EMPLOYERS RESOURCE MANAGEMENT COMPANY, an Idaho Corporation, Plaintiff-Appellant,
MEGAN RONK, in her capacity as Director of the Idaho Department of Commerce, Defendant-Respondent.
Opinion No. 108
from the District Court of the Fourth Judicial District of
the State of Idaho, Ada County. Hon. Samuel Hoagland,
judgment of the district court is vacated and
remanded for further proceedings.
Eberle, Berlin, Kading, Turnbow & McKlveen, Chartered,
Boise, for appellant. Neil D. McFeeley argued.
Lawrence G. Wasden, Attorney General, Boise, for respondent.
Carl J. Withroe argued.
an appeal from the district court's dismissal of
Employers Resource Management Company's
("Employers") complaint for declaratory relief for
lack of standing. We reverse and remand for further
FACTUAL AND PROCEDURAL BACKGROUND
2014, the Idaho Legislature passed the Idaho Reimbursement
Incentive Act ("IRIA"). IRIA is intended to create
incentives for businesses to move to Idaho or to
significantly increase their workforces by way of a subsidy
in the form of a refundable tax credit. IRIA authorizes the
Department of Commerce to provide a business with a
refundable tax credit for up to 15 years and up to 30% of the
new revenue Idaho receives from the company's corporate
income tax, payroll taxes, and sales and use tax attributable
to a new project. I.C. § 67-4740. The benefits of IRIA
are available to both new and existing businesses in any
industry with a competitive project that adds a minimum of 20
new full-time, non-seasonal jobs in rural areas (50 new jobs
in urban areas) that pay an average wage that equals or
exceeds the wage for the county where the business is
located. I.C. § 67-4738(11), (12).
business seeking the credit must apply to the Director of the
Idaho Department of Commerce ("the Director"). I.C.
§ 67-4739. Among the requirements that the applicant
must satisfy is "proof of a community match." I.C.
§ 67-4739(1)(c). The applicable local government unit
must demonstrate "active support of the applicant,
" which may include "a contribution of money, fee
waivers, in-kind services, the provision of infrastructure,
or a combination thereof." I.C. § 67-4738(5).
Director conducts a technical review and economic impact
analysis of each application. IDAPA 28.04.01.151.07. After
the Director determines that the application meets the
requirements of IRIA, the application is forwarded to the
Economic Advisory Council ("the EAC"), a body
created under authority of Idaho Code section 67-4704. The
EAC reviews the application and may require that additional
information be provided before approving or rejecting the
application. I.C. § 67-4739. If the application is
approved, the Director enters into an agreement with the
applicant consistent with the terms of the EAC's
approval. I.C. § 67-4739(3). The EAC is given broad
discretion to approve or deny applications for the IRIA tax
2016, the EAC granted a tax credit of $6.5 million to
Paylocity, an Illinois corporation. Employers' complaint
alleged that this tax credit was a governmental subsidy to
Paylocity that would give it a competitive advantage over
Employers. Employers challenged the IRIA program as
unconstitutional, alleging that the Legislature
unconstitutionally delegated its authority over tax matters
to the Executive Branch.
moved to dismiss Employers' complaint pursuant to Idaho
Rule of Civil Procedure 12(b)(6), asserting that Employers
lacked standing because nothing done by the EAC was directed
at Employers. Ronk further contended that Employers'
allegation of competitor standing was insufficient because
there was only conjectural proof of injury. The district
court granted the motion to dismiss, holding that Employers
did not have a protectable interest in its competitive
position in the marketplace. The court also found that the
harm Employers alleged that it would suffer was
"abstract and speculative." Thus, the district
court concluded that Employers did not have standing.
Employers timely appealed from the district court's
judgment dismissing the action.
STANDARD OF REVIEW
district court dismissed Employers' complaint pursuant to
Idaho Rule of Civil Procedure 12(b)(6). In a decision issued
subsequent to the district court's decision, we clarified
that justiciability challenges, including those related to
standing, "are subject to Idaho Rule of Civil Procedure
12(b)(1) since they implicate jurisdiction." Tucker
v. State, 162 Idaho 11, 18, 394 P.3d 54, 61 (2017).
Despite the different applicable rule, our standard of review
is the same. This is because:
There is a distinction between 12(b)(1) facial
challenges and 12(b)(1) factual challenges.
Osborn v. United States, 918 F.2d 724, 729 n.6 (8th
Cir.1990); 5B [Charles Alan Wright & Arthur R. Miller,
Federal Practice and Procedure], § 1350 [3d ed.
(2004)]. Facial challenges provide the non-movant the same
protections as under a 12(b)(6) motion. Id. Factual
challenges, on the other hand, allow the court ...