UPDATES & ANALYSIS

Iowa Supreme Court makes a call for the State in ‘Field of Dreams’ film case

by Rox Laird | January 22, 2018

The Iowa Economic Development Authority had the authority to claw back tax credits approved for a documentary film about Iowa’s mystical Field of Dreams baseball story, the Iowa Supreme Court said in a ruling handed down Jan. 19.

The Economic Development Authority revoked economic-development tax credits it had approved for Ghost Player, a film company making a documentary called “Field of Dreams Ghost Players,” after a State investigation concluded that financial support for the project had been fabricated to inflate the value of credits by $250,000.

Ghost Player sued, and the Polk County District Court ruled in its favor, saying the State was precluded from revoking the tax credits because the Economic Development Authority’s initial approval of the credits was a final agency decision.

The Supreme Court, in a unanimous decision by Justice Brent Appel, disagreed and overturned the lower court.

The issue is a matter of administrative procedure: Was the Economic Development Authority precluded, as a matter of law, from reversing its earlier approval and clawing back the tax credits? Ghost Player argued it was, because the original approval of tax credits was a final agency decision. The State argued that its action approving the credits was an administrative, not an adjudicative, process, and thus subject to reconsideration.

In siding with the State, the Supreme Court cited two of its own precedents – Bennett v. MC and George v. Zinser – which tied the legal doctrine of claim preclusion to judicial-style actions that have procedural rights for applicants and an adversarial process, as opposed to administrative actions that have neither.

Justice Appel said the Iowa Supreme Court has not used a bright-line rule in these cases, but the Iowa statute and the administrative rules regulating the film tax credits in this case clearly show the agency’s original action was an administrative, not adjudicative, proceeding.

“Adjudications are ordinarily a three-cornered proposition, with contesting parties jousting before a passive third-party tribunal,” Appel wrote. “Here, the parties were binary. There were no adversaries making arguments and proving their cases before a third party as is generally required for adjudication. The IDED staff were acting more like tax accountants than adjudicators.”

Thus, in this case, the umpire’s call goes to the State.

Tags: Iowa Supreme Court 2017-18, Iowa Supreme Court Opinions