State ex rel. Fent v. WATER RESOURCES BD.

• Decision Date: 18 March 2003
• Docket Number: No. 96,276.,96,276.
• Citation: 66 P.3d 432,2003 OK 29
• Parties: STATE of Oklahoma ex rel. Margaret B. FENT and Jerry R. Fent, as State of Oklahoma resident taxpayers, Plaintiffs/Appellants, v. STATE of Oklahoma ex rel. OKLAHOMA WATER RESOURCES BOARD; State of Oklahoma ex rel. Water Conservation Storage Commission; and J. Ross Kirtley, Richard McDonald, Dick Seybolt, Lonnie Farmer, Grady Grandstaff, Ervin Mitchell, Bill Secrest, Richard Sevenoaks, and Wendell E. Thomasson, as individuals and as members of the Oklahoma Water Resources Board and the Water Conservation Storage Commission; and The United States of America ex rel. Department of Defense, Department of The Army and its Corps of Engineers, Defendants/Appellees.
• Court: Oklahoma Supreme Court

66 P.3d 432

2003 OK 29

STATE of Oklahoma ex rel. Margaret B. FENT and Jerry R. Fent, as State of Oklahoma resident taxpayers, Plaintiffs/Appellants, v. STATE of Oklahoma ex rel. OKLAHOMA WATER RESOURCES BOARD; State of Oklahoma ex rel. Water Conservation Storage Commission; and J. Ross Kirtley, Richard McDonald, Dick Seybolt, Lonnie Farmer, Grady Grandstaff, Ervin Mitchell, Bill Secrest, Richard Sevenoaks, and Wendell E. Thomasson, as individuals and as members of the Oklahoma

Water Resources Board and the Water Conservation Storage Commission; and The United States of America ex rel. Department of Defense, Department of The Army and its Corps of Engineers, Defendants/Appellees.

No. 96,276.

Supreme Court of Oklahoma.

March 18, 2003.

William A. Pipkin, Moore, OK, for Plaintiffs/Appellants.

Andrew Tevington and E. Clyde Kirk, Assistant Attorneys General, Oklahoma City, OK, for Defendants/Appellees.

OPALA, V.C.J.

¶ 1 The dispositive issue in this taxpayers' qui tam¹ action is whether summary judgment was correctly given to defendants. We answer this question in the affirmative. Although like the Court of Civil Appeals, we affirm the trial court's ruling, we disagree with the appellate court's decision to resolve the critical issue on constitutional grounds when legal relief is available on an alternative, non-constitutional basis. We hence vacate the appellate court's opinion and affirm the summary disposition of taxpayers' claim.

I ANATOMY OF LITIGATION

¶ 2 The Flood Control Act of 1962² authorized the United States Army Corps of Engineers (the Corps) to construct the Clayton Reservoir on the Kiamichi River in Oklahoma "in accordance with the recommendation of the Chief of Engineers in Senate Doc. 145, 87th Cong., at an estimated cost of $29,748.00" (the project).³ The project was to have multiple purposes, including water supply. Under the provisions of the federal Water Supply Act of 1958,⁴ any non-federal interest that benefits from the water supply component of a federal project must agree to pay for the share of construction costs allocated to water supply.⁵

¶ 3 In the 1970's, decisions regarding state participation in water supply projects in Oklahoma were among the duties of a state commission known as the Water Conservation Storage Commission (WCSC).⁶ As the non-federal participant in the Clayton Reservoir project, later renamed Sardis Lake,⁷ the WCSC in 1974 entered into a contract (the contract) with the Corps under which the WCSC agreed to pay the costs of the project allocated to water supply, then estimated to be $16,399,000.⁸ Under the contract, approximately $7.8 million was allocated to storage for present demand and approximately $8.5 million was allocated to storage for future demand. With respect to storage for present demand, the contract states:

The amount of the Project investment costs allocated to the storage for present demand shall be paid in 50 consecutive annual installments, the first of which shall be due and payable within 30 days after the User [the WCSC] is notified by the contracting Officer that the Project is completed and operational for water supply purposes. Annual installments thereafter will be due and payable on the anniversary date of the first payment. Except for the first payment which will be applied solely to the retirement of principal, all installments shall include accrued interest on the unpaid balance ...." (emphasis added)

Payments of principal and interest allocated to future demand storage space were not required to begin until ten years after the project became operational unless the State commenced using that storage space during that period.

¶ 4 In addition to contracting to repay the project's construction costs, the WCSC also agreed to pay a percentage of the annual operating and maintenance costs, to pay a portion of the costs of any major capital replacement items, and to hold the Corps harmless from liability for damages incurred on account of the water storage component of the project. The contract does not give the WCSC a right to terminate the agreement or otherwise to be relieved of its contractual obligations, but as permitted by federal law,⁹ it contains the following provision:

"The parties agree that this contract is not an obligation for which the full faith and credit of the State of Oklahoma is pledged. Nothing herein shall be construed as legally obligating the Oklahoma Legislature to make any appropriation of funds."

¶ 5 Finally, the contract recites the opinion of the Oklahoma Attorney General that the WCSC is acting within its authority in entering into the contract.

¶ 6 The project became operational for water storage purposes on 6 January 1983 and the Corps notified the Oklahoma Water Resources Board (the OWRB or the Board),¹⁰ which had assumed the functions of the WCSC in 1979,¹¹ that the first installment, together with the operating and maintenance costs for the ensuing year, was due within thirty (30) days.¹² Because the legislature had not appropriated funds for the first payment in the FY83 budget, the OWRB could not make the first payment until after the start of FY84. The payment was hence not made until 17 August 1983 and thus began a still-unresolved dispute over the state's liability for interest on late payments. The OWRB made periodic payments between 1983 and 1997 amounting to $4,414,700.69 and incurred an arrearage by the time this action was brought in excess of $3,000,000.00.

¶ 7 A group of taxpayers in 1997 served on the OWRB and its members a written demand that the Board "authorize and diligently prosecute an action to recover" from the federal government all payments made under the contract.¹³ The group's demand asserted that the contract creates a state debt in violation of the budget balancing provisions of the Oklahoma Constitution, Article 10, § 23,¹⁴ § 24,¹⁵ and § 25.¹⁶ The Board denied the group's request. ¶ 8 Two of the taxpayers who had issued the written demand, Margaret B. Fent and Jerry R. Fent (taxpayers) filed this qui tam action pursuant to the provisions of 62 O.S.1991, § 372¹⁷ and 62 O.S.1991, § 373,¹⁸ haling into court as statutory defendants¹⁹ the State of Oklahoma ex rel. the OWRB and ex rel. the WCSC and as real-party defendants the United States of America, the Department of Defense, the Army Corps of Engineers (collectively the United States or the federal defendants) and the nine individuals who were served with the written demand and who sat on the OWRB at the time the action was filed (defendants or individual defendants).

¶ 9 The petition alleged that the contract between the WCSC and the Corps violated the Oklahoma Constitution and that all payments made pursuant to the contract were therefore unlawful. The petition further alleged that the individual defendants had wrongfully refused to prosecute an action for the return of the funds from the United States. Taxpayers sought to hold the federal and individual defendants jointly and severally liable under the qui tam statutes for the return to the State of Oklahoma of all public funds paid under the contract and for treble damages of $13,244,102.07, half of which would be payable to them and half to the State.

¶ 10 The cause was removed by the federal defendants to the United States District Court for the Western District of Oklahoma. That court dismissed taxpayers' claim against the federal defendants on sovereign immunity grounds and dismissed without prejudice taxpayers' claim against the remaining defendants—the State ex rel. the state agencies and the individual defendants—on the grounds of Eleventh Amendment immunity. Taxpayers appealed. The Tenth Circuit Court of Appeals affirmed the dismissal as to the federal defendants, but vacated the dismissal of the claim against the state defendants and remanded the cause to the federal district court with directions that the claim against the state defendants be remanded to state court.²⁰

¶ 11 Upon remand to Oklahoma County District Court, taxpayers filed a motion for summary judgment, arguing that the uncontroverted facts, consisting of the contract and the conduct of state officials in carrying it out, established that the contract violated the constitutional prohibition on contracting debt and that they were hence entitled to judgment as matter of law.²¹ Defendants filed their own motion for summary judgment, arguing that the contract is not unconstitutional, but even if it were, the members of the Board cannot be held civilly liable under the qui tam statutes because their actions were taken in conformity with the advice of the state Attorney General that the contract was lawful.

¶ 12 The trial court gave judgment to defendants without elaboration. Taxpayers appealed and the Court of Civil Appeals affirmed, adopting defendants' contention that the contract does not violate the state Constitution. We granted certiorari on taxpayers' petition. While we agree that summary judgment is defendants' due, we vacate the appellate court's opinion because we deem it unnecessary to reach the constitutional issue. Where the legal relief sought is affordable on non-constitutional grounds, consideration of constitutional infirmities is deemed precluded by a self-erected "prudential bar" of restraint.²² There is no need in this case to determine the constitutionality of the contract because the defendants cannot in any event be held civilly liable for treating the contract as lawful in conformity with the advice of the Attorney General.²³

II STANDARD OF REVIEW ON SUMMARY PROCESS

¶ 13 Summary process—a special pretrial procedural track pursued with the aid of acceptable probative substitutes²⁴—is a search for undisputed material facts which, sans forensic combat, may be utilized in the judicial decision-making process.²⁵ Summary process is applied where neither the material facts nor any inferences that may be drawn from undisputed facts are in dispute, and the law...