906 N.W.2d 917
S.D.2018Background
- Residents associated with Buffalo Chip Campground petitioned Meade County to incorporate "Buffalo Chip City"; initial petition withdrawn for proximity issues to Sturgis, then refiled with corrected boundary and supporting survey and census documents.
- Meade County Board approved an amended petition on February 27, 2015, found statutory requirements met, and scheduled a May 7, 2015 election; voters approved incorporation and the Board declared Buffalo Chip City incorporated.
- Sturgis, and Meade County residents Gary Lippold and Jane Murphy appealed the Board’s incorporation order to circuit court under SDCL 7-8-27, arguing the petitions/census were defective and the incorporation did not meet SDCL chapter 9-3 requirements.
- Circuit court denied Sturgis’s stay request, the election proceeded, and after a one-day trial the court held the petition filings were deficient, declared the Board’s order a nullity, and voided Buffalo Chip City ab initio.
- On appeal, the Supreme Court addressed whether the circuit court had subject-matter jurisdiction, focusing on SDCL 9-3-20, which limits challenges to the regularity of an acting municipality’s organization to actions brought by or on behalf of the State.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether circuit court had subject-matter jurisdiction to review incorporation after Buffalo Chip became an acting municipality | Lippold/Murphy: private parties may appeal county board decision under SDCL 7-8-27 and challenge defects in petition/census | Board/Campground: SDCL 9-3-20 bars private suits challenging the regularity of an acting municipality; only the State (or its agents) may bring such actions | Held: SDCL 9-3-20 deprives private parties of standing once an entity is an acting (de facto) municipality; circuit court lacked subject-matter jurisdiction and its judgment was vacated |
| Effect of holding an election before judicial review (whether appeal could proceed after incorporation) | Plaintiffs: court could grant complete relief after election and still invalidate incorporation | Defendants: once election occurs and municipality acts, it becomes de facto and is insulated from private collateral attack | Held: Because election occurred and Buffalo Chip acted as a municipality, private collateral attack was barred; court lost jurisdiction |
| Applicability of de facto / de jure corporation doctrine to municipal incorporations | Plaintiffs: substantive defects in filings and residency facts make incorporation invalid and reviewable | Defendants: de facto doctrine and precedent protect acting municipalities from private collateral attack to preserve public reliance | Held: De facto doctrine applies; public and third parties can rely on municipality’s acts; only the State can directly challenge organization |
| Preclusive effect of this Court’s denial of writ of prohibition | Plaintiffs: denial of writ means jurisdiction already decided in their favor (res judicata) | Defendants: denial of extraordinary writ is not a merits decision and does not preclude relitigation of jurisdictional issue | Held: Denial of writ does not have res judicata effect; Court may decide jurisdiction anew |
Key Cases Cited
- Merchants' Nat'l Bank v. McKinney, 2 S.D. 106 (1891) (establishes de facto municipal/organizational doctrine and bars collateral private attacks on acting governmental entities)
- Tulare Irrigation Dist. v. Shepard, 185 U.S. 1 (1902) (federal precedent recognizing that the state has primary authority to challenge municipal organization)
- State v. Escalante, 458 N.W.2d 787 (S.D. 1990) (affirming principles related to de facto officers and organizational recognition)
- State v. Smejkal, 395 N.W.2d 588 (S.D. 1986) (related precedent on de facto officeholders and limitations on collateral challenges)