HF 997

as introduced - 87th Legislature (2011 - 2012) Posted on 03/09/2011 10:05am

A bill for an act
relating to civil actions; regulating the imposition of certain civil penalties by
state agencies; awarding fees and expenses to prevailing parties in certain actions
involving state agencies and municipalities; amending Minnesota Statutes 2010,
sections 15.471, subdivision 6, by adding a subdivision; 15.472; proposing
coding for new law in Minnesota Statutes, chapters 15; 471.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

new text begin [15.062] PENALTY FACTORS.
new text end

new text begin (a) In determining the amount of civil penalty to be proposed or assessed in an
administrative or civil action by any state agency, where there is an allegation of a
violation of statute, regulation, term, condition, or any enforceable standard, the following
factors shall be considered by the state agency, delegated county administering state
authority, administrative law judge, or court:
new text end

new text begin (1) the willfulness of the violation;
new text end

new text begin (2) the gravity of the violation, including irreparable damage to humans, animals,
air, water, land, or other natural resources of the state;
new text end

new text begin (3) the number of prior contacts with the person where the state agency offered
reasonable corrective measures prior to issuing the fine;
new text end

new text begin (4) the history of past violations;
new text end

new text begin (5) the number of violations;
new text end

new text begin (6) the economic benefit gained by the person by allowing or committing the
violation;
new text end

new text begin (7) the costs incurred to correct the violation or otherwise comply;
new text end

new text begin (8) the person's ability to pay;
new text end

new text begin (9) other economic factors affecting the feasibility or practicality of compliance;
new text end

new text begin (10) penalties that similarly situated persons have paid to the state for similar
violations;
new text end

new text begin (11) the cooperation and responsiveness of the person, provided that a penalty shall
not be imposed or enhanced because a person has contested a violation or asserted their
rights or defenses; and
new text end

new text begin (12) other factors as justice may require.
new text end

new text begin (b) For a violation after an initial violation, the state agency, delegated county
administering state authority, administrative law judge, or court shall, in determining the
amount of a penalty, also consider the following factors:
new text end

new text begin (1) similarity of the most recent previous violation and the violation to be penalized;
new text end

new text begin (2) time elapsed since the last violation;
new text end

new text begin (3) number of previous violations; and
new text end

new text begin (4) response of the person to the most recent previous violation identified.
new text end

new text begin (c) In addition to stating the factual and legal basis for each violation, the state
agency or delegated county administering state authority shall, in its notice, demand,
order, or complaint in an administrative or civil proceeding, document the application of
these considerations in determining any proposed penalty. The state agency or delegated
county administering state authority shall provide this documentation to the person subject
of the administrative or civil action 60 days before initiating any such action.
new text end

Sec. 2.

new text begin [15.0621] INITIAL VIOLATION; PENALTY LIMITATION.
new text end

new text begin In any case where the person subject to the statute, regulation, term, or condition of
any enforceable standard has no history of noncompliance, the state agency, delegated
county administering state authority, administrative law judge, or court shall not assess a
penalty of more than 20 percent of the statutory maximum that may be imposed for such
violation unless the alleged violation presents an imminent and substantial endangerment
to the public, human health, or the environment or where there is an allegation of a
violation of the specific terms of an administrative order, a judicial order, consent decree, a
stipulation agreement, or a schedule of compliance.
new text end

Sec. 3.

Minnesota Statutes 2010, section 15.471, is amended by adding a subdivision
to read:

new text begin Subd. 3a. new text end

new text begin Demand. new text end

new text begin "Demand" means the express demand of the agency which led
to the civil action or contested case proceeding but does not include a recitation by the
agency of the maximum statutory penalty:
new text end

new text begin (1) in the administrative complaint; or
new text end

new text begin (2) elsewhere when accompanied by an express demand for a lesser amount.
new text end

Sec. 4.

Minnesota Statutes 2010, section 15.471, subdivision 6, is amended to read:

Subd. 6.

Party.

(a) Except as modified by paragraph (b), "party" means a person
named or admitted as a party, or seeking and entitled to be admitted as a party, in a court
action or contested case proceeding, or a person admitted by an administrative law judge
for limited purposes, and who is:

(1) an unincorporated business, partnership, corporation, association, or
organization, having not more than 500 employees at the time the civil action was filed or
the contested case proceeding was initiated; and

(2) an unincorporated business, partnership, corporation, association, or organization
whose annual revenues did not exceed deleted text begin $7,000,000 deleted text end new text begin $30,000,000 new text end at the time the civil action
was filed or the contested case proceeding was initiated.

(b) "Party" also includes a partner, officer, shareholder, member, or owner of an
entity described in paragraph (a), clauses (1) and (2).

(c) "Party" does not include a person providing services pursuant to licensure or
reimbursement on a cost basis by the Department of Health or the Department of Human
Services, when that person is named or admitted or seeking to be admitted as a party in a
matter which involves the licensing or reimbursement rates, procedures, or methodology
applicable to those services.

Sec. 5.

Minnesota Statutes 2010, section 15.472, is amended to read:

15.472 FEES AND EXPENSES; CIVIL ACTION OR CONTESTED CASE
PROCEEDING INVOLVING STATE.

(a) If a prevailing party other than the state, in a civil action or contested case
proceeding other than a tort action, brought by or against the state, shows that the position
of the state was not substantially justified, the court or administrative law judge shall award
fees and other expenses to the party unless special circumstances make an award unjust.

new text begin (b) If, in a civil action or contested case proceeding arising from an agency action
to enforce a party's compliance with a statutory or regulatory requirement, the demand
by the agency is substantially in excess of the decision of the administrative law judge
or court and is unreasonable when compared with such decision under the facts and
circumstances of the case, the administrative law judge or court shall award to the party
the fees and other expenses related to defending against the excessive demand, unless
the party has committed a willful violation of law or engaged in conduct that unduly
and unreasonably protracted the final resolution of the matter in controversy, or special
circumstances make an award unjust.
new text end

deleted text begin (b) deleted text end new text begin (c) new text end A party seeking an award of fees and other expenses shall, within 30 days of
final judgment in the action, submit to the court or administrative law judge an application
of fees and other expenses which shows that the party is a prevailing party and is eligible
to receive an award, and the amount sought, including an itemized statement from any
attorney or expert witness representing or appearing on behalf of the party stating the
actual time expended and the rate at which fees and other expenses were computed. The
party shall also allege that the position of the state was not substantially justified.

deleted text begin (c) deleted text end new text begin (d) new text end The court or administrative law judge may reduce the amount to be awarded
under this section, or deny an award, to the extent that the prevailing party during
the proceedings engaged in conduct that unduly and unreasonably protracted the final
resolution of the matter in controversy. The decision of an administrative law judge under
this section must be made a part of the record containing the final decision of the agency
and must include written findings and conclusions.

deleted text begin (d) deleted text end new text begin (e) new text end This section does not preclude a party from recovering costs, disbursements,
fees, and expenses under other applicable law.

Sec. 6.

new text begin [471.421] DEFINITIONS.
new text end

new text begin Subdivision 1. new text end

new text begin Terms defined. new text end

new text begin For purposes of sections 471.421 to 471.423, the
terms defined in this section have the meanings given them.
new text end

new text begin Subd. 2. new text end

new text begin Expenses. new text end

new text begin "Expenses" means the costs incurred by the party in the
litigation, including:
new text end

new text begin (1) filing fees;
new text end

new text begin (2) subpoena fees and mileage;
new text end

new text begin (3) transcript costs and court reporter fees;
new text end

new text begin (4) expert witness fees;
new text end

new text begin (5) the reasonable cost of any study, analysis, engineering report, survey, appraisal,
test, or project;
new text end

new text begin (6) photocopying and printing costs;
new text end

new text begin (7) postage and delivery costs; and
new text end

new text begin (8) service of process fees.
new text end

new text begin Subd. 3. new text end

new text begin Demand. new text end

new text begin "Demand" means the express demand of the agency which led
to the civil action or contested case proceeding but does not include a recitation by the
agency of the maximum statutory penalty:
new text end

new text begin (1) in the administrative complaint; or
new text end

new text begin (2) elsewhere when accompanied by an express demand for a lesser amount.
new text end

new text begin Subd. 4. new text end

new text begin Fees. new text end

new text begin "Fees" means the reasonable attorney fees or reasonable fees charged
by a person not an attorney who is authorized by law or rule to represent the party and
may include reasonable charges by the party, the party's employee, or agent. The amount
of fees must be based upon prevailing market rates for the kind and quality of the services
furnished. In a court action, an expert witness may not be compensated at a rate in excess
of the highest rate of compensation for expert witnesses paid by the state.
new text end

new text begin Subd. 5. new text end

new text begin Municipality. new text end

new text begin "Municipality" means a home rule charter or statutory city,
county, town, school district, political subdivision, or agency of local government. The
term also includes the Metropolitan Council or a board or agency created under chapter
473.
new text end

new text begin Subd. 6. new text end

new text begin Party. new text end

new text begin (a) Except as modified by paragraph (b), "party" means a person
named or admitted as a party, or seeking and entitled to be admitted as a party, in a court
action, and who is:
new text end

new text begin (1) an unincorporated business, partnership, corporation, association, or organization,
having not more than 500 employees at the time the civil action was filed; and
new text end

new text begin (2) an unincorporated business, partnership, corporation, association, or organization
whose annual revenues did not exceed $30,000,000 at the time the civil action was filed.
new text end

new text begin (b) "Party" also includes a partner, officer, shareholder, member, or owner of an
entity described in paragraph (a), clauses (1) and (2). The term does not include a party in
a civil action brought by or against the municipality in connection with the granting or
denying of a liquor license.
new text end

new text begin Subd. 7. new text end

new text begin Substantially justified. new text end

new text begin "Substantially justified" means that the
municipality's position had a reasonable basis in law and fact, based on the totality of the
circumstances before and during the litigation.
new text end

Sec. 7.

new text begin [471.422] FEES AND EXPENSES; CIVIL ACTION INVOLVING
MUNICIPALITY.
new text end

new text begin (a) The court shall award fees and other expenses to a prevailing party in a civil
action unless special circumstances make an award unjust, provided that:
new text end

new text begin (1) the action is a civil action other than a tort action;
new text end

new text begin (2) the municipality's orders or total cost of compliance with the orders is in an
amount of $10,000 or more;
new text end

new text begin (3) the prevailing party is not the municipality; and
new text end

new text begin (4) the position of the municipality was not substantially justified.
new text end

new text begin (b) If, in a civil action arising from an agency action to enforce a party's compliance
with a statutory, regulatory, or ordinance requirement, the demand by the municipality is
substantially in excess of the decision of the court and is unreasonable when compared
with such decision under the facts and circumstances of the case, the court shall award to
the party the fees and other expenses related to defending against the excessive demand,
unless the party has committed a willful violation of law or engaged in conduct that
unduly and unreasonably protracted the final resolution of the matter in controversy, or
special circumstances make an award unjust.
new text end

Sec. 8.

new text begin [471.423] PAYMENT OF COSTS AND FEES.
new text end

new text begin A judgment against a municipality in a civil action for fees and expenses under
section 471.422 must be paid from funds of the municipality.
new text end

Sec. 9. new text begin TITLE.
new text end

new text begin This act may be cited as the "Small Business Bill of Rights - Regulatory Fairness
Act."
new text end

Sec. 10. new text begin EFFECTIVE DATE; APPLICATION.
new text end

new text begin This act is effective August 1, 2011, and applies to administrative or civil actions
commenced on or after that date.
new text end