The Supreme Court yesterday agreed to a Reagan administration request for a ruling on whether the government can be ordered to finance lawsuits brought against it even when it wins.
The court will review a decision of the Court of Appeals for the District of Columbia awarding $90,000 in court costs and legal fees to the Sierra Club and the Environmental Defense Fund after they lost a 1979 suit questioning Environmental Protection Agency procedures for promulgating sulfur dioxide emission standards for coal-fired power plants.
A Supreme Court ruling, expected by summer, will be important in the administration's campaign to cut the pipeline that finances hundreds of lawsuits brought by such organizations challenging government actions.
It could also play a role in the court's own efforts to reduce the caseload in the federal judiciary. Denial of fees to the losers -- a principle breached by the apellate court in yesterday's case -- is supposed to deter unnecessary or risky lawsuits.
Attorneys fees and costs are routinely awarded by the courts to successful challengers of many government decisions, and routinely denied, or not even requested by, losing litigants. In this case, Gorsuch vs. Sierra Club and Environmental Defense Fund, however, the appeals court awarded the money under the Clean Air Act on the grounds that the suit brought important issues to the court for resolution.
The administration, in appealing the fee award, told the Supreme Court that the ruling opened the door to similar awards under 13 other laws, including the Noise Control Act, the Safe Drinking Water Act, strip-mining laws and the Endangered Species Act. All contain language giving the lower courts flexibility to award fees when "appropriate."
The court agreed to review two other decisions yesterday. One, First National City Bank vs. Banco Para El Comercio Exterior De Cuba, is a 21-year-old conflict over the expropriation of American banks following Fidel Castro's seizure of power in Cuba.
It began in 1961 when a Cuban bank, established by the Castro regime and at one time headed by Che Guevara, sued Citibank in New York to recover a $193,000 pre-revolution sugar-related debt. Citibank refused to pay the money, saying it would use it to offset its losses from the nationalization of 11 of its branch banks in Cuba.
The Cuban bank argued that it was independent of the Cuban government and not responsible for the expropriation. After years of litigation, the 2nd U.S. Circuit Court of Appeals in New York agreed, saying that the Cuban bank could not be shown to have played "any role" in the expropriations.
The decision upset the American banking industry and the U.S. government, which fears its future application in disputes with countries such as Iran. The ruling "provides to foreign governments contemplating expropriation a blueprint on how to insulate" themselves from retaliation in the American courts, the administration argued.
The second case the court will review involves a labor revolt by waitresses at Big Apple East restaurant in Phoenix that began with the dismissal of waitress Ruth Helton for allegedly suggesting the need for a union to her co-workers.
Following her dismissal, three other waitresses joined in a picket line outside the restaurant, distributing leaflets charging the management with overworking them, making "unwarranted sexual advances" and keeping a "filthy restroom," among other things.
The restaurant management then sued the waitresses for $500,000 in state court, saying they were blocking access to the restaurant and defaming the management.
The National Labor Relations Board, in a decision later upheld by an appeals court panel, found that the lawsuit was an improper attempt to discourage unionism in violation of federal labor law and ordered the women reimbursed and rehired, and the lawsuit withdrawn. That finding will be addressed by the Supreme Court in Bill Johnson's Restaurants Inc. vs. National Labor Relations Board.