Appeal from the United States District Court for the District of Oregon. D.C. No. CV-91-6041-MRH. Michael R. Hogan, District Judge, Presiding.
Before: Alfred T. Goodwin, Jerome Farris, and David R. Thompson, Circuit Judges. Opinion by Judge Goodwin; Dissent by Judge Farris.
Appellants (collectively "the Wilderness Society") appeal the denial of their application for attorneys' fees pursuant to the Equal Access to Justice Act ("the EAJA"). 28 U.S.C. § 2412 (d)(1)(A). The Wilderness Society maintains that the district court abused its discretion in finding: (1) that the Wilderness Society was not a "prevailing party" within the meaning of the EAJA, and (2) that the Service's position was substantially justified. We reverse.
The present action for attorneys' fees stems from a citizen's enforcement suit against appellees (collectively "the Service"). The Wilderness Society claimed that the Service violated the National Environmental Policy Act ("NEPA") by failing to examine the effects of cattle grazing on the Hart Mountain Refuge ("the Refuge") and to disclose such findings in an Environmental Impact Statement ("EIS"). Furthermore, the Service allegedly violated the National Wildlife Refuge System Administration Act ("the Refuge Act"), Executive Order 7523, the Migratory Bird Conservation Act, the Wilderness Act, the Administrative Procedure Act, and Fish & Wildlife Service guidelines by failing to prepare compatibility determinations for grazing on the Refuge and by allowing grazing that was incompatible with the Refuge's purposes.
On August 22, 1991, the magistrate in charge of this case*fn1 recommended dismissal of the Wilderness Society's suit. The magistrate found that, because the Service was in the process of formulating a management plan for the Refuge and had not issued any grazing permits for the 1991 season, the case was not ripe for review. The district court did not enter judgment on the merits because the parties entered into a Stipulation of Dismissal Without Prejudice. The Service formally agreed to prepare an EIS and a compatibility determination, and to refrain from issuing any grazing permits until thirty days after the adoption of a management plan.
The stipulation also provided that the Wilderness Society "may file their bill of costs and application for award of attorney fees under 28 U.S.C. § 2412." The district Judge denied the Wilderness Society's application seeking $51,691 in attorneys' fees. We review this denial as an abuse of discretion. Thomas v. Peterson, 841 F.2d 332, 334 (9th Cir. 1988).
The EAJA provides that a court shall award attorneys' fees to a "prevailing party" in a civil action brought against the United States "unless the court finds that the position of the United States was substantially justified or that special circumstances make the award unjust." 28 U.S.C. § 2412 (d)(1)(A).
Although the Wilderness Society and the Service reached an out-of-court settlement, "[a] party need not obtain formal relief on the merits to be deemed a prevailing party." Oregon Envtl. Council v. Kunzman, 817 F.2d 484, 497 (9th Cir. 1987). The Wilderness Society may be deemed a prevailing party if it can demonstrate "a clear, causal relationship between the litigation brought and the practical outcome realized." McQuiston v. Marsh, 707 F.2d 1082, 1085 (9th Cir. 1983) (emphasis in original) (citation omitted). We must inquire whether the Wilderness Society's lawsuit was a "material factor" or played a "catalytic role" in bringing about the desired outcome. Kunzman, 817 F.2d at 497. We must then determine whether "the benefit achieved was required by law and was not a gratuitous act of the defendant." Greater Los Angeles Council on Deafness v. Community Television, 813 F.2d 217, 220 (9th Cir. 1987).
A. Material or Catalytic Factor
The Wilderness Society argues that the district court clearly erred in finding that the lawsuit was not a material or catalytic factor in prompting the Service to conduct an EIS and a compatibility study and to prohibit grazing on the Refuge pending their completion. It maintains that the catalytic force of the lawsuit is demonstrated by two factors: (1) the chronology of the case, and (2) the extraordinary circumstances surrounding the Service's decisions to undertake the actions urged by the Wilderness Society.
1. Chronology of the Case
"Chronological events are important, although not a definitive factor, in determining whether or not a defendant can be reasonably inferred to have guided his actions in response to a plaintiff's lawsuit." Braafladt v. Board of Governors of the Oregon State Bar Ass'n, 778 F.2d 1442, 1444 (9th Cir. 1985).
The Wilderness Society filed its action on February 7, 1991. At this time, the Service allowed grazing on the Refuge but was considering "temporary" reductions in grazing levels because of drought conditions. On February 6, the Service had urged the grazing permittees to find alternate grazing sources because of the drought conditions. The Service had previously notified them that "continued grazing during the remainder of this very dry period can occur only after the needs of ...