City of Kan. City v. Chastain

• Decision Date: 04 February 2014
• Docket Number: No. SC 93195.,SC 93195.
• Citation: 420 S.W.3d 550
• Court: Missouri Supreme Court
• Parties: CITY OF KANSAS CITY, MISSOURI, Respondent, v. Karen CHASTAIN, et al., Appellants.

420 S.W.3d 550

CITY OF KANSAS CITY, MISSOURI, Respondent,

v.Karen CHASTAIN, et al., Appellants.

No. SC 93195.

Supreme Court of Missouri, En Banc.

Feb. 4, 2014.

Jeffrey Jay Carey, Carey Law Firm, Lee's Summit, Sarah Baxter, City Attorney's Office, Kansas City, for Respondent.

Joseph D. “Chip” Sheppard III, Christiaan D. Horton, Austin J. Preston, Carnahan, Evans, Cantwell & Brown PC, Springfield, for Maranda Reynolds d/b/a/ Springfield Cannabis Regulation, Show–Me Cannabis Regulation Inc. and American Victory Coalition Inc., which filed a brief as friends of the Court.

RICHARD B. TEITELMAN, Judge.

Karen Chastain and additional members of a “Committee of Petitioners” (collectively, “Chastain”) appeal a judgment declaring that a proposed ordinance initiative petition violates article III, section 51 of the Missouri Constitution because the initiative was used for the appropriation of money. Chastain also appeals the dismissal of her counterclaim for mandamus.

The proposed ordinance does not appropriate money and, therefore, does not violate article III, section 51 of the Missouri Constitution. The judgment is reversed, and the case is remanded.

Facts

Kansas City is a constitutional charter city that permits citizens to propose ordinances via initiative petition. See Chastain v. City of Kansas City, 289 S.W.3d 759, 761 (Mo.App.2009). In July 2011, Chastain submitted to the city clerk an initiative petition seeking adoption of an ordinance that would impose additional sales taxes “for the benefit of the city.”

The preamble to the proposed ordinance states that the purpose of the sales taxes is to construct a light rail system. The proposed ballot title suggests using the revenues to construct infrastructure for a light rail system, a street car, electric shuttle buses and bicycles. The only action mandated by the proposed ordinance is the imposition of two taxes: (1) a 1/4 of one percent sales tax for capital improvements as authorized in sections 94.575 to 95.577 and (2) a 1/8 of one percent sales tax for transportation purposes as authorized in sections 94.600 to 94.655.¹ Although the taxes are imposed for “capital improvements” and “transportation purposes,” no particular project is mandated.

The proposed ordinance was referred to the city council's transportation and infrastructure committee. The committee held a public hearing and sent the ordinance to the city council with a recommendation that the council not pass the ordinance. The city council determined that the city was not required to place the election before the voters. Chastain filed a request with the city clerk to place the ordinance on the ballot. The city declined.

The city filed a petition for a declaratory judgment seeking a declaration that the proposed ordinance was facially unconstitutional pursuant to article III, section 51 of the Missouri Constitution because the ordinance failed to provide the revenue necessary to construct the transportation system. Chastain filed a counterclaim seeking mandamus to require the city to put the proposed ordinance to a public vote.

The trial court entered an order sustaining the city's motion to dismiss Chastain's counterclaim. Subsequently, the trial court entered final judgment for the city on grounds that the proposed ordinance was “an unconstitutional appropriation ordinance under Article III, section 51 of the Missouri Constitution.” The judgment then concluded that the “City is therefore not obligated to place the facially unconstitutional ordinance before the voters, and is legally justified in refusing to place said ordinance before the voters.”

Chastain raises five points on appeal: (1) that the trial court erred in concluding that the ordinance was facially unconstitutional because insufficient revenue is not grounds for pre-election review of an initiative petition; (2) that the trial court erred in declaring the proposed ordinance to be a facially unconstitutional appropriation ordinance; (3) that the trial court lacked subject matter jurisdiction because the city failed to prove that it lacked an adequate remedy at law; (4) that the trial court erred in dismissing her counterclaim for mandamus because the ordinance was not facially unconstitutional; and (5) that the trial court erred in the admission of certain evidence at the evidentiary hearing.

Standard of Review

“The standard of review in a declaratory judgment case is the same as in any other court-tried case.” Levinson v. State, 104 S.W.3d 409, 411 (Mo. banc 2003). “The judgment will be affirmed unless there is no substantial evidence to support it, it is against the weight of the evidence, or it erroneously declares or applies the law.” Id. In this case, the dispositive issue is whether the proposed ordinances violate the Missouri Constitution. This is a legal question subject to de novo review. See, Pearson v. Koster, 367 S.W.3d 36, 43 (Mo. banc 2012)(legal question in a court-tried case is subject to de novo review).

Pre-election review of initiative petitions

Chastain's first point asserts the trial court erred by conducting pre-election review of the facial constitutionality of the proposed ordinance. This point fails because Missouri law authorizes courts to conduct pre-election review of the facial constitutionality of an initiative petition. See Missourians to Protect the Initiative Process v. Blunt, 799 S.W.2d 824, 828 (Mo. banc 1990); Kansas City v. McGee, 364 Mo. 896, 269 S.W.2d 662, 664 (1954)(courts may review a law to be enacted by initiative to determine its constitutionality). The idea underlying this rule is that pre-election review of the facial constitutionality of an initiative petition is warranted given the “cost and energy expended relating to elections” and to avoid the “public confusion generated by avoiding a speedy resolution of a question....” Blunt, 799 S.W.2d at 828. The circuit court had the authority to engage in pre-election review of the facial constitutionality of the initiative petition.

Availability of declaratory relief

Chastain asserts that the trial court lacked subject matter jurisdiction to consider the city's petition for declaratory judgment because the city failed to prove that it lacked an adequate remedy at law. There is no doubt that the trial court had subject matter jurisdiction. See J.C.W. ex rel. Webb v. Wyciskalla, 275 S.W.3d 249, 253 (Mo. banc 2009)(subject matter jurisdiction is a matter of “the court's authority to render a judgment in a particular category of case”). Circuit courts have subject matter jurisdiction to enter declaratory judgments.

The lack of an adequate remedy at law is a prerequisite to relief via declaratory judgment. See State ex rel. SLAH, LLC v. City of Woodson Terrace, 378 S.W.3d 357, 361 (Mo. banc 2012). As such, the real issue presented by Chastain's third point is whether the trial court erred in concluding that the city lacked an adequate legal remedy.

Chastain asserts that if the ordinance was placed before the voters and passed, then the city's adequate legal remedy is to repeal the ordinance as it is empowered to do pursuant to the city charter. Missouri law not only permits pre-election review of the facial constitutionality of the initiative petition, but it also expressly allows such a challenge to be raised in an action for declaratory judgment. See McGee, 269 S.W.2d at 664 (affirming declaratory judgment that an ordinance proposed in initiative petition facially violated article III, section 51 and need not be submitted for a vote). The circuit court had the authority to enter a declaratory judgment finding that the initiative petition was facially unconstitutional.

Article III, section 51

Chastain asserts that the trial court erred in concluding that the proposed ordinance is facially unconstitutional. Article III, section 51 of the Missouri Constitution states in pertinent part:

The initiative shall not be used for the appropriation of money other than of new revenues created and provided for thereby, or for any other purpose prohibited by this constitution.

The plain language of article III, section 51 generally prohibits the appropriation of money by initiative, except that an initiative may appropriate revenues created by the initiative proposal. What is prohibited is an initiative that, either expressly or through practical necessity, requires the appropriation of funds to cover the costs associated with the ordinance.

The city's claim, and the trial court's judgment, is based on the premise that the proposed ordinance is an unconstitutional appropriation ordinance because the proposed sales taxes would only “help fund” a series of mandated transportation projects by providing financing for bonds and to secure federal matching funds. This premise is refuted by the plain language of the proposed ordinance.

As noted above, the proposed ordinance mandates the imposition of two additional sales taxes. The two new sales taxes are the only actions mandated by the proposed ordinance. Although the preamble and proposed ballot title represent that the new taxes would be used to “help fund” four specific transportation projects, the ordinance itself does not mandate that the city spend any money, make any plans or do anything at all other than impose the two new sales taxes. The proposed ordinance is not an appropriation ordinance that violates article III, section 51 of the Missouri Constitution.

The fact that the proposed ordinance creates no financial obligations for the city distinguishes the constitutional ordinance in this case from the unconstitutional ordinance at issue in McGee. There, proponents of a proposed ordinance establishing a pension plan argued that the ordinance appropriated no funds and, therefore, did not violate article III, section 51. 269 S.W.2d at 666. Although the ordinance in McGee did not directly appropriate money, the fact remained that the city was required to fund the pension plan by appropriating the...