Ramah Navajo School Bd., Inc. v. Bureau of Revenue

• Decision Date: 07 January 1986
• Docket Number: No. 7960,7960
• Citation: 1986 NMCA 3,720 P.2d 1243,104 N.M. 302
• Parties: , 33 Ed. Law Rep. 858 RAMAH NAVAJO SCHOOL BOARD, INC., and Lembke Construction Company, Inc., Petitioners-Appellees, v. BUREAU OF REVENUE, State of New Mexico, Respondent-Appellant.
• Court: Court of Appeals of New Mexico

Page 1243

720 P.2d 1243

104 N.M. 302, 33 Ed. Law Rep. 858

RAMAH NAVAJO SCHOOL BOARD, INC., and Lembke Construction Company, Inc., Petitioners-Appellees, v. BUREAU OF REVENUE, State of New Mexico, Respondent-Appellant.

No. 7960.

Court of Appeals of New Mexico.

Jan. 7, 1986.

Certiorari Quashed June 3, 1986.

[104 N.M. 304] Paul G. Bardacke, Atty. Gen., Gerald B. Richardson, Sp. Asst. Atty. Gen., Santa Fe, for respondent-appellant.

Michael P. Gross, Roth, Van Amberg, Gross, Amarant & Rogers, Santa Fe, for petitioners-appellees.

OPINION

BIVINS, Judge.

We withdraw the opinion filed on December 12, 1985, and substitute the following.

From an order awarding petitioners Ramah (Ramah School Board, Inc., and Lembke Construction Company, Inc.) attorney's fees pursuant to 42 U.S.C. Section 1988 following remand from the United States Supreme Court, respondent Bureau (Bureau of Revenue, State of New Mexico) appeals. The Bureau raises three issues:

1. Whether Ramah's complaint sufficiently pled a 42 U.S.C. Section 1983 violation so as to allow an attorney's fee award under Section 1988;

2. Whether the Bureau is a "person" within the meaning of Section 1983; and

3. Whether the complaint states a cause of action cognizable under Section 1983.

We answer each issue in the affirmative and, therefore, affirm.

In 1978, Ramah sued for a refund of gross receipts taxes paid. This court affirmed a judgment in favor of the Bureau. Ramah Navajo School Board Inc. v. Bureau of Revenue, 95 N.M. 708, 625 P.2d 1225 (Ct.App.1980), cert. quashed, 96 N.M. 17, 627 P.2d 412 (1981), rev'd, 458 U.S. 832, 102 S.Ct. 3394, 73 L.Ed.2d 1174 (1982). Ramah petitioned the United States Supreme Court which reversed on the basis that federal law preempted the assessment of the New Mexico tax on proceeds from the construction of a school on the Ramah Navajo Reservation. Ramah Navajo School Board Inc. v. Bureau of Revenue, 458 U.S. 832, 102 S.Ct. 3394, 73 L.Ed.2d 1174 (1982).

Following remand, Ramah filed a motion for an award of attorney's fees under Section 1988, the Federal Civil Rights Attorney's Fees Awards Act. After a hearing, the trial court awarded to Ramah attorney's fees. The parties stipulated as to the amount; therefore, the issue on appeal involves only the legality of the award.

In the Civil Rights Attorney's Fees Awards Act of 1976, Congress authorized the awarding of attorney's fees in a number of specific civil rights actions. The Act, in pertinent part, provides for the allowance of attorney's fees:

[I]n any action or proceeding to enforce a provision of sections [42 U.S.C. Secs. ] 1981, 1982, 1983, 1985 and 1986 title IX of Public Law 92-318, [or in any civil action or proceeding, by or on behalf of the United States of America, to enforce, or by charging a violation of, a provision of the United States Internal Revenue Code], or Title VI of the Civil Rights Act of 1964, the court, in its discretion, may allow the prevailing party, other than the United States, a reasonable attorney's fee as part of costs.

42 U.S.C. Sec. 1988. (Emphasis added.)

Ramah claims entitlement to Section 1988 attorney's fees because its original action qualifies as one to enforce a provision of Section 1983, and because it prevailed in the lawsuit.

Section 1983 provides:

Every person who, acting under color of any statute, ordinance, regulation, custom, or usage, of any State or Territory or District of Columbia, subjects, or causes to be subjected, any citizen of the United States or other person within the jurisdiction thereof to the deprivation of any rights, privileges, or immunities secured by the Constitution and laws, shall be liable to the party injured in an action at law, suit in equity, or other proper proceeding for redress. For the purposes of this action, any Act of Congress applicable exclusively to the District of Columbia shall be considered to be a statute of the District of Columbia.

In order for Ramah to succeed, it must have pled a Section 1983 cause of action; the Bureau must be a "person" within the meaning of Section 1983; and the cause of action must be one that is cognizable under Section 1983. The Bureau claims that Ramah fails each of those requirements. We now examine the Bureau's contentions.

1. Did the complaint sufficiently plead a Section 1983 violation?

In Gomez v. Toledo, the United States Supreme Court stated that by its "plain terms," Section 1983 requires "two---and only two---allegations." 446 U.S. 635, 640, 100 S.Ct. 1920, 1923, 64 L.Ed.2d 572 (1980). First, the plaintiff must allege that he was deprived of a federal right. Second, the plaintiff must contend that the person who deprived him of the federally protected right was acting under the color of state or territorial law. Id.

While the Supreme Court, in Gomez, was discussing the standard of pleading required in a Section 1983 action when qualified immunity is at issue, lower courts, in cases more factually similar to ours, have basically reiterated the Gomez standard of pleading. For instance, in Harradine v. Board of Supervisors, a voting rights case, the plaintiff argued that the distribution and apportionment of the Board violated the equal protection clause of the Fourteenth Amendment and sections of the New York constitution. 73 A.D.2d 118, 425 N.Y.S.2d 182 (1980). The plaintiff prevailed in the suit and then sought attorney's fees under Section 1988 even though he had not specifically alleged, in his complaint or at trial, a Section 1983 violation. Accordingly, the question before the Harradine court, was whether a plaintiff who prevails in a state court suit, not arguing a Section 1983 violation but seeking to vindicate a federal civil right, should be allowed to recover Section 1988 attorney's fees. In answering that question, the court first noted that the purpose of Section 1988 was to encourage private citizens to act as private attorneys general in enforcing civil rights and that Section 1988 should be construed so as to effectuate that purpose. The court, therefore, allowed recovery on the basis that "[t]he Civil Rights Attorneys Fees Awards Act must be broadly applied to achieve its remedial purpose." Id. at 126, 425 N.Y.S.2d at 188.

Similarly, in Gumbhir v. Kansas State Board of Pharmacy, 231 Kan. 507, 646 P.2d 1078 (1982), cert. denied, 459 U.S. 1103, 103 S.Ct. 724, 74 L.Ed.2d 950 (1983), the plaintiff argued in his complaint that the Board's denial of his license application violated his rights under the First, Fifth, and Fourteenth Amendments as well as Article 1, Section 8 of the United States Constitution. The plaintiff failed to plead specifically a Section 1983 violation. The plaintiff prevailed at trial with the court not reaching his claimed constitutional violations. He then sought attorney's fees under Section 1988. While acknowledging that "the better practice is to specifically plead a violation of Section 1983," the Kansas Supreme Court invoked Kansas' liberal rules of notice pleading to rule that the plaintiff had adequately pled a violation of his civil rights. Id. at 514, 646 P.2d at 1085. See also Fairbanks Correctional Center Inmates v. Williamson, 600 P.2d 743 (Alaska 1979); Boldt v. State, 101 Wis.2d 566, 305 N.W.2d 133, cert. denied, 454 U.S. 973, 102 S.Ct. 524, 70 L.Ed.2d 393 (1981). This result is consistent with New Mexico's liberal rules of notice pleading. See N.M.Civ.P.Rule 8 (Repl.Pamp.1980); Temple Baptist Church, Inc. v. City of Albuquerque, 98 N.M. 138, 646 P.2d 565 (1982).

Ramah specifically alleged that the Bureau, in implementing its tax program, was acting "under color of the New Mexico Gross Receipts and Compensating Tax Act," and that the tax "constitutes interference by the State of New Mexico in Navajo self-government in violation of the Treaty of 1868 and the laws of the United States." (Emphasis added.) Based on these authorities and the pleadings, we hold that Ramah's failure to plead specifically a Section 1983 violation does not bar its recovery of Section 1988 attorney's fees.

Two recent New Mexico cases do not persuade us differently. Both are distinguishable from the present case. In Garcia v. State Board of Education, this court denied plaintiff's request for attorney's fees, a request first asserted on appeal. 102 N.M. 306, 694 P.2d 1371 (Ct.App.), cert. quashed, 102 N.M. 293, 694 P.2d 1358 (1985). We based our refusal on five grounds: first, the action was not brought under Section 1983; second, the plaintiff did not plead or prove that his civil rights were violated; third, the plaintiff did not prevail in the lawsuit; fourth, the plaintiff offered no proof that a Section 1988 award can be made when a Section 1983 claim is raised, for the first time, on appeal; and, fifth, Section 1988 does not authorize an award of attorney's fees in an administrative proceeding.

In this case, Ramah prevailed. Ramah also demonstrated that a Section 1988 award may be made even though the case was not specifically litigated under Section 1983. Ramah did argue, in its complaint, that a federal right had been violated. Finally, this case does not involve an administrative proceeding.

In Chapman v. Luna, the plaintiffs prevailed, in part, in their challenge to the Albuquerque/Bernalillo County Motor Vehicle Emission Inspection Program. 101 N.M. 59, 678 P.2d 687 (1984). On remand to the district court, plaintiffs sought Section 1988 fees because the state supreme court had ruled that a provision of the emissions inspection program violated "equal protection standards." In plaintiffs' complaint, however, they had failed to refer specifically to the New Mexico Constitution, the United States Constitution, Section 1983, or Section 1988. The district court rejected plaintiffs' claim to Section 1988 fees, and the state supreme court affirmed. 102 N.M. 768, 701 P.2d 367, cert. denied, --- U.S. ----, 106 S.Ct. 345, 88 L.Ed.2d 292 (1985).

The supreme court held that the plaintiffs were unable to...