814.245 Actions by state agencies.

(1) The legislature intends that courts in this state, when interpreting this section, be guided by federal case law, as of November 20, 1985, interpreting substantially similar provisions under the federal equal access to justice act, 5 USC 504.

(2) In this section:

(a) “Nonprofit corporation" has the meaning designated in s. 181.0103 (17).

(b) “Small business" means a business entity, including its affiliates, which is independently owned and operated, and which employs 25 or fewer full-time employees or which has gross annual sales of less than $5,000,000.

(c) “Small nonprofit corporation" means a nonprofit corporation which employs fewer than 25 full-time employees.

(d) “State agency" does not include the citizens utility board.

(e) “Substantially justified" means having a reasonable basis in law and fact.

(3) Except as provided in s. 814.25, if an individual, a small nonprofit corporation or a small business is the prevailing party in any action by a state agency or in any proceeding for judicial review under s. 227.485 (6) and submits a motion for costs under this section, the court shall award costs to the prevailing party, unless the court finds that the state agency was substantially justified in taking its position or that special circumstances exist that would make the award unjust.

(4) In determining the prevailing party in actions in which more than one issue is contested, the court shall take into account the relative importance of each issue. The court shall provide for partial awards of costs under this section based on determinations made under this subsection.

(5) If the court awards costs under sub. (3), the costs shall include all of the following which are applicable:

(a) The reasonable expenses of expert witnesses, the reasonable cost of any study, analysis, engineering report, test or project which is found by the court to be necessary for the preparation of the case and reasonable attorney or agent fees. The amount of fees awarded under this section shall be based upon prevailing market rates for the kind and quality of the services furnished, except that:

1. No expert witness may be compensated at a rate in excess of the highest rate of compensation for expert witnesses paid by the agency which is the losing party.

2. Attorney or agent fees may not be awarded in excess of $150 per hour unless the court determines that an increase in the cost of living or a special factor, such as the limited availability of qualified attorneys or agents, justifies a higher fee.

(b) Any other allowable cost specified under s. 814.04 (2).

(6) A party seeking an award under this section shall, within 30 days after final judgment in the action, submit to the clerk under s. 814.10 (1) an itemized application for fees and other expenses, 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. Section 814.10 applies for the procedure for taxation of costs, except that the clerk shall allow the state agency 15 working days to respond under s. 814.10 (3).

(7) The court acting under s. 814.10 (4) may reduce the amount awarded under this section or deny an award if it finds that the prevailing party engaged in conduct which unduly and unreasonably delayed the action.

(8) An individual is not eligible to recover costs under this section if the person's properly reported federal adjusted gross income was $150,000 or more in each of the 3 calendar years or corresponding fiscal years immediately prior to the commencement of the action. This subsection applies whether the person files the tax return individually or in combination with a spouse.

(9) If a state agency is ordered to pay costs under this section, the costs shall be paid from the applicable appropriation under s. 20.865 (1) (a), (g) or (q).

(10) Each state agency that is ordered to pay costs under this section or that recovers costs under sub. (11) shall report annually, as soon as is practicable after June 30, to the presiding officer of each house of the legislature the number, nature and amounts awarded, the claims involved in the action in which the costs were incurred, the costs recovered under sub. (11) and any other relevant information to aid the legislature in evaluating the effect of this section.

(11) If the court finds that the motion under sub. (3) is frivolous, the examiner may award the state agency all reasonable costs in responding to the motion. In order to find a motion to be frivolous, the court must find one or more of the following:

(a) The motion was submitted in bad faith, solely for purposes of harassing or maliciously injuring the state agency.

(b) The party or the party's attorney knew, or should have known, that the motion was without any reasonable basis in law or equity and could not be supported by a good faith argument for an extension, modification or reversal of existing law.

History: 1985 a. 52; 1985 a. 182 s. 57; 1985 a. 332 s. 253; 1995 a. 27; 1997 a. 79, 133; 2003 a. 145.

A petitioner must receive at least some requested relief in order to “prevail" under sub. (3). Kitsemble v. DHSS, 143 Wis. 2d 863, 422 N.W.2d 896 (Ct. App. 1988).

A circuit court retains jurisdiction to assess costs under sub. (3) when it remands a decision to any agency for further proceedings. The 30-day period in sub. (6) commences at the time that the matter is disposed of in favor of the party on the remand. Sheely v. DHSS, 150 Wis. 2d 320, 442 N.W.2d 1 (1989).

In order for a state agency's position to be “substantially justified" under sub. (3), it must have a reasonable basis in truth and in law and there must be a reasonable connection between the facts alleged and the legal theory advanced. An agency's failure to provide required written notice in terminating medical assistance benefits did not have a reasonable basis in law. Stern v. DHFS, 212 Wis. 2d 393, 569 N.W.2d 79 (Ct. App. 1997), 96-2381.

The appropriate base for a cost of living adjustment to the award of attorney fees under sub. (5) (a) 2. is November, 1985, the date of enactment of the statute. Stern v. DHFS, 222 Wis. 2d 521, 588 N.W.2d 658 (Ct. App. 1998), 98-1493.

Unlike its federal counterpart, sub. (3) only provides for attorney fees in actions by state agencies, not actions brought by the State of Wisconsin. The legislature was guided by the federal act when enacting this section. If the legislature intended for this section to apply to actions brought by or against the State of Wisconsin, similar to the federal act applying to the United States, it could have done so, and plainly did not. This case was a forfeiture action that s. 778.02 requires be brought in the name of the State of Wisconsin. Thus, this case was not an action by a state agency. State v. Detert-Moriarty, 2017 WI App 2, 373 Wis. 2d 227, 890 N.W.2d 588, 14-2433.