Haman v. Marsh

• Court: Nebraska Supreme Court
• Writing for the Court: HASTINGS; PER CURIAM
• Citation: Haman v. Marsh, 237 Neb. 699, 467 N.W.2d 836 (Neb. 1991)
• Decision Date: 29 March 1991
• Docket Number: No. 90-474,90-474
• Parties: , 59 USLW 2692 Gayle E. HAMAN, Individually and on Behalf of all Others Similarly Situated, Plaintiff, v. Frank MARSH, Treasurer of the State of Nebraska, et al., Defendants, and Security Investment Company, Intervenor.

Page 836

467 N.W.2d 836

237 Neb. 699, 59 USLW 2692

Gayle E. HAMAN, Individually and on Behalf of all Others Similarly Situated, Plaintiff, v. Frank MARSH, Treasurer of the State of Nebraska, et al., Defendants and Security Investment Company, Intervenor.

No. 90-474.

Supreme Court of Nebraska.

March 29, 1991.

Syllabus by the Court

1. Constitutional Law: Statutes: Proof. The party claiming that a legislative act is unconstitutional has the burden of establishing such unconstitutionality, and all reasonable doubts will be resolved in favor of constitutionality.

2. Constitutional Law: Statutes: Proof. Unconstitutionality of a statute must be clearly demonstrated before a court can declare the statute unconstitutional.

3. Constitutional Law: Legislature. The Legislature cannot circumvent an express provision of the Constitution by doing indirectly what it may not do directly.

4. Constitutional Law: Legislature: Statutes: Special Legislation. The Legislature shall not pass local or special laws that grant to any corporation, association, or individual any special or exclusive privileges, immunity, or franchise whatever.

5. Statutes: Special Legislation: Legislature. By definition, a legislative act is general, and not special, if it operates alike on all persons of a class or on persons who are brought within the relations and circumstances provided for and if the classification so adopted by the Legislature has a basis in reason and is not purely arbitrary.

6. Statutes: Special Legislation. A legislative act that applies only to particular individuals or things of a class is special legislation.

7. Constitutional Law: Statutes: Special Legislation. General laws embrace the whole of a subject, with their subject matter of common interest to the whole state. Uniformity is required in order to prevent granting to any person, or class of persons, the privileges or immunities which do not belong to all persons.

8. Constitutional Law: Special Legislation: Due Process. It is because the legislative process lacks the safeguards of due process and the tradition of impartiality which restrain the courts from using their powers to dispense special favors that constitutional prohibitions against special legislation were enacted.

9. Constitutional Law: Statutes: Special Legislation. A legislative act can violate Neb. Const. art. III, § 18, as special legislation in one of two ways: (1) by creating a totally arbitrary and unreasonable method of classification, or (2) by creating a permanently closed class.

10. Constitutional Law: Special Legislation: Words and Phrases. The term "class legislation" is a characterization of legislation in contravention of Neb. Const. art. III, § 18. It is that which makes improper discrimination by conferring privileges on a class arbitrarily selected from a large number of persons standing in the same relation to the privileges, without reasonable distinction or substantial difference.

11. Constitutional Law: Statutes: Liability: Negligence: States. Only by general law, uniform in its application to persons, can a liability of the state be constitutionally created for the negligence of its agents and servants.

12. Constitutional Law: Legislature: Special Legislation. While the Legislature may make classifications, it cannot do so arbitrarily and unreasonably. A reasonable classification must operate equally on all within the class.

13. Constitutional Law: Special Legislation: Public Policy. A legislative classification, in order to be valid, must be based upon some reason of public policy--some substantial difference of situation or circumstances--that would naturally suggest the justice or expediency of diverse legislation with respect to objects to be classified. Classifications for the purpose of legislation must be real and not illusive; they cannot be based on distinctions without a substantial difference.

14. Constitutional Law: Special Legislation. Classification is proper if the special class has some reasonable distinction from other subjects of like general character, which distinction bears some reasonable relation to the legitimate objectives and purposes of the legislation. The question is always whether the things or persons classified by the act form by themselves a proper and legitimate class with reference to the purpose of the act.

15. Constitutional Law: Special Legislation: Legislature: Intent: Public Purpose. If the purpose of a legislative act is unclear and the Legislature declares a public purpose which is not invalid on its face, this court will give strong consideration to the intent of the Legislature, but if the act is clearly contrary to the Constitution, the court must declare the act unconstitutional regardless of the proclaimed legislative intent.

16. Constitutional Law: Legislature: Statutes: Special Legislation: Public Purpose. The Legislature may not, under the guise of public purpose, pass a law solely for the benefit of a select few.

17. Constitutional Law: Equal Protection: Special Legislation. In Nebraska, both equal protection and the prohibition against special legislation emanate from Neb. Const. art. III, § 18.

18. Constitutional Law: Equal Protection: Legislature: Statutes. Under equal protection, classifications that do not involve a suspect class or fundamental right are tested for rational basis. All that is required is that there be a rational relationship between a legitimate state interest and the statutory means selected by the Legislature to accomplish that purpose.

19. Constitutional Law: Special Legislation. The test of validity under the special legislation prohibition is more stringent than the traditional rational basis test. Classifications must be based on some substantial difference of situation or circumstances that would naturally suggest the justice or expediency of diverse legislation with respect to the objects to be classified.

20. Constitutional Law: Special Legislation. There is no reasonable classification when the classes are based on historical facts alone.

21. Constitutional Law: Statutes: Equal Protection: Special Legislation. Under the equal protection clause, both state and federal courts will uphold state laws which make economic classifications unless the classification rests on grounds wholly irrelevant to the achievement of the state's objective, or unless the law is so unrelated to the achievement of a legitimate purpose that it appears irrational. On the other hand, the test for statutes challenged under the special-laws prohibitions is that they must bear a reasonable and substantial relation to the object sought to be accomplished by the legislation.

22. Statutes: States: Liability: Notice. A moral obligation attaches when there is a law which is passed notifying and warning the taxpayer and the citizen generally that the state will undertake the burden of such damages.

23. Statutes: Special Legislation. If the evil to be corrected can be seen to be merely fanciful, the injustice or the wrong illusory, the courts may intervene and strike the special statute down.

24. Statutes: Special Legislation. Whether a classification is arbitrary depends upon the purpose and subject of the particular act and the circumstances and conditions surrounding its passage.

25. States: Banks and Banking. Clearly, it has not yet come to pass that the state, in its supervision of the banking business, has become an eleemosynary institution.

26. Statutes: Special Legislation. A classification which limits the application of the law to a present condition, and leaves no room or opportunity for an increase in the numbers of the class by future growth or development, is special.

27. Statutes: Special Legislation. In determining whether a class is closed, this court is not limited to the face of the legislation, but may consider the act's application.

28. Statutes: Special Legislation. In deciding whether a statute legitimately classifies, the court must consider the actual probability that others will come under the act's operation. If the prospect is merely theoretical, and not probable, the act is special legislation. The conditions of entry into the class must not only be possible, but reasonably probable of attainment.

29. Constitutional Law: States: Debtors and Creditors: Guaranty. Except for certain circumstances, the purpose of Neb. Const. art. XIII, § 3, is to prevent the state or any of its governmental subdivisions from extending the state's credit to private enterprise. It is designed to prohibit the state from acting as a surety or guarantor of the debt of another.

30. States: Debtors and Creditors: Taxation. The state's credit is inherently the power to levy taxes and involves the obligation of its general fund.

31. States: Loans: Debtors and Creditors. There is a distinction between the loaning of state funds and the loaning of the state's credit. When a state loans funds it is in the position of creditor, whereas the state is in the position of debtor upon a loan of credit.

32. Legislature: Public Purpose: Public Health and Welfare. What is a public purpose is primarily for the Legislature to determine. A public purpose has for its objective the promotion of the public health, safety, morals, security, prosperity, contentment, and the general welfare of all the inhabitants. No hard and fast rule can be laid down for determining whether a proposed expenditure of public funds is valid as devoted to a public use or purpose. Each case must be decided with reference to the object sought to be accomplished and to the degree and manner in which that object affects the public welfare.

33. Legislature: Public Policy: Public Purpose. It is the province of the Legislature to determine matters of policy and appropriate the public funds. If there is reason for doubt or argument as to whether the purpose for which the appropriation is made is a public or a private purpose, and reasonable men ...