Dakota v. Heydinger

State of North Dakota, et al., Plaintiffs, v. Beverly Heydinger, Commissioner and Chair of Minnesota Public Utilities Commission, et al., Defendants.

Case No. 11-cv-3232 (SRN/SER)

UNITED STATES DISTRICT COURT DISTRICT OF MINNESOTA

September 29, 2016

AMENDED MEMORANDUM OPINION AND ORDER¹

John A. Knapp, Thomas H. Boyd, and Brent A. Lorentz, Winthrop & Weinstine, P.A., 225 South Sixth Street, Suite 3500, Minneapolis, MN 55402-4629; Casey Jacobson and Claire M. Olson, Basin Electric Power Cooperative, Office of General Counsel, 1717 East Interstate Avenue, Bismarck, ND 58503-0564; John Neumann, The North American Coal Corporation, 5340 Legacy Drive, Building 1, Suite 300, Plano, TX 75024; Paul Forster and Brian Bjella, Crowley Fleck PLLP, 400 East Broadway, Suite 600, Bismarck, ND 58502; Gerad Paul, Minnkota Power Cooperative, Inc., PO Box 13200, Grand Forks, ND 58208; Wayne K. Stenehjem, Office of the Attorney General, State of North Dakota, 600 East Boulevard, 1st Floor, Bismarck, ND 58505-0040; William Taylor, Woods Fuller Schultz & Smith, 300 South Phillips Avenue Suite 300, P.O. Box 5027, Sioux Falls, SD 57117-5027; and Wyatt Hogan, Great Northern Properties L.P., 601 Jefferson Street, Suite 3600, Houston, TX 77002, for Plaintiffs.

Alethea M. Huyser, Lisa A. Crum, John S. Garry, and Michael T. Everson, Office of the Attorney General, State of Minnesota, 445 Minnesota Street, Suite 1100, St. Paul, MN 55101-2128, for Defendants.

SUSAN RICHARD NELSON, United States District Court Judge

I. INTRODUCTION

This matter is before the Court on Plaintiffs' Motion for Attorneys' Fees and Nontaxable Costs [Doc. No. 212] incurred in this litigation before the district court ("the Court") and Appellees' motion for attorneys' fees and costs incurred before the Eighth Circuit Court of Appeals.² For the reasons set forth below, the Court finds that Plaintiffs are entitled to a total of $1,310,088 in attorneys' fees and nontaxable costs. In addition, documents filed under seal in support of Plaintiffs' motions may remain under seal.

II. BACKGROUND

The Court has summarized the background of this litigation in prior Orders. See, e.g., North Dakota v. Heydinger ("Heydinger II"), No. 11-cv-3232 (SRN/SER), 2014 WL 7157013, at *1-2 (D. Minn. Dec. 15, 2014). Briefly stated, Plaintiffs asserted several claims under 42 U.S.C. § 1983, alleging that certain provisions of Minnesota's Next Generation Energy Act ("NGEA") (Minn. Stat. § 216H.03, subd. 3(2)-(3)) violate the Commerce Clause (Count I), the Supremacy Clause (Counts II and III), the Privileges and Immunities Clause (Count IV), and the Due Process Clause of the Fourteenth Amendment (Count VI). (See Am. Compl. ¶¶ 23, 85-127, 134-43 [Doc. No. 9].)Plaintiffs also sought a declaratory judgment that the Federal Power Act preempts Minn. Stat. § 216H.03, subd. 3 (Count V). (See id. ¶¶ 128-33.) Plaintiffs requested an order declaring Minn. Stat. § 216H.03, subd. 3(2)-(3), unconstitutional and unenforceable; an order enjoining enforcement of Minn. Stat. § 216H.03, subd. 3; and an award of costs and expenses incurred in the litigation, including reasonable attorneys' fees pursuant to 42 U.S.C. § 1988(b). (See id. at 39-40.)

Defendants filed a Motion for Partial Judgment on the Pleadings on Counts II through VI of Plaintiffs' Amended Complaint, which the Court granted in part, as to Counts IV and VI. (Order of 9/30/12 at 40 [Doc. No. 32].) The parties subsequently brought cross-motions for summary judgment on all of the remaining claims. On April 18, 2014, the Court granted summary judgment in favor of Plaintiffs on Count I, finding that Minn. Stat. § 216H.03, subd. 3(2)-(3), violates the dormant Commerce Clause (the "Summary Judgment Order"). North Dakota v. Heydinger ("Heydinger I"), 15 F. Supp. 3d 891, 908 (D. Minn. 2014). As a result, the Court enjoined Defendants and their successors in office from enforcing Minn. Stat. § 216H.03, subd. 3(2)-(3). Id. at 919. In light of the Court's holding as to Count I, it declined to consider the parties' federal preemption arguments and denied as moot the parties' motions as they related to Counts II, III, and V. Id. at 908.

On May 2, 2014, Plaintiffs filed their Motion for Attorneys' Fees and Nontaxable Costs pursuant to Rule 54(d) of the Federal Rules of Civil Procedure, seeking an award of attorneys' fees and costs under 42 U.S.C. § 1988. Section 1988 provides that, "[i]n any action or proceeding to enforce a provision of [42 U.S.C. § 1983,] the court, in itsdiscretion, may allow the prevailing party, other than the United States, a reasonable attorney's fee as part of the costs." Plaintiffs requested a briefing schedule bifurcating the issues of (1) whether Plaintiffs may recover their attorneys' fees and nontaxable costs under § 1988, and (2) whether the amounts requested are reasonable and appropriate. (Letter of 5/2/14 at 2 [Doc. No. 213].) The Court agreed that bifurcation was proper, received full briefing, and heard oral argument on the first issue. Based on this Court's ruling in favor of Plaintiffs on summary judgment, which awarded them the relief they sought in bringing the lawsuit, the Court concluded that Plaintiffs are prevailing parties under § 1988. Heydinger II, 2014 WL 7157013, at *3. And, because Defendants presented no special circumstances that would render an award unjust, the Court determined that Plaintiffs are entitled to their reasonable attorneys' fees. Id. at *5. The parties' briefing on the reasonableness of the amount of district court-related fees requested is now before the Court.³

In May 2014, Defendants appealed the summary judgment ruling to the Eighth Circuit. (Notice of Appeal [Doc. No. 219].) The Eighth Circuit affirmed this Court's ruling on June 15, 2016. North Dakota v. Heydinger ("Heydinger III"), 825 F.3d 912 (8th Cir. 2016). The author of the Eighth Circuit opinion, Judge Loken, ruled in Plaintiffs' favor based on Plaintiffs' Dormant Commerce Clause challenge, as this Court did. Id. at 919-22. Judges Murphy and Colloton both found that Minn. Stat. § 216H.03, subd. 3(2)-(3), is preempted by federal statutes. Id. at 923-29. While Judge Murphy affirmed the Court's ruling based on preemption, she disagreed with Judge Loken's extraterritoriality analysis under the Dormant Commerce Clause. Id. at 924-27. However, Judge Colloton declined to address the Dormant Commerce Clause claim altogether, explaining that a preemption claim is considered statutory for purposes of the Supreme Court's practice "of deciding statutory claims first to avoid unnecessary constitutional adjudications" under the doctrine of constitutional avoidance. Id. at 927 (citations omitted). If federal law preempts the challenged statute, Judge Colloton observed that it would be unnecessary to address the Dormant Commerce Clause challenge. Id. Finding that federal law preempted the statute, Judge Colloton concurred in the affirmance of the district court's ruling that granted partial summary judgment to Plaintiffs. Id.

While Plaintiffs' attorneys' fees motion was pending before this Court, Plaintiffs also moved for attorneys' fees and costs before the Eighth Circuit in connection with Plaintiffs' appellate work. As noted, the Eighth Circuit referred Plaintiffs' appellate motion for attorneys' fees and costs to this Court, along with a motion to seal related documents. (Heydinger, (8th Cir. July 27, 2016) [Doc. No. 276 at 2].) In doing so, Judge Loken indicated that he would deny the fee petition were he to rule on it. Id. The Eighth Circuit also directed this Court to address, inter alia, the following: (1) whether the State of North Dakota ("North Dakota") and its Industrial Commission are "persons" eligible for an award of attorneys' fees under 42 U.S.C. §§ 1983, 1988; (2) whether the presence of additional plaintiffs justifies a fee award even if the State and its agency are ineligible;⁴ and (3) whether any "special circumstances" would render a fee award unjust. Id. (citing Hatfield v. Hayes, 877 F.2d 717, 719 (8th Cir. 1989)). Pursuant to this Court's Order of July 29, 2016, the parties submitted supplemental briefing on the topics identified above, as well as the question of "whether Plaintiffs are entitled to fees as 'prevailing parties' under § 1988 where the appellate panel was split as to the basis of its affirmance of the district court." (Order of 7/29/16 at 2 [Doc. No. 277].)

III. DISCUSSION

A. Eligibility for Attorneys' Fees

A party seeking attorneys' fees and costs must timely make such a claim under Rule 54(d) and identify the statute or rule entitling the movant to the award and a fair estimate of the amount sought. Fed. R. Civ. P. 54(d)(2)(A)-(B). Plaintiffs timely filed such a motion here, asserting that they are entitled to their attorneys' fees and nontaxable costs and expenses pursuant to 42 U.S.C. § 1988, (Pls.' Mot. for Attorneys' Fees and Nontaxable Costs at 3 [Doc. No. 212]), and before the Eighth Circuit. (Appellees' Mot. for Attorneys' Fees Pursuant to 8th Cir. R. 47C ("Pls.' App. Br.") at 2.)⁵

Under § 1988, "[i]n any action or proceeding to enforce a provision of [42 U.S.C. § 1983,] the court, in its discretion, may allow the prevailing party, other than the United States, a reasonable attorney's fee as part of the costs." 42 U.S.C. § 1988(b). "[T]he courts have wide discretion in determining whether or not an award of attorney's fees is warranted, giving due consideration to the principle that the prevailing party should recover attorney's fees 'unless special circumstances would render such an award unjust.'" Planned Parenthood of Minn., Inc. v. Citizens for Cmty. Action, 558 F.2d 861, 870 (8th Cir. 1977) (quoting Newman v. Piggie Park Enters., Inc., 390 U.S. 400, 402 (1968)). Section 1983 expressly provides:

Every person who, under color of any statute, ordinance, regulation, custom, or usage, of any State or Territory or the District of Columbia,subjects, or causes to be subjected, any citizen of the United States

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