Opinion ID: 1850348
Heading Depth: 2
Heading Rank: 2

Heading: whether the chancery court order of december 22, 2000, allocating $20 million a year to the partnership is a valid and enforceable order.

Text: ¶ 66. The Partnership asserts that even if the Governor, Division of Medicaid and MHCTF had the right to intervene, the chancery court order of December 22, 2000, was a valid and enforceable modification to the original Settlement Agreement and should not have been vacated by the chancery court. On the other hand, the Governor, Division of Medicaid and MHCTF claim that the order of December, 2000, violated the Mississippi Constitution, the Mississippi Health Care Trust Fund statutes, court rules and procedures, and the Settlement Agreement. ¶ 67. We thus turn to the chancery court order of May 30, 2006, which vacated the earlier order of December 22, 2000. In this order of May 30, 2006, the chancellor stated: At the time this Court's Order was entered on December 22, 2000, there was agreement between the Legislative and Executive branches of government, as represented by the Attorney General, for entry of said Order in an effort to protect this portion of the tobacco settlement funds. The testimony presented demonstrated that the State of Mississippi, by and through the Attorney General of the State of Mississippi, procured the order in question after presenting the Court with the Order and further indicating, as the chief legal officer for the State of Mississippi that all parties, the state of Mississippi and tobacco companies, were in agreement. Since entry of the order in question and until the filing of the Motion to Intervene, the Executive and Legislative branches of government, as evidenced by the testimony regarding the agreement of legislative leaders and individual members of the legislature, the increase in budgets and spending ability of government agencies directly related to funding by the Partnership, and both legislative action and inaction, have been in agreement with said order. It is clear that this no longer exist (sic) and that the Executive and Legislative branches of government no longer agree to the Order in question. Absent agreement between those specific branches of government or specific legislation authorizing funding of the Partnership, this Court is placed in the position of determining the allocation and expenditure of disputed funds from the tobacco settlement. The Court finds this is outside the scope of this Court's authority and falls within the province of the legislative branch of government. The legislation recently passed by the Mississippi Legislature which directed funding of the Partnership is further evidence that this is a legislative function, subject to the veto power of the Executive as was exercised in regard to the recent legislation. Absent agreement among the Legislative and Executive branches of government for the State of Mississippi and absent specific legislation providing for the creation and funding of a tobacco cessation program, the Court looks to the language of the settlement agreement. The settlement agreement only provides for the funding of a 24 month pilot program. . . . While this Court recognizes the efforts and the success of the Partnership as evidenced through the testimony and pleadings, and recognizes the effort of the State of Mississippi, through its Attorney General, to procure these settlement proceeds from various tobacco companies, this Court cannot legislate. Without agreement between the Executive and Legislative branches of state government of the State of Mississippi or specific legislation authorizing funding of the Partnership, this Court is now without authority to continue funding of the Partnership pursuant to the terms of the Order now challenged. ¶ 68. We disagree with the absent agreement rationale applied by the chancellor to undergird her decision to vacate the previously entered order of December 22, 2000. However, while we agree with the chancellor's vacating the order, we do so for reasons different from those stated by the chancellor, and we will explain why. ¶ 69. Again, we must remember who are the original parties to this action  the Attorney General, for and on behalf of the citizens of this State, and the various tobacco defendants. These parties voluntarily entered into a Settlement Agreement which was approved by the chancery court. However, the Partnership was not a party at the time of the settlement because it did not even exist. In fact, in today's case, the Partnership stands in the same shoes as the Governor, Division of Medicaid and MHCTF  an intervenor. We must also keep in mind that, as a matter of practicality, we are dealing with a contract which was entered into on October 17, 1997, by the State of Mississippi and the tobacco defendants, when they executed the Settlement Agreement, which was later approved by the Jackson County Chancery Court by order entered on December 29, 1997. This Settlement Agreement, approved by the chancery court, provided, inter alia, that (1) $170,000,000 initially would be paid into the State Treasury; and (2) an additional $61,818,000 would be paid for a 24-month pilot program focusing on the reduction of tobacco use by our state's youth. In June 1998, the duly-created, private, non-profit Partnership properly received the $61.8 million for the twenty-four-month pilot program. The Settlement Agreement also provided for various sums thereafter to be paid annually by the tobacco companies into the State Treasury. It was for the receipt of these subsequent annual payments from the tobacco defendants that the Legislature in 1999 statutorily created the Mississippi Health Care Trust Fund within the State Treasury. For the sake of emphasis, we set out in toto the declaration of legislative intent at the time of the establishment of the Health Care Trust Fund. Miss.Code Ann. § 43-13-401 (Rev.2004) states: It is declared by the Legislature that the funds received by the State of Mississippi from tobacco companies in settlement of a certain lawsuit brought against those companies by the State of Mississippi, or as a result of the settlement of any lawsuit brought against the tobacco companies by another state, should be applied toward improving the health and health care of the citizens and residents of the state. It is the intent of the Legislature by this article to provide the manner and means necessary to carry out those purposes. When this statutory expression of legislative intent is read in conjunction with the Settlement Agreement and the chancery court order approving the Settlement Agreement, we cannot envision a declaration of legislative intent which could be any clearer than that which is set out in section 43-13-401. ¶ 70. Notwithstanding this clear expression of legislative intent, the Partnership contends that the Mississippi Health Care Trust Fund Act authorizes the continued funding of the Partnership with settlement proceeds. The Partnership asserts that Miss.Code Ann. § 43-13-405 illustrates that MHCTF should not receive all of the tobacco funds. Section 43-13-405(1), as cited by the Partnership, states: In accordance with the purposes of this article, there is established in the State Treasury the Health Care Trust Fund, into which shall be deposited Two Hundred Eighty Million Dollars ($280,000,000.00) of the funds received by the State of Mississippi as a result of the tobacco settlement as of the end of fiscal year 1999, and all tobacco settlement installment payments made in subsequent years for which the use or purpose for expenditure is not restricted by the terms of the settlement. . . . (Emphasis added). ¶ 71. Furthermore, the Partnership points to section 43-13-405(2)(d) to show that the Legislature contemplated that a portion of the tobacco funds was to be used for a tobacco cessation program. Section 43-13-405(2)(d) states in relevant part: The Health Care Trust Fund shall remain inviolate and shall never be expended, except as provided in this article. The Legislature shall appropriate from the Health Care Trust Fund such sums as are necessary to recoup any funds lost as a result of any of the following actions: (d) Tobacco cessation programs are mandated by the federal government or court order. ¶ 72. However, the Partnership's reliance on the Health Care Trust Fund Statutes is misplaced. A plain reading of section 43-13-405(1) states that all of the tobacco installment payments were to be made to the Health Care Trust Fund unless restricted by the terms of the Settlement Agreement. The Settlement Agreement never restricted $20 million of the tobacco installment payments for the program which is currently run by the Partnership. In fact, the granting of $20 million to the Partnership each year explicitly contradicts the Settlement Agreement, which directs that the annual installment payments are to be paid into a special account for the benefit of the State of Mississippi. (Emphasis added). In addition, according to the very terms of the Settlement Agreement, the pilot program was set to last for a 24-month period. The continued funding of the initial pilot program through the Partnership occurred only after an ex parte proceeding attended by the chancellor and the then-Attorney General. ¶ 73. With regard to section 43-13-405(2)(d), the language of the statute is also clear that the  legislature shall appropriate from the Health Care Trust Fund such sums as are necessary to recoup any funds lost as a result of any of the following actions: (d) Tobacco cessation programs which are mandated by the federal government or court order. (Emphasis added). The statute does not grant any court authority to allocate such funds. The statute expressly states that the funds must come from the Health Care Trust Fund, not directly from the tobacco installment payments, and that the funds must be appropriated by the Legislature. Neither prerequisite is met by the chancery court's order of December 22, 2000. ¶ 74. Additionally, the chancellor stated in her opinion: The Partnership contends that Section 43-13-405(2) MCA, shows legislative authorization for the Court to order a tobacco cessation program. However, this provision does not specifically provide for the creation of that program or its funding. A reading of the relevant statutes anticipates implementation of a national tobacco cessation program, which was contemplated during settlement of the tobacco litigation involving various states who were parties to those lawsuits. We agree with the chancellor inasmuch as section 43-13-405(2)(d) does not give the chancery court authority to legislate or to continue funding the Partnership pursuant to the terms of the order of December 22, 2000. ¶ 75. Although we are not deciding today's case on constitutional grounds, we do acknowledge that the Governor, Division of Medicaid and MHCTF attack the constitutionality of the chancery court order of December 22, 2000. The assertion is that the chancery court order of December 22, 2000, violates article 1, sections 1-2, of the Mississippi constitution, which deals with the separation of powers doctrine. Section 1 of our state constitution provides [t]he powers of the government of the State of Mississippi shall be divided into three distinct departments, and each of them confided to a separate magistracy, to-wit: those which are legislative to one, those which are judicial to another, and those which are executive to another. Section 2 of our state constitution states, inter alia, [n]o person or collection of persons, being one or belonging to one of these departments, shall exercise any power properly belonging to either of the others. ¶ 76. However since the constitutionality issue is not outcome-determinative in today's case, we need not discuss the issue of whether the chancery court order of December 22, 2000 is constitutional. This Court has steadfastly adhered to the rule that we will abstain from ruling on a constitutional issue unless such determination is necessary to a disposition of the case. Freeman v. PERS, 822 So.2d 274, 281 (Miss.2002); Dean v. PERS, 797 So.2d 830, 833 (Miss.2000); Johnson v. Memorial Hosp., 732 So.2d 864, 866 (Miss.1998); Scott v. Flynt, 704 So.2d 998, 1007 (Miss. 1996); Kron v. Van Cleave, 339 So.2d 559, 563 (Miss.1976) (It is familiar learning that courts will not decide a constitutional question unless it is necessary to do so in order to decide the case.) ¶ 77. With this being said, we note the obvious. The Legislature holds the purse strings. To illustrate this point, we have previously stated: Under all constitutional governments recognizing three distinct and independent magistracies, the control of the purse strings of government is a legislative function; indeed, it is the supreme legislative prerogative, indispensable to the independence and integrity of the legislature, and not to be surrendered or abridged, save by the constitution itself, without disturbing the balance of the system and endangering the liberties of the people. The right of the legislature to control the public treasury, to determine the sources from which the public revenues shall be derived and the objects upon which they shall be expended, to dictate the time, the manner, and the means both of their collection and disbursement is firmly and inexpugnably established in our political system. City of Belmont v. Miss. State Tax Comm'n, 860 So.2d 289, 306-07 (Miss.2003) (citing Colbert v. State, 86 Miss. 769, 775, 39 So. 65, 66 (1905)). ¶ 78. More recently, in Myers v. City of McComb, 943 So.2d 1 (Miss.2006), we reiterated the importance of the separation of powers doctrine outlined in the Mississippi Constitution. In our discussion of the separation of powers doctrine we stated, Article 1, Section 2 of the Mississippi Constitution prohibits the exercise of `any power' belonging to one branch by a member of another branch. Id. at 4 (emphasis in original). Thus, it follows that the judicial branch cannot perform a clearly legislative branch function. The prevailing power of the Legislature stems from the power of the purse. In Myers, we again enunciated, `the legislative department alone has access to the pockets of the people, and has in some Constitutions full discretion, and in all, a prevailing influence over the pecuniary rewards of those who fill the other departments, a dependence is thus created in the latter, which gives still greater facility to encroachments of the former.' Id. at 8 (citing The Federalist No. 48 at 334 (James Madison)). ¶ 79. Before money can come out of the state treasury, such money must be appropriated by the Legislature. State ex rel. Barron v. Cole, 81 Miss. 174, 193, 32 So. 314, 315 (1902) ([n]o money can come into the treasury or go out of it lawfully except as directed by legislative act. Collection and disbursement of public money belong to the legislature and must be done as it directs.). Without question, the expenditure of public funds is appropriately a legislative function. Bd. of Supervisors v. Bailey, 236 So.2d 420, 423 (Miss.1970) (The appropriation of public funds is traditionally within the exclusive province of the legislature.) The $20 million given annually to the Partnership has never been appropriated. Instead, the chancery court entered the December, 2000, order on an ex parte motion by the Attorney General. However, the chancery court is not authorized by law to make such a modification. The tobacco installment payments are monies that unquestionably belong to the state of Mississippi, and all of these payments, including the annual payments which were diverted to the Partnership, should have been placed in the Health Care Trust Fund until properly appropriated by the Legislature. ¶ 80. However, the Partnership asserts that the funds paid to the Partnership are not subject to the appropriations process. To support its argument, the Partnership contends that the tobacco settlement payments are private funds given for a designated purpose; and thus, are not state funds. The Partnership relies on Tatum v. Wheeless, 180 Miss. 800, 178 So. 95 (1938), for the assertion that non-state funds given to the state of Mississippi for a designated purpose are not subject to the appropriations process. Tatum involved Mississippi's unemployment compensation law. In Tatum, the Legislature levied taxes on employers and required the funds to be placed into a trust fund for the benefit of persons who involuntarily lost their jobs. The Legislature did take affirmative action and we correctly held [a]s this money is not property to be put into the state treasury, but is to be held by the state treasurer, who is authorized to place it in the depositories, and keep it apart and separate from the general funds of the state. . . . Tatum, 180 Miss. at 827-28, 178 So. at 102. ¶ 81. We find that Tatum is clearly distinguishable. In the case sub judice, the Legislature did not take affirmative action to set aside $20 million each year specifically for the Partnership. Instead, the provisions of the Settlement Agreement set aside $61.8 million for a two-year pilot program for which the Partnership was thereafter established to control. Nowhere in the Settlement Agreement did the State of Mississippi or the various tobacco defendants address continued funding for the pilot program. The chancellor acknowledged this reality in her May 30, 2006, order which vacated the December 22, 2000, order, when she found, inter alia, that absent specific legislation providing for the creation and funding of a tobacco cessation program, the Court looks to the language of the settlement agreement. ¶ 82. Turning now to the Settlement Agreement, it is clear that while the Settlement Agreement provided for subsequent amendments; it is equally clear that such amendments were to be in writing and signed by the signatories to the Settlement Agreement. The December 22, 2000, order which diverted $20 million annually to the Partnership, was generated without a written motion and from an ex parte meeting by the Attorney General with the chancellor. Thus, the Settlement Agreement was improperly amended by the ex parte entry of the December 22, 2000, order, without a written amendment signed by the signatories to the original Settlement Agreement. ¶ 83. Likewise, the Settlement Agreement provides only for the funding of a twenty-four month `pilot' program. ¶ 84. In fact, the language of the Settlement Agreement states in pertinent part: 8. Pilot Program Payment. In support of the State of Mississippi's demonstrated commitment to the meaningful and immediate reduction of the use of Tobacco Products by children under the age of 18 years, Settling Defendants agree to support a pilot program (the Mississippi Tobacco Pilot Program), the terms of which shall be submitted to the Court by the Attorney General of the State of Mississippi, and the elements of which shall be aimed specifically at the reduction of the use of Tobacco Products by children under the age of 18 years. Accordingly, on or before October 20, 1997, Settling Defendants shall, pursuant to a mutually acceptable escrow agreement attached hereto as Exhibit A, cause to be paid into a second special escrow account (the Mississippi Tobacco Pilot Program Escrow Account), for the benefit of the State of Mississippi, to be held in escrow pending Final Approval of this Settlement Agreement, the sum of $61,818,000. The Mississippi Tobacco Pilot Program shall commence within a reasonable period after Final Approval of this Settlement Agreement, and shall last for a 24-month period. The $61,818,000 amount payable by Settling Defendants in support of the Mississippi Tobacco Pilot Program (the Pilot Program Amount) shall be used only after Court approval of the specific terms of the Mississippi Tobacco Pilot Program for general enforcement, media, educational and other programs directed to the underage users or potential underage users of Tobacco Products, but shall not be directed against any particular tobacco company or companies or any particular brand of Tobacco Products. No expenditure from the Pilot Program Amount shall be made except upon application to the Court by the Attorney General and approval of such application by the Court. (Emphasis added). The Settlement Agreement goes on to state: 9. Annual Payments. Each of the Settling Defendants agrees, severally and not jointly, that on December 31, 1998 and annually thereafter (subject to final adjustment within 30 days), it shall cause to be paid into a special account for the benefit of the State of Mississippi (the Account). . . . (Emphasis added). Given that the annual payments were to be deposited into a special account for the benefit of the State of Mississippi, it is the Legislature's solemn duty and responsibility to appropriate these funds and not that of the judiciary. It is important to note that funds held in a special account still equate to state money. Additionally, it is abundantly clear from the unconditional language of the Settlement Agreement that by its very terms, the pilot program was to last for only twenty-four months, at which time the pilot program was to expire by the express terms of the Settlement Agreement. ¶ 85. In the end, we are constrained to find that the chancery court order of December 22, 2000, must be vacated since it was void ab initio because of being in violation of the applicable statutes and the Settlement Agreement; therefore, we need not delve any further into such issues as whether the December 22, 2000, order violates the Mississippi Constitution and court rules and procedures. Thus, while the chancery court was incorrect in its reasoning, we here uphold the chancellor's order of May 30, 2006, which order vacated the prior order of December 22, 2000, albeit for reasons different from those stated by the chancellor. This Court has constantly held that if a trial court reaches the right decision, we will affirm that decision even though the trial court may have reached that right decision for the wrong reason. Aldridge v. West, 929 So.2d 298, 303 (Miss.2006); Georgia-Pacific Corp., Inc. v. Mooney, 909 So.2d 1081, 1089 (Miss.2005) (citing Donald v. Amoco Production Co., 735 So.2d 161, 177 (Miss. 1999)); Falco Lime v. Mayor of Vicksburg, 836 So.2d 711, 725 (Miss.2002) (citing Jackson v. Fly, 215 Miss. 303, 311, 60 So.2d 782, 786 (1952)). See also Fulton v. Robinson Indus., Inc., 664 So.2d 170, 176 (Miss.1995). Accordingly, we affirm the May 30, 2006, order insofar as it vacates the prior chancery court order of December 22, 2000. However, there is one more issue which we must address.