 suit filed in the Northern District of California, arguing insufficient water was to be dedicated to (b)(2) purposes. On May 7, 1998, the environmental plaintiffs' case was consolidated with this, the lead case. See Doc. 36.

All parties moved for partial summary judgment in early 1999. The environmental plaintiffs specifically sought a finding that interior violated the statute by treating (b)(2) water as a discretionary allocation, arguing that the AP (1) failed to annually set aside the requisite 800 TAF of CVP yield exclusively for environmental purposes; (2) wrongfully implements §§ 3406(b)(1), (2) and (3) adopted measures that ignore express statutory management duties; (3) improperly permitted reuse of (b)(2) water; and (4) failed to adopt the (b)(1) fish program within three years.

A March 19, 1999, decision found in favor of the environmental plaintiffs on some issues. The district court held that Interior abused its discretion by: (1) "rewriting the water dedication provision of § 3406(b)(2) in merging (b)(1), (2) and (3) compliance and in failing to account for and dedicate annually 800,000 AF of CVP yield;" (2) "failing to comply with the (b)(1) three[-]year time limit for developing and implementing the anadromous fish doubling program;" (3) "making an unauthorized [and unjustified] five year `no need' finding under 3406(b)(2)(D);" (4) "failing to comply with NEPA, for (b)(1) compliance, which reduces annual CVP contractor deliveries by more than 800,000 AF of CVP yield;" and (5) "relying on an Interior Solicitor's legal opinion that is a post hoc rationalization that rewrites section 3406(b)(2) and justifies agency action that ignores express water dedication requirements." Doc. 156 at 51. The issue of (b)(2) compliance was remanded to Interior to formulate and adopt a proper method to calculate CVP yield. See id. at 28.

On April 9, 1999, the AP was found contrary to the CVPIA, and the issue was remanded to Interior to complete a proper (b)(2) accounting. See Doc. 159. A preliminary injunction issued May 14, 1999, to enjoin Interior from implementing the AP. See Doc. 209.²

2 Interior had been temporarily enjoined since April 16, 99. See Doc. 174 (TRO).

In response, on July 14, 1999, Interior issued an "Interim Decision of Implementation of Section 3406(b)(2) of the Central Valley Project Improvement Act." See Doc. 376 ex. 1 at ex. A ("July, 1999, Interim Decision").³ Interior also issued an "Accounting" of CVP yield that was, pursuant to CVPIA § 3406(b)(2), to be dedicated and used from March 1, 1999, through February 28, 2000. See Doc. 431 at ex. A. Interior's July, 1999, Interim Decision provided that "Interior will continue to credit up to 450,000 AF of CVP water used to meet the [Water Quality Control Plan] obligations toward the (b)(2) requirements." Doc. 376, Ex. 1, Ex. A at 8.

3 On August 16, 1999, San Luis submitted its comments on the Interim Decision to the Bureau. See Doc. 376 ex. 1 at ex. B.

On October 5, 1999, Interior issued its Final Decision, "Decision on Implementation of Section 3406(b)(2) of the Central Valley Improvement Act," which defines the method Interior intended to employ to calculate CVP yield, to account for the use of the dedicated yield, and the procedures to manage the dedicated (b)(2) yield. See Doc. 376 ex. 1 at ex. C. The Final Decision provides that: (1) Interior will credit water used to meet 1995 WQCP requirements against the 800 TAF (b)(2) mandate, up to a 450 TAF cap; and (2) Interior is not required to, but may, credit water used to meet post CVPIA-enacted ESA requirements against the 800 TAF (b)(2) mandate.

After evidentiary hearings on January 31, and February 3, 2001, see Docs. 310-11 (hearings); Doc. 284 (order maintaining preliminary injunction in effect), a memorandum and order issued March 13, 2000 addressing: (1) the challenge to the Interim Decision's definition of "CVP yield;" and (2) the motion for a preliminary injunction. See Doc. 320. That order upheld "Interior's interpretation of the definition of CVP yield, except for the deduction for the modified D-1400 flows in calculating CVP yield, as lawful, not arbitrary or capricious," id. at 31, but found Interior erred by using modified D-1400 flows to calculate CVP yield, because D-893 flows should have been used, see id. For the 1999 water year, the calculation of the Clear Creek (b)(2) action below Whiskeytown Dam was ordered reduced by 39,000 acre-feet, for a net use of 13,000, rather than 52,000, acre-feet. See id. at 32. The preliminary injunction was dissolved. See id. ⁴ Interior was ordered to recalculate the CVP yield by substituting the D-893 flows for the improperly-utilized modified D-1400 flows, and to submit such recalculation within ten (10) days following date of service of the decision. See id. at 32-33.

4 On May 04, 2000, San Luis filed an interlocutory appeal of the order that vacated the preliminary injunction. See Doc. 324. On September 21, 2000, the Ninth Circuit affirmed the propriety of dissolving the preliminary injunction, but declined to rule on the underlying merits of the appeal. See Doc. 359; San Luis Delta-Mendota Water Auth. v. United States, 238 F.3d 430, 2000 WL 1367912 (9th Cir. 2000) (unpublished memorandum).
On November 27, 2000, a scheduling conference was held. See Doc. 363. The federal defendants were ordered to submit a statement to the court and all parties concerning their intent to comply with the court order to implement the AFRP requirement of the CVPIA. See id. at 3. Any party was given leave to object to the government's position. See id. The government was also ordered to provide by December 11, 2000, its accounting for the 1999 water year, showing the various uses of the CVP yield in compliance with CVPIA § 3406(b)(2) and related laws. See id. Last, the parties were directed to file their motions for final judgment and interlocutory appeal. See id. at 3-4.

On March 17, 2000, the Bureau submitted its re-calculated figure for annual CVP "yield," 5,990,000 acre-feet of CVP water. See Doc. 424 at ¶ 34 (federal defendants' statement of undisputed facts in support of summary judgment).

On March 21, 2000, the Bureau submitted the declaration of Ann Lubas-Williams, which confirmed that Interior rectified the only error in the CVP yield calculation by revising the CVP yield study's PROSIM input files to use the D-893 flows, not the modified D-1400 flows. See Doc. 322 at 3.

On December 11, 2000, the government filed the declaration of Alan Candlish, which it claimed complied with the order requiring the 1999 water year CVP accounting. See Doc. 364. Mr. Candlish represented that "[t]he signing of the [Record of Decision] and finalization of the Anadromous Fish Restoration Program will occur no later than January 19, 2001." Id. at 2.

On December 22, 2000, San Luis objected to the 1999 water year accounting, claiming that Mr. Bowling's declaration was "incomplete," because "one cannot tell: (1) the acre[-]foot cost of each individual action, nor (2) the annual acre[-]foot contribution of each individual CVP facility." Doc. 367 at 2-3.

On December 22, 2000, the government responded, noting that at an informational meeting held on December 20, 2000, printed materials that contained the allegedly "missing" information were distributed. See Doc. 368 at 3-4 (citing ¶ 8 of its attached declaration of Derek Hilts: "The Printed Materials contain information pertaining to (a) the acre[-]foot cost of each individual action taken in compliance with section 3406(b)(2) of the Central Valley Project Improvement Act and (b) the annual acre[-]foot contribution of each individual Central Valley Project Facility."). This aspect of the challenge to the 1999 water year accounting was mooted.

On January 16, 2001, San Luis filed a motion seeking leave to file a second amended complaint ("SAC") and to require the government to supplement the administrative record. See Doc. 374; Doc. 376 at ex. 1 (proposed SAC). San Luis argued this amendment was necessary, due to additions related to events that occurred after the November 16, 1999, filing of its first amended complaint ("FAC") (Doc. 263). The SAC included six specific changes: (1) added Westlands as a plaintiff (SAC ¶ 4); (2) alleged that the August 28, 2000, programmatic ROD modified the October 6, 1999 decision to implement CVPIA § 3406(b)(2) (SAC ¶ 19); (3) added two assertions to the first claim for relief, i.e., that all CVP yield that is used to meet the requirements of the 1995 Delta Water Quality Control Plan ("WQCP") and the ESA must be counted against the 800,000 acre-foot maximum (SAC ¶¶ 25(d)-(e)); (4) amended the second claim for relief to be retrospective, rather than prospective, because the 1999-2000 water year had passed (SAC ¶¶ 28-31); (5) added a third claim for relief, which alleged that the government will dedicate and manage more than 800,000 acre-feet of CVP yield under CVPIA § 3406(b)(2) during the 2000-2001 water year (SAC ¶¶ 32-34); and (6) added a fourth claim for relief, which alleged that since October, 1999, the government implemented its final decision CVPIA § 3406(b)(2) in a manner that was arbitrary, capricious, and an abuse of discretion, because it created substantial uncertainty concerning the extent and timing of water releases for particular (b)(2) actions, did not count all water being dedicated and managed for (b)(2) purposes against the statutory limit, and allowed Interior to carry-over stored (b)(2) water from one year to the next, which contravenes § 3406(b)(2)'s 800,000 acre-foot limit for (b)(2) purposes (SAC ¶¶ 35-40).

In order to "satisfy the concerns of the federal defendants and environmental plaintiffs," San Luis and Westlands agreed to: (1) "file joint briefs for all aspects of the case, including any appeals;" and (2) "to the extent that th[e] Court or any appellate court imposes time limits for oral argument, trial or other proceedings, the Authority and Westlands will be deemed to be a single party for time-allocation purposes and will share the time allocated to them." See Doc. 375 at 3.

On March 26, 2001, the parties appeared for oral argument on San Luis' motion to file its SAC and to require Interior to supplement the administrative record. See Doc. 393. The motions were granted orally during the hearing, and a confirming written order issued April 10, 2000. See Doc. 396.

On April 05, 2001, San Luis filed its SAC, see Doc. 395, which the federal defendants answered on April 17, 2001, see Doc. 409.

On April 10, 2001, San Luis and Westlands moved for a preliminary injunction to prevent Interior from releasing in excess of the statutorily-capped 800,000 acre-feet of water under CVPIA § 3406(b)(2). See Doc. 397. On April 16, 2001, oral argument was held on the motion for preliminary injunction. The parties agreed an evidentiary hearing was needed to determine how much (b)(2) water, if any, Interior had released in violation of the 800,000 acre-foot floor/cap. See Doc. 406.⁵

5 Because of the time urgency of the availability of CVP water for fish restoration and the irrevocable loss of such water use once it is released, on April 19, 2001, the parties were ordered to submit declaration(s) to explain why it was impossible, not merely inconvenient, to produce any of their expert witness(es) by April 25, 2001, the scheduled preliminary injunction hearing date. See Doc. 411. No party submitted a declaration.

A hearing on the motion for preliminary injunction was held on April 25, 2001, and evidence taken. See Doc. 419. On April 26, 2001, the parties appeared telephonically to determine what further action should be taken on plaintiffs' motion for a preliminary injunction. Plaintiffs withdrew their preliminary injunction motion, which defendants did not oppose. On May 14, 2001, plaintiffs' motion for preliminary injunction was vacated and ordered off calendar without prejudice. See Doc. 436.

On May 03, 2001, the environmental plaintiffs moved: (1) to sever under Rules 42(b) and 54(b) of the Federal Rules of Civil Procedure; and (2) to enter judgment and certify under Rule 54(b), as to: (a) paragraphs 55(a), (d)-(e) of their second cause of action; and (b) the first and second causes of action filed by San Luis, the Pixley Irrigation District ("Pixley"), and the Stockton East Water District ("SEWD"). See Doc. 422 at 2. Oral argument was held Monday, June 18, 2001, where the parties agreed the ruling on that motion should await disposition of the pending cross-motions for summary judgment.

On May 4, 2001, the federal defendants moved for summary judgment against the environmental plaintiffs and water-district plaintiffs on all claims. See Doc. 423 at 2.

On May 7, 2001, the water-district plaintiffs moved for partial summary judgment that:

(1) Interior's calculation of CVP yield is not in accordance with law because it calculates the baseline using modified D-1400 flows instead of D-893 flows;

(2) the Final Decision is contrary to law because it does not calculate the amount of CVP yield, as defined by the statute, that is dedicated to (b)(2) purposes;

(3) the Final Decision is not in accordance with law because Interior does not count all water used to meet the requirements of the 1995 WQCP and other legal obligations imposed after enactment against the 800,000 acre-foot limit; and

(4) to the extent Interior uses "reset" and "offset" to avoid counting yield dedicated and managed pursuant to (b)(2), it is acting contrary to law.

Doc. 426 at 2.

On May 7, 2001, the environmental plaintiffs moved for partial summary judgment against the federal defendants on paragraphs 55(a), (c)-(e) of their second claim for relief. See Doc. 430 at 2.⁶ The environmental plaintiffs sought judgment on their allegations that the "Final Decision and DOI's implementation of the CVPIA misinterpret the requirements of Section 3406(b)(2) of the CVPIA in several important respects," including:

6 On August 1, 2001, federal defendants moved to continue the scheduled August 13, 2001, hearing for sixty (60) days due to the change in federal administration, e.g., a new Commissioner of Reclamation and new Secretary for Water and Science. See Doc. at 2. Westlands and San Luis joined in that motion on August 2, 2001. See Doc. 460. The environmental plaintiffs refused to join the other parties, and argued that because the new water year began in two months, the hearing should proceed as scheduled. See Doc. 462. On August 8, 2001, federal defendants' motion to continue this hearing was denied. See Doc. 461.

(1) DOI improperly elevates the secondary purposes of the (b)(2) water over and above the primary purposes for which Congress directed the water to be dedicated and managed;

(2) DOI improperly appropriates to itself unlimited discretion in charging the water used to fulfill obligations under the Endangered Species Act, 16 U.S.C. § 1531 et seq., ("ESA") against the 800,000 acre-feet of water that is to be dedicated under Section 3406(b)(2);

(3) the Final Decision fails to properly implement the banking provisions of Section 3408(d);

(4) the Final Decision improperly purports to provide Interior with discretion to provide (b)(2) water for other CVP purposes, including irrigated agriculture, in the absence of the required finding that the (b)(2) water is not necessary for the fish, wildlife and habitat restoration purposes of the CVPIA, and

(5) the Final Decision contains several errors in technical methodology that are likely to result in a dedication of less then [sic] the full 800,000 acre-feet of water required to be dedicated to the CVPIA's fish, wildlife and habitat restoration purposes and measures.

Doc. 431 at 2:12-3:4.

A series of final orders were issued in response to the parties' cross motions.⁷ The environmental plaintiffs achieved essentially no success at the district court level on this round of cross motions for summary judgment. The district court ruled in favor of the federal defendants against the environmental plaintiffs on all issues presented.

7 The district court rulings are set forth in Doc. 484, Supplemental Memorandum and Order: Re Summary Judgment Motion on Offset and Reset, filed February 2, 2002; Doc. 486, Amended Memorandum Decision and Order Re: Motions to Sever Claims: to Enter Final Judgment; and to Certify for Interlocutory Appeal, filed February 22, 2003; Doc. 487, Memorandum Decision and Order Re: Federal Defendants' Motion to Amend Memorandum Decision and Order Re: Motions to Sever Claims; to Enter Final Judgment; and to Certify for Interlocutory Appeal, filed February 28, 2002.

First, the environmental plaintiffs argued that using up to 450 TAF of (b)(2) water to satisfy ESA and WQCP requirements is contrary to the plain language of CVPIA § 3406(b)(2) and contravenes the CVPIA as a whole. See Doc. 431 at 13-22. The district court ruled that:

Section 3406(b)(2) unambiguously directs Interior to "dedicate and manage annually eight hundred thousand acre-feet of Central Valley Project yield for the primary purpose of implementing the fish, wildlife, and habitat restoration purposes and measures authorized by this title." Interior has no discretion whether to annually provide more or less than 800 TAF of CVP yield (approximately 5.99 MAF) for (b)(2) purposes, unless it makes certain findings under CVPIA § 3406(b)(2)(C) . . . Interior is also directed to annually dedicate and manage the mandatory 800 TAF of CVP yield "to assist the State of California in its efforts to protect the waters of the San Francisco Bay/Sacramento-San Joaquin Delta Estuary [ i.e., the WQCP]; and to help to meet such obligations as may be legally imposed upon the [CVP] under State or Federal law following the date of enactment of this title, including but not limited to additional obligations under the Federal Endangered Species Act." Id. at 4715-16. As a matter of law, this language is not ambiguous — water used to meet WQCP or post-CVPIA ESA requirements is an additional (b)(2) purpose and must be charged against the 800 TAF (b)(2) mandate if so used.

The CVPIA is not silent on what amount of water used for these so-called "secondary" purposes is to be credited against the 800 TAF (b)(2) mandate. ( E.g., could all 800 TAF of (b)(2) water be used to meet post-CVPIA-enactment ESA requirements?). Congress mandates that exactly 800 TAF of CVP yield ( 5.99 MAF) be dedicated for (b)(2) purposes, whether "primary" or "secondary." To hold otherwise would render the 800 TAF figure superfluous. This leaves to Interior, the discretion to annually determine how much CVP yield to devote to WQCP or post-CVPIA ESA requirements. However, if it were left to Interior's "discretion" whether or not to count CVP yield used for such (b)(2) purposes, the annual 800 TAF cap would be illusory. The 800,000 TAF is intended by Congress as an immutable floor and ceiling on annual reallocation of water from CVP yield for (b)(2) purposes. If Interior uses more than 800 TAF for (b)(2) purposes in any year, but does not count all CVP yield used for such purposes, it violates CVPIA § 3406(b)(2). Water-districts' motion for summary judgment on whether Interior has the discretion to limit credits against (b)(2) for water used for WQCP or post-CVPIA ESA purposes to 450 TAF is GRANTED, Interior has no such discretion. Any amount of CVP yield water annually used for a (b)(2) purpose must be counted as part of the 800 TAF. The environmental plaintiffs' motion for summary judgment on this issue is denied.

Doc. 466 at 32-33 (internal citations and footnotes omitted). The bottom line of this ruling was that although Interior had full discretion to determine how much CVPIA yield should annually be dedicated to each of the enumerated (b)(2) purposes, whether primary or secondary, all CVPIA yield annually dedicated for (b)(2) purposes had to be "counted."

Second, the environmental plaintiffs argued that the Final Decision's system of "banking" water for fish and wildlife purposes violates the CVPIA because it proscribes banking if it interferes with other CVP purposes and relegates banking to the lowest priority in the (b)(2) system. The district court held:

This is not the case, but even assuming, arguendo, the truth of this statement, the CVPIA is not violated, because CVPIA § 3408(d) does not prioritize (b)(2) water for banking. Cf. CVPIA § 3406(b)(2) (deducting 800 TAF before water for other uses, such as meeting existing water-service contracts with various water-districts). Rather, this section simply extends discretion to, but does not require, Interior to bank (b)(2) water, consistent with State law, if CVP project facilities are not otherwise committed or needed to meet CVP project purposes or other federal obligations. It is for Interior, in its reasonable discretion, to annually determine what "priority" water-banking for fish or wildlife purposes shall have, if project facilities are available.

Id. at 37.

Third, environmental plaintiffs challenged the Final Decision's conclusion on "reuse" of CVPIA yield devoted to (b)(2) purposes that "[a]fter water released for upstream [(b)(2) purposes] has served the purpose for which its release was prescribed, it is available for recapture and reuse by the [CVP], including for export south of the Delta." The district court confirmed that such reuse is permissible under California law:

Fish and wildlife measures under the CVPIA must conform to non-conflicting California law, 3411(a), which permits re-use of water to achieve its most beneficial use. The COA between the United States and the California DWR for coordinated operation of the CVP with the State Water Project recognizes the State's right to divert water from the CVP that cannot be used or diverted after it fulfills (b)(2) purposes. AR 4193. The statute does not prevent Interior from exercising its discretion to manage (b)(2) water for multiple uses, so long as the environmental requirements of (b)(2) are achieved.

Id. at 37.

Finally, the district court found Environmental plaintiffs argument that "Interior has no discretion to employ modeling methodologies or assumptions in the accounting for the (b)(2) dedicated yield that are likely to result in an under-allocation of the (b)(2) water in any given year," Doc. 431 at 24, was a request for an advisory opinion and denied it.

An evidentiary hearing was ordered "to address the sole, discrete issue whether under the reset and offset methods, Interior releases more than 800 TAF CVP yield for (b)(2) purposes and actually resulted in the dedication and use of more than 800,000 AF of CVP yield for (b)(2) purposes in 1999-2000 water year. The water district plaintiff's summary judgment motion was granted; federal defendants were prohibited from using its "reset" or "offset methods." The ruling required every use of CVP yield for (b)(2) purposes in any water year to be counted and not reversed or ignored. Doc. 484.

All parties filed timely notices of appeal to the Ninth Circuit and briefing was scheduled to begin September 5, 2002. See Doc. 527 at 3, ex. A. On August 20, 2002, federal defendants voluntarily dismissed their appeal. See Doc. 520 at 2.

On October 24, 2002 environmental plaintiffs filed an expedited motion to stay the March 20, 2002 Final Partial Judgment, pending their appeal in the Ninth Circuit. Doc. 527 at 2. Environmental plaintiffs also moved to enjoin federal defendants from "issuing any new agency policy which would alter existing [CVIPA] 3406(b)(2) water allocation and accounting procedures pursuant to the March 20, 2002 Final partial Judgment." Id. at 2 5.

The Ninth Circuit heard oral arguments May 12, 2003. The Circuit Court's amended decision addresses five issues. See Bay Inst. of San Francisco v. U.S., 66 Fed. Appx. at 735, as amended on, January 23, 2004.

The Ninth Circuit agreed with the district court's rejection of the water authority plaintiffs' principal contention that § 3406(b)(2) requires Interior to calculate the costs of 3406(b)(2) actions against a hypothetical model of Project operations during the 1928-34 drought period. Id. at 735. Interior and the environmental plaintiffs both opposed this contention. The second finding affirmed that "the Improvement Act does not prohibit Interior from reusing water initially released for (b)(2) purposes. Because the CVPIA does not specifically address reuse, Interior's reasonable interpretation of the statute is entitled to deference." Id. (citing Wilderness Soc'y, 316 F.3d at 921-22). This ruling was against the environmental plaintiffs. Third, the Ninth Circuit found:

The district court erred in concluding that Interior lacks discretion to refrain from crediting the amount of Project yield actually used for any (b)(2) purpose against the designated 800,000 acre feet of Project yield. To hold otherwise would defeat the primary purpose for which the 800,000 acre feet were designated-fish, wildlife, and habitat restoration. Section 3406(b)(2) provides that the "primary purpose" to which the 800,000 acre feet should be dedicated is the implementation of "fish, wildlife, and habitat restoration purposes authorized by this title. . . ." Section 3406(b)(2) also provides that the 800,000 acre feet may be used to "help" meet obligations under the Endangered Species Act and to "assist" in meeting water quality standards. If Interior were required to deduct some or all the water it uses for water quality and Endangered Species Act purposes from the (b)(2) dedication, the water needed for implementation of the Improvement Act's restoration mandate could be relegated to a secondary role, or perhaps no role at all. Such a scenario would directly conflict with the Interior's mandate to give effect to the hierarchy of purposes established in Section 3406(b)(2).

Bay Inst., 87 Fed. Appx. 637. The parties dispute who prevailed on appeal of this issue and to what extent.

The Ninth Circuit upheld the District Court's decisions on another of the environmental plaintiffs' claims:

Interior may not exclude from its calculation of CVPIA yield certain water flows implemented in connection with the Auburn Dam. Section 3406(b)(2) requires Interior to exclude from its Project yield calculation only those "flow and operational requirements imposed by terms and conditions existing in licenses, permits, and other agreements . . ." The record reflects no such license, permit or other agreement concerning the Auburn Dam flows.

Id. The water authority plaintiffs' allegation that Interior should be "prohibited from using offset/reset matrices in accounting for use of water under § 3406(b)(2), to impermissibly alter the 800,000 acre feet designated by Congress" was also affirmed. Id. This was contrary to the environmental plaintiffs' position, which was the same as Interior's.

The district court's decision on these two issues found: Interior's decision to credit a maximum 450,000 AF . . . against (b)(2) 800,000 AF mandate is not provided for by statute, is arbitrary, and violates (b)(2); . . . The use of reset is unlawful, arbitrary, and capricious; . . . Offset is unlawful arbitrary, and capricious . . . [.]

Doc. 491, The District Court's Final Partial Judgement on Accounting Issues, at 3, ¶¶ e, h I, filed March 20, 2002.

IV. DISCUSSION

A. Threshold Requirements.

1. The Statute of Limitations.

The EAJA provides that an application for fees under the Act must be filed within thirty days of final judgment. Final judgment means "final and not appealable." 28 U.S.C. § 2412(d)(2)(G). In this case, the Ninth Circuit issued its decision on June 3, 2003. See Bay Institute, 66 Fed. Appx. at 734. The parties had ninety days after the Court of Appeals' judgment in which to apply to the Supreme Court for a writ of certiorari, pursuant to 28 U.S.C. § 2101(c); they did not. On September 1, 2003, the ninety-day period expired, and the decision of the appellate court became final. The Appeals Court decision was thereafter amended, and a new ninety day period began to run on January 23, 2004. This period technically expired on May 23, 2004, a Sunday. Plaintiffs timely filed their petition the following day, Monday, May 24, 2004. The statute of limitations is not a bar.

2. Financial Eligibility.

As an additional threshold matter, a party must show that it is either:

(I) an individual whose net worth did not exceed $2,000,000 at the time the civil action was filed, or

(ii) any owner of an unincorporated business, or any partnership, corporation, association, unit of local government, or organization, the net worth of which did not exceed $7,000,000 at the time the civil action was filed, and which had not more than 500 employees at the time the civil action was filed; except . . .

28 U.S.C. § 2412(d)(2)(B). However, an organization that operates as a 501(c)(3) tax exempt organization "may be a party regardless of the net worth of such an organization." Id.

Environmental plaintiff's initial declarations contained no information as to the financial or tax-exempt status of the plaintiff organizations. Defendants argue in their opposition that the environmental plaintiffs bear the burden of proving eligibility to seek fees and failed to do so within the 30-day statute of limitations. (Environmental plaintiffs did file a supplemental declaration setting forth their tax-exempt status, but this declaration was not filed within the 30-day window.) Environmental plaintiffs point out that the statute provides that an organization operating as a 501(c)(3) tax exempt organization "may be a party regardless of the net worth of such an organization," and maintain that this provision releases them from the burden of proving their party status within the statute of limitations. Environmental plaintiffs also point out that their tax-exempt status is clearly set forth in the complaint and amended complaint.

Defendants cite several cases in which fee petitions were deemed untimely for failure to set forth all elements of eligibility. SAI Industries, Corp. v. United States, 63 Fed. Cl. 1 (2004); Favret v. United States, 341 F. Supp. 2d 613 (E.D. La. 2004). In SAI Industries, plaintiff filed a "bill of costs" within the statutory window, but filed its application for fees and expenses under the EAJA after the deadline. The fee petitioner in that case argued that the EAJA application should relate back to the filing of the bill of costs, but the Court of Federal Claims rejected that argument because the initial bill of costs did not give the government any notice that an EAJA application would be forthcoming. Favret simply does not address the issue at hand. In that case, the fee petitioner initially failed to include a showing that she had a net worth of less than $2 million, a requirement of the applicable fee statute. However, Favret cured this defect within the statutory time limit, so her petition was allowed to proceed. Environmental plaintiffs stand in a very different position from the plaintiffs in either Favret or SAI Industries. Environmental plaintiffs timely filed their fee petition without providing any proof of financial eligibility because the statute deems them eligible parties by virtue of their nature as 502(c)(3) tax exempt organizations, a fact they specifically alleged in many pleadings filed during the course of this litigation, including the first page of the fee petition itself. See Doc. 573 at 1. Moreover, the Ninth Circuit recently permitted a Hyde Amendment⁸ fee petitioner to amend his defective fee petition out of time to include required information concerning his net worth and an itemized statement of attorney's fees:

8 The Hyde Amendment, Pub.L. No. 105-119, Title VI, § 617, 111 Stat. 2440, codified at 18 U.S.C. 3006A, specifically incorporates the filing requirements of the EAJA. See Hristov, 396 F.3d at 1046.

When the government can show no prejudice from allowing an amendment to a fee application, it is unduly harsh not to allow an amendment to bring the application in conformity with a technical pleading requirement.

United States v. Hristov, 396 F.3d 1044, 1048 (9th Cir. 2005).

The government does not allege prejudice. Environmental plaintiffs are exempt from the net worth requirements. They refer to their tax exempt organization status in the fee petition. This unambiguously informed the government of the basis for environmental plaintiffs' claimed eligibility for EAJA fees. No authority has been provided to require an affirmative assertion of eligibility in the petition. An amendment of the petition will serve the interests of justice.

3. Threshold Eligibility Requirements Under the EAJA.

"The Equal Access to Justice Act (EAJA) directs a court to award fees and other expenses to private parties who prevail in litigation against the United States if, inter alia, the Government's position was not `substantially justified.'" INS v. Jean, 496 U.S. 154, 158 (1990) (quoting 28 U.S.C. § 2412(d)(1)(A)). "The clearly stated objective of the EAJA is to eliminate financial disincentives for those who would defend against unjustified governmental action and thereby to deter the unreasonable exercise of Government authority." Ardestani v. INS, 502 U.S. 129, 138 (1991) (citations omitted).

Eligibility for fees under the EAJA is established by meeting the remaining conditions set out by the statute:

(1) that the claimant be a "prevailing party";

(2) that the Government's position was not "substantially justified"; and

(3) that no "special circumstances make an award unjust".

Jean, 496 U.S. at 158; Shalala v. Schaefer, 509 U.S. 292, 302 (1993); see also Perez-Arellano v. Smith, 279 F.3d 791, 793 (9th Cir. 2002) ("For the court to award attorney's fees and costs pursuant to EAJA, it must be shown that (1) the plaintiff is the prevailing party; (2) the government has not met its burden of showing that its positions were substantially justified or that special circumstances make an award unjust; and (3) the requested attorney's fees and costs are reasonable.").

But, "no award of fees is automatic." Jean, 496 U.S. at 163. A district court retains substantial discretion in fixing the amount of any EAJA award. Exorbitant, unfounded, or procedurally defective fee applications — like any other improper position that may unreasonably protract proceedings — are matters that the district court can recognize and discount. "A request for attorney's fees should not result in a second major litigation." Id. at 163.

a. Prevailing Party.

"The Supreme Court identified two judicial outcomes under which a party may be considered a `prevailing party' for the purpose of awarding attorney's fees: (1) an enforceable judgment on the merits; or (2) a settlement agreement enforceable through a court-ordered consent decree." Perez-Arellano, 279 F.3d at 793-94 (citing Buckhannon Bd. Care Home v. W. Va. Dep't of Health Human Res., 532 U.S. 598, 603-04 (2001)). An enforceable judgment "provides the necessary foundation for a plaintiff's status as a prevailing party because the plaintiff has received at least some relief based on the merits of the claim." Id.

While the EAJA contains no applicable definition of "prevailing party," claimants are classified as "prevailing parties" for attorney's fees purposes if they "succeed on any significant issue in litigation which achieves some of the benefit the parties sought in bringing suit." Nat'l Wildlife Fed'n v. Fed. Energy Regulatory Comm'n, 870 F.2d 542, 544 (9th Cir. 1989); see also Friend v. Kolodzieczak, 72 F.3d 1386, 1393 (9th Cir. 1995). "A prevailing party is one who succeeds on any significant issue even though other issues are unreached, remanded, or prove unsuccessful." Id.

In this case, the environmental plaintiffs experienced substantial success in the early stages of litigation. The district court's March 19, 1999, decision found Interior abused its discretion in adopting the November 20, 1997 final administrative proposal, finding for environmental plaintiffs on most of the issues presented. The federal defendants appear to concede that this ruling was at least a partial victory for the environmental plaintiffs. See Doc. 583 Opp. at 8.

The environmental plaintiffs experienced more limited success, however, in later stages of the litigation, prevailing on appeal with respect to a single (and perhaps partially a second) of the five discrete issues appealed to the Ninth Circuit. Environmental plaintiffs acknowledge that they "lost some of the issues and arguments raised in the litigation" but insist that this "does not rob them of prevailing party status." Doc. 573, Mot. at 8. Environmental plaintiffs are absolutely correct that "[w]hile limited success may become a factor in the calculation of the amount of reasonable fees . . . there can be no doubt that plaintiffs are entitled to an award." Id. Environmental plaintiffs did succeed on at least one significant issue, rendering them sufficiently successful to qualify as a prevailing party for purposes of eligibility for EAJA fees.⁹

9 While environmental plaintiffs' success on at least one significant issue is enough to qualify them as a prevailing party, the degree of their success (or lack thereof) is otherwise relevant to the amount of fees awarded. The parties do not agree on the degree of success experienced by the environmental plaintiffs at various stages of the litigation. This issue is discussed at length in Part IV.B.5.

b. Substantial Justification.

"The EAJA mandates the award of attorney's fees and expenses to the prevailing party unless the court finds that the position of the United States was substantially justified or that special circumstances make an award unjust." See Or. Natural Res. Council v. Madigan, 980 F.2d 1330, 1331 (9th Cir. 1992). "The government has the burden of demonstrating substantial justification." Id. In order to demonstrate that its position was substantially justified, the government must show that its position has a reasonable basis in law and fact. Id. (citing Pierce v. Underwood, 487 U.S. 552, 563-65 (1988)). The Government's underlying action must be justified to a degree that would satisfy a reasonable person. Pierce, 487 U.S. at 563-64. "Put another way, substantially justified means there is a dispute over which reasonable minds could differ." Gonzales v. Free Speech Coalition, 408 F.3d 613, 618 (9th Cir. 2005).

In evaluating whether a position is "substantially justified," objective indicia "such as the terms of a settlement agreement, the stage in the proceedings at which the merits were decided, and the views of other courts on the merits can be relevant, but not necessarily dispositive." Gonzales, 408 F.3d at 618 (citing Pierce, 487 U.S. at 568). "A string of losses can be indicative; and even more so a string of successes." Id. Where objective indicia are not available or do not provide a conclusive answer, the court will examine the "merits of the government's litigating position." Id.

In this case, the district court's March 19, 1999, decision found in favor of the environmental plaintiffs on several issues, holding that Interior abused its discretion by: (1) "rewriting the water dedication provision of § 3406(b)(2) in merging (b)(1), (2) and (3) compliance and in failing to account for and dedicate annually 800,000 AF of CVP yield;" (2) "failing to comply with the (b)(1) three[-]year time limit for developing and implementing the anadromous fish doubling program;" (3) "making an unauthorized [and unjustified] five year `no need' finding under 3406(b)(2)(D);" (4) "failing to comply with NEPA, for (b)(1) compliance, which reduces annual CVP contractor deliveries by more than 800,000 AF of CVP yield;" and (5) "relying on an Interior Solicitor's legal opinion that is a post hoc rationalization that rewrites section 3406(b)(2) and justifies agency action that ignores express water dedication requirements." Doc. 156 at 51. The issue of (b)(2) compliance was remanded to Interior to formulate and adopt a proper method to calculate CVP yield. See id. at 28. The court denied the environmental plaintiff's motions on (1) the "reuse" issue and (2) whether Interior was required to dedicate (b)(2) water to address other adverse environmental issues.

The district court's conclusion in the March 19, 1999 opinion states:

The CVPIA is a complex and ambiguous statutory construct that reflects a legislative choice to reorder the priorities of the CVP to make environmental protection a co-equal statutory objective. The CVPIA invests Interior with broad discretion to implement the management and operations changes that will drive the reallocation of CVP water, subject to finite limits. The court and parties must defer to the expertise and good faith of Interior to manage the CVP to comply with the CVPIA. Interior has gone beyond the legislative grant of discretion: 1) by rewriting the water dedication provisions of § 3406(b)(2) in merging (b)(1), (2) and (3) compliance and in failing to account for and dedicate annually 800,000 AF of CVP yield; 2) by failing to comply with the (b)(1) three year time limit for developing and implementing the anadromous fish doubling program; 3) by making an unauthorized five year "no need" finding under § 3406(b)(2)(D); 4) by failing to comply with NEPA, for (b)(1) compliance, which reduces annual CVP contractor deliveries by more than 800,000 AF of CVP yield; and 5) by relying on an Interior Solicitor's legal opinion that is a post hoc rationalization that rewrites section 3406(b)(2) and justifies agency action that ignores express water dedication requirements. Interior has the legal authority within its broad grant of CVPIA water. It does not have the discretion to fail to annually make any section 3406(b)(2)(D) finding of "no need."

Doc. 156 at 50-51 (emphasis added). This finding — that Defendants actions exceeded the broad discretion afforded it under the statute and was based on a post hoc solicitor's opinion — is equivalent to a finding that the government's position was not substantially justified.

Defendants concede the March 19, 1999 opinion rejected Interior's initial attempt to interpret and implement § 3406(b)(2). Opp. at 13. Defendants insist, however, that their initial interpretation was substantially justified because the question was one of first impression and because they argued their position "forcefully and well." Id.

The Ninth Circuit rejects the argument that a position is substantially justified simply because it concerns a matter of first impression.

There is no per se rule that EAJA fees cannot be awarded where the government's position contains an issue of first impression . . . we have never held that the government is automatically shielded from a fee award because its argument involves any issue on which this court has not ruled.

United States v. Real Prop. At 2659 Roundhill Drive, 283 F.3d 1146, 1153 (9th Cir. 2002). The federal defendants cite Bay Area Peace Navy v. United States, 914 F.2d 1224, 1231 (9th Cir. 1990) for the proposition that substantial justification may be shown where the "government has argued its position forcefully and well." But, when read in context, the forcefulness of the government's argument was only part of the Ninth Circuit's basis for a "substantial justification" finding in Bay Area Peace Navy:

It was not unreasonable for the government to try to uphold the regulation when confronted with litigation. In other words, "substantial justification" is shown in this case because the government has argued its position "forcefully and well," [citations], "difficult questions" were raised and there is an absence of adverse precedent on point. [citations] The disagreement within this panel regarding the merits of the government's appeal further suggests that a finding of substantial justification is appropriate.

Id. (emphasis added) (internal citations omitted). Mere forceful argument alone does not necessarily reflect a position that has a reasonable basis in law and fact. Here, none of the other factors considered in Bay Area Peace Navy are present. The government's position on most issues in the initial round of summary judgment motions was essentially untenable and was based on erroneous analysis by a government lawyer. There was little room for disagreement on that matter.

The federal defendants also cite Gonzales v. Free Speech Coalition, 480 F.3d 613 (9th Cir. 2005), in which the Ninth Circuit found that the United States' defense of a congressional statute against a constitutional challenge was substantially justified. In Gonzales, the Ninth Circuit based its finding of substantial justification on several factors. First, the government made "appropriate arguments" in defense of the statute. Second, the government had a string of successes defending the statute against attack in four other circuits and the district court. Finally, the Ninth Circuit panel issued a split decision on the merits of the case.¹⁰ Here, the government cannot boast a prior "string of successes" on any of the issues raised in the first round of summary judgment motions. Nor can the government find post-hoc support for the positions it took in the form of a split panel decision on those issues. Gonzales is distinguishable.

10 The district court in Gonzales had dismissed these factors as inconclusive, relying instead on the Supreme Court's subsequent decision on the merits, which held that the statute was unconstitutional, to find that the government's position was not substantially justified. The Ninth Circuit found that the district court put "undue weight on the Supreme Court's holding on the merits" and criticized the district court's reliance "on hindsight, rather than an assessment of the reasonableness of the government's position at the time of the litigation." Id. at 620.

The absence of substantial justification for the position taken by the government prior to March 1999 is all that is required for environmental plaintiffs' fee petition to proceed. The analysis of "substantial justification" is a one time threshold determination.

The single finding that the Government's position lacks substantial justification, like the determination that a claimant is a "prevailing party," thus operates as a one-time threshold for fee eligibility. In EAJA cases, the court first must determine if the applicant is a "prevailing party" by evaluating the degree of success obtained. If the Government then asserts an exception for substantial justification or for circumstances that render an award unjust, the court must make a second finding regarding these additional threshold conditions. As we held in Hensley v. Eckerhart, 461 U.S. 424, 40 (1983), the "prevailing party" requirement is "a generous formulation that brings the plaintiff only across the statutory threshold. It remains for the district court to determine what fee is `reasonable.'" Id., at 433.

Jean, 496 U.S. at 160. Here, although the federal defendants and water authority plaintiffs raise serious questions as to the extent of the environmental plaintiffs' success in later stages of the litigation, such challenges are more appropriately considered in calculating the amount of the fee award.

c. Special Circumstances.

"Where the position of the government as a whole is not substantially justified, an award of attorney fees to the prevailing party is required unless `special circumstances make an award unjust.'" Gutierrez v. Barnhart, 274 F.3d 1255, 1261 (9th Cir. 2001) (quoting 28 U.S.C. § 2412(d)(1)(A)). "This provision, however, should only be invoked with caution" and "should be narrowly construed." Lucas v. White, 63 F. Supp. 2d 1046, 1056 (N.D. Cal 1999) (citing J J Anderson, Inc. v. Town of Erie, 767 F.2d 1469, 1474 (10th Cir. 1985); Martin v. Heckler, 773 F.2d 1145, 1150 (11th Cir. 1985)). Such a narrow reading of this provision is in accord with the purpose of the EAJA, a "clearly stated objective of [which] is to eliminate financial disincentives for those who would defend against unjustified governmental action and thereby to deter the unreasonable exercise of Government authority." Ardestani, 502 U.S. at 138.

"It is the government's burden to show that its position was substantially justified or that special circumstances exist to make an award unjust." Gutierrez, 274 F.3d at 1258. Defendants have not identified any special circumstances that would make an award of fees or costs unjust. The rule initially adopted did not conform to the requirements of § 3406(b)(2) et seq. and required court intervention to order Interior to formulate a rule that complied with the CVPIA. The federal defendants have not met their burden of proof.

d. Conclusion Re: Eligibility for EAJA fees

Environmental plaintiffs timely filed a complete fee application. They were prevailing parties on at least one important claim in which the federal defendants' position was not substantially justified. Finally, the government has not shown that special circumstances make an award unjust.

B. Reasonable Costs and Fees.

1. Legal Framework.

Once threshold eligibility under the EAJA is established, the court must then determine an appropriate award. The EAJA provides that, in non-tort civil actions against the United States, a district court "shall award . . . fees and other expenses" to a prevailing plaintiff. 28 U.S.C. § 2412(d)(1)(A). Under the terms of 28 U.S.C. § 2412(d)(2)(A) fees and other expenses include:

(1) the reasonable expenses of expert witnesses,

(2) the reasonable cost of any study, analysis, engineering report, test, or project which is found by the court to be necessary for the preparation of the party's case, and

(3) reasonable attorney fees (The amount of fees awarded under this subsection shall be based upon prevailing market rates for the kind and quality of the services furnished, except that (I) no expert witness shall be compensated at a rate in excess of the highest rate of compensation for expert witnesses paid by the United States; and (ii) attorney fees shall not be awarded in excess of $125 per hour unless the court determines that an increase in the cost of living or a special factor, such as the limited availability of qualified attorneys for the proceedings involved, justifies a higher fee.)

The phrase "fees and other expenses" is defined to include "reasonable attorney fees." 24 U.S.C. § 2412(d)(2)(A). "In determining what a reasonable attorney's fee entails, the district court must apply the hybrid approach adopted in Hensley v. Eckerhart, 461 U.S. 424, 433 (1983)." United States v. $12,248 U.S. Currency, 957 F.2d 1513, 1520 (9th Cir. 1992).¹¹ "The most useful starting point for determining the amount of a reasonable fee is [1] the number of hours reasonably expended on the litigation [2] multiplied by a reasonable hourly rate." Sorenson v. Mink, 239 F.3d 1140, 1145 (9th Cir. 2001) (relying upon Hensley, 461 U.S. at 433). The resulting figure is known as the "Lodestar."

11 Although "Hensley was an attorney-fee proceeding under § 1988; however, it also is applicable to awards of fees under the EAJA." Sorenson v. Mink, 239 F.3d 1140, 1145 (9th Cir. 2001) (citing INS v. Jean, 496 U.S. 154, 161 (1990) (stating that, when a plaintiff has demonstrated eligibility for attorney fees under the EAJA, "the district court's task of determining what fee is reasonable is essentially the same as that described in Hensley")); Atkins v. Apfel, 154 F.3d 986, 988 (9th Cir. 1998) (finding Hensley governs the award of attorney fees under EAJA).

To determine what qualifies as reasonable attorney's fees, the Ninth Circuit has adopted the twelve Lodestar Factors as "guidelines [and] as appropriate factors to be considered in the balancing process required in a determination of reasonable attorney's fees:"

(1) the time and labor required,

(2) the novelty and difficulty of the questions involved,

(3) the skill requisite to perform the legal service properly,

(4) the preclusion of other employment by the attorney due to acceptance of the case,

(5) the customary fee,

(6) whether the fee is fixed or contingent,

(7) time limitations imposed by the client or the circumstances,

(8) the amount involved and the results obtained,

(9) the experience, reputation, and ability of the attorneys,

(10) the "undesirability" of the case,

(11) the nature and length of the professional relationship with the client, and

(12) awards in similar cases.

Kerr v. Screen Extras Guild, Inc., 526 F.2d 67, 71 (9th Cir. 1975) (suits brought pursuant to 29 U.S.C. §§ 412 and 529) (citing Johnson, 488 F.2d 714); see also $12,248 U.S. Currency, 957 F.2d at 1520 (applying the twelve factors outlined in Kerr to the EAJA). "[Although] the lodestar determination has emerged as the predominate element of the analysis. . . . the court [can still] make adjustments to the lodestar figure based on the `riskiness' of the lawsuit and the quality of the attorney's work." Jordan v. Multnomah Co., 815 F.2d 1258, 1262 n. 5 (9th Cir. 1986). In addition, the court may reduce the fee award "if the relief, however significant, is limited in comparison to the scope of the litigation as a whole." Hensley, 461 U.S. at 440.

2. Summary of the Government's Objections to the Fee Request.

Here, the government raises a number of threshold objections to the fee petition. First, the government argues that the environmental plaintiffs "have failed to exercise billing discretion" by "failing to exclude excessive, redundant or otherwise unnecessary fees," and by using "block billing." Doc. 583, Opp. at 20-21. Second, the government objects to environmental plaintiffs' request that their lead attorney be reimbursed at $400.00 per hour. These objections are not well founded.

The government's primary objection is that environmental plaintiffs' success was "limited in comparison to the scope of the litigation as a whole." The government and the water authority plaintiffs also question whether plaintiff is entitled to fees for work performed in opposition to motions filed by the water authority plaintiffs. These objections are discussed at length below.

Finally, the government disputes environmental plaintiffs' entitlement to requested costs and expert fees.

3. Alleged Billing Inadequacies.

"Where the documentation of hours is inadequate, the district court may reduce the award accordingly. The district court also should exclude from this initial fee calculation hours that were not `reasonably expended.'" Sorenson, 239 F.3d at 1146 (quoting Hensley, 461 U.S. at 433-34). If the court finds that "portions of the fee request are documented inadequately and reflect duplicative efforts and excessive staffing," it may lower the fee award. Id. Although "[a] district court has wide latitude in determining the number of hours that were reasonably expended by the prevailing lawyers, . . . it must provide enough of an explanation to allow for meaningful review of the fee award. . . . [it must] explain how or why the unspecified reduction in hourly rate fairly balanced the unspecified number of improperly billed hours." Id.

a. Excessive billing.

Defendants offer several examples of excessive billing. First, the government suggests that it was excessive for an experienced attorney such as Save San Francisco Bay's Koehler to take 66 hours to draft the complaint in this case. Environmental plaintiffs responds that in order to understand the complex claims against the federal defendant, Koehler had to "meet with her client organizations, confer with co-counsel, familiarize herself with the available administrative records, research the law of CVPIA and federal judicial review of administrative actions, and draft, revise and edit the pleading which would commence a long-running lawsuit against the federal government." Doc. 602, Reply, at 12. The government's objection is not persuasive. Sixty-six hours is not an unreasonable amount of time to spend drafting the complaint in this case which is legally and technically complex.

Second, the government protests the 155 hours spent by Ms. Koehler and Mr. Friedman preparing their fee application, especially in light of the fact that Friedman states in his declaration that fee litigation "has been one of the principal focuses of my 17 years of practice." The environmental plaintiffs respond that the time spent (75 hours by Friedman, who served as retained fee counsel, and 81 by Koehler) was actually an exercise in efficiency. Environmental plaintiffs attempted to settle the fee dispute but point out that, when not settled, such disputes, by reason of the meticulous detail and volume of information required, absorb enormous amounts of time. The environmental plaintiffs' position is supported by the caselaw which recognizes that fee litigation can become a "case within a case" and a burden on the parties and the court. Jean, 497 U.S. at 163 (cautioning that "[a] request for attorney's fees should not result in a second major litigation"). It has taken the court far more than 155 hours to evaluate and analyze this fee petition. The hours spent by environmental plaintiffs on the fee petition are not unreasonable.

b. Block Billing.

Federal defendants also protest that environmental plaintiffs employ the "block billing" format. In block billing, an attorney groups several functions within one block for a specific date and a total figure is provided for all of the services performed in that block. With block billing it is impossible to determine what time was spent on a specific task.

The "fee applicant bears the burden of establishing entitlement to an award and documenting the appropriate hours expended and hourly rates." Hensley, 461 U.S. at 437. "The applicant should exercise `billing judgment' with respect to hours worked . . . and should maintain billing time records in a manner that will enable a reviewing court to identify distinct claims." Id. Though "there is no certain method of determining when claims are related or unrelated[,] [and] Plaintiff's counsel . . . is not required to record in great detail how each minute of his time was expended[,] . . . counsel should [still] identify the general subject matter of time expenditures." Id. at 437 n. 12.

Here, it does not appear that block billing was used. The lengthy detailed billing records submitted by environmental plaintiffs identify particular tasks, the dates they were performed, and the amount of time taken to complete the particular tasks. This documentation provides sufficient detail to allow the parties and the court to evaluate the amount of time billed and its relationship to the work performed.

4. Hourly Rates.

Environmental plaintiffs request that their lead counsel, Ms. Koehler, be compensated at an hourly rate of $400. They request that all other lawyers be compensated at $150 (the statutory maximum of $125 plus an allowable adjustment for cost of living).

Under the EAJA, though attorney's fees are generally set at the market rate, they are nevertheless capped at $125 per hour. Atkins v. Apfel, 154 F.3d 986, 987 (9th Cir. 1998). Although the EAJA sets a ceiling of $125 per hour, the court may determine "that an increase in the cost of living or a special factor, such as the limited availability of qualified attorneys for the proceedings involved, justifies a higher fee." 28 U.S.C. § 2412(d)(2)(A).

With respect to the unopposed request to adjust the $125 cap to $150 for all attorneys other than Ms. Koehler, to adjust for the cost of living, the Ninth Circuit applies the consumer price index for all urban consumers (CPI-U). Jones v. Espy, 10 F.3d 690, 692-93 (9th Cir. 1993). Here, such a CPI adjustment is necessary to raise the $125 cap to the $150 level requested for all attorneys other than Ms. Koehler. The environmental plaintiffs submit their own calculation based on a CPI calculator available online through the Federal Reserve Bank of Minneapolis. See Friedman Decl., Doc. 579.¹² This calculation indicates that an hourly rate of $125 in 1996 (the year the cap was set by Congress) equates to more than $150 in today's dollars. The requested $150 per hour figure is appropriate.

12 The calculator is available at http://minneapolisfed.org/research/data/us/calc/.

The federal defendants vehemently object, however, to awarding Ms. Koehler fees at $400 per hour. To determine whether $400 per hour is appropriate, the court must determine whether the statutory exception for limited availability of qualified attorneys applies here. See 28 U.S.C. § 2412(d)(2)(A). This provision "refers to attorneys having some distinctive knowledge or specialized skill needful for the litigation in question." Rueda-Menicucci v. INS, 132 F.3d 493, 496 (9th Cir. 1997) (permitting an exceeding of the $125 cap because immigration law is a specialty); Pierce, 487 U.S. at 552 (recognizing patent law as a specialty whose attorneys may be entitled to extra fees); Pirus v. Bowen, 869 F.2d 536 (9th Cir. 1989) (finding lawyers who specialize in social security may be entitled to extra fees); Animal Lovers Volunteer Assoc. v. Carlucci, 867 F.2d 1224, 1226 (9th Cir. 1989) (finding environmental litigation an identifiable practice specialty that requires distinctive knowledge).

Three conditions must be met for an award in excess of the $125 cap to be awarded:

(1) The attorney must possess distinctive knowledge and skills developed through a practice specialty.

(2) Those distinctive skills must be needed in the litigation.

(3) Those skills must not be available elsewhere at the statutory rate.

Pirus, 869 F.2d at 541-42; United States v. 22249 Dolorosa St., 190 F.3d 977, 984-85 (9th Cir. 1999). "Environmental litigation is an identifiable practice specialty that requires distinctive knowledge." Love, 924 F.2d at 1496 (citing Animal Lovers, 867 F.2d at 1226).¹³

13 The federal defendants cite Select Milk Producers, Inc. v. Johanns, 400 F.3d 939, 950-51 (D.C. Cir. 2005), in which the D.C. Circuit applied its long-standing rule that "an attorney cannot be awarded enhanced fees under the special factor exception based solely on expertise the lawyer acquired through practice in a specific area of administrative law." Critically, however, the Ninth Circuit applies a contrary rule. See Love, 924 F.2d 1492 (environmental expertise may constitute a special factor). The D.C. Circuit has acknowledged this split in Truckers United for Safety v. Mead, 329 F.3d 891, 895 n. 6 (D.C. Cir. 2003) (noting contrary rule from Love). Love controls here.

The parties do not seriously dispute that environmental plaintiffs have satisfied the first two Love requirements. Ms. Koehler has extensive experience in the field of environmental litigation, with particular emphasis on water law and aquatic species protection. Among other credentials, she served as Legal Director for Save San Francisco Bay Association for approximately five years, where she litigated numerous federal and state water policy cases. From 1995 through 2000, she served on the CALFED Ecosystem Roundtable. Other distinguished attorneys in the field have described her as "one of the top water law attorneys in California." Rossman Decl., at ¶ 6. Such expertise is absolutely necessary for effective litigation of cases involving CVIPA water issues.¹⁴ Ms. Koehler's performance as lead counsel demonstrates she is a highly competent and effective advocate in a very complex sub-specialty of environmental law, water resource preservation and management.

14 Ms. Koehler's qualifications served to justify an enhanced fee award in another case in this District. Koehler Decl., Doc. 578, at ¶ 28; NRDC v. Patterson, Case No. 2:88-CV-1658 LKK GGH.

The government's objections primarily concern the third Love requirement: that the specialized skills of the attorney must not be available elsewhere at the statutory rate. Specifically, the Federal defendants argue that (1) environmental plaintiffs have failed to demonstrate that few attorneys would have been available to take this case at $150 per hour; (2) the requested hourly rate of $400 is based upon fees charged by attorneys in San Francisco, not Fresno; and (3) it is improper to award fees for Ms. Koehler's work because she received a salary from Save San Francisco Bay during the course of this litigation

With respect to the first objection, the federal defendants rely upon the district court's prior ruling in this case on the water authority plaintiffs' fee petition. In that ruling, an enhanced rate was not awarded because the water authority plaintiffs failed to "provide evidence that the specialized skills required for this case were not available elsewhere at the statutory rate." Doc. 567 at 49-50. Here, however, evidence has been submitted on the general unavailability of public interest specialty lawyers for this type of complex and extended litigation.

Environmental plaintiffs have established that no other attorney with Ms. Koehler's distinctive skills would have been available at the statutory rate (adjusted for inflation) of $150 per hour. For example, environmental plaintiffs provide the declaration of Antonio Rossman, Esq., a well-known and highly experienced natural resource attorney, who states that "there are only a few individuals anywhere in the state who could have effectively served as a lead counsel in [this] case, and I believe none of them would have been willing to work on the case with a capped fee rate." Rossman Decl., at ¶ 8.

The government's second objection is that the requested rate of $400 is based upon the San Francisco market, not the local, Fresno market. As a general rule, a court should base a fee award on "the prevailing market rates in the relevant community, which typically is the community in which the district court sits." Schwartz v. Secretary of Health and Human Serv., 73 F.3d 895, 906 (9th Cir. 1995). However, in Gates v. Deukmejian, 987 F.2d 1392 (9th Cir. 1993), the Ninth Circuit articulated a narrow exception to this rule. In Gates, the Ninth Circuit permitted an award of fees to San Francisco lawyers at San Francisco market rates-even though the forum district was Sacramento, because plaintiff proved that "Sacramento firms could not successfully have provided the expert representation required to effectively represent the litigants in [that] matter." Id. at 1405. Mr. Rossman's declaration that "there are only a few individuals anywhere in the state who could have effectively served as a lead counsel in [this] case, and I believe none of them would have been willing to work on the case with a capped fee rate" is sufficient to justify application of the Gates exception here.

The district court, as an expert in attorney's fees, see Primrose Operating Co. v. Nat'l Am. Ins. Co., 382 F.3d 546, 561 (5th Cir. 2004), Env'tl Defense Fund, Inc. v. Reilly, 1 F.3d 1254, 1256 (D.C. Cir. 1993), recognizes that although water attorneys are available in the Fresno Division at the $250.00 to $300.00 hourly rate, these attorneys generally represent water districts and water users. The court is unaware of any Fresno Division lawyers practicing public interest water law who actively try comparable cases in federal or state court. Nor is the court aware of any private water law attorneys in the Fresno Division representing plaintiffs with the level of expertise exhibited by Ms. Koehler.

The government points out that Ms. Koehler's may have received a salary from Save San Francisco Bay during the course of this litigation. The government suggests that it may be improper to award Ms. Koehler fees at an hourly rate beyond the hourly-rate equivalent of her salary. But, the government points to no authority that is on point.¹⁵ In fact, the actual expense incurred by the client (in this case the salary paid by the non-profit) is irrelevant to the amount of an EAJA award.

The computation of attorney fees should be based on prevailing market rates without reference to the fee arrangements between attorney and client. . . . The fact that attorneys may be providing services at salaries or hourly rates below the standard commercial rates which attorneys might normally receive for services rendered is not relevant to the computation of compensation under the [EAJA].

Cornella v. Schweiker, 728 F.2d 978, 986 (11th Cir. 1984) (citing H.R. Rep. No. 1418, 96th Cong., 2d Sess., at 15, reprinted in 1980 U.S.C.C.A.N 4953, 4994).

15 The government does cite Curran v. Department of Treasury, 805 F.2d 1406 (9th Cir. 1986), in which the Ninth Circuit considered the ethical implications of an award of fees to a non-profit organization. Curran held that fee-splitting is appropriate where the non-profit maintains a "separate operating account for legal services." Although Curran suggests that there may be ethical consequences to an EAJA award under certain circumstances, Curran does not bar an attorney salaried by a non-profit organization from seeking EAJA attorneys fees in the amount of the reasonable value of the services performed.

Environmental plaintiffs' evidence justifies a higher rate for Ms. Koehler. Her time shall be compensated at the rate of $400.00 per hour.

5. Extent of Environmental Plaintiffs' Success.

The crux of the dispute in this case is whether the environmental plaintiffs' fee award should be reduced to account for the extent (or lack thereof) of their success. "[A] court may reduce the fee award in cases where the plaintiff only received partial or limited success." Sorenson, 239 F.3d at 1147 (quoting Hensley, 461 U.S. at 436-37). A prevailing plaintiff is "not entitled to compensation for attorney's fees for time expended unsuccessfully pursuing claims unrelated to those on which plaintiff ultimately prevailed." Id. at 434-35. However, "where a lawsuit consists of related claims, a plaintiff who has won substantial relief should not have his attorney's fee reduced simply because the district court did not adopt each contention raised." Id. at 440. The Ninth Circuit has interpreted this holding "as establishing the general rule that plaintiffs are to be compensated for attorney's fees incurred for services that contribute to the ultimate victory in the lawsuit." Cabrales v. Co. of L.A., 935 F.2d 1050, 1052 (9th Cir. 1992).

The Ninth Circuit has adopted a two part test to determine which legal services contributed to the ultimate victory in the lawsuit and whose fees were deserving of restitution.

Part I

The first step is to consider whether "the plaintiff failed to prevail on claims that were unrelated to the claims on which he succeeded." Id. [ Hensley, 461 U.S.] at 434. Claims are "unrelated" if they are "entirely distinct and separate" from the claims on which the plaintiff prevailed. Odima [ v. Westin Tucson Hotel], 53 F.3d 1484, 1499 [(9th Cir. 1995)]. Hours expended on unrelated, unsuccessful claims should not be included in an award of fees.

Part II

The second step of the Hensley analysis is to consider whether "the plaintiff achieved a level of success that makes the hours reasonably expended a satisfactory basis for making a fee award." Id. [ Hensley, 461 U.S.] at 434. In answering that question, a district court "should focus on the significance of the overall relief obtained by the plaintiff in relation to the hours reasonably expended on the litigation." Id. at 435. "Where a plaintiff has obtained excellent results, his attorney should recover a fully compensatory fee." Id. A plaintiff may obtain excellent results without receiving all the relief requested. Id. at 435 n. 11.

Sorenson, 239 F.3d at 1147.

Under the EAJA, recovery may only be awarded "to the prevailing party in any civil action brought by or against the United States or any agency or any official of the United States acting in his or her official capacity." 28 U.S.C. § 2412(a)(1). The EAJA allows for the recovery of "[f]ees and other expenses" but only from "an agency over which the party prevails." Id. at (d)(4). As a result, the prevailing party may not use the EAJA to recover from a private party or non federal agency against whom it prevailed. As a general rule, "attorney's fees are only appropriate for portions of the litigation made necessary by government opposition to legitimate claims of the party seeking the award." Love, 924 F.2d at 1496 (citing Avoyelles Sportsmen's League v. Marsh, 786 F.2d 631 (5th Cir. 1986)). "[A]n award is not appropriate for a phase of the litigation in which the party seeking an award was opposed only by other, non-governmental parties. . . ." Id. The burden is on a plaintiff to show that "their claimed expenses were incurred in opposing improper government resistance to their rightful demands." Id. at 636 (emphasis added).

Environmental plaintiffs urge the application of a more flexible rule relied upon by several courts in other jurisdictions, including American Lung Ass'n v. Reilly, 144 F.R.D. 622, 629 (E.D.N.Y. 1992), Jenkins by Agyei v. Missouri, 967 F.2d 1248, 1251 (8th Cir. 1992), and Environmental Defense Fund v. EPA, 672 F.2d 42 (D.C. Cir. 1982), all of which found time expended on issues raised by a non-governmental interest to be compensable. Although American Lung does articulate a rule favorable to environmental plaintiffs, it is contrary to Ninth Circuit precedent. The American Lung court specifically disregards the Ninth Circuit rule from Love, choosing another approach:

The Love/Avoyelles test is overly formalistic because it turns exclusively on whether or not the government participates in a phase of a lawsuit. [The D.C. Circuit case] EDF v. EPA [ 672 F.2d 42] recognizes that alignment of interests between government and a private intervenor-defendant might exist even when the government takes no position on a matter. The EDF v. EPA approach is preferable because it instructs district courts to examine the facts and circumstances surrounding the government's abstention.

Applying the EDF v. EPA test to the instant motion, it is clear that an alignment of interests existed between the EPA and Alabama Power. Alabama Power filed a provisional answer to plaintiffs' complaint raising defenses almost identical to the EPA's answer.

144 F.R.D. 629. In this circuit, however, Love controls. The environmental plaintiffs do not point to any cases from this circuit adopting the American Lung approach over the rule enunciated in Love. Fees cannot be recovered for litigating discrete issues that were raised by non-governmental parties.

The parties do not agree on the degree of success experienced by the environmental plaintiffs in this case. The parties also dispute the environmental plaintiffs' entitlement to fees for time spent opposing certain motions filed by the water authority plaintiffs. In order to evaluate the fee request in light of these concerns, it is helpful to break the litigation into three phases: (1) challenges to the initial Administrative Proposal; (2) requests for injunctive relief following the decision on the Administrative Proposal; and (3) subsequent litigation concerning the Interim Decision and related appeals.¹⁶ The extent of the environmental plaintiffs' success at each of these stages is discussed below, as is the propriety of awarding fees claimed for time spent opposing motions filed by the water authority plaintiffs.

16 The water authority plaintiffs suggest breaking down the litigation differently, into the following three phases: (1) the initial summary judgment motions and injunctive relief requests regarding the AP, (2) the second round of summary judgment motions regarding the Interim Decision, and (3) the appeals before the Ninth Circuit. But, the appeals before the Ninth Circuit are directly relevant to a determination of the environmental plaintiffs' success on the second round of summary judgment motions. If a party is successful on appeal, time spent litigating that issue in the trial court is also compensable. See Larez v. City of Los Angeles, 946 F.2d 630, 649 (9th Cir. 91). Therefore, it is more helpful to analyze these two phases together.

a. Litigation Concerning the Administrative Proposal.

The environmental plaintiffs experienced considerable success in the early stages of litigation, leading up to the issuance of a decision on the initial round of summary judgment motions concerning Interior's final administrative proposal. The environmental plaintiffs break this early stage of litigation into five central issues/arguments, each of which is discussed below.

(1) Dedicate and Manage.

Environmental plaintiffs' assert that their "bedrock" claim during the first round of summary judgment motions was that the final AP was an abuse of discretion because it treated (b)(2) water as a discretionary allocation, thereby failing to satisfy the statutory requirement that Interior "dedicate and manage" the 800 TAF dedicated yield. The district court found that the AP was contrary to (b)(2)'s requirement that Interior calculate, dedicate, and manage 800 TAF for (b)(2) purposes. Doc. 156 at 28-33.

(2) Five Year "No Need" Finding.

The environmental plaintiffs successfully argued that Interior's inclusion in the AP of a five-year `no-need' finding to justify rededication of any unused portion of (b)(2) water was a misapplication of the statute. Doc. 159 at 7.

(3) Plan for Anadromous Fish.

Environmental plaintiffs obtained summary adjudication on their claim that Interior's failure to timely develop a plan for doubling anadromous fish populations violated section 3406(b)(1). Doc. 159 at 7.

(4) Reuse of (b)(2) Water.

Environmental plaintiffs also unsuccessfully argued that it was an abuse of discretion for Interior to allow the recapture and/or reuse of (b)(2) water for other consumptive uses. The district court rejected this contention, finding instead that Interior had "discretion to manage (b)(2) water for multiple uses, so long as the environmental requirements of (b)(2) are achieved." Doc. 156 at 38. Environmental plaintiffs concede that they were not successful on this ground, but maintain that this claim shared a common core of facts and law and are therefore compensable under Hensley/Sorenson. Nevertheless, to account for their lack of success on this issue, the environmental plaintiffs have reduced the fees claimed on the initial round of summary judgment motions by 10%, or 21 hours.

(5) Other Identified Adverse Impacts.

Finally, environmental plaintiffs argued that Interior failed to address "other adverse environmental impacts" as required by 3406(b)(1).¹⁷ Environmental plaintiffs acknowledge that they did not prevail on this issue, but explain that most of the work on this issue was performed by counsel for NRDC, for whom no fees are requested. Environmental plaintiffs make no claim for work performed by Ms. Koehler on this issue.

17 Section 3406(b)(1) requires the Secretary of the Interior to:

develop within three years of enactment and implement a program which makes all reasonable efforts to ensure that, by the year 2002, natural production of anadromous fish in Central Valley rivers and streams will be sustainable, on a long-term basis, at levels not less than twice the average levels attained during the period of 1967-1991 . . . And provided further, That in the course of developing and implementing this program the Secretary shall make all reasonable efforts consistent with the requirements of this section to address other identified adverse environmental impacts of the Central Valley Project not specifically enumerated in this section.

(emphasis added).

The federal defendants appear to concede that the ruling on this initial round of summary judgment motions was at least a partial victory for the environmental plaintiffs. See Doc. 583, Opp. at 8. However, the federal defendants insist that the environmental plaintiffs' success was "modest, and any award of fees should reflect that fact." Specifically, the federal defendants take issue with the characterization of the "dedicate and manage" argument as a "bedrock" claim. The federal defendants point to language from this court's decision on the water authorities' application for fees and costs, which characterized the "bedrock claim" as whether "the 1928-34 drought regime should be the measuring criterion for [the] yield calculation." Doc. 567 at 30. This is true in part. The water authority plaintiffs' main claim concerned the standard that should be applied to (b)(2). However, the dedicate and manage claim was equally important to cause Interior to rewrite the Final Decision to comply with the law.

The environmental plaintiffs have already accounted in part for those issues on which they did not prevail at this initial stage of the litigation. They voluntarily deducted 10% of the time spent on the initial round of summary judgment motions to account for their lack of success on the "reuse of b(2) water" issue and they are essentially not claiming fees for time spent on the "other identified adverse impacts" issue. An additional 10% must be deducted for time spent opposing the water authority plaintiffs' claims. The environmental plaintiffs should reduce their fee request by an additional 10% of the hours spent on the first phase of the litigation, up to and including the issuance of the district court's decision on the first round of summary judgment motions.

b. Requests for Injunctive Relief Following the Ruling on the Administrative Proposal.

Immediately following the decision on the initial round of summary judgment motions concerning the Administrative Proposal, the water agency plaintiffs applied for a temporary restraining order, seeking to enjoin (b)(2) operations for the 1999 water year and alleging that Interior's then-operative accounting methods would exceed the 800 TAF dedication cap. On April 16, 1999, the court issued a temporary restraining order, enjoining Interior from implementing certain "Delta Actions" described in the "Final Administrative Proposal on the Management of 3406(b)(2) Water." See Doc. 174. A preliminary injunction eventually issued, which precluded Interior from "implementing Section 3406(b)(2) of the [CVPIA] in the 1999 water year . . . in a manner that results in the dedication and management of more than or less than 800,000 acre-feet of CVPIA yield for 3406(b)(2) purposes." Doc. 209, filed May 14, 1999.

Environmental plaintiffs request 50% of the time counsel spent responding to the application for a temporary restraining order. The water authority plaintiffs and the federal defendants object to any award of fees for this work on the ground that the environmental plaintiffs were not aligned against the government when addressing the TRO request. See Doc. 314 at 8 (Fed. Deft's Suppl. Opp'n) Doc. 611 at 3 (Water Auth. Suppl. Opp'n).

As discussed above, the applicable rule is set forth in Love:

[A]ttorney's fees are only appropriate for portions of the litigation made necessary by government opposition to legitimate claims of the party seeking the award. . . . [A]n award is not appropriate for a phase of the litigation in which the party seeking an award was opposed only by other, non-governmental parties . . . [T]he burden on the plaintiffs to show that "their claimed expenses were incurred in opposing improper government resistance to their rightful demands."

924 F.2d 1495-96 (citing Avoyelles, 786 F.2d at 632, 636).

Both the water authority plaintiffs and the federal defendants insist that the federal defendants and environmental plaintiffs were aligned with one another throughout the temporary restraining order proceedings. Environmental plaintiffs correctly point out, however, that they consistently highlighted one issuenot advanced by the federal defendants — the possibility that Interior's implementation of 3406(b)(2) in the 1999 water year might result in the dedication of less than 800,000 acre-feet of CVPIA yield for 3406(b)(2) purposes. This concern was embodied in the injunctive relief issued by the court. Doc. 174 at 3 (". . . this order shall not be construed to modify this Court's earlier ruling that I must provide the full and entire 800,000 acre-feet dedication to the 3406(b)(2) purposes enumerated in this statute."). To a certain extent, environmental plaintiffs hijacked the injunctive relief proceedings to effectuate their own purposes.

The standard from Love is not easily applied under these circumstances. In a technical sense, environmental plaintiff's participation in the injunctive relief proceedings does not constitute an expense "incurred in opposing improper government resistance to their rightful demands." On the other hand, environmental plaintiffs' efforts to interject their concerns into the injunctive relief process represents a natural extension of otherwise compensable (successful) efforts to obtain relief during the initial round of motions for summary judgment. The environmental plaintiffs' work related to the issuance of injunctive relief arose out of a three-sided debate over accounting that began well before the water authority plaintiff's request for injunctive relief.

In this light, the work done by environmental plaintiffs to shape the form of injunctive relief was made necessary by positions taken by the government on accounting issues in related proceedings. The environmental plaintiffs were protecting past victories from erosion. However, given the Ninth Circuit's expressed reluctance to compensate parties for time spent in proceedings opposed only by non-governmental parties, environmental plaintiff's request for 50% of the time spent on the injunctive relief proceedings is excessive.¹⁸ The environmental plaintiffs ultimately sought the inclusion of a provision in the injunction that the annual (b)(2) dedication not be less than 800,000 acre-feet. Plaintiffs are entitled to 20% of the time spent responding to the temporary restraining order and participating in related injunctive relief proceedings. This figure accounts for the extent to which the form of injunctive relief that eventually issued successfully protected environmental plaintiffs' previous victories against the government. Environmental plaintiffs are directed to adjust their fee request accordingly.

18 The environmental plaintiffs also volunteer to deduct an additional 10% from the time spent on the preliminary injunction proceedings to reflect their lack of success on the "change of storage metric" issue. ( See infra at p. 61.) Environmental plaintiffs should increase this to a total deduction of 80% of the time spent on the temporary and preliminary injunctive relief proceedings.

c. Challenges after the Issuance of the Interim Decision.

The final stage of the litigation breaks down into eight separate challenges/issues. The environmental plaintiffs raised three main challenges to the interim decision: (1) that the "primary purpose" of restoration was not being adequately advanced; (2) that the Interim Decision made several modeling errors resulting in an overstatement of water dedicated to (b)(2) purposes; and (3) that the Interim Decision used an inappropriate cut-off date for use of the upstream action "change of storage metric." The environmental plaintiffs raised four other legal challenges concerning: (4) American River Flows; (5) Banking Issues; (6) Section 3406(b)(2)(D) Findings; and (7) Offset/Reset. Finally, (8) environmental plaintiffs unsuccessfully sought a stay pending appeal.

(1) Primary Purpose.

The environmental plaintiffs alleged that using up to 450 TAF of (b)(2) water to satisfy ESA and WQCP requirements is contrary to the plain language of CVPIA § 3406(b)(2) and contravenes the CVPIA as a whole.¹⁹ See Doc. 431 at 13-22. The district court ruled that:

19 In their opening appellate brief, the environmental plaintiffs summarized the parties positions on summary judgment of this issue:

Environmental Appellants moved for summary judgment on the ground that the Final Decision fails to allocate most of the 0,000 AF dedication to the "primary purpose" of implementing the ecosystem restoration measures authorized by the CVPIA. The Water Agencies sought the opposite ruling: that Interior must use the (b)(2) water to cover all of the CVP's water quality and endangered species obligations as a first priority. The Court granted to the Water Agencies' motion and denied Environmental Appellants' motion.

Envt'l Pltf's Opening Appellate Brief, 200 WL 32123196, at 28.

Section 3406(b)(2) unambiguously directs Interior to "dedicate and manage annually eight hundred thousand acre-feet of Central Valley Project yield for the primary purpose of implementing the fish, wildlife, and habitat restoration purposes and measures authorized by this title." Interior has no discretion whether to annually provide more or less than 800 TAF of CVP yield (approximately 5.99 MAF) for (b)(2) purposes, unless it makes certain findings under CVPIA § 3406(b)(2)(C) . . . Interior is also directed to annually dedicate and manage the mandatory 800 TAF of CVP yield "to assist the State of California in its efforts to protect the waters of the San Francisco Bay/Sacramento-San Joaquin Delta Estuary [ i.e., the WQCP]; and to help to meet such obligations as may be legally imposed upon the [CVP] under State or Federal law following the date of enactment of this title, including but not limited to additional obligations under the Federal Endangered Species Act." Id. at 4715-16. As a matter of law, this language is not ambiguous — water used to meet WQCP or post-CVPIA ESA requirements is an additional (b)(2) purpose and must be charged against the 800 TAF (b)(2) mandate if so used.

The CVPIA is not silent on what amount of water used for these so-called "secondary" purposes is to be credited against the 800 TAF (b)(2) mandate. ( E.g., could all 800 TAF of (b)(2) water be used to meet post-CVPIA-enactment ESA requirements?). Congress mandates that exactly 800 TAF of CVP yield ( 5.99 MAF) be dedicated for (b)(2) purposes, whether "primary" or "secondary." To hold otherwise would render the 800 TAF figure superfluous. This leaves to Interior, the discretion to annually determine how much CVP yield to devote to WQCP or post-CVPIA ESA requirements. However, if it were left to Interior's "discretion" whether or not to count CVP yield used for such (b)(2) purposes, the annual 800 TAF cap would be illusory. The 800,000 TAF is intended by Congress as an immutable floor and ceiling on annual reallocation of water from CVP yield for (b)(2) purposes. If Interior uses more than 800 TAF for (b)(2) purposes in any year, but does not count all CVP yield used for such purposes, it violates CVPIA § 3406(b)(2). Water-districts' motion for summary judgment on whether Interior has the discretion to limit credits against (b)(2) for water used for WQCP or post-CVPIA ESA purposes to 450 TAF is GRANTED, Interior has no such discretion. Any amount of CVP yield water annually used for a (b)(2) purpose must be counted as part of the 800 TAF. The environmental plaintiffs' motion for summary judgment on this issue is denied.

This ruling recognized that interior had the discretion to decide how much CVPIA yield to use annually for each of the enumerated CVPIA purposes, but if Interior used such yield for any (b)(2) purpose it had to be counted as a (b)(2) use and subtracted from the 800,000 acre-feet supply.

Initially, both the environmental plaintiffs and the federal defendants appealed on this issue. Their positions were similar, but not identical.

The environmental plaintiffs argued extensively in their opening appellate brief that the district court erred "in relegating the primary purpose of the § 3406(b)(2) dedication to the lowest priority of use." Specifically, the environmental plaintiffs first argued that "the plain language of the statute establishes that most of the 800,000 acre-feet must be reserved for the `primary purpose' of the dedication," because "when Congress uses the term `primary,' its ordinary meaning of predominant, `first importance' or `principally must be given effect." Id. at 33-34.

Second, the environmental plaintiffs argued that "the district court improperly elevated the subordinate purpose of the (b)(2) dedication over the primary purpose" by holding that "all CVP water used for endangered species or water quality obligations must be subtracted from the 800,000 AF, even if this means that little, or no, water remains for the primary purpose of the (b)(2) dedication." Id. at 36. Specifically, the environmental plaintiffs insisted that "[t]he 800 TAF is intended by Congress as an immutable floor and ceiling on annual reallocation of water-from CVP yield for (b)(2) purposes. If Interior uses more than 800 TAF for (b)(2) purposes in any year, but does not count all CVP yield used for such purposes, it violates CVPIA § 3406(b)(2)." Id. at 37. This interpretation, according to the environmental plaintiffs, rendered the therm "primary" meaningless.

Finally, the environmental plaintiffs argued that the district court's ruling "cannot be reconciled with the CVPIA as a whole." Specifically, the environmental plaintiffs pointed to interior's "non-discretionary duty to use water from the (b)(2) account to `achieve' the salmon doubling mandate." Id. at 39-40. The environmental plaintiff's acknowledge that "Section 3406(b)(1)(C) directs Interior to `avoid duplicative obligations' which may be imposed on the CVP and to credit CVP contributions to water quality standards against the (b)(2) account `to the greatest extent practicable.'" But, the environmental plaintiffs insisted that

this practicability limitation establishes that Congress was aware that it would not be practicable to deduct all of the CVP's water quality obligations from the (b)(2) account. Congress intended to authorize Interior to deduct the CVP's water quality obligations from the (b)(2) account only where these actions would be duplicative with the CVPIA's restoration mandate.

Id.

The federal defendants initially filed a cross-appeal, but later abandoned their appeal. The federal defendants insist, however, that their position on "primary purpose" was markedly similar to the position taken by the environmental plaintiffs (which was eventually adopted by the Ninth Circuit). For evidence of its position on this issue, federal defendants point only to a brief filed in an earlier stage of the litigation on May 31, 2000 (well before the appeal was taken), in which the government argued:

[T]he Secretary correctly reads 3406(b)(2) which first mandates that the Secretary "dedicate and manage annually eight hundred thousand acre-feet of Central Valley Project yield for the primary purpose [emphasis in original brief] of implementing the fish, wildlife and habitat restoration purposes and measures authorized by this title." Then the Secretary has the discretion "to assist" the State of California in its efforts to protect the water of the San Francisco Bay/Sacramento San Joaquin Delta Estuary." Finally, the Secretary also has the discretion to use (b)(2) water "to help meet such obligations as may be legally imposed upon the Central Valley Project * * *.

(emphasis in original brief). The government further argued that "the language of 3406(b)(2) . . . prioritizes how (b)(2) water shall be used. . . ." Id. at 15.

On this issue, the Ninth Circuit's reversed the district court's judgment, reasoning that:

The district court erred in concluding that Interior lacks discretion to refrain from crediting the amount of Project yield actually used for any (b)(2) purpose against the designated 800,000 acre feet of Project yield. To hold otherwise would defeat the primary purpose for which the 800,000 acre feet were designated-fish, wildlife, and habitat restoration. Section 3406(b)(2) provides that the "primary purpose" to which the 800,000 acre feet should be dedicated is the implementation of "fish, wildlife, and habitat restoration purposes authorized by this title. . . ." Section 3406(b)(2) also provides that the 800,000 acre feet may be used to "help" meet obligations under the Endangered Species Act and to "assist" in meeting water quality standards. If Interior were required to deduct some or all the water it uses for water quality and Endangered Species Act purposes from the (b)(2) dedication, the water needed for implementation of the Improvement Act's restoration mandate could be relegated to a secondary role, or perhaps no role at all. Such a scenario would directly conflict with the Interior's mandate to give effect to the hierarchy of purposes established in Section 3406(b)(2).

Bay Inst., 87 Fed. Appx 637.

The government insists that the Ninth Circuit's reasoning vindicated its own position that Interior has discretion to use (b)(2) water to (a) assist the State's Bay Delta Estuary protection efforts and (b) help meet other obligations legally imposed upon the Central Valley Project. From a strictly theoretical perspective, this is true. Had the government continued its participation in the appeal, perhaps Love would have barred environmental plaintiffs from recovering fees. But, in practice, the government abandoned this position when itabandoned the appeal. In effect, this abandonment withdrew opposition to the water authorities' position on this issue. The government's position on Interior's primary purpose discretion would never have been vindicated by the Ninth Circuit were it not for environmental plaintiffs' continued pursuit of the appeal. The environmental plaintiffs' appellate work was made necessary by the government's abandonment, which is compensable, but not the work in the district court which was not opposed by the government and was only adverse to the water authority plaintiffs.²⁰

20 Under a narrow reading of Love no fees may be recovered for any stage of work unless (a) the government is directly involved in that stage of the case and (b) the government is standing in opposition to the party requesting fees. Here, however, because of the unique circumstances presented — where the government abandoned an appeal of an issue on which the environmental plaintiffs eventually prevailed — application of such a narrow reading is not appropriate.

Fees on this issue should be limited to the appellate work by environmental plaintiffs. The environmental plaintiffs should deduct an additional 10% of the time spent briefing and arguing the second round of motions for summary judgment before the district court.

(2) Modeling Errors.

During a series of evidentiary proceedings held in July 1999 and February 2000, environmental plaintiffs argued that the federal defendants made several modeling errors in the water distribution plan. See paragraphs 55(a), (c)-(e) of environmental plaintiffs' second claim of their amended complaint, concerning accounting issues. The environmental plaintiffs obtained a favorable judgment from the district court on this issue. See Doc. 320, at 25-28.

(3) Change of Storage Metric.

Environmental plaintiffs challenged Interior's choice of a cut off date for the use of the upstream action "change of storage metric," but this challenge was rejected. Doc. 320 at 30-31. Environmental plaintiffs have volunteered to deduct 10% of the time expended on the preliminary injunction proceedings (13 hours) to account for this limited success. As discussed, supra at 54, environmental plaintiffs should increase this to a total deduction of 80% of the time spent on the temporary and preliminary injunctive relief proceedings.

(4) American River Flows.

Throughout the course of the litigation, the water authority plaintiffs raised challenges to Interior's treatment of certain American River flows. The environmental plaintiffs acknowledged that they experienced "limited success" on these issues and accordingly reduced by 20% (38 hours) the number of hours expended briefing, preparing, and participating in the January and February 2000 hearings which resulted in the issuance of a memorandum opinion and order concerning this and other issues. Doc. 320.²¹ In addition, the environmental plaintiffs deducted 25% (65 hours) of the time spent briefing the interlocutory appeal to the Ninth Circuit and 10% (21 hours) of the time spent on the Ninth Circuit briefing after entry of Final Partial Judgment.

21 Although the interests of the federal defendants and the environmental plaintiffs were largely aligned with respect to the American River flows, the proceedings leading up to the issuance of this particular order concerned other issues (e.g., the modeling errors) on which the environmental plaintiffs eventually prevailed and were opposed by the federal defendants.

Under Love, the deduction must be increased to 100% of the time expended on proceedings related to this issue because the environmental plaintiffs were not opposed by the federal defendants on this issue. Accordingly, environmental plaintiffs must recalculate their fee request to deduct a total of 50% of the time spent briefing, preparing, and participating in the January and February 2000 hearings. Similarly, they must deduct a total of 50% of the time spent briefing the interlocutory appeal to the Ninth Circuit. (The January and February 2000 hearings and the interlocutory appeal covered a number of topics, including the American River flows issues. Accordingly, the remainder of the time billed at these stages is not barred by Love.)

(5) Banking Issues.

Environmental plaintiffs also raised an argument regarding water banking, which comprised less than one page of their opening summary judgment brief. Doc. 431 at 23. The district court ruled against them on this issue. Doc. 466 at 36-38. Environmental plaintiffs did not pursue the matter further. They have reduced billing by 5% (7 hours) of the time spent on briefing summary judgment motion. No further reduction is required.

(6) Section 3406(b)(2)(D) Findings.

District court also ruled against environmental plaintiffs on the issue of 3406(b)(2)(D) findings. Specifically, the district court pointed out that this argument was rejected in the initial round of summary judgment motions, Doc. 156, and that environmental plaintiffs raised the same issue in the second round of summary judgment motions without raising any new arguments in support of their allegations. See Doc. 466 at 39. Environmental plaintiffs have deducted 46 hours to account for their lack of success on this issue (representing 10% of time spent on the summary judgment motions and, 15% of time spent on appeal). Having reviewed the documents pertaining to this renewed allegation, this deduction adequately accounts for any and all time spent by environmental plaintiff's on this issue.

(7) Offset/Reset.

The water authority plaintiffs challenged certain metrics incorporated in Interior's accounting methodology (the "offset/reset" metrics). The Environmental plaintiffs participated in briefing of the matter in mid-2001 and in a related evidentiary hearing in 2002. The interests of the federal defendants, however, were aligned with the environmental plaintiffs on this issue. The district court and the Ninth Circuit ruled in favor of the water authority plaintiffs on this issue. Environmental plaintiffs have already reduced their request by 161 hours (80% of time expended on those trial proceedings; and 15% expended on briefing before Ninth Circuit).

Under Love, the deduction must be increased to 100% of the time expended on the trial proceedings related to this issue because the environmental plaintiffs were not opposed by the federal defendants on this issue. Environmental plaintiffs must adjust their fee request to reflect this deductions. No further deduction for time spent briefing the Ninth Circuit is required, as the 15% deduction already made is sufficient to account for the time spent on the appeal of this issue.

(8) Request for Stay Pending Appeal.

After the district court entered partial final judgment in March 2002, environmental plaintiffs sought an expedited motion for a stay pending appeal, which the district court denied. Doc. 544, filed November 13, 2002. The environmental plaintiffs have already reduced their request by 45 hours, representing 100% of the time spent pursuing the stay. No further reduction is warranted.

6. Costs.

Under 28 U.S.C. § 2412 (a)(1) a prevailing party can recover costs under the following circumstances:

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 or any official of the United States acting in his or her official capacity in any court having jurisdiction of such action. A judgment for costs when taxed against the United States shall, in an amount established by statute, court rule, or order, be limited to reimbursing in whole or in part the prevailing party for the costs incurred by such party in the litigation.

Section 1920, to which § 2412 (a)(1) refers, adds the following considerations to a prevailing party's recovery of costs:

A judge or clerk of any court of the United States may tax as costs the following:

(1) Fees of the clerk and marshal;

(2) Fees of the court reporter for all or any part of the stenographic transcript necessarily obtained for use in the case;

(3) Fees and disbursements for printing and witnesses;

(4) Fees for exemplification and copies of papers necessarily obtained for use in the case;

(5) Docket fees under section 1923 of this title;

(6) Compensation of court appointed experts, compensation of interpreters, and salaries, fees, expenses, and costs of special interpretation services under section 1828 of this title.

Environmental plaintiffs do not appear to seek reimbursement for any expenses specifically listed in § 1920. Rather, they seek $3979 in travel, telephone, and other associated litigation expenses not specifically listed in § 1920. Under International Woodworkers, Local 3-98 v. Donovan, 792 F.2d 762, 767 (9th Cir. 1986) an award of costs may include compensation for telephone calls, postage, courier expenses, travel and other similar costs that are routine under other fee statutes.

The Secretary appeals the district court's award of costs for telephone calls, postage, air courier and attorney travel expenses on the ground that such costs are not specifically listed in Section 2412(b). However, awards of such costs — costs that are ordinarily billed to a client — are routine under all other fee statutes. Moreover, in awarding costs, the district court noted that the expenses enumerated in Section 2412(d)(2)(A) are set forth as examples, not as an exclusive list. The district court's award of costs under Section 2412(b) is proper.

Id. See also Jean v. Nelson, 863 F.2d 759, 778 (11th Cir. 1988); Kelly v. Bowen, 868 F.2d 1333, 1335 (9th Cir. 1988); In re Application of Mgndichian, 312 F. Supp. 2d 1250, 1266 (C.D. Cal. 2003). The federal defendants cite no binding authority that contradicts Woodworkers. Under Woodworkers, the $3979 requested for travel, telephone, and related litigation expenses is recoverable. Furthermore, having reviewed the relevant records, this amount is reasonable in the context of this extraordinarily long-lived and complex case.

7. Expert Witness Fees.

In addition, environmental plaintiffs seek to recover expert fees. Section 2412(d)(2)(A) allows for compensation of expert witness fees and reasonable expenses of those witnesses:

fees and other expenses" includes the reasonable expenses of expert witnesses, the reasonable cost of any study, analysis, engineering report, test, or project which is found by the court to be necessary for the preparation of the party's case, and reasonable attorney fees (The amount of fees awarded under this subsection shall be based upon prevailing market rates for the kind and quality of the services furnished, except that (I) no expert witness shall be compensated at a rate in excess of the highest rate of compensation for expert witnesses paid by the United States. . . .

Environmental plaintiffs seek expert witness fees for A. Spreck Rosekrans (306 hours at $150 per hour), Christina Swanson (32 hours at $100 per hour), and Betty Andrews (72.5 hours at $135 per hour), plus $419 in expert expenses. Federal defendants object that Rosekrans was never qualified as an expert during trial and another did not testify at trial. Environmental plaintiffs correctly point out that, in fact, all three did testify before the court and that the federal government stipulated to Rosekrans' qualifications as an expert. The federal defendants raise no other objections as to the number of hours billed by these experts. The experts were necessary in this technical case and the amounts claimed are reasonable. This request is approved.

V. CONCLUSION

For the reasons set forth above, environmental plaintiffs fee petition is granted in part and denied in part. Environmental plaintiffs must modify their fee request as follows:

(1) Deduct a total of 20% of time spent on the entire first phase of the litigation, up to the decision on the first round of summary judgment motions (as opposed to the voluntary reduction of 10% suggested by environmental plaintiffs).

(2) Deduct a total of 80% of the time spent responding to the request for a temporary restraining order and on proceedings concerning the preliminary injunction (as opposed to the voluntary reductions of 50% of the time spent on the TRO and 10% of the time spent on the preliminary injunction proceedings suggested by environmental plaintiffs).

(3) Deduct an additional 10% of the time spent briefing and arguing the second round of summary judgment motions before the district court to account for the time spent on the "primary purpose" issue prior to the appeal. (Environmental plaintiffs are entitled to fees for the time spent appealing this issue.)

(4) Deduct a total of 50% of the time spent on the January and February 2000 hearings (as opposed to the voluntary reduction of 25% suggested by environmental plaintiffs) to account for non-compensable time spent litigating American River flows issues.

(5) Deduct a total of 50% of the time spent on the interlocutory appeal (as opposed to the voluntary reduction of 25% suggested by environmental plaintiffs) to account for non-compensable time spent litigating American River flows issues.

(6) Deduct a total of 100% of the time spent on the offset/reset trial proceedings (as opposed to the voluntary reduction of 80% suggested by environmental plaintiffs).

No further reductions, beyond those previously volunteered by environmental plaintiffs, are warranted.²² Environmental plaintiffs shall submit the requested deductions within 10 days of service of this order for the court's approval.

22 Unless specifically altered by this memorandum opinion and order, any voluntary reductions previously suggested by environmental plaintiffs should be incorporated into the revised fee request.

SO ORDERED.