High court rules for Planned Parenthood in funding dispute

JEFFERSON CITY, Mo. -- Planned Parenthood affiliates won a roughly $900,000 victory Tuesday as the Missouri Supreme Court ruled they did not have to repay family planning funds received against the will of the legislature.

The 4-3 ruling capped a legal dispute that has lasted most of the past decade as pro-life lawmakers struggled to try to prevent state grants for family planning and other women's health services from going to affiliates of abortion providers.

After gaining control of the legislature, Republicans eliminated the grants from the 2004 budget and have kept them out since. But the legal battle continued over money received in the 2000 and 2003 fiscal years by Planned Parenthood affiliates in the St. Louis, Kansas City and mid-Missouri areas.

A Cole County circuit judge ruled in May 2005 that the state health department -- then under Democratic governorship -- wrongly gave the money to Planned Parenthood contrary to the restrictive budget language passed by the legislature.

The judge ordered the Planned Parenthood affiliates to repay the money with 9 percent interest.

But the Supreme Court reversed that decision, concluding there was no legal ground to justify the restitution.

"We're obviously just thrilled, grateful, relieved with today's decision," Gianinio said, "and really feel very vindicated with the court saying there was no indication of any kind of fraud by Planned Parenthood. ... We did what was asked of us."

Gov. Matt Blunt criticized the decision, saying it "undermines the Legislature's ability to spend tax dollars in accord with the values of Missourians." He claimed "Missouri case law is clear" that restitution should have been paid.

Writing for the majority, Chief Justice Michael Wolff said the contracts received by Planned Parenthood could not be voided because the health department director had authority to enter into them under the budget laws. Additionally, there was no evidence Planned Parenthood had acted in bad faith but rather took numerous steps to comply with the contract, he wrote.

"In these circumstances, the government cannot accept the benefits of the contracts, and retain those benefits, while also recovering the consideration paid," Wolff wrote.

He was joined by Judges Laura Denvir Stith, Ronnie White and Richard Teitelman.

Dissenting were Judges Stephen Limbaugh Jr., William Ray Price Jr. and Mary Russell. They said the contracts should have been voided because they were awarded in violation of the budget laws, so the state was entitled to get its money back.

"In short, the (health department) director had no authority to enter into the contracts with Planned Parenthood," Limbaugh wrote, "because the defendants were too intertwined with their abortion providers and, consequently, they were not eligible for funding under the appropriations statute."

For a while, Attorney General Jay Nixon's office was paying staff attorneys to defend the health department grants while also funding an outside attorney to represent the Legislature's position that the grants to Planned Parenthood were illegal.

The Supreme Court ruled in January 2002 that Nixon had a conflict of interest in defending both positions, and he responded by dropping the case. But a new lawsuit challenging the grants was filed by Daniel Shipley, president and CEO of St. Charles-based Gateway Medical Research Inc., which specializes in testing for generic pharmaceutical drugs.

Suing as an individual taxpayer, Shipley sought an injunction against awarding money to Planned Parenthood, a declaration that Planned Parenthood is ineligible for family planning funding and an order to repay the previously awarded money.

The Supreme Court said the requests for the injunction and declaration were moot, since the state no longer funds family planning.

Shipley said he was disappointed not only that Planned Parenthood affiliates will not have to repay the money but that the Supreme Court did not address whether they are eligible for family planning funds. He said the ruling could have negative consequences in the future.

"So basically, if the department of health chooses to do what they want, and the state attorney general does not proceed to recover the moneys that were inappropriately distributed, then the citizens of the state have no avenue to seek compensation or reimbursement -- that's a shame," Shipley said.

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Case is Shipley v. Cates, SC87063.

On the Net:

Supreme Court: http://www.courts.mo.gov/sup/index.nsf