Opinion ID: 779057
Heading Depth: 4
Heading Rank: 5

Heading: Recovery of Attorney's Fees and Other Abatement Action Costs

Text: 98 Under MERLO, Lodi may recover from any PRP [a]ll abatement action costs incurred by the city to undertake, or cause or compel any responsible party to undertake, any abatement action in compliance with the requirements of this chapter.... MERLO § 8.24.040(A)(9)(a) (emphasis added). MERLO defines the phrase abatement action costs to include any and all legal, technical or administrative fees and costs and interest and other costs of financing incurred by the [C]ity in performing or preparing to perform an abatement action. MERLO § 8.24.010(2). Thus, MERLO permits the City to recover any attorney's fees it incurs in the course of its efforts to cleanup the PCE contamination of its soil and groundwater. 99 In Key Tronic Corp. v. United States, 511 U.S. 809, 114 S.Ct. 1960, 128 L.Ed.2d 797 (1994), the Supreme Court held that CERCLA § 107(a)(4) does not permit a  private party  to recover her attorney's fees. 511 U.S. at 817-19, 114 S.Ct. 1960 (emphasis added). However, in United States v. Chapman, 146 F.3d 1166 (9th Cir.1998), we held that CERCLA § 107(a)(4) permits the United States Government or a State or an Indian tribe to recover all reasonable attorney fees attributable to the litigation as a part of its response costs if it is the prevailing party. Chapman, 146 F.3d at 1175-76 (citing Key Tronic, 511 U.S. at 813, 819, 114 S.Ct. 1960) (emphasis added). 100 We need not decide if a city is the State for purposes of recovering its attorney fees under CERCLA, because, in any case, a city that is also a PRP should not be able to avail itself of this advantage. If the district court finds that Lodi is indeed a PRP, it may not legislate for itself a litigation advantage by granting itself the right to collect attorney's fees. If, on the other hand, Lodi proves not to be a PRP, we see no reason why Lodi may not provide for recovery of attorney's fees for itself under its municipal liability scheme. Of course, the amount and nature of attorney's fees recoverable is always subject to the reasonableness standard as applied in the discretion of the district court. 101 We have held above that Lodi is entitled to the presumption of consistency bestowed on States by the phrase not inconsistent with the national contingency plan contained in CERCLA, 42 U.S.C. § 9607(a)(4)(A), by virtue of the Cooperative Agreement with the DTSC. A similar result, however, is not called for with respect to attorney's fees. The ability of states to recover attorney's fees under CERCLA flows from language providing that responsible parties shall be liable to states for all costs of removal or remedial action. 42 U.S.C. § 9607(a)(4)(A). Attorney's fees recoverable by states are included in the definition of all costs. Chapman, 146 F.3d at 1175. Non-State litigants are, on the other hand, confined to recovery of necessary costs, which do not include attorney's fees. 42 U.S.C. § 9607(a)(4)(B). Under the peculiar facts of this case, it does not follow from the fact that Lodi is entitled to the presumption of consistency, that it is also entitled to recover all costs. 102 Lodi has expended significant attorney's fees in an attempt to escape liability through the enactment and defense of its municipal ordinance. These efforts, so far as we can tell, have not advanced the cleanup of the Lodi Site. Litigation costs may indeed be a part of recovering funds that are needed to advance the cleanup. However, the ability to recover litigation-related attorney's fees does not necessarily advance the pace of cleanup because it may encourage ambitious litigation. We do not interpret the Cooperative Agreement to allow Lodi to recover its attorney's fees, nor do we necessarily believe that it could bestow on Lodi the right to recover all of its attorney's fees under the circumstances of this case. 103 Lodi also seeks to recover costs related to a financing scheme upon which it has embarked in order to avoid municipal finance mechanisms that would make Lodi's ratepayers responsible (at least initially) for principal and interest costs. The Insurers assert that Lodi is trying to pass on, as costs of financing the cleanup, interest costs of 25 to 30 percent. We decline to pass judgment on these costs on the record before us, and leave it to the district court to determine if these costs are recoverable under the standard of necessary costs of response if Lodi should prove to be a PRP. If Lodi should prove not to be a PRP, we leave it to the district court to determine, under the standards the district court determines to be appropriate, whether these costs are recoverable. 104