These are consolidated appeals. BHA Investments, Inc. v. City of Boise is an appeal from the district court’s decision not to certify the case as a class action. We affirm the district court and award attorney fees on appeal. Bravo Entertainment, L.L.C. v. City of Boise is an appeal from a judgment holding that the City was not required to refund an illegally imposed fee. We affirm the judgment insofar as it dismisses the state causes of action and vacate that portion of the judgment dismissing the federal cause of action.
I. FACTS AND PROCEDURAL HISTORY
BHA Investments, Inc. The Plaintiff BHA Investments, Inc., (BHA) is an Idaho corporation whose only asset was a liquor license issued by the state of Idaho. On July 17, 2000, the Power House LLC purchased all of the stock in BHA in order to acquire the liquor license. Pursuant to Boise City Code 5-05-10, the Defendant City of Boise (City) charged BHA a fee of $8,625.00 in order for the liquor license to be transferred to the Power House LLC. BHA paid the fee under protest.
On July 23, 2001, BHA filed a complaint in the district court seeking to maintain a class action lawsuit to recover the liquor license transfer fees paid to the City by it and others. Upon' the City’s motion, the district court dismissed the complaint on the ground that Idaho Code § 23-916 granted municipalities the authority to impose liquor license transfer fees. BHA appealed, and we reversed, holding that the City had no authority to charge such a fee.
BHA Investments, Inc. v. City of Boise,
The case was remanded to the district court, and on June 2, 2003, BHA filed a
Bravo Entertainment, L.L.C. v.City of Boise. On December 14, 2000, Bravo Entertainment, L.L.P., purchased a liquor license. The City charged it a liquor license transfer fee of $9,000. Bravo immediately leased the liquor license to Splitting Kings, d/b/a The Big Easy, (Splitting Kings) which agreed to pay the transfer fee as part of the lease agreement. On December 14, 2000, Splitting Kings paid the fee to the City. On February 26, 2003, Bravo Entertainment, L.L.P. was dissolved, and all of its assets were transferred to the Plaintiff Bravo Entertainment, L.L.C., (Bravo). It owns a 60% majority interest in Splitting Kings.
On August 20, 2003, Bravo filed a complaint seeking damages from the City for the wrongful taking of its property and for unjust enrichment. Both parties moved for summary judgment. In response to the City’s contention that Bravo was not the real party in interest, the district court on October 31, 2003, permitted Splitting Kings to be added as a plaintiff, and it joined in the motion for summary judgment.
On December 17, 2003, the district court issued its memorandum decision and order denying Bravo and Splitting Kings’s motion for summary judgment and granting the City’s motion for summary judgment. The district court ruled in favor of the City on three grounds: (1) Bravo and Splitting Kings had faded to satisfy the notice requirements of Idaho Code §§ 50-219 and 6-906; (2) this Court’s opinion in
BHA Investments, Inc. v. City of Boise,
Both cases were consolidated for the appeal.
II. ISSUES ON APPEAL
A. Did the district court err in denying BHA’s motion for class certification?
B. Did the district court err in granting the City’s motion for summary judgment and dismissing Bravo and Splitting Kings’s complaint?
C. Is any party entitled to an award of attorney fees on appeal?
III. ANALYSIS
A. Did the District Court Err in Denying BHA’s Motion for Class Certification?
BHA sought certification of its lawsuit as a class action under Rules 23(a) and (b) of the Idaho Rules of Civil Procedure. BHA alleged that there would be seventeen members in the class, all of whom were known persons or entities within the City. In denying the motion for class certification, the district court held, “While there is not a specific number of members required in order to be considered ‘so numerous’ that joinder of all members is impracticable, the Court finds that 17 members is not sufficient to be considered ‘numerous’ in this case.”
The decision of a trial court to grant or deny class certification is reviewable on appeal under an abuse-of-discretion standard.
Pope v. Intermountain Gas Co.,
In order to certify a lawsuit as a class action, the trial court must find that all four
B. Did the District Court Err in Granting the City’s Motion for Summary Judgment and Dismissing Bravo and Splitting Kings’s Complaint?
1. Did the exaction of the liquor license transfer fee constitute a taking of property? In their complaint, Bravo and Splitting Kings alleged that the City’s fee to transfer a liquor license constituted a taking of its property without just compensation in violation of the United States and Idaho Constitutions. Citing
BHA Investments, Inc. v. State,
In
BHA Investments, Inc. v. State,
we stated, “The primary argument of BHA is that the money in excess of a reasonable transfer fee is a taking.”
The City argues, “Money associated with the transfer of a liquor license is not property.” Of course, if that argument were valid then the City should have no problem returning the money it unlawfully exacted, since it would not be returning property. Money is clearly property that may not be taken for public use without the payment of just compensation.
Brown v. Legal Found. of Wash.,
In
BHA Investments, Inc. v. State
we quoted from
San Remo Hotel L.P. v. City and County of San Francisco,
2. Does our holding in
BHA I
apply to this case? In
BHA I
we held that the City’s ordinance imposing a liquor license
The decisions of this Court apply prospectively, to all future cases. The issue is whether and to what extent they apply retroactively to past or pending eases. The usual rule is that decisions of this Court apply retroactively to all past and pending cases.
State v. Tipton,
The first factor is the purpose of our decision in BHA I. The purpose of that decision was to prevent the City from wrongfully taking property it had no authority to take. The decision vindicated the protections under the United States and Idaho Constitutions that prohibit the government from taking property for a public purpose without the payment of just compensation.
The second factor is the reliance upon the prior law. The City contends that it has relied upon the validity of its ordinance by collecting liquor license transfer fees totaling $121,512.50 from a total of twenty-four entities (including BHA) since 1993. The reliance factor is not significant in this case. No appellate court in Idaho had previously held that cities could impose a liquor license transfer fee. The City claimed that Idaho Code § 23-916 authorized it to impose such fee, but in
BHA I
we held, “This statute is not ambiguous. The plain language of I.C. § 23-916 provides cities with authority to impose a license fee, not a transfer fee.”
The third factor is the effect on the administration of justice, “that is, the number of cases that would be reopened if the decision is applied retroactively,”
V-1 Oil Co. v. Idaho Petroleum Clean Water Trust Fund,
After weighing the three factors, we conclude that the retroactive application of our decision in BHA I should not be limited. It applies to Bravo and Splitting Kings’s case.
On April 22, 2003, Bravo properly filed a notice of claim with the City. The notice stated that Bravo had paid the assessed liquor license transfer fee of $9,000 to the City. It included the statement, “Bravo Entertainment, LLP, demands that it be reimbursed $9,000.00, plus interest from the date the illegal tax was paid.” Splitting Kings was not mentioned in Bravo’s notice of claim.
The district court held that even if the notice of claim filed by Bravo was timely, it was insufficient because it did not notify the City that Splitting Kings, who had paid the transfer fee, was asserting a claim for the return of such fee. There was nothing in the notice of claim indicating that Bravo was filing the claim on behalf of Splitting Kings.
Bravo and Splitting Kings argue that they timely filed their notice of claim because they could not reasonably have known they had a claim until January 30, 2003, when we issued our opinion in
BHA I.
That opinion did not create a cause of action where none previously existed. The phrase “reasonably should have been discovered” refers to knowledge of the facts upon which the claim is based, not knowledge of the applicable legal theory upon which a claim could be based. As we stated in
Mitchell v. Bingham Memorial Hospital,
This Court has held that “[k]nowledge of facts which would put a reasonably prudent person on inquiry is the equivalent to knowledge of the wrongful act and will start the running of the [180 days].” The Court has further held that the statutory period begins to run from the occurrence of the wrongful act even if the full extent of damages is not known at that time. In a recent case, the Court of Appeals clarified the amount of knowledge required to begin the notice period: “The statute does not begin running when a person fully understands the mechanism of the injury and the government’s role, but rather when he or she is aware of such facts that would cause a reasonably prudent person to inquire further into the circumstances surrounding the incident.” The claimant in Mallory [the Court of Appeals case] had argued that the notice period should not start running until she knew the exact cause of her injury. The Court of Appeals held that “such an interpretation would allow a party to delay completion of an investigation for months or even years before submitting a notice under the [ITCA].”
Splitting Kings paid the transfer fee to the City on December 14, 2000. The notice of claim filed by Bravo on April 22, 2003, was untimely.
Bravo and Splitting Kings next argue that they should be entitled to the benefit of the notice of claim filed by BHA on January 2, 2001. That notice of claim did not mention either Bravo or Splitting Kings, but it included a statement, “BHA Investment demands that it be reimbursed $8,625.00, plus interest from the date the illegal tax was paid, and that the City should reimburse all transfer fees charged for liquor license transfers for the past four (4) years.”
Idaho Code § 6-907 specifies the information that must be included in the notice of claim. It states:
All claims presented to and filed with a governmental entity shall accurately describe the conduct and circumstances which brought about the injury or damage, describe the injury or damage, state the time and place the injury or damage occurred, state the names of all persons involved, if known, and shall contain the amount of damages claimed, together with a statement of the actual residence of the claimant at the time of presenting and filing the claim and for a period of six (6) months immediately prior to the time the claim arose.....A claim filed under the provisions of this section shall not be heldinvalid or insufficient by reason of an inaccuracy in stating the time, place, nature or cause of the claim, or otherwise, unless it is shown that the governmental entity was in fact misled to its injury thereby.
In
Wickstrom v. North Idaho College,
Bravo and Splitting Kings’s complaint also included, however, a claim that the City had taken their property for public use without the payment of just compensation in violation of the Constitution of the United States. The notice of claim requirement set forth in Idaho Code § 50-219 does not apply to a claim based upon federal law.
In
Felder v. Casey,
In Felder the plaintiff filed an action in a Wisconsin state court under 42 U.S.C. § 1983 seeking to recover damages for police conduct that allegedly violated his rights under the Fourth and Fourteenth Amendments to the Constitution of the United States. The officers moved to dismiss for failure to comply with Wisconsin’s notice-of-claim statute. The trial court dismissed the state law claims, but did not dismiss the federal claims. On appeal, the Wisconsin Supreme Court reversed, holding that States retain the authority to prescribe rules and procedures to govern actions in their own tribunals. The United States Supreme Court granted certiorari, and reversed the Wisconsin court.
The Supreme Court stated that a State’s authority to prescribe the rules and procedures governing suits in its own courts “does not extend so far as to permit States to place conditions on the vindication of a federal right.”
4. Were Bravo and Splitting Kings required to pay the fee “under protest” in order to recover it? The district court ruled that because the liquor license transfer fee charged by the City constituted a disguised tax and a party must pay a tax under protest in order to obtain a refund, Bravo and Splitting Kings could not recover the unlawfully exacted fee because they did not pay it under protest. We have held that when a governmental entity imposes what is on its face a tax, the taxpayer must pay it under protest in order to preserve the right to claim a refund.
Walker v. Wedgwood,
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.
We have declined to apply the payment-under-protest requirement to an action seeking recovery of unlawful fees. In
Owner-Operator Independent Drivers Ass’n, Inc. v. Idaho Public Utilities Commission,
The City ordinance denominated the sum owing as a “transfer fee,” not a tax. In BHA I, the City argued that it was a properly imposed fee and not a tax. Now, the City contends it was a tax all along and that Bravo and Splitting Kings should be denied recovery because they did not pay that “tax” under protest. Where the City denominated the sum owing as a “fee,” the payment-of-tax-under-protest requirement does not apply. The district court erred in holding that Bravo and Splitting Kings were required to have paid the liquor license transfer fee under protest in order to bring this action.
5. Did Bravo and Splitting Kings fail to exhaust their administrative remedies? Citing
KMST, LLC v. County of Ada,
C. Is any Party Entitled to an Award of Attorney Fees on Appeal?
The City requests an award of attorney fees under Idaho Code § 12-121. For it to be awarded fees, we must find that BHA brought or pursued this appeal frivolously, unreasonably, or without foundation. We so find. The requested class certification was a matter within the discretion of the district court. The district court determined that a class of seventeen entities located within the City of Boise was not so numerous that joinder of all members is impracticable. BHA did not present any reasoned argument as to why such determination would constitute an abuse of discretion. We therefore award the City attorney fees on BHA’s appeal.
The City also requests an award of attorney fees against Bravo and Splitting Kings under Idaho Code § 12-121. Since they have prevailed in part on their appeal, their appeal was clearly not brought frivolously, unreasonably, or without foundation. We therefore do not award the City attorney fees against Bravo and Splitting Kings.
Bravo and Splitting Kings request an award of attorney fees under Idaho Code § 12-117. For attorney fees to be awardable under that statute, we must find that the City acted “without a reasonable basis in law or fact.” Although we had previously declined to apply the payment-under-protest requirement to a claim for a refund of fees,
Owner-Operator Independent Drivers Ass’n, Inc. v. Idaho Public Utilities Commission,
IV. CONCLUSION
We affirm the judgment in BHA Investments, Inc. v. City of Boise. We award the City costs and reasonable attorney fees on appeal. In Bravo Entertainment, L.L.C. v. City of Boise, we affirm that portion of the judgment dismissing the claims based upon state law, and we vacate that portion of the judgment dismissing the claim based upon federal law. We award Bravo and Splitting Kings costs on appeal, but not attorney fees.
Notes
. The City collected liquor license transfer fees from one entity in 1993, from three entities in 1995, from three entities in 1996, from two entities in 1998, from two entities in 1999, from four entities in 2000, from six entities in 2001, and from three entities in 2002.
. In
Felder,
the plaintiff brought his action pursuant to 42 U.S.C. § 1983, while in this case Bravo and Splitting Kings have asserted their federal claim directly under the Takings Clause in the United States Constitution. That difference has no bearing on the application of
Felder.
Section 1983 “does not confer any substantive rights. It is a vehicle for vindicating rights secured by the United States Constitution or federal law."
Bryant v. City of Blackfoot,
