Opinion ID: 2364258
Heading Depth: 4
Heading Rank: 2

Heading: This is a contested case even though the ITD used informal procedures

Text: The Dissent asserts that this is not a contested case because the ITD utilized informal procedures in processing the case. A person aggrieved by an agency action other than an order in a contested case is entitled to petition for judicial review. I.C. § 67-5270(2). This was a contested case even though the ITD only followed informal procedures because the IAPA both authorizes and expressly encourages state agencies to resolve issues informally. Formal procedures, such as notice, a hearing, or a formal record are not part of the definition of an order in a contested case. The IAPA provides that an informal disposition may be made of any contested case by negotiation, stipulation, agreed settlement, or consent order. I.C. § 67-5241(1)(c). It goes on to specifically state that [i]nformal settlement of matters is to be encouraged. Id. The statute represents a conscious legislative effort to encourage informal dispute resolution related to all kinds of agency action. Gilmore & Goble, supra, 30 Idaho L.Rev. at 280; see also Act of April 8, 1992, ch. 263, § 25, 1992 Idaho Sess. Laws 783, 802 (adding I.C. § 67-5241). However, an agency cannot unilaterally decide to utilize informal procedures to the exclusion of formal proceedings. Unless all parties agree to the contrary in writing, informal proceedings do not substitute for formal proceedings and do not exhaust administrative remedies, and informal proceeding [sic] are conducted without prejudice to the right of the parties to present the matter formally to the agency. IDAPA 04.11.01.103. Although the ITD has adopted substantive standards for issuing special permits, the Attorney General promulgates rules of procedure for agencies to use when executing their general functions, including adjudicating contested cases. Id. § 67-5206(2), (4). These rules apply unless an agency has devised its own procedural scheme, which the ITD has not. Id. § 67-5206(5). The ITD rules also specifically state that appeals in special-permit applications are governed by the Attorney General's rules. IDAPA 39.03.11.003. The Idaho Rules of Administrative Procedure of the Attorney General (the Rules) can be found at IDAPA 04.11.01.000 to .999. The Rules allow informal proceedings to be followed in contested cases before an agency. IDAPA 04.11.01.100. Unless prohibited by statute, the agency may provide for the use of informal procedure at any stage of a contested case. IDAPA 04.11.01.101. There is ample authority supporting an agency's decision to handle a dispute informally. The Dissent asserts that only formally adjudicated cases are contested cases under the IAPA. To the contrary, no statute or rule makes formal proceedings a prerequisite to a contested case. A contested case is defined both by statute and by the Rules as a proceeding by an agency . . . that may result in the issuance of an order. Id. § 67-5240; see also IDAPA 04.11.01.005.06 (stating that a contested case is a proceeding which results in the issuance of an order). Moreover, Rule 50 states that the rules governing both informal and formal proceedings apply to agencies in contested cases. IDAPA 04.11.01.050. Following the plain text of the statute, this Court has twice stated that there are only two elements to a contested case: (1) the agency must be empowered to determine the particular issue, and (2) the action must fit the statutory definition of an order. Lochsa Falls, 147 Idaho at 237, 207 P.3d at 968; Westway Constr., 139 Idaho at 111-13, 73 P.3d at 725-27. This Court has never otherwise suggested that only formally adjudicated cases are contested cases. See Barron v. Idaho Dep't of Water Res., 135 Idaho 414, 417, 18 P.3d 219, 222 (2001) (stating that  all proceedings by an agency . . . that may result in the issuance of an `order' are governed by the IAPA (emphasis added)); Dupont v. Idaho State Bd. of Land Comm'rs, 134 Idaho 618, 622, 7 P.3d 1095, 1099 (2000) (I.C. § 67-5240 defines any proceeding that may result in an order as a contested case, unless otherwise provided. (emphasis added)). Whether formal procedures were followed is irrelevant to the definition of a contested case. The Dissent nonetheless contends that there was no contested case because the ITD stated that it declined to initiate one and indicated that it did not regard ConocoPhillips's application for a permit as a contested case. The Dissent cites I.C. § 67-5241(1)(a), which does provide that an agency or a presiding officer may decline to initiate a contested case. Again, however, it does not matter whether the agency regards a proceeding to be part of a contested case or not. Proceedings that result in the issuance of an order are contested cases. I.C. § 67-5240. Idaho Code § 67-5241(1)(a) does not state that an agency may decline to follow the required statutory procedures in a contested case. It states that an agency may decline to initiate a contested case. It recognizes that some agencies have a prosecutorial function and, when exercising that function, have discretion to decline to prosecute. Agencies can have both prosecutorial and adjudicatory functions. As IDAPA 04.11.01.420 states, [w]hen statute assigns to an agency both (1) the authority to initiate complaints or to investigate complaints made by the public, and (2) the authority to decide the merits of complaints, the agency is required to perform two distinct functions: prosecutorial/investigative and adjudicatory. The prosecutorial function includes deciding whether or not to issue a complaint. As IDAPA 04.11.01.420.01 states, [t]he prosecutorial function includes presentation of allegations or evidence to the agency head for determination whether a complaint will be issued. . . . A complaint charges a person with a violation of the law. All pleadings charging other person(s) with acts or omissions under law administered by the agency are called `complaints.' IDAPA 04.11.01.240.01. The filing of a complaint initiates a contested case. See IDAPA 04.11.01.210 (Pleadings in contested cases are called applications or claims or appeals, petitions, complaints, protests, motions, answers, and consent agreements.). Idaho Code § 67-5241(1)(a) simply provides that an agency has discretion to decline to prosecuteto decline to initiate a contested case. For example, under the Idaho Bar Commission Rules (I.B.C.R.), Bar Counsel investigates all grievances that allege violations of the Rules of Professional Conduct. I.B.C.R. 504(b), 509(a). Bar Counsel has a number of options when handling a grievance, including the power to seek formal charges. I.B.C.R. 509(c). Yet, after an informal investigation, Bar Counsel often chooses to simply disregard the matter, to issue an informal admonition, or to privately reprimand the charged attorney. I.B.C.R. 509(b), (c). While all of these actions would constitute the agency's disposition in a dispute, none involves an order that determines the attorney's legal rights, duties, or privileges. These actions would reflect the presiding officer's decision to decline to initiate a contested case under I.C. § 67-5241(1)(a). The Dissent also argues that, since apparently no application was filed with the ITD until the day it issued the permits, no contested case was ever initiated. It cites Rule 200 for the proposition that an application is the initial pleading that commences a contested case. This position ignores the plain text of Rule 200, which simply provides that representatives for service must be named in [t]he initial pleading of each party at the formal stage of a contested case.  IDAPA 04.11.01.200 (emphasis added). The rule on its face does not require any pleading to commence a contested case, but merely governs how pleadings are filed in the formal stage of a contested case. ConocoPhillips did not have to file an application to initiate a contested case. Therefore, because the issuance of the permit was an order in a contested case, this Court does not have jurisdiction under I.C. § 67-5270(2).