Forward Mont. v. State

415 Mont. 101

FORWARD MONTANA; LEO GALLAGHER; MONTANA ASSOCIATION OF CRIMINAL DEFENSE LAWYERS; GARY ZADICK, Plaintiffs and Appellants,

v.THE STATE OF MONTANA, by and through GREG GIANFORTE, Governor, Defendant and Appellee.

No. DA 22-0639.

Submitted on Briefs November 29, 2023

Decided January 31, 2024.

2024 MT 19.

415 Mont. 101.

__P.3d__

Appeal from the District Court of Lewis and Clark County.

First Judicial District Court, Cause No. ADV-2021-611.

Honorable Mike Menahan, Judge.

The district court’s finding that the case presented equitable considerations that did not warrant attorney fees under the private attorney general doctrine, an equitable exception to the American rule, was unreasonable under the facts and as such an abuse of discretion. All three of the equitable factors a party seeking attorney fees had to show under the doctrine supported an award of attorney fees; the first factor, the strength or societal importance of the public policy vindicated by the litigation, was satisfied because contestants challenged amendments purely on constitutional grounds and won summary judgment on their claims under Mont. Const. art. V, §11; the second factor, the necessity for private enforcement was met. Since the only governmental entity involved in the case was defending the statute, private enforcement was necessary.

Reversed and remanded.

JUSTICE RICE dissented, joined by JUSTICE SANDEFUR.

For Appellants: Raph Graybill, Graybill Law Firm, PC, Great Falls.; Rylee Sommers-Flanagan, Constance Van Kley, Upper Seven Law, Helena.

For Appellee: Austin Knudsen, Montana Attorney General, Brent Mead, Deputy Solicitor General, Helena; Emily Jones, Special Assistant Attorney General, Jones Law Firm, PLLC, Billings.

CHIEF JUSTICE McGRATH delivered the Opinion of the Court.

¶1 Forward Montana, Leo Gallagher, Montana Association of Criminal Defense Lawyers, and Gary Zadick (Appellants) appeal from a September 16, 2022 order of the First Judicial District Court denying attorney fees under the private attorney general doctrine (Private AG Doctrine or the Doctrine) and under the Uniform Declaratory Judgments Act (UDJA), § 27-8-313, MCA. We reverse and remand to the District Court for calculation of attorney fees.

¶2 We restate the issue on appeal as follows:

Was it an abuse of discretion for the District Court to deny Appellants’ attorney fees under the private attorney generaldoctrine?

FACTUAL AND PROCEDURAL BACKGROUND

¶3 The Montana Legislature passed Senate Bill 319 (SB 319) during the 2021 legislative session. The Bill—originally a regulation of joint political fundraising committees—proceeded normally through the legislative process (introduced in Senate, passed through the Senate Committee on State Administration, passed on the Senate floor, passed as amended through the House Committee on State Administration, passed as amended on the House floor). Each of these steps included a public process, and citizen testimony was provided in both committees. The House passed and transmitted a slightly amended version back to the Senate. The Bill’s sponsor recommended the Senate not concur with the amendments so a committee could "review those amendments."

¶4 A free conference committee consisting of members of both houses was appointed. The committee did not discuss the House amendments at all. Instead, on April 27, 2021—two days before the Legislature adjourned—the free conference committee used the opportunity to include four new sections to the Bill during a 17-minute meeting, closed to public comment. Several of these last-minute amendments came almost verbatim from a Bill that had recently failed to pass in the legislative session. See S.B. 318, § 4(1)(E)(v), (F), 67th Leg., Reg. Sess. (Mont. 2021) (rejected on House floor April 15, 2021); compare S.B. 319.5, § 22, 67th Leg., Reg. Sess. (Mont. 2021) (adopted during last-minute, closed-door session April 27, 2021). The Bill as amended then passed both houses in the last 24 hours of the 2021 legislative session.

¶5 On June 1, 2021, Appellants challenged two of these amendments based on Article V, Section 11(6), of the Montana Constitution, which allows a person to challenge a statute "on the ground of noncompliance with [Section 11] only within two years after its effective date." Among other allegations of unconstitutionality, Appellants challenged Sections 21¹ and 22² of SB 319 as violative of two sections of the Montana Constitution: Article V, Sections 11(1) and (3). Article V, Section 11(1), requires that "[a] law shall be passed by bill which shall not be so altered or amended on its passage through the legislature as to change its original purpose." (Rule on Amendments.) Article V, Section 11(3), requires that "[e]ach bill, except general appropriation bills and bills for the codification and general revision of the laws, shall contain only one subject, clearly expressed in its title." (Single Subject Rule.)

¶6 On June 4, 2021, Appellants filed a Verified Amended Complaint and an Application for Preliminary Injunction to preserve the status quo while the merits of the case were heard, as the laws were set to go into effect on July 1, 2021. The Attorney General responded to Appellants’ motion for preliminary injunction on June 21, arguing Appellants did not have legal standing to challenge the law, and that they had not satisfied the legal standard for obtaining a preliminary injunction. The District Court held a show-cause hearing on June 28 and granted Appellants’ motion on July 1, preliminarily enjoining the enforcement of SB 319, Sections 21 and 22. On August 4, the Attorney General filed a motion to dismiss, arguing again that Appellants did not have standing to challenge the laws and that they had failed to state a claim upon which relief could be granted under M. R. Civ. P. 12(b)(6).

¶7 On August 18, Appellants filed a Motion for Summary Judgment in their claims under Article V, Section 11. Appellants argued there were no genuine disputes of material fact, and they were entitled to judgment as a matter of law. The State filed a motion to stay the decision on Appellants’ motion for summary judgment until its motion to dismiss was resolved and until it could conduct discovery into Appellants’ claims regarding standing.

¶8 The District Court ruled that Appellants had standing to bring the lawsuit and denied the State’s motion to dismiss on October 6. The court further found that additional discovery was unnecessary on the two constitutional claims in Appellants’ summary judgment motion and stayed discovery until resolution of that motion. Thereafter, the State responded to Appellants’ motion for summary judgment. The State again argued that Appellants lacked standing and that the sections at issue were not unconstitutional. The court held oral argument on the motion for summary judgment on January 25, 2022, and issued its order on February 3.

¶9 The court found that SB 319 contained two subjects unrelated to campaign finance (the original subject of SB 319) because Section 21 banned select campaign activities³ and had no effect on campaign contributions, spending, or disclosures, and because Section 22 regulated judicial recusal⁴ rather than limiting campaign contributions or reporting requirements. It was thus in violation of Article V, Section 11(3), of the Montana Constitution. The court further found that Sections 21 and 22 amended SB 319 to the extent that its original purpose was changed in violation of Article V, Section 11(1), of the Montana Constitution. The court permanently enjoined enforcement of Sections 21 and 22 as violative of Article V, Sections 11(1) and (3), of the Montana Constitution. It then certified its prior judgment as a final judgment subject to immediate appeal.

¶10 [1] In a tacit acknowledgment that the Bill was unconstitutional, the State filed a notice that it was waiving appeal of the District Court’s order.⁵ The order thus became law. See Jonas v. Jonas, 2013 MT 202, ¶ 21, 371 Mont. 113, 308 P.3d 33 ("[A] legal decision made at one stage of litigation which is not appealed when the opportunity to do so exists, becomes the law of the case for the future course of that litigation." (internal quotation omitted)). Section 13-35-242, MCA (2021), and § 3-1-609, MCA (2021), repealed 2023 Mont. Laws ch. 433, § 2, are thus unconstitutional and void.

¶11 Thereafter, Appellants moved for attorney fees under the Private AG Doctrine; § 25-10-711, MCA; and under the UDJA, § 27-8-313, MCA. The District Court declined to award attorney fees. Under the Private AG Doctrine, the court found that Appellants had satisfied all three factors required for attorney fees under Montanans for the Responsible Use of the School Trust v. State ex rel. Bd. of Land Comm’rs, 1999 MT 263, ¶¶ 66-67, 296 Mont. 402, 989 P.2d 800 (Montrust). Nevertheless, the court considered equity and immunity principles and found that this case was a "garden-variety" constitutional challenge undeserving of attorney fees under the Doctrine. The court also denied fees under § 25-10-711, MCA, finding the Attorney General did not act frivolously or in bad faith in defending the Bill, and under the UDJA, finding this case did not present circumstances making fees equitable. Appellants appealed the court’s decision under the Private AG Doctrine and the UDJA but did not appeal the court’s decision regarding § 25-10-711, MCA.

STANDARD OF REVIEW

¶12 [2, 3] We review de novo a district court’s conclusion on whether legal authority exists to support an award of attorney fees. City of Helena v. Svee, 2014 MT 311, ¶ 7, 377 Mont. 158, 339 P.3d 32. If legal authority exists, we review for an abuse of discretion the court’s order granting or denying fees. Svee, ¶ 7. An abuse of discretion exists if the district court acted arbitrarily, without the employment of conscientious judgment, or exceeded the bounds of reason resulting in substantial injustice. Montrust, ¶ 68.

DISCUSSION

¶13 Was it an abuse of...