Western Tradition Partnership, Inc. v. Attorney General

DA 11-0081 November 27 2012

IN THE SUPREME COURT OF THE STATE OF MONTANA
2012 MT 271

WESTERN TRADITION PARTNERSHIP, INC.,
a corporation registered in the State of Montana,
and CHAMPION PAINTING, INC., a Montana
corporation, MONTANA SHOOTING SPORTS
ASSOCIATION, INC., a Montana corporation,

Plaintiffs, Appellees, and
Cross-Appellants,

v.

ATTORNEY GENERAL of the State of Montana,
and COMMISSIONER OF THE COMMISSION
FOR POLITICAL PRACTICES,

Defendants, Appellants, and
Cross-Appellees.

APPEAL FROM: District Court of the First Judicial District,
In and For the County of Lewis and Clark, Cause No. BDV 10-238
Honorable Jeffrey M. Sherlock, Presiding Judge

COUNSEL OF RECORD:

For Appellants:

Steve Bullock, Montana Attorney General; James P. Molloy, Assistant
Attorney General; Helena, Montana; Anthony Johnstone; Missoula,
Montana

For Appellees:

Margot B. Ogburn; Wittich Law Firm, P.C.; Bozeman, Montana

Submitted on Briefs: August 1, 2012

Decided: November 27, 2012

Filed:

__________________________________________
Clerk
Justice Beth Baker delivered the Opinion of the Court.

¶1 This matter returns to the Court for determination of the Cross-Appellants’ appeal

from the District Court’s rejection of their claim for attorneys’ fees. In the previous

appeal, we reversed the District Court’s grant of summary judgment for the

Cross-Appellants and held that their cross-appeal on the attorneys’ fee issue was moot.

Western Tradition Partn., Inc. v. Atty. Gen., 2011 MT 328, ¶ 48, 363 Mont. 220, 271

P.3d 1. Our decision thereafter was reversed by the United States Supreme Court.

American Tradition Partn., Inc. v. Bullock, 567 U.S. ___, 132 S. Ct. 2490 (2012) (per

curiam). On motion of the Cross-Appellants, we agreed to consider the attorneys’ fee

issue based on the briefing previously submitted to this Court. We now affirm.

FACTUAL AND PROCEDURAL BACKGROUND

¶2 The procedural history of this case is set forth in detail in the Court’s previous

opinion. Western Tradition Partn., ¶¶ 2-33. Briefly stated, Plaintiffs Western Tradition

Partnership—now known as American Tradition Partnership—Champion Painting, and

Montana Shooting Sports Foundation (collectively referred to as ATP) sought a

declaratory ruling that § 13-35-227(1), MCA, violated their rights to free speech

guaranteed by the United States and Montana Constitutions by prohibiting political

expenditures by corporations on behalf of or opposing candidates for public office. ATP

argued that the U.S. Supreme Court’s decision in Citizens United v. FEC, 558 U.S. 310,

130 S. Ct. 876 (2010), barred Montana from prohibiting independent and indirect

2
corporate expenditures on political speech, and that Montana’s century-old ban on

independent corporate expenditures therefore was invalid.

¶3 The Attorney General defended the law’s constitutionality on the grounds that the

law invalidated in Citizens United was distinguishable from the Montana statute, that

corporate rights could not be asserted against states in the same manner as against

Congress, and that Montana has a compelling interest in requiring business corporations

to use segregated funds for campaign expenditures. The Attorney General argued that

§ 13-35-227(1), MCA, is narrowly tailored because it still allows for lobbying, testimony,

and other direct contacts and that the Commissioner of Political Practices has interpreted

the law to exclude voluntary associations.

¶4 The District Court entertained the parties’ cross-motions for summary judgment.

ATP’s motion included a request for attorneys’ fees under the Uniform Declaratory

Judgments Act (UDJA), §§ 27-8-101 et seq., MCA, and under the private attorney

general doctrine, first recognized by this Court in In re Dearborn Drainage Area, 240

Mont. 39, 43, 782 P.2d 898, 900 (1989). The court granted ATP’s motion for summary

judgment on the merits of its constitutional claim, denied the State’s motion for summary

judgment, declared § 13-35-227(1), MCA, unconstitutional, enjoined enforcement of the

statute, and denied ATP’s request for attorneys’ fees. The Attorney General appealed the

District Court’s summary judgment rulings and ATP appealed the denial of its request for

attorneys’ fees.

3
¶5 On appeal, this Court reversed. A majority of the Court agreed with the Attorney

General’s position that Citizens United did not foreclose Montana from prohibiting

independent corporate expenditures on behalf of candidates. Based on the record

developed in the District Court, this Court concluded that the State had a compelling

interest that justified the imposition of statutory restrictions that the Court determined

were narrowly tailored to meet its objectives. Western Tradition Partn., ¶¶ 47-48. We

did not reach ATP’s claim for fees, as it was mooted by our reversal of the District

Court’s summary judgment ruling. Western Tradition Partn., ¶ 48. Two members of the

Court dissented on the ground that Montana’s statute did not pass constitutional muster

under Citizens United. Western Tradition Partn., ¶¶ 49-60 (Baker, J., dissenting), ¶¶ 61-

135 (Nelson, J., dissenting). The U.S. Supreme Court summarily reversed, ruling that

“[t]here can be no serious doubt” that the holding of Citizens United applies to the

Montana statute. American Tradition Partn., 567 U.S. at ___, 132 S. Ct. at 2491.

¶6 We return now to ATP’s cross-appeal and consider whether it is entitled to recover

its attorneys’ fees from the State of Montana under either the UDJA or the private

attorney general doctrine.1 ATP seeks a total award of $138,403.01.

STANDARD OF REVIEW

¶7 We review for abuse of discretion a district court’s ruling granting or denying

attorneys’ fees under either the UDJA or the private attorney general doctrine. Bitterroot

1
Although ATP’s renewed motion for fees also seeks a fee award under 42 U.S.C. § 1988, as
prevailing parties in a proceeding to enforce 42 U.S.C. § 1983, this argument was not raised in or
decided by the District Court and we decline to consider it. Robison v. Mont. Dep’t of Revenue,
2012 MT 145, ¶ 26, 365 Mont. 336, 281 P.3d 218.
4
River Protective Ass’n v. Bitterroot Conserv. Dist., 2011 MT 51, ¶¶ 9-10, 359 Mont. 393,

251 P.3d 131.

DISCUSSION

¶8 Did the District Court abuse its discretion in declining to award attorneys’ fees?

¶9 Montana follows the American Rule that, absent a specific statutory or contractual

provision, a prevailing party generally is not entitled to recovery of its attorneys’ fees in

prosecuting or defending the action. Trustees of Ind. Univ. v. Buxbaum, 2003 MT 97,

¶ 19, 315 Mont. 210, 69 P.3d 663. We have recognized equitable exceptions to the

American Rule, Buxbaum, ¶ 19, but construe these exceptions narrowly “lest they

swallow the rule.” Jacobsen v. Allstate Ins. Co., 2009 MT 248, ¶ 23, 351 Mont. 464, 215

P.3d 649. We have rejected the expansion of such equitable exceptions when the effect

would “drive a stake into the heart of the American Rule.” Jacobsen, ¶ 22 (quoting

Mountain West Farm Bureau Mut. Ins. Co. v. Brewer, 2003 MT 98, ¶ 40, 315 Mont. 231,

69 P.3d 652).

1. Statutory Basis for Fees

¶10 Montana law provides that a prevailing party may recover attorneys’ fees against

the State of Montana only if “the court finds that the claim or defense of the state . . . was

frivolous or pursued in bad faith.” Section 25-10-711(1)(b), MCA. A claim or defense is

frivolous or in bad faith “when it is ‘outside the bounds of legitimate argument on a

substantial issue on which there is a bona fide difference of opinion.’” Ostergren v. Dept.

of Revenue, 2004 MT 30, ¶ 23, 319 Mont. 405, 85 P.3d 738 (quoting Jones v. City of

5
Billings, 279 Mont. 341, 344, 927 P.2d 9, 11 (1996), and Armstrong v. State, Dept. of

Justice, 250 Mont. 468, 469-70, 820 P.2d 1273, 1274 (1991)). In this case, the District

Court did not find the Attorney General’s position to be frivolous or in bad faith. To the

contrary, the court determined that the State’s arguments “were made in good faith and

were supported by briefs that were meticulously researched, well written, and well

argued.”

¶11 ATP argues that, despite its finding of good faith, the District Court erred by

failing to award fees under § 27-8-313, MCA, which serves as statutory authority for an

award of fees in this case. That section does not specifically provide for an award of

attorneys’ fees to a prevailing party, but does give a court the ability to grant

“supplemental relief” in a case brought under the Uniform Declaratory Judgments Act

when the court determines such relief to be “necessary or proper.” Wagner v. Woodward,

2012 MT 19, ¶ 31, 363 Mont. 403, 270 P.3d 21 (citing Buxbaum, ¶ 42). While § 27-8-

313, MCA, may provide a statutory basis for awarding fees, its reach is narrow. In order

to avoid “eviscerat[ing]” the American Rule, we have determined that an award of fees to

the prevailing party is not warranted “in every garden variety declaratory judgment

action[.]” Mungas v. Great Falls Clinic, LLP, 2009 MT 426, ¶ 44, 354 Mont. 50, 221

P.3d 1230.

¶12 Accordingly, we have required courts analyzing a claim for fees in a declaratory

judgment proceeding to make a threshold determination that equitable considerations

support an award of attorneys’ fees. Mungas, ¶ 45; Hughes v. Ahlgren, 2011 MT 189,

6
¶¶ 13, 21, 361 Mont. 319, 258 P.3d 439; United Nat’l Ins. Co. v. St. Paul Fire & Marine

Ins. Co., 2009 MT 269, ¶ 39, 352 Mont. 105, 214 P.3d 1260. If that threshold

determination is met, we apply a three-part “tangible parameters test” to determine

whether an award of fees is necessary or proper as required by § 27-8-313, MCA.

Renville v. Farmers Ins. Exch., 2004 MT 366, ¶ 27, 324 Mont. 509, 105 P.3d 280.2 The

District Court concluded that, although the Uniform Declaratory Judgments Act provided

authority for an award of fees, the court did not find it “necessary and proper to do so in

this case.” Because equitable considerations also inform the analysis of ATP’s claim for

fees under the private attorney general doctrine, we will consider these arguments

together.

2. Private Attorney General Doctrine

¶13 The private attorney general doctrine is one of a handful of equitable exceptions

this Court has recognized to the American Rule. Buxbaum, ¶ 19. This doctrine “is

normally utilized when the government, for some reason, fails to properly enforce

interests which are significant to its citizens.” Montanans for the Responsible Use of the

Sch. Trust v. State ex rel. Bd. of Land Comm’rs (Montrust), 1999 MT 263, ¶ 64, 296

Mont. 402, 989 P.2d 800 (quoting Dearborn Drainage Area, 240 Mont. at 43, 782 P.2d at

900). It, too, has been invoked sparingly. Since first recognizing the doctrine in 1989,

we have only twice used it to award or uphold the award of fees, and just once to a party

2
The three factors are “(1) an insurance company possesses what the plaintiffs sought in the
declaratory relief action; (2) it is necessary to seek a declaration showing that the plaintiffs are
entitled to the relief sought; and (3) the declaratory relief sought was necessary in order to
change the status quo.” Renville, ¶ 27.
7
prevailing against the State. Montrust, ¶ 69 (fees awarded against the State); Bitterroot

River Protective Ass’n, ¶ 37 (upholding award of fees against private parties).

¶14 We held in Montrust that three factors should be considered in determining

whether to award fees under the private attorney general doctrine: “(1) the strength or

societal importance of the public policy vindicated by the litigation, (2) the necessity for

private enforcement and the magnitude of the resultant burden on the plaintiff, (3) the

number of people standing to benefit from the decision.” Montrust, ¶ 66 (quoting

Serrano v. Priest, 569 P.2d 1303, 1314 (Cal. 1977)). We have limited the award of fees

under the doctrine to cases “vindicating constitutional interests.” Bitterroot River

Protective Ass’n, ¶ 22. We have declined to apply the doctrine when the litigation

primarily served a party’s own pecuniary interests. Sunburst Sch. Dist. No. 2 v. Texaco,

Inc., 2007 MT 183, ¶ 91, 338 Mont. 259, 165 P.3d 1079. We also consider whether an

award of fees would be unjust under the circumstances. Finke v. State ex rel. McGrath,

2003 MT 48, ¶ 33, 314 Mont. 314, 65 P.3d 576.

¶15 ATP argues that it has vindicated important free speech rights that benefit all

Montana citizens and corporations and will result in adding more thoughts and views to

the state’s political discourse. The Attorney General, conversely, argues that there is

substantial overlap between ATP’s view of the public interest and its own pecuniary

interests, and that the District Court was justified in declining to award fees in this case.

¶16 The constitutional principles underlying this litigation cannot be doubted. The

U.S. Supreme Court’s order reaffirmed that “political speech does not lose First

8
Amendment protection simply because its source is a corporation.” ATP v. Bullock, 567

U.S. at ___, 132 S. Ct. at 2491 (quoting Citizens United, 558 U.S. at ___, 130 S. Ct. at

900). Our cases applying the private attorney general doctrine reflect the caution,

however, “that the first factor not become for courts ‘assessments of the relative strength

or weakness of public policies furthered by their decisions . . . a role closely approaching

that of the legislative function.’” Bitterroot Protective Ass’n, ¶ 22 (quoting Serrano, 569

P.2d at 1314). The separation of powers between the branches requires us to use the

same caution to avoid interference with the executive function as well.

¶17 “The Attorney General is the legal officer of the state and shall have the duties and

powers provided by law.” Mont. Const. art. VI, § 4(4). It is the duty of the Attorney

General “to prosecute or defend all causes in the supreme court in which the state or any

officer of the state in the officer’s official capacity is a party or in which the state has an

interest.” Section 2-15-501(1), MCA. As an executive officer of the State of Montana,

the Attorney General determines when to prosecute or to defend cases in which the State

has an interest. Thus, if a challenge is brought to a state statute, the Attorney General has

discretion to decide whether or not to defend its constitutionality. See In re W.C., 206

Mont. 432, 439, 671 P.2d 621, 624 (1983) (Attorney General does not have a duty to

appear in every action concerning constitutionality of a statute); Associated Press v. State

of Mont., 250 Mont. 299, 820 P.2d 421 (1991) (noting Attorney General’s concession that

challenged statute was unconstitutional). The courts necessarily must use caution in

awarding fees against the State in a “garden variety” declaratory judgment action that

9
challenges the constitutionality of a statute that the Attorney General, in the exercise of

his executive power, has chosen to defend.

¶18 The legislature has cabined this executive discretion by authorizing the courts to

impose fees when the State’s defense is frivolous or in bad faith. Section 25-10-

711(1)(b), MCA. While not dispositive, this standard also serves as a guidepost in

analyzing a claim for fees under the private attorney general doctrine. This Court

reversed a fee award in Dearborn Drainage Area where, notwithstanding the ruling’s

potential “far reaching” effects, the State, through the Department of Fish, Wildlife and

Parks, had “acted in good faith and in accordance with constitutional and statutory

mandates” in representing the public’s recreational use rights in the waters of Bean Lake.

Dearborn Drainage Area, 240 Mont. at 43, 782 P.2d at 900. In Montrust, on the other

hand, we implied that since the private attorney general doctrine is an equitable exception

to the American Rule, the statute was not controlling. Montrust, ¶ 64.

¶19 Montrust, however, was not a “garden variety” constitutional challenge to a

legislative enactment. It involved unique issues raising the State’s breach of fiduciary

duties imposed by the Montana Constitution and federal enabling laws under which the

federal government’s grant of lands to Montana for support of common schools

constitutes a trust for which the State is the trustee. Montrust, ¶¶ 13-14. As trustee, the

State is obligated to obtain full market value for the school trust lands; the statutes in

question were held to violate the State’s constitutional obligation and its duty of

undivided loyalty to the trust beneficiary. Montrust, ¶¶ 14, 32, 42, 51, 58. In contrast,

10
we observed in Finke that fees against the State would not be appropriate under the

private attorney general doctrine where “the only potential liability of the State for fees

would lie for the actions of the Legislature in enacting an unconstitutional bill.” Finke,

¶ 34.

¶20 In this case, the District Court did not abuse its discretion in determining that the

State mounted a good faith defense to § 13-35-227(1), MCA. While the Attorney

General did not prevail, it is difficult to conclude that his arguments were frivolous when

five members of this Court were convinced of their merit. In the final analysis, even

though ATP vindicated principles of constitutional magnitude, the State’s defense also

was grounded in constitutional principles and in an effort to enforce interests the

executive deemed equally significant to its citizens. The Attorney General defended a

statute with deep roots in the State’s history, enacted by initiative of the people to combat

corruption that had resulted in the bribery of state judges and the embarrassment of

seeing one of the State’s U.S. Senators unseated for also accepting bribes. Western

Tradition Partn., ¶¶ 23, 25. The challenge was brought in a time of shifting legal

landscapes, the contours of which still have not finally been defined. Under these

circumstances, the predicate for an award of fees under the private attorney general

doctrine—“when the government, for some reason, fails to properly enforce interests

which are significant to its citizens”—has not been established.

11
 CONCLUSION

¶21 We reverse a district court for abusing its discretion only “when it acts arbitrarily

without employment of conscientious judgment or exceeds the bounds of reason[,]

resulting in substantial injustice.” B Bar J Ranch, LLC v. Carlisle Wide Plank Floors,

Inc., 2012 MT 246, ¶ 10, 366 Mont. 506, ___ P.3d ___. For the reasons discussed above,

and given the District Court’s express determination that the State’s defense was

meticulously researched, well presented, and made in good faith, we cannot conclude that

equitable considerations required it to award fees against the State under either the

Uniform Declaratory Judgments Act or the private attorney general doctrine.

¶22 The District Court’s order declining to award attorneys’ fees to the

Cross-Appellants is affirmed.

/S/ BETH BAKER

We concur:

/S/ MIKE McGRATH
/S/ MICHAEL E WHEAT
/S/ PATRICIA COTTER
/S/ BRIAN MORRIS
/S/ JIM RICE

Justice James C. Nelson, dissenting.

¶23 I dissent from the Court’s denial of attorneys’ fees under the private attorney

general doctrine. I believe the Court errs in three respects.

12
¶24 First, the District Court provided two distinct analyses of ATP’s two distinct

theories for seeking attorneys’ fees: one under the private attorney general doctrine and

the other under the Uniform Declaratory Judgments Act (§ 27-8-313, MCA). This Court

provides zero analysis of the District Court’s actual decision under the private attorney

general doctrine. Moreover, the Court fails to conduct its own distinct analysis under this

doctrine pursuant to the three Montrust factors. See Opinion, ¶ 14; Montanans for the

Responsible Use of the Sch. Trust v. State ex rel. Bd. of Land Commrs. (Montrust), 1999

MT 263, ¶ 67, 296 Mont. 402, 989 P.2d 800. Instead, the Court merges the private

attorney general analysis into the Uniform Declaratory Judgments Act analysis and

thereby creates a sort of one-size-fits-all procedural “smoothie” for analyzing attorneys’

fees requests under these two distinct doctrines.

¶25 Second, the Court further confuses matters by injecting § 25-10-711, MCA, into

this case. That statute provides an independent basis for an award of attorneys’ fees. It

states:

(1) In any civil action brought by or against the state, a political
subdivision, or an agency of the state or a political subdivision, the
opposing party, whether plaintiff or defendant, is entitled to the costs
enumerated in 25-10-201 and reasonable attorney fees as determined by the
court if:
(a) the opposing party prevails against the state, political
subdivision, or agency; and
(b) the court finds that the claim or defense of the state, political
subdivision, or agency that brought or defended the action was frivolous or
pursued in bad faith.
(2) Costs may be granted pursuant to subsection (1) notwithstanding
any other provision of the law to the contrary.

13
Section 25-10-711, MCA. If ATP had sought an award of attorneys’ fees pursuant to this

provision, then ATP would have been required to show (a) that it prevailed against the

State and (b) that the State’s defense was “frivolous or pursued in bad faith.” What the

Court apparently fails to appreciate, however, is the fact that ATP did not seek an award

of attorneys’ fees based on this statute. ATP relied, rather, on the private attorney general

doctrine and the Uniform Declaratory Judgments Act. Hence, ATP was not required to

show that the State’s defense was “frivolous or pursued in bad faith.” It was required,

rather, to establish the elements of the two doctrines upon which it relied.

¶26 Notably, the district court in Montrust denied an award of attorneys’ fees under

§ 25-10-711, MCA, because the action involved “neither frivolous conduct, extreme

conduct, nor bad faith by the State.” Montrust, ¶ 60. On appeal, the State asserted the

very proposition stated at ¶ 10 of today’s Opinion—namely, that a prevailing party may

recover attorneys’ fees against the State only if the court finds that the claim or defense of

the State was frivolous or pursued in bad faith. See Montrust, ¶ 63. In other words, the

State suggested that § 25-10-711, MCA, is a blanket limitation on an award of attorneys’

fees against the State under any theory—what the Court effectively holds in today’s

decision. The statute contains no such language, however, and we therefore rejected the

State’s proposition and instead adopted the private attorney general doctrine as a theory

of recovery distinct from the entitlement to, and limitations on, an award of attorneys’

fees under § 25-10-711, MCA. See Montrust, ¶¶ 64-67. We concluded that Montrust

was entitled to attorneys’ fees under the private attorney general theory, regardless of the

14
district court’s determination that the action involved “neither frivolous conduct, extreme

conduct, nor bad faith by the State.” Montrust, ¶¶ 60, 69. The Court’s contrary approach

in its decision today throws this entire area of law into a state of utter disarray.

¶27 Third, the Court denies relief under ATP’s private attorney general theory based

entirely on a sentence in the District Court’s order that was not part of the District Court’s

reasoning under that theory. Specifically, the District Court observed that “[t]he State’s

arguments were made in good faith and were supported by briefs that were meticulously

researched, well written, and well argued.” This statement might be relevant if ATP were

pursuing a claim for attorneys’ fees under § 25-10-711, MCA. ATP is not relying on this

statute, however, as noted above. Furthermore, the District Court provided the foregoing

quoted statement as its rationale for concluding that an award of attorneys’ fees was not

proper under ATP’s Uniform Declaratory Judgments Act theory. The District Court

provided an entirely separate analysis of the private attorney general theory; this Court

simply chooses not to address the District Court’s specific reasoning under that theory.

¶28 In short, and with due respect, I believe it is wrong—not to mention patently

unfair—for this Court to reject ATP’s argument for attorneys’ fees based on the criteria

of a statute (§ 25-10-711, MCA) that ATP never even invoked. Cf. Western Sec. Bank v.

Eide Bailly LLP, 2010 MT 291, ¶¶ 73, 81, 359 Mont. 34, 249 P.3d 35 (Nelson, J.,

concurring in part and dissenting in part) (“It will surely come as a surprise to Glacier,

however, when it learns that it has lost this case because it failed to adequately support a

claim that it never even raised! . . . It is unfair to remake a plaintiff’s cause of action into

15
something it never was intended to be and then to deny the plaintiff relief for failing to

adequately support this remade cause.”). The Court completely muddles this area of law

by blending the private attorney general doctrine and the Uniform Declaratory Judgments

Act doctrine into a single analysis and then superimposing on that analysis the “frivolous

or pursued in bad faith” criterion of § 25-10-711, MCA—contrary to our approach in

Montrust. With this Opinion, we have effectively done away with the private attorney

general doctrine. Like the majority of the United States Supreme Court in Citizens

United v. FEC, 558 U.S. 310, 130 S. Ct. 876 (2010), this Court has now remade this case

so as to remake the law pertaining to the private attorney general doctrine.

¶29 For the reasons which follow, I conclude and would hold that ATP is entitled to an

award of attorneys’ fees under a proper application of the criteria of the private attorney

general doctrine, as set forth in Montrust.

The Private Attorney General Doctrine

¶30 This Court adopted the private attorney general doctrine in Montrust, ¶ 67. There

are three factors to be considered in awarding attorneys’ fees under this doctrine: (1) the

strength or societal importance of the public policy vindicated by the litigation, (2) the

necessity for private enforcement and the magnitude of the resultant burden on the

plaintiff, and (3) the number of people standing to benefit from the decision.

Montrust, ¶ 66 (citing Serrano v. Priest, 569 P.2d 1303, 1314 (Cal. 1977)).

¶31 In the present case, the District Court concluded under the first factor that the

issues here are clearly very important. Second, the District Court reasoned that because

16
the Attorney General is required to defend the statute in question, private enforcement of

the important constitutional rights at issue was required. Third, however, although the

District Court had ruled in favor of ATP on the merits of its constitutional claim, the

court opined that “there is no reasonable way of knowing ‘the number of people’ standing

to benefit from this decision” (emphasis in original). For this latter reason, the District

Court denied an award of attorneys’ fees under the private attorney general doctrine.

¶32 While I agree with the District Court’s analysis as to the first factor, and agree

with the District Court’s ultimate conclusion under the second factor, I do not agree with

the District Court’s reasoning regarding the third factor. In my view, ATP has

successfully answered all three factors. I address each one in turn.

Factor 1

¶33 First, as to the strength or societal importance of the public policy vindicated by

the litigation, it is hardly open to argument that ATP’s lawsuit secured against the

proscriptions of Montana’s Corrupt Practices Act (in particular, § 13-35-227, MCA) the

expansive right of corporations and associations—as decreed by the United States

Supreme Court under the First Amendment in Citizens United—to use general treasury

funds to make independent expenditures expressly advocating the election or defeat of

candidates. Absent this challenge, corporations and associations remained constrained

and inhibited from making such independent expenditures in support of or against

candidates in Montana. Moreover, as the Ninth Circuit has recently held, the loss of such

First Amendment freedoms, for even minimal periods of time, constitutes irreparable

17
injury. Sanders County Republican Cent. Comm. v. Bullock, 698 F.3d 741, 748 (9th Cir.

2012).

Factor 2

¶34 Second, as to the necessity for private enforcement and the magnitude of the

resultant burden on the plaintiff, the Attorney General’s decision to defend the Corrupt

Practices Act left ATP with no choice but to litigate its rights under Citizens United.

Indeed, ATP took on the burden of vindicating the First Amendment rights of every

corporation, association, and person1 in the State of Montana.

¶35 In this regard, I note my disagreement with the District Court’s reasoning that this

is a case in which the Attorney General was “required to defend the statute.” I appreciate

that it is the Attorney General’s duty, generally, to defend the State and argue the validity

of state statutes against attack. See § 2-15-501, MCA. However, as the Court points out,

the Attorney General has discretion in this regard and has even conceded that a

challenged statute was unconstitutional. Opinion, ¶ 17; In re W.C., 206 Mont. 432, 439,

671 P.2d 621, 624 (1983); Associated Press v. State, 250 Mont. 299, 300, 820 P.2d 421,

422 (1991). In the present case, given the clarity and breadth of the Citizens United

decision and the fact that the Supreme Court in Citizens United rejected every one—not

just some, but all—of the arguments for upholding § 13-35-227, MCA,2 I cannot

1
I use the term “person” here deliberately, for reasons explained under the third
factor.
2
See Am. Tradition Partn. v. Bullock, ___ U.S. ___, 132 S. Ct. 2490, 2491 (2012)
(per curiam) (“Montana’s arguments in support of the judgment below either were
already rejected in Citizens United, or fail to meaningfully distinguish that case.”).
18
understand how, much less agree with the proposition that, the Attorney General had any

substantial grounds to defend the statute against ATP’s challenge. Nor can I agree with

the Court’s suggestion that ATP’s challenge was brought in a time of “shifting legal

landscapes.” Opinion, ¶ 20. The Supreme Court was very clear as to the breadth of its

holding in Citizens United. The Attorney General, like other elected officials of this

State, takes an oath to “support, protect and defend the constitution of the United States

. . . .” Mont. Const. art. III, § 3. The Constitution of the United States, as interpreted by

the Supreme Court in Citizens United, is “the supreme Law of the Land . . . , any Thing in

the Constitution or Laws of any State to the Contrary notwithstanding.” U.S. Const.

art. VI, cl. 2. I am not going to repeat my analysis in Western Tradition Partn., Inc. v.

Atty. Gen. of Montana, 2011 MT 328, ¶¶ 61-135, 363 Mont. 220, 271 P.3d 1 (Nelson, J.,

dissenting). Suffice it to say that, in my view, such analysis could just as easily have

been undertaken and adopted by the Attorney General (as a host of other state attorneys

general did), with the result that ATP’s litigation in the District Court would not have

been necessary, ATP’s appeal to this Court would not have been necessary, and ATP’s

appeal to the Supreme Court of the United States would not have been necessary.

¶36 In any event, the important point is that the Attorney General’s decision to defend

the law made it necessary for ATP to enforce its rights under Citizens United. As for the

magnitude of the resultant burden on the plaintiff, the State contends that ATP’s burden

was negligible because ATP’s attorneys “litigated this case only minimally. Plaintiffs

conducted no discovery, swore out a couple of bare-bones affidavits, and in their two

19
summary judgment briefs below made no legal arguments not already contained within

the Citizens United opinion itself.” According to the State, “[t]his is far from the typical

case of private attorney general doctrine fee awards, which involves ‘significant legal

costs’ resulting from extensive discovery, expert testimony, and often trial.”

¶37 There are two flaws in the State’s argument. First, the magnitude of the resultant

burden on the plaintiff must be considered in relative terms. Here, the burden on ATP

was significant if one considers that ATP should not have been forced to pursue this

action in the first place. According to the Supreme Court, the Attorney General’s

arguments for upholding § 13-35-227(1), MCA, “either were already rejected in Citizens

United, or fail to meaningfully distinguish that case.” Am. Tradition, 132 S. Ct. at 2491.

Yet, despite the clarity and breadth of the Citizens United decision, the Attorney General

took the position that Montana’s ban on independent expenditures is constitutional and

enforceable. Regardless of the Attorney General’s rationale behind this decision, the

undisputed result was that ATP had to incur the burden of litigating its rights—not only

in the District Court, but also in appeals to this Court and the Supreme Court—against

arguments that “either were already rejected in Citizens United, or fail to meaningfully

distinguish that case.” Am. Tradition, 132 S. Ct. at 2491. In my view, given these facts,

the magnitude of the burden was great.

¶38 Second, even assuming, for the sake of argument, that ATP’s burden was

“minimal,” adopting the State’s approach would give plaintiffs in these sorts of cases an

incentive to run up “significant legal costs”—even if the costs are unnecessary—in order

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to strengthen their claim for attorneys’ fees under the private attorney general doctrine.

In a case, such as the present one, which otherwise qualifies under that doctrine, the

plaintiff should not be penalized for failing to incur “significant legal costs” in the

process. It is truly ironic that the State is here complaining that ATP’s legal bills are not

high enough. Such an approach to the private attorney general doctrine would not be in

the taxpayers’ best interests.

¶39 For the foregoing reasons, I would hold that the necessity for private enforcement

and the magnitude of the resultant burden on the plaintiff weigh in ATP’s favor. The

Supreme Court spoke unequivocally in Citizens United; Montana chose to challenge the

application of Citizens United to Montana; and, predictably, Montana lost. Montana

should not now be heard to argue that ATP is not entitled to its attorneys’ fees for

successfully litigating a case that, in my view, ATP should not have been forced to

litigate in the first place.

Factor 3

¶40 Finally, the third factor concerns the number of people standing to benefit from the

decision. There is no question that every corporation and association in Montana—and,

due to ATP’s appeal to the Supreme Court, every corporation and association in the

United States—benefited from ATP’s filing and pursuance of this litigation. As a result

of the instant lawsuit, each corporation and association has been guaranteed the ability to

exercise, at the state level, the rights decreed in Citizens United, given that the Supreme

Court’s reversal of this Court’s decision removed any lingering doubt—implausible as

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that doubt may have been3—about whether the application of Citizens United was limited

to federal elections. See Am. Tradition, 132 S. Ct. at 2491 (“The question presented in

this case is whether the holding of Citizens United applies to the Montana state law.

There can be no serious doubt that it does.” (citing the Supremacy clause, U.S. Const.,

art. VI, cl. 2)).

¶41 As noted, the District Court concluded that the third factor was not met because

“there is no reasonable way of knowing ‘the number of people’ standing to benefit” from

the District Court’s ruling in favor of ATP on the merits of its constitutional claim

(emphasis in original). The District Court, however, cited no authority for its apparent

premise that the term “people” in Montrust’s third factor is limited to human beings. The

District Court, it appears, simply assumed this to be true without analysis.

¶42 Setting aside the controversial question whether corporations and associations are

“persons,” however, the District Court overlooked a fundamental point of the Citizens

United decision. As I recently discussed in Montanans Opposed to I-166 v. Bullock,

2012 MT 168, ¶¶ 20-25, 365 Mont. 520, 285 P.3d 435 (Nelson, J., dissenting), Citizens

United was not just about the rights of corporations and associations to speak. More

importantly, it was about the rights of citizens to hear and obtain information about

candidates from diverse sources without governmental censorship. Indeed, the Citizens

United decision rested on two propositions: first, that expenditures (by a person or an

3
See Citizens United, 130 S. Ct. at 903 (noting that a state ban on corporate
independent expenditures would be unconstitutional under the longstanding principle that
“the First Amendment does not allow political speech restrictions based on a speaker’s
corporate identity”).
22
organization) on political communication are a form of “speech”; and second, that

“citizens [have the right] to inquire, to hear, to speak, and to use information to reach

consensus.” Citizens United, 130 S. Ct. at 898 (emphasis added). These propositions

were not created in Citizens United. Rather, they can be traced to Buckley v. Valeo, 424

U.S. 1, 96 S. Ct. 612 (1976) (per curiam), and First Natl. Bank v. Bellotti, 435 U.S. 765,

98 S. Ct. 1407 (1978).

¶43 Of particular significance to the present discussion, the Supreme Court observed in

Bellotti that

[t]he court below framed the principal question in this case as whether and to
what extent corporations have First Amendment rights. We believe that the court
posed the wrong question. The Constitution often protects interests broader than
those of the party seeking their vindication. The First Amendment, in particular,
serves significant societal interests. The proper question therefore is not whether
corporations “have” First Amendment rights and, if so, whether they are
coextensive with those of natural persons. Instead, the question must be whether
[the state statute at issue] abridges expression that the First Amendment was
meant to protect.

435 U.S. at 775-76, 98 S. Ct. at 1415 (emphasis added). The Bellotti Court stated further

that “[t]he inherent worth of the speech in terms of its capacity for informing the public

does not depend upon the identity of its source, whether corporation, association, union,

or individual,” 435 U.S. at 777, 98 S. Ct. at 1416, and that “the First Amendment goes

beyond protection of the press and the self-expression of individuals to prohibit

government from limiting the stock of information from which members of the public may

draw,” 435 U.S. at 783, 98 S. Ct. at 1419 (emphasis added).

¶44 Likewise, the Supreme Court stated in Citizens United that “it is inherent in the

nature of the political process that voters must be free to obtain information from diverse
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sources in order to determine how to cast their votes” and that the First Amendment does

not allow “the exclusion of a class of speakers from the general public dialogue.” 130

S. Ct. at 899 (emphases added). The Supreme Court observed that the First Amendment

protects the “open marketplace” of ideas, Citizens United, 130 S. Ct. at 899, and prohibits

restrictions on political speech based on the speaker’s identity, Citizens United, 130 S. Ct.

at 902-03. Because voters must be free to obtain information from diverse sources, it is a

violation of the First Amendment to control expression by distinguishing among different

speakers and the subjects upon which they may speak. Citizens United, 130 S. Ct. at

898-99. The Supreme Court held that this country’s law and tradition require more

expression, not less, Citizens United, 130 S. Ct. at 911, and that “[w]hen Government

seeks to use its full power, including the criminal law, to command where a person may

get his or her information or what distrusted source he or she may not hear, it uses

censorship to control thought,” Citizens United, 130 S. Ct. at 908 (emphasis added).

¶45 Clearly, then, the constitutional rights protected by the Citizens United decision

are not just those of corporations; they are those of “people.” And the District Court was

clearly wrong, therefore, in suggesting that “people” do not stand to benefit from the

District Court’s decision in favor of ATP or that there is no reasonable way of knowing

“the number” of people standing to benefit from that decision. As a matter of federal

constitutional law, all Montana citizens—at least, every voter in Montana—benefitted

from the District Court’s decision in favor of ATP under Citizens United. By virtue of

the District Court’s decision, which the Supreme Court has now tacitly affirmed, the

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State of Montana may not “use its full power, including the criminal law, to command

where a person may get his or her information or what distrusted source he or she may

not hear.” Citizens United, 130 S. Ct. at 908. The State no longer may “limit[ ] the stock

of information from which members of the public may draw” when making their

electoral decisions. Bellotti, 435 U.S. at 783, 98 S. Ct. at 1419. ATP’s successful lawsuit

vindicated not only the rights of corporations and associations to make independent

expenditures in support of or against candidates, but also the First Amendment rights of

the “people” of Montana to receive information about candidates from diverse sources

without governmental censorship.4

Conclusion

¶46 Based on the foregoing analysis, I conclude that the private attorney general

doctrine applies to ATP’s lawsuit. Accordingly, I would reverse the District Court’s

denial of attorneys’ fees. I would remand for a factual determination of ATP’s attorneys’

fees and for the entry of judgment in ATP’s favor and against the State. I disagree with

this Court’s contrary decision.

4
While I accept, and agree with, the principle that the government does not have
the power “to command where a person may get his or her information or what distrusted
source he or she may not hear,” Citizens United, 130 S. Ct. at 908, I still have concerns
about the ability of corporations, associations, and those with extreme wealth to drown
out other voices. Western Tradition, ¶ 127 (Nelson, J., dissenting). In my view, the
protections of the First Amendment, as with other constitutional provisions, ought to be
balanced. Western Tradition, ¶ 130 (Nelson, J., dissenting). In this respect, while all
speakers—corporations, associations, and individuals alike—have the right to contribute
to the “open marketplace” of ideas, Citizens United, 130 S. Ct. at 899, no one contributor
should be able to monopolize the marketplace to the exclusion of other potential
contributors. There can be no open exchange of ideas and debate if some of the parties to
the conversation cannot afford to get a word in edgewise.
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¶47 I dissent.

/S/ JAMES C. NELSON

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