Breck v. Janklow

• Decision Date: 06 March 2001
• Docket Number: No. 21832.,21832.
• Citation: 2001 SD 28,623 N.W.2d 449
• Parties: Betty E. BRECK, Plaintiff and Appellant, v. Governor William J. JANKLOW and Members of the South Dakota State Legislature 75th Special Session, Defendants and Appellees, and South Dakota State Cement Plant Commission, d/b/a Dacotah Cement, Intervenor and Appellee.
• Court: South Dakota Supreme Court

623 N.W.2d 449

2001 SD 28

Betty E. BRECK, Plaintiff and Appellant, v. Governor William J. JANKLOW and Members of the South Dakota State Legislature 75th Special Session, Defendants and Appellees, and South Dakota State Cement Plant Commission, d/b/a Dacotah Cement, Intervenor and Appellee.

No. 21832.

Supreme Court of South Dakota.

Considered on Briefs on February 28, 2001.

Decided March 6, 2001.

Betty E. Breck, Groton, SD, Pro se.

Roger W. Damgaard of Woods, Fuller, Shultz & Smith, Sioux Falls, SD, Attorneys for defendant and appellee Governor William J. Janklow.

Lawrence E. Long, Chief Deputy Attorney General and Jeffrey P. Hallem, Assistant Attorney General, Pierre, SD, Attorneys for defendants and appellees Members of the SD State Legislature 75th Special Session.

James S. Nelson of Gunderson, Palmer, Goodsell, attorneys for intervenor and appellee South Dakota State and Nelson, Cement Plant Commission, Rapid City, SD, d/b/a Dacotah Cement.

GILBERTSON, Justice.

[¶ 1.] Betty E. Breck appeals a judgment dismissing various claims challenging the sale of the South Dakota State Cement Plant. We affirm.

FACTS

[¶ 2.] Since the early 1920s, the State of South Dakota has owned and operated its own cement plant in the Rapid City, South Dakota area. The State's ownership of a normally private commercial enterprise can be attributed to the lack of an in-state cement producer in the early-1900s and the monopolistic prices being charged for the product during the post-World War I era of heavy infrastructure development. See Reeves, Inc. v. Stake, 447 U.S. 429, 431, 100 S.Ct. 2271, 2275, 65 L.Ed.2d 244, 247, n. 1 (1980)

. In simple terms, because the cement¹ needs of the State and its citizens were not being met in an economic fashion by private enterprise, the State went into the business itself.²

[¶ 3.] The Cement Plant has functioned over the years with varying degrees of success. It has supplied the cement needs of the State and has also operated as a commercial venture for profit by selling cement to private customers both in and out-of-state. In the last several years, during the country's unprecedented economic expansion and a period of heavy construction, the Cement Plant has returned average profits to the State Treasury of $12,000,000 per year. However, despite these recent profits and consistent with modern business practices, the Governor and the Cement Plant's governing commission³ and management have been involved in long-term strategic planning regarding the future operation of the Plant. Based upon this review, these entities have concluded that changing market forces and the slowing economy as well as mounting concentration and competition in the cement industry pose significant threats to the continued viability and profitability of the Cement Plant.

[¶ 4.] In response to these threats and over the course of the last year, the Governor and Cement Plant Commission and management began exploring the possibility of selling the Cement Plant and investing the proceeds in a manner providing a stable revenue stream for State government. After an appraisal of assets, contacts with suitable purchasers and the submission of proposals from several potential buyers, a sales agreement in principle was concluded on December 23, 2000 with Grupos Cementos de Chihuahua/GCC Dacotah, Inc.(GCC).

[¶ 5.] The agreement for sale of the Cement Plant was made contingent on approval and ratification by the South Dakota Legislature by December 31, 2000. Thus, it was necessary for the Governor to call the Legislature into a special session that began on December 28, 2000. During the course of that two-day session, the Legislature passed a series of five bills and resolutions necessary to ratify various aspects of GCC's purchase agreement for the Cement Plant.

[¶ 6.] Prior to the special legislative session, the plaintiff here, Betty E. Breck, pro se, of Groton, South Dakota, brought an action for declaratory and injunctive relief against the Governor and Legislators of the special session. Breck sought a declaratory judgment that the sale of the Cement Plant was unconstitutional and illegal on various grounds and a restraining order preventing the consummation of the sale and its closing on February 28, 2001. Subsequently, the Cement Plant Commission was allowed to intervene in the action and a trial to the court was held on February 2. At the close of that trial, the trial court entered oral findings of fact, conclusions of law and an oral decision denying Breck all claims for relief. The trial court's oral decision was subsequently incorporated by reference in its written findings of fact and conclusions of law and a written judgment was entered on February 9. Breck's appeal followed. The defendants then filed a motion for expedited appeal proceedings and an expedited briefing schedule which this Court granted and approved in an order entered February 15. Additional facts will be set forth as they become pertinent to the issues in this appeal.

ISSUE ONE

[¶ 7.] Is the sale of the Cement Plant prohibited by the South Dakota Constitution?

[¶ 8.] Preparatory to the Legislature's enactment of statutes initiating the State's operation of the Cement Plant in 1919, the South Dakota electorate approved a constitutional amendment in 1918 that authorized the State's entry into the cement business. The amendment is contained at SD ConstArt XIII, § 10 and provides:

The manufacture, distribution and sale of cement and cement products are hereby declared to be works of public necessity and importance in which the state may engage, and suitable laws may be enacted by the Legislature to empower the state to acquire, by purchase or appropriation, all lands, easements, rights of way, tracks, structures, equipment, cars, motive power, implements, facilities, instrumentalities and material, incident or necessary to carry the provisions of this section into effect: provided, however, that no expenditure of money for the purposes enumerated in this section shall be made, except upon a vote of two-thirds of the members elect of each branch of the Legislature. (emphasis added).

Breck argues the word "necessity" in this provision prohibits the Legislature from enacting any laws to sell the Cement Plant. We disagree. [¶ 9.] Absent any constitutional language prohibiting the Legislature from authorizing the sale of the Cement Plant, we hold that it was fully empowered to do so. First, it is settled that, unless prohibited by some constitutional provision, a state may dispose of its property just as any citizen may dispose of his property. See Herr v. Rudolf, 75 N.D. 91, 25 N.W.2d 916, 919 (N.D.1947). Accord, Adkins v. Kalter, 171 Ark. 1111, 287 S.W. 388, 389 (1926); Peters v. Twogood, 167 So. 206, 208 (La.Ct.App.1936); State v. Hubbard, 203 Minn. 111, 280 N.W. 9, 12 (1938). Second, as this Court has repeatedly held, our constitutional provisions are not grants of power to the Legislature, but are instead limitations on legislative authority and, therefore, legislative acts are presumed to be constitutional. Poppen v. Walker, 520 N.W.2d 238, 241 (S.D.1994). As was more fully explained in Wyatt v. Kundert, 375 N.W.2d 186, 190-191 (S.D.1985):

The South Dakota Constitution, unlike the Constitution of the United States, does not constitute a grant of legislative power. Instead, our constitution is but a limitation upon the legislative power and the legislature may exercise that power in any manner not expressly or inferentially proscribed by the federal or state constitutions. Thus, except as limited by the state and federal constitutions, the legislative power of the state legislature is unlimited. "What the representatives of the people have not been forbidden to do by the organic law, that they may do." "Consequently, in determining whether an act is unconstitutional we search the state and federal constitutions for provisions which prohibit its enactment rather than for grants of such power." A presumption in favor of constitutionality is also accorded any legislative act and that presumption is not overcome until the act is clearly and unmistakably shown to be unconstitutional and no reasonable doubt exists that it violates constitutional principles. (citations omitted).

[¶ 10.] This Court cannot read the word "necessity" in Article XIII, § 10 in isolation and ignore its use within the phrase "public necessity." (emphasis added). This violates settled rules of constitutional construction. See South Dakota Bd. of Regents v. Meierhenry, 351 N.W.2d 450, 452 (S.D.1984)

(constitutional provision must be read giving full effect to all of its parts); Kneip v. Herseth, 87 S.D. 642, 659, 214 N.W.2d 93, 102 (1974) (in construing constitutional provision, no wordage should be found surplus and no provision can be left without meaning). The phrase "public necessity" has a particularized meaning in the context of a declaration by a public entity. A "[p]ublic necessity is a substantial or obvious community need in light of attendant circumstances. It is a somewhat nebulous concept which requires more than mere convenience but less than absolute or indispensable need." Dept. of Fin. Instit. v. Colonial Bank & Trust Co., 176 Ind.App. 368, 375 N.E.2d 285, 288 (Ind.Ct. App.1978) (emphasis added). Accord Miller Transporters v. Public Serv. Com'n, 518 So.2d 1018, 1019 (La.1988) (to be a "public necessity" a service does not have to be absolutely indispensable); State Banking Bd. v. First State Bank, 618 S.W.2d 905, 908 (Tex.Civ.App.1981) ("public necessity" is a substantial or obvious community need in light of attendant circumstances as distinguished from a mere convenience on the one hand and an absolute or indispensable need on the other).⁴ As is clear from this definition, nothing in Article XIII, § 10's use of the phrase "public necessity" should be construed to mandate the State's ongoing participation in the cement business as an absolute or...