State Ex Rel. Fent v. State Ex Rel. Oklahoma Water Resources Board

2003 OK 29, 66 P.3d 432, 74 O.B.A.J. 963, 2003 Okla. LEXIS 33, 2003 WL 1220244
CourtSupreme Court of Oklahoma
DecidedMarch 18, 2003
Docket96,276
StatusPublished
Cited by62 cases

This text of 2003 OK 29 (State Ex Rel. Fent v. State Ex Rel. Oklahoma Water Resources Board) is published on Counsel Stack Legal Research, covering Supreme Court of Oklahoma primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
State Ex Rel. Fent v. State Ex Rel. Oklahoma Water Resources Board, 2003 OK 29, 66 P.3d 432, 74 O.B.A.J. 963, 2003 Okla. LEXIS 33, 2003 WL 1220244 (Okla. 2003).

Opinion

OPALA, V.C.J.

{1 The dispositive issue in this taxpayers' gui tam 1 action is whether summary judgment was correctly given to defendants. We answer this question in the affirmative. Although like the Court of Civil Appeals, we affirm the trial court's ruling, we disagree with the appellate court's decision to resolve the critical issue on constitutional grounds when legal relief is available on an alternative, non-constitutional basis. We hence vacate the appellate court's opinion and affirm the summary disposition of taxpayers' claim.

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ANATOMY OF LITIGATION

2 The Flood Control Act of 1962 2 authorized the United States Army Corps of Engineers (the Corps) to construct the Clayton Reservoir on the Kiamichi River in Oklahoma "in accordance with the recommendation of the Chief of Engineers in Senate Doe. 145, 87th Cong., at an estimated cost of $29,748.00" (the project). 3 The project was to have multiple purposes, including water supply. Under the provisions of the federal *436 Water Supply Act of 1958, 4 any non-federal interest that benefits from the water supply component of a federal project must agree to pay for the share of construction costs allocated to water supply. 5

3 In the 1970's, decisions regarding state participation in water supply projects in Oklahoma were among the duties of a state commission known as the Water Conservation Storage Commission (WCSC). 6 As the non-federal participant in the Clayton Reservoir project, later renamed Sardis Lake, 7 the WCSC in 1974 entered into a contract (the contract) with the Corps under which the WCSC agreed to pay the costs of the project allocated to water supply, then estimated to be $16,399,000. 8 Under the contract, approximately $7.8 million was allocated to storage for present demand and approximately $8.5 million was allocated to storage for future demand. With respect to storage for present demand, the contract states:

The amount of the Project investment costs allocated to the storage for present demand shall be paid in 50 consecutive annual installments, the first of which shall be due and payable within 80 days after the User [the WCSC] is notified by the contracting Officer that the Project is completed and operational for water supply purposes. Annual installments thereafter will be due and payable on the anniversary date of the first payment. Except for the first payment which will be applied solely to the retirement of principal, all installments shall include accrued interest on the unpaid balance ...." (emphasis added)

Payments of principal and interest allocated to future demand storage space were not required to begin until ten years after the project became operational unless the State commenced using that storage space during that period.

1 4 In addition to contracting to repay the project's construction costs, the WCSC also agreed to pay a percentage of the annual operating and maintenance costs, to pay a portion of the costs of any major capital replacement items, and to hold the Corps *437 harmless from liability for damages incurred on account of the water storage component of the project. The contract does not give the WCSC a right to terminate the agreement or otherwise to be relieved of its contractual obligations, but as permitted by federal law, 9 it contains the following provision:

"The parties agree that this contract is not an obligation for which the full faith and credit of the State of Oklahoma is pledged. Nothing herein shall be construed as legally obligating the Oklahoma Legislature to make any appropriation of funds."

5 Finally, the contract recites the opinion of the Oklahoma Attorney General that the WCSC is acting within its authority in entering into the contract.

"I 6 The project became operational for water storage purposes on 6 January 1988 and the Corps notified the Oklahoma Water Resources Board (the OWRB or the Board), 10 which had assumed the functions of the WCSC in 1979, 11 that the first installment, together with the operating and maintenance costs for the ensuing year, was due within thirty (30) days. 12 Because the legislature had not appropriated funds for the first payment in the FY83 budget, the OWRB could not make the first payment until after the start of FY84. The payment was hence not made until 17 August 1983 and thus began a still-unresolved dispute over the state's liability for interest on late payments. The OWRB made periodic payments between 1983 and 1997 amounting to $4,414,700.69 and incurred an arrearage by the time this action was brought in excess of $8,000,000.00.

17 A group of taxpayers in 1997 served on the OWRB and its members a written demand that the Board "authorize and diligently prosecute an action to recover" from the federal government all payments made under the contract. 13 The group's demand asserted that the contract creates a state debt in violation of the budget balancing provisions of the Oklahoma Constitution, Article 10, § 23, 14 § 24, 15 and $ 25. 16 The Board denied the group's request.

*438 18 Two of the taxpayers who had issued the written demand, Margaret B. Fent and Jerry R. Fent (taxpayers) filed this gui tam action pursuant to the provisions of 62 0.S$.1991, § 372 17 and 62 0.8.1991, § 373, 18 haling into court as statutory defendants 19 the State of Oklahoma ex rel. the OWRB and ex rel. the WCSC and as real-party defendants the United States of America, the Department of Defense, the Army Corps of Engineers (collectively the United States or the federal defendants) and the nine individuals who were served with the written demand and who sat on the OWRB at the time the action was filed (defendants or individual defendants).

T9 The petition alleged that the contract between the WCSC and the Corps violated the Oklahoma Constitution and that all payments made pursuant to the contract were therefore unlawful. The petition further alleged that the individual defendants had wrongfully refused to prosecute an action for the return of the funds from the United States.

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Cite This Page — Counsel Stack

Bluebook (online)
2003 OK 29, 66 P.3d 432, 74 O.B.A.J. 963, 2003 Okla. LEXIS 33, 2003 WL 1220244, Counsel Stack Legal Research, https://law.counselstack.com/opinion/state-ex-rel-fent-v-state-ex-rel-oklahoma-water-resources-board-okla-2003.