Idaho House accuses Gov. Little of undermining Legislature in ITD property lawsuit
The Idaho House has stepped into a feud between Idaho Gov. Brad Little and Attorney General Raúl Labrador, accusing the executive branch of colluding with private developers to defend the planned sale of state property in Boise and hampering the state’s legal defense to undermine laws passed by the Legislature.
The rift between branches of Idaho’s government stems from developers’ lawsuit against the state over its agreement to purchase the Idaho Transportation Department headquarters on State Street — a $52 million sale that the Legislature nixed during this year’s session.
A dispute over the legal approach of the court case now pits portions of the executive branch, which moved to sell the property at the Legislature’s direction, against some of those same lawmakers who changed their minds two years later and sought to retain it. The heated fissure among state officials hinges on a difference of legal opinion: whether to defend the constitutionality of Idaho budget laws that revoked the ITD campus sale. While Labrador opted to defend the Legislature’s laws, Little selected an outside attorney who argued they may be unconstitutional — a move Labrador and the House have characterized as a failure to stand by state laws.
“This case is an effort by private interests, aligned with certain elements in the executive branch, to interfere with the Legislature’s ability to set fiscal policy for the state,” attorneys Mark Hilty and Daniel Bower, of Nampa, wrote on behalf of House Speaker Mike Moyle, R-Star, and the Idaho House in filings submitted Wednesday.
Idaho House suggests defense attorney is helping plaintiffs
Developers Hawkins Cos., The Pacific Cos. and FJ Management Inc. sued the state in April. Their lawsuit argued the Legislature’s reversal of the property sale — which had been sent out to bid and finalized, but not contractually signed by the state — through a budget bill violates the single-subject rule of the Idaho Constitution. Moyle and the House intervened in the lawsuit soon afterward, and oral arguments before the Idaho Supreme Court are scheduled for August.
Labrador’s office, which is tasked with representing the state, its agencies and boards in court, initially responded in court on behalf of Idaho and the Board of Examiners, a defendant in the complaint. The attorney general’s office argued that the state decided against selling the property and could not be forced to sell, and that the court does not have jurisdiction to rule on whether the bill was constitutional.
Little’s office said Labrador’s legal arguments were not approved by him or Secretary of State Phil McGrane, two members of the Board of Examiners. Labrador’s office contended staff members had communicated about the planned legal arguments in the days leading up to the filing, which had to be submitted on two weeks’ notice.
Two days after Labrador’s filing, Little designated Joan Callahan, an attorney with Boise firm Naylor & Hales, to represent ITD and the Department of Administration — the two agencies sued — after consulting with Labrador, according to a letter from Little.
Callahan’s argument was different from Labrador’s. She argued that the recent budget bills conflict with general state property law, which have put the two agencies in a difficult position. Trying to revoke the campus sale in a budget bill was a “hallmark” of a violation of the state constitution’s requirement that bills have a single subject, she wrote.
The House’s attorneys wrote Wednesday that Callahan’s response “cannot in any way be characterized as a defense” against the lawsuit.
“The House is disturbed by what appears to be attempts in the executive branch to deprive the state of a defense in this case,” the attorneys wrote.
“This is the second case to come before the court in less than a year that the House suspects is a feigned or collusive action involving parties in the executive branch” that “offer no real defense,” the attorneys added, referring to another lawsuit from the Idaho State Athletic Commission.
Labrador’s office accused Little of not doing his job in a statement Thursday, arguing that their disagreements over “policy positions” led Little to select an outside attorney who has written that two of the Legislature’s laws “run afoul” of the state constitution.
“The public record is clear: The governor did not allow our office to defend Idaho’s laws and the two state agencies being sued by Hawkins,”, spokesperson Dan Estes said by email. “Regardless of the governor’s reasons, the attorney general refuses to play games with this litigation and will continue to defend Idaho’s laws in this case on behalf of the state.”
Emily Callihan, a spokesperson for Little, told the Statesman by email that the executive agencies’ legal positions will be elaborated in future filings.
“In seeking to ensure the Idaho Constitution is followed, the agencies filed additional briefs asking the court to address the constitutional questions that arose in this case,” Callihan wrote.
Callahan, the outside lawyer, did not immediately respond to a request for comment.
House: Little had ‘preference’ to sell property
The House’s attorneys argued that the state’s executive branch failed to properly declare the ITD campus “surplus,” which would allow it to be sold, and suggested Little had an “apparent preference” to “get rid of the property.”
The “driving force” behind the sale “had everything to do with interest among some to place public property in private hands,” they wrote. They added that a flood of the building in 2022, which was estimated to cost $3 million to repair, was a “pretext” and not a legitimate reason to move.
Lawmakers on the state’s budget committee expected the property to sell for $80 million to $100 million, according to the filing. It was appraised at $38.6 million two years ago — 35% less than the agreed upon sale price.
The House’s attorneys also refuted the lawsuit’s contentions that the budget bills were unconstitutional and argued that the Department of Administration could have signed the final contract with the developers this spring, which would have prevented lawmakers from intervening.
“The failure of a real estate deal to go through is a disappointment, not an injury,” the lawyers wrote.
The lawyers posited that if the court declares the canceling of the sale unconstitutional, ITD’s $1.4 billion budget should also be thrown out.
That prospect concerned Little, who pushed for enhanced road and bridge funding this year, and kept him from vetoing the bill. He didn’t sign the budget bill but did not veto it either.
“A veto might have jeopardized two of the big things I talked about in my State of the State,” Little said referring to road enhancements in a news conference, a video of which was provided by Idaho Reports. He said he would have preferred more money for the ITD building, but that the state should have followed through after the sale was negotiated in “good faith.”
This story was originally published May 30, 2024 at 6:23 PM.
