By Philip White
CHEYENNE – Cheyenne attorney Karen Budd-Falen has raised a furor among ranching communities in Wyoming and elsewhere in the West by claiming that environmental groups are abusing federal statutes and collecting billions of dollars in attorneys’ fees from the public treasury.
In an October 3, 2009 guest opinion in the Wyoming Livestock Roundup, Budd-Falen said, “Environmental groups are receiving billions of federal taxpayer dollars in attorney fees for settling or ‘winning’ cases against the federal government.” (Emphasis in original).
On November 3, U.S. Representatives Cynthia Lummis (R-WY) and Rob Bishop (R-UT), writing for the Congressional Western Caucus, sent a letter to US Attorney General Eric Holder alleging abuse of the Equal Access to Justice Act (EAJA) by “certain organizations” and citing “alarming” figures presented by “an independent law firm.” The letter urged the Department of Justice to set up a searchable database detailing disbursements made under the act, which enables the payment of the attorney fees.
On November 7, Lummis and Bishop wrote a guest editorial in the Billings Gazette in which they repeated Budd-Falen’s charges and her incredible numbers, which they attributed to an anonymous “Wyoming-based law firm“: “Over the years, these groups have been able to force the federal government to pay out billions of dollars for attorney fees and costs.” Later in the month, Fox Television News picked up the story, interviewed Budd-Falen on camera, and commented, “Sometimes they [environmentalists’ lawyers] are paid if they lose.”
Attorneys from the environmental groups say Budd-Falen’s calculations are wildly inaccurate, deceitful and defamatory. An analysis by WyoFile indicates that Budd-Falen’s research contains no support for her assertion that these fee payments are anywhere near “billions”.
Lummis Wants to Shine
Rep. Lummis, moved by Budd-Falen’s figures, says she plans to introduce a bill in Congress on the issue. Her bill would require federal agencies to provide a readily accessible means of determining how much is being paid to whom under federal statutes authorizing attorneys’ fees to litigants—plaintiffs or defendants– who prevail in lawsuits against the government. Lummis said she decided to address the issue after she read Budd-Falen’s allegations and also learned that the federal government is no longer required to report on recipients and the amounts.
“The information I received from Karen Budd-Falen indicates that these fees might be quite large and that certain environmental groups might be receiving such large payments as to draw suspicion on my part as to what is motivating these lawsuits,” Lummis told WyoFile in a telephone interview this month. “I’m simply wanting to shine a light on this expenditure of taxpayer monies.”
Who Pays for the Lawyer?
In the United States, the loser in a lawsuit does not have to pay the winner’s attorney’s fees unless obligated to do so by a contract or a law specifically authorizing such an award. Many federal statutes do exactly that, authorizing a court to allow fees to a prevailing party in a proceeding in which the government agency, whether involved in the litigation as a plaintiff or a defendant, is found to have violated the federal laws and regulations. The Equal Access to Justice Act, which is the focus of Budd-Falen’s work, was passed by Congress to give citizens a tool to lessen the risk of challenging the power of the federal government by allowing them to recoup attorneys’ fees when they prevail– and also meet several other requirements that federal judges have broad discretion to apply.
Budd-Falen argues that tax-exempt environmental groups should not be able to use these fee-shifting laws because some of the groups are well-heeled and can afford to pay their own lawyers. She claims that some of these non-profit groups use the fee awards just to finance the filing of more lawsuits, a sort of self-perpetuating lawsuit industry.
On the other hand, environmental lawyers say Budd-Falen’s crusade is ultimately motivated more by a dislike of the substance of the decisions being made in their successful cases, rather than the awards of fees.
And others point out that the fee-shifting laws benefit many besides environmentalists. Two Northern Plains lawyers who have represented agricultural producers in cases where fees were awarded, believe these fee-shifting statutes are helpful to their clients.
“Given how expensive it is to sue the government, this is an important protection of an individual’s right to try to correct government mistakes,” says Susan Schneider, director of the graduate program in agricultural law at the University of Arkansas, which also houses the National Agricultural Law Center.
EAJA “is important overall as a safeguard of individual rights when dealing with government action,” Schneider said.
Route to ‘Billions’
According to a December 2009 article in the Wyoming Livestock Roundup, concerns about the attorneys’ fees going to environmental groups arose during a 2007 meeting of the Idaho Cattlemen’s Association, and led that group to join with a Farm Bureau coalition to form an organization called the Western Legacy Alliance.
Legacy Alliance President Jeff Faulkner stated in the article that people at the meeting “gave us $30,000 in five minutes” to investigate.
“We knew we wanted to de-fund environmental groups, but we didn’t know what was going on,” Faulkner said.
Faulkner said Budd-Falen has helped the group with research on the issue.
“We’ve had folks tell us that if we do away with EAJA [Equal Access to Justice Act], we’ll lose funding ourselves, “ Faulkner said in the article. “Karen pulled the same numbers for the Idaho court to see how much our side had garnered through EAJA and it was zero.”
In Budd-Falen’s widely reprinted 2009 opinion piece, she began her journey to the “billions” by noting that from 2003 until mid-2007, payments from the federal government’s “Judgment Fund”  totaled $4.7 billion. But the attorney fees to environmental groups, which are the target of her campaign, are mainly paid from the Equal Access to Justice Act, not the Judgment Fund. When Congress had re-authorized EAJA in 1985, it amended the statute by removing the Judgment Fund as a source of payment. Payments from the Judgment Fund are authorized under nearly 100 federal statutes — including damages awarded under the Federal Tort Claims Act. Only seven of those are environmental protection statutes.
After stating the billions paid out of the Judgment Fund, Budd-Falen presented her finding that eight environmental groups had filed 1,596 lawsuits against the federal government between 2000 and 2009. Then she asserted: “On the other end, these same environmental groups are receiving billions of federal tax payer dollars in attorney fees for settling or ‘winning’ cases against the federal government.”