DeVORE, J.
In these consolidated cases, petitioner Cascade Kelly Holdings filed an action in the Circuit Court of Marion County under ORS 183.490 of the Administrative Procedures Act (APA) and an alternate claim for declaratory relief under ORS 28.010, seeking to compel the Oregon Department of Energy to certify that petitioner is entitled to claim or to sell business energy tax credits pursuant to former ORS 469.215 (2009), for petitioner's ethanol production and transfer facilities.
The department appeals, raising several assignments of error. The department has also given notice of probable mootness under ORAP 8.45, as a result of the "sunset" of the business energy tax credit program. As explained below, we conclude that the program's end now precludes the remedy awarded by the trial court and therefore makes the underlying controversy nonjusticiable, and we therefore do not address the merits of the circuit court's ruling. But, because the department also challenges the award of attorney fees, the appeal itself is not moot. We therefore write to address the department's assignment of error regarding attorney fees, and we reverse the award.
At the outset, we provide the statutory and factual context for this dispute. Oregon's business energy tax credit, first enacted by the Legislative Assembly in 1979, was based on a public policy "to encourage the conservation of electricity, petroleum and natural gas by providing tax relief for Oregon facilities that conserve energy resources or meet energy requirements through the use of renewable resources." ORS 469.190. At the relevant time, a business that was engaged in the manufacture or distribution of alternate fuels such as ethanol could apply for certification for energy tax credits, to be determined as a percentage of the certified cost of construction of its facilities. ORS 315.354(3); ORS 469.205; ORS 469.215. Upon receipt of a final certification for energy tax credits from the department, the tax credits could be applied against the taxpayer's Oregon income tax obligation over a period of years. ORS 315.354. The tax credits could be claimed by the facility's owner or could be sold to a "pass-through partner" in exchange for their present value. ORS 469.205(1)(c)(A); ORS 469.206; OAR 330-090-0110(45) (defining "pass-through partner" as "[a]n individual, C corporation or S corporation that purchases a tax credit certificate in return for a cash payment equivalent to the net present value of the [business energy tax credit]").
The facilities in this case are known as "Port Westward" and were designed and constructed for the production and loading of ethanol at the Port of St. Helens in Clatskanie, Oregon. The facilities were built between 2006 and 2008 by Cascade Grain Products, LLC. Before it began construction of the facilities, Cascade Grain filed an application with the department and was approved for a "preliminary certificate" for energy tax credits for both facilities. See ORS 469.205 (describing application process for preliminary certification for the energy tax credit). When, in June 2008, the facilities were largely complete and operational, Cascade Grain applied for final certification pursuant to ORS 469.215. Pursuant to the department's administrative rule, OAR 330-090-0130(9)(c), when an applicant desires to sell its tax credits to a pass-through partner, the department does not issue final certification of the tax credits to the facility owner. Rather, the department issues "certified amount letters" authorizing the facility owner to pass through its tax credits. The department issues the tax credits to the pass-through partner after the pass-through partner has paid for the credits and the department has given final approval to the transfer of the credits. Because Cascade Grain intended to sell its tax credits to pass-through partners, Cascade Grain's application was entitled an "Application for Final Certification for Pass-Through Projects." The department issued certified amount letters to Cascade Grain, certifying eligible project costs for the pass-through program of $22,000,000 (with a tax
Cascade Grain transferred some of its eligible tax credits for the ethanol production facility to three pass-through partners and, when the transfers were approved, the department issued final tax credit certificates to the pass-through partners. No final certificates were issued for the remaining, potential credits, because no pass-through partners had been identified and no cash payments had been made to Cascade Grain for the remaining $3,250,000 in eligible certified costs on the production facility or the entire eligible certified cost of $5,083,334 on the distribution facility.
In January 2009, Cascade Grain ceased operations and filed for bankruptcy. Cascade Grain's parent company, JH Kelly, acquired the facilities at a bankruptcy auction and transferred them to petitioner on December 23, 2009. At that time, the facilities were in "cold maintenance mode." Because the facilities were damaged from not having been operated for over a year, petitioner could not begin operations until it had hired employees, made repairs, obtained permits, and fulfilled obligations to multiple stakeholders.
After petitioner acquired the facilities on December 23, 2009, petitioner submitted applications for final pass-through certification on December 31, 2009. ORS 469.215(2)(b)(A) (providing that "any person" may apply for final certification "after acquisition of the proposed facility"). Under ORS 469.215(4), "[t]he director [of the department] shall act on an application for certification before the 60th day after the filing of the application[.]"
The subsection concludes that the "[f]ailure of the director to act constitutes rejection of the application." ORS 469.215(5).
The department's administrative rules included similar provisions. Under OAR 330-090-0133(1)(a), "[w]ithin 60 days after a completed final certification application is filed," the Director of the department "will either approve or deny the final application."
And also similar to ORS 469.215(5), OAR 330-090-0133(2)(c) states that if the Director "does not issue a final certification within 60 days after an application is filed, the application is denied pursuant to ORS
The department took no action on petitioner's applications for final certification. Thus, on March 2, 2010, the 61st day after the filing of the applications, the applications were deemed rejected by operation of ORS 469.215(5).
Within 60 days of the date that its applications were rejected by operation of ORS 469.215(5), petitioner filed this action under ORS 183.490, seeking to "compel [the] agency to act where it has unlawfully refused to act[.]"
The department responded that petitioner's application had been rejected by operation of law, ORS 469.215(5), and that there was no authority, under either ORS 183.490 or ORS 28.010, for the court to order the department to take further action.
At a hearing on the parties' cross-motions for summary judgment, the court expressed frustration with the department's failure to respond to petitioner's applications. Concluding that the court had authority under ORS 183.490 to compel the department to act, the court ordered the department to issue the requested final certificates for each facility, i.e., tax credits of $8,333,334. Further, deeming the department's position unreasonable, the court ordered the department to pay petitioner's attorney fees of
As a preliminary matter, we address whether the underlying controversy is now moot because, in its 2012 session, the Legislative Assembly enacted a new statute phasing out the business energy tax credit. This "sunset" enactment provides that "[a]ny preliminary certification issued for a facility * * * that remains outstanding as of July 1, 2011, shall expire on July 1, 2014." ORS 315.357(2).
Petitioner responds that, as agreed by the parties, their dispute is governed by the versions of the statutes in effect in 2009 and, therefore, the 2012 enactment should have no bearing on the controversy. Whatever version of the relevant statutory provisions is applicable to resolution of the underlying dispute, when an event occurs that "render[s] it impossible for the court to grant
For the reasons explained here, we conclude that the change in the law through the sunset of the business energy tax credit has made it impossible for the court to grant effectual relief. A preliminary certificate for the business energy tax credit is a prerequisite to the issuance of a final certificate. ORS 469.215(2).
The court's inability to grant the requested relief, however, does not necessarily render the appeal moot. As a general rule, a case is not justiciable if it becomes moot during judicial proceedings because of a court's inability to grant the requested relief. See Hamel, 330 Or. at 184, 998 P.2d 661. If, however, "the court's decision in the matter will have some practical effect on the rights of the parties to the controversy," the case remains justiciable and will not be considered moot. Brumnett v. PSRB, 315 Or. 402, 405, 848 P.2d 1194 (1993). The circuit court in this case awarded attorney fees to petitioner based on its conclusions that it had the authority to address petitioner's challenge under ORS 183.490, that the department was required to provide the final certifications, that the department had acted without a reasonable basis in fact or in law, and that attorney fees were available under either ORS 182.090
The Supreme Court's case law provides mixed guidance on how a court reviews an award of attorney fees on appeal when the underlying controversy is no longer justiciable. In 2606 Building v. MICA OR I Inc., 334 Or. 175, 179 n. 2, 47 P.3d 12 (2002), the court addressed the merits of the underlying FED controversy, despite the fact that it had become moot, when the trial court's award of attorney fees depended on the correctness of the trial court's decision on the merits. The court held, citing Pacific N.W. Dev. Corp. v. Holloway, 274 Or. 367, 546 P.2d 1063 (1976), that, although the underlying FED dispute between the parties had dissolved due to the passage of time and the expiration of the lease underlying the dispute, the trial court's award of attorney fees as provided in the disputed lease agreement depended on the correctness of the trial court's judgment interpreting the lease and, therefore, preserved the justiciability of the underlying controversy. See also Kay v. David Douglas Sch. Dist. No. 40, 303 Or. 574, 578, 738 P.2d 1389 (1987), cert. den., 484 U.S. 1032, 108 S.Ct. 740, 98 L.Ed.2d 775 (1988) (the court noted in dicta that an award of attorney fees might prevent a case from becoming moot on appeal when the award depended on plaintiff's success on the merits); cf. Kerr v. Bradbury, 340 Or. 241, 251, 131 P.3d 737 (2006) (in the absence of a challenge to the award of attorney fees, that award could not support the continued justiciability of the action).
In contrast, in Atiyeh v. State of Oregon, 326 Or. 531, 536, 956 P.2d 177 (1998), the court reversed an award of attorney fees made on a judgment in which the underlying controversy had become moot, without addressing the merits of the underlying claim. In that case, the plaintiffs sought a declaratory judgment challenging the constitutionality of Ballot Measure 8, an initiative measure that had been approved by the people. The circuit court declared the measure unconstitutional and awarded attorney fees to the plaintiffs. Subsequently, pending appeal and in a different case, the Supreme Court invalidated Measure 8 on different grounds.
Here, for the reasons that will become apparent, the correctness of the trial court's award of attorney fees does not depend on the correctness of its ruling on the merits; we therefore do not address the merits of the underlying controversy. Accordingly, we proceed directly to the question of petitioner's entitlement to attorney fees, which is a question of law that we review for legal
In its petition for judicial review, petitioner sought attorney fees under ORS 183.497(1)(b).
Attorney fees are available under ORS 183.497(1)(b) only in the judicial proceedings listed in ORS 183.497(2). Lewis v. Beyer, 262 Or.App. 486, 496, 325 P.3d 59, on recons. 266 Or.App. 208, 338 P.3d 715 (2014), rev. den., 357 Or. 299, 353 P.3d 594 (2015); see Jordan v. SAIF, 343 Or. 208, 218, 167 P.3d 451 (2007) (the legislature's omission of review of suspensions from the list of own-motion authority granted to the Workers' Compensation Board is "some indication" that the legislature intended to omit suspensions from the board's own motion authority); Waddill v. Anchor Hocking, Inc., 330 Or. 376, 382, 8 P.3d 200 (2000) (the specification in ORCP 21 G(3) of three times at which a party may assert a defense indicates an intention to limit the times at which a party may raise the defense to those three and to make the defense otherwise unavailable). This is not one of the enumerated proceedings. It is not a petition for judicial review of an agency order, and petitioners do not seek review of the validity of a declaratory ruling or an administrative rule. Petitioner's action was brought under ORS 183.490. As we held in Lewis, 262 Or.App. at 497, 325 P.3d 59, a judicial review proceeding under ORS 183.490 is not a proceeding for which attorney fees are available under ORS 183.497(1)(b). We conclude, therefore, that the trial court erred in awarding fees under ORS 183.497(1)(b).
We move on to consider the department's contention that the trial court erred in awarding attorney fees under ORS 182.090. That statute provides:
For several reasons, we agree with the department that ORS 182.090 does not provide a basis for attorney fees in this case. First, as we have noted, 275 Or. App. at 513 n. 16, 365 P.3d at 611 n. 16, the petition for judicial review did not request fees under ORS 182.090. That failure alone is reason
Secondly, in cases such as this brought under the APA, the case law is clear that the exclusive authority for the award of attorney fees is ORS 183.497. Stelljes/Dumler v. State Board of Parole, 307 Or. 365, 368, 769 P.2d 177 (1989); see also Executive Department v. FOPPO, 94 Or.App. 754, 757, 767 P.2d 112 (1989) ("Attorney fees in APA cases are generally governed by ORS 183.497[.]"). Not a single decision of this court or the Supreme Court in a judicial review proceeding under the APA has awarded attorney fees under ORS 182.090. In Donnell v. Eastern Ore. State College, 64 Or.App. 271, 275, 668 P.2d 423, rev. den., 296 Or. 120, 672 P.2d 1193 (1983), we explicitly considered and rejected the contention that ORS 182.090 provides an independent source for an award of attorney fees in a proceeding under the APA, concluding that "ORS 182.090 has no application to judicial review of agency actions under the APA." We adhered to that conclusion in White v. Employment Div., 77 Or.App. 35, 38 n. 3, 711 P.2d 196 (1985).
Finally, our own contextual analysis of ORS 182.090 persuades us that it does not apply in the context of an APA proceeding. It is true, as petitioner points out, that ORS 182.090(1) states that it applies "[i]n any civil proceeding." ORS 182.090(3) defines a "civil judicial proceeding" as "any proceeding, other than a criminal proceeding * * * conducted before a court of this state." As a pure textual matter, that definition would appear to encompass judicial review proceedings under the APA. In Donnell, we rejected the argument that judicial review under the APA is a "civil judicial proceeding," 64 Or.App. at 274, 668 P.2d 423, without explicitly discussing the definition. We understand why, therefore, petitioner contends that Donnell does not provide a satisfactory resolution to the textual interpretation.
We have reviewed the sparse legislative history that exists regarding the enactment of ORS 182.090 and ORS 183.497, and it supports our conclusion in Donnell that the legislature intended that ORS 183.497 apply to judicial review proceedings under the APA and that ORS 182.090 apply to all other civil proceedings in which an agency is a party. We conclude that the circuit court erred in determining that petitioner was entitled to attorney fees under ORS 182.090.
In light of our conclusion that the underlying controversy has become moot as a result of the sunset of the business energy tax credit, we conclude that it is appropriate to vacate the circuit court's judgment directing the department to issue final certification for more than $8 million in energy tax credits. Kerr v. Bradbury, 340 Or. 241, 131 P.3d 737 (2006) ("`A party who seeks review of the
Judgment requiring issuance of final certification vacated; award of attorney fees reversed.
The Legislative Assembly repealed that subsection in 1999. Or. Laws 1999, ch. 365, § 4.
The department adopted OAR 330-090-0160 to implement the provisions of ORS 315.357. The administrative rule provides, in part: