Teeboom v. City of Nashua

172 N.H. 301

213 A.3d 877

Fred S. TEEBOOM

v.CITY OF NASHUA

Daniel Moriarty

v.Mayor, City of Nashua & a.

No. 2018-0171

Supreme Court of New Hampshire.

Argued: May 8, 2019

Opinion Issued: July 2, 2019

Douglas, Leonard & Garvey, P.C., of Concord (Charles G. Douglas, III, on the brief and orally), for plaintiff Fred S. Teeboom.

Office of Corporation Counsel, of Nashua (Steven A. Bolton and Dorothy S. Clarke on the memorandum of law, and Mr. Bolton orally), for the defendants.

LYNN, C.J.

Plaintiff Fred S. Teeboom appeals an order of the Superior Court (Temple, J.) dismissing his claims for declaratory, injunctive, and mandamus relief based upon the court's determination that the budget spending cap¹ in the Nashua city charter is unenforceable because it violates state law. We affirm.

I. Pertinent Facts

The trial court found the following facts. The spending cap was added to the Nashua city charter in November 1993. As quoted by the trial court, the spending cap provides:

Recognizing that final tax rates for the City are set by the New Hampshire Department of Revenue Administration ... the Mayor, the [Board of Aldermen], and all departments in the City ... shall prepare their annual budget proposals and the [Board of Aldermen] shall act upon such proposals in accordance with the mandates in this paragraph.

In establishing a combined annual municipal budget ... for the next fiscal year, the Mayor and the [Board of Aldermen] shall consider total expenditures not to exceed an amount equal to the [combined annual municipal budget] of the current fiscal year, increased by a [specified] factor ....

This provision shall not prevent the Mayor and [Board of Aldermen] from establishing a [combined annual municipal budget] below this limit.

This provision shall not prevent the Mayor and the [Board of Aldermen] from appropriately funding any programs or accounts mandated to be paid from municipal funds by state and federal law.

(Brackets and ellipsis omitted.)

The Nashua city charter also outlines exemptions to the spending cap:

The total or any part of principal and interest payments of any municipal bond, whether established for school or municipal purposes, may be exempted from the limitation defined in [the spending cap provision] upon an affirmative vote of at least ten (10) aldermen. This decision shall be made annually.

In addition, capital expenditures deemed necessary by the mayor and the board of aldermen, ... may similarly be exempted from this limitation upon an affirmative vote of at least ten (10) aldermen.

In April 2017, by a vote of nine to six, the Nashua Board of Aldermen (board) passed an ordinance exempting the entire wastewater treatment fund from the combined annual municipal budget. Later that month, Nashua's mayor proposed a budget for fiscal year 2018 that, consistent with the ordinance, removed the wastewater treatment fund from the spending cap calculation. In so doing, the mayor did not adjust for the fact that the 2017 combined annual municipal budget included $8.1 million of wastewater treatment funds that were not included in the proposed 2018 combined annual municipal budget. This process had the effect of allowing the mayor to allocate a significant amount of additional funds to other areas without running afoul of the spending cap.

On the surface, the proposed 2018 combined annual municipal budget appeared to comply with the spending cap. The maximum allowable budget pursuant to the cap was $267,517,084, and the 2018 combined annual municipal budget was $265,598,979. Faced with a proposed 2018 combined annual municipal budget purporting to be $1,918,105 below the spending cap, the board voted, ten to five, to adopt that budget.

Thereafter, Teeboom brought the instant lawsuit against the City of Nashua (City), asking the trial court to enforce the spending cap provision on the ground that the ordinance exempting the wastewater treatment fund from the combined annual municipal budget violated that provision. Teeboom contended that the wastewater treatment fund does not qualify for exemption from the spending cap and that, even if it did, such an exemption may be made only by an annual vote of a supermajority of ten aldermen. Because the ordinance was adopted by only nine aldermen, Teeboom contended that, even if the wastewater treatment fund could be excluded from the spending cap, the ordinance was ineffective to accomplish this objective. Teeboom also asserted that the board's vote on the proposed 2018 budget did not amount to a vote to exempt the wastewater treatment fund from the spending cap because the vote was not labeled as such.

The City countered that the ordinance was validly enacted. Alternatively, the City argued that, even if the ordinance violates the spending cap, the 2018 budget is valid because a supermajority of the board impliedly voted to override the spending cap by adopting the mayor's proposed budget. The City also argued that Teeboom lacked standing to bring his action.

Following a bench trial, the trial court ruled that Nashua's spending cap is unenforceable because it does not contain an override provision as required by state law. See RSA 49-C:12, III, :33, I(d) (2012). The court found that the charter provision allowing a supermajority of the board to exempt from the spending cap municipal bond and capital expenditures did not constitute the requisite override provision. The court decided that because the spending cap was unenforceable, it could not provide redress for Teeboom's alleged injury and, therefore, that he lacks standing to bring his claims. Having so ruled, the trial court dismissed Teeboom's action. This appeal followed. Plaintiff Daniel Moriarty, whose separate action challenging the ordinance and the 2018 budget was consolidated in the trial court with Teeboom's action, has not appeared in this appeal.

II. Analysis

A. Teeboom's Standing

Before addressing the merits of Teeboom's appellate arguments, we consider the City's assertion that he lacks standing. For the purposes of our analysis, we assume without deciding that, as the City argues, the 2018 amendments to Part I, Article 8 of the State Constitution, related to taxpayer standing, do not apply to this case.

When the relevant facts are not in dispute, we review de novo the trial court's determination on standing. State v. Actavis Pharma, 170 N.H. 211, 214, 167 A.3d 1277 (2017). "[S]tanding under the New Hampshire Constitution requires parties to have personal legal or equitable rights that are adverse to one another, with regard to an actual, not hypothetical, dispute, which is capable of judicial redress." Duncan v. State, 166 N.H. 630, 642-43, 102 A.3d 913 (2014) (citations omitted). "In evaluating whether a party has standing to sue, we focus on whether the party suffered a legal injury against which the law was designed to protect." Actavis Pharma, 170 N.H. at 215, 167 A.3d 1277 (quotation omitted). "Neither an abstract interest in ensuring that the State Constitution is observed nor an injury indistinguishable from a generalized wrong allegedly suffered by the public at large is sufficient to constitute a personal, concrete interest." Id. (quotations omitted). "Rather, the party must show that its own rights have been or will be directly affected." Id. (quotation omitted).

In the trial court, Teeboom asserted that his personal rights were directly affected by passage of the 2018 budget because, by his calculations, his 2018 property taxes will be $290 more than they would have been had the wastewater treatment fund been included in the spending cap calculation. The City contends that Teeboom's assertion is insufficient to confer standing because his alleged injury "is shared generally by all other taxpayers in the city, meaning it is not a distinguishable, particularized injury." However, there is no requirement that a party suffer a "unique" injury to establish standing. Although, under our standing doctrine as articulated in Duncan and its progeny, a person's status as a taxpayer is not, by itself, sufficient to establish standing, taxpayer status in conjunction with an injury or impairment of rights can confer standing. See Duncan, 166 N.H. at 645, 102 A.3d 913 (to bring a declaratory judgment action, a party must establish that some right of the party has been impaired or prejudiced by application of a rule or statute). As the United States Supreme Court has explained:

As a general matter, the interest of a federal taxpayer in seeing that Treasury funds are spent in accordance with the Constitution does not give rise to the kind of redressable "personal injury" required for Article III standing. Of course, a taxpayer has standing to challenge the collection of a specific tax assessment as unconstitutional; being forced to pay such a tax causes a real and immediate economic injury to the individual taxpayer.

Hein v. Freedom From Religion Foundation, Inc., 551 U.S. 587, 599, 127 S.Ct. 2553, 168 L.Ed.2d 424 (2007).

Here, Teeboom contended that the adoption of the 2018 budget, based upon the elimination of the wastewater treatment fund from the spending cap calculation, would impair his personal rights by illegally increasing his property taxes. He asserted that his individual, annual tax bill would increase "proportional to the amount the spending cap had [impermissibly] exceeded the statutory limit." Thus, he did not merely assert standing as a taxpayer. See Duncan, 166 N.H. at 646, 102 A.3d 913 (holding that the petitioner's claim that a program would result in "net fiscal losses" to local governments does not articulate a personal injury sufficient to confer standing (quotation omitted)). Instead, Teeboom contested the collection of a specific tax, arguing that it results from a budget that is based upon an unlawful spending cap calculation. Although, arguably, other taxpayers in Nashua will suffer the same injury — increased property taxes — that does not mean that Teeboom's personal rights are not...