Hon. Lawrence G. Wasden v. Idaho State Board of Land Commissioners

IN THE SUPREME COURT OF THE STATE OF IDAHO
Docket No. 37528
IN THE MATTER OF THE VERIFIED )
PETITION FOR ISSUANCE OF A WRIT )
OF PROHIBITION. )
--------------------------------------------------------
) Boise, June 2010 Term
HON. LAWRENCE G. WASDEN, the )
Attorney General of Idaho, ex rel. the STATE ) 2010 Opinion No. 128
OF IDAHO, )
) Filed: December 1, 2010
Petitioner, )
) Stephen Kenyon, Clerk
v. )
)
IDAHO STATE BOARD OF LAND )
COMMISSIONERS, and GEORGE BACON, )
in his official capacity as Director of the Idaho )
Department of Lands, )
)
Respondents. )
Petition for Issuance of Writ of Prohibition filed by Hon. Lawrence G. Wasden,
Attorney General.
The motion to dismiss is granted.
Hon. Lawrence G. Wasden, Attorney General, Boise, for petitioner. Melissa N.
Moody argued.
Hawley, Troxell, Ennis & Hawley, Boise, for respondents. Merlyn W. Clark
argued.
_______________________________________________
HORTON, Justice
This matter comes before this Court on a petition for issuance of a writ of prohibition,
filed by Attorney General Lawrence Wasden. Wasden seeks a writ of prohibition to stop the
Director of the Idaho Department of Lands (IDL) George Bacon from executing new lease
agreements on recreational home sites located on Priest Lake and Payette Lake (cottage sites).
Wasden argues that the proposed lease agreements (cottage leases) for the cottage sites violate
both the Idaho Constitution and I.C. § 58-310A by: (1) failing to secure the maximum long-term
1
financial return for the beneficiaries of the Idaho public lands trust; and (2) failing to generate
market rent. Respondents have moved to dismiss the petition, arguing that the decision of the
Idaho State Board of Land Commissioners (the Land Board) regarding rental rates was not in
excess of its discretion and that issuance of a writ of prohibition is inappropriate due to the
availability of other remedies. Because we find that there is a plain, speedy and adequate remedy
in the ordinary course of law, we do not reach the question of whether the State Board of Land
Commissioners (the Board) is attempting to act in excess of its jurisdiction, and dismiss the
petition for writ of prohibition.
I. CONSTITUTIONAL AND STATUTORY BACKGROUND
The federal government granted federal lands to the Idaho Territory, later the State of
Idaho, through § 4 of the Idaho Admission Bill of 1890, for the purpose of supporting public
education. Article IX, section 7 of the Idaho Constitution established the State Board of Land
Commissioners, comprised of the governor, superintendent of public instruction, secretary of
state, attorney general and state controller. The Board is given ―the discretion, control and
disposition of the public lands of the state, under such regulations as may be prescribed by law.‖
Id. Article IX, section 8 of the Idaho Constitution states, inter alia:
It shall be the duty of the state board of land commissioners to provide for the
location, protection, sale or rental of all the lands heretofore, or which may
hereafter be granted to or acquired by the state by or from the general
government, under such regulations as may be prescribed by law, and in such
manner as will secure the maximum long-term financial return to the institution to
which granted or to the state if not specifically granted . . . .
Idaho Code § 58-304 governs the leasing of state lands, and provides, inter alia, ―[t]he
state board of land commissioners may lease any portion of the state land at a rental amount
fixed and determined by the board.‖ Idaho Code § 58-310(1) states:
When two (2) or more persons apply to lease the same land, the director of the
department of lands, or his agent, shall, at a stated time, and at such place as he
may designate, auction off and lease the land to the applicant who will pay the
highest premium bid therefore, the annual rental to be established by the state
board of land commissioners.
However, the cottage sites were specifically exempted from the conflict auction requirement by
I.C. § 58-310A, wherein the legislature determined that the stability gained by continuing to
lease the cottage sites to existing long-term lessees was the best means of achieving the
maximum long-term financial return to the beneficiaries. Specifically, I.C. § 58-310A provides
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that ―[i]n the absence of the conflict application and auction procedure in the single family,
recreational cottage site and homesite lease, and lease renewal process, the board shall insure that
each leased lot generates market rent throughout the duration of the lease.‖
Idaho Code § 58-101 established the IDL as the executive agency charged with assisting
the Board in carrying out its constitutional duty of administering state endowment lands. IDL‘s
powers and responsibilities are set forth in I.C. § 58-119. George Bacon is the Director of IDL
(Director). The Director of IDL is tasked with countersigning leases issued by the president of
the Board for rental of state endowment lands, pursuant to I.C. § 58-121.
Section 20.03.13 of the Idaho Administrative Procedure Act (IDAPA) provides the
specific structure that is employed in the leasing of the state endowment lands. IDAPA
20.03.13.027 is titled ―equity sharing premium rental‖ and states that:
Equity sharing premium rental shall be required through December 31, 1992 or
until contract rents have been increased to full market rents, whichever comes
first, and is due and payable prior to lease assignment and/or transfer and shall be
computed as follows: Assignment Payment. All assignments and/or transfers
shall pay a rate of ten percent (10%) of the leasehold value as determined under
Section 025.
II. FACTUAL AND PROCEDURAL BACKGROUND
Each cottage site is owned in fee simple by the State of Idaho, and held in trust for the
benefit of the public schools, normal schools (Idaho State University, Department of Education,
and Lewis-Clark State College), and the state hospital (collectively ―the Beneficiaries‖). The
Board began renting cottage sites in Idaho in 1924, but the majority of lots were not leased until
sometime between the mid 1940‘s and early 1950‘s. The State originally leased the cottage sites
as bare land, and the cottage site lessees (Lessees) themselves constructed homes and other
structures and improvements upon the land for their own use and benefit. From 1945 to 1988
cottage sites were leased for flat rates, with sporadic adjustments (generally rates were adjusted
every three-to-five years, with an extreme of fourteen years between adjustments).
The Board has long allowed the Lessees to sell or assign their leasehold interests to
others for profit. IDAPA 20.03.13.10.06, defines ―Leasehold Value‖ as ―[t]he value which
accrues to a leasehold estate when the contract rent is below the market rent.‖ This proposition
has also been recognized by IDL and its former and current directors, former and current
members of the Board, and professional appraisers. Leasehold values are determined by
3
subtracting the value of improvements and personal property from the total sales price. IDAPA
20.03.13.25.
As leasehold values grew it became clear to the Board that it was not achieving market
rent, and in 1981 the Board invented the concept of ―premium rent‖ to try to decrease the amount
of profit the Lessees were reaping from the gap between actual and market rent. The term
―premium rent‖ is a misnomer; it would be more accurate to refer to this mechanism as a
―leasehold transfer fee.‖ Premium rent requires that the lessee pay the State a certain percentage
of the value that the lessee receives from selling his leasehold interest in a cottage site. 1 In 1981
this percentage was set at 10%. So, for example, if a lessee sold his leasehold for $160,000 and
had placed $60,000 of improvements and personal property on the land, the leasehold value
would be $100,000. Of that $100,000 the State would be entitled to $10,000 and the remaining
$90,000 would go to the selling lessee. Premium rent was conceived of as a temporary measure,
the utility and impact of which would disappear as rents reached fair market value. In fact the
IDAPA provision establishing premium rent – IDAPA 20.03.13.027 – reproduced above, expired
on December 31, 1992. Nevertheless the Board and IDL have continued to apply premium rent
to leasehold sales.2
In 1986, a study by IDL showed that the State was receiving a rate of return on the
cottage sites of approximately .67% per year. In an attempt to increase the return for the
Beneficiaries the Board abandoned the flat rental rates and instead adopted a rental rate target at
2.5% of each cottage site‘s appraised value, to be phased in (incrementally increased) over a ten-
year period.
From 1905 until 1991 the cottage sites were subject to conflict auctions pursuant to I.C.
§ 58-310, and its statutory predecessors. Idaho Code § 58-310 provides that, when a lease term
expires and more than one party makes application to lease the property, an auction is held
amongst the applying parties to determine which is willing to pay the most to lease the property.
Despite having been subject to this provision, no conflict auction had been carried out on a
cottage site until 1990. It is likely that this apparent lack of interest was attributable to lack of
public awareness, largely due to the fact that the Board had a policy against advertising when
1
Premium rent is only collected when a lessee transfers his leasehold for profit - in excess of the money he
expended in developing the property. Where a lessee assigns his leasehold interest to another for no money there is
no premium rent, as there is no basis upon which to determine leasehold value.
2
A report prepared by a subcommittee that was appointed by the Board, shows that from 2003 until approximately
2010, leasehold transfers brought in over $25,000,000 for lessees, but only $2,700,000 for the Beneficiaries.
4
cottage leases were expiring, and posted notices of availability only on the local court house
bulletin board. In 1990 the Board received conflicting applications for two different cottage
sites, where both the existing lessees and an outside party applied to lease. Instead of holding a
conflict auction as I.C. § 58-310 required, IDL requested that the legislature draft legislation
exempting cottage sites from I.C. § 58-310. As a result, I.C. § 58-310A was passed, eliminating
conflict auctions as a means of establishing the maximum long-term financial return and instead
requiring that the Board ensure that the cottage leases generate market rent throughout their
duration.
Following the passage of I.C. § 58-310A in 1991, the Board reexamined the rental rates
charged for cottage sites in order to comply with the statutory mandate of obtaining market rent.
In order to ascertain market rent, the Board employed a consulting group to perform appraisals
on 13 cottage sites at Payette Lake and 16 cottage sites at Priest Lake. After conducting these
appraisals the consulting group recommended variable rental rates, from 4.5% of market value
for some cottage sites, up to 5.5% for others. A subcommittee appointed by the Board
considered the consultant recommendations, but nevertheless recommended that the Board
continue the already implemented 2.5% rental rate, with a target rent based on the 1992
appraisal, phased in over 10 years. One Board member expressed his discomfort with ignoring
the consultant‘s recommendations, warned that not setting a new target rate for 10 years would
place the cottage leases even further below market rent than they already were, and stated that
the phase-in schedule for rent must be abandoned in order to ―generate market rent throughout‖
the lease term, as required by I.C. § 58-310A. IDL also advised the Board against freezing the
target rental rate at the 1992 appraised values. The Board nevertheless voted to implement the
subcommittee‘s recommendations.3
By 1997, leasehold values had escalated sharply4 and for some cottage sites the local
property taxes actually exceeded the rent IDL was collecting from the Lessees. The escalating
property value, coupled with the 5.3% cap on rent increases from year-to-year, meant that the
return on the cottage sites was only slightly higher than it had been in 1986, at 1%. IDL
3
In fact, far from removing the phase-in schedule, the Board further restricted the rate at which rent could increase
from year to year. The Board had previously capped rent increases at 25% over the previous year‘s rent, but elected
to lower that cap to 5.3%.
4
In 1994 leaseholds for lakefront cottage sites at Payette Lake were averaging nearly $285,000, non-lakefront
cottage sites at Payette Lake were averaging $59,000, and lakefront sites at Priest Lake were averaging slightly over
$96,000.
5
concluded that it was quite apparent that the rent being collected under the cottage leases was
below market rent. IDL concluded that all available market data suggested that market rent
would be somewhere between 3% and 5%, noting that most data supported a 5% rate. 5 IDL
concluded that the Board would not be complying with its constitutional duty if it continued with
its existing rental formula. The Board nonetheless voted to continue the 2.5% rate, though it did
create a new target rent based on the most recent property assessment — to be updated on an
annual basis — eliminated the phase-in period, and removed the yearly cap on rent increases.6
Following its 1997 vote, the Board commissioned appraisals of the cottage sites on each
lake, asking the appraisers to determine market rent. The appraisers recommended a rental rate
of 3.5% at Priest Lake and between 4% and 6% at Payette Lake. In 1998 a subcommittee of the
Board met to consider the recommendations of the appraisers and IDL. After recognizing the
strong support in market data for rates of 3.5% at Priest Lake and 4% at Payette Lake, the
subcommittee nevertheless recommended that the Board maintain the 2.5% rate, as it
―recognizes and takes into consideration the lessees‘ sweat equity and site improvements.‖
Rental rates have ostensibly remained at 2.5% since 1998.
Due to escalating property values around the cottage sites at Payette Lake, the 2.5% rate
called for increases in rental rates of between 48% and 87% from 2007 to 2008. In response to
these large pending increases the Board voted to freeze Payette Lake cottage site rental rates at
the 2007 level. The rental rate formula called for an increase in rent for both the Payette Lake
and Priest Lake cottage sites from 2008 to 2009, but the Board voted to freeze rents at the 2008
level (which was really the 2007 level for the Payette Lake cottage sites, due to the freeze the
year before). For 2010 the Board again froze rent, leaving the 2007 rate in effect at Payette Lake
and the 2008 rate in effect at Priest Lake.
On June 12, 2007, the Board appointed Secretary of State Ysursa and Superintendent of
Public Education Luna to a subcommittee (the Cottage Site Subcommittee) tasked with making
recommendations to the Board on market rate for the cottage sites. The goal of the Cottage Site
Subcommittee was to recommend an updated rental formula to be included in cottage leases for
the ten-year lease term to begin on January 1, 2011.
5
IDL noted that the current 2.5% rate ―is supported only through an earlier appraisal which reveals that Newport
Beach City, California has an actual rate of return of 1.8% to 2.5%.
6
The Board also implemented a ―hardship provision‖ under which ―any lessee forced to sell due to escalating rental
could ask for deferment of any increase in rental for a period of up to three years. Payment of deferred rent would
be due upon sale of the leasehold or at the expiration of the deferment.‖
6
The Cottage Site Subcommittee recommended a new lease structure with annual rent set
at 4% of the average market value of each cottage site over the previous 10 years, to be updated
annually (the so-called ―rolling average‖). However, the 4% rolling average would not be
reached until the end of a 5-year phase-in period during which rent would be incrementally
increased from its current level to the target rent. The new cottage leases would also include
premium rent, though under a more complicated formula than that previously employed. The
Cottage Site Subcommittee recommended that ―premium rent be calculated at 10% of the gross
leasehold value or 50% of the net leasehold value, whichever is the greater amount for the
endowment.‖ The Cottage Site Subcommittee explained that ―[n]et leasehold value shall be
calculated by subtracting the original leasehold value (sales price less the value of tenant
improvements) of the lessee who is transferring the lease from the leasehold value (sale price
less the value of tenant improvements) when a transfer occurs.‖ It was clarified during a regular
Board meeting that the Cottage Site Subcommittee was recommending the 50% net leasehold
premium rent be phased in over a period of 5 years.
The Director of IDL analyzed the Cottage Site Subcommittee recommendations and
determined that the rolling average system of determining rental rates would result in actual
return being approximately 2.4% assuming land value appreciates at 4.8% a year, or 1.5% if land
appreciates at 10.3% annually. The Director concluded ―I do not believe the Subcommittee‘s
recommendation ensures that each leased lot generates market rent throughout the duration of the
lease, but neither does the current system.‖ On March 16, 2010, the Board voted 3-2 for the new
lease structure as recommended by the Cottage Site Subcommittee.
On March 24, 2010, Attorney General Wasden submitted a Verified Petition for Issuance
of a Writ of Prohibition with this Court. Wasden alleges that the Board, of which he is a
member, is acting in excess of its jurisdiction under the Idaho Constitution and statutory law in
attempting to lease state endowment lands for less than market rent.
On April 8, 2010, the Board submitted a Motion to Dismiss with this Court, pursuant to
Idaho Rule of Civil Procedure 12(b)(6). The Board argues that Wasden has failed to state a
claim upon which relief may granted. In the Board‘s Memorandum in Support of Motion to
Dismiss, filed the same day as the Motion to Dismiss, it argues that Wasden failed to
demonstrate either of the two requisites that must be established in order for this Court to issue a
writ of prohibition.
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This Court heard oral argument on June 9, 2010.
III. STANDARD OF REVIEW
In Henry v. Ysursa, we explained:
This Court has original jurisdiction to issue writs of prohibition. Idaho
Const. Art. V, §9. ―The writ of prohibition is not a remedy in the ordinary course
of law, but is an extraordinary remedy.‖ Maxwell v. Terrell, 37 Idaho 767, 774,
220 P. 411, 413 (1923). Before this Court will issue such writ, two contingencies
must be shown: ―the tribunal, corporation, board or person is proceeding without
or in excess of the jurisdiction of such tribunal, corporation, board, or person, and
that there is not a plain, speedy, and adequate remedy in the ordinary course of
law.‖ Olden v. Paxton, 27 Idaho 597, 600, 150 P. 40, 41 (1915). The word
―jurisdiction‖ when used in reference to a writ of prohibition includes the power
or authority conferred by law. Crooks v. Maynard, 112 Idaho 312, 319, 732 P.2d
281, 288 (1987) (where administrative orders were within the ―power and
authority‖ of the administrative district judge, a writ of prohibition would not
issue); Stein v. Morrison, 9 Idaho 426, 455, 75 P. 246, 256 (1904) (quoting from
Maurer v. Mitchell, 53 Cal. 289, 292 (1878)) (―The word ‗jurisdiction,‘ when
used in connection with ‗prohibition,‘ would be at once understood as being
employed in the sense of the legal power or review. State v. District Court, 143
Idaho 695, 699, 152 P.3d 556, 570 (2007).
148 Idaho 913, __, 231 P.3d 1010, 1012 (2008). The party seeking the writ of prohibition carries
the burden of proving the absence of that adequate, plain, or speedy remedy. See Edwards v.
Indus. Comm’n, 130 Idaho 457, 460, 943 P.2d 47, 50 (1997) (applying the identical ―plain,
speedy, and adequate‖ requirement for writs of mandate).
IV. ANALYSIS
As noted above, ―[w]rits of prohibition are extraordinary and are issued with caution.‖
Gibbons v. Cenarrusa, 140 Idaho 316, 318, 92 P.3d 1063, 1065 (2002). Without reaching the
question of whether the Land Board has proceeded in excess of its jurisdiction, we find that there
is ―a plain, speedy, and adequate remedy in the ordinary course of law‖ as required by I.C. § 7-
402, a remedy that is available by means of joining an action for declaratory judgment with a
request for injunctive relief.
The use of the word ―plain‖ in the statute has a readily apparent meaning. The remedy
must be evident, obvious, simple or not complicated. For lawyers desirous of having another
party act or refrain from acting in a specified manner, a request for injunctive relief is the
obvious course of action. This Court has long recognized that a party may join an action for
declaratory judgment with a prayer for injunctive relief. Indeed, during the seventy year history
of cases in which this Court has considered appeals involving such joined claims, starting with
8
Century Distilling Co. v. Defenbach, 61 Idaho 192, 99 P.2d 56 (1940) and ending most recently
in Lattin v. Adams Cnty., 149 Idaho 497, 236 P.3d 1257 (2010), this Court has never questioned
the propriety of joining such actions.7
Thus, the only remaining question is whether injunctive relief is a sufficiently ―speedy‖
remedy. We are convinced that the availability of preliminary injunctive relief is sufficiently
―speedy‖ as to warrant denial of the requested writ of prohibition.
The plaintiff in such an action8 would be entitled to a preliminary injunction upon a
showing that it appears that there is entitlement to relief and such relief would consist of
―restraining the commission or continuance of the acts complained of. . . .‖ I.R.C.P. 65(e)(1).
While injunctions are equitable in nature, they are within the scope of the ―adequate remed[ies]
in the ordinary course of law‖ contemplated by I.C. § 7-402. See Butters v. Hauser, 131 Idaho
498, 501, 960 P.2d 181, 184 (1998) (―The existence of an adequate remedy in the course of legal
procedure, either legal or equitable in nature, will prevent the issuance of a writ of mandamus.‖).
A preliminary injunction would prevent the threatened harm which underlies the presently
requested writ of prohibition. Assuming that the plaintiff is successful in persuading the district
court of the merits of its position, it would be entitled to a declaration that the Land Board‘s
actions did not comply with I.C. § 58-310A or Article IX, section 8 of the Idaho Constitution.
Permanent injunctive relief would then be appropriate.
In short, we agree with the reasoning of the Idaho Court of Appeals‘ decision in
Agricultural Services, Inc. v. City of Gooding, 120 Idaho 627, 818 P.2d 331 (Ct. App. 1991)
(―ASI‖). In ASI, the court observed that, as of 1991, the decisions of this Court which recognized
the writ of prohibition as a ―proper and appropriate remedy for violations of statute by a public
body or official‖ predated the adoption of the declaratory judgment act. Id. at 629, 818 P.2d at
333. While this Court has not shown much hesitance to issue writs of prohibition in the years
7
The dissent writes that ―a stay or injunction would only perpetuate [any violation by the land board], not remedy it
in an adequate manner . . . .‖ We note that a writ of prohibition is not inherently superior to injunctive relief as a
remedy. A court‘s order enjoining behavior is enforceable in precisely the same manner as that of a writ of
prohibition. Enforcement of either can only come through exercise of the court‘s contempt powers.
8
The dissent‘s argument that declaratory or injunctive relief will not be available to Wasden is effectively a
suggestion that he lacks standing. There has been no suggestion by the parties to this action that Wasden lacks
standing to seek a writ of prohibition and, without the benefit of briefing from the parties, we can discern no evident
basis to conclude that Wasden has standing to obtain the requested writ of prohibition while similarly lacking
standing before the district court. Without deciding the question whether Wasden would have standing to seek
declaratory or injunctive relief, it is evident that the beneficiaries would have standing. Selkirk-Priest Basin Ass’n,
Inc. v. State ex re. Andrus, 127 Idaho 239, 242, 899 P.2d 949, 952 (1995).
9
since ASI was decided, those decisions have conspicuously failed to closely examine the question
of a ―plain, speedy, and adequate‖ alternative. Without discussing each of these cases, we
simply observe that this Court never addressed this requirement in view of the availability of
declaratory and injunctive relief.
It is a principle of universal application, and one which lies at the very foundation
of the law of prohibition, that the jurisdiction is strictly confined to cases where
no other remedy exists; and it is always a sufficient reason for withholding the
writ, that the party aggrieved has another and complete remedy at law.
Taylor v. Girard, 54 Idaho 787, 792, 36 P.2d 773 (1934) (quoting Kabadian v. Doak, 65 F.2d
202 (Ct. App. D.C. 1933)). The avenues of preliminary and declaratory injunctive relief fit this
description.
In so holding, we note that injunctive relief will be at least as effective as the issuance of
the writ and, arguably, will be more effective. The Court‘s issuance of the writ of prohibition
would not, itself, determine what appropriate market rates are. Rather, a grant of the writ would
merely conclude that the new leases do not comply with the requirements of I.C. § 58-310A.
Any decision of what the proper rental rates are or should be would be left to future action of the
Land Board.
―[P]rohibition arrests proceedings which are without or in excess of the jurisdiction‖
possessed by the court or body in question, Stein v. Morrison, 9 Idaho 426, 455, 75 P. 246, 256
(1904), and serves to preserve the status quo wherein the court or body is acting within its
jurisdiction. The Attorney General‘s position is based upon the premise that the Land Board has
never complied with the requirements of I.C. § 58-310A. Thus, there is no status quo wherein
the Land Board has acted within its jurisdiction to be preserved. We have always said that the
writ of prohibition is ―granted only when the court is satisfied that the remedy is appropriate.‖
Clark v. Ada Cnty. Bd. of Comm’rs, 98 Idaho 749, 752, 572 P.2d 501, 504 (1977); see also
Pfirman v. Probate Court of Shoshone Cnty., 57 Idaho 304, 309, 64 P.2d 849, 850 (1937)
(―Being an extraordinary writ, it should not issue in doubtful cases . . . .‖) (quoting Rust v.
Stewart, 7 Idaho, 558, 561, 64 P. 222, 223 (1901).
This Court has also stated that the writ will not issue when its ―effectiveness is doubtful.‖
Clark, 98 Idaho at 752, 572 P.2d at 504. The legal issues presented by the Attorney General‘s
claims involve the scope of the Land Board‘s discretion to determine ―market rent‖ as required
by I.C. § 58-310A. The determination of ―market rent‖ is fundamentally a factual determination
10
although the statements of three-fifths of the membership of the Land Board do indicate that the
leases in question do not achieve the level of market rent. Were we to issue the writ under these
circumstances, it would certainly serve to warn the members of the Land Board to exercise
caution in stating their views as to whether future lease terms comply with the requirements of
I.C. § 58-310A, but it would not otherwise serve to prohibit future conduct in violation of the
Land Board‘s statutory or constitutional duties. In Clark, this Court stated that a writ of
prohibition will not issue unless ―the writ will effectively prevent the respondent‖ from acting
without or in excess of its jurisdiction. Id. If the writ will not have this effect, it will not be
issued as it would merely be an idle gesture. Id. Instead, in an action for declaratory and
injunctive relief, the district court will be in the best possible position to assess the fundamental
factual question of whether the Land Board has violated its duties as trustee under Article IX,
section 8, its statutory duties under I.C. § 58-310A, some combination thereof, or whether it has
acted within its discretion.
As there is a plain, speedy, and adequate remedy available and because issuing the
requested writ will not be any more effective in addressing the underlying questions, we grant
the Land Board‘s motion to dismiss.
V. CONCLUSION
We grant the Land Board‘s motion to dismiss, finding that there is a plain,
speedy, and adequate remedy in the ordinary course of law such that the extraordinary remedy of
a writ of prohibition would be improper.
Chief Justice EISMANN and Justice Pro Tem TROUT CONCUR.
BURDICK, J. dissenting:
The facts in this case are not in dispute. The record clearly demonstrates that the Land
Board is exceeding its discretion in leasing the cottage sites for less than market value and failing
to obtain the maximum long-term financial return for the beneficiaries, which is a violation of
both I.C. § 58-310A and the Idaho Constitution. The majority does not deny this, instead finding
that the Attorney General has other plain, speedy and adequate remedies available.
A. There is no other plain, speedy and adequate remedy available in the ordinary course of
law.
It should be noted that the requirement that no other ―plain, speedy and adequate‖ remedy
exist in the ordinary course of law is phrased in the conjunctive. See Henry v. Ysursa, 148 Idaho
11
913, __, 231 P.3d 1010, 1012 (2008). That is to say, this prong is satisfied when there is no
remedy in the course of law which satisfies all three criteria, being plain, speedy and adequate.
To the extent the proposed cottage lease structure violates the Board‘s constitutional and/or
statutory mandates, a stay or injunction would only perpetuate that violation, not remedy it in an
adequate manner, let alone a speedy one.
I wish to initially note the rather cavalier manner in which the majority assumes that: (1)
a preliminary injunction may be obtained in this case; or (2) that the Attorney General may
obtain a declaratory judgment.
Idaho Rule of Civil Procedure 65(e) allows for the granting of a preliminary injunction in
the following cases:
(1) When it appears by the complaint that the plaintiff is entitled to the
relief demanded, and such relief, or any part thereof, consists in restraining the
commission or continuance of the acts complained of, either for a limited period
or perpetually.
(2) When it appears by the complaint or affidavit that the commission or
continuance of some act during the litigation will produce waste, or great or
irreparable injury to the plaintiff.
(3) When it appears during the litigation that the defendant is doing, or
threatens, or is about to do, or is procuring or suffering to be done, some act in
violation of the plaintiff‘s rights, respecting the subject of the action, and tending
to render the judgment ineffectual.
(4) When it appears, by affidavit, that the defendant during the pendency
of the action, threatens, or is about to remove, or to dispose of the defendant‘s
property with intent to defraud the plaintiff, an injunction order may be granted to
restrain the removal or disposition.
(5) A preliminary injunction may also be granted on the motion of the
defendant upon filing a counterclaim, praying for affirmative relief upon any of
the grounds mentioned above in this section, subject to the same rules and
provisions provided for the issuance of injunctions on behalf of the plaintiff.
(6) The district courts, in addition to the powers already possessed, shall
have power to issue writs of injunction for affirmative relief having the force and
effect of a writ of restitution, restoring any person or persons to the possession of
any real property from the actual possession of which the person or persons may
be ousted by force, or violence, or fraud, or stealth, or any combination thereof, or
from which the person or persons are kept out of possession by threats whenever
such possession was taken from them by entry of the adverse party on Sunday or
a legal holiday, or in the nighttime, or while the party in possession was
temporarily absent therefrom. The granting of such writ shall extend only to the
right of possession under the facts of the case, in respect to the manner in which
the possession was obtained, leaving the parties to their legal rights on all other
questions the same as though no such writ had issued: provided, that no such writ
12
shall issue except upon notice in writing to the adverse party of at least five (5)
days of the time and place of making application therefore.
Here, a preliminary injunction may not be entered under I.R.C.P. 65(e)(2), as it is obvious
that there is no injury to Attorney General Wasden in this case. An injunction is also unavailable
under I.R.C.P. 65(e)(3) as there has been no allegation that the Board‘s actions violated
Wasden‘s rights. Likewise, I.R.C.P. 65(e)(4) & (6) are clearly unavailable as no property has
been removed or taken from any party. Finally, I.R.C.P. 65(e)(5) pertains to counterclaims and
is clearly inapplicable here. Therefore, the only possible basis upon which Wasden could obtain
a preliminary injunction is I.R.C.P. 65(e)(1), and it is far from certain that Wasden would be
entitled to relief under that section.
In the event that a preliminary injunction is not entered, the unconstitutional actions of
the Land Board will continue until a declaratory judgment finally works its way through the
court system, much like the school funding case, which took fifteen years. See State v. Dist.
Court, 143 Idaho 695, 152 P.3d 566 (2007). Speediness aside, it is unclear that the Attorney
General even has standing to obtain a declaratory judgment.
Idaho Code § 10-1202 states:
Any person interested under a deed, will, written contract or other writings
constituting a contract or any oral contract, or whose rights, status or other legal
relations are affected by a statute, municipal ordinance, contract or franchise, may
have determined any question of construction or validity arising under the
instrument, statute, ordinance, contract or franchise and obtain a declaration of
rights, status or under legal relations thereunder.
It is obvious that the Attorney General is not a person interested under a deed, will, written
contract or other writing constituting a contract, or an oral contract, so the first basis for relief
under the declaratory judgment act is unavailable. It is likewise clear that the Attorney General‘s
―rights, status or other legal relations‖ are not being affected, therefore the second basis for relief
is unavailable. See also Sunshine Mining Co. v. Carver, 34 F. Supp. 274 (D. Idaho 1940);
Selkirk-Priest Basin Ass’n v. State ex rel. Andrus, 127 Idaho 239, 899 P.2d 949 (1995).
Presuming that the Attorney General had standing to initiate a declaratory judgment
action, the first thing that would occur in this ―speedy‖ remedy proceeding is that all of the
parties who filed intervening briefing in this matter would request to join as parties to the action.
This could potentially include each and every lessee of the cottage sites. Each lessee would have
13
to be given a chance to present their side of the case, and voluminous discovery would
undoubtedly result.
The majority cites to the Court of Appeals decision in Agricultural Services, Inc. v. City
of Gooding, 120 Idaho 627, 818 P.2d 331 (Ct. App. 1991), in attempting to eliminate this Court‘s
constitutionally provided power to issue writs of prohibition. The legislature, in enacting the
Declaratory Judgment Act, did not intend to replace the writ of prohibition as an avenue of relief,
but following the logic of the majority here that is essentially what would result.
B. The Board is acting in excess of its jurisdiction in attempting to implement leases that
will not achieve market rent, in contravention of I.C. § 58-310A, as applied by the Idaho
Constitution.
Wasden argues that by adopting the cottage site lease terms at issue the Board is acting in
excess of its jurisdiction under both Article IX, section 8, of the Idaho Constitution and I.C. § 58-
310A. The Board responds that it is granted broad discretion under the Idaho Constitution to
manage the endowment property in a manner designed to achieve maximum long-term financial
returns to the Beneficiaries.
This Court addressed the issue of jurisdiction, as it applies to the scope of the Board‘s
action—in the context of a petition for a writ of prohibition—in the case of Balderston v. Brady.
17 Idaho 567, 107 P. 493 (1910). In Balderston, the Board was attempting to give some of the
endowment lands away to private citizens (settlers) for free. Id. In discussing whether the Board
was acting outside of its jurisdiction, the Balderston Court wrote:
In many of the matters coming before the board in reference to state lands they
must exercise their judgment and discretion, and it is a well-settled principle of
law that in such cases the courts will not attempt to control or supervise the
discretion vested in the officers of a co-ordinate branch of the government. . . .
The finding of the board on the facts of any matter of inquiry is final and
conclusive . . . but an error made in applying the law to the facts, or an erroneous
construction of the law by the Land Department, may be reviewed and corrected
by the courts. In Pierson v. [State Board of Land Commissioners, 14 Idaho 163,
93 P. 775 (1908),] this court said: ―If they [the Board] act in a matter without
jurisdiction, there is a remedy; if they misapply the law to the fact found, or in
case of fraud, there is a remedy.
It is obvious that if the contemplated action of the Board of Land
Commissioners involves the exercise of a judgment or discretion vested in them
by law, then this court cannot and will not attempt to control that discretion, or in
any manner interfere with or direct the action of the board. If, on the other hand,
the action proposed is without authority of law, or has no legal sanction or
authority, or is an attempt to act, not upon the discretion and judgment of the
board, but upon a substituted judgment or discretion, or upon the judgment,
14
discretion, and direction of some other board or body, then and in such cases this
court may interrupt them and declare the law on the subject, and point out to
them the legal scope within which their judgment and discretion must be
exercised.
Id. at 575, 107 P. at 495 (emphases added) (second alteration in the original). In Balderston, the
legislature, at the urging of the governor, passed a joint resolution directing the Board to
relinquish title to certain state lands to private citizens. Id. at 577, 107 P. at 495–96. This Court
issued the requested writ of prohibition, finding that the joint resolution was not a law of the state
and therefore could not be relied upon by the Board as authority. Id. at 579–80, 107 P. at 496.
One year after Balderston, this Court was again asked to issue a writ of prohibition
against the Board in Pike v. State Board of Land Commissioners. 19 Idaho 268, 113 P. 447
(1911). In Pike, the Board proposed to sell almost 24,000 acres of state lands to the Potlach
Lumber Company, the highest bidder at public auction, at the appraised value for that land. Id.
at 272–75, 113 P. at 450. The appellant offered many reasons why this Court should issue a writ
of prohibition preventing the proposed sale, including his belief that auctioning off land that is
currently subject to a long-term lease (Potlach Lumber Company had a 20-year lease to remove
the timber from the property, 11 years of which remained at the time of the proposed sale) can
never bring the State the ―maximum possible amount‖ 9 for lands sold. Id. at 287, 113 P. at 453-
54. The Pike Court declined to issue a writ of prohibition, finding that ―[i]t is self-evident . . .
that the lands can be sold at public auction for the ‗maximum possible amount‘ which such lands
will bring at that time and under conditions then existing.‖ Id. at 287, 113 P. at 454. This Court
noted that it is a doubtful or questionable business policy to offer lands for public auction under
such circumstances, but that the decision to do so was ―purely a matter of policy to be
determined by the State Board of Land Commissioners, and if they act unwisely they must
account to the electors of the state, but their judgment and discretion in such matters cannot be
controlled by the courts.‖ Id. The Court also noted that:
the Constitution vests the control, management and disposition of state lands in
the State Board of Land Commissioners. Section [VIII], art. 9. They are, as it
were, the trustees or business managers for the state in handling these lands, and
on matters of policy, expediency and the business interest of the state, they are the
9
At the time when Pike was issued Article IX, section 8 of the Idaho Constitution required the Board to manage the
endowment lands in a manner that brought the ―maximum possible amount therefor‖. In 1982 this provision was
amended to the current version, which requires the Board to ―secure the maximum long-term financial return‖. S.L.
1982, p. 935.
15
sole and exclusive judges so long as they do not run counter to the provisions of
the Constitution or statute.
Id. at 286, 113 P. at 453 (emphasis added).
In Idaho Watersheds Project, Inc. v. State Board of Land Commissioners, a conflict
auction took place for one of the state endowment lands, pursuant to I.C. § 58-310, as the then-
current lessee and the Idaho Watersheds Project (IWP) both applied to lease the land. 128 Idaho
761, 918 P.2d 1206 (1996). At the conflict auction IWP placed the only bid; the Board
nevertheless awarded the lease to the then-current lessee. Id. IWP appealed to this Court,
arguing that the Board exceeded its authority in granting the lease to a non-bidding party after
the conflict auction had been held. Id. This Court noted that although the Board had general
discretion to choose the bid that, in its judgment would ―secure the maximum long term financial
return‖, it could not award the lease to a party that had failed to participate in the I.C. § 58-310
auction at all. Id. at 766, 918 P.2d at 1211. This Court reemphasized that ―the constitution and
laws of the state should at all times be followed and upheld and sustained by the courts, and
should not be ignored by public officers in the administration of public affairs of the state.‖ Id.
(quoting Tobey v. Bridgewood, 22 Idaho 566, 584, 127 P. 178, 184-85 (1912), overruled on other
grounds by Idaho-Iowa Lateral & Reservoir Co. v. Fisher, 27 Idaho 695, 151 P. 998 (1915)).
In Henry v. Ysursa, this Court noted that:
[t]he word ―jurisdiction‖ when used in reference to a writ of prohibition includes
powers or authority conferred by law. Crooks v. Maynard, 112 Idaho 312, 319,
732 P.2d 281, 288 (1987) (where administrative orders were within the ―power
and authority‖ of the administrative district judge, a writ of prohibition would not
issue); Stein v. Morrison, 9 Idaho 426, 455, 75 P. 246, 256 (1904) (quoting from
Maurer v. Mitchell, 53 Cal. 289, 292 (1878)) (―The word ‗jurisdiction,‘ when
used in connection with ‗prohibition,‘ would be at once understood as being
employed in the sense of the legal power or authority ‗to hear and determine
causes.‘‖).
148 Idaho 913, __, 231 P.3d 1010, 1012 (2008). The jurisdictional question at issue in Henry
was whether the Secretary of State was acting beyond his jurisdictional authority in placing an
independent candidate on the ballot where that candidate met the statutory requirements under
I.C. § 34-708, and that statute directed that—where those requirements were met—―the
[Secretary of State] shall‖ place the name of that candidate on the ballot. Id. Appellants in
Henry argued that the candidate had acted improperly and unethically and was not actually in
compliance with the requirements for being placed on the ballot. Id. at __, 231 P.3d at 1011–12.
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Emphasizing that the word ―shall‖ has repeatedly been construed by this court as of mandatory
rather than discretionary intent, this Court found that the Secretary of State was not acting
outside of his jurisdiction in placing that candidate on the ballot. Id. at __, 231 P.3d at 1013–14.
It is true that the Board is granted broad discretion in Article IX, section 8, of the Idaho
Constitution to manage the endowment properties in a manner it believes will bring the
maximum long-term financial benefit to the Beneficiaries of the endowment trust. However, this
discretion is not unrestrained. Article IX, section 8 of the Idaho Constitution directs that the
Board must not only manage the public lands in such a manner as will secure the maximum long
term financial return, but also ―under such regulations as may be prescribed by law.‖ As such,
where the Board attempts to manage the endowment property in a manner that violates statutory
law it is acting in excess of the discretion it is granted under the Idaho Constitution.
Idaho Code § 58-310A(3) specifically states that ―[i]n the absence of the conflict
application and auction procedure in the single family, recreational cottage site and homesite
lease, and lease renewal process, the board shall insure that each leased lot generates market rent
throughout the duration of the lease.‖10 The situation before us in the present action is analogous
to that presented in Balderston v. Brady, where this Court found that the Board was acting in a
manner outside of its jurisdictional authority. 17 Idaho 567, 107 P. 493 (1910). Here, I.C. § 58-
310A directs the Board not to hold conflict auctions for the cottage sites, but rather to lease these
properties at market rent. As was noted in Idaho Watersheds Project, ―the constitution and laws
of the state should at all times be followed and upheld and sustained by the courts, and should
not be ignored by public officers in the administration of public affairs of the state.‖ 128 Idaho
at 766, 918 P.2d at 1211 (quoting Tobey, 22 Idaho at 584, 127 P. at 184–85). Where the Board
fails to ensure that the cottage sites generate market rent throughout the duration of the leases it
cannot be said that Board has acted within its jurisdictional authority.
As noted above, where significant leasehold value accrues for the cottage sites those
cottage sites are not being leased at market rent. See IDAPA 20.03.13.10.06. By including a
premium rent provision in the cottage leases the Board is implicitly recognizing that it will not be
achieving market rent. Beyond mere implicit recognition, however, the evidence offers explicit
10
Although not argued by any party here, I.C. § 58-310A is clearly unconstitutional as—in eliminating the conflict
auction procedure and instead requiring ―market rent‖—the legislature encroached upon the discretion
constitutionally granted to the Land Board. Incidentally, it seems axiomatic that where the Land Board failed to
obtain market rent, it was not obtaining the maximum long-term financial returns, as is mandated by the Idaho
Constitution. However, until declared unconstitutional, I.C. § 58-310A must still be followed by the Land Board.
17
recognition of this concept by a majority of the Board. When discussing the Cottage Site
Subcommittee‘s proposal to the Board, on March 16, 2010, one Board member said, ―Do we
acknowledge that we‘re not at market rent by using the term premium rent? Yes. We‘ve done
that since 1981.‖ Another member remarked, ―I do disagree with your rental rate
recommendation. Just – I don‘t think that will bring us to a true market rent, as you said. And
by continuing to collect the premium rent, we‘re openly acknowledging that our rental rate is too
low.‖ Attorney General Wasden has likewise made it clear than he believes the existence of
premium rent demonstrates that the new cottage leases would not achieve market rent. Thus,
three out of the five members of the Board have expressly stated that the existence of premium
rent shows that the Board is failing to achieve market rent throughout the duration of the leases.
The five-year phase-in period that the Board proposes to implement with the new cottage
leases also fails to comply with the Board‘s statutory duty. Assuming the Board has determined,
in its discretion, that market rent for the cottage sites is a return of 4% of the average value of the
cottage sites over the previous 10 years, there is then no justification for failing to ensure that the
cottage sites generate this market rent during the five-year phase-in. As noted above, I.C. § 58-
310A requires the Board to generate market rent ―throughout the duration of the lease‖, not
merely at certain points during the lease. This reasoning also applies to the five-year phase-in
proposed for the increase of premium rent from 10% to 50%. Even disregarding the fact that the
existence of premium rent is evidence that market rent is not being received, the phase-in period
would still violate I.C. § 58-310A.
As it is clear from the record before this Court that the Land Board has acted in excess of
its jurisdiction, and as there is no other plain, speedy and adequate remedy available at law I
respectfully dissent.
Justice W. JONES CONCURS.
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