No. 93-657
IN THE SUPREME COURT OF THE STATE OF MONTANA
. P
,B
ALAN
RESPONSIBLE
MONTANA EDUCATION
an unincorporated association; MONTANA PUBLIC
OF STATE, COUNTY, AND MUNICIPAL EMPLOYEES/MONTANA
COUNCIL NINE, an unincorporated association affiliated
with American Federation of State, County, and
Municipal Employees; ASSOCIATED STUDENTS OF MONTANA
STATE UNIVERSITY, an unincorporated association; MONTANA
STATE UNIVERSITY FACULTY COUNCIL; ASSOCIATED STUDENTS
OF EASTERN MONTANA COLLEGE, an unincorporated association;
MONTANA LOW INCOME COALITION, a Montana corporation;
and ASSOCIATED STUDENTS OF THE UNIVERSITY OF MONTANA,
Plaintiffs, Appellants and Cross-Respondents,
MIKE COONEY, Secretary of State of the State of
Montana; ROBERT G. NATELSON, individually and as
Chairman of MONTANANS FOR BETTER GOVERNMENT, P.A.C.;
MONTANANS FOR BETTER GOVERNMENT, P.A.C., a citizens
group, registered as a political committee,
Defendants, Respondents and Cross-Appellants.
APPEAL FROM: District Court of the First Judicial District,
In and for the County of Lewis and Clark,
The Honorable Thomas C. Honzel, Judge presiding.
COUNSEL OF RECORD:
For Appellants:
James H. Goetz (argued) and Richard J. Dolan; Goetz,
Madden and Dunn, Bozeman, Montana
Jim McGarvey, Attorney at Law, Helena, Montana
For Respondents:
Gerald J. Neely (argued), Attorney at Law, Billings, MT
Hon. Joseph P. Mazurek, Attorney General, Beth Baker
(argued), Assistant Attorney General, Helena, Montana
Submitted: May 24, 1994
Decided: June 30, 1994
Filed: ,
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Justice John Conway Harrison delivered the Opinion of the Court.
This is an action to declare unconstitutional Referendum 112
and the suspension of 1993 Mont. Laws 634 prior to a referendum
vote. The District Court for the First Judicial District, Lewis
and Clark County, granted summary judgment in favor of defendants.
Plaintiffs appeal, and defendant Secretary of State Mike Cooney
cross-appeals. We affirm.
The issues are:
1. Did the District Court err in concluding that Counts I1
and V of the amended complaint were not time-barred under 5 3-5-
302 (6)(a), MCA?
2. Does the suspension of Chapter 634 pending a referendum
vote deny equal protection of the law in violation of the
Fourteenth Amendment to the United States Constitution and Article
11, Section 4 of the Montana Constitution?
3. Does the suspension of Chapter 634, which placed the
state's budget out of balance, violate Article VIII, Section 9 of
the Montana Constitution?
4. Does Chapter 634 constitute an appropriations measure on
which a referendum vote is prohibited?
5. Does suspension of Chapter 634 constitute a surrender and
suspension of the taxation power in violation of Article VIII,
Section 2 of the Montana Constitution?
In 1993, the Montana legislature enacted a revision of state
income tax and corporate tax laws. The measure, 1993 Mont. Laws
634 (Chapter 634), increases the income tax burden on some
individual taxpayers while reducing it on others, increases minimum
corporate taxes, and imposes graduated corporate tax rates. The
purposes of the measure include raising revenues for the general
operation of state government and balancing the state's budget.
Had Montana voters adopted a proposed four percent general
sales tax at the June 1993 primary election, Chapter 634 would have
been repealed beginning January 1, 1994, and the sales tax would
have taken effect at that time. However, the voters rejected the
sales tax. Therefore, under the scheme adopted by the legislature,
Chapter 634 remained in effect.
During the summer of 1993, defendants Natelson and Montanans
for Better Government circulated petitions in support of Referendum
112, in order to place Chapter 634 on the ballot in the November
1994 general election pursuant to Article 111, Section 5 of the
Montana Constitution. On September 3, 1993, defendant Secretary of
State Mike Cooney certified to the Governor that he had received
petitions containing sufficient signatures to place Chapter 634 on
the ballot at that election. On September 28, 1993, defendant
Cooney certified to the Governor that he had received petitions
containing sufficient signatures to require suspension of Chapter
634 until the vote on Referendum 112, pursuant to subsection (2) of
the Constitutional referendum power.
The Governor issued a proclamation calling the legislature
into special session. Among other things, the proclamation stated
that ''the suspension of [Chapter 6341 has made its provisions
inoperative, thereby making it virtually impossible to balance the
state's budget without legislative action."
Plaintiffs filed this action for declaratory judgment on
October 18, 1993. While it was pending before the District Court,
the special session of the legislature began. By the close of the
special session in December 1993, the legislature had made
substantial cuts in appropriations in order to balance the budget.
Plaintiffs1 amended complaint contains seven counts. Counts
I through VI challenge the constitutionality of Referendum 112.
Count VII alleges fraud on the part of defendants Natelson and
Montanans for Better Government. At the hearing giving rise to
this appeal, the District Court heard only those claims relating to
the constitutionality of Referendum 112. Plaintiffst fraud claim,
Count VII of the amended complaint, was reserved for possible
hearing at a later date.
The District Court thoroughly analyzed the issues in a twenty-
four page memorandum and order. Before it reached the plaintiffs1
constitutional arguments, it rejected the argument of defendant
Cooney that portions of the amended complaint were time-barred.
The court then considered and rejected all of plaintiffs1
constitutional arguments, upholding the constitutionality of the
referendum process in this case.
* * *
This case requires reexamination ofthe referendum power which
the people of Montana have resewed to themselves since 1906, when
it was first adopted by amendment to the Montana Constitution. &g
Art. V, Sec. 1, Mont. Const. (1889). The referendum provision of
Montana's present Constitution provides:
Referendum. (1) The people may approve or reject by
referendum any act of the legislature except an
appropriation of money. A referendum shall be held
either upon order by the legislature or upon petition
signed by at least five percent of the qualified electors
in each of at least one-third of the legislative
representative districts. The total number of signers
must be at least five percent of the qualified electors
of the state. A referendum petition shall be filed with
the secretary of state no later than six months after
adjournment of the legislature which passed the act.
(2) An act referred to the people is in effect until
suspended by petitions signed by at least 15 percent of
the qualified electors in a majority of the legislative
representative districts. If so suspended the act shall
become operative only after it is approved at an
election, the result of which has been determined and
declared as provided by law.
Art. 111, Sec. 5, Mont. Const.
In interpreting this provision, we are guided by the principle
that "initiative and referendum provisions of the Constitution
should be broadly construed to maintain the maximum power in the
people." Chouteau County v. Grossman (1977), 172 Mont. 373, 378,
563 P.2d 1125, 1128. We are also mindful, in considering this
appeal, of the first two substantive provisions of the Montana
Constitution. Article 11, Section 1, provides:
Popular sovereignty. All political power is vested in
and derived from the people. All government of right
originates with the people, is founded upon their will
only, and is instituted solely for the good of the whole.
Article 11, Section 2, provides:
Self-government. The people have the exclusive right of
governing themselves as a free, sovereign, and
independent state. They may alter or abolish the
constitution and form of government whenever they deem it
necessary.
With these principles in mind, we now consider the issues raised on
appeal.
Issue 1
Did the District Court err in concluding that Counts I1 and V
of the amended complaint were not time-barred under 5 3-5-
302 (6)(a), MCA?
Counts I1 and V of plaintiffs' amended complaint allege that
there are constitutional prohibitions against putting Chapter 634
to a public vote, which claims do not involve the issue of
suspension of the law prior to the election. Secretary of State
Cooney argues that these counts of the complaint are barred under
5 3-5-302(6) (a), MCA, because the claims raised therein were not
filed within 30 days after the ballot issue was certified to the
Governor, on September 3, 1993.
On September 27, 1993, defendants Natelson and Montanans for
Better Government filed a petition for declaratory judgment in this
Court. They named as defendants Montanans for Responsible
Government, P.A.C., and the State of Montana, and asked for a
declaratory judgment that the suspension of Chapter 634 and its
placement on the ballot did not violate federal or state
constitutional provisions. Pursuant to order of this Court,
responses were filed by the same counsel who appear in the present
case on behalf of the plaintiffs and the Montana Secretary of
State. This Court dismissed the action for declaratory judgment,
without substantive discussion, on October 14, 1993.
As stated above, the present action was filed four days later,
on October 18, 1993. The District Court ruled that the statute of
limitations as to Counts I1 and V of the amended complaint was
equitably tolled during the pendency of the declaratory judgment
action.
The doctrine of equitable tolling of a statute of limitations
applies when a claimant in good faith pursues one of several
possible legal remedies and meets three criteria: (1) timely
notice to the adverse party within the applicable statute of
limitations in filing the first claim; (2) lack of prejudice to the
adverse party in gathering evidence to defend against the second
claim; and (3) good faith and reasonable conduct by the claimant in
filing the second claim. Harrison v. Chance (1990), 244 Mont. 215,
228, 797 P.2d 200, 208. Cooney does not claim any deficiencies
concerning the three criteria listed in Harrison. Rather, he
asserts that equitable tolling is not available here because the
plaintiffs were not the ones who filed the "first claim,^ the
action for declaratory judgment in this Court. He cites Erickson
v. Croft (1988), 233 Mont. 146, 760 P.2d 706, in which this Court
quoted a California case describing equitable tolling as available
where an injured person has several legal remedies and, reasonably
and in good faith, pursues one.
Cooneyls argument is not persuasive. In this case, there has
been no showing of lack of notice or of prejudice to any party.
The plaintiffs filed this action in District Court promptly after
the action for declaratory judgment was dismissed by this Court.
In this instance, where some defendants attempted to bypass the
District Court by filing an original proceeding in this Court, and
where this Court ordered responses to the arguments on the issues,
we will not impose a requirement that the plaintiffs should have
second-guessed that the action in this Court would ultimately be
dismissed.
We conclude the plaintiffs should not be penalized because of
the premature attempt by some of the defendants to have this Court
resolve the same or similar issues as those raised in this action.
We hold that the District Court did not err in ruling that Counts
I1 and V of the amended complaint are not time-barred, under the
doctrine of equitable tolling.
Issue 2
Does the suspension of Chapter 634 pending a referendum vote
deny equal protection of the law in violation of the Fourteenth
Amendment to the United States Constitution and Article 11, Section
4 of the Montana Constitution?
Plaintiffs1 argument is based upon their interpretation of
several reapportionment cases, most notably Reynolds v. Sims
(1964), 377 U.S. 533, 84 S.Ct. 1362, 12 L.Ed.2d 506. Revnolds was
a case concerning apportionment of legislative districts for the
Alabama legislature. Despite Alabama's constitutional requirements
for legislative representation based on population and for
decennial reapportionment, the 1900 census still formed the basis
for the existing state legislative apportionment in 1961, when the
complaint in Revnolds was filed. The complaint alleged serious
discrimination against voters in counties whose populations had
grown proportionately more than others since the 1900 census. In
affirming a holding that plaintiffs had proven a violation of the
Equal Protection Clause, the Court stated:
[Rlepresentativegovernment is inessence self-government
through the medium of elected representatives of the
people, and each and every citizen has an inalienable
right to full and effective participation in the
political processes of his State's legislative body.
Most citizens can achieve this participation only as
qualified voters through the election of legislators to
represent them. Full and effective participation by
citizens in state government requires, therefore, that
each citizen have an equally effective voice in the
election of members of his state legislature.
Reynolds, 377 U.S. at 565.
Plaintiffs argue that the suspension of Chapter 634 through
the initiative of a small minority of electors violates this
principle. They maintain that lV[i]f a minority can negate a
legislative act carried out through the body representing the will
of the majority, the principles of equal representation -- upon
which both our state and federal governments rest -- are rendered
void.
The authority cited by the plaintiffs is not dispositive of
this case, nor is their argument persuasive. Unlike the
reapportionment cases, this is not a case concerning access to the
legislative process. Nor have plaintiffs met the requirement under
traditional equal protection analysis of demonstrating that any
class or segment of the population has been "fenced outw of the
referendum process.
Here, the majority, through a constitutional referendum
provision, has affirmatively granted certain powers to a minority.
The majority retains the power to eliminate the referendum
provision from the Montana Constitution or to amend it to increase
the numbers of signatures needed to put a referendum on the ballot
or to suspend a law through the referendum process. "[Tlhere is
nothing in the language of the Constitution, our history, or our
cases that requires that a majority always prevail on every issue. l1
Gordon v. Lance (1971), 403 U.S. 1, 6, 91 S.Ct. 1889, 1892, 29
L.Ed.2d 273, 276.
Additionally, and critically, the referendum process is not
yet complete in the present case. All Montana voters will have the
opportunity to vote on Chapter 634 in the November 1994 general
election. The majority of the voters at that election will decide
the fate of Chapter 634. Therefore, the referendum process is not
comparable, as plaintiffs attempt to argue, to a veto power given
to a small group.
Article 111, Section 5 of the Montana Constitution expresses
the will of the majority in Montana on the matter of allowing
referenda to be placed on the ballot and allowing the suspension of
laws which are referred to the people. We hold that the District
Court did not err in ruling that plaintiffs have failed to
demonstrate any violation of their right to equal protection under
the law.
Issue 3
Does the suspension of Chapter 634, which placed the state's
budget out of balance, violate Article VIII, Section 9 of the
Montana Constitution?
Article VIII, Section 9 of the Montana Constitution provides:
"Balanced budget. Appropriations by the legislature shall not
exceed anticipated revenue." Plaintiffs point out that Montana's
budget went out of balance when Chapter 634 was suspended, because
appropriations made by the 1993 legislature then significantly
exceeded the anticipated revenues for the biennium. They argue
that harmonizing the referendum provision with the balanced budget
provision requires a conclusion that general revenue bills are off
limits to the referendum process.
We disagree. Article VIII, Section 9 places a restriction on
the legislature, not on the people. The contention that it is
inconsistent with the operation of the suspension provision in this
case is groundless.
The reaction of the executive and legislative branches in
calling a special session of the legislature to deal with an
unforeseen decline in revenue (or increase in expenditures) might
have been prompted by any number of causes. See, e.s., State v.
Erickson (1933), 93 Mont. 466, 473, 19 P.2d 227, 229. Calling a
special session to reconcile expenditures with anticipated revenues
was entirely proper. The purpose of the balanced budget provision
is therefore fully compatible with operation of the referendum
process.
We hold that the District Court was correct in ruling that
plaintiffs have shown no violation of Article VIII, Section 9 of
the Montana Constitution.
Issue 4
Does Chapter 634 constitute an appropriations measure on which
a referendum vote is prohibited?
This argument refers to the prohibition in subsection (1) of
the referendum clause: "The people may approve or reject by
referendum any act of the legislature except a ~ w r o ~ r i a t i oof
n
monev.It (Emphasis added.) The plaintiffs argue that Chapter 634
constitutes an appropriation of money because it is a general
revenue measure which is "inextricably tiedtt to appropriations
legislation and is used to balance Montana's state budget. They
contend that the referendum provision cannot be read in isolation,
but must be harmonized with other constitutional provisions,
including the balanced budget requirement discussed above.
Plaintiffs cite cases in which courts in Maryland and Michigan have
interpreted the meaning of the word "appropriationw as used in
their state constitutions in relation to specific referenda
measures in those states.
The definition of ttappropriationtt
under the above provision in
Montana's Constitution is well-established and quite limited. A
long line of Montana cases has established that "appropriationtt
refers only to the authority given to the legislature to expend
money from the state treasury.
ttAppropriationtt
means an authority from the law-making
body in legal form to apply sums of money out of that
which may be in the treasury in a given year, to
specified objects or demands against the state.
State v. Dixon (1921), 59 Mont. 58, 78, 195 P. 841, 845. See also
Board of Regents of Higher Education v. Judge (1975), 168 Mont.
In the present case, the District Court stated,
Since Chapter 634 does not relate to the actual use or
expenditure of money, the Court concludes it is not an
act for the appropriation of money, and therefore, it is
not excluded from the referendum process.
We agree with the District Court. Chapter 634 is a pure revenue-
raising measure, and contains no provisions for expenditures. It
was offered, debated, and voted upon separately from appropriation
bills considered by the 1993 Montana legislature. We hold that
Chapter 634 does not constitute an appropriations measure on which
a referendum vote is prohibited.
Issue 5
Does suspension of Chapter 634 constitute a surrender and
suspension of the taxation power in violation of Article VIII,
Section 2 of the Montana Constitution?
In this argument, plaintiffs refer to the provision of the
Montana constitution that I1[t]he power to tax shall never be
surrendered, suspended, or contracted away.I1 Plaintiffs argue that
this specific prohibition controls over the general right of the
people to suspend the effect of legislation under the referendum
power. They also argue that Referendum 112 has resulted in a
surrender of the power to tax to a small minority of Montanans.
As under Issue 4, the plaintiffs have cited cases from two
other states in which similar state constitutional provisions have
been interpreted in relation to exercises of the referendum power
reserved to the people of those states. Because we conclude that
the language of our constitution is clear on its face, we decline
13
to adopt, extend, and apply the reasoning of those cases to the
language of the Montana Constitution and to the facts of this case.
Plaintiffs fail to distinguish between a tax measure and the
taxing power. There has been no surrender or suspension of the
taxing power; Referendum 112 has merely resulted in the suspension
and referral of one measure by which the taxing power is exercised.
As the District Court pointed out, the State of Montana is still
collecting taxes, and will continue to do so; under Chapter 634, if
the voters approve it, or under the law in existence prior to the
legislative enactment of Chapter 634, if the voters reject it. We
hold that the plaintiffs have failed to establish any violation of
the prohibition against suspension or surrender of the taxing
power.
Affirmed.
We concur:
-
Justices
Justice James C. Nelson concurs in part and dissents in part:
While I concur in the CourtQsdiscussion of Issues 2 through
5 and with the result reached in its opinion on those issues, I
respectfully dissent from the discussion on Issue 1 and from the
conclusions expressed therein. I would hold that Counts I1 and V
of plaintiffst amended complaint are time-barred by reason of the
applicable statute of limitation, S 3-5-302(6)(a), MCA, which, in
pertinent part, requires that:
...a contest of a ballot issue submitted by ...
referendum may be brought prior to the election only if
it is filed within 30 days after the date on which the
issue was certified to the governor, as provided in 13-
27-308, ... .
Here, it is undisputed that plaintiffsQ complaint was
filed within 30 days after the date on which the issue was
certified to the governor. It is also undisputed that there was
absolutely no legal reason or bar that would have prevented
plaintiffs from filing their complaint within the time period
allowed by the statute. Importantly, the Natelson/Montanans for
Better Government petition for declaratory judgment filed as an
original proceeding in and subsequently dismissed by this Court
(Natelson action), did not in any way prevent or prohibit t h e
timely filing of plaintiffs' complaint, and no legitimate argument
to the contrary has been advanced here.
At the outset, I note that this Court has in the past, looked
disfavorably on pre-election attempts to invalidate ballot issues
and has required strict compliance with the procedures and time
limits statutorily mandated by the legislature in mounting such
challenges. See, State ex rel. Boese v. Waltermire (1986), 224
Mont. 230, 234, 730 P.2d 375, 377-78. Given that Montana's
election laws are replete with numerous strict deadlines governing
the election process, it only makes sense to protect the
administration of that process and the election itself from
disruptive litigation which might ultimately serve to frustrate the
right of the people to vote.
No sound reason has been advanced here as to why we should
back away from that general principle. While invoking the doctrine
of equitable tolling may be appropriate when applying the doctrin.
would effectuate the policies and purposes underlying the statute
of limitations, see, Hosogai v. Kadota (Ariz. 1985), 700 P.2d 1327,
1331, in pre-election challenge cases, invoking the doctrine
actually encourages such challenges and tends to defeat the
purposes and policy behind the statute of restricting such
challenges.
Notwithstanding that plaintiffst claims may be important and
interesting,
[tlhe statute of limitations is explicit. By the letter
of the law, the late filing was fatal to plaintiffst
claim. We will not resurrect a complaint which was not
properly brought before the court.
* * * *
...
The statute of limitations does not discriminate between
the just and unjust claim. The statute does represent
legislative and public policy controlling the rights of
potential litigants. In balancing these rights, the
legislature placed the fulcrum precisely at [30 days] --
no more, no less.
Schaffer v. Champion Home Builders Co. (1987), 229 Mont. 533, 536-,
37, 747 P.2d 872, 874, (statute of limitations barred plaintiffs
wrongful death and survival actions when filed one day late.) With
that principle in mind, we have been reluctant to judicially alter,
change or lessen statutory limits for the commencement of actions,
Schaffer, 747 P.2d at 874, or to expand tolling doctrines. See,
Bestwina v. Village Bank (1989), 235 Mont. 329, 334, 767 P.2d 338,
Accordingly, in the instant case, the basis on which we have
chosen to ignore the statute of limitations -- equitable tolling --
is not only judgmentally unsound, but, as discussed below, having
also distorted the elements of the doctrine itself, its application
in this case is legally insupportable.
In Erickson v. Croft (1988), 233 Mont. 146, 760 P.2d 706, we
discussed, but, on the basis of the facts of that case, did not
recognize or adopt the doctrine of equitable tolling. Citing case
law from other jurisdictions we described the elements of the
doctrine as follows:
[Clourts have adhered to a general policy which favors
relieving plaintiff from the bar of a limitations statute
when, possessing several legal remedies he, reasonably
and in good faith, pursues one designated to lessen the
extent of his injuries or damage. (Emphasis added).
Erickson 760 P.2d at 708.
The three requirements referenced by this Court to justify the
applicability of equitable tolling in the instant case were also
mentioned Erickson. Those criteria are, unfortunately,
misstated in the opinion here. In Erickson, citing Collier v. City
of Pasadena (1983), 142 Cal.App.3d 917, 191 Cal.Rptr. 681, 685, we
listed the three requirements as follows:
(1) timely notice to the defendant [within the applicable
statute of limitations] in filing the first claim;
(2) lack of prejudice to the defendant in gathering
evidence to defend against the second claim; and
(3) good faith and reasonable conduct by the plaintiff in
filing the second claim. (Emphasis added.)
Erickson, 760 P.2d at 708.
While declining to recognize equitable tolling in Erickson, we
subsequently expressed some willingness to apply the doctrine when
the Erickson requirements appeared to have been met. In Harrison
v. Chance (1990), 244 Mont. 215, 797 P.2d 200, citing to the same
three criteria as set forth in Erickson, we invoked the doctrine in
order to allow a claimant to refile before the Human Rights
Commission her claim which had become time-barred because she had
erroneously, but in good faith, first filed in district court ic
reliance on previous case law which subsequently was legislatively
overruled. ~arrison,797 P.2d at 208.
As referred to in Harrison, the doctrine of equitable tolling
contemplates as threshold requirements (a) an injured party
(plaintiff or claimant) who (b) had several possible legal remedies
and (c) pursued one of those remedies reasonably and in good faith.
Harrison, 797 P.2d at 208. Only if those threshold requirements
are first met, is it then necessary to determine whether the
injured party also meets the three additional criteria referred to,
though misstated, in this Courtts instant opinion.
The plaintiffs in this case do not meet the three threshold
requirements for the application of the doctrine. The plaintiffs
here were not the plaintiffs in the Natelson action; they were the
defendants. The plaintiffs here did not reasonably and in good.
faith first pursue a particular remedy from several others
18
available to them; this is their first cause of action; they were
defending the Natelson action. Quite simply, having failed to meet
the threshold requirements for application of the doctrine of
equitable tolling, we need not concern ourselves with whether
plaintiffs comply with the remaining three criteria.
Moreover, in justifying the equitable tolling of the statute
of limitations and the filing of plaintiffs1 time-barred causes of
action on the basis of the premature filing of the Natelson action,
this Court has also ignored other well established precedent. While
equitable tolling addresses the reasonableness and good faith of
plaintiff's actions in bringing successive suits, tolling doctrines
are much more restricted where, as here, it is the defendant's
actions which are alleged to have been responsible for plaintiff'^
untimely filing of his claim.
We have allowed tolling of statutes of limitation on the basis
of defendant's conduct only under narrowly defined circumstances
unquestionably not at issue here: i.e. where there is a showing of
fraudulent concealment by the defendant calculated to obscure the
existence of plaintiff's cause of action and which lulls him into
a false sense of security leading to his failure to timely initiate
suit, Keneco v. Cantrell (1977), 174 Mont. 130, 136, 568 P.2d 1225,
1228; or where there is a relation of trust or confidence betweer,
the parties which imposes upon the defendant a duty of making full
disclosure of the facts, Skierka v. Skierka Bros. , Inc. (1981), 192
Mont. 505, 511, 512, 629 P.2d 214, 217-18.
In short, by misapplying and distorting the elements of the
doctrine of equitable tolling in this case, we have established
some very bad precedent, indeed. Not only have we thrown the
threshold requirements for application of the doctrine of equitable
tolling out the window, but we have also significantly expanded the
circumstances under which action by a defendant will toll the
statute of limitations on a plaintiff's claim. Our decision on
Issue 1 proves the old maxim that "hard cases make bad law." They
do, and we have.
Failing to meet the threshold requirements to invoke +,he
doctrine, I would hold that plaintiffs here are not entitled to
equitable tolling of the running of the statute of limitations on
Counts I1 and V of their amended complaint. I would reverse 0~
.1
that issue and, accordingly, I respectful1
Court's opinion on Issue 1.
Justice Karla M. Gray joins in t
Justice Terry N. Trieweiler dissenting.
I dissent from that part of the majority's opinion which
concludes that the suspension of Chapter 634 did not violate the
Federal and State Constitutions.
I conclude that when as few as eight percent of the State's
voters can exercise an effective veto over legislation enacted by
representatives who were elected by a majority of the State's
voters; and when, based on that veto, services, benefits and
educational opportunities are permanently lost by citizens who were
denied any voice in the matter, then the principle of one equally
weighted vote for each person is rendered meaningless and the Equal
Protection Clause of the Fourteenth Amendment to the United States
Constitution, and Article 11, Section 4, of the Montana
Constitution, have been violated.
I furthermore conclude that when a referendum, by suspending
a revenue-raising measure such as 1993 Montana Laws, Chapter 634,
leaves the Legislature with no alternatives other than an
unbalanced budget in violation of Article VIII, Section 9, of the
Montana Constitution, or rescinding an appropriation of money
already made, then the referendum is, in effect, one to reject an
appropriation of money in violation of Article 111, Section (5), of
the Montana Constitution.
Finally, I conclude that Referendum 112, by suspending
Chapter 634 which was enacted pursuant to the Legislature's power
to tax, would unconstitutionally suspend that power in violation of
Article VIII, Section 2, of the Montana Constitution.
Although these constitutional provisions are, of course, o u ~ .
foremost concern, I also conclude that the ramifications of the
majority1 decision will be devastating to the ability of future
s
legislatures to provide for the obligations and services of State
government. Because of this decision, government in the State of
Montana will always be hostage to tyranny by a small minority who
are easily misled by those unimaginative but ambitious persons who
would exploit the universal disdain for taxation for their own
political benefit.'
FACTUAL BACKGROUND
I find the following undisputed facts relevant to the
conclusions I have reached:
1. House Bill 671 was passed by the Montana
Legislature during the 1993 Legislative Session and was
signed by the Governor on May 11, 1993. The measure
revises state income tax and corporate tax laws. It
increased income tax revenue, but shifts the income tax
burden. It increases minimum corporate taxes and imposes
graduated corporate tax rates.
2. House Bill 671 was passed, in part, for the
purpose of raising revenues for the general operation of
State government and balancing the state's budget.
3. House Bill 671 became effective after Montana
voters rejected Senate Bill 235, which contained a four
percent general sales tax, and was given retroactive
application to January 1, 1993. ...
' For example, to gather support for Referendum 112, Natelson
claimed that the tax burden of Montanans was the eighth highest in
the country, when, in reality, it is near the bottom - at 44th.
According to figures from the U.S. Bureau of the Census, the only
neighboring state where residents pay a lower percent of income in
taxes is South Dakota, which is 45th among the states. However,
Natelson failed to acknowledge the correct figures until after the
necessary signatures were gathered in support of Referendum 112.
(Mike Dennison, Montana Tax Burden Much Lower Than Natelson Claims, Great
Falls Tribune (Montana), October 21, 1993, at 1A; Shirley Salemy,
Natelson Admits Knowing Tax Claim Was Shaky, Great Falls Tribune (Montana),
October 22, 1993, at 1A.)
4. Defendants Natelson and Montanans for Better
Government circulated the Petition Referendum 112 to
place House Bill 671 on the ballot for the November 1994
general election.
5. On September 3, 1993, Defendant Cooney
certified to the Governor that he received petitions
containing sufficient signatures to place House Bill 671
on the ballot for the November 1994 general election.
6. On September 28, 1993, Defendant Cooney
certified to the Governor that he received petitions
containing sufficient signatures to require suspension of
House Bill 671 until the vote on Referendum 112.
Stipulation of Facts entered into between the parties.
Based upon the Secretary of State's certification that
sufficient signatures were gathered to suspend House ill 671
(which was enacted as 1993 Montana Laws, Chapter 634), the Governor
of the State of Montana, on October 8, 1993, issued a proclamation
calling the 53rd Legislature for a special session. In his
proclamation he stated that:
WHEREAS, Article VIII, Section 9, of the Montana
Constitution provides that appropriations by the
Legislature shall not exceed anticipated revenue; and
WHEREAS, ~rticle VI, Section 9, of the Montana
Constitution provides that it is the responsibility of
the Governor to recommend measures necessary to balance
the budget; and
WHEREAS, a referendum undertaken pursuant to
Article 111, Section 5, of the Montana Constitution, has
resulted in both the suspension of House Bill 671 and in
its placement on the ballot for approval or rejection by
the qualified electors on November 8, 1994; and
WHEREAS, the suspension of House Bill 671 has made
its provisions inoperative, thereby making it virtually
impossible to balance the state's budget without
legislative action.
NOW, THEREFORE I, Marc Racicot, Governor of the
State of Montana, pursuant to the authority vested in me
by the Constitution and laws of the State of Montana do
hereby call the Fifty-Third Legislature into Special
Session in Helena, at the State Capitol, at the hour of
9:00 A.M., the 29th day of November, 1993, and hereby
direct the Special Session ofthe Fifty-Third Legislature
to consider action on the following:
1. Legislation to balance the state's budget and
address appropriate personnel and operational issues.
7. Appropriations to state and local government
and programs, allocation of revenue, accounting
procedures and budget modifications for state and local
government agencies ....
In other words, House Bill 671 was enacted to balance the
state budget. When it was suspended, the budget was unbalanced and
the Legislature was forced to meet and reduce appropriations.
The Legislature met in special session from November 29, 1992
through December 20, 1993. During this time, the Legislature cut
$19 million that had been appropriated for public education in
kindergarten through twelfth grade; $12.5 million which had been
appropriated for human services; and $11.8 million which had been
appropriated for higher education. (Office of the Legislative
Fiscal Analyst, Appropriations Report 1995 Biennium, November 1993
Special Session (February, 1994) at summary page 2.)
EOUAL PROTECTION CLAUSE
The majority dispenses with the constitutional principle.
established in Reynolds v Sims (1964), 377 U.S. 533, 84 S. Ct. 1362,
.
12 L. Ed. 2d 506, that each person eligible to vote is entitled to
cast an equally weighted vote with its conclusion that "[ulnlike
the reapportionment cases, this is not a case concerning access to
the legislative process." However, contrary to that conclusion,
access to the legislative process is exactly what this case is
about.
This State's legislative representatives were elected by a
majority of Montana's voters. In their representative capacity, a
majority of those legislators enacted laws, including House
Bill 671. However, their representative efforts were effectively
vetoed by a small minority of voters who supported Referendum 112
without any opportunity by those who opposed Referendum 112 to cast
a vote in opposition. The argument that those who oppose
Referendum 112 will ultimately have an opportunity to express their
view on November 8, 1994, is of little constitutional significance,
considering the irreversible suspension of the majority's decision
for the intervening 14 months.
TO hold that Reynolds has no significance beyond legislative
apportionment is to miss the important principle of "one equally
weighted vote for each person1' that it reaffirmed. While that
principle was discussed in terms of representative government, that:
discussion was based on the historical principle that each person's
vote in this country has historically been given effect through
their elected representatives. The court in Reynolds stated:
State legislatures are, historically, the
fountainhead of representative government in this
country. A number of them have their roots in colonial
times, and substantially antedate the creation of our
Nation and our Federal Government. In fact, the first
formal stirrings of American political independence are
to be found, in large part, in the views and actions of
several of the colonial legislative bodies. With the
birth of our National Government, and the adoption and
ratification of the Federal Constitution, state
legislatures retained a most important place in our
Nation's governmental structure. But representative
government is in essence self-government through the
medium of elected representatives of the people, and each
and every citizen has an inalienable right to full and
effective participation in the political processes of his
State's legislative bodies. Most citizens can achieve
this participation only as qualified voters through the
election of legislators to represent them. Full and
effective participation by all citizens in state
government requires, therefore, that each citizen have an
equally effective voice in the election of members of his
state legislature. Modern and viable state government
needs, and the Constitution demands, no less.
Reynolds, 377 U . S . at 564-65.
It is clear that what the Court in Reynolds found offensive to
the Equal Protection Clause of the Fourteenth Amendment was
minority control over legislative bodies. In that regard, the
Court stated:
[Alnd to sanction minority control of state legislative
bodies, would appear to deny majority rights in a way
that far surpasses any possible denial of minority rights
that might otherwise be thought to result. ...
And the
concept of equal protection has been traditionally viewed
as requiring the uniform treatment of persons standing in
the same relation to the governmental action questioned
or challenged.
Reynolds, 377 U.S. at 565.
It is for these reasons that the Court majority in Reynolds made
clear that while its discussion was couched in terms of
representation, the principle with which it was really concerned
was the right of each voter to participate equally in a
representative democracy. For that reason, the Court explained
that :
While the result of a court decision in a state
legislative apportionment controversy may be to require
restructuring of the geographical distribution of seats
in a state legislature, the judicial focus must be
concentrated upon ascertaining whether there has been any
discrimination against certain of the State's citizens
which constitutes an impermissible impairment of their
constitutionally protected right to vote. Like Skinner v .
Oklahoma, 316 U.S. 535, such a case Iftouchesa sensitive
and important area of human rightsffl and ffinvolvesone of
the basic civil rights of man,If presenting questions of
alleged Ifinvidiousdiscriminations ... against groups
or types of individuals in violation of the
constitutional guarantee of just and equal laws." 316
U.S. at 536, 541. Undoubtedly, the right of suffrage is
a fundamental matter in a free and democratic society.
Especially since the right to exercise the franchise in
a free and unimpaired manner is preservative of other
basic civil and political rights, any alleged
infringement of the right of citizens to vote must be
carefully and meticulously scrutinized. Almost a century
ago, in Xck Wo v. Hopkins, 118 U. S. 356, the Court referred
as
to "the political franchise of votingff "a fundamental
political right, because preservative of all rights."
118 U.S. at 370.
Reynolds, 377 U.S. at 561-62.
For these reasons, the Court in Reynolds held that legislative
apportionment which dilutedthe weight of urban voters violated the
Equal Protection Clause of the Fourteenth Amendment.
The State of Montana and the majority of this Court would
contend on the one hand that the referendum process provided for in
Article 111, Section 5(2), of the Montana Constitution, is a
continuation of the legislative process, and therefore, the result
accomplished as a result of Referendum 112 was not a suspension of
the power to tax held exclusively by the Legislature pursuant to
Article VIII, Section 2, of the Montana Constitution. However,
that argument finds no comfort in the Reynolds decision. The Supreme
Court in Reynolds specifically held that a bicameral legislature in
which only one house is apportioned according to population does
not satisfy the equal protection requirement. In language relevant
to the circumstances in this case, the Supreme Court stated that:
[W]e necessarily hold that the Equal Protection Clause
requires both houses of a state legislature to be
apportioned on a population basis. The right of a
citizen to equal representation and to have his vote
weighted equally with those of all other citizens in the
election of members of one house of a bicameral state
legislature would amount to little if States could
effectively submerge the equal-population principle in
the apportionment of seats in the other house. If such
a scheme were permissible, an individual citizen's
ability to exercise an effective voice in the only
instrument of state aovernment directly re~resentative of
the people misht be almost as effectively thwarted as if
neither house were apportioned on a ~ o ~ u l a t i obasis.
n
Deadlock between the two bodies might result in
compromise and concession on some issues. But in all too
many cases the more probable result would be frustration
of the majority will through minority veto in the house
not apportioned on a population basis, stemming directly
from the failure to accord adequate overall legislative
representation to all of the State's citizens on a
nondiscriminatory basis. In summary, we can perceive no
constitutional difference, with respect to the
geographical distribution of state legislative
representation, between the two houses of a bicameral
state legislature. [Emphasis added].
Reynolds, 377 U.S. at 576.
Likewise, in this case the fact that both Montana's House of
Representatives and Senate are apportioned on a population basis is
of no benefit to the majority who elected them if a minority can
routinely and effectively veto their efforts in a process which
provides no opportunity for those who are opposed to the proposed
referendum to cast their vote in opposition. In conclusion, I can
comprehend no difference between the bicameral scenario prohibited
in Reynolds and the referendum process permitted in this case. In
each case, the will of the majority is effectively thwarted by a
minority of voters.
The majority cites Gordon v. Lance (1971), 403 U.S. 1, 6, 91
S. Ct. 1889, 1892, 29 L. Ed. 2d 273, 276, for the principle that
the will of the majority need not always prevail. However, the
majority's citation is incomplete and oversimplifies the holding in
Gordon. The challenge in that case was to a West Virginia statute
which provided that a political subdivision could not incur bonded
indebtedness nor increase tax rates beyond those established by the
Constitution without the approval of 60 percent of the voters in a
referendum election. While the Court held that requiring a super
majority did not violate the Equal Protection Clause of the.
Fourteenth Amendment, the Court qualified its holding by stating
that:
We intimate no view on the constitutionality of a
provision requiring unanimity or giving a veto power to
a very small group. Nor do we decide whether a State
may, consistently with the Constitution, require
extraordinary majorities for the election of public
officers.
Gordon, 403 U.S. at 8, n.6.
What the Court in Gordon refused to address is exactly the
situation that exists in this case. Therefore, Gordon is no
authority for the result arrived at by the majority.
Because the principles articulated in Reynolds are so clearly
applicable to the situation in this case, I do not believe that
further equal protection analysis is necessary, as is suggested in
the majority opinion. For these reasons, I dissent from the
majority's conclusion that the process by which Chapter 634 was
suspended does not violate the Equal Protection Clauses of our
State and Federal Constitutions.
BALANCED BUDGET
The majority opinion deals with Article VIII, Section 9, of
the Montana Constitution which requires a balanced budget, and that
part of Article 111, Section 5, which prohibits referenda rejecting
appropriations, in isolation, and thereby, concludes that neither
prohibition was violated. However, in doing so, the majority
opinion violates a cardinal rule of constitutional construction,
which is that "[a]ll of theprovisions of the Constitution bearing upon the
same subject are to receive appropriatte attention and be construed together." Board of
Regentsv. Judge (1975), 168 Mont. 433, 444, 543 P.2d 1323, 1330. For
that reason, in Board of Regents, 543 P.2d at 1330, we held that our
task is to harmonize in a practical manner those provisions of the
Constitution which would otherwise be in apparent conflict. The
majority opinion fails to do so.
On the one hand, the majority concludes that Referendum 112
did not cause an unbalanced budget because the Legislature
exercised its only alternative which was to come into special
session and cut appropriations. On the other hand, the majority
concludes that Referendum 112 did not affect appropriations since
it did not directly prohibit the expenditure of money. BY
isolating its consideration of these separate provisions, the
majority has failed to harmonize in a practical manner the various
provisions of the State Constitution.
The practical effect of Referendum 112 is that the Legislature
was left with one of two alternatives. It could either leave the
budget unbalanced in violation of Article VIII, Section 9, or i t
was forced to reduce expenditures in violation of the prohibition
found in Article 111, Section 5(1). Considering the practical
effect of Referendum 112 and harmonizing the provisions of
Montana's Constitution requires the conclusion that under the facts
in this case, the referendum was a rejection of the appropriation
of money, and therefore, unconstitutional pursuant to Article 111,
Section 5(2). This conclusion finds support in other jurisdictions
under similar circumstances and based on similar constitutional
provisions.
Other states which have considered similar constitutiona~
restrictions on referenda to protect appropriations passed by the
Legislature have held that when appropriation bills, such as House
Bill 2 from the 1993 regular legislative session, are dependent on
revenue bills, such as House Bill 671, then the bills must be read
in pan materia for purposes of determining whether they may be
referred, and that where they are interdependent, revenue bills may
not be referred for a vote. Wiizebrenner v Salmon (Md. 1928) , 142 A.
.
723 ; Dorsey v. Petrott (Md . 19 4 0 ) , 13 A. 2 d 630 ; Kelly v. Marylanders for Sport5
Sanity, Inc. .
(Md 1987) , 530 A. 2 d 24 5 ; County Road Assoc. v. Board of Stcte
Canvassers (Mich. 1979), 282 N.W.2d 774.
In Dorsey, 13 A.2d at 637, the Maryland Court reasoned:
It follows that revenue measures to raise the public
funds to pay the appropriations of the Budget Bill are
excepted from the operation of the Referendum Amendment,
although the revenue thus procured is disbursed by the
Treasury through the provisions of the Budget without any
express authorization in the money bill for its
disbursement.
Likewise, in this case, House Bill 671 cannot be considered in
a vacuum. Its enactment was interrelated with the appropriations
enacted in the 1993 regular session of the Legislature, and those
appropriations depended upon the revenue that it raised. The
effect of Referendum 112's suspension of House Bill 671 was to also
reject those appropriations which were dependent on the revenue
that it generated.
For these reasons, I conclude that Referendum 112 did, in
fact, reject an act of the Legislature for appropriation of money,
and therefore, was unconstitutional in violation of Article 111,
Section 5(1), of the Montana Constitution.
SUSPENSION OF POWER TO TAX
Article VIII, Section 2, of the Montana Constitution
specifically provides that ''the power to tax shall never be ...
suspended.I1 Chapter 634 was enacted by the Legislature pursuant tc
its power to tax. However, Chapter 634 was suspended pursuant to
Referendum 112. The majority concludes that the Legislature's
power was unaffected, even though the tax that it enacted pursuant
to that power has been suspended. The logic of this conclusion
escapes me. What is the practical purpose of the power to tax if
actual taxes levied pursuant to that power can be freely suspended
pursuant to the whim of a small minority of voters?
To me, the language of Article VIII, Section 2, is clear. It
prohibits exactly what was accomplished by Referendum 112 in this
case.
While Article 111, Section 5(2), does provide for the
suspension of an act of the Legislature by 15 percent of the
qualified voters in a majority of the representative districts,
that provision of the Constitution (even if the exception for
appropriation measures is not considered), is a general provision.
The prohibition against suspension of the Legislature's taxing
power found at Article VIII, Section 2, is a specific prohibition.
Whether talking about legislation or constitutional provisions, the
specific control over the general. Grossman v. State Dept. of Natural
Resources (1984), 209 Mont. 427, 682 P.2d 1319.
Therefore, I conclude that Referendum 112 violated Article
111, Section 2 of the Montana Constitution and dissent from the
majority's conclusion to the contrary.
STATUTE OF LIMITATIONS
Although I dissent from the majority's conclusion that
Referendum 112 was constitutional, I concur with the majority's
conclusion that plaintiff's complaint was not barred by the statute
of limitations found at 5 3-5-302(6)(a), MCA.
The principle of equitable tolling is based on principles of
fairness and common sense which apply equally in this situation 8,s
where two successive actions are brought by the same party. The
dissenting opinion of Justices Nelson and Gray, to the effect that
it cannot be applied because the original action was, in fact,
brought by Natelson and the second action was brought by Nicholson,
even though the issues involved were the same, and even though
common sense required resolving the first action before filing the
second action, exalts form over substance. The approach taken by
the dissenters is unduly mechanical and without regard for the
equitable principles which are being invoked. In short, I find
that the dissenting opinion on this subject is the antithesis of
equity.
For these reasons, I concur with the majority's conclusion
that the statute of limitations was equ
Justice William E. Hunt, Sr., joins in the foregoing dissent.