City of Normandy v. Parson

• Decision Date: 26 April 2022
• Docket Number: SC 98998
• Citation: 643 S.W.3d 311
• Parties: CITY OF NORMANDY, et al., Appellants, v. Michael L. PARSON in His Official Capacity as Governor of Missouri, et al., Respondents.
• Court: Missouri Supreme Court

643 S.W.3d 311

CITY OF NORMANDY, et al., Appellants,

v.Michael L. PARSON in His Official Capacity as Governor of Missouri, et al., Respondents.

No. SC 98998

Supreme Court of Missouri, en banc.

Opinion issued April 26, 2022

The municipalities were represented by David H. Pittinsky of Ballard Spahr LLP in Philadelphia, Pennsylvania, (215) 665-8500; and Anthony Kuenzel of McQueen Kuenzel LLC in St. Louis, (314) 258-2900.

The state was represented by D. John Sauer of the attorney general's office in Jefferson City, (573) 751-3321.

Paul C. Wilson, Chief Justice

In 2016, the Cole County Circuit Court entered a judgment permanently enjoining the state from enforcing sections 67.287¹ and 479.359.2 because it found those sections to be unconstitutional special laws. This Court affirmed that judgment. City of Normandy v. Greitens , 518 S.W.3d 183, 202 (Mo. banc 2017). After this Court restored the rational basis analysis for special laws claims in City of Aurora v. Spectra Communications Group, LLC , 592 S.W.3d 764 (Mo. banc 2019), the state filed a Rule 74.06(b)(5) motion for relief from the 2016 judgment. The state argued sections 67.287 and 479.359.2 are not special laws under the rational basis analysis reinstated in City of Aurora . The circuit court agreed and granted the state relief from judgment. Appellants, the City of Normandy, other municipalities, and two taxpayers (collectively, the "municipalities"), appealed. This Court has jurisdiction pursuant to article V, section 3 of the Missouri Constitution. Because the circuit court improperly assumed a change in decisional law was sufficient to warrant relief from judgment pursuant to Rule 74.06(b)(5), this Court vacates the circuit court's judgment and remands for further proceedings.

Background

In 2015, the General Assembly passed Senate Bill No. 5 ("SB 5") to address the claim that some local governments were engaging in the practice of "taxation-by-citation." SB 5 contains multiple provisions that apply statewide, including a statewide 20 percent cap on local government revenues generated from fines. § 479.359.2. In addition, SB 5 contains provisions applicable only to St. Louis County. First, SB 5 imposes a lower cap of 12.5 percent of revenue generated from fines for "any county with a charter form of government and with more than nine hundred fifty thousand inhabitants and any city, town, or village with boundaries found within such county," which currently describes only St. Louis County and municipalities within St. Louis County. Id. Second, SB 5 requires "municipalities" to meet certain minimum standards, including accounting and policing standards. § 67.287. As defined in section 67.287.1(2), a "municipality" is "any city, town, or village located in any county with a charter form of government and with more than nine hundred fifty thousand inhabitants[.]" Again, this definition describes only municipalities in St. Louis County.

Twelve municipalities in St. Louis County and two taxpayers filed a lawsuit arguing the provisions in SB 5 that apply only to St. Louis County were special laws in violation of article III, section 40 of the Missouri Constitution. The circuit court agreed and entered a judgment finding sections 67.287 and 479.359.2 were unconstitutional special laws. The circuit court permanently enjoined the state from enforcing the provisions in SB 5 that applied only to municipalities in St. Louis County. In May 2017, this Court affirmed the circuit court's judgment.² City of Normandy , 518 S.W.3d at 202.

In December 2019, this Court decided City of Aurora , 592 S.W.3d at 777, restoring the rational basis analysis for special laws claims that had "served the Court and the language of the constitution well for more than a century." In so holding, this Court recognized "[t]he [use of this] rational basis analysis ... has been diminished in recent years," and it called City of Normandy the "final misdirection" in the diminishing use of the rational basis analysis. Id. at 778-79.

In January 2020, in the wake of this Court's decision in City of Aurora , the state filed a Rule 74.06(b)(5) motion for relief from the permanent injunction in the circuit court's 2016 judgment. The state argued it was no longer equitable for the injunction to remain in force because SB 5 was not an unconstitutional special law under the rational basis analysis used in City of Aurora . The circuit court agreed and sustained the state's motion, lifting the permanent injunction that prohibited enforcement of sections 67.287 and 479.359.2. The municipalities appealed.

Analysis

A firmly entrenched aspect of our judicial system is the principle of finality of judgments. This Court has long enforced the common law doctrines of res judicata , which "precludes relitigation of a claim formerly made," and collateral estoppel, which "precludes relitigation of an issue previously decided and incorporated into an earlier judgment." Sexton v. Jenkins & Assocs., Inc. , 152 S.W.3d 270, 273 & n.3 (Mo. banc 2004). Even more relevant to this case, "[t]he doctrine of law of the case provides that a previous holding in a case constitutes the law of the case and precludes relitigation of the issue on remand and subsequent appeal." Walton v. City of Berkeley , 223 S.W.3d 126, 128-29 (Mo. banc 2007). This concern with the finality of judgments serves several important interests, including protecting litigants from retrying identical cases and issues, ensuring uniformity of decisions, and promoting judicial economy. Am. Eagle Waste Indus., LLC v. St. Louis Cnty. , 379 S.W.3d 813, 825 (Mo. banc 2012). Most importantly, "there must always be an end to litigation and a certainty as to the rights of litigants must be achieved so that dignity and respect for judicial determinations will be maintained." Goldsmith v. M. Jackman & Sons, Inc. , 327 F.2d 184-85 (10th Cir. 1964).

This Court has provided narrow exceptions to the general principle of finality under Rule 74.06, which provides for relief from judgment in limited circumstances. Pertinent to this case, Rule 74.06(b)(5) allows a court to relieve a party from a final judgment when "it is no longer equitable that the judgment remain in force."³ This narrow exception to the principle of finality is "based on the historic power of a court of equity to modify its decree in light of changed circumstances." 11 C. Wright & A. Miller, Federal Practice and Procedure § 2863 at 205 (3d ed. 2021). "The source of the power to modify is of course the fact that an injunction often requires continuing supervision by the issuing court and always a willingness to apply its powers and processes on behalf of the party who obtained the equitable relief." Sys. Fed'n No. 91, Ry. Emp. Dep't, AFL-CIO v. Wright , 364 U.S. 642, 647-48, 81 S.Ct. 368, 5 L.Ed.2d 349 (1961). Accordingly, Missouri courts have recognized Rule 74.06(b)(5) applies only to judgments that have prospective effect. Killingsworth v. Dickinson Theatres, Inc. , 83 S.W.3d 656, 658 (Mo. App. 2002).

Admittedly, this Court has had few opportunities to expound upon the contours of Rule 74.06(b)(5). This dearth of guidance led all of the parties – and the circuit court – to make an incorrect assumption as to the application and reach of this rule. All assumed Rule 74.06(b)(5) justifies relief from the 2016 judgment if the circuit court concluded this Court would have reversed that judgment under a rational basis analysis had that approach been restored in that appeal rather than in the subsequent City of Aurora decision. This is incorrect. A change in decisional law is neither necessary nor sufficient to warrant relief from judgment under Rule 74.06(b)(5). United States Supreme Court precedent interpreting FRCP 60(b)(5), which allows a court to relieve a party from judgment when "applying it prospectively is no longer equitable," illustrates this principle.

The Supreme Court has held that a change in decisional law may warrant relief from judgment under FRCP 60(b)(5), but only in specific circumstances. Agostini v. Felton , 521 U.S. 203, 215, 117 S.Ct. 1997, 138 L.Ed.2d 391 (1997). For example, relief from judgment must be granted if a change in statutory or decisional law makes "one or more of the obligations placed upon the parties ... impermissible under federal law." Rufo v. Inmates of Suffolk Cnty. Jail , 502 U.S. 367, 388, 112 S.Ct. 748, 116 L.Ed.2d 867 (1992). On the other hand, relief from judgment "may be warranted when the statutory or decisional law has changed to make legal what the decree [or injunction] was designed to prevent."⁴ Id. (emphasis added). But, this flexible approach to determining whether a change in law warrants relief from judgment seemingly applies only to federal institutional reform cases. Id. at 383, 112 S.Ct. 748 ("Although we hold that a district court should exercise flexibility in considering requests for modification of an institutional reform consent decree, it does not follow that a modification will be warranted in all circumstances."); Horne , 557 U.S. at 450, 129 S.Ct. 2579 ("But in recognition of the features of institutional reform decrees, we have held that courts must take a flexible approach to [FRCP] 60(b)(5) motions addressing such decrees.") (quotation omitted). In Horne , the Supreme Court provided the following reasons for treating institutional reform cases differently in the context of FRCP 60(b)(5) : (1) "[I]njunctions issued in such cases often remain in force for many years, and the passage of time frequently brings about changed circumstances"; (2) "[I]nstitutional reform injunctions often raise sensitive federalism concerns"; and (3) "[P]ublic officials sometimes consent to, or refrain from vigorously opposing, decrees that go well beyond what is required by federal law ... bind[ing] state and local officials to the policy preferences of their predecessors[.]" Id. at 447-49, 129 S.Ct. 2579. Those reasons simply do not apply here.

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