Court Opinion

ID: 3152659
Source: CourtListenerOpinion
Date Created: 2015-11-06 15:03:21.563458+00
Date Added: 2024-06-11T07:38:35.761595
License: Public Domain

IN THE SUPREME COURT OF IOWA
                              No. 14–0205

                         Filed November 6, 2015

MONROE BRANSTAD,

      Appellant,

vs.

STATE OF IOWA ex rel. NATURAL RESOURCE COMMISSION and the
IOWA DEPARTMENT OF NATURAL RESOURCES,

      Appellees.

      On review from the Iowa Court of Appeals.

      Appeal from the Iowa District Court for Hancock County, Rustin

Davenport, Judge.

      The court of appeals held that no exceptions to Iowa Code section

625.29(1) applied to preclude an award of attorney fees to Branstad. It

reversed the decision of the district court and remanded for a calculation

of attorney fees.   DECISION OF COURT OF APPEALS VACATED;

DISTRICT COURT JUDGMENT AFFIRMED.

      Christine E. Branstad of Branstad Law, PLLC, Des Moines, and

James L. Pray of Brown, Winick, Graves, Gross, Baskerville and

Schoenebaum, PLC, Des Moines, for appellant.
                                   2

      Thomas J. Miller, Attorney General, Jeffrey S. Thompson, Solicitor

General, and David R. Sheridan and David L. Dorff, Assistant Attorneys

General, for appellees.
                                     3

ZAGER, Justice.

      In this appeal we are asked to decide whether the State’s role is

“primarily adjudicative” when the Natural Resource Commission decides

a contested case following an investigation and subsequent decision by

the Department of Natural Resources to assess restitution. We find that

the State’s role in this case was primarily adjudicative, precluding an

award of attorney fees. See Iowa Code § 625.29(1)(b) (2011). Therefore,

we vacate the decision of the court of appeals and affirm the judgment of

the district court denying attorney fees.

      I. Background Facts and Proceedings.

      The Iowa Department of Natural Resources (DNR) was called to

investigate a fish kill that occurred in the Winnebago River on or around

August 28, 2008. The agency found the following facts.

      Scott Grummer, a biologist for the DNR, led the investigation into

the fish kill.   During the investigation, Grummer interviewed Monroe

Branstad about the possibility that the fish kill was caused by pollution

from his farming operation.    According to Grummer, Branstad said he

had recently installed a silage leachate runoff basin on his property.

Branstad also said that he was the only farmer in the area he knew of

who stored silage leachate.     The fish kill affected 16.1 miles of the

Winnebago River.

      As a result of Grummer’s investigation, he determined that the

release of sweet corn silage runoff from Branstad’s farming operation

caused the fish kill on the Winnebago River. Grummer also performed a

fish kill assessment, which led him to calculate that the number of fish

killed was 31,244 and that those fish had a monetary value of

$63,020.23. As a result of this investigation and fish kill assessment,

the DNR prepared a litigation report and made a referral to the attorney
                                     4

general’s office for appropriate enforcement action pursuant to Iowa Code

section 455B.191 (2009).

      On May 11, 2010, Branstad entered into a consent order with the

State. As part of this consent order, Branstad admitted that on August

28 and 29, 2008, sweet corn silage leachate, a pollutant, discharged from

a containment basin on his farm operation into the Winnebago River in

violation of Iowa Code section 455B.186(1). However, Branstad denied

the discharge caused the death of fish in the Winnebago River and

specifically reserved his right to contest any claim for damages brought

by the DNR for the fish kill pursuant to Iowa Code section 481A.151 and

Iowa Administrative Code chapter 571—113. Branstad agreed to pay a

civil penalty of $10,205 and an administrative penalty of $6795 for the

violations.

      On June 10, the DNR submitted its restitution assessment to

Branstad.     As noted in the restitution assessment, Iowa Code section

481A.151 provides that any person who is liable for polluting water of the

state in violation of state law shall be required to pay restitution for the

injury. Id. § 481A.151(1). This Code section also authorizes the Iowa

Natural Resource Commission (Commission) to adopt rules providing for

procedures for the investigation of violations and the assessment of

restitution amounts. Id. § 481A.151(2). The restitution assessment also

set forth Branstad’s appeal rights pursuant to Iowa Code section

481A.151(2) and Iowa Administrative Code rules 571—7.1 and 561—7.4.

As set forth in the restitution assessment, “[a] contested hearing will then

be commenced” pursuant to the above statutes and rules.           Branstad

timely appealed.

      A contested hearing was conducted on July 25 before an

administrative law judge (ALJ). In his appeal, Branstad raised a number
                                        5

of arguments and defenses. During the proceeding, both Branstad and

the DNR were represented by counsel. On December 6, the ALJ issued a

proposed decision that affirmed the restitution assessment in its entirety,

including the restitution amount of $61,794.49. 1              Branstad timely

appealed the proposed decision of the ALJ to the Commission. On March

8, 2012, the Commission conducted a hearing on the appeal at which all

parties were able to argue their respective positions. At the conclusion of

the hearing, the Commission voted 4–1 to affirm the proposed decision of

the ALJ, which then became its final decision.

      Branstad timely filed his petition for judicial review in the district

court. In its ruling issued July 16, the district court affirmed the final

decision of the Commission on most of Branstad’s arguments. However,

the district court found that the DNR failed to follow its own rules for

investigating fish kills.   The district court found that the extrapolation

method used by the DNR when it investigated the Winnebago River fish

kill was incorrect and inconsistent with the methods prescribed by the

American Fisheries Society Special Publication 24 (AFS 24). The district

court reversed the final decision of the Commission and struck the

restitution assessment. On July 29, the DNR requested that the district

court reconsider its ruling and remand the case for a restitution

calculation based only on the amount of dead fish actually counted. The

district court determined that this was consistent with the rules

contained in AFS 24.        The district court remanded the case to the

      1Following   the investigation, Grummer initially calculated the amount of
restitution owed to be $63,020.23, using the American Fisheries Society Special
Publication 30 (AFS 30). Later, using AFS 24, Grummer calculated the amount owed as
$61,448.47. With costs, the final amount in the restitution assessment given to
Branstad was $61,797.49.
                                      6

Commission to recalculate the damages based upon the 2233 dead fish

actually counted by the DNR.

      In its decision on remand, the Commission reduced the restitution

assessment to Branstad as a result of the Winnebago River fish kill to

$5298.19. Branstad did not appeal this restitution assessment.

      On October 30, Branstad filed an application for an award of

attorney fees under Iowa Code section 625.29 (2011). The district court

denied Branstad’s motion for attorney fees on January 3, 2014.           In

denying the motion, the district court found three exceptions to the

requirement to award attorney fees applied: the State’s position was

supported by substantial evidence, the role of the State was primarily

adjudicative, and an award of fees in the situation would be unjust. Id.

§ 625.29(1)(a)–(c). Because it found these exceptions applied, the district

court did not rule on whether Branstad was the prevailing party.

      Branstad appealed the decision of the district court.             We

transferred the case to the court of appeals.       The court of appeals

reversed the district court’s decision and remanded the case for a

calculation of attorney fees. The court of appeals held that none of the

exceptions found in Iowa Code section 625.29(1) applied to Branstad’s

case to preclude an award of attorney fees. The court of appeals also

held that the district court should have found Branstad was the

prevailing party under the statute.

      The State filed an application for further review, which we granted.

      II. Standard of Review.

      The standard of review we use for cases involving a district court’s

interpretation of a statute is for correction of errors at law. Star Equip.,

Ltd. v. Iowa Dep’t of Transp., 843 N.W.2d 446, 451 (Iowa 2014). We are

not bound by the district court’s legal conclusions. Van Sloun v. Agans
                                        7

Bros., Inc., 778 N.W.2d 174, 179 (Iowa 2010).             The sole question we

address is whether the district court correctly applied the law with

respect to an award of attorney fees under Iowa Code section 625.29.

Remer v. Bd. of Med. Exam’rs, 576 N.W.2d 598, 600 (Iowa 1998).

      III. Analysis.

      Because an award of attorney fees are a derogation of the common

law, attorney fees “ ‘are generally not recoverable as damages in the

absence of a statute or a provision in a contract.’ ” Botsco v. Davenport

Civil Rights Comm’n, 774 N.W.2d 841, 845 (2009) (quoting Kent v. Emp’t

Appeal Bd., 498 N.W.2d 687, 689 (Iowa 1993)).                   The statutory

authorization must be express and “ ‘must come clearly within the terms

of the statute.’ ” Id. (quoting Thorn v. Kelley, 257 Iowa 719, 726, 134
N.W.2d 545, 548 (1965)).         Iowa Code section 625.29(1) is such a

statutory exception to the rule, and it allows for the recovery of attorney

fees in some civil actions that involve the State. Remer, 576 N.W.2d at

600. It provides, in part:

      Unless otherwise provided by law . . . the court in a civil
      action brought by the state or an action for judicial review
      brought against the state pursuant to chapter 17A other
      than for a rulemaking decision, shall award fees and other
      expenses to the prevailing party unless the prevailing party
      is the state. However, the court shall not make an award
      under this section if it finds one of the following:

           a. The position of the state was supported by
      substantial evidence.

            b. The     state’s   role   in   the   case   was   primarily
      adjudicative.

           c. Special circumstances exist which would make the
      award unjust.
                                     8

Iowa Code § 625.29(1)(a)–(c). Although there are several exceptions listed

under the statute, any one exception can prevent a party from being

awarded attorney fees. See id. § 625.29(1).

         A. Prevailing Party.       The district court declined to decide

whether Branstad was the prevailing party under the statute because it

found that the exceptions under Iowa Code section 625.29(1) applied to

prevent an award of attorney fees. Branstad contends it was error for the

district court not to address whether he was the prevailing party.

However, we have previously declined to award attorney fees under one

of the exceptions to section 625.29(1) without addressing whether the

defendant was the prevailing party.       See In re Property Seized from

McIntyre, 550 N.W.2d 457, 460 (Iowa 1996).          Because we ultimately

conclude that an exception to Iowa Code section 625.29(1) applies, we

decline to determine whether Branstad was the prevailing party under

the statute.

         B. Exceptions    to   an    Award    of   Attorney    Fees   Under

625.29(1). The district court relied on three of the exceptions contained

in Iowa Code section 625.29(1) to deny Branstad’s motion to recover

attorney fees. The court of appeals held none of these exceptions applied

to preclude the award of attorney fees. However, in its application for

further review, the State focused its argument largely on whether the

action of the Commission was primarily adjudicative.          See Iowa Code

§ 625.29(1)(b). Focusing primarily on the statute, we must determine if

the award of attorney fees is prohibited by the exception because the

Commission’s role was primarily adjudicative.

      Branstad argues that we should consider the DNR—not the

Commission—to be the “State” for purposes of the “State’s role” under

the statute. We do not agree. Iowa Code section 481A.151 provides that
                                      9

the DNR, in its investigatory role, was acting under the umbrella of the

Commission.    See id. § 481A.151(2) (2009).      The statute requires that

“[t]he commission shall adopt rules providing for procedures for

investigations and the administrative assessment of restitution amounts.

The rules shall establish an opportunity to appeal a departmental action

including by a contested case proceeding under chapter 17A.” Id. The

Code clearly anticipates that the DNR will act as an investigatory body

and the Commission will take the final agency action if the DNR’s

restitution assessment is appealed. See id.

      The phrase “primarily adjudicative” is not defined in the Code.

When we are asked to interpret the language of a statute, we apply well-

settled principles of statutory interpretation:

      The purpose of statutory interpretation is to determine the
      legislature’s intent.   We give words their ordinary and
      common meaning by considering the context within which
      they are used, absent a statutory definition or an established
      meaning in the law. We also consider the legislative history
      of a statute, including prior enactments, when ascertaining
      legislative intent. When we interpret a statute, we assess the
      statute in its entirety, not just isolated words or phrases.
      We may not extend, enlarge, or otherwise change the
      meaning of a statute under the guise of construction.

Schaefer v. Putnam, 841 N.W.2d 68, 75 (Iowa 2013) (internal quotation

marks omitted).

      “We also consider the statute’s ‘subject matter, the object sought to

be accomplished, the purpose to be served, underlying policies, remedies

provided, and the consequences of the various interpretations.’ ” Cox v.

State, 686 N.W.2d 209, 213 (Iowa 2004) (quoting State v. Albrecht, 657
N.W.2d 474, 479 (Iowa 2003)).

      While primarily adjudicative is not defined by statute, we are not

without guidance on this issue. In Remer, the court was faced with the

question of whether the board of medical examiners’ role in a disciplinary
                                      10

proceeding against a physician was primarily adjudicative under the

statute in determining whether to award attorney fees. 576 N.W.2d at

599–600. In that case, the board began an investigation against Remer,

a licensed doctor, based on complaints received by the board. Id. at 599.

The board investigated the merits of the complaint and filed formal

disciplinary charges against Remer. Id. Once the disciplinary charges

were filed against Remer, notice was served on him, and his case was

contested in front of a three-member panel of the board. Id. at 603. The

board was assisted by an impartial ALJ.          Id.   The attorney general

prosecuted the case against Remer. Id. at 599. Although the charges

against Remer were ultimately dismissed by the board, Remer and the

board agreed that final action by the agency was achieved. Id. at 603.

      The court defined primarily adjudicative in Remer and concluded

that the board’s role was primarily adjudicative under the statute. Id. at

601, 603.     “[I]f an agency’s function principally or fundamentally

concerns settling and deciding issues raised, its role is primarily

adjudicative.” Id. at 601. When a court determines whether the state’s

role is primarily adjudicative in the context of this statute, it must look at

the state’s role in the case currently in front of it, and not the state’s role

in other, similar cases or the state’s role generally. Id.

      The parties agree that the framework this court set out in Remer is

appropriate for determining whether to award attorney fees. However,

they disagree as to whether the procedural history in this case is similar

enough to Remer to preclude an award of attorney fees to Branstad. The

district court found that the State’s role in this case was primarily

adjudicative because the agency’s role was to investigate, to determine if

restitution was appropriate and in what amount, and to consider the

defenses argued by Branstad.         The court of appeals disagreed and
                                    11

reversed on appeal, basing its decision primarily on procedural

differences between Remer and Branstad’s case.

      Although it was not exactly the same, the procedure followed by

the Commission aligns with that of Remer. Id. at 599. As in Remer, the

DNR received complaints about the fish kill and investigated it before

assessing restitution and before the hearing.        Although Branstad’s

hearing was in front of an ALJ rather than a panel of the Commission,

the opinion issued by the ALJ was only a proposed decision.             The

decision did not become final until it was heard and considered by the

Commission.

      We also consider the term primarily adjudicative in the context of

the statute defining the role of the Commission. As defined by statute,

the role of the Commission includes “establish[ing] policy and adopt[ing]

rules,” in addition to “[h]ear[ing] appeals in contested cases pursuant to

chapter 17A.”   Iowa Code § 455A.5(6)(a)–(b).    A contested case is also

defined in chapter 17A as “a proceeding including but not restricted to

ratemaking, price fixing, and licensing in which the legal rights, duties or

privileges of a party are required by Constitution or statute to be

determined by an agency after an opportunity for an evidentiary

hearing.” Id. § 17A.2(5). The Commission in this case followed the exact

duties outlined in the statute—to act as an adjudicative body in a

contested hearing.    See id. § 455A.5(6)(b).    Although the restitution

amount requested by the DNR was ultimately found to be the result of an

improper application of AFS 24, the Commission weighed the evidence

about the fish kill, applied the rules, considered Branstad’s various

defenses, and determined that the amount in the restitution assessment

was proper. The restitution assessment was later found to be improper
                                        12

during judicial review in district court.      However, this is precisely the

procedure that should be followed to correct a final agency decision.

      We also rely on dictionary definitions to determine the plain and

ordinary meaning of the phrase primarily adjudicative.                  Webster’s

Dictionary defines “adjudicate” as “to settle finally (the rights and duties

of the parties to a court case) on the merits of issues raised,” to “enter on

the records of a court (a final judgment, order, or decree of sentence).”

Webster’s Third New International Dictionary 27 (unabr. ed. 2002). The

Commission’s action in this case falls squarely within the definition of

adjudicate.     The    Commission       was   presented    with   the   fish   kill

investigation, the restitution assessment, and various defenses raised by

Branstad. Although it was the impartial ALJ who heard the case and

made an initial decision, the Commission made the final decision after

weighing the evidence, considering the defenses, and determining the

rights and duties of the parties.

      We are mindful of the concerns raised by Justice Carter in his

special concurrence in Remer regarding cases in which the potential

award of attorney fees is swallowed by the exceptions. See Remer, 576
N.W.2d   at   604     (Carter,   J.,   concurring   specially).    However,      a

commentator who has reviewed the legislative history notes that, while

there is no explanation provided in the legislation, previous proposed

bills would have eased the ability to award attorney fees against the

State. See Samuel A. Thumma & Barbara J. Dawson, The Iowa Equal

Access to Justice Act: Is Recovery Available?, 39 Drake L. Rev. 431, 436–

42 (1989–90).       These bills were rejected in favor of more limiting

language contained in the final legislation.        Id.   Key among legislative

concerns with prior forms of the bill was the cost to the State if attorney

fees were awarded often. Id. at 441.
                                   13

      Because we find the State’s role was primarily adjudicative and the

statutory exception contained in Iowa Code section 625.29(1)(b) applies,

an award of attorney fees is not proper in this case. Because any one

exception can prevent the district court from awarding attorney fees

under the statute, we need not address the other exceptions that may

apply under Iowa Code section 625.29(1).

      IV. Conclusion.

      We hold that the State’s role in this case—the final decision of the

Commission regarding the amount of restitution for the fish kill—was

primarily adjudicative and falls within the exception found in Iowa Code

section 625.29(1)(b) (2011). Therefore, the district court was correct in

its application of the law in denying an award of attorney fees to

Branstad. We vacate the decision of the court of appeals and affirm the

judgment of the district court.

      DECISION OF COURT OF APPEALS VACATED; DISTRICT

COURT JUDGMENT AFFIRMED.