State ex rel. Lesmeister v. Olson, 10719

• Decision Date: 16 August 1984
• Docket Number: No. 10719,10719
• Citation: 354 N.W.2d 690
• Parties: STATE of North Dakota, ex rel. John S. LESMEISTER, in his capacity as State Treasurer of the State of North Dakota and as a resident and taxpayer of the State of North Dakota, Petitioner, v. Allen OLSON, Robert Wefald, and Kent Jones, as members of the Industrial Commission of North Dakota, and Allen Olson, Kent Jones, Florenz Bjornson, Guy Larson, Henry Schank, Alvin Kramer, Garvin Jacobson, Ray Hutton, and Bernie Voulek, as members of the North Dakota Water Commission, Respondents. Civ.
• Court: North Dakota Supreme Court

Page 690

354 N.W.2d 690

STATE of North Dakota, ex rel. John S. LESMEISTER, in his

capacity as State Treasurer of the State of North

Dakota and as a resident and taxpayer of

the State of North Dakota, Petitioner, v. Allen OLSON, Robert Wefald, and Kent Jones, as members of

the Industrial Commission of North Dakota, and Allen Olson,

Kent Jones, Florenz Bjornson, Guy Larson, Henry Schank,

Alvin Kramer, Garvin Jacobson, Ray Hutton, and Bernie

Voulek, as members of the North Dakota Water Commission, Respondents.

Civ. No. 10719.

Supreme Court of North Dakota.

Aug. 16, 1984.

Thomas F. Kelsch, Sp. Asst. Atty. Gen., of Kelsch, Kelsch, Bennett, Ruff & Austin, Bismarck, for petitioner.

Brian D. Neugebauer, Sp. Asst. Atty. Gen., of Ohnstad, Twichell, Breitling, Rosenvold, Wanner, Nelson, Neugebauer & Maring, West Fargo, for respondents. Appearances by Daniel R. Twichell, Sp. Asst. Atty. Gen., and Timothy E. Pickrell, of Chapman & Cutler, Chicago, Ill.

VANDE WALLE, Justice.

The State of North Dakota, on the relation of the State Treasurer, John Steven Lesmeister, seeks to invoke the original jurisdiction of this court for a declaratory judgment holding certain statutes unconstitutional and seeks an injunction prohibiting the issuance of bonds to finance the Southwest Pipeline. The relevant facts have been stipulated by the parties.

The 1983 Legislative Assembly enacted legislation to provide for the construction and financing of the Southwest Pipeline. The Southwest Pipeline project would attempt to alleviate water shortages in the southwest corner of the State by treating and transporting water from the Missouri River to various communities and industrial users in that portion of the State. The estimated construction cost of the Southwest Pipeline is approximately $100,000,000.

The 1983 Legislature passed three bills which created Chapters 61-24.3 and 61-24.4, N.D.C.C., and amended Section 57-51.1-07, N.D.C.C. Chapter 61-24.3 authorizes construction of the Southwest Pipeline project; Chapter 61-24.4 authorizes the issuance of bonds to finance the project; and the amendment to Section 57-51.1-07 provides that ten percent of monies deposited in the oil extraction tax development fund should be allocated to a sinking fund established for payment of the Southwest Pipeline bonds.

Pursuant to this legislation, the Industrial Commission has adopted and approved a "Construction and Operating Agreement" and an "Agreement Regarding: System Revenue Bonds in the Southwest Pipeline Project" to implement the project. These agreements require the signature of the State Treasurer. The State Treasurer, however, has refused to sign the agreements and has petitioned this court for a determination of the validity of the financing scheme outlined in Chapter 61-24.4. He seeks a declaratory judgment holding the financing scheme unconstitutional and an injunction prohibiting issuance of bonds to finance the project. The respondents, members of the Industrial Commission and the North Dakota State Water Commission, seek a writ of mandamus ordering the State Treasurer to execute the agreements.

Before turning to the merits of this controversy, we must determine whether or not this court has jurisdiction to decide this case. We have recently stated the principles which govern our authority to exercise original jurisdiction in State ex rel. Wefald v. Meier, 347 N.W.2d 562, 564 (N.D.1984):

"Article VI, Section 2, of the North Dakota Constitution, gives this court authority to exercise original jurisdiction and to issue remedial writs as may be necessary to properly exercise the court's jurisdiction. The power vested in this court to issue original writs is a discretionary power which may not be invoked as a matter of right, and this court will determine for itself whether or not a particular case is within its original jurisdiction. State ex rel. Peterson v. Olson, 307 N.W.2d 528 (N.D.1981). It is well settled that the power of this court to issue writs in the exercise of its original jurisdiction extends only to those cases in which the question presented is publici juris, wherein the sovereignty of the State, the franchises or prerogatives of the State, or the liberties of its people are affected. State ex rel. Link v. Olson, 286 N.W.2d 262 (N.D.1979). To warrant the exercise of this court's original jurisdiction, the interests of the State must be primary, not incidental, and the public, the community at large, must have an interest or right which may be affected, State ex rel. Vogel v. Garaas, 261 N.W.2d 914, 916 (N.D.1978)."

We are also concerned with whether or not the State Treasurer has standing to bring the action. This court has indicated that an elected State official to whom no injury can result and to whom no violation of duty can be imputed by reason of the performance of an act in compliance with the requirements of a statute may not question its constitutionality. See State v. Baker, 74 N.D. 244, 21 N.W.2d 355 (1946). A portion of the Syllabus by the Court in Baker states:

"Pursuant to the constitution and the statutes of the state of North Dakota, when a state officer is in doubt as to the constitutionality of a statute, under the terms of which he is called upon to perform a ministerial act, it is his duty to consult with and procure the opinion of the attorney general with respect to the matter and be guided in his action by that opinion until it is superseded by judicial decision. If he follows this course he will be protected and absolved from liability under his oath and on his official bond. If he does not request an opinion from the attorney general, or, having done so disregards it, and refuses to perform as required by the statute, he cannot raise the question of its constitutionality as a defense in a mandamus proceeding to compel performance."

Although Baker involved a mandamus action brought against the State Auditor in which the Auditor raised the constitutionality of the statute sought to be enforced as a defense, whereas this case involves an action brought by the State Treasurer in which he questions the constitutionality of certain statutes, we do not believe that difference is significant.

The holding of this court in Baker has not been superseded in the intervening years, and we recently cited Baker in Haugland v. Meier, 339 N.W.2d 100, 106 n. 6 (N.D.1983). The State Treasurer did not request the opinion of the Attorney General concerning the constitutionality of the statutes he now challenges, ¹ nor does he allege that he has any duties other than ministerial duties with regard to the issuance of the bonds. Rather, he urges that we do not apply the holding in Baker because the Attorney General, as a member of the Industrial Commission, is a respondent to the action and it would be a useless act to request his opinion as to the constitutionality of the statutes at issue. Further, the State Treasurer alleges that Baker should not apply because he instituted this action not only as State Treasurer but also as a resident and taxpayer of the State of North Dakota. Neither of these reasons persuades us that the holding of Baker should not be applied in this instance. There is no reason to believe that because the Attorney General is a member of a board charged with implementing statutes enacted by the Legislature he would be unable to perform his statutory duty to consult with and advise State officers and, "when requested give written opinions on all legal or constitutional questions relating to the duties of such officers ..." as specified in Section 54-12-01(6), N.D.C.C. Nor are we impressed with the argument that the State Treasurer also instituted the action as a resident and taxpayer of the State of North Dakota. Every elected official must be a resident of the State as a qualification of office. See Article V, Section 12, North Dakota Constitution. Presumably most of them are taxpayers as well. If we are to accept jurisdiction of this matter, it will be for reasons other than that the rationale of Baker is no longer viable or is not applicable under the facts of this case.

We have no doubt, however, of the significance of this case to the people of the State of North Dakota. It is significant to those who will be served by the Southwest Pipeline, as well as to all taxpayers of the State. It presumably will be significant in the future as a precedent for the Legislature in determining whether or not bond issues for projects the Legislature deems desirable and advisable, and which the Legislature finances with a portion of the tax revenues of the State, are in violation of the limits of indebtedness imposed by our Constitution. The State Treasurer, in his challenge, has raised issues which involve the State debt limitation in our North Dakota Constitution as well as the authority of the Legislature to enact legislation prescribing the use of future tax revenues. The issues raised in this case are publici juris. State ex rel. Wefald v. Meier, supra.

Furthermore, we recognize the action for what it is--an action necessary to test the constitutionality of the statutes authorizing the issuance of the bonds in order to determine the marketability of the bonds. We agree with the position taken by the Supreme Court of Montana in Grossman v. State, Mont., 682 P.2d 1319, 1326 (1984), wherein that court, in determining whether or not it should accept jurisdiction of an original action brought to test the validity of statutes authorizing bonds, stated:

"We should without hesitancy recognize this case for what it appears to be: a test case designed to obtain a final judgment on the validity of coal severance tax revenue bonds so that if valid, the bonds will be marketable. We will no longer be qualmish about jurisdiction in a bond issuance case. When the issues are fairly stated, fully explored and vigorously contended, as they appear here, we have a justiciable controversy suitable for final...