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Louisiana-Pacific Corp. v. Asarco Inc.

April 10, 1997

LOUISIANA-PACIFIC CORPORATION, A DELAWARE CORPORATION; MURRAY PACIFIC CORPORATION, A WASHINGTON CORPORATION; WASSER & WINTERS, INC., A WASHINGTON CORPORATION; AND CASCADE TIMBER COMPANY, A WASHINGTON CORPORATION, PLAINTIFFS,
v.
ASARCO INCORPORATED, A NEW JERSERY CORPORATION, DEFENDANT.



Appeal from Certified Court. US District Court - Western District. Hon. Robert J. Bryan, Judge.

Authored by Charles Z. Smith. Concurring: Barbara Durham, James M. Dolliver, Charles W. Johnson, Richard B. Sanders. Dissenting: Barbara A. Madsen, Gerry L. Alexander, Richard P. Guy.

The opinion of the court was delivered by: Smith

En Banc

SMITH, J.-The United States District Court for the Western District of Washington at Tacoma on February 23, 1996 certified to this court the question whether an award of attorneys' fees and costs to a prevailing party under the private action section of the Model Toxics Control Act, RCW 70.105D.010-921, is limited to actual fees of attorneys and RCW 4.84.010 costs or whether the court is authorized additionally to award to the prevailing party other reasonably necessary expenses of litigation. We answer the question by concluding the court is not so limited and may additionally award other reasonably necessary expenses of litigation upon such equitable factors as the court determines are appropriate.

QUESTION PRESENTED

Under the Certification Order the only question in this case is whether an award of attorneys' fees and costs to a prevailing party under the private action section of the Model Toxics Control Act *fn1 is limited to actual attorneys' fees and statutory costs or whether the court may additionally award other reasonably necessary expenses of litigation.

STATEMENT OF FACTS

This action in the United States District Court for the Western District of Washington arose as a result of pollution at several sites near the Port of Tacoma by heavy metal contaminants leached from a slag and wood waste mixture. Asarco Incorporated (Asarco) had been smelting near Tacoma since 1905. In about 1973, Asarco entered into a contract with a distributor to sell slag, a by-product of smelting. The distributor sold the slag to log yards to use essentially like gravel. The log yards would use a load of slag until it became too mixed with wood waste and other debris. Then the log yards would haul away the slag mixture and put down a new load of slag.

In 1980, the Environmental Protection Agency (EPA) found high concentrations of heavy metals in the water runoff from one of the log yards. The EPA turned its findings over to the Washington Department of Ecology (Ecology). During the course of the next several years Ecology met with representatives of affected sites, but took no formal action. In 1986 Ecology began formally requiring cleanup of the sites.

A suit was brought in the United States District Court for the Western District of Washington under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA) *fn2 and Washington statutes *fn3 to determine who would bear the cost of these cleanups. On March 1, 1991, *fn4 the Honorable Robert J. Bryan entered judgment against the producer for at least 75 percent of cleanup costs. An appeal was then taken to the United States Court of Appeals for the Ninth Circuit. *fn5

On appeal Defendant contended slag was excluded from CERCLA; argued the state law claims were barred by the statute of limitations; argued the lower court erred in not granting summary judgment and in imposing response costs under CERCLA; and requested a new trial because of excluded evidence and erroneous jury instructions. *fn6

Plaintiffs cross-appealed. They contended the court erred in reducing their attorneys' fees by the percentage of comparative fault, in determining their nuisance claims were preempted by the Washington Product Liability Actions statute *fn7 and in dismissing their claims under the Washington Model Toxics Control Act (MTCA). *fn8

The United States Court of Appeals, the Honorable David R. Thompson writing, affirmed the award of damages under CERCLA. *fn9 The court reversed the award of attorneys' fees under CERCLA and the award of litigation expenses to the extent that award included expenses not recoverable as costs under 28 U.S.C. 1821(b) and 1920. The court also reversed the finding of liability under the Washington Hazardous Waste Management Act and award of loss-of-use damages under the Washington Product Liability Actions statute. The court remanded to the district court the question of when the statute of limitations began to run for plaintiffs' "Washington Product Liability Act" *fn10 claims. The court reversed the dismissal by the district court of the MTCA claim because in the interim the statute was amended to provide a private right of action. The court remanded the MTCA claim to the district court. *fn11 The Court of Appeals also reversed the dismissal by the district court of plaintiff's common-law intentional nuisance claim. *fn12

On remand the United States District Court for the Western District of Washington, the Honorable Robert J. Bryan, determined plaintiffs were the prevailing parties in the MTCA case brought under RCW 70.105D.080, *fn13 and that they have incurred reasonably necessary attorneys' fees, costs of suit under RCW 4.84.010, *fn14 and other reasonably necessary expenses of litigation including:

(1) Expert witness fees; (2) all deposition costs; (3) long distance telephone calls and telefax charges; (4) photocopying charges (including copy machine rental); (5) out of town travel costs of lawyers, lawyers' staff and witnesses; (6) out of town lodging expenses (including meals) for lawyers, lawyers' staff and witnesses; (7) computerized legal research; (8) mediator fees and expenses; (9) office, office furniture and equipment rentals, and the cost of supplies and equipment incurred specifically for this litigation; (10) postage, including overnight delivery and messenger charges; (11) automobile and mileage allowances, including out of town parking; (12) exhibit preparation costs (film development, photographic production and enlargement, etc.); (13) cost of paralegal and clerical assistance obtained from outside firms, and not recoverable as attorneys' fees; and (14) cost of other paralegal and clerical assistance not otherwise recoverable as attorneys' fees. *fn15

Discussion

Plaintiffs contend they should be fully reimbursed under case law, the language of the MTCA, the court's interpretation of "reasonable attorneys' fees and costs" in contract law, the legislative policies expressed throughout the MTCA, and public policy considerations. Defendants contend the statute refers to expenses and costs in two distinct provisions that serve entirely different purposes which limit the potential recovery sought by Plaintiffs, that the MTCA provides no guidance concerning the proper scope of expanded cost recovery, and that the statute thus should be interpreted narrowly.

Washington Case Law

Plaintiffs contend the current confusion in Washington over recoverable costs arises in part from the trend away from the American rule on attorneys' fees and costs. *fn16 They cite Wagner v. Foote for the statement that "the American rule states fees and expenses are not recoverable absent specific statutory authority, contractual provision, or recognized grounds in equity." *fn17

According to Plaintiffs, the Legislature has contributed to the confusion by inconsistency in its use of words. *fn18 Plaintiffs also assert that the greatest confusion has resulted from civil rights cases under RCW Chapter 49.60.

In Shannon v. Pay 'N Save Corp. *fn19 this court upheld the trial court's denial of certain litigation expenses. However, two years later in Blair v. Washington State University, after surveying federal cases, we adopted the federal rule allowing more liberal recovery of costs "in order to further the policies underlying these civil rights statutes." *fn20 These cases suggest a shift by this court at least in civil rights cases.

Plaintiffs assert that Washington courts have consistently authorized recovery of litigation expenses when a statute has referred to both "costs" and "expenses." *fn21 To support this proposition they cite In re Statler's Estate *fn22 and Puget Sound Plywood, Inc. v. Mester. *fn23 Plaintiffs argue that, as allowed in those cases, the MTCA similarly provides explicitly for recovery of both "costs" and "expenses" *fn24 and that this case easily meets the standard of a statute which allows expanded cost recovery. *fn25

According to Defendant, Plaintiffs erroneously rely on In re Statler's Estate and Puget Sound Plywood, Inc. v. Mester because the phrases being interpreted were substantially different from those contained in RCW 70.105D.080. *fn26 In In re Statler's Estate the phrase interpreted included "costs and expenses," while in Puget Sound Plywood the phrase interpreted was "loss, cost or expense, including attorney fees." Defendant contends RCW 70.105D.080 uses the phrases in separate and distinct statutory provisions, unlike the phrases interpreted in In re Statler's Estate and Puget Sound Plywood. *fn27 Defendant argues that the portion of the statute pertaining to expenses does not apply because Plaintiffs are seeking expenses incurred solely in the litigation of a private cost recovery action. According to Defendant, this limits Plaintiffs to "costs" in the prevailing party provision. *fn28 Defendant also states it is unclear whether In re Statler's Estate and Puget Sound Plywood are good law because those cases were decided prior to our 1994 decision in Hume v. American Disposal Co. *fn29

In Puget Sound Plywood this court interpreted former RCW 60.04.210(7) which provided in pertinent part "Any potential lien claimant shall be liable for any loss, cost or expense including reasonable attorney fees . . . ." That statute was repealed in 1992 *fn30 and replaced by RCW 60.04.221, which uses essentially the same language but adds "and statutory costs" after "reasonable attorney fees." *fn31

In Hume the court stated that, absent a statute expressly allowing expanded cost recovery, the plaintiffs are not entitled to such generous cost awards. The court cited Nordstrom, Inc. v. Tampourlos as an example of disallowing extended costs in a Consumer Protection Act case. *fn32 The Consumer Protection Act statute provides that a party may "recover the actual damages sustained . . . [and recover] the costs of the suit, including a reasonable attorney's fee." *fn33

Defendant cites Hume for the proposition that expanded cost recovery is not favored in Washington and that civil rights cases are the exception. *fn34 In distinguishing the Washington Law Against Discrimination *fn35 from the MTCA, Defendant points to the portion of the statute which states that successful civil rights litigants may recover actual damages together with the cost of suit, including reasonable attorneys' fees or "any other ...


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