STATE of Idaho, TRANSPORTATION DEPARTMENT, Petitioner-Appellant,
Marina KALANI-KEEGAN, Respondent.
[Copyrighted Material Omitted]
Hon. Lawrence G. Wasden, Attorney General; Susan K. Servick, Special Deputy Attorney General, Coeur d'Alene, for appellant. Susan K. Servick argued.
Greg D. Horne, Coeur d'Alene, for respondent.
The State of Idaho Transportation Department (ITD) appeals from the district court's decision, upon judicial review, affirming the ITD's order vacating the suspension of Marina Kalani-Keegan's driver's license after she failed a blood alcohol concentration test. For the reasons set forth below, we reverse.
FACTS AND PROCEDURE
On June 10, 2011, an officer stopped Kalani-Keegan's vehicle for failure to maintain its lane of travel. The officer detected an odor of alcohol and administered field sobriety tests, which Kalani-Keegan failed. Kalani-Keegan was arrested for driving under the influence (DUI) and taken to a medical center for an involuntary blood draw. A probable cause affidavit in support of Kalani-Keegan's arrest dated June 14 and bearing a signature of the arresting officer was received by the ITD on June 17. The results of the blood alcohol test, which were available on June 23, revealed that Kalani-Keegan's blood alcohol concentration was above the legal limit. On June 29, the ITD sent Kalani-Keegan a notice of administrative license suspension (ALS).
In July, Kalani-Keegan requested an administrative hearing to contest the suspension of her license. On August 11, the same day as the hearing, the hearing officer issued its findings of fact and conclusions of law and order.  The hearing officer vacated the suspension
of Kalani-Keegan's license because the required documents were not forwarded to the ITD in compliance with I.C. § 18-8002A(5)(b). Specifically, I.C. § 18-8002A(5)(b) provides that, within five business days following service of a notice of suspension, the arresting officer shall forward to the ITD a sworn statement of the officer, which may incorporate any arrest or incident reports relevant to the arrest and evidentiary testing. The hearing officer found that, because the probable cause affidavit did not contain the original signature of the arresting officer, the notary certificate which followed was invalid. On August 23, the ITD filed a motion for reconsideration, which contained a statement from the notary whose name appeared on the probable cause affidavit. In her statement, the notary declared that the arresting officer appeared before her on June 14 and, in her presence, signed the probable cause affidavit relating to the DUI arrest of Kalani-Keegan. On September 20, the hearing officer issued an order denying the motion. On October 7, the ITD filed a petition for judicial review. The district court affirmed the hearing officer's decision. The ITD appeals.
STANDARD OF REVIEW
The ALS statute, I.C. § 18-8002A, requires that the ITD suspend the driver's license of a driver who has failed a blood alcohol concentration test administered by a law enforcement officer. A person who has been notified of such an ALS may request a hearing before a hearing officer designated by the ITD to contest the suspension. I.C. § 18-8002A(7). The hearing officer must uphold the suspension unless he or she finds, by a preponderance of the evidence, that the driver has shown one of five grounds enumerated in I.C. § 18-8002A(7) for vacating the suspension. Once the driver has made an initial prima facie showing of evidence proving some basis for vacating the suspension, the burden shifts to the state to rebut the evidence presented by the driver. See Kane v. Idaho Dep't of Transp., 139 Idaho 586, 590, 83 P.3d 130, 134 (Ct.App.2003).
An ITD administrative hearing officer's decision regarding the suspension of a person's driver's license is subject to challenge through a petition for judicial review. I.C. § 18-8002A(8); Kane, 139 Idaho at 589, 83 P.3d at 133. The Idaho Administrative Procedures Act (IDAPA) governs judicial review of the ITD decisions to deny, cancel, suspend, disqualify, revoke, or restrict a person's driver's license. See I.C. §§ 49-201, 49-330, 67-5201(2), 67-5270. In an appeal from the decision of the district court acting in its appellate capacity under IDAPA, this Court reviews the agency record independently of the district court's decision. Marshall v. Idaho Dep't of Transp., 137 Idaho 337, 340, 48 P.3d 666, 669 (Ct.App.2002). This Court may overturn an agency's decision where its findings, inferences, conclusions, or decisions: (a) violate statutory or constitutional provisions; (b) exceed the agency's statutory authority; (c) are made upon unlawful procedure; (d) are not supported by substantial evidence in the record; or (e) are arbitrary, capricious, or an abuse of discretion. I.C. § 67-5279(3).
A. Prejudice to a Substantial Right
It is well established that the party challenging an agency decision must demonstrate the agency erred in a manner specified in I.C. § 67-5279(3) and that a substantial right of that party has been prejudiced. Wheeler v. Idaho Dep't of Health & Welfare, 147 Idaho 257, 260, 207 P.3d 988, 991 (2009).
Further, nothing in IDAPA requires the courts to address these two requirements in any particular order. Hawkins v. Bonneville Cnty. Bd. of Comm'rs, 151 Idaho 228, 232, 254 P.3d 1224, 1228 (2011). Therefore, an agency's decision may be affirmed solely on the grounds that the petitioner has not shown prejudice to a substantial right. Id. In other words, the courts may forego analyzing whether an agency erred in a manner specified by I.C. § 67-5279(3) if the petitioner does not show that a substantial right was violated. Id.
Citing Wheeler and Hawkins, the district court affirmed the hearing officer's decision without addressing the substantive issues raised by the ITD  because it determined the ITD had not established, or even alleged, that a substantial right was violated. Kalani-Keegan argues that, having failed to specifically allege that a substantial right was prejudiced, the ITD is precluded from raising the issue for the first time on appeal. The ITD responds that Kalani-Keegan's argument has no merit because, in an appeal from the decision of the district court acting in its appellate capacity under IDAPA, this Court reviews the agency record independently of the district court's decision. Thus, the ITD concludes this Court should review the issue of whether the substantial rights of the ITD were violated by the unfair decision-making process of the hearing officer.
We must decide whether, and to what extent in an ALS proceeding, the ITD must allege and demonstrate prejudice to a substantial right. In an ALS proceeding, the ITD is the statutorily  designated representative of the state and the interests of the people of the state that lie behind the driver's license suspension law. As such, the ITD has, as a matter of law, substantial rights in the fairness of the decision-making process and the outcome of the proceeding— namely, proper adjudication through application of correct legal standards which, upon violation, are prejudiced. While in some proceedings there may be parties that can demonstrate a substantial interest in the matter such that it can then be adjudicated, the directly affected parties— in this case statutorily mandated— have substantial rights in the ...