McKee v. Likins

Decision Date23 September 1977
Docket Number46283,Nos. 46085,s. 46085
PartiesMichael F. McKEE, Respondent-Appellant, v. Vera J. LIKINS, Appellant-Respondent, James W. Edmunds, et al., Defendants.
CourtMinnesota Supreme Court

Warren Spannaus, Atty. Gen., Thomas L. Fabel, Deputy Atty. Gen., Michael R. Saeger, Sp. Asst. Atty. Gen., St. Paul, for Vera Likins.

Briggs & Morgan and John R. Kenefick, St. Paul, for respondent-appellant.

Randall D. B. Tigue, Minn. Civil Liberties Union, Steven A. Grossman, Minneapolis, amicus curiae seeking reversal.

Considered and decided by the court en banc.


Cross-appeals from a judgment of the Ramsey County District Court enjoining the state of Minnesota and Ramsey County from providing medical assistance to welfare recipients for abortions. This case involves the validity under the Minnesota Medicaid statute of the use of medical assistance funds for elective, nontherapeutic abortions. We hold that a policy bulletin issued by the Commissioner of Public Welfare which allowed the coverage of elective, nontherapeutic abortions constituted rulemaking without compliance with the public notice and hearing requirements of the Minnesota Administrative Procedure Act. Accordingly, we remand for compliance with rulemaking procedures.

The plaintiff in this action, Michael F. McKee, brought an action in Ramsey County District Court challenging on constitutional and statutory grounds the authority of both the state and county welfare officials to make welfare payments for the medical expenses connected with abortions. The action was brought principally as a taxpayers' suit. McKee is a resident of Ramsey County and owns real property there. As a property owner he is subject to a real estate tax, the proceedings of which are deposited in the county general revenue fund. These funds are used in part by the county welfare department for medical assistance to welfare recipients. Named as defendants in the action were the director of the Ramsey County Welfare Department, the county commissioners, the director of the county Department of Property Taxation, and the county administrator. All of these county officials are involved in assessment, appropriation, and expenditure of county tax funds. Also joined as a defendant is the Commissioner of Public Welfare for the State of Minnesota, Vera J. Likins.

The plaintiff McKee challenged the use of such funds for abortions on two main grounds: (1) That the collection and use of such funds for abortions violated his first amendment freedom of religion because he believed that abortion constituted the taking of human life; (2) that the policy bulletin issued by the Minnesota Commissioner of Public Welfare authorizing the coverage of abortions was invalid because it constituted a rule within the meaning of the Minnesota Administrative Procedure Act (Minn.St. 15.01 to 15.43) and was not issued pursuant to public notice and hearing requirements of Minn.St. 15.0412, subd. 4.

At trial, the parties stipulated to the following pertinent facts:

"6. Through the Medical Assistance Program, the Ramsey County Welfare Department reimburses physicians and health care institutions for providing medical services to eligible individuals. The funds expended under this program are derived from federal, state and county revenues.

"7. On or about February 28, 1973, defendant, Vera J. Likins, as Commissioner of the Minnesota Department of Public Welfare, issued 1973 Policy Bulletin # 12 as follows:

" 'Recent decisions of the United States and Minnesota Supreme Courts have projected policy on the procedures for termination of pregnancy. Such terminations, when performed by licensed providers shall be reimbursed pursuant to the Medical Assistance Program as provided for by Title XIX of the Social Security Act and Minnesota Statutes, Chapter 256B (1971).

" 'All present regulations remain in effect for those procedures related to the above insofar as eligibility, qualifications of the procedure, and payment methods are concerned.'

"8. Since receiving 1973 Policy Bulletin # 12, the Ramsey County Welfare Department has been paying, and at the present time continues to pay physicians' and health care institutions' fees relating to terminations of pregnancies, also known as abortions, through the Medical Assistance Program.

"9. The Department of Public Welfare is an agency within the meaning of the Minnesota Administrative Procedure Act, Minnesota Statutes, Sections 15.0411, et seq.

"10. The issuance of 1973 Policy Bulletin # 12 was not preceded by notice or public hearing under the Minnesota Administrative Procedure Act.

"13. Plaintiff believes that he has been and continues to be injured by being required to participate in and to support the act of abortion, which he believes to be the taking of human life, by way of payment of property tax into the Ramsey County general revenue fund.

"14. As an adherent to the Roman Catholic faith and by his individual convictions, plaintiff strongly believes that he must not condone or support abortion, in any way, except where such a procedure is necessary to save the life of the pregnant woman.

"15. Plaintiff's religious and moral convictions are deeply offended by the knowledge that the general revenue of Ramsey County which include plaintiff's property tax dollars are used to pay for abortions of eligible medical assistance recipients residing in Ramsey County."

The plaintiff McKee moved for summary judgment. The defendants moved to dismiss the claim on the ground that McKee failed to state a claim upon which relief can be granted because he lacked sufficient standing to challenge such action, or in the alternative, for judgment on the pleadings. The trial court held: (1) McKee had standing; (2) as to the substance of McKee's claim, the use of such funds did not violate his first amendment rights; (3) the policy bulletin was invalid because of the failure of the Commissioner to follow the appropriate rulemaking procedures. Accordingly, the trial court granted partial judgment to the defendants on the first amendment claim, and granted partial judgment to the plaintiff McKee on his administrative law claim. As part of its judgment, the trial court enjoined the state of Minnesota and the county of Ramsey from expending any medicaid funds for the payment of abortions until the Department of Public Welfare complies with the APA rulemaking procedure. Each party appealed that part of the judgment of the trial court unfavorable to them. Of the defendants, however, only the Commissioner of Public Welfare appealed the decision below. In a separate proceeding this court ordered the injunction suspended during the pending of this appeal.

Before proceeding to the merits of this appeal we must consider whether McKee has standing to bring this action. The trial court ruled in the affirmative. We agree.


The plaintiff McKee alleges two bases for standing to seek a declaratory judgment that the administrative bulletin issued by the Commissioner is defective 1 and thus warrants an injunction against the use of state monies for elective, nontherapeutic abortions: (1) interference with the free exercise of his religion, a first amendment claim; and (2) his status as a taxpayer. 2

While we question plaintiff's standing to sue on first amendment grounds, we deem it unnecessary to decide that issue because we hold that he does have standing to bring suit as a taxpayer.

In pertinent part, section 15.0416 of the Minnesota Administrative Procedure Act provides with respect to the determination of the validity of rules:

"The validity of any rule may be determined * * * when it appears that the rule, or its threatened application, interferes with or impairs, or threatens to interfere with or impair the legal rights or privileges of the petitioner. * * * "

This court previously has stated that "injury in fact" is the test for standing to challenge administrative action under the state act, absent a discernible legislative intent to the contrary in a given case. Snyder's Drug Stores v. Minnesota Bd. of Pharm., 301 Minn. 28, 32, 221 N.W.2d 162, 165 (1974). Accord, Park View Heights Corp. v. City of Black Jack, 467 F.2d 1208, 1212, note 4 (8 Cir. 1972). Thus, the issue which this case presents is whether expenditure of tax monies under a rule which the plaintiff taxpayer alleges was adopted by a state official without compliance with the statutory rule-making procedures, is "injury in fact" within the meaning of the Minnesota Administrative Procedure Act.

In contrast with the Federal courts, 3 it generally has been recognized that a state or local taxpayer has sufficient interest to challenge illegal expenditures. 4 Thus, as early as 1888, Mr. Justice Mitchell declared for this court in a case in which " 'freeholders, tax-payers, and legal voters' " of a county brought an action to compel county officers to perform certain acts required by law that "where the object is * * * to enforce a public duty * * * any private person may move to enforce it." State v. Weld, 39 Minn. 426, 428, 40 N.W. 561, 562 (1888). Later, in Oehler v. City of St. Paul, 174 Minn. 410, 417, 219 N.W. 760, 763 (1928), this court again reiterated that

" * * * it is well settled that a taxpayer may, when the situation warrants, maintain an action to restrain unlawful disbursements of public moneys; to recover for the use of the public subdivision entitled thereto money that has been illegally disbursed, as well as to restrain illegal action on the part of public officials."

More recently, this court stated that "it has been generally recognized that a taxpayer has sufficient interest to enjoin illegal expenditures of both municipal and state funds." Arens v. Village of Rogers, 240 Minn. 386, 392, 61 N.W.2d 508, 513 (1953), appeal dismissed for want of a substantial Federal question, 347 U.S. 949, 74 S.Ct. 680, 98 L.Ed. 1096 (1954). Thus, while the activities of governmental...

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