Rukavina v. Pawlenty

• Decision Date: 03 August 2004
• Docket Number: No. A03-1709.,A03-1709.
• Citation: 684 N.W.2d 525
• Parties: Tom RUKAVINA, et al., Appellants, Range Association of Municipalities and Schools, Appellant, v. Tim PAWLENTY, Governor of Minnesota, et al., Respondents.
• Court: Minnesota Court of Appeals

684 N.W.2d 525

Tom RUKAVINA, et al., Appellants, Range Association of Municipalities and Schools, Appellant, v. Tim PAWLENTY, Governor of Minnesota, et al., Respondents.

No. A03-1709.

Court of Appeals of Minnesota.

August 3, 2004.

Paul D. Cerkvenik, Trenti Law Firm, Virginia, MN, for appellants Rukavina, et al.

Richard E. Prebich, Law Offices of Richard E. Prebich, Hibbing, MN, for appellant Range Association.

Mike Hatch, Attorney General, Christie B. Eller, Kenneth E. Raschke, Jr., Assistant Attorneys General, St. Paul, MN, for respondents.

Considered and decided by STONEBURNER, Presiding Judge; SCHUMACHER, Judge; and FORSBERG, Judge.¹

OPINION

STONEBURNER, Judge.

Appellants challenge summary judgment dismissing, for lack of standing and on the merits, their claim that the commissioner of finance's $49 million reduction in allotments to the Minnesota Minerals 21st Century Fund (the mineral fund) and transfer of that amount to the general fund, under Minn.Stat. § 16A.152, subd. 4(b), to address the deficit in 2003, was unauthorized by the statute and unconstitutional. Because the range Association of Municipalities and Schools (RAMS) has standing to pursue the claim, we reverse the district court's determination that all of the appellants lack standing, but because the reduction and transfer is authorized by Minn.Stat. § 16A.152, subd. 4, and the statute is not unconstitutional, we affirm the district court's grant of summary judgment on the merits.

FACTS

Appellants are two taxpaying members of the 83rd Legislature, representing House District 5A and Senate District 5; three taxpaying Minnesota citizens who reside on the Iron Range; and the Range Association of Municipalities and Schools (RAMS), an association created to provide an area-wide approach to problems common to the areas of northeastern Minnesota affected by iron mining and taconite processing and to promote the general welfare and economic development within the cities, towns, and school districts of the iron-mining areas of northeastern Minnesota. Minn.Stat. § 471.58 (2002). Respondents are the governor and the commissioner of finance.

The mineral fund was created in 1999 by the legislature "as a separate account in the treasury." 1999 Minn. Laws ch. 223, art. 2, § 23, (codified at Minn.Stat. § 116J.423 (2002)). The purpose of the mineral fund is to help the Minnesota mineral industry become globally competitive. Minn.Stat. § 116J.23. The legislature appropriated approximately $60 million to the mineral fund. Money in the mineral fund was transferred from the general fund in accordance with three separate legislative appropriations.

The general fund consists of "moneys as have been deposited in the treasury for the usual, ordinary, running, and incidental expenses of the state government and does not include moneys deposited in the treasury for a special or dedicated purpose." Minn.Stat. § 16A.54 (2002). The commissioner of finance has at all times maintained the mineral fund as a separate account within the state's special revenue fund, which is separate from the general fund.

Before money can be disbursed from any fund, a prior obligation must be incurred. Minn.Stat. § 16A.15, subd. 3 (2002). At the time the commissioner of finance reduced the mineral fund by $49 million, no money in the mineral fund was encumbered or obligated for any project. And there were no pending economic development-project requests for any money to be expended from the mineral fund.

In response to the widely publicized 2001-03 biennium budget deficit, the commissioner of finance, with the approval of the governor and after consulting with the legislative advisory commission, reduced the mineral fund by $49 million in February 2003, leaving a balance of approximately $10.6 million.² The commissioner of finance took this action under Minn.Stat. § 16A.152, subd. 4(a) and (b) (2002), which provides:

(a) If the commissioner [of finance] determines that probable receipts for the general fund will be less than anticipated, and that the amount available for the remainder of the biennium will be less than needed, the commissioner shall, with the approval of the governor, and after consulting the legislative advisory commission, reduce the amount in the budget reserve account as needed to balance expenditures with revenue.

(b) An additional deficit shall, with the approval of the governor, and after consulting the legislative advisory commission, be made up by reducing unexpended allotments of any prior appropriation or transfer. Notwithstanding any other law to the contrary, the commissioner is empowered to defer or suspend prior statutorily created obligations which would prevent effecting such reductions.

Appellants sued respondents, seeking a declaratory judgment that the transfer of $49 million from the mineral fund to the general fund was not authorized by Minn.Stat. § 16A.152, subd. 4(b), and is an unlawful encroachment by the executive branch on the powers reserved to the legislative branch that violates the separation-of-powers provision of the Minnesota Constitution. Minn. Const. art. III, § 1. Appellants sought an order restoring $49 million to the mineral fund. The district court granted summary judgment to respondents, concluding that appellants lack standing to pursue the claims asserted and that, in the alternative, as a matter of law, the statute, which is not unconstitutional, authorized the reduction and transfer. This appeal followed.

ISSUES

I. Do appellants have standing to pursue the claims asserted?

II. Does Minn.Stat. § 16A.152, subd. 4(b), authorize reduction of unexpended allotments within the special revenue fund and transfer of the amount reduced to the general fund?

III. Are funds transferred from the general fund to a separate account in the special revenue fund "expended" for purposes of application of Minn.Stat. § 16A.152, subd. 4(b)?

IV. If Minn.Stat. § 16A.152, subd. 4(b), permits unallotment³ of funds from a special revenue fund, does the statute violate the separation-of-powers doctrine of the Minnesota Constitution?

ANALYSIS

"On an appeal from summary judgment we ask two questions: (1) whether there are any genuine issues of material fact and (2) whether the [district court] erred in [its] application of the law." State by Cooper v. French, 460 N.W.2d 2, 4 (Minn.1990).

A motion for summary judgment shall be granted when the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue of material fact and that either party is entitled to a judgment as a matter of law. On appeal, the reviewing court must view the evidence in the light most favorable to the party against whom judgment was granted.

Fabio v. Bellomo, 504 N.W.2d 758, 761 (Minn.1993) (citation omitted).

There are no factual disputes in this case. Appellants argue that the district court misapplied the law and erred in determining that unallotment from the mineral fund was permissible under the statute, that the statute is constitutional, and that appellants lack standing to pursue the claims asserted.

I. Standing

The district court based summary judgment primarily on its determination that none of the original plaintiffs in the suit has standing to challenge the action of the respondents.⁴ "Whether a party has standing to sue is a question of law, which we review de novo." Schiff v. Griffin, 639 N.W.2d 56, 59 (Minn.App.2002).

Standing has been called one of "the most amorphous [concepts] in the entire domain of public law." Flast v. Cohen, 392 U.S. 83, 99, 88 S.Ct. 1942, 1952, 20 L.Ed.2d 947, (1968).... The concept of standing is filled with "complexities and uncertainties." Flast, 392 U.S. at 99, 88 S.Ct. at 1952. However, "[t]he fundamental aspect of standing is that it focuses on the party seeking to get his complaint before a * * * court and not on the issues he wishes to have adjudicated." Id. (emphasis added). The essential question is "whether the litigant is entitled to have the court decide the merits of the dispute or of particular issues." Warth v. Seldin, 422 U.S. 490, 498, 95 S.Ct. 2197, 2205, 45 L.Ed.2d 343 (1975).

Sundberg v. Abbott, 423 N.W.2d 686, 688 (Minn.App.1988), review denied (Minn. June 29, 1988).

"Standing is the requirement that a party has a sufficient stake in a justiciable controversy to seek relief from a court." State by Humphrey v. Philip Morris Inc., 551 N.W.2d 490, 493 (Minn.1996). A sufficient stake may exist if the party has suffered an "injury-in-fact" or if the legislature has conferred standing by statute. Id. To have standing to seek a declaratory judgment regarding the constitutionality of a statute, a party must have a direct interest in the validity of that statute which is different in character from the interest of the citizenry in general. Arens v. Village of Rogers, 240 Minn. 386, 390, 61 N.W.2d 508, 512 (1953). A citizen must have sustained or be in immediate danger of sustaining some direct injury from the enforcement of the challenged statute and not suffering in some indefinite way in common with people generally. Lott v. Davidson, 261 Minn. 130, 109 N.W.2d 336, 345 (1961).

The individual appellants assert that they have standing as taxpayers, even in the absence of a showing of injury-in-fact, to challenge the unallotment as an illegal expenditure.

[I]t 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.

McKee v. Likins, 261 N.W.2d 566, 571 (Minn.1977) (citation omitted). The district court focused on appellants' failure to allege any unlawful disbursement of funds to conclude that appellants lack standing to challenge unallotment from the mineral fund...