On Appeal From the United States District Court for the Western District of Pennsylvania, D.C. Civil No. 82-437.
Higginbotham, Becker, Hunter, Circuit Judges.
This appeal by the United States arises from an award by the district court of $144,590.65 in attorneys' fees and expenses to plaintiff's counsel under the Equal Access to Justice Act, as amended, 28 U.S.C. § 2412(d)(1)(A) (1982 & Supp. III 1985) ("EAJA").*fn1 In the civil action underlying the fee award, thirty-nine individuals (the "Dunn Group") living or doing business in the vicinity of an inactive uranium ore processing mill in Canonsburg, Pennsylvania (the "Site") sued the United States, the Commonwealth of Pennsylvania, and numerous federal and state agencies and officials in the District Court for the Western District of Pennsylvania, seeking declaratory and injunctive relief with respect to the need for cleanup of radioactive materials at the Site. The suit was predicated upon the defendants' alleged failure both to comply with federal environmental laws and to abate the public nuisance at the Site. This phase of the litigation ended with the entry of a consent judgment, in which the federal defendants agreed, inter alia, that the United States Department of Energy ("DOE") would hold informational public meetings before the commencement of each construction season for remedial action at the Site.*fn2 Thereafter, the district court ultimately awarded counsel for the Dunn Group fees and costs in the abovementioned amount, having enhanced the lodestar by a multiplier of 1.5 in recognition of the contingent nature of success and the quality of counsel's work on the case.*fn3
In its appeal of the fee award, the Government contends that the district court erred in concluding that the members of the Dunn Group were prevailing parties under EAJA. The Government also challenges the district court's conclusion that the position of the United States was not "substantially justified" within the meaning of EAJA and its award of quality and contingency multipliers. For the reasons that follow, we conclude that, on the present record, the district court's determination that plaintiffs were prevailing parties for purposes of an EAJA fee award was clearly erroneous. Therefore, we will vacate the judgment of the district court but, because the prevailing party issue has not been fleshed out fully, remand the case for further proceedings consistent with this opinion. Given our disposition of the prevailing party question, we need not address the remaining issues raised in the Government's appeal.
I. FACTS AND PROCEDURAL HISTORY
Particularly with respect to the question whether the Dunn Group is a prevailing party, this appeal presents challenges to the fee award that are inextricably linked with the history of the litigation. We will therefore set forth in some detail the course of the relevant underlying litigation and the results it is said to have achieved.
A. The Underlying Litigation
1. The Plaintiffs' Complaint
The Dunn Group filed its complaint on March 19, 1982. Plaintiffs identified themselves as persons living, conducting business, and owning or leasing real property in proximity to the Site. They sought therein to represent a class of similarly situated persons. The complaint contained three counts, alleging both common law and statutory violations. In Count 1, sounding in nuisance, plaintiffs sought an injunction that would require defendants (1) to remove all radioactive and radiation-contaminated materials from the Site and vicinity properties; (2) to repair and restore, as necessary, these properties after the removal; (3) to undertake any other acts necessary to abate the public nuisance; and (4) to desist from future dumping of any radioactive waste at the Site.
In Count II, plaintiffs sought declaratory, mandatory, and injunctive relief against DOE for its alleged failure to comply with the public participation provisions of the Uranium Mill Tailings Radiation Control Act of 1978 ("UMTRCA"), 42 U.S.C. § 7921 (1982). Specifically, plaintiffs asked the district court to issue an order declaring that DOE had failed to perform its duties under UMTRCA and ordering DOE to comply with the Act. Plaintiffs sought "funding for independent testing and epidemiological studies to be conducted by experts selected by or upon consultation with plaintiffs." App. at 37. In paragraph (c) of Count II the complaint also requested that the district court enjoin DOE from establishing priorities, selecting remedial action, and executing cooperative agreements concerning the Site until the completion of public hearings and other public participation. Id.*fn4
In Count III plaintiffs alleged that DOE had failed to comply with the National Environmental Policy Act ("NEPA").*fn5 42 U.S.C. §§ 4321-4347 (1982). Plaintiffs sought (1) a declaration that DOE's failure to prepare an Environmental Impact Statement ("EIS") for the site violated NEPA; (2) an order requiring submission of an EIS; and (3) an injunction against DOE taking any action at the Site, remedial or otherwise, until such an EIS was prepared.
On August 9, 1982, the federal defendants moved in the alternative to dismiss the complaint or for summary judgment. The motion was accompanied by affidavits of several federal officials involved with implementation of UMTRCA at the Site. However, on October 29, 1982, the district court denied this motion as "premature." App. at 399. On August 22, 1983, the federal defendants renewed their motion to dismiss as to Count III on the ground it had been mooted by the issuance of a draft EIS in December 1982 and a final EIS for the Site on August 5, 1983. Plaintiffs did not contest the renewed motion on procedural grounds, and on October 18, 1983, the district court dismissed Count III as moot. Thereafter, the parties settled the underlying litigation by entry of a consent judgment.
The consent judgment was entered on May 23, 1984, stipulating that it was in "full settlement" of the Dunn Group's claims against the federal defendants and constituted a "full discharge and release" of the defendants, and that the district court retained jurisdiction over DOE and the NRC to enforce the terms of the judgment. App. at 432. The Dunn Group, however, reserved the right to participate in NRC rulemaking or licensing proceedings and to seek attorneys ' fees from the federal defendants. The Government, in turn, reserved the right to oppose the Dunn Group's efforts to obtain attorneys' fees and expenses.
In paragraph IV of the consent judgment the DOE and the NRC agreed to the following:
In order to resolve the remaining issues in this action, Defendants United States Department of Energy and United States Nuclear Regulatory Commission agree to the following:
A. Representatives of the United States Department of Energy or its agents will convene a meeting to which the public is invited, before the start of each construction season[,] at which time they will explain the schedule and plans for remedial action at the Canonsburg Industrial Park for that construction season.
B. Representatives of the United States Department of Energy or its agents will meet with each vicinity property owner, prior to the conduct of remedial action on the property, at which time they will explain the schedule and plan for such remedial action.
C. The United States Nuclear Regulatory Commission will notify counsel for Plaintiffs of the initiation of rulemaking or other proceedings with respect to the initial licensing of the Canonsburg Industrial Park site subsequent to the completion of remedial action on the site, by the United States Department of Energy.
As we have noted, supra note 3, the district court originally dismissed the fee petition on jurisdictional grounds and, following appeal, we reversed and remanded the matter to the district court. See Dunn v. United States, 775 F.2d 99 (3d Cir. 1985). On remand, the district court had before it the original application, as supplemented with several affidavits and billing statements of counsel, as well as an affidavit from one plaintiff, Janis Dunn. The Dunn Group requested attorneys' fees and expenses for two law firms. For the firm of Mansmann, Cindrich & Huber, plaintiffs requested fees for hours expended in the underlying litigation and on the fee petition totaling 2732.38 hours. For the firm of Wilson, Johnson & Sweat, the Dunn Group requested compensation for a total of 424.70 hours spent up to the time of entry of the consent judgment and the original filing of the fee petition. Additionally, both law firms asked the district court to apply a multiplier of 1.5 to reflect the supposed novelty, complexity and contingent nature of the case.
On February 6, 1986, the district court granted plaintiffs' application for fees and expenses as submitted, awarding the firm of Mansmann, Cindrich & Huber a total of $135,846.04, and the firm of Wilson, Johnson & Sweat a total of $27,161.45. The Government moved to vacate the order, however, challenging the district court's conclusion that plaintiffs were prevailing parties based upon the agreement embodied in the consent decree. On March 12, 1986, the district court vacated its February 6 opinion and order and scheduled further briefing on the fee application.*fn6 Thereafter, the original petition was further supplemented with additional affidavits and billing statements to reflect time expended since the filing of the original application. On October 15, 1986, after briefing by the parties, the district court issued a second ...