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District court entitled to review statutory argument even though brought up for first time on appeal

The Supreme Court of Montana, in a June 25 decision, upheld a lower court's reversal of a disciplinary decision by the state's Board of Plumbers, holding that a disciplined licensee was entitled to raise a defense at the appellate stage arguing that he had not actually violated state plumbing law because of a statutory exception for permitting requirements.

(Hill v. Montana State Board of Plumbing)

Montana plumber Jeffrey Hill was working as a subcontractor for a firm run by a man named Mark Murphy when, in 2017, Murphy’s clients sued, claiming that Murphy had performed work for which he was not licensed, and had charged for more work than he had actually done.

This led to trouble for him, as, after reviewing the allegations, the Montana Board of Plumbers brought a license complaint against Hill, claiming that he had failed to obtain proper permits in his subcontracting work for the client. In December of that year, the board held that Hill had, in fact, failed to obtain the proper permits for his work, and it placed his license on probation.

Hill appealed, and a state district court reversed the board’s decision. The board appealed that decision, and the case went up to Montana’s Supreme Court, which issued a decision in favor of Hill.

In his defense on appeal, Hill had argued that the un-permitted work for which he was charged actually fell under a “minor repair” exception for plumbing permit requirements in Montana. However, the board claimed that Hill had failed to raise this defense during his initial board proceedings, and improperly raised it for the first time before the district court, thus foreclosing that defense on appeal.

This claim did not succeed, with the high court finding that the lower court was, in fact, obligated to determine whether the board had charged Hill for a non-existent offense. “While we generally will not consider issues raised for the first time on appeal,” Justice Ingrid Gustafson wrote for the court, “the Board cannot credibly assert [that] the District Court was not permitted to consider the statutory criteria which sets forth when obtaining a permit is required and when it is not required, or to consider the agency’s application of facts to the statutory criteria.”

“The complaint initiated by the board against Hill asserts he engaged in unprofessional conduct by failing to obtain a plumbing permit as required by [Montana law]. The very next statutory section . . . sets forth exceptions to the requirement to obtain a permit.”

“Clearly, these statutes are meant to be considered together to determine if a licensed plumber was required to obtain a permit for his services. The District Court would be remiss in its review if it did not consider the provisions of both in determining whether the agency correctly applied the law in reaching its decision . . . In its review, the District Court was not required to leave its common sense at the door.”

The lower court had not abused its discretion by overturning a factual finding of the board, but had, instead, concluded that the board’s application of the law was unreasonable and an abuse of its discretion, the state Supreme Court held in affirming the district court’s reversal decision.