Yes, Virginia, It Is Possible To Win A Fee Award Against An Environmental NGO

Last week, Judge Walter Smith, Jr., ordered the Sierra Club to pay more than six million dollars – yes, you read that correctly – to Energy Future Holdings and Luminant Generation, after finding that the Sierra Club’s Clean Air Act citizen suit against them concerning the Big Brown big-brown-coal-plant(great name for a coal-fired facility!) plant was “frivolous, unreasonable, or groundless.”

The Sierra Club had avoided a motion to dismiss, which in the long run was a disaster, because the defendants incurred millions of dollars in discovery and expert witness fees. What were the key factors leading to the fee award?

• Sierra Club could not make out a prima facie case of a particulate matter emissions violation

• Sierra Club knew that the Big Brown permit exempted it from PM deviations during maintenance, startup, or shutdown

• Sierra Club had one standing witness, who could not demonstrate any causation or injury.

• Sierra Club refuse to dismiss Energy Future Holdings from the case, even though it knew that EFH had no role in the ownership or operations of Big Brown.

• The Texas Commission on Environmental Quality found no violations at Big Brown. I doubt if, on its own, that would provide a basis for a fee award against an NGO. After all, the point of the citizen suit provisions is to allow citizens to supplement agency enforcement. However, Sierra Club apparently admitted that it did not analyze or investigate the TCEQ reports.

Ultimately, the court gave the defendants 100% of their fees, other than denying a conditional request for appellate fees. Notably, the Court agreed that the CAA is complex and requires expert counsel, thus justifying use of counsel outside the “home market.”

In Texas, at least, NGOs appear to face some risk if they act on the assumption that, because they are saving the world, they can do no wrong.

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