Section 31 Remedies for Violation of Voter Approval Requirement

• Library: Tax Law 2009

Article X, § 23, of the Missouri Constitution, which provides that a taxpayer may bring suit to enforce the provisions of Hancock, is silent as to the scope of relief a court may provide to a taxpayer successfully challenging a local government’s imposition or increase of a tax without voter approval, other than mandating that a successful taxpayer receive costs and reasonable attorney fees. This is to be contrasted with the provisions of article X, § 18(b), of the Missouri Constitution, which provides an explicit formula requiring the state government to refund revenues it collects that exceed the Hancock Amendment’s limit.

In Beatty v. Metropolitan St. Louis Sewer District, 867 S.W.2d 217 (Mo. banc 1993) (Beatty I), discussed in §2.24 above, the Supreme Court of Missouri held that a rate increase imposed by The Metropolitan St. Louis Sewer District (MSD) without voter approval violated article X, § 22(a), of the Missouri Constitution. The Court remanded the case to the St. Louis County Circuit Court for a determination of the remedy. On remand, the three taxpayers that initiated the suit sought a refund credit for all of MSD’s ratepayers. The trial court found that the three taxpayers had brought a “representative taxpayer suit” and ordered MSD to refund the amount of the increased rates by crediting the periodic bill of any customer that had paid the increased charge. Beatty v. Metro. St. Louis Sewer Dist., 914 S.W.2d 791, 794 (Mo. banc 1995) (Beatty II).

In Beatty II, the Supreme Court of Missouri reversed the trial court’s ruling that the three taxpayers had brought a “representative taxpayer suit,” and it remanded the case to the trial court for a determination of the amount of credit due, if any, to only the three taxpayers that originally brought the suit. In reaching its conclusion, the Court noted that the plaintiffs did not file the suit as a class action and that the trial court had not followed the Missouri Rules of Civil Procedure mechanism for certification and conduct of class action lawsuits. The Court concluded that “[i]t was error for the trial court to order relief concerning individuals and entities who were not parties to the case.” Id. at 796.

In Ring v. Metropolitan St. Louis Sewer District, 969 S.W.2d 716 (Mo. banc 1998), a case following the Beatty decisions, a group of taxpayers brought a class action suit for a refund of user rates paid to the sewer district under an ordinance previously held unconstitutional. The trial...