Bill On Attorney's Fees Could Affect Indiana Environmental Lawsuits

Environmental groups and some lawmakers worry a bill, HB 1436, could pressure regulators to approve pollution permits they would otherwise deny. The Hoosier Environmental Council said an amendment has dramatically improved the bill, but it could still have unintended consequences.

Under the original bill, several Indiana agencies would have to pay the attorney’s fees of a party that wins a lawsuit against the state in a court case overseen by an administrative law judge. But an amendment made it so that would only be the case if an agency acts “frivolously” or “in bad faith.”

HEC senior staff attorney Kim Ferraro said this new language is better, but it could still pose a threat to cash-strapped agencies like the Indiana Department of Environmental Management. 

“If you don't issue this permit on our terms, we're going to appeal and you could be on the hook for our hundreds of thousands of dollars in attorney's fees," she said.

Ferraro said companies asking for pollution permits already tend to have whole legal teams and a prominent voice in IDEM permitting decisions. She said the bill also goes beyond IDEM alone. It applies to the majority of Indiana's state agencies — only about a dozen would be exempt.

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A trade group of gas station owners and a company that cleans up leaking gas tanks expressed support for the bill.

Greg Zoeller serves as general counsel for Golars Environmental Engineering. He said his company has had to pay thousands of dollars in attorney's fees to fight IDEM when the agency refused to reimburse it for cleanup costs — even when the company won. Zoeller said without this bill, the agency can run amok.

“You're empowering the administrative law judges to check the abuse of the authority of the state," he said.

IDEM has said in the past that some companies are taking advantage of the state fund that pays for leaking gas tank cleanups — the Excess Liability Trust Fund — and it's in danger of running out of money.

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The bill passed the Senate Judiciary Committee last week and now moves to the full Senate for consideration. Sen. Sue Glick (R-LaGrange) was one of only three committee members who voted against the bill.

“I have watched pinstripe suits rape the ELT fund and I don't approve of that and I certainly don't approve — I think the bill’s better with the amendment, but I think we're treading on treacherous ground here,” she said.

Contact reporter Rebecca at rthiele@iu.edu or follow her on Twitter at @beckythiele.

Indiana Environmental reporting is supported by the Environmental Resilience Institute, an Indiana University Grand Challenge project developing Indiana-specific projections and informed responses to problems of environmental change.