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Published June 07, 2012, 08:51 PM

ND Supreme Court Rejects Property Tax Lawsuit

BISMARCK, N.D. (AP) — Advocates of eliminating North Dakota property taxes do not have authority to sue public officials whom they believe are illegally spending taxpayers' money to campaign against the idea, the North Dakota Supreme Court concluded.

By: Dale Wetzel, Associated Press

BISMARCK, N.D. (AP) — Advocates of eliminating North Dakota property taxes do not have authority to sue public officials whom they believe are illegally spending taxpayers' money to campaign against the idea, the North Dakota Supreme Court concluded.

The court, in a unanimous ruling issued Thursday, decided that only prosecutors — and not private citizens — may enforce North Dakota laws that prohibit dishonest statements and the use of public funds in initiated measure campaigns.

The decision came two days after the court heard attorneys' oral arguments in the case.

"I'm glad that it's over with. I think that it was the right decision, and I'm pleased that we can move on," said Tax Commissioner Cory Fong, the most prominent public official who was named in the lawsuit.

Fong told The Associated Press Thursday night that he was "shocked" the ruling came so quickly.

The case arose because of disputes about the potential consequences of Measure 2, a proposed amendment to the North Dakota Constitution that would abolish property taxes. It was put on the ballot by a citizens' petition that was signed by more than 27,000 people.

North Dakota voters will decide the measure's fate during a statewide election Tuesday. A media company's public opinion poll has showed strong opposition to the amendment, which has been lambasted by critics who believe it would strip local governments of a vital revenue source for financing services and projects.

A group of Measure 2 supporters called Empower the Taxpayer sued Fong, four state legislators, two county commissioners and other officials last February, accusing them of spreading false information about the measure's impact and using taxpayer money to do it.

A North Dakota law, called the Corrupt Practices Act, makes it a misdemeanor crime — punishable by a year in jail and a $2,000 fine — to do what property tax foes were accusing their opponents of doing.

The targeted officials denied violating the law and said the lawsuit was an attempt to throttle their free-speech rights and intimidate them for providing unflattering information about the proposal's consequences.

The measure says the Legislature must provide funds to local governments to replace lost property tax revenues, which the Tax Department estimated at more than $800 million annually. Critics of the amendment say the measure would leave local governments dependent on lawmakers' whims to get money for projects.

The Supreme Court's brief, four-page ruling Thursday does not address whether the law was being violated. It concludes only that property tax critics have no authority to enforce North Dakota's campaign practices laws if prosecutors decline to do so.

"Empower has pointed to noting in the language and focus of the statutes, the legislative history, or the statutory purpose indicating the Legislature intended to create a private right of action," said the court's opinion, written by Justice Mary Muehlen Maring.

Lynn Boughey, a Bismarck attorney for Empower the Taxpayer, said the measure's supporters had been reluctant to file a criminal complaint about what they believed was illegal campaigning by the measure's detractors.

Boughey said he hoped the North Dakota Legislature will consider allowing citizens to file private lawsuits to enforce the law. He is not optimistic that will happen, he said.

"Will the Legislature actually change the statute to allow the citizens of North Dakota to sue them when they provide false and misleading information?" Boughey asked. "I will be very pleasantly surprised if they do. ... I will not be holding my breath."

Robert Hale, a Minot attorney and businessman who is one of the measure's leading supporters, said he believed the Supreme Court's ruling renders the law meaningless, because prosecutors almost never file charges over campaign disputes.

The lawsuit was focused on public officials because North Dakota law forbids them from advocating either side of a citizen ballot initiative, Hale said. The restriction makes sense because the initiative process is a way for citizens to approve laws directly, without the Legislature's involvement, Hale said.

"When there's an initiated measure by the people, the government must stay out of it," Hale said. "If we were trying to stifle debate on this issue, we would have sued the (North Dakota) Chamber of Commerce (for its opposition to the measure). What we wanted is to stop some of this other nonsense, by people who are paid by the taxpayer."


Copyright 2012 The Associated Press.

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