Thursday, June 6, 2013

Interfaith Community Organization v. Honeywell International, Inc

Jun 4: In the U.S. Court of Appeals, Third Circuit, Case Nos. 11-3813 and 11-3814. Appealed from the United States District Court for the District of New Jersey. This latest appeal, in this protracted litigation, requires the panel to decide whether offers of judgment pursuant to Fed. R. Civ. P. 68 may be made in the context of attorney's fee disputes under the fee-shifting provisions of the Resource Conservation and Recovery Act ("RCRA"), 42 U.S.C. §§ 6901, et seq. We are also called upon once again to determine whether the fee award is excessive. The Appeals Court says, "Because we conclude that Rule 68 offers of judgment may be made in this context, we will reverse the District Court‟s declaration that the offers of judgment in this case are null and void as well as its decision to bar any further offers of judgment. And, while we uphold as not clearly erroneous the District Court's decisions with respect to the appropriate hourly rates in this case, we are unable to sustain its conclusions with respect to the number of hours claimed by counsel because the District Court‟s findings lack sufficient explanation. Accordingly, we will vacate the fee award and remand for further proceedings."

    The underlying case involves the Mutual Chemical Company of America (Mutual) which operated a chrome manufacturing plant in Jersey City, New Jersey from 1895 to 1954. During that time, the company deposited approximately 1.5 million tons of industrial waste residue containing hexavalent chromium into wetlands along the Hackensack River. In 1954, Allied Corporation purchased the plant and ended the dumping. Allied Corporation was succeeded by AlliedSignal, Inc., and later by Honeywell International, Inc. (Honeywell). Although the dumping stopped, the contaminated area was not cleaned up. In 1995, the Interfaith Community Organization (ICO) and five residents of the nearby community  represented by the Washington, DC law firm of Terris, Pravlik & Millian, LLP (Terris), filed the original suit. In 2004, the District Court awarded ICO more than $4.5 million in fees and expenses for litigating the 1995 action. Additional litigation followed to address and remediate the additional related contaminated sites.

    Initially, the parties were able to reach agreement on fees and expenses, but beginning in the fall of 2009, Honeywell, on the one hand, and ICO and Riverkeeper (an additional party) failed to reach agreement with respect to the fees. On September 8, 2011, the District Court issued an opinion that substantially upheld the Appellees' fee request (approximately #3.2 million).

    [Without getting into the extensive and specific details on the disagreement over expenses between the parties], the Appeals Court finally rules, "For the foregoing reasons, we will reverse the District Court's ruling that Rule 68 offers of judgment are inapplicable in the context of environmental citizen suits brought under RCRA, direct that the previously made offers of judgment be reinstated, affirm the District Court's departure from the forum-rate rule because review of this issue is barred by collateral estoppel, affirm the District Court‟s application of the LSI-updated Laffey Matrix, vacate the District Court‟s fee award, and remand the case for further proceedings consistent with this opinion."

    Access the complete opinion (click here). [#Haz, #Remed, #CA3]

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