Fuchs v. State, Docket No. 37652
| Decision Date | 28 February 2012 |
| Docket Number | Docket No. 37652 |
| Parties | DANIEL S. FUCHS, Petitioner-Appellant, v. STATE OF IDAHO, DEPARTMENT OF IDAHO STATE POLICE, BUREAU OF ALCOHOL BEVERAGE CONTROL, Respondent-Respondent on Appeal. DANIEL S. FUCHS, Plaintiff-Appellant, v. STATE OF IDAHO, DEPARTMENT OF IDAHO STATE POLICE, BUREAU OF ALCOHOL BEVERAGE CONTROL, Defendant-Respondent. |
| Court | Idaho Supreme Court |
Stephen W. Kenyon, Clerk
Appeal from the District Court of the Fifth Judicial District, State of Idaho, Twin Falls County. Hon. G. Richard Bevan, District Judge.
District court ruling there is no property right in multiple listings on priority list for liquor licenses affirmed.
Brian N. Donesley, Boise, argued for appellant.
Hon. Lawrence G. Wasden, Idaho Attorney General, Boise, for respondent. Cheryl Anne Emmons Meade, Deputy Attorney General argued.
This case arises out of the district court's dismissal for failure to exhaust administrative remedies of Daniel S. Fuchs's (Fuchs) petition for judicial review and complaint for declaratory and injunctive relief. Fuchs is challenging the Alcohol Beverage Control's (ABC) removal ofhis name from liquor license priority waiting lists. He argues that the agency actions constitute an informal rule that was not promulgated in accordance with the Idaho Administrative Procedure Act (Idaho APA). In response, ABC argues that Fuchs' failed to exhaust administrative remedies before bringing his action before the district court, and that the removal was done in accordance with IDAPA 11.05.01.013.04, a properly promulgated rule. Although we now hold that the district court erred in finding that Fuchs had to exhaust administrative remedies, we affirm the decision of the district court on other grounds.
ABC, a division of the Idaho State Police (ISP), maintains a priority waiting list of liquor license applicants for cities that do not have any available incorporated city liquor licenses. IDAPA 11.05.01.013.01. Between June 3, 1994, and February 13, 1995, Fuchs applied for and was placed on the city priority lists in: Twin Falls (9 times); Sun Valley (3 times); Ketchum (3 times); Hailey (3 times); Bellevue (twice); and Idaho Falls (twice).
In 2006, ABC began the process of promulgating new administrative rules related to, among other things, the priority lists for liquor licenses. The pertinent addition in the draft rule would allow an applicant to place their name only once on each incorporated city priority list. As part of the rule making process, ABC sought input from various groups and made revisions to the draft rules accordingly. On October, 4, 2006, a Public Notice of Intent to Propose or Promulgate New or Changed Agency Rules was published. After receiving public input, the proposed rules reached the legislature, and were passed by the Idaho Senate Judiciary and Rules Committee. The final form of the pertinent rule states, in part, that "[a]n applicant shall hold only one position at a time on each incorporated city priority list." IDAPA 11.05.01.013.04.
On July 24, 2009, ABC sent Fuchs a letter informing him that the agency was removing nearly all of his applications from the priority lists pursuant to IDAPA 11.05.01.013.04, leaving his name listed only once per city. Enclosed with the letter was a refund check for the full amount of the application fees for the removed listings.
On August 19, 2009, Fuchs filed a petition for judicial review under I.C. § 67-5270, and amended that petition the next day. Fuchs claimed that the above referenced letter constituted a final agency action undertaken against him without due process of law. The amended petition was followed by a statement of issues for judicial review pursuant to I.R.C.P. Rule 84(d). The statement asked the district court to review, among other things, whether the agency action waslawful or whether it was an unlawful retroactive rulemaking in excess of statutory authority and in violation of the Idaho APA. In response, ABC argued that Fuchs failed to exhaust administrative remedies before petitioning for judicial review, and filed a motion for dismissal on those grounds. Fuchs replied that any attempt at administrative remedy would be unnecessary, since exhaustion is not required when the agency acted outside of its authority.
Fuchs also filed a complaint seeking declaratory and injunctive relief on grounds similar to his petition for judicial review. In the complaint, Fuchs alleges that he was entitled to notice and due process before the agency removed his name from the priority lists. He also claims that the July 24, 2009 letter he received from ABC was an unlawful order that exceeded the agency's authority. This civil complaint was consolidated with the petition for judicial review in a September 17, 2009 order by the district court.
On March 10, 2010, the district court dismissed without prejudice Fuchs's petition for review and his civil action. In the decision, the district court acknowledged the exceptions to exhaustion, found that none of the exceptions apply to Fuchs, and dismissed for failure to exhaust administrative remedies. The district court also dismissed the declaratory judgment claims on the same ground. Fuchs timely appealed to this Court.
Whether a dismissal for lack of jurisdiction pursuant to I.R.C.P. 12(b) was properly granted is a question of law over which this Court exercises free review. Owsley v. Idaho Indus. Comm'n, 141 Idaho 129, 133, 106 P.3d 455, 459 (2005). When reviewing a motion to dismiss, the court looks only at the pleadings, and all inferences are viewed in favor of the non-moving party. Young v. City of Ketchum, 137 Idaho 102, 104, 44 P.3d 1157, 1159 (2002). "[T]he question then is whether the non-movant has alleged sufficient facts in support of his claim which, if true, would entitle him to relief." Rincover v. State, 128 Idaho 653, 656, 917 P.2d 1293, 1296 (1996). "[E]very reasonable intendment will be made to sustain a complaint against amotion to dismiss for failure to state a claim." Idaho Comm'n on Human Rights v. Campbell, 95 Idaho 215, 217, 506 P.2d 112, 114 (1973). "The issue is not whether the plaintiff will ultimately prevail, but whether the party is entitled to offer evidence to support the claims." Young, 137 Idaho at 104, 44 P.3d at 1159 (quoting Orthman v. Idaho Power Co., 127 Idaho 960, 961, 895 P.2d 561, 562 (1995)).
This Court exercises free review over a district court's conclusions of law. Maresh v. State, Dept. of Health & Welfare ex rel. Caballero, 132 Idaho 221, 224, 970 P.2d 14, 17 (1998). The constitutionality of a statute or administrative regulation is a question of law over which this Court exercises free review. Wanner v. State, Dept. of Transp., 150 Idaho 164, 167, 244 P.3d 1250, 1253 (2011); Am. Falls Res. Dist. No. 2 v. Idaho Dep't of Water Res., 143 Idaho 862, 869, 154 P.3d 433, 440 (2007).
Fuchs filed a petition for judicial review and a civil claim in the district court without first resorting to administrative relief. In response, ABC filed a motion to dismiss for failing to exhaust administrative remedies. On March 10, 2010, the district court held that Fuchs failed to exhaust administrative remedies, and must return to the agency to state his initial claims. In so ruling, the district court held that Fuchs had no vested property right from being on the priority lists so he was not entitled to notice, and that he did not fit any of the exceptions to exhaustion.
On appeal, Fuchs argues that the district court erred, and that he did not have to exhaust administrative remedies because he fit an exception to exhaustion. Specifically, he argues that the interests of justice and the fact that ABC's July 24, 2009 letter was outside of the agency's authority allow him to bypass administrative remedy. He also argues that he could bring the declaratory action without resorting to administrative remedies first.
1. The district court erred in finding that Fuchs had to exhaust administrative remedy before filing a petition for judicial review or a complaint for declaratory action.
A party's right to appeal an administrative decision is governed by statute. Cobbley v. City of Challis, 143 Idaho 130, 133, 139 P.3d 732, 735 (2006); I.R.C.P. 84(a)(2)(C). Idaho Code section 67-5270(2) states that: "A person aggrieved by final agency action other than an order ina contested case is entitled to judicial review under this chapter if the person complies with the requirements of sections 67-5271 through 67-5279, Idaho Code."
However, "[a] person is not entitled to judicial review of an agency action until that person has exhausted all administrative remedies required . . . ." I.C. § 67-5271. "Absent a statutory exemption, the exhaustion of an administrative remedy is a prerequisite for resort to the courts." Dept. of Agric. v. Curry Bean Co., 139 Idaho 789, 792, 86 P.3d 503, 506 (2004). "This Court has held that generally the exhaustion doctrine implicates subject matter jurisdiction because a 'district court does not acquire subject matter jurisdiction until all the administrative remedies have been exhausted.'" Owsley, 141 Idaho at 135, 106 P.3d at 461 (quoting Fairway Dev. v. Bannock Cnty., 119 Idaho 121, 125, 804 P.2d 294, 298 (1990)).
Here, Fuchs made no attempt to...
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