HELENA, Mont. (Legal Newsline) – The Montana Supreme Court affirmed a lower court's ruling throwing out a potential class action suit of individuals who paid property taxes “under protest” because of alleged government deficiencies.

The Supreme Court concluded Oct. 25 that the District Court of the First Judicial District was correct in determining that the plaintiffs lacked standing to sue. In coming to that conclusion, the majority opinion of the Supreme Court stated, "Taxpayers have not adequately alleged a concrete, threatened  injury, and therefore have not established standing. Without an independent ground for standing, they cannot assert a claim under the Declaratory Judgments Act…. Neither the private attorney general doctrine nor the Declaratory Judgments Act grants taxpayers standing to seek relief in this case.”   

Justice Beth Baker delivered the opinion of the court. 

Elaine Mitchell filed a class action against Glacier County and the state of Montana in the District Court for the county of Lewis and Clark in 2015. Mitchell felt there were many deficiencies in Glacier County government. She alleged that Glacier County and the state of Montana had not complied with budgeting and accounting laws.

In 2013 and 2014 audits were conducted of the county’s finances and deficit balances were discovered. The audits "identified budget deficits in numerous county funds and stated that the county had exceeded its budgetary authority in many of those funds. A subsequent county treasurer’s report showed ongoing deficit balances in a number of the County’s funds,” according to the opinion.

The original complaint asked for injunctive relief, including:  “(2) a declaration that the county had failed to comply with generally accepted governmental accounting standards; (3) a declaration that the county was in violation of laws designed to ensure 'strict accountability' of government finances; (4) a declaration that county officials who incurred financial obligations in excess of appropriations were personally liable for the resulting budget deficits; (5) an order requiring the State to withhold public funds from the county under the Single Audit Act until the county complied with its budgeting obligations; (6) an order requiring the State to hold County officials personally liable for their failure to ensure strict accountability," according to the opinion.

In the second amended complaint, plaintiffs stated: “Based on the 2013 and 2014 audits of the county, and the deficiencies described therein, it is foreseeable that the county’s residents and taxpayers would be injured as a result of the State’s failure to enforce the terms of the Single Audit Act to 'insure strict accountability of all revenues received and money spent' by the county.'”

The state and the county challenged the plaintiffs’ standing to sue after they moved for partial summary judgment. 

Justice Michael Wheat dissented, noting, “The majority’s conclusions about the validity of the audit should be left to a jury, not a judge. Based on the deficiencies found within the audits, the taxpayers should be afforded the opportunity to fully explore and develop the alleged mismanagement of public funds. Standing requirements should not be barriers to justice."

Plaintiffs were represented by Lawrence A. Anderson of Great Falls, Montana. Defendants were represented by Kirk D. Evenson of Marra, Evenson & Bell, P.C., in Great Falls (attorney for Glacier County) and Gary M. Zadick and James R. Zadick of Ugrin, Alexander, Zadick & Higgins, P.C., in Great Falls (attorneys for State of Montana).

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