Costanich v. Department of Social & Health Services

C. Johnson, J. ¶ 1 This case asks us to determine whether RCW 4.84.350, which provides a statutory cap on attorney fees, establishes a limit for each level of judicial review of an agency action or on all levels of review combined. Consistent with the purpose of the equal access to justice act (EAJA), RCW 4.84.340, .350, and .360, we hold that the statute provides a cap on attorney fees for each level of judicial review and reverse the Court of Appeals. 928 FACTS ¶ 2 Under the Administrative Procedure Act, chapter 34.05 RCW, Kathie Costanich sought review in superior court of an administrative ruling affirming the Department of Social and Health Services’ (Department) revocation of her foster care license. The superior court reversed the Department’s decision and awarded Costanich $25,000 in attorney fees, the statutory cap under RCW 4.84.350. Costanich’s attorneys at this point in the appellate process had accumulated over $160,000 in attorney fees and costs.1 ¶ 3 The Department appealed the superior court decision. The Court of Appeals affirmed the superior court but reversed the superior court’s award of attorney fees. Costanich filed a motion for reconsideration, asking attorney fees be awarded by the Court of Appeals and reinstated at the superior court level, pursuant to RCW 4.84.350. The motion was granted. ¶ 4 Pursuant to RAP 18.1(d), Costanich filed an affidavit for attorney fees that went uncontested by the Department. The commissioner found Costanich’s request reasonable and awarded her the $46,239 requested in attorney fees and costs. The State then filed a motion to modify the order, arguing that RCW 4.84.350 limits the total attorney fee awards on judicial review to $25,000, the amount Costanich had already been awarded by the superior court. The court granted the motion and denied Costanich attorney fees on appeal but imposed $1,000 in sanctions against the Department because this was the first time the Department had raised these arguments. Costanich then sought review by this court under RAP 13.5(b)(2), arguing that the Court of Appeals committed probable error altering the status quo and limiting her freedom to act. We granted review to resolve this issue of first impression. 929 ISSUES (1) Whether the attorney fee limit provided by RCW 4.84.350(2) applies to each level of judicial review. (2) Whether the Department waived application of the statutory cap by failing to timely object. ANALYSIS Statutory Cap on Attorney Fees ¶ 5 In 1995, the legislature enacted the EAJA, chapter 4.84 RCW, to ensure citizens a better opportunity to defend themselves from inappropriate state agency actions. Laws of 1995, ch. 403, § 901. The relevant statute provides that “a court shall award a qualified party that prevails in a judicial review of an agency action fees and other expenses, including reasonable attorneys’ fees.” RCW 4.84-.350(1) (emphasis added). Under the statute, the reasonable attorney fees cannot exceed $25,000. RCW 4.84.350(2).2 Although subsection (2) provides for the attorney fee cap, it is the language of subsection (1) and the definition of “judicial review” that is the focal point of our inquiry in this case. The question we must answer is whether the $25,000 cap on attorney fees applies to all levels of judicial review combined or to each level separately. Both parties argue the statute is clear and by its plain meaning supports their opposing assertions. ¶ 6 A judicial review is not defined in the statute, but RCW 4.84.340 states that a judicial review is defined by 930 chapter 34.05 RCW. Unfortunately, chapter 34.05 RCW does not actually define judicial review. The Department argues that because the statute references the entire chapter, 34.05 RCW, which uses the term “judicial review” to refer to review by the superior court, the Court of Appeals, and the Supreme Court, it is meant to encompass all levels of review combined. However, the Department does not cite to any specific subsection of chapter 34.05 RCW that suggests that these levels of judicial review are collectively the judicial review referenced in RCW 4.84.350; consequently this argument is not persuasive. ¶ 7 Without clear guidance, judicial review is susceptible to different meanings and could mean either each level of judicial review or all levels combined. Because the statute is ambiguous, we must discern and implement the legislature’s intent. See Campbell v. Dep’t of Soc. & Health Servs., 150 Wn.2d 881, 894, 83 P.3d 999 (2004). ¶ 8 The Department alternatively argues that even if we find the statute ambiguous, we should interpret judicial review to mean all levels of review combined. The Department cites to one case in support of its interpretation, Alpine Lakes Protection Society v. Department of Natural Resources, 102 Wn. App. 1, 979 P.2d 929 (1999). The court in Alpine held that an award of fees incurred at the administrative level was not appropriate under the statute and remanded the case to determine the amount of attorney fees incurred in both the superior court and the Court of Appeals. Although the court directed the trial court to ensure the attorney fees at both levels combined did not exceed the statutory cap, whether combining fees was mandated under the statute was not at issue in the case. Alpine does not support the Department’s argument since in that case attorney fees were allowed for each level of 931 court review and the $25,000 cap was not exceeded or addressed.3 ¶ 9 The Department argues the statute should be construed narrowly because the EAJA represents a waiver of sovereign immunity of the State with respect to attorney fees and costs. Resp’t’s Resp. to Brs. of Amici Curiae at 5 n.2. We agree that the EAJA, similar to its federal counterpart, provides a partial waiver of sovereign immunity in allowing litigants to recover fees and costs from the State. Yet we still must ascertain the intent of the legislature within the statutory guidelines provided for us: the language and purpose of the statute. ¶ 10 The EAJA is meant to provide equal access to the courts to private litigants defending against government actions. Specifically, the legislature found that [c]ertain individuals . . . may be deterred from seeking review of or defending against an unreasonable agency action because of the expense involved in securing the vindication of their rights in administrative proceedings. . . . The legislature therefore adopts this equal access to justice act to ensure that these parties have a greater opportunity to defend themselves from inappropriate state agency actions and to protect their rights. Laws of 1995, ch. 403, § 901 (legislative findings). Based on this explicit statement of intent, to ensure the public has the ability to contest and appeal agency decisions and rule making, a finding that the cap is for each level of judicial review is reasonable. This decision is particularly appropriate in this case where the Department appealed the superior court decision on the substantive issue and lost, forcing Costanich into the Court of Appeals proceeding, and Costanich’s attorney fees at this point in the appellate process are greater than $200,000. ¶ 11 Despite this explicit legislative purpose, the Department argues that the statute taken as a whole and the 932 legislative history reflect a purposeful decision to limit agency liability for attorney fees to $25,000 per case. First, the statute mandates that where there are two or more qualified parties, the award in total shall not exceed $25,000. RCW 4.84.350(2). This limits the liability of agencies when providing for attorney fees under the EAJA, and the Department contends this demonstrates the legislature’s intent to limit liability for all levels of review combined. This conclusion does not logically follow; the legislature could have intended to limit liability for each level of review as easily as it may have intended to limit liability for all levels combined. ¶ 12 In 1996, the legislature proposed an amendment to RCW 4.84.350, which stated: The amount awarded . . . shall not exceed: (a) For cases involving rule validity: (i) Twenty-five thousand dollars for superior court cases; and (ii) Fifteen thousand dollars for appeals to the court of appeals and the supreme court; and (b) For cases involving other agency action: (i) Fifty thousand dollars for superior court cases; and (ii) Fifteen thousand dollars for appeals to the court of appeals and the supreme court. H.B. 2747, § 9(2), at 12, 54th Leg., Reg. Sess. (1996). The Department asserts that the rejection of these amendments indicates the legislature’s intent to cap attorney fees for all levels of judicial review combined. However, we disagree. The legislature may have intended for this amendment to first distinguish between cases involving rule validity and agency action and, second, reduce the award for higher level appeals rather than awarding $25,000 for each level. As pointed out by Costanich, the language in the statute uses the singular, “a court” and “the court.” RCW 4.84-.350(1) (emphasis added). This language, along with the stated purpose of the EAJA, indicates legislative intent to award fees for each level of judicial review before each court. 933 ¶ 13 The definition of “a” is “one” or “[a] single” or “[a] certain, a particular.” 1 The New Shorter Oxford English Dictionary 1 (Lesley Brown ed., Univ. P. 1993). The superior court, the Court of Appeals, and the Supreme Court are each “a” court, each with its own particular procedural rules, judges, attorneys, and fees. We read the statute to provide for these differences by designating that a court may award fees under the statute. We cannot ignore this designation by the legislature. In this case, we hold the statutory cap of $25,000 applies separately to the superior court, the Court of Appeals, and our review as well. ¶ 14 During oral argument, the Department argued our review is not included in the statutory language, which deems the attorney fee award applies to “review of an agency action” and because our review was conducted under the attorney fee statute only, Costanich should not receive attorney fees here. However, our review is necessitated only because of the initial agency action; the attorney fees in dispute are inseparable from that review. Often, a review has many interlinked pieces and an agency action may implicate possible remedies under multiple statutes. Each statute is encompassed in the review of the agency action; our review is only one part of the underlying dispute between the Department and Costanich. This does not bring the review outside the scope of the EAJA. Awarding Costanich attorney fees for our review is consistent with the statute’s purpose to afford Costanich “a greater opportunity to defend [herself] from inappropriate state agency actions and to protect [her] rights.” Laws of 1995, ch. 403, § 901. A denial of attorney fees to Costanich at this level would undermine the core purpose of the EAJA. ¶ 15 The general rule is that time spent on establishing entitlement to a court awarded attorney fee is compensable where the fee shifts to the opponent under fee shifting statutes. Fisher Props., Inc. v. Arden-Mayfair, Inc., 115 Wn.2d 364, 378, 798 P.2d 799 (1990). The only reason Costanich is involved in our review here is because of the initial agency action; without that, any debate over attor 934 ney fees would be unnecessary. Therefore, our review triggers the statutory cap under RCW 4.84.350 and Costanich is entitled to any attorney fees and expenses related to this court’s review up to $25,000. Waiver ¶ 16 Although we find a qualified party may be awarded up to $25,000 for each level of judicial review, Costanich urges us to find the Department waived its right to contest the Court of Appeals’ original grant of fees. Because of this waiver, Costanich argues, she should receive the full amount originally awarded, $46,239. RAP 18.1(e) provides that a party must object to a request for fees within 10 days after service of the affidavit of fees and expenses. The Department argued for the first time that an award of appellate fees was barred by RCW 4.84.350’s statutory cap in a motion to modify filed July 12, 2007, 22 days after the award by the court. Costanich argues that the Court of Appeals erred in granting this untimely motion, and under the Rules of Appellate Procedure, it should have granted the motion only if it found “extraordinary circumstances” and a necessity “to prevent a gross miscarriage of justice.” RAP 18.8(b). ¶ 17 Courts have the authority to award attorney fees only as granted by statute. By asking us to find a waiver in this situation, we are asked to find the court has powers exceeding those statutory limits. This expansion would be too contrary to the express statutory language; we find the Department cannot waive the statutory cap on attorney fees and is liable only for the statutory cap, $25,000, for the Court of Appeals’ review. CONCLUSION ¶ 18 We hold that RCW 4.84.350 provides a statutory cap for each level of judicial review of an agency action and the Department did not waive its right to argue the statutory 935 cap at the Court of Appeals. In addition, we hold that our review falls within the scope of the statute and, thus, Costanich is entitled to $25,000 in attorney fees at both the superior court and the Court of Appeals, and up to $25,000 for review by our court as well. Chambers, Owens, Fairhurst, and Stephens, JJ., concur. Footnotes [1] This was the amount stated by petitioner during oral argument on May 13, 2008. [2] RCW 4.84.350(2) provides, “The amount awarded a qualified party under subsection (1) of this section shall not exceed twenty-five thousand dollars. Subsection (1) of this section shall not apply unless all parties challenging the agency action are qualified parties. If two or more qualified parties join in an action, the award in total shall not exceed twenty-five thousand dollars. The court, in its discretion, may reduce the amount to be awarded pursuant to subsection (1) of this section, or deny any award, to the extent that a qualified party during the course of the proceedings engaged in conduct that unduly or unreasonably protracted the final resolution of the matter in controversy.” [3] The superior court had awarded $7,500.00 in fees and $1,149.74 in expenses; the amount of fees for the Court of Appeals level had not been determined. Alpine, 102 Wn. App. at 20.