Barrett v. Greitens

• Decision Date: 19 December 2017
• Docket Number: WD 80837
• Citation: 542 S.W.3d 370
• Parties: Michael K. BARRETT, et al., Appellants, v. Eric GREITENS, Respondent.
• Court: Missouri Court of Appeals

542 S.W.3d 370

Michael K. BARRETT, et al., Appellants,

v.Eric GREITENS, Respondent.

WD 80837

Missouri Court of Appeals, Western District.

Opinion filed: December 19, 2017

Application for Transfer to Supreme Court Denied January 30, 2018

Application for Transfer to Supreme Court Denied April 3, 2018

John G. Mermelstein, Columbia, for Appellants.

Dean J. Sauer, for Respondent.

Michael C. Martinich-Sauter, Co-counsel for Respondent.

Before Division Three: Lisa White Hardwick, Presiding Judge, Victor C. Howard, Judge, and Alok Ahuja, Judge

VICTOR C. HOWARD, JUDGE

The State Public Defender¹ appeals the trial court’s grant of judgment on the pleadings in favor of the Missouri Governor² on its claims that the Governor’s withholding of fiscal year 2017 funds appropriated by the General Assembly to the Public Defender violated the Missouri Constitution. The judgment is affirmed in part; the appeal is dismissed in part.

Factual and Procedural Background

The Public Defender’s pleadings, which are taken as true for purposes of this appeal, asserted that for fiscal year 2017, which began July 1, 2016, and ended June 30, 2017, the General Assembly appropriated $41,497,581 to the Public Defender. This sum represented approximately a $4.5 million increase over the appropriation received in fiscal year 2016. In July 2016, the Governor withheld $3.5 million of the Public Defender’s appropriation. The State of Missouri’s official financial system, SAM II, indicated that the Public Defender was scheduled to receive $1 million of the $4.5 million increase in four equal quarterly installments of $250,000. The Governor issued a proclamation to the General Assembly that the withholding was made pursuant to his authority to control the rate of expenditure provided in article IV, section 27 of the Missouri Constitution. Article IV, section 27.1 provides:

The governor may control the rate at which any appropriation is expended during the period of the appropriation by allotment and may reduce the expenditures of the state or any of its agencies below their appropriations whenever the actual revenues are less than the revenue estimates upon which the appropriations were based. The governor shall not reduce any appropriation for the payment of principle and interest on the public debt.

The withholding represented approximately 1% of the state general revenue appropriated to all state departments for fiscal year 2017 but 8.5% of the budget of the Public Defender.

The Public Defender filed its petition for declaratory judgment and injunctive relief against the Governor in July 2016 and its first amended petition in August 2016 asserting four claims that the withholding violated the Missouri Constitution. Count I asserted that the withholding violated the expenditure reduction provision of article IV, section 27 because the Public Defender is not a state agency within the meaning of that provision. Count II asserted that the withholding violated the expenditure reduction provision of article IV, section 27 because the withholding did not apply to the state as a whole. Count III asserted that the withholding violated the expenditure rate control provision of article IV, section 27 because it constituted a permanent expenditure reduction, not a temporary rate control. Finally, Count IV alleged that the withholding violated the separation of powers doctrine in article II, section I because it allowed the executive branch of government to impede the proper functioning of an independent department of the judicial branch.

The Governor moved to dismiss all counts on ripeness grounds arguing that fiscal year 2017 "has barely begun" and at this point, it could not be known whether the Governor is exercising his constitutional authority to control the rate of appropriation or whether they are being reduced.

In September 2016, the trial court dismissed Count III based on ripeness. It denied the motion as to Counts I, II, and IV.

The Governor filed a renewed motion to dismiss based on ripeness or, in the alternative, motion for judgment on the pleadings in October 2016. The trial court granted the motion and entered judgment on the pleadings in favor of the Governor on Counts I, II, and IV. It found that the Public Defender is a "state agency" for purposes of article IV, section 27 and that the provision does not require the reduction of expenditures of the state as a whole. Finally, it found that the Public Defender does not exercise judicial power; therefore, it cannot claim that a restriction in its funding by the Governor (the executive) constitutes a violation of the separation of powers clause. This appeal by the Public Defender followed.

Standard of Review

The appellate court reviews the trial court’s grant of a motion to dismiss or a motion for judgment on the pleadings de novo. Mo. Mun. League v. State , 489 S.W.3d 765, 767 (Mo. banc 2016) ; Claudia Lee & Assocs. v. Kansas City, Mo. Bd. of Zoning Adjustment , 489 S.W.3d 802, 809 (Mo. App. W.D. 2016). For purposes of both motions, the well-pleaded facts of the nonmoving party are treated as admitted. Eaton v. Mallinckrodt, Inc. , 224 S.W.3d 596, 599 (Mo. banc 2007) ; Claudia Lee & Assocs. , 489 S.W.3d at 809. "In determining whether a motion to dismiss should have been granted, the appellate court reviews the petition, in an almost academic manner, to determine if the facts alleged meet the elements of a recognized cause of action, or of a cause that might be adopted in that case." Mo. Mun. League , 489 S.W.3d at 767 (internal quotes and citation omitted). The position of a party moving for judgment on the pleadings is like that of a movant on a motion to dismiss; i.e., assuming the pleaded facts to be true, the facts are, nevertheless insufficient as a matter of law. Id. at 767-68. A motion for judgment on the pleadings is properly granted if, from the face of the pleadings, the moving party is entitled to judgment as a matter of law. Id. at 768. The reviewing court is primarily concerned with the correctness of the result, not the route taken by the trial court to reach it; therefore, the trial court’s judgment will be affirmed if it is correct on any ground supported by the record regardless of whether the trial court relied on that ground. Mo. Soybean Ass'n v. Mo. Clean Water Comm'n , 102 S.W.3d 10, 22 (Mo. banc 2003).

The Public Defender raises four points on appeal challenging the trial court’s judgment on the pleadings on Counts I, II, and IV and its dismissal of Count III as not ripe. In point I, the Public Defender argues that the Governor’s withholding under article IV, section 27 violated the separation of powers doctrine in article II, section I because it is an independent department of the judicial branch under section 600.019.1, RSMo 2016, and the withholding targeted it for substantially disproportionate reductions and impermissibly impeded its proper functioning. In points II and III, the Public Defender contends that it is not an agency within the meaning of the expenditure reduction provision of article IV, section 27 and the withholding violated that provision because it did not apply to the state as a whole. Finally, in point IV, the Public Defender contends that the trial court erred in dismissing Count III as not ripe.

Ripeness

Before addressing the merits, the issue of ripeness is examined. "A declaratory judgment is not a general panacea for all real and imaginary legal ills." Mo. Soybean Ass'n , 102 S.W.3d at 25. "It is not available to adjudicate hypothetical or speculative situations that may never come to pass." Id. A trial court, therefore, cannot render a declaratory judgment unless the petition presents a controversy ripe for judicial determination. Id. at 26.

In this case, the Governor withheld $3.5 million of the Public Defender’s appropriation under his authority in article IV, section 27.1 of the Missouri Constitution. The provision contains two fiscal control mechanisms. It "broadly authorizes the governor to control the rate at which any appropriation is expended and to balance the state’s budget by reducing expenditures in the event that state revenues fall below the revenue expectations." State ex rel. Liberty Sch. Dist. v. Holden , 121 S.W.3d 232, 233 (Mo. banc 2003).

In cases involving the Governor’s right to reduce state expenditures under article IV, section 27, "the question of the propriety of the Governor’s order to reduce state expenditures is ripe for adjudication only where there is a factual showing that actual state revenues have fallen below revenue estimates and the Governor has reduced the expenditures below the amount appropriated." State ex rel. Sikeston R-VI Sch. Dist. v. Ashcroft , 828 S.W.2d 372, 375-76 (Mo. banc 1992). In Schweich v. Nixon , 408 S.W.3d 769 (Mo. banc 2013), the Missouri Supreme Court determined that the Missouri State Auditor’s declaratory judgment action filed in August 2011 challenging the Governor’s authority under article IV, section 27 to withhold $300,000 of the appropriation for the Auditor’s office for fiscal year 2012 was not ripe. Id. at 779. It held that the Auditor’s challenge to the Governor’s authority to reduce expenditures of state agencies below their appropriations brought prior to the end of the fiscal year was premature. Id. The Court explained, "Until the end of that year it could not be determined whether the Governor merely was controlling the rate of appropriations or was withholding a portion of the Auditor’s appropriation entirely nor could it be determined whether the constitutional requirements for permitting a permanent withhold were met." Id. at 772. See also Id. at 779.

Schweich controls in this case. While the Governor indicated in his proclamation to the General Assembly that the withholding was made pursuant to his authority in article IV, section 27 to control the rate of expenditures, the Public Defender framed Counts I, II, and IV of its declaratory judgment action as a challenge to the Governor’s...