Opinion handed down October
1, 2013
Thomas A. Schweich, the Missouri State Auditor,
filed a declaratory judgment action to challenge Missouri State Governor
Jeremiah W. Nixon’s announcement to withhold funds from the 2012 fiscal year
(“FY 2012”) state budget for the Missouri legislature, the Supreme Court of
Missouri, and the office of the Auditor.[2] The trial court held that the
Governor had complete discretion to withhold or reduce expenditures provided that
actual revenues were less than the estimated revenues at any time until the
final day of the fiscal year.[3] However, the Governor was not authorized to
increase appropriations based on an “estimated” designation on the line item.[4]
After review, the Supreme Court of Missouri held that the Auditor did not have
standing to seek declaratory judgment and the issue was ripe for review.[5]
Accordingly, the action was dismissed without prejudice pursuant to Missouri
Supreme Court Rule 84.14.[6]
I.
Facts
and Holding
On June
10, 2011, the Governor announced that he would withhold $600,000 from the
Missouri Legislature, $300,000 from the Missouri Auditor’s office, and $6
million from the Missouri Judiciary in FY 2012 pursuant to article IV, Section
27 of the Missouri Constitution.[7] The auditor commenced an audit of the
Governor’s office on June 27, 2011, which was prior to the start of FY 2012,
and filed petition for declaratory judgment challenging the Governor’s announcement
on August 26, 2011.[8]
The
Auditor argued that (1) the Governor’s FY 2012 actions are unconstitutional
because they are arbitrary and capricious and (2) the Governor’s FY 2012
actions are unconstitutional because they were announced before FY 2012
began.[9] He also argued that it was unconstitutional for the Governor to
authorize an expenditure in excess of the estimated amount set by the state
legislature.[10]
Both the
Auditor and Governor filed motions for summary judgment.[11] The trial court
granted in part and denied in part both motions and all parties appealed.[12]
Because the case involved the validity of appropriations enacted by the General
Assembly subject to Governor approval, the Supreme Court of Missouri had
exclusive jurisdiction to review the issues.[13]
The
Supreme Court of Missouri found that the Auditor did not have standing to seek
declaratory judgment and the issue was not ripe for review.[14] The Court
turned to the constitutionally prescribed duties and authorities of the Auditor
and found that it authorizes the post-audits of “the accounts of all state
agencies” and the establishment of “appropriate systems of accounting” for
public officials.”[15] Because the Auditor sought declaratory judgment to
challenge the Governor’s authority to withhold funds from a budget for a fiscal
year that had not yet concluded, the Auditor was effectively conducting a
pre-audit which is not within his constitutional authority.[16] Thus the
Supreme Court of Missouri held that the Auditor lacked standing to contest the
constitutional authority of the Governor’s withholds and handling of estimated
appropriations.[17]
However,
the Supreme Court of Missouri did find that the Auditor had standing to
challenge the announcement that $300,000 would be withheld from the State
Auditor’s office because the issue involves a “legally protectable interest in
the litigation” and the Auditor would be “directly and adversely affected by
its outcome.”[18] Although the Court held that the Auditor had standing to
challenge the announcement regarding his own office, the issue was not a
controversy ripe for judicial determination.[19] It reasoned that “until FY
2012 ended without payment of the $300,000 at issue, it could not be known
whether the Governor merely was exercising his constitutional authority to
control the rate of appropriation of these funds or whether they were being
withheld to control the rate of appropriation of these funds or whether they
were being withheld or spent beyond their appropriation entirely.”[20] Due to
the lack of standing and ripeness, the Supreme Court of Missouri did not rule
on the merits of the Auditor’s action and dismissed the claim without prejudice
under Missouri Supreme Court Rule 84.14.[21]
II.
Legal
background
A.
Interpretation
of the Constitutional Authority Given to State Officers
Article
IV, § 27 of the Missouri Constitution states:
“The
governor may control the rate at which any appropriation is expended during the
period of the appropriation by allotment or other means, and may reduce the
expenditures of the state or any of its agencies below their appropriations
whenever the actual revenues are less than the revenue estimates upon which the
appropriations were based.”[22]
Article
IV, § 13 of the Missouri Constitution provides:
“The
state auditor shall have the same qualifications as the governor. He shall
establish appropriate systems of accounting for all public officials of the
state, post-audit the accounts of all state agencies and audit the treasury at
least once annually. He shall make all other audits and investigations required
by law, and shall make an annual report to the governor and general assembly.
He shall establish appropriate systems of accounting for the political
subdivisions of the state, supervise their budgeting systems, and audit their
accounts as provided by law. No duty shall be imposed on him by law which is
not related to the supervising and auditing of the receipt and expenditure of
public funds.”[23]
The
Missouri Supreme Court has determined that the responsibilities and authority
of State Officers should be strictly limited to what is constitutionally
prescribed.[24] In a case involving the interpretation of the constitutional
authority given to the state treasurer, the Court held “the constitution
enumerates very specific powers that the treasurer may exercise and, then,
specifically provides that no duty not related to those specifically enumerated
powers may be exercised by [him or] her.”[25]
B.
Standing
and Ripeness
In order
to ensure there is sufficient controversy between parties so that an issue may
be adequately presented, the Missouri Supreme Court has long adhered to
prudential principles of justiciability, which includes the requirements of “standing”
and “ripeness.”[26] A sufficient showing of “standing” must be presented before
adjudication on the merits may occur.[27] In order for a plaintiff to
demonstrate standing, they must show “a pecuniary or personal interest directly
at issue and subject to immediate or prospective consequential relief.”[28] In
addition, they must establish that they possess “some legally protectable
interest in the litigation so as to be directly and adversely affected by its
outcome.”[29]
Even if
it shown that a party has standing, a court may not render declaratory judgment
unless the issue in question is ripe for judicial determination.[30] In State ex rel. Sikeston R-VI Sch. Dist. V.
Ashcroft, the Supreme Court of Missouri held that a Governor’s order to
reduce state expenditures “is ripe for adjudication only where there is a
factual showing that actual state revenues have fallen below revenue estimates
and the Governor has reduced the expenditures below the amount
appropriated.”[31]
III. Comment
The
doctrines of ‘standing” and “ripeness” have rich history in Missouri’s judicial
system, thus this case does not appear to add anything new to Missouri law.
Given the circumstances surrounding the Auditor’s action for declaratory
judgment, the findings of the Missouri Supreme Court are of little surprise.
The Auditor was acting outside of his constitutionally prescribed authority and
brought his action before the completion of FY 2012, thus inhibiting his
ability to pursue his claim due to lack of “standing” and “ripeness.”
- Melesa Johnson
[1]
Thomas A. Schweich v. Jeremiah W. Nixon, SC92750 (October 1, 2013).
[2] Id. at 1.
[3] Id.
[4] Id. at 2.
[5] Id.
[6] Id. at 3.
[7] Id. at 3.
[8] Id.
[9] Id. at 4.
[10] Id.
[11] Id. at 4-5.
[12] Id. at 5.
[13] Id.
[14] Id. at 8.
[15] Id. at 10.
[16] Id.
[17] Id. at 12.
[18] Id. at 14.
[19] Id. at 15.
[20] Id.
[21] Id. at 17.
[22] Mo.
Const. art. IV, § 27.
[23] Mo.
Const. art. IV, §13.
[24]Kinder,
89 S.W.3d at 453-54; Petition of Bd. of Pub. Buildings, 363 S.W.2d 598, 608
(Mo. banc 1962)
[25]
Kinder, 89 S.W.3d at 453.
[26]
Ryder v. St. Charles Cnty., 552 S.W.2d 705, 707 (Mo. banc 1977).
[27]
Farmer v. Kinder, 89 S.W.3d 447, 451 (Mo. Banc 2002).
[28] Mo.
Soybean Ass’n v. Mo. Clean Water Comm’n, 102, S.W.3d 10, 25 (Mo. banc 2003).
[29] Mo.
State Med. Ass’n v. State, 256 S.W.3d 85, 87 (Mo. banc 2008)(citing Ste.
Genevieve Sch. Dist. R–II v. Bd. of Aldermen of Ste. Genevieve, 66 S.W.3d 6, 10
(Mo. banc 2002)).
[30] Mo.
Soybean Ass'n, 102 S.W.3d at 26.
[31] 828
S.W.2d 372, 375-76 (Mo. Banc 1992).
