Opinion ID: 2515085
Heading Depth: 2
Heading Rank: 2

Heading: Sierra Club Is Entitled to Reimbursement of Reasonable Attorney's Fees and Costs As The Prevailing Party

Text: In its January 31, 2008 final judgment, despite the enactment of Act 2 the circuit court restated that Sierra Club was the prevailing party and authorized Sierra Club to seek reimbursement from DOT and Superferry for reasonable attorney's fees and costs. [19] Accordingly, on March 27, 2008, the circuit court granted, in part, Sierra Club's request for reimbursement of reasonable attorney's fees and costs. In granting the request, the circuit court found Superferry and DOT jointly liable, basing its award on both HRS ง 607-25 and the private attorney general doctrine: The Court hereby grants Plaintiffs' Motion for Reimbursement of Reasonable Attorney's Fees and Costs [Filed on January 15, 2008], in part, based upon HRS ง 607-25 and the Private Attorney General Doctrine, and awards Plaintiffs, with the exceptions noted on the record, attorney's fees, at the hourly rate of $200 per hour, and costs, both commencing as of August 24, 2007. The total amount of attorney's fees hereby awarded is $86,270.28. The total amount of costs hereby awarded is $5,442.44. The total amount of attorney's fees and costs hereby awarded is $91,712.72. Defendants [Superferry] and [DOT] shall pay this total amount of attorney's fees and costs to [Sierra Club]. DOT argues that the circuit court erred in awarding fees and costs to the non-prevailing parties, whether that award was made under a purported application of the private attorney general doctrine or some other theory. Superferry argues that the trial court erred in: (1) determining that Sierra Club was the prevailing party; (2) awarding Sierra Club its attorney's fees and costs against Superferry pursuant to HRS ง 607-25; (3) awarding Sierra Club its attorney's fees and costs against Superferry pursuant to the private attorney general doctrine; (4) awarding attorney's fees at the rate of $200 per hour; and (5) awarding costs in the amount of $5,442.44. Sierra Club argues that the circuit court erred by: (1) not awarding fees for the period of litigation prior to the initial appeal to this court; (2) not considering or giving weight to documents presented by Sierra Club on the issue of whether DOT and Superferry relied in good faith as required by HRS ง 607-25(e)(3); and (3) not awarding fees at the rate of $300 per hour. The first issue that must be determined regarding the fee and cost award is whether Sierra Club was the prevailing party. We agree with the circuit court that Sierra Club was the prevailing party.
DOT and Superferry argue that Sierra Club was not the prevailing party in this case because final judgment was not rendered in its favor. DOT argues that [t]he circuit court expressly entered final judgment in favor of [DOT] and Superferry and against [Sierra Club]. (Emphasis removed.) Superferry similarly argues that [n]otwith-standing that this Court [sic] granted Plaintiffs permission `to . . . file' a request for attorney fees, . . . the Final Judgment made clear that [Superferry] and [DOT], not [Sierra Club], were the prevailing parties. (Emphasis removed.) Sierra Club contends that it is the prevailing party as determined by this court's ruling in Sierra Club I and several circuit court rulings prior to the enactment of Act 2. Sierra Club notes that it prevailed on four of five counts in the complaint that initiated this lawsuit: when this court's order reversed the DOT's exemption determination and held that an EA pursuant to HRS chapter 343 applied to the facts of the case; when the circuit court entered partial summary judgment in favor of Sierra Club on its claim for an EA; [20] when the circuit court voided the operating agreement on October 9, 2007, enjoined Superferry and DOT by issuing the TRO on August 27, 2007 and the permanent injunction on October 9, 2007, and awarded Sierra Club attorney's fees and costs on March 27, 2008. We agree with Sierra Club.
This court described the general rule for determining the prevailing party in a case in Kamaka v. Goodsill Anderson Quinn & Stifel, 117 Hawai'i 92, 176 P.3d 91 (2008), stating in general, a party in whose favor judgment is rendered by the district court is the prevailing party in that court, plaintiff or defendant, as the case may be. Although a plaintiff may not sustain his entire claim, if judgment is rendered for him, he is the prevailing party for purposes of costs and [attorney's] fees. Id. at 126, 176 P.3d at 125 (internal quotations and original brackets omitted) (emphasis in original) (quoting MFD Partners v. Murphy, 9 Haw.App. 509, 514, 850 P.2d 713, 716 (1992)). Kamaka considered an award for attorney's fees in a wrongful termination case. Id. at 97-98, 176 P.3d at 96-97. The jury in Kamaka found in favor of the plaintiff on one of three claims and awarded her $209,937.91 in special damages. Id. at 98, 176 P.3d at 97. Subsequently, the defendant was granted a renewed motion for judgment as a matter of law and the trial court entered final judgment in favor of the defendant as to all claims and entered an order granting the defendant's motion for attorney's fees and costs. Id. Superferry and DOT rely on Kamaka, and several other cases, for support of the proposition that the party in whose favor final judgment is entered is the prevailing party. Wong v. Takeuchi, 88 Hawai'i 46, 49, 961 P.2d 611, 614 (1998); Blair v. Ing, 96 Hawai'i 327, 330, 31 P.3d 184, 187 (2001); Mist v. Westin Hotels, Inc., 69 Haw. 192, 201, 738 P.2d 85, 92 (1987). Kamaka presents the general rule for prevailing parties, as discussed within the context of HRS ง 607-14; [21] however, the general rule and HRS ง 607-14 do not provide guidance in this case, where the underlying law of the claim was changed after a prevailing party had been declared. See Kamaka, 117 Hawai'i at 121, 176 P.3d at 120.
The general rule for attorney's fees has been further defined in a case where final judgment did not make clear which party had prevailed. Food Pantry, Ltd. v. Waikiki Business Plaza, Inc., 58 Haw. 606, 620, 575 P.2d 869, 879 (1978) (considering a lessor that prevailed on the basic issues of the case and was awarded damages, but was prevented from canceling the lease). In Food Pantry, this court concluded that where a party prevails on the disputed main issue, even though not to the extent of his original contention, he will be deemed to be the successful party for the purpose of taxing costs and attorney's fees. Id. (footnote omitted). To determine which party prevailed on the main issues, the Intermediate Court of Appeals (ICA) has further held that [t]he trial court is required to first identify the principle issues raised by the pleadings and proof in a particular case, and then determine, on balance, which party prevailed on the issues. MFD Partners, 9 Haw.App. at 515, 850 P.2d at 716; see also Fought & Co., Inc. v. Steel Engineering & Erection, Inc., 87 Hawai'i 37, 53, 951 P.2d 487, 503 (1998).
Superferry and DOT argue that guidance on this issue should be found instead in cases consistent with the United States Supreme Court's decision in Sole v. Wyner, 551 U.S. 74, 127 S.Ct. 2188, 2194, 167 L.Ed.2d 1069 (2007). In Sole, the Court observed that `[t]he touchstone of the prevailing party inquiry,' ... is `the material alteration of the legal relationship of the parties in a manner which Congress sought to promote in the fee statute.' Id. at 2194 (quoting Texas State Teachers Assn v. Garland Indep. Sch. Dist., 489 U.S. 782, 792-93, 109 S.Ct. 1486, 103 L.Ed.2d 866 (1989)). The Court held that [p]revailing party status ... does not attend achievement of a preliminary injunction that is reversed, dissolved, or otherwise undone by the final decision in the same case. Id. at 2195 (footnote omitted). In Sole, the plaintiff sought and obtained a preliminary injunction to prevent the Florida Department of Environmental Protection from interfering with an art display planned to take place within a beach park that would consist of nude individuals assembled into a peace sign. Id. at 2192. The plaintiff also requested permanent injunctive relief against interference with `future expressive activities that may include non-erotic displays of nude human bodies.' Id. The plaintiff was granted the preliminary injunction as to the peace sign display, but was later denied a permanent injunction. Id. at 2192-93. The trial court concluded, and the appellate court affirmed, that the plaintiff qualified as a prevailing party to the extent of the preliminary injunction, and awarded plaintiff attorney's fees to cover that stage of litigation. Id. at 2193-94. The Supreme Court reversed that conclusion. Id. at 2194. Sole is distinguishable from this case, however. In Sole, the Supreme Court centered its reasoning on the circumstances of the preliminary injunction: In some cases, the proceedings prior to a grant of temporary relief are searching; in others, little time and resources are spent on the threshold contest. In this case, the preliminary injunction hearing was necessarily hasty and abbreviated. Held one day after the complaint was filed and one day before the event, the timing afforded the state officer defendants little opportunity to oppose Wyner's emergency motion. Counsel for the state defendants appeared only by telephone. The emergency proceeding allowed no time for discovery, nor for adequate review of documents or preparation and presentation of witnesses. The provisional relief immediately granted expired before appellate review could be gained, and the court's threshold ruling would have no preclusive effect in the continuing litigation. Both the District Court and the Court of Appeals considered the preliminary injunction a moot issue, not fit for reexamination or review, once the display took place. In short, the provisional relief granted terminated only the parties' opening engagement. Its tentative character, in view of the continuation of the litigation to definitively resolve the controversy, would have made a fee request at the initial stage premature. Id. at 2195 (internal citations omitted).
We agree with Sierra Club that the inquiry outlined by this court in Food Pantry, 58 Haw. at 620, 575 P.2d at 879, and further interpreted by the ICA in MFD Partners, 9 Haw.App. at 514, 850 P.2d at 716, is more appropriate considering the facts of this case.
In this case, the circuit court determined that Sierra Club prevailed on the merits of the claim requiring preparation of an EA pursuant to HRS chapter 343 and granted summary judgment in favor of the Plaintiffs. Subsequently, the circuit court conducted four weeks of evidentiary hearings before issuing an order to enforce the judgment requiring an EA and granting a permanent injunction in favor of Sierra Club. The court expressly recognized Sierra Club as the prevailing party, and authorized Sierra Club to file a request for attorney's fees and costs. Moreover, prior to issuing its order, the circuit court stated during the October 9, 2007 hearing on the motion to enforce the EA: In this particular instance, as noted, the plaintiffs have prevailed on the merits, on their claim for an environmental assessment. So it is clear that that has been resolved in this case. That is a decision that was issued by the Supreme Court of the State of Hawaii, the highest court in this state. That is the final decision with respect to the evironment [sic] assessment claim. Later during the same hearing, the circuit court stated: The Court will, therefore, issue an injunction prohibiting further implementation of the Hawaii Superferry project at the Kahului Harbor until the Hawaii Department of Transportation prepares a legally acceptable environmental assessment based upon the applicable Hawaii Administrative Rules and based upon the Hawai'i Revised Statutes Chapter 343. The plaintiffs are the prevailing party with respect to this matter. Therefore, the Court will authorize the issuance of an order for reasonable fees and costs. The plaintiffs are instructed to submit to this Court proposed findings, conclusions, and an order.
DOT and Superferry argue that Sierra Club could not be the prevailing party after Act 2 was enacted, and cite Sole in support. This argument is without merit. Unlike Sole, in this case Act 2 changed the underlying law that ultimately resulted in a final judgment in favor of Superferry and DOT, rather than a change in the final decision in the same case based on application of the same law as was the case in Sole. Sole, 127 S.Ct. at 2195. Additionally, several federal cases provide support for the proposition that parties may be considered prevailing when they have achieved only part of the benefit sought by the suit, including an injunction of limited duration. See Farrar v. Hobby, 506 U.S. 103, 109, 113 S.Ct. 566, 121 L.Ed.2d 494 (1992); Garland Indep. Sch. Dist., 489 U.S. at 792, 109 S.Ct. 1486; Nat'l Black Police Ass'n v. D.C. Bd. of Elec., 168 F.3d 525, 530 (D.C.Cir.1999); Richard S. v. Dept. of Developmental Servs., 317 F.3d 1080 (9th Cir.2003); Young v. City of Chicago, 202 F.3d 1000 (7th Cir.2000); Virzi Subaru v. Subaru of New England, 742 F.2d 677 (1st Cir.1984); Williams v. Alioto, 625 F.2d 845 (9th Cir.1980); Black Hills Alliance v. Reg'l Forester, 526 F.Supp. 257 (D.C.S.D.1981). Accordingly, it was not error for the circuit court to determine that the EA requirement pursuant to HRS chapter 343 was the main disputed issue in the litigation prior to November 2, 2007. As such, it also was not error for the circuit court to find that Sierra Club was the prevailing party in the litigation under the unique facts of this case where the underlying applicable law was changed prior to a final judgment being entered. Since Sierra Club prevailed under the law applicable to the case prior to Act 2's enactment, this court must now consider whether Sierra Club is entitled to recover reasonable attorney's fees and costs from both DOT and Superferry based on the private attorney general doctrine and HRS ง 607-25, as concluded by the circuit court.