Hunter v. State, No. 2003-013.

Docket NºNo. 2003-013.
Citation865 A.2d 381
Case DateOctober 22, 2004
CourtUnited States State Supreme Court of Vermont

865 A.2d 381

Susann HUNTER, Robin Gagne and Jane Doe
v.
STATE of Vermont, M. Jane Kitchel and Eileen Elliott

No. 2003-013.

Supreme Court of Vermont.

October 22, 2004.


865 A.2d 384
John J. McCullough III and Mark Loevy-Reyes of Vermont Legal Aid, Inc., Montpelier, for Plaintiffs-Appellants

William H. Sorrell, Attorney General, Montpelier, and Susan R. Harritt, Assistant Attorney General, Waterbury, for Defendants-Appellees.

Present: AMESTOY, C.J.,1 DOOLEY, JOHNSON, SKOGLUND and REIBER, JJ.

DOOLEY, J.

¶ 1. The principal question presented is whether, consistent with the separation-of-powers provision of the Vermont Constitution, the General Assembly validly delegated to the Secretary of Administration and the Joint Fiscal Committee the authority to prepare and implement a deficit-prevention plan to address a revenue shortfall while the Legislature was not in

865 A.2d 385
session. A subsidiary question is whether the Department of Prevention, Assistance, Transition and Health Access (PATH) complied with emergency rulemaking procedures in implementing the reductions called for in the deficit-prevention plan. Plaintiffs challenged the plan, and the superior court ruled that the plan did not violate the separation-of-powers doctrine, put that PATH had failed to provide proper notice and hearing before adopting the emergency rule. We affirm the court's ruling that the delegation of authority was constitutionally permissible, and reverse the superior court determination that the emergency rule violated the Administrative Procedure Act, finding instead that PATH complied with the requisite rule-making procedures

¶ 2. The facts are briefly summarized as follows, although additional material facts are provided in the discussion. The Fiscal Year 2003 Appropriations Act (Act), enacted at the conclusion of the 2002 legislative session, contained a final section directing he Secretary of Administration (Secretary)—in consultation with the legislative leadership and "relevant committee hairs"—to prepare and present to the legislative branch Joint Fiscal Committee JFC) a "deficit prevention plan" in the vent that: (1) the official state revenue estimates of the emergency board for the general fund, the transportation fund, or federal funds were reduced by two percent r more from the estimates adopted by the board on January 15, 2002;2 (2) the General Assembly was not in session; and (3) he plan was "necessary to ensure a balanced budget in the general fund or the transportation fund." 2001, No. 142 Adj.Sess.), § 324(a), (d). The JFC could accept, reject or amend the plan, and the Secretary was then empowered to implement the plan as approved. Id. § 324(d).

¶ 3. The Legislature adjourned in late June 2002. After adjournment, the chairs of the House and Senate Appropriations Committees prepared and signed a "Statement of Intent to the Budget Act." That statement provided that § 324 was intended to provide temporary rescission authority to address revenue shortfalls. It further stated that it was the intent of the appropriation act conferees that PATH could invoke emergency rulemaking procedures to implement any program change "where it is necessitated by the imminent peril to public welfare posed by the revenue shortfall and the need through prompt exercise of rescission authority to avert or mitigate a state budget deficit." Statement of Legislative Intent, Omnibus Appropriations Act, 2001, No. 142 (Adj.Sess.), available at Joint Fiscal Office.

¶ 4. In July, the emergency board predicted a revenue reduction in excess of four percent of the general fund from the January 2002 estimate, thereby triggering the Act's deficit-prevention provision. The Secretary, in response, developed a deficit-prevention plan and presented it to the JFC, as the Act required, on August 12. The plan recommended reductions in excess of $23 million, including cuts below the appropriation to PATH of nearly $4 million. The proposed reductions to PATH's budget included the elimination of adult chiropractic coverage for Medicaid and Vermont Health Access Plan (VHAP) recipients, suspension of denture coverage for Medicaid recipients, and the elimination of VHAP coverage for elective inpatient hospital admissions.3 After several

865 A.2d 386
meetings, the JFC adopted the plan on August 23. On September 5, PATH filed an emergency rule to implement the budget reductions articulated in the plan, to become effective on October 1. PATH refiled the emergency rule on October 16, to reflect an amended implementation date of November 1

¶ 5. In late October, plaintiffs—three individuals affected by PATH's proposed reductions—filed a complaint against the State, Agency of Human Services Secretary Kitchel, and PATH Commissioner Elliott in superior court, seeking to enjoin implementation of the plan. Plaintiffs claimed that the proposed reductions and implementing regulations were invalid because: (1) the deficit-prevention section of the Act impermissibly delegated an essential legislative function to the executive branch and legislative committee, in violation of the separation-of-powers provision of the Vermont Constitution; (2) PATH's implementation of the reductions violated certain requirements of the Administrative Procedure Act (APA), 3 V.S.A. §§ 800-849; (3) the elimination of coverage for dentures and chiropractic services violated § 148(g), (i) of the Act; (4) the elimination of chiropractic coverage violated Vermont's health insurance law; and (5) the elimination of denture services violated federal Medicaid law.

¶ 6. The trial court heard arguments on plaintiffs' motion for a preliminary injunction, and issued a written decision on November 22. The court rejected plaintiffs' separation-of-powers claim, concluding that the Constitution allowed such overlapping institutional arrangements as a means to accomplish the Legislature's limited objective of responding to a financial emergency during a period when the General Assembly was not in session. The court also rejected plaintiffs' claims that the reductions violated § 148 of the Appropriations Act, or state health insurance and federal Medicaid law. Finally, the court determined that PATH had failed to provide adequate notice and hearing in connection with the emergency rule, in violation of the APA. The court granted the preliminary injunction as a remedy for the APA violation, but stayed its effect until December 31, 2002, to afford PATH an opportunity to comply with the notice and hearing requirements and, after it complied, to move to vacate the order granting the preliminary injunction. On December 27, the court granted defendants' motion to vacate the preliminary injunction, and also granted plaintiffs' motion for permission to take an interlocutory appeal, which this Court accepted. The court's order granting interlocutory appeal specified two issues for review: (1) whether the court erred in concluding that plaintiffs had failed to show a likelihood of success on their claim that § 324 of the Act violated the separation-of-powers doctrine; and (2) whether the court erred in staying issuance of a preliminary injunction after finding that PATH had failed to comply with the notice and hearing requirements of the APA.

I.

¶ 7. We first address plaintiffs' claim that § 324 of the Act violates the Vermont

865 A.2d 387
Constitution's separation-of-powers provision by delegating the Legislature's appropriations power to the executive branch and the JFC. Because the Act authorizes the Secretary to prepare and implement a deficit-prevention plan, subject to JFC approval or amendment, plaintiffs argue that at effectively empowers the executive and a small legislative body to make budgetary decisions properly exercised only by the Legislature as a whole. See Bowsher v. Synar, 478 U.S. 714, 763, 106 S.Ct. 3181, 92 L.Ed.2d 583 (1986) ("appropriating funds is a peculiarly legislative function"); Vt. Home Mortgage Credit Agency v. Montpelier Nat'l Bank, 128 Vt. 272, 279, 262 A.2d 445, 450 (1970) (Legislature may not delegate power to act as lawmaker). The defendants argue, in response, that the Act represents a constitutionally permissible delegation of limited authority within the bounds of the necessarily over-apping budgetary powers of the executive and legislative branches. As explained below, we find the defendants' position to be he more persuasive.

¶ 8. We start with a more detailed explanation of the statute under attack, he context in which it was enacted, and he relevant constitutional provisions. The Act requires three specific conditions before the Secretary is required to undertake emergency budgetary planning actions. First, official state revenue estimates of the emergency board for one of the funds must have been reduced by two percent or more from the previous estimate; second, the General Assembly must not have been in session; and third, a deficit-prevention plan must have been "necessary to ensure a balanced budget in the general fund or the transportation fund." 2001, No. 142 Adj.Sess.), § 324(a)(3). When all of these circumstances coexisted, the Secretary was required to prepare a deficit-prevention plan "in consultation with legislative leadership and relevant committee chairs, and . . . file the plan with the joint fiscal committee." Id. § 324(d). The time period within which the Secretary was authorized to act was also limited, dating from the Legislature's adjournment in June 2002 to the end of September: "The secretary shall have no authority to file a plan under this section after September 30, 2002." Id. The Act further required the Secretary to report to the General Assembly by November 15, 2002, "describing in detail the manner in which any deficit prevention plan has been implemented, including a discussion of the impacts of any funding reductions." Id.

¶ 9. The Secretary's plan was, in effect, only a recommendation to the JFC, which could approve, modify...

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6 practice notes
  • N.H. Health Care Ass'n v. Governor, No. 2010–436.
    • United States
    • Supreme Court of New Hampshire
    • January 21, 2011
    ...N.H. 714, 720, 532 A.2d 195 (1987) (recognizing executive's “discretion for expenditure of funds”); see also Hunter v. State, 177 Vt. 339, 865 A.2d 381, 390–91 (2004); [161 N.H. 390] Opinion of the Justices to the Senate, 376 N.E.2d at 1222–23. As the justices of the Massachusetts Supreme J......
  • Athens Sch. Dist. v. Vt. State Bd. of Educ., Nos. 19-185 & 19-241
    • United States
    • Vermont United States State Supreme Court of Vermont
    • July 10, 2020
    ...of one branch virtually usurping from another its constitutionally defined function." Hunter v. State, 2004 VT 108, ¶ 21, 177 Vt. 339, 865 A.2d 381 (quotations and alterations omitted) (quoting James Madison for principle that separation-of-powers doctrine is violated when one branch exerci......
  • Brayton v. Pawlenty, No. A10-64.
    • United States
    • Supreme Court of Minnesota (US)
    • May 5, 2010
    ...that such a decision will not compromise the achievement of underlying legislative purposes and goals."); Hunter v. State, 177 Vt. 339, 865 A.2d 381, 390-91 (2004) (adopting rationale of Opinion of the Justices in noting that although the Governor has some discretion in deciding whether to ......
  • Athens Sch. Dist. v. Vt. State Bd. of Educ., No. 2019-185
    • United States
    • Vermont United States State Supreme Court of Vermont
    • July 10, 2020
    ...of one branch virtually usurping from another its constitutionally defined function." Hunter v. State, 2004 VT 108, ¶ 21, 177 Vt. 339, 865 A.2d 381 (quotations and alterations omitted) (quoting James Madison for principle that separation-of-powers doctrine is violated when one branch exerci......
  • Request a trial to view additional results
6 cases
  • N.H. Health Care Ass'n v. Governor, No. 2010–436.
    • United States
    • Supreme Court of New Hampshire
    • January 21, 2011
    ...N.H. 714, 720, 532 A.2d 195 (1987) (recognizing executive's “discretion for expenditure of funds”); see also Hunter v. State, 177 Vt. 339, 865 A.2d 381, 390–91 (2004); [161 N.H. 390] Opinion of the Justices to the Senate, 376 N.E.2d at 1222–23. As the justices of the Massachusetts Supreme J......
  • Athens Sch. Dist. v. Vt. State Bd. of Educ., Nos. 19-185 & 19-241
    • United States
    • Vermont United States State Supreme Court of Vermont
    • July 10, 2020
    ...of one branch virtually usurping from another its constitutionally defined function." Hunter v. State, 2004 VT 108, ¶ 21, 177 Vt. 339, 865 A.2d 381 (quotations and alterations omitted) (quoting James Madison for principle that separation-of-powers doctrine is violated when one branch exerci......
  • Brayton v. Pawlenty, No. A10-64.
    • United States
    • Supreme Court of Minnesota (US)
    • May 5, 2010
    ...that such a decision will not compromise the achievement of underlying legislative purposes and goals."); Hunter v. State, 177 Vt. 339, 865 A.2d 381, 390-91 (2004) (adopting rationale of Opinion of the Justices in noting that although the Governor has some discretion in deciding whether to ......
  • Athens Sch. Dist. v. Vt. State Bd. of Educ., No. 2019-185
    • United States
    • Vermont United States State Supreme Court of Vermont
    • July 10, 2020
    ...of one branch virtually usurping from another its constitutionally defined function." Hunter v. State, 2004 VT 108, ¶ 21, 177 Vt. 339, 865 A.2d 381 (quotations and alterations omitted) (quoting James Madison for principle that separation-of-powers doctrine is violated when one branch exerci......
  • Request a trial to view additional results

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