{
  "id": 516095,
  "name": "Orbit Transport, Inc., Claimant, v. The State of Illinois, Respondent",
  "name_abbreviation": "Orbit Transport, Inc. v. State",
  "decision_date": "1996-03-19",
  "docket_number": "No. 91-CC-2735",
  "first_page": "311",
  "last_page": "318",
  "citations": [
    {
      "type": "official",
      "cite": "48 Ill. Ct. Cl. 311"
    }
  ],
  "court": {
    "name_abbreviation": "Ill. Ct. Cl.",
    "id": 8793,
    "name": "Illinois Court of Claims"
  },
  "jurisdiction": {
    "id": 29,
    "name_long": "Illinois",
    "name": "Ill."
  },
  "cites_to": [],
  "analysis": {
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  "last_updated": "2023-07-14T19:26:49.278659+00:00",
  "provenance": {
    "date_added": "2019-08-29",
    "source": "Harvard",
    "batch": "2018"
  },
  "casebody": {
    "judges": [],
    "parties": [
      "Orbit Transport, Inc., Claimant, v. The State of Illinois, Respondent."
    ],
    "opinions": [
      {
        "text": "OPINION\nEpstein, J.\nThis is a claim against the Respondents Department of Transportation (\u201cIDOT\u201d) for litigation expenses pursuant to section 10 \u2014 55(a) of the Illinois Administrative Procedures Act (the \u201cAPA\u201d). (5 ILCS 100/10 \u2014 55(a).) This Court has jurisdiction of this claim under section 8(i) of our Act. 705 ILCS 505/8.\nThe statutory fee-shifting provision that is invoked here by the Claimant is paragraph (a) of APA section 10 \u2014 55, which applies, insofar as material here, to a \u201ccontested case initiated by any agency that does not proceed to Court for judicial review * * A\u201d The standard of liability for litigation expenses in APA section 10 \u2014 55(a) reads as follows:\n\u201c* \u00b0 * any allegation made by the agency without reasonable cause and found to be untrue shall subject the agency mating the allegations to the payment of tire reasonable expenses, including attorney\u2019s fees, actually incurred in defending against that allegation by the party against whom tire case was initiated. A claimant may not recover litigation expenses when the parties have executed a settlement agreement that, while not stipulating liability or violation, requires the claimant to take corrective action or pay a monetary sum.\u201d\nClaimant Orbit Transport, Inc. (\u201cOrbit\u201d) alleges that IDOT made an allegation of \u201cknowing\u201d conduct in an administrative enforcement complaint against it \u201cwithout reasonable cause\u201d and that the allegation was \u201cfound to be untrue\u201d by the IDOT hearing officer. (IDOT did not seek administrative review of the hearing officers decision, and no settlement agreement was involved in those proceedings.)\nThis fee claim is based on an IDOT administrative \u201cnotice of probable violation\u201d against the Claimant, a trucking company, that alleged a \u201cknowing\u201d violation of the Illinois Hazardous Material Transportation Act, 430 ILCS 30/1, et seq. (the \u201cAct\u201d). IDOT alleged that Claimant knowingly violated IDOT s placard regulations for transporting hazardous materials on Illinois highways that were adopted under the Act by driving a truck containing hazardous commodities when one of the several required placards had (somehow) come off the truck while traveling our highways. IDOT sought to impose civil penalties on the Claimant for this alleged violation. Following a stipulation between Orbit and IDOT that the Orbit driver did not have \u201cactual knowledge\u201d of the missing placard, the case was tried to an IDOT administrative hearing officer on a theory of \u201cconstructive knowledge.\u201d The hearing officer found the charges unproven.\nThe critical issue before us on this fee claim is whether IDOTs allegation of a \u201cknowing\u201d violation of the placard rules was, or was not, made with \u201creasonable cause.\u201d This is not quite as straightforward a question as it initially might seem, given the shifting meaning of the key word.\nAt the outset, it is clear that: (1) the Act allows civil penalties only against a \u201cperson * * # [who] knowingly committed an act that is a violation of this Act or any rule or regulation issued under this Act,\u201d 403 ILCS 30/11, and that (2) IDOT accused Claimant of \u201cknowingly\u201d driving a truckload of hazardous materials with at least one of the required placards missing, and (3) the IDOT hearing officer found that IDOT had \u201cfailed to prove that the Respondent engaged in a knowing violation of the Act * * In the Matter of Orbit Transport, Inc., CP 89-1438 (October 30, 1990) (C.R. Draper), at 9.\nThe unusual twist in this case is that the meaning of \u201cknowingly\u201d \u2014 the allegedly false allegation \u2014 was itself a disputed issue in the administrative proceeding. The Claimant took the position then, and adheres to it now, that IDOT\u2019s stipulation that Orbit\u2019s truck driver did not have \u201cactual knowledge\u201d that the placard was missing is terminally dispositive of the violation charge. On Claimant\u2019s view, the \u201cknowingly\u201d allegation meant, and under the Illinois statute and IDOT regulations had to mean, \u201cactually knew\u201d and that that was admitted to be false by IDOT\u2019s stipulation.\nIDOT takes the view that \u201cknowingly\u201d was intended by IDOT to mean \u201cconstructively knew,\u201d and that it clearly and explicitly confirmed that by the pre-trial stipulation. Under that \u201cconstructive knowledge\u201d interpretation, IDOT contends that its allegation of \u201cknowingly\u201d was reasonable under the circumstances, as well as a reasonable and properly aggressive attempt to obtain a stricter judicial interpretation of the statute that would be more favorable to enforcement of the Act. IDOT argues strenuously that it ought not be penalized \u2014 or at least not forced to pay Orbit\u2019s litigation expenses \u2014 because it sought to advocate a legally plausible, but unsuccessful, interpretation of the law. Respondent urges that it acted reasonably at all stages of the administrative proceeding, and that APA section 55(a) requires a much more egregious behavior on the part of the agency before liability is imposed.\nBoth sides agree that the administrative action proceeded to trial on IDOT\u2019s legal theory that the Act and regulations should be construed only to require \u201cconstructive knowledge\u201d that the placard was missing, i.e., that the Orbit driver was somehow negligent or derelict of his duty in not determining that the placard had somehow come off the side of the truck during the first few hours of driving that day (after undisputedly leaving the dock with all signs in place). It appears that the IDOT hearing officer accepted this theory or at least applied it in this case.\nAs Claimant emphasizes, the hearing officer applied the lower \u201cconstructive knowledge\u201d standard of scienter to this case and found it unproven by IDOT, which Claimant contends is tantamount to a finding that the allegation was untrue.\nUnder the circumstances presented here, we do not find it necessary to reach several of these interesting issues raised by the parties, including the issues of whether or not the \u201cuntrue allegation\u201d liability of APA section 10 \u2014 55(a) includes allegations of law as well as allegations of fact, a point on which neither party has produced precedent or analysis.\nOur following findings suffice for us to decide the dispositive issue under the section 10 \u2014 55(a) standard of liability for \u201cuntrue allegations\u201d in IDOTs charge against this Claimant:\n1. IDOTs administrative complaint alleged \u201cknowing\u201d misconduct under an Illinois statute that, on its face, and as then construed to date, required actual knowledge in order to trigger a civil penalty; no regulatory gloss purported to alter that statutory standard of scienter; IDOTs complaint sought a civil penalty against the Claimant and thus invoked the \u201cknowingly\u201d standard;\n2. In order to plead its \u201cconstructive knowledge\u201d theory of Claimant\u2019s liability, IDOTs complaint could have, but did not, allege \u201cconstructive knowledge\u201d as a fact conclusion and could have, but did not, allege facts known or thought to be known to the Claimant (i.e., to its driver or other personnel) that might support a conclusion of such constructive knowledge; this traditional pleading technique was not utilized by IDOT in this case;\n3. From the time of the IDOT-Orbit stipulation, Claimant was not, and knew it was not, defending a charge of \u201cactual knowledge\u201d of the missing placard; but this case does not involve bad faith or intentional deception by IDOT;\n4. The IDOT administrative hearing officer accepted the \u201cconstructive knowledge\u201d application of the Act insofar as he applied that construction of the \u201cknowing\u201d element to the facts presented by IDOT at the administrative hearing, and found that IDOT failed to prove that Orbit (i.e., Orbits driver) had constructive knowledge of the missing placard; in the absence of complicating factors, this finding is tantamount to a determination that the charge was untrue;\n5. In this Court and in the administrative hearing below, IDOT failed to make any significant showing of a factual basis for its allegation of \u201cconstructive knowledge\u201d of the missing placard. IDOT failed to show a reasonable basis for alleging that the Orbit driver, at any time during approximately two hours of highway driving after leaving his departure point with all required hazardous material placards duly affixed in compliance with the IDOT regulations, and affixed in a manner that met IDOT regulations, knew facts that should have indicated to him, or otherwise had reason to know, that one hazardous materials placard had come off of tire truck.\nThese findings require us to conclude that IDOT has breached the standard of section 10 \u2014 55(a) by its factual allegation of \u201cknowing\u201d violation, under both an actual knowledge and a constructive knowledge interpretation. Either way, the allegation was not reasonably made in this case. Claimant is entitled to an award of litigation expenses under the statute.\nHowever, in awarding litigation expenses under this statute, we are commanded to award only such expenses, including attorneys fees, that were \u201cactually incurred in defending against the [offending] allegation # * V\u2019 Because of the shifting meaning of the critical allegation during the administrative proceedings, our award determination requires further comment.\nOrdinarily, the defense of an allegation would seemingly require the allegation to have been made. Ordinarily, recoverable defense expenses based on an improper allegation would exclude defense efforts preceding the making of the allegation. However, under the peculiar procedural facts involved in this administrative action, where the legal and factual issues are so closely intertwined, where the first (\u201cactual knowledge\u201d) as well as the second (\u201cconstructive knowledge\u201d) interpretative version of the unreasonable/false allegation was false, and where the administrative Respondent from the outset had to defend itself against baseless charges, we are not inclined to draw fine lines to demark the onset of the recoverable defense expenses, and we are not persuaded that Claimant\u2019s knowledge of the intended meaning of the charge is a reason to reduce its recompense in these circumstances.\nAccordingly, we will award Claimant his requested litigation expenses, consisting of attorney\u2019s fees based on 19.5 hours of time in the administrative hearing process (at $100 per hour), including pre-trial and pre-stipulation time, as set forth in Claimants bill of particulars. We will add to the award Claimants counsel fees for the filing, briefing and hearing in this Court, as allowed by the statute and conceded to be appropriate by the Respondent.\nThe Court finds liability in favor of the Claimant. Claimant shall file a supplementary bill of particulars covering its litigation expenses in this court within 14 days after this order. Respondent may file objections within 14 days after its receipt thereof.\nJudgment is entered for Claimant and against the Respondent. An award will follow.\nSUPPLEMENTARY ORDER AND AWARD\nEpstein, J.\nOn March 19, 1996, the Court issued its opinion in this case granting this claim and entered an order directing supplemental submissions by the parties on the Claimants attorneys fees in this court. Claimant filed its supplementary bill of particulars, requesting $2,200 in attorneys fees (and no other litigation expenses) in addition to the $1,950 in attorneys fees previously approved in the Courts opinion, and the Respondent has not interposed any objection.\nAccordingly, pursuant to our opinion and order of March 19, 1996, it is hereby ordered: Claimant Orbit Transport, Inc. is awarded the sum of $4,150 in full and complete satisfaction of all claims presented in this matter.\nIDOT\u2019s constructive knowledge theory was based on at least one judicial decision so construing a parallel Federal statute. IDOT concedes, however, that that decision relied on a Federal administrative rule that defined the required \"knowledge\" element to include constructive (\u201cshould have known\") knowledge, but that no parallel Illinois administrative rule has been adopted by IDOT (assuming arguendo that one could be, consistent with the language of the Act itself). In any event, the decision on which IDOT relied was not rendered by an Illinois court and was not a construction of the Illinois statute or of IDOT regulations; and no Illinois court has directly addressed this issue.\nTills Court need not and does not intimate any opinion as to the proper interpretation of the \u201cknowledge\u201d element of the Act and, correspondingly, of the IDOT hazardous material transportation regulations.",
        "type": "majority",
        "author": "Epstein, J. Epstein, J."
      }
    ],
    "attorneys": [
      "Loewenstein, Hagen, Oehlert & Smith, P.C. (Gary L. Smith, of counsel), for Claimant.",
      "Jim Ryan, Attorney General (Jennifer Johnson, Assistant Attorney General, of counsel), for Respondent."
    ],
    "corrections": "",
    "head_matter": "(No. 91-CC-2735\nOrbit Transport, Inc., Claimant, v. The State of Illinois, Respondent.\nOpinion filed March 19, 1996.\nSupplementary order and award filed May 13, 1996.\nLoewenstein, Hagen, Oehlert & Smith, P.C. (Gary L. Smith, of counsel), for Claimant.\nJim Ryan, Attorney General (Jennifer Johnson, Assistant Attorney General, of counsel), for Respondent."
  },
  "file_name": "0311-01",
  "first_page_order": 479,
  "last_page_order": 486
}