June Newsletter (Issue 06-2016)


Requirement That Candidate For Office Be A Qualified Voter Two Years Prior To Taking Office Is Constitutional

need-to-preview-your-ballot-before-voting-use-this-app-249fa7a3cdRachel Johns sought the Democratic Party’s nomination for Missouri State Representative. John’s filed a declaration of candidacy with the Missouri Secretary of State, in which she stated under oath, that she “will qualify” to hold the office of state representative pursuant to the Missouri Constitution’s requirements for that office.  Respondent Joshua Peters, another candidate for the Democratic party’s nomination for State Representative in the District filed a petition with the Circuit Court of the City of St. Louis seeking to disqualify Johns as a candidate and have her name removed from any official election ballot because Johns did not register to vote until February 4, 2015, which is less than two years before the general election date of November 8, 2016.  Based on the date of registration as a voter, Johns did not meet the two-year durational voter registration requirement of Article III, Section 4 of the Missouri Constitution.  Johns agreed that she did not meet the two-year voter registration requirement arguing that the 2 year voter registration requirement is invalid as applied to her because it temporarily disqualified her from running for office thereby penalizing her for engaging in an act of political expression protected by the First Amendment to the United States Constitution as incorporated by the Fourteenth Amendment.

The trial court determined that the voter registration requirement in the Missouri Constitution and state law did not violate the First or 14th Amendments to the United States Constitution. John’s appealed to the Missouri Supreme Court, which upheld the two-year durational voter registration requirement.

The Missouri Supreme Court first determined that a “qualified voter” is “one who by law, at an election, is entitled to vote.” There was no indication that the drafters of the Constitution intended the term “qualified voter” means something different.

The Missouri Supreme Court held that the “qualified voter” requirement is constitutional because Johns’ failure to register to vote does not constitute “symbolic speech” that was inherently expressive, making it subject to First Amendment protection.  In addition, the requirement does not unjustifiably burden Johns’ right to run for office or the voting rights of Johns and the other voters in her district because it imposes only a de minimis burden on those rights by temporarily delaying Johns’ ability to seek office and the voters’ corresponding opportunity to vote for her.  The “qualified voter” requirement is a state constitutional provision adopted by voters that serves the legitimate interests of requiring candidates to take certain minimal steps to demonstrate their seriousness about engaging in Missouri’s political, social, and civic processes.  Peters v. Johns, (SC95678, 05/20/16)

Comment Howard: This decision was a 4 to 3 majority with a vigorous dissent that took a completely divergent view on how to analyze the issues.  The majority opinion determined that the durational voter registration requirement did not impose a significant burden on John’s allowing application of the rationally related test, while the dissent concluded the burden was significant, requiring application of strict scrutiny to the constitutional provision.  John’s did not preserve an equal protection argument (that could trigger strict scrutiny) with respect to the durational requirement.  The dissent suggested that the equal protection claim was a serious argument, even though it was abandoned, suggesting that later we may see an equal protection version of this case.

Nebraska License Law Requiring A California Real Estate Agent To Secure A Nebraska Real Estate Brokers License Was Constitutional

Leslie Rae Young was a California resident and a licensed real estate broker in California, but not in Nebraska.  In March and July 2010, the Director of the Nebraska Real Estate Commission, (“the Commission”) issued Young letters stating that she was advertising real property located in the State of Nebraska for sale on http://www.ForSaleByOwner.com, which is linked to http://www.eList.me, and on REALTOR.com, without securing a Nebraska real estate broker’s license, and ordering Young to “cease and desist from any and all conduct which requires a real estate broker’s, associate broker’s, or salesperson’s license in the State of Nebraska.”

Young commenced a 42 U.S.C. § 1983 action against Nebraska officials in their official capacities (Nebraska).  She seeks prospective relief declaring that provisions of the Nebraska Real Estate License Act, (Act) are facially invalid and violated her rights under the First Amendment and the Due Process, Equal Protection, and Privileges or Immunities Clauses, as applied to the States by the Fourteenth Amendment and that Nebraska be enjoined from enforcing these provisions.

The facts showed that Young entered into a contract with ForSaleByOwner.com [“FSBO”] to provide advertising services to [FSBO’s] clients.  Under that contract, Ms. Young agreed to enter pictures and other information about [FSBO’s] clients’ properties into the database operated by Elist.me, which is then fed to [FSBO] and other websites that advertise homes and other real estate for sale by owner.  Ms. Young charges [FSBO] a flat fee of $95 per-property for these services, not a commission, which is paid whether or not an advertised house sells, and without regard to how much it sells for.

Young contended that the Act that “FSBO advertising is fully Protected First Amendment speech;” therefore, requiring Young to get a Broker’s license in Nebraska is a content-based prior restraint on her First Amendment rights by restricting advertising protected by the First Amendment.  Nebraska filed a motion for summary judgment, which was granted by the trial court.  Young appealed her constitutional claims to the Eighth Circuit.

The Eighth Circuit starts its analysis by examining the Act, which provides that it is unlawful for a non-exempt person to “directly or indirectly, to engage in or conduct, or to advertise or hold himself or herself out as engaging in or conducting the business, or acting in the capacity, of a real estate broker, associate broker, or real estates salesperson within this state without first obtaining a license” from the Commission.  The Act defined broker as:

‘‘any person who, for any form of compensation or consideration or with the intent or expectation of receiving the same from another, negotiates or attempts to negotiate the listing, sale, purchase, exchange, rent, lease, or option for any real estate or improvements thereon, or assists in procuring prospects or holds himself or herself out as a referral agent for the purpose of securing prospects for the listing, sale, purchase, exchange, renting, leasing, or optioning of any real estate . . . or holds himself or herself out as engaged in any of the foregoing’

The Eighth Circuit concluded that there was no First Amendment restriction of freedom of Young’s speech rights because the activities of Young constituted brokerage of real estate transactions as shown by the licensing agreements and her client related activities.  Young took the affairs of her clients in hand and exercised judgment on their behalf, which made her a broker under the Act requiring her to obtain a brokers license.  Young v. Rickets, (8th Cir., 15–1873, 06/09/60)

Comment Howard: The court ‘s decision, cast the described activities as regulation of a profession; therefore, it did not reach the free speech questions, although cases cited by the Eighth Circuit in distinguishing this case from other cases in a slightly different context provide insight into free speech questions that relate to business licensing.  This decision offers considerable comfort to local government officials when a license provision is challenged based on a violation of the First Amendment right of free speech.  This is the first case that I have seen dealing with these issues making it a useful jumping off point. Considering the breadth of the Nebraska license law it would seem that we might see similar controversies.

Age Was a Factor In Terminating Employee Who Was Eligible for Retirement

Lincoln_university_via_lincolnuniversitydoteduOn January 19, 2012, Curtis Creagh, Chief Financial Officer (CFO) for Lincoln University advised Dr. Mahoney that the General Assembly was anticipating a 12.5% reduction in Lincoln’s budget allocation for fiscal year 2013.  Despite the anticipated budget cut, Lincoln still planned to increase salaries across the board by 2%.  Later the CFO sent Dr. Mahoney a second message, indicating that the anticipated budget cut was reduced to 8%.

On April 17, 2012, Ferguson’s direct supervisor, Curtis Creagh, the CFO sent Dr. Mahoney an email regarding possible position eliminations for the 2013 budget, in order to address the anticipated budget cuts.  In the email, the CFO stated:

“I had two positions that were pending resolution: Tamala Norfus & Ken Ferguson. Tamala is not yet eligible to retire; I want to keep this position until she is. Ken Ferguson is eligible to retire; I can give up this position and associated departmental expenses, if necessary.”

When the Governor signed the budget in June, Lincoln suffered only a 1% cut in its funding from the State.  Nevertheless, on July 16, 2012, the CFO sent a memo to Dr. Mahoney, recommending Ferguson’s termination stating, “The reason for the separation is insufficient budget to fund the office of Governmental Affairs.”  Lincoln than issued in a termination letter to Ferguson, advising him: “Due to budget constraints at Lincoln University, a decision has been made to eliminate the position of Director of Governmental and Community Relations.”

Ferguson appealed the decision, claiming that he had been terminated because of his age. A grievance hearing was held before a review panel consisting of four individuals including Dr. K.B. Paul.  Dr. Paul commented (rambling out loud) at the hearing over the difficulties of eliminating a position for a person who was eligible for full retirement like Ferguson (with 32 years of service) versus a new hire who was not eligible to retire that had a family to support.  Dr. Paul rambled at the Grievance Hearing:

“But, if I have a choice between somebody who has served his time here.  He has earned his full retirement.  So this is one case.

Another case, that maybe somebody just young came here, started a job, raising a young family, and if I let that person go, if I[’m] faced with the choice.

This person on one hand, this person can go on retirement and can still get the full salary, full benefits, everything.

On the other hand this individual, if I let him go or (inaudible) go, then this person is not ready to retire and this person is going to be faced with a lot of hardship.”

After the grievance hearing, the review panel recommended that the termination be upheld and submitted its recommendation to Dr. Mahoney, President of the University who then wrote Ferguson a letter accepting the findings of the panel.  Ferguson then filed a complaint with the Missouri Commission on Human Rights (MCHR) alleging discrimination based upon age.  After a jury trial, Lincoln University was found to have discriminated against Ferguson based upon age.  The decision was appealed to the Western District, which considered a number of key evidentiary points.

  • Final Decision Maker Not Shielded: Lincoln University argued that the comments made by Dr. Paul at the grievance hearing should not have been admitted into evidence because the Grievance Committee was not the final decision-maker.  The Western District responded that the discriminatory comments made by Dr. Paul were relevant because the Grievance Committee was in a position to influence the decision maker Dr. Mahoney who made the decision to terminate; therefore the comments were a contributing factor.
  • After the Fact Age Neutral Explanation Backfires: At the jury trial the CFO added, for the first time, that he believed Ferguson’s position should be eliminated because it was an “outlier” among his direct reports and because Ferguson’s department had only one person.  The Western District concluded that this justification given by the CFO was unworthy of credence and was a form of circumstantial evidence that is probative of intentional discrimination, and rejection of the defendant’s proffered reasons will permit the trier of fact to infer the ultimate fact of intentional discrimination.
  • Retirement As a Proxy For Age Discrimination: Lincoln argued that mere inquiries into the retirement plans of an employee, who is of retirement age, does not rise to the level of age discrimination, when the decision to terminate an employee is based upon an age-dependent factor such as retirement eligibility if the employer offers plausible alternate explanation for the termination.  The court rejected this argument because the evidence showed that someone with the ability to influence the decision acted based on age-based stereotypes.  In addition, the elimination of the position based upon a cut in school revenues did not seem to be plausible.  There was sufficient evidence from which a jury could infer that age was a contributing factor to the termination decision.  Ferguson v. Curators of Lincoln University, (WD 78752, 05/31/ 16)

Trial Court Loses All Jurisdiction When a Prosecutor Dismisses a Case Without Prejudice Prior To a Jury Being Impaneled and Sworn or a Court Has Begun to Hear Evidence

r-JUDGE-ROBE-large570After considerable legal maneuvering the prosecutor, prior to the start of a bench trial in the case, announced in court “Judge, I am going to be dismissing this at this time.” The trial court then inquired if the State would be refilling the case and when informed that the State would be refilling, the trial court stated:

“Then it will be dismissed with prejudice to the defendant; it violated his constitutional rights. I’m also going to order that the prosecutor’s office pay for all the expenses of the defendant in this case, all deposition expenses, and the court costs.”

The trial court did not specify which constitutional rights of the Defendant had been violated.  The prosecutor in coordination with the dismissal of Case 1 then refilled the same charges in Case 2.  Defendant filed a motion to dismiss Case 2 on the grounds of Double Jeopardy and Collateral Estoppel and the motion was granted by the trial court effective 30 days from the entry sustaining the motion.  The prosecutor then appealed to the Southern District, which held that a prosecutor always has the right to dismiss a case under provisions of Section 56.087.  Once the prosecutor stated it was dismissing Case 1, the trial court lost all jurisdiction and its entry sustaining the motion to dismiss with prejudice was null and void.  State of Missouri vs. Alqabbaa, (SD33783, 03/30/16)

Missouri Damage Caps Applies to Out of State Courts

Based upon a recent decision by the United States Supreme Court in Franchise Tax of California v. Hyatt, Missouri damage caps for local government would apply to an out of state court.  I assume that the same reasoning would apply to venue provisions of Missouri law that require municipalities to be sued in the county where they are located.  Franchise Tax Board of California v. Hyatt (US SC, 14-1175, 4/19/16)

Court Of Appeals Affirms Motion to Dismiss Class Action For Unauthorized Fee For Failure To Appear

Appellants filed a class action lawsuit against some 13 cities (Cities) in the Kansas City area requesting a declaratory judgment based upon their having paid an illegal warrant fee and/or a failure to appear fee to the Cities and seeking recovery of these fees based upon unjust enrichment or money had and received.

Plaintiffs alleged that the Cities collected a warrant fee or failure to appear fee for an individual’s failure to appear on his or her municipal court date, which fee was not authorized by statute.  The amount of this fee varied between the Cities and ranged from $25 up to $149.50.  Plaintiffs alleged that each of them paid such a fee; however, the petition did not specify to which of the thirteen Cities the Plaintiffs paid the fee.  The Plaintiffs contended that the fees were not authorized by any Missouri statute and constituted a surcharge “in violation of Section 488.005, which provides that “no clerk of any court shall collect any surcharge authorized by or pursuant to any ordinance, order or resolution . . . unless such ordinance, order or resolution is authorized by statute.”

The Cities filed a motion to dismiss, which was sustained by the trial court and Plaintiffs appealed to the Western District.

Declaratory Judgment

To state a claim for declaratory relief, the petition must set forth facts demonstrating:

“(1) a justiciable controversy that presents a real, substantial, presently-existing controversy admitting of specific relief, as distinguished from an advisory decree upon a purely hypothetical situation; (2) a plaintiff with a legally protectable interest at stake, consisting of a pecuniary or personal interest directly at issue and subject to immediate or prospective consequential relief; (3) a controversy ripe for judicial determination; and (4) an inadequate remedy at law.”
(Emphasis added)

Plaintiffs and Defendants argued on appeal, whether or not there was an adequate remedy at law.  However, the Western District concluded that these arguments overlooked the procedural status of the case, which was whether or not the Plaintiffs pled sufficient facts to withstand a motion to dismiss, not whether they did not have an adequate remedy at law.  Since the Plaintiffs had the burden of proof to establish that they did not have an adequate remedy at law the pleadings were required to allege facts to support their allegations that they did not have an adequate remedy at law.

The Appellants argued (having failed to plead any facts to support their argument) that they had “…no adequate legal remedy to contest the allegation that they failed to appear because they were never charged with or convicted of failing to appear, and they had no legal remedy to contest the fee because no corresponding charge was ever brought nor a conviction obtained.” Plaintiffs also argued that a trial de novo, if possible, would not have been an adequate legal remedy.  The Western District concluded that Plaintiffs did not allege in their petition any facts showing that they did not have an adequate remedy at law nor did they plead all of the facts necessary to demonstrate their right to declaratory relief.

Unjust Enrichment And Money Had And Received

Plaintiffs did not allege, which one of the thirteen Cities that the four Plaintiffs paid nor did they allege which Defendant was enriched by or benefited from the payment of the unauthorized fees.  The identity of the Cities that received and appreciated a benefit at Appellants’ expense and the identity of the Cities that unjustly retained such benefits were ultimate facts that were necessary to support essential elements of both the unjust enrichment claim and the claim for money had and received.  Therefore, the Plaintiffs did not allege facts sufficient to state a claim for unjust enrichment or money had and received.  Gerke et. al., v. City of Kansas City, et. al., (WD78991, 6/14/16)

Comment Howard: My experience is that it is very common for the plaintiff to simply plead that there is no adequate remedy at law without any supporting factual allegations in the pleadings; therefore, you may want to look closely at this case to support a motion to dismiss.  While the court did not go into other defects in the pleading for declaratory judgment it strikes me that there was no case or controversy.  The request for a declaratory judgment was simply a request for an advisory opinion.

Classifying Duties of  Deputy Clerk to Include Managing Public Relations and Advising the Elected Clerk About Attending Political Functions Was Sufficient to Make Deputy Clerk a Political Employee

69395039Ronda DePriest served as an at-will employee in the Saline County, Arkansas, Circuit Clerk’s office as Chief Deputy Clerk.  In this capacity, DePriest handled real estate filings and some personnel and financial matters.  The Chief Deputy Clerk worked under and reported to the Circuit Clerk, who is an elected official in the County.  In 2010, Dennis Milligan was elected Circuit Clerk in a close contest against long-time incumbent Doug Kidd.  DePriest supported Kidd in the election by wearing his campaign shirt and walking in a parade on his behalf.  It is undisputed that when a new Circuit Clerk is elected, he or she must appoint or reappoint individuals to staff the office.  DePriest had been reappointed by Kidd each time he won an election.

Shortly before Milligan took office as Circuit Clerk, DePriest learned that she would not be retained as an employee under Milligan.  Instead, Milligan hired Jim Harris, an experienced political operative, to fill DePriest’s position.  In contrast to DePriest’s largely administrative role, Milligan envisioned his Chief Deputy would serve in a chief-of-staff capacity.  Notably, Harris was responsible for managing public relations, advising Milligan, attending political functions, and performing some of the administrative tasks DePriest had performed.  At the time he took office, Milligan had not met DePriest even though he contended DePriest was not someone he could trust in this role nor was he qualified.  The parties agreed that Harris’s job duties are different from those that DePriest performed as Chief Deputy.  DePriest contended that Harris is not as qualified to hold the position because she had nearly twenty years of experience.

On April 12, 2012, DePriest filed a lawsuit against Milligan in Arkansas state court alleging Milligan dismissed her in retaliation for her political affiliation with Kidd in violation of her First Amendment political affiliation right.  Milligan removed the case to federal court and following discovery, the district court granted Milligan’s motion for summary judgment as to the First Amendment political affiliation claim.  DePriest appealed to the Eighth Circuit.

DePriest argued in the Eighth Circuit, that Milligan violated her First Amendment rights by dismissing her from the position of Chief Deputy because of her political affiliation based upon Elrod v. Burns, which held that a dismissal based upon an employee’s political affiliation violated the First Amendment unless “the hiring authority can demonstrate that party affiliation is an appropriate requirement for the effective performance of the public office involved.”  Milligan submitted evidence that political affiliation or loyalty was an appropriate requirement for the performance of the public office involved by showing that the additional job duties for the Chief Deputy Clerk required loyalty and exercise of judgment on behalf of the Circuit Clerk.  The trial court’s decision was affirmed.   DePriest v. Milligan, (8th Cir., 15–1365, 05/26/16),

Determination By The Army Corps of Engineers That Property Contains Waters Of The United States Is Subject To Immediate Judicial Review

 A jurisdictional determination, that property contains “waters of the United States,” by the Army Corp of Engineers is final agency action, which is subject to immediate review in court.  See United States Supreme Court decision in United States Army Corps of Engineers v. Hawk.  If a local governmental agency receives such a determination it should immediately consider the impact on the project and determine whether or not to seek judicial review of this decision.  A first stop in understanding the issues is review of the excellent analysis provided by Lisa Sorensen of the Hawks case for IMLA members.  Ms. Soronen’s comments are available at  https://momunicipallaw.com and available below.

To: MML Staff

Date: May 31, 2016

“HI league staff:  This win wasn’t surprising but it is still just as good.  Long and short summaries are below.  Lisa

Supreme Court Rules Against the Corp In WOTUS Case

In United States Army Corp of Engineers v. Hawkes the Supreme Court ruled unanimously that an approved jurisdictional determination that property contains “waters of the United States” may be immediately reviewed  in court. The State and Local Legal Center (SLLC) filed an amicus brief in this case arguing in favor of this result.

Per the Clean Water Act, “waters of the United States” (WOTUS) are federally regulated. Property owners may seek an approved jurisdictional determination (JD) from the US Army Corp of Engineers definitively stating whether such waters are present or absent on a particular parcel of land.

Three companies wanted to mine peat from wetland property in Minnesota. The Corp issued an approved JD that the property contained WOTUS because its wetlands had a “significant nexus” to a river located about 120 miles away.

Per the Administrative Procedures Act judicial review may be sought only from final agency actions. Per Bennett v. Spear (1997), agency action is final when it marks the consummation of the agency’s decision making process and when legal consequences flow from the action.

The Court, in an opinion written by Justice Chief Roberts, concluded that an approved JD is a final agency action subject to court review because it meets both conditions laid out in Bennett. The Corp didn’t argue that an approved JD is tentative; its regulations describe approved JDs as “final agency action” valid for five years. Approved JDs give rise to “direct and appreciable legal consequences,” the Court reasoned, because the Corp is bound by them for five years. And a “longstanding memorandum of agreement” between the Corp and the Environmental Protection Agency (EPA) binds the EPA. So per an approved JD the two agencies authorized to bring civil enforcement proceedings under the Clean Water Act, practically speaking, grant or deny a property owner a five-year safe harbor from such proceedings. 
The SLLC amicus brief pointed out states and local governments would be negatively affected as landowners and partners with the business community responsible for economic development and capital infrastructure planning if judicial review of JDs is not possible. The Court agreed that neither alternative to judicial review is adequate. Proceeding without a permit could lead to civil penalties of up to $37,500 a day; seeking a permit can be “arduous, expensive, and long.”

Interestingly in three separate concurrences (each about a page long) Justices Kennedy, Thomas, Alito, Kagan, and Ginsburg debate whether an approved JD really is binding on EPA and whether it matters. Justice Kennedy warns that if it isn’t, “the Act’s ominous reach would again be unchecked by the limited relief the Court allows today.” In light of this discussion the Corp and EPA are likely to clarify the nature of their agreement.”