Title: Ex Parte Town of Lowndesboro

State: alabama

Issuer: Alabama Supreme Court

Document:

950 So. 2d 1203 (2006)
Ex parte TOWN OF LOWNDESBORO and Lee Frazer.
(In re Alabama Department of Environmental Management
v.
Town of Lowndesboro and Lee Frazer).
1041071.

Supreme Court of Alabama.
May 12, 2006.
Rehearing Denied August 25, 2006.
*1204 J. Doyle Fuller and Susan G. Copeland of Law Office of J. Doyle Fuller, P.C., Montgomery, for petitioners.
Troy King, atty. gen.; Scott L. Rouse, asst. atty. gen.; and Olivia H. Rowell and Paul Christian Sasser, asst. attys. gen., Department of Environmental Management.
SMITH, Justice.
The plaintiffs below, the Town of Lowndesboro and Lee Frazer (hereinafter "the petitioners"), were awarded "interim" attorney fees and expenses in their declaratory-judgment action against the Alabama Department of Environmental Management ("ADEM"). The petitioners' declaratory-judgment action arose out of ADEM's approval of the construction of a landfill in Lowndes County. ADEM appealed the trial court's order, and the Court of Civil Appeals reversed the trial court's decision. Lowndesboro and Frazer then petitioned this Court for certiorari review. We granted the petition, and we now affirm the judgment of the Court of Civil Appeals.
In 1998, Alabama Disposal Solutions-Landfill, L.L.C. ("ADSL"), a waste-disposal company, entered into an agreement with the Lowndes County Commission pursuant to which ADSL would operate a solid-waste landfill in Lowndes County. ADSL petitioned ADEM for a permit to operate the landfill. As part of the permitting process, ADSL was to submit a list of all persons who owned property adjacent to the landfill site. ADSL provided ADEM with such a list; however, Frazer, who owns property adjacent to the site, was not included on the list. ADEM ultimately issued a permit for the landfill. Frazer and the Town of Lowndesboro, however, appealed the issuance of the permit to the Environmental Management Commission ("EMC"), alleging that Frazer *1205 had not been given proper notice and that the presence of the landfill violated an ordinance of the Town of Lowndesboro.
In August 2000, while their appeal was pending before the EMC, the petitioners filed a declaratory-judgment action in the Montgomery Circuit Court alleging numerous statutory and regulatory violations by both ADEM and ADSL, including an allegation that ADEM had failed to adopt a State Solid Waste Management Plan ("State Plan") as a "final" regulation pursuant to Ala.Code 1975, § 22-27-45.
In November 2000, the circuit court entered an order staying the appeal that was then pending before the EMC. ADEM and ADSL appealed that order, and while the appeal of that order was pending, ADEM adopted a State Plan, and the circuit court lifted the stay. The Court of Civil Appeals thus dismissed the appeal as moot. See Alabama Disposal Solutions-Landfill, L.L.C. v. Town of Lowndesboro, 837 So. 2d 292 (Ala.Civ.App.2002). The petitioners then filed a motion for a summary judgment in the declaratory-judgment action, arguing that the notice ADEM had provided to the public and to adjacent landowners was improper. In March 2002, the circuit court entered a summary judgment and declared the landfill permit void.
Shortly before the circuit court entered the summary judgment, the petitioners filed a motion requesting an award of attorney fees against ADEM. This request argued that, as a result of the petitioners' efforts, ADEM had adopted a State Plan that benefited the citizens of Lowndes County and of the State. The petitioners argued that under the common-benefit doctrine they were entitled to attorney fees, which they alleged totaled $1.6 million. In December 2002, the circuit court entered an order awarding the petitioners $338,618 in interim attorney fees and expenses. ADEM appealed; the Court of Civil Appeals reversed the circuit court's order, holding that an award of attorney fees and expenses against ADEM violated Ala. Const.1901, § 14. See Alabama Dep't of Envtl. Mgmt. v. Town of Lowndesboro, [Ms. 2020385, April 8, 2005] 950 So. 2d 1180 (Ala.Civ.App.2005). The petitioners then filed with this Court a petition for certiorari review.
Article I, § 14, Alabama Constitution of 1901, provides generally that the State is immune from suit: "[T]he State of Alabama shall never be made a defendant in any court of law or equity." Justice Maddox has previously described the long history of this provision:
Hutchinson v. Board of Trs. of Univ. of Alabama, 288 Ala. 20, 23, 256 So. 2d 281, 282-83 (1971) (footnote omitted).
Section 14 has been described as a "nearly impregnable" and "almost invincible" "wall" that provides the State an unwaivable, absolute immunity from suit any in any court. Alabama Agric. & Mech. Univ. v. Jones, 895 So. 2d 867 (Ala. 2004); Patterson v. Gladwin Corp., 835 So. 2d 137, 142 (Ala.2002); and Alabama State Docks v. Saxon, 631 So. 2d 943, 946 (Ala.1994). When an action is one against the State or a State agency, § 14 wholly removes subject-matter jurisdiction from the courts. Lyons v. River Road Constr., Inc., 858 So. 2d 257, 261 (Ala.2003). An action is considered to be against the State "`when a favorable result for the plaintiff would directly affect a contract or property right of the State, or would result in the plaintiff's recovery of money from the [S]tate.'" Jones, 895 So. 2d  at 873 (quoting Shoals Cmty. College v. Colagross, 674 So. 2d 1311, 1314 (Ala.Civ.App.1995)) (emphasis added in Jones).
The appellate courts of this State have generally held that an action may be barred by § 14 if it seeks to recover damages or funds from the State treasury. Ex parte Alabama Dep't of Mental Health & Mental Retardation, 937 So. 2d 1018, 1023 (Ala.2006) ("Sovereign immunity bars claims against State agencies on the rationale that a damages award against a State agency would result in a monetary loss to the State treasury."); Lyons, 858 So. 2d  at 262 (noting that a party could not bring an action against a State official, because "[s]uch an action impermissibly seeks funds from the State treasury"); Armory Comm'n of Alabama v. Staudt, 388 So. 2d 991, 993-94 (Ala.1980) (stating that an action against the Armory Commission of Alabama was barred by § 14 because a judgment against it "would adversely affect the state treasury"); Southall v. Stricos Corp., 275 Ala. 156, 158, 153 So. 2d 234, 235 (1963) (holding that § 14 prevents an action against the State when a result favorable to the plaintiff "would directly affect a contract or property right of the State"); and Moody v. University of Alabama, 405 So. 2d 714, 717 (Ala.Civ.App. 1981) (noting that an action was barred because a result in the plaintiff's favor "could ultimately `touch' the state treasury by requiring the disbursement of state funds"). Additionally, a party may not indirectly sue the State by suing its officers or agents "`when a result favorable to plaintiff would be directly to affect the financial status of the state treasury.'" Patterson v. Gladwin Corp., 835 So. 2d  at 142 (quoting State Docks Comm'n v. Barnes, 225 Ala. 403, 405, 143 So. 581, 582 (1932)) ( emphasis added in Patterson ).
This case presents an issue of first impression: whether § 14 prohibits an award of attorney fees and expenses against a department or agency of the State of Alabama. The Court of Civil Appeals held that the attorney-fee award in this case did violate § 14:
ADEM v. Lowndesboro, 950 So. 2d  at 1201.
On appeal, Lowndesboro and Frazer argue that because the underlying action falls within an exception to the bar found in § 14 the award of interim attorney fees and expenses likewise is not barred. This Court has previously noted certain exceptions to § 14:
Ex parte Alabama Dep't of Transp., 764 So. 2d 1263, 1268 (Ala.2000).[1]
The petitioners contend that the underlying action, which seeks a declaratory judgment, falls within an exception to § 14. Furthermore, the petitioners cite numerous cases that fell within exceptions to § 14 in which courts have awarded attorney fees against the State. See, e.g., Brown v. State, 565 So. 2d 585 (Ala.1990); Slawson v. Alabama Forestry Comm'n, 631 So. 2d 953 (Ala.1994); State Dep't of Human Res. v. Kelly, 623 So. 2d 738 (Ala. Civ.App.1993); Wyatt v. Stickney, 344 F. Supp. 387 (M.D.Ala.1972), reversed in part, Wyatt v. Aderholt, 503 F.2d 1305 (5th Cir.1974); and NAACP v. Allen, 340 F. Supp. 703 (M.D.Ala.1972). Because the underlying action falls within an exception to § 14, the petitioners argue, an award of attorney fees and expenses is also not barred. We disagree.
None of these cases cited by the petitioners actually addresses whether § 14 bars an award of attorney fees against the State. As the Court of Civil Appeals noted:
ADEM v. Lowndesboro, 950 So. 2d  at 1194-95.
None of the cases cited by the petitioners holds that § 14 allows an award of attorney fees and expenses against the State; indeed, this issue, even if raised in those cases, was not decided by the courts and made part of the opinion of the case.[2] Thus, those decisions cannot be binding precedent on the issue.
The petitioners further argue that this Court held in Alabama Alcoholic Beverage Control Board v. City of Pelham, 855 So. 2d 1070, 1084 (Ala.2003), that State funds could be used to award attorney fees. We stated in that case: "This Court has held that State funds may be used to award attorney fees to plaintiffs who bestow a common benefit to the named plaintiffs as well as the public. Brown [v. State, 565 So. 2d 585, 591-92 (Ala.1990)]."[3] However, this Court also expressed concern regarding whether an award of attorney fees against the State outside of a federal law permitting such an award was permissible: "Laying to one side concerns over the applicability of Brown to this proceeding where no federally created right to an attorney fee is presented, we must determine whether the City bestowed a common benefit." 855 So. 2d  at 1084 (footnote omitted). However, we were not required to address that issue in ABC Board v. Pelham, because we held that the plaintiffs were not otherwise entitled to attorney fees. While we acknowledged in ABC Board v. Pelham that, in the past, attorney fees have been awarded against the State, we went on to note concern as to whether such an award was permissible, and we resolved the case on other grounds. That decision thus does not support the proposition that this Court has approved of an attorney-fee award in the face of § 14; indeed, our decision in that case did not address § 14 at all.
The petitioners also cite State Board of Education v. Waldrop, 840 So. 2d 893 (Ala. 2002), for the proposition that attorney fees may be awarded against the State in spite of § 14. Again, in that decision this Court held that an award of attorney fees was inappropriate. Therefore, we were not required to address the issue whether *1211 § 14 barred such an award, and our opinion is not precedent on that issue.[4]
Additionally, the fact that an action seeks a declaratory judgment and thus purportedly falls within an exception to § 14 does not necessarily open the doors of the State treasury to legal attack. The exception afforded declaratory-judgment actions under § 14 generally applies only when the action seeks "construction of a statute and how it should be applied in a given situation," Aland v. Graham, 287 Ala. 226, 230, 250 So. 2d 677, 679 (1971), and not when an action seeks other relief. Curry v. Woodstock Slag Corp., 242 Ala. 379, 6 So. 2d 479 (1942) (holding that a declaratory-judgment action that seeks only a declaration to construe the law and direct the parties, and no other relief, does not violate § 14).[5] Section 14 bars an action characterized as a declaratory-judgment action "when it is nothing more than an action for damages." Lyons, 858 So. 2d  at 263. As the Court of Civil Appeals noted in Moody v. University of Alabama, 405 So.2d at 717: "[W]hile an action for declaratory judgment against the state or its agencies which seeks the interpretation of a statute is generally not prohibited, . . . such an action is prohibited when, as here, a result favorable to the plaintiff would directly affect a contract or property right of the state." See also Stark v. Troy State Univ., 514 So. 2d 46, 50 (Ala.1987) (holding that a declaratory-judgment action seeking to compel officials to perform their legal duties was not barred by § 14; however, a portion of the action seeking compensatory damages could not be maintained); and Unzicker v. State, 346 So. 2d 931, 933 (Ala. 1977) (holding that a declaratory-judgment action against the State that would affect property in which the State had an interest was barred by § 14).
Although the petitioners' underlying declaratory-judgment action may not have been barred by § 14,[6] it is clear that an award of interim attorney fees and expenses impacts the State treasury and divests it of funds in the very way forbidden *1212 by § 14. Haley v. Barbour County, 885 So. 2d 783, 789 (Ala.2004). Therefore, the Court of Civil Appeals correctly held that the award of interim attorney fees was barred.
The petitioners argue that the Court of Civil Appeals' reliance on Haley was misplaced. Although Haley holds that § 14 forbids the State from being assessed a sanction for contempt, Haley cannot be construed, the petitioners contend, to hold that § 14 bars an award of attorney fees. Specifically, the petitioners note that in Haley the trial court awarded attorney fees against the State, and the State paid those fees. Because this Court, on the appeal from the award of sanctions, did not vacate the attorney-fee award, the petitioners maintain that Haley cannot stand for the proposition that § 14 bars an award for attorney fees. We disagree.
In Haley, funds were appropriated by the legislature to bring the Department of Corrections into compliance with certain orders of the trial court in that case. See Haley, 885 So. 2d  at 787. Those funds were used in part to pay the plaintiffs' attorney fees. However, the issue whether § 14 barred the trial court from awarding such fees was not raised, decided, or part of our decision in Haley. Haley thus cannot stand for the proposition that an attorney-fee award against the State is permissible under § 14. Instead, the Court of Civil Appeals held that the general principles of law regarding § 14 found in Haleywhich led to the conclusion in that case that contempt sanctions against the State were barred by § 14were applicable in the instant case. We see no error in the Court of Civil Appeals' analysis.
The petitioners further argue that their action "would have been cognizable" under 42 U.S.C. § 1983,[7] and that thus an award of attorney fees in this case is appropriate under 42 U.S.C. § 1988.[8] In support of their argument, the petitioners cite James v. Alabama Coalition for Equity, Inc., 713 So. 2d 937 (Ala.1997), which states that an award of attorney fees under 42 U.S.C. § 1983 and 42 U.S.C. § 1988 is not barred by § 14: "[T]he doctrine of State sovereign immunity does not bar an award of attorney fees pursuant to §§ 1983 and 1988. Hutto v. Finney, 437 U.S. 678, 693-94, 98 S. Ct. 2565, 2575, 57 L. Ed. 2d 522 (1978). For these reasons, the trial court did not err in awarding fees pursuant to § 1988." 713 So. 2d  at 950.
In James, three plaintiffs were awarded attorney fees in an action against the State. Two plaintiffs were awarded fees under 42 U.S.C. § 1988, and the third, Alabama Coalition for Equity, Inc. ("ACE"), was awarded fees under the "common-fund" theory. 713 So. 2d  at 947. This Court held that ACE should have been awarded fees under 42 U.S.C. § 1988. Although the trial court did not explicitly award fees under 42 U.S.C. § 1988, we *1213 noted that the award could be upheld under the well-settled theory that a correct judgment will not be reversed, even if the trial court gave a wrong reason for its judgment. 713 So. 2d  at 951. The petitioners urge that this Court construe the award of interim attorney fees and expenses in this case as a permissible award under § 1988, which, they argue, would not be barred by § 14.
The holding of James, however, is inapplicable here. In that case, we held that the plaintiffs' pleadings invoked 42 U.S.C. § 1983 and 42 U.S.C. § 1988. 713 So. 2d  at 948. ADEM asserts that in the instant case the petitioners did not allege a cause of action under 42 U.S.C. § 1983 or any other federal law that would allow an award of attorney fees under 42 U.S.C. § 1988. The petitioners do not dispute this assertion, and nothing in the record demonstrates that the instant action was based on 42 U.S.C. § 1983 or 42 U.S.C. § 1988. Therefore, we see no facts or authority that would require the judgment of the Court of Civil Appeals to be reversed on this ground.
The petitioners further argue that if this Court holds that § 14 bars an award of attorney fees and expenses, it should apply this rule prospectively and allow the award in this case to stand. The petitioners contend that applying our ruling retroactivelythus vacating the award in this casewould amount to "changing the rules after the game has been played." The petitioners, however, cite no authority in their initial brief in support of this argument.
McCullar v. Universal Underwriters Life Ins. Co., 687 So. 2d 156, 165 (Ala.1996) (plurality opinion) (quoting Chevron Oil Co. v. Huson, 404 U.S. 97, 106-07, 92 S. Ct. 349, 30 L. Ed. 2d 296 (1971)).
As we noted above, there is no "clear past precedent" indicating that an award of attorney fees and expenses against the State is not barred by § 14; thus, we are not required to overrule any prior caselaw. Indeed, as noted above, this case presents an issue of first impression. Moreover, several Justices have previously questioned whether § 14 immunity would bar an attorney-fee award, especially in the absence of a federal law that would arguably override such immunity. State v. *1214 Brown, 577 So. 2d 1256, 1261 (Ala.1991) (Maddox, J., dissenting) (questioning whether an award of attorney fees against the State was consistent with § 14 and noting that the majority had failed to address that issue); State Bd. of Educ. v. Waldrop, 840 So. 2d  at 902-03 (Lyons, J., concurring specially) (expressing concern as to whether Brown v. State, 565 So. 2d 585 (Ala.1990), which awarded attorney fees against the State, was consistent with § 14); ABC Bd. v. Pelham, 855 So. 2d  at 1084 n. 7 (noting concerns regarding whether § 14 would bar an award of attorney fees "where no federally created right to an attorney fee is presented").
Moreover, this Court has declined to give constitutional rulings prospective-only application. In Alabama State Docks Terminal Ry. v. Lyles, 797 So. 2d 432, 439 (Ala.2001), we noted:
797 So. 2d  at 439. ADEM, on the other hand, argues that prospective-only application of this case would amount to a waiver of the State's § 14 immunity, which this Court is without jurisdiction to do.
Because prospective-only application of judgments is disfavored, especially within the realm of constitutional law, our judgment must apply retroactively. Therefore, the award of interim attorney fees and expenses in this case must be vacated.
The judgment of the Court of Civil Appeals is affirmed.
AFFIRMED.
NABERS, C.J., and SEE, LYONS, HARWOOD, WOODALL, STUART, BOLIN, and PARKER, JJ., concur.
[1]  "Other non-prohibited actions are inverse condemnation actions brought against State officials in their representative capacity and actions brought against State officials in their representative capacity and individually where it is alleged that they have acted fraudulently, in bad faith, beyond their authority, or in a mistaken interpretation of law." Taylor v. Troy State Univ., 437 So. 2d 472, 474 (Ala.1983).
[2]  The Court of Civil Appeals' opinion thoroughly explains why the authority cited by the petitioners does not hold that attorney fees against the State are permissible under § 14, and we see no need to repeat that analysis here. See ADEM v. Lowndesboro, 950 So. 2d  at 1191. Additionally, neither Wyatt v. Stickney nor NAACP v. Allen, which were not discussed in the Court of Civil Appeals' decision, hold that § 14 does not bar an award of attorney fees.
[3]  Brown v. State was followed by State v. Brown, 577 So. 2d 1256 (Ala.1991), in which Justice Maddox, in a dissent, questioned whether an award of attorney fees against the State was consistent with § 14. 577 So. 2d  at 1261.
[4]  Moreover, Justice Lyons noted in his special concurrence in Waldrop that the plaintiff asserted his claims under the Civil Rights Act, 42 U.S.C. § 1981 et seq., and that 42 U.S.C. § 1988 could allow the recovery of attorney fees, regardless of any State constitutional provision affording immunity. Thus, Justice Lyons noted, "The question whether the liability of the State for payment of an attorney fee as recognized in Brown v. State[, 565 So. 2d 585 (Ala.1990),] is properly confined to cases arising under statutes such as 42 U.S.C. § 1988 must await another day." 840 So. 2d  at 903.
[5]  In State v. Louis Pizitz Dry Goods Co., 243 Ala. 629, 633, 11 So. 2d 342, 345 (1943), superseded, in part, on other grounds, Ala.Code 1940, tit. 7, § 167 (now Ala.Code 1975, § 6-6-221), we further explained why a declaratory-judgment action is not barred by § 14:

"But we have held that when an officer of the State is confronted with an uncertain problem of what the law means which requires certain acts on his part, or whether the law is valid, and he proposes to pursue a certain course of conduct in that connection, which would injuriously affect the interests of others who contend that he has no legal right thus to act, there is thereby created a controversy between them and the Declaratory Judgments Act furnishes a remedy for either party against the other to declare the correct status of the law. The purpose is to settle a controversy between individuals, though some of them may be State officers."
See also Thurlow v. Berry, 247 Ala. 631, 639, 25 So. 2d 726, 733 (1946) ("This court has declared the rule to be that when a suit against a state official seeks a declaration of applicable principles of law to a certain status and direction of the parties in the premises, it does not infringe Section 14, Constitution, or violate sovereign immunity.").
[6]  We express no opinion as to whether the underlying action is permissible under § 14, because the record before us is insufficient to allow such a determination.
[7]  42 U.S.C. § 1983 provides, in pertinent part:

"Every person who, under color of any statute, ordinance, regulation, custom, or usage, of any State or Territory or the District of Columbia, subjects, or causes to be subjected, any citizen of the United States or other person within the jurisdiction thereof to the deprivation of any rights, privileges, or immunities secured by the Constitution and laws, shall be liable to the party injured in an action at law, suit in equity, or other proper proceeding for redress. . . . "
[8]  42 U.S.C. § 1988(b), provides, in pertinent part: "In any action or proceeding to enforce a provision of sections 1981, 1981a, 1982, 1983, 1985, and 1986 of this title, . . . the court, in its discretion, may allow the prevailing party, other than the United States, a reasonable attorney's fee as part of the costs. . . ." (Emphasis added.)