Free Motion for Attorney Fees - District Court of Federal Claims - federal

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Electronically Filed on December 12, 2006 IN THE UNITED STATES COURT OF FEDERAL CLAIMS ____________________________________ ) THE SWEETWATER, A WILDERNESS ) LODGE LLC, ) ) Plaintiff, ) ) No. 02-1795C v. ) (Senior Judge Merow) ) THE UNITED STATES, ) ) Defendant. ) ____________________________________)

PLAINTIFF'S REVISED APPLICATION FOR ATTORNEYS' FEES AND COSTS PURSUANT TO THE EQUAL ACCESS TO JUSTICE ACT

Kevin R. Garden THE GARDEN LAW FIRM P.C. 211 North Union Street, Suite 100 Alexandria, VA 22314 (703) 519-1286

Dated: December 12, 2006

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Pursuant to 28 U.S.C. § 2412(d) of the Equal Access to Justice Act ("EAJA") and this Court's Order dated November 29, 2006, plaintiff The Sweetwater, A Wilderness Lodge LLC ("The Sweetwater") respectfully submits this revised application for fees, expenses and costs incurred by The Sweetwater in the above-captioned matter.1 As demonstrated below, The Sweetwater is a prevailing party in this matter and is eligible to receive an award under 28 U.S.C. § 2412(d) in the amount of $350,292.54 for reasonable attorneys fees, expenses and costs which were incurred in this lengthy and vigorously fought proceeding. The position of the United States in this matter was not substantially justified. Because the Court's final judgment was issued on October 12, 2006 and the appeal period as to the final judgment expired on December 11, 2006, this application is timely. The Sweetwater is a limited liability company the net worth of which did not exceed $7 million and which did not employ more than 500 employees at the time this action was filed. See Declaration of Jeffrey C. Mummery at ¶ 3 (attached hereto as Exhibit A). Thus, The Sweetwater meets the criteria under the EAJA with regard to eligible parties. 28 U.S.C. § 2412(d)(2)(B). The Sweetwater filed its Complaint in this matter on December 6, 2002, over four years ago. In that Complaint, The Sweetwater sought a judgment from the Court determining that The Sweetwater was entitled to compensation pursuant to the rights it held under its Term Special Use Permit for the Forest Service's actions in hindering The Sweetwater's ability to perform under that permit. In its Opinion dated August 25, 2006 and revised on October 6, 2006, the Court found that the Forest Service had in fact precluded The Sweetwater from performing under

The Sweetwater filed its initial application for attorneys fees and costs on September 22, 2006. Pursuant to the Court's Order dated November 29, 2006, The Sweetwater is submitting this revised application. 1

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the Term Special Use Permit and The Sweetwater was therefore entitled to compensation based on the government's actions. The Sweetwater is a prevailing party in this matter because the Court ordered a change in the legal relationship between the parties, a judgment was entered in The Sweetwater's favor and the judicial order confers judicial relief upon The Sweetwater. See Thomas v. Nat'l Sci. Found., 330 F.3d 486, 492-93 (D.C. Cir. 2003). Pursuant to the EAJA, a prevailing party is entitled to its reasonable attorneys fees, expenses and costs unless the government can demonstrate that the government's position was substantially justified. When the government makes such an assertion, "the court must look at the `government's position throughout the dispute, including not only its litigating position but also the agency's administrative position.'" Keeton Corrections, Inc. v. United States, 62, Fed. Cl. 134, 135 (2004), quoting Coty v. United States, 71 F.3d 384, 386 (Fed. Cir. 1995). This case is replete with unreasonable and unsupported agency conduct with regard to its administrative and litigation positions. All of the facts relevant to this conduct were, or should have been known to the government before these proceedings even began. As the Court found, the Forest Service did not inform The Sweetwater at the time it entered into the Term Special Use Permit in 1995 that in 1992 the Forest Service had "basically condemned" the bridges leading to the lodge facilities. Opinion at 17. While the Forest Service revealed this conclusion for the first time in 1997, this determination was not previously set forth in any document.2 In addition, and as the Court found, while the Forest Service placed an official sign at the bridges as of 1995 that prominently stated "Weight Limit 3 Tons," no load rating of the bridges had actually been done notwithstanding this sign's representations. Opinion

A Forest Service employee admitted that he did not include this determination in the files pertaining to the bridges until 1997. Opinion at 17.

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at 4. While the Forest Service policy was to close bridges that were not load rated, the Forest Service had not done so as of 1995 thus violating its policy. Opinion at 22. It was later revealed that the Forest Service's bridge experts had stated in 1992 that "the bridges should be closed," but the bridges were not closed because the Forest Service wanted to prevent its own liability to a prior lodge owner. Opinion at 4. (In making this decision, considerations for the public safety apparently took a back seat to the Forest Service's intent to protect its own agency budget.) After The Sweetwater purchased the lodge facilities, the Forest Service's disclosure in 1997 of its previous conclusion as to the bridges being "basically condemned" caused the closure of The Sweetwater's operations under the permit due to the safety issues raised by this finding (which the Forest Service agreed with)(Opinion at 19). The Forest Service then stated to and assured The Sweetwater that it was seeking funding to replace the bridges in order to restore operations. Opinion at 18-19. However, while the Forest Service subsequently received funding in 1999, it secretly sent this funding back because it was hoping to avoid investing any money in the lodge area at all from its own budget, and it hid this activity from The Sweetwater. Opinion at 21.3 After this action, the Forest Service continued to misrepresent to The Sweetwater that it was trying to locate funds to replace the bridges. Id. The Forest Service then encouraged The Sweetwater to hire a private structural engineer to inspect the bridges in late 2000. Opinion at 21. When that engineer concluded that the bridges could not be load rated, the Forest Service then placed locked gates on the bridges in April 2001 because the bridges could not be load rated, even though this same exact condition was in existence in 1995 and the Forest Service had left the bridges open. Opinion at 22. Thus,

As the Court found, at the time of executing the permit with The Sweetwater, the Forest Service "assure[d] The Sweetwater that they would make their best efforts to obtain replacement funds" if the bridges subsequently could not be used. Opinion at 10. 3

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had the Forest Service not inexplicably waited until 2001 to follow its own policy, the bridges would have been closed long before The Sweetwater inquired about purchasing the lodge and invested substantial financial and personal resources into it. As the testimony of the Forest Service's engineers Messrs. Fischer and Koenig clearly showed, all of these facts were known to the government. From early on in this matter, The Sweetwater asserted that the Forest Service was required under the circumstances to compensate it pursuant to clause 15 of the permit. We respectfully urge the Court to review Joint Exhibits 16, 18, and 20, which are letters written by The Sweetwater to the Forest Service in 2001, long before this litigation began. In those letters, The Sweetwater sets forth its repeated efforts to resolve this case and thus avoid litigation and its commensurate legal costs. The Court has now confirmed in its Opinion each of the material bases cited to by The Sweetwater in those letters. However, the Forest Service ignored these assertions that it was obligated to address the situation under clause 15 and consistently refused to resolve this matter in a fair and efficient manner. Notwithstanding the agency's culpability for the situation causing this loss of access and rather than making any effort to arrive at a fair resolution of this matter as The Sweetwater was urging, the Forest Service then sent a letter to The Sweetwater in December 2001 in which the Forest Service stated that The Sweetwater had to operate the lodge without vehicular use of the bridges, that access to the lodge was the sole responsibility of The Sweetwater and that the permit could be revoked if The Sweetwater did not operate. Opinion 24-25.4 At this point, The Sweetwater had no choice but to incur the substantial expense of pursuing a claim against the

As the Court noted, two months before sending this letter the Forest Service had secretly decided to remove the Sweetwater bridges and close the road permanently. Opinion at 24. 4

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federal government. When The Sweetwater presented its administrative claim to the Forest Service in 2002, the agency summarily asserted in its response dated July 22, 2002 that The Sweetwater did not have a legal binding contract with the Forest Service, and the agency refused to even consider The Sweetwater's administrative claim. Opinion at 25. The Forest Service took and has continuously maintained the position throughout this proceeding that the permit at issue was in no way a legal contract even though this Court had held that such permits were binding contracts. See Son Broadcasting, Inc. v. United States, 52 Fed. Cl. 815 (July 11, 2002)(finding that Forest Service Term Special Use Permits are binding legal contracts)(no appeal filed); see also Keeton, 62 Fed. Cl. 137 (in awarding EAJA fees, this Court found that the government's position was contrary to prior decisions on the issue). Moreover, while it did not inform the Court, the government had taken the exact opposite position in a separate District Court proceeding where the Forest Service (and not the permittee) was the party seeking contract damages arising under the very same type of permit. See Peckham v. United States, 61 Fed. Cl. 102 (2004)(discussing Forest Service action in a District Court against special use permittee in which the Forest Service sought contract damages)5; see also Keeton, 62 Fed. Cl. at 137 (in awarding EAJA fees, this Court noted that the government had taken a contrary position in other litigation); Notice of Newly Discovered Authority (August 4, 2004)(CFC Docket # 62). As the record demonstrates, in addition to asserting that it had no contract with The Sweetwater, the Forest Service took the administrative position that The Sweetwater had to operate the lodge Thus, the government was taking the wholly unreasonable and duplicitous position that, when it was the plaintiff, Forest Service Term Special Use Permits were legally binding contracts entitling the government to pursue contract damages against permittees, but when it was the defendant being sued by a permittee, these same permits were mere licenses and not legal contracts. The Forest Service has never offered an explanation for these irreconcilable positions.
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without bridges or it would be in breach of its permit and risk losing its lodge as well as being liable for restoring the land to its natural state.6 Thus, there is simply no way the Forest Service can meet its burden of demonstrating that its administrative position in this matter was substantially justified. Before this Court, the government then continued with this same position on behalf of the Forest Service and moved for summary judgment based on lack of jurisdiction, which the Court denied. Order (December 30, 2004)(CFC Docket # 69).7 Even after the Court's determination that it had jurisdiction over this matter, the government continued to assert the very same argument. Defendant's Post Trial Brief at 1-3 (asserting the Court had no jurisdiction over this matter because the permit is not a contract). The government also asserted that it had not precluded The Sweetwater's operations (even after the Forest Service padlocked and physically prevented any access over the Sweetwater bridges in 2001) and insisted that The Sweetwater could have operated its lodge using fords. As the Court found, it was "clear" that this was an erroneous position. Opinion at 10. As the Court further found, the Forest Supervisor (who admitted to having no background in lodge operations and conducted no assessment whatsoever of the viability of operations without vehicular access) had summarily taken the erroneous and self-serving position throughout this matter that the lodge could be operated with fords and failed to pursue bridge funds based on this The Forest Service made no inquiries of any one with expertise as to the viability of operating the lodge without vehicular access at this time. See Opinion at 20. However, when the Forest Service finally did so in the course of this litigation, the Forest Service's own expert informed it that operating without vehicular access was not feasible. At this point, the Forest Service had become so imbedded in its position that it ignored its expert's view. While The Sweetwater cross-moved for summary judgment and that motion was denied due to a dispute of material facts, that motion was effectively later granted by the Court's August 25, 2006 Opinion in which the Court, after hearing from the witnesses at the trial, agreed with The Sweetwater as to all material facts raised in that summary judgment motion.
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unsupported position. Opinion at 20. In fact, the government's own expert informed the government that it was wrong and "fords do not work." Opinion at 10-11. The Forest Supervisor had also maintained, and the government insisted in the litigation, that The Sweetwater had agreed in 1995 that it would use fords to operate the lodge if necessary. Opinion at 20. However, the Forest Supervisor was not even at the 1995 meeting. As the Court found, the Forest Service's own employees who attended the meeting where this agreement was allegedly made clearly admitted that no such agreement was ever made and that fords would be used only as a temporary means to access and maintain the lodge. Opinion at 10-11, 20.8 The Forest Supervisor's position with regard to not restoring bridge access to the lodge facilities, which was critical to this situation not being resolved, was influenced by her entirely unsupported belief in this regard. Opinion at 20. In fact, in 1997 the Forest Service had written a letter in which it acknowledged that any use of fords would only be temporary. See Opinion at 19 (quoting from JX 12, which was a letter written to The Sweetwater by Ms. Watson and signed by Mr. Larson in 1997 describing agreed-upon use of fords as "temporary"). The Forest Supervisor simply chose to ignore these facts. In this litigation, rather than finally acknowledge these facts as to the use of fords which had been confirmed by its own employees and now by its own expert, the government adopted the Forest Supervisor's wholly contradicted position and stubbornly continued with her entirely unsupportable position until its very last filing in this case. See Defendant's Response to Plaintiff's Proposed Finding of Fact at ¶ 6 (CFC Docket # 121)(filed February 1, 2006)(insisting the lodge was viable by using fords as a means of access); Id. at ¶ 63 (the government disagreed
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One Forest Service employee (Mr. Monte Barker), who was very familiar with the lodge facilities and the unsafe conditions of Sweetwater Creek, testified that it was so obvious that the lodge could not operate using fords that it went without saying. Tr. 822:24-823:3.

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with The Sweetwater's assertion that the parties agreed to the temporary use of fords).9 The Sweetwater achieved full success in its claim when the Court determined that the Forest Service had terminated its permit and was liable to The Sweetwater for equitable consideration under that permit. The action which directly led to this litigation was the Forest Service's issuance of the non-compliance letter to The Sweetwater in December 2001 in which the Forest Service asserted that The Sweetwater had to operate the lodge and that, if it did not, The Sweetwater was in breach of its permit which could then be revoked and The Sweetwater would be liable for removing its facilities and restoring the land to its natural condition. However, The Sweetwater successfully demonstrated that the Forest Service had in fact terminated any lodge operations, and was thus liable under the permit for this action. Therefore, rather than losing its lodge facilities and having to pay to restore the land to its natural condition, as the Forest Service was asserting was The Sweetwater's liability, by filing this action The Sweetwater established that it is entitled to equitable consideration for its lodge facilities and it is not liable in any way for restoring the permit area to its natural condition. Based on these results, The Sweetwater is entitled to recover a fully compensatory fee. Keeton, 62 Fed. Cl. at 138-139.

In an effort to support its damage theory presented to this Court (which erroneously asserted that The Sweetwater was entitled to no more than the replacement cost of the bridges), the government brought forth an expert at the trial to testify that both bridges could be replaced for $85,000. Opinion at 23. However, the government had previously stated to the public when it closed the bridges (as part of its effort to quell public opposition to its actions) that it would cost over $500,000 to replace those bridges. Opinion at 23. The credibility of the government's bridge expert as to the $85,000 bridge replacement cost only further demonstrates the government's misrepresentations in this regard back in 2001 when it represented to the public that the cost would be over $500,000. Moreover, had the government sought out this particular expert back in 2001 or earlier, the Forest Service may well have not blocked funding to replace the bridges given that the actual cost to replace the bridges was far lower than the Forest Service had asserted. Instead, the government ended up paying as much for its experts in this case in an attempt to defend itself (some of whom did not even testify) than it would have paid to actually replace the bridges and solve the problem.

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The Sweetwater is seeking an award of fees, expenses and costs totaling $350,292.54 which are fully itemized, documented and supported in the attached exhibits. This request is based on The Sweetwater having incurred attorneys fees for 1734.1 hours in pursuing this matter capped at the adjusted EAJA rate of $152.38/hour. Exhibit B; see Exhibits E-K (supporting documentation that itemizes these hourly efforts).10 The total amount incurred for attorneys fees is $263,846.86 based on this capped rate. Id. All fees set forth in The Sweetwater's counsel's bills and itemizations of time have been incurred in this matter. See Declaration of Jeffrey C. Mummery at ¶ 4 (attached hereto as Exh. A).11 This effort includes review and analysis to prepare the Complaint as well as preparation of The Sweetwater's defense against the United States' motion for summary judgment in which the United States asserted that the Term Special Use Permit at issue was not a contract and thus the Court had no jurisdiction over The Sweetwater's claim, and that the government had not terminated the permit and thus had no liability under clause 15. This claim also includes the extensive effort involved in preparing for the trial in this matter, which included review and analysis of approximately 9,000 pages of documents produced by the government in this case in response to discovery, and preparation for sixteen (16) depositions which were held in Cody, As shown on Exhibit C attached hereto, because the cost of living has increased since 1986, The Sweetwater is seeking to adjust the base EAJA rate to include cost of living adjustments by calculating the average CPI-U for the period 2002-2006 which is when legal fees were incurred (189.74), and dividing it by the baseline CPI-U for March 1996 (155.7). See Chapman Law Firm, 65 Fed. Cl. at 425; California Marine Cleaning, Inc. v. United States, 43 Fed. Cl. 724, 733-34 (1999). This results in the factor of 1.219, which was then multiplied by the standard EAJA rate of $125/hour to arrive at the adjusted EAJA rate of $152.38. With the exception of Mr. Housel, The Sweetwater's actual attorney rates were in excess of $152.38/hour. Declaration of Jeffrey C. Mummery at ¶ 5 (attached hereto as Exh. A). This request will be supplemented subsequent to any opposition filed by the government to include additional fees and expenses associated with filing this application for attorneys fees. Cinciarelli v. Reagan, 729 F.2d 801 (D.C. Cir. 1984).
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Wyoming, Denver, Colorado and Fort Collins, Colorado. It also includes the nine-day trial at which testimony totaling 2,985 pages was presented from 17 witnesses and 114 exhibits were introduced. Finally, it includes exhaustive and comprehensive post-trial briefings which addressed the extensive record in this matter. All in all, over 130 docket entries were filed in this proceeding.12 The Sweetwater is also seeking the expenses and costs incurred by its attorneys in this matter, which totals $20,131.54. See Exhibit D attached hereto. These expenses and costs are itemized and described in Exhibits E-K attached hereto. In addition, also set forth on Exhibit D attached hereto is an itemized list of all additional expenses incurred by The Sweetwater in this proceeding and paid directly by The Sweetwater. These costs, which are documented in Exhibits L-W, total $66,314.14 and include expenses paid by The Sweetwater to its experts (which is far less than that expended by the government for its experts) as well as payments to court reporters for deposition transcripts. These expenses also include travel costs associated with the depositions, the summary judgment hearing and the trial itself. See Declaration of Jeffrey C. Mummery at ¶ 6. For the reasons set forth above, The Sweetwater respectfully requests that its application for fees, expenses and costs totaling $350,292.54 pursuant to the Equal Access to Justice Act be granted.
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In its Opinion, the Court excluded from the expenditures owed to The Sweetwater all expenses related to the litigation of this case. Opinion at 34. In doing so, the Court excluded all fees to The Sweetwater charged to it by Saltman & Stevens in 2002. Because the Court has apparently viewed these expenditures as related to the litigation of this matter, The Sweetwater has included those attorneys fees and expenses in this EAJA request. However, in the event that the government asserts that such fees and expenses are not recoverable pursuant to the EAJA because they are not incurred in litigating this matter, The Sweetwater respectfully requests that the Court amend its Opinion to include those expenses as part of The Sweetwater's compensable expenditures for 2002.

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Respectfully submitted, s/Kevin R. Garden _______________________ Kevin R. Garden THE GARDEN LAW FIRM P.C. 211 North Union Street, Suite 100 Alexandria, VA 22314 (703) 519-1286 Dated: December 12, 2006

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