NO. 84-245
IN THE SUPREME COURT OF THE STATE OF MONTANA
1985
RODNEY NICK,
Plaintiff and Appellant,
MONTANA DEPARTMENT OF HIGHWAYS,
GARY WICKS as Director, RUSSELL
WRIGG, as Administrator of Divi-
sion of Motor Pool Equipment,
Defendants and Respondents.
APPEAL FROM: District Court of the First Judicial District,
In and for the County of Lewis & Clark,
The Honorable Henry Lohle, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
John L. Hollow argued, Helena, Montana
For Respondents:
Roy Andes argued, Agency Legal Services, Helena,
Montana
Jack Holstrom argued, Dept. of Highways, Helena,
Montana
Submitted: May 15, 1955
Decided: December 27, 1985
Filed: DEC 2 :'7985
Mr. Justice L. C. Gul-brandson delivered the Opinion of the
Court.
Rodney Nick, a disabled veteran, appeals an order of
the District Court, of the First Judicial District, Lewis and
Clark County, granting the State's motion for judgment on the
pleadings. The District Court found that the veterans'
preference was a gratuity, repealable or amendable at any
time, rather than a constitutionally protected property
right; that the retroactive repealer in the newer statute did
not deny him equal protection; and that the newer statute did
not require a two-thirds vote by the Legislature to repeal
the old law and bar claims under it. We affirm.
Nick is a veteran of both World War I1 and the Korean
conflict. He was employed as a Bureau Chief with the Montana
Department of Highways from 1978 to 1981. In 1981, Nick was
laid-off as part. of the Department's "reduction in force. "
He then applied for two other similar jobs available in that
Department but did not receive either.
Nick filed a petition for damages and requested the
court issue an order that defendant show cause why plaintiff
should not be employed by the Department of Highways, on the
grounds that his veterans' preference right was not
considered in his dismissal or in his two subsequent
applications for employment. The court granted the
Department of Highways' motion for judgment on the pleadinqs
on April 17, 1984. The District Court determined that the
Montana Legislature, in Chapter 1, Section 14, Laws of 1983,
passed in the 1983 Special Session (hereinafter Section 14)
effectively repealed the veterans' preference statute and
that this repeal applied retroactively to bar Nick's claim
because it had not been reduced to judgment.
After Nick appealed, the State requested an extension
of time because the issues raised by Nick's appeal were
pending before this Court in Conboy v . State of Montana
(Mont. 1985), 693 P.2d 547, 42 St.Rep. 120. Both Nick and
the Department of Highways filed amicus briefs in Conboy .
After this Court affirmed the constitutionality of Section
14, Nick continued to press his appeal.
The jssues Nick presents are:
(1) That Section 14 deprives Nick of property without
due process of law in violation of Article 2, Section 17 of
the Montana Constitution and the Fourteenth Amendment of the
United States Constitution.
(2) That Section 14, by treating Nick differently than
other veterans and handicapped persons, denies him equal
protection of the laws guaranteed by Article 2, Section 4 of
the Montana Constitution and the Fourteenth Amendment of the
United States Constitution.
(3) That Section 14 is invalid under Article 2, Section
14 of the Montana Constitution because it bars Nick's suit
for injury to property and it failed to receive the necessary
two-thirds vote of all of the members of the House of
Representatives.
This is another case following the wake of our decision
in Crabtree v. Montana State Library (Mont. 1983) , 665 P.2d
231, 40 St.Rep. 963. In Crabtree, we determined that the
preference in hiring and firing accorded to qualified
veterans and disabled persons by § 10-2-203, MCA was
absolute. Subsequently, Governor Schwinden called a Special.
Session of the 1983 Montana Legislature to address the
situation created by Crabtree. The Legislature passed a bill.
retroactively repealing the statutes interpreted in Crabtree
and prospectively making the preference accorded veterans and
disabled persons a tie-breaking device. See Ch. 1, 48th Sp.
Session, Laws of Montana, Dec. 1983. The portion of the
Veterans' Preference Act that is directly addressed. in this
case is Section 14, which states:
Sections 10-2-201 through 10-2-206, MCA,
are repealed. This repeal applies
retroactively to bar any claim of
violation or application of 10-2-201
through 10-2-206 that has not been
reduced to judgment, whether or not the
judgment is final, on [the effective date
of this act]. Claims under 10-2-201
through 10-2-206 that have been reduced
to judgment, whether or not the judgment
is final, on [the effective date of this
act] are enforceable. No claim for a
violation of 10-2-201 through 10-2-206
may be made under [section 81 of this
act. (Effective date December 20, 1983.)
The Act passed the House of Representatives by a vote
of 66-33, with one member absent and not voting. Legislative
records disclose that, at the time of the Special Session,
approximately fourteen 1a.wsuits were pending against the
State based on this Court's interpretation of § 10-2-203, MCA
in Crabtree. The legislative history of Section 14 shows
that the Legislature was unequivocal in its aim to bar those
pending claims. Minutes of the meeting of the House
Judiciary Committee on December 13, 1-983, p. 1-5, point out
the Legislature's intent:
CHAIRMAN BROWN introduced a second
amend-mentto bar any claims pending under
the preference rule :
He said his concern arose yesterday when
Superintendent Koke, from the East Helena
Schools, described the situa-tion they
were in concerning the decisions they
made after the Crabtree case to hire all
veterans beca.use five of seven people who
had applied for employment were veterans
and there were only five positions
available . Essentiall-y, what this
amendment does is bar any cla-ims pending
except those that are pending final
judgement [sic] . Senator Mazurek
indicated in testimony that there were
only one or two cases at the judgement
[sic] stage. Representative Keyser
seconded the motion.
REPRESENTATIVE HANNAH asked John McMaster
what the discussion was in the interim
committee on this particular issue. Can
the legislature go back and take away the
rights of people who have already filed
under the current statutes? John
McMaster stated that the only thing that
is really questionable is whether we can
take away a judgement [sic] that is
already conclusive.
REPRESENTATIVE HANNAH asked John what was
the point he had made during the interim
committee hearing that said, in effect,
that it was questionable whether or not
you could go back and take away rights
that somebody had under the previous law.
Mr. McMaster said that what he was saying
was limited to the right to file where a
judgement [sic] had already been made.
Generally speaking, if you have a
statutory right and a statutory methods
[sic] of enforcing that right, and the
whole statute is repealed, then that
right is lost even if a lawsuit is filed.
In Conboy, 693 P.2d 549, we ruled on the validity of
Section 14. Conboy involved a complaint of wrongful
discharge by a former deputy clerk of the Supreme Court who
was not reappointed to that position. We upheld the district
court's granting of summary judgment to the State because
Conboy never legally held the job before he was discharged.
Conboy also alleged that he was not granted his veterans'
preference in his discharge. We observed in Conboy:
In substance, the District Court held
that the veterans' preference was a
government gratuity which was repealable
by the legislature at any time by a
majority vote. We adopt the analysis of
veterans' preference rights in State ex
rel. Dolan v. Civil Service Bur. of St.
Paul (1972), 293 Minn. 477, 197 N.W.2d
711, 714, where the Minnesota Supreme
Court stated:
"Veterans' preference rights are not
rights that have been earned through
years of service to the state. They are
a gratuity, given to the class of persons
to show the state's appreciation for
service in the Armed Forces of the United
States, and they do not amount to vested
rights in the recipients ....
Therefore, a veterans' preference right
can be adjusted when and as the
legislature sees fit without violating
any vested rights. ' (Citations omitted)
I
We hold that the veterans ' preference
rights granted under the repealed portion
of the Veterans Preference Act are not
rights earned through years of service to
the state, but are a gratuity given to
citizens of Montana by the State to show
its appreciation for service in the Armed
Forces. They do not amount to rights
vested in the veterans.
Conboy, 693 P.2d at 552.
Nick argues that Conboy and Dolan are distinguishable
from the case at bar because neither involved a situation
where a veteran had claimed. (or "accepted") his statutory
preference, only to have it retroactively taken by the
legislature. In Conboy, the plaintiff had not claimed the
preference prior to filing his complaint. In Dolan, the
Minnesota Supreme Court only upheld the legislature's power
to prospectively modify the preference scheme. This
distinction is legally significant and, for that reason, we
must go beyond Conboy and examine Nick's due process claim in
light of his situation.
As presented in this case, the dispositive question is:
What, for due process purposes, is the nature of a claimed
veterans' preference? Nick's equal protection argument also
hinges on this inquiry.
The due process clause in the Fourteenth Amendment to
the United States Constitution, and in Section 17, Article 2
of the Montana Constitution provides that the state may not
deprive a person of life, liberty, or property without "due
process of law." This poses the question of whether
"claiming" or "accepting" a veterans' preference creates a
property interest sufficiently great to hold sway over the
legislature's power to retract the same.
Nick suggests two ways in which he acquired a property
interest in his preference; by contract or by reliance.
Neither of these convince us that Nick had an interest the
legislature was powerless to revoke absent "just
compensation."
For Nick's first argument, we reaffirm the position we
adopted in Conboy that the veterans' preference is a
gratuity, not a contractual right. This Court held that
veterans did not acquire any rights beyond those of other
citizens for their service in the Armed Forces. Conboy, 693
P.2d at 552. The United States Supreme Court expressly
rejected the same contractual right argument in United States
v. Teller (1883), 107 U.S. 64, 2 S.Ct. 39, 27 L.Ed. 352.
This principle was reaffirmed in Lynch v. United States
(1934), 292 U.S. 571, 54 S.Ct. 840, 78 L.Ed. 1434, where that
Court reasoned:
Pensions, compensation allowances, and
privileges are gratuities. They involve
no agreement of parties; and the grant of
them creates no vested right. The
benefits conferred by gratuities may be
redistributed or withdrawn at any time in
the discretion of Congress. (Citations
omitted. )
292 U.S. at 577. Noting that this principle has never been
overruled or modified, the Ninth Circuit Court of Appeals, in
Monaco v. United States (9th Cir. 1975), 523 F.2d 935, cert.
den. 424 U.S. 914, 96 S.Ct. 1.11.4, 47 L.Ed.2d 319, upheld the
constitutionality of the "Dual Compensation Act of 1964," 5
U. S.C. SS3501-3503. That Act revoked preferences originally
granted to veterans by the "Veterans' Preference Act of 1944"
(originally codified at 5 U.S.C. S861 et. seq.) . In Monaco,
"the plaintiffs . . . were threatened with loss of their
civil service jobs as a consequence of a substantial
reduction in force at the [military facility] ." 523 F.2d at
937. Addressing the veterans' argument that they were
unconstitutionally denied rights vested under the Veterans'
Preference Act, the court noted:
... [Wlhatever anticipations a
serviceman entertained between 1944 and
1964 with respect to preferential
advantage in the federal civil service
were no more than some sort of floating
expectancy entirely dependent upon the
Government's bounty. A claim of
unconstitutional deprivation cannot be
built upon this foundation.
523 F.2d at 940. See also Kizas v. Webster (D.C.Cir. 1983),
707 F.2d 524 and Mack v. United States (Ct. of Claims 1980),
Nick does not have a reliance interest in the veterans'
preference unless and until. it is actually received. Before
that point, Nick did not incur any direct, specific financial
detriment in gaining the status of a veteran--the cost of war
and the armed services falls on all shoulders, albeit on some
more heavily than others. The preference was given by the
legislature to those more heavily saddled with that burden
for public purposes.
For a reliance interest to be valid, it must be
reasonable. We held in Conboy that veterans acting under the
veterans' preference statute did so in contemplation of the
legislature's power of repeal and cited S 1-2-110, MCA:
Any statute may be repealed at an.y time
except when it is otherwise provided
therein. Persons acting under any
statute are deemed to have acted in
contemplation of this power of repeal.
Along this line, Nick argues that Article 11, Section
35 of the Montana Constitution requires this Court to find
tha.t the veterans' preference is, in Montana, more than a
gratuity. That Section states: "The people declare that
Montana servicemen, servicewomen, and veterans may be given
special considerations determined by the legislature."
Our reading of this provision is that it is permissive
and does not provide an independent, substantive ground for
finding that the veterans' preference has any greater
incidents of property than that found in Conboy, Dolan or the
federal cases discussed above. The meaning of the above
clause and the context of the term "special considerations"
lead us to the conclusion that the use of the word
consideration was not meant as implying a term of art from
contract law. This is supported by the minutes of discussion
of the above clause at the Constitutional Convention.
Delegate McKeon, who proposed Section 35 stated that:
.. . [Tlhis section is a permissive
section to be added to the Bill of
Rights, allowing the Legislature to give
special consideration to veterans of
wars ...
I think that we should include a section
of this nature in the Bill of Rights to
give the Legislature an impetus to try
and help these individuals ...
Vol. VI, Montana Constitutional Convention, verbatim
transcript, p. 1842.
Section 35 is permissive, laudatory and suggestive in
nature, and was designed to remove any other constitutional
impediment that might stand in the way of the preferential
treatment of vetera.ns.
Wick also contended at oral argument that the statement
in White v. State of Montana (Mont. 1983), 661 P.2d 1272,
1275, 40 St.Rep. 507, 510, that "all persons have a speedy
remedy for every injury" is an independent ground for his
lawsuit. This language alone does not provide Nick a new
cause of action not otherwise recognized. Further, White is
distinguishable from the case at bar in that here, as
discussed above, no fundamental right is burdened.
This result is supported by Jensen v. State of Montana
(Mont. 1984), 689 P.2d 1231, 41 St.Rep. 1971, holding that
the remedy for denial of the statutory preference alone,
(i.e. absent the other elements of wrongful discharge or
discrimination) is a writ of mandamus directing the hiring
agency to re-open the application process and fill the
vacancy in accordance with Crabtree.
This brings us to Nick's argument that Section 14
offends the equal protection clauses of the Fourteenth
Amendment to the United States Constitution, and Article TI,
Section 4 of the Montana Constitution. In order for this
Court to apply a strict scrutiny analysis to this claim, Nick
must show that Section 14 either burdens a fundamental right
or involves a suspect class. Oberg v. City of Rillings
(Mont. 1983), 674 P.2d 494, 40 St.Rep. 2034. Otherwise,
Section 14 survives review if the legislature has a rational
basis for its action.
Nick argues that Section 14 created three classes of
veterans : (1) those who received the full Crabtree
preferen.ce; (2) his class, those who were denied the
preference post- Crabtree but failed to obtain a judgment
before Section 14 took effect and received nothing; and (3)
those who received the tie-breaker preference articulated in
Section 14. These classes do not involve a suspect criteria
such as race, nationality or alienage, so a strict scrutiny
analysis is not required. The legislative history, of Section
1.4 shows the legislature's valid and rational reasons for its
actions. Testimony indicated that many governmental bodies
were thrust into difficult situations by the Crabtree
decision after interpreting the preference statutes
differently for decades. Legislators voiced concerns of
fiscal integrity, employee competence, and academic freedom.
Ch. 1, Laws 1983, including Section 14, was a rational
response to these legitimate concerns.
The legislature's giving of a veterans' preference does
not cause that preference to be a fundamenta.1 right, as
discussed in the first issue. This government gra-tuity fits
within one group of statutory rights discussed by Professor
Charles R . Hochman in his article, The Supreme Court - -
and the
Constitutionality - Retroactive Legislation, 73 Harv.L.Rev.
of
There are two special types of statutory
right which may be altered or repudiated
at any time until the benefits conferred
by them are actually received. The first
of these embraces rights arising from
statutes granting gratuities from the
government. The Court has said that the
general principle governing such statutes
is that "benefits conferred by gratuities
may be redistributed or withdrawn at any
time in the d-iscretion of Congress."
[Citing Lynch, 292 U.S. at 577.1
The key element in both the gratutiy and
penalty cases appears to be the absence
of any financial cost in the acquisition
of the right based upon the original
statute. [Citing Steamship Co. v.
Joliffe (1865), 69 U.S. (2 Wall.) 450.1
It should be stressed that the reliance
required - remove a right from . -
to the
category of gratuity or penalty is a
financial detriment - - acquisition o
in txe ?
the right, - - merely reliance - -
and not on t
&
fiht after it accrues, as, for example,
OaF
the making - - financiaT commitmen; - in
reliance upon the statute. The reason
for this stricter requirement is probably
similar to that encountered in the cases
sustaining the extension of statutes of
limitations; the penalty or gratuity is
given by a statute for public purposes
which are not controlled by the merits of
the donee's claim to the right. Under
these circumstances, the Court is
reluctant to permit the donee to obstruct
a rea~sessme~t these purposes by the
of
legislature. (Emphasis added.)
73 Harv.L.Rev. at 724-726. Again, no strict scrutiny
analysis applies since Section 14 does not burden a
fundamental right and the legislature's reasons for its
actions, articulated above, satisfy the rational basis test.
Finally, Nick argues that Section 14 failed to garner
the Constitutionally required two-thirds vote of the House of
Representatives, and is thus invalid; see Art. 11, Sec 18,
Mont.Const. We affirm the following holding in Conboy: "We
conclude that the legislature properly could repeal the
veterans' preference by a majority vote at any time ... "
The District Court's order is affirmed
n
We concur: '7
6g Justice
Justices /I /-"-7
Honorable Thoma
Judge of the
sitting in
Justice William Hunt, Sr.
Mr. J u s t i c e Frank R. M o r r i s o n , J r . d i s s e n t s a s f o l l o w s :
The majority opinion simply fails to address the
paramount issue presented i n t h i s appeal. That issue is:
WHERE A CAUSE O F ACTION CAN BE STATED FOR A
W O G U TERMINATION OR W O G U FAILURE TO HIF.E,
R N F L R N F L
CAN THAT CAUSE O F ACTION RE ELIMINATED WITHOUT
OFFENDING THE ACCESS CLAUSE OF THE MONTANA
CONSTITUTION?
Nick was terminated in 1981 and shortly thereafter
applied f o r two similar jobs, but did not receive e i t h e r .
Nick was e n t i t l e d t o p r e f e r e n c e p o i n t s under t h e v e t e r a n s 1
preference s t a t u t e then i n existence. I f Nick had a c l a i m ,
t h e m e r i t s o f which a r e n o t b e f o r e t h i s C o u r t , t h a t c l a i m had
r i p e n e d p r i o r t o t h e l e g i s l a t i v e r e p e a l i n 1983.
This case does not involve the question of whether
v e t e r a n s ' p r e f e r e n c e p o i n t s a r e a g r a t u i t y which can be t a k e n
by the legislature. I do agree that a statute granting
p r e f e r e n c e p o i n t s can be r e p e a l e d . I n o t h e r words, a v e t e r a n
i s not entitled t o preference points for the life of the
v e t e r a n simply b e c a u s e t h e y e x i s t e d a t t h e t i m e t h e v e t e r a n
entered the service.
Nick alleges that he was terminated and not rehired
b e c a u s e t h e S t a t e o f Montana f a i l e d t o comply w i t h t h e l e g a l
mandate granting preference points. Rather than seek a
r e o p e n i n g of t h e b i d d i n g p r o c e s s , Nick sued f o r damages. The
damages claimed arose out of a wrongful discharge and
wrongful f a i l u r e t o r e h i r e i n t h a t t h e S t a t e f a i l e d t o f o l l o w
t h e law and t h e r e f o r e v i o l a t e d p u b l i c p o l i c y . Such a c a u s e
of a c t i o n i s r e c o g n i z e d i n Montana. Nye 17. Department of
L i v e s t o c k ( 1 9 8 2 ) , 196 Mont. 2 2 2 , 639 P.2d 498.
Nick alleges damages. If i t be true that the State
violated the law in f a i l i n g t o give preference points and
Nick was damaged, t h e c a u s e of a c t i o n r i p e n e d a t t h e t i m e t h e
S t a t e acted. A t that p o i n t Nick had a c l a i m f o r damages
which had v a l u e , if true. In enacting the legislation i n
1983, and applying it retroactively, the legislature
abolished a cause of action for damage to Nick's property
interest which was, at that time, recognized by law.
Article 11, Section 16 of the 1972 Montana Constitution
provides :
The administration of justice. Courts of justice
shall be open to every person, and speedy remedy
afforded for every injury of person, property, or
character.
We have interpreted this section to afford a
constitutional right to full legal redress for every injury
to person or property. White v. State of Montana (Mont.
1983), 661 P.2d 1272, 40 St.Rep. 507.
The constitutional right stated in Article 11, Section
16 has not been held by this Court to be an absolute right.
Rather we have held that the right, being stated in the
Declaration of Rights section of the Constitution, is
fundamental in character. Being a fundamental right,
classification systems which discriminate among litigants are
subjected to a strict scrutiny analysis.
Here we have a group of people, veterans and handicapped
persons, who had a cause of action when their preference
points were unlawfully taken from them. All other employees
who were terminated by the State or other employers, in
violation of the law, have a recourse in the court system.
Veterans are singled out and are denied any recourse although
the law was violated in their discharge. Such treatment of
veterans, the group to which Nick belongs, must be strictly
scrutinized and the discriminatory scheme fail unless there
is a compelling state interest shown. White v. State of
Montana, supra.
The State cannot satisfy a compelling state interest
showing by a mere claim on the legislature's part that a
compelling state interest exists. White v. State of Montana,
supra. The majority opinion does not even contend that a
compelling state interest has here been shown.
The discrimination against veterans who had a cause of
action and were entitled to redress under the Constitution
must fail when subjected to a strict scrutiny analysis. I
would remand this case for trial.
I concur in the dissent of Jus