Shipley v. Cates

• Decision Date: 08 August 2006
• Docket Number: No. SC 87063.,SC 87063.
• Citation: 200 S.W.3d 529
• Parties: Daniel R. SHIPLEY, Respondent, v. Ronald CATES, et al., Appellants.
• Court: Missouri Supreme Court

200 S.W.3d 529

Daniel R. SHIPLEY, Respondent, v. Ronald CATES, et al., Appellants.

No. SC 87063.

Supreme Court of Missouri, En Banc.

August 8, 2006.

Rehearing Denied September 26, 2006.

COPYRIGHT MATERIAL OMITTED

Jeremiah W. (Jay) Nixon, Atty. Gen., Joel E. Anderson, Rikki L. Wright, Asst. Attys. Gen., Jefferson City, Roger K. Evans, New York, NY, Arthur A. Benson, II, Jamie K. Lansford, Kansas City, for appellants.

Robert D. Nienhuis, St. Louis, John D. Landwehr, Jefferson City, for respondent.

MICHAEL A. WOLFF, Chief Justice.

History of the Controversy

This is the latest and, perhaps, the last battle over whether Planned Parenthood was eligible to receive state funds to provide family planning and related gynecological care to low-income women.

The funding for such services ceased at the end of fiscal year 2003. For several years in the 1990s, the general assembly appropriated, upon the governor's request, funds to the department of health (now the department of health and senior services) for providing such care. This care included family planning services, pregnancy testing, and follow-up services. Some of the money went to local health department clinics. The Planned Parenthood entities in this litigation¹ also received funds under contracts with the department for providing such care. Some of the money in the early years of state funding went to Planned Parenthood entities that perform abortions, though there is no contention that any state money was directly spent on abortion services.²

To ensure that no state money would encourage or subsidize abortions, even indirectly, the general assembly in 1999 enacted restrictions in the appropriations legislation.³ The director of the department of health signed contracts with these Planned Parenthood entities, which had reorganized their corporate structures. In the contracts, the appropriations language is construed in a way that did not exclude these reorganized entities from receiving funds for non-abortion family planning and gynecological services.

The state, through a "special assistant attorney general," sued for an injunction to halt funds to Planned Parenthood and for a refund of state money spent on such services under those contracts. The state's position, as expressed by the special assistant, was that the contract did not conform to the appropriations statute. The circuit court entered judgment that Planned Parenthood was ineligible to receive these funds and ordered repayment. This Court vacated the judgment and remanded because of a question as to the authority of the special assistant attorney general to seek the relief requested in that action. State v. Planned Parenthood of Kansas and Mid-Missouri, 37 S.W.3d 222 (Mo. banc 2001). After remand, the authority of the special assistant attorney general was restated; judgment again was entered in favor of the state. On appeal, that judgment was vacated because this Court held that the state, through the attorney general, could not take positions on both sides of the litigation. State v. Planned Parenthood of Kansas and Mid-Missouri, 66 S.W.3d 16 (Mo. banc 2002).

Upon remand after the second opinion by this Court, the attorney general moved to dismiss the action. Daniel Shipley, the taxpayer plaintiff in this case, sought to intervene. The circuit court declined to allow dismissal of the action, and the attorney general sought a writ of mandamus in this Court. In that proceeding, this Court upheld the authority of the attorney general to dismiss the action and held that Shipley did not have a right to intervene in that case. State ex rel. Planned Parenthood of Kansas and Mid-Missouri v. Kinder, 79 S.W.3d 905 (Mo. banc 2002).

Shipley's Taxpayer Lawsuit

Shipley filed this separate taxpayer's lawsuit in 2002 seeking a declaration that Planned Parenthood is ineligible to receive the family planning funding; he sought an injunction against payment of the funds to Planned Parenthood and, in an amended petition, sought restitution of funds already paid for the services that were rendered at the Planned Parenthood facilities. Planned Parenthood received $168,900.00 in state money under the contracts in fiscal year 2000 and received $499,950.00 in state money under the contracts in fiscal year 2003. In the intervening two years, the circuit court injunctions were in effect and Planned Parenthood did not participate in the program.

Shipley's lawsuit contends that Planned Parenthood was ineligible to receive family planning funds because of the restrictions in the appropriations statutes. The relevant restrictions in section 10.705 (1999) and section 10.710 (2002) are as follows:

An otherwise qualified organization shall not be disqualified from receipt of these funds because of its affiliation with an organization that provides abortion services, provided that the affiliated organization that provides abortion services is independent as determined by the conditions set forth in this section. To ensure that the state does not lend its imprimatur to abortion services, and to ensure that an organization that provides abortion services does not receive a direct or indirect economic or marketing benefit from these funds, an organization that receives these funds and its independent affiliate that provides abortion services may not share any of the following:

(a) The same or similar name;

(b) Medical or non-medical facilities, including but not limited to business offices, treatment, consultation, examination, and waiting rooms;

(c) Expenses;

(d) Employee wages or salaries; or

(e) Equipment or supplies, including but not limited to computers, telephone systems, telecommunications equipment and office supplies.

An independent affiliate that provides abortion services must be separately incorporated from any organization that receives these funds.⁴

Planned Parenthood does not provide abortion services. It is, however, affiliated with two organizations that do provide abortions. The Kansas-Missouri entity is affiliated with the abortion provider Comprehensive Health of Planned Parenthood of Kansas and Mid-Missouri, Inc.; the St. Louis Planned Parenthood is affiliated with the abortion provider Reproductive Health Services of Planned Parenthood of the St. Louis Region.

Although various terms are defined in the appropriations laws, neither provided definitions for the terms "share" or "similar name." In contracting with Planned Parenthood, the department included the language of the appropriations laws and also defined the terms "share" and "similar name." In defining "similar name," the department provided that contractors must demonstrate compliance with the statutes through documentation establishing that they do not share "[t]he same or similar name under applicable corporation statutes of Missouri or any other state in which the Contractor and affiliate are incorporated" with any affiliated abortion provider. The department defined "share" as "services, employees, or equipment that are provided or paid for by the family planning contractor on behalf of the independent affiliate that provides abortion services without payment or financial reimbursement from the independent affiliate who [sic] provides abortion services."

Planned Parenthood took various measures, including restructuring its organizations, to comply with the appropriations statutes and the contract provisions.

Shipley's petition requested that the court declare the following: (1) that the appropriations statutes do not violate the Missouri or United States Constitutions, (2) that the appropriations statutes are unambiguous and that the department's interpretations of "share" and "same or similar" name are invalid, and (3) that the Planned Parenthood entities have not qualified and do not currently qualify for receipt of state family planning funds. Shipley sought injunctive relief against Planned Parenthood to prohibit these entities from applying for or obtaining state family planning funds, and against defendant Ronald Cates, acting director of the department, to prohibit him from issuing contracts or requests for proposals contrary to the express language of the appropriations statutes. Shipley filed a first amended petition in 2003 substituting defendant Richard Dunn, director of the department beginning in January 2003, and adding a claim for restitution to the State of Missouri of all family planning funds that have been paid to Planned Parenthood since fiscal year 1999.

The circuit court entered judgment in 2005 for Shipley, finding that the director's interpretation of "similar" and "share" was invalid and that the relationship between Planned Parenthood and the abortion affiliates rendered Planned Parenthood ineligible to receive funds under the appropriations statutes. The circuit court found that the appropriations restrictions do not violate the Missouri or United States constitutions, enjoined Planned Parenthood from receiving any further funds under the statute, enjoined the director from distributing family planning funds in violation of the appropriations statutes, and ordered Planned Parenthood to repay amounts it was paid under the program plus interest. The court subsequently issued an amended judgment, ordering Planned Parenthood to pay Shipley's attorney's fees and litigation expenses from the returned funds.

The department and Planned Parenthood appeal. This Court has jurisdiction because this case involves the validity of Missouri statutes. Mo. Const. art. V, sec. 3.

Resolution of this Appeal

Planned Parenthood argues that the trial court erred in ordering it to repay funds received under the contracts because (1) the director had authority to enter into the contracts, (2) Planned Parenthood was entitled to rely on the director's construction of the statute, and (3) it would be inequitable to require repayment of the funds.

Shipley does not contend that Planned Parenthood failed to deliver...