The Wolf as a Cash Cow
By Karen Budd-Falen and Joshua Tolin
The Economics of Litigation
Environmental groups have profited immensely by “defending wolves” in federal litigation. Interestingly, in their fundraising appeals, environmental groups explain their need for funds as essential to supporting education, administration, lobbying, and litigation. What they fail to explain is that the litigation itself is also a significant source of income and the wolf is but one of many species that these groups use to raise money so they can keep on litigating, which hampers federal and state agencies in doing their conservation work, and that in turn makes them easier targets for more litigation.
Even more troubling is that the attorney’s fees paid to these groups by the federal government are not properly tracked, so the public cannot know for sure exactly how much money the environmental groups are taking in by their constant filing of litigation.
Additionally, the funding source of the attorney’s fees payments made to the environmental groups is not always clear. Generally, payments are made either from the Department of Treasury’s Judgment Fund (an open-ended budget item) by way of the Endangered Species Act of 1973’s citizen-suit provision or from the responsible agency’s budget pursuant to the Equal Access to Justice Act by way of the Administrative Procedure Act (APA). Oftentimes, environmental groups file their complaints mixing both ESA citizen-suit claims and APA claims; therefore, even a review of the claims cannot provide a clear answer.
Environmental Litigation Gravy Train
There are two major sources of attorney fees that can be paid to plaintiffs that “prevail” in litigation either by winning a case on the merits or by the Justice Department agreeing that the group “prevailed” in a settlement by achieving the purpose of the litigation.
One source is called the “Judgment Fund.” The Judgment Fund is a Congressional line-item appropriation and is used for Endangered Species Act cases, Clean Water Act cases, and other statutes that directly allow a plaintiff to recover attorney fees. There is no central database for tracking the payment of these fees; thus neither the taxpayers nor members of Congress nor the federal government knows the total amount of taxpayer dollars spent from the Judgment Fund on individual cases.
The second major source of payments to “winning” litigants against the federal government is the Equal Access to Justice Act (EAJA). EAJA funds are taken from the “losing” federal agencies’ budget. Within the federal government, there is no central data system or tracking of these payments from the agencies’ budgets.
The Judgment Fund
Prior to 1956, most judgments against the United States could not be paid from existing appropriations, but required specific congressional appropriations. In 1956, Congress enacted a permanent, indefinite appropriation called the Judgment Fund for the payment of final judgments which were “not otherwise provided for” by another source of funds.
EAJA
In 1980, Congress embarked upon an experiment in “curbing excessive regulation and the unreasonable exercise of government authority” by directing that attorney fees be awarded in favor of private parties who resist unjustifiable government conduct in litigation. Signed into law by President Carter on October 21, 1980, the EAJA contained a sunset provision and expired by its own terms on October 1, 1984. In 1985, Congress passed new legislation that reinstated EAJA retroactively to October 1, 1984. On August 5, 1985, President Reagan signed the bill, making the EAJA a permanent statute.
The EAJA awards costs of litigation and attorney fees (up to $125/hour) when a citizen, non-profit organization, or small business wins a case involving the federal government and can show that the federal government’s position was not “substantially justified.” The EAJA’s purpose is to help those who had been locked out of the decision-making process by virtue of their income, race, economic scale, or educational limitations.
While the time span of wolf litigation actually covers almost thirty years of profits, the ridiculousness of the attorney’s fees awards under EAJA has ballooned in the last ten years, where the average case garnered over a quarter million dollars in attorney’s fees. The following is a summary of major cases where environmentalists have won awards of attorney’s fees by representing the interests of wolves over the interests of those people living nearby.
Sierra Club v. Clark
In 1985, the Sierra Club secured an appeals court win in the Eighth Circuit Court of Appeals in Sierra Club v. Clark, 755 F.2d 608 (8th Cir. 1985). In Sierra Club, the environmentalists challenged rules concerning the eastern timber wolves (gray wolves living in Minnesota). At the time, the wolves were listed as threatened species under the Endangered Species Act of 1973 (“ESA”), 16 USC. §§ 1531–1543. As the population of wolves in Minnesota spiraled out of control, the state requested transfer of control of the wolves to it so it could create a public sport season to control wolf numbers.
While the Fish and Wildlife Service (“FWS”) did not transfer control of the wolves to the state, in 1983 the FWS promulgated regulations permitting trapping of the wolves in certain areas where repeat livestock predation had occurred. Shortly after publication of the new regulations, environmentalists filed suit. The Eighth Circuit held that the regulations violated the ESA because it found the ESA did not provide discretion to the Secretary of the Interior to allow for “taking” threatened species. The environmentalists won, and were awarded $55,369.45 in attorney’s fees. That number included a 30 percent upward adjustment of the fees of the two attorneys for the “extraordinary circumstances and the importance of the case to the management of all threatened species.” Little did anyone know that we would look back on awards of $55,000 of tax-payer funds as “the good ol’ days.”
Biodiversity Legal Foundation v. Babbitt
Ten years passed before the environmental groups again sued over wolves in Biodiversity Legal Found. v. Babbitt, 943 F. Supp. 23 (D.D.C. 1996). In Biodiversity Legal, the environmentalists petitioned FWS to list the Alexander Archipelago wolf, which is found in the Tongass National Forest in Alaska. For several years, the US Forest Service had been considering major revisions to the Tongass Land Management Plan (“TLMP”). Because the Forest Service had major changes planned for the TLMP, the Regional Director of FWS found that listing the Alexander Archipelago wolf was not warranted, as the Forest Service’s revisions would reverse any declining population of the wolf. The District Court in Washington, DC, overruled the agency’s action, holding that the ESA only allowed consideration of current regulations and their effects on species, not upcoming changes. The environmentalists won and were awarded attorney’s fees.1 The exact amount is not available online, as the DC District Court does not keep digital records from twenty years ago. The award may be available through federal archives.
Defenders of Wildlife v. Department of the Interior
Another ten years passed before the environmentalists recognized their cash cow: ESA litigation. In Defenders of Wildlife v. Department of Interior, 354 F. Supp. 2d 1156 (D. Ore. 2005), the environmentalists cashed in on their first quarter-million-dollar wolf case. After numerous years of much higher than expected “recovery” of wolves throughout the country, the US Fish and Wildlife Service issued a rule creating three distinct population segments (“DPSs”) for the gray wolf and down-listing the wolf from endangered to threatened in the Eastern and Western DPSs (“2003 Rule”). Wolves in the Southwestern DPS remained listed as endangered, and the experimental populations in the Northern Rocky Mountains remained unchanged. The environmentalists succeeded in convincing the court that the Fish and Wildlife Service had violated the ESA by creating the DPSs and down-listing wolves in major parts of the country. In doing so, the environmentalists found what they were looking for: attorney’s fees paid by the federal government to the tune of $272,710.54.
National Wildlife Federation v. Norton
In the same year as Defenders of Wildlife, environmentalists double dipped on the same issue. Nine months after the United States District Court for the District of Oregon held the 2003 Final Rule promulgated by the US Fish and Wildlife Service violated the ESA, another environmentalist group scored another quarter of a million dollars from challenging the same rule. In National Wildlife Federation v. Norton, 386 F. Supp. 2d 553 (D. Ver. 2005), environmentalists challenged the FWS’s final rule because it had combined two DPSs listed in its proposed rule into one DPS in its final rule. The environmentalists won their argument, and even though the final rule had already been invalidated more than six months prior, secured more funds for their coffers: $255,500.
Humane Society of U.S. v. Kempthorne
After paying the environmentalists half a million dollars to litigate against its 2003 final rule, the US Fish and Wildlife Service issued a new rule in 2007 creating a Western Great Lakes DPS and simultaneously delisting that DPS, as the wolf numbers had over the years exploded in Minnesota. In Humane Society of U.S. v. Kempthorne (“HSUS”), 579 F.Supp.2d 7 (D.D.C. 2008), the animal rights group challenged FWS for creating a DPS based on geographical boundaries and at the same time removing that DPS from ESA protection by delisting the DPS. HSUS was able to successfully argue that FWS was incorrect in considering the ESA clear on its face as for providing authority to create a DPS and delist it at the same time. The court did not hold that FWS’s interpretation of the statute was unreasonable—only that the statute was not clear on its face. The court vacated the 2007 rule and remanded it back to the FWS to explain its interpretation. For that, the HSUS cashed a check for $280,000.
Defenders of Wildlife v. Hall
The final case environmentalists used to make wolf litigation a million-dollar industry was Defenders of Wildlife v. Hall, 565 F.Supp.2d 1160 (D. Mont. 2008). In Hall, the environmentalists challenged a rule similar to that in HSUS, only the rule in Hall concerned wolves in the Northern Rocky Mountain DPS instead of in Minnesota. In 2008, FWS created this DPS and delisted all the wolves in the DPS. Judge Don Molloy held that FWS acted arbitrarily by delisting these wolves without proof of genetic exchange between the subpopulations and without explaining its reversal concerning Wyoming’s wolf management plan.2 Judge Molloy granted a preliminary injunction, finding that the environmentalists would likely succeed on the merits of their case. As a result, the wolves in Idaho, Montana, and Wyoming were relisted, and the environmentalists took in an additional $263,099.66. (The environmental groups had actually requested $388,370 in attorney fees.)
USFWS attempted to comply with Judge Molloy’s ruling in Defenders I. In 2009, FWS issued another final rule, this time delisting the wolves in Montana and Idaho. With respect to the wolves in Wyoming, FWS stated that the proposed management plan for Wyoming was deficient, and therefore the wolves in Wyoming would remain listed until the issues were sufficiently addressed.
Again, the environmentalists challenged this rule in Defenders of Wildlife v. Salazar (“Defenders II”), 729 F. Supp. 2d 1207 (D. Mont. 2010). And again, Judge Molloy ruled in favor of the environmentalists, this time on the basis that ESA does not allow for designations smaller than DPSs, which the court held FWS had done by delisting the wolves from the same DPS in Idaho and Montana, but not delisting them in Wyoming.
No Matter What
The United States Congress eventually took notice that no matter what USFWS would do with wolves, the environmentalists would challenge those decisions in court. In response to Judge Molloy’s decision in Defenders II and while that case was on appeal to the Ninth Circuit, Congress passed H.R. 1473, the Department of Defense and Full Year Continuing Appropriations Act of 2011. Congress, in § 1713 of that Act, directed FWS to reissue the 2009 rule. Moreover, Congress mandated that the 2009 rule could not be subject to judicial review, thus shielding it from the environmentalists’ never-ending challenges.
Yet again, the environmentalists filed another challenge in court, this time to Congress’s passage of § 1713 in Alliance for the Wild Rockies v. Salazar, 800 F. Supp. 2d 1123 (D. Mont. 2011). The environmentalists claimed that Congress overstepped its authority and unconstitutionally violated the separation of powers doctrine. The court sided with the government, and the environmentalists then appealed that decision, but the Ninth Circuit affirmed the constitutionality of § 1713 in Alliance for the Wild Rockies v. Salazar, 672 F.3d 1170 (9th Cir. 2012).
Finally, more than fifteen years after FWS introduced Canadian wolves to the Rockies and after paying more than one million dollars to environmentalists’ attorneys, wolves in Idaho and Montana have been removed from ESA protection.
Conclusion
Environmentalists have taken one animal, the wolf, and used it and the ESA to develop a profit-generating business opportunity for its lawyers. In a span of only a few years, environmentalists have been able to promote the interests of wolves over the interests of those people living near the animals, and other species of wildlife, and in doing so, cashed in on over one million dollars of taxpayer funds. These funds, taken from taxpayer dollars and sportsmen contributions, could have been used to conduct many other wildlife management programs, and the man-hours spent on the case by the federal government—both attorneys and staff—could also have been directed to other purposes.
As if this was not bad enough, the wolf is just the tip of the iceberg in environmentalist and animal rights litigation against the federal government.
According to Pulitzer Prize–winning Sacramento Bee journalist Tom Knudsen, during the 1990s the US government paid out $31.6 million in attorney fees for 434 cases brought against federal agencies by environmental organization attorneys.1
Studies released independently in 2012 by the Notre Dame Law School, the Federal Government Accountability Office, and the Boone and Crockett Club find ever-increasing sums of money being paid by the government to environmental and animal rights groups, and although the original EAJA law calls for the government to keep track of money paid out in EAJA cases, the GAO report finds that accounting stopped in 1995, so the government does not know how much money is actually being paid to environmental litigants. The GAO report, dated April 12, 2012, finds: “Most USDA and Interior agencies did not have readily available information on attorney fee claims and payments made under EAJA and other fee-shifting statutes for fiscal years 2000 through 2010. As a result, there was no way to readily determine who made claims, the total amount each department paid or awarded in attorney fees, who received the payments, or the statutes under which the cases were brought for the claims over the 11-year period.”2
Some of the highlights of that report include:
• When the GAO asked seventy-five bureaus and agencies at USDA and the Department of the Interior (DOI) for records on payments, only ten could provide data on cases and attorney fee reimbursements; and the records provided were incomplete and unreliable, based on manual calculations from older files, and the memory of career employees. Also, some records may overlap, so the GAO is not even certain of their totals.
• The GAO identified $4.4 million per year of EAJA payments to environmental groups during the period of 2000–10 from suits against the ten units of USDA and DOI that had any records at all.
• The GAO’s minimum numbers do not add up to totals available from public court records and tax returns over the same period. Public federal court records from just thirteen federal courts revealed $5.2 million in legal fees per year, compared to GAO’s estimate of $4.4 million, as tabulated by legal staff for the Western Legacy Alliance. A broader analysis including additional federal court records and public tax returns from just twenty environmental organizations showed $9.1 million reimbursed during FY2010 alone, as demonstrated by attorneys for the Boone and Crockett Club.3
Boone and Crockett Club research shows EAJA actual costs are exceeding fifty million dollars per year from litigation by the top twenty environmental litigants.4 Additionally, a careful review of the cases finds that many are about challenging “minor procedural decisions”—red tape—rather than substantive issues. Thus, what emerges is that not only does the government not know just how much money is being spent on EAJA cases (their accounting does not include fees for government attorneys), but the adversarial actions of the environmental and animal rights groups are causing more stress on the federal agencies, which is burying them in paperwork and making them more prone to overlook bureaucratic details, which makes them an easier target for more legal actions.
In short, the wolf is a cash cow for environmental litigants, and the successes of wolf litigation cases has helped establish a sizeable source of revenue for environmental and animal rights groups, all at the expense of the taxpayer, and wildlife in general. And unfortunately, the wolf is only one example of how environmental and animal rights groups are using the Endangered Species Act and the EAJA to drain economic resources from taxpayers and reduce the effectiveness of federal agencies in practicing effective wildlife management.
“Here is your country. Cherish these natural wonders, cherish the natural resources, cherish the history and romance as a sacred heritage, for your children and your children’s children. Do not let selfish men or greedy interests skin your country of its beauty, its riches or its romance.” —Theodore Roosevelt
Endnotes:
1. icecap.us/images/uploads/ENVIRONMENTINC.doc
2. http://www.gao.gov/products/GAO-12-417R
3. http://www.boone-crockett.org/news/featured_story.asp?area=news&ID=137
4. Lowell E. Baier, Reforming the Equal Access to Justice Act, Journal of Legislation, Notre Dame Law School. Vol. 38, No. 1, 2012, pgs. 1–70; or http://www.boone-crockett.org/news/featured_story.asp?area=news&ID=114
Photo credit: Holly Kuchera/Shutterstock.com