Ruckelshaus v. Sierra Club

Background

In 1979 the Environmental Protection Agency issued new rules limiting sulfur dioxide emissions from coal-fired powerplants. Two environmental groups — the Sierra Club and the Environmental Defense Fund — challenged the rule in court but lost on the merits. Despite that loss, they asked the appeals court to pay their attorney fees under a Clean Air Act provision that allows fees "whenever . . . such award is appropriate." The appeals court awarded fees of about $45,000 to each group.

Reasoning

The central question was whether a party that obtains no success on the merits can recover fees under §307(f). The majority, written by Justice Rehnquist, read the statute against longstanding fee rules in American law (the “American Rule”) and the relevant legislative history. It concluded Congress intended courts to award fees only when a claimant had at least some success on the merits. The opinion also stressed limits on taking money from the federal government unless Congress clearly authorized it. The Supreme Court reversed the appeals court and held that absent some degree of success, fee awards under §307(f) are not "appropriate."

Real world impact

Environmental groups and other challengers cannot expect fee recovery if they lose every claim; courts still may award fees where a challenger wins in part or otherwise makes a meaningful contribution. The ruling also affects many other statutes that use similar "appropriate" language, narrowing when courts can shift litigation costs to the government or private parties.

Dissents or concurrances

Justice Stevens (joined by three colleagues) dissented, arguing the statute and its history gave courts discretionary power to award fees in exceptional cases even to nonprevailing parties and that the appeals court reasonably exercised that discretion in this complex case.