Kraft v. Meade County Ex Rel. Board of County Commissioners

#24063-a-JKM
2006 SD 113
IN THE SUPREME COURT
OF THE
STATE OF SOUTH DAKOTA
* * * *
JERRY R. KRAFT, d/b/a KRAFT HARDWARE;
ROBERT S. TRUPE, MOREY W. TRUPE, and
MARTY L. TRUPE, as the members of BROTHERS
III, LLC, a South Dakota Limited Liability
Company; MID-STATE CAMPER SALES, INC.,
a South Dakota Corporation; T-M CONCRETE
CONSTRUCTION, INC., a South Dakota
Corporation; ROBERT C. VAN HOUTEN;
STEVEN A. VAN HOUTEN; RAPID
CONSTRUCTION, a Partnership; STACEY G.
ROSELLES; RHS, INC., a South Dakota
Corporation; ERDEAN A. OLSEN and VERNA J.
OLSEN, husband and wife; JEROME E.
TORKELSON and PATRICIA A. TORKELSON,
husband and wife; DAVID R. BOOZE and PATTY
L. BOOZE, husband and wife; and, with each and
Every such party acting individually and on behalf
of all persons respectively similarly situated, Plaintiffs and Appellants,
and
PHYLLIS A. COLBERT, Plaintiff,
v.
MEADE COUNTY, acting through its Board
of County Commissioners; SUMMERSET,
an unorganized municipality; Defendants and Appellees,
and
AMERICAN WEST COMMUNITIES, INC.,
a South Dakota Corporation; SUMMERSET
OWNERS ASSOCIATION, INC., a South
Dakota Corporation; and RONALD A. BAKER,
individually, and as an officer, director, and/or
shareholder of American West Communities,
Inc., and SUMMERSET OWNERS ASSOCIATION,
INC., Defendants.
* * * *
APPEAL FROM THE CIRCUIT COURT OF
THE FOURTH JUDICIAL CIRCUIT
MEADE COUNTY, SOUTH DAKOTA
* * * *
HONORABLE JEROME A. ECKRICH, III
Judge
* * * *
ARGUED ON NOVEMBER 28, 2006
OPINION FILED 12/27/06
RONALD G. SCHMIDT of
Schmidt, Schroyer, Moreno,
Lee & Bachand
Rapid City, South Dakota Attorneys for appellants.

JESSE SONDREAL
Meade County State’s Attorney

TIMOTHY R. JOHNS
Meade County Deputy State’s Attorney
Sturgis, South Dakota Attorneys for appellees.
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MEIERHENRY, Justice

[¶1.] This case involves a constitutional challenge to the proposed

incorporation of the municipality of Summerset. The plaintiffs in this action

include individuals and corporate entities that own or otherwise claim an interest in

property within the proposed municipal boundary [referred to collectively as

“Kraft”]. The defendants involved in this appeal are Meade County and the

unorganized municipality of Summerset [referred to collectively as “Meade

County”]. On June 7, 2005, a majority of eligible voters voted to incorporate the

municipality of Summerset. On August 19, 2005, Kraft filed a summons and

complaint contesting the election based on the premise that the statutory scheme

governing the organization, creation, and incorporation of a municipality violated

due process and equal protection guarantees under Article VI, section 2 and section

18 of the South Dakota State Constitution. Shortly thereafter, Kraft filed a motion

for an interlocutory injunction and ex parte temporary restraining order to enjoin

the election of municipal officers set for August 30, 2005. The trial court denied

Kraft’s request for a temporary restraining order because of substantive and

procedural defects but proceeded to hear Kraft’s motion for interlocutory injunction,

Kraft’s summary judgment motion and Meade County’s motions to dismiss. The

trial court concluded that SDCL ch 9-3 did not violate due process or equal

protection and dismissed all claims. Kraft appeals and presents the following issue:

ISSUE

Whether the trial court erred in holding that SDCL ch 9-3 did
not violate due process and equal protection under Article VI,
section 2 and section 18 of South Dakota’s Constitution.

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STANDARD OF REVIEW

[¶2.] Our standard of reviewing the constitutionality of statutes is well

established. “Statutes are presumed constitutional: challengers bear the burden to

prove beyond a reasonable doubt that a statute violates a constitutional provision.”

Steinkruger v. Miller, 2000 SD 83, ¶8, 612 NW2d 591, 595. “Constitutional

interpretation is a question of law reviewable de novo.” Id.

ANALYSIS

[¶3.] Kraft does not contest the regularity or validity of any aspect of

Summerset’s organization nor does he challenge the June 7, 2005 election. Kraft

argues that SDCL ch 9-3 is unconstitutional because the statutory scheme violates

due process and equal protection guarantees of the South Dakota State

Constitution. The statutory scheme for the organization, creation, and

incorporation of a municipality is found in SDCL ch 9-3 of South Dakota’s Codified

Laws. The statutory scheme requires that a “survey, map, and census when

completed and verified shall be left at some convenient place within such territory

for a period of not less than thirty days for examination by those having an interest

in such application.” SDCL 9-3-4. Additionally, the application for incorporation

must be signed by at least twenty-five percent of qualified voters within the

proposed boundary and a majority of qualified voters must vote to incorporate the

municipality. 1 SDCL 9-3-5; SDCL 9-3-6. Notice of the election must be published

1. Generally, the requirements for incorporation are set forth as follows:

(1) Prior to incorporation, persons making the application for the
organization of a municipality shall “cause an accurate survey and map to
(continued . . .)
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“in all official newspapers at least once each week for two consecutive weeks.”

SDCL 12-12-1. It is the published notice with which Kraft takes issue.

Article VI, Section 2 Due Process

[¶4.] Kraft claims that published notice of the election to incorporate

violated due process. Article VI, section 2 of South Dakota’s Constitution provides

in relevant part: “No person shall be deprived of life, liberty or property without

due process of law. . . .” Kraft claims that due process of law required personal or

formal notice to property owners whose lands were included in the boundaries of the

proposed municipality rather than the published notice designated by the statute.

Specifically, he argues that because the incorporator and Meade County knew the

names and addresses of those residing in the boundaries of the proposed

municipality as a result of completing a census required by SDCL 9-3-3, they should

have notified the landowners by first class letter or a phone call. 2 Kraft relies on

___________________
(. . . continued)
be made of the territory intended to be embraced within the limits of such
municipality.” SDCL 9-3-2.
(2) An accurate census shall be taken of the landowners and the resident
population in the proposed municipality. SDCL 9-3-3.
(3) The survey, map and census shall be posted at a convenient place within
the proposed municipality for at least thirty days. SDCL 9-3-4.
(4) The application for incorporation must be in the form of a petition signed
by not less than twenty-five percent of the qualified voters registered or
owning land in the proposed municipality. SDCL 9-3-5.
(5) Following the petition, the County Commissioners shall make an order
scheduling for an election to be conducted in accordance with SDCL Title
12. SDCL 9-3-6.
(6) A majority vote is required. SDCL 9-3-10.
(7) Title 12 requires, among other things, notice of elections. SDCL 12-12-1.

2. Kraft alleges that this lack of notice resulted in a loss of property rights
including increased governmental regulation and taxation. Specifically,
(continued . . .)
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the United States Supreme Court’s holding in Mullane v. Central Hanover Bank &

Trust Co. to support his argument. 339 US 306, 70 SCt 652, 94 LEd 865 (1950).

Mullane, which involved a judicial settlement of trust funds, held that notice by

publication was insufficient in matters affecting private property where the owners

of the property were known or easily ascertainable. Id. at 314, 70 SCt at 657. Kraft

argues that since the property owners in this case were known, notice by

publication was insufficient. Meade County, on the other hand, claims that

Mullane does not control because it dealt with judicial proceedings not legislative

acts. Meade County contends that due process has no application because the

formation of a municipality is a legislative act which the legislature may exercise by

its own fiat.

[¶5.] We have determined that constitutional due process requirements do

not apply to legislative acts. Tripp County v. State, 264 NW2d 213, 217 (SD 1978);

see also Detroit Edison Company v. East China Township School Dist., No. 3, 378

F2d 225, 228 (6thCir 1967), cert. denied, 389 US 932, 88 SCt 296, 19 LEd2d 284

(1967) (holding that the alteration of a municipal boundary is a “legislative matter

not justiciable under the due process clause or equal protection clauses of the

Fourteenth Amendment.”); Hammonds et. al. v. City of Corpus Christi, Texas, 343

F2d 162 (5thCir 1965) (affirming the district court’s finding that the annexation of

land by a city is of a “purely. . . political matter, entirely within the power of the

___________________
(. . . continued)
Kraft alleges that the plaintiffs have suffered financially from the imposition
of a mill levy of $4.50 on all real property within the municipality which
imposed a real property tax of $4.50 per $1000 of assessed value and the loss
of a Meade County liquor license.

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legislature of the State to regulate.”). We have said that “consideration of what

procedures due process may require under any given set of circumstances must

begin with a determination of the precise nature of the government function

involved as well as of the private interest that has been affected by government

action.” Matter of South Dakota Water Management Board, 351 NW2d 119, 123

(SD 1984) (citing Goldberg v. Kelly, 397 US 254, 90 SCt 1011, 25 LEd2d 287 (1970)).

[¶6.] Consequently, our first consideration is whether the nature of the

governmental function of incorporating a municipality is legislative. We

determined in Tripp that “[t]he power to create municipal corporations, . . . is purely

legislative.” Tripp, 264 NW2d at 221. Additionally, we said that “questions of

public policy, convenience, and welfare related to any change in county boundaries

are of purely legislative cognizance and any action in regard thereto does not come

within the due process clauses of either the state or federal constitutions.” Tripp,

264 NW2d at 217. We explained as follows:

The power to create municipal corporations, including the power
to designate their boundaries and to increase or to decrease
their corporate limits, is purely legislative it is not part either of
the executive or judicial branches of the government. In the
absence of constitutional restrictions the legislature may
exercise this power at will. . . .

Id. at 221 (considering whether attachment of unorganized county with organized

county violated organized county residents’ rights to due process). We recognized

that the legislature’s power to control counties and other political subdivisions “is

unrestrained by requirements of due process.” Id. at 217. Likewise, the

legislature’s broad power to establish and develop municipalities is unrestrained by

due process requirements.

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[¶7.] Thus, Kraft’s reliance on Mullane is misplaced because it did not

involve legislative action. The legislative act of creating, altering, or developing the

boundaries of municipalities is not subject to the requirements of due process

despite its injurious consequences. See Hunter v. Pittsburgh, 207 US 161, 178-79,

28 SCt 40, 46-47, 52 LEd 151 (1907); Tripp, 267 NW2d at 221. Thus, Kraft has

failed to overcome the presumption of constitutional validity accorded to SDCL ch 9-

3 et seq. under a due process challenge.

Article VI, Section 18 Equal Protection & Privileges and Immunities

[¶8.] Kraft also argues that the statutory scheme in SDCL ch 9-3 is a

violation of Equal Protection. Article VI, section 18 of South Dakota’s Constitution

provides: “No law shall be passed granting to any citizen, class of citizens or

corporation, privileges or immunities which upon the same terms shall not equally

belong to all citizens or corporations.” “[W]hen a statute has been called into

question because of an alleged denial of equal protection of the laws, we employ our

traditional two-part test.” In re Davis, 2004 SD 70, ¶5, 681 NW2d 452, 454

(citations and internal quotations omitted).

First, we determine whether the statute creates arbitrary
classifications among citizens. Second, if the classification does
not involve a fundamental right or suspect group, we determine
whether a rational relationship exists between a legitimate
legislative purpose and the classifications created.

Id. (citations omitted). Kraft’s argument does not address the two-part test.

Additionally, Kraft does not specifically identify an arbitrary classification within

the statutes.

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[¶9.] Without identifying an arbitrary classification, Kraft generally

complains of the effect of the municipal incorporation on the individual and

corporate plaintiffs. He argues that the defendants benefited from the

incorporation while the plaintiffs suffered detriment. He also complains that the

plaintiffs did not have full knowledge and opportunity to participate in the pre-

election process and decision concerning the municipal boundary nor the

opportunity to vote. Nevertheless, Kraft clearly recognizes that corporations have

no right to vote, and the record indicates that all the eligible plaintiffs voted in the

election. Kraft’s general complaints fail to establish an arbitrary classification

created by statute under the first prong of the test.

[¶10.] Additionally, Kraft claims an equal protection violation because the

municipal incorporation statutes do not provide notice equal to the notice provided

in the municipal annexation statutes codified in SDCL ch 9-4. Kraft argues that

because landowners, corporations, and limited liability companies are entitled to

“certified mail notice” when their land is being annexed by an existing city under

SDCL ch 9-4, certified mail notice should also be required when their land is

included in a proposed municipality. Here also under the first prong of the two-part

test, Kraft must first show that SDCL ch 9-3 creates arbitrary classifications among

citizens. See In re Davis, 2004 SD 70, ¶5, 680 NW2d at 454. In other words, he

must demonstrate that the statute does not apply equally to all people. See State v.

Krahwinkel, 2002 SD 160, ¶23, 656 NW2d 451, 461; Accounts Management Inc. v.

Williams, 484 NW2d 297, 300 (SD 1992).

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[¶11.] Kraft fails to satisfy the first prong because the differing notice

requirements for annexation and incorporation are not dependent upon any

classification of the citizenry. Rather, the required notice is dependent on whether

the government action is one of incorporation or annexation. Annexation and

incorporation are two distinct actions with separate and discrete procedures set

forth by the legislature. These different procedures alone do not constitute a

violation of equal protection. In the context of analyzing two Michigan statutes,

which prescribed different procedures for condemning property based on the state’s

intended use of the property, the United States Supreme Court stated that “the

equal protection clause [does not] exact uniformity of procedure. The Legislature

may classify litigation and adopt one type of procedure for one class and a different

type for another.” Duhany v. Rogers, 281 US 362, 369, 50 SCt 299, 302, 74 LEd 904

(1930). Similarly, equal protection does not require the legislature to prescribe

uniform procedures for two wholly distinct actions -- the annexation of land and the

incorporation of a municipality. Furthermore, individually, chapters 9-3 and 9-4

apply generally and uniformly to all citizens within the State of South Dakota. “A

law which is general and uniform throughout the state, and operates alike upon all

persons or localities which come within the relations and circumstances provided

for, is not objectionable to the Constitution as wanting in uniformity.” Bon Homme

County Farm Bureau v. Bd. of Com’rs of Bon Homme County, 53 SD 174, 220 NW

618, 621 (1928).

[¶12.] Because Kraft has not met his burden of showing that SDCL ch 9-3

creates arbitrary classifications, we need not address the second part of the test to

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determine if there is a rational relationship between the legislative purpose and the

classifications. Kraft’s arguments regarding SDCL ch 9-3 essentially come down to

a claim that the statutory scheme is unfair. Kraft, however, has failed to

demonstrate beyond a reasonable doubt that SDCL ch 9-3 violates due process or

equal protection under the South Dakota Constitution Article VI, section 18 and

section 2. Because the statutory scheme does not violate constitutional

requirements, Kraft’s complaints are more appropriately addressed to the

legislature.

[¶13.] We affirm.

[¶14.] GILBERTSON, Chief Justice, and SABERS, KONENKAMP, and

ZINTER, Justices, concur.

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