Financing Environmental Lawsuits 

Oregon State Senator Doug Whitsett

October 20, 2009 

Do you ever wonder where environmental organizations get the money to finance their countless lawsuits?

The eight most litigious environmental organizations have filed about one thousand six hundred federal court cases against the federal government during the past 15 years. The National Wildlife Federation alone has filed 427 environmental law suits in federal court during that period.

Between 2000 and 2009, the Center for Biological Diversity filed more than 400 lawsuits in federal district court in addition to filing more than 160 appeals in federal appellate courts. That organization’s website claims that “it works through science, law, and creative media to secure a future for all species, great or small, hovering on the brink of extinction”.

           Meanwhile, the Center has filed or appealed more than one suit in federal court each week for the last nine years.

Would you be surprised to learn that the preponderance of the money to fund these myriad lawsuits comes from the taxpaying public? Our tax dollars, yours and mine, are being used by these extremist environmental organizations to sue the federal government to prevent access to our cornucopia of natural resource wealth.

Let me explain.

These tax exempt organizations are receiving billions of federal tax dollars in attorney fees and costs, for winning or settling environmental cases against the federal government.

            The actual amount awarded in these settlements is often confidential, even though money comes from tax dollars and should be a matter of public record.

There are two major sources of these federal tax dollars.

The first is the Judgment Fund that is a line item expense in the Congressional budget. The fund was created to pay attorney fees and costs for prevailing plaintiffs in cases involving the Endangered Species Act, the Clean Water Act, and several other public laws that also allow the prevailing plaintiff to recover costs and attorney fees.

According to the Budd-Falen Law Offices, in just the time between January 2003 and July of 2007, the Judgment Fund paid nearly 42,000 claims totaling more than $4.7 billion taxpayer-dollars to reimburse prevailing radical environmental organizations for their legal costs and attorney fees. The average reimbursement to the prevailing non-government environmental organization was $112,000. The total amount paid per settlement may never be known because neither the federal government nor its agencies appear to track the payments from the Judgment Fund.

The second major source of prevailing plaintiff payments is the Equal Access to Justice Act. In this scheme, funds are taken from the losing federal agency’s budget to pay the attorney fees and costs claimed by the winning environmental organization.

             Between 2003 and 2005, the United States Forest Service alone paid about $1.7 million to 44 prevailing environmental organizations. Once again, it appears that neither the federal government nor its agencies are tracking the cumulative costs of the Equal Access to Justice Act. In fact, the amount of the individual settlement payment made by the agencies to the environmental organizations is often kept confidential.

            The federal law allows the court to require the government to pay the plaintiff’s attorney fees and costs when the plaintiff prevails in court. The law specifically prohibits the prevailing defendant government agency from recovering their costs and attorney fees. When a case is settled out of court the law allows for the plaintiff to recover their costs and attorney fees if the settlement substantially favors the plaintiff’s claim. The plaintiff is unlikely to settle out of court unless the defendant government agency agrees that the settlement “substantially” favors the plaintiff insuring that the environmental organization gets paid.

            This I win or you lose scheme is providing a steady stream of tax revenue to the litigious environmental organizations.

These tax exempt, extremist groups are also extracting their taxpayer-funded bounty in lawsuits filed in state courts. Many of the states, including Oregon, have similar prevailing plaintiff statutes. According to the Attorney General’s staff, during the 2009 Legislature more than thirty fairness to prevailing plaintiff bills were introduced that would have enhanced their access to this ongoing cash tsunami.

            A BILLION A YEAR INDUSTRY

The Budd-Falen Law Offices have documented well more than a billion federal tax dollars being transferred to prevailing environmental lawsuit plaintiffs in each of the last nine years. This total is incomplete because the law firm only tracked certain groups and state settlement costs were not included in their study. The fact of the matter is that taxpayers have no way of determining the total amount of their tax dollars that are being funneled to these radical environmental organizations. No one appears to be keeping records.

Citizens are being forced to expend millions of their own private funds to intervene, or participate in these lawsuits to protect their way of life. They have no chance of recovering their costs and attorney fees if they prevail. In fact, the private citizen is paying attorney fees and costs to defend his way of life, while his tax dollars are being used to promote and finance the same lawsuit that would destroy his way of life.

It is often difficult to find any meaningful difference between policies being promoted by government agencies, and policies being promoted by radical environmental organizations through their myriad lawsuits. That distinction is further blurred by the fact that both the agencies, and the environmental organizations, are funded with the same tax dollars.

One thing is certain. The billions of tax dollars funneled to these radical environmental groups is not creating business opportunities and is not creating jobs. Rather, it is serving to destroy businesses, jobs and American wealth.                      

THE FAILING DOLLAR

The ongoing weakness of the United States dollar is a significant threat to American prosperity that should be of great concern to everyone. Since 2002 the value of the dollar is down 34%, as measured against a basket of other currencies. That loss in dollar value has averaged 5% for each of the past seven years.

The long term dollar devaluation has resulted from world-wide investor concern with the absurd growth of the United States national debt. The short term devaluation of the dollar is primarily an issue of supply and demand.

In their effort to curtail the current recession, and to prevent commodity deflation, the Federal Reserve has flooded the market with more than a trillion dollars. In response, the dollar has fallen 12% in value since the Obama inauguration. Recently, the loss in dollar value has accelerated to an alarming rate.

The combination of the loss in confidence in the United States economy, and this massive oversupply of dollars, has caused investors to flee away from United States currency.

            The result is loss of American wealth, loss of American industry, and loss of American jobs.

If the value of the US dollar had remained at the 2002 level, $685 dollars would purchase the same ounce of gold that now costs $1,040, and $45 would buy the same barrel of oil that cost $70 today.

Home prices in Oregon have declined significantly, in some areas by more than 20%. However, when we factor in the 34% deflated value of the dollar, the actual loss in value of those homes is closer to 50%.

For instance, if we were to sell a home for $200,000 today we could reinvest the money in a similar home at essentially the same price. However, if we chose to invest the $200,000 in commodities such as gold and oil, or if we chose to invest the money in other currencies, it would purchase a third less of these commodities than the same $200,000 would purchase if the dollar value had remained at the 2002 level.

Moreover, the recent gains in the stock markets are largely an illusion. There is no net gain when the price of stocks increases by one third, while the value of the currency decreases by one third. According to the Wall Street Journal, when compared with another currency such as the Euro, the S&P 500 peaked at around 1700 Euro in 2000, plummeted to 600 Euro in March of this year, and now stands at about 700 Euro. So compared to other world currencies, our stock market has lost nearly 60% of its capitalized value since the year 2000.

Most of the U.S. stocks, and virtually all of the homes, are owned by Americans. The devaluation of the dollar has caused a massive decline in the U.S. share of the global wealth. That wealth is being transferred to other nations, and to multi-national corporations and investment banking consortiums. That transferred wealth is being used to capitalize industrial growth, and to create jobs, in other nations that compete with our own industries.

The certain result of the flight of U.S. wealth and capitol will be prolonged high unemployment as the jobs, follow the money, overseas. As I have said before, in my opinion, this great nation is seriously on the wrong path. It is time for new leadership and new fiscal policy.

Remember, if we do not stand up for rural Oregon, no one will.