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Monday, February 11, 2013

Why the SF Sharp Park lawsuits will never ever end: We pay them to sue us.

In December U.S. District Judge Susan Illston dismissed a lawsuit filed by the W.E.B.L.E.E.D.U. Axis (Wildly Equitable Biodiverse Litigants for Ecological Extortion and Deep Untruths) to shut down the City's landmark Sharp Park golf course.  This led some to wonder whether the long running Battle for Sharp Park might finally be over.

Spoiler alert: No.

I was laboring under no such illusion. On Friday February 8, 2013 the WEBLEEDU's filed a pleading with Judge Illston that demonstrates exactly why these lawsuits will never end:

"In a curious twist in the long-running fight between anti-golf activists and San Francisco over the fate of the city’s historic public Sharp Park Golf Course, the Tucson-based Center for Biological Diversity, Wild Equity Institute, and a handful of other groups filed a motion here today in Federal Court, asking the same Federal Judge who dismissed their lawsuit in December, 2012 to order the City of San Francisco to pay their legal bill of more than $1.3 Million... The Plaintiffs’ fee motion was filed under a provision of the Endangered Species Act that authorizes the Courts to award legal fees “whenever the Court determines such award is appropriate”.  Plaintiffs seek payment for more than 2,000 hours of attorneys time, most of which are billed at hourly rates between $550 and $750."
The press release quotes Bo Links of the San Francisco Public Golf Alliance echoing the feelings of most people hearing this story - with bemusement and incredulity:  “It’s a head-scratcher... This is environmental litigation in Wonderland... they lose every motion they file, and their case is thrown out.  And now they want the Court to order the City to pay their attorney’s fees?

Of course it makes no sense. But that does not mean the WEBLEEDU's won't get paid.  It is very possible that the people of San Francisco will be forced to pay some or most of their attorney fees. Welcome to the Looking Glass World of EAJA (Equal Access to Justice Act) legal fee reimbursements.

The NeverEnding Sharp Park Lawsuits

In recent years, similar legal fees have often been awarded to at least one of the plaintiffs - the Tucson based  "Center For Biological Diversity".  Regardless of motivation, lucrative reimbursement of legal fees represent a significant financial incentive for litigants from CBD and their local "mini-me" variant the "Wild Equity Institute" founded by a relocated CBD staff attorney.  Think about it. As a lawyer, why go through all that hard work finding a client who will pay your hourly rate if you can just sue a federal agency, state or local municipality and have a judge grant you whatever fees you request?

The simple reason why these lawsuits in general and the Sharp Park lawsuits in particular will never end, is that we - the taxpayers - at a federal, state, and even municipal level are paying environmental ambulance chasers a lot of money to sue us.

Why, you may ask,  are we paying these fees? Therein lies a tale of unintended consequences.  For thirty years we have been sliding down a regulatory slope that started with Equal Access to Justice Act, was accelerated with the Endangered Species Act, and flew off the cliff with a series of poorly thought out legislative modifications and judicial decisions.  As a consequence, the good intentions of both these legislative acts are now regularly abused and perverted into something that was never anticipated by their authors.  This sordid legislative history is worth a detailed look, but first - What kind of a financial incentive to sue are we really talking about?  The recent Sharp Park filing is a good illustration.

The Sharp Park Legal Fee Reimbursement Windfall

Brent Plater was the lead attorney on the dismissed lawsuit against the City of San Francisco regarding Sharp Park. Mr. Plater learned the environmental litigation game when he was a staff attorney at the Center for Biological Diversity. He branched out on his own and created the Oakland based Wild Equity Institute in 2009. As a non-profit they are required to file IRS Form 990 every year. The WEI forms for 2009 - 2011 are linked here.  This is what they say:
  • In 2009 WEI had $19,755 in revenue from contributions and $686 in expenses, none of which was paid out in salaries for Mr. Plater or anyone else on the staff.
  • In 2010 WEI had $38,919 in revenue from contributions and membership fees and $31,425 in expenses including $7,680 in salary expense and $14,465 in fees paid to independent contractors. According to the form, Mr. Plater was the only one on staff to receive a salary - a sum of $6,209.
  • In 2011 WEI had $100,918 in revenue from contributions, memberships, and "government fees" against $118,839 in expenses including $26,998 in salary expense and $73,594 paid to independent contractors. Mr  Plater received a salary of $23,028.
Their 2012 filing is not yet available, but I will update this post with the most recent information when available. There is no information on the form regarding who received the specific independent contractor payments.

The picture that emerges over the first three years is a small environmental activist organization staffed primarily by committed hard working volunteers working without pay - except for Brent Plater.  All well and good. That is the context.  Now lets look at the Sharp Park motion filed in District Court last Friday and the legal fees requested for reimbursement:
Case No.: 3:11-CV-00958 SI
According to Plaintiffs’ counsels’ contemporaneously maintained billing records, counsel have thus far spent the following number of hours on this case through January 31, 2013: 
Brent Plater: 857.7 hours
Howard Crystal: 844 hours
Eric Glitzenstein: 282.75 hours
Shawna Casabier: 47.15 hours
Kelli Shields: 217 hours
In addition, paralegals spent 691 hours working on the case... 
In light of that experience and background, Plaintiffs request the following rates for counsel: $750/hour for Mr. Glitzenstein; $700/hour for Mr. Crystal; $550/hour for Mr. Plater; $295/hour for Ms. Casebier; and $250/hour for Ms. Shields... 
Applying the requested hourly rates to the number of hours for which recovery is sought, Plaintiffs are entitled to a fee award of $ 1,451,556.  However, to account for any billing discrepancies, Plaintiffs are affirmatively reducing that request by 10%, to $1,306,400...
For the foregoing reasons, Plaintiffs respectfully request that the Court grant their fee Petition and award fees in the amount of $1,306,400 and $59,409 in costs.
All of the listed attorneys are identified in the motion  as "Attorneys for Plaintiffs". Since I have no idea how that breaks down between all the players in the WEBLEEDU Axis,  let's just focus on the lead attorney - Brent Plater, President of Wild Equity Institute.

 Mr. Plater is submitting his bill to be reimbursed for 857.7 hours at a rate of $550.00 / hour. His total fee on the case so far:  $471,735.00. This for his billable hours working on a case that was initially filed in March 2011 and continued through January 2013 when they filed an appeal after it was dismissed. That legal fees he is requesting is more than four times the total revenue that came into the Wild Equity Institute for the first three years of its existence. Not bad pay for 20 months work. And that is only one lawsuit. Active or imminent, there are more WEI / Plater lawsuits in the works. 

This begs all kinds of questions.  I have no visibility into what Mr. Plater would do with the funds should the court decide to reimburse him for his time as he has requested. My assumption is that as a committed environmentalist leading a struggling new environmental advocacy organization staffed by unpaid volunteers, he would naturally funnel the funds secured as a consequence of his leadership role in WEI back into WEI in order to continue its work.  That is what any commited leader would do. He would, of course, continue to draw a salary commensurate with the success and non-profit nature of the organization.This structure is sensible, if for no other reason but to avoid the appearance of a conflict of interest with the organization he runs. In the most recent IRS filing, he took about 25% of the WEI revenues as a salary.

In any case, it would be a good question for an investigative reporter to ask directly of Mr. Plater.  Just where wound the money go if he prevails?

I have more questions, but first an apology.

Earlier in this post, I compared WEBLEEDU lawyers to "ambulance chasers". That was not right.  "Ambulance chaser" is a term that is sometimes used to describe personal injury lawyers who represent people hurt in accidents.  Personal injury lawyers generally work on contingency, which means they only get paid if they win a judgement in a court of law.  In the Sharp Park case, the WEBLEEDU plaintiffs are asking for $1.3 million  in legal fees to be reimbursed for a case they lost. A case that was dismissed.  My previous comment comparing the Sharp Park litigants to ambulance chasers was completely unfair. My apologies to any ambulance chasers reading this post. 

I really should end this post here, but I've got a more few more questions. To the casual reader, I suggest you stop reading now. I'm am about to embark on a deep dive. No telling how long this post is going to be.   If you are interested in accompanying me down the rabbit hole...

This is one specific case primarily involving one smallish environmental litigator wannabe on one suit levied against one golf course owned by the most liberal, environmentally conscious major city in the country. Yet it can have a large financial impact on the city and drive a significant windfall for the litigator. Even in a losing cause.

So this spawns more begged questions: How big is this problem nationally and how did we get here?

The Long and Winding Road of EAJA Abuse

The best source I've found to understand in detail how we got here and why taxpayers are financing these meritless lawsuits is an academic paper by Lowell Baier published last year in the Notre Dame Law School Journal of Legislation - Reforming the Equal Access to Justice Act:
"This article examines the history and ideological roots of EAJA, focusing on its legislative purpose as a measure that protects individual citizens and small businesses. In exploring EAJA’s mechanisms, it focuses on problems that have emerged with EAJA in recent years, particularly in environmental litigation. It discusses how environmental groups and other nonprofits engage in abusive procedural litigation, receive excessive attorneys’ fees in cases totally disconnected from EAJA’s original purpose, and force the government into settlements at great expense. 

The Equal Access to Justice Act (EAJA) is one of the broadest-reaching, yet most obscure federal laws in existence. Its basic function is simple: in any case, be it in court or in an administrative agency proceeding, where the federal government’s position is not substantially justified, a prevailing party is entitled to receive attorneys’ fees, provided that there is no other applicable fee-shifting statute. It is a safety net, designed to make sure that a party cannot be harassed by unjustifiable government activity solely because of the prohibitive expense of attorneys’ fees, and it was originally passed to protect the small business community from governmental overreach, just as earlier fee-shifting statutes were designed to promote specific causes such as civil rights litigation. In the past thirty years, this law has gone from a welcome corrective measure for the small business community to a powerful weapon wielded against federal agencies that has caused them to spend millions of dollars in payments for largely meritless lawsuits, and an almost certainly larger amount of money in preparing for, responding to, and fighting such lawsuits. And it has produced an incalculable waste of taxpayer money and loss of government productivity."
In the paper, Baier points to the Center of Biological Diversity (one of the plaintiffs seeking reimbursement in the dismissed Sharp Park lawsuit) as a serial abuser of the EAJA reimbursement provisions:
"...In the primary consolidated case, Wild Earth Guardians received attorneys’ fees of $167,602 and the Center for Biological Diversity received attorneys’ fees of $128,158. Fees in related cases may yet be awarded in the future. Funding for these multiple attorneys’ fees will come directly from the Judgment Fund and EAJA, as determined by the guidelines of the Department of Justice which typically splits them by order of how much was subject to ESA fee shifting, followed by EAJA fee-shifting. 
Were this not troubling enough, the Center for Biological Diversity filed a petition on March 9, 2006 to reclassify the delta smelt—the same species that was the focus of the above litigation—from threatened to endangered. Though FWS published a ninety day finding concluding the petition might have merit, and began a status review, it missed its twelve month deadline to make a final decision, and was immediately sued by the Council for Endangered Species Act Reliability (CESAR) for missing the deadline. This lawsuit settled, and CESAR accepted$35,000 in attorneys’ fees for essentially harassing the over-worked FWS."
Perhaps the most stunning, unappreciated, and under-reported finding in Baier's article is the extent to which the United States Fish and Wildlife Service (USFWS) service has been overwhelmed by these abusive EAJA / ESA taxpayer subsidized lawsuits.  The entire staff of the agency responsible for managing the listing of endangered species is completely consumed with work schedules controlled by the terms of the lawsuits. I wonder how many Americans understand that through the mechanism of these lawsuits, a major agency of the United States government is being controlled by the Center for Biological Diversity and their ilk?
"The story of the ramifications and impact of these two settlement agreements on the federal government and American taxpayers does not end with just the domination of FWS by outside parties, and the effective hijacking of its budget and staff...  In sum, FWS now has no agency flexibility whatsoever; no discretion. Its work schedule and priorities have been set by court order, and it is reporting not only to the court but to private plaintiffs. All of this was triggered because FWS missed deadlines due to delays caused by the plaintiffs’ excessive litigiousness. In fact, FWS even admits that meeting these deadlines will take “substantially all of the resources in the Listing Program.” 
The original intent of these legislative acts were to give small businesses and organizations a mechanism whereby they could fight bad rulings from governmental agencies and not be unduly obstructed by prohibitive legal fees.  To protect taxpayers, the legislation placed limits on the size of the business / organization that could have legal fees reimbursed as well as a limit on the hourly rate the government would pay, and payment would only be made if the litigant prevailed. All of those limits have subsequently been swept aside by lawyers exploiting sloppy legislative language and questionable judicial precedents. There are no longer any effective limits protecting taxpayers from legal fee reimbursement abuse and government agencies from being overwhelmed by extremist environmental litigators.
"Intended originally as a cost saving mechanism, the $125 an hour cap on attorney’s fees is routinely “evaded,” and despite court instructions to narrowly interpret EAJA’s language to increase fees for special factors, EAJA reimbursements range from $157 to over $500 an hour... 
The absence of an equitable cap on the net worth of groups eligible to receive EAJA reimbursement, combined with the absence of any federal oversight provides the opening for well-heeled organizations to sue the federal government repeatedly over procedural issues outside the bounds of environmental law... 
Reviews of open court documents from September of 2009 to October of 2010 reveal payments to twenty environmental litigants that totaled at least $5.8 million, while an examination of tax returns from these same twenty groups showed the average yearly attorneys’ fees totaled $9.1 million... 
 Meanwhile, at the same time it had become clear that courts were calculating EAJA fees not from the actual costs incurred in a representation, or from how much the actual attorneys (many of whom were in-house or pro bono) cost, but rather from a reasonable fee for a private attorney. So courts would not object if environmental litigants claimed attorneys’ fees well in excess of what they themselves were paying their in-house counsel."
The legislative intent of the reimbursement provisions of the EAJA / ESA acts has been turned on its heads. There is no cost to suing governmental agencies on environmental issues regardless of merit. In fact there is a positive financial incentive to keeping lawsuits going. Large well-heeled environmental organizations now use the reimbursement process to take control of  Federal agencies, manipulate state priorities, and intimidate local municipalities. It gets worse. In 1995, in an apparent fit of sort-sighted ideological pique, the Republican led Congress eliminated the agency that was the only mechanism for auditing and tracking the cost of these reimbursements.
"Unfortunately, in passing the Federal Reports Elimination and Sunset Act of 1995 Congress looked at the history of EAJA reporting from 1981 to 1995 saw an EAJA program that effectively had stayed at a  few million dollars a year total without much growth, and decided the reporting provision was superfluous (and of course incurring a cost itself), eliminating it entirely. Now the coast was clear for 501(c)(3) groups to profit: there was no reporting, and no one would know how much money the groups were making in suing agencies. Without centralized reports, it was hard for anyone to accurately gauge whether the rate of EAJA activity was staying constant or increasing."
It is hard to believe the situation could really be this bad with millions being paid out to these lawyers and absolutely no accountability anywhere in the federal government. Congress apparently didn't believe it either and last year asked the Government Accountability Office to report on how much was being paid in legal reimbursements.  Turns out  It really is that bad.

The GAO Reports only on the tip of  iceberg.  Because that is all they can find. 

Here is the GAO Study: Limited Data Available on USDA and Interior Attorney Fee Claims and Payments and some pertinent excerpts:
"...some in Congress have expressed concerns about the use of taxpayer funds to make attorney fee payments with agencies’ limited funding, such as concerns that environmental organizations are using taxpayer dollars to fund lawsuits against the government, particularly against the Department of Agriculture (USDA), the Department of the Interior (Interior), and the Environmental Protection Agency (EPA)."
"Most USDA and Interior agencies did not have readily available information on attorney fee claims and payments made under EAJA and other fee-shifting statutes for fiscal years 2000 through 2010. As a result, it is difficult to readily determine who made claims, the total amount each department paid or awarded in attorney fees, who received the payments, or the statutes under which the cases were brought over the 11-year period. Both USDA and Interior officials stated that given the decentralized nature of their departments and the absence of an external requirement to track or report on attorney fee information, the information is not centrally tracked and decisions about whether to track attorney fee data and the manner in which to do so are best handled at the agency level." 
"The total number of claims filed for attorney fees cannot be determined." 
"Information on who received the payment is not always recorded." 
"Data on actual attorney fee payments made are not consistently available."
Even recognizing the very limited and constrained data the GAO was able to find, it is worth looking at their findings for one agency. The Interior Department agency that is the target of choice for environmental litigators  is the US Fish and Wildlife service:
"Interior officials said that in February 2012 they provided the committees with the fiscal year 2010 EAJA data that the department had available. The department plans to provide the committees with available fiscal years 2011 and 2012 EAJA information, but has not yet determined when it will be able to do so. Beginning with the fiscal year 2014 budget submission, Interior plans to include summary EAJA information for the prior fiscal year. Interior is working to determine how to track this information department wide." 
"Similar to the Forest Service, USFWS did not utilize a data system to track attorney fees and costs paid, but tracked information on attorney fees and costs paid by the Endangered Species Program in the Washington office using a spreadsheet. USFWS officials gathered information on those cases paid by the Washington office and supplemented the information with four endangered species cases identified by the regional offices. However, not all regions track attorney fee payments, so the data may not be complete over the identified timeframe." 
"Figure 5 shows the amount and number of payments made by Treasury on behalf of Interior by fiscal year"
Net net - this graph is a fraction of  legal fee reimbursements now being paid. With limited data, the  GAO cannot quantify the absolute size of the problem in any meaningful way, but the report does tell us something. The problem is big and getting bigger at an alarming rate.

What we are experiencing in San Francisco from the lawsuits promulgated by CBD / WEI is but one snowball sitting on the tip of the iceberg. Given that snowball could potentially cost San Francisco $1.3 million dollars to pay for a lawsuit that was dismissed... well...  we can safely assume there are a lot of taxpayers getting "snowed" by this broken process all across our nation.

Cross posted on my other blog and Fix Pacifica


Civic Center said...

Way to do some serious research, dude. Wanna play some golf?

mw said...

Yes. I've got a tee-time Sunday at Sharp. Check your e-mail in the morning.