Insight An Update on Attorney Fees in Cases Involving Governmental Entities

This article was originally published in the August 2013 Edition of The Advocate – the official publication of the Idaho State Bar. Online access to the original version of this article can be found via the Idaho State Bar’s website or via HeinOnline (login required).

The issue of whether attorney fees and costs can be awarded in cases involving governmental agencies and subdivisions has been in continual flux for the past few years. Though there are numerous statutes which conceivably allow for attorney fees in cases involving governmental entities¹, the case law regarding these statutes has been confusing. This article will discuss the history of some of these issues, and will further discuss some of the recent changes which clarify which statutes apply to which situations.

Attorney fees in civil actions

A number of statutes indicate that, based on their plain language, they apply to civil actions involving governmental entities. For example, Idaho Code § 12-117 states that it applies when the adverse parties are “a state agency or a political subdivision and a person.”² Attorney fees are also allowed to be awarded to the “claimant [or] the governmental entity” under the Idaho Tort Claims Act.³ Attorney fees are mandatorily awarded⁴ to the prevailing party in cases involving a commercial transaction or contract pursuant to Idaho Code Section 12-120(3), which specifically provides that a “party” to a commercial transaction includes “the state of Idaho or political subdivision thereof.”⁵ Attorney fees and costs may also be awarded in cases involving requests for public records.⁶ This list is not exclusive, as there are numerous sources under which attorney fees may be awarded in cases involving governmental agencies and subdivisions.

Though there are many statutes that allow for attorney fees in cases involving governmental entities, until recently the Idaho Supreme Court’s decisions seemed to limit the award of attorney fees to just one or two statutes. In 1996, the Idaho Supreme Court issued an opinion holding that there was “legislative intent to make the standard of Idaho Code § 12-117 the basis for an attorney fee award against a state agency, rather than the tests encompassed under the private attorney general doctrine.”⁷ This ruling essentially held that the private attorney general doctrine was no longer a valid source of attorney fee awards in cases involving state agencies and governmental subdivisions and was later followed in State v. Hagerman Water Right Owners, Inc. (HWRO), 130 Idaho 718, 726, 947 P.2d 391, 399 (1997). However, in Hagerman, the Supreme Court utilized broader language than was perhaps necessary:

An award of attorney fees against the [agency] pursuant to the private attorney general doctrine was improper. Idaho Code 12-117 provides the exclusive basis of an award of attorney fees against a state agency.⁸

The “exclusive basis” language in Hagerman has recently become a basis for denying fees under any other statute. For example, in 2002, attorney fees were awarded under Idaho Code § 12-120(3) to a school district as a prevailing party in an action involving a teacher contract.⁹ However, in Potlatch Educ. Ass’n v. Potlatch Sch. Dist. No. 285, 148 Idaho 630, 635, 226 P.3d 1277, 1282 (2010), the Idaho Supreme Court denied a school district an award of attorney fees under Idaho Code § 12-121 because, relying on Hagerman, Idaho Code § 12-117 was “the exclusive means for awarding attorney fees for the entities to which it applies.”¹⁰

This language in Potlatch resulted in a number of apparently conflicting decisions. For example, in a 2008 case under the Idaho Tort Claims Act (“ITCA”), the Idaho Court of Appeals stated that Idaho Code § 6-918A “is the exclusive provision for awarding attorney fees under the ITCA, including claims on appeal. Therefore, Idaho Code § 12-117 does not apply to this case.”¹¹ But two years later, in Brown v. City of Pocatello, 148 Idaho 802, 811, 229 P.3d 1164, 1173 (2010) (another ITCA case), and without any discussion of the 2008 Court of Appeals Case, the Idaho Supreme Court relied on Potlatch to state that Idaho Code § 12-117 was the exclusive basis for an attorney fee award, and that Idaho Code § 6-918A was not applicable.¹²

A similarly confusing result occurred in Henry v. Taylor, 152 Idaho 155, 267 P.3d 1270 (2012), a case arising out of a request for public documents. In that case, attorney fees were requested under multiple statutes, including Idaho Code §§ 12-117 and 9-344(2).¹³ After explaining that Idaho Code § 12-117 was the “exclusive basis for awarding court costs and attorney fees in an action between a person and a state agency”, the Supreme Court held that Idaho Code § 9-344(2) was exclusive under the circumstances of Henry.¹⁴

Between 1996 and 2013, there were at least 11 reported cases which indicated that Idaho Code § 12-117 was the “exclusive” source of attorney fees in cases involving governmental agencies or subdivisions, or which utilized language discussing § 12-117’s exclusivity.¹⁵ Eight of those cases were decided after Potlatch. However, during that same time period, there were eight cases involving governmental agencies and/or subdivisions in which attorney fees were awarded under other statutes beside Idaho Code § 12-117,¹⁶ and a number of other cases that discuss multiple attorney fee statutes (but do not discuss exclusivity of any statute over another).¹⁷

This confusion has recently been rectified by the Idaho Supreme Court. In Syringa Networks, LLC v. Idaho Dep’t of Admin., No. 38735, 2013 WL 1276493 (Idaho Mar. 29, 2013), attorney fees were requested under a number of statutes, including Idaho Code § 12-120(3) and § 12-117. The Supreme Court stated that:

The district court denied an award of fees under section 12-120(3) based upon our holding in [Hagerman], wherein we stated, “Idaho Code § 12-117 provides the exclusive basis upon which to seek an award of attorney fees against a state agency.” That holding has been followed in subsequent cases, but it is incorrect.¹⁸

The Supreme Court went on to state that “section 12-117(1) is not the exclusive basis upon which to seek an award of attorney fees against a state agency or political subdivision, but attorney fees may be awarded under any other statute that expressly applies to a state agency or political subdivision, such as sections 12-120(3) and 12-121.”¹⁹ Presumably, this means that in any civil action involving a governmental entity, the full panoply of applicable attorney fee statutes is again available to the parties, and parties need not worry whether a particular statute is “exclusive” as to any other statute.

Attorney fees on judicial review

Another issue which has recently been in flux is the state of attorney fees in agency proceedings and judicial reviews of such proceedings. Historically, Idaho Code § 12-117 was utilized as a source of attorney fees in administrative proceedings and judicial reviews.²⁰ However, in Rammell v. Idaho State Dep’t of Agric., 147 Idaho 415, 210 P.3d 523 (2009), the Idaho Supreme Court held that administrative agencies could not award attorney fees under Idaho Code § 12-117.²¹ Courts, on the other hand, could still award attorney fees under that statute when reviewing appeals of agency decisions.²²

Shortly thereafter, the Idaho Legislature attempted to abrogate the Rammell decision by altering the language of Idaho Code § 12-117.²³ However, this attempt apparently backfired. After the changes were made to Idaho Code § 12-117, the Idaho Supreme Court issued two decisions stating that the new language allowed administrative agencies to award attorney fees under Idaho Code § 12-117, but courts sitting in review of those decisions could not. First, in Smith v. Washington Cnty. Idaho, 150 Idaho 388, 391, 247 P.3d 615, 618 (2010), the Supreme Court stated that “as amended, Idaho Code § 12-117(1) does not allow a court to award attorney fees in an appeal from an administrative decision.”²⁴ The reasoning for this decision, in part, was that judicial reviews of agency decisions were not a “civil judicial proceeding,” which, according to the Supreme Court, started with the filing of a complaint under Idaho R. Civ. P. 3(a)(1), as opposed to an appeal (as happens in a petition for judicial review).²⁵

This logic was affirmed shortly thereafter in Sopatyk v. Lemhi Cnty., 151 Idaho 809, 264 P.3d 916 (2011). In Sopatyk, Lemhi County requested that the Supreme Court overrule Smith as bad law, but the Supreme Court declined and instead affirmed that under Idaho Code § 12-117, the court could not award attorney fees in judicial reviews of agency decisions.²⁶

As was predicted previously in The Advocate²⁷, the Legislature moved swiftly to again remedy this situation. In the 2012 session, the Legislature again modified Idaho Code § 12-117, so that the relevant language now reads:

(1) Unless otherwise provided by statute, in any proceeding involving as adverse parties a state agency or a political subdivision and a person, the state agency, political subdivision or the court hearing the proceeding, including on appeal, shall award the prevailing party reasonable attorney’s fees, witness fees and other reasonable expenses, if it finds that the non-prevailing party acted without a reasonable basis in fact or law.
…
(5) For purposes of this section:
(c) “Proceeding” means any administrative proceeding, administrative judicial proceeding, civil judicial proceeding or petition for judicial review or any appeal from any administrative proceeding, administrative judicial proceeding, civil judicial proceeding or petition for judicial review.²⁸ (emphasis added)

Based on this language, it is clear that the Legislature intended to provide that attorney fees could be awarded under Idaho Code § 12-117 in administrative proceedings and in appellate reviews of those proceedings.

Presumably, it would appear that the Legislature intended to abrogate the rulings in both Smith and Sopatyk, along with any cases that relied on them. However, that does not mean that Smith and Sopatyk are without any judicial bite. For example, Idaho Code § 12-117 only applies when there are “unwarranted legal challenges.”²⁹ What if the parties seek a mandatory attorney fee award related to an agency employment decision? For example, what if attorney fees are sought in a judicial review of a school board’s decision relating to termination of a teacher employment contract?³⁰ Under the Syringa Networks case, attorney fees can now be sought under Idaho Code § 12-120(3), which applies to employment contracts.³¹ This statute requires a mandatory award of attorney fees to a prevailing party.³² Though many changes have been made to Idaho Code § 12-117 to get it to apply to both administrative agency decisions and related appeals, no such changes have been made to Idaho Code § 12-120(3) or Idaho Code § 12-121. Both of those sections still say that they apply to “any civil action”³³, and do not include the new “proceeding” definition the Legislature incorporated into Idaho Code § 12-117 in 2012. As both Smith and Sopatyk (and a number of other cases) explicitly state, “civil actions” do not include judicial reviews of agency/political subdivision decisions.³⁴ Thus, neither a government employee nor employer can obtain attorney fees under Idaho Code § 12-120(3) for an administrative employment decision or judicial review of that decision.

In summary, the issues surrounding Idaho Code § 12-117 appear to be more or less cleared up with regard to both administrative decisions and judicial review. However, although the Supreme Court has decided to allow attorney fee awards to (or against) a governmental subdivision or agency under any applicable statute, it is questionable whether any other statute can apply in the administrative agency/judicial review realm.

Conclusion

The Idaho Supreme Court and the Idaho legislature are doing a good job of ensuring that attorneys work for their pay (at least when it comes to understanding attorney fee statutes). In civil cases involving governmental agencies or subdivisions, recent case law makes it clear that attorney fees may be awarded under any applicable statute (and not just Idaho Code § 12-117). However, when there is an administrative proceeding or judicial review of such proceeding, it appears that attorney fees are only available under Idaho Code § 12-117. Other statutes that would normally apply (such as Idaho Code § 12-120(3) in decisions relating to employment issues), have been relegated to waiting on the back burner to see if the legislature will update them in the same way it has updated Idaho Code § 12-117.

Endnotes

1. Such statutes include I.C. § 12- 117 (a statute specifically dealing with attorney fees in cases involving governmental entities), 12-120(3) (dealing with attorney fees in contract or commercial transactions), 12-121 (general statute regarding attorney fees), 6-918A (attorney fees allowed in tort claims cases), and 9-344 (attorney fees allowed in cases involving the Public Records Act).
2. I.C. § 12-117(1).
3. I.C. § 6-918A.
4. Downey Chiropractic Clinic v. Nampa Rest. Corp., 127 Idaho 283, 287 – 88, 900 P.2d 191, 195 – 96 (1995) (“I.C. § 12-120(3) generally mandates an award of attorney fees to the prevailing party”).
5. I.C. § 12-120(3).
6. I.C. § 9-344(2).
7. Roe v. Harris, 128 Idaho 569, 573, 917 P.2d 403, 407 (1996), abrogated by Rincover v. State, Dep’t of Fin., Sec. Bureau, 132 Idaho 547, 976 P.2d 473 (1999).
8. State v. Hagerman Water Right Owners, Inc. (HWRO), 130 Idaho 718, 723, 947 P.2d 391, 396 (1997) (emphasis added), abrogated by Syringa Networks, LLC v. Idaho Dep’t of Admin., No. 38735, 2013 WL 1276493 (Idaho Mar. 29, 2013).
9. Willie v. Bd. of Trustees, 138 Idaho 131,136, 59 P.3d 302, 307 (2002).
10. Potlatch Educ. Ass’n v. Potlatch Sch. Dist. No. 285, 148 Idaho 630, 635, 226 P.3d 1277, 1282 (2010).
11. Beehler v. Fremont Cnty., 145 Idaho 656, 661, 182 P.3d 713, 718 (Ct. App. 2008).
12. Brown v. City of Pocatello, 148 Idaho 802, 811, 229 P.3d 1164, 1173 (2010).
13. Henry v. Taylor, 152 Idaho 155, 161, 267 P.3d 1270, 1276 (2012).
14. Id. at 162, 267 P.3d at 1277.
15. See State v. Hagerman Water Right Owners, Inc. (HWRO), 130 Idaho 718, 723, 947 P.2d 391, 396 (1997), abrogated by Syringa Networks, LLC v. Idaho Dep’t of Admin., 38735, 2013 WL 1276493 (Idaho Mar. 29, 2013); Westway Const., Inc. v. Idaho Transp. Dep’t, 139 Idaho 107, 116, 73 P.3d 721, 730 (2003); Potlatch Educ. Ass’n v. Potlatch Sch. Dist. No. 285, 148 Idaho 630, 635, 226 P.3d 1277, 1282 (2010); Brown v. City of Pocatello, 148 Idaho 802, 811, 229 P.3d 1164, 1173 (2010); Lake CDA Investments, LLC v. Idaho Dep’t of Lands, 149 Idaho 274, 285, 233 P.3d 721, 732 (2010); Smith v. Washington Cnty. Idaho, 150 Idaho 388, 392, 247 P.3d 615, 619 (2010); Sopatyk v. Lemhi Cnty., 151 Idaho 809, 818, 264 P.3d 916, 925 (2011); Kepler-Fleenor v. Fremont Cnty., 152 Idaho 207, 213, 268 P.3d 1159, 1165 (2012), reh’g denied (Jan. 30, 2012); City of Osburn v. Randel, 152 Idaho 906, 910, 277 P.3d 353, 357 (2012); Arambarri v. Armstrong, 152 Idaho 734, 741, 274 P.3d 1249, 1256 (2012), reh’g denied (May 7, 2012); State, Dep’t of Transp. v. HJ Grathol, 153 Idaho 87, 278 P.3d 957, 963 (2012).
16. See Hummer v. Evans, 132 Idaho 830, 833, 979 P.2d 1188, 1191 (1999); Willie v. Bd. of Trustees, 138 Idaho 131, 136, 59 P.3d 302, 307 (2002) (attorney fees awarded to Board of Trustees under I.C. § 12-120(3)); Clark v. State, Dep’t of Health & Welfare, 134 Idaho 527, 532, 5 P.3d 988, 993 (2000); Huyett v. Idaho State Univ., 140 Idaho 904, 911, 104 P.3d 946, 953 (2004); Beehler v. Fremont Cnty., 145 Idaho 656, 661, 182 P.3d 713, 718 (Ct. App. 2008); Sadid v. Idaho State Univ., 151 Idaho 932, 942, 265 P.3d 1144, 1154 (2011); Henry v. Taylor, 152 Idaho 155, 162, 267 P.3d 1270, 1277 (2012); Noak v. Idaho Dep’t of Correction, 152 Idaho 305, 314, 271 P.3d 703, 712 (2012), reh’g denied (Mar. 12, 2012).
17. See Treasure Valley Concrete, Inc. v. State, 132 Idaho 673, 677-78, 978 P.2d 233, 237-38 (1999); overruled by City of Osburn v. Randel, 152 Idaho 906, 277 P.3d 353 (2012); Cox v. City of Sandpoint, 140 Idaho 127, 133, 90 P.3d 352, 358 (Ct. App. 2003); Hayden Lake Fire Prot. Dist. v. Alcorn, 141 Idaho 307, 312-13, 109 P.3d 161, 166-67 (2005); Jenkins v. Barsalou, 145 Idaho 202, 207-08, 177 P.3d 949, 954-55 (2008) (attorney fees were requested under both I.C. § 12-117 and § 12-121; the Supreme Court awarded fees, but did not say under which statute); Cantwell v. City of Boise, 146 Idaho 127, 138, 191 P.3d 205, 216 (2008) (see also n. 6); City of McCall v. Buxton, 146 Idaho 656, 667, 201 P.3d 629, 640 (2009); Allied Bail Bonds, Inc. v. Cnty. of Kootenai, 151 Idaho 405, 415, 258 P.3d 340, 350 (2011); Chavez v. Canyon Cnty., State, ex rel. its Duly Elected Bd. Of Cnty. Comm’rs, 152 Idaho 297, 305, 271 P.3d 695, 703 (2012).
18. Syringa Networks, LLC v. Idaho Dep’t of Admin., No.38735, 2013 WL 1276493 (Idaho Mar. 29, 2013)
19. Id.
20. T. Hethe Clark, The Curious Case of Idaho Code Section 12-117: Who Gets Paid?, 55 ADVOCATE 26 (2012)
21. Rammell v. Idaho State Dep’t of Agric., 147 Idaho 415, 423, 210 P.3d 523, 531 (2009).
22. Id.
23. T. Hethe Clark, The Curious Case of Idaho Code Section 12-117: Who Gets Paid?, 55 ADVOCATE 26 (2012). See also Pioneer Irr. Dist. v. City of Caldwell, 153 Idaho 593, 288 P.3d 810, 819 (2012), reh’g denied (Nov. 29, 2012) (discussing that the Idaho legislature abrogated the holding in Rammell by changing the statute).
24. Smith v. Washington Cnty. Idaho, 150 Idaho 388, 391, 247 P.3d 615, 618 (2010).
25. Id.
26. Sopatyk v. Lemhi Cnty., 151 Idaho 809, 818-19, 264 P.3d 916, 925-26 (2011).
27. T. Hethe Clark, The Curious Case of Idaho Code Section 12-117: Who Gets Paid?, 55 ADVOCATE 26, 27-28 (2012).
28. I.C. § 12-117 (2013) (emphasis added).
29. T. Hethe Clark, The Curious Case of Idaho Code Section 12-117: Who Gets Paid?, 55 ADVOCATE 26, 28 (2012).
30. See I.C. § 33-513(5)(m).
31. Willie v. Bd. of Trustees, 138 Idaho 131, 136, 59 P.3d 302, 307 (2002).
32. Downey Chiropractic Clinic v. Nampa Rest. Corp., 127 Idaho 283, 288, 900 P.2d 191, 196 (1995).
33. See I.C. §§ 12-120(3) and 12-121.
34. See Smith v. Washington Cnty. Idaho, 150 Idaho 388, 391, 247 P.3d 615, 618 (2010); Sopatyk v. Lemhi Cnty., 151 Idaho 809, 818, 264 P.3d 916, 925 (2011); Lake CDA Investments, LLC v. Idaho Dep’t of Lands, 149 Idaho 274, 285, 233 P.3d 721, 732 (2010) (n.6); Sanchez v. State, Dep’t of Correction, 143 Idaho 239, 243, 141 P.3d 1108, 1112 (2006).

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