Fent v. Contingency Review Bd.

163 P.3d 512

2007 OK 27

Jerry R. FENT, as a resident taxpayer, citizen and voter of the State of Oklahoma, and all other similar persons, Petitioner, v. CONTINGENCY REVIEW BOARD, a State of Oklahoma Agency; Brad Henry, Governor of Oklahoma; Todd Hiett, Speaker of the House, and Mike Morgan, President Pro Tempore of the Senate, Respondents.

No. 103,714.

Supreme Court of Oklahoma.

May 1, 2007.

Original Proceeding For A Prerogative Writ.

¶ 0 Petitioner brought in this court an original proceeding for a declaration that the Contingency Review Board's approval of expenditures to be made out of the Oklahoma Opportunity Fund usurps the power of the executive and is void ab initio and for injunctive relief to prevent the Board's continued participation in the approval process.

ORIGINAL COGNIZANCE TAKEN; DECLARATORY RELIEF GRANTED.

Jerry R. Fent, Oklahoma City, Oklahoma, pro se.

Edwin Kessler, Norman, Oklahoma, pro se.¹

Lynn C. Rogers and Scott Boughton, Assistant Attorneys General, Oklahoma City, Oklahoma, for Respondents Contingency Review Board, Governor Brad Henry and Speaker Todd Hiett.

Judith S. King, Oklahoma State Senate, and Lee Slater, Oklahoma City, Oklahoma, for Respondent President Pro Tempore Mike Morgan.²

OPALA, J.

¶ 1 The dispositive issues tendered by this original proceeding are: (1) Is the mandatory participation by the legislative members of the Contingency Review Board (CRB) in the process of approval of expenditures from appropriations to the Oklahoma Opportunity Fund³ (Opportunity Fund) an impermissible intrusion upon the executive branch's powers in violation of Art. 4, § 1, Okl. Const.?⁴ and if so (2) Are the offending provisions of 62 O.S.Supp.2006 § 48⁵ severable from the remainder of the Act? and (3) Is the CRB's approval of funding to the Ardmore Development Authority for two related projects void ab initio? We answer the first two questions in the affirmative and the third in the negative.⁶

I THE ANATOMY OF LITIGATION

¶ 2 Petitioner Jerry R. Fent (petitioner or Fent), a resident taxpayer, invokes this court's original jurisdiction to challenge the legality of the CRB, of the status of the two legislator members who sit on that board, as well as of the CRB's approval of funding that was to flow from the Opportunity Fund to the Ardmore Development Authority (Authority) for two projects in the Ardmore area.

¶ 3 The Opportunity Fund, created by the terms of 62 O.S.Supp.2006 § 48,⁷ is a revolving fund for the Department of Commerce to be used for economic development projects. The enactment establishes explicit criteria for determining whether proposed expenditures are expected to result in a substantial economic benefit to the State. The Director of the Department of Commerce is authorized to administer the Opportunity Fund⁸ and to propose expenditures from the fund in accordance with the legislative guidelines.⁹ Appropriations to the fund may be budgeted and expended by the Governor for proposed projects subject to the unanimous approval of the CRB.¹⁰ The CRB is composed of the Governor, Speaker of the House of Representatives, President Pro Tempore of the Senate and Director of State Finance (an ex officio nonvoting member).¹¹ The Opportunity Fund received a $45,000,000 appropriation during the second extraordinary legislative session in 2006.¹² The CRB approved Authority's application for two grants in the aggregate amount of $20,000,000 for a project related to a new MG automobile plant:¹³ (1) a $5,000,000 loan to Oklahoma Global Motors, LLC to assist it in start-up operations to manufacture MG automobiles in Ardmore and (2) a $15,000,000 award for improvements to be made at the Ardmore Municipal Airport, which would enable the airport to accommodate cargo aircraft for use in transporting manufactured MG automobiles.¹⁴

II THE PARTIES' ARGUMENTS

¶ 4 Fent claims the CRB's mandated participation in the approval process for all expenditures from appropriations to the Opportunity Fund (for economic development projects) contravenes the State's constitutional separation-of-powers provision.¹⁵ This is so because two legislators, who sit as members of the CRB, have the power to veto funding for proposed projects selected by the executive service. He challenges the legitimacy of the CRB as an "executive" board because it is composed of two legislator-members who sit ex officio.¹⁶ He claims the legislators sitting on the CRB are both serving simultaneously in the executive as well as in the legislative capacities in violation of the state constitutional prohibition against holding dual state offices.¹⁷

¶ 5 Respondents counter the CRB is essentially a legislative body acting in support of a legislative function—the determination of State fiscal policy on a matter of great public importance. They claim the CRB acts in a cooperative, not coercive, manner, when it participates in the approval process. According to Respondents, even if we assume the statutory approval regime is unlawful, the offending language is severable from the remainder of the act without any harm to its essential character.

III FENT'S STANDING

¶ 6 Fent claims he has standing¹⁸ as an Oklahoma resident taxpayer, citizen and voter to challenge as constitutionally infirm (a) the expenditure of public tax-derived funds in the amount of $20,000,000, (b) the CRB, an executive board composed of two legislative and one executive voting members, whose mandatory participation in the approval of expenditures to be made out of appropriations to the Opportunity Fund offends the separation-of-powers doctrine, Art. 4 § 1, Okl. Const., and (c) the role of the President Pro Tempore of the Senate and the Speaker of the House, both of whom sit on the CRB in contravention of the dual-office-holding prohibition of Art. 5 § 23, Okl. Const. Fent's claim to standing is unchallenged by the respondents. Since standing, very much like jurisdiction, must be inquired into sua sponte,¹⁹ we must pass here sua sponte on Fent's standing.

¶ 7 Standing refers to a person's legal right to seek relief in a judicial forum.²⁰ The three threshold criteria of standing are (1) a legally protected interest which must have been injured in fact i.e., suffered an injury which is actual, concrete and not conjectural in nature, (2) a causal nexus between the injury and the complained-of conduct, and (3) a likelihood, as opposed to mere speculation, that the injury is capable of being redressed by a favorable court decision.²¹ The doctrine of standing ensures a party has a personal stake in the outcome of a case and the parties are truly adverse.²²

¶ 8 This court has long-recognized the right of a taxpayer to challenge illegal taxation or expenditure of public funds.²³ The unlawful appropriation or expenditure of public funds is deemed to be an invasion of the taxpayer's legal rights.²⁴ A taxpayer also has a vital interest in (a) the unimpeded use of appropriated funds (b) by its destined recipient (c) for the purpose for which the fund was intended (d) without unlawful legislative interference. There is an injury to the public interest when the Legislature places unlawful barriers to a recipient agency's access to appropriated funds by interposing its own control over an appropriation bill beyond the point in time at which that bill passes outside the legitimate zone of legislative control.²⁵ A taxpayer's challenge to the constitutionality of legislation affecting the use of public funds is a matter of public right.

¶ 9 The claimed public injury in this case consists of the Legislature's usurpation of the executive branch's power (to use appropriated funds) through legislative post-passage interposition of an improper veto barrier which legislative officials may use when sitting on the CRB. That injury is redressable by judicial severance of the offending provisions of 62 O.S.Supp.2006 § 48(B) from the remainder of the statute.

IV ORIGINAL JURISDICTION

¶ 10 Respondent Morgan submits there is no urgency or pressing need for an early decision.²⁶ He argues this case is analogous to the scenario in Keating v. Johnson,²⁷ in which this court declined to assume original jurisdiction of the Governor and of two state representatives in a publici juris case in which an issue of governmental power's usurpation was raised. Petitioner, on the other hand, urges this court to take original jurisdiction and decide the state constitutional issues that are pressed here.

¶ 11 This case is appropriate for the court's assumption of original jurisdiction to grant declaratory relief. In controversies where (as here) this court and the district court both have concurrent jurisdiction, this court's decision to assume original jurisdiction constitutes an exercise of discretionary power.²⁸ Jurisdiction to grant declaratory relief may be assumed (1) in matters of public interest where there is (2) an element of urgency or a pressing need for an early decision.²⁹ Both of these prongs are met here. The funding of state programs is clearly a matter publici juris.³⁰ The Legislature has appropriated $45,000,000 to the Opportunity Fund for the development of economic activity in the State. There is a pressing need here for an early determination of the legitimacy of the CRB's role in the approval-of-expenditures process designed to expend money appropriated to the Opportunity Fund. The continued disbursement of those funds from the state treasury to the Ardmore recipient, the approval and funding of future projects as well as future legislative appropriations to the Opportunity Fund will remain under a heavy cloud of legal uncertainty until the constitutional claims pressed by Fent are resolved. We hence exercise our discretionary authority to take original jurisdiction and rule on these fundamental-law challenges.

V THE STATE'S FUNDAMENTAL LAW PROHIBITS THE LEGISLATURE FROM INTERPOSING ITS POWER OVER AN APPROPRIATION THAT HAS ALREADY BECOME ENACTED LAW

¶ 12 Oklahoma's fundamental...