Court rejects Drury on River Campus

Thursday, February 14, 2002

JEFFERSON CITY, Mo. -- The Missouri Supreme Court handed River Campus supporters a double victory on Tuesday, declaring valid two Cape Girardeau city ordinances key to the project moving forward.

In a 7-0 decision, the court ruled the ordinance that put a 1-cent hotel/motel tax on the November 1998 ballot for voter approval didn't violate the city charter's "clear title" requirements. The court also found constitutional -- for the time being -- a second ordinance adopted a month later by the City Council entering into an agreement with Southeast Missouri State University relating to bond debt for the project.

The high court reversed decisions of both the Missouri Court of Appeals Eastern District in St. Louis and Madison County Associate Circuit Court Judge Robert C. Stillwell that invalidated the first ordinance and restored Stillwell's finding that the second was constitutional. The eastern district court had overruled the trial judge on that measure, declaring it unconstitutional as well.

The Supreme Court also dismissed Stillwell's injunction preventing the city from collecting the tax, which is intended to provide the city's nearly $9 million share for the $36 million conversion of the former St. Vincent's Seminary into a fine arts center. The state and private donations to the university will cover the remaining cost.

Cape Girardeau businessman James L. Drury and his MidAmerica Hotels Corp. sued the city in April 1999, challenging the ordinances.

Surprise decision

Walter S. Drusch of Cape Girardeau, Drury's attorney, was surprised by the decision in light of the earlier victories.

"It is kind of difficult to second guess the Supreme Court," Drusch said. "I thought we were right. The trial court thought we were right. The Supreme Court said we were wrong."

James Mello, the city's St. Louis-based attorney, said the ruling clearly followed relevant precedent.

"The decision of the court was essentially just a reaffirmation of the law with respect to single subjects and clear titles," Mello said. "The lower court opinions were at odds with the case law and the Supreme Court brought that back into line."

The quickness with which the court issued its decision also surprised the attorneys, coming just five weeks after oral arguments on Jan. 8.

Drury argued that the ballot ordinance, passed by the City Council in August 1998, was invalid because its title was underinclusive. The Missouri Constitution and the city charter require the content of legislation to be limited to a single subject that is clearly reflected in the title in order to prevent the passage of deceptive or misleading laws.

The ordinance title called for an election on the proposed tax increase but didn't state how the money would be spent. Both lower courts said that made it unconstitutional. With the ordinance faulty, the subsequent approval of the tax by voters was irrelevant, those courts said.

Clear title

In writing the Supreme Court's 11-page decision, Judge Ronnie White said it is reasonable to assume that a tax increase would be spent on something and the absence of such purpose in the title isn't a fatal flaw.

"Keeping in mind this court's traditionally liberal construction of titles in the face of clear title challenges, the title is sufficiently general that it does not misleadingly exclude the spending portions of the ordinance from its subject matter," White wrote.

The second ordinance authorizes the city to enter into an agreement under which the university would issue bonds for the River Campus that the city would pay off. This measure was necessitated by the voters' unexpected action of endorsing the tax increase while not garnering enough votes for a companion measure that would have allowed the city to directly issue the bonds.

Drury argued the city would be pulling an unconstitutional end-run around the will of the voters by paying for bonds issued by the university. Because the bonds haven't yet been issued, the agreement at the moment is merely contract on what may happen if certain conditions are met rather than an incursion of debt, the court said.

"Here, the contract with the university is, at this time, purely executory," White wrote. "It's performance depends on actions by the city council, the university and the state before any unconditional indebtedness arises."

Debt issue continues

That wording is important, said Drusch. The court essentially found the debt ordinance not yet ripe for challenge because the contract hasn't been executed, but would be actionable once it is, he said.

"They didn't give the city a clean bill of health on that second point," Drusch said.

Drusch said he was unsure if Drury would revisit that ordinance in a future lawsuit if and when the bonds are issued.

The city enjoyed extensive support from third parties interested in the case's outcome. Kansas City, St. Louis, the state attorney general and the Missouri Municipal League all filed friend-of-the-court briefs backing the Cape Girardeau's position.

Those parties were worried that if the eastern district opinion was upheld, city ordinances of municipalities around Missouri, as well as state laws, would be exposed to frivolous challenges.

Southeast, which was not a party to the lawsuit, also filed a supportive brief, claiming Drury was attempting to overturn the results of a lawful election.

Mello said the city welcomed the support, but noted the court's opinion didn't really address the issues raised by those parties.

"It's good to have company," Mello said. "I think it underscored the importance many put on this case -- that if there were to be a departure from the law, the ramifications of that could have had serious consequences. With this decision, that has been avoided."

Drusch, who had been dismissive of the dire predictions of other cities, said the court wasn't swayed by those arguments.

Chief Justice Stephen N. Limbaugh Jr. of Cape Girardeau, whose wife serves on the board of directors of Southeast's fund-raising foundation, didn't participate in the case. Platte County Associate Circuit Court Judge Gary D. Witt temporarily filled Limbaugh's seat on the bench.

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