Director, Office of State Lands v. Merbanco
| Decision Date | 06 June 2003 |
| Docket Number | No. 02-18., No. 01-261 |
| Citation | 2003 WY 73,70 P.3d 241 |
| Parties | DIRECTOR OF the OFFICE OF STATE LANDS & INVESTMENTS, Board of Land Commissioners, Petitioners, v. MERBANCO, INC., an Ohio Merchant Banking Company; Christopher A. Johnston, as a citizen of Wyoming; Christopher A. Johnston, as the natural parent and legal guardian of Ian Oliver Johnston, Paige Kanary Johnston, and Ryan Christopher Johnston; and Wyoming Education Association, a nonprofit Wyoming corporation, Respondents. In the Matter of the Teton Village School Section (Section 36, T42N, R117W): Merbanco, Inc., an Ohio Merchant Banking Company; Christopher A. Johnston, as a citizen of Wyoming; and Christopher A. Johnston, as the natural parent and legal guardian of Ian Oliver Johnston, Paige Kanary Johnston, and Ryan Christopher Johnston, Appellants (Plaintiffs), and Wyoming Education Association, a nonprofit Wyoming corporation, Appellant (Intervening Plaintiff), v. Director of the Office of State Lands & Investments, Board of Land Commissioners, and Snake River Associates, Appellees (Defendants). |
| Court | Wyoming Supreme Court |
Hoke MacMillan, Attorney General; Michael L. Hubbard, Deputy Attorney General; and Nancy E. Vehr, Assistant Attorney General, Representing Office of State Lands & Investments and Board of Land Commissioners.
Rosemary J. Beless, Douglas B. Cannon, and Robert A. Garda, Jr. of Fabian & Clendenin, Salt Lake City, Utah; and Katherine Mead of Mead & Mead, Jackson, Wyoming, Representing Merbanco and the Johnstons.
William P. Schwartz of Ranck, Schwartz & Day, LLC, Jackson, Wyoming; and William J. Thomson, II and Randall B. Reed of Dray, Thomson & Dyekman, P.C., Cheyenne, Wyoming, Representing Snake River Associates.
Patrick E. Hacker and Gregory P. Hacker of Patrick E. Hacker, P.C., Cheyenne, Wyoming, Representing Wyoming Education Association.
Before HILL, C.J., and GOLDEN, LEHMAN, KITE, and VOIGT, JJ.
[¶ 1] Merbanco, Inc., Christopher Johnston and his children, and the Wyoming Education Association (WEA) (referred to hereinafter as "challengers") seek a declaration that the Wyoming Constitution prohibits the exchange of state school lands without public auction and, consequently, the statutes and administrative rules which authorize such exchanges are void as unconstitutional. Case No. 01-261 came to us on a petition for a writ of review, which we granted, and, in Case No. 02-18, the district court reserved constitutional questions to this Court pursuant to W.R.C.P. 52(d). We hold the constitution requires public auctions only for sales of school lands; exchanges are not sales; and, in the absence of any other constitutional prohibitions, the legislature acted within its authority in adopting the statutes and authorizing the rules challenged here.
[¶ 2] This case arose out of a declaratory judgment action filed by Merbanco, an Ohio Merchant Banking Company which sought to purchase certain school lands in Teton County; Mr. Johnston, a resident of Teton County and the president of Merbanco; and the Johnston children who attend public school in the county. They filed suit against the Director of the Office of State Lands & Investments and the Board of Land Commissioners (board), the governmental authorities responsible for the administration of school lands. The dispute arose when the state undertook procedures to exchange Section 36, Township 42 North, Range 117 West of the 6th Principal Meridian, Teton County, for land of equal value without a public auction. The land in question was included within those lands granted to the state upon statehood for the support of the common schools and is located near Teton Village (Teton Village school section). Merbanco also sued Snake River Associates, a Wyoming limited partnership (SRA) which owns and operates a cattle ranch surrounding the section and has historically leased it for grazing purposes. SRA proposed acquiring ownership of the Teton Village school section in exchange for other SRA lands located adjacent to Teton Village which could be used for residential and commercial development.
[¶ 3] SRA and other interested parties1 initiated discussions with the state through the board and its staff concerning the possible exchange. At the same time, Merbanco urged the board to initiate procedures to sell the Teton Village school section at public auction and, on June 7, 2001, offered an opening bid of $36.48 million. On June 14, 2001, the board approved pursuing the exchange with SRA consistent with its rules. Merbanco filed a petition for review on July 13, 2001, contending the decision to exchange the Teton Village school section violated the board's constitutional, statutory, administrative, and fiduciary duties. The district court granted the state's motion to dismiss the petition for review because no final agency action had occurred. On August 1, 2001, Merbanco filed a complaint for declaratory judgment and injunctive relief seeking to have the court declare the board's decision and the statutes and regulations upon which it was based unconstitutional for lack of a public auction. WEA, a nonprofit organization whose members are educators in the Wyoming public schools and parents of students who attend the public schools, intervened in support of Merbanco's position.
[¶ 4] The state moved to dismiss Merbanco's complaint claiming the court did not have subject matter jurisdiction because none of the challengers had standing and, because no final action had occurred, the matter was not ripe for consideration by the court and no justiciable controversy existed. The district court denied the state's motion, and the state filed a petition for review. While the state's petition was pending, the board voted to end the "exclusive" negotiations with SRA in favor of continued consideration of an exchange and other options, including Merbanco's proposed public auction. As a result of the board's action, the state filed a motion to dismiss in this Court contending again the matter was not ripe and no justiciable controversy existed. This Court denied the motion concluding that issues of great statewide importance had been raised and should be addressed.
[¶ 5] The district court issued an order reserving to this Court the following questions regarding the constitutionality of the statutes and regulations authorizing land exchanges:
c. Does the Director of the Office of State Lands & Investments' (the "Director") decision and the Board's approval of his decision to pursue an exchange of State School Trust Land Section 36, Teton County, Wyoming ("Section 36") in accordance with Chapter 26, violate Wyoming Constitution, Article 18, Section 1?
[¶ 6] The state's petition for review of the district court's denial of its motion to dismiss and the constitutional questions reserved by the district court were consolidated in this Court for purposes of oral argument. We address both cases in this opinion.
[¶ 7] Whether a court has subject matter jurisdiction is a question of law to be reviewed de novo. Ritter v. Ritter, 989 P.2d 109, 111 (Wyo.1999)
. Subject matter jurisdiction refers to "`the power to hear and determine cases of the general class to which the proceedings in question belong.'" Lacey v. Lacey, 925 P.2d 237, 238 (Wyo.1996) (quoting Fuller v. State, 568 P.2d 900, 903 (Wyo.1977)). The district court's subject matter jurisdiction was invoked through the Uniform Declaratory Judgments Act (Wyo. Stat. Ann. §§ 1-37-101 to -114 (LexisNexis 2001)), which allows any person "whose rights, status or other legal relations are affected by the Wyoming constitution or by a statute" to have the construction and validity of the particular provision determined and his rights, status, or other legal relations declared in a court of law. Section 1-37-103.
[¶ 8] The state objected to the district court's consideration of the declaratory judgment action primarily because the board had made no final decision on SRA's proposed land exchange or Merbanco's proposed public auction of the lands in question. Without such final decision, the state insists, no justiciable controversy exists. While conceding the court has jurisdiction pursuant to Article 5, Section 10 of the Wyoming Constitution and the Uniform Declaratory Judgments Act, the state contends such jurisdiction does not extend to advisory opinions "since binding legal determinations made in the abstract and decisions rendered without concrete factual...
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