Opinion ID: 874314
Heading Depth: 2
Heading Rank: 1

Heading: IDWR Complied with IDAPA in Creating WD170

Text: This Court, in Nettleton v. Higginson , held that [t]he requirement of procedural due process is satisfied by the statutory scheme of Title 42 of the Idaho Code. [2] 98 Idaho 87, 91, 558 P.2d 1048, 1052 (1977). Idaho Code § 42-1701A provides that all IDWR hearings shall be conducted in accordance with IDAPA. Idaho Code § 42-604 specifically requires notice and a hearing prior to entering an order creating, modifying, or abolishing a district and states that [t]he director's order is subject to judicial review in accordance with IDAPA. Therefore, analysis of whether the necessary process was provided becomes an inquiry into whether the provisions of IDAPA were substantially complied with. Thompson Creek argues that IDWR violated IDAPA in three ways: 1) failing to record the entire public hearing held by the Director prior to the creation of WD170, in violation of I.C. § 67-5242(3)(d); 2) failing to provide an impartial and disinterested decision-maker, as required by Eacret v. Bonner County, 139 Idaho 780, 784, 86 P.3d 494, 498 (2004); and 3) depriving water rights holders the opportunity to provide meaningful input regarding the creation of WD170.
Thompson Creek argues that the Director failed to record the entire hearing, in violation of I.C. § 67-5242(3)(d), and I.C. § 67-5279(3)(a), (c). IDWR responds that Thompson Creek's argument on this point should be deemed waived as it was not raised in Thompson Creek's post-hearing Written Comments, its Petition for Reconsideration, or its Objection to Administrative Record (pursuant to Idaho Rule of Civil Procedure 84(j)). IDWR argues alternatively that the unrecorded hearing that Thompson Creek refers to was merely an informal question-and-answer session that preceded the formal hearing on the creation of WD170, and was not relied upon by the Director in his decision to create WD170.
Idaho Rule of Civil Procedure 84 governs judicial review of agency actions by the district court, and I.R.C.P 84(j) concerns settlement of the record, providing, inter alia: Any party may object to the transcript and record with [sic] fourteen (14) days from the date of mailing of the notice of the parties that the transcript and record has been lodged with the agency. Upon failure of the parties to file an objection within that time period, the transcript and record shall be deemed settled. An issue not raised below will generally not be considered or reviewed on appeal. Mountainview Landowners Coop. Ass'n v. Cool, 142 Idaho 861, 866, 136 P.3d 332, 337 (2006). This Court held, in Manookian v. Blaine County , that I.R.C.P. 84(j) applies to administrative decisions being appealed to a district court, and failure to raise an issue before an administrative agency will preclude that issue from being heard upon review by the district court. 112 Idaho 697, 700, 735 P.2d 1008, 1011 (1987). The record shows that Thompson Creek did file an objection to the record, but failed to object upon the basis that the transcript of the hearing was inadequate for failure to include the portion of the hearing that took place from 7:00-8:10 p.m. Thompson Creek argues that I.R.C.P. 84(j) is inapplicable as Thompson Creek is challenging a procedural error at the hearing itself rather than an error in the preparation of the transcript of the record. Nothing within the rule supports this attempted distinction. Finally, Thompson Creek alleges that this error could not have been corrected by the Director and, therefore, raising the objection would have been fruitless and should be excused. In fact, a proper objection to the record would have provided IDWR with an opportunity to reconsider the sufficiency of the record, and at a minimum would have preserved the issue for appeal. See Idaho R. Civ. P. 84(j) (The agency's decision on the objection and all evidence, exhibits, and written presentations on the objection shall be included in the record on petition for review. ) (emphasis added). Thompson Creek first objected to the adequacy of the record, on the grounds that it failed to include a transcript of the first seventy minutes of the hearing, when appealing IDWR's decision to the district court below. Therefore, we find that Thompson Creek waived its objection to the sufficiency of the hearing transcript both by failing to include the objection in its Objection to Administrative Record, as required by I.R.C.P. 84(j), and by raising the issue for the first time on appeal, in violation of Mountainview.
Having found the objection to the record waived, we nonetheless choose to discuss this issue in order to clarify the requirements of I.C. § 67-5242. Idaho Code § 67-5242(3)(d) provides that at an administrative hearing, the presiding officer [s]hall cause the hearing to be recorded at the agency's expense. The plain legislative purpose behind this provision is to create a record of agency hearings sufficient to provide the district court with a meaningful record for review. The Director gave notice to affected water rights holders that a hearing on the proposed creation of WD170 would be held at 7:00 p.m. on November 11, 2005, in Challis, Idaho. In the transcript of the portion of the hearing that was recorded, the Director states, [w]e went on the record at approximately 8:10 p.m. This meeting began shortly after 7:00 p.m. but was preceded by a period of questions and answers on related matters. Clearly the Director should have begun recording when the proceedings began, at 7:00 p.m. The public was given notice that the meeting would begin at 7:00 p.m. and the meeting actually began at 7:00 p.m. To argue, after the fact, that over seventy minutes of the hearing did not need to be included in the record because it was a mere question-and-answer session is disingenuous. The Director has stated that he did not rely upon any information articulated during this unrecorded seventy minutes that was not also reported on the record, but this is beside the point. In order for courts to effectively review the administrative process they must be provided with a full transcript of the hearing in the record. However, under IDAPA, notwithstanding procedural violations, [the] agency action shall be affirmed unless substantial rights of the appellant have been prejudiced. I.C. § 67-5279(4). Thompson Creek has failed to demonstrate that its substantial rights have been prejudiced by this procedural defect in not recording the entire hearing. Thompson Creek acknowledges that the Director repeatedly implored all parties to come forth and make any comments they wanted on the record, during the recorded portion of the hearing on November 11, 2005. Furthermore, Thompson Creek acknowledged at oral argument that one of its representatives was present at the hearing, including the unrecorded portion. Additionally, the Director accepted written comments from Thompson Creek after the hearing, considered them, and included discussion of them in his Amended Final Order. Therefore, as ample opportunity was provided for all comments to be made on the record, Thompson Creek had actual knowledge of everything said at the hearing, and the Director took all comments into consideration, we find that the procedural violation did not prejudice Thompson Creek's substantial rights.
Thompson Creek argues that the Director believed that the WSRA obligated him to create WD170, and that the Director was statutorily precluded from creating a water district solely based upon the WSRA. Thompson Creek further asserts that this false belief violated due process in rendering the Director a biased decision-maker, and in depriving water rights holders the opportunity to provide meaningful input regarding the creation of WD170. IDWR responds that this argument should be deemed waived as Thompson Creek failed to seek the Director's disqualification under I.C. § 67-5252. IDWR argues, alternatively, that the Director was aware that the WSRA was not binding upon him and that he based his decision to create WD170 upon substantial evidence in the record, not upon the WSRA. Ultimately, the claim of director bias and the claim of depriving water rights holders of an opportunity to provide meaningful input are the same claim, and shall be treated as such.
Idaho Code § 67-5252(2) provides, inter alia: Any party may petition for the disqualification of a person serving or designated to serve as presiding officer: (a) within fourteen (14) days after receipt of notice indicating that the person will preside at the contested case; or (b) promptly upon discovering facts establishing grounds for disqualification, whichever is later. (Emphasis added). Thompson Creek argues that it was unaware of the Director's bias until it reviewed the administrative record, subsequent to the hearing. Idaho Code § 67-5252 does not require that a biased decision-maker claim be raised prior to an agency hearing. Turning to the Mountainview analysis, the issue becomes whether Thompson Creek raised the issue of director bias for the first time on appeal. See Mountainview Landowners Coop. Ass'n v. Cool, 142 Idaho 861, 866, 136 P.3d 332, 337 (2006). This Court has held that when an issue is not formally raised but is actually considered below, it will be deemed to have been raised below. Manookian v. Blaine County, 112 Idaho 697, 700, 735 P.2d 1008, 1011 (1987) (The distinction must be made between an issue not formally raised below and an issue that was never raised below. Where an issue never surfaced below, it is not proper for it to be raised on appeal.). Thompson Creek did not specifically couch its argument before IDWR as one of director bias. Rather, Thompson Creek argued that the Director believed that the State of Idaho had bound him to create WD170 when the State signed the WSRA, or at a minimum, that the Director's knowledge of the WSRA improperly predisposed him to create WD170. Ultimately, Thompson Creek's argument regarding the WSRA's influence on the Director is the basis for their claim that the Director was biased. Therefore, we find Thompson Creek's argument of director bias was not waived.
The Due Process Clause entitles a person to an impartial and disinterested tribunal. Eacret v. Bonner County, 139 Idaho 780, 784, 86 P.3d 494, 498 (2004) (citing Marshall v. Jerrico, Inc., 446 U.S. 238, 100 S.Ct. 1610, 64 L.Ed.2d 182 (1980)). This requirement applies not only to courts, but also to state administrative agencies. Id. (citing Stivers v. Pierce, 71 F.3d 732 (9th Cir.1995)). In Marcia T. Turner, L.L.C. v. City of Twin Falls, this Court further examined what makes a decision-maker biased, holding: In the context of due process, it does not mean `lack of preconception in favor of or against a particular legal view. This sort of impartiality would be concerned, not with guaranteeing litigants equal application of the law, but rather with guaranteeing them an equal chance to persuade the court on the legal points in their case.' It also does not mean having `no preconceptions on legal issues, but [being] willing to consider views that oppose his preconceptions, and remain[ing] open to persuasion, when the issues arise in a pending case.' Impartiality under the Due Process Clause does not guarantee each litigant a chance of changing the judge's preconceived view of the law. 144 Idaho 203, 209, 159 P.3d 840, 846 (2007) (alterations in original) (citations omitted) (quoting Republican Party of Minn. v. White, 536 U.S. 765, 122 S.Ct. 2528, 153 L.Ed.2d 694 (2002)). A decision maker is not disqualified simply because he has taken a position, even in public, on a policy issue related to the dispute, in the absence of a showing that the decision maker is `not capable of judging a particular controversy fairly on the basis of its own circumstances.' Turner, 144 Idaho at 209, 159 P.3d at 846 (quoting Eacret, 139 Idaho at 785, 86 P.3d at 499). Thompson Creek argues that the Director of IDWR believed he was bound by the WSRA to create WD170, and that the Director presented slides at the public hearing stating that IDWR must establish WD170. The Director responds that the SRBA court, in authorizing the WSRA, specifically excluded IDWR from being bound by that agreement as a non-signatory party, and that the Director was capable of judging the controversy fairly. Thompson Creek counters that the Attorney General for the State of Idaho was a signatory party, signing for the State of Idaho, including the Idaho Water Resources Board, and that the Attorney General, as an agent for the State, may bind the State and all of the State's administrative agencies. Thompson Creek's argument is misguided. The Director was certainly entitled to consider the WSRA as contextual information in determining whether the creation of WD170 was necessary, particularly as the WSRA is the reason the State of Idaho filed a motion for interim administration of water rights, pursuant to I.C. § 42-1417. It is true that the WSRA anticipated that IDWR would create WD170. The slide Thompson Creek points to as evidence that the Director had pre-determined that WD170 would be created is, in fact, a bullet-point summarizing provisions of the WSRA itself. In approving the proposed WSRA, the SRBA court specifically decreed that the provisions of the WSRA addressing administration of water rights shall not be binding on this Court or non-signatory parties with regard to administration of water rights by IDWR.  Whether or not the Attorney General, as an agent for the State of Idaho, may bind a State agency, the SRBA court made it clear that in this instance IDWR was not bound. The Director believed that the creation of WD170 was necessary for the proper administration of water rights within the district area, which is the reason the public hearing was convened. His preliminary belief that WD170 should be created does not mean that the Director was not capable of judging that particular controversy fairly on the basis of its own circumstances. See Turner, 144 Idaho at 209, 159 P.3d at 846. The Director's Amended Final Order demonstrates that he considered Thompson Creek's arguments opposing the creation of WD170, and considered a broad range of other factors in coming to the decision that the creation of WD170 was necessary. The record shows that IDWR treated Thompson Creek fairly throughout the process of deciding to create WD170. IDWR listened to Thompson Creek's concerns, but in the end simply disagreed with Thompson Creek's conclusions. In fact, 17 of 26 paragraphs of the Conclusions of Law in the Amended Final Order were devoted to responding to concerns raised by Thompson Creek. Therefore, we find that the Director was not biased in the creation of WD170. [3]