Third Circuit: FRCP 68 Offers of Judgment in Disputes over Attorneys' Fees Valid in Private Environmental Suits | Practical Law

Third Circuit: FRCP 68 Offers of Judgment in Disputes over Attorneys' Fees Valid in Private Environmental Suits | Practical Law

The US Court of Appeals for the Third Circuit held in Interfaith Community Organization v. Honeywell International that Federal Rule of Civil Procedure (FRCP) 68 offers of judgment are applicable to disputes over attorneys' fees in environmental citizen suits after liability has been determined.

Third Circuit: FRCP 68 Offers of Judgment in Disputes over Attorneys' Fees Valid in Private Environmental Suits

by PLC Litigation
Published on 11 Jun 2013 • USA (National/Federal)
The US Court of Appeals for the Third Circuit held in Interfaith Community Organization v. Honeywell International that Federal Rule of Civil Procedure (FRCP) 68 offers of judgment are applicable to disputes over attorneys' fees in environmental citizen suits after liability has been determined.
On June 4, 2013, the US Court of Appeals for the Third Circuit held in its decision in Interfaith Community Organization v. Honeywell International that FRCP 68 offers of judgment are applicable to disputes over attorneys' fees in environmental citizen suits after liability has been determined.

Background

This case arose from the dumping of 1.5 million tons of industrial waste residue from a chrome manufacturing plant into New Jersey wetlands between 1895 and 1954. In 2003, the district court ordered Honeywell International (Honeywell) to clean up the waste. In 2004, it awarded the community plaintiffs $4.5 million in litigation fees and expenses and ordered Honeywell to pay the future fees and costs incurred by the plaintiffs to monitor the cleanup. A companion case followed in 2005 regarding cleanup in an adjacent area.
Although the parties entered into consent decrees, they failed to reach an agreement on fees sought for monitoring Honeywell's remediation work. The plaintiffs filed separate fee applications for over $3 million with the district court. Honeywell objected and served FRCP 68 offers of judgment for the disputed fees. The district court substantially upheld the plaintiffs' fee request and found that offers of judgment cannot be made under the Resource Conservation and Recovery Act (RCRA), which awards litigation costs, including attorneys' fees, to the prevailing party (42 U.S.C. § 6901). The court reasoned that this would violate the Rules Enabling Act, 28 U.S.C. § 2072, by discouraging citizen suits.

Outcome

The US Court of Appeals for the Third Circuit reversed the district court and held that FRCP 68 offers of judgment may be made in the context of attorneys' fees disputed under the RCRA. It reasoned that:
  • The plain language of FRCP 68 does not exclude any type of civil action from its purview.
  • FRCP 68's requirement that the plaintiff bear the fees incurred after it rejects an offer of judgment does not abridge any substantive rights under the RCRA and therefore does not violate the Rules Enabling Act.
  • The question of whether FRCP 68 offers of judgment would discourage citizen suits under RCRA is irrelevant.
  • FRCP 68 may be applied to suits seeking only equitable relief.

Practical Implications

Counsel in the Third Circuit should be aware that FRCP 68 offers of judgment apply to RCRA disputes over attorneys' fees after liability has been determined.

Court Documents

Update: On July 8, 2013, the Third Circuit vacated its June 4, 2013 decision and filed a new opinion that amended its discussion of the forum-rate rule. On July 11, 2013, the court issued another order, amending language in its July 8, 2013 opinion relating to the forum-rate rule.