OPEA v. CENTRAL SERVICES

• Decision Date: 24 September 2002
• Docket Number: No. 94,985.,94,985.
• Citation: 55 P.3d 1072,2002 OK 71
• Parties: OKLAHOMA PUBLIC EMPLOYEES ASSOCIATION, Billy D. & Earlene Melton, Paul Benefied, Oris D. Davis, Richard C. Jackson, Sr., Helen L. Jackson, Dwain E. Kelley, Roy E. Mitchell, Allena E. Harms, Kathryn Reinauer Freeman, Coleen Patterson, Betty Bennan, Linda Turner, Fredetta Jones, Richard F. Buck, Betty Jo Whinnery, Joyce Brown, Pauline V. Terry, Pamela G. Weaver, Kenneth Eugene & Bonnie J. Johnson, Plaintiffs/Appellees, v. OKLAHOMA DEPARTMENT OF CENTRAL SERVICES, Tom Jaworsky, State Purchasing Director for the Oklahoma Department of Central Services, and Oklahoma Department of Human Services, Defendents/Appellants, v. Stratton Taylor, President Pro Tempore of the Oklahoma Senate, Amicus Curiae.
• Court: Oklahoma Supreme Court

55 P.3d 1072

2002 OK 71

OKLAHOMA PUBLIC EMPLOYEES ASSOCIATION, Billy D. & Earlene Melton, Paul Benefied, Oris D. Davis, Richard C. Jackson, Sr., Helen L. Jackson, Dwain E. Kelley, Roy E. Mitchell, Allena E. Harms, Kathryn Reinauer Freeman, Coleen

Patterson, Betty Bennan, Linda Turner, Fredetta Jones, Richard F. Buck, Betty Jo Whinnery, Joyce Brown, Pauline V. Terry, Pamela G. Weaver, Kenneth Eugene & Bonnie J. Johnson, Plaintiffs/Appellees, v. OKLAHOMA DEPARTMENT OF CENTRAL SERVICES, Tom Jaworsky, State Purchasing Director for the Oklahoma Department of Central Services, and Oklahoma Department of Human Services, Defendents/Appellants, v. Stratton Taylor, President Pro Tempore of the Oklahoma Senate, Amicus Curiae.

No. 94,985.

Supreme Court of Oklahoma.

September 24, 2002.

Richard W. Freeman, Jr., Assistant General Counsel, DHS, and John J. Ely, Jr., Assistant General Counsel, DHS, Oklahoma City, OK, for Defendant/Appellant Oklahoma Department of Human Services.

Joseph Walters and John D. Stiner, McAffee & Taft, Oklahoma City, OK, for Defendants/Appellants Oklahoma Department of Central Services and Tom Jaworksky.

Richard A. Mildren and Catherine Napier, Riggs, Abney, Neal, Turpen, Orbison & Lewis, Oklahoma City, OK, for Plaintiff/Appellee Oklahoma Public Employees Association.

Stratton Taylor, President Pro Tempore of Oklahoma Senate, Oklahoma City, Oklahoma, Amicus Curiae/Appellee, Pro se.

SUMMERS, J.

¶ 1 In this case we address whether the Department of Human Services (DHS) is limited to express statutory or constitutional authority for determining its authority to enter into certain contracts. We determine that when express contractual authority is not granted DHS possesses those implied contractual powers that are necessary for the effective discharge of the duties expressly conferred upon DHS. We also conclude that Plaintiffs, as taxpayers, possess standing to challenge an alleged unlawful expenditure of public funds. We affirm the trial court's determination of taxpayer standing, but reverse the summary judgment, because it was based upon the idea that a contractual authority or power would not exist in the absence of authority expressly granting such authority. Motions by DHS, Department of Central Services, and Tom Jaworsky for oral argument are denied.

¶ 2 DHS decided to outsource the management of Robert M. Greer Center Facility (Greer) located in Enid. DHS requested that the Oklahoma Department of Central Services (Central Services) solicit offers for management contracts, whereupon Central Services selected Liberty of Oklahoma Corporation (Liberty) for the management of Greer Center. One contract was awarded to Liberty for one sixty-day period effective November 30, 1999, and an additional contract to run one year through January 31, 2001, with options to renew for nine additional one-year periods.

¶ 3 The plan for managing Greer Center included removing the state employees at those centers from the state payroll, with the successful bidder then hiring those same employees for a period of no less than six months. To implement the outsourcing DHS decided to reduce the total number of state employees at Greer, and thereby decrease the number of employees the successful bidder would be required to hire. DHS obtained permission from the Office of State Finance to offer employees a statutory benefit package for those deciding to voluntarily terminate their state employment prior to the outsourcing. See 74 O.S.Supp.1999 § 840-2.28.

¶ 4 Another facility of DHS is the Northern Oklahoma Resource Center of Enid (NORCE), located on the same property as Greer. The contract with Liberty includes a provision that "food and related supplies" will be obtained by "NORCE staff" "via utilization of state contracts"; that is, that the food and related supplies will be provided by DHS (NORCE) to Liberty. A similar contractual provision requires DHS to provide pharmaceutical and medical supplies. They are to be "procured by the Agency, by NORCE staff via utilization of state contracts and provided to the Contractor [Liberty] via the Shared Goods and Services Agreement...."

¶ 5 Plaintiffs, the Oklahoma Public Employees Association (OPEA) and several individuals, brought suit in the District Court seeking a permanent injunction against implementation of the management contract, and they also sought a declaratory judgment on the lawfulness of outsourcing and the Shared Goods and Services Agreement. Both sides sought summary judgment, and the trial court ruled in favor of Plaintiffs. The court concluded that Plaintiffs had standing, and that the outsourcing was improper because the Legislature had not specifically authorized DHS to outsource the Greer Center. The District Court stayed the effect of its decision pending an appeal. DHS and Central Services appealed and we retained the controversy.¹

I. Standing of the OPEA

¶ 6 The trial court granted summary judgment against Central Services and DHS. Summary judgment is an adjudication on the merits of the controversy. Union Oil Co. of California v. Board of Equalization of Beckham County, 1996 OK 40, 913 P.2d 1330, 1333. It is appropriate "where there is no dispute as to the material facts or as to the inferences to be drawn from undisputed facts, and the law favors the movant's claim or liability-defeating defense." Harkrider v. Posey, 2000 OK 94, ¶ 8, 24 P.3d 821, 824-825. When the facts are not in dispute a plaintiff's standing may adjudicated on a motion for summary judgment. Beville v. Curry, 2001 OK 1, ¶ 9, 39 P.3d 754, 758; Herring v. State ex rel. Oklahoma Tax Commission, 1995 OK 28, 894 P.2d 1074, 1076. No facts are in dispute relevant to the standing of the OPEA.

¶ 7 DHS and Central Services argue that OPEA and the individual plaintiffs lack standing to bring the suit. OPEA includes members who are taxpayer/residents and employees at the Greer Center. We address first the standing of the OPEA.

¶ 8 OPEA argues that it has standing if Respondents violated state statutes or public agency rules, because such violations are injuries to the State and its citizens. OPEA further argues that a taxpayer has standing to challenge the illegal creation of a public debt or the illegal expenditure of public funds, and that the proposed action of the Defendants created such debt and expenditure. OPEA further asserts that its members are citizens and taxpayers. OPEA cites Independent School Dist. No. 9 v. Glass, 1982 OK 2, 639 P.2d 1233, 1237, for the proposition that "A violation of a state statute is an injury to the State and its citizens."² OPEA states that its members are citizens, that a violation of a statute has occurred, and it thus has standing.

¶ 9 We have said that an association possesses standing to seek relief on behalf of its members. Independent Finance Institute v. Clark, 1999 OK 43, n. 7, 990 P.2d 845, 849. In Independent Finance Institute we relied upon Private Truck Council of America, Inc., v. Oklahoma Tax Commission, 1990 OK 54, ¶ 31, 806 P.2d 598, 607, vacated and remanded on other grounds by National Private Truck Council, Inc. v. Oklahoma Tax Commission, 501 U.S. 1247, 111 S.Ct. 2882, 115 L.Ed.2d 1048 (1991), and we explained that an association's standing was based, in part, upon an injury to a right possessed by a member of the association:

The Supreme Court of the United States "has recognized that an association may have standing to assert the claims of its members even where it has suffered no injury from the challenged activity." In determining whether an association has standing, the United States Supreme Court has:

recognized that an association has standing to bring suit on behalf of its members when: (a) its members would otherwise have standing to sue in their own right; (b) the interests it seeks to protect are germane to the organization's purpose; and (c) neither the claim asserted nor the relief requested requires the participation of individual members in the lawsuit.

Private Truck Council of America, Inc., 1990 OK 54, 806 P.2d at 607.

Thus an association's standing is based upon members of that association possessing standing to sue in their own right.³ Do members of the OPEA possess standing? We conclude that they do. ¶ 10 The standing of the OPEA is based in this case on the status of its members as taxpayers challenging an alleged illegal expenditure of public funds. Four years before Statehood this Court examined opinions in different jurisdictions, and concluded that a taxpayer should be allowed to seek relief in a court of equity to challenge illegal taxation or illegal expenditure of public funds. Kellogg v. School Dist. No. 10 of Comanche County, 1903 OK 81, 74 P. 110, 116. We have followed this conclusion in subsequent years. See, e.g., Thompson v. Haskell, 1909 OK 140, 102 P. 700, 704; Airy v. Thompson, 1931 OK 770, 6 P.2d 445, 447-448; Payne v. Jones, 1944 OK 86, 146 P.2d 113, 117; Brandon v. Ashworth, 1998 OK 20, 955 P.2d 233, 235; Quinn v. City of Tulsa, 1989 OK 112, 777 P.2d 1331, 1340. Thus, a taxpayer possesses standing to seek equitable relief when alleging that a violation of a statute will result in an illegal expenditure of public funds or the imposition of an illegal tax.

¶ 11 DHS states that taxpayers may bring suit against a municipal corporation, but not an agency of State government. This Court addressed this argument at length in Vette v. Childers, 1924 OK 190, 228 P. 145, where we explained that the principle in Kellogg applied to taxpayers seeking to challenge the unlawful or unconstitutional expenditure of state funds.

Thompson et al. v. Haskell, Governor, supra, [1909 OK 140, 24 Okla. 70, 102 P. 700] therefore, does not support the contention of the defendants in error, and the rule announced in the Kellogg Case has never been overruled.... We are of the opinion that the correct rule is announced in Fergus v. Russel, 270 Ill. 304, 110 N.E. 130, Ann.Cas. 1916B, 1120, in the first

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