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Citizens Organizing Project v. Department of Natural Resources

January 21, 2000

CITIZENS ORGANIZING PROJECT, APPELLANT,
v.
THE DEPARTMENT OF NATURAL RESOURCES ET AL., APPELLEES.



The opinion of the court was delivered by: Chief Justice Harrison

Agenda 27-September 1999.

The issue in this case is whether the Citizens Organizing Project (C.O.P.) is entitled to an award of litigation expenses under section 10-55 of the Illinois Administrative Procedure Act (5 ILCS 100/10-55 (West 1998)) based on its success in having an administrative rule of the Department of Natural Resources invalidated. The circuit court denied C.O.P.'s petition for such expenses and the appellate court affirmed, with one justice dissenting. No. 4-97-0851 (unpublished order under Supreme Court Rule 23). We reverse and remand for further proceedings.

C.O.P. is a citizens group organized as an Illinois general not-for-profit corporation. It opposed a decision by the Department of Natural Resources to approve a permit for strip mining in Knox County. The permit procedures were governed by the Surface Coal Mining Land Conservation and Reclamation Act (225 ILCS 720/1.01 et seq. (West 1996)). Pursuant to section 2.11 of that Act (225 ILCS 720/2.11 (West 1996)), C.O.P. requested a hearing on the Department's decision.

During the course of the ensuing administrative proceedings, C.O.P. argued that the Department's permit decision should be reviewed under a "preponderance of the evidence" standard rather than under the "clear and convincing" standard then specified by the Department's administrative regulations. See 62 Ill. Adm. Code §1847.3(g) (1996). C.O.P.'s argument was initially rejected by the hearing examiner, but in his final decision, the hearing examiner reconsidered his position. Although he ultimately denied C.O.P.'s challenge to the Department's decision granting the permit, the hearing examiner ruled that the matter should, indeed, be governed by the "preponderance of the evidence" standard advocated by C.O.P.

At the conclusion of those proceedings, C.O.P. filed a complaint for administrative review in the circuit court of Sangamon County pursuant to the Administrative Review Law (735 ILCS 5/3-101 et seq. (West 1996)). In its complaint, C.O.P. sought judicial review of the Department's decision to grant the strip mining permit. It also requested that the circuit court invalidate the Department's regulation specifying a "clear and convincing" burden of proof in proceedings to review Department decisions.

The circuit court affirmed the Department's decision to grant the strip mining permit. In so doing, however, it found meritorious C.O.P.'s challenge to the Department's regulation containing the "clear and convincing" burden of proof. Accordingly, it expressly declared the regulation to be invalid. Based on that ruling, the Department removed the "clear and convincing" standard from its regulations and replaced it with a "preponderance of the evidence" standard. 22 Ill. Reg. 5183 (proposed March 20, 1998); 22 Ill. Reg. 20144 (eff. November 5, 1998); 62 Ill. Adm. Code §1847.3(g) (1999).

Section 10-55(c) of the Illinois Administrative Procedure Act (5 ILCS 100/10-55(c) (West 1998)) provides:

"In any case in which a party has any administrative rule invalidated by a court for any reason, including but not limited to the agency's exceeding its statutory authority or the agency's failure to follow statutory procedures in the adoption of the rule, the court shall award the party bringing the action the reasonable expenses of the litigation, including reasonable attorney's fees."

For the purposes of this provision, an "administrative rule" encompasses any principle, procedure, or regulation governing an agency's conduct or action. See Ardt v. State, 292 Ill. App. 3d 1059, 1063 (1997). This includes regulations governing the standard of proof. See 5 ILCS 100/10-10 (West 1998). Accordingly, there is no dispute that section 1847.3(g) of title 62 of the Illinois Administrative Code, which fixed the burden of proof in proceedings to review the Department's decisions on permits, constituted an "administrative rule" within the meaning of the statute.

Because the circuit court sustained C.O.P.'s challenge to section 1847.3(g) and declared the rule to be invalid, C.O.P. petitioned for an award of its reasonable litigation expenses in accordance with section 10-55(c). That petition was timely filed, contained no procedural defects, and was supported by detailed billing records and an affidavit from counsel explaining the basis for the fees and expenses claimed. C.O.P. subsequently filed two supplements to its petition, including an affidavit from an expert attesting to the reasonableness of the litigation expenses claimed.

As indicated at the outset of this disposition, the circuit court denied C.O.P.'s petition. C.O.P. appealed, challenging only the denial of its petition for litigation expenses. The propriety of the circuit court's rulings in the underlying action for administrative review was not at issue. The appellate court affirmed in an unpublished decision under Supreme Court Rule 23. We granted C.O.P.'s petition for leave to appeal (177 Ill. 2d R. 315), and the matter is now before us for review.

In undertaking our analysis, we begin with the unassailable fact that when the circuit court disposed of C.O.P.'s complaint on administrative review, it expressly invalidated the version of section 1847.3(g) of title 62 of the Illinois Administrative Code containing the "clear and convincing" burden of proof. Whether the court needed to do so or should have avoided doing so is immaterial. What matters is that it did invalidate the rule, and the Department elected not to appeal its decision.

Section 10-55(c) of the Illinois Administrative Procedure Act (5 ILCS 100/10-55(c) (West 1998)) specifically states that where, as here, an administrative rule has been invalidated by a court, "the court shall award the party bringing the action the reasonable expenses of the litigation, including reasonable attorney's fees." (Emphasis added.) When used in a statute, the word "shall" is generally interpreted to mean that something is mandatory. People v. Reed, 177 Ill. 2d 389, 393 (1997). That is how it has been construed in the context of other fee-shifting statutes. See, e.g., North Shore Community Bank & Trust Co. v. Kollar, 304 Ill. App. 3d 838, 846-47 (1999); Maher & Associates, Inc. v. Quality Cabinets, 267 Ill. App. 3d 69, 81 (1994); Verdonck v. Scopes, 226 Ill. App. 3d 484, 488 (1992); Schackleton v. Federal Signal Corp., 196 Ill. App. 3d 437, 446 (1989); Cuevas v. Bill Tsagalis, Inc., 149 Ill. App. 3d 977, 992-93 (1986). There is no reason to believe that the legislature intended otherwise here. Accordingly, the circuit court was required to award C.O.P. its reasonable litigation expenses. To hold otherwise would require us to disregard the plain and unambiguous language of the statute.

C.O.P.'s entitlement to an award of its reasonable litigation expenses is not diminished by the fact that it did not prevail on all of its claims. The purpose of the fee-shifting provisions of section 10-55(c) of the Illinois Administrative Procedure Act is to discourage enforcement of invalid rules and give those subject to regulation an incentive to oppose doubtful rules where compliance would otherwise be less costly than litigation. See Kaufman Grain Co. v. Director of the Department of Agriculture, 179 Ill. App. 3d 1040, 1048 (1988); Board of Education of School ...


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