The Ninth Circuit Court of Appeals recently rejected a developer’s petition for rehearing en banc and upheld an award of $1,117,368.56 in attorneys’ fees, plus interest, in favor of the Center for Biological Diversity and a local anti-development group under the Endangered Species Act (ESA). Although all three judges on the appellate panel expressed concern about the result, a majority of the panel ruled that the court was bound by precedent to uphold the fees award.  

The ESA provides for an award of attorneys’ fees to a prevailing party “whenever the court determines such award is appropriate.” Less than a year after the district court determined that the developer’s activities would harass or “take” threatened bald eagles and awarded plaintiffs their attorneys’ fees, the Fish & Wildlife Service removed the bald eagle from the list of federally threatened species. As a result of the delisting, the developer could not appeal from the district court’s underlying ruling on the merits because the controversy had become moot. The developer argued that in these “special circumstances” an award of attorneys’ fees would be unjust. That is, whatever might have been the case previously, the developer could no longer violate the ESA regarding the bald eagle, regardless of any appellate decision. Similarly, as a result of the delisting, the court could not grant the plaintiffs the relief they sought under the ESA.

Nonetheless, the majority of the Ninth Circuit panel upheld the award of attorneys’ fees even though they could not review the merits of the district court decision to determine whether an award of attorneys’ fees was proper. The panel initially concluded that there was insufficient record evidence that the developer’s activities would harass the bald eagle and that the award of attorneys’ fees had to be vacated along with the ruling on the merits. However, on reconsideration, the court changed course. A majority of the panel decided that they could consider only whether the plaintiffs prevailed on the merits so as to be eligible for fees, but could not ask whether the district court’s underlying decision was erroneous. The majority reasoned that until the date of the delisting, the judgment of the district court had the effect of giving relief to the plaintiffs and protecting the thenthreatened bald eagle. In the circumstances, the majority concluded that the plaintiffs had prevailed on the merits and that an award of attorneys’ fees was appropriate. The court “adhere[d] to the wide agreement by appellate judges that they should not undertake to delve into the details of a district court’s resolution of a controversy that has since become moot in order to decide the ancillary question of fees.” The dissenting judge would have concluded that the plaintiffs were not prevailing parties eligible for attorneys’ fees. However, the panel majority declined to reconsider the decision a second time, and no judge of the court requested a vote for en banc consideration. The developer is currently seeking Supreme Court review of this unfortunate decision.

NOTE: In previous editions of Legal Briefs (Issue No. 33, May 2010; Issue No. 30, Sept. 2008), we reported on cases where both the Ninth Circuit and Tenth Circuit Courts of Appeals had invalidated attorneys’ fees awards by lower courts because environmental activists did not establish that they were prevailing parties eligible for such awards. In both of those cases, the activists had secured preliminary injunctions to maintain the status quo, and the federal government defendants then voluntarily withdrew the challenged activity. Because the activists received no relief from the courts on the merits, they did not qualify as prevailing parties who were eligible for attorneys’ fees. However, in the case discussed here, the majority concluded that the plaintiffs were prevailing parties eligible to be awarded attorneys’ fees because they secured relief on the merits from the district court in the form of permanent injunctive relief, even though the relief was only short-lived and the injunction had to be dissolved when the case became moot.