Monday, April 12, 2004
Copyright © Las Vegas Review-Journal

Federal court to consider Nevada Constitution question

CARSON CITY -- A federal court will hear arguments Thursday stemming from the controversial Nevada Supreme Court ruling that sought to remedy last year's legislative budget stalemate by setting aside a state constitutional amendment.

A panel of the 9th U.S. Circuit Court of Appeals, meeting at the Stanford University Law School, will consider whether the U.S. District Court erred in dismissing the case brought July 14 by 24 Republican lawmakers and others after the 6-1 state Supreme Court ruling.

As lawmakers waged a pitched battle last summer over record tax increases, Gov. Kenny Guinn sought intervention from the Nevada Supreme Court to force lawmakers to fund public education and balance the state budget, actions that required hundreds of millions of dollars in tax increases.

On July 10, the state Supreme Court ruled an "irreconcilable conflict" existed between two provisions of the Nevada Constitution: one requiring a two-thirds supermajority vote in the Legislature to approve tax increases, and one requiring that the Legislature fund the public education system.

It then determined that the requirement to fund education outweighed the procedural requirement for a two-thirds vote and ruled that lawmakers could pass tax increases with a simple majority vote.

Lawmakers eventually passed $833 million in tax increases with two-thirds support because of concern that future appeals could overturn a simple majority vote.

Although the Supreme Court ruling applied only to the 2003 session, Republicans are concerned a precedent has been set.

"We will see a repeat of this if we don't do something," said Assemblywoman Sharron Angle, R-Reno, who wants the case sent back to U.S. District Court for trial. "If it was a one-time ruling, never to be used again, the court should have vacated its decision."

Republican lawmakers had asked the Nevada Supreme Court to do as much, but justices refused the request.

Ray Bacon, a party in the case with the Republican lawmakers, both as a citizen and as executive director of the Nevada Manufacturing Association, said a favorable ruling from the appeals court could reveal how the Supreme Court decision was reached.

"If the case is remanded to District Court for trial, what is opened up for discovery?" he asked. "Might it open up all the e-mail files of the court or the e-mails from the governor's office?"

Such information could illuminate how the court reached its decision to rule that the funding of the public education budget was more important than the voter-mandated, two-thirds requirement for the Legislature to raise taxes, Bacon said.

Ken Lange, executive director of the Nevada State Education Association, said the group will be watching the 9th Circuit case closely.

"The issues embodied in the appeal are of paramount importance," he said. "The questions revolve around how you resolve conflicts on inconsistent issues, especially in states with the initiative process." The two-thirds amendment was an initiative approved by voters in 1994 and 1996.

Not only did the Supreme Court rule education funding took priority over the two-thirds vote rule, at least during the 2003 budget impasse, it also ruled that education funding was elevated by the framers of the state constitution to a "position of constitutional primacy," Lange said.

"That finding may be more important than the two-thirds issue," he said.

John Eastman, director of the Claremont Center at the Chapman University School of Law in Orange, Calif., is representing the Republican lawmakers. He said the issue before the appeals court is a technical one: Whether lawmakers and citizens are prohibited from seeking a review of their claims in federal court under a legal precept known as the Rooker-Feldman doctrine.

The doctrine says a party cannot use the federal courts to serve as an appellate review of a state court ruling.

Eastman said he was aware of the doctrine, and its exceptions, when the petition to overturn the Supreme Court was made.

"I drafted our litigation to avoid those jurisdictional problems," he said.

Eastman said the doctrine does not apply to people such as Bacon and the manufacturers association, parties not involved in the original Supreme Court decision.

The 9th Circuit hearing is critical for opponents of the state Supreme Court ruling. The U.S. Supreme Court in March refused to take the case on direct appeal.

Republican lawmakers argue that the nullification of the two-thirds amendment violates the Republican Guarantee Clause of Article IV of the United States Constitution. The provision guarantees that the people might choose the details of their republican form of government, such as the voter-approved two-thirds rule.

Eastman said a ruling from the appeals court is expected by the fall.

Guinn and the Legislature as a whole oppose the request to return the case to U.S. District Court for a trial.

A response by the Legislature as a whole, opposing the reinstatement of the case, says Republican lawmakers and citizens initiated the lawsuit because they were dissatisfied with the Supreme Court decision:

"The appellants are therefore asking the federal courts to provide them with the relief they could not obtain from the Nevada Supreme Court -- an interpretation of the Nevada Constitution consistent with their own personal views."

The Republican lawmakers "cannot offer a single cogent argument countering the district court's dismissal of their claims ... because of the Rooker-Feldman Doctrine," the Legislature's brief said.

The idea that parties outside the Legislature are not barred by the doctrine are "factually and legally meritless," the brief said.

The response by Guinn and other administration officials makes a similar argument, saying the doctrine applies to people such as Bacon if their claims "directly attack the highest state court's ruling."

Concerns that the ruling might set a precedent for the future also are unfounded, the brief said. Even if the ruling is used in a future tax debate, there would be nothing to stop opponents from seeking a temporary restraining order or injunction at that time, the brief said.