State v. Hagerty

• Decision Date: 08 June 1998
• Docket Number: No. 980039,980039
• Citation: 580 N.W.2d 139,1998 N.D. 122
• Parties: STATE of North Dakota and Heidi Heitkamp, Attorney General for the State of North Dakota, Bismarck State College, Department of Human Services, Department of Transportation, Job Service North Dakota, North Dakota State University, North Dakota State University-Bottineau, University of North Dakota, University of North Dakota-Lake Region, Jon M. Arntson, Arntson & Stewart, P.C., Steven C. Lian, Farhart, Lian & Maxson, P.C. (formerly Farhart, Lian, Maxson, Louser & Zent, P.C.), Daniel A. Speights, Amanda Graham Steinmeyer, Robert N. Hill and Speights & Runyan, Petitioners, v. The Honorable Gail HAGERTY, Judge of District Court, South Central Judicial District, and W.R. Grace & Co.-Conn., Respondents. Civil
• Court: North Dakota Supreme Court

Page 139

580 N.W.2d 139

1998 ND 122

STATE of North Dakota and Heidi Heitkamp, Attorney General for the State of North Dakota, Bismarck State College Department of Human Services, Department of Transportation Job Service North Dakota, North Dakota State University North Dakota State University-Bottineau, University of North Dakota, University of North Dakota-Lake Region, Jon M Arntson, Arntson & Stewart, P.C., Steven C. Lian, Farhart, Lian & Maxson, P.C. (formerly Farhart, Lian, Maxson, Louser & Zent, P.C.), Daniel A. Speights, Amanda Graham Steinmeyer, Robert N. Hill and Speights & Runyan, Petitioners, v. The Honorable Gail HAGERTY, Judge of District Court, South Central Judicial District, and W.R. Grace & Co.-Conn., Respondents.

Civil No. 980039.

Supreme Court of North Dakota.

June 8, 1998.

M.K. Heidi Heitkamp, Attorney General, Bismarck; Douglas A. Bahr, Assistant Attorney General, Bismarck, (on brief); and J. Philip Johnson, of Wold Johnson, P.C., Fargo, for petitioners.

J. Michael Schwartz, of Plunkett, Schwartz & Peterson, Minneapolis, MN, for respondents.

VANDE WALLE, Chief Justice.

¶1 The State of North Dakota, Heidi Heitkamp, Attorney General for the State of North Dakota, Bismarck State College, Department of Human Services, Department of Transportation, Job Service North Dakota, North Dakota State University, North Dakota State University-Bottineau, University of North Dakota, and University of North Dakota-Lake Region (hereinafter collectively referred to as the Attorney General) have petitioned this court for a supervisory writ directing the district court to vacate its September 29, 1997, order requiring them to cease and desist from using special assistant attorneys general retained under contingent fee agreements to prosecute the underlying action.

¶2 Jon M. Arnston, Arntson & Stewart, P.C.; Steven C. Lian, Farhart, Lian & Maxson, P.C.; Daniel A. Speights, Amanda Graham Steinmeyer, Robert N. Hill, and Speights & Runyon (Special Assistants Attorney General and law firms retained under contingent fee agreements to prosecute the underlying action, hereinafter collectively referred to as the Special Assistants) filed a supplemental petition for a supervisory writ directing the district court to vacate its September 29, 1997, order.

¶3 We conclude this is an appropriate case in which to exercise our supervisory jurisdiction, and we grant the petitions.

I

¶4 By complaint of July 11, 1994, W.R. Grace & Co.--Conn., (Grace) sued for a declaratory judgment determining its rights and duties associated with construction products containing asbestos designed, manufactured or sold by Grace and installed in public buildings owned or operated by the State. The State answered and counterclaimed on August 11, 1994. The State was represented by the Special Assistants under contingency fee agreements.

¶5 On July 22, 1997, Grace requested a cease and desist order declaring the contingency fee agreements violate the North Dakota Constitution and North Dakota statutes, and prohibiting the Special Assistants from further prosecuting the underlying action pursuant to the contingency fee agreements. On September 29, 1997, the district court issued an order granting Grace's motion for a cease and desist order. The trial court later denied a motion to alter or amend the cease and desist order and denied a request for certification under Rule 54(b), N.D.R.Civ.P., permitting entry of a final judgment as to one or more but fewer than all of the claims or parties. The Attorney General and the Special Assistants then filed these petitions for a supervisory writ.

¶6 This court's authority to issue supervisory writs is derived from Art. VI, § 2, N.D. Const., which vests this court with appellate and original jurisdiction "with authority to issue, hear, and determine such original and remedial writs as may be necessary to properly exercise its jurisdiction." Traynor v. Leclerc, 1997 ND 47, p 6, 561 N.W.2d 644. See also N.D.C.C. 27-02-04 ("In the exercise of its appellate jurisdiction, and in its superintending control over inferior courts," this court "may issue such original and remedial writs as are necessary to the proper exercise of such jurisdiction."). The power to issue a supervisory writ is a discretionary power, which we exercise "rarely and cautiously," Comm'n on Medical Competency v. Racek, 527 N.W.2d 262, 264 (N.D.1995), "only to rectify errors and prevent injustice in extraordinary cases where no adequate alternative remedy exists." Trinity Med. Ctr., Inc. v. Holum, 544 N.W.2d 148, 151 (N.D.1996).

¶7 To be appealable, an interlocutory order must satisfy one of the criteria specified in N.D.C.C. 28-27-02 and the trial court must certify the appeal under Rule 54(b), N.D.R.Civ.P. Mitchell v. Sanborn, 536 N.W.2d 678, 681 (N.D.1995). However, if denying immediate appellate review of an interlocutory order creates a substantial injustice, our supervisory jurisdiction acts as a safety net for the restrictive use of Rule 54(b). Id. at 682. Here, the case is extraordinary, the injustice if the trial court erred is significant and the Attorney General has no adequate alternative remedy. We conclude this is an appropriate case in which to exercise our supervisory jurisdiction.

II

¶8 Relying on Bies v. Obregon, 1997 ND 18, 558 N.W.2d 855, the Attorney General contends Grace's challenge of the contingent fee agreements is not ripe for adjudication because there can only be a controversy if there is a recovery in the underlying litigation. For a court to adjudicate, there must be before it an actual controversy that is ripe for review. Id. at p 9. "An issue is not ripe for review if it depends on future contingencies which, although they might occur, necessarily may not, thus making addressing the question premature." Id. at p 9. But, whether Grace has a right not to have litigation prosecuted against it by special assistant attorneys general retained under continent fee agreements on behalf of the State is an actual controversy which is ripe for review without waiting to see if the litigation results in a recovery.

¶9 Alternatively, relying on Diocese of Bismarck Trust v. Ramada, Inc., 553 N.W.2d 760 (N.D.1996), the Attorney General contends Grace's challenge is barred by laches. We discussed laches in Diocese of Bismarck Trust:

"Laches does not arise from the passage of time alone, but is a delay in enforcing one's right which is prejudicial to another. In addition to the passage of time, parties against whom a claim of laches is sought to be invoked must be actually or presumptively aware of their rights and must fail to assert those rights against parties who in good faith changed their position and cannot be restored to their former state."

Id. at 767 (citations omitted). We are not persuaded the Attorney General was prejudiced by the timing of Grace's challenge.

¶10 The Special Assistants contend Grace lacks standing to challenge the legality of the contingent fee agreements. We explained standing in State v. Carpenter, 301 N.W.2d 106 (N.D.1980):

"The question of standing focuses upon whether the litigant is entitled to have the court decide the merits of the dispute. It is founded in concern about the proper--and properly limited--role of the courts in a democratic society. Without the limitation of the standing requirements, the courts would be called upon to decide purely abstract questions. As an aspect of justiciability, the standing requirement focuses upon whether the plaintiff has alleged such a personal stake in the outcome of the controversy as to justify exercise of the court's remedial powers on his behalf."

Id. at 107 (citations omitted), quoted in Shark v. U.S. West Communications, Inc., 545 N.W.2d 194, 198 (N.D.1996). In State v. Erickson, 72 N.D. 417, 7 N.W.2d 865 (N.D.1943), the Insurance Commissioner was sued by the State of North Dakota in a complaint signed by a private attorney who had no authority from the attorney general. The defendant challenged the authority of the attorney to represent the State. The trial court, agreeing with the defendant, dismissed the complaint and this court affirmed, holding the statute involved did not authorize an attorney other than the attorney general to represent the State in actions. Under Carpenter and Erickson, we conclude Grace had standing to challenge the authority of the Special Assistants to prosecute litigation against it.

III

¶11 The basis for the trial court's order is Grace's contention the contingent fee agreements violate Art. X, § 12, N.D. Const., and statutes requiring all State moneys to be paid into the treasury and disbursed only pursuant to legislative appropriation.

¶12 Art. X, § 12(1), N.D. Const., provides, in part:

"All public moneys, from whatever source derived, shall be paid over monthly ... to the state treasurer, and deposited by him to the credit of the state, and shall be paid out and disbursed only pursuant to appropriation first made by the legislature."

¶13 "When interpreting constitutional sections, we apply general principles of statutory construction." Comm'n on Med. Competency v. Racek, 527 N.W.2d 262, 266 (N.D.1995). "Our overriding objective is to give effect to the intent and purpose of the people adopting the constitutional statement." Id. "The intent and purpose of a constitutional provision is to be determined if possible, from the language itself." Bulman v. Hulstrand Constr. Co., Inc., 521 N.W.2d 632, 636 (N.D.1994).

¶14 Grace argues "[w]hatever is paid by way of either settlement or judgment, constitutes public money for the public's claims, all of which must be deposited into the state treasury to be appropriated by the Legislature." Grace's position is supported by Meredith v. Ieyoub, 700 So.2d 478 (La.1997), where the Louisiana Supreme Court held that state's attorney general could not hire private attorneys to prosecute environmental litigation on a contingency basis:

"Thus, under the...