§ 105.005.Recovery of Attorney's Fees and Costs in Frivolous Regulatory Action

The administrative counterpart, and it reaches conduct that never became a lawsuit.

The court reviewing a decision in a contested case under the Administrative Procedure Act may award a person — in addition to all other costs allowed by law or rule — an amount not to exceed $1 million for reasonable attorney’s fees and costs incurred in defending against a frivolous regulatory action during the contested case and judicial review.

The reach back into the contested case is the section’s most valuable feature. Fees are recoverable for the administrative proceeding itself, not only for the court review.

That matters because of where the cost lies. A contested case before an agency can run for years with hearings, experts and discovery, and by the time judicial review begins the money has already been spent.

Two conditions must be met: the person prevails on review, and there is a final determination that the regulatory action is frivolous.

"Final determination" is a higher standard than a finding in the reviewing court, and it suggests the frivolousness must be settled rather than merely held at first instance.

The award is discretionary — the court may award — where the litigation provision says a party is entitled to recover.

The $1 million ceiling matches the litigation provision, so the two halves of the chapter are calibrated alike.

Together they cover both ways a state agency can impose cost without cause: by suing, and by regulating. The litigation route has its motion requirement; this one does not, since a contested case has no equivalent stage.