IN THE SUPREME COURT OF THE STATE OF IDAHO

Docket No. 44074-2016

HILL-VU MOBILE HOME PARK, on

behalf of itself and all others similarly

situated; and ED QUINN, on behalf of himself

and all others similarly situated,

Plaintiffs-Appellants,

v.

CITY OF POCATELLO, an Idaho

municipality,

Defendant-Respondent.

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Boise, June 2017 Term

2017 Opinion No. 96

Filed: September 6, 2017

Karel A. Lehrman, Clerk

Appeal from the District Court of the Sixth Judicial District of the State of Idaho, 

in and for Bannock County. Hon. Stephen S. Dunn, District Judge.

The judgment of the district court is vacated and this case is remanded.

Nathan M. Olsen, Petersen Moss Hall & Olsen, Idaho Falls, argued for appellants.

Blake G. Hall, Hall Angell & Associates, LLP, Idaho Falls, argued for 

respondent.

EISMANN, Justice.

This is an appeal out of Bannock County from a judgment dismissing an action seeking 

to recover money unlawfully collected by the City of Pocatello from users of the City’s water 

and sewer systems. We vacate the judgment and remand this case for further proceedings that 

are consistent with this opinion.

I.

Factual Background.

The City of Pocatello (“City”) owns and operates water and sewer systems for City 

residents. In 2005, the city government decided that the City should be able to operate its water 
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and sewer systems at a profit like private utilities. By law, the City is required to charge and 

collect sufficient fees so that its water and sewer systems “shall be and always remain selfsupporting.” I.C. § 50-1032. Those fees had to be sufficient to pay when due all bonds and 

interest as required by Idaho Code section 50-1032(a) and “to provide for all expenses of 

operation and maintenance of such works . . . , including reserves therefor,” as required by Idaho 

Code section 50-1032(b). The reserves can also provide for improvements to such systems. I.C. 

§ 50-1033. 

The City wanted to obtain a profit in excess of the amounts necessary for the water and 

sewer systems to remain self-supporting. This profit was paid into the general fund. City 

officials believed that the City should be able to make a profit just as private utilities are able to

do, and so the City added an additional charge to water and sewer bills. The City called this 

additional charge a “rate of return” or “return on equity,” which was an increased charge (profit) 

included in the bills sent to users of the City’s water and sewer systems. As explained by the 

City’s Chief Financial Officer: “The ‘rate of return’ policy refers to city-owned public utilities 

(i.e. water, sewer, etc.) making a transfer to the general fund. These are businesses operated by 

the public that could and do operate as for-profit private enterprises in other communities.” This 

charge was in addition to the statutorily permitted charges to cover the costs of operation, 

maintenance, replacement and depreciation, including creating and maintaining reserves for such 

expenses. The City also adopted a policy called “PILOT,” which stood for payment in lieu of 

taxes. Under this scheme, the city-owned water and sewer departments were required to pay 

“property taxes” to the City as if they were private entities, and the departments then passed this 

cost on to their customers. The “property taxes” were then paid into the City’s general fund. As 

explained by the City’s Chief Financial Officer in 2012: “For the past two years, the rates have 

been re-described as a franchise fee (% of gross revenues) and a payment-in-lieu-of-taxes 

(PILOT) to make it directly comparable to private utilities operating in the community such as 

Intermountain Gas. The PILOT is calculated on the prior year city property tax levy rate 

multiplied by the estimated market value per the most recent financial plan prepared by an 

outside consulting engineer.”

By letter dated December 26, 2006, Pocatello Mayor Chase asked the Attorney General 

about the City’s policy of imposing the additional charge for a rate of return. In the letter, the 

Mayor stated:
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Charging a rate of return is commonly used by public utilities and private 

sector companies, and we feel it is a fairer way to generate revenue for the City. 

As I am sure you are well aware, relying on property taxes for revenue will not 

work in Pocatello due to the number of property tax exemptions given by the

State. Therefore, it has been my practice as Mayor to move our city away from 

property taxes and to a fee based system. The rate of return is an important part of 

this plan.

By letter dated February 6, 2007, a Deputy Attorney General responded to Mayor 

Chase’s letter. In that letter, the Deputy wrote with respect to the City’s rate-of-return charge: 

“The overall rate of return for the same utilities [Idaho’s three largest electric utilities] range [sic] 

between 8.1% and 9.25%. According to the Robinson letter, the city’s “rate of return” is equal to 

7% and generates approximately $3.54 million in revenues.” The letter included an analysis of 

applicable law, and it concluded that analysis by stating: “In this instance, the revenue from the 

rate of return component is dedicated to the city’s general fund and is utilized as a property tax 

substitute. Thus, it appears this practice is contrary to Loomis [v. City of Hailey, 119 Idaho 434, 

807 P.2d 1272 (1991)] and therefore not appropriate.”

The profit earned by the City from the return-on-equity charge and PILOT totaled about 

$4 million during fiscal years 2006 through 2011. The City apparently stopped receiving the 

return-on-equity charge in fiscal year 2012, and it stopped receiving the PILOT funds during 

fiscal year 2014.

On December 9, 2011, the Building Contractors Association of Southeast Idaho filed an 

action against the City challenging the PILOT, and the district court ultimately held that it was 

an unlawful charge. On November 15, 2013, the district court entered a judgment enjoining the 

City “from using the PILOT fee as part of the calculation of user and/or connection fees charged 

to the public.” When the City discontinued the PILOT component in the bills sent to users of the 

City water and sewer systems, their monthly bills decreased by about ten percent.1

 

 

1 Ironically, over 100 years ago, the City sued the owner of the water system that supplied water to the City, 

contending that the rates being charged were “not fair, equitable, or reasonable” and that the earnings of the water 

system should not exceed “five per cent above reasonable expenses upon the value of said water system.” City of 

Pocatello v. Murray, 21 Idaho 180, 188, 191, 120 P. 812, 815 (1912). The City sought a writ of mandate requiring 

the owner of the water system to appoint two commissioners in conformity with Idaho Revised Codes section 2839 

(1908). Id. at 188, 120 P. at 814. Under the statute, the town and the owner of the water system each selected two 

commissioners, who then selected a fifth commissioner, and the majority of the commissioners then determined the 

water rates to apply for the next three years. This Court ordered that the writ issue. Id. at 211, 120 P. at 822–23.
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This shows that the City was operating its water and sewer “primarily as a source of 

revenue to the city,” in violation of Idaho Code section 50-1028. The City made the decision 

that its water and sewer departments should be operated as for-profit corporations in order to 

raise revenues for the City’s general fund. The ten percent increase in monthly bills means that 

the City was earning a profit of ten percent above the amount that was necessary to ensure that 

its water and sewer systems would always remain self-supporting. That profit went into the 

general fund, not into any reserves for the maintenance and improvement of the water and sewer 

systems. Indeed, the rationale for the “rate of return” and the PILOT was the profit that the City 

would earn if its water and sewer systems were for-profit entitities.

On April 15, 2014, the Plaintiffs filed this action seeking a refund of the PILOT sums that 

they had paid. They also sought class certification for those who had been charged and paid the 

illegal sum. On cross-motions for summary judgment, the district court held that the Plaintiffs’ 

state law claims were barred under the Idaho Tort Claims Act, that there was no unconstitutional 

taking under the Fourteenth Amendment to the Constitution of the United States, that the 

decision in the Building Contractors case would not be applied retroactively, and that the 

Plaintiffs’ motion for class certification was denied. The court entered a judgment dismissing 

the Plaintiffs’ complaint, and they timely appealed.

When reviewing on appeal the granting of a motion for summary judgment, we apply the 

same standard used by the trial court in ruling on the motion. Infanger v. City of Salmon, 137 

Idaho 45, 46–47, 44 P.3d 1100, 1101–02 (2002). We construe all disputed facts, and draw all 

reasonable inferences from the record, in favor of the non-moving party. Id. at 47, 44 P.3d at 

1102. Summary judgment is appropriate only if the evidence in the record and any admissions 

show that there is no genuine issue of any material fact regarding the issues raised in the 

pleadings and that the moving party is entitled to judgment as a matter of law. Id. If the 

evidence reveals no disputed issues of material fact, then only a question of law remains, over 

which this Court exercises free review. Id. In this case, there is no dispute regarding the 

material facts.

II.

Did the District Court Err in Holding that Recovery of the PILOT Was Barred by Idaho 

Code Section 6-904A?
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Idaho Code section 6-904A states, insofar as is relevant:

A governmental entity and its employees while acting within the course 

and scope of their employment and without malice or criminal intent and without 

reckless, willful and wanton conduct as defined in section 6-904C, Idaho Code, 

shall not be liable for any claim which:

1. Arises out of the assessment or collection of any tax or fee.

The district court held that all of the Plaintiffs’ state-law claims were barred because their 

“state law claims—unconstitutional taking, unjust enrichment, and equitable estoppel/equitable 

tolling—arise out of the collection of the PILOT component, which was found to be a tax.” In so 

holding, the district court erred.

“A municipality may collect fees considered incidental to regulation and enacted 

pursuant to the municipality’s police powers.” Lewiston Indep. Sch. Dist. No. 1 v. City of 

Lewiston, 151 Idaho 800, 804–05, 264 P.3d 907, 911–12 (2011). Pursuant to its proprietary 

function, municipalities may also construct and maintain public works, Viking Const., Inc. v. 

Hayden Lake Irr. Dist., 149 Idaho 187, 193, 233 P.3d 118, 124 (2010), and charge a fee “for a 

direct public service rendered to the particular consumer,” Brewster v. City of Pocatello, 115 

Idaho 502, 505, 768 P.2d 765, 768 (1988). Finally, a municipality may assess and collect taxes 

if authorized by the legislature. Id. at 504, 768 P.2d at 767; Idaho Const. art. VII, § 2.

For a fee to be considered incidental to regulation, “funds generated thereby must bear 

some reasonable relationship to the cost of enforcing the regulation.” Brewster, 115 at 504, 768 

P.2d at 767. “Such municipal fees must be rationally related to the cost of enforcing the 

regulation and cannot be assessed purely as a revenue-generating scheme.” Potts Constr. Co. v. 

N. Kootenai Water Dist., 141 Idaho 678, 681, 116 P.3d 8, 11 (2005). The power to impose a 

regulatory fee “may not be resorted to as a shield or subterfuge, under which to enact and enforce 

a revenue-raising ordinance or statute.” Foster’s, Inc., v. Boise City, 63 Idaho 201, 218–19, 118 

P.2d 721, 728 (1941). If the regulatory fee does not bear a reasonable relationship to the cost of 

enforcing a regulation, it is considered as being a tax. Brewster, 115 at 504–05, 768 P.2d at 767–

68. 

For a fee to be for water and sewer services provided by the municipality that is subject 

to the Revenue Bond Act, as in this case, “the services of such works shall be furnished at the 

lowest possible cost.” I.C. § 50-1028. “[I]f fees are collected under the disguise of the [Revenue 

Bond] Act and allocated and spent otherwise, then the fees are primarily revenue raising and will 
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be construed as taxes.” Loomis v. City of Hailey, 119 Idaho 434, 439, 807 P.2d 1272, 1277

(1991). “In a general sense a fee is a charge for a direct public service rendered to the particular 

consumer, while a tax is a forced contribution by the public at large to meet public needs.” 

Brewster, 115 at 505, 768 P.2d at 768.

In both of the above instances, the fee is considered to be a tax because its purpose is 

primarily to raise revenue. “[I]f the fee or charge is imposed primarily for revenue raising 

purposes, it is in essence a tax and can only be upheld under the power of taxation.” Idaho Bldg. 

Contractors Ass’n v. City of Coeur d’Alene, 126 Idaho 740, 743, 890 P.2d 326, 329 (1995). A 

fee or charge primarily for raising revenue is “in essence a tax,” id. (emphasis added); “a 

disguised tax,” Lewiston Indep. Sch. Dist., 151 Idaho at 801, 264 P.3d at 912 (emphasis added); 

or it “operates as general tax on the public,” Potts Constr. Co., 141 Idaho at 681, 116 P.3d at 11 

(emphasis added). That classification is part of the analysis in determining whether the fee or 

charge is lawful. If its purpose is primarily to raise revenue, it is not a regulatory fee or fee for 

services, but is characterized as a tax. It would then only be valid if the city was authorized to 

impose such a tax. See State v. Nelson, 36 Idaho 713, 722, 213 P. 358, 361 (1923) overruled on 

other grounds by, Greater Boise Auditorium Dist. v. Royal Inn of Boise, 106 Idaho 884, 888, 684 

P.2d 286, 290 (1984) (“A license that is imposed for revenue is not a police regulation, but a tax, 

and can only be upheld under the power of taxation.”); Brewster v. City of Pocatello, 115 Idaho 

502, 503, 768 P.2d 765, 766 (1988) (“There is no argument here that our legislature has 

authorized the imposition of such a tax if indeed it is denominated a tax.”). 

However, although fees or charges that are imposed primarily to raise revenues may be 

considered as being a tax or in essence a tax, such fees or charges are not actually taxes, because

the legislature must invest in any county, city, town, or other municipal corporation “the power 

to assess and collect taxes for all purposes of such corporation.” Idaho Const. art. VII, § 6. 

“[T]he grant of taxing power to cities is not self-executing or unlimited. It is limited by what 

taxing power the legislature authorizes in its implementing legislation.” Brewster, 115 Idaho at 

503, 768 P.2d at 766. “A city or village cannot, in the exercise of its police power, levy taxes.” 

Nelson, 36 Idaho at 722, 213 P. at 361. If the legislature has not granted a city the power to 

impose a fee or charge as a tax, then such fee or charge is not actually a tax. There is no 

contention that the legislature authorized the City to impose a tax like the charges that it added to 
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the bills of users of the City’s water and sewer systems. Because those charges were not an 

authorized tax, they were not a tax as that term is used in Idaho Code section 6-904A.

In BHA Investments, Inc. v. City of Boise, 141 Idaho 168, 108 P.3d 315 (2004), we held 

that the fee versus tax analysis does not apply when a city does not have the authority to impose 

either the fee or a tax. In BHA Investments, an entity referred to as “Splitting Kings” leased a 

liquor license and agreed in the lease agreement to pay the liquor license transfer fee charged by 

the City of Boise. Id. at 171, 108 P.3d at 318. Later, Splitting Kings and its lessor’s successor, 

“Bravo,” sued Boise to recover damages for wrongful taking and unjust enrichment based upon 

the exaction of the transfer fee. Id. The district court granted summary judgment to Boise on 

three grounds, one of which was that “the fee charged by the City was a disguised tax and a party 

cannot obtain reimbursement of a tax unless it is paid ‘under protest.’ ” Id. We held that the 

analysis of whether the money collected was an unreasonable fee or a disguised tax had no 

bearing where the city did not have the authority to impose either the fee or a tax. We stated:

We have also held that a city’s imposition of a purported fee that does not bear a 

reasonable relationship to services to be provided by the city is in reality the 

imposition of a tax. . . . .

The purpose of the analysis regarding excessive fees is to prevent a city 

from imposing an illegal tax by masquerading it as a fee. That analysis does not 

apply, however, where the city does not have the authority to impose either the tax 

or the fee. If it has no authority to impose any fee at all, it does not matter 

whether the fee imposed bears a reasonable relationship to the services provided. 

It is illegal regardless of the amount of the fee. In this case, the City did not have 

the authority to impose either a fee for the transfer of a liquor license or a tax on 

the transfer of a liquor license. Therefore, the analysis of whether liquor license 

transfer fee was in reality a disguised tax does not apply.

Id. at 176, 108 P.3d at 323 (citation omitted) (emphasis added). We also held that where Boise 

“denominated the sum owing as a ‘fee,’ the payment-of-tax-under-protest requirement does not 

apply.” Id. In this case, the City did not have the authority to add either the fee (PILOT) or a tax 

to the bills of those who used City the water or sewer systems. The City also did not denominate 

the additional charges as taxes. In fact, it raised the rates for water and sewer service so that it 

would not have to take the politically unpopular route of raising property taxes.

“ ‘Whenever an act of the Legislature can be so construed and applied as to avoid 

conflict with the Constitution and give it the force of law, such construction will be adopted by 

the courts.’ ” Grice v. Clearwater Timber Co., 20 Idaho 70, 77, 117 P. 112, 114 (1911). As 
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quoted above, Idaho Code section 6-904A provides that a governmental entity is not liable for a 

claim that arises out of the assessment or collection of a tax unless the governmental entity was 

acting with “malice or criminal intent and with[] reckless, willful and wanton conduct as defined 

in section 6-904C.” The Idaho Constitution provides, “Private property may be taken for public 

use, but not until a just compensation, to be ascertained in the manner prescribed by law, shall be 

paid therefor.” Idaho Const. art. I, § 14. To hold that an unlawful fee or charge is a “tax” as that 

term is used in section 6-904C would create a conflict between the statute and the Constitution. 

A statute cannot limit the right to recover for the taking of property in violation of the 

Constitution.

III.

Did the District Court Err in Holding that Money Is Not Property under the Takings 

Clause of the Constitution?

The Plaintiffs alleged in their complaint that the unlawful additional charge for water and 

sewer service was a taking under the Idaho and United States Constitutions. In granting 

summary judgment, the district court held that the imposition of the PILOT was not a 

compensable taking. It appeared to rely upon three grounds for that decision: (1) “Some courts 

have made that determination on the grounds that money is not ‘property’ within the meaning of 

the Takings Clause,” and (2) “Other courts ‘have concluded that a governmental-imposed

obligations to pay money are not the sort of governmental actions subject to a takings analysis.’ ” 

(Citations omitted.) Both of these rationales are incorrect.

First, it is clear that money is property within the meaning of the takings clause. The 

Supreme Court of the United States so held in Webb’s Fabulous Pharmacies, Inc. v. Beckwith, 

449 U.S. 155 (1980). In that case, the purchaser of the assets of a corporation, whose debts 

appeared greater than the purchase price, filed an interpleader action interpleading as defendants 

the corporation and its creditors and paid into court the amount of the purchase price. Id. at 156–

57. Pursuant to a statute, the court clerk deducted a fee for services rendered for receiving the 

money into the registry of the court and deposited the balance of the money into an interest 

bearing account. Id. at 157. About a year later, a receiver was appointed for the corporation, and 

the principal balance in the account was paid to the receiver, but the interest earned was retained 

by the clerk pursuant to another statute which declared that the interest earned was public money. 
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Id. at 158. The receiver obtained a court order holding that the clerk was not entitled to the 

interest earned, and on appeal the Supreme Court of Florida held “that a fund so deposited is 

‘considered “public money” ’ from the date of deposit until it leaves the account; that ‘the statute 

takes only what it creates’; and that ‘[t]here is no unconstitutional taking because interest earned 

on the clerk of the circuit court’s registry account is not private property.’ ” Id. at 158–59. The 

United States Supreme Court reversed, because “[i]t is obvious that the interest was not a fee for 

services” because the sum deducted by the clerk was for services rendered and “the exaction is a 

forced contribution to general governmental revenues, and it is not reasonably related to the costs 

of using the courts.” Id. at 162–163. Therefore, “the interest earned on the interpleader fund 

while it was in the registry of the court was a taking violative of the Fifth and Fourteenth 

Amendments.” Id. at 164–65. Likewise, in BHA Investments, Inc. v. City of Boise, 141 Idaho 

168, 172, 108 P.3d 315, 319 (2004), we held, “Money is clearly property that may not be taken 

for public use without the payment of just compensation.” Thus, the district court erred in 

holding that money is not property under the Takings Clause.

Second, the cases cited by the district court regarding a governmental-imposed obligation 

to pay money are inapposite. The issue in Commonwealth Edison Co. v. United States, 46 Fed. 

Cl. 29 (2000) aff’d, 271 F.3d 1327 (Fed. Cir. 2001), was the constitutionality of legislation 

“which imposes special monetary assessments on domestic utilities for the remediation of 

environmentally contaminated uranium processing facilities owned by the United States.” Id. at 

1329. The issue in Branch v. United States, 69 F.3d 1571, 1576–77 (Fed.Cir. 1995), cert. 

denied, 519 U.S. 810 (1996), was whether a statute changing corporate liability for acts of sister 

corporations constituted a taking. The statute at issue provided “that when a bank failure causes 

a loss to the federal Bank Insurance Fund, sister banks that are owned by the same bank holding 

company may be held liable for the loss.” Id. at 1573. In Meriden Trust & Safe Deposit Co. v. 

F.D.I.C., 62 F.3d 449 (2d Cir. 1995), there was no taking where a bank voluntarily subjected 

itself to a known obligation created by a failure of a commonly owned bank. Id. at 455. In 

Commercial Builders of Northern California v. City of Sacramento, 941 F.2d 872 (9th Cir. 

1991), the court held that an ordinance that “conditions certain types of nonresidential building 

permits upon the payment of a fee intended to offset the burdens on the city caused by lowincome workers who move there to fill jobs created by the project in question” does not 

constitute an unconstitutional taking where “the city had adequately supported its contribution 
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requirement by showing a sufficient nexus between nonresidential development and the demand 

for low-income housing.” Id. at 873. In United States Shoe Corp. v. United States, 296 F.3d 

1378 (Fed. Cir. 2002), a harbor tax had been held unconstitutional as a violation of the Export 

Clause of the Constitution, which states, “No Tax or Duty shall be laid on Articles exported from 

any State.” On appeal to the United States Supreme Court, the government attempted to uphold 

the tax as a user fee, but the Court held that “the tax, which is imposed on an ad valorem basis, is 

not a fair approximation of services, facilities, or benefits furnished to the exporters, and 

therefore does not qualify as a permissible user fee.” United States v. U.S. Shoe Corp., 523 U.S. 

360, 363 (1998). The Shoe Corporation received a refund of the tax, and the Court of 

International Trade awarded it interest on the refund. 296 F.3d at 1381. The government 

appealed to the Federal Circuit, which addressed the Shoe Corporation’s arguments in support of 

the award of interest, one of which was that the harbor tax was a taking in violation of the Fifth 

Amendment. The court held it was not a taking because the amount of the tax was not excessive 

when compared to the exporter’s use of port services. “Because ‘the Takings Clause is less 

restrictive than the Export Clause,’ and the tax [of 0.125 percent] would be sustained if it ‘fairly 

match[ed] the exporters’ use of port services and facilities,’ we conclude that the tax did not rise 

to the level of a taking.” Id. at 1383–84. None of these cases involved a government entity

inflating its user fees to the point that they are clearly excessive when compared to the services 

provided in order to raise revenue for the entity’s general fund.

More instructive is the decision of the United States Supreme Court in United States v. 

Sperry Corp., 493 U.S. 52 (1989). After the seizure of the United States Embassy in Tehran on 

November 4, 1979, the governments of the United States and Iran reached accords to provide a 

means for resolving claims by American companies against Iran. Id. at 55. Pursuant to the 

agreement, a tribunal was created to hear the claims, and litigation by Americans against Iran 

was precluded in American courts. Id. at 55–56. Sperry Corporation and Sperry World Trade, 

Inc. (hereinafter “Sperry”), had filed suit against Iran prior to the creation of the tribunal, but it 

was prohibited from pursuing that claim. Id. at 56. Sperry therefore filed its claim with the 

tribunal, and Sperry and Iran reached an agreement requiring Iran to pay Sperry $2.8 million. Id. 

They submitted the claim to the tribunal, and, upon the tribunal granting the claim, it became 

final and binding and enforceable in the courts of any nation in accordance with that nation’s 

laws. Id. at 56–57. That enabled Sperry to have its claim paid from $1 billion in Iranian assets 
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that had been placed in a Security Account in the Bank of England for the payment of those 

awards. Id. at 57. Sperry’s award was paid through the Federal Reserve Bank of New York, and

Congress enacted legislation (“Section 502”) requiring the bank to deduct 11⁄2% from Sperry’s 

award “as reimbursement to the United States Government for expenses incurred in connection 

with the arbitration of claims of United States claimants against Iran before [the] Tribunal and 

the maintenance of the Security Account established pursuant to the [Accords].” Id. at 58. 

Sperry sued, contending that the deduction constituted, among other things, the taking of 

property by the government without just compensation. Id. The court of claims rejected 

Sperry’s claim, but the Federal Circuit reversed, holding that the deduction was an 

unconstitutional taking of Sperry’s private property without just compensation, and the 

Government appealed. Id.

The Supreme Court held that the plaintiff was required to show that the amount of the 

deduction was not a user fee to reimburse the United States Government for expenses it incurred 

in connection with the arbitration of the claims against Iran in order to prove it was a taking. The 

Court stated:

Section 502(a) specifically states that the deductions are made as 

“reimbursement to the United States Government for expenses incurred in 

connection with the arbitration of claims of United States claimants against Iran 

before [the] Tribunal and the maintenance of the Security Account . . . .” Given 

especially this specific declaration by Congress that the deductions are intended to 

reimburse costs incurred by the United States, the burden must lie with Sperry to 

demonstrate that the reality of § 502 belies its express language before we 

conclude that the deductions are actually takings.

Id. at 60.

The Court then held that the amount deducted was not so clearly excessive as to show 

that it was not a user fee. “This Court has never held that the amount of a user fee must be 

precisely calibrated to the use that a party makes of Government services. . . . All that we have 

required is that the user fee be a ‘fair approximation of the cost of benefits supplied.’ ” Id. The 

Court stated that “[t]he deductions authorized by § 502 are not so clearly excessive as to belie 

their purported character as user fees. . . . . [F]or we are convinced that on the facts of this case, 

11⁄2% does not qualify as a ‘taking’ by any standard of excessiveness.” Id. at 62. The Court 

concluded that the benefits available to Sperry through the tribunal were “sufficient benefits to 

justify the imposition of a reasonable user fee.” Id. at 64.
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In rejecting the claim that the deduction constituted a taking, the Court stated that “a 

reasonable user fee is not a taking if it is imposed for the reimbursement of the cost of 

government services.” Id. at 63. The Court did not hold that there was no taking because money

is not subject to the Takings Clause, nor did it hold that a user fee cannot be subject to the 

Takings Clause. Rather, the Court held that a reasonable user fee is not a taking if it was to 

reimburse the cost of government services. That proviso would be meaningless, as would the 

Court’s discussion about the reasonableness of the fee in relation to the services provided, unless 

the converse was also true—a “user fee” is a taking if it is not a reasonable fee imposed for the 

reimbursement of the costs of government services.

The PILOT was not a reasonable user fee to reimburse the City for the cost of 

government services. It was an exaction that was designed to be in addition to what would be a 

reasonable charge for the water and sewer systems to remain self-supporting. In the Building 

Contractors case, the City conceded that fact.

In denying the Plaintiffs’ motion for reconsideration in this case, the district court also 

held that the PILOT was not a taking because: “In this case the City clearly had the authority to 

charge the fees, but to the extent it used those fees for improper purposes, that portion of the fee 

was a disguised tax and could not be collected. This is not a constitutional ‘taking’ but an 

improper method of raising revenue.” The district court did not cite any authority for this 

proposition. If an “improper method of raising revenue” cannot constitute a taking, then money 

cannot be subject to the Takings Clause because all money received by the government is 

revenue. Revenue is simply “the income of a government from taxation, excise duties, customs, 

or other sources, appropriated to the payment of the public expenses.” 

http://www.dictionary.com/browse/revenue?s=t (accessed July 17, 2017).

IV.

Did the District Court Err in Holding that Its Conclusion that the PILOT Was Unlawful 

Would Not Be Applied to this Case?

The district court held that it would not apply its decision in the Building Contractors

case to this case, and so it dismissed the Plaintiffs’ complaint with prejudice. In so holding, the 

court applied this Court’s analysis in BHA Investments, Inc. v. City of Boise, 141 Idaho 168, 108 

P.3d 315 (2004) (BHA II). In a prior appeal (BHA I), we had held that a liquor license transfer 
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fee imposed by the City of Boise was not authorized by the legislature. Id. at 170, 108 P.3d at 

317. After our opinion in BHA I, the case of Bravo Entertainment, L.L.C. v. City of Boise was 

brought seeking to recover the liquor license transfer fee paid by a party in that case, and the trial 

court held that our opinion in BHA I should not apply retroactively to the Bravo Entertainment

case. 

On appeal, we did not address whether the district court abused its discretion in refusing 

to apply our BHA I opinion to the Bravo Entertainment case. Rather, we stated:

The usual rule is that decisions of this Court apply retroactively to all past and 

pending cases. For policy reasons, however, this Court has discretion to limit the 

retroactive application of a particular decision. We may hold that it does not 

apply even to the case in which the decision was announced; or that it applies 

only to that case and not to other past or pending cases; or that it applies to both 

that case and pending cases, but not to past cases. When deciding whether to 

limit the retroactive application of a decision, we weigh three factors: (1) the 

purpose of the decision; (2) the reliance upon the prior law; and (3) the effect 

upon the administration of justice if the decision is applied retroactively. We 

balance the first factor against the other two to determine whether to limit the 

retroactive application of the decision.

Id. at 173, 108 P.3d at 320 (emphases added)(Citations omitted). In the above-quoted statement 

from BHA I, we made it clear that it is this Court sitting in its appellate capacity that has 

discretion to limit the retroactive application of a particular decision. That is exactly what 

happened in BHA II. We did not even address the trial court’s determination or rationale for 

holding that BHA I would not be applied retroactively. We addressed the three factors, weighed 

them, and concluded that the retroactive application of our decision in BHA I should not be 

limited. Id. We have not held that a trial court has discretion to refuse to apply a decision it 

made on an issue in one case to another case involving the same issue. Therefore, the district 

court erred in holding that it would not apply its decision in the Building Contractors case to this 

case.

V.

Did the District Court Err in Failing to Consider Equitable Remedies?

The Plaintiffs contend that the district court erred in failing to consider equitable 

remedies. Since the district court granted the City’s motion for summary judgment on all claims, 

the court did not consider any remedies. “This Court does not review an alleged error on appeal 
14

unless the record discloses an adverse ruling forming the basis for the assignment of error.” Ada 

Cnty. Highway Dist. v. Total Success Investments, LLC, 145 Idaho 360, 368, 179 P.3d 323, 331 

(2008). Therefore, we will not consider this issue.

The Plaintiffs also assert that they attempted to amend their complaint, which motion the 

district court denied. The district court denied the motion on various grounds—“undue delay, 

timeliness, court-imposed deadlines, substantial work being done, prejudice, and validity of the 

claim.” The Plaintiffs do not address any of those grounds on appeal, much less all of them. 

Therefore, to the extent that the Plaintiffs are contending that the court erred in denying their 

motion to amend, we will not address that issue. “We will not consider assignments of error not 

supported by argument and authority in the opening brief.” Hogg v. Wolske, 142 Idaho 549, 559, 

130 P.3d 1087, 1097 (2006).

VI.

Is the City Entitled to an Award of Attorney Fees on Appeal?

The City seeks an award of attorney fees on appeal pursuant to Idaho Code sections 6-

918A and 12-117. Idaho Code section 6-918A provides:

At the time and in the manner provided for fixing costs in civil actions, 

and at the discretion of the trial court, appropriate and reasonable attorney fees 

may be awarded to the claimant, the governmental entity or the employee of such 

governmental entity, as costs, in actions under this act, upon petition therefor and 

a showing, by clear and convincing evidence, that the party against whom or 

which such award is sought was guilty of bad faith in the commencement, 

conduct, maintenance or defense of the action. . . . . The right to recover attorney 

fees in legal actions for money damages that come within the purview of this act 

shall be governed exclusively by the provisions of this act and not by any other 

statute or rule of court, except as may be hereafter expressly and specifically 

provided or authorized by duly enacted statute of the state of Idaho.

The statute provides that if, “upon a showing, by clear and convincing evidence, that the 

party against whom or which such award is sought was guilty of bad faith in the commencement, 

conduct, maintenance or defense of the action,” reasonable attorney fees may be awarded as 

costs “at the discretion of the trial court.” In Minich v. Gem State Developers, Inc., 99 Idaho 

911, 591 P.2d 1078 (1979), this Court held that the word “judge” in Idaho Code section 12-121 

“is simply an officer or member of a tribunal assembled under authority of law for the 

administration of justice, we conclude that the singular ‘judge’ should also be construed to mean 
15

the plural ‘judges’ or ‘justices,’ ” thereby authorizing the award of attorney fees on appeal under 

that statute. Id. at 918, 591 P.2d at 1085. We also stated that “had the legislature intended to 

limit the statutory authority to any particular level of courts within the judicial system, it could 

easily and clearly have done so.” Id.

Idaho Code section 6-918A clearly states that upon the proper showing, attorney fees 

may be awarded under that statute “at the discretion of the trial court.” The words “trial court” 

could not reasonably be construed to include an appellate court. Therefore, Idaho Code section 

6-918A does not provide for the awarding of attorney fees on appeal.

This Court has never previously addressed the meaning of the words “trial court” in 

section 6-918A. We have previously denied requests for an award of attorney fees on appeal 

pursuant to the statute because there was no showing that the party against whom attorney fees 

was sought was “guilty of bad faith in the commencement, conduct, maintenance or defense of 

the action.” We have not, however, previously addressed the meaning of the words “trial court” 

in the statute, nor have we even quoted that part of the statute that includes those words.” CNW, 

LLC v. New Sweden Irrigation Dist., 161 Idaho 89, 93 n.1, 383 P.3d 1259, 1263 n.1 (2016); 

Hennefer v. Blaine Cnty. Sch. Dist., 158 Idaho 242, 261–62, 346 P.3d 259, 278–79 (2015); Block 

v. City of Lewiston, 156 Idaho 484, 490, 328 P.3d 464, 470 (2014); Hoffer v. City of Boise, 151 

Idaho 400, 403, 257 P.3d 1226, 1229 (2011); Renzo v. Idaho State Dep’t of Agr., 149 Idaho 777, 

781, 241 P.3d 950, 954 (2010); Cordova v. Bonneville Cnty. Joint Sch. Dist. No. 93, 144 Idaho 

637, 642–43, 167 P.3d 774, 779–80 (2007); Dorea Enterprises, Inc. v. City of Blackfoot, 144 

Idaho 422, 426, 163 P.3d 211, 215 (2007); Nation v. State, Dep’t of Correction, 144 Idaho 177, 

194, 158 P.3d 953, 970 (2007); O’Guin v. Bingham Cnty., 142 Idaho 49, 55–56, 122 P.3d 308, 

314–15 (2005); Jensen v. State, 139 Idaho 57, 64–65, 72 P.3d 897, 904–05 (2003); Tomich v. 

City of Pocatello, 127 Idaho 394, 400, 901 P.2d 501, 507 (1995).

In Block, we did cite Beehler v. Fremont County, 145 Idaho 656, 182 P.3d 713 (Ct. App.

2008), but it was for the proposition, “(holding I.C. § 12-117 did not provide an exception after 

noting it has held that ‘I.C. § 6-918A governed to the exclusion of all other standards when the 

case was brought under the ITCA’).” 156 Idaho at 490, 328 P.3d at 470. In Beehler, the issue 

was whether the requirement in Idaho Code section 6-610 of posting a bond before filing an 

action against any law enforcement officer that arises in the course of performance of the 

officer’s duty was superseded by the later enactment of Idaho Code section 6-918A. 145 Idaho
16

at 658, 182 P.3d at 715. The appellant contended that section 6-918A superseded section 6-610 

because both statutes address attorney fees. Id. at 659, 182 P.3d at 716. The Court of Appeals 

held that “[t]here is no indication that the legislature intended I.C. § 6-918A to terminate the 

applicability of I.C. § 6-610 in tort claims.” Id. 

With respect to the respondents’ request for an award of attorney fees on appeal in 

Beehler, the Court of Appeals held that they had not shown by clear and convincing evidence 

that the appellants had proceeded in bad faith. Id. at 661, 182 P.3d at 718. The Court of Appeals 

did state, “Section 6–918A is the exclusive provision for awarding attorney fees under the ITCA, 

including claims on appeal.” Id. at 661, 182 P.3d at 718. However, the Court of Appeals did not 

quote or consider that portion of the statute stating that attorney fees may be awarded “at the 

discretion of the trial court.” Rather, it cited as authority for that statement Nation v. State, 144 

Idaho 177, 194, 158 P.3d 953, 970 (2007); Jensen v. State, 139 Idaho 57, 64–65, 72 P.3d 897, 

904–05 (2003); and Packard v. Joint Sch. Dist. No. 171, 104 Idaho 604, 614, 661 P.2d 770, 780 

(Ct.App.1983). In Nation and Jensen, we had simply denied requests to award attorney fees on 

appeal pursuant to Idaho Code section 6-918A on the ground that there was no showing that the 

appeal had been brought in bad faith. Nation, 144 Idaho at 194, 158 P.3d at 970; Jensen, 139 

Idaho at 64–65, 72 P.3d at 904–05. In those cases we did not quote or discuss that part of section 

6-918A that referred to the “trial court.” In Packard, the Court of Appeals held: “Assuming, 

without deciding, that neither party would be entitled to recover attorney fees on appeal unless 

the opposing party had exhibited ‘bad faith’ within the meaning of I.C. § 6–918A, we believe no 

award could be made. This appeal has been free of bad faith.” 104 Idaho at 614, 661 P.2d at

780. (Emphasis added). We have never previously addressed the issue of the scope of section 6-

918A in light of the words “trial court,” not only regarding whether the statute permitted the 

award of attorney fees on appeal, but also with respect to what impact, if any, those words would 

have on the exclusivity provision in the statute.

The City also seeks an award of attorney fees pursuant to Idaho Code section 12-121. “In 

order to be eligible for an award of attorney fees under Idaho Code section 12-121, the party 

must be the prevailing party on appeal.” Armand v. Opportunity Mgmt. Co., Inc., 155 Idaho 592, 

602, 315 P.3d 245, 255 (2013). Thus, the City is not entitled to an award of attorney fees on 

appeal, assuming that it would apply. Because the issue is not raised in this appeal, we do not 

decide whether the exclusivity provision in section 6-918A only applies to the awarding of 
17

attorney fees in the trial court or also prevents the awarding of attorney fees on appeal pursuant 

to another statute.

VI.

Conclusion.

We vacate the judgment and amended judgments in this action and remand this case for 

further proceedings that are consistent with this opinion. We award the Appellants costs on 

appeal.

Chief Justice BURDICK, and Justices JONES, HORTON and BRODY CONCUR.