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12/08/89 Raton Gas Transmission v. Federal Energy Regulatory

December 8, 1989





On Application for Taxation of Costs and Award of Attorneys' Fees.


Ruth Bader Ginsburg and Silberman, Circuit Judges, and Robinson, Senior Circuit Judge. Opinion for the Court filed by Circuit Judge Robinson. Dissenting Opinion filed by Circuit Judge Silberman.


Raton Gas Transmission Company applies for taxation of court costs *fn1 and allowance of attorneys' fees *fn2 following our resolution of its controversy with the Federal Energy Regulatory Commission over fees charged upon its Purchased Gas Adjustment filings. *fn3 The Commission contends that an assessment of court costs is precluded by statute. *fn4 It resists any recovery of attorneys' fees, not on grounds that Raton did not prevail in the underlying litigation, *fn5 but that the Commission's stance therein was adequately justified. *fn6

We share the Commission's conviction that taxation of court costs is statutorily barred. We conclude, however, that Raton prevailed sufficiently to qualify for recovery of attorneys' fees in some amount, and that the Commission was not substantially justified in advancing the defenses we found lacking. We accordingly award such fees as we deem appropriate. I.

We open our discussion with a summary of the salient events forerunning the present dispute. Raton objected to a fee charged uniformly by the Commission upon PGA filings by regulated utilities. *fn7 Raton had submitted with a six-page PGA filing a check for $2,300, a fee amount established by the Commission in its Order No. 361. *fn8 Shortly before Raton's submission, however, the Commission had raised the filing fee to $4,000. *fn9 Raton paid the $1,700 difference under protest and then sought relief therefrom. After exhausting its administrative remedies without achieving success, Raton petitioned for review by this court.

Originally, Raton asserted two grounds here. First, it contended that it should not have to pay any fee at all since its filing would merely enable it to lower the price of its gas, and would not result in any special benefit. Alternatively, Raton insisted that the fee was not commensurate with the cost to the Commission of processing Raton's six-page filing. *fn10 We rejected Raton's first argument, not only as an attack on Order No. 361 made long after expiration of the statutory 60-day period for judicial review, *fn11 but also because "the Commission's processing of Raton's filing conferred enough of a special benefit to support a fee requirement under the governing statute." *fn12

With respect to Raton's objection to the size of the fee, however, we disagreed with the Commission that Raton was tardy. We pointed out that Raton's petition for review did not "implicate Order No. 361 directly, but focuse[d] instead on the increase [which was] announced only a month prior to Raton's motion for [administrative] relief, *fn13 and which spawned a new generation of concerns. *fn14 With respect to these, we said, Raton's petition for review was timely, *fn15 and the Commission's explanation inadequate. *fn16 Reminding the Commission that filing fees must be both "cost-justified and fair," *fn17 we vacated its order and remanded the case to the Commission for reconsideration of its decision to charge Raton the full $4,000. *fn18 Following our remand, the Commission, "partially in response" to our decision, modified its regulation to reduce to $1,800 the fee for PGA filings by "nonmajor" natural gas companies such as Raton. *fn19 II

Raton's application has provoked a welter of arguments and counterarguments, and to some extent concessions by Raton. It is useful, if indeed not necessary, to catalog them before proceeding to further analysis.

In the beginning, Raton asserted that it was the prevailing party in this court, *fn20 and as such was entitled to court costs in the amount of $924 and attorneys' fees aggregating $17,200, *fn21 for a total of $18,124. *fn22 Citing the steady increase in the cost of living, *fn23 and declaring that "practice before the Federal Energy Regulatory Commission requires specialized legal experience," *fn24 Raton beseeched us to exercise our authority to relax the Equal Access to Justice Act's ceiling on attorneys' fee allowances, *fn25 and to award compensation at the rate of $100 per hour for the services of its counsel. *fn26

The Commission opposed Raton's application and moved to dismiss it on grounds that taxation of costs against the Commission is prohibited by the Natural Gas Act, *fn27 and that Raton could not recover attorneys' fees because the Commission's position in the main litigation was substantially justified. *fn28 Alternatively, the Commission maintained that if Raton were allowed attorneys' fees, the amount sought should be reduced because the attorney's hourly rate surpassed the normal statutory ceiling *fn29 and thus was unreasonable. *fn30 The Commission suggested, however, that even if Raton were entitled to more than the statutory maximum rate would confer, the adjustment should be limited to a cost-of-living increase producing an hourly rate of $95.83. *fn31

The Commission also argued that the "law clerk's" $40 hourly rate was too high. *fn32 Raton, said the Commission, had not shown that this rate was "within the range of prevailing market rates for law clerks of comparable experience" *fn33 nor had Raton provided information regarding the law clerk's salary. *fn34 In the Commission's view, the rate for the law clerk's work should not exceed the clerk's salary rate. *fn35 Finally, the Commission maintained that since Raton did not prevail on all of the issues raised in this court, time spent on those on which it was unsuccessful should be eliminated. *fn36

In a tendered reply, *fn37 Raton conceded that taxation of costs against the Commission is forbidden by the Natural Gas Act, *fn38 and withdrew its request therefor. *fn39 Raton also accepted the $95.83 proposed by the Commission as the ceiling on the attorney's hourly rate. *fn40 Raton insisted, however, that the associate's hourly rate was reasonable, and that the Commission's litigation position was not substantially justified. Raton noted that in 1982 the District Court approved an hourly rate of $35 for a summer associate, *fn41 and maintained that with "a significant escalation in the cost of legal services since 1982," a $5 increase to $40 would not only be reasonable but also "conservative." *fn42 Raton declared that "an allowance of $40.00 per hour for the time spent by the associate in writing the Petitioner's Initial Brief, reviewing Respondent's Brief, assisting in the preparation of the Reply Brief, and assisting preparation for oral argument is justified." *fn43

Raton amplified its claim that the Commission's defense in the principal case was not justified by characterizing "respondent's litigation position [as] part of a course of conduct deliberately engaged in to obstruct sustantive (sic) review of its fee structure." *fn44 Raton observed that as soon as Phillips Petroleum Co. v. FERC *fn45 was decided, the Commission nearly doubled the fee, and later increased it again. *fn46 Raton said that by "radically changing the magnitude of the impact of that rule, and then claiming that the changed impact cannot be challenged because the impacted party had lost its opportunity to challenge the rule," the Commission had engaged in "'vexatious and oppressive' action," *fn47 and thus went beyond the bounds of justification.

Raton countered the Commission's plea for disallowance of time spent on issues upon which Raton was not successful with the argument that they were distinctly secondary to the issues upon which it prevailed. *fn48 Raton suggested, however, that if a partial ...

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