River Ridge Development Authority v. Outfront Media, LLC, David Watkins, No Moore, Inc., the Schlosser Family Limited Partnership, the Town of Utica, and the Utica Board of Zoning Appeals, 146 N.E.3d 906

Background

River Ridge Development Authority (RRDA) planned a $25M expansion and sued Outfront Media, its employee Watkins, landowners, the Town of Utica, and the Utica BZA alleging the town-issued permits for seven billboards violated zoning and caused private nuisance.
Outfront completed three billboards; a scenic-byway nomination later threatened the remaining four.
INDOT recommended the scenic-byway; RRDA voluntarily dismissed its complaint with prejudice the same day.
Defendants moved for attorney’s fees; the trial court awarded $237,440.63 under (1) the common-law obdurate-behavior exception, (2) Indiana’s General Recovery Rule, and (3) the court’s inherent sanctioning power.
The Indiana Supreme Court reversed: statutory/common-law fee exceptions require a “prevailing party” (not satisfied after voluntary dismissal) and the record did not support finding RRDA acted in the extreme bad faith necessary to invoke the court’s inherent authority.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the common-law obdurate-behavior exception or the General Recovery Rule permits fee awards when plaintiff voluntarily dismisses its suit	RRDA: Dismissal with prejudice is similar to a merits judgment; no prevailing party exists to justify fees	Defendants: RRDA’s conduct was baseless/obdurate; they should be "prevailing" for fee purposes	Held: Both exceptions require a "prevailing party" that obtains judicial relief; voluntary dismissal with prejudice does not confer prevailing-party status, so fees cannot be awarded on those grounds
Whether the common-law obdurate-behavior exception survives after codification in the General Recovery Rule	RRDA: Statute absorbed and displaced the common-law rule	Defendants: The common-law exception remains distinct and operable	Held: The common-law exception remains in force alongside the statute; statute codified but did not abrogate the common law
Whether a court may use inherent authority to award fees at any point in litigation	RRDA: Inherent authority is limited and cannot be used here absent clear bad faith	Defendants: Courts have inherent power to sanction and may award fees where conduct is sufficiently oppressive or in bad faith	Held: Courts have inherent authority to award fees at any point, but it requires a high showing of bad faith, calculated oppression, or obstreperous conduct
Whether the trial court’s factual findings supported awarding fees under inherent authority	RRDA: Record lacks proof of knowing baseless claims, harassment, or bad-faith tactics; many findings were erroneous	Defendants: RRDA engaged in tactics (e.g., naming individuals, seeking recusal, timing dismissal) demonstrating bad faith	Held: The record does not support the trial court’s factual findings of extreme bad faith; award under inherent authority was an abuse of discretion

Key Cases Cited

Kikkert v. Krumm, 474 N.E.2d 503 (Ind. 1985) (adopts common-law obdurate-behavior exception to the American Rule)
Loparex, LLC v. MPI Release Techs., LLC, 964 N.E.2d 806 (Ind. 2012) (explains American Rule and narrow exceptions)
Buckhannon Bd. & Care Home, Inc. v. W. Va. Dep’t of Health & Human Res., 532 U.S. 598 (2001) ("prevailing party" requires judicially sanctioned change in legal relationship)
Farrar v. Hobby, 506 U.S. 103 (1992) (prevailing-party concept requires actual relief on the merits)
Chambers v. NASCO, Inc., 501 U.S. 32 (1991) (courts have inherent equitable power to impose sanctions, including fees)
Reuille v. E.E. Brandenberger Constr., Inc., 888 N.E.2d 770 (Ind. 2008) (construes ordinary meaning of "prevailing party")
Estate of Kroslack, 570 N.E.2d 117 (Ind. Ct. App. 1991) (recognizes inherent authority to sanction for extreme bad faith)
Mitchell v. Mitchell, 695 N.E.2d 920 (Ind. 1998) (compares statutory General Recovery Rule to common-law exception)