ALJ attorney fees bill heading into opposition at Senate hearing

After sailing through the House without a single vote in opposition, a bill that would enable individuals to recoup attorney fees from state agencies could hit a stiff wind Wednesday as public interest organizations are aligning to try to block the legislation from moving any further through the Statehouse.

House Bill 1436, authored by Republican Rep. Jeffrey Thompson, would allow private citizens to collect “reasonable attorney’s fees” if an administrative law judge determines an agency acted in a manner contrary to the law. Speaking before the House Judiciary Committee in February, Thompson described the measure as bringing back “what I consider proper balance between regulators and citizens.”

However, the coalition of public interest groups including the Hoosier Environmental Council, Indiana Farmers Union, Indiana Forest Alliance and Save the Dunes, sees the bill as threatening state agencies with “high-dollar fees of attorneys” when regulated industries are unhappy with administrative decisions. The groups stated in a press release that they are concerned that the Indiana Department of Environmental Management and the Indiana Department of Natural Resources, in particular, could not only be deterred from “pursuing necessary enforcement” but also be pressured into issuing permits for “environmentally destructive projects” which they would otherwise deny.

HB 1436 was presented to the House Judiciary Committee February 9. It passed 10-0 and then moved through the full House on a 94-0 vote. Now the bill is on the agenda for the Senate Judiciary Committee’s hearing at 1:30 p.m. March 24.

The bill lists five findings by an ALJ that would allow for a party to recoup attorney fees. Included on the list is the administrative law judge making the determination that the agency’s action was either arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with the law; contrary to constitutional right, power, privilege or immunity; or in excess of statutory jurisdiction, authority, or limitations.

Thompson told the House committee members that individuals who want to challenge a ruling by a state agency will often have to pay attorney fees that exceed the fine they owe. The person “comes out on the losing end,” he continued, regardless of whether he or she accepts the fine or appeals to an administrative law judge.

“So this, in my mind, at least brings about the correct balance,” Thompson said.

Barnes & Thornburg partner Brian Burdick spoke in support of the bill on behalf of the United States Small Business Owners Association, which represents about 1,100 independent businesses in Indiana.

He echoed Thompson’s claim that hiring an attorney to appeal an agency’s decision to an ALJ is an expense. Also, he said, being successful in that appeal is very rare.

“… (W)e just want to put the … small business or the individual taxpayer back in the financial situation they would have been if the agency would have made the right decision as determined by the ALJ,” Burdick said. “No more, no less.”