Is A Prevailing Party Still Entitled to Attorney’s Fees When A Claim Is Defeated By Mootness?

Ninth Circuit Holds That Fees Are Still In Order, Although Circuit Judges Are Badly Splintered on the Issue.

     The next issue—whether a prevailing party is entitled to attorney’s fees under a fee-shifting statute where the controversy has been mooted—may be destined for U.S. Supreme Court review. The opinions of the circuit judges in an amended decision, Center For Biological Diversity v. Marina Point Development Co., Case No. 06-56193 (9^th Cir. Mar. 27, 2009 amended) (for publication), may have sealed the fate for this particular issue.

American Bald Eagle.   Library of Congress.

     In the Ninth Circuit case, Center had brought Clean Water Act (CWA) and Endangered Species Act (ESA) challenges to a Big Bear Lake residential condominium project based on impacts to the American bald eagle. Center prevailed and was awarded attorney’s fees under both the CWA and ESA. The Ninth Circuit reversed the CWA fee award, but remanded for apportionment of fee work incurred by Center in prevailing under the ESA.

     The CWA ruling was reversed because Center had failed to send a proper 60-day notice of intent to sue. However, the ESA claim suffered defeat on a much narrower basis—mootness, given that the bald eagle had been delisted as an endangered species. Center effectively conceded the mootness point.

     So, that left the federal court of appeals with consideration of the fee award.

     Because the district court lacked subject matter jurisdiction under the CWA based on the defective notice of intent to sue, fees had to fall to the extent that they were based on the CWA.

     However, that brought the Ninth Circuit to the thorniest of issues—were fees still justified under ESA even though the controversy was moot? The majority (Circuit Judges Fernandez and Rymer) said yes, while the dissent (Circuit Judge Kleinfeld) said no. The majority cited numerous cases indicating that the “weight of authority” supported no review of the underlying “moot” dispute for purpose of determining whether an award of attorney’s fees was proper. (See cases listed in Slip Opn., at pp. 3722-3723.) The matter was remanded so that the district court could segregate out the fees awardable under the ESA claim only.

     In a concurrence, Circuit Judge Rymer followed the “weight of authority” but did note that “[p]erhaps it is time, and this is the case, for the question to be answered afresh” by the U.S. Supreme Court, which has previously noted the difficulty of the mootness question in a fee context. (Lewis v. Continental Bank Corp., 494 U.S. 472, 483 (1990).)

     Circuit Judge Kleinfeld, in dissent, disagreed that Center could prevail based on a moot controversy. “It makes no sense to award attorneys’ fees based on a ‘judgment’ that no longer exists (because we are vacating it), and that entitles the party to no legally enforceable relief.” (Slip Opn., at p. 3728.)

     Looks like this issue is ripe for high court review.