Owner-Operator Independent Drivers Ass'n, Inc. v. Idaho Public Utilities Com'n

Decision Date16 March 1994
Docket NumberOWNER-OPERATOR,No. 20428,20428
Citation125 Idaho 401,871 P.2d 818
Parties, Fed. Carr. Cas. P 83,899 INDEPENDENT DRIVERS ASSOCIATION, INC., and J.R. Hansen, and on behalf of themselves and as class representatives of all others similarly situated, Plaintiffs-Appellants, Cross-Respondents, v. The IDAHO PUBLIC UTILITIES COMMISSION, The Idaho Department of Law Enforcement, Idaho State Treasurer, and State of Idaho, Defendants-Respondents, Cross-Appellants.
CourtIdaho Supreme Court

Hawley, Troxell, Ennis & Hawley, Boise, Collier, Shannon & Scott, Washington, D.C., for appellants/cross-respondents. K. Michael O'Connell argued.

Larry EchoHawk, Idaho Atty. Gen., Michael S. Gilmore, Deputy Atty. Gen., Boise for respondents/cross-appellants. Michael S. Gilmore argued.

TROUT, Justice.

I. BACKGROUND AND PROCEDURAL HISTORY

This is an appeal from a district court determination that certain interstate motor carriers are entitled to a refund of a portion of the fees they have paid to renew their registration of Interstate Commerce Commission ("I.C.C.") operating authority. The appellants are the Owner-Operator Independent Drivers Association, Inc., and J.R. Hansen, as a class representative of all other interstate carriers similarly situated ("OOIDA"). The respondents are the Idaho Public Utilities Commission, the Idaho Department of Law Enforcement, the Idaho State Treasurer, and the State of Idaho ("IPUC"). This action was commenced when a lawsuit was filed by OOIDA against the IPUC for imposing an impermissibly high registration renewal fee.

A brief explanation of the genesis of the regulation of interstate motor carriers is important in understanding the conflict between state and federal laws in this case. In 1935, Congress enacted the Motor Carrier Act as Part II of the Interstate Commerce Act, which is currently codified at 49 U.S.C. §§ 10101 et seq. The Motor Carrier Act gave the I.C.C. the authority to regulate motor carriers engaged in interstate commerce. Thereafter states began to impose their own requirements and fees on the motor carriers which forced the carriers to comply with a number of different and sometimes conflicting regulations. National Ass'n of Regulatory Util. Comm'rs. v. United States, 397 F.Supp. 591 (D.D.C.1975), cert. denied, 423 U.S. 1041, 96 S.Ct. 763, 46 L.Ed.2d 630 (1976).

In order to address the burden imposed on the interstate carriers by state regulations, Congress enacted Public Law No. 89-170, 79 Stat. 648 (1965), 49 U.S.C. § 11506. In that statute the I.C.C. was directed to establish uniform procedures and standards for, among other things, the filing and maintaining of certificates and permits issued by the I.C.C. and for the registering and identifying of vehicles operating under I.C.C. certificates. 49 U.S.C. § 11506(c). That statute provides in part:

(b) General rule.--The requirement of a state that a motor carrier, providing transportation subject to the jurisdiction of the Commission under subchapter II of chapter 105 of this title and providing transportation in that State, register the certificate or permit issued to the carrier under section 10922 or 10923 of this title is not an unreasonable burden on transportation referred to in section 10521(a)(1) and (2) of this title when the registration is completed under standards of the Commission under subsection (c) of this section. When a State registration requirement imposes obligations in excess of the standards, the part in excess is an unreasonable burden.... (Emphasis added.)

The I.C.C. then promulgated regulations which governed the standards and procedures for states desiring to regulate registration of the operating authority of an interstate carrier (49 C.F.R. §§ 1023.11-15) and registration and identification of particular vehicles which are operating under I.C.C. authority (49 C.F.R. §§ 1023.31-42).

Pursuant to the authority vested by the I.C.C. regulations, the Idaho legislature amended I.C. § 61-812 to give the IPUC the responsibility of charging all interstate carriers twenty-five dollars for annual registration of interstate carrier authority or exemption, whether they were applying originally to register their operating authority or were seeking only to renew it.

OOIDA filed suit on December 7, 1990, maintaining that the legislature had exceeded the registration authority given to it by the I.C.C. and that the flat rate of twenty-five dollars per registration exceeded by fifteen dollars the permissible fee for renewal of registration by each interstate carrier. The suit was certified as a class consisting of all interstate carriers who paid the allegedly excessive registration renewal fee. Specifically OOIDA requested relief on four grounds: (1) that I.C. § 61-812, which imposed a registration renewal fee of twenty-five dollars, violated 49 C.F.R. § 1023.13; (2) that I.C. § 61-812 violated the commerce clause by imposing a registration renewal fee upon interstate carriers that was an unreasonable burden on interstate commerce; (3) that by enforcing I.C. § 61-812, the IPUC violated 42 U.S.C. § 1983 by imposing a renewal registration fee in violation of the commerce clause, thus depriving the carriers of constitutional rights under the color of law; and (4) that they were entitled to injunctive relief from further enforcement of the unconstitutional Idaho statute. Shortly after the complaint was filed, the legislature amended § 61-812 to provide for a fee of twenty-five dollars for initial registration of operating authority and a reduced fee of ten dollars for annual renewal of that registration.

On April 9, 1991, both parties filed cross-motions for summary judgment. The district court, on May 12, 1992, granted in part both parties' motions. In its Memorandum Decision and Order of May 12, 1992, the District Court found that at the time suit was originally filed, I.C. § 61-812 violated the Commerce Clause of the United States Constitution. However, because the statute had subsequently been amended to reduce the amount charged for registration renewal, the court did not have to declare it unconstitutional and did not grant the request for an injunction to enjoin its enforcement. The Court further held:

1. That the State did not provide the interstate carriers meaningful pre-deprivation or post-deprivation relief from the imposition of the unlawful fee, and that there was no need for the taxpayers to pay under protest in order to be entitled to a refund;

2. Only single vehicle interstate carriers could recover a five dollar refund for renewal fees paid over the past three years due to a limitation of liability against the State under I.C. § 5-218(1) 1;

3. That Congress intended twenty dollars to be a reasonable burden on commerce because 49 C.F.R. 1023.13 provided for a ten dollar renewal of registration fee and 49 C.F.R. 1023.33 provided a ten dollar fee for vehicle identification. Thus Congress intended twenty dollars as a reasonable burden which the State of Idaho could charge;

4. That attorney fees would not be awarded under 42 U.S.C. § 1988 to either party. OOIDA could not recover because § 1983 and § 1988 did not apply to the State or to state officials acting in their official capacity. The IPUC was not entitled to attorney fees under 42 U.S.C. § 1988 as the suit never would have been brought but for the unconstitutional statute;

5. That there was no overall prevailing party to justify an award of attorney fees under Idaho laws.

By special motion the court established a distribution plan, and awarded attorney fees in the amount of twenty-five percent pursuant to the Idaho Common Fund doctrine. The court entered a final judgment on December 2, 1992. Appeal was taken by both parties.

On appeal we must address the question of whether the district court correctly calculated the amount of refund to which the class members of OOIDA were entitled. We are also asked to review the district court's holding regarding the necessity for paying this fee under protest in order to preserve the right to challenge it, and finally whether the court's ruling on attorney fees was in error.

II. THE DISTRICT COURT ERRED BY COMBINING TWO FEDERAL REGULATIONS TO DETERMINE THE PERMISSIBLE BURDEN ON INTERSTATE COMMERCE AND BY ALLOWING ONLY SINGLE VEHICLE CARRIERS A FIVE DOLLAR REFUND

OOIDA argues on appeal that the district court improperly combined two federal regulations to determine a permissible burden on interstate commerce. Thus the court erred by allowing only single vehicle carriers to recover payment in the amount of five dollars of the excessive fees paid. We agree that the district court miscalculated the refund amount.

The district court, on summary judgment, ruled that it was entitled to determine what Congress intended to be a permissible burden on interstate commerce. In doing so, the district court determined that Congress specifically allowed the states to impose a ten dollar fee on interstate carriers to renew their I.C.C. operating authority and a ten dollar per vehicle identification fee. Thus the district court opined that Congress intended a minimum of twenty dollars per carrier to be a permissible burden on interstate commerce. The district court reached its ruling by combining two federal regulatory schemes 49 C.F.R. § 1023, subpart B (§§ 1023.10 et. seq.) and 49 C.F.R. § 1023, subpart D (§§ 1023.30 et. seq.) This was in error.

Subpart B allows the state to require a carrier to register I.C.C. operating authority with the state. If the state chooses to require carriers to register, the regulation describes how registration must be completed. 49 C.F.R. § 1023.13 allows the state to charge a fee with the application for registration and provides in pertinent part:

[t]he application shall be accompanied by the fee, if any, prescribed by the law of such State: Provided, however, That such fee shall not exceed $25 ... And provided further, That such fee shall not exceed $10 for...

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