Foundation v. S.C. Transp. Infrastructure Bank

• Decision Date: 12 June 2013
• Docket Number: Nos. 27266.,s. 27266.
• Citation: 744 S.E.2d 521,403 S.C. 640
• Court: South Carolina Supreme Court
• Parties: SOUTH CAROLINA PUBLIC INTEREST FOUNDATION and Edward D. Sloan, Jr., individually, and on behalf of all others similarly situated, Petitioners, v. SOUTH CAROLINA TRANSPORTATION INFRASTRUCTURE BANK, Robert W. Harrell, Jr., in his official capacity as Speaker of the S.C. House of Representatives, John E. Courson in his official capacity as President Pro Tempore of the S.C. Senate, and the State of South Carolina, Respondents. Appellate Case No. 2012–207128.

403 S.C. 640

744 S.E.2d 521

SOUTH CAROLINA PUBLIC INTEREST FOUNDATION and Edward D. Sloan, Jr., individually, and on behalf of all others similarly situated, Petitioners,

v. SOUTH CAROLINA TRANSPORTATION INFRASTRUCTURE BANK, Robert W. Harrell, Jr., in his official capacity as Speaker of the S.C. House of Representatives, John E. Courson in his official capacity as President Pro Tempore of the S.C. Senate, and the State of South Carolina, Respondents.Appellate Case No. 2012–207128.

Nos. 27266.

Supreme Court of South Carolina.

Heard June 19, 2012.

Decided June 12, 2013.

L. Warren Clayton, III and James G. Carpenter, both of Carpenter Law Firm, PC, of Greenville, for Petitioners.

Robert E. Stepp, Robert E. Tyson, Jr., Alexis K. Lindsay, all of Sowell, Gray, Stepp, & Laffitte, LLC, of Columbia, Attorney General Alan M. Wilson, Deputy Attorney General Robert D. Cook, and Assistant Deputy Attorney General J. Emory Smith, Jr., all of Columbia, Kenneth M. Moffitt, John P. Hazzard, V, and Michael R. Hitchcock, all of Columbia, Charles Fennell Reid and Bradley Scott Wright, both of Columbia, for Respondents.

Justice HEARN.

Edward D. Sloan and the South Carolina Public Interest Foundation ¹ (collectively, Sloan) instituted this suit in our original jurisdiction to determine whether the South Carolina Transportation Infrastructure Bank is constitutional. In particular, Sloan alleges Section 11–43–140 of the South Carolina Code (2011), which governs the composition of the Bank's Board of Directors, violates both the dual office holding and the separation of powers prohibitions of the South Carolina Constitution. We find both challenges fail and that section 11–43–140 is constitutional.

FACTUAL/PROCEDURAL BACKGROUND

The Bank, a corporate and political instrumentality established by legislative enactment, is responsible for selecting and assisting “in financing major qualified projects by providing loans and other financial assistance to government units and private entities for constructing and improving highway and transportation facilities.” S.C.Code Ann. § 11–43–120 (2011). In doing so, the Bank may, among other things, “make loans to qualified borrowers to finance the eligible costs of qualified projects and to acquire, hold, and sell loan obligations at prices and in a manner as the [B]oard determines advisable” and “borrow money through the issuance of bonds and other forms of indebtedness as provided in this chapter.” Id. § 11–43–150(5) & (14) (2011). Since 1998, the Bank has expended nearly three billion dollars for major transportation projects.

Section 11–43–140 establishes the composition of the Board as follows:

[T]he Chairman of the Department of Transportation Commission, ex officio; one director appointed by the Governor who shall serve as chairman; one director appointed by the Governor; one director appointed by the Speaker of the House of Representatives; one member of the House of Representatives appointed by the Speaker, ex officio; one director appointed by the President Pro Tempore of the Senate; and one member of the Senate appointed by the President Pro Tempore of the Senate, ex officio.

Since the Bank's creation, no more than two legislators have served as directors at any one time. The legislators currently serving on the Board are the Honorable Hugh K. Leatherman, Chairman of the Senate Finance Committee, and the Honorable Harry B. “Chip” Limehouse, Vice–Chairman of the House Ways and Means Committee. We granted Sloan's petition to bring a declaratory judgment action in our original jurisdiction challenging the constitutionality of section 11–43–140.

ISSUES PRESENTED

I. Does Sloan have standing to bring this action?

II. Does section 11–43–140 violate the South Carolina Constitution's dual office holding prohibitions in Article III, Section 24; Article VI, Section 3; and Article XVII, Section 1A by allowing legislators to serve as directors on the Board?

III. Does section 11–43–140 violate the South Carolina Constitution's separation of powers provisions in Article I, Section 8 by allowing legislators to serve as directors on the Board?

STANDARD OF REVIEW

“This Court has a limited scope of review in cases involving a constitutional challenge to a statute because all statutes are presumed constitutional and, if possible, will be construed to render them valid.” State v. Neuman, 384 S.C. 395, 402, 683 S.E.2d 268, 271 (2009). “A statute will not be declared unconstitutional unless its invalidity appears so clearly as to leave no doubt that it violates some provision of the constitution.” Segars–Andrews v. Judicial Merit Selection Comm'n, 387 S.C. 109, 118, 691 S.E.2d 453, 458 (2010). A “legislative act will not be declared unconstitutional unless its repugnance to the constitution is clear and beyond a reasonable doubt.” Id.

LAW/ANALYSIS

I. STANDING

As a threshold matter, Respondents argue Sloan does not have standing to assert his claims because he does not allege a particularized injury and has not shown that this matter falls within the public importance exception. We disagree.

A party seeking to establish standing bears the burden of proving it. See Sea Pines Ass'n for Prot. of Wildlife, Inc. v. S.C. Dep't of Natural Res., 345 S.C. 594, 601, 550 S.E.2d 287, 291 (2001). As a general rule, a private individual may not use the judicial process to scrutinize the validity of a legislative act without showing that the act in question caused or threatens to cause a direct injury to the individual. Sloan v. Dep't of Transp., 379 S.C. 160, 169, 666 S.E.2d 236, 241 (2008). However, the rule of standing is not inflexible and standing may be conferred where the issue is one of public importance. Sloan v. Wilkins, 362 S.C. 430, 436, 608 S.E.2d 579, 583 (2005). The public importance exception grants standing to a party who has not suffered a particularized injury where the issue involved is of such public importance that its resolution is required for future guidance. ATC S., Inc. v. Charleston Cnty., 380 S.C. 191, 198, 669 S.E.2d 337, 341 (2008). “It is this concept of ‘future guidance’ that gives meaning to an issue which transcends a purely private matter and rises to the level of public importance.” Id. at 199, 669 S.E.2d at 341.

Sloan has not asserted he has suffered a particularized harm or injury as a result of section 11–43–140, but we find this case fits within the public importance exception. While we are mindful that we must be cautious with this exception, lest it swallow the rule, this is the precise instance where the public importance exception should apply. Sloan presents a colorable claim that the Board is unconstitutionally comprised, casting a cloud of illegitimacy which could marginalize the important decisions of the Board. We find resolution of this question is certainly of importance and concern to the public and therefore hold Sloan has standing to bring this challenge.

II. DUAL OFFICE HOLDING

Sloan first argues that section 11–43–140 violates the constitution because concurrent service on the Board and in the General Assembly constitutes dual office holding.² Because we believe the ex officio exception to dual office holding applies, we disagree.

The South Carolina Constitution prohibits members of the General Assembly from holding another office during their service in the legislature, both expressly and by virtue of the repeated general prohibitions against dual office holding. SeeS.C. Const. art. III, § 24 (“No person is eligible to a seat in the General Assembly while he holds any office or position of profit or trust under this State....”); S.C. Const. art. VI, § 3 (“No person may hold two offices of honor or profit at the same time.”); S.C. Const. art. XVII, § 1A (“No person may hold two offices of honor or profit at the same time....”). This Court, however, has recognized an “ex officio” or “incidental duties” exception where “there is a constitutional nexus in terms of power and responsibilities between the first office and the ‘ex officio’ office.” Segars–Andrews, 387 S.C. at 126, 691 S.E.2d at 462. Ex officio is defined as “[b]y virtue or because of an office; by virtue of the authority implied by office.” Black's Law Dictionary 267 (3d pocket ed.2006).

Sloan argues that the ex officio exception is inapplicable here because service on the Board does not relate to the duties of a legislator. In support of his position, Sloan relies heavily on Ashmore v. Greater Greenville Sewer District, 211 S.C. 77, 44 S.E.2d 88 (1947), in which we considered a constitutional challenge to the statute creating a board of trustees for an auditorium in Greenville. Id. at 85, 44 S.E.2d at 91. There, we found a statutory requirement that the senator and representative from Greenville County serve as members on the board of trustees ran afoul of the dual office holding provisions of the constitution. Id. at 90, 44 S.E.2d at 94. However, we clarified that our ruling was not applicable to “ those officers upon whom other duties relating to their respective offices are placed by law” and would “not affect the state of the law with respect to ex officio officeholding.” Id. at 92, 44 S.E.2d at 95.

More recently, in Segars–Andrews, we elucidated the framework for determining whether a second office is being held ex officio. There, we considered, inter alia, a dual office holding challenge against legislators serving as members of the Judicial Merit Selection Commission (JMSC). 387 S.C. at 123–28, 691 S.E.2d at 461–64. The JMSC possesses the power, both statutorily and constitutionally, to evaluate the qualifications and fitness of all judicial candidates for election or re-election. Id. at 114, 691 S.E.2d at 456. A candidate must first be found qualified by the JMSC to be considered by the legislature. Id. After the JMSC determined Judge Segars–Andrews was not qualified for re-election, she brought multiple constitutional challenges against the JMSC. Id. at 116, 691 S.E.2d at 457. In...