State v. Black Hills Power, Inc.

• Decision Date: 03 August 2015
• Docket Number: No. S–14–0268.,S–14–0268.
• Citation: 2015 WY 99,354 P.3d 83
• Parties: The STATE of Wyoming, Appellant (Intervenor–Plaintiff), v. BLACK HILLS POWER, INC., a South Dakota corporation, Appellee (Defendant).
• Court: Wyoming Supreme Court

354 P.3d 83

2015 WY 99

The STATE of Wyoming, Appellant (Intervenor–Plaintiff)

v.BLACK HILLS POWER, INC., a South Dakota corporation, Appellee (Defendant).

No. S–14–0268.

Supreme Court of Wyoming.

Aug. 3, 2015.

Representing Appellant: Peter K. Michael, Wyoming Attorney General; Martin L. Hardsocg, Deputy Attorney General;^* Ryan T. Schelhaas, Senior Assistant Attorney General; Jared S. Crecelius, Senior Assistant Attorney General; and Megan L. Nicholas, Senior Assistant Attorney General. Argument by Ms. Nicholas.

Representing Appellee: Stuart R. Day and Scott P. Klosterman of Williams, Porter, Day & Neville, P.C., Casper, Wyoming; Thomas G. Fritz, Steven J. Oberg, and Catherine M. Sabers of Lynn, Jackson, Shultz & Lebrun, Rapid City, South Dakota. Argument by Ms. Sabers.

Before BURKE, C.J., and HILL, KITE, DAVIS, and FOX, JJ.

Opinion

DAVIS, Justice.

[¶ 1] The United States District Court for the District of Wyoming certified three questions concerning the State of Wyoming's ability to recover expenses incurred in suppressing a wildfire near Newcastle, Wyoming from the party whose alleged negligence created the need for those services.

CERTIFIED QUESTIONS

[¶ 2] 1. Can the State of Wyoming recover its fire suppression and/or emergency services costs from a party whose negligence created the need for the emergency services?¹

2. If the State of Wyoming cannot generally recover its fire suppression and/or emergency services costs from a party whose negligence created the need for the services, can the State of Wyoming nonetheless recover the costs of its services where portions of the lands protected by the fire suppression effort were State lands?

3. If the State of Wyoming can recover the costs of its services where portions of the lands protected by the fire suppression effort were State lands, is the State's recovery limited in any way, such as to a pro rata share of those costs based on the State's percentage of the total acres affected by the fire?

FACTS

[¶ 3] The federal district court's certification order contains a statement of facts relevant to the questions certified. Although our review and ultimate resolution of the questions do not require application of the facts, we set forth that portion of the order to provide context:

(b) Statement of Relevant Facts

1. On June 29, 2012, a wildfire was ignited near Newcastle, Weston County, Wyoming. The fire, referred to as the “Oil Creek Fire,” originated in an area with a concentrated number of nearby State parcels and grew to a point that it could not be contained with the resources of the local Fire District in Weston County.

2. For qualified “emergency fires,” as defined by Wyo. Stat. § 36–1–401(a)(ii), the costs of suppressing the fires are covered by the State of Wyoming through its Emergency Fire Suppression Account, created by § 36–1–402 and administered by the State Forester under § 36–1–403. As a participating county pursuant to the provisions of § 36–1–404, Weston County requested that the State pay for the costs of suppressing the Oil Creek Fire from the State's Emergency Fire Suppression Account. The State Forester approved the request.

3. The Oil Creek Fire allegedly consumed more than 61,000 acres, damaging approximately 9,857 acres of lands owned and managed by the State of Wyoming.

4. The State allegedly incurred approximately $5,213,000 in suppression costs for the Oil Creek Fire, which it has paid or will pay from the State's Emergency Fire Suppression Account.

(c) Nature of Controversy

On April 12, 2013, a group of private landowners (“Landowners”) filed this action [in Federal Court] against Defendant, Black Hills Power (“BHP”), alleging BHP was negligent in its inspection, operation, and maintenance of a 69kV transmission line, which ignited the Oil Creek Fire and resulted in damages to the Landowners.... BHP disputes liability and denies the nature and extent of the Landowners' alleged damages. On June 3, 2014, the State of Wyoming filed a motion to intervene, which was granted on July 1, 2014. The State's Complaint was subsequently filed.

In its Complaint, the State also alleges BHP was negligent in its inspection, maintenance and operation of the 69kV transmission line. The State seeks recovery for damages to State-owned property as well as for suppression costs associated with the Oil Creek Fire, including both costs incurred in the protection of its own property and through payment obligations to Weston County from the State's Emergency Fire Suppression Account. The State's Complaint does not delineate between the amount of fire suppression costs incurred in the protection of State land versus those fire suppression costs incurred in protection of lands owned by other parties.

Defendant moved to dismiss the State's claim for recovery of fire suppression costs arguing, because recovery of such costs by a governmental entity is not recognized at common law, the State cannot make a viable claim for recovery of fire suppression costs in the absence of a specific state statute authorizing recovery. In response, the State argues, even if the “public services doctrine” was recognized in Wyoming, an exception to the doctrine applies where the government incurs expenses to protect its own property.

STANDARD OF REVIEW

[¶ 4] Pursuant to W.R.A.P. 11.01, we may answer a question of law that may be determinative of a cause pending in the certifying court for which there appears to be no controlling precedent from this Court. Preston v. Marathon Oil Co., 2012 WY 66, ¶ 4, 277 P.3d 81, 83 (Wyo.2012). Certified questions are queries of law that are reviewed de novo. Id.; State v. Mares, 2014 WY 126, ¶ 10, 335 P.3d 487, 493 (Wyo.2014).

DISCUSSION

General Rule

[¶ 5] The general common law rule adopted by other jurisdictions, which has been called the free public services doctrine, provides that absent specific statutory authorization, a governmental entity cannot recover the costs of providing public services from a tortfeasor whose conduct caused the need for such services.² See Dist. of Columbia v. Air Florida, Inc., 750 F.2d 1077, 1080 (D.C.Cir.1984) ; City of Flagstaff v. Atchison, Topeka & Santa Fe Ry. Co., 719 F.2d 322, 323–24 (9th Cir.1983) ; Walker Cnty. v. Tri–State Crematory, 284 Ga.App. 34, 643 S.E.2d 324, 327 (2007). The raison d'être for the rule is that a governmental entity providing certain essential services for the public can more fairly absorb and pass the costs for those services on to its citizenry as a whole through taxation. Dist. of Columbia, 750 F.2d at 1080 ; City of Flagstaff, 719 F.2d at 323–24 ; City of Bridgeton v. B.P. Oil, Inc., 146 N.J.Super. 169, 369 A.2d 49, 54 (1976).

[¶ 6] A seminal case is City of Flagstaff, 719 F.2d at 323, in which the Ninth Circuit Court of Appeals held that “the cost of public services for protection from fire or safety hazards is to be borne by the public as a whole, not assessed against the tortfeasor whose negligence creates the need for the service.” See also Dep't of Natural Res. v. Wisconsin Power & Light Co., 108 Wis.2d 403, 321 N.W.2d 286, 288 (1982) (“Any liability for the cost of extinguishing the instant fire must be imposed by statute, for there is no common law liability permitting a governmental entity to charge an electric utility for fire suppression expenses.”). It went on to explain that the

governmental entities themselves currently bear the cost in question, and they have taken no action to shift it elsewhere. If the government has chosen to bear the cost for reasons of economic efficiency, or even as a subsidy to the citizens and their business, the decision implicates fiscal policy; the legislature and its public deliberative processes, rather than the court, is the appropriate forum to address such fiscal concerns.

City of Flagstaff, 719 F.2d at 324 ; see also City of Chicago, 290 Ill.Dec. 525, 821 N.E.2d at 1144–45.

[¶ 7] A year later, a similar result was reached in District of Columbia v. Air Florida, 750 F.2d at 1079. In that case, the District of Columbia brought a negligence action against an airline seeking to recoup costs associated with rescue and recovery efforts incurred due to a plane crash. Id. The District of Columbia Circuit Court of Appeals affirmed the district court's dismissal of the action based upon the free public services doctrine. In so doing, the court explained:

Where emergency services are provided by the government and the costs are spread by taxes, the tortfeasor does not anticipate a demand for reimbursement. Although settled expectations must sometimes be disregarded when new tort doctrines are needed to remedy an inequitable allocation of risks and costs, where a generally fair system for spreading the costs of accidents is already in effect—as it is here through assessing taxpayers the expense of emergency services—we do not find the argument for judicial adjustment of liabilities to be compelling.

We are especially reluctant to reallocate risks where a governmental entity is the injured party. It is critically important to recognize that the government's decision to provide tax-supported services is a legislative policy determination. It is not the place of the courts to modify such decisions. Furthermore, it is within the power of the government to protect itself from extraordinary emergency expenses by passing statutes or regulations that permit recovery from negligent parties.

Id. at 1080; see also Cnty. of Erie, New York v. Colgan Air, Inc., 711 F.3d 147, 150–51 (2d Cir.2013) ; Walker Cnty., 643 S.E.2d at 327.

[¶ 8] We are convinced that the reasons for the common law's free public services doctrine as articulated in City of Flagstaff, District of Columbia and similar cases are sound.³ Accordingly, like many other jurisdictions, we adopt the free public services doctrine. Absent a legislative grant of authority, the State of Wyoming may not generally recover its fire suppression and/or emergency service costs from a party whose negligence created the need for the...