Opinion ID: 4021145
Heading Depth: 2
Heading Rank: 1

Heading: Unconstitutional Burden Shift

Text: ¶112 The District Court unconstitutionally shifted the burden and relieved Missoula of proving every element of condemnation.1 Under the Fifth Amendment, before Missoula could take Mountain Water’s property, it was required to show its taking was for a “public use.” Kelo, 545 U.S. at 477-78 (citing U.S. Const. amend. V). Article II, § 29 of the Montana Constitution imposes a similar requirement. The Legislature further codified the “public use” requirement in Montana’s condemnation statute, § 70-30-111, MCA. ¶113 Citing Missoula’s Water Utility expert, the District Court supported its finding that Missoula’s ownership was a “more necessary public use” with the following language: Important public policy objectives are promoted by municipal ownership, including predictability and stability in rates, ability to obtain low cost financing not available in the private sector, lack of a profit motive, coordination with City services, planning and development efficiencies, greater transparency and accessibility to leadership and reflection of local preferences including conservation and stewardship. 1 Mountain Water argues that its due process rights were violated and refers to the burden shift as “an abstract policy preference for municipal ownership in and of itself.” 59 The District Court’s broad statement is a mandatory presumption that municipal ownership of a water system is always a “more necessary public use.” The District Court did not state that public policy objectives will be promoted by Missoula’s ownership; rather, it held unequivocally that public policy objectives are promoted by any municipal ownership. In essence, according to the District Court’s analysis, because Missoula is a city, and because this is a water supply, there is no further need to establish by evidence the “public use” requirement of the Fifth Amendment of the U.S. Constitution, Article II, § 29 of the Montana Constitution, or § 70-30-111, MCA. Instead, and in complete contradiction to two constitutions and a state statute, the District Court made it incumbent upon Mountain Water to rebut that presumption—to the extent that such a task would even have been possible, given the breadth of the District Court’s statement and its predisposition. However, due process required Missoula, not Mountain Water, to carry that burden because the right to possess property is a fundamental right. Speiser, 357 U.S. at 525-26; Mont. Const. art. II, § 3. The District Court violated Mountain Water’s due process rights when it relieved Missoula of its burden to prove the “public use” element of eminent domain. ¶114 This solitary holding by the District Court was just the proverbial tip of the iceberg of its improper analysis. The District Court’s reasoning in this mode was lengthy, waxing broadly about the many virtues it saw in public ownership, and contrasting the many vices it saw in private ownership. For example: “Local government ownership and management of water systems allows the stable pursuit of [] important public purposes,” whereas “Private companies are not well suited to the promotion of public 60 interest goals”; “Under municipal ownership, important financial decisions regarding the Water System can be based on promoting public health, safety and welfare rather than on decisions regarding returns on investments for a large and growing utility conglomerate”; “Revenue requirements for municipally owned water systems are less than privately owned systems because there is no need for profit”; “Protection and promotion of the public health, safety and welfare is the fundamental duty of a municipality. Private corporations have no duty to protect and promote the public health, safety and welfare.” These statements, and many more like them in the District Court’s order, further demonstrate that the District Court held a predispositional perspective that led it to relieve Missoula of the constitutional burden to prove that ownership by, specifically for this case, the City of Missoula, was a more necessary public use. ¶115 This unconstitutional presumption was not harmless. In the context of a jury verdict in a criminal case, the Supreme Court has stated “it has long been settled that when a case is submitted to the jury on alternative theories the unconstitutionality of any of the theories requires that the conviction be set aside.” Sandstrom v. Montana, 442 U.S. 510, 526 (1979) (internal quotations and citation omitted). This is because courts have no way of knowing whether the verdict was based on the unconstitutional presumption or not. Sandstrom, 442 U.S. at 526. What we have here is far more damning: the District Court explicitly told us it relied on the unconstitutional presumption. B. Due Process Right to Discovery and Meaningful Opportunity 61 ¶116 Missoula’s flagrant discovery abuses denied Mountain Water its due process right to “discover information relevant to the case against them along with the identity of the witnesses who are expected to testify and the substance of the expected testimony.” Wilson, 260 Mont. at 172, 858 P.2d at 371. The District Court likewise denied Mountain Water its due process right to a “meaningful opportunity to be heard,” James Daniel, 510 U.S. at 48, when it refused to continue the trial to remedy Missoula’s discovery abuses. ¶117 As noted above, Mountain Water was due at least the minimal discovery rights afforded criminal defendants. That right includes a protection against a series of abuses which, taken as a whole, have the cumulative effect of a due process violation. City of Billings v. Peterson, 2004 MT 232, ¶ 47, 322 Mont. 444, 97 P.3d 532 (citing Kyles v. Whitley, 514 U.S. 419, 432-54 (1995)). A due process violation exists if the State’s discovery abuse amounted to a deprivation of a fair trial. Kyles, 514 U.S. at 433-34 (citation omitted). ¶118 Missoula’s discovery tactics were Machiavellian, to put it politely. If I condoned winning at all costs, and was not concerned about the rule of law, I might even be impressed. ¶119 First, Missoula—a government actor, it should be emphasized—converted its electronic files from native format into unusable PDF portfolios when it produced the files to Mountain Water. When Mountain Water notified Missoula of the problem, Missoula refused to produce the documents in a usable form, making three further sets of production, consisting of over 17,000 documents, in the unusable PDF format. The Special Master ruled against Missoula, ordering it to produce the documents in a usable 62 format, and noting it had a multitude of options to do so, including utilizing e-discovery software already in its counsel’s possession or simply producing the documents in native form. After extensive delay, Missoula finally complied with the Special Master’s order three weeks before trial and delivered 26,581 documents to Mountain Water for its review. ¶120 Next, Missoula refused to produce communications between it and the town of Apple Valley, California, on its mistaken claim of privilege. The Special Master again ruled against Missoula, concluding it wrongfully withheld the documents and ordering Missoula to produce them. However, by the time Missoula produced the documents, depositions had already been taken and discovery had closed. Then, Missoula refused to produce internal emails regarding the assignments and interactions between it and one of its experts. Once again, the Special Master ruled against Missoula and ordered it to produce the documents, admonishing that the emails were “clearly discoverable.” Missoula’s foot-dragging kept these documents from Mountain Water until twelve days before trial. ¶121 Missoula then engaged in similar games with other experts, producing nine supplements to its expert disclosures after discovery closed and continuing to supplement its expert disclosures even during trial, including by supplementation of new documents that its experts used on the witness stand. Supplementation is required and generally appropriate, of course, but here Missoula used the process—abused it, that is—to delay its obligation to disclose and hide information from Mountain Water as long as it could. Several of Missoula’s experts testified under oath that Missoula had not asked them for 63 copies of documents supporting their opinions, despite outstanding discovery requests from Mountain Water for those very documents, demonstrating that Missoula never attempted to gather responsive documents and had no intention of complying with disclosure requirements. ¶122 The cumulative effect of these discovery abuses goes far beyond sharp litigation practices and constitutes a clear due process violation. Peterson, ¶ 47. Far from owning up to its actions, Missoula repeatedly asserts Mountain Water cannot point to one piece of prejudicial evidence and thus no prejudice occurred, a position that the Court adopts. However, first, it is incorrect to state that there was no prejudice. Missoula repeatedly stated throughout discovery it had no plan for capital expenditures, managing the system, or fixing leaks. Then, a few days before trial, the City surprised Mountain Water with an expert disclosure that included a 5-year capital expenditure plan with figures in the millions and an organizational chart detailing a plan to integrate Mountain Water employees into the City’s employment structure. Second, on the eve of trial, the City supplemented an expert disclosure to provide a new administrative cost analysis, which played a critical role in the District Court’s findings. These are just two examples, and they are prejudice enough. ¶123 But further, Missoula fails to recognize one of the true costs of discovery delay and abuse is the time expended by the other side to respond to that mischief. Whether the 26,581 documents Missoula dumped on Mountain Water three weeks before trial contained a smoking gun can only be ascertained after the 26,581 documents are reviewed by Mountain Water. Missoula intentionally and strategically put Mountain 64 Water in a time bind shortly before trial as other trial preparations were occurring, forcing the company to spend precious time reviewing the documents to determine whether there was information useful to its case. If there wasn’t, Missoula had nonetheless successfully wasted Mountain Water’s critical trial-preparation time. If there was, Missoula had disclosed the evidence before trial to give it plausible deniability to a contention it had withheld evidence. Missoula’s diabolical tactics hardly demonstrate that Mountain Water received a fair trial, one “worthy of confidence.” Kyles, 514 U.S. at 434. I sincerely hope this kind of gamesmanship with experts and a 26,581 page “document dump” three weeks before trial—repeated violations found by the Standing Master—would preclude the government from taking someone’s liberty. Likewise, because property is also a fundamental right, it should be no different when the government is taking someone’s property. The cumulative effect of Missoula’s discovery abuse was to deprive Mountain Water of its procedural due process right to a fair trial as guaranteed by the Constitutions of Montana and the United States. ¶124 The deprivation of a fair trial is particularly stark when contrasted with the very reasonable alternative that Mountain Water repeatedly requested: a continuance of a few months. Although due process does not require the best opportunity to be heard, it does require a meaningful opportunity to be heard. James Daniel, 510 U.S. at 48; Geil, ¶ 61. Granting a continuance of a few months, which would have allowed Mountain Water to review all of Missoula’s delayed discovery materials, would have ensured Mountain 65 Water’s opportunity to be heard was meaningful. Denying the continuation ensured it was not. The District Court therefore violated Mountain Water’s due process rights.2 C. Statutory Right to Discovery ¶125 Even if the District Court’s refusal to continue the trial would not have constituted a due process violation, it abused its discretion by not continuing the trial in light of § 70-30-206, MCA, which requires the District Court to set a trial schedule that will not prejudice any party’s position. ¶126 Mutual knowledge of all relevant facts gathered by both parties is essential to proper litigation. Hickman, 329 U.S. at 507. “Modern instruments of discovery, together with pretrial procedures, ‘make a trial less a game of blindman’s bluff and more a fair contest with the basic issues and facts disclosed to the fullest practicable extent.’” Richardson v. State, 2006 MT 43, ¶ 22, 331 Mont. 231, 130 P.3d 634 (quoting U.S. v. Procter & Gamble Co., 356 U.S. 677, 682 (1958)). Without an adequate opportunity to obtain discoverable information, a party is “at a significant disadvantage in litigating the merits of the case.” Preston v. Montana Eighteenth Judicial Dist. Ct., 282 Mont. 200, 206, 936 P.2d 814, 817 (1997). Achieving a just result—the foundational goal of our courts and legal system—is “contingent upon full disclosure.” Richardson, ¶ 63. Litigants who purposely halt the discovery process therefore “act in opposition to the 2 This Court could likewise have remedied this violation by granting Mountain Water’s meritorious petition for supervisory control, where we originally stated we were “troubled by what appears to be the City’s obstruction of discovery to gain a tactical advantage.” The Court denied Mountain Water’s request over my dissent. 66 authority of the court and cause impermissible prejudice to their opponents.” First Bank (N.A.)-Billings v. Heidema, 219 Mont. 373, 376, 711 P.2d 1384, 1386 (1986). ¶127 This Court strictly adheres to the policy that dilatory discovery actions shall not be dealt with leniently. Richardson, ¶ 56 (citation omitted). As we have said, the trial courts, and this Court on review, must remain intent upon punishing transgressors rather than patiently encouraging their cooperation. Richardson, ¶ 56 (citation omitted). It is “a maxim of our rules of discovery that the price for dishonesty must be made unbearable to thwart the inevitable temptation that zealous advocacy inspires.” Richardson, ¶ 56 (citation omitted). ¶128 Under § 70-30-202, MCA, six months is the default time period between service of summons and trial in a condemnation case. However, the guideline is flexible, and the court may “shorten[] or lengthen[] that time for good cause.” Section 70-30-202, MCA. Discovery and trial is required to proceed as expeditiously as possible, unless doing so will “prejudic[e] any party’s position . . . .” Section 70-30-206(5), MCA. District courts are required to give the proceedings “priority consideration.” Section 70-30-206(5), MCA. ¶129 In its order denying Mountain Water’s motion to continue, the District Court explicitly stated it would not continue the trial, regardless of prejudice. The District Court’s reason for its blanket denial of a new trial date regardless of prejudice was that it would have difficulty calendaring a new trial. Such a rigid stance is in violation of § 70-30-206(5), MCA, which required the District Court to not proceed as expeditiously as possible if doing so prejudiced either party. Further, given § 70-30-206(5)’s 67 requirement that the District Court give the proceeding “priority consideration,” a full calendar is not a satisfactory excuse to deny a meritorious request for a new trial date. I am hard pressed to conceive of a better showing of “just cause” for a continuance than blatant discovery abuse, or what would be more prejudicial than insisting on a rigid trial schedule regardless of discovery abuse. I would hold the District Court abused its discretion in denying Mountain Water’s request for a continuance. A Word for the Legislature ¶130 What should be taken from this case is that condemnation of private property in Montana is subject to a long procedural process, but that ultimately the merits of the case are decided under a lenient, subjective legal standard. What is a “more necessary” use? First, the statutory standard of “more necessary” itself is vague and amorphous, leaving the determination largely to the subjective views of the trial judge. Then, the Supreme Court has here determined to review the trial court’s determination of “more necessary” as a finding of fact, which is a very narrow and deferential standard of review, meaning that such findings are usually affirmed and are difficult to reverse by an appellate court. If the Legislature would prefer that the law provide a higher substantive bar to be reached before private property can be condemned, the statute will need to be revisited.