Neel v. Strong

114 S.W.3d 272, 2003 Mo. App. LEXIS 559, 2003 WL 1908385
CourtMissouri Court of Appeals
DecidedApril 22, 2003
DocketED 81902
StatusPublished
Cited by1 cases

This text of 114 S.W.3d 272 (Neel v. Strong) is published on Counsel Stack Legal Research, covering Missouri Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Neel v. Strong, 114 S.W.3d 272, 2003 Mo. App. LEXIS 559, 2003 WL 1908385 (Mo. Ct. App. 2003).

Opinion

GLENN A. NORTON, Judge.

Sherry Neel and Rickey Jamerson (“Appellants”) appeal the judgment denying their claim for injunctive relief and declaratory judgment against Thomas Strong, Robert Ritter, Worsham Caldwell, Kenneth McClain, James Bartimus, Brown and Williamson Tobacco Corporation, Lorillard Tobacco Company, R.J. Reynolds Tobacco Company, Philip Morris USA, Inc. and the Missouri State Attorney General’s Office (collectively “Respondents”). We affirm.

I. BACKGROUND

The Attorney General of Missouri sued several tobacco companies on behalf of the State (“the tobacco litigation”). The Attorney General entered into a contract for legal services with Thomas Strong who agreed to serve as “lead special assistant attorney general” in the tobacco litigation. Strong entered into subcontract agreements, also governed by the contract for legal services, with attorneys Robert Rit-ter, Worsham Caldwell, Kenneth McClain and James Bartimus (collectively “outside counsel”). The contract for legal services provided that the Attorney General “shall have final authority over all aspects of the tobacco litigation.”

The tobacco companies and the state settled the tobacco litigation. As part of the settlement, the Attorney General and the tobacco companies agreed that the tobacco companies would pay the fees of the outside counsel. Outside counsel waived their right to compensation under the contract for legal services and entered into the Missouri Fee Payment Agreement (“the Agreement”) with the tobacco companies. Under the Agreement, the tobacco companies agreed to pay outside counsel directly for the services they performed on behalf of the state in the tobacco litigation. The amount of outside counsel’s fees was set by binding arbitration at $111,250,000.00, payable over 25 years.

Appellants sought to intervene in the tobacco litigation. Appellants’ motion to intervene was denied by the circuit court, and the denial was upheld by the Supreme Court in State ex rel. Nixon v. American *274 Tobacco Company, 34 S.W.3d 122 (Mo. banc 2000). Appellants then filed this action seeking a declaratory judgment that the Agreement is unconstitutional. Appellants claimed that outside counsel were officers of the state and therefore must be paid according to Missouri Constitution Article IV, Section 21. Appellants also sought injunctive relief prohibiting the tobacco companies from paying the fees to outside counsel under the agreement. The circuit court heard this case on cross-motions for judgment on the pleadings and found for Respondents on all issues.

II. DISCUSSION

“The party moving for judgment on the pleadings admits, for purposes of the motion, the truth of all well pleaded facts in the opposing party’s pleadings.” Id. A motion for judgment on the pleadings is properly granted by the trial court if, from the face of the pleadings, the moving party is entitled to judgment as a matter of law. Id. The facts in this case are not in dispute. The sole legal question before this Court is whether Article IV, Section 21 applies to the Agreement.

A. Standing

We will not review an appeal unless the parties had proper standing to bring the action. Eastern Missouri Laborers Dist. Council v. St. Louis County, 781 S.W.2d 43, 45-46 (Mo. banc 1989). Appellants rely on American Tobacco for the proposition that they have standing to bring this case. In American Tobacco, the Supreme Court affirmed the denial of Appellants’ motion to intervene under Rule 52.12 in the tobacco litigation. The Court found that “[t]o the extent that [Appellants have] any interest in the settlement, however, that interest is clearly neither impaired nor impeded” by Appellants’ absence from that litigation. American Tobacco, 34 S.W.3d at 131. In affirming the denial of Appellants’ motion to intervene, the Court went on to state that “[Appellants] could file a separate lawsuit to address [their] allegations.” Id.

The Supreme Court’s holding in American Tobacco was limited solely to whether Appellants could intervene in that litigation. Nowhere in American Tobacco does the Court address the justiciability of Appellants’ claims. While the Court did say that Appellants were free to file a separate lawsuit to address their claims, it said nothing about their standing in that new lawsuit. The mere filing of a lawsuit does not automatically confer standing on a taxpayer. Eastern Missouri Laborers, 781 S.W.2d at 46. The Court in American Tobacco did, however, address the standing of other taxpayers who brought claims similar to the one in this case. See American Tobacco, 34 S.W.3d at 132.

“The primary basis for taxpayer suits arises from the need to ensure that government officials conform to the law.” Eastern Missouri Laborers, 781 S.W.2d at 46. The taxpayer has an interest that can be legally protected if the taxpayer is directly and adversely affected by the action in question or if the taxpayer’s interest is conferred by statute. Ste. Genevieve School District R-II v. Board of Aldermen of City of Ste. Genevieve, 66 S.W.3d 6, 10 (Mo. banc 2002). In order to have standing, a taxpayer must show either: 1) a direct expenditure of funds generated through taxation, 2) an increased levy in taxes, or 3) a pecuniary loss attributable to the challenged transaction of a municipality. American Tobacco, 34 S.W.3d at 131.

While the Agreement does not specifically involve state funds, outside counsel would not be owed any fees unless they had represented the state. See American Tobacco, 34 S.W.3d at 134. “To character *275 ize these funds as wholly private funds places form before substance.” Id. In this unique situation, the Appellants’ claims exist because of the underlying claims of the state against the tobacco companies. Id. Just as the other taxpayers in American Tobacco had standing, Appellants have standing in this cause of action. Id. Therefore, we will address the merits of their claims.

B. Officers of the State

In their first point on appeal, Appellants contend that the trial court erred in concluding that outside counsel are not officers of the state under Article IV, Section 21 of the Missouri State Constitution. Article IV, Section 21 states:

The officers named in this article shall receive for their services salaries fixed by law, which shall not be increased or diminished during their terms.

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Related

Moynihan v. Gunn
204 S.W.3d 230 (Missouri Court of Appeals, 2006)

Cite This Page — Counsel Stack

Bluebook (online)
114 S.W.3d 272, 2003 Mo. App. LEXIS 559, 2003 WL 1908385, Counsel Stack Legal Research, https://law.counselstack.com/opinion/neel-v-strong-moctapp-2003.