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113th Congress                                            Rept. 113-540
                        HOUSE OF REPRESENTATIVES
 2d Session                                                      Part 1

======================================================================



 
            ENDANGERED SPECIES LITIGATION REASONABLENESS ACT

                                _______
                                

 July 17, 2014.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

 Mr. Hastings of Washington, from the Committee on Natural Resources, 
                        submitted the following

                              R E P O R T

                             together with

                            DISSENTING VIEWS

                        [To accompany H.R. 4318]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Natural Resources, to whom was referred 
the bill (H.R. 4318) to amend the Endangered Species Act of 
1973 to conform citizen suits under that Act with other 
existing law, and for other purposes, having considered the 
same, report favorably thereon without amendment and recommend 
that the bill do pass.

                          Purpose of the Bill

    The purpose of H.R. 4318 is to amend the Endangered Species 
Act of 1973 to conform citizen suits under that Act with other 
existing law.

                  Background and Need for Legislation

    H.R. 4318 is intended to standardize the awarding of 
attorneys' fees to prevailing parties against the federal 
government, in effect reducing the excessive amount of 
taxpayer-financed payouts in Endangered Species Act lawsuits.
    Under current law, section 2412 of Title 28 of the U.S. 
Code (the Equal Access to Justice Act or EAJA) limits awards of 
attorneys' fees to parties that prevail on the merits in 
lawsuits against the federal government, and provides that 
``attorney fees shall not be awarded in excess of $125 per hour 
unless the court determines that an increase in the cost of 
living or a special factor, such as the limited availability of 
qualified attorneys for the proceedings involved, justifies a 
higher fee.''
    While the $125 per hour EAJA cap is not an insignificant 
hourly rate for American taxpayers to reimburse successful 
litigants against the federal government, no similar hourly cap 
current exists for attorneys' fees awarded under the Endangered 
Species Act (ESA), which are distributed from the federal 
government's Judgment Fund. In addition, there is no current 
requirement that parties suing the federal government under the 
ESA must ``prevail'' to be awarded attorneys' fees. It is 
reasonable, therefore, for successful ESA litigants to abide by 
the same rules.
    H.R. 4318 applies EAJA's $125 per hour cap on attorneys' 
fees awarded to individuals and groups suing the federal 
government under the ESA and requires that the party prevail in 
the case.
    The Committee on Natural Resources has received numerous 
examples of attorneys under the current ESA's citizen suit 
provision arguing for and being awarded by federal courts 
upwards of $400, $500, and even $700 or more per hour in 
taxpayer-funded fees.
    For example, in 2012, Mr. Daniel J. Rohlf, a Lewis and 
Clark College law professor who also represented Southwest 
Center for Biological Diversity in a lawsuit involving the 
construction of a San Diego elementary school due to the 
existence of a two-inch fairy shrimp, argued that the 
``prevailing San Diego market rate'' for his attorneys fees 
were reasonable, including his special expertise in challenging 
ESA habitat conservation plans, vernal pools, and his 
efficiency in preparing and reviewing legal documents for the 
case. In the final six years of the litigation, he charged over 
$400 per hour, including $450 per hour in the years in which 
the school district was blocked from moving forward with 
construction of the school. He and two other attorneys were 
awarded over $650,000 in federal funds, with his fees totaling 
over $150,000.
    In another example, in March 2012, the National Marine 
Fisheries Service and the Bonneville Power Administration were 
involved in a settlement for the payment of attorneys' fees 
associated with litigation on biological opinions for operation 
of several Northwest federal hydroelectric dams that the 
plaintiffs claimed jeopardized listed salmon. The settlements 
included payment of $940,000 in legal fees to the plaintiffs 
for litigation between 2000 and 2004 and an agreement to pay an 
additional $950,000 in legal fees to the plaintiffs for 
litigation between 2004 and 2008. The plaintiffs were paid an 
hourly rate of $200 to $350 per hour and interns on the case 
were paid $100 per hour. Recently, three of same attorneys 
representing these groups filed a third application for 
attorneys' fees at rates of $500, $475, and $400 per hour for a 
total of $535,000 for their time between 2010 and 2012. This 
would amount to a total of more than $2.4 million in taxpayer-
funded fees at rates that have more than doubled in just a few 
years' time.
    Also in 2012, EarthJustice, a plaintiff with several other 
groups in a lawsuit challenging the Department of the 
Interior's decision to delist the gray wolf, sought over 
$630,000 in attorneys' fees at the rate of over $300 per hour 
for the principal attorney.
    This bill would not eliminate the ability of aggrieved 
parties to sue or recover attorneys' fees under the citizen 
suit provision of ESA. However, instead of continuing the law 
that incentivizes litigious attorneys to argue in court for 
inflated, ``market'' rates at the taxpayers' expense, it would 
allow federal agencies to better prioritize resources that 
could go to more productive efforts, such as actual on-the-
ground conservation efforts for species.

                            Committee Action

    H.R. 4318 was introduced on March 27, 2014, by Congressman 
Bill Huizenga (R-MI). The bill was referred to the Committee on 
Natural Resources and in addition to the Committee on the 
Judiciary. On April 8, 2014, the Committee on Natural Resources 
held a hearing on the bill and on April 30, 2014, the Committee 
met to consider the bill. Congressman Jared Huffman (D-CA) 
offered an amendment designated .001 to the bill; the amendment 
was ruled out of order. No further amendments were offered, and 
the bill was then adopted and ordered favorably reported to the 
House of Representatives by a bipartisan roll call vote of 27 
to 15, as follows:


            Committee Oversight Findings and Recommendations

    Regarding clause 2(b)(1) of rule X and clause 3(c)(1) of 
rule XIII of the Rules of the House of Representatives, the 
Committee on Natural Resources' oversight findings and 
recommendations are reflected in the body of this report.

                    Compliance With House Rule XIII

    1. Cost of Legislation. Clause 3(d)(1) of rule XIII of the 
Rules of the House of Representatives requires an estimate and 
a comparison by the Committee of the costs which would be 
incurred in carrying out this bill. However, clause 3(d)(2)(B) 
of that rule provides that this requirement does not apply when 
the Committee has included in its report a timely submitted 
cost estimate of the bill prepared by the Director of the 
Congressional Budget Office under section 402 of the 
Congressional Budget Act of 1974. Under clause 3(c)(3) of rule 
XIII of the Rules of the House of Representatives and section 
403 of the Congressional Budget Act of 1974, the Committee has 
received the following cost estimate for this bill from the 
Director of the Congressional Budget Office:

H.R. 4318--Endangered Species Litigation Reasonableness Act

    CBO estimates that implementing H.R. 4318 would have no 
significant effect on the federal budget. Enacting the bill 
would reduce direct spending on attorneys' fees over the 2015-
2024 period; therefore, pay-as-you-go procedures apply. 
However, we estimate that any such effects would be negligible. 
Enacting the bill would not affect revenues.
    Under current law, courts can require the U.S. Treasury to 
pay reasonable attorneys' fees to plaintiffs who prevail 
against the federal government in cases brought under the 
Endangered Species Act (ESA). Under the bill, courts would 
determine the amount of fees to award using guidelines 
established under the Equal Access to Justice Act (EAJA), which 
cap attorneys' fees at $125 per hour but allow for adjustments 
for cost of living and special factors, such as the limited 
availability of qualified attorneys for certain cases. Based on 
historical information regarding the amounts of attorneys' fees 
paid to plaintiffs under the ESA and EAJA, CBO expects that 
amounts awarded to attorneys under the bill would be similar to 
amounts awarded under current law, and we estimate that 
enacting the bill would have no significant effect on the 
federal budget.
    H.R. 4318 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act and 
would not affect the budgets of state, local, or tribal 
governments.
    The CBO staff contacts for this estimate fare Jeff LaFave 
and Daniel Austin. The estimate was approved by Theresa Gullo, 
Deputy Assistant Director for Budget Analysis.
    2. Section 308(a) of Congressional Budget Act. As required 
by clause 3(c)(2) of rule XIII of the Rules of the House of 
Representatives and section 308(a) of the Congressional Budget 
Act of 1974, this bill does not contain any new budget 
authority, spending authority, credit authority, or an increase 
or decrease in revenues or tax expenditures. CBO estimates that 
implementing H.R. 4318 would have no significant effect on the 
federal budget.
    3. General Performance Goals and Objectives. As required by 
clause 3(c)(4) of rule XIII, the general performance goal or 
objective of this bill is to amend the Endangered Species Act 
of 1973 to conform citizen suits under that Act with other 
existing law.

                           Earmark Statement

    This bill does not contain any Congressional earmarks, 
limited tax benefits, or limited tariff benefits as defined 
under clause 9(e), 9(f), and 9(g) of rule XXI of the Rules of 
the House of Representatives.

                    Compliance With Public Law 104-4

    This bill contains no unfunded mandates.

                       Compliance With H. Res. 5

    Directed Rule Making. The Chairman does not believe that 
this bill directs any executive branch official to conduct any 
specific rule-making proceedings.
    Duplication of Existing Programs. This bill does not 
establish or reauthorize a program of the federal government 
known to be duplicative of another program. Such program was 
not included in any report from the Government Accountability 
Office to Congress pursuant to section 21 of Public Law 111-139 
or identified in the most recent Catalog of Federal Domestic 
Assistance published pursuant to the Federal Program 
Information Act (Public Law 95-220, as amended by Public Law 
98-169) as relating to other programs.

                Preemption of State, Local or Tribal Law

    This bill is not intended to preempt any State, local or 
tribal law.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, existing law in which no change is 
proposed is shown in roman):

ENDANGERED SPECIES ACT OF 1973

           *       *       *       *       *       *       *


                       penalties and enforcement

  Sec. 11. (a) * * *

           *       *       *       *       *       *       *

  (g) Citizen Suits.--(1) * * *

           *       *       *       *       *       *       *

  (4) The court, in issuing any final order in any suit brought 
pursuant to paragraph (1) of this subsection, may award costs 
of litigation (including reasonable attorney and expert witness 
fees) [to any party, whenever the court determines such award 
is appropriate.] to any prevailing party in accordance with 
section 2412 of title 28, United States Code.

           *       *       *       *       *       *       *




                            DISSENTING VIEWS

      H.R. 4318: Endangered Species Litigation Reasonableness Act

    H.R. 4318 would undermine the citizen suit provisions of 
the Endangered Species Act (ESA) and, similar to the other ESA 
bills passed through this Committee by the Majority, would 
compromise recovery of endangered or threatened species. H.R. 
4318 would render the ESA citizen suit provision, currently 
used to ensure enforcement of the law, ineffective by 
restricting citizens' ability to recover their true litigation 
costs if they prevail in court.
    There is a presumption in the United States that each party 
bears its own attorneys' fees. For policy reasons, Congress has 
reversed this presumption by enacting fee-shifting provisions 
that authorize the award of attorneys' fees and costs 
``whenever . . . appropriate'' in numerous federal statutes 
including the: Toxic Substances Control Act; Surfacing Mining 
Control and Reclamation Act; Clean Water Act; Marine 
Protection, Research, and Sanctuaries Act; Deepwater Ports Act; 
Safe Drinking Water Act; Noise Control Act of 1972; Energy 
Reorganization Act of 1974; Energy Policy and Conservation Act; 
Solid Water Disposal Act; CERCLA, and the Outer Continental 
Shelf Lands Act. Similarly, Congress has done this under the 
ESA citizen suit provision to allow a prevailing party, 
including industry plaintiffs, to recover reasonable attorney's 
fees and costs. In addition, the Republican-led Congress has 
passed legislation this year that would allow for the recovery 
of ``reasonable attorney's fees and costs'' for litigants 
challenging the federal government under H.R. 1944, the 
``Private Property Rights Protection Act of 2014.''
    It is appropriate to expect each party to pay their own 
attorney's fees in cases where successful; plaintiffs stand to 
recover damages or win their share of a monetary settlement. 
However, ESA plaintiffs stand to win nothing personally. That 
is why Congress has determined that for the ESA and other 
similar laws, the courts should have the flexibility to make a 
case-by-case determination regarding a fee award that will make 
a plaintiff whole. Clearly the Majority agrees with this based 
on their support of H.R. 1944. Unfortunately, H.R. 4318 would 
change this common-sense, market-based, recovery fee provision, 
but only for the ESA.
    Instead, H.R. 4318 would require an Equal Access to Justice 
Act fee-shifting regime, a more restrictive attorney's fee 
recovery law that is typically considered a safety-net for fee 
recovery when the primary statute does not have a citizen suit 
provision like the one found in the ESA.
    The bill further complicates matters by making it unclear 
whether it would require the agencies to pay fee awards to 
prevailing parties from their own agency appropriations, a 
opposed to the Equal Access to Judgment Fund. Under current 
law, fees are paid from either appropriated funds or the 
Judgment fund, depending on the circumstances of the case. If, 
however, agencies would now be required to pay all fees from 
their appropriated funds as the supporters of the bill seem to 
imply, this would certainly divert agency resources and detract 
from the agencies' core mission of recovering species. For all 
of these reasons, we strongly oppose the bill as reported.

                                    Peter DeFazio,
                                           Ranking Member, Committee on 
                                               Natural Resources.
                                   Raul M. Grijalva.
                                   Grace F. Napolitano.
                                   Gregorio Kilili Camacho Sablan.
                                   Eni F.H. Faleomavaega.
                                   Rush Holt.
                                   Jared Huffman.
                                   Alan S. Lowenthal.
                                   Katherine M. Clark.
                                   Matt Cartwright.