Before Williams, Sentelle, and Randolph, Circuit Judges.
FOR THE DISTRICT OF COLUMBIA CIRCUIT
And consolidated case Nos. 94-1540, 94-1590, and 94-1654
On Motion for Award of Attorneys' Fees
Opinion for the Court filed by Circuit Judge Sentelle.
American Petroleum Institute and National Petroleum Refiners Association (hereinafter "petitioners" or "API") move for an award in the amount of $334,755 for attorneys' fees incurred in connection with their successful petition for review of an Environmental Protection Agency ("EPA") regulation. See American Petroleum Inst. v. EPA, 52 F.3d 1113 (D.C. Cir. 1995). After considering petitioners' motion, we find that they are entitled to an award of reasonable attorneys' fees but that they have not carried their burden with respect to the full amount for which they seek reimbursement. For reasons that we will discuss in detail below, we conclude that petitioners are entitled to attorneys' fees in the amount of $237,997.03.
In the underlying litigation, petitioners challenged EPA's regulations implementing the Reformulated Gasoline ("RFG") program established by Congress in Section(s) 211(k), (42 U.S.C. Section(s) 7545(k)), of the Clean Air Act ("CAA"), 42 U.S.C. Section(s) 7401, et seq. (1988 & Supp. V 1993). That program mandated the promulgation of regulations to achieve clean air goals through reformulation of conventional gasolines and specified minimum percentages of oxygen for such fuels, thus requiring the use of oxygenates. 42 U.S.C. Section(s) 7545(k)(1), (2). The EPA regulations at issue required, inter alia, that 30 percent of the oxygen required to be used in RFG comes from renewable oxygenates, as opposed to non-renewable oxygenates such as those produced by petitioners. Regulation of Fuels and Fuel Additives: Renewable Oxygenate Requirement in Reformulated Gasoline, 59 Fed. Reg. 39,258 (1994).
Petitioners sought review in the proceeding which underlies the present fee petition. The facts and decision are set forth in our prior opinion, American Petroleum Institute v. EPA, 52 F.3d at 1115-21. Petitioners argued the invalidity of the regulations on five bases. In the end, we needed to reach only one of them: under the plain meaning of section 7545(k), EPA had no power to adopt the rules in question as they were not directed toward the reduction of volatile organic compounds and toxic emissions and EPA improperly interpreted the statute as giving it broader power to adopt the Renewable Oxygenate Rule ("ROR"), which would not provide for additional reductions in those emissions. Id. at 1119.
A. Petitioners' Eligibility for a Fee Award
Petitioners now move for attorneys' fees under 42 U.S.C. Section(s) 7607(f), which provides that for judicial proceedings on petitions for review of EPA's regulations under the CAA "the court may award costs of litigation (including reasonable attorney and expert witness fees) whenever it determines that such award is appropriate." There are two primary tests for determining when an award of attorneys' fees is "appropriate" under section 7607(f): 1) whether the party prevailed on the merits; and 2) whether the party's litigation furthered the purposes of the statute and the proper implementation and interpretation of the Act. See Sierra Club v. EPA, 769 F.2d 796, 799-800 (D.C. Cir. 1985). It is clear and the government concedes that petitioners meet this test and are entitled to an award of reasonable attorneys' fees under Section(s) 7607(f).
The government, however, challenges the reasonableness of portions of the award prayed. Though some of the government's arguments are without merit, some correctly suggest grounds on which we should disallow portions of the fees sought.
B. The "Distinctly Different Claims"
The government argues that we should disallow a portion of the fees prayed because petitioners argued five grounds for the invalidity of the regulations and the court based its decision on only one of them. In the government's view, this means that we should eliminate fees attributable to the other arguments under the theory that where a party raises "distinctly different claims for relief that are based on different facts and legal theories," in seeking fees the party must establish an entitlement to fees for each subset of claims separately. See Hensley ...