Koch v. Canyon County

• Decision Date: 25 January 2008
• Docket Number: No. 33707.,33707.
• Citation: 145 Idaho 158,177 P.3d 372
• Parties: Glenn KOCH, Joyce Chase, Carl Chase, Kathy Alder, Paul Alldredge, Atwell Parry, Gina Lujak, Deloris Cram, Dick Winder and Bob Carpenter, Plaintiffs-Appellants, v. CANYON COUNTY, a political subdivision of the State of Idaho; and The Idaho Association of Counties Capital Finance Corporation, a 501(c)(3) non-profit corporation, Defendants-Respondents.
• Court: Idaho Supreme Court

177 P.3d 372

145 Idaho 158

Glenn KOCH, Joyce Chase, Carl Chase, Kathy Alder, Paul Alldredge, Atwell Parry, Gina Lujak, Deloris Cram, Dick Winder and Bob Carpenter, Plaintiffs-Appellants, v. CANYON COUNTY, a political subdivision of the State of Idaho; and The Idaho Association of Counties Capital Finance Corporation, a 501(c)(3) non-profit corporation, Defendants-Respondents.

No. 33707.

Supreme Court of Idaho, Boise, December 2007 Term.

January 25, 2008.

Richard L. Harris, Caldwell, for appellants.

Hon. David L. Young, Canyon County Prosecuting Attorney, Caldwell, for respondent Canyon County. Charles L. Saari, Deputy Prosecuting Attorney, argued.

Moore Smith Buxton & Turcke, Chtd., Boise, for respondent The Idaho Association of Counties Capital Finance Corp. Tammy A. Zokan argued.

EISMANN, Chief Justice.

This is an appeal from a judgment holding that taxpayers of a political subdivision do not have standing to litigate whether the subdivision has incurred indebtedness or liability in violation of Article VIII, § 3, of the Idaho Constitution. We hold that the plaintiffs as taxpayers do have standing, but dismiss the appeal because the issue raised regarding the violation of the constitutional provision has become moot.

I. FACTS AND PROCEDURAL HISTORY

On March 27, 2006, Canyon County (County) leased from the Arthur J. and Grace L Jerome Trust (Trust) a 23.87-acre parcel of real property upon which the County intended to construct a jail and other County facilities. The initial term of the lease was from April 1, 2006 through September 30, 2006. Thereafter it was automatically renewed for twenty-nine, consecutive, one-year terms commencing on October 1 of each year. The County could elect not to renew the lease by not budgeting and appropriating the $150,000 annual lease payment.

On March 27, 2006, the Trust also granted Idaho Association of Counties Capital Finance Corporation (IAC Finance) an option to purchase the real property for the sum of $2,550,000. The term of the option was from October 1, 2006 until April 1, 2016, but it would terminate upon any termination of the lease agreement between the Trust and the County. IAC Finance paid $500,000 for the option from funds provided by the County. The option expressly provided that it could be assigned to the County and that if it was exercised the $500,000 would be applied to the purchase price of the land.

The Plaintiffs are residents of Canyon County and own real property in the county upon which they pay real property taxes. On August 22, 2006, they filed this lawsuit, contending that the lease agreement violated Article VIII, § 3, of the Idaho Constitution. Upon motion of the County, the district court dismissed the case on the ground that the Plaintiffs lacked standing to challenge the lease under Article VIII, § 3. The Plaintiffs then appealed.

While the appeal was pending, the IAC Finance assigned its option to the County. The County then purchased the real property and later sold it. As a result, both the County and IAC capital contend that this appeal should be dismissed because the case is now moot.

II. ISSUES ON APPEAL

1. Did the plaintiffs, have standing to challenge the lease agreement as violating Article VIII, § 3, of the Idaho Constitution?

2. Should the appeal be dismissed because this case is now moot?

3. Is either the County or IAC Finance entitled to an award of attorney fees on appeal?

III. ANALYSIS

A. Did the Plaintiffs Have Standing to Challenge the Lease Agreement as Violating Article VIII, § 3, of the Idaho Constitution?

As a general rule, a citizen or taxpayer, by reason of that status alone, does not have standing to challenge governmental action. "An interest, as a concerned citizen, in seeing that the government abides by the law does not confer standing." Troutner v. Kempthorne, 142 Idaho 389, 391, 128 P.3d 926, 928 (2006). "A citizen or taxpayer may not challenge a governmental enactment where the injury is one suffered alike by all citizens and taxpayers of the jurisdiction." Ameritel Inns, Inc. v. Greater Boise Auditorium Dist., 141 Idaho 849, 852, 119 P.3d 624, 627 (2005). The general rule holds even if the citizen or taxpayer alleges some indirect harm from the governmental action.

Thus, in Young v. City of Ketchum, 137 Idaho 102, 44 P.3d 1157 (2002), we held that the plaintiffs lacked standing to challenge a services contract between the city and the local chamber of commerce under which the chamber agreed to distribute tourist information and promote the area. The city paid for those services from revenues raised by a local option tax. The plaintiffs alleged that they were indirectly injured because: (a) the chamber's activities under the contract would attract visitors and second homeowners, which would drive up the plaintiffs' land values, thereby increasing their real estate taxes; (b) the plaintiffs would ultimately pay the tax because the businesses that were taxed would pass the cost on to their customers; and (c) the money that the city paid to the chamber under the contract would reduce the city's funds available for essential services, causing the city to increase levies against the plaintiffs' properties. We held that the plaintiffs lacked standing because they "do not point to any injury that is not shared alike by all citizens and taxpayers in the City nor have they alleged that the relief requested will prevent or redress the claimed injury." 137 Idaho at 106, 44 P.3d at 1161.

Likewise, in Greer v. Lewiston Golf & Country Club, Inc., 81 Idaho 393, 342 P.2d 719 (1959), we held that the plaintiffs, as electors and taxpayers of the city, lacked standing to challenge an ordinance disannexing a golf course leased by the city. The plaintiffs contended they were injured because the city would lose property taxes paid by the owner of the golf course and liquor license fees paid by the country club at the golf course. In holding that, the plaintiffs lacked standing, we concluded, "The insignificant increase in plaintiffs' tax burden, due to the loss of taxes and license fees by reason of the ordinance, is not sufficient to establish their right to maintain this action." 81 Idaho at 398, 342 P.2d at 722.

In appropriate circumstances, however, taxpayers do have standing to challenge governmental action. In Brewster v. City of Pocatello, 115 Idaho 502, 768 P.2d 765 (1988), the city enacted a tax to pay for street maintenance upon all owners and occupants of real property in the city. The tax owing by each owner or occupant was based upon the traffic generated by that owner's or occupant's property. Even though the city had not sought to enforce the tax against any of the plaintiffs, we held that they had standing to challenge it. A party can also have standing even when the injury is indirect and is shared by a large group. Thus, in Miles v. Idaho Power Co., 116 Idaho 635, 778 P.2d 757 (1989), a ratepayer had standing to challenge the Swan Falls Agreement entered into between Idaho Power Company and the State of Idaho where it was alleged that the Agreement and implementing legislation would impact his power rate. It did not matter that the plaintiff was only one of thousands of power customers. As we stated, "Idaho Power ratepayers are therefore the group most adverse to the agreement, not Idaho Power or the State." 116 Idaho at 642, 778 P.2d at 764.

When deciding whether a party has standing, we have looked to decisions of the United States Supreme Court for guidance. See, Miles v. Idaho Power Co., 116 Idaho at 641, 778 P.2d at 763 (citing Valley Forge College v. Americans United for Separation of Church and State, Inc., 454 U.S. 464, 102 S.Ct. 752, 70 L.Ed.2d 700 (1982), and quoting from Duke Power Co. v. Carolina Environmental Study Group, 438 U.S. 59, 98 S.Ct. 2620, 57 L.Ed.2d 595 (1978), and Warth v. Seldin, 422 U.S. 490, 95 S.Ct. 2197, 45 L.Ed.2d 343 (1975)), and Bear Lake Education Ass'n, by and through Belnap v. Board of Trustees of Bear Lake School, 116 Idaho 443, 448, 76 P.2d 452, 457 (1989) (adopting the United States Supreme Court's analysis of associational standing). Like Idaho, the United States Supreme Court has held that as a general rule a taxpayer does not have standing to challenge the expenditure of government monies. "As a general matter, the interest of a federal taxpayer in seeing that Treasury funds are spent in accordance with the Constitution does not give rise to the kind of redressable `personal injury' required for Article III standing." Hein v. Freedom From Religion Foundation, ___ U.S. ___, ___, 127 S.Ct. 2553, 2563, 168 L.Ed.2d 424, 438 (2007), accord, Valley Forge College; Doremus v. Board of Education of Hawthorne, 342 U.S. 429, 72 S.Ct. 394, 96 L.Ed. 475 (1952); and Frothingham v. Mellon, 262 U.S. 447, 43 S.Ct. 597, 67 L.Ed. 1078 (1923).

However, in Flast v. Cohen, 392 U.S. 83, 88 S.Ct. 1942, 20 L.Ed.2d 947 (1968), the Supreme Court carved out a narrow exception against the general prohibition against taxpayer standing. Hein, ___ U.S. at ___, 127 S.Ct. at 2564, 168 L.Ed.2d at 439. In Flast, the Court held that a taxpayer did have standing to challenge a congressional appropriation that violated a specific constitutional limitation upon the congressional taxing and spending power. This Court has also recognized such a rule in Greer v. Lewiston Golf & Country Club, Inc., 81 Idaho 393, 397, 342 P.2d 719, 722 (1959) (citations omitted), when we stated: "Taxpayers have been held qualified to maintain an action to test the validity of a statute or ordinance which increases the tax burden. Generally cases so holding involve an alleged illegal expenditure of public money."

The Plaintiffs herein allege that by entering into the lease agreement the County violated the specific provision in Article VIII, § 3, of the Idaho Constitution prohibiting counties and other subdivisions of the State from incurring any indebtedness or liability, other than for ordinary and...