Opinion ID: 2639445
Heading Depth: 2
Heading Rank: 1

Heading: Denial of Motion to DismissSubject Matter Jurisdiction

Text: [¶ 7] Whether a court has subject matter jurisdiction is a question of law to be reviewed de novo. Ritter v. Ritter, 989 P.2d 109, 111 (Wyo.1999). Subject matter jurisdiction refers to `the power to hear and determine cases of the general class to which the proceedings in question belong.' Lacey v. Lacey, 925 P.2d 237, 238 (Wyo.1996) (quoting Fuller v. State, 568 P.2d 900, 903 (Wyo.1977)). The district court's subject matter jurisdiction was invoked through the Uniform Declaratory Judgments Act (Wyo. Stat. Ann. §§ 1-37-101 to -114 (LexisNexis 2001)), which allows any person whose rights, status or other legal relations are affected by the Wyoming constitution or by a statute to have the construction and validity of the particular provision determined and his rights, status, or other legal relations declared in a court of law. Section 1-37-103. [¶ 8] The state objected to the district court's consideration of the declaratory judgment action primarily because the board had made no final decision on SRA's proposed land exchange or Merbanco's proposed public auction of the lands in question. Without such final decision, the state insists, no justiciable controversy exists. While conceding the court has jurisdiction pursuant to Article 5, Section 10 of the Wyoming Constitution and the Uniform Declaratory Judgments Act, the state contends such jurisdiction does not extend to advisory opinions since binding legal determinations made in the abstract and decisions rendered without concrete factual background would be imprecise, subject to speculation, and would create rather than diminish future controversies. Cranston v. Thomson, 530 P.2d 726, 729 (Wyo.1975). The state argues a justiciable controversy requires the parties have `existing and genuine, as distinguished from theoretical, rights or interests.' Brimmer v. Thomson, 521 P.2d 574, 578 (Wyo.1974) (quoting Sorenson v. City of Bellingham, 80 Wash.2d 547, 496 P.2d 512, 517 (1972)). The state points out the board's decision did not foreclose the possibility of a public auction, leaving the court with hypothetical facts and issues. [¶ 9] In response, the challengers contend they object to the very process the board was pursuing which assumed the option of an exchange without a public auction was available. The record discloses this process continued over a period of almost two years before this litigation commenced. The state, SRA, and the other interested parties, including the Teton County commission, all proceeded as if the option of a land exchange without a public auction was available, and, for a time, the state conducted exclusive negotiations with the proponents of an exchange. Merbanco entered the fray in direct competition with SRA, urging the state to adopt its position that a public auction was constitutionally required. [¶ 10] This controversy over the constitutionality of exchanges of state lands without a public auction impacts many stakeholders, including state school land lessees, the beneficiaries of the funds generated by state school lands, the legislature which adopted statutes authorizing exchanges, those members of the executive branch of state government whose responsibility it is to steward the state school lands, as well as the public at large. As inevitable growth and development increase the pressure on Wyoming state lands, the need for certainty and clarity regarding this aspect of the management of state lands grows. We conclude this is precisely the type of circumstance contemplated by the Uniform Declaratory Judgments Act, the purpose of which is to settle and to afford relief from uncertainty and insecurity with respect to legal relations. Section 1-37-114. The act instructs that we are to liberally construe it to fulfill that purpose. Barber v. City of Douglas, 931 P.2d 948 (Wyo.1997); Reiman Corporation v. City of Cheyenne, 838 P.2d 1182 (Wyo.1992). [¶ 11] The state's argument that we must let the board's process with regard to the Teton Village school section run its course is counter to the entire thrust of the declaratory judgments statute which was designed to enable parties to obtain judicial determinations prior to an injury rather than requiring them to wait until the damage is done. The board itself possesses no power to resolve questions of constitutionality. Riedel v. Anderson (Conflicting Lease Applications for Wyoming Agricultural Lease No. 1-7021), 972 P.2d 586, 587 (Wyo.1999). We have rejected the argument that, in the context of administrative agency action, parties must exhaust their administrative remedies before challenging the authority of the agency to act. Rocky Mountain Oil and Gas Association v. State, 645 P.2d 1163 (Wyo.1982). If the relief requested concerns the constitutionality or interpretation of a statute upon which the administrative action is, or is to be, based, the [declaratory judgment] action should be entertained. Id. at 1168. To force the parties to expend the time and resources to complete the board's process only to subject the final product to possible jeopardy is not sound policy. In addition, the lack of certainty concerning the viability of the exchange option may influence the nature of the final decision by the board, an equally problematic result with the potential of denying the various stakeholders the benefits they might otherwise receive. [¶ 12] Nevertheless, the proponent of a declaratory judgment must still present a fully justiciable controversy. As we stated in Brimmer, 521 P.2d at 578 (quoting Sorenson, 496 P.2d at 517), a four-part showing is required: First, a justiciable controversy requires parties having existing and genuine, as distinguished from theoretical, rights or interests. Second, the controversy must be one upon which the judgment of the court may effectively operate, as distinguished from a debate or argument evoking a purely political, administrative, philosophical or academic conclusion. Third, it must be a controversy the judicial determination of which will have the force and effect of a final judgment in law or decree in equity upon the rights, status or other legal relationships of one or more of the real parties in interest, or, wanting these qualities[,] be of such great and overriding public moment as to constitute the legal equivalent of all of them. Finally, the proceedings must be genuinely adversary in character and not a mere disputation, but advanced with sufficient militancy to engender a thorough research and analysis of the major issues. [¶ 13] The state contends the challengers cannot meet the first requirement of a justiciable controversythat they have existing and genuine rights or interests at stake. Pursuant to the substantial public interest and importance doctrine, we have found standing where we ordinarily would not in the following instances: Washakie County School District Number One [ v. Herschler ], 606 P.2d 310 [(Wyo.1980)] (constitutionality of school financing); Memorial Hospital of Laramie County [ v. Department of Revenue and Taxation of State of Wyoming ], 770 P.2d 223 [(Wyo.1989)] (tax exempt status of hospital); State ex rel. Wyoming Association of Consulting Engineers and Land Surveyors v. Sullivan, 798 P.2d 826 (Wyo.1990) (constitutionality of the Wyoming Professional Review Panel Act); Board of County Commissioners of the County of Laramie v. Laramie County School District Number One, 884 P.2d 946 (Wyo.1994) (entitlement of school district to interest on school district funds held by county treasurer); and Management Council of the Wyoming Legislature [ v. Geringer ], 953 P.2d 839 [(Wyo.1998)] (constitutional scope of governor's veto power). Jolley v. State Loan and Investment Board, 2002 WY 7, ¶ 9, 38 P.3d 1073, ¶ 9 (Wyo.2002). [¶ 14] In a similar context, we addressed standing in a challenge to the constitutionality of the public school financing statutes and stated: Standing is a concept used to determine whether a party is sufficiently affected to insure that a justiciable controversy is presented to the court. It is a necessary and useful tool to be used by courts in ferreting out those cases which ask the courts to render advisory opinions or decide an artificial or academic controversy without there being a palpable injury to be remedied. However, it is not a rigid or dogmatic rule but one that must be applied with some view to realities as well as practicalities. Standing should not be construed narrowly or restrictively. Further, as said in Residents of Beverly Glen, Inc. v. City of Los Angeles, 1973, 34 Cal.App.3d 117, 109 Cal.Rptr. 724, 727 [(citations omitted) ]: In recent years there has been a marked accommodation of formerly strict procedural requirements of standing to sue and even of capacity to sue where matters relating to the `social and economic realities of the present-day organization of society' are concerned. Accordingly, we have seen a retreat from ... formalism and rigidity.... Washakie County School District Number One v. Herschler, 606 P.2d 310, 317 (Wyo.1980) (some citations omitted). [¶ 15] In this case, the state's claim of no standing focuses on the lack of final action, and, thus, the state argues no injury has occurred. This approach fails to consider the essential nature of the challengers' interests and whether those interests are sufficient to provide standing for the various parties. [¶ 16] As to the standing of WEA, Mr. Johnston, and the Johnston children, they claim a potential injury because the state's position authorizing exchanges without public auction will directly affect the revenue available to the permanent school fund. In Washakie, we held school children and their parents had a sufficient interest in the funding of public education to maintain a challenge to the constitutionality of the statutes providing for the same. [¶ 17] Educating the youth of our state is an important function performed by our state government. Our constitution, as we shall see, plainly expresses the commitment of a free people to the value of a thorough education. The school districts and the members of school boards are charged with the responsibility of providing education to the children of Wyoming and are tangibly injured if the statutes which guide their hands disenable them from so providing. Parents are keenly concerned and suffer tangible injury if their children do not receive a proper education. The children themselves are, obviously, tangibly injured if they do not uniformly receive the best education that tax resources can provide. With these considerations in mind, we hold that each of the named appellants has standing to sue under the circumstances of this case. Id. [¶ 18] A similar analysis and result are appropriate when considering the standing of WEA, an organization of persons involved and interested in public education. Although we have held that the nature of the interests of school children and their parents may meet the standing requirement in matters relating to equality in funding public schools, we still must consider whether the potential impact of less funding on WEA's members and the Johnstons is sufficient to create standing. While revenues from school lands are constitutionally and statutorily dedicated to support education, those funds provide a relatively small portion of the total funds provided for public schools. No showing was made that the funding provided by the legislature for schools would be inadequate without the interest from the permanent school fund. Furthermore, given the statutory requirement that any exchange must be on a value for value basis, Wyo. Stat. Ann. § 36-1-111(a) (LexisNexis 2001), it seems unlikely that an exchange of lands would negatively impact the funds available for the support of education in any significant amount. However, WEA argues the significance of the impact on the permanent fund is obvious because a bid of $36.48 million was to be paid upon transfer of the land. We believe evaluating the impact on the permanent fund is the appropriate approach and concur with the standing analysis employed in Branson School District RE-82 v. Romer, 958 F.Supp. 1501, 1509-11 (D.Colo.1997), which concluded similar plaintiffs had standing to challenge a constitutional amendment affecting the administration of the permanent school fund in Colorado. [¶ 19] With regard to Merbanco's standing, a different problem is presented. The state had no obligation to either sell or exchange the Teton Village school section. Consequently, Merbanco had no legally recognizable right to bid on the property. Furthermore, the public auction requirement was intended to protect interests of the permanent school fund and those who would benefit from it, not those who may seek to purchase school lands. We have consistently held that standing requires a legally protectable, tangible interest to be at stake. Gooden v. State, 711 P.2d 405 (Wyo.1985) (defendant had no right to plea bargain and thus no right to claim statute imposing mandatory sentence for DUI violated constitutional separation of powers); Cremer v. State Board of Control, 675 P.2d 250, 254 (Wyo.1984) (senior water right holder had no standing to seek abandonment of junior right); see also Budd v. Bishop, 543 P.2d 368 (Wyo.1975); Cuthbertson v. Union Pacific Coal Co., 50 Wyo. 441, 62 P.2d 311 (1936). Merbanco had no legally protected interest entitling it to bid on school lands and thus had no standing to challenge the statutes allowing the state to exchange lands without public auction. [¶ 20] The Colorado Supreme Court faced a similar situation in Brotman v. East Lake Creek Ranch, L.L.P., 31 P.3d 886 (Colo.2001), where a former lessee of school lands challenged a proposed exchange between the state and a third party, claiming the exchange constituted a sale and the state had not followed the statutory requirements for a sale. Colorado's test for standing is similar to ours: A plaintiff has standing if he or she (1) incurred an injury-in-fact (2) to a legally protected interest, as contemplated by statutory or constitutional provisions. 31 P.3d at 890; see also Wimberly v. Ettenberg, 194 Colo. 163, 570 P.2d 535, 539 (1977). The lessee claimed he was injured because of the potential that, if the school lands were owned privately, the lessee would be subject to condemnation for a right of way across his lands to the private section. The Colorado court found such injury was speculative and, even if it occurred, the lessee would not have a legally protected right to prevent a condemnation if just compensation were paid. Brotman, 31 P.3d at 891. Our conclusion regarding Merbanco's lack of standing is consistent with the Colorado court's reasoning. [¶ 21] Having found three of the four challengers have standing, we must determine whether the controversy at issue is one upon which a judgment of the court may effectively operate, as distinguished from a debate or argument evoking a purely political, administrative, philosophical, or academic conclusion and upon which a judicial determination will have the effect of a final judgment. The state complains the lack of final action by the state renders the argument hypothetical. As stated above, we have consistently refused to require final agency action as a condition precedent to a declaratory judgment action concerning the underlying authority of the agency to act, especially when matters of constitutionality are at issue. Wyoming Community College Commission v. Casper Community College District, State of Wyoming, 2001 WY 86, 31 P.3d 1242 (Wyo.2001); Rocky Mountain Oil and Gas Association, 645 P.2d 1163. Certainly, a judicial determination of the constitutional propriety of exchanges of state lands without a public auction will provide clear rules for the future administration of state lands. [¶ 22] Finally, the state steadfastly clings to its claim that, without final action, no adversity of interests exists. Even a cursory review of this record discloses clear adversity between the parties the state claiming it has authority to pursue exclusive negotiations for the exchange of lands with one party and the challengers demanding the immediate initiation of public auction proceedings. To require the parties to wrestle this dispute to the ground and obtain a final state action would accomplish little other than the expenditure of additional time and resources potentially in vain. [¶ 23] Even though we conclude the traditional elements of a justiciable controversy exist in this case, we have historically relaxed those requirements in matters of great public interest and importance. Management Council of Wyoming Legislature v. Geringer, 953 P.2d 839, 841 (Wyo.1998); Memorial Hospital of Laramie County v. Department of Revenue and Taxation of State of Wyoming, 770 P.2d 223 (Wyo.1989); Brimmer, 521 P.2d 574. In this case, we face important questions of great public interest, and they deserve to be answered. We find the district court's denial of the state's motion to dismiss was well founded and affirm.