Environmental Litigation: Cases against EPA and Associated Costs over Time
Released: 2011-08-31T00:00:00

Letter

Background

To carry out its responsibilities under the nation’s environmental laws, EPA conducts an array of activities, such as promulgating regulations; issuing and denying permits; approving state programs; and issuing enforcement orders, plans, and other documents. Many of these activities may be subject to legal challenge.

Environmental Statutes and Lawsuits against the Federal Government

Generally, the federal government has immunity from lawsuits, but federal laws authorize three types of suits related to EPA’s implementation of environmental laws. First, most of the major environmental statutes include “citizen suit” provisions authorizing citizens—including individuals, associations, businesses, and state and local governments—to sue EPA when the agency fails to perform an action mandated by law. These suits are often referred to as “agency-forcing” or “deadline” suits. Second, the major environmental statutes typically include judicial review provisions authorizing citizens to challenge certain EPA actions, such as promulgating regulations or issuing permits. Third, the Administrative Procedure Act authorizes challenges to certain agency actions that are considered final actions, such as rulemakings and decisions on permit applications. As a result, even if a particular environmental statute does not authorize a challenge against EPA for a final decision or regulation, the Administrative Procedure Act may do so. Table 1 lists key environmental laws under which EPA takes actions—or that govern EPA actions—that may be subject to challenge in court.

Supporters of provisions allowing legal challenges to actions of the federal government assert that they provide a check on the authority of federal agencies as they carry out—or fail to carry out—their duties. For example, in passing the 1977 Clean Air Act amendments, a key sponsor indicated that authorizing citizens to sue agencies to compel them to carry out their duties is integral to a democratic society. According to others, citizen suits against government agencies have achieved benefits, such as ensuring the implementation of congressional directives or accelerating regulatory programs. Similarly, the Administrative Procedure Act arose out of the expansion of the federal government in the New Deal, with concerns about agencies’ adjudicative powers, their exercise of delegated legislative power by rulemakings, and the scope of review of agency administrative action by courts.

A lawsuit challenging EPA’s failure to act may begin when the aggrieved party sends EPA a notice of intent to sue, if required, while a lawsuit challenging a final EPA action begins when a complaint is filed in court.

Before EPA takes final action, the public or affected parties generally have opportunities to provide comments and information to the agency. In addition, administrative appeals procedures are available—and in many cases required—to challenge EPA’s final action without filing a lawsuit in a court. For example, citizens can appeal an EPA air emission permit to the agency’s Environmental Appeals Board. These administrative processes provide aggrieved parties with a forum that may be faster and less costly than a court.

If a party decides to pursue a case, the litigation process generally involves filing of a complaint, formal initiation of the litigation; motions to the court before trial, such as asking for dismissal of the case; and hearings and court decisions. Throughout this process, the parties to the litigation can decide to reach a settlement. Negotiations between the aggrieved party and EPA may occur anytime after the agency action, at any point during active litigation, and even after judgment. A common remedy sought in litigation against EPA under the statutes listed in table 1 is for the court to set aside an EPA regulation or permit decision and to require EPA to reconsider that regulation or permit decision.

The Equal Access to Justice Act

In the United States, parties involved in litigation generally pay their own attorney fees and costs, except in instances in which Congress has provided exceptions for policy reasons, such as to encourage citizens to bring suits to enforce the law. In these instances, as well as some common-law exceptions, a prevailing plaintiff may seek award of its attorney fees and court costs from the losing party. Many of the environmental statutes in table 1 contain such exceptions authorizing courts to award fees, which, according to Justice, include awards against the federal government.

In 1980, Congress enacted the Equal Access to Justice Act (EAJA) authorizing the award of attorney fees and costs to parties that prevail in certain lawsuits against the federal government; the payments are made from Treasury’s Judgment Fund and agency appropriations. While the federal government was already subject to some of these exceptions in environmental statutes, before EAJA was enacted, the federal government in many other cases was not subject to these exceptions and therefore was not authorized to make payments to prevailing parties. As the 1980 conference committee report for EAJA explains, the act’s premise is that individuals, corporations, partnerships, and labor and other organizations do not seek review of or defend against unreasonable government actions because of the expense involved, as well as a disparity in expertise and resources between the government and the individual or organization involved. For those cases brought under statutes that do not make the federal government subject to pay fees and costs, EAJA thus allows payment of the attorney fees and other costs if the organizations sought review of a government action and prevailed. (See app. II for a detailed description of the act.)

Except as otherwise specifically provided by law, EAJA authorizes the award of the following costs to be paid from Treasury’s Judgment Fund or an agency’s appropriations, as indicated:  Court costs of prevailing parties against the United States in any civil action. These costs may include fees for the clerk and marshal, reporter, printing, witnesses, copies, docket fees, and interpreters and court-appointed experts and may include an amount equal to the filing fees. Payment of costs made under this section generally are paid by Treasury’s Judgment Fund.  Reasonable attorney fees and expenses of a prevailing party to the same extent as any other party where a statutory or common-law exception provides for award of fees to a prevailing party. Regarding the environmental statutes in table 1, according to Justice, many of the relevant provisions under which EPA may be sued provide for award of such fees against EPA, independent of EAJA. Nevertheless, EAJA makes EPA subject to fee awards under all the environmental statutes’ provisions authorizing courts to award attorney fees and expenses. Therefore, in many—but not all—of the environmental lawsuits against EPA, a court may award attorney fees and expenses of a prevailing party against the agency, independently or as a result of EAJA section 2412(b). Payment of awards made under this section generally are paid by Treasury’s Judgment Fund.  Attorney fees and expenses of a prevailing party in most other cases—that is, when the relevant statute does not authorize courts to award attorney fees and expenses, and no common-law exception applies—unless the court finds that the position of the United States was substantially justified or that special circumstances make an award unjust. Two laws listed in table 1—the Federal Insecticide, Fungicide, and Rodenticide Act and the Federal Food, Drug, and Cosmetic Act—as well as some individual provisions of other statutes, do not authorize payment of fees to prevailing parties. As a result, in cases brought against EPA under these statutes and provisions, courts award payment of fees under EAJA section 2412(d). Payment of awards made under this section is generally made from agency appropriations.

In addition, to settle a case, the government may agree to pay a plaintiff court costs and attorney fees and expenses. Payments made in connection with settlements are paid in the same manner as a court award for the case.

Some in Congress have expressed concerns that the use of taxpayer funds to make EAJA payments depletes limited funding; these individuals have called for transparency of these expenditures. Originally, EAJA provided for governmentwide reporting on its use and cost. For judicial proceedings, EAJA required the Director of the Administrative Office of the U. S. Courts to report annually to Congress on EAJA court activity, including the number, nature, and amounts of awards; claims involved; and any other relevant information deemed necessary to aid Congress in evaluating the scope and effect of awards under the act. The responsibility for this reporting was transferred to the Attorney General in 1992. In addition, EAJA required the Chairman of the Administrative Conference of the United States to submit an EAJA report annually to Congress on administratively awarded fees and expenses. Then, in December 1995, the Federal Reports Elimination and Sunset Act of 1995 repealed the Attorney General’s reporting requirement for fees and expenses awarded under EAJA and also discontinued reporting of governmentwide administrative awards of fees and costs under EAJA after fiscal year 1994.

We have previously reported certain governmentwide EAJA data, as well as data focused on selected agencies. In 1995, we reported data on the number of cases and amounts of awarded plaintiff attorney fees exceeding $10,000 against nine federal agencies for cases closed during fiscal years 1993 and 1994. In 1998, we provided information on the history of EAJA, the extent to which one provision of the act was used governmentwide from 1982 to 1994, and the provision’s use by the Department of Labor and other agencies. The governmentwide data for fiscal year 1994 showed, among other things, that the Departments of Health and Human Services and of Veterans Affairs accounted for most EAJA payments in court proceedings, under the provision that applies when the substantive law does not authorize award of attorney fees and costs.

The Number of Environmental Litigation Cases against EPA Showed No Discernible Trend over 16 Years, and Stakeholders Stated That Various Factors Affected Yearly Numbers

The number of environmental litigation cases brought against EPA each year from fiscal year 1995 through fiscal year 2010 varied but showed no discernible trend. According to the stakeholders we interviewed, a number of factors—particularly presidential administration, the passage of new regulations or amendments to laws, or EPA’s failure to meet statutory deadlines—affect the number of environmental litigation cases each year and the type of plaintiffs who bring them.

No Trend Was Discernible in the Number of Cases Brought against EPA from Fiscal Year 1995 through Fiscal Year 2010

The number of environmental litigation cases brought against EPA each year from fiscal year 1995 through fiscal year 2010 varied but did not change systematically over time. The average number of new cases filed each year was 155, ranging from a low of 102 new cases filed in fiscal year 2008 to a high of 216 cases filed in fiscal year 1997 (see fig. 1). From fiscal year 1995 through fiscal year 2001, the average number of new cases was 170; from fiscal year 2002 through fiscal year 2010, the average number of new cases was 144, a difference of 26 fewer new cases on average. The average number of new cases in these periods varied from the long-term average of 155 cases by less than 10 percent. In all, Justice defended EPA in nearly 2,500 cases from fiscal year 1995 through fiscal year 2010.

The greatest number of cases was filed in fiscal year 1997, which, according to a Justice official, may be explained by the fact that EPA revised its national ambient air quality standards for ozone and particulate matter in 1997, which may have caused some groups to sue. In addition, according to the same official, in 1997 EPA implemented a “credible evidence” rule, which also was the subject of additional lawsuits. The fewest cases against EPA (102) were filed in fiscal year 2008, and Justice officials were unable to pinpoint any specific reasons for the decline. In fiscal years 2009 and 2010, the caseload increased. A Justice official said that it is difficult to know why the number of cases might increase because litigants sue for different reasons, and some time might elapse between an EPA action and a group’s decision to sue.

As shown in figure 2, most cases against EPA were brought under the Clean Air Act, which represented about 59 percent of the approximately 2,500 cases that were filed during the 16-year period of our review. Cases filed under the Clean Water Act represented the next largest group of cases (20 percent), and the Resource Conservation and Recovery Act represented the third largest group of cases (6 percent).

The lead plaintiffs filing cases against EPA during the 16-year period fit into several categories. The largest category comprised trade associations (25 percent), followed by private companies (23 percent), local environmental groups and citizens’ groups (16 percent), and national environmental groups (14 percent). Individuals, states and territories, municipal and regional government entities, unions and workers’ groups, tribes, universities, and a small number of others we could not identify made up the remaining plaintiffs (see table 2). Appendix I gives more information about our method of developing these categories and classifying cases.

According to the stakeholders we interviewed, a number of factors— particularly a change in presidential administration, the passage of regulations or amendments to laws, and EPA’s failure to meet statutory deadlines—affect plaintiffs’ decisions to bring litigation against EPA. Stakeholders did not identify any single factor driving litigation, but instead, attributed litigation to a combination of different factors.

According to most of the stakeholders we spoke with, a presidential administration is an important factor in groups’ decisions to bring suits against EPA. Some stakeholders suggested that a new administration viewed as favoring less enforcement could spur lawsuits from environmental groups in response, or industry groups could sue to delay or prevent the administration’s actions. For example, a presidential administration that seems to favor less enforcement of requirements under environmental statutes could motivate increased litigation. Other stakeholders suggested that if an administration is viewed as favoring greater enforcement of rules, industry may respond to increased activity by bringing suit against EPA to delay or prevent the administration’s actions, while certain environmental groups may bring suit with the aim of ensuring that required agency actions are completed during an administration they perceive as having views similar to the groups’ own.

Most of the stakeholders also suggested that the development of new EPA regulations or the passage of amendments to environmental statutes may lead parties to file suit against the new regulations or against EPA’s implementation of the amendments. When EPA issues new or amended regulations, parties may take issue with the specific new provisions. One stakeholder noted that an industry interested in a particular issue may become involved in litigation related to the development of regulations because it wishes to be part of the regulatory process and negotiations that result in a mutually acceptable rule. In addition, several of the stakeholders noted that if EPA does not meet its statutory deadlines, organizations or individuals might sue to enforce the deadline. In such suits, interested parties seek a court order or a settlement requiring EPA to implement its statutory responsibilities.

In addition, some stakeholders said that some statutes are broadly written or contain vague language or definitions; such statutes are more likely to be litigated because different parties want to define the terms and set precedent for future cases. For example, a stakeholder representing states’ perspectives said that under the Clean Water Act, an area of frequent litigation is the definition of “navigable waters.” Through lawsuits, litigants have argued about whether a certain body of water comes within the definition and can therefore be regulated under the act.

A few stakeholders identified two other factors that may affect litigation: (1) the maturity of the statute in question and (2) the use of existing laws to address new problems. The stakeholders said that the focus of litigation over a particular statute changes with time, as early cases may set precedents that will affect how the statute is implemented later. Also, a representative of an environmental organization said that because no major rewriting of any environmental statutes has occurred in 20 years, plaintiffs are increasingly bringing suits, and judges are making decisions, about how to interpret statutes in situations for which rules were not explicitly written. For example, parties disagree over whether the Clean Air Act should be used to regulate greenhouse gases, such as carbon dioxide, methane, and nitrous oxide—substances that some stakeholders say the act was not originally designed to regulate.

Available Data Indicate That Costs Associated with Environmental Litigation against EPA, including Payments to Plaintiffs, Have Varied over the Past 10 Years with No Discernible Trend

Data available from Justice, Treasury, and EPA show that the costs associated with environmental litigation cases against EPA have varied from year to year with no discernible trend. Justice’s Environment and Natural Resources Division spent a total of about $43 million to defend EPA in these cases from fiscal year 1998 to fiscal year 2010, averaging $3.3 million per year. Some cost data from the Department of Justice are not available, however, in part because Justice’s Environment and Natural Resources Division and the U.S. Attorneys’ Offices do not have a standard approach for maintaining key data for environmental litigation cases. For example, while the Environment and Natural Resources Division tracks attorney hours by case, the U.S. Attorneys’ Offices do not. Treasury paid a total of about $14.2 million to prevailing plaintiffs for attorney fees and costs related to these cases from fiscal years 2003 through 2010, averaging about $1.8 million per year. EPA paid a total of $1.4 million from fiscal year 2006 through fiscal year 2010 in attorney fees and costs, averaging about $280,000 per year.

On Average, Justice Spent at Least $3.3 Million a Year Defending EPA against Environmental Litigation in Fiscal Year 1998 through Fiscal Year 2010

Our analysis of data from Justice’s Environment and Natural Resources Division found that from fiscal year 1998 through fiscal year 2010, Justice spent at least $3.3 million on average annually to defend EPA against environmental litigation, for a total of $43 million. (The Environment and Natural Resources Division fiscal year 2010 budget was $110 million.) The U.S. Attorneys’ Offices’ database, however, does not contain information on attorney hours worked by case, which meant that we could not include the time these attorneys spent on each case in our estimate. According to Justice officials, however, the $3.3 million average per year represents the majority of Justice’s time spent defending EPA each year, given that the U.S. Attorneys’ Offices handle a small number of environment-related cases each year. Overall, as shown in figure 3, annual costs increased by an average of about 3 percent each year from fiscal year 1998 through 2010, ranging from a low of $2.7 million in fiscal year 1998 to a high of $3.9 million in fiscal year 2007.

Justice maintains separate, decentralized databases containing environmental case information and does not have a standard approach for collecting and entering data on these cases. Without a standard approach, it is it difficult to identify and summarize the full set of environmental litigation cases and costs managed by the department agencywide. Specifically, the department’s Environment and Natural Resources Division and the U.S. Attorneys’ Offices maintain different case management systems, and these systems do not use the same unique number to identify cases, making it possible to track cases within each component but not to align and merge cases from the two components. Because the U.S. Attorneys’ Offices may assist the Environment and Natural Resources Division in certain case activities, a single case may appear in both systems, each with a different unique identifier. The only piece of data in both databases that can in practice be used to identify cases managed by both components is the court number, yet neither system has adopted the standard court number format used in the federal judiciary’s Public Access to Court Electronic Records system, an electronic service that allows public access to case and docket information from federal appellate, district, and bankruptcy courts. According to an official of the Executive Office for U.S. Attorneys, the individual U.S. Attorneys’ Offices may enter the court numbers in the specific formats used by the courts in their individual jurisdictions, although the official also said that there is no formal or written guidance for proper format of court numbers. Without such standard identifying numbers, it is difficult to identify a full and unduplicated list of environmental litigation cases and to derive descriptive statistics on costs, statute, or opposing parties. Because the department’s data on environmental litigation cannot be reliably merged or aggregated to provide summary information on environmental cases, we had to use an iterative electronic and manual process to compile data from the two systems to conduct our review and identify the full set of environmental litigation cases and associated costs.

Moreover, not only are the two Justice databases separate, but the two agency components do not collect the same types of data on environmental cases. Specifically, the U.S. Attorneys’ database does not collect data on the number of hours attorneys spend on an individual case or information on the statute under which a case is filed. As a result, it is impossible to gather complete data on all environmental litigation cases and costs from these databases. For example, we were unable to calculate the total number of hours that Justice attorneys worked on environmental cases—and hence, total costs of attorney time—because the U.S. Attorneys’ time is not tracked by case.

By employing an iterative electronic and manual process to standardize the court numbers associated with all cases and matching cases from the two systems by these numbers, we were ultimately able to merge the two sets of data on environmental litigation cases managed by Justice’s Environment and Natural Resources Division and the U.S. Attorneys’ Offices for purposes of this report. Justice officials said, however, that they do not plan to change their approach to managing the data because they use the data in each system to manage individual cases, not to identify and summarize agencywide data on cases or trends. Officials said that their systems were designed for internal management purposes and not agencywide statistical tracking. Furthermore, while funds are spent to maintain the systems, officials indicated that the systems are old, and adding data fields or otherwise making changes to the systems may be technically infeasible or too costly. Justice officials said that the department previously sought to develop and implement a single case management system to gather common data agencywide, but the project was terminated in 2010 after a 2009 Office of the Inspector General report found that the project was more than 2 years behind the initial estimated completion date and that the project’s total cost would be more than $18 million over budget. Because the two Justice components are not regularly required to merge and report their data in a systematic way, we are not making a recommendation regarding these data or systems.

On Average, Treasury Paid Successful Plaintiffs $1.8 Million Annually from the Judgment Fund over the Last 8 Years, and EPA Paid about $280,000 a Year over the Last 5 Years

In addition to Justice’s costs of defending EPA, costs of litigation include payment of attorney fees and court costs to plaintiffs who prevail in lawsuits against EPA. As part of the payment process, Justice negotiated payment amounts with prevailing parties before finalizing the amount to be paid. For most of the claims under the 10 environmental statutes in this report, payments to successful plaintiffs were made from Treasury’s Judgment Fund. Justice defended approximately 2,500 EPA-related cases filed from fiscal year 1995 through fiscal year 2010, but the number of environmental litigation cases from which plaintiffs received payments was small, representing about 8 percent of all cases. In addition, EPA made a small number of payments for attorney fees and costs under the appropriate provision of EAJA.

From fiscal year 2003—the first year for which Treasury’s Judgment Fund data are available—through fiscal year 2010, Treasury made, on average, 26 payments totaling $1.8 million per year for EPA-related environmental cases. The average Judgment Fund payment was $68,600 per payment. Treasury paid a total of about $14.2 million out of its Judgment Fund to prevailing plaintiffs for attorney fees and costs related to these cases (see fig. 4). The largest share of monies (46 percent) were made in cases filed by national environmental groups, followed by monies paid for cases filed by local environmental and citizens’ groups (29 percent). The payments ranged from as little as $145, to the administrator of a law school clinic for a Clean Air Act suit, to as much as $720,000, to a private law firm for a Clean Water Act suit. According to Justice officials, payments are made either to the plaintiff or to the plaintiff’s attorneys. Appendix III lists payments from Treasury’s Judgment Fund for the environmental statutes in our review.

Fluctuations in annual payments may occur, according to Justice officials, because payments to plaintiffs can be made several years after a case is completed, in part because Justice attempts to negotiate settlements of attorney fee claims before seeking a determination by the courts regarding claims that cannot be settled. Officials said that through this process of negotiation, the department pays plaintiffs, in the majority of cases, an amount that is much lower than requested. To determine attorney fees for each case, Justice considers, among other things, documentation by the plaintiff, including such factors as (1) the number of hours the plaintiff’s attorneys spent on the case, which must be documented by the plaintiff; (2) the job description of the person spending time on the case (e.g., the costs for a paralegal and a lead counsel would be very different); (3) the specific tasks performed; and (4) applicable law in the jurisdiction, such as limits on hourly attorney fees or total amounts that courts have approved in the past. Although Justice may conclude that the hours are justified, fees may still be denied because of court precedent. Each time fees are negotiated, depending on the amount, Justice’s Assistant Attorney General or the relevant Environment and Natural Resources Division Section Chief must approve the result, pursuant to applicable regulations and delegations.

From fiscal year 2006—the first year for which EPA specifically tracked the payments by type of claim—through fiscal year 2010, EPA made 14 payments, totaling $1.4 million, for attorney fees and other costs under EAJA. EPA made an average of 2.8 payments per fiscal year, with an average payment of about $100,000. On average, EPA paid about $280,000 per year. The largest share of the monies (61 percent) went to payments for claims filed by local environmental groups, followed by monies (23 percent) for claims filed by national environmental groups. Although workers’ groups filed comparatively few lawsuits, one such group did receive a single payment of $230,000 in fiscal year 2010 (see fig. 5).

The EPA payments ranged from $1,179, which was paid to an individual for a Clean Water Act suit in 2010, to $472,967, which was paid to an environmental group for two Clean Water Act suits, including one appeal. Appendix III contains a list of payments by payee.

Agency Comments and Our Evaluation

We provided a draft of this report to EPA, Justice, and Treasury for their review and comment. EPA did not provide comments, and Justice and Treasury had technical comments, which we incorporated as appropriate.

As agreed with your offices, unless you publicly announce the contents of this report earlier, we plan no further distribution until 30 days from the report date. At that time, we will send copies to the appropriate congressional committees, the Attorney General of the United States, the Secretary of the Treasury, the Administrator of EPA, and other interested parties. In addition, the report will be available at no charge on the GAO Web site at http://www.gao.gov.

If you or your staff members have any questions about this report, please contact me at (202) 512-3841 or trimbled@gao.gov. Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this report. GAO staff who made major contributions to this report are listed in appendix IV.

Appendix I: Objectives, Scope, and Methodology

This report describes (1) trends, if any, in environmental lawsuits against the Environmental Protection Agency (EPA) from fiscal year 1995 through fiscal year 2010, as well as stakeholders’ views of factors affecting any trends, and (2) Justice’s recent costs for representing EPA in defensive environmental lawsuits and the federal government’s recent payments to plaintiffs.

To examine the changes over time to EPA’s environmental litigation caseload, we obtained and analyzed data on lawsuits filed against the agency from databases maintained by two components within the Department of Justice—the Case Management System database maintained by Justice’s Environment and Natural Resources Division and the Legal Information Office Network System database maintained by Justice’s U.S. Attorneys’ Offices. We obtained and analyzed data from these databases for lawsuits: filed in federal court from fiscal year 1995 through fiscal year 2010 (Oct. 1, 1994, through Sept. 30, 2010); in which EPA was the lead defendant, excluding cases in which EPA was a defendant but the lead defendant identified by Justice was another agency, such as the U.S. Army Corps of Engineers;  brought under 10 major environmental statutes implemented by or applying to EPA, including the Clean Air Act; Clean Water Act; Safe Drinking Water Act; Resource Conservation and Recovery Act; Comprehensive Environmental Response, Compensation, and Liability Act (Superfund); Emergency Planning and Community Right- to-Know Act; Federal Insecticide, Fungicide, and Rodenticide Act; Federal Food, Drug, and Cosmetic Act; Toxic Substances Control Act; and the Endangered Species Act as it applies to EPA.

We excluded cases filed under the National Environmental Policy Act (NEPA) because these cases are managed by a number of sections within the Environment and Natural Resources Division, and because, according to Justice officials, few cases are filed under NEPA with EPA as the lead defendant. We also excluded the Freedom of Information Act, Discrimination in Federal Employment Act, Fair Labor Standards Act, and other generally applicable laws because the intent was to focus on challenges to EPA’s core work in implementing environmental laws. Likewise, we excluded bankruptcy cases and cases heard in state court unless they were moved to federal court.

To determine if the data were reliable for our purposes, we checked them for completeness and legitimate values. When we were uncertain of the data’s accuracy, we requested clarification from the source of the data. Within each database, we checked for duplicate records and either combined data across records into one record or removed unnecessary records. To compile a list of all cases of EPA lawsuits, we needed to identify duplicate cases across the two databases. Because the common field in the two systems—court number—is not kept in the same format, it was necessary for us to standardize court numbers into one format. To do so, we used the standard court number format used in the federal judiciary’s Public Access to Court Electronic Records (PACER) system, an electronic public-access service that allows users to obtain case and docket information from federal appellate, district, and bankruptcy courts. After electronically processing reports of matched and unmatched cases, we conducted extensive manual review of the data to (1) confirm that matched cases from the two databases were in fact the same and (2) identify cases that were the same but were still not found with the electronic process. Manual checks of selected individual court cases were performed using the PACER system to correct information, such as EPA’s role in the case, the names of plaintiffs, and court numbers.

We analyzed selected data elements—such as plaintiffs’ names, filing and disposition dates, and relevant statute—over time to identify any trends in litigation. We also used the data on plaintiffs to identify categories of plaintiffs that have filed suit against EPA. To do this analysis, we used a process known as content analysis, searching national databases for information on each plaintiff and then using this information to code the plaintiffs according to rules developed by our internal team of analysts and specialists in program evaluation methods. Our team created 13 categories into which plaintiffs were coded (see table 3).

We evaluated the reliability of our plaintiff categories using two pretests on simple random samples of 40 and 41 plaintiffs, respectively. A minimum of five analysts independently coded the samples to ensure they had a common understanding of the categories and made the same coding decisions. For each pretest, we estimated the analysts’ agreement rates adjusted for the possibility of agreement by chance. These “kappa” statistics estimate the reliability of each category. In the first pretest, the analysts agreed 74 percent of the time across all categories and 71 to 91 percent of the time for the individual categories other than “unknown,” using the combined category of “local environmental and citizens’ groups.” On the basis of the results of the first pretest, we refined the definitions of the categories and conducted the second pretest. In the subsequent pretest, the analysts agreed 87 percent of the time across all categories and 84 to 95 percent of the time for the individual categories other than “unknown” and “other.” These agreement rates suggested that the analysts could reliably classify the plaintiffs according to common standards in academic literature on intercoder agreement. Classifying the plaintiffs helped us quantify the number of cases brought each year against EPA by different types of groups.

After validating the categories, we searched in public databases of organizations for information that would allow us to classify each plaintiff. We used the Nexis Encyclopedia of Associations and the Nexis Company Profile data systems, both of which identify organizations by North American Industry Classification System and Standard Industrial Classification. To the extent possible, we used these codes to classify plaintiffs. If these sources were not sufficient, we searched the Web pages of each organization for self-reported information. For the “individual” category of plaintiff, we confirmed through court records that those people were in fact suing as private individuals and not, for example, as mayors or attorneys general of a state. In some cases, insufficient information was available in Justice’s databases to determine a given plaintiff’s identity. In such cases, we looked up the case in the PACER system. Six analysts conducted the content analysis of plaintiffs in the Case Management System and the Legal Information Office Network System. Discrepancies in coding were discussed, and agreement was reached among the analysts or resolved through a group analyst review.

To obtain stakeholder perspectives on environmental litigation trends and the factors that underlie them, we interviewed officials from EPA and Justice; representatives from the offices of five state attorneys general and one state environment department; representatives from six environmental groups; and six industry trade associations. We also spoke with a representative of the National Association of Attorneys General. Additionally, we interviewed one academic expert who has published extensively on environmental litigation in legal journals (see table 4). We selected these representatives on the basis of input from government officials and other interviewees. We asked the interviewees for their perspectives about factors that can affect trends in the types of lawsuits against EPA. We then performed a content analysis to group and summarize their responses. Not all stakeholders provided views on all issues, and statements from our sample of stakeholders cannot be generalized to all groups.

To determine Justice’s costs for representing EPA in defensive environmental lawsuits and the government’s payments to plaintiffs, we obtained data on three components of costs: (1) Justice’s costs for its attorneys’ time defending EPA, (2) payments for attorney and other costs from the Department of the Treasury’s Judgment Fund for some cases that the government lost, and (3) payments for attorney and other costs by EPA for some cases that the government lost. For the first component, we obtained data from Justice on the number of cases per year that involved any of the 10 statutes in our scope, as well as the number of hours Justice attorneys spent working on these cases. To calculate costs, we multiplied the total hours worked in a given year by that year’s average hourly pay rate—ranging from $41 to $66 per attorney for fiscal years 1998 through 2010—which we received from Justice. To adjust for uncompensated overtime, we reduced the reported annual hours the attorneys worked by 15 percent, an amount that Justice estimated represents overtime worked by its attorneys. To adjust the attorneys’ salaries to include benefits and related agency overhead, we increased the attorneys’ salaries by 84.3 percent, a factor that was provided to us by Justice on the basis of its actual 2009 costs. To ensure that attorney costs are comparable across years, we adjusted annual pay rates by applying the consumer price index for all urban consumers from the Department of Labor, Bureau of Labor Statistics, and inflated all pay rates to constant 2010 dollars. When we reported single payments, however, we did not adjust these figures to constant dollar figures.

To determine the second and third components of litigation costs— Treasury’s Judgment Fund and EPA’s payments to plaintiffs—we obtained and analyzed data from Treasury and EPA. First, we obtained and analyzed data from the Department of the Treasury’s Judgment Fund Internet Claims System, which tracks the progress of plaintiffs’ claims for Judgment Fund payments from the time they are sent to Treasury until the time they are paid. To identify data on payments related to the environmental statutes in our scope, we matched Treasury’s data with data from Justice’s two databases and eliminated payments that did not correspond with cases in our scope. When information was determined to be missing, we asked Treasury to provide us with additional information. In particular, we learned that Treasury’s data included payments that were issued but were not cashed or were returned; we worked with Treasury to remove these payments to avoid counting these as actual payments and overrepresenting the amount paid from the Judgment Fund. We deleted Superfund cases because we were unable to discern from available information whether the Superfund-related payments were for attorney fees and court costs or for reimbursements of site cleanups, which is a different category of payment than what is within our scope. Similarly, to identify EPA payments to plaintiffs within our scope under the Equal Access to Justice Act, we obtained EPA data on payments made to plaintiffs and manually matched these cases with the cases in Justice’s two databases. When certain case information was determined to be missing, we did additional research on these cases using PACER and corrected the data. Inconsistent formatting of key data elements produced significant problems for completing our analysis and required significant manual review by us and Justice. If we did not find the necessary information from available sources, we asked EPA to send us relevant portions of the internal voucher packages used to request payment.

We conducted this performance audit from June 2010 through July 2011, in accordance with generally accepted government auditing standards. Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions based on our audit objectives. We believe that the evidence obtained provides a reasonable basis for our findings and conclusions based on our audit objectives.

Appendix II: Key Provisions and Historical Reporting under the Equal Access to Justice Act

In the United States, parties involved in litigation generally bear their own attorney fees and costs. For policy reasons, including encouraging citizens to bring suits to enforce the law, Congress has provided exceptions to this rule for cases brought under several statutes, such as the Civil Rights Act. In these instances, as well as some common-law exceptions, a prevailing plaintiff may seek awards of its attorney fees and court costs from the losing party.

Historically, the federal government had sovereign immunity from some of these exceptions, but in some instances, the statutes also waived sovereign immunity so that a court could award fees and costs against the federal government, as well as a private party. According to Justice, many of the key environmental statutes’ provisions authorizing award of attorney fees and costs apply to the federal government. For example, EPA pays attorney fees under several provisions of the Clean Air Act and the Clean Water Act.

Furthermore, in 1980, the Equal Access to Justice Act (EAJA) was enacted to waive sovereign immunity for the remaining statutes authorizing award of fees and costs, as well as to authorize the awarding of fees and costs in other cases. As the 1980 conference committee report for EAJA explains, the act’s premise is that individuals, corporations, partnerships, and labor and other organizations did not seek review of or defend against unreasonable government actions because of the expense involved, which was compounded by the disparity in expertise and resources between the government and the individual or organization involved. EAJA was intended to help certain individuals, partnerships, corporations, and labor and other organizations by paying the attorney fees and other costs if the federal government brought an administrative or judicial action and lost because the action was not substantially justified. EAJA seeks to (1) encourage parties that are the subject of unreasonable federal government action to seek reimbursement for attorney fees and other costs, (2) restrain overzealous regulators, and (3) ensure that the government pays for the cost of refining and formulating public policy.

EAJA authorizes the award of the following:  Court costs of prevailing parties against the United States in any civil action. These costs may include fees for the clerk and marshal, reporter, printing, witnesses, copies, docket fees, and interpreters and court-appointed experts and may include an amount equal to the filing fees.  Attorney fees and expenses against the United States of a prevailing party to the same extent as any other party, codified at 28 U.S.C. § 2412(b) and hereinafter referred to as “subsection b.” That is, where there is a statutory or common-law exception that provides for award of fees to a prevailing party, such exceptions also apply to the federal government. Regarding the 10 environmental statutes covered in this report, many of the relevant provisions under which EPA may be sued provide for award of such fees. However, EAJA makes EPA subject to fee awards under all the environmental statutes’ provisions authorizing courts to award attorney fees and expenses. According to Justice, many of the environmental suits against EPA involve provisions that authorize fee awards independent of EAJA, but a small number may fall into EAJA subsection b. A feature of this subsection is that it does not itself limit the eligibility of prevailing plaintiffs, nor expressly limit the hourly rate of attorney fees; however, the statute requires that the fees be “reasonable.” Additionally, any award of fees made under this section is subject to any limitations that would apply to analogous awards against private parties, as may be provided by the underlying statute.  Attorney fees and expenses of a prevailing party in cases even when no statutory or common-law exception exists to make a private defendant liable for such fees, unless the court finds that the position of the United States was substantially justified or that special circumstances make an award unjust. This subsection of EAJA, codified at 28 U.S.C. § 2412(d) and hereinafter referred to as “subsection d,” authorized the award of these fees against the federal government in civil court actions, while another subsection authorized the award of these fees in certain agency adjudications such as when a party files an appeal of an agency decision to the EPA Environmental Appeals Board. Two of the 10 laws covered in this report—the Federal Insecticide, Fungicide, and Rodenticide Act and the Federal Food, Drug, and Cosmetic Act—as well as some individual provisions of other statutes, do not authorize payment of fees to prevailing parties. Cases brought against EPA under these statutes and provisions, then, fall into EAJA subsection d. This subsection limits the prevailing plaintiff’s eligibility to receive payment by defining an eligible party as, at the time the lawsuit is filed, either an individual with a net worth below $2 million or a business owner or any partnership, corporation, association, local government, or organization with a net worth below $7 million and fewer than 500 employees. Tax-exempt nonprofit organizations and certain agricultural marketing cooperatives are considered parties regardless of net worth.

Payment of attorney fees by federal agencies under statutes independently authorizing awards against federal agencies and under subsection b are made from the Judgment Fund, which is a permanent, indefinite appropriation available to pay many money judgments against the United States. Payment of attorney fees by federal agencies under subsection d is generally made from agency appropriations. Table 5 summarizes key attributes of the three authorizing situations under which EPA may pay fees and costs.

Originally, EAJA provided for governmentwide reporting on its use and cost. For judicial proceedings, EAJA required the Director of the Administrative Office of the U.S. Courts to report annually to Congress on EAJA court activity, including the number, nature, and amounts of awards; claims involved; and any other relevant information deemed necessary to aid Congress in evaluating the scope and effect of awards under the act. The responsibility for this reporting was transferred to the Attorney General in 1992. In addition, EAJA required the Chairman of the Administrative Conference of the United States to submit an EAJA report annually to Congress on administratively awarded fees and expenses. Then, in December 1995, the Federal Reports Elimination and Sunset Act of 1995 repealed the Attorney General’s reporting requirement for fees and expenses awarded under EAJA and also discontinued reporting of governmentwide administrative awards of fees and costs under EAJA after fiscal year 1994. Currently, there are no statutory requirements in effect for agency or governmentwide reporting of payments made under EAJA for either administrative or judicial proceedings. According to officials from the Administrative Conference of the United States, the conference has begun to obtain and compile such information for fiscal year 2010, noting that there has been continued interest in Congress (including pending legislation) regarding data about payments under EAJA. Officials told us the conference has requested EAJA data from 50 government agency conference members, as well as a few additional agencies that had previously reported EAJA activity to the conference. The chairman plans to publish a report for fiscal year 2010 later in 2011.

We have previously reported certain governmentwide EAJA data, as well as data focused on selected agencies. In 1996, we reported data on the number of cases and amounts of awarded plaintiff attorneys’ fees exceeding $10,000 against nine federal agencies for cases closed during fiscal years 1993 and 1994. In 1998, we provided information on the history of EAJA, the extent to which one provision of the act was used governmentwide from 1982 to1994, and the provision’s use by the Department of Labor and associated agencies. The governmentwide data showed, among other things, that the Departments of Health and Human Services and of Veterans Affairs accounted for most EAJA payments in court proceedings, under the provision that applies when the substantive law does not authorize award of attorney fees and costs.

Appendix III: Department of the Treasury and Environmental Protection Agency Payments

This appendix provides data on payments for attorney fees and court costs made by the Department of the Treasury for fiscal year 2003 through fiscal year 2010 and by the Environmental Protection Agency (EPA) for fiscal year 2006 through fiscal year 2010. Payments for attorney fees and expenses and court costs may be made to a plaintiff or directly to a plaintiff’s attorney. In cases involving multiple plaintiffs, one or more plaintiffs or their attorneys may receive payment. The first plaintiff named in the case title does not necessarily receive the payment. Table 6 shows payments from the Judgment Fund.

In addition to payments from the Judgment Fund, EPA made payments under EAJA to successful plaintiffs. Table 7 shows payments made by EPA for fiscal year 2006 through fiscal year 2010.

Appendix IV: GAO Contact and Staff Acknowledgments

GAO Contact

Staff Acknowledgments

In addition to the individual contact named above, Susan Iott (Assistant Director), Jacques Arsenault, Elizabeth Beardsley, Jennifer Beveridge, Colleen Candrl, Ellen W. Chu, Bernice Dawson, Cindy Gilbert, Cynthia Grant, Anne K. Johnson, Rebecca Makar, Mehrzad Nadji, and Jeff Tessin made key contributions to this report.