Home » Case Summaries » 1995 » United States v. Trident Seafoods Corp.

 
 

United States v. Trident Seafoods Corp.

 

The United States brought an action against Trident Seafoods Corporation (Trident) for violating the asbestos abatement requirements of the Clean Air Act (CAA). Trident had made an offer of judgment before trial, which the government rejected. This offer of judgment exceeded the final judgment, so Trident moved for an award of attorneys’ fees and costs pursuant to Federal Rule of Civil Procedure 68 (Rule 68). The district court granted Trident an award of costs, but denied an award of attorneys’ fees. Trident appealed the denial of fees, and the government cross-appealed the award of costs. The Ninth Circuit affirmed.

In May 1988, Trident purchased and began renovating an abandoned fish cannery in Anacortes, Washington. Trident’s general contractor hired an uncertified subcontractor to remove asbestos from the cannery. The Northwest Air Pollution Control Authority (NWAPCA) learned about this, and sent an asbestos inspector to the facility. NWAPCA fined Trident $250 for failing to provide notice of the asbestos abatement. The Environmental Protection Agency (EPA) was informed of the violation and served Trident with a request for information in August 1989.

Nearly three years later, in April 1992, EPA referred the asbestos abatement matter to the United States Department of Justice (DOJ), which intended to file an action against Trident for violations of the CAA. EPA alleged that Trident violated the National Emission Standards for Hazardous Air Pollutants (NESHAP) for asbestos, which provides for notice requirements and work practice standards for renovating a facility that contains asbestos. Settlement negotiations began, and Trident rejected the government’s offer to settle the action for $346,886 because the average settlement for alleged NESHAP violations was at the time was less than $35,000.

In June 1992, the DOJ filed an action against Trident alleging one notice violation and four work practice violations of the asbestos NESHAP. In May 1993, Trident served the government with an offer of judgment pursuant to Rule 68. This offer included a civil penalty of $30,000 and a consent decree requiring Trident to take a number of asbestos control and abatement actions. The government rejected this offer and a subsequent offer that increased the civil penalty to $50,000. The district court granted summary judgment in the government’s favor on the claim that Trident violated the NESHAP notice requirement.

At trial, Trident received a jury verdict in its favor on all four work practice violations. The district court assessed a $65,000 penalty for the notice violation, finding that the violation was continuous. Trident moved for attorneys’ fees and costs pursuant to Rule 68, the Equal Access to Justice Act (EAJA),[1] and the CAA. The court denied the motion for attorneys’ fees, but granted the motion for costs pursuant to the EAJA.

Trident appealed the $65,000 penalty and the Ninth Circuit reversed, holding that the notice violation was singular rather than continuous.[2] On remand, the district court imposed a penalty of $25,000, the statutory maximum for a single violation. Trident then appealed the denial of attorneys’ fees and the government appealed the award of costs. In deciding this issue, the Ninth Circuit had to determine the interplay between Rule 68 and the CAA.

Pursuant to Rule 68, if a plaintiff rejects a defendant’s offer of judgment, and the judgment finally obtained by the plaintiff is not more favorable than the offer, the plaintiff must pay the costs incurred by the defendant subsequent to the offer. Trident’s offer of judgment exceeded the final judgment in this case, therefore Trident was entitled to “costs” which Rule 68 defines as all costs properly awardable under the relevant substantive statute, in this case the CAA. The court, in determining the plain meaning of the CAA, found that Congress did not intend to award attorneys’ fees unless the action was unreasonable.[3] The district court found that the action against Trident was reasonable.

In addressing an issue of first impression, the Ninth Circuit applied an abuse of discretion standard in reviewing this finding of reasonableness. In Pierce v. Underwood,[4] the Supreme Court stated that the question was whether the United State’s position was “substantially justified.” The Court emphasized that deference should be given to the district court to decide this issue, given its full knowledge of the facts and insights not conveyed by the record. The Ninth Circuit adopted this standard in reviewing section 7413(b) CAA determinations, finding abuse of discretion only if the district court bases its decision on an erroneous conclusion of law or on an irrational interpretation of the evidence. The court held that although the government’s actions did not deserve commendation, the district court correctly concluded that the action had a reasonable basis in law and fact.

The district court awarded Trident statutory costs as the prevailing party pursuant to section 2412(a)(1) of the EAJA,[5] which does not include attorneys’ fees in its definition of “costs.” On appeal, the government argued that section 7413(b) of the CAA, awarding costs only if the action was unreasonable, preempted section 2412(a)(1). The Ninth Circuit found that the plain meaning of the two statutes did not clearly indicate whether the statutes provided alternative or mutually exclusive bases for cost awards. The court determined that the two statutes could be read harmoniously if they were interpreted to provide independent bases for the recovery of costs. Congress, in enacting section 7413(b), did not specifically preclude costs awarded under the previously enacted EAJA, it simply provided that costs may be awarded if the court finds that the action was unreasonable.


[1]28 U.S.C. § 2412(a)(1) (1994).

[2]United States v. Trident Seafoods Corp., 60 F.3d 556 (9th Cir. 1995).

[3] See 42 U.S.C. § 7413(b) (1994).

[4]487 U.S. 552 (1988) (determining standard for review under the Equal Access to Justice Act).

[5]28 U.S.C. § 2412(a)(1) (1994).

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