Court Opinion

ID: 9591101
Source: CourtListenerOpinion
Date Created: 2023-08-22 00:02:11.868978+00
Date Added: 2024-06-11T17:55:44.827964
License: Public Domain

OPALA, Vice Chief Justice,
dissenting.
The court reverses today the nisi prius dismissal of Oklahoma City’s [City’s] lawsuit for failure to state a breach-of-contract claim and vacates the Court of Appeals' opinion which:
(a) holds the City was' entitled to interest accrued to the State on sales tax revenue which the Oklahoma Tax Commission [Commission] collected for it and deposited with the State Treasurer [Treasurer] in a revolving fund account kept pursuant to the statutory regime then in force1 and
(b) attributes “vendor” status to the Commission.
Today’s pronouncement rests on a legal theory different from that applied by the Court of Appeals, but reaches the same result.2 Its ultimate conclusion is that no recovery of interest earned on the City’s share of the invested revolving account revenue is possible because all funds from which payment could have been made have now been exhausted.
I cannot join the court’s pronouncement. I would grant certiorari to dismiss this appeal as mooted by after-enacted amend-atory legislation, 68 O.S.Supp.1989 §§ 1373 and 2702,3 based on (a) the City’s unqualified confession (on certiorari) that the legal issues pressed below in its declaratory judgment suit against the Commission and the Treasurer are no longer lively and (b) the Treasurer’s report to this court that there are no funds in any account from which a recovered interest could be paid. I would direct that, on remand, the district court order its record memorialized to show that this controversy became moot while on certiorari to the Court of Appeals.
I
MATERIAL MIDAPPEAL DEVELOPMENTS WHICH TRIGGER THE MOOTNESS DOCTRINE
This controversy was generated by the City’s attempt (a) to establish its right to *1296the interest earned by the State! on sales tax revenue collected for the City by the Commission pursuant to a contr'actual arrangement and (b) to prevent the Treasurer and the Commission from “appropriating” those funds. The then-effective. statutory scheme allowed municipalities tó contract with the Commission for collection of municipal sales tax revenue. All ⅛⅞ collected funds would be routinely deposited with the Treasurer in the Commission’s revolving account and coiimingled with' other tax collections.4 The interest paid ()n the investment from thel revolving account became subject to legislative appropriation. The Commission remitted each month to the municipal recipient the amount of tax collected less its statutorily authorized retention fee. No interest was ever paid the City on its share of the invested revenue.
While appellate scrutiny is generally confined strictly to the record of proceedings below, a well-recognized exception sanctions an appellate tribunal’s claim to cognizance of those after-occurring facts — transpiring during the pendency of an appeal— which adversely affect the reviewing court’s capacity to administer effective relief.5
After the Commission and the Treasurer sought certiorari for review in this case and in a related appeal,6 the legislature changed the statutory collection scheme governing the recipient cities’ revenue. Beginning November 1, 1989, all sales taxes, including penalties and interest, collected by the Commission under a contractual arrangement must be deposited in a sales tax remitting account and distributed monthly to each recipient municipality.7 The claim to interest collected on City’s sales tax revenue is now statutorily established. The City has unequivocally conceded that this controversy, pressed below under the old statutory regime, now stands mooted by the amendatory 1989 legislation. The very problem which precipitated the instant quest for recovery is incapable of repetition under the current sales tax collection regime.
The Court of Appeals’ attribution of “vendor” status to the Commission, qua collector of the sales tax for another recipient entity, even if indeed mistaken, cannot again be invoked in the face of new legislation and hence the error does not clamor for correction in a precedent-setting pronouncement. The amended statute now in force amply regulates the relationship between the City, qua ultimate revenue recipient, and the Commission, qua collector of a municipal entity’s revenue.8 The Trea*1297surer unequivocally informs this court that the interest earned on the City’s sales tax revenue during the period in suit has been appropriated by the legislature and funds no longer exist from which any recovered interest could be paid.
Where, as here, after an appeal has been commenced, conditions arise which preclude an appellate decision from affording any effective relief, the appeal will be dismissed for mootness.9 A dispute ceases to present a lively “case or controversy” when the tendered issues are abstract, hypothetical or have become moot.10 This is the essence of the law’s mootness doctrine. Oklahoma jurisprudence recognizes but two “escape hatches” from its strictures — the public-interest11 and the likelihood-of-recurrence12 exceptions. Neither is available to the two certiorari petitioners before us — either to the Treasurer or to the Commission.
Distribution of public revenue is the only issue here. No real relief is affordable, and the challenged conduct of the Commission is not likely to recur. The amendatory legislation’s comprehensive character now regulates the interaction of the Commission with its municipal recipient-clients so completely that appellate pronouncement is unnecessary. Yesterday’s question, now fully answered by statute, does not bear the earmarks of one “capable of repetition” while evading review.13
Because the issues in litigation stand mooted by the 1989 legislative changes and there are no unappropriated funds from which the interest sought for the period in question could be paid, I would grant certiorari and put an end to this quarrel without adding gratuitous judicial gloss.
II
A LAWYER’S DUTY TO APPRISE THE COURT OF AFTER-OCCURRING DEVELOPMENTS WHICH CAST DOUBT ON THE CONTINUED LIVELINESS OF A CONTROVERSY
This case cries out for a refresher course in legal ethics to remind the Bar that a lawyer’s maintenance of a mooted contro*1298versy may constitute professional misconduct. The Treasurer and Commission filed their certiorari petitions on February 13, 1989. The amendatory legislation was approved by the Governor May 8, 1989. We issued a show cause order in both appeals on January 26, 1990 to inform ourselves of the controversy’s status.
During the course of litigation counsel have an ethical duty to advise the court of developments occurring after the lawsuit’s commencement, which tend to moot the controversy.14 This duty to inform applies with equal force to private lawyers as well as to those in the service of a public agency.15
When issues have become moot and relief may no longer be afforded, the continued prosecution of an action (or of a plea for corrective relief) becomes closely akin, in its effect, to the maintenance of a frivolous or groundless claim. At least one federal court has held that an attempt to press a mooted lawsuit is no less sanctiona-ble than the institution of a groundless claim.16 The continued prosecution of a mooted controversy clogs an overburdened judicial system, needlessly delays the end of litigation and wastes scarce judicial resources.
Civil and disciplinary tools are available and should be used to curb counsel’s failure to end mooted claims. The Model Rules of Professional Conduct impose upon lawyers the duty of candor to the tribunal at every stage of the case.17 A lawyer has an affirmative obligation to advise the *1299court about matters relevant to the proper disposition of the controversy, such as any adverse precedent that is not revealed by opposing counsel.18 New or amendatory legislation may have the same effect on the outcome of a lawsuit or on a plea for corrective relief as adverse legal precedent. If there is any doubt about the continued liveliness of a controversy, based on facts occurring after a proceeding’s institution— whether at the trial or appellate stage — the pertinent facts should be disclosed to and then resolved by the court. Once the facts have been revealed counsel is always free to argue against the controversy’s dismissal.
I would support the assessment of attorney’s fees against a lawyer or his client for pressing a quest to secure corrective relief when the controversy is known or should have been known to be moot.19 In my view, a state entity’s prosecution of certio-rari quest to vindicate a right that inheres in a mooted controversy would also warrant imposition of a counsel-fee award. A certiorari petitioner in effect “initiates” a new proceeding for appellate review. A frivolous plea for corrective relief or that plea’s continued maintenance after the controversy is no longer lively falls within the ambit of 12 O.S.Supp.1987 § 941(A).20 The cited statute authorizes an award of attorney’s fees in favor of a defendant when “any civil action [was] brought in any court of this state by any state ... commission ... without reasonable basis or is friv*1300olous.” (Emphasis mine.)21
In the present case, the pertinent facts were not placed of record until this court, acting sua sponte, issued an order calling upon the parties (a) to give us a status of the issues in controversy and (b) to account for any unappropriated funds representing interest earned on the sales taxes from which recovery could be had. All parties responded except the Commission. Though counsel for the Treasurer and the Commission stated in their certiorari petitions that an important public-law question needed to be addressed, they failed to inform this court of the legislative changes that became effective after certiorari had been brought.22 This court should not be expected to learn about vital after-occurring developments through disclosure coerced by a. show cause order.
Because, based on undisputed facts now of record, this controversy stood mooted when (a) the legislature amended the statute giving rise to the dispute and (b) the funds from which this liability could have been paid had been exhausted, I would grant certiorari for the purpose of (1) vacating the Court of Appeals’ opinion, (2) dismissing the appeal and (3) remanding the cause to the trial court with directions to memorialize its record to show that this controversy became moot while on certiora-ri to the Court of Appeals as a result of after-enacted legislation and unavailability of funds from which the liability in contest could be paid.

. 68 O.S.Supp.1986 § 2702.

. Today’s pronouncement — that the interest earned on municipal sales tax revenue is an accretion to the principal — has constitutional underpinnings. In holding that the interest earned on municipal sales tax revenue collected by the Commission pursuant to its contract with the City is due the recipient municipality, the court relies on the mandate of Art. 10, § 19, Okl. Const., which provides that taxes levied and collected for one purpose may not be devoted to another.

. Okl.Sess.L.1989, Ch. 168, approved May 8, 1989, eff. Oct. 1, 1989 (68 O.S.Supp.1989 § 1373) and Nov. 1, 1989 (68 O.S.Supp.1989 § 2702).

. 68 O.S.Supp.1986 § 2702; 62 O.S.Supp.1986 § 7.1.

. Lawrence v. Cleveland County Home Loan Auth., Okl., 626 P.2d 314, 315 [1981]; Brown Investment Company v. Hickox, Okl., 369 P.2d 807, 808 [1962]; Carlton v. State Farm Mutual Automobile Ins. Co., Okl., 309 P.2d 286, 289-290 [1957]; City of Tulsa v. Chamblee, 188 Okl. 94, 106 P.2d 796, 798 [1940]; see also Tulsa Tribune v. Oklahoma Tax Com’n, Okl., 768 P.2d 891, 896 [1989] (Opala, V.C.J., dissenting).

. The City of Oklahoma City v. The State Treasurer, Leo Winters, Treasurer, Okl., 789 P.2d 1300 [1990].

. 68 O.S.Supp.1989 §§ 1373 and 2702 (Okl.Sess. L.1989, Ch. 168). The amendatory legislation added the following paragraph to § 2702:
"The Oklahoma Tax Commission shall place all sales taxes, including penalties and interest, collected on behalf of a municipality pursuant to the provisions of this section in the Sales Tax Remitting Account as provided in Section 3 of this act.”

. I must recede from the court’s characterization of the Commission's duty when collecting City tax. Today’s opinion overlooks the statute-imposed institutional design. Under the regime in force during the period in this controversy, the Commission, qua collector, was under no duty to invest the City’s funds. Its job was to collect and remit. The very statute that authorized cities to levy sales tax also established the timetable for State remittance of City revenue. Only when unreasonably withholding municipal funds on hand in disobedience of the statutory remittance schedule could the State have ever been liable for interest accruable to a city as its damages for delay or moratory damages. Seal v. Banes, 183 Okl. 203, 80 P.2d 657, 663 [1938]; E.B. Jones Const. v. City & County of Denver, 717 P.2d 1009, 1014 [Colo.App.1986], In the face of the self-containing levy-and-collection scheme then in existence, the court erroneously invokes today the provisions of Art. 10, § 19, Okl. Const., to hold that State-earned interest income *1297accreted to the City's share of the invested principal by force of our fundamental law.

. Hamilton v. Investment Towers Corporation, Okl., 489 P.2d 488, 490 [1971]; Wolfe v. Hart's Bakeries, Inc., Okl., 460 P.2d 950, 952 [1969]; Edwards v. Hanna Lumber Co., Okl., 415 P.2d 980, 981 [1966]; Duncan v. Sims, Okl., 277 P.2d 145, 146 [1954]; Westgate Oil Co. v. Refiners Production Co., 172 Okl. 260, 44 P.2d 993, 994 [1935]; In Re Protest Against Referendum Petition No. 5, 185 Okl. 393, 92 P.2d 374, 375 [1939]; Ham v. McNeil, 27 Okl. 773, 117 P. 207 [1911].

. Rogers v. Excise Bd. of Greer County, Okl., 701 P.2d 754, 761 [1985]; Lawrence v. Cleveland County Home Loan Auth., supra note 5 at 315; Edwards v. Hanna Lumber Co., supra note 9 at 981; Westgate Oil Co. v. Refiners Production Co., supra note 9 at 994; Payne v. Jones, 193 Okl. 609, 146 P.2d 113, 116 [1944]; Wallace v. McClendon, 144 Okl. 39, 289 P. 354 [1930].
Art. 3, § 2, U.S. Const., limits the jurisdiction of the U.S. Supreme Court to "cases and controversies.” In Sosna v. Iowa, 419 U.S. 393, 402, 95 S.Ct. 553, 559, 42 L.Ed.2d 532 [1975], the Court held that there must be a lively controversy not only at the time the complaint is brought, but also when the case is reached for review.

. Westinghouse Elec. v. Grand River Dam Auth., Okl., 720 P.2d 713, 720 [1986]; Lawrence v. Cleveland County Home Loan Auth., supra note 5 at 315-316; Application of Goodwin, Okl., 597 P.2d 762, 764 [1979]; Special Indemnity Fund v. Reynolds, 199 Okl. 570, 188 P.2d 841, 842 [1948]; Peppers Refining Co. v. Corporation Commission, 198 Okl. 451, 179 P.2d 899, 901 [1947]; Payne v. Jones, 193 Okl. 609, 146 P.2d 113, 116 [1944]; see also Tulsa Tribune v. Oklahoma Tax Com’n, supra note 5 at 896 (Opala, V.C.J., dissenting).

. Morton v. Adair County Excise Bd., Okl., 780 P.2d 707, 711 [1989]; Lawrence v. Cleveland County Home Loan Auth., supra note 5 at 315—316; In re D.B.W., Okl., 616 P.2d 1149, 1151 [1980]; see also Tulsa Tribune v. Oklahoma Tax Com’n, supra note 5 at 896 (Opala, V.C.J., dissenting).

. Southern Pacific Terminal Co. v. ICC, 219 U.S. 498, 515, 31 S.Ct. 279, 283, 55 L.Ed. 310 [1911]; Roe v. Wade, 410 U.S. 113, 125, 93 S.Ct. 705, 713, 35 L.Ed.2d 147 [1973]; see also In re. D.B.W., supra note 12 at 1151; Federal Land Bank of Wichita v. Story, Okl., 756 P.2d 588, 589 [1988].

. See Amherst & Clarence Ins. v. Cazenovia Tavern, 59 N.Y.2d 983, 466 N.Y.S.2d 660, 661, 453 N.E.2d 1077, 1078 [1983]; St. Charles Parish School Bd. v. GAF Corp., 512 So.2d 1165, 1173 [La.1987]; see also Medina, Ethical Concerns in Civil Appellate Advocacy, 43 S.W.Law J. 677, 695 [1989], The Court in Board of License Com'rs of Town of Tiverton v. Pastore, 469 U.S. 238, 240, 105 S.Ct. 685, 686, 83 L.Ed.2d 618 [1985], reminds counsel "that they have a 'continuing duty to inform the Court of any development which may conceivably affect the outcome’ of the litigation.” The Court states that "[w]hen a development after this Court grants certiorari or notes probable jurisdiction could have the effect of depriving the Court of jurisdiction due to the absence of a continuing case or controversy, that development should be called to the attention of the Court without delay.” (Emphasis in original.) When corrective relief is sought by certiorari, the primary duty of apprising this court of subsequent changes likely to bring about the controversy’s mootness rests on the petitioner — the party whose action is keeping the controversy alive by its affirmative plea for further relief.

. The duty to inform a tribunal of an event that tends to moot mid-stage a lively controversy applies with equal efficacy to all lawyers— those practising privately and those on a public agency’s payroll as in-house counsel. It is not the purpose of this discussion to raise a public lawyer’s level of responsibility above that of a private practitioner. Whether the former owes a higher duty than a private lawyer is still debatable. The question need not be addressed in this case. See Miller, Government Lawyers’ Ethics in a System of Checks and Balances, 54 Univ. of Chicago L.Rev. 1293 [1987]; cf. Patterson, Legal Ethics, The Law of Professional Responsibility, Part III, Introduction [1982],

. In Nemeroff v. Abelson, 94 F.R.D. 136 [S.D.N.Y.1982], aff’d, 704 F.2d 652 [2nd Cir.1983], the defendants were awarded attorney’s fees for the plaintiff’s bad-faith prosecution of a meritless suit, although at the suit's inception an adequate factual basis for the claim was indeed in existence. A federal court's power to impose sanctions for bad-faith litigation is not restricted to the initiation stages of the controversy; sanctions may also be levied where bad faith is found in the subsequent conduct of litigation. See Roadway Exp., Inc. v. Piper, 447 U.S. 752, 766, 100 S.Ct. 2455, 2464, 65 L.Ed.2d 488 [1980] (citing Hall v. Cole, 412 U.S. 1, 15, 93 S.Ct. 1943, 1951, 36 L.Ed.2d 702 [1973], and Browning Debenture Holders' Committee v. DASA Corp., 560 F.2d 1078, 1088 [2nd Cir.1977]); Hutto v. Finney, 437 U.S. 678, 689 n. 14, 98 S.Ct. 2565, 2573 n. 14, 57 L.Ed.2d 522 [1978]. See also Christianburg Garment Co. v. E.E.O.C., 434 U.S. 412, 424, 98 S.Ct. 694, 701, 54 L.Ed.2d 648 [1978], where the Court held that “a plaintiff should not be assessed his opponent’s attorney’s fees unless a court finds that his claim was frivolous, unreasonable, or groundless, or that the plaintiff continued to litigate after it clearly became so."

. The Comment to Rule 3.3, Oklahoma Rules of Professional Conduct, 5 O.S.Supp.1988, Ch. 1, App. 3-A, states that an "advocate’s task is to present the client's case with persuasive force," but the loyal performance of that responsibility is qualified by the advocate's duty of candor to the tribunal. The clear message of Rule 3.3 is that the duty of candor to the court explicitly outweighs the fidelity to serve the client. See Hazard and Hodes, The Law of Lawyering, p. 347 [1985]; Henry S. Drinker, Legal Ethics, p. 74 [1953]; Medina, supra note 14 at 694.
The federal court’s response to the abuse of judicial process has spawned amendments to *1299Rule 11, Federal Rules of Civil Procedure. The cited rule now requires a lawyer who signs paperwork for filing in court to represent that any paper filed is "well grounded in fact and is warranted by existing law or a good faith argument for the extension, modification, or reversal of existing law, and that it is not interposed for any improper purpose, such as to harass or to cause unnecessary delay or needless increase in the cost of litigation.” The accountability Rule 11 imposes on lawyers adds an “ethical responsibility” to the concept that a baseless claim should not survive. Levy v. Seaton, 358 F.Supp. 1, 6 [S.D.N.Y.1973]; see also The Judicial Response to Lawyer Misconduct, Report of ABA Standing Committee on Professional Discipline Center for Professional Responsibility, p. IV.3 [May 1984], Oklahoma’s counterpart to Rule 11 is 12 O.S.Supp.1987 § 2011. Rule 11 and § 2011 give the courts greater enforcement powers. Section § 2011 provides that upon discovering a violation of the rule:
“the court, upon motion or upon its own initiative, shall impose upon the person who signed it, a represented party, or both, an appropriate sanction, which may include an order to pay to the other party or parties the amount of the reasonable expenses incurred because of the filing of the pleading, motion, or other paper, including a reasonable attorney’s fee.”

. Rule 3.3(a)(3), Rules of Professional Conduct, supra note 17, provides:
"(a) A lawyer shall not knowingly: * * * (3) fail to disclose to the tribunal legal authority in the controlling jurisdiction known to the lawyer to be directly adverse to the position of the client and not disclosed by opposing counsel; * * * ’’
The duty to disclose is not new. It is identical to DR 7-106(B)(l), Code of Professional Responsibility, 5 O.S.1981, Ch. 1, App. 3.(now superseded by the Rules of Professional Conduct), and can be traced back to the Canons of Professional Ethics as well. See Hazard and Hodes, supra note 17 at 352; Henry S. Drinker, supra note 17 at 78, Medina, supra note 14 at 704.
See also 12 O.S. Supp.1987 § 3203(E) for statutory articulation of a lawyer's duty to disclose during the discovery process. The cited statute makes supplementation of one’s response to an interrogatory a continuing obligation. See West v. Cajun’s Wharf, Inc., Okl., 770 P.2d 558, 562 [1988].

. See City Nat. Bank & Trust Co. v. Owens, Okl., 565 P.2d 4, 7 [1977]; Moses v. Hoebel, Okl., 646 P.2d 601, 603 [1982]; Melinder v. Southlands Development, Inc., Okl., 715 P.2d 1341 [1985]; Hervey v. American Airlines, Okl., 720 P.2d 712, 713 [1986]; see also 20 O.S. Supp.1982 § 15.1, which provides:
“On any appeal to the Supreme Court, the prevailing party may petition the court for an additional attorney fee for the cost of the appeal. In the event the Supreme Court or its designee finds that the appeal is without merit, any additional fee may be taxed as costs.”

. The terms of 12 O.S. Supp.1987 § 941(A) are:
“The defendant in any civil action brought in any court of this state by any state agency, board, commission, department, authority or bureau authorized to make rules or formulate orders shall be entitled to recover against such state entity court costs, witness fees and reasonable attorney fees if the court determines that the action was brought without reasonable basis or is frivolous. This subsection shall apply to any action commenced on or after October 1, 1982.” (Emphasis added.)

. The state may no longer be regarded as absolutely protected by sovereign immunity from counsel-fee liability for vexatious or bad-faith litigation conduct of its lawyers or functionaries. See State ex rel. Poulos v. State Bd. of Equal., Okl., 646 P.2d 1269, 1274-1275 [1982].

. If certiorari had not been sought and the case had been returned to the district court pursuant to the Court of Appeals’ mandate, the City, qua plaintiff, would then have borne the responsibility for calling the nisi prius judge’s attention to the intervening facts militating in favor of declaring the controversy moot.