Court Opinion

ID: 9942543
Source: CourtListenerOpinion
Date Created: 2024-02-21 15:11:58.46999+00
Date Added: 2024-06-11T13:48:12.524504
License: Public Domain

THE STATE OF SOUTH CAROLINA
              In The Court of Appeals

South Carolina Coastal Conservation League, Inc.,
Elizabeth M. Smith, Abraham B. Jenkins, Jr., and South
Carolina Public Interest Foundation, Plaintiffs,

of which South Carolina Coastal Conservation League,
Inc., Elizabeth M. Smith, and Abraham B. Jenkins, Jr.,
are the Appellants.

v.

Charleston County, South Carolina, South Carolina
Transportation Infrastructure Bank, and South Carolina
Department of Transportation, Respondents.

Appellate Case No. 2020-001189

               Appeal From Richland County
           L. Casey Manning, Circuit Court Judge

                    Opinion No. 6050
     Heard November 14, 2023 – Filed February 21, 2024

        AFFIRMED IN PART, REVERSED AND
              REMANDED IN PART

W. Andrew Gowder, Jr., of Austen & Gowder, LLC, of
Charleston, and Christopher Kaltman DeScherer, of
Southern Environmental Law Center, of Charleston, both
for Appellants.

Robert E. Tyson, Jr. and Jasmine Denise Smith, both of
Robinson Gray Stepp & Laffitte, LLC, of Columbia, for
             Respondent South Carolina Transportation Infrastructure
             Bank.

             Barbara Munig Wessinger and Linda C. McDonald, of the
             South Carolina Department of Transportation, and
             Andrew F. Lindemann, of Lindemann Law Firm, P.A., of
             Columbia, both for Respondent South Carolina
             Department of Transportation.

             Michael A. Timbes, of Thurmond Kirchner & Timbes,
             P.A., of Charleston, and Natalie Armstrong Ham, Bernard
             E. Ferrara, Jr., and Edward L. Knisley, Jr., of the
             Charleston County Attorney's Office, all for Respondent
             Charleston County.

HEWITT, J.: This is an appeal by the South Carolina Coastal Conservation League
and two individuals (collectively, Appellants). Appellants brought this case seeking
declaratory and injunctive relief that would prohibit Charleston County from using
"penny tax" funds for a project colloquially known as the "Mark Clark Extension."
Appellants also alleged violations of the Freedom of Information Act (FOIA).

The circuit court granted Charleston County's motion to dismiss based on the court's
finding that Appellants lacked standing, their claims were time-barred, and the
claims also failed on the merits. Here, Appellants argue that they have taxpayer
standing or public interest standing and that their claims were timely and adequately
pled.
We affirm the circuit court's order dismissing all claims with the exception of one
alleged FOIA violation. We agree with the circuit court that the majority of
Appellants' claims are barred as late protests of the referenda authorizing the taxes
in question. For different reasons, the other non-FOIA claims fail as well. As
explained below, we affirm the bulk of the order dismissing this case and reverse
and remand one FOIA claim for additional proceedings.

FACTS

The following background is taken from Appellants' second amended complaint.
Charleston voters approved a one-half cent tax to be used for transportation and
greenbelt projects in 2004. They approved a second-half cent tax in 2016. We will
occasionally refer to proceeds from these taxes as "penny tax funds" even though
this case involves the levying and allocation of two separate one-half cent taxes.

Appellants brought this lawsuit after Charleston County, the South Carolina
Department of Transportation (DOT), and the South Carolina Transportation
Infrastructure Bank (the Bank) amended their three-party Intergovernmental
Agreement under which the parties agreed to fund the Mark Clark Extension. In the
amended agreement, Charleston County pledged penny tax revenue to fund its local
match obligation for the Mark Clark Extension. Appellants claim that Charleston's
pledge violated the law in two ways: first, that it violated the ordinances and
referenda authorizing the two taxes; and second, that the amended agreement is an
unlawful appropriation.

Appellants further claim that, in February 2019, Charleston County improperly
allocated penny tax funds for the Mark Clark Extension in violation of FOIA, and
that its rescinding of the February 2019 allocation also violated the executive session
requirements of FOIA.
After a hearing, the circuit court granted Charleston County's motion to dismiss all
claims. The court denied Appellants' motion to alter or amend the dismissal. This
appeal followed.
STANDARD OF REVIEW

"In reviewing the dismissal of a claim for failure to state facts sufficient to constitute
a cause of action under Rule 12(b)(6), SCRCP, the appellate court applies the same
standard of review as the trial court." Sloan Const. Co. v. Southco Grassing, Inc.,
377 S.C. 108, 112, 659 S.E.2d 158, 161 (2008), holding modified by Shirley's Iron
Works, Inc. v. City of Union, 403 S.C. 560, 743 S.E.2d 778 (2013). The court must
resolve every doubt in a light most favorable to the nonmovant to determine whether
the facts alleged on the face of the complaint state "any valid claim for relief." Id.
at 112-13, 659 S.E.2d at 161(citing Plyler v. Burns, 373 S.C. 637, 645, 647 S.E.2d
188, 192 (2007)). Dismissal based on Rule 12(b)(6) is improper when "facts alleged
and inferences reasonably deducible therefrom would entitle the plaintiff to any
relief on any theory of the case." Id. at 113, 659 S.E.2d at 161 (quoting Stiles v.
Onorato, 318 S.C. 297, 300, 457 S.E.2d 601, 603 (1995)).
The court typically evaluates a pleading by focusing on the pleading itself, but
review is expanded and may include other documents when a plaintiff attaches
documents to the complaint and incorporates them by reference. Brazell v. Windsor,
384 S.C. 512, 516, 682 S.E.2d 824, 826 (2009). The 2019 amended agreement, the
enabling ordinances, and the 2004 and 2016 referenda ballot questions were attached
as exhibits to the second amended complaint. For that reason, we have considered
those documents here.

ELECTION CHALLENGE

The statutes authorizing the penny tax are found in Chapter 37 of Title 4 of the South
Carolina Code. Counties may impose this tax after adopting an enabling ordinance
that voters approve by referendum. See S.C. Code Ann. § 4-37-30(A)(1) (2021).
Charleston voters approved the first-half cent tax in 2004 and the second-half cent
tax in 2016.

The enabling statute requires that each ordinance identifies the transportation related
projects that will be funded by the tax proceeds if the referendum on the ordinance
is successful. § 4-37-30(A)(1)(a)(i)-(iii). Each enabling ordinance must also
identify the listed project's anticipated cost and timeline for completion.
§ 4-37-30(A)(1)(a)-(b). Appellants' primary argument to the circuit court, and to
this court, is that Charleston County may not spend penny tax dollars on the Mark
Clark Extension because that project was not listed in either the 2004 or 2016
ordinances and was therefore not contemplated in the referenda that voters approved.

We agree with the circuit court that this argument is an untimely challenge to both
the 2004 and 2016 elections, when the voters approved the penny taxes.

Charleston voters approved broad language in 2004 and 2016. Though the 2004
ordinance listed a number of transportation related projects that the proposed tax
would fund, it also explained the penny tax proceeds would go to "financing the
costs of highways, roads, streets, bridges, and other transportation-related projects,
facilities, and drainage facilities related thereto, and mass transit systems operated
by Charleston County or jointly operated by the County and other governmental
entities . . . ." The 2016 ordinance and referendum similarly explained that penny
tax proceeds would fund transportation projects that "may include, but [were] not
limited to "various projects of regional and local significance.

State election law requires any protest or contest of a countywide election be filed
by noon on the Wednesday following the election's certification. S.C. Code Ann.
§ 7-17-30 (2019). The deadlines to challenge these referenda passed long ago.
Appellants may not now argue that the broad language approved by Charleston
voters does not comply with the enabling statute. As Appellants' second amended
complaint recognized, the referenda authorized the collection of taxes far in excess
of the amount required to fund the projects listed in the enabling ordinances, and the
ordinances advertised that the list of projects was not exclusive. These were known
and knowable at the time the ordinances were adopted and at the time of the
referenda elections. Thus, this challenge is untimely.
History and context bolster this reasoning. The 2004 referendum that Charleston
voters approved came about after our supreme court invalidated a 2002 referendum
on the same subject matter. W.J. Douan v. Charleston Cnty. Council, 357 S.C. 601,
594 S.E.2d 261 (2003). There, our supreme court held that the printed instructions
to voters that appeared on the ballot were not neutral and that this affected the
fundamental integrity of the election. Id. at 612, 594 S.E.2d at 266. Unlike this case,
that case began as a timely protest to the election. Id. at 606, 594 S.E.2d at 263. If
the deadline for an election protest is to mean anything, it must mean that Appellants
cannot now claim, as they do in their complaint, that "the referenda and ordinances
that authorized [the taxes in question] do not comply with [the enabling statute]."
The alleged deficiencies that Appellants point to in the ordinances and referenda
ballot questions were apparent at the time of the adoption of the ordinance and the
referenda elections and were ripe for challenge then.

Appellants also urge the court to apply the "Contract with the Voters Doctrine,"
arguing that at various times Charleston County councilmembers assured the public
that penny tax funds would not be used to fund the Mark Clark Extension.
Long-settled precedent establishes that this is not a viable claim—if political bodies
or office holders renege on their public positions, it is not for the court to mandate
compliance, and the voter's best recourse is at the ballot box. See, e.g., State v.
Whitesides, 30 S.C. 579, 585, 9 S.E. 661, 663 (1889) ("And, even without this
expressed desire, there is high authority for saying that such legislation would be
valid with or without the consent of the people, the only check to an unwise exercise
thereof, as we have said above, being, not the courts, but the intelligence of the
general assembly and the ballot-box."); see also, e.g., Sarrat v. Cash, 103 S.C. 531,
88 S.E. 256 (1916) (addressing the allegation that voters approved a bond
referendum based on representations made by public officials that a school would
be built in a specific location, but upon passage, the school trustees decided to build
the school elsewhere; further finding that the trustees had a right to exercise
discretion).

Based on this reasoning, and in light of the fact that using penny tax funds for the
Mark Clark Extension fits plainly within the broad language presented to and
approved by Charleston voters, the circuit court correctly dismissed this claim as one
for which relief could not be granted.
INTERGOVERNMENTAL AGREEMENT
Appellants claim the 2019 amended agreement between Charleston County, DOT,
and the Bank illegally binds future councils and is an improper contracting of a
legislative governmental power (budgeting), as opposed to proprietary power
(business dealings). As noted earlier, the amended agreement was attached to
Appellants' pleading. The terms of the agreement and the controlling law lead us to
the conclusion that this claim was properly dismissed.
The test that controls this court's inquiry of whether an action is legislative or
business in nature is whether the contract in question "deprives a governing body, or
its successor, of a discretion which public policy demands should be left
unimpaired." City of Beaufort v. Beaufort-Jasper Cnty. Water & Sewer Auth.,
325 S.C. 174, 180, 480 S.E.2d 728, 731 (1997) (quoting Piedmont Pub. Serv. Dist.
v. Cowart, 319 S.C. 124, 133, 459 S.E.2d 876, 881 (Ct. App. 1995)).
We see the amended agreement as a straightforward business function of Charleston
County. The plain terms of the agreement do not deprive future county councils of
budgetary discretion. In pertinent part, the agreement contains a pledge by
Charleston County to pay its share of the future costs for the Mark Clark Extension
from penny tax proceeds, "or any lawful source," and provides that the county
council will adopt future budgets to fund its payment obligations under the
agreement. It is evident that this is not an actual appropriation, but rather an
agreement to make future appropriations with funds from the penny tax or any other
lawful source. Equally evident is that the agreement does not mandate that future
councils spend a specific amount of funds each year on the Mark Clark Extension.
Therefore, the agreement does not bind the legislative budgetary function of future
councils.

Furthermore, the Transportation Infrastructure Bank Act explicitly contemplates this
type of agreement. See S.C. Code Ann. §§ 11-43-120, -180, & -190 (2021)
(explaining the Act's purpose as financing "major" projects, authorizing the Bank to
require borrowers to enter agreements, and authorizing borrowers to pledge revenues
to fulfill their obligations). If this type of agreement were an illegal allocation, it
would be impossible for the State, the Bank, and local governments to carry out the
sort of complex, multi-year transportation projects the Act specifically contemplates.

THE FEBRUARY 2019 APPROPRIATION
The claim that Charleston County violated the law by appropriating penny tax funds
at a February 2019 meeting is not preserved for our review. The circuit court did
not specifically rule on this issue in the order dismissing this case. This omission
was the sole argument Appellants raised to the circuit court in their motion to
reconsider. The court denied the motion to reconsider because Appellants did not
provide the court with a copy of the motion within ten days, as required by Rule
59(g), SCRCP. The court cited our decision in Smith v. Fedor, which involved the
exact same error, as support for its ruling. 422 S.C. 118, 126, 809 S.E.2d 612, 616
(Ct. App. 2017).
If a party has raised an issue and the circuit court has not ruled upon it, a motion to
alter or amend is required to preserve the issue for appellate review. Great Games,
Inc. v. S.C. Dep’t of Revenue, 339 S.C. 79, 85, 529 S.E.2d 6, 9 (2000). An
unaddressed issue remains unpreserved when a motion to reconsider is denied on the
basis of procedural defect under Rule 59(g). Fedor, 422 S.C. at 126, 809 S.E.2d at
616 ("Because the trial court did not err in denying [plaintiff's] motion for
reconsideration, the arguments presented in that motion are unpreserved."). It was
within the circuit court's discretion to deny the motion to reconsider for failing to
comply with Rule 59(g). Because this resulted in the circuit court never having ruled
on the claim involving the February 2019 appropriation, that claim is not preserved
for appeal.
FOIA
The final pair of claims we address are the alleged FOIA violations. Appellants
allege Charleston County Council's special finance committee violated FOIA when
it went into executive session and when the committee subsequently voted to rescind
an earlier appropriation following that executive session. Appellants argue the
announced reason for going into executive session was improper and that the
committee failed to give proper notice to the public of a potential vote. As explained
below, the claim related to the reason for executive session was properly dismissed,
but Appellants have alleged sufficient facts to maintain their claim that Charleston
County gave insufficient notice that the committee would take official action after
the executive session.

FOIA allows executive session for the discussion of legal advice related to pending
litigation. S.C. Code Ann. § 30-4-70(a)(2) (Supp. 2023). Though the printed agenda
listed the reason for the executive session as "Transportation Sales Tax Budget,"
Charleston County was in active litigation related to the penny tax and its
transportation budget at the time of this meeting. The Charleston County attorney
announced that the purpose of the executive session was for the county to receive
legal advice related to that litigation. Precedent suggests the announced purpose
before the executive session began was sufficient to satisfy FOIA's requirement that
a public body disclose the "specific purpose" of any executive session. Compare
Donohue v. N. Augusta, 412 S.C. 526, 532–33, 773 S.E.2d 140, 143 (2015) (noting
that vague statements like "contractual matter" or "contractual recommendation" are
insufficient topics for closed session). We emphasize that this analysis does not
venture beyond Appellants' pleading. The announced reasons the Charleston County
attorney gave for the executive session are taken from Appellants' second amended
complaint and, facially, the county adequately announced this session.

Immediately after returning from the executive session, the special finance
committee voted to reallocate penny tax dollars without any public debate. We read
the relevant precedent to hold that any vote pursuant to matters discussed in
executive session must be announced in advance. Brock v. Town of Mount Pleasant,
415 S.C. 625, 631, 785 S.E.2d 198, 202 (2016) ("[I]n special meetings, 'nothing can
be done beyond the objects specified for the call.'") (citation omitted). As pled, this
case fits squarely within Brock, which held that any action taken by a public body
must be properly noticed and that "it is sufficient for the agenda to reflect that, upon
returning to open session, action may be taken on the items discussed during the
executive session." Id.

Charleston County urges us not to reach this issue because it subsequently rescinded
the reallocation action it took after executive session, making the FOIA violation
moot. This argument would require us to venture beyond Appellants' pleading and
its supporting documents. As already noted, our standard of review does not permit
us to accept that invitation. Therefore, the dismissal of this claim and the
corresponding claim for attorneys' fees are reversed and remanded.
CONCLUSION

The circuit court's order of dismissal is affirmed for all claims with the exception of
Appellants' FOIA claim related to the vote taken after the special finance committee
returned from executive session and the claim for attorneys' fees attributable to that
claim, should they prevail. The dismissal of those claims is reversed and remanded.

WILLIAMS, C.J., and VERDIN, J. concur.