Free Motion for Attorney Fees - District Court of Colorado - Colorado

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO Case No. 00-cv-02325-MSK-OES SIERRA CLUB, and MINERAL POLICY CENTER, Plaintiffs, v. CRIPPLE CREEK & VICTOR GOLD MINING COMPANY, ANGLOGOLD ASHANTI (COLORADO) CORPORATION, ANGLOGOLD ASHANTI NORTH AMERICA, INC., and GOLDEN CYCLE GOLD CORPORATION, Defendants; and Civil Action No. 01-cv-02307-MSK SIERRA CLUB, and MINERAL POLICY CENTER, Plaintiffs, v. CRIPPLE CREEK & VICTOR GOLD MINING COMPANY, ANGLOGOLD ASHANTI (COLORADO) CORPORATION, ANGLOGOLD ASHANTI NORTH AMERICA, INC., and GOLDEN CYCLE GOLD CORPORATION, Defendants. ______________________________________________________________________________ ANGLOGOLD DEFENDANTS' MOTION FOR ATTORNEY FEES ______________________________________________________________________________

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Pursuant to Section 1365(d) of the federal Clean Water Act, 33 U.S.C. §§ 1251 et seq. ("CWA"), Defendants Cripple Creek & Victor Gold Mining Company ("CC&V"), AngloGold Ashanti (Colorado) Corp., and AngloGold Ashanti North America Inc. (collectively, the "AngloGold Defendants") move the Court to enter an Order awarding them their attorney fees, expert witness fees, and litigation expenses (hereinafter "legal fees") in the amount of $1,436,497.01. A. THE STANDARD In its April 13, 2006 Memorandum Opinion and Order ("Opinion"), the Court ordered that judgment enter in favor of the Defendants on all of Plaintiffs' 14 claims. The Court also held that one of the Plaintiffs -- Mineral Policy Center ("MPC") -- lacked standing in this case. And the Court ordered that the Defendants may apply for an award of attorney fees and costs as provided by Fed.R.Civ.P. 54(d) and Section 1365(d) of the CWA.1 Section 1365(d) of the CWA provides that "[t]he court, in issuing any final order in any [citizen suit] . . . , may award costs of litigation (including reasonable attorney and expert witness fees) to any prevailing or substantially prevailing party, whenever the court determines such award is appropriate." Through its use of the phrase "any prevailing or substantially prevailing party," Congress made clear that courts have discretion to award fees to prevailing defendants as well as successful plaintiffs. See Christiansburg Garment Co. v. Equal Employment Opportunity Commission, 434 U.S. 412, 416 & n.7 (1978) (includes the CWA in its list of "statutes [that] are more flexible, authorizing the award of legal fees to either plaintiffs or defendants, and entrusting the effectuation of the statutory policy to the discretion of the district courts").
In its Judgment entered on the same date, the Court awarded costs to the Defendants. Pursuant to that Judgment, the AngloGold Defendants are simultaneously filing a separate Bill of Costs.
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The standard for awarding legal fees to prevailing plaintiffs under the CWA is quite liberal. Courts typically award fees to plaintiffs whenever they "have pursued and obtained remedies under the [CWA]." See, e.g., Stoddard v. Western Carolina Regional Sewer Authority, 784 F.2d 1200, 1209 (4th Cir. 1986) (citations omitted). Given the language in Section 1365(d), which places prevailing plaintiffs and prevailing defendants on an equal footing, one would expect these criteria to be applied equally. Nevertheless, the relatively few courts that have reached the issue have held that Congress intended a more stringent standard for the award of legal fees to successful defendants. In explaining the different standard for successful defendants, courts have reasoned that a prevailing plaintiff is "the chosen instrument of Congress to vindicate" a Congressional policy and the district court is awarding attorney fees "against a violator of federal law." Christiansburg, 434 U.S. at 418-19. Because a prevailing defendant does not possess these same attributes, courts have concluded that legal fees should not be assessed against a citizen plaintiff unless the court finds that its claim "was frivolous, unreasonable, or groundless, or that the plaintiff continued to litigate after it clearly became so." Id. at 422; cf. Browder v. City of Moab, 427 F.3d 717, 721 (2005). If a plaintiff is found to have brought or continued a claim in bad faith, "there will be an even stronger basis for charging him with the attorney's fees incurred by the defense." Christiansburg, 434 U.S. at 422. Here, the Plaintiffs' claims lacked merit from the outset, and the Plaintiffs continued to pursue them in bad faith even as it became increasingly clear that they were groundless. B. PLAINTIFFS' CLAIMS WERE FRIVOLOUS, AND THEY WERE INITIATED AND CONTINUED IN BAD FAITH

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Citizen plaintiffs have two distinct advantages under the CWA. First, the standard for standing in a CWA citizen suit is extremely liberal. As Justice Scalia explained in his dissent in Friends of the Earth v. Laidlaw Environmental Services (TOC), Inc., 528 U.S. 167 (2000), If there are permit violations, and a member of a plaintiff environmental organization lives near the offending plant, it would be difficult not to satisfy today's lenient standard [for standing]. Id. at 201 (Scalia, J. dissenting). Second, CWA plaintiffs have the status of private attorneys general with the power to vindicate the policies of the CWA as to a specific list of CWA "effluent standard or limitation" violations. See Section 1365(f) of the CWA. When the citizen suit provision of the CWA is properly used to supplement agency enforcement authorities, citizen plaintiffs rarely lose. Despite these advantages, Plaintiffs could not prove a single one of their 14 claims. Why? There are two reasons. The first is that Plaintiffs never did have a credible basis for their CWA claims and, notwithstanding ample opportunity during discovery, they were unable to develop any factual evidence or expert testimony to support their theories of liability. The second reason that Plaintiffs could prove none of their claims follows from the first. Plaintiffs were not focused on proving their claims; instead, they pursued this case for an improper purpose. Plaintiffs wanted to gain the "massive bargaining power" of CWA's Their goal was to extract from the

favorable civil penalty and attorney fee provisions.2

See Laidlaw, 528 U.S. at 209-210 (Scalia, J., dissenting) ("A Clean Water Act plaintiff pursuing civil penalties acts as a self-appointed mini-EPA. Where, as is often the case, the plaintiff is a national association, it has significant discretion in choosing enforcement targets. Once the association is aware of a reported violation, it need not look long for an injured member, at least under the theory of injury the Court applies today.... And once the target is chosen, the suit goes forward without meaningful public control. The availability of civil penalties vastly disproportionate to the individual injury gives citizen plaintiffs massive bargaining power -- which is often used to achieve settlements requiring the defendant to support environmental projects of the plaintiffs' choosing. See Greve,

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AngloGold Defendants what they could not obtain when their objections to the mine's expansion failed. Instead of vindicating a Congressionally sanctioned policy of the CWA, Plaintiffs

appropriated the citizen suit provision of the CWA to vindicate their own personal perception that the Amendment 8 expansion should not have been approved. From the outset, Plaintiffs' lawsuit was nothing more than an attempt to penalize the AngloGold Defendants for Amendment 8. It was never a careful, methodical matching of evidence to elements in order to prove justified claims. Plaintiffs' conduct at key points in the life of this case prove this point -- and confirm that this lawsuit was frivolous at its inception and continued in bad faith. 1. Standing.

In their haste to attack the mine expansion authorized by Amendment 8, MPC's counsel neglected to perform even a cursory analysis as to whether MPC had standing to sue. Given the express language of MPC's Articles of Incorporation, there is no question that MPC did not have any members. Nor did the "contributors" to MPC, referred to in MPC's Articles of Incorporation as "so-called members," satisfy the "indicia of membership" criteria set out in Hunt v. Washington State Apple Advertising Comm'n., 432 U.S. 333, 343-45 (1977). It was never disputed, and clear from MPC's own formative documents, that these contributors could neither be officers or directors of MPC, nor could they elect any officers or directors. They had absolutely no role or influence in the management or affairs of MPC. In short, there has never been any merit to MPC's CWA claims because its own organizing documents made clear that it lacked standing to sue from the outset. Under Rule 11,
The Private Enforcement of Environmental Law, 65 Tulane L. Rev. 339, 355-359 (1990). Thus, is a public fine diverted to a private interest.") (Emphasis added; certain citations omitted).

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MPC's counsel should have known this long before the initial Complaint was filed. For this reason alone, MPC is liable under the CWA for all of the AngloGold Defendants' reasonable legal fees. 2. The Permit Violation Claims.

Citizen plaintiffs may bring an action only for "ongoing" violations of the CWA. The case law articulating this limitation is well settled. See, e.g., Gwaltney of Smithfield, Ltd. v. Chesapeake Bay Foundation, Inc., 484 U.S. 49 (1987). Yet in crafting their CWA lawsuit, Plaintiffs looked to the past. All of the alleged violations of the Carlton Tunnel Permit and the Arequa Gulch Permit were historic exceedances, some predating Plaintiffs' initial Complaint by more than 4 years. Additionally, the most recent exceedances of the permits occurred more than a year before Plaintiffs filed their initial Complaint, and those exceedances had already been evaluated by the permitting agency (the Colorado Water Quality Control Division, or "WQCD") and determined to have been caused by an upset condition or exceptional precipitation event. The WQCD's upset determination is significant. The definition of upset makes it clear that the exceedances were not the result of any design or operational defect within the control of CC&V. In other words, the installed treatment facilities were adequate to meet permit limits, and CC&V was operating those facilities properly. The exceedances were caused by something else: an exceptional event that CC&V could not control. Given this determination, there was never any merit to Plaintiffs' claim that there were "ongoing" violations of the permits; a reasonable fact finder could not conclude violations would recur under any condition other than another upset. See e.g., Chesapeake Bay Foundation, Inc. v. Gwaltney of Smithfield, Ltd., 844 F.2d 170, 171-172 (4th Cir. 1988). Moreover, the WQCD's conclusion about the individual

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exceedances has proven true with the passage of time:

there have been no confirmed

exceedances of either permit since the upset exceedances in 1999. Despite all these facts, Plaintiffs not only filed their claims, they continued to pursue them even as each passing year gave testament to their frivolousness. 3. Experts.

From the outset, Plaintiffs recognized that they were going to need expert testimony. For example, Plaintiffs had the burden of connecting the hydrologic dots to prove their "unpermitted discharge" claims. That is, Plaintiffs were required to prove by a preponderance that there was a hydrologic connection between the water flows and the Defendants, and that the Defendants were adding pollutants to that flow from a point source. Given that all of the flows at issue emerged at a particular feature with no visually apparent source, Plaintiffs could not meet their burden with a photo of the feature or a simple description of their observations. Plaintiffs needed experts in various scientific disciplines to connect the visible features to the elements of their claims. Similarly, with regard to their "ongoing permit violation" claims, Plaintiffs needed expert testimony about the purported inadequacies of the treatment facilities from which a reasonable trier of fact could find a continuing likelihood of a recurring permit violation. Recognizing their need for expert testimony, Plaintiffs designated three experts. However, in the course of deposing those experts, it was revealed that Plaintiffs' counsel had improperly restricted the work that was performed and controlled what the experts said. See, e.g., Defendants' Motion to Strike Affidavits and Reports of Robert Burm and Ann Maest with incorporated Legal Authority, 01-cv-2307 [#81] (hereinafter "Motion to Strike") at 6-8, and 1518; and the citations to the deposition transcripts attached thereto as Exhibits 1 and 2 [#84]. For

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example, in Dr. Maest's case she had not even seen the site until after her first report was submitted. Her first report was based solely on pictures of the area that Plaintiffs' counsel showed and explained to her. Motion to Strike at 17. And, for both Dr. Maest and Mr. Burm, counsel actually wrote the first draft of their reports because, as Mr. Burm explained, he "knows what's significant and what isn't significant.... [and when he writes the first draft] I at least know where he's coming from, what he would like to see." Id. at 6-7. By using this approach, Plaintiffs definitely could be assured that the reports parroted their theory of the case. But this approach also ensured that no objective scientific analysis was performed and that the groundlessness of Plaintiffs' claims would not be exposed. Plaintiffs' approach to the admission of their experts' opinions under Rule 702 provides further proof that Plaintiffs were blinded by their zeal to oppose CC&V's mine, not guided by the merit of their claims. First, it became clear in all of the Rule 702 hearings that while Plaintiffs' counsel had controlled formulation of each expert's opinion, they still did not remotely meet that Rule's requirements for admissibility. Second, as the Court pointed out in footnote 15 of the Opinion, even if the opinions had been admissible, none of them even addressed the issue of core importance: whether the chemical constituents in various flows "were naturally

occurring or were the result of human action." Thus, despite their recognition of the necessity for experts to prove their case, they secured experts who did not meet the strictures of Rule 702, and they did not even match the proferred opinions to the elements they needed to prove. The Court's decision on their experts after extensive briefing and hard-fought, lengthy hearings should have been a bell-tolling event for the Plaintiffs. But they forged ahead with their

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claims. That decision was not consistent with the citizen plaintiffs' role of vindicating a CWA policy with facts and expert testimony. Instead, it suggests a bad faith, ulterior motive. 4. Discovery and Trial Preparation.

Plaintiffs had ample opportunity to gather all the discovery they needed in this case. For the liability phase alone, they had over four years to get factual proof of their claims. And they took advantage of their opportunity: they engaged in multiple rounds of discovery with multiple site inspections, interrogatories, requests for admission, requests of production, and depositions; and they had endorsed three expert witnesses on two occasions. But in the end, Plaintiffs ignored what they actually learned through this discovery. They were blind to the lack of evidence supporting their theories. As a result and despite all the discovery they imposed on Defendants, Plaintiffs were unable to offer any evidence on critical elements of their claims such as where the water and the chemical constituents in the various water flows were coming from. Plaintiffs also were unable to offer any credible evidence supporting such assertions as (1) the permits were issued to all of the Defendants, (2) that corporate veils should be pierced, or (3) that the Squaw Gulch Pond was ever used for anything but stock watering. As the lack of evidence mounted during discovery, the Plaintiffs should not have continued with these claims. This is especially true where, for example, (a) Plaintiffs' own witness testified that there was no water flow in the Roosevelt

Tunnel upgradient of the El Paso Shaft (which demonstrated conclusively that Plaintiffs never had any evidence of an ongoing hydrologic connection between the Cresson Project and the Roosevelt Tunnel portal);

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(b)

The paired water quality data from the Carlton Tunnel Ponds and the Fourmile

Creek Springs collected by Plaintiffs' own witness demonstrated conclusively that the water quality was different (and in some cases by orders of magnitude); and (c) The Tenth Circuit had already notified these very same Plaintiffs and their

counsel that they had to connect the hydrologic and geochemical dots in order to prove their Roosevelt Tunnel claim. See Sierra Club and Mineral Policy Center v. El Paso Gold Mines, Inc., 421 F.3d 1133, 1149-51 (2005). Having lost their experts, Plaintiffs attempted to mask the shortcomings of their claims just prior to trial by listing a vast array of multi-page exhibits. But at trial most of those exhibits were not even offered (let alone admitted), and the ones that were admitted did not contain the evidence required to support Plaintiffs' theories. documentary evidence was attenuation: Indeed, the hallmark of most of the

exhibits about other mines, other policies, other

companies, other fact finders that were at best marginally probative of Plaintiffs' claims in this case. 5. Initial Settlement Discussions.3

In an attempt to timely resolve Plaintiffs' stated CWA concerns, CC&V arranged for mediated settlement discussions with Plaintiffs and their counsel shortly after receiving Plaintiffs' first Notice of Intent to Sue letter. During those settlement discussions, Plaintiffs demanded more than they could have ever been awarded judicially even if they had prevailed on
The AngloGold Defendants recognize that caution and sensitivity always should be employed before informing the Court about the substance of settlement discussions. F.R.E. 408 does not, however, bar the admission of settlement discussions unless offered "to prove liability for or invalidity of [a] claim or its amount." The AngloGold Defendants do not ask the Court to consider settlement efforts in this case for that purpose; instead, they raise these facts because they are probative of Plaintiffs' disregard for the merits of their claims and continuance of this case in bad faith. See F.R.E. 408 ("This rule also does not require exclusion when the evidence is offered for another purpose").
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every one of their claims. For example, Plaintiffs' settlement proposal disregarded the permitting role of the WQCD and required Defendants to accept whatever permit limits Plaintiffs wanted at both the Carlton Tunnel and the Arequa Gulch outfalls. Similarly, Plaintiffs insisted that the Defendants agree to limits set by Plaintiffs at the Roosevelt Tunnel prior to WQCD involvement ­ and to agree to pay stipulated penalties if those limits were exceeded. Plaintiffs' excessive demands were not made in good faith; they cannot fairly be interpreted as an attempt to vindicate the stated policy of the CWA. The only reasonable explanation for these excessive demands is that Plaintiffs were attempting to misuse the "massive bargaining power" inherent in any CWA citizen suit to intimidate the Defendants. 6. Agency Settlement Agreements.

During the pendency of Plaintiffs' lawsuit, the U.S. Environmental Protection Agency ("EPA") and the Colorado Department of Public Health and Environment ("CDPHE") evaluated the Cresson Project in considerable detail with particular attention to the claims raised by Plaintiffs. The enforcement agencies and their lawyers (Department of Justice and the Colorado Attorney General) inspected the site with a specific emphasis on the historic features for which Plaintiffs alleged Defendants needed point source discharge permits. They also sampled the water observed at these locations and evaluated approximately a dozen 3-ring binders of data and information along with a CD containing 1600 pages of water quality monitoring data provided by CC&V. In the end, a joint settlement was reached to resolve the historic permit exceedances and the unpermitted discharge allegations that CC&V disputed. See, e.g., Exhs. 57 and 73. Given the level of effort expended by the agencies in this enforcement action, the settlement achieved was significant for at least three reasons. First, the enforcement agencies

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were never able to prove an "ongoing" violation of the permits. This fact is reflected in the separate settlement agreements with each agency. Specifically, these agreements do not require any upgrades to the treatment facilities or any improvements to the operation of those facilities, thereby confirming the WQCD's earlier determination that the historic exceedances were caused by an upset condition or exceptional precipitation. Second, the enforcement agencies did not require discharge permits for the Moffat Tunnel Cribbing Wall, the Squaw Gulch Pond, or the Roosevelt Tunnel, a fact that reflects an implicit rejection of Plaintiffs' unpermitted discharge claims with regard to these features. Third, like the Plaintiffs in this action, the enforcement agencies were never able to prove a hydrologic connection between the Carlton Tunnel Ponds and the Fourmile Creek Springs. CC&V's agreement to obtain a permit for these springs was simply part of the overall "give and take" compromise that occurs as part of settlement. Additionally, the enforcement agencies' final approval of the settlement agreements was specifically conditioned on their review and evaluation of public comments. Because Plaintiffs opposed the settlement, they provided comments during this public comment period, and the agencies considered them. In the end, however, none of Plaintiffs' comments persuaded the enforcement agencies to alter their position. As a result, the settlement agreements were

finalized and signed by all parties. See, e.g., Section 1319(g) of the CWA, and Exh. 73 at 10-11, ¶¶ 47-48. Plaintiffs had a clear mechanism under the CWA and Colorado's counterpart -- the Colorado Water Quality Control Act, C.R.S. §§ 25-8-101 et seq. -- to continue to press their opposition by appealing the settlement agreements. See, e.g., Section 1319(g)(8) of the CWA. But Plaintiffs disregarded that mechanism. Instead, they continued to proceed with their CWA

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lawsuit, asking the Court to look at the very same evidence but come to a different conclusion more to Plaintiffs' liking. This was a clear abuse of the citizen suit provision of the CWA. The enforcement agencies' limited resources had not precluded them from fully investigating Plaintiffs' allegations or from taking what the agencies believed to be an appropriate enforcement action. Plaintiffs were not vindicating the supplementary role of citizens under the CWA. This is particularly true here because Plaintiffs did not even develop any data or expert testimony to rebut the enforcement agencies' conclusions. They simply wanted a different outcome -- even though there was no basis for getting one. Finally, based on a subsequent settlement conference described below, it is now evident that attorney fees played a significant role in Plaintiffs' decision not to appeal the settlement agreements. Plaintiffs could not let this case be resolved through the EPA and CDPHE

settlement agreements, and judicial review of those agreements, because that route did not give them the opportunity their CWA citizen suit did: recovery of their attorney fees. Thus, again it appears the real motive was fees and "massive leverage" -- not maintenance of meritorious citizens suit claims. 7. Final Settlement Discussions.

In a final attempt to resolve the matter, Defendants again engaged in structured settlement discussions with Plaintiffs and their counsel shortly before trial with the assistance of Magistrate Judge Schlatter. Plaintiffs' motives became even more clear during these discussions. As part of a compromise, Defendants offered to settle the case for a substantial amount of money so long as it was used for mutually acceptable environmental projects -- work to be performed on the

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ground. See "Offer of Judgment Under Rule 68" letter dated January 30, 2006 (attached hereto as Exhibit 1). Even though Plaintiffs had already lost their experts by then, they rejected the offer. This rejection, together with Plaintiffs' settlement proposal at the time, spoke volumes about Plaintiffs' motives. To settle, Plaintiffs demanded a civil penalty in the amount of

$1,500,000, emphasizing that the Defendants faced a potential $250,000,000 civil penalty. Plaintiffs also staked out as "non-negotiable" a separate demand for all their costs, expert fees, and attorneys fees. See December 15, 2005 Correspondence from John Barth (attached hereto as Exhibit 2). In other words, Plaintiffs threatened the Defendants with a $250,000,000 hammer, rejected money applied directly to benefit the environment, and insisted that no settlement would occur unless they got their fees and costs. That offer demonstrated Plaintiffs' misuse of "the massive bargaining power" of CWA citizen suits to intimidate and punish Defendants. 8. Amendment 8. Plaintiffs' pattern of conduct throughout this litigation,

But punish them for what?

together with the lack of a credible basis for their CWA claims begs the question: What was their ulterior motive for pursuing the AngloGold Defendants? Rewinding to a few months before Plaintiffs filed their initial Complaint, it is apparent that the real motive here is not vindicating meritorious claims but instead punishing the AngloGold Defendants for expanding the mine. In September 2000, CC&V succeeded in obtaining approval from the Mine Land and Reclamation Board ("MLRB") for the mine expansion authorized by Amendment 8. As parties to the Amendment 8 proceeding, Plaintiffs were entitled to seek judicial review of MLRB's decision directly in state court under the state Administrative Procedure Act. But Plaintiffs ignored this remedy and elected a different course of conduct. Less than three weeks after

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Amendment 8 was formally approved, having lost their Amendment 8 opposition, Plaintiffs initiated this CWA citizen suit. The timing of Plaintiffs' CWA lawsuit is too coincidental to ignore. As Marilyn Fay and Kirby Hughes conceded during their testimony, all of the features that Plaintiffs claimed needed discharge permits -- Moffat Tunnel Cribbing Wall, Squaw Gulch Pond, Roosevelt Tunnel, and the Fourmile Creek Springs -- existed for years before Plaintiffs initiated their CWA lawsuit. Similarly, the last of the permit exceedances, as well as the WQCD's evaluation of them, substantially predated the Amendment 8 process. Yet, it was only after their loss during the Amendment 8 process that Plaintiffs became "concerned" about these CWA issues. From Plaintiffs' point of view, the CWA citizen suit approach was obviously preferable to any direct challenge of Amendment 8. The standard of judicial review was more favorable; Plaintiffs would not have to worry about the deferential "any reasonable basis in the record" standard applicable to a direct appeal of Amendment 8. Additionally, the opportunity to pursue civil penalties, as Justice Scalia observed, gave Plaintiffs "massive bargaining power." And finally, the best thing about the CWA citizen suit strategy was the threat that Plaintiffs could recover their attorney fees without having to completely prevail. But Plaintiffs' use of the citizen suit provision of the CWA in this fashion was abusive. The problem was that none of the conclusions they leapt to about flow sources or ongoing violations were ever supported. In fact, there were many, many signs along with way that indicated those conclusions were groundless. Yet the Plaintiffs pressed on. They were not advancing any legitimate CWA policy. As the U.S. Supreme Court has explained, citizen suits are intended to supplement agency enforcement efforts, not supplant them. See Gwaltney, 484

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U.S. 49. This was never a case where the permitting and enforcement agencies, hampered by resource constraints, were unable to pay substantive attention to the Cresson Project, past permit exceedances, and the potential for other point source discharges from the facility. The agencies were giving substantive attention to all of these and, as explained earlier, the WQCD had already completed its evaluation of the most recent, and final, permit exceedances long before Plaintiffs filed their lawsuit. Plaintiffs may not have liked the WQCD's decision, but there was never any good faith basis to "overfile" on these exceedances. See id. at 61. Given the timing of their CWA citizen suit and the pattern of conduct throughout the litigation, it is apparent that Plaintiffs misused the citizen suit provision of the CWA for the purpose of punishing the Defendants for their success in obtaining approval for mine expansion under Amendment 8. C. LEGAL FEES SHOULD NOT BE DENIED ON POLICY GROUNDS This is not a case where the AngloGold Defendants are asking the Court to reach a simple post hoc conclusion "that, because a plaintiff did not ultimately prevail, his action must have been unreasonable or without foundation." Christiansburg, 434 U.S. at 420-21. The AngloGold Defendants recognize that "[t]his kind of hindsight logic could discourage all but the most airtight claims, for seldom can a prospective plaintiff be sure of ultimate success." Id. However, as this admonition is cautionary and does not preclude a district court from concluding that an action is "frivolous, unreasonable, or groundless" after hearing the merits of the case. A number of courts have granted attorney fees to prevailing defendants after hearing the merits of the plaintiffs' cases. See, e.g., Blue v. United States Department of the Army, 914 F.2d 525, 535 (4th Cir. 1990) (citing Lewis v. Brown & Root, Inc., 711 F.2d 1287 (5th Cir. 1983); Coleman v. General Motors Corp., 667 F.2d 704 (8th Cir. 1981); Carrion v. Yeshiva University, 535 F.2d 722

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(2nd Cir. 1976), cert denied, 111 S. Ct. 1580 (1991)); see also Introcaso v. Cunningham, 857 F.2d 965, 967 (4th Cir. 1988) (In the § 1988 context, "although in some instances a frivolous case will be quickly revealed as such, it may sometimes be necessary for defendants to 'blow away the smoke screens the plaintiffs had thrown up' before the defendants may prevail.") (quoting Hicks v. Southern Maryland Health Systems Agency, 805 F.2d 1165, 1167-68 (4th Cir. 1986)). Similarly, legal fees should be awarded here given the unique circumstances; the facts here are not like any of the cases where a prevailing defendant has been denied an award of legal fees under the CWA. As Judge Posner wrote in Tarkowski v. Lake County, 775 F.2d 173, 176 (7th Cir. 1985), "[a] legally and factually baseless suit is frivolous but even more clearly and reprehensibly so is a suit brought to harass or oppress -- a suit that the plaintiff brought not in the hope of winning but solely in order to put the defendant to the burden of defending himself." Like the Tarkowski case, Plaintiffs here filed an invalid federal claim in an effort to achieve a result that they had failed to accomplish during the Amendment 8 process. That improper motive establishes

Plaintiffs' bad faith. See also Munson v. Friske, 754 F.2d 683, 697 (7th Cir. 1985) (affirming award of defendant's attorneys fees under test where district court "not only concluded that the plaintiff's claim were without merit or foundation, it also stated that the plaintiff had used the judicial system to carry on a personal vendetta"). This bad faith use of the CWA citizen suit provision provides "an even stronger basis for charging [plaintiffs] with the attorneys fees incurred by the defense." Christiansburg at 422. In addition, such a result would not chill plaintiffs who properly use the citizen suit provision of the CWA. Rather, an award here will send a message that there are certain responsibilities when citizens assert their role under the

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CWA as private attorneys general. Those responsibilities are minimal. Citizen plaintiffs must read their charter to ensure that they have members and that they are authorized to pursue a CWA lawsuit. And citizen plaintiffs cannot use the CWA with its "massive bargaining power" as a vehicle for addressing general dissatisfaction with a particular project, especially when there is already a tailor-made remedy for obtaining judicial review of that project. In this case, Plaintiffs demonstrated a failure to embrace these modest responsibilities. Their litigation was driven by pride and prejudice. Plaintiffs and their counsel were prejudiced by their overarching view that the mine expansion authorized by Amendment 8 was bad and Defendants should have to pay for that expansion; and counsel, despite their obligations under Rule 11, were too proud to walk away from a strategy in which the facts did not support their preconceived notion of what ought to be. An award here is in the public interest because it will have the effect of discouraging the sort of misuse Plaintiffs and their counsel made of the citizen suit provision of the CWA. Under the special circumstances of this case, it is appropriate to award the AngloGold Defendants -- who prevailed on every single claim -- their legal fees. D. THE REQUESTED LEGAL FEES ARE REASONABLE 1. Attorney Fees.

The starting point in calculating a reasonable attorney fee is the "lodestar figure, " which is "the number of hours reasonably expended on the litigation multiplied by a reasonable hourly rate." Hensley v. Eckerhart, 461 U.S. 424, 433 (1983); see also Ramos v. Lamm, 713 F.2d 546,

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552 (10th Cir. 1983).4 There is a strong presumption that the lodestar is a reasonable fee. Blum v. Stenson, 465 U.S. 886, 897 (1984). A reasonable hourly rate should be calculated "according to the prevailing market rates in the relevant community. . . ." Id. at 895. "The hourly rate at which compensation is awarded should reflect rates in effect at the time the fee is being established by the court, rather than those in effect at the time services were performed." Ramos, 713 F.2d at 555. It is appropriate for the Court to rely upon affidavits of local attorneys, including counsel of record, concerning the reasonableness of the hourly rates charged by the prevailing party's counsel. Zuchel v. City and County of Denver, 997 F.2d 730, 746 (10th Cir. 1993); see also D.C.COLO.LCivR 54.3(A). "Normally [an award of attorneys' fees] will encompass all hours reasonably expended on the litigation. . . ." Hensley, 461 U.S. at 435. Services provided by non-lawyers are also recoverable, particularly where the law firm's practice is to bill those amounts separately. Ramos, 713 F.2d at 558-59. A fee award also should include compensation for time spent securing the attorneys' fees. Mares v. Credit Bureau of Raton, 801 F.2d 1198, 1205 (10th Cir. 1986). The AngloGold Defendants seek an award of $1,345,273.40 in attorneys fees, comprised of the following amounts: 1. 2. Vranesh and Raisch fees -- $829,740.90 Hogan & Hartson fees -- $515,532.50

Hensley, Ramos, and many of the other cases cited in this portion of the Motion awarded fees under 42 U.S.C. § 1988. In Delaware Valley, the Supreme Court held that Section 1988 and the fee-shifting section of the Clean Air Act, which is identical to Section 1345(d) of the CWA, "should be interpreted in a similar manner." 478 U.S. at 559. Thus, courts regularly look to Section 1988 decisions as authority for the calculation of fees under the CWA. See, e.g., Student Public Interest Research Group of New Jersey, Inc. v. AT&T Bell Labs., 842 F.2d 1436, 1439 n.1 (3d Cir. 1988).

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3.

TOTAL -- $1,345,273.40

These amounts are substantiated in detail by the attached Affidavits of Eugene J. Riordan (attached hereto as Exhibit 3) and Robert C. Troyer (attached hereto as Exhibit 4).5 (a) Reasonable Number of Hours.

The total hours expended in the AngloGold Defendants' defense of this case are as follows: 1. 2. 3. Vranesh and Raisch -- 4,810 Hogan & Hartson -- 1,313.75 TOTAL -- 6,123.75

Federal court litigation, even in a straightforward case, is time consuming. This case lasted 5½ years. It includes two separate cases that were consolidated. Fourteen total claims were asserted in two Complaints and one Amended Complaint. In response to those claims, for four years the AngloGold Defendants fought back with a highly specialized but unusually lean defense team: Gene Riordan and one other attorney at his small Boulder firm. They defended the case vigorously but without the excess that often accompanies federal litigation involving companies exposed, as Plaintiffs' put it, to a $250 million judgment plus attorneys' fees. Rather than trying to bury the Plaintiffs in discovery, motions, and unnecessary disputes, they conducted focused discovery, filed strategic motions, and conducted few depositions. Only after a scheduling conference in September 2004, when trial appeared imminent, did the AngloGold Defendants hire Hogan & Hartson to add trial experience to the team. Hogan
The amounts reflected in this Motion do not include legal fees related to the preparation of this Motion. If the Court grants this Motion in whole or in part, the AngloGold Defendants may supplement their request for fees to include time spent in connection with this Motion. In the meantime, the legal fees requested here are those incurred through the end of the last billing cycle after conclusion of trial and post-trial filings, but before issuance of the Opinion and the entry of Judgment.
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& Hartson too avoided overstaffing, overbilling, or overworking the case. Only one attorney did the vast majority of the work, with little associate or paralegal assistance, as the defense sought to increase rather than reduce efficiencies with two firms involved. Only a few, focused standing depositions were conducted (and the Court's ruling on standing indicates those were necessary and effective). Strategy concentrated on a careful but methodical Rule 702 vetting of Plaintiffs' experts. And Hogan & Hartson engaged in no long-shot discovery or motion practice. Rather, the whole team remained focused on strategic and thematic preparation of the AngloGold Defendants' defense, matching the facts to the elements. (b) Reasonable Hourly Rates.

The hourly rates that the AngloGold Defendants paid Vranesh and Raisch and Hogan & Hartson are the same or lower than hourly rates paid in this community for such services. See, e.g., National Law Journal's "Billing Rate" summary for 2005 at p. S3 (attached hereto as Exhibit 5) (indicating that rates for attorneys in a representative large, local Denver firm in 2005 ranged from $250 to $565 per hour for partners, and $185 to $395 per hour for associates). The rates paid here are the same rates those firms customarily charge their clients, and the same rates their other clients customarily pay. See Exhibits 3 and 4. 2. Expert Witness Fees.

To defend this case, the AngloGold Defendants retained six expert witnesses. The total amount of the fees and expenses they were paid is $59,763.11. All six experts played distinct and important roles in this case, and the fees incurred for all of the expert witnesses were necessary to defend this case. Specifically, the AngloGold Defendants hired one primary expert because he already had extensive knowledge of the Cresson

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Project and the exact hydrologic expertise to rebut Plaintiffs' core experts: Adrian Brown. The AngloGold Defendants then hired additional experts only as necessary to address a few very specific issues beyond Mr. Brown's expertise. There was no duplication of experts, and given the total exposure claimed by Plaintiffs, the total payment of $59,793.11 in expert fees in a complex scientific case like this was unusually restrained. In addition, their fees were consistent with market rates and thus are reasonable for the work performed. See Exhibit 3, ¶ 8. 3. Litigation Expenses.6

"Reasonable attorneys' fees . . . must include reasonable expenses because attorneys' fees and expenses are inseparably intertwined as equally vital components of the cost of litigation." Brown v. Gray, 227 F.3d 1278, 1298 (10th Cir. 2000) (citation omitted). Thus, courts should award costs that "are normally itemized and billed [by a lawyer] in addition to the hourly rate," so long as they are reasonably incurred and not normally absorbed by a law firm as part of its overhead. Ramos, 713 F.2d at 559. Specific recoverable expenses, as long as they are not part of firm overhead, include (1) long distance telephone charges, Ramos, 713 F.2d at 559; (2) fax charges, Case v. Unified School Dist No. 233, 157 F.3d 1243, 1258 (10th Cir. 1998); (3) electronic legal research, id.; (4) postage, Ramos, 713 F.2d at 559; and (5) secretarial overtime, id. The AngloGold Defendants' attorneys itemized and billed, and the AngloGold Defendants paid, the expenses incurred during their defense of this lawsuit that are set forth in their billing statements attached to Exhibits 3 and 4. These expenses were reasonable and necessary for the successful defense of this case. Because they are reasonable in amount, they
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"Litigation expenses" sought pursuant to this Motion are separate from the costs detailed in the AngloGold Defendants' Bill of Costs.

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should be included in the award against Plaintiffs. The total amount of those litigation expenses for both firms is $31,460.50. CONCLUSION For the reasons outlined herein, the AngloGold Defendants request, pursuant to Section 1365(d) of the CWA, that they be awarded their reasonable attorney fees, expert witness fees, and litigation expenses in the amount of $1,436,497.01. CERTIFICATION OF COMPLIANCE WITH D.C.COLO.LCivR 7.1(A) Robert C. Troyer, counsel for the AngloGold Defendants, certifies that he consulted with John Barth, counsel for Plaintiffs, concerning this Motion. Mr. Barth indicated that the Plaintiffs object to the relief requested herein.

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Respectfully submitted this 27th day of April, 2006.

HOGAN & HARTSON L.L.P. s/ Robert C. Troyer __________________________________ Robert C. Troyer 1200 17th Street, Suite 1500 Denver, CO 80202 Telephone: 303-899-7300 Facsimile: 303-899-7333 [email protected] and Eugene J. Riordan Lisa C. Ledet VRANESH AND RAISCH, LLP 1720 14th Street, Suite 200 P.O. Box 871 Boulder, CO 80306-0871 Telephone: 303-443-6151 Facsimile: 303-443-9586 [email protected] [email protected] ATTORNEYS FOR DEFENDANTS CRIPPLE CREEK & VICTOR GOLD MINING COMPANY, ANGLOGOLD ASHANTI (COLORADO) CORP., AND ANGLOGOLD ASHANTI NORTH AMERICA INC.

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CERTIFICATE OF SERVICE I hereby certify that on April 27, 2006, I electronically filed the foregoing ANGLOGOLD DEFENDANTS' MOTION FOR ATTORNEY FEES with the Clerk of the Court using the CM/ECF system which will send notification of such filing to the following email addresses: John M. Barth P.O. Box 409 Hygiene, CO 80533 [email protected] Roger Flynn Jeffrey C. Parsons Western Mining Action Project P.O. Box 349 Lyons, CO 80540 [email protected] Randall M. Weiner Law Offices of Randall M. Weiner, P.C. 1942 Broadway, Suite 408 Boulder, CO 80302 [email protected] Don H. Sherwood Attorney at Law 10861 West 28th Place Denver, CO 80215 [email protected] Craig R. Carver CARVER KIRCHHOFF, SCHWARZ, MCNAB & BAILEY, P.C. 1600 Stout Street, Suite 1700 Denver, CO 80202 [email protected] Eugene J. Riordan Lisa C. Ledet VRANESH & RAISCH, LLP P.O. Box 871 Boulder, CO 80306-0871 [email protected] [email protected] Peter V. O'Connor (via email) AngloGold Ashanti North America, Inc. 7400 E. Orchard Road, Suite 350 Greenwood Village, CO 80111

s/ Robert C. Troyer __________________________________ Robert C. Troyer Hogan & Hartson L.L.P. 1200 17th Street, Suite 1500 Denver, CO 80202

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