NO. 84-245 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1985 

RODNEY NICK, 

Plaintiff and Appellant, 

MONTANA DEPARTMENT OF HIGHWAYS, 

GARY WICKS as Director, RUSSELL 

WRIGG, as Administrator of Division of Motor Pool Equipment, 

Defendants and Respondents. 

APPEAL FROM: District Court of the First Judicial District, 

In and for the County of Lewis & Clark, 

The Honorable Henry Lohle, Judge presiding. 

COUNSEL OF RECORD: 

For Appellant: 

John L. Hollow argued, Helena, Montana 

For Respondents: 

Roy Andes argued, Agency Legal Services, Helena, 

Montana 

Jack Holstrom argued, Dept. of Highways, Helena, 

Montana 

Submitted: May 15, 1955 

Decided: December 27, 1985 

Filed: DEC 2 :' 7985 
Mr. Justice L. C. Gul-brandson delivered the Opinion of the 

Court. 

Rodney Nick, a disabled veteran, appeals an order of 

the District Court, of the First Judicial District, Lewis and 

Clark County, granting the State's motion for judgment on the 

pleadings. The District Court found that the veterans' 

preference was a gratuity, repealable or amendable at any 

time, rather than a constitutionally protected property 

right; that the retroactive repealer in the newer statute did 

not deny him equal protection; and that the newer statute did 

not require a two-thirds vote by the Legislature to repeal 

the old law and bar claims under it. We affirm. 

Nick is a veteran of both World War I1 and the Korean 

conflict. He was employed as a Bureau Chief with the Montana 

Department of Highways from 1978 to 1981. In 1981, Nick was 

laid-of f as part. of the Department' s "reduction in force. " 

He then applied for two other similar jobs available in that 

Department but did not receive either. 

Nick filed a petition for damages and requested the 

court issue an order that defendant show cause why plaintiff 

should not be employed by the Department of Highways, on the 

grounds that his veterans' preference right was not 

considered in his dismissal or in his two subsequent 

applications for employment. The court granted the 

Department of Highways' motion for judgment on the pleadinqs 

on April 17, 1984. The District Court determined that the 

Montana Legislature, in Chapter 1, Section 14, Laws of 1983, 

passed in the 1983 Special Session (hereinafter Section 14) 

effectively repealed the veterans' preference statute and 

that this repeal applied retroactively to bar Nick's claim 

because it had not been reduced to judgment. 

After Nick appealed, the State requested an extension 

of time because the issues raised by Nick's appeal were 
pending before this Court in Conboy v. State of Montana 

(Mont. 1985), 693 P.2d 547, 42 St.Rep. 120. Both Nick and 

the Department of Highways filed amicus briefs in Conboy . 

After this Court affirmed the constitutionality of Section 

14, Nick continued to press his appeal. 

The jssues Nick presents are: 

(1) That Section 14 deprives Nick of property without 

due process of law in violation of Article 2, Section 17 of 

the Montana Constitution and the Fourteenth Amendment of the 

United States Constitution. 

(2) That Section 14, by treating Nick differently than 

other veterans and handicapped persons, denies him equal 

protection of the laws guaranteed by Article 2, Section 4 of 

the Montana Constitution and the Fourteenth Amendment of the 

United States Constitution. 

(3) That Section 14 is invalid under Article 2, Section 

14 of the Montana Constitution because it bars Nick's suit 

for injury to property and it failed to receive the necessary 

two-thirds vote of all of the members of the House of 

Representatives. 

This is another case following the wake of our decision 

in Crabtree v. Montana State Library (Mont. 1983) , 665 P.2d 

231, 40 St.Rep. 963. In Crabtree, we determined that the 

preference in hiring and firing accorded to qualified 

veterans and disabled persons by § 10-2-203, MCA was 

absolute. Subsequently, Governor Schwinden called a Special. 

Session of the 1983 Montana Legislature to address the 

situation created by Crabtree. The Legislature passed a bill. 

retroactively repealing the statutes interpreted in Crabtree 

and prospectively making the preference accorded veterans and 

disabled persons a tie-breaking device. See Ch. 1, 48th Sp. 

Session, Laws of Montana, Dec. 1983. The portion of the 
Veterans' Preference Act that is directly addressed. in this 

case is Section 14, which states: 

Sections 10-2-201 through 10-2-206, MCA, 

are repealed. This repeal applies 

retroactively to bar any claim of 

violation or application of 10-2-201 

through 10-2-206 that has not been 

reduced to judgment, whether or not the 

judgment is final, on [the effective date 

of this act]. Claims under 10-2-201 

through 10-2-206 that have been reduced 

to judgment, whether or not the judgment 

is final, on [the effective date of this 

act] are enforceable. No claim for a 

violation of 10-2-201 through 10-2-206 

may be made under [section 81 of this 

act. (Effective date December 20, 1983.) 

The Act passed the House of Representatives by a vote 

of 66-33, with one member absent and not voting. Legislative 

records disclose that, at the time of the Special Session, 

approximately fourteen 1a.wsuits were pending against the 

State based on this Court's interpretation of § 10-2-203, MCA 

in Crabtree. The legislative history of Section 14 shows 

that the Legislature was unequivocal in its aim to bar those 

pending claims. Minutes of the meeting of the House 

Judiciary Committee on December 13, 1-983, p. 1-5, point out 

the Legislature's intent: 

CHAIRMAN BROWN introduced a second 

amend-ment to bar any claims pending under 

the preference rule : 

He said his concern arose yesterday when 

Superintendent Koke, from the East Helena 

Schools, described the situa-tion they 

were in concerning the decisions they 

made after the Crabtree case to hire all 

veterans beca.use five of seven people who 

had applied for employment were veterans 

and there were only five positions 

available . Essentiall-y, what this 

amendment does is bar any cla-ims pending 

except those that are pending final 

judgement [sic] . Senator Mazurek 

indicated in testimony that there were 

only one or two cases at the judgement 

[sic] stage. Representative Keyser 

seconded the motion. 

REPRESENTATIVE HANNAH asked John McMaster 

what the discussion was in the interim 
committee on this particular issue. Can 

the legislature go back and take away the 

rights of people who have already filed 

under the current statutes? John 

McMaster stated that the only thing that 

is really questionable is whether we can 

take away a judgement [sic] that is 

already conclusive. 

REPRESENTATIVE HANNAH asked John what was 

the point he had made during the interim 

committee hearing that said, in effect, 

that it was questionable whether or not 

you could go back and take away rights 

that somebody had under the previous law. 

Mr. McMaster said that what he was saying 

was limited to the right to file where a 

judgement [sic] had already been made. 

Generally speaking, if you have a 

statutory right and a statutory methods 

[sic] of enforcing that right, and the 

whole statute is repealed, then that 

right is lost even if a lawsuit is filed. 

In Conboy, 693 P.2d 549, we ruled on the validity of 

Section 14. Conboy involved a complaint of wrongful 

discharge by a former deputy clerk of the Supreme Court who 

was not reappointed to that position. We upheld the district 

court's granting of summary judgment to the State because 

Conboy never legally held the job before he was discharged. 

Conboy also alleged that he was not granted his veterans' 

preference in his discharge. We observed in Conboy: 

In substance, the District Court held 

that the veterans' preference was a 

government gratuity which was repealable 

by the legislature at any time by a 

majority vote. We adopt the analysis of 

veterans' preference rights in State ex 

rel. Dolan v. Civil Service Bur. of St. 

Paul (1972), 293 Minn. 477, 197 N.W.2d 

711, 714, where the Minnesota Supreme 

Court stated: 

"Veterans ' preference rights are not 

rights that have been earned through 

years of service to the state. They are 

a gratuity, given to the class of persons 

to show the state's appreciation for 

service in the Armed Forces of the United 

States, and they do not amount to vested 

rights in the recipients . . . . Therefore, a veterans' preference right 

can be adjusted when and as the 

legislature sees fit without violating 

any vested rights. 'I (Citations omitted) 
We hold that the veterans ' preference 

rights granted under the repealed portion 

of the Veterans Preference Act are not 

rights earned through years of service to 

the state, but are a gratuity given to 

citizens of Montana by the State to show 

its appreciation for service in the Armed 

Forces. They do not amount to rights 

vested in the veterans. 

Conboy, 693 P.2d at 552. 

Nick argues that Conboy and Dolan are distinguishable 

from the case at bar because neither involved a situation 

where a veteran had claimed. (or "accepted") his statutory 

preference, only to have it retroactively taken by the 

legislature. In Conboy, the plaintiff had not claimed the 

preference prior to filing his complaint. In Dolan, the 

Minnesota Supreme Court only upheld the legislature's power 

to prospectively modify the preference scheme. This 

distinction is legally significant and, for that reason, we 

must go beyond Conboy and examine Nick's due process claim in 

light of his situation. 

As presented in this case, the dispositive question is: 

What, for due process purposes, is the nature of a claimed 

veterans' preference? Nick's equal protection argument also 

hinges on this inquiry. 

The due process clause in the Fourteenth Amendment to 

the United States Constitution, and in Section 17, Article 2 

of the Montana Constitution provides that the state may not 

deprive a person of life, liberty, or property without "due 

process of law." This poses the question of whether 

"claiming" or "accepting" a veterans' preference creates a 

property interest sufficiently great to hold sway over the 

legislature's power to retract the same. 

Nick suggests two ways in which he acquired a property 

interest in his preference; by contract or by reliance. 

Neither of these convince us that Nick had an interest the 
legislature was powerless to revoke absent "just 

compensation." 

For Nick's first argument, we reaffirm the position we 

adopted in Conboy that the veterans' preference is a 

gratuity, not a contractual right. This Court held that 

veterans did not acquire any rights beyond those of other 

citizens for their service in the Armed Forces. Conboy, 693 

P.2d at 552. The United States Supreme Court expressly 

rejected the same contractual right argument in United States 

v. Teller (1883), 107 U.S. 64, 2 S.Ct. 39, 27 L.Ed. 352. 

This principle was reaffirmed in Lynch v. United States 

(1934), 292 U.S. 571, 54 S.Ct. 840, 78 L.Ed. 1434, where that 

Court reasoned: 

Pensions, compensation allowances, and 

privileges are gratuities. They involve 

no agreement of parties; and the grant of 

them creates no vested right. The 

benefits conferred by gratuities may be 

redistributed or withdrawn at any time in 

the discretion of Congress. (Citations 

omitted. ) 

292 U.S. at 577. Noting that this principle has never been 

overruled or modified, the Ninth Circuit Court of Appeals, in 

Monaco v. United States (9th Cir. 1975), 523 F.2d 935, cert. 

den. 424 U.S. 914, 96 S.Ct. 1.11.4, 47 L.Ed.2d 319, upheld the 

constitutionality of the "Dual Compensation Act of 1964," 5 

U. S.C. SS3501-3503. That Act revoked preferences originally 

granted to veterans by the "Veterans' Preference Act of 1944" 

(originally codified at 5 U.S.C. S861 et. seq.) . In Monaco, 

"the plaintiffs . . . were threatened with loss of their 

civil service jobs as a consequence of a substantial 

reduction in force at the [military facility] ." 523 F.2d at 

937. Addressing the veterans' argument that they were 

unconstitutionally denied rights vested under the Veterans' 

Preference Act, the court noted: 

. . . [Wlhatever anticipations a 

serviceman entertained between 1944 and 
1964 with respect to preferential 

advantage in the federal civil service 

were no more than some sort of floating 

expectancy entirely dependent upon the 

Government's bounty. A claim of 

unconstitutional deprivation cannot be 

built upon this foundation. 

523 F.2d at 940. See also Kizas v. Webster (D.C.Cir. 1983), 

707 F.2d 524 and Mack v. United States (Ct. of Claims 1980), 

Nick does not have a reliance interest in the veterans' 

preference unless and until. it is actually received. Before 

that point, Nick did not incur any direct, specific financial 

detriment in gaining the status of a veteran--the cost of war 

and the armed services falls on all shoulders, albeit on some 

more heavily than others. The preference was given by the 

legislature to those more heavily saddled with that burden 

for public purposes. 

For a reliance interest to be valid, it must be 

reasonable. We held in Conboy that veterans acting under the 

veterans' preference statute did so in contemplation of the 

legislature's power of repeal and cited S 1-2-110, MCA: 

Any statute may be repealed at an.y time 

except when it is otherwise provided 

therein. Persons acting under any 

statute are deemed to have acted in 

contemplation of this power of repeal. 

Along this line, Nick argues that Article 11, Section 

35 of the Montana Constitution requires this Court to find 

tha.t the veterans' preference is, in Montana, more than a 

gratuity. That Section states: "The people declare that 

Montana servicemen, servicewomen, and veterans may be given 

special considerations determined by the legislature." 

Our reading of this provision is that it is permissive 

and does not provide an independent, substantive ground for 

finding that the veterans' preference has any greater 

incidents of property than that found in Conboy, Dolan or the 
federal cases discussed above. The meaning of the above 

clause and the context of the term "special considerations" 

lead us to the conclusion that the use of the word 

consideration was not meant as implying a term of art from 

contract law. This is supported by the minutes of discussion 

of the above clause at the Constitutional Convention. 

Delegate McKeon, who proposed Section 35 stated that: 

. . . [Tlhis section is a permissive 

section to be added to the Bill of 

Rights, allowing the Legislature to give 

special consideration to veterans of 

wars . . . 

I think that we should include a section 

of this nature in the Bill of Rights to 

give the Legislature an impetus to try 

and help these individuals . . . 

Vol. VI, Montana Constitutional Convention, verbatim 

transcript, p. 1842. 

Section 35 is permissive, laudatory and suggestive in 

nature, and was designed to remove any other constitutional 

impediment that might stand in the way of the preferential 

treatment of vetera.ns. 

Wick also contended at oral argument that the statement 

in White v. State of Montana (Mont. 1983), 661 P.2d 1272, 

1275, 40 St.Rep. 507, 510, that "all persons have a speedy 

remedy for every injury" is an independent ground for his 

lawsuit. This language alone does not provide Nick a new 

cause of action not otherwise recognized. Further, White is 

distinguishable from the case at bar in that here, as 

discussed above, no fundamental right is burdened. 

This result is supported by Jensen v. State of Montana 

(Mont. 1984), 689 P.2d 1231, 41 St.Rep. 1971, holding that 

the remedy for denial of the statutory preference alone, 

(i.e. absent the other elements of wrongful discharge or 

discrimination) is a writ of mandamus directing the hiring 
agency to re-open the application process and fill the 

vacancy in accordance with Crabtree. 

This brings us to Nick's argument that Section 14 

offends the equal protection clauses of the Fourteenth 

Amendment to the United States Constitution, and Article TI, 

Section 4 of the Montana Constitution. In order for this 

Court to apply a strict scrutiny analysis to this claim, Nick 

must show that Section 14 either burdens a fundamental right 

or involves a suspect class. Oberg v. City of Rillings 

(Mont. 1983), 674 P.2d 494, 40 St.Rep. 2034. Otherwise, 

Section 14 survives review if the legislature has a rational 

basis for its action. 

Nick argues that Section 14 created three classes of 

veterans : (1) those who received the full Crabtree 

preferen.ce; (2) his class, those who were denied the 

preference post- Crabtree but failed to obtain a judgment 

before Section 14 took effect and received nothing; and (3) 

those who received the tie-breaker preference articulated in 

Section 14. These classes do not involve a suspect criteria 

such as race, nationality or alienage, so a strict scrutiny 

analysis is not required. The legislative history, of Section 

1.4 shows the legislature's valid and rational reasons for its 

actions. Testimony indicated that many governmental bodies 

were thrust into difficult situations by the Crabtree 

decision after interpreting the preference statutes 

differently for decades. Legislators voiced concerns of 

fiscal integrity, employee competence, and academic freedom. 

Ch. 1, Laws 1983, including Section 14, was a rational 

response to these legitimate concerns. 

The legislature's giving of a veterans' preference does 

not cause that preference to be a fundamenta.1 right, as 

discussed in the first issue. This government gra-tuity fits 

within one group of statutory rights discussed by Professor 
Charles R. Hochman in his article, The Supreme Court -- and the 

Constitutionality - of Retroactive Legislation, 73 Harv.L.Rev. 

There are two special types of statutory 

right which may be altered or repudiated 

at any time until the benefits conferred 

by them are actually received. The first 

of these embraces rights arising from 

statutes granting gratuities from the 

government. The Court has said that the 

general principle governing such statutes 

is that "benefits conferred by gratuities 

may be redistributed or withdrawn at any 

time in the d-iscretion of Congress." 

[Citing Lynch, 292 U.S. at 577.1 

The key element in both the gratutiy and 

penalty cases appears to be the absence 

of any financial cost in the acquisition 

of the right based upon the original 

statute. [Citing Steamship Co. v. 

Joliffe (1865), 69 U.S. (2 Wall.) 450.1 

It should be stressed that the reliance 

required - to remove a ri g ht from the . - 

category of gratuity or penalty is a 

financial detriment -- in txe acquisition o? 

the right, -- and not merely reliance on -- t& 

fiht after it accrues, as, for example, 

the making - OF - a financiaT commitmen; - in 

reliance upon the statute. The reason 

for this stricter requirement is probably 

similar to that encountered in the cases 

sustaining the extension of statutes of 

limitations; the penalty or gratuity is 

given by a statute for public purposes 

which are not controlled by the merits of 

the donee's claim to the right. Under 

these circumstances, the Court is 

reluctant to permit the donee to obstruct 

a rea~sessme~t of these purposes by the 

legislature. (Emphasis added.) 

73 Harv.L.Rev. at 724-726. Again, no strict scrutiny 

analysis applies since Section 14 does not burden a 

fundamental right and the legislature's reasons for its 

actions, articulated above, satisfy the rational basis test. 

Finally, Nick argues that Section 14 failed to garner 

the Constitutionally required two-thirds vote of the House of 

Representatives, and is thus invalid; see Art. 11, Sec 18, 

Mont.Const. We affirm the following holding in Conboy: "We 
conclude that the legislature properly could repeal the 

veterans' preference by a majority vote at any time . . . " 

The District Court's order is affirmed 

We concur: '7 

6g n Justice 

Justices /I /-"-7 

Honorable Thoma 

Judge of the 

sitting in 

Justice William Hunt, Sr. 
Mr. Justice Frank R. Morrison, Jr. dissents as follows: 

The majority opinion simply fails to address the 

paramount issue presented in this appeal. That issue is: 

WHERE A CAUSE OF ACTION CAN BE STATED FOR A 

WRONGFUL TERMINATION OR WRONGFUL FAILURE TO HIF.E, 

CAN THAT CAUSE OF ACTION RE ELIMINATED WITHOUT 

OFFENDING THE ACCESS CLAUSE OF THE MONTANA 

CONSTITUTION? 

Nick was terminated in 1981 and shortly thereafter 

applied for two similar jobs, but did not receive either. 

Nick was entitled to preference points under the veterans1 

preference statute then in existence. If Nick had a claim, 

the merits of which are not before this Court, that claim had 

ripened prior to the legislative repeal in 1983. 

This case does not involve the question of whether 

veterans' preference points are a gratuity which can be taken 

by the legislature. I do agree that a statute granting 

preference points can be repealed. In other words, a veteran 

is not entitled to preference points for the life of the 

veteran simply because they existed at the time the veteran 

entered the service. 

Nick alleges that he was terminated and not rehired 

because the State of Montana failed to comply with the legal 

mandate granting preference points. Rather than seek a 

reopening of the bidding process, Nick sued for damages. The 

damages claimed arose out of a wrongful discharge and 

wrongful failure to rehire in that the State failed to follow 

the law and therefore violated public policy. Such a cause 

of action is recognized in Montana. Nye 17. Department of 

Livestock (1982), 196 Mont. 222, 639 P.2d 498. 

Nick alleges damages. If it be true that the State 

violated the law in failing to give preference points and 

Nick was damaged, the cause of action ripened at the time the 

State acted. At that point Nick had a claim for damages 

which had value, if true. In enacting the legislation in 

1983, and applying it retroactively, the legislature 
abolished a cause of action for damage to Nick's property 

interest which was, at that time, recognized by law. 

Article 11, Section 16 of the 1972 Montana Constitution 

provides : 

The administration of justice. Courts of justice 

shall be open to every person, and speedy remedy 

afforded for every injury of person, property, or 

character. 

We have interpreted this section to afford a 

constitutional right to full legal redress for every injury 

to person or property. White v. State of Montana (Mont. 

1983), 661 P.2d 1272, 40 St.Rep. 507. 

The constitutional right stated in Article 11, Section 

16 has not been held by this Court to be an absolute right. 

Rather we have held that the right, being stated in the 

Declaration of Rights section of the Constitution, is 

fundamental in character. Being a fundamental right, 

classification systems which discriminate among litigants are 

subjected to a strict scrutiny analysis. 

Here we have a group of people, veterans and handicapped 

persons, who had a cause of action when their preference 

points were unlawfully taken from them. All other employees 

who were terminated by the State or other employers, in 

violation of the law, have a recourse in the court system. 

Veterans are singled out and are denied any recourse although 

the law was violated in their discharge. Such treatment of 

veterans, the group to which Nick belongs, must be strictly 

scrutinized and the discriminatory scheme fail unless there 

is a compelling state interest shown. White v. State of 

Montana, supra. 

The State cannot satisfy a compelling state interest 

showing by a mere claim on the legislature's part that a 

compelling state interest exists. White v. State of Montana, 

supra. The majority opinion does not even contend that a 

compelling state interest has here been shown. 
The discrimination against veterans who had a cause of 

action and were entitled to redress under the Constitution 

must fail when subjected to a strict scrutiny analysis. I 

would remand this case for trial. 

I concur in the dissent of Jus