15 Or. Tax 402 | Or. T.C. | 2002
Decision rendered March 21, 2002 *404 This matter is before the court on Plaintiff (TVKO) TVKO's Motion for an Award of Attorneys' Fees and Costs under TCR 68.1 Defendants filed written objections.
The matter was submitted to the court on cross-motions for summary judgment. After considering the briefs and oral arguments of the parties, the court held that it had no jurisdiction over the licensing and regulatory provisions and denied TVKO's motion as to those provisions. The court held that it did have jurisdiction over the gross-receipts tax and further held that the tax violated the First Amendment to the United States Constitution. In granting TVKO's Motion for Summary Judgment in part, the court awarded costs "to neither party." (Order Granting Ptf's Mot for Summ J and Den Defs' Cross-Mot for Summ J at 15.)
ORS
"In any civil judicial proceeding involving as adverse parties a state agency, as defined in ORS
291.002 , and a petitioner, the court shall award the petitioner reasonable attorney fees and reasonable expenses if the court finds in favor of the petitioner and also finds that the state agency acted without a reasonable basis in fact or in law."
TVKO asserts that Defendants acted without a reasonable basis in fact or law because the gross-receipts tax on its face violated the United States Constitution. TVKO reaches that conclusion in part because "virtually identical statutes" had been declared unconstitutional in California and Georgia. (Ptf's Mem in Supp of TVKO's Mot for an Award of Attys' Fees and Costs at 2.)
Defendants oppose the motion with regard to ORS
"Alleging Right to Attorney Fees. A party seeking attorney fees shall allege the facts, statute, or rule which provides a basis for the award of such fees in a pleading filed by that party. Attorney fees may be sought before the substantive right to recover such fees accrues. No attorney fees shall be awarded unless a right to recover such fee is alleged as provided in this subsection." (Emphasis added.)
TCR 68 C(2)(a) is identical to ORCP 68 C(2)(a). Therefore, the court will give the Tax Court rule the same construction as the ORCP.4
As indicated, ORCP 68 C(2)(a) requires a party to allege the facts, statute, or rule that provides the basis for recovering attorney fees. The purpose of the rule is to give the opposing party notice of all of the requesting party's claims, enabling the opposing party to respond appropriately. Attaway, Inc. v. Saffer,
"It is not necessary to specify the statutory basis of a request for fees when the facts asserted would provide a basis for an award of fees, the parties have fairly been alerted that attorney fees would be sought and no prejudice would result." Page and Page,
103 Or. App. 431 ,434 ,797 P.2d 408 (1990) (citations omitted).
There does not appear to be a need to even identify or associate the facts with the claim for attorney fees; it is enough that the facts are alleged. Hogue and Hogue,
In this case, TVKO claims it complied with the rule. The court agrees. TVKO's Complaint alleged that:
"Defendants' enforcement of §§
463.035 and463.320 of the Boxing Statute and Rule230-030-0350 (2) of the Oregon Administrative Rules is without a reasonable basis in law and is contrary to the public interest in the fundamental protections of the First and Fourteenth Amendments." (Ptf's Compl at 8.)
TVKO also alleged that the state had no compelling or important state interest that would support imposition of the burdens on free speech. The complaint sought declaratory and injunctive relief and expressly requested costs and attorney fees. (Id. at 9.)
By requesting an award of attorney fees, TVKO placed Defendants on notice that a claim would be made. Defendants were then obligated to ask themselves on what basis such a claim could be made. Knowing that the basis for the claim must be contained within the Complaint, they would examine it and realize that it alleges they had acted unreasonably. They would also know, or are presumed to know, that if they had acted unreasonably, they could become liable for attorney fees under ORS
As a second ground for opposing an award of attorney fees under ORS
Here, the only issue was a legal issue. Defendants maintain that whether the statutes and rule in question were unconstitutional was not certain. Defendants argue that there was no binding federal decision and a state agency is not authorized to question or act contrary to the policies of the legislature as found in the statutes. Defendants state:
"* * * Agencies are not in a position to judge the constitutionality of the legislature's policy choice and requiring them to do so would place an unreasonable burden on agencies, not to mention the potential separation of powers concerns such a requirement could create." (Defs' Objections to Ptf's Mot for Award of Atty Fees at 6.)
Defendants overstate the inhibitions that restrain an agency relative to constitutional challenges. Agencies do have authority to question the constitutionality of a statute. In Nutbrown v. Munn,
*408"* * * Although it is an authority to be exercised infrequently, and always with care, Oregon administrative agencies have the power to declare statutes and rules unconstitutional." (Citations omitted.)
Agencies are obligated to follow the established higher law. Schultzv. Springfield Forest Products,
"* * * [m]ust administer the law in accordance with constitutional principles, and must enforce its statutory obligations. If a statute tells an agency to do something that a constitution forbids, the agency should not do it." (Citations omitted.)
The circumstances in this case do not indicate that Defendants acted unreasonably. TVKO's Complaint asserted that a broad federal constitutional provision rendered two relatively narrow state statutes and a rule unconstitutional. Legal counsel for TVKO met with the Attorney General for Oregon. TVKO based its position upon two federal district court decisions involving similar statutes in other states and its interpretation of United States Supreme Court decisions involving other kinds of acts. The Attorney General disagreed, indicating that the California federal district court decision was in error and noting that there were differences between the California statute and the Oregon statute. The Attorney General advised Defendants to continue to enforce the statutes and rule. (Ptf's Mem in Support of TVKO's Mot for an Award of Attys' Fees and Costs at Attachs 3,4.) TVKO therefore concluded that it must file suit in order to obtain relief.
TVKO does not assert that the Attorney General acted in bad faith. Whether the Attorney General was correct in his assessment of the law, Defendants cannot be said to have acted unreasonably when they followed his advice. State officers are entitled to follow the opinion of the Attorney General and, when acting in good faith, will be protected, even though that opinion may be in error. State ex rel. v. Mott,
The general "American" rule is that a court has no authority to award attorney fees in the absence of a statute or agreement. See, e.g., Beaverv. Davis,
In Dennehy v. Dept. of Rev.,
The most recent case handed down by the Oregon Supreme Court awarding attorney fees under a court's equitable power is Armatta v. Kitzhaber,
It is the element of self interest that disqualifies TVKO here. TVKO contested licensing and tax provisions that only apply to those who promote a boxing or wrestling match. The benefits of the court's decision flow largely to TVKO and other members of its industry, while the public is only indirectly benefitted. Such circumstances are similar to those in Vannatta v. Keisling,
IT IS ORDERED that Plaintiff TVKO's Motion for an Award of Attorneys' Fees and Costs is denied.
Dated this ______ day of March 2002.
_______________________________
Carl N. Byers
Senior Judge
*1