In an important decision affecting citizen legal challenges to actions by state agencies, the Washington Supreme Court ruled Thursday that citizens who prevail against state agencies are entitled to at least some compensation for legal expenses at each step in the judicial review process.
The controversy arose in the case of Kathie Costanich, who successfully challenged the revocation of her foster care license by the state Department of Social and Health Services. Costanich prevailed in a King County superior court when she appealed a DSHS administrative ruling revoking her license. DSHS appealed the case and while the agency lost on the substance of the case regarding the license revocation, the Court of Appeals ruled that Costanich was entitled to no more than $25,000 to compensate her for legal fees incurred while successfully challenging the revocation.
The issue before the Supreme Court was how to interpret the fee recovery provision of Washington’s Equal Access to Justice Act (EAJA). While the 1995 law waives the state’s sovereign immunity to allow citizens like Costanich to recover legal fees when they successfully challenge an agency action, it limits that recovery to $25,000 per “judicial review.”
The law left unresolved the issue of whether judicial review encompassed all appellate
proceedings, or whether prevailing citizens are entitled to a maximum of $25,000 for each judicial proceeding necessary to win their cause.
“Without clear guidance [in the legislation],” wrote Justice Charles Johnson for the court majority, “judicial review is susceptible to different meanings and could mean either each level of judicial review or all levels combined. Because the statute is ambiguous, we must discern and implement the legislature’s intent.”
And here is how the court resolved it, according to Justice Johnson’s opinion:
“The EAJA is meant to provide equal access to the courts to private litigants defending against government actions. Specifically, the legislature found that ‘[c]ertain individials…may be deterred from seeking review of or defending against an unreasonable agency action because of the expense involved in securing the vindication of their rights in administrative proceedings….The legislature therefore adopts this equal access to justice act to ensure that these parties have a greater opportunity to defend themselves from inappropriate state agency actions and to protect their rights.’ Based on this explicit statement of intent, to ensure the public has the ability to contest and appeal agency decisions and rule making, a finding that the cap is for each level of judicial review is reasonable. This decision is particularly appropriate in this case where the Department appealed the superior court decisions on the substantive issue and lost, forcing Costanich into the Court of Appeals proceeding, and Costanich’s attorney fees at this point in the appellate process are greater than $200,000.”
Thus, by the court’s ruling, instead of being capped at $25,000, Costanich should be able to recover $75,000, to cover the Court of Appeals challenge and the Supreme Court proceedings.
The Center for Justice’s Chief Catalyst, Breean Beggs, offered this comment on the ruling:
“A divided Washington Supreme Court ruled today that the legislature intended to reward citizens and non-profit groups for holding state government accountable for illegal activity by requiring
the state to reimburse up to $25,000 on legal costs at each level of judicial review rather. This will strengthen the ability of individual people and organizations to hold state government to the standards it sets for everyone else.”
Costanich didn’t get everything she wanted. A commissioner had awarded her $46,239 in fee and cost recovery associated with the King County Superior Court proceedings, but the Supreme Court majority ruled that this sum exceeded the statutory cap for that phase of the proceedings.
Of course, the glaring irony in Judge Johnson’s opinion is that Costanich’s fees and costs far exceeded even the $75,000 in higher caps constructed by the majority’s ruling which, as Johnson noted, was rooted in legislative intent “to ensure the public has the ability to contest and appeal agency decisions and rule-making” that are harshly adverse to them.
Chief Justice Gerry Alexander dissented from all parts of the decision, explaining that he viewed the EAJA language as clearly setting a total cap at $25,000. Justice’s Richard Sanders and James Johnson agreed with the majority but dissented as to the $46,239 fee award which they believe is owed to Constanich. Justice Barbara Madsen, while agreeing with the main thrust of the reasoning of the majority opinion, dissented as to the final $25,000, compensating Constanich for fees and costs of the Supreme Court appeal. Justice Madsen wrote that she believed the statute clearly pertained only to appeals of “agency actions” and that the ruling on attorney fees and costs was a court decision and not an agency action.