Budd-Falen addresses loopholes, calls for EAJA changes during Range Rights conference

Omaha, Neb. – “We’ve been working on the attorney’s fees reimbursement issue since 2009, and the idea that the federal government basically pays environmental groups to sue the federal government to stop our use of the land is still hard for me to understand eight years later,” said Cheyenne Attorney and Budd-Falen Law Offices LLC Co-Owner Karen Budd-Falen.

She discussed the current use of federal funds to reimburse attorney’s fees during the 2017 Range Rights and Resource Symposium on May 19-20.

Judgment Act

Budd-Falen explained there are two basic ways the federal government reimburses attorney’s fees, the Equal Access to Justice Act (EAJA) and the Judgment Act.

“The Judgment Act is an act that is simply funded by the government every year,” said Budd-Falen. “It’s not something that Congress renews. They just put money into this Judgment Fund.”

The Judgment Act applies to litigation under the Endangered Species Act, the Clean Water Act, the Clean Air Act, Resource Conservation Act and other similar statutes.

She continued, “It is a fee shifting statute that says ‘a prevailing party’ should have their attorney’s fees reimbursed by the federal government.”

According to Budd-Falen, the interpretation of a prevailing party by the court is the party that achieves their desired outcome.

Equal Access to Justice Act

“EAJA applies to cases brought under the National Environmental Policy Act (NEPA), Federal Land Policy and Management Act (FLPMA) or the National Forest Management Act,” said Budd-Falen.

According to the act, the prevailing party should have their attorney’s fees reimbursed.

“EAJA was actually signed by President Ronald Reagan because, what he saw and what Congress saw at that time was the federal government in some cases was taking positions against a private business or a private landowner, and he thought it was a way to equalize the playing field,” she explained.

Budd-Falen continued, “President Reagan said that, if we proved the government is wrong, unjustified in their position, didn’t have a legitimate legal position or was just trying to be a bully and push people around, if we win in court, we should have our attorney’s fees reimbursed.”

When the act was passed, the reimbursement cap was $125 per hour, which would be the equivalent of $200 per hour today, for attorney’s fees.

“They also were only going to pay EAJA funds to businesses or individuals whose net worth was less than $8 million,” she said.

Shift in use

According to Budd-Falen, the acts weren’t abused until 1995 when President Clinton signed the Paperwork Reduction Act.

“One of the pieces of paper they reduced was any accounting for the spending or reimbursement of litigation fees to these groups,” she said.

Prior to 1995, the Congressional Research Office filed an annual report that was released for public record, giving a detailed account of how much money was paid to each entity.

“Once that piece of paper was reduced, we saw massive increases in litigation,” she commented. “When we started studying the issue, I thought it was really interesting because the vast majority of attorney’s fees cases are settled by the federal government.”

Budd-Falen noted the amount of litigation by environmental or animal rights groups dramatically increases while under democratic administrations.

“I don’t think it’s because Republicans were better at following the law than the Democrats. I think it was because of the settlement of attorney’s fees,” she said.

Budd-Falen continued, “When we simply compare the raw numbers across administrations, significantly more fees were paid to these groups during Democrat administrations than during Republican administrations.”

Holes

Budd-Falen explained that loopholes have been created in the EAJA and Judgment Act funds.

The $8 million net worth cap now only applies to for-profit entities, said Budd-Falen.

“For non-profit public interests, net worth doesn’t matter,” commented Budd-Falen. “The Sierra Club Legal Foundation in 2013 was worth, by their IRS forms, $56 million. Sierra Club gets their attorney’s fees reimbursed.”

Another loophole Budd-Falen discussed was the attorney’s fees reimbursement amount cap.

“What these groups have done is, they’ve convinced the Justice Department that environmental law is a ‘specialty,’” said Budd-Falen.

She continued, “I have seen requests for attorney’s fees from Earth Justice Legal Foundation at $750 per hour, and those attorney’s fees have been paid by the federal government.”

According to EAJA, attorney’s fees are only to be paid if the federal government is not substantially justified in its position through either law or facts.

“In 21 percent of cases, there was no determination of whether the government was substantially justified in its position,” stated Budd-Falen. “Rather, a settlement is simply made with the environmental group, and their fees get paid.”

Needed changes

According to Budd-Falen, accounting of attorney’s fees is an important change that must be made.

“I think we have to have an accounting of the fees just so the American public knows how much money is being spent,” said Budd-Falen.

Changes also need to be pushed for and made to the EAJA, said Budd-Falen, noting “We also have to go further and push for some changes in the EAJA.”

“The idea that even if their net is over $8 million but they’re a ‘non-profit public interest’ and can get attorney’s fees anyway is absolutely ridiculous,” she commented.

She explained that trade organizations such as the Public Lands Council are ineligible for reimbursement as some organization members have individual net worth greater than $8 million.

“I think that has to stop. I think it’s got to be an equal play field for all of us,” said Budd-Falen.

A hard cap should also be enforced on reimbursement amount per hour, according to Budd-Falen.

“People shouldn’t be able to make an windfall on attorney’s fees just because they want to hire somebody who wants to work in a place like California,” she stressed.

Emilee Gibb is editor of Wyoming Livestock Roundup and can be reached at emilee@wylr.net.