RALPH NAYLOR FARMS, LLC, an Idaho limited liability company, Plaintiff-Appellant, v. LATAH COUNTY, Idaho, Defendant-Respondent.
No. 33422
Supreme Court of Idaho, North Idaho
Nov. 21, 2007
172 P.3d 1081
September 2007 Term.
William W. Thompson, Jr., Latah County Prosecuting Attorney, Moscow, for respondent; James E.M. Craig, deputy prosecuting attorney, argued.
TROUT, Justice Pro Tem.
This is an appeal from a decision of the district court denying Ralph Naylor Farms’ (Naylor Farms) motion for an award of attorney fees and costs pursuant to
FACTUAL AND PROCEDURAL BACKGROUND
Naylor Farms filed an application with the Idaho Department of Water Resources (IDWR) on June 26, 2002, requesting a groundwater right for both irrigated agriculture and an industrial use for clay processing. Latah County (the County) filed a petition to intervene, which IDWR granted. Following a hearing at which the County appeared and gave testimony in opposition to Naylor Farms’ application, IDWR entered a preliminary order approving the application on December 1, 2004. The County filed a petition for reconsideration of the preliminary order, which was granted and a new hearing was set. While that was pending, an entity, known as Protect Our Water Inc. (POW), also filed a petition and request for hearing in the matter, which was denied by IDWR.
In January of 2005, POW presented the County with a petition requesting that the County impose a moratorium prohibiting the acceptance, review or approval of all conditional use permits or zoning permits related to mineral resource extraction within Latah County. The Latah County Board of Commissioners (Commissioners) requested input from the Latah County Planning Commission, and the Planning Commission concluded that existing zoning ordinances were adequate to address the concerns of POW. Nevertheless, on March 2, 2005, on an emergency basis, the Commissioners enacted Ordinance No. 258 (the Ordinance), creating the “Moscow Sub-basin Groundwater Management Overlay Zone” within a portion of Latah County. The Ordinance prohibited certain activities within the overlay zone, including natural resource mineral extraction and processing.
On June 27, 2005, Naylor Farms attempted to file an application with the Latah County Planning and Building Department for a conditional use permit in order to conduct mineral extraction on its property. The Director of the Planning and Building Department rejected the application, finding that the Ordinance prohibited consideration of the application. Naylor Farms resubmitted the application on June 28, 2005, and sent a letter to both the Director and the Commissioners requesting an appeal to the extent the conditional use permit application had been summarily denied. The Director responded by letter, informing Naylor Farms that the Department was unable to accept applications for uses that are prohibited within the applicable zone.
Naylor Farms filed a complaint in district court seeking invalidation of the Ordinance, as well as just compensation for an alleged regulatory taking. Both Naylor Farms and the County filed motions for summary judgment. After a hearing, the district court granted Naylor Farms’ motion, invalidating the Ordinance, and denied the County‘s motion. Naylor Farms then filed a motion for award of attorney fees and costs, together with a supporting memorandum pursuant to
II.
STANDARD OF REVIEW
The appellate court exercises free review over the decision of a district court applying
III.
ANALYSIS
A. Attorney fees under Idaho Code § 12-117
Naylor Farms appeals the district court‘s decision denying its request for attorney fees
Unless otherwise provided by statute, in any administrative or civil judicial proceeding involving as adverse parties a state agency, a city, a county or other taxing district and a person, the court shall award the prevailing party reasonable attorney‘s fees, witness fees and reasonable expenses, if the court finds that the party against whom the judgment is rendered acted without a reasonable basis in fact or law.
Typically, in analyzing an award of fees under
On the other hand, in Magic Valley Sand and Gravel, supra, the Court did not award attorney fees against the City of Burley, even though we found the City acted in violation of the constitutional limits on its power and in violation of the LLUPA by adopting a zoning ordinance affecting an impact area lying outside the City‘s limits. The Court noted there was case precedent dating “as far back as 1949 that a city‘s exercise of jurisdiction in an impact area lying beyond a city‘s limits is inconsistent with the constitutional limitations placed on a city‘s powers by Article XII, § 2 of the Idaho Constitution.” 140 Idaho at 120, 90 P.3d at 345. Nevertheless, because the City was making a reasonable attempt to interpret the LLUPA, no fees were awarded.
In Karel v. Department of Finance, 144 Idaho 379, 162 P.3d 758 (2007), this Court declined to award fees even though we determined the Department had no authority to request documents from a securities agent when there was no statutory obligation to maintain the requested documents. There were statutory recordkeeping provisions, but the Department admitted it was not requesting any of those documents from the securities agent. However, because this was a matter of first impression in determining how the recordkeeping requirements should be applied, we denied an award of fees under
While the issue presented by this appeal relates only to the decision denying an award of attorney fees, it necessarily involves some consideration of the underlying issue presented to the district court: the validity of the Ordinance. The district court concluded that the enactment of the Ordinance was not arbitrary, as it bore a reasonable relation to the advancement of its stated purpose and it was based on a consideration of the evidence. Nevertheless, the trial court determined that the ordinance was invalid because of an implicit conflict with state law.1 Naylor Farms asserted, and the district court agreed, that the Ordinance implicitly conflicted with state statutes regulating water appropriation and quality.
Although Naylor Farms was the prevailing party below, the district court declined to award fees because the conflict between the Ordinance and state law “was by no means obvious.” In explanation, the court noted that Latah County was empowered through the LLUPA to consider the effects of land use regulations on water. Although the court concluded that the Ordinance went beyond considering the effects on water and, in effect, was an attempt to manage water in Idaho, the court also concluded that the County‘s interpretation of its duties under LLUPA was not unreasonable.
In considering whether Naylor Farms is entitled to an award of attorney fees, we must determine whether the County was faced with an ambiguous or unclear statute that would excuse a reasonable but erroneous interpretation, in the absence of applicable case law. While
In creating the Sub-basin Groundwater Management Overlay Zone, the Ordinance contains a number of opening clauses which reflect the County‘s recognition of its duties under the LLUPA and under the Groundwater Management Plan adopted by the Palouse Basin Advisory Committee, specifically a need to “regulate developments which
Certain Land Uses Prohibited
Within the Zone, the following land use activities shall be prohibited:
- Natural resource mineral extraction and processing
- Confined animal feedlot operations exceeding 200 animal units as defined by
Idaho Code Section 67-6529C - Golf courses
While we respect the district court‘s analysis of the Ordinance and preemption by State law, it appears that the major thrust of this Ordinance is to regulate land use, a power clearly reserved to the local governing boards in the LLUPA. It further appears the County made this land use decision by considering, in part, the effects of these types of activities on water quality and quantity in the County.
In making its argument that the County was acting without any reasonable basis in fact or law, Naylor Farms points to several statements or actions taken by the Commissioners, which reflect a less than deliberative approach in adopting the Ordinance. Prior to enacting the Ordinance, Paul Kimmell, a Commissioner, testified that while the Commissioners had control over land use planning and management, “ultimately the State has the right to issue water rights.” Further, in email correspondence with Bruce Livingston, a member of the Moscow Civic Association, Kimmell acknowledges: “I anticipate the State (through IDWR) may challenge our proposed ordinance as a preemptive move by a local jurisdiction to manage the State‘s water.” Despite that, Kimmell later acknowledges: “I‘m a risk taker and I want to help in deciding what Latah County should look like—not leaving it to someone in Boise. Should be fun.” Furthermore, the County did not wait for legal advice. When contacted by the Commissioners about the legality of the Ordinance, the County‘s attorney asked for some time to give them a legal opinion. In spite of that request, the Commissioners proceeded to adopt the Ordinance without waiting for any guidance from their attorney. One of the Commissioners suggested they could “un-adopt it” if their attorney advised them that it was illegal: “. . . if something happens . . . it can be changed, too, or we could un-adopt it.” While the Commissioners may have been motivated by desires to limit mining in Latah County and could have been more circumspect, nevertheless, the County acted to adopt an ordinance which regulated land use, which is something the County has the authority to do.
We also note in its ruling on the underlying issue, the district court found that “in general, the purposes set forth in Ordinance 258 are legitimate bases for regulation.” The district court also found “that there is a basis for a reasonable difference of opinion regarding the necessity of Ordinance 258” and “the Court cannot conclude that the Board of Commissioners acted in an arbitrary manner.” Although this Court reviews the determination of whether to award attorney fees pursuant to
Because there was a legitimate question about the validity of the County‘s actions in adopting the Ordinance, the County did not act without a reasonable basis in fact or law and, therefore, we affirm the district court‘s decision denying an award of attorney fees under
B. Costs as a matter of right
Naylor Farms argues that pursuant to
C. Attorney fees on appeal
Naylor Farms and the County both seek attorney fees and costs on appeal. The two-part test of
IV.
CONCLUSION
Because the County did not act without a reasonable basis in fact or law in adopting Ordinance No. 258, we affirm the district court‘s decision denying an award of attorney fees under
Chief Justice EISMANN, Justices BURDICK and W. JONES concur.
J. JONES, J., dissenting.
I respectfully dissent. It is my view that Naylor Farms was entitled to recover its attorney fees under
The district court correctly noted that Latah County adopted Ordinance No. 258 for the purpose of regulating water. As the court noted:
Although Ordinance 258 is enacted as a zoning ordinance, it purports to establish a ‘Groundwater Management Overlay Zone.’ In other words, by its own terms, the ordinance purports to manage groundwater. Additionally, the purposes set forth in the ordinance all relate to issues of groundwater quantity and quality. Consequently, the Court concludes that Ordinance 258 does attempt to regulate water.
This conclusion is supported by the following colloquy in the County‘s 30(b)(6) deposition:
Q. [Counsel for Naylor Farms] Handing you what‘s been marked as Exhibit 25. I don‘t have copies for everybody because we just marked it.
A. [Commissioner Kimmell] Okay.
Q. That is a March 23rd, 2005, article from the Lewiston Morning Tribune.
A. Yes.
Q. It says down towards the middle of the article there that, ‘Likewise, Latah County Commissioners Paul Kimmell and Tom Stroschein let everyone know that they had passed an emergency ordinance that limits certain water-depleting land uses in a newly designated Moscow sub-based area.’ And there‘s a quote, ‘Since we can‘t manage water directly,’ said Kimmell, ‘we‘ll do it indirectly.’ First of all, is that what you said to the Tribune?
A. I don‘t recollect my exact words, but based on the accuracy of the newspaper.
Q. What did you mean there when you said, ‘Since we can‘t manage water directly, we will do it indirectly‘?
A. I believe what I meant there was land use ordinances have the ability to consider water resources within—as part of the land use itself. Water, land, air quality are all part of our authority under the Local Land Use Planning Act.
* * *
Q. Okay. So I take it then that the purpose of these particular land uses that—the purpose behind choosing these particular land uses that are listed down here that are prohibited
under Section 2 was to essentially eliminate those uses that could potentially require a large quantity of water? A. That‘s correct.
* * *
Q. Commissioner Kimmell, is it fair to say that Ordinance 258 was a way for the Commission to control who in Latah County gets the water through land-use planning?
A. I wouldn‘t agree with how you have stated that. I would say that 258 helps us better manage the water resources in Latah County.
Q. By prohibiting some uses—use of water for certain land uses outright?
A. Correct.
As noted by the district court, the ordinance, itself, makes a number of references in its statement of purpose that pertain to groundwater management (“maintain sustainable groundwater resources“, “policies for groundwater management“, “regulate developments which could jeopardize . . . water quantity,” and the like). While the Court is correct that counties may, pursuant to
It should be kept in mind that the ordinance was adopted after the county was un-successful in opposing Naylor Farms’ water right application with the Idaho Department of Water Resources. After failing to stop Naylor Farms’ project by trying to shoot down the water rights application, the county turned to Plan B, which was an attempt to shoot down the project by utilizing a power—management of groundwater—that the county did not possess.
The Commissioners were well aware that they were treading on thin ice in adopting the ordinance. It appears rather apparent that their effort was to stymie Naylor Farms by attempting to employ groundwater management authority, which they understood they lacked. Thus, it appears to me that they subjected themselves to the imposition of Section 12-117 fees. Naylor Farms has borne an unfair and unjustified financial burden attempting to correct a misstep that Latah County should never have taken. Ater v. Idaho Bureau of Occupational Licenses, 144 Idaho 281, 286, 160 P.3d 438, 443 (2007).