Category: Iowa Supreme Court

Iowa Supreme Court broadens application of Open Meetings Act by including “agent or proxy” of public body

Gary Taylor

by Gary Taylor and Hannah Dankbar

Hutchison, et al., v. Douglas Shull and The Warren County Board of Supervisors
Iowa Supreme Court, March 18, 2016

On March 4, 2014 the Warren County Board of Supervisors held a public meeting to unanimously approve an annual budget that included all county employees’ salaries, with raises.  Before, during, and after that time, however, members of the Warren County Board of Supervisors met with the County Administrator individually to discuss a restructuring of county government, which included the termination of a number of employees.  These meetings went as far back as January 2014.  On March 25 and 26 the County Administrator, one Board member and the County Attorney met with each employee who was terminated to give them notice of the restructuring and offer them a severance package, the details of which had been worked out through the individual conversations between the County Administrator and the Board members.

On April 16 six employees who were eliminated brought suit the employees who were eliminated brought suit against the County, claiming that the Board, the County, and the individual supervisors violated Iowa’s Open Meeting Law.  Then, on April 18 the Board provided notice for their next meeting which included consideration of the restructuring and the severance agreements. The meeting that day lasted about 20 minutes- the Board passed both resolutions and did not allow for public comment.

The Warren County District Court found that because a majority of the Board of Supervisors was never together in one place to discuss the restructuring, the Board did not explicitly violate Iowa’s open meetings law.  The Board members had testified, however, that they understood the law and used the various one-on-one meetings between the Administrator and the individual supervisors to work around it.  The terminated employees appealed to the Iowa Supreme Court.

The Supreme Court first reiterated that ambiguities regarding the Open Meetings Law (OML) should be resolved in favor of openness.  To do so it found it necessary to resort to common law rules of “agency” to interpret OML.  “To do otherwise would undermine the clear purpose of the statute.”  After examining the common law, the Supreme Court determined that the relevant statutory definition of “meeting” in the OML should be effectively read to now say:

“all in-person gatherings at which there is deliberation upon any matter within the scope of the policy-making duties of a governmental body by a majority of its members, including in-person gatherings attended by a majority of the members by virtue of an agent or a proxy.”

Deliberation is the province of elected bodies.  An elected body cannot use agents to deliberate.  The Court was troubled by the use of the County Administrator to “conduct ‘shuttle diplomacy’ [which] worked so well they managed to implement the restructuring…without deliberating a single detail of the reorganization during a public meeting.”

The Supreme Court remanded the case back to the trial court in light of their revised interpretation of “meeting” in the OML.  It directed the district court to determine whether an agency relationship legally existed between the County Administrator and one or more of the Supervisors.

Three justices dissented, raising the following points:

  • The decision could have unintended consequences for well-meaning government actors. It arguably overrules a 35-year old case in which the Iowa Supreme Court rejected the idea that serial phone conversations with less than a majority of a board could violate the open meeting law.
  • The Iowa legislature twice considered, but failed to pass, legislation that would have addressed serial gatherings of elected officials. This is evidence that they did not intend to include such gatherings within the meaning of the existing statute.
  • Other jurisdictions have “resoundingly rejected” the majority’s interpretation of a “meeting.”
  • The interpretation will chill necessary and appropriate private consultations by public officials that precede open meetings.
  • The majority’s new agency theory rests on a legal fiction that treats the county administrator as a supervisor.

 

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Links to law presentations from 2015 APA-Iowa Annual Conference

Gary Taylor

The powerpoint presentations from the 2015 APA-Iowa Annual Conference held in Sioux City on October 14-16 are now available here.

Thursday afternoon session on Signs and Cell Towers, by Peter McNally, Dustin Miller and Gary Taylor

Iowa APA 2015 Cell Towers
Iowa APA 2015 Signs

Friday morning AICP Law session by Gary Taylor

Iowa APA 2015 Law session

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Under Iowa law, two or more corporations may form multiple housing cooperative

Gary Taylor

by Gary Taylor

City of Iowa City v. Iowa City Board of Review
Iowa Supreme Court, May 15, 2015

Iowa Code 499A.1(1) provides in relevant part:

Any two or more persons of full age, a majority of whom are citizens of the state, may organize themselves for the following or similar purposes: Ownership of residential, business property on a cooperative basis.  A corporation is a person within the meaning of this chapter.

In May 2012 the Iowa City Board of Review sent notices to 18 properties indicating the board changed the classification for those properties from commercial to residential for property tax purposes.  They were reclassified because they had been recently organized into multiple housing cooperatives.  The City of Iowa City filed a notice of appeal with the district court, objecting to the Board’s reclassification.  All parties agreed that two Iowa corporations organized each of the multiple housing cooperatives for the purpose of owning residential property in a cooperative. The City argued that the Board’s reclassification was improperly because (1) two natural persons, not two corporations, must organize multiple housing cooperatives under the Iowa Code, and that (2) the Iowa Code requires a one-apartment-unit-per-member ownership ratio for a multiple housing cooperative to be properly organized.  The district court granted summary judgment in favor of the Board and the City appealed.

Need for natural persons to organize cooperatives.  In Krupp v. Jasper County Board of Review the Iowa Supreme Court held that the proper test for determining if a property could be classified as residential is whether the multiple housing cooperative was properly organized, not the actual use of the property.  After examining the language of Section 499A.1(1) the Iowa Supreme Court concluded that a natural person need not be one of the organizers of a multiple housing cooperative.  The phrases “persons of full age, a majority of whom are citizens of the state” and “a corporation is a person within the meaning of this chapter” are not inconsistent with each other.  The Court said that “the intent of the General Assembly … was to put the same restrictions on corporate organizers as it did on persons who organized multiple housing cooperatives; [that is] the corporate organizers must have the authority to organize a multiple housing cooperative and a majority of the corporate organizers must be Iowa corporations. Had the General Assembly intended to adopt the City’s position…[it] would have said a corporation could organized a multiple housing cooperative only with two or more natural persons….”

One-apartment-unit-per-member ownership ratio.  The City read Iowa Code 499A.11 to require this ratio.  It reads in part

The cooperative has the right to purchase real estate for the purpose of erecting, owning, and operating apartment houses or apartment buildings. The interest of each individual member in the cooperative shall be evidenced by the issuance of a certificate of membership. The certificate of membership is coupled with a possessory interest in the real and personal property of the cooperative, entitling each member to a proprietary lease with the cooperative under which each member has an exclusive possessory interest in an apartment unit and a possessory interest in common with all other members in that portion of the cooperative’s real and personal property not constituting apartment units, and which creates a legal relationship of landlord and tenant between the cooperative and member. The certificate of membership shall be executed by the president of the cooperative and attested by its secretary in the name and in the behalf of the cooperative.

The Court stated that Section 499A.11 is not an organizational statute; rather Section 499A.1 is the statute that states the requirements that must be satisfied to organize as a multiple housing cooperative.  The Court refused to glean a one-apartment-unit-per member ratio requirement from Section 499A.11, instead finding that it requires only a coupling of ownership and membership interests.  “Put another way, while section 499A.11 certainly requires that each apartment be linked with a corresponding membership interest, there is nothing prohibiting one person from holding ownership and corresponding membership interest in more than one apartment unit.”

The Iowa Supreme Court affirmed judgment for the Iowa City Board of Review.

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Iowa Supreme Court refuses to extend protections of implied warranty of workmanlike construction

Gary Taylor

by Gary Taylor

Luana Savings Bank v. Pro-Build Holdings, Inc. and United Building Centers
(Iowa Supreme Court, December 12, 2014)

Rosauer Corporation v. Sapp Development, LLC et al.
(Iowa Supreme Court, December 12, 2014)

In two cases decided December 12, the Iowa Supreme Court addressed the scope of the implied warranty of workmanlike construction.  This is a common law remedy developed by the courts “to protect an innocent home buyer by holding the experienced builder accountable for the quality of construction.”  When introduced by the Iowa Supreme Court in 1985 as a “logical extension of the implied warranty of habitability for a tenant leasing a home.”  The primary policy reason for these warranties is the “protection of innocent homeowners as consumers…to address the disparity in bargaining power between the consumer and the sophisticated builder-vendor.”

In Iowa, the elements of the implied warranty of workmanlike construction are:
(1) That the house was constructed to be occupied by the warrantee as a home;
(2) that the house was purchased from a builder-vendor, who had constructed it for the purpose of sale;
(3) that when sold, the house was not reasonably fit for its intended purpose or had not been constructed in a good and workmanlike manner;
(4) that, at the time of purchase, the buyer was unaware of the defect and had no reasonable means of discovering it; and
(5) that by reason of the defective condition the buyer suffered damages.

In Luana Savings Bank v. Pro-Build Holdings, Inc. and United Building Centers  the Court was asked to extend the warranty to protect a bank that had acquired a mold-infested apartment complex by deed in lieu of foreclosure.  Luna Savings Bank had financed the construction of two apartment buildings that, after a series of transactions, came to be owned by Shalom Rubashkin, an owner of Agriprocessors, Inc. in Postville, who was eventually indicted, convicted, and sentenced to prison for bank fraud and other financial and  immigration crimes after the federal Immigration and Customs Enforcement raid on Agriprocessors in 2008.  In June 2009 Rubashkin gave the bank a deed in lieu of foreclosure in satisfaction of the bank’s mortgage interest in the apartment complexes.  It was then that the bank discovered substantial black mold in the apartments, resulting from improper installation of window and air conditioning units, and inadequate attic ventilation.

After determining that the bank’s claim failed the 5-part test set forth above, the court found that none of the policy justifications for the implied warranty of workmanlike construction justified extending it for the protection of lenders.  A defective dwelling is not the same problem for a lender as it is for a home dweller.  Furthermore, the lender has other ways of protecting itself in a transaction, and it is not the case that the lender is in an unequal bargaining position relative to the builder.

In Rosauer Corporation v. Sapp Development, LLC et al. the court refused the protections of the implied warranty to the purchaser of a residential lot without a home or other structure.  In this case the plaintiff, a contractor-developer, bought a lot from a realtor to build townhomes for sale. The contractor alleged that the lot had improperly compacted backfill, requiring extensive additional work to get it ready for construction. Plaintiff sued the original developers whose contractor had performed the substandard soil work.

The court applied the 5 elements listed above, and found the plaintiff’s claim lacking in all respects. As in Luana Savings, the court then examined the policy justifications for the implied warranty of workmanlike construction and found that they did not demand the extension of its protection to this purchaser, who was in no way in a similar position to an innocent homebuyer.

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US Supreme Court declines to take Grain Processing Corporation nuisance case

Gary Taylor

The US Supreme Court has declined to hear Grain Processing Corporation’s appeal of the Iowa Supreme Court’s decision that neither the Federal Clean Air Act nor state emissions regulations preempt nuisance suits brought by neighbors complaining of the chemicals and particulate matter from the company’s facility in Muscatine. The original blogpost of the Iowa Supreme Court case is here.

A brief article from of all places, Fox News Montana.

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Iowa cities may shift tort liability for unsafe sidewalks to abutting property owners

Gary Taylor

by Gary Taylor

Madden v. City of Iowa City and State of Iowa
(Iowa Supreme Court, June 13, 2014)

Beth Madden was riding her bike on a sidewalk abutting the University of Iowa when she lost control, crashed, and sustained injuries.  She sued the city claiming that the city owned or had control over the sidewalk, a defect in the sidewalk caused the accident, and the city was negligent in failing to prevent or remedy the defect or failed to exercise reasonable care in maintaining the sidewalk.  The city brought the university (the state of Iowa) in as a third party, citing a city ordinance that requires abutting property owners to maintain sidewalks in safe condition.  The university disputed its liability, which gave rise to this case.

In Iowa, the courts have long followed the common law rule that an abutting property owner is not liable in tort for injuries arising from defects in adjacent sidewalks, and that statutes requiring abutting landowners to engage in maintenance such as snow and ice removal do not give rise to such liability.  Iowa Code 364.12(2) provides:

A city shall keep all …sidewalks…in repair, and free from nuisance, with the following exceptions
b.  The abutting property owner is responsible for the removal of  the natural accumulations of snow and ice from the sidewalks within a reasonable amount of time and may be liable for damages caused by the failure of the abutting property owner to use reasonable care in the removal of the snow or ice….
c.  The abutting property owner may be required by ordinance to maintain all property outside the lot and property lines and inside the curb lines upon the public streets….
The Iowa Supreme Court found that Iowa Code 364.12(2)(c) does not give rise to a private cause of action against an abutting property owner for injuries resulting from a sidewalk defect.  The court pointed out that the statute expressly authorizes a damages action in subsection (b) for failure to remove snow and ice, but that such language is conspicuously absent in subsection (c).
Preemption. This, however, did not end the legal dispute.  The city’s ordinance provides that “the abutting property owner shall maintain the sidewalk in a safe condition, in a state of good repair, and free from defects,” and further that the abutting property owner “may be liable for damages caused by failure to maintain the sidewalk.”  The university asserted that the city did not have the authority under state law to impose liability on an abutting property owner, or enact an ordinance that would result in a waiver of the state’s sovereign immunity in tort claims such as this one.  The city argued that under home rule it has the authority to impose liability on abutting property owners, regardless of the state statute.
The Supreme Court viewed the issue as one of preemption; specifically, whether state law “impliedly preempts” local regulation on the subject.  In order to give rise to implied preemption, the local ordinance must be “irreconcilable” with state law.  Courts will work to “interpret the state law in such a manner as to render it harmonious with the ordinance.”  The court noted that section (c) is silent on the issue of liability, but that “legislative silence [should not be] interpreted as a prohibition of local action in light of our obligation to harmonize and reconcile a statute with an ordinance whenever possible….We therefore conclude that when an ordinance or statute validly imposes a maintenance obligation and also imposes liability on the abutting landowner, the city is entitled to indemnification from the abutting landowner for any damages arising out of its failure to maintain the sidewalk.”  An ordinance that creates such as scheme is not preempted by Iowa Code 364.12.
Illegal tax. For its second line of defense, the university asserted that the attempt to transfer liability to the state amounted to levying a tax not authorized by statute.  The court disagreed.  A “tax” is a general revenue measure without benefits conferred.  In this case, no funds go into the city’s coffers for general purposes, and taxpayers are not being charged for services that have no benefit to them.  the ordinance is a police powers regulation that cannot be “shoehorned into our taxation doctrine.”
Sovereign immunity.  Finally, the university argued that state immunity from liability under the Iowa Tort Claims Act (ITCA) was not waived in this case, either by operation of statute or under common law.  The court also rejected this argument, noting that the ITCA has been interpreted as establishing a “general waiver of sovereign immunity” subject to the exceptions delineated in the act, none of which apply in this case.  The purpose of the waiver of immunity is to allow the state to be sued “under circumstances where the state, if a private person, would be liable to the claimant for such damage, loss, injury, or death.”
For these reasons, the Iowa Supreme Court ruled that the university should remain a party to the lawsuit.
Justices Mansfield and Waterman dissented.  They read Iowa City’s ordinance as an effort to alter the statutory division of responsibility between city and property owner. “Simply stated, the city wants the property owner to do more to maintain city-owned sidewalks, so that the city may do less.”  They believe that the city ordinance clearly conflicts with Iowa Code 364.12, which they read as containing “an express legislative determination that the city should be responsible for sidewalk maintenance subject only to a particularized right to shift costs of repair to the adjoining property owner in certain circumstances.”
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Clean Air Act, state emissions regulations do not preempt private nuisance or trespass claims

Gary Taylor

by Gary Taylor

Laurie Freeman, et al v. Grain Processing Corporation
(Iowa Supreme Court, June 13, 2014)

Grain Processing Corporation (GPC) conducts corn wet milling operations at its facility in Muscatine.  Laurie Freeman and seven other named plaintiffs – representing a class identified as “all Muscatine residents who have resided…within 1.5 miles of the perimeter of [GPC’s] facility” – allege that GPC’s operations create hazardous by-products and harmful chemicals which are released directly into the atmosphere.  The pollutants include sulfur dioxide, hydrochloric acid, particulate matter, and volatile organic compounds including acetaldehyde.  They assert that particulate matter is visible on nearby properties and that the emissions cause persistent irritations and discomforts and put them at risk for serious health effects.  They brought claims for nuisance, negligence and trespass against GPC.  GPC countered by filing for summary judgment, claiming that (1) the federal Clean Air Act (CAA) preempts the plaintiffs’ state law claims, (2) Iowa Code Chapter 455B – which regulates emissions – preempts the plaintiffs’ claims, and (3) a lawsuit impacting facility emissions lacks judicially discoverable standards for resolving the issues.  The district court sided with GPC and plaintiffs appealed.  The portions of the Iowa Supreme Court decision addressing (1) and (2) will be reviewed here.

Clean Air Act preemption. In a 63-page opinion that included a history lesson on the origins of present day environmental law, the Iowa Supreme Court acknowledged that “the Environmental Protection Agency has created a vast regulatory structure to control the emission of air pollutants, including technological standards, health standards, risk levels, and enforcement provisions, completely transforming what was once the province of state law.” The court also recognized, however, that there are differences between common law remedies such as nuisance and trespass, and regulatory regimes such as the CAA and chapter 455B.  While regulatory regimes focus on the prevention of pollution through emissions standards designed to protect the general public, “the common law focuses on special harms to property owners caused by pollution at a specific location.”  The Iowa Supreme Court noted that the United States Supreme Court is reluctant to find that a federal law preempts state law in areas where states have traditionally exercised their police power.  Congress has the power to preempt local law and can expressly do so, but did not in the CAA.  To suggest that Congress indirectly removed state law claims such as nuisance and trespass “seems…rather unlikely,” and the Iowa Supreme Court declined to interpret the CAA in that way.  “The purpose of state nuisance and common law actions is to protect the use and enjoyment of specific property, not to achieve a general regulatory purpose….We decline to conclude that the increased complexity of the CAA has categorically elbowed out a role for the state nuisance and common law claims presented here.”

Iowa Code Chapter 455B. The court began by noting that “the legislature is presumed to know the existing state of the law when a new statute is enacted.  In the absence of any express repeal, the new provision is presumed to accord with the legislative policy embodied in prior statutes.”  While there are no definitive Iowa cases addressing the question of whether nuisance claims may go forward in light of Chapter 455B, the court did find instructive cases that have found that a lawful business, properly conducted, may still constitute a nuisance, even if in compliance with state regulations.  “We do not see enforcement of nuisance and other common law torts as inconsistent with the regulatory framework of chapter 455B.”  Nuisance claims are based on specific harms to the use and enjoyment of real property, while air pollution regulations are enacted to protect the public interest.

The Iowa Supreme Court reversed the district court’s summary judgment, allowing the case to proceed to trial.

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“Unused right-of-way” includes property previously used for roadway purposes

Gary Taylor

by Gary Taylor

Tunis E. Den Hartog, et al. v. City of Waterloo
(Iowa Supreme Court, May 30, 2014)

The state of Iowa transferred control of a state highway – now known as San Marnan Drive – and its right-of-way to the city of Waterloo in 1983. The city has maintained it by grading and mowing since that time. The city recently reached agreement to transfer the property to Sunnyside South Addition, LLC, for one dollar. Sunnyside proposes to relocate San Marnan Drive in order to place residential development where the road is currently located. Some Waterloo taxpayers filed suit, claiming that the transaction failed to comply with the notice and sale provisions of Chapter 306 of the Iowa Code, which governs the establishment, alteration, and vacation of roads. The city responded that the procedures of Chapter 306 cited by the taxpayers (specifically, section 306.23) only apply to property acquired for roadway purposes that was never used as a roadway.

Iowa Code 306.23 provides in part:

1. The agency in control of a tract, parcel, or piece of land, or part thereof, which is unused right-of-way shall send by certified mail to the last known address of the present owner of adjacent land from which the tract, parcel, piece of land, or part thereof, was originally purchased or condemned for highway purposes, and to the person who owned the land at the time it was purchased or condemned for highway purposes, notice of the agency’s intent to sell the land, the name and address of any other person to whom a notice was sent, and the fair market value of the real property based upon an appraisal by an independent appraiser.
2.  The notice shall give an opportunity to the present owner of adjacent property and to the person who owned the land at the time it was purchased or condemned for highway purposes to be heard and make offers within sixty days of the date the notice is mailed for the tract, parcel, or piece of land to be sold.  An offer which equals or exceeds in amount any other offer received and which equals or exceeds the fair market value of the property shall be given preference by the agency in control of the land. If no offers are received within sixty days or if no offer equals or exceeds the fair market value of the land, the agency shall transfer the land for a public purpose or proceed with the sale of the property.

The parties dispute the meaning of “unused right-of-way.” The city argued that it refers only to land never in use for roadway or related purposes – the implication being that section 306.23 does not apply in this case. The taxpayers argue that the phrase should be read to include any land which the city has determined will no longer be needed or used for roadway purposes. This could include land currently in use for roadway purposes, so long as the city has determined that the land will not be used as such in the future. Under this reading section 306.23 applies and the property should have first been offered to adjacent landowners for purchase at or above fair market value.

In siding with the taxpayers, the Iowa Supreme Court cited several “linguistic and structural cues…the statutory purpose, and the legislative history [of chapter 306].” Noting that the owner of land abutting a highway may suffer special damage because of its vacation, the hearing procedures in chapter 306 protect their unique property interests. The Court looked to several provisions in the chapter that suggest a broad reading of the term “unused”; i.e., to apply to land that will not be used for roadway purposes going forward, regardless of whether it may have been used for such purposes previously.

The Supreme Court remanded for entry of an order prohibiting the city from the sale or transfer of the property to Sunnyside without first following the requirements of section 306.23.

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70-day delay in satisfying records request deemed too long under Iowa Open Records Law

Gary Taylor

by Kristi Harshbarger
Legal Council, Iowa State Association of Counties

Horsfield Materials, Inc. v. City of Dyersville
(Iowa Supreme Court, July 5, 2013)

This article originally appeared in the August 2013 issue of The Iowa County.  Kristi provides good advice on responding to records requests at the end.

What is a timely response to a records request?  I don’t know if we have a definitive answer to that question, but what we do have is a case from the Iowa Supreme Court giving us an example of what the Court deemed to not be a sufficiently timely response under Chapter 22 of the Iowa Code (the open records laws).  The opinion handed down by the Court on July 5, 2013 in Horsfield Materials, Inc. v. City of Dyersville addressed a dispute between the city and a materials supplier related to the city’s public bidding of a project.  There were several claims made by the materials supplier related to the city’s process for public bidding.  An additional claim was made related to the timeliness of the response from the city on several open records requests made by the material supplier related to gathering information on the city’s process in this particular public bid.  The opinion sets forth the detailed timeline in the situation, which involved several rounds of communication between the city and the materials supplier related to the open records requests.  The original request was made on December 21st.  The parties communicated on various issues and clarifications, and the city provided a small portion of the documents requested on December 31st.  On January 26th, the city attorney claimed attorney-client privilege on five emails related to the request.  On March 25th, the city offered a remedy for providing a video that was a part of the open records request.  On April 6th, the city provided 617 pages of documents in response to the request.  On April 8th, the city attorney claimed attorney-client privilege on eight additional emails.  At a later date, the city agreed to release these emails.  Throughout this time, the city stated the reasons for delay were the large number of documents that had to be reviewed in order to comply with the request and the difficulty in getting the 48 hours of video reviewed that was requested.

The district court concluded that the city’s response was a good faith effort to comply with the open records laws and thus no violation occurred.  The Iowa Supreme Court reversed this decision and held that a violation had occurred.  The Court considered Iowa Code Section 22.8(4)(d) which provides that it is a good-faith reasonable delay in responding to a records request if the delay is no longer than 20 calendar days for the purpose of determining “whether a confidential record should be available for inspection and copying to the person requesting the right to do so.”  The Court found, however, that this 20 day parameter should not be applied as a blanket rule in other situations.  The Court instead relied on an administrative interpretation found in Iowa’s Uniform Rules on Agency Procedure which states access to records “shall be provide promptly upon request unless the size or nature of the request makes access infeasible.”  While this standard can be subjective, the Court did recognize that the size or nature of the request might play into the response time needed.

The Court held it was a close call whether or not the time it took the city to respond given the size and nature of the request was a violation of the open records laws, but the Court ultimately held the approximately 70 day delay was too long for substantial compliance.  The Court noted that for over a month during the time the request was outstanding the city did not communicate with the requestor.  The Court seemed most concerned with the fact that “it appears the video recordings of public proceedings became a stumbling block to the production of the hard copy documents.”  The Court felt adamantly that the city should have turned over the hardcopy documents as soon as available and then provided the video recordings later if more time for review was necessary.  The Court did recognize that the city employees and the city attorney had other significant responsibilities during the time they were trying to respond to the records request, but stated that because the testimony did not include specific dates or time frames “it is impossible to know how much time it really took city officials to work on Horsfield’s request, relative to other demands on city officials’ time.”

The requestor also claimed that it was a violation of the open records laws for the city to initially claim attorney-client privilege for some emails because it later waived that privilege and the requestor argued that was an admission that the city had “no defense to its failure to produce relevant and responsive documents.”  The Court disagreed.  It held “the City’s tactical decision to waive the attorney-client privilege . . . does not establish that the City violated the [open records] Act when it initially withheld them.”

Some things to learn or remember in light of this opinion are:  1) if you are trying to sort out a large or otherwise difficult records request, stay in regular communication with the requestor; 2) supply records as you go and do not wait until you have the request completed before providing the records; and 3) document the time you spend on compiling the records request.

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Sierra Club must exhaust administrtative remedies before challenging Iowa DOT highway extension proposal

by Kaitlin Heinen

Sierra Club Iowa Chapter, Linda Biederman, and Elwood Garlock v. Iowa Department of Transportation
(Iowa Supreme Court, June 7, 2013)

The Iowa chapter of the Sierra Club has more than 5000 members residing in the state, some of which hike in Rock Island State Preserve and Rock Island County Preserve. The Iowa Department of Transportation (IDOT) is a state administrative agency that has proposed extending Highway 100 west of Cedar Rapids, which would run adjacent to Rock Island State Preserve and through Rock Island County Preserve, thus negatively impacting the ecosystems in the two preserves.

The Sierra Club Iowa Chapter and two of its members filed a petition for judicial review challenging IDOT’s Highway 100 project. The IDOT responded with a motion to dismiss, which was granted by the district court because the Sierra Club “had not exhausted administrative remedies by first seeking a declaratory order from IDOT under section 17A.9(1)(a).” The Sierra Club did not participate in any administrative proceedings with IDOT prior to filing the petition for judicial review.

On appeal, the Iowa Supreme Court addressed the issue “if a party challenging agency action must seek a declaratory order from the agency under section 17A.9(1)(a) before petitioning for judicial review in order to satisfy the exhaustion doctrine.” Important to note, Iowa Code § 17A.19(1) provides: “A person or party who has exhausted all adequate administrative remedies and who is aggrieved or adversely affected by any final agency action is entitled to judicial review thereof . . . .”  There are situations when a party can bypass the exhaustion doctrine; however, “the Sierra Club has not preserved error on an argument for one of these exceptions to apply.”

The Sierra Club filed a complaint in federal court, captioned “Complaint for Declaratory and Injunctive Relief.” The complaint involved the United States Secretary of Transportation and the Administrator of the Federal Highway Administration as defendants. The Sierra Club alleged that “the secretary and administrator did not follow the applicable federal statutes and regulations when they issued and approved the Final Supplemental Impact Statement for the Highway 100 project.” Because of the complaint’s caption, the Iowa Supreme Court held that the Sierra Club requested declaratory and injunctive relief. Because the Sierra Club sought declaratory relief, “the court must [construe] section 17A.9 to determine whether declaratory orders are mandatory or permissive.” Section 17A.9 was adopted in 1974 as part of the Model State Administrative Procedure Act. When enacted, 17A.9 required “any agency with authority to issue declaratory rulings to do so within thirty days after a party files the petition…Failure of the agency to do so results in the administrative remedy being ‘deemed inadequate or exhausted.’”

To construe such a statute, the court must determine legislative intent. If the statute’s language is unambiguous, the court looks no further. One could argue that “the requirement to file a petition for declaratory relief with the agency is permissive because the word ‘may,’ as found in section 17.9(1)(a), is unambiguous.” The Iowa Code’s rules of statutory construction state: “The word ‘shall’ imposes a duty. . . . The word ‘must’ states a requirement. . . . The word ‘may’ confers a power.” Further, “the legislature’s use of the word ‘may’ usually indicates legislative intent for the statute to apply permissively…[so] a person can argue that a party need not exhaust administrative remedies before filing a declaratory judgment action with the court.” But to the contrary, “when a statute provides a person with an administrative remedy and uses the word ‘may,’ but does not explicitly state the administrative remedy is the exclusive remedy, the person is still required to exhaust the administrative remedy before seeking court intervention…[so] a person can also argue that a party must file a declaratory order with the agency before seeking court intervention, because the Code uses the word ‘may.’” As a result of these competing interpretations, the court found the statute ambiguous.

After assessing the statute in its entirety, the court concluded the legislature’s intent when enacting section 17A.9(1)(a) “requires the Sierra Club to first petition IDOT and therein ask the agency to determine whether IDOT complied with sections 314.23(3) and 314.24 in extending Highway 100 adjacent to the Rock Island State Preserve and through the Rock Island County Preserve.” First, by using the term “inadequate or exhausted,” the legislature indicated that a party must first exhaust his or her administrative remedies before seeking court intervention. Second, an article written by the 1973-1974 counsel to the Subcommittee, Arthur Bonfield, “revealed that the legislature created the administrative procedure for agency-issued declaratory orders to replace the court-provided remedy of declaratory judgments for matters within an agency’s jurisdiction,” which means that the legislature clearly “intended section 17A.9 to be the preferred method for obtaining a declaratory order when a person challenges the agency’s administration of a statute.” Third, “in a declaratory order proceeding, the agency must state in its order the facts it relied upon and the basis for its decision…[which] ensures the agency will make a complete record and the parties will know the rationale supporting the agency’s decision.” Fourth, though the Sierra Club argued it would be futile to ask the agency to reverse its own decision, the court did not agree. In the past, “agencies…have decided many issues within their purview…[with] no evidence to suggest agencies will conduct declaratory order proceedings in a biased, unprofessional manner and without regard for the rules promulgated by the legislature.” Finally, “any party to a declaratory order may seek judicial review of that order…[which] protects a party to a declaratory order proceeding if the agency makes the incorrect decision.”

Therefore, the Iowa Supreme Court “concluded [overall] that the Sierra Club must first seek a declaratory order under Iowa Code section 17A.9(1)(a) before asking the court for relief; and thus, the exhaustion doctrine bars its petition.” The Iowa Supreme Court affirmed the district court’s judgment.

Iowa Supreme Court, Procedural Issues, public roads and highways ,
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