Monroe Branstad v. State of Iowa Ex Rel. Natural Resource Commission and the Iowa Department of Natural Resources ( 2015 )

IN THE SUPREME COURT OF IOWA
No. 14–0205
Filed November 6, 2015
MONROE BRANSTAD,
Appellant,
vs.
STATE OF IOWA ex rel. NATURAL RESOURCE COMMISSION and the
IOWA DEPARTMENT OF NATURAL RESOURCES,
Appellees.
On review from the Iowa Court of Appeals.
Appeal from the Iowa District Court for Hancock County, Rustin
Davenport, Judge.
The court of appeals held that no exceptions to Iowa Code section
625.29(1) applied to preclude an award of attorney fees to Branstad. It
reversed the decision of the district court and remanded for a calculation
of attorney fees. DECISION OF COURT OF APPEALS VACATED;
DISTRICT COURT JUDGMENT AFFIRMED.
Christine E. Branstad of Branstad Law, PLLC, Des Moines, and
James L. Pray of Brown, Winick, Graves, Gross, Baskerville and
Schoenebaum, PLC, Des Moines, for appellant.
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Thomas J. Miller, Attorney General, Jeffrey S. Thompson, Solicitor
General, and David R. Sheridan and David L. Dorff, Assistant Attorneys
General, for appellees.
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ZAGER, Justice.
In this appeal we are asked to decide whether the State’s role is
“primarily adjudicative” when the Natural Resource Commission decides
a contested case following an investigation and subsequent decision by
the Department of Natural Resources to assess restitution. We find that
the State’s role in this case was primarily adjudicative, precluding an
award of attorney fees. See Iowa Code § 625.29(1)(b) (2011). Therefore,
we vacate the decision of the court of appeals and affirm the judgment of
the district court denying attorney fees.
I. Background Facts and Proceedings.
The Iowa Department of Natural Resources (DNR) was called to
investigate a fish kill that occurred in the Winnebago River on or around
August 28, 2008. The agency found the following facts.
Scott Grummer, a biologist for the DNR, led the investigation into
the fish kill. During the investigation, Grummer interviewed Monroe
Branstad about the possibility that the fish kill was caused by pollution
from his farming operation. According to Grummer, Branstad said he
had recently installed a silage leachate runoff basin on his property.
Branstad also said that he was the only farmer in the area he knew of
who stored silage leachate. The fish kill affected 16.1 miles of the
Winnebago River.
As a result of Grummer’s investigation, he determined that the
release of sweet corn silage runoff from Branstad’s farming operation
caused the fish kill on the Winnebago River. Grummer also performed a
fish kill assessment, which led him to calculate that the number of fish
killed was 31,244 and that those fish had a monetary value of
$63,020.23. As a result of this investigation and fish kill assessment,
the DNR prepared a litigation report and made a referral to the attorney
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general’s office for appropriate enforcement action pursuant to Iowa Code
section 455B.191 (2009).
On May 11, 2010, Branstad entered into a consent order with the
State. As part of this consent order, Branstad admitted that on August
28 and 29, 2008, sweet corn silage leachate, a pollutant, discharged from
a containment basin on his farm operation into the Winnebago River in
violation of Iowa Code section 455B.186(1). However, Branstad denied
the discharge caused the death of fish in the Winnebago River and
specifically reserved his right to contest any claim for damages brought
by the DNR for the fish kill pursuant to Iowa Code section 481A.151 and
Iowa Administrative Code chapter 571—113. Branstad agreed to pay a
civil penalty of $10,205 and an administrative penalty of $6795 for the
violations.
On June 10, the DNR submitted its restitution assessment to
Branstad. As noted in the restitution assessment, Iowa Code section
481A.151 provides that any person who is liable for polluting water of the
state in violation of state law shall be required to pay restitution for the
injury. Id. § 481A.151(1). This Code section also authorizes the Iowa
Natural Resource Commission (Commission) to adopt rules providing for
procedures for the investigation of violations and the assessment of
restitution amounts. Id. § 481A.151(2). The restitution assessment also
set forth Branstad’s appeal rights pursuant to Iowa Code section
481A.151(2) and Iowa Administrative Code rules 571—7.1 and 561—7.4.
As set forth in the restitution assessment, “[a] contested hearing will then
be commenced” pursuant to the above statutes and rules. Branstad
timely appealed.
A contested hearing was conducted on July 25 before an
administrative law judge (ALJ). In his appeal, Branstad raised a number
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of arguments and defenses. During the proceeding, both Branstad and
the DNR were represented by counsel. On December 6, the ALJ issued a
proposed decision that affirmed the restitution assessment in its entirety,
including the restitution amount of $61,794.49. 1 Branstad timely
appealed the proposed decision of the ALJ to the Commission. On March
8, 2012, the Commission conducted a hearing on the appeal at which all
parties were able to argue their respective positions. At the conclusion of
the hearing, the Commission voted 4–1 to affirm the proposed decision of
the ALJ, which then became its final decision.
Branstad timely filed his petition for judicial review in the district
court. In its ruling issued July 16, the district court affirmed the final
decision of the Commission on most of Branstad’s arguments. However,
the district court found that the DNR failed to follow its own rules for
investigating fish kills. The district court found that the extrapolation
method used by the DNR when it investigated the Winnebago River fish
kill was incorrect and inconsistent with the methods prescribed by the
American Fisheries Society Special Publication 24 (AFS 24). The district
court reversed the final decision of the Commission and struck the
restitution assessment. On July 29, the DNR requested that the district
court reconsider its ruling and remand the case for a restitution
calculation based only on the amount of dead fish actually counted. The
district court determined that this was consistent with the rules
contained in AFS 24. The district court remanded the case to the
1Following the investigation, Grummer initially calculated the amount of
restitution owed to be $63,020.23, using the American Fisheries Society Special
Publication 30 (AFS 30). Later, using AFS 24, Grummer calculated the amount owed as
$61,448.47. With costs, the final amount in the restitution assessment given to
Branstad was $61,797.49.
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Commission to recalculate the damages based upon the 2233 dead fish
actually counted by the DNR.
In its decision on remand, the Commission reduced the restitution
assessment to Branstad as a result of the Winnebago River fish kill to
$5298.19. Branstad did not appeal this restitution assessment.
On October 30, Branstad filed an application for an award of
attorney fees under Iowa Code section 625.29 (2011). The district court
denied Branstad’s motion for attorney fees on January 3, 2014. In
denying the motion, the district court found three exceptions to the
requirement to award attorney fees applied: the State’s position was
supported by substantial evidence, the role of the State was primarily
adjudicative, and an award of fees in the situation would be unjust. Id.
§ 625.29(1)(a)–(c). Because it found these exceptions applied, the district
court did not rule on whether Branstad was the prevailing party.
Branstad appealed the decision of the district court. We
transferred the case to the court of appeals. The court of appeals
reversed the district court’s decision and remanded the case for a
calculation of attorney fees. The court of appeals held that none of the
exceptions found in Iowa Code section 625.29(1) applied to Branstad’s
case to preclude an award of attorney fees. The court of appeals also
held that the district court should have found Branstad was the
prevailing party under the statute.
The State filed an application for further review, which we granted.
II. Standard of Review.
The standard of review we use for cases involving a district court’s
interpretation of a statute is for correction of errors at law. Star Equip.,
Ltd. v. Iowa Dep’t of Transp., 843 N.W.2d 446, 451 (Iowa 2014). We are
not bound by the district court’s legal conclusions. Van Sloun v. Agans
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Bros., Inc., 778 N.W.2d 174, 179 (Iowa 2010). The sole question we
address is whether the district court correctly applied the law with
respect to an award of attorney fees under Iowa Code section 625.29.
Remer v. Bd. of Med. Exam’rs, 576 N.W.2d 598, 600 (Iowa 1998).
III. Analysis.
Because an award of attorney fees are a derogation of the common
law, attorney fees “ ‘are generally not recoverable as damages in the
absence of a statute or a provision in a contract.’ ” Botsco v. Davenport
Civil Rights Comm’n, 774 N.W.2d 841, 845 (2009) (quoting Kent v. Emp’t
Appeal Bd., 498 N.W.2d 687, 689 (Iowa 1993)). The statutory
authorization must be express and “ ‘must come clearly within the terms
of the statute.’ ” Id. (quoting Thorn v. Kelley, 257 Iowa 719, 726, 134
N.W.2d 545, 548 (1965)). Iowa Code section 625.29(1) is such a
statutory exception to the rule, and it allows for the recovery of attorney
fees in some civil actions that involve the State. Remer, 576 N.W.2d at
600. It provides, in part:
Unless otherwise provided by law . . . the court in a civil
action brought by the state or an action for judicial review
brought against the state pursuant to chapter 17A other
than for a rulemaking decision, shall award fees and other
expenses to the prevailing party unless the prevailing party
is the state. However, the court shall not make an award
under this section if it finds one of the following:
a. The position of the state was supported by
substantial evidence.
b. The state’s role in the case was primarily
adjudicative.
c. Special circumstances exist which would make the
award unjust.
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Iowa Code § 625.29(1)(a)–(c). Although there are several exceptions listed
under the statute, any one exception can prevent a party from being
awarded attorney fees. See id. § 625.29(1).
A. Prevailing Party. The district court declined to decide
whether Branstad was the prevailing party under the statute because it
found that the exceptions under Iowa Code section 625.29(1) applied to
prevent an award of attorney fees. Branstad contends it was error for the
district court not to address whether he was the prevailing party.
However, we have previously declined to award attorney fees under one
of the exceptions to section 625.29(1) without addressing whether the
defendant was the prevailing party. See In re Property Seized from
McIntyre, 550 N.W.2d 457, 460 (Iowa 1996). Because we ultimately
conclude that an exception to Iowa Code section 625.29(1) applies, we
decline to determine whether Branstad was the prevailing party under
the statute.
B. Exceptions to an Award of Attorney Fees Under
625.29(1). The district court relied on three of the exceptions contained
in Iowa Code section 625.29(1) to deny Branstad’s motion to recover
attorney fees. The court of appeals held none of these exceptions applied
to preclude the award of attorney fees. However, in its application for
further review, the State focused its argument largely on whether the
action of the Commission was primarily adjudicative. See Iowa Code
§ 625.29(1)(b). Focusing primarily on the statute, we must determine if
the award of attorney fees is prohibited by the exception because the
Commission’s role was primarily adjudicative.
Branstad argues that we should consider the DNR—not the
Commission—to be the “State” for purposes of the “State’s role” under
the statute. We do not agree. Iowa Code section 481A.151 provides that
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the DNR, in its investigatory role, was acting under the umbrella of the
Commission. See id. § 481A.151(2) (2009). The statute requires that
“[t]he commission shall adopt rules providing for procedures for
investigations and the administrative assessment of restitution amounts.
The rules shall establish an opportunity to appeal a departmental action
including by a contested case proceeding under chapter 17A.” Id. The
Code clearly anticipates that the DNR will act as an investigatory body
and the Commission will take the final agency action if the DNR’s
restitution assessment is appealed. See id.
The phrase “primarily adjudicative” is not defined in the Code.
When we are asked to interpret the language of a statute, we apply well-
settled principles of statutory interpretation:
The purpose of statutory interpretation is to determine the
legislature’s intent. We give words their ordinary and
common meaning by considering the context within which
they are used, absent a statutory definition or an established
meaning in the law. We also consider the legislative history
of a statute, including prior enactments, when ascertaining
legislative intent. When we interpret a statute, we assess the
statute in its entirety, not just isolated words or phrases.
We may not extend, enlarge, or otherwise change the
meaning of a statute under the guise of construction.
Schaefer v. Putnam, 841 N.W.2d 68, 75 (Iowa 2013) (internal quotation
marks omitted).
“We also consider the statute’s ‘subject matter, the object sought to
be accomplished, the purpose to be served, underlying policies, remedies
provided, and the consequences of the various interpretations.’ ” Cox v.
State, 686 N.W.2d 209, 213 (Iowa 2004) (quoting State v. Albrecht, 657
N.W.2d 474, 479 (Iowa 2003)).
While primarily adjudicative is not defined by statute, we are not
without guidance on this issue. In Remer, the court was faced with the
question of whether the board of medical examiners’ role in a disciplinary
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proceeding against a physician was primarily adjudicative under the
statute in determining whether to award attorney fees. 576 N.W.2d at
599–600. In that case, the board began an investigation against Remer,
a licensed doctor, based on complaints received by the board. Id. at 599.
The board investigated the merits of the complaint and filed formal
disciplinary charges against Remer. Id. Once the disciplinary charges
were filed against Remer, notice was served on him, and his case was
contested in front of a three-member panel of the board. Id. at 603. The
board was assisted by an impartial ALJ. Id. The attorney general
prosecuted the case against Remer. Id. at 599. Although the charges
against Remer were ultimately dismissed by the board, Remer and the
board agreed that final action by the agency was achieved. Id. at 603.
The court defined primarily adjudicative in Remer and concluded
that the board’s role was primarily adjudicative under the statute. Id. at
601, 603. “[I]f an agency’s function principally or fundamentally
concerns settling and deciding issues raised, its role is primarily
adjudicative.” Id. at 601. When a court determines whether the state’s
role is primarily adjudicative in the context of this statute, it must look at
the state’s role in the case currently in front of it, and not the state’s role
in other, similar cases or the state’s role generally. Id.
The parties agree that the framework this court set out in Remer is
appropriate for determining whether to award attorney fees. However,
they disagree as to whether the procedural history in this case is similar
enough to Remer to preclude an award of attorney fees to Branstad. The
district court found that the State’s role in this case was primarily
adjudicative because the agency’s role was to investigate, to determine if
restitution was appropriate and in what amount, and to consider the
defenses argued by Branstad. The court of appeals disagreed and
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reversed on appeal, basing its decision primarily on procedural
differences between Remer and Branstad’s case.
Although it was not exactly the same, the procedure followed by
the Commission aligns with that of Remer. Id. at 599. As in Remer, the
DNR received complaints about the fish kill and investigated it before
assessing restitution and before the hearing. Although Branstad’s
hearing was in front of an ALJ rather than a panel of the Commission,
the opinion issued by the ALJ was only a proposed decision. The
decision did not become final until it was heard and considered by the
Commission.
We also consider the term primarily adjudicative in the context of
the statute defining the role of the Commission. As defined by statute,
the role of the Commission includes “establish[ing] policy and adopt[ing]
rules,” in addition to “[h]ear[ing] appeals in contested cases pursuant to
chapter 17A.” Iowa Code § 455A.5(6)(a)–(b). A contested case is also
defined in chapter 17A as “a proceeding including but not restricted to
ratemaking, price fixing, and licensing in which the legal rights, duties or
privileges of a party are required by Constitution or statute to be
determined by an agency after an opportunity for an evidentiary
hearing.” Id. § 17A.2(5). The Commission in this case followed the exact
duties outlined in the statute—to act as an adjudicative body in a
contested hearing. See id. § 455A.5(6)(b). Although the restitution
amount requested by the DNR was ultimately found to be the result of an
improper application of AFS 24, the Commission weighed the evidence
about the fish kill, applied the rules, considered Branstad’s various
defenses, and determined that the amount in the restitution assessment
was proper. The restitution assessment was later found to be improper
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during judicial review in district court. However, this is precisely the
procedure that should be followed to correct a final agency decision.
We also rely on dictionary definitions to determine the plain and
ordinary meaning of the phrase primarily adjudicative. Webster’s
Dictionary defines “adjudicate” as “to settle finally (the rights and duties
of the parties to a court case) on the merits of issues raised,” to “enter on
the records of a court (a final judgment, order, or decree of sentence).”
Webster’s Third New International Dictionary 27 (unabr. ed. 2002). The
Commission’s action in this case falls squarely within the definition of
adjudicate. The Commission was presented with the fish kill
investigation, the restitution assessment, and various defenses raised by
Branstad. Although it was the impartial ALJ who heard the case and
made an initial decision, the Commission made the final decision after
weighing the evidence, considering the defenses, and determining the
rights and duties of the parties.
We are mindful of the concerns raised by Justice Carter in his
special concurrence in Remer regarding cases in which the potential
award of attorney fees is swallowed by the exceptions. See Remer, 576
N.W.2d at 604 (Carter, J., concurring specially). However, a
commentator who has reviewed the legislative history notes that, while
there is no explanation provided in the legislation, previous proposed
bills would have eased the ability to award attorney fees against the
State. See Samuel A. Thumma & Barbara J. Dawson, The Iowa Equal
Access to Justice Act: Is Recovery Available?, 39 Drake L. Rev. 431, 436–
42 (1989–90). These bills were rejected in favor of more limiting
language contained in the final legislation. Id. Key among legislative
concerns with prior forms of the bill was the cost to the State if attorney
fees were awarded often. Id. at 441.
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Because we find the State’s role was primarily adjudicative and the
statutory exception contained in Iowa Code section 625.29(1)(b) applies,
an award of attorney fees is not proper in this case. Because any one
exception can prevent the district court from awarding attorney fees
under the statute, we need not address the other exceptions that may
apply under Iowa Code section 625.29(1).
IV. Conclusion.
We hold that the State’s role in this case—the final decision of the
Commission regarding the amount of restitution for the fish kill—was
primarily adjudicative and falls within the exception found in Iowa Code
section 625.29(1)(b) (2011). Therefore, the district court was correct in
its application of the law in denying an award of attorney fees to
Branstad. We vacate the decision of the court of appeals and affirm the
judgment of the district court.
DECISION OF COURT OF APPEALS VACATED; DISTRICT
COURT JUDGMENT AFFIRMED.