In a keynote address before 950 Alaskans attending RDC’s 36th Annual Meeting Luncheon in Anchorage June 28, Wyoming attorney Karen Budd-Falen reported that environmental groups are collecting tens of millions of dollars in attorney fees from the federal government in lawsuits aimed at systematically stopping development in oil, mining, timber, and other industries.
At issue is the Judgment Fund and the Equal Access to Justice Act (EAJA) which requires the federal government to pay attorney fees when it loses cases under statutes that do not specifically call for such fees to be paid by the government.
Budd-Falen and a growing block of Republicans in Congress argue that environmental groups have taken advantage of a lack of oversight on such payments and file lawsuits they know they can win on procedural grounds. Frequent litigants include the Sierra Club Legal Defense Fund, the Center for Biological Diversity, and Earthjustice.
Budd-Falen noted the Judgment Fund is reauthorized every year by Congress, but with no specified amount. The fund pays for litigation under the Clean Water Act, the Clean Air Act, and the Endangered Species Act (ESA). The Equal Access to Judgment Act applies in cases involving the National Environmental Policy Act (NEPA).
The Wyoming attorney and rancher reported that the Sierra Club alone has collected at least $56 million from the federal government for attorney fees. She said in one case, the government agreed to pay Earthjustice an hourly rate of $750 in attorney fees.
In that case, the environmental law firm collected $500,000. She said that in many cases the federal government would not disclose fees paid to environmental groups. In at least 10 percent of the cases nationwide, there is no information available as to how much in U.S. tax dollars were paid in attorney fees to environmental groups.
Budd-Falen pointed out that although federal law requires the awarding of fees be limited to the winning party in a lawsuit, in 21 percent of the cases, the government paid fees before the outcome of the case was determined.
Budd-Falen emphasized that in most cases, the groups sue on process, not substance. She said that despite best intentions, the federal agencies cannot fulfill all NEPA and ESA requirements in an entirely perfect manner, given compliance is too complex. This opens the door for environmentalists to sue on process issues, not on the impacts of a project itself.
For instance, under the ESA, the government has 90 days to respond to a petition to list a species for special protection. If the government does not respond to the petition within that time period, it is vulnerable to a process-driven lawsuit where the environmental group gets its fees paid, even for writing the petition in the first place, Budd-Falen warned.
The Center for Biological Diversity last year alone filed 1,000 petitions with the federal government to list species under the ESA.
The litigation climate in Alaska and elsewhere is driving investment away from America, Budd-Falen warned. “We’re funding our own demise.”
In research she conducted, Budd-Falen discovered that between 2000 and 2009, in 19 states 14 environmental groups filed 3,000 lawsuits in federal district courts, collecting $37 million in attorney fees. In addition, they collected an additional $4 million from private companies. No fees were disclosed in at least 10 percent of the cases.
Moreover, court documents revealed that the federal government and private companies were forced to make $555,000 in donations to environmental groups, Budd-Falen said.
She noted that twice as many cases have been filed during the Obama administration, suggesting green groups may be emboldened by favorable decisions from a Democratic U.S. Justice Department. The most heavily litigated industry is the oil and gas sector.
According to a separate academic study outside of Budd-Falen’s research, the Forest Service itself paid $6.1 million in legal fees to groups that sued it over a six-year period. The payments cover the period spanning 1999-2005.
Budd-Falen said there are efforts underway in Congress to accomplish litigation reform to curb what she called abuses of the system. A Republican-backed bill, H.R. 1996, would reform the law to restrict reimbursements for each entity to no more than three in a calendar year and would prevent payments to any group that has a net worth of more than $7 million. Attorney fees would be capped at $175 an hour and maximum payment for each case would be $200,000. Accountability of every dollar paid out in attorney fees would be required.
With regard to NEPA cases, Budd-Falen said the impacts of delays stemming from litigation should be calculated into the cost of a project. She said that in all NEPA compliant projects, the federal government should be required to equally consider the economic benefits of a project to local communities. She said the NEPA process needs to consider local economic stability in the permitting process. These recommendations are being worked into federal legislation. A video of Budd-Falen’s presentation is available at akrdc.org.
Return to newsletter headlines
