*1 BEATTY, al., Richard et
Plaintiffs/Respondents,
METROPOLITAN ST. LOUIS SEWER
DISTRICT, Defendant/Appellant.
No. 77985. Missouri,
Supreme Court of
En Banc.
Dec. 20, 1996. Denying Rehearing
Order Feb. *2 Kohn, Byrne, M. Robert H. Alan James C.
' Grant, Kramer, Louis, Jeffrey for J. St. Appellant. Green, Morrison, and
Lewis Bruce A. C. Louis, Respon- for Henry, St. Kathleen G. dents. Mills, Newburger, Lewis Robert
David J. Louis, Smith, Johnson, L. and Arthur St. C. amici for curiae.
PRICE, Judge. Beatty Metropolitan
In
v.
St. Louis Sewer
1993)
District,
(Mo.
217, 221
II),
(Beatty
rate
Court declared
Metropolitan
Louis
increase
St.
Sewer
22(a)
(“MSD”)
X, §
District
violated article
remand,
On
Missouri Constitution.
Court, for the
County Circuit
the St. Louis
time,
brought
found that the suit was
first
“represen
plaintiffs as a
the three individual
and ordered
taxpayer
tative
suit”
periodic
bills as
credit all of its customers’
part
reverse
method of refund. We
prosecuted
was not
remand. This lawsuit
pursuant to Rule
plaintiffs as a class
Civil Proce
of Missouri Rules of
52.08
trial court follow
did the
dure. Neither
pro
to assure the
procedures of
52.08
proceedings.
It was
of class action
priety
obligations
adjudicate
rights and
error
420,000MSD customers
approximately
three individ
the court. As
not before
expressly waived sov
plaintiffs, MSD has
ual
Ordinance
immunity pursuant
to its
ereign
(Ord. 8657,
8657,
Number
section
13,
May
The case is
remanded to
circuit court for
On
MSD enacted Ord.
8657, §
credits in accordance with Ord.
increased
wastewater
one
year,
July
beginning
Relying
on
I.
Dist.,
County
Keller Marion
Ambulance
City
St. Louis
and St. Louis Coun-
*3
1991),
On
X,
subject
charges
to the article
were
Civil Proce
The Missouri Rules of
22(a) requirements
§
and did
issue
provide a mechanism for
certifica
dure
case,
injunction.
our first review of
lawsuits.
and conduct of class action
tion
subject
held
were
507.070,
RSMo
Rule 52.08. See also
22(a)
X, §
and could not be increased
article
is to
purpose
procedure
of class action
Beatty
approval.
II at
prior
without
voter
per
the number of
facilitate
when
on remand or-
221. The standard mandate
great
having
is so
sons
interest
lawsuit
“be re-
dered that
trial court
join
impractical
them all as
it
versed,
naught held and
and for
annulled
Thomann,
parties. Sheets v.
esteemed,
appellants be re-
and that said
many
this al
(Mo.App.1960). In
cases
*4
things
they
stored to all
have lost
many relatively
the accumulation of
lows
judgment.”
of
reason
the said
single
a
meritorious claims into
suit
small but
remand,
pursued.
no
evidence was
that
otherwise not be
On
additional
would
fact,
to
fails
reflect that
taken.
record
proce-
leading
action
In his
work on class
plaintiffs
in this case actu-
the three
involved
however,
dure,
Newberg
that
*5
can be utilized to refund
payments by
excess
52.08,
There is no reference to Rule
what-
Sevier,
ratepayers.
as Aetna Ins.
v.
Co.
soever, in
plaintiffs’
the named
Petition for
(Mo.
Hyde,
1930),
It was error for trial court order relief 588 S.W.2d 477 concerning individuals and entities who were to the case. case, this not balance the In need power impose such a rem- court’s inherent
III. edy against right be immune the state’s from suit. do we need to determine Nor MSD also raised number dif Hancock Amendment tran- arguments concerning the ferent defense immunity. sovereign scends defense immunity. right of sovereign The the sover Here, adopted has an ordinance that immunity long from has eign to suit been provides in part: applies recognized in Missouri. to tax moneys by Although collected the state. any Any by the District to funds owed may waived, sovereign immunity “it is the be may be used Person reason expressed consent to be sued that is to be any charges against District as a set-off statutory constitutional enactment or District, to the wheth- owed the Person voluntary appearance and submis waived delinquent or er not. Morris, jurisdiction.” Kleban v. sion overpayment by any Person of (1952). Mo. 837-38 S.W.2d District, made shall be Metropolitan Page v. Louis St. Sewer Dis by the used District available trict, (Mo.1964), it was any unpaid delinquent as set-off right sovereign determined that the immu charges against Person. such nity extends MSD. 8657, § 12. Ord. seeking
Plaintiffs filed a lawsuit de injunction trial claratory prior relief and an court referred to ordinance *6 apparently Judgment the in Decree and payment of increased sewer rates. This its and it. the its relief in accordance with appropriate is an method to enforce Han tailored lawsuit, any the this in cock Amendment. Fort School Within context of Zumwalt State, (Mo. payment by of rates these Dist. v. 896 S.W.2d 923 banc creased sewer “overpay Although initially plaintiffs certainly the trial court did would constitute Beatty plaintiffs, entitling in favor the II ment” them to a credit-refund under not rule of 8657, § v. that have so. Ac 12. See Hackman Director established it should done Ord. 1989) Rev., (Mo. 77, 81 cordingly, on remand directed the trial banc of reversed, (holding wholly a payment court’s “be annulled that of tax unau and esteemed, by cert. naught “overpayment”), held that said thorized law was an for and and denied, 493 110 107 appellants things be restored to all U.S. S.Ct. (1990). they might they by judg Although lost reason of said L.Ed.2d 738 have so, plaintiffs appeal their ap ment.” This is successful done did not “[t]he because have relief, any a money further such as pellant right has the restitution of entitlement judg of and immediate refund of excess lost reason the erroneous void direct Highway ex interest. ment.” State rel. State Comm’n rates with Actions, short, Newberg requested. opt it is not the role of bers out. See Class been supra, § § 4.14 and 4.20. remedy completion a to fashion new at courts however, significantly, Judge Robertson Most lawsuit, disappointing a even at risk of a of pro- misunderstands of that role class individuals, private large a liti- number of when safeguard, attempt to cedure is to not frus- gant pursue already existing chose and not trate, rights Al- of absent members. remedy beginning adequate at of the lawsuit. private though proposes newly he fashioned Judge here Robertson seeks to ironic that lawsuit, explain "representative” he does not that an award to class members is inade- affirm proceed how such lawsuit could consistent understanding quate of of Han- in terms his principles process due with our would Amendment. Instead full and immediate cock plaintiffs. protect rights Nei- unnamed interest, overpayments with refund why explain ther does he class certification un- court, accepted and relief awarded the trial 52.08(b)(1) (b)(2) existing der would our periodic plaintiffs, merely set- was the named accomplished not have worked well and all of seeks, off, goals might that turn out to be. he if such had ever whatever certification X, Accordingly, § matter penses we remand this for a in accordance with art. 23 of Constitution, of the amount the named determination Missouri just plaintiffs’ overpayments, any, if and the HOLSTEIN, C.J., BENTON and plaintiffs pur-
setoff which the are entitled COVINGTON, JJ., CROW, Special and 8657, § to MSD Ord. suant
Judge, concur. IV. ROBERTSON, J., part in concurs part separate filed. opinion dissents opinion, In this we do not address are the remainder of MSD customers enti- LIMBAUGH, J., opinion concurs in setoffs in with tled accordance MSD ROBERTSON, J. 8657, 12, they or whether are entitled Ord. J., WHITE, participating because beyond provided relief a member of the Court when cause was enough say It is that substan- ordinance. submitted. legal policy exist on arguments tial both question. of this MSD cus- sides The other ROBERTSON, Judge, concurring part lawsuit, were not tomers to this dissenting part. proceed the lawsuit did not under our rules history of the wastewater fee increase safeguarded manner in a that would have Beatty litigation that led to this is set out rights regarding rights both and MSD’s District, St. Louis Metropolitan Sewer the determination of these issues. There- II). 1993) (Beatty S.W.2d 217 fore, any ruling such neither here would action, plaintiffs The three of which just. nor wise chapter, filed June this is but another suit on argue holding Plaintiffs that to limit our so 17,1992, enjoin taking a fee increase effect “meaningless”. render will July years For three and one-half is not so. This Plaintiffs have obtained a pursued they have their belief that ruling of this Court that not in- MSD are to a refund of the MSD entitled fees its sewer crease without an election. 22(a). imposed in violation of section Those Plaintiffs also will receive a credit refund of per imposed fees amount to month $4.00 they paid, any. private the excess rates As if period single year. As I understand litigants, they obtained all could record, stopped collecting of- *7 request. place petition At no in did their Now, fending on June after fees plaintiffs pursue litigation seek to this years three of and one-half affect- any behalf of defined class of individuals 420,000 ing nearly customers of remand, other than themselves. Even trips up and appellate numerous down the they attempt did not petition to their amend ladder, majority is the holds that this case request, to make such a or establish people paid about three fees $96.00—the evidentiary hearing propriety the of an order Beatty paid by Mr. and the fee andMr. designating them as representatives. Droege, co-plaintiffs. No Mrs. Walter his right Plaintiffs in this proceeding have no paid person imposed other who the fee complain on behalf of others for relief that of MSD in violation the constitution benefits request might did not others or that others litigation. Surely from this this cannot inadequate. consider people intended what the when amend- permit private
ed the constitution attor- neys general to enforce the constitution. V. November, 1980, portion We reverse the of the of the voters of Missouri trial court applies adding the insofar as it amended the constitution sections (the Amendment) individuals or entities other than the named 16-24 Hancock to article plaintiffs. We remand for a deter- new sections the case X. The nine of the amendment impose ability of the purport mination offset to which the named strict limits on the plaintiffs awarding governments are entitled and for of of local the state and to increase plaintiffs’ attorneys’ plain language the named fees and ex- the taxes. From the of amendment, gov- proce- a argue require could would not a class action as one that state a a predicate ernment cannot increase taxes without con- dural refund of taxes all raising govern- stitutional amendment state taxpayers pay who a tax collected violation limitations, 22(a). income if the ment’s even voters of section approve authorizing a a referendum statuto- holding ignores The Court’s the intent of X, ry from tax increase. Art. 18. And the Worse, it the Hancock Amendment. makes plain language of the amendment it is clear the out enforcement mechanism set sec- government may not its local raise tax- cases and tion 23 more difficult some (hereafter taxes) es, licenses fees tax laughable in this one. toothless approval direct without voter advance say about the one wishes Whatever imposition government’s the the tribute. Amendment, 22(a). Hancock this much is clear: it X, § Art. ability longer blithely the of the no trusts plain language of Unfortunately, government representatives of the elected us Hancock Amendment does tell fiscal Pri- manage government’s affairs. scope taxpayers may of relief court a afford adoption or to the the Hancock Amend- general single taxpayer when successful- ment, rep- people given had their elected ly merely to enforce the It sues amendment. authority to resentatives carte blanche raise empowers taxpayer bring an action “to The Hancock Amendment revokes taxes. provisions through enforce of section 16 a presumption that consent and establishes article_” X, § 22 ... of Art. from government enough has taken silence, majori- From the constitution’s and, taxpayers government, toas local for- ty brings taxpayer concludes that when a reaching any government from bids the X, against unit article section 23 action pocketbooks into deeper without government local to enforce section approval taxpayers’ express in advance. Be- extent of the relief a court afford is to government, of its it is cause basic distrust unconstitutional, enjoin declare the tax provision unlike other of the constitution collection the tax that violates section Therefore, remedy the statutes. actual, plaintiffs award named taxpayer admits —a suit —must amendment tax, action a of the unconstitutional refund bloody hang guillotine of the like the blade judgment against offending enter constant, Reign over the deter- of Terror —a government plaintiff’s attorneys’ unit for the ring reminder of the fate that awaits rulers Court, fees. For the these limits on relief ignore people. who the will apply unless the file class action opinion purpose. The Court’s thwarts that persons suit under Rule 52.08 on behalf of all necessary says be- a class action paid who the tax. Persons plaintiffs in cause courts cannot assume that tax, part unconstitutional but who were represent a section 23 action the will of other action, bring legal must their own *8 paid taxpayers have the unconstitutional who illegally to actions recover collected tax who its result” “will bound origi- tribute if no class action is filed they disagree. This even if conclusion is plaintiffs. nal reasons. misguided at least four Clearly the of the Hancock Amend- silence First, in only taxpayer bring ment this issue can the suit to on leaves Court position impose procedural rules it enforce the amendment. This limitation as- bringing person uncharted the suit has wishes. We sail waters here. sures adopted by an in action to procedure the Court is rea- identical factual interest persons actually paid the tax. within the context of the all other who sonable usual course Second, litigation. determining proper adoption of in of the Hancock But voters’ procedural presumption under rule the Hancock Amend- Amendment created ment, paying adopting taxpayers the intent of the a common interest voters have and, conversely, polestar. only they approve Hancock Amendment is the That taxes approve. guidance paying do not seems sufficient for me to reach a those taxes in- presumes than I The that common different conclusion does the Court: amendment terest extends actions for refunds of taxes ments advanced in requiring favor of Third, unconstitutionally imposed. taxpay- strongly requiring actions militate favor of government ers who want the to collect the plaintiff taxpayers proceed with a class accept tax need not taxpayer their refund if a action under the Hancock Amendment. Re- suit to enforce section 22 is successful. spectfully, it makes little to me sense Fourth, taxpayer a successful suit necessari- require governments pay the unnecessari- ly enjoins government from further col- ly high expenses of a class action suit when lecting the tax. taxpayers Even those demands the fiscal resources disagree with the lawsuit are bound its government sufficiently great were as to re- prospectively plaintiff results once the tax- quire place. the fee increase in the first Const, payers X, prevail. Mo. art. Indeed, aspect the most curious majority embraces the class action majority’s applying insistence on Rule 52.08 because it “facilitates when the presents potential outcome that violates the persons having number of interest in a [an] 52.08(c)(2) constitution. poten- Under Rule great lawsuit is so impractical that it is tial member of the class ask the court to join them all parties” as and because “class be excluded from the class. The actions many allow accumulation of rela- apply the court does not to the excluded tively small but meritorious claims into member. Id. Because that member is ex- single suit that pur- otherwise would not be cluded, a declaration that a tax is unconstitu- [Emphasis sued.” added.] As to the former tional under apply section does not to that contention, persons the number of who have person taxing authority may and the contin- charge the unconstitutional in this case levy Yet, ue to person. tax as to that 420,000. large If, is however, —over X, article section demands that taxes “shall Court chooses to read section permit- 23 as upon be uniform the same class or subclass ting suits, representative purpose the first subjects within the territorial limits majority cited accomplished without authority levying Surely the tax.” ma- messy always the often expensive notifi- jority cannot apply intend Rule 52.08 to in all requirements cation imposed by Rule not, its detail. And if it does one wonders 52.08(c)(2). components apply the rule As to purpose, the latter this case shows which do not. exceedingly well that promise section 23’s Finally, requires gov- section 18 the state attorneys’ award of fees in a successful ernment to refund revenues it encourages collects above taxpayers pursue rela- tively small, the revenue limit imposes. the constitution but meritorious claims. 18(b). X, § Art. accept If we are to permit Class actions geographically di- (and majority’s ignore conclusion on its face join verse their common interests rests), the tenuous foundation which it pursuit of a legal objective. common we must conclude that a lawsuit to enforce 52.08 advises that a class necessary action is provisions the refund of section 18 will result prevent “inconsistent varying adjudica- only plaintiffs, refunds to the un- named respect tions with to individual members of judicial less the approval receive 52.08(b)(1)(A). the classRule class, notify form a plus the five million Taxpayer litigation against govern- local taxpayers state, give them an usually geographically ments is confined to opportunity to exclude themselves from the *9 corporate the limits of government. the local judgment. Given the clear thrust of the The facts at inherently issue are identical Amendment, Hancock this seems absurd and the defense government offered the result. applies potential taxpayer to all suits to en- Therefore, force section 22. the threat of I government see no reason to saddle with judgments substantially inconsistent less- the costs of successful class action lawsuits to taxpayer litigation ened in against gov- local enforce the Hancock Amendment. This is ernments because of particularly the nature of the claims so when much more efficient very made. policy argu- Indeed few of procedure permitting plaintiffs rep- 800 person merely paid all from the date of the deci
resent
who have
unconsti-
not
preferred by
tax
branding
tutional
seems
the amend-
sion
it.”
ex rel.
v.
so
State
Miller
itself,
words,
652,
641,
ment
if not in its
at least in its
O’Malley,
Mo.
342
(Mo.
spirit.
319,
1938);
banc
accord Norton v.
324
425, 442,
County,
Shelby
118 U.S.
6 S.Ct.
respect, I believe the Court would
With
(1886).
[1125-26],
1121
MSD’s defeats explained:
Court past it has been stated “An
unconstitutional statute is no law con *10 (citations omitted)_ no ... rights
fers enactment,
This
true from
date of its
notes
Herbert
ally paid
increase under the ordinance
jurispru-
“[hjistorically and under modern
question.
from the record
is unclear
dence,
litiga-
is nontraditional
a class action
a
hearing
a
The record
whether
was held.
Newberg
1
B.
procedure_”
tion
Herbert
instead,
arguments
implies,
written
Conte, Newberg on Class Actions
& Alba
prior to the effec-
the trial court found that
(3d
is
class
This
so because
1.01
ed.
respondents filed
date of the ordinance
tive
to
“cardi-
exceptions
are
action lawsuits
“representative taxpayer
action as a
jurisprudence
is not
principle
nal
of
that one
Consequently,
suit”.
the trial court ordered
entered in
by judgment
personam
bound
a
(by crediting
to
the customers’
MSD refund
designated
a
litigation
as
to which he was
bills)
periodic
increased
the amount of the
process
a
service of
party
party
or made
to all customers
under the ordinance
at
entry
appearance.”
of
Sheets
or
charges.
who
the increased
raising
impact of
of
lawsuit as
appealed
basic issues.
The
certification
two
readily
First,
apparent.
Individuals
argues
it
court
class action is
that the trial
erred
litigation
and who
treating
“representative”
lawsuit. who did not initiate
this as
Second,
practical
or no
control over
argues
protected
it is
from a will have little
it
by its
sovereign immunity.
litigation
will be bound
money judgment by
nonetheless
potential
exposure
increase
appeal.
result. The
did
cross
class,
of
may
all of the members
and
direct
some or
not favorable to the
shall include
action,
proposed
any step
or
specify
in the
or describe those to whom
notice
directed,
52.08(c)(2)
opportunity
judgment,
provided
was
and
extent of the
or
in Rule
exclusion,
requested
signify
consider
and whom
members
have not
adequate,
intervene
representation fair and
members of the class.
the court finds
be
defenses,
(4)
may
present
or
or otherwise
appropriate
be
claims
When
an action
action; (3) imposing conditions
brought
or
as a
action with
come into
maintained
class
intervenors;
parties
particular
may
representative
or on
respect
be
on the
issues or
class
(4) requiring
pleadings be amended to
that the
into
and each subclass
divided
subclasses
class,
allegations
represen-
as
provisions
therefrom
of this
eliminate
treated as
persons,
action
applied
and that the
tation of absent
Rule 52.08 shall then be construed
(5) dealing
accordingly;
proceed
with similar
accordingly.
(d)
procedural matters.
in Conduct of Actions. In the con-
Orders
applies,
may be
with
order
The orders
combined
duct of actions to which this Rule
62,
may be altered or amended
may
appropriate
court
make
orders:
under
(1) determining
proceedings
time to time.
desirable from
the course of
as
be
(e)
Compromise. A
prevent
repeti-
prescribing
Dismissal or
measures
undue
compromised
presentation
without
complication
not be dismissed or
tion
in the
shall
court,
(2)
approval
of the
argument;
requiring,
and notice
evidence
for
compromise
shall
protection
proposed dismissal or
of the class or oth-
of the members
action,
in such
given
of the class
to all members
erwise for the fair conduct of the
given
the court directs.
as the court
manner as
notice be
such manner
795
[Tjhere
the defendant and the additional increase in
pre-trial
no
was
order with ref-
the burden and
cost of
to all
erence to maintenance of this suit as a
may well overwhelm the
substantive merits
class action.
finding
There was no
at
dispute.
compliance
require-
time as to
with the
52.08(b)
ments of Rule
and there was no
provisions
given
notice
various
members of the class in
Rule 52.08
52.08(c)(2).
carefully
weigh
have been
accordance with Rule
drafted to
these
Conse-
quently,
considerations and to
process
assure that
conclude that this case was not
due
requirements
maintained. The
maintainable as a class action and
of this rule
the trial
merely
holding
are not
court
directory,
technical or
erred
that it
but
was. Howev-
er,
mandatory.
Junkins,
State ex rel.
the suit is
Niess v.
maintainable
the individu-
468,
(Mo.1978);
572 S.W.2d
al relators on their
470
own behalf ...
Moore v.
City Pacific,
(Mo.App.
S.W.2d
rely primarily upon
Plaintiffs
State ex rel.
1976);
Wheaton,
Carl C.
The New General
Sevier,
Abeille Fire Ins.
v.Co.
Code
Civil
Supreme
Procedure and
Court
for
1934),
denied,
cert.
293 U.S.
Interpreted,
Rules
20 Mo.L.Rev.
386 585,
(1934),
55 S.Ct.