Lead Opinion
Sоuth Alabama Gas District appeals to this Court from an order of the Clarke Circuit Court enjoining it from selling liquified petroleum (“LP”) gas and related appliances outside its member cities. We dismiss the appeal and order the trial court to vacate the injunction.
I. Facts and Procedural History
To facilitate the provision of natural gas to rural areas in Alabama, state law authorizes two or more municipalities to create a “gas district.” § 11-50-390 et seq., Ala.Code 1975. These districts have significant competitive advantages over private providers of natural gas. As a condition for operating outside the cities composing the gas district (known as “member cities”), a gas district must provide notice and a buy-out offer to any preexisting “plant and system” with which it might compete. See § 11-50-266, Ala.Code 1975, made applicable to gas districts by § 11-50-399, Ala.Code 1975. In
On May 18, 2010, four individual taxpayers and Fletcher Smith Butane Co., Inc., sued SAG, seeking both an injunction and damages for SAG’s alleged violation of § 11-50-266, as made applicable to gas districts by § 11-50-399. The trial court bifurcated the claim for injunctive relief and the damages claim and on October 7, 2011, held a bench trial on the claim for injunctive relief. SAG argued that the notice and buy-out provisions did not apply to it because LP gas is not a “manufactured gas” within the terms of the statute. The trial court found otherwise and enjoined SAG from selling LP gas and related appliances outside its member cities if it did not comply with § 11-50-266.
We first address the claims of the individual taxpayers.
II. The Taxpayer Plaintiffs
In their amended complaint plaintiffs Kerry W. and Christy Knight and Kirklyn and Regina Gwin identify themselves as adult residents of the City of Thomasville and of Clarke County. They allege “standing to bring this claim contesting the legality of South Alabama Gas’ activities because the City of Thomasville and Clarke County are deprived of the tax and other revenue to which they are entitled.” In particular, they claim harm resulting from the tax advantages provided to SAG as a public corporation. See Henson v. HealthSouth Med. Ctr., Inc.,
The trial court in its order of April 2, 2012, found that the taxpayers had failed tо carry their burden of proving that “tax increases probably resulted from SAG’s tax reduction.” Thus, they “lack[ed] standing to challenge SAG’s appliance sales.” Although the trial court limited its findings to the topic of appliance sales, logically the taxpayers’ failure to prove harm requires dismissal of all their claims.
III. Fletcher Smith Butane Co., Inc.
A. Fletcher Smith’s Admissions
On April 5, 2012, SAG appealed the injunction to this Court. See Rule 4(a)(1)(A), Ala. R.App. In its opening brief SAG argues, among other things, that Fletcher Smith no longer has standing because it has “sold its assets and is no longer engaging in the LP gas business.” SAG’s brief, at 54.
“1. Admit that Plaintiff Fletcher Smith Butane Co., Inc., a corporation, is no longer in the business of selling or distributing propane gas.
“RESPONSE: ... [Fletcher Smith] states that it is not currently selling or distributing propane gas due to the asset sale described-herein.
“2. Admit that the assets of Fletcher Smith Butane, Co., Inc., have been recently sold and assigned.
“RESPONSE: [Fletcher Smith] admits that it has sold assets to Parden Gas.
“3. Admit that the sales agreement for Fletcher Smith Butane Co., Inc., Usted the assets sold with assigned value to each asset.
“RESPONSE: ... [T]he sales agreement speaks for itself....
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“6. Admit that Fletcher Smith Butane Co., Inc., present [sic] has no tangible assets.
“RESPONSE: ... [T]he Company has no current real or personal property-
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“10. Admit that Fletcher Smith Butane Co., Inc., is not in competition with South Alabama Gas.
“RESPONSE: Denied.”
These admissions raise a question we must examine as to whether the necessary adversity of interests still exists between Fletcher Smith and SAG for this action to continue. “A plaintiff must be so situated that he or she will bring the requisite adverseness to the proceeding. A plaintiff must also have a direct stake in the outcome....” Hamm v. Norfolk Southern Ry.,
Fletcher Smith in its response brief in this Court does not deny the existence of the admissions. It instead attempts to mitigate their effect, stating that “these responses [to requests for admissions] do not state that [Fletcher Smith] is no longer in [the LP gas] business. Instead, the responses state that [Fletcher Smith] is not currently selling LP gas.” Fletcher Smith’s response brief, at 50. Fletcher Smith also refuses to admit that it is no longer in competition with SAG. Id. We do not consider these responses adequate to rebut the allegation of mootness. Although Fletcher Smith did not directly admit that it “is no longer in the business of selling or distributing propane gas,” its response that “it is not currently selling or distributing propane gas due to the asset sale described herein” indicates that it lacks prospective injury from SAG’s sales of propane, i.e., LP gas. Its bare denial that it is not in competition with SAG hardly counterbalances its admissions that it sold its assets to Parden Gas via a sales agreement that left it with “no current real or personal property.”
B. Effect of the Admissions
When an action becomes moot during its pendency, the court lacks power to further adjudicate the matter.
“ ‘The test for mootness is commonly stated as whether the court’s action on the merits would affect the rights of theparties.’ Crawford v. State, 153 S.W.3d 497 , 501 (Tex.App.2004) (citing VE Corp. v. Ernst & Young,860 S.W.2d 83 , 84 (Tex.1993)). ‘A case becomes moot if at any stage there ceases to be an actual controversy between the parties.’ Id. (emphasis added) (citing National Collegiate Athletic Ass’n v. Jones,1 S.W.3d 83 , 86 (Tex.1999)).”
Chapman v. Gooden,
Although Fletcher Smith may have viable legal claims based on SAG’s past actions, it is not entitled to injunctive relief if SAG’s future sales of LP gas can cause it no harm. See American Fed’n of State, Cnty. & Mun. Emps. v. Dawkins,
“ ‘The duty of this court, as of every other judicial tribunal, is to decide actual controversies by a judgment which can be carried intо effect, and not to give opinions upon moot questions or abstract propositions, or to declare principles or rules of law which cannot affect the matter in issue in the case before it.’ ”
King v. Campbell,
C. Mootness on Appeal
Events occurring subsequent to the entry or denial of an injunction in the trial court may properly be considered by this Court to determine whether a cause, justiciable at the time the injunction order is entered, has been rendered moot on appeal. “[I]t is the duty of an appellate court to consider lack of subject matter jurisdiction....” Ex parte Smith,
Fletcher Smith’s admissions, although entered into the record on appeal after the trial сourt entered its order granting the request for the injunction, are properly before us for consideration of the question of mootness. “[B]eeause mootness is a jurisdictional issue, we may receive facts relevant to that issue; otherwise there would be no way to find out if an appeal has become moot.” Clark v. K-Mart Corp.,
1. Cases dismissing appeals for mootness
We have previously dismissed appeals when events occurring subsequent to the entry of the order or judgment being apрealed rendered the controversy moot. After granting a petition for a writ of mandamus that provided the same relief sought in a pending appeal, this Court dismissed the appeal, noting that “[a]n action that originally was based upon a justi-ciable controversy cannot be maintained on appeal if the questions raised in it have become moot by subsequent acts or events.” Case v. Alabama State Bar,
In Employees of Montgomery County v. Marshall,
2. Mootness caused by going out of business
Other jurisdictions have dismissed appeals as moot based on facts similar to those in this case. In particular, a plaintiffs action for an injunction becomes moot on appeal when it leaves the business
The same principle applies to a sale of assets. See Young’s Realty v. Brabham,
3. Assessing whether a live controversy s till exists
Fletcher Smith argues that its admissions that it sold all of its assets, that it has no current real or personal property, and that it is no longer selling LP gas do not mean that it is no longer in the LP gas business or in competition with SAG. However, “a live controversy is not maintained by speculation that claimant might reenter a business that it has left.” Munsell,
IV. Conclusion
Under the reasoning of Henson,
APPEAL DISMISSED.
Notes
. On April 27, 2012, pursuant to Rule 62(c), Ala. R. Civ. P., the trial court stayed, pending appeal, that "portion of the injunction prohibiting SAG from conducting LP gas sales outside its member cities,” subject to two conditions: “1. SAG must pay into an interest-bearing escrow account 5% of its gross revenues from its sales of LP gas outside its member cities. 2. SAG is prohibited from paying any member city or franchised city any payment from the sale of LP gas pending the outcome of the appeal.”
. "If a party to an appeal suggests that the controversy has, since the rendering of judgment below, become moot, that party bears the burden of coming forward with the subsequent events that have produced that alleged result.” Cardinal Chem. Co. v. Morton Int’l, Inc.,
. Ripeness is "[t]he state of a dispute that has reached, but has not passed, the point when the facts have developed sufficiently to permit an intelligent and useful decision to be made.” Black’s Law Dictionary 1442 (9th ed.2009).
. A mootness analysis "concentrate[s] attention on the peculiar problems of a suit's death, rather than its birth.” 13B Charles Alan Wright et al., Federal Practice and Procedure § 3533.1 (3d ed.2008).
Concurrence Opinion
(concurring in the rationale in part and concurring in the result).
I concur in the result reached by the main opinion and in part of the analysis by which it reaches that result. I write separately for three reasons. First, there are significant substantive questions concerning the statutory regulation of municipal gas districts suggested by this case, and in some instances raised by the parties, that I do not wish to be understood as implicitly addressed by my vote. Secondly, I write to explain the unique nature of this case that I believe makes appropriate the invocation of the concept of standing despite my view that our courts have overused this concept. Finally, although I conclude that the individual taxpayer plаintiffs lack standing, I do not do so based on the same rule of decision upon which the main opinion relies.
I find it necessary to briefly explain my understanding of the limited purpose of and the mechanics of the statutory scheme outlined in Ala.Code 1975, §§ 11-50-266 through -270, as made applicable to gas districts by § 11-50-399, Ala.Code 1975.
Article 12 of Chapter 50, Title 11, Ala. Code 1975, authorizes the creation of and governs the operation of municipal “gas districts.” See Ala.Code 1975, § 11-5-390 et seq. Section 11-50-399 restricts the ability of municipal gas districts to compete with other entities already engaged in the business of manufacturing, distributing, and/or selling natural gas and/or “manufactured gas” by adopting for application to such gas districts certain provisions of Article 8 of Chapter 50:
“All districts incorporated under the provisions of this article shall have all powers and be subject to all limitations with respect to the acquisition of competing gas systems and the duplication of existing privately owned gas systems to the same extent as boards under the provisions of Sections 11-50-266 through 11-50-270.”
The sole function of §§ 11-50-266 through 11-50-270
The first step in this process is the giving of notice to the owner that the gas district intends to compete with it. § 11— 50-266, Ala.Code 1975. Thereafter, §§ 11-50-267 through -270 provide for a multistep process by which the parties can
Whether the process described above even applies in the present case depends on whether the product at issue in this case, liquified petroleum gas or “LP gas,” is to be considered a “manufactured gas” within the meaning of the aforesaid statutory provisions. A valid question has been raised by the defendant, South Alabama Gas District (“SAG”), as to whethеr these provisions lend themselves to an affirmative answer to this question. (Section 11-5-396(18), for example, appears to addresses LP gas separately from other provisions in the statute. Also, LP gas is separately regulated by the Alabama LP Gas Board. See Ala.Code 1975, § 9-17-100 et seq.) On the other hand, it appears that SAG may have taken the position before the trial court, at least for purposes of the injunctive relief at issue, that LP gas is to be considered a manufactured gas. Given the grounds upon which this Court decides the appeal before us today, however, it is not necessary for us to decidе in this appeal whether LP gas is a manufactured gas within the meaning of these statutes. Nor is it necessary for us to decide whether SAG conceded this issue for purposes of this appeal (or for purposes of any claims that remain pending in the trial court).
It also appears that a question exists as to whether the legislature intended with its enactment of Article 12 of Chapter 50 of Title 11, and the application to municipal gas districts of the procedures outlined in §§ 11-50-266 through -270, to provide existing owners such as Fletcher Smith Butane Co., Inc. (“Fletcher Smith”), with a private right of action in the courts of this state in the event a municipal gas district competes against it without first pursuing the process outlined in §§ 11-50-266 through -270.
The legal question of the cognizability of an alleged cause of action under state law goes to the merits of a lawsuit asserting that cause of action rather than the subject-matter jurisdiction of the court to decide that legal question. See, e.g., Wyeth, Inc. v. Blue Cross & Blue Shield of Alabama,
Our inability to dispose of this case on the ground that the causes of action alleged are not cognizable under Alabama law leads me to consider the standing issue that is presented in the main opinion as the ground for disposing of the individual taxpayer plaintiffs’ claims against SAG. I wish to explain that I vote to concur in the result reached by this portion of the main opinion despite being of the view that the notion of “standing” recognized by federal courts in relation to “public law” cases, see generally, e.g., Lujan v. Defenders of Wildlife,
Although most of the actions addressed on a daily basis by this and other Alabama
That said, the individual plaintiffs have not shown that, as a result of the complained-of omissions of the defendant, they have suffered a sufficient present, or threatened, particularized injury to justify a conclusion that they have “standing.”
“The ‘gist of the question of standing’ is whether the party seeking relief has ‘alleged such a personal stake in the outcome of the controversy as to assure that concrete adverseness which sharpens the presentation of issues upon which the court so largely depends for illumination of difficult constitutional questions.’ ”
Flast v. Cohen,
Moreover, “the controversy” at issue here is over the enforcement of a regulatory scheme intended for the protection of existing suppliers of certain products and, indirectly, for the public that depends upon a reliable supply of those products. To
In support of its conclusion that the individual plaintiffs lack standing, the main opinion relies upon the rule of decision articulated in Henson v. HealthSouth Medical Center, Inc.,
Moreover, even if the rule of decision articulated in Henson is a correct and workable one insofar as it goes, I question whether it goes far enough. The test in Flast (or at least the test espoused in Flast) is not merely whether a plaintiff can demonstrate a nexus between his or her status and “the challenged activity,” but whether he or she can demonstrate a nexus between his or her status and “the controversy” over that activity. That is, there must be a nexus between the plaintiffs status and the “precise nature of the infringement” at issue. See Flast,
. Based on the quoted provision, and for ease of discussion, I hereinafter will treat the references to waterworks boards in §§ 11-50-266 through 11-50-270 as references to gas districts.
. Perhaps a judicial action exists merely to enable a preexisting owner to force a gas district to engage in that process before the gas district is permitted to begin competing against the owner. In this case, the gas district never gave the notice allegedly required by § 11-50-266 to initiate that process. Nonetheless, the owner had actual knowledge of the gas district’s coming into its jurisdiction in 2003 and beginning to compete against it. Despite this fact, the owner did not object to this competition at that time, either through a challenge in the courts or before the Alabama Public Service Commission; instead, the owner allowed seven years to pass before filing the present action in 2010. We are not presented here with an argument that no private right of action is available to the owner based on a defense of waiver or laches.
. In many cases decided by this and other courts, the concerns raised have not involved matters that turn on the special justiciability concerns surrounding public-interest litigation; instead, such cases, both legally and practically, simply implicate such private-law concepts as cause of action, proof of damage (or some other element of the cause of action), real party in interest, capacity, necessary and indispensable parties, and like notions. As a leading treatise has noted,
"[i]n its flowering, subsequent withering, eventual revival, and occasionally complex application, the standing concept that there is a need to establish an entitlement to judicial action, separate from proof of the substantive merits of the claim advanced, has been largely a creature of twentieth century decisions of the federal courts. More importantly, it has been very much tied to litigation asserting the illegality of governmental action. The assertion may be that executive or administrative action goes beyond the limits of statutory authorization or constitutional limits, or that a statute exceeds constitutional limits. Claims oí private wrongdoing ordinarily are asserted by persons obviously having the enforceable interest, if anyone has; such problems as arise commonly are handled in terms of defining private causes of action or of identifying the real party in interest.
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"At times — and perhaps with increasing frequency — courts are tempted to move beyond the public-law arena, invoking Article III principles to address questions of private right.... [SJtanding decisions are invoked to address the existence of a cause of action, capacity, intervention, and even the procedural rights of bankrupts. Although such decisions may be aided by reference to standing doctrine, they involve other matters that do not turn on the special justiciability concerns surrounding public-interest litigation."
13A Charles Alan Wright et al., Federal Practice & Procedure § 3531 (3d ed.2008) (emphasis added). See also, e.g., K-B Trucking Co. v. Riss Int’l Corp.,
“The standing question arises in the realm of public law, when governmental action is attacked on the ground that it violates private rights or some constitutional principle...."....' C. Wright, The Law of Federal Courts 452-53 n. 2 (4th ed.1983) (quoting Kent v. Northern California Regional Office of American Friends Service Committee,497 F.2d 1325 , 1329 (9th Cir.1974)).”
The use of standing to challenge the cogniz-ability of a cause of action or the proof of one of its elements (e.g., damage), raises the specter of unwarranted and unnecessary collateral challenges to the subject-matter jurisdiction of a court and to the finality and reliability of judgments in private-law actions.
. We do not have before us individual plaintiffs who seek relief because they are potential competitors or consumers for whose benefit was enacted the regulatory scheme that SAG did not follow.
