Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca4-06-01475/USCOURTS-ca4-06-01475-0/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 

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PUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

OHIO RIVER VALLEY ENVIRONMENTAL 

COALITION, INCORPORATED; HOMINY

CREEK PRESERVATION ASSOCIATION,

INCORPORATED; CITIZENS COAL

COUNCIL,

Plaintiffs-Appellees,

v.

GREEN VALLEY COAL COMPANY,

Defendant-Appellant,

and

MICHAEL C. CASTLE; MICHAEL O.  No. 06-1475

CALLAGHAN, Director of the West

Virginia Division of Environmental

Protection; STEPHANIE R.

TIMMERMEYER, Acting Secretary of

the West Virginia Department of

Environmental Protection; GALE A.

NORTON, Secretary of the Interior,

Defendants,

MINGO LOGAN COAL COMPANY; COAL

MAC, INCORPORATED,

Intervenors/Defendants. 

Appeal from the United States District Court

for the Southern District of West Virginia, at Huntington.

Robert C. Chambers, District Judge.

(3:00-cv-00058)

Argued: September 25, 2007

Decided: December 19, 2007

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Before MICHAEL and MOTZ, Circuit Judges,

and Joseph F. ANDERSON, Jr., United States District Judge for

the District of South Carolina, sitting by designation.

Affirmed in part, vacated in part, and remanded by published opinion.

Judge Michael wrote the opinion, in which Judge Motz and Judge

Anderson joined. 

COUNSEL

ARGUED: Robert Gale McLusky, JACKSON & KELLY, P.L.L.C.,

Charleston, West Virginia, for Appellant. Walton Davis Morris, Jr.,

Charlottesville, Virginia, for Appellees. ON BRIEF: Erin E. Magee,

JACKSON & KELLY, P.L.L.C., Charleston, West Virginia, for

Appellant. 

OPINION

MICHAEL, Circuit Judge: 

Green Valley Coal Company (Green Valley) appeals the award of

attorney fees in a citizen suit brought under the Surface Mining Control and Reclamation Act (SMCRA or the Act), 30 U.S.C. § 1201 et

seq. Initially, three environmental organizations, Ohio River Valley

Environmental Coalition, Inc., Hominy Creek Preservation Association, Inc., and Citizens Coal Council (collectively, OVEC), sued the

Director of the West Virginia Division of Environmental Protection

(the state agency) to mandate changes in the way the agency enforces

its regulatory program under SMCRA. In its complaint against the

state agency, OVEC alleged that certain mining permit applications

filed by Green Valley were deficient, and Green Valley intervened to

defend the validity of its applications. The district court issued a preliminary injunction enjoining the state agency from approving one of

Green Valley’s applications, though the injunction was later dissolved

as moot after Green Valley withdrew the application. Later, OVEC

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filed supplemental claims against Green Valley in this litigation and

a citizen complaint in the administrative arena, alleging SMCRA violations at one of Green Valley’s mining sites. Partly as a result of

OVEC’s efforts, Green Valley took remedial actions at the site, which

led OVEC to dismiss its claims voluntarily. OVEC ultimately moved

for an award of attorney fees under SMCRA’s fee-shifting provision,

30 U.S.C. § 1270(d). The district court made a fee award that

included prejudgment interest. We affirm the fee award with respect

to the preliminary injunction phase (phase one) of the litigation. However, we vacate the fee award with respect to the supplemental claims

phase (phase two) because that award includes fees for OVEC’s

efforts in the administrative arena, and fees for these efforts are not

recoverable under § 1270(d). On remand the district court may reconsider, in light of the applicable standard, whether a fee award is

appropriate for OVEC’s efforts in phase two of the litigation. We also

affirm the award of prejudgment interest but vacate and remand to

allow the district court to correct an apparent miscalculation. 

I.

A.

OVEC started this litigation in January 2000 by filing a lawsuit

under SMCRA’s citizen suit provision, 30 U.S.C. § 1270, against the

Director of the West Virginia Division of Environmental Protection.

Congress enacted SMCRA to, among other things, "assure that surface coal mining operations are so conducted as to protect the environment." 30 U.S.C. § 1202(d). To further its goals, SMCRA creates

an arrangement that allows a state to "assume exclusive jurisdiction

over the regulation of surface coal mining and reclamation operations" within its borders if the federal Secretary of the Interior (the

Secretary) approves the state’s regulatory program. 30 U.S.C. § 1253;

see Bragg v. West Virginia Coal Ass’n, 248 F.3d 275, 288-89 (4th

Cir. 2001). However, if an approved state program fails to enforce

properly the minimum national standards established by SMCRA, the

Secretary may revoke the state’s exclusive jurisdiction and reassume

regulatory authority. 30 U.S.C. §§ 1254(a), 1271(b); see Bragg, 248

F.3d at 288-89. West Virginia received approval for its SMCRA regulatory program in 1981, and the state agency continues to administer

the program. See 30 C.F.R. § 948.10. 

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OVEC asserted in its initial complaint that the state agency was

consistently failing to enforce numerous provisions in the applicable

surface mining regulations. The regulations relevant in this appeal

require a coal operator to include in each surface mining permit application an assessment of the probable hydrologic impact of the proposed mining on the surrounding area. See 30 U.S.C. § 1257(b)(11).

The regulations bar approval of a permit application unless this

assessment, known as a cumulative hydrologic impact assessment

(CHIA), demonstrates that the proposed mining operation will not

cause material damage to the surrounding area. See 30 U.S.C.

§ 1260(b). OVEC’s complaint alleged, among other things, that the

state agency had a pattern and practice of approving permit applications that contained inadequate CHIAs. The complaint identified

numerous applications, some approved and others still pending, that

were allegedly inadequate. OVEC sought a declaratory judgment that

the state agency has a mandatory duty to deny any permit application

that is not supported by an adequate CHIA and an injunction barring

approval of all inadequate pending applications. 

Green Valley, the intervenor in this case, had filed two of the permit applications that OVEC’s complaint identified as inadequate.

These two applications, known as incidental boundary revisions 6 and

7 (IBR 6 and IBR 7), sought revisions to existing permits related to

Green Valley’s operations in the Hominy Creek watershed in Nicholas County, West Virginia. These revisions were necessary because

the refuse area authorized by the existing permit was nearing its

capacity. IBR 6 proposed a long-term solution to this problem that

would nearly double the size of the authorized refuse area while also

converting it from a side-hill fill to a valley fill. IBR 7, on the other

hand, was designed to meet the operation’s short-term refuse needs

during the time required for implementation of the plan proposed by

IBR 6. 

OVEC’s complaint asserted that Green Valley’s permit applications for IBR 6 and IBR 7 were deficient in failing to include at least

three separate pieces of information: (1) complete and accurate hydrologic baseline information; (2) an adequate hydrologic monitoring

plan; and (3) an adequate statement demonstrating that the proposed

operation would not cause violations of applicable water quality standards. The practical effect of these alleged deficiencies was that the

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permit applications, in OVEC’s view, contained neither adequate

information detailing the existing iron problem in Hominy Creek nor

a sufficient basis for concluding that the proposed operations would

not worsen the iron problem. 

On June 1, 2000, roughly four months after this lawsuit was filed,

the state agency informed OVEC that IBR 6 and IBR 7 would soon

be approved. OVEC responded by moving first for a temporary

restraining order on June 5 and then for a preliminary injunction on

June 13. On June 7 Green Valley moved to intervene in the case "to

protect its property interest in both its mining operations and its surface mining permit." J.A. 170. The court granted Green Valley’s

motion to intervene, and the company participated fully in the injunction proceedings. 

Following a four-day hearing in mid-June 2000, the district court

issued a preliminary injunction that enjoined the state agency from

approving IBR 6. The court denied relief with respect to IBR 7 subject to the condition that the state agency amend the CHIA to account

for certain information adduced at the hearing. With respect to IBR

6, the court found that the "CHIA does not include an adequate

assessment of the current [iron] problem" and that OVEC was "likely

to prevail on one of its principal challenges to the sufficiency of the

CHIA." J.A. 242. The court also concluded that the baseline data in

the CHIA was questionable and that the CHIA’s groundwater monitoring plan was inadequate. In its decision the court highlighted evidence "tending to show that the CHIA had an insufficient basis for

concluding" (1) that the existing iron problem in Hominy Creek

derived mostly from an abandoned mine downstream of Green Valley’s operations and (2) that the significant expansion of the side-hill

fill proposed by IBR 6 would not worsen the iron problem. J.A. 241.

The court noted that Green Valley and the state agency contested the

evidence on these points but found that OVEC had made a sufficiently strong showing to warrant a preliminary injunction. The court

concluded that further investigation was necessary to determine

whether the proposed project was likely to worsen materially the iron

problem in Hominy Creek. 

The state agency filed its notice of appeal from the preliminary

injunction on July 19, 2000. Several months later, in December 2000,

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Green Valley obtained permission from the state agency to withdraw

the IBR 6 application. In February 2001 the state agency informed the

district court of this development and noted that Green Valley had

resubmitted the application as IBR 9. OVEC then moved to dissolve

the preliminary injunction as moot. Though the state agency opposed

the motion based on the similarities between IBR 6 and IBR 9, it

acknowledged that it had not completed a full administrative review

of IBR 9 and could not predict the outcome of such review. The district court dissolved the preliminary injunction on April 11, 2001,

based on its determination that "[a]lthough similar to the enjoined

IBR [6], the newly submitted IBR [9] has not been reviewed by [the

state agency]." J.A. 284. Dissolution of the injunction concluded what

we refer to as phase one of the litigation.

B.

Later, in October 2001, OVEC filed an administrative complaint,

known as a "citizen complaint," with the Charleston, West Virginia,

office of the federal Office of Surface Mining (OSM). The citizen

complaint alleged that Green Valley’s existing Hominy Creek operations were in violation of numerous provisions of SMCRA. A few

days after filing the citizen complaint with OSM, OVEC notified

Green Valley of its intent to commence a civil action against the company based on the violations identified in the citizen complaint. A

year later, in October 2002, phase two of this litigation began when

OVEC moved successfully in district court to file supplemental

claims against Green Valley. 

In the meantime, OVEC’s October 2001 citizen complaint

prompted OSM to begin a lengthy administrative review process. The

most important events in that process, at least for our purposes,

occurred in mid-2003. On June 20, 2003, OSM issued a notice of violation based on several seeps containing iron that were draining into

Hominy Creek without first passing through a treatment pond. Green

Valley thereafter took remedial measures to address these seeps. In

response to Green Valley’s measures, OSM terminated its notice of

violation on September 17, 2003. Based in part on its satisfaction with

Green Valley’s remedial efforts, OVEC moved on May 3, 2004, to

dismiss, without prejudice, its supplemental claims against Green

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Valley. The district court granted OVEC’s dismissal motion the next

day, thus ending phase two of the litigation.

C.

OVEC petitioned the district court for an award of costs of litigation, including attorney and expert witness fees, under 30 U.S.C.

§ 1270(d). In a series of rulings the district court held that OVEC was

eligible for a fee award based on the preliminary injunction that

barred issuance of IBR 6, calculated the amount of a reasonable fee

award based on the degree of success OVEC achieved in the two

phases of the litigation, and awarded prejudgment interest. For phase

one the district court awarded $64,107.50 in fees and $24,360.85 in

prejudgment interest. The court determined that OVEC’s limited success in phase two warranted reducing its fee award for that phase by

half, resulting in an award of $49,573.76 with prejudgment interest of

$3,965.90. The court also awarded additional amounts for the attorney

fees incurred in preparing the fee petitions and for a few other miscellaneous lawyer expenses. Green Valley appeals the award of fees and

prejudgment interest.

II.

Under what is called the American Rule, a "prevailing litigant is

ordinarily not entitled to collect" an award of attorney fees "from the

loser." Alyeska Pipeline Serv. Co. v. Wilderness Soc’y, 421 U.S. 240,

247 (1975). Congress from time to time departs from this rule by

enacting provisions that require or permit a court to order one party

to pay the reasonable attorney fees of another. Most fee-shifting provisions allow a court to award fees to a prevailing party. See Loggerhead Turtle v. County Council, 307 F.3d 1318, 1322 & n.4 (11th Cir.

2002) (listing "prevailing party" provisions). Less commonly, a feeshifting provision, such as SMCRA’s, authorizes a fee award "to any

party, whenever the court determines such award is appropriate." 30

U.S.C. § 1270(d); see Loggerhead Turtle, 307 F.3d at 1322 & n.5

(listing "whenever appropriate" provisions). Under a "whenever

appropriate" provision a fee award is appropriate only when the fee

claimant achieves "some degree of success on the merits." Ruckelshaus v. Sierra Club, 463 U.S. 680, 694 (1983). We review de novo

the legal determination of whether a party has achieved sufficient sucOHIO RIVER VALLEY v. GREEN VALLEY COAL CO. 7

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cess to be eligible for a fee award under a "whenever appropriate"

provision. W. Va. Highlands Conservancy v. Norton, 343 F.3d 239,

246 (4th Cir. 2003). The factual findings underpinning that determination are reviewed for clear error. Carolina Care Plan, Inc. v. McKenzie, 467 F.3d 383, 390 (4th Cir. 2006). 

III.

We first consider whether OVEC achieved sufficient success on

the merits during phase one of the litigation to warrant an award of

attorney fees. 

A.

OVEC advances alternative reasons to support its eligibility for a

fee award with respect to phase one. It argues first that the district

court was correct in holding that the preliminary injunction, by itself,

provided OVEC with sufficient success on the merits to justify the

award. OVEC argues in the alternative that it is eligible for an award

under the catalyst theory based on Green Valley’s withdrawal of the

IBR 6 permit application. Because we conclude that the catalyst theory supports a fee award for phase one of this litigation, we do not

take up the question of whether obtaining a preliminary injunction

might, standing alone, support a fee award under a "whenever appropriate" provision. Cf. Smyth v. Rivero, 282 F.3d 268, 276-77 (4th Cir.

2002) (holding that a preliminary injunction was not sufficient to

create eligibility for fees under a prevailing party provision). 

The catalyst theory holds that "parties who obtain, through settlement or otherwise, substantial relief prior to adjudication on the merits" may be eligible for attorney fees under a "whenever appropriate"

provision. See Sierra Club v. EPA, 322 F.3d 718, 719 (D.C. Cir.

2003). The theory derives in large part from the Supreme Court’s

observation in Ruckelshaus that Congress intended the "whenever

appropriate" standard in the Clean Air Act to allow fee recovery for

"suits that force[ ] defendants to abandon illegal conduct, although

without a formal court order." 463 U.S. at 686 n.8 (citing S. Rep. No.

91-1196 (1970)). Allowing catalyst theory recovery was, as the

Supreme Court noted, a "somewhat expansive innovation" that

extended fee eligibility beyond that available under the prevailing

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party standard. Id. The legislative history demonstrated, however, that

Congress clearly intended such a result. Id.; see also Gwaltney of

Smithfield v. Chesapeake Bay Found., 484 U.S. 49, 67 n.6 (1987) (citing similar legislative history relating to the "whenever appropriate"

standard in the Clean Water Act). 

Green Valley argues that the catalyst theory is no longer valid after

S-1 & S-2 v. State Board of Education, 21 F.3d 49 (4th Cir. 1994),

and Buckhannon Board & Care Home v. West Virginia Department

of Health & Human Resources, 532 U.S. 598 (2001). Both S-1 & S2 and Buckhannon hold that prevailing party fee provisions do not

permit recovery based on the catalyst theory. S-1 & S-2, 21 F.3d at

51; Buckhannon, 532 U.S. at 610. Instead, these provisions require a

"judicially sanctioned change in the legal relationship of the parties."

Buckhannon, 532 U.S. at 605. Green Valley’s argument based on

cases that interpret prevailing party provisions runs squarely into

Ruckelshaus, which remains the controlling law on the construction

of "whenever appropriate" provisions. As Ruckelshaus acknowledges,

Congress’s adoption of the "whenever appropriate" standard acts as

a rejection of the prevailing party standard and its narrower application. 463 U.S. at 687. For this reason, Buckhannon and other cases

rejecting the catalyst theory under prevailing party provisions do not

bar the application of the theory to "whenever appropriate" provisions. 

Other circuits agree with us that Buckhannon does not bar catalyst

recovery under a "whenever appropriate" provision. See Sierra Club

v. EPA, 322 F.3d 718 (D.C. Cir. 2003) (Clean Air Act); Loggerhead

Turtle v. County Council, 307 F.3d 1318 (11th Cir. 2002) (Endangered Species Act). These circuits have likewise reasoned that Ruckelshaus, which was not even cited in Buckhannon, remains the

controlling Supreme Court decision with respect to the "whenever

appropriate" standard. Sierra Club, 322 F.3d at 721-26; Loggerhead

Turtle, 307 F.3d at 1322-27. In sum, SMCRA’s "whenever appropriate" fee-shifting provision authorizes recovery under the catalyst theory.

B.

We turn now to whether the catalyst theory supports OVEC’s fee

recovery for phase one of this case. To warrant a catalyst recovery,

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OVEC must establish three things: first, that Green Valley’s actions

provided OVEC with "some of the benefit sought" in the lawsuit; second, that OVEC’s claims in the lawsuit were not frivolous; and third,

that OVEC’s lawsuit was a substantial or significant cause of Green

Valley’s actions providing relief. See Sierra Club, 322 F.3d at 726.

The district court’s findings support application of the catalyst theory in this case, although the court did not base the fee award on that

theory. The second element of a catalyst recovery is not in dispute.

In granting the injunction with respect to IBR 6, the district court necessarily found that OVEC’s claims were not frivolous. The third element, causation, is likewise satisfied. The record makes clear that,

absent the preliminary injunction obtained by OVEC, the state agency

would have approved IBR 6 in its original form, and Green Valley

would have had no reason to submit IBR 9 in lieu of IBR 6. Green

Valley’s withdrawal of IBR 6 was thus caused, at least in significant

part, by OVEC’s lawsuit. 

The issue that requires closest attention is whether Green Valley’s

withdrawal of IBR 6 provided OVEC "some of the benefit sought" in

its lawsuit. The district court concluded that Green Valley’s withdrawal of its IBR 6 application and the submission of IBR 9

"achieved one of [OVEC’s] primary purposes" because it required the

state agency to reconsider the allegedly inadequate CHIA. J.A. 573.

Under our precedent this rather modest victory provides OVEC a sufficient benefit to warrant eligibility for a fee award. In West Virginia

Highlands Conservancy v. Norton, 343 F.3d 239, 246-47 (4th Cir.

2003), we held that a plaintiff was eligible for a SMCRA fee award

based on its success in securing a remand requiring OSM to reconsider the claim asserted in the plaintiff’s citizen complaint. Likewise,

in National Wildlife Federation v. Hanson, 859 F.2d 313, 316-17 (4th

Cir. 1988), we held that a fee award was appropriate under the Clean

Water Act when the plaintiff secured a remand requiring the Army

Corps of Engineers to reconsider a previous determination that an

area was not wetlands. In both cases we held that a remand requiring

the agency to begin its administrative review process anew constituted some success under Ruckelshaus, regardless of whether the

plaintiff ultimately prevailed on the underlying issue. The same reasoning applies here. As the district court pointed out, the practical

effect of Green Valley’s withdrawal of IBR 6 and submission of IBR

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9 was to restart the administrative review process and require the state

agency to reconsider the allegedly deficient permit application. Therefore, we conclude that OVEC, like the plaintiffs in Norton and Hanson, is eligible for a fee award under the "whenever appropriate"

standard. Green Valley, however, argues that satisfying this standard

is not dispositive in this case because other factors (considered below)

negate fee eligibility.

C.

Green Valley argues that the district court’s fee award is inappropriate under Independent Federation of Flight Attendants v. Zipes,

491 U.S. 754 (1989), due to the company’s status as an intervenor

during phase one of the litigation. In Zipes the Supreme Court held

that an intervenor could be liable for attorney fees under Title VII’s

prevailing party standard only if its participation in the litigation was

"frivolous, unreasonable, or without foundation." 491 U.S. at 761.

The Court imposed this stringent standard based on its determination

that imposing liability on blameless intervenors would not advance

the purposes of Title VII’s fee-shifting provision. Id. at 761-62.

OVEC concedes that Green Valley’s actions were not frivolous,

unreasonable, or without foundation, but it argues that Zipes, which

interpreted a prevailing party provision, is not controlling in this case.

We agree with OVEC that Zipes does not apply here. To begin

with, Zipes is distinguishable because it construed Title VII’s prevailing party standard rather than the "whenever appropriate" standard

used in SMCRA. More important, the Supreme Court’s rationale in

Zipes actually supports the fee award in this case in at least two ways.

First, Green Valley is not blameless in the sense that term was used

in Zipes. The intervening party in Zipes was a union representing all

of the employees of Trans World Airlines (TWA). After TWA

reached a settlement agreement with the Title VII plaintiffs, the union

intervened because it claimed the settlement agreement adversely

affected the seniority rights of its members. As the Court recognized,

the union intervenor was blameless because there was no allegation

that it had violated Title VII. 491 U.S. at 762. By contrast, OVEC’s

initial complaint alleged that Green Valley had violated its duties

under SMCRA by submitting permit applications that did not comply

with the Act’s requirements. Second, Zipes instructs that the discreOHIO RIVER VALLEY v. GREEN VALLEY COAL CO. 11

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tion to award fees is guided by the "large objectives" of the underlying substantive provisions in a statute. 491 U.S. at 759. SMCRA’s

large objectives do not support imposing the Zipes standard as a

shield against liability for intervenors in Green Valley’s position. To

the contrary, the purpose of SMCRA’s fee-shifting provision — to

ensure compliance with SMCRA’s provisions both by the states

implementing the regulatory program and the coal operators regulated

by the program — would be undercut by a rule that protects operators

from fee liability when they intervene to defend allegedly illegal mining permits and practices. 

Green Valley also contends that our decision in Johnson v. City of

Aiken, 278 F.3d 333 (4th Cir. 2002), bars a fee award against an intervening party. This assertion, too, lacks merit. Like Zipes, Johnson is

distinguishable because it construes a prevailing party provision, and

it lacks persuasive force in the context of this case. In Johnson we

reversed the district court’s decision to award fees against a police

officer who had not been a party to the only claim, a pendent state law

assault claim, on which the plaintiffs had won more than nominal

damages. We held that the officer’s "status as a nonparty on the state

law assault claim protects him from [fee] liability [under § 1988] arising from that claim." 278 F.3d at 338. Here, Green Valley was an

intervenor with respect to the claim in question, not a nonparty like

the officer in Johnson. Moreover, in Johnson we emphasized the

"crucial connection between liability for violation of federal law and

liability for attorney’s fees under federal fee-shifting statutes." Id.

(quoting Zipes, 491 U.S. at 762). In this case Green Valley’s submission of allegedly illegal mining permit applications provides the necessary connection between the substantive provisions of SMCRA and

fee liability. 

D.

Green Valley also argues that the district court’s fee award is inappropriate because of our decision in Bragg v. West Virginia Coal

Association, 248 F.3d 275 (4th Cir. 2001). In Bragg we held that

Eleventh Amendment immunity bars a SMCRA suit in federal court

that seeks an injunction against a state official to enforce the provisions of a state’s (federally approved) SMCRA regulatory program.

Green Valley casts its Bragg argument in terms of subject matter

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jurisdiction, yet it does not dispute the district court’s jurisdiction at

the time the order awarding attorney fees was entered. Thus, the heart

of Green Valley’s argument appears to be that the district court

should not have awarded attorney fees because Bragg, which was

decided shortly after the district court dissolved the preliminary

injunction, demonstrates that the injunction would have been reversed

on appeal. This argument fails because Green Valley’s actions

mooted the injunction while the state agency’s appeal was pending

and before the Bragg decision was issued. And nothing in Bragg

negated OVEC’s success in both blocking the issuance of IBR 6 and

requiring the state agency to restart the administrative process with

respect to Green Valley’s IBR 9 application. 

E.

In sum, we hold that the district court’s fee award to OVEC for its

work on phase one of the litigation is appropriate under the catalyst

theory, and that Green Valley’s arguments attacking that portion of

the award are without merit. 

IV.

We turn now to whether OVEC may recover its fees for phase two

of the litigation. Phase two began when the district court allowed

OVEC to file supplemental claims against Green Valley alleging that

the company was violating SMCRA at its Hominy Creek operations.

In calculating OVEC’s phase two award, the district court included

not only time OVEC’s lawyers spent pursuing the supplemental

claims in this case but also time spent on related administrative

efforts. For the reasons that follow, we hold that the district court

erred by awarding fees for time spent on the related administrative

efforts. On remand the district court may award fees for OVEC’s

phase two litigation efforts — but not for efforts in administrative

proceedings — if the court determines (applying catalyst theory

requirements) that OVEC’s phase two litigation was a significant or

substantial cause of Green Valley’s decision to take remedial action

at its Hominy Creek mining site. 

A.

OVEC contends that the portion of the fee award attributable to

time spent on phase two may be affirmed based on the success

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achieved during phase one. We disagree. In Hensley v. Eckerhart, 461

U.S. 424, 440 (1983), the Supreme Court held that "where the plaintiff achieve[s] only limited success, the district court should award

only that amount of fees that is reasonable in relation to the results

obtained." The Hensley rule suggests that in the circumstance before

us — involving a lawsuit with distinct phases and claims — a plaintiff

is entitled to recover fees only with respect to any phase that is successful. For this reason, OVEC may recover a fee award for its efforts

during phase two of this case only if it achieved some degree of success (as measured by the catalyst theory) during that phase. 

B.

We also disagree with OVEC’s contention that the district court

properly included time spent in the administrative arena as part of the

phase two fee award. (The fee award for OVEC’s efforts in administrative proceedings appears to include time spent in preparing the citizen complaint and in advancing OVEC’s position in the agency

investigation triggered by the complaint.) The inclusion of the time

spent in administrative proceedings is inconsistent with the text of

§ 1270(d), the provision that allows for fee awards in citizen suits

brought under SMCRA. Section 1270(d) provides that a court "in

issuing any final order in any action brought" to compel compliance

with SMCRA "may award costs of litigation (including attorney and

expert witness fees) to any party . . . ." 30 U.S.C. § 1270(d) (emphasis

added). The phrase "costs of litigation" refers to costs of litigating a

citizen suit, and not to costs of pursuing separate administrative remedies.*

OVEC points out that in an environmental compliance case, Pennsylvania v. Delaware Valley Citizens’ Council, 478 U.S. 546 (1986),

the Supreme Court allowed fee recovery for time spent in related

administrative proceedings. The case before us today is not like Delaware Valley, however. The type of fee recovery permitted in Delaware Valley is limited to circumstances in which the "administrative

proceedings are intimately tied to the resolution of the judicial action

*Another fee-shifting provision in SMCRA, 30 U.S.C. § 1275(e),

allows for the recovery of fees in administrative proceedings. OVEC’s

fee petition did not seek fees under § 1275(e). 

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and necessary to the attainment of the results Congress sought to promote by providing for fees." Sullivan v. Hudson, 490 U.S. 877, 888

(1989). In Delaware Valley the plaintiff’s "participation in [state]

administrative proceedings was crucial to the vindication of [the

plaintiff’s] rights" under a court-ordered consent decree in a Clean

Air Act case. 478 U.S. at 561. The Supreme Court thus upheld a fee

award that included time spent by plaintiff’s counsel in pursuing

"measures [in the administrative arena that were] necessary to enforce

the remedy ordered by the District Court." 478 U.S. at 559. Here,

OVEC’s dual-track strategy of pursuing both judicial and administrative relief might have been wise, but the pursuit of administrative

remedies was not necessary to the attainment of relief in its citizen

suit under SMCRA. Its citizen complaint and subsequent work in the

administrative arena simply provided OVEC a separate, alternative

route to the goals it was pursuing in the litigation. Therefore, nothing

in Delaware Valley alters our conclusion that OVEC is not entitled in

this case to a fee award under § 1270(d) for efforts in the administrative proceedings. 

C.

OVEC argues that its phase two fee award may be upheld under

the catalyst theory because its dual-track efforts — filing both an

administrative complaint and supplemental claims in phase two of

this litigation — caused Green Valley to take remedial action. As

OVEC points out, the district court found that OVEC’s "litigation and

administrative complaints forced [the state agency], OSM and [Green

Valley] to assemble more data on the iron found in Hominy Creek,

to determine [the iron’s] sources and to modify the permits and plan

of operation to control those sources." J.A. 810. Moreover, the district

found that "[a]s a result of [OVEC’s] dual track approach," Green

Valley "negotiated a resolution of the regulatory actions by revising

its permit and operations to address some, even if not most, of the

iron flowing from its permit areas into Hominy Creek." J.A. 810.

These actions, the district court concluded, advanced OVEC’s "primary goal," which was "to hold [Green Valley] accountable for the

iron pollution of Hominy Creek in the vicinity of [Green Valley’s]

operations." J.A. 810. 

These findings are not sufficient to support a catalyst theory award

under § 1270(d). Application of that theory requires a finding that

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OVEC’s phase two litigation was a significant or substantial cause of

Green Valley’s decision to undertake remedial efforts. See Sierra

Club, 322 F.3d at 726. The district court’s findings do not meet this

standard because they address only the combined effect of OVEC’s

administrative and phase two litigation efforts. We therefore vacate

that part of the fee award that relates to phase two of the litigation and

the administrative proceedings. On remand the district court may

award OVEC its fees for phase two of the litigation — but not fees

for its administrative efforts — if the court determines that litigation

of the supplemental claims in this case had a significant or substantial

effect on Green Valley’s decision to take remedial action. 

V.

We turn finally to the propriety of the district court’s award of prejudgment interest. In awarding attorney fees, a district court is

required to account for "the effect of delay in payment on the value

of the fee." Daly v. Hill, 790 F.2d 1071, 1081 (4th Cir. 1986). The

delay factor may be accounted for either by using a fee rate based on

the current market or by using the historical fee rate with reasonable

interest added. Johannssen v. Dist. No. 1 - Pac. Coast Dist., MEBA

Pension Plan, 292 F.3d 159, 180 (4th Cir. 2002). The district court

stated that its fee award was based on historical fee rates and that an

award of prejudgment interest was therefore the appropriate method

of accounting for the delay in payment. 

Green Valley argues that an award of prejudgment interest is not

permissible in this case. Green Valley says that awarding prejudgment

interest would result in an improper windfall to OVEC because at

least two of OVEC’s lawyers charged the same rate at the time of the

award as they did when the work was performed. This argument fails

under controlling law. The thrust of Daly and Johannssen, cited

above, is that a fee award must account for the effect of delay in payment. When a lawyer’s rates are unchanged throughout the relevant

time period, that is, when the current fee rate is the same as the historical rate, a fee award based on the current rate does not account for

the delay in payment at all. In these circumstances, the only proper

course is to account for the delay in payment by awarding prejudgment interest. Thus, the district court’s decision to award prejudgment

interest was proper.

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The district court did, however, err in one respect in calculating the

award of prejudgment interest. OVEC’s filings indicate that one of its

lawyers, Ted Korth, charged an hourly rate of $150 prior to May 1,

2001, and $175 per hour thereafter. Although all work relating to the

preliminary injunction phase of the litigation was completed prior to

April 13, 2001, the district court calculated the fee award based on

Korth’s $175 rate. Using the higher rate to calculate the fee award

while also awarding prejudgment interest is inappropriate under Daly

and Johannssen. For this reason, we vacate the district court’s award

of prejudgment interest and remand for the court to recalculate the

interest and issue a corrected award.

VI.

For the foregoing reasons, we affirm the district court’s fee award

with respect to the portion attributable to time spent on phase one of

the litigation. We vacate the award with respect to phase two with

instructions that the district court reconsider on remand whether to

award OVEC the fees incurred in pursuing its supplemental claims in

this litigation without taking into account the related administrative

proceedings. Finally, we affirm the district court’s decision to award

prejudgment interest, but we vacate the interest award and remand for

the district court to recalculate the interest due on the fees of one of

OVEC’s lawyers. 

AFFIRMED IN PART,

VACATED IN PART,

AND REMANDED

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