author: JUSTICE TRIEWEILER CHIEF JUSTICE TURNAGE,

text:
    SHIRLEY CALDER, Plaintiff and Appellant, v. CARL ANDERSON and BONNIE ANDERSON, Defendants and Respondents.
    No. 95-288.
    Submitted on Briefs February 8, 1996.
    Decided February 26, 1996.
    53 St.Rep. 139.
    275 Mont. 273.
    911 P.2d 1157.

      For Appellant: Gene A. Picotte, Attorney at Law, Helena.
    For Respondents: G. Curtis Drake, Keller, Reynolds, Drake, Johnson & Gillespie, Helena.
   JUSTICE TRIEWEILER

delivered the Opinion of the Court.

The plaintiff, Shirley Calder, filed a complaint in the First Judicial District Court in Lewis and Clark County in which she alleged that her landlords, Carl and Bonnie Anderson, were negligent. Andersons moved for summary judgment and the District Court granted their motion. We reverse the judgment of the District Court.

The issue on appeal is whether the District Court erred when it granted summary judgment.

FACTUAL BACKGROUND

In March 1994 Shirley Calder and her husband rented an apartment from Carl and Bonnie Anderson. A set of steps leads from the entrance of the Calders’ apartment to a sidewalk which leads to the tenants’ parking area. The tenants’ parking area consists of gravel and dirt and is located near one side of the sidewalk.

In her complaint, Calder alleged that on the afternoon of May 3, 1994, she exited her apartment, descended the staircase, and fell on the sidewalk at the base of the steps. She alleged that as a result of the fall, she sustained injuries to her lower back, hip, neck, and shoulder, and required hospitalization for three and one-half days.

Calder also stated in her complaint that the Andersons negligently failed to maintain the sidewalk in a safe condition and violated § 70-24-303, MCA, in the following manner:

At all times material herein defendants negligently failed to keep said common area, to wit: Said concrete walk in a clean and safe condition as they were required to do by § 70-24-303(l)(c), MCA, and permitted dirt, refuse, pebbles and other materials to accumulate and remain thereon so that said walk became and remained and was at the time of plaintiff’s accident and injuries hereinafter alleged dangerous and unsafe to walk upon.

The Andersons answered the complaint and denied all allegations of negligence.

Shirley Calder testified by deposition that on the date of her accident she had descended the stairway leading from the door of her apartment and stepped onto the sidewalk, where her feet landed unexpectedly on rocks or gravel which caused her to skid for some distance before her feet flew out from under her and she landed face down. She further testified that she knew that she had skidded and lost control on small rocks because she felt the rocks through the soles of her shoes when she stepped down on them and because she and her husband later observed the skid marks caused by the rocks where her accident occurred.

The Andersons moved for summary judgment following Calder’s deposition. They argued that there was no hidden defect on the premises and that they had no duty to warn Calder of the presence of gravel on the sidewalk because the gravel would have been clearly obvious had she looked.

The District Court granted the Andersons’ summary judgment motion. The court found that Calder’s injuries were not caused by a hidden or lurking danger which would subject the Andersons to liability. The court further stated that the rocks on the sidewalk would have been obvious to Calder if she had looked at the sidewalk while she walked on it. Finally, the court stated that there was no evidence that the Andersons took any affirmative action to aggravate or create the alleged hazard, and therefore, that there was no basis for finding that they were negligent.

DISCUSSION

Did the District Court err when it granted summary judgment?

This Court reviews a summary judgment order entered pursuant to Rule 56, M.R.Civ.R, based on the same criteria applied by the district court. Brinkman and Lenon v. P & D Land Enterprises (1994), 263 Mont. 238, 241, 867 P.2d 1112, 1114. Rule 56(c), M.R.Civ.R, provides that summary judgment is proper only when “there is no genuine issue as to any material fact and ... the moving party is entitled to a judgment as a matter of law.” We look to the pleadings, depositions, answers to interrogatories, admissions on file, and affidavits to determine the existence or nonexistence of a genuine issue of material fact. Ulrigg v. Jones (1995), [274 Mont. 215], 907 P.2d 937, 940.

We first address the Andersons’ contention that because Calder failed to cite § 70-24-303, MCA, in opposition to the Andersons’ motion for summary judgment, she waived its consideration on appeal. The Supreme Court of Alaska considered a similar argument and, after reviewing Alaska’s summary judgment rule, which is identical to Montana’s, disagreed that the law applicable to a case could be waived. Newton v. Magill (Alaska 1994), 872 P.2d 1213, 1215. That court held that:

[E]ven if a litigant does not oppose summary judgment, the superior court may grant the motion only if otherwise “appropriate” under Rule 56. Weaver Bros., Inc. v. Chappel, 684 P.2d 123, 126 (Alaska 1984). For this reason, this court should review the superior court’s grant of summary judgment under the usual standard of review.
This court will uphold a summary judgment only if the record presents no genuine issues of material fact and “the moving party was entitled to judgment on the law applicable to the established facts.”

Newton, 872 P.2d at 1215.

The applicability of the controlling statute was raised in the District Court when, in Paragraph IV of her complaint, Calder alleged that “[a]t all times material herein defendants negligently failed to keep said common area, to wit: Said concrete walk in a clean and safe condition as they were required to do by § 70-24-303(l)(c), MCA.” Paragraph IV of Calder’s complaint was specifically denied by the defendants’ answer.

Rule 56(c), M.R.Civ.R, provides in relevant part that:

The judgment sought shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.

(Emphasis added.)

It is clear from Rule 56 that the court must consider allegations in the pleadings unless they have been controverted by evidence presented by the opposing party. In this case, the defendants presented no evidence that the sidewalk was clean and safe at the time of Calder’s fall and injury. In fact, neither the defendants’ motion for summary judgment, nor the memorandum that they submitted in support of that motion, addressed a landlord’s duty to a tenant pursuant to the statute relied on in Calder’s complaint. Calder’s memorandum in opposition to the defendants’ motion simply responded to the issues raised in the defendants’ memorandum.

Once Calder alleged in District Court that the relevant statute had been violated and cited that statute to the court and opposing counsel, she did not have to re-argue that claim repeatedly in order to preserve the claim for appeal and to avoid waiver.

Calder maintains that violation of § 70-24-303, MCA, constitutes negligence per se. This Court has not directly addressed this issue. However, when considering identical statutory provisions, the Supreme Court of Alaska has held that they impose duties different from and greater than those imposed by common law. Newton v. Magill (Alaska 1994), 872 P.2d 1213. In that case, Darlene Newton, the plaintiff, slipped and fell on a walkway which led to the front door of her home which was rented from the defendants. Newton, 872 P.2d at 1214. She sued her landlords based on her allegation that the walkway was slippery and hazardous and that the landlords had a duty to make it safe. Newton, 872 P.2d at 1214. The trial court dismissed the plaintiff’s complaint by summary judgment based on its conclusion that it was the plaintiff’s duty to keep the walkway safe and clean. Newton, 872 P.2d at 1214. The Supreme Court noted that even though according to traditional notions of Alaska common law a landlord has no duty to tenants for dangerous conditions on the property, Alaska’s adoption of the Uniform Residential Landlord and Tenant Act changed and added to a landlord’s obligations. That court concluded that since Alaska’s act imposed a duty on the landlord to keep even those areas occupied and used by the tenant in a clean and safe condition, the landlord had a duty to use reasonable care to discover and remedy conditions which presented an unreasonable risk of harm, and that included the slippery condition of the walkway. Whether the condition was hidden or apparent was irrelevant. Newton, 872 P.2d at 1216-18. Based on the facts in that case, the Supreme Court of Alaska held that whether the landlord failed to exercise reasonable care in light of all the circumstances with respect to the condition of the walkway presented an issue of fact to be resolved by the jury. Newton, 872 P.2d at 1218.

Montana, likewise, adopted the Residential Landlord and Tenant Act in 1977. Among its provisions is § 70-24-303, MCA. Montana’s adoption of that Act changed and added to the duties owed by property owners to their tenants.

Since § -303 of the Act was obviously intended by the legislature to be for the benefit and safety of tenants, a landlord’s failure to comply with the statute is negligent per se. We have held that:

The violation of statutes is negligence as a matter of law when the purpose of the statute is to protect a class of persons, the plaintiff is a member of that class, and the defendant is a person against whom a duty is imposed. Azure v. City of Billings (1979), 182 Mont. 234, 240-41, 596 P.2d 460, 464. The purpose of the statute also must be to protect against the kind of injury received by the plaintiff. Rauh v. Jensen (1973), 161 Mont. 443, 507 P.2d 520.

Nehring v. LaCounte (1986), 219 Mont. 462, 468, 712 P.2d 1329, 1333.

Shirley Calder was a member of the class that § 70-24-303, MCA, was intended to protect; Andersons were members of the class on whom a duty was imposed; and Calder’s slip and fall is the type of injury that the statute was designed to prevent. The Supreme Court of Michigan has held that violation of a similar statute established negligence per se. See Morningstar v. Strich (Mich. 1950), 40 N.W.2d 719. We agree with that holding.

Contrary to the suggestion in the dissenting opinion, neither the Newton opinion nor the Morningstar opinion are cited in this opinion based on the similarity of the facts in those cases to the facts in this case. Newton is cited for the legal proposition that the Residential Landlord and Tenant Act creates duties in addition to and greater than those imposed on property owners by the common law. Morningstar is cited for the proposition that violation of statutes which impose duties on a landlord to provide for the safety of his or her tenants is negligent per se. The facts of the cases are irrelevant.

Furthermore, the Arizona and Ohio cases cited and relied on in the dissenting opinion are of no assistance to us for purposes of resolving the issue presented in this case. Neither case applies nor interprets a duty similar to the one which exists in Montana pursuant to § 70-24-303, MCA, and upon which this opinion is based.

Finally, the dissenting opinion’s reliance on § 70-24-32 l(l)(b), MCA, to suggest that it was actually the tenant’s duty to maintain the area where Calder fell is misplaced. That section of the Residential Landlord and Tenant Act pertains to that part of the premises which the tenant actually “occupies and uses.” It does not pertain to common areas. Common areas are specifically addressed in § 70-24-303(l)(c), MCA, and place the duty of maintenance solely on the landlord.

According to the testimony of Shirley Calder, the sidewalk on which she fell was not in a clean and safe condition, and as a result, she fell and seriously injured herself. Calder testified that on the date of her accident she had descended the stairway leading from the door of her apartment and stepped onto the sidewalk, where her feet landed unexpectedly on rocks or gravel which caused her to skid for some distance before her feet flew out from under her and she landed face down. She knew that it was small rocks on which she skidded and lost control because she felt the rocks through the soles of her shoes when she stepped down on them, and she and her husband later observed the skid marks caused by the rocks where her accident occurred. Calder’s testimony was sufficient to raise an issue of fact whether the defendants breached their duty owed to her pursuant to the Residential Landlord and Tenant Act.

Whether the condition which caused Calder’s injury was “hidden or lurking,” and whether or not the condition at the bottom of her stairway was one she should have been looking for and noticed are simply issues to be considered as part of the question of contributory negligence.

The dissenting opinion suggests that it is a proper function of this Court to decide as a matter of law when debris allowed to remain on a common walkway does or does not violate the obligation to keep the area clean and safe. The dissenting opinion suggests that the majority opinion has already passed judgment on that issue. However, that suggestion is incorrect. The majority opinion simply recognizes that pursuant to Article II, Section 26, of the Montana Constitution, and § 26-1-202, MCA, there is a right to have issues of fact tried by juries when the parties request a jury, or by the district court when the right to jury trial is waived. The dissent would have this Court apply that right on a sliding scale based on how impressed the members of this Court are with the merits of a party’s claim or defense. However, to do so would substantially blur the distinct functions of the fact finder and appellate review.

For these reasons, we conclude that as landlords the Andersons had a duty to keep the area where Calder fell in a clean and safe condition. If they failed to do so they were negligent as a matter of law. Whether or not the Andersons breached their duty to Calder, and the extent to which that breach of duty, if any, was a cause of Calder’s damages, are issues of fact which must be decided by the trier of fact.

For these reasons, we reverse the order of the District Court and remand for further proceedings consistent with this opinion.

JUSTICES NELSON, GRAY, HUNT and LEAPHART concur.

CHIEF JUSTICE TURNAGE,

dissenting:

A cause of action in negligence consists of four elements: (1) duty; (2) breach of duty; (3) causation; and (4) damages. Hatch v. State Dept. of Highways (1994), 269 Mont. 188, 192, 887 P.2d 729, 732. While the existence of a duty is a question of law, the second element, whether that duty has been breached, is normally a question of fact to be determined by the finder of fact. Limberhand v. Big Ditch Co. (1985), 218 Mont. 132, 144-45, 706 P.2d 491, 498. However, when a defect is so slight that no prudent person could reasonably anticipate danger from it, but an accident happens which could only have been guarded against with extraordinary care and foresight, the question of the defendant’s responsibility is one of law. Wiley v. City of Glendive (1995), 272 Mont. 213, 217-19, 900 P.2d 310, 313.

In the present case, Calder stated by deposition that the sidewalk outside her apartment was usually dirty and that renters, the mailman, and other persons walking from the graveled driveway to the apartment building tracked gravel onto the sidewalk. She acknowledged, however, that she had never considered gravel on the sidewalk to be a danger to her and had not complained to the Andersons about the dirty sidewalk. Nothing in the record supports the idea that the few alleged pieces of gravel on the sidewalk in this case were either a known hazard or a hidden or lurking danger.

This Court has acknowledged the rule that universally known conditions should not be considered hazards. Luebeck v. Safeway Stores, Inc. (1968), 152 Mont. 88, 93, 446 P.2d 921, 924. We have further recognized that the mere happening of an accident, in itself, is not evidence of negligence. Clark v. Norris (1987), 226 Mont. 43, 48, 734 P.2d 182, 185. The law does not require that for every injury there must be a recovery of damages, but only imposes liability for a breach of legal duty proximately causing injury. Clark, 734 P.2d at 185.

Can reasonable minds differ on whether pieces of gravel on a sidewalk adjoining a gravel parking lot establish a breach of legal duty by the property owner? The Court of Appeals of Arizona has said “No.” Forbes v. Romo (Ariz. App. 1979), 601 P.2d 311.

[A] possessor of land is not liable to his invitees for physical harm caused to them by any activity or condition on the land whose danger is known or obvious to them unless the possessor should anticipate the harm despite such knowledge and obviousness. The ... possessor may have reason to expect harm to a visitor from known or obvious dangers, for example when the possessor has reason to expect that the invitee’s attention may be distracted, so he will not discover what is obvious, or forget what he has discovered, or fail to protect himself against it. Since there is no such evidence here, the trial court was correct in awarding summary judgment in favor of the Romos.
... The very most Forbes has shown is that she slipped on a piece of gravel. Neither its size nor the length of time it was on the sidewalk has ever been shown. The record discloses only this lone, solitary piece of gravel on the sidewalk. We do not believe that reasonable minds would differ. Forbes has not shown that [the lessee of the store] was negligent.

Forbes, 601 P.2d at 313-14.

More recently, the Court of Appeals of Ohio affirmed a summary judgment that gravel on a walkway next to a gravel parking lot did not render the walkway unreasonably dangerous or create liability.

Gravel on a walkway next to a gravel parking lot or driveway is, as held by the trial court, a “minor imperfection, commonly encountered and expected.” To hold defendants liable for such “trivial departures from perfection” would be to render them insurers for plaintiffs safety and “the law does not go that far.”

Jones v. H. & T. Enterprises (Ohio App. 9 Dist. 1993), 623 N.E.2d 1329, 1333.

I agree with the reasoning of the Arizona and Ohio courts. I conclude that reasonable minds could not differ as to whether the presence of a few grains of gravel on a sidewalk next to a gravel driveway establishes negligence on the part of the property owner. We do not yet live in an eggshell society in which there is a tort remedy for every injury.

The majority opinion, in seeking to establish for the first time in Montana an actionable tort under § 70-24-303(l)(c), MCA, part of Montana’s Residential Landlord and Tenant Act of 1977 (RLTA), has created a new liability that the majority opinion rests upon negligence per se. In doing so, the majority has stretched the RLTA to a point that approaches the mere happening of an accident as the basis for a tort claim to be decided by a jury.

In the State of Montana, on or in our streets, alleys and parking lots, owned by property owners and occupied by renters, there are to be found inevitably small pieces of gravel. How this could be avoided by a property owner defies reasonableness and common sense. Section 70-24-303(l)(c), MCA, provides:

(1) A landlord shall:
(c) keep all common areas of the premises in a clean and safe condition!.]

The majority has taken this provision of our code and under the facts of this case has misapplied it.

The majority has also ignored provisions of the RLTA that place certain obligations and duties upon the tenant of the rented premises. Section 70-24-32l(l)(b), MCA, provides:

Tenant to maintain dwelling unit. (1) A tenant shall:
(b) keep that part of the premises that the tenant occupies and uses as reasonably clean and safe as the condition of the premises permits[.] [Emphasis added.]

Calder admits in her brief that she and her husband specifically assumed this obligation under their written lease.

Certainly, if the tenant’s obligation is to keep the premises reasonably clean and safe as the condition of the premises permits — which is a reasonable provision — we should, as to reasonableness, not place any higher duty upon the landlord. The landlord’s duty should be to keep the premises reasonably clean and safe as the condition of the premises permits.

The majority opinion finds support and comfort in Newton v. Magill (Alaska 1994), 872 P.2d 1213.I find it informative, however, to point out that the facts involved in Newton are entirely different from the facts involved in the case before this Court. In Newton, the landlord had constructed a wooden walkway from the front door of the house, six feet long and five feet wide, without a handrail, virtually uncovered, and with no “anti-slip” material on its surface. The Alaska premises was located in Petersburg, where persistent rains resulted in a constant drizzle except in the summer when the rain is intermittent and the wet climate fosters the growth of plant organisms on exposed wooden boards causing them to become dangerously slippery when wet.

In Newton the permanent installation of the wooden walkway was accomplished by the landlord, who had notice over a long period of time of the wet boards and the hazard created for slipping. This is an entirely different fact scenario than that before this Court.

The majority has failed to cite a major, important part of the holding in Newton, letting the Alaska court’s relevant comments slip by. The Alaska court stated:

The duty of a tenant is to “keep that part of the premises occupied and used by the tenant as clean and safe as the condition of the premises permit[s].” AS 34.03.120(1). This obligation exists as part of the same statute which defines the landlord’s obligation to “make all repairs and do whatever is necessary to put and keep the premises in a fit and habitable condition.” AS 34.03.100(a)(1). It follows that the legislature intended these obligations to be reconcilable. Reconciliation can be accomplished by interpreting the tenant’s duty to pertain to activities such as cleaning, ice and snow removal, and other light maintenance activities pertaining to the safety of the premises which do not involve an alteration of the premises, whereas the landlord’s duty relates to the physical state of the premises. This distinction is suggested by the phrase “as the condition of the premises permit[s]” in section 120(1). In context this must refer to the inherent physical qualities of the premises.
... The legislature by adopting the URLTA has accepted the policy reasons on which the warranty of habitability is based. These are the need for safe and adequate housing, recognition of the inability of many tenants to make repairs, and of their financial disincentives for doing so, since the value of permanent repairs will not be fully realized by a short-term occupant. ...
Our rejection of the general rule of landlord immunity does not make landlords liable as insurers.6 [6We do not accept the Newtons’ argument that a rule of strict liability should govern this case.] Their duty is to use reasonable care to discover and remedy conditions which present an unreasonable risk of harm under the circumstances. Nor does our ruling mean that questions as to whether a dangerous condition existed in an area occupied solely by the tenant or in a common area, or whether the condition was apparent or hidden, are irrelevant. These are circumstances which must be accounted for in customary negligence analysis. They may pertain to the reasonableness of the landlord’s or the tenant’s conduct and to the foreseeability and magnitude of the risk. In particular, a landlord ordinarily gives up the right to enter premises under the exclusive control of the tenant without the tenant’s permission. The landlord’s ability to inspect or repair tenant areas is therefore limited. In such cases “a landlord should not be liable in negligence unless he knew or reasonably should have known of the defect and had a reasonable opportunity to repair it.” Young v. Garwacki, 380 Mass. 162, 402 N.E.2d 1045, 1050 (1980).
In our view genuine issues of material fact exist as to whether the appellees breached their duty to Darline Newton to exercise reasonable care in light of all the circumstances with respect to the condition of the walkway. Determination of whether that duty was breached should be left for the trier of fact.

Newton, 872 P.2d at 1217-18 (emphasis added).

The majority also cites as support for its opinion the case of Morningstar v. Strich (Mich. 1950), 40 N.W.2d 719. This case, decided over forty-six years ago in Michigan, is cited by the majority as the holding of the Supreme Court of Michigan that violation of a “similar” statute established negligence per se. However, that case involved a Michigan statute under the State Housing Law of Michigan that provided, “every dwelling and all the parts thereof including plumbing, heating, ventilating and electrical wiring shall be kept in good repair by the owner.” Morningstar, 40 N.W.2d at 721. A statute not similar by any comparison to § 70-24-303(l)(c), MCA.

Further, the facts of the Michigan case have no resemblance to the facts of the case before this Court. The Michigan court recited the relevant facts as follows:

The plaintiff was two years and nine months old on February 16, 1944, the date of the accident. He was playing at the dining room window near the radiator when the valve came off. He was so severely scalded that he was hospitalized for 76 days.

Morningstar, 40 N.W.2d at 720.

It is clear from the Morningstar opinion that a steam radiator remained in defective condition for a long period of time with the knowledge of the landlord and that this defect permitted live steam to escape causing the plaintiff injury. The Michigan court went on to state:

The trial court found that the Hoffman valve introduced in evidence had been on the radiator and that the accident and injuries to plaintiff resulted from the wornout and stripped condition of its threads. He further found that some inspection of the heating apparatus was made and that the defendant, Henry C. Strich, through his agents had notice of the defective valve and was negligent in not taking the necessary steps to correct the dangerous condition, and that this was the proximate cause of the accident.
Viewing the testimony in the light most favorable to plaintiff, the failure of Henry C. Strich, through his agent to take the necessary remedial steps to maintain the heating system in good repair was the proximate cause of the accident, and the motions were properly denied. There is no question that Henry G. Strich had notice of trouble with the valves and that he came to the house with a plumber. The defective condition of the valve in question, if it was on the radiator, should have been apparent upon the examination of it that either was made or should have been made.

Morningstar, 40 N.W.2d at 721.

The facts of the Alaska and Michigan cases are strikingly different from the facts in the case before this Court.

The result of the majority opinion in this case, that negligence per se can be visited upon a property owner renting a residential facility and can subject the property owner to a jury trial because of a claimed pebble or pebbles of gravel on a sidewalk, is stretching the RLTA too far. It gravels me that this Court would do so.

I would hold that the entry of summary judgment for the Andersons was correct.

JUSTICE ERDMANN joins in the foregoing dissent of CHIEF JUSTICE TURNAGE.


source: Caselaw Access Project

author: JUSTICE NELSON JUSTICE TRIEWEILER JUSTICE ERDMANN

license: Public Domain

text:
    SHANNON L. WADSWORTH, Plaintiff and Respondent, v. STATE OF MONTANA AND ITS DEPARTMENT OF REVENUE, Defendant and Appellant.
    No. 94-602.
    Submitted October 17, 1995.
    Decided February 26, 1996.
    53 St.Rep. 146.
    275 Mont. 287.
    911 P.2d 1165.

      For Appellant: Dennis McCafferty, James, Gray & McCafferty, Great Falls (argued).
    For Respondent: Kenneth R. Olson, Attorney at Law, Great Falls (argued).
   JUSTICE NELSON

delivered the Opinion of the Court.

The State of Montana (State) and its Department of Revenue (DOR) appeal from the final judgment entered by the Montana Eighth Judicial District Court, Cascade County, following a jury trial finding that Shannon Wadsworth (Wadsworth) was wrongfully terminated from his employment with DOR; finding said wrongful termination was the proximate cause of the damages suffered by Wadsworth; and awarding Wadsworth $85,000 in damages. We affirm.

ISSUES

The following are issues on appeal:

1. Did the District Court err in not granting the State’s motion for summary judgment based on Wadsworth’s failure to appeal his petition for judicial review?

2. Does Wadsworth have a fundamental constitutional right to the opportunity to pursue employment and, if so, did the State provide a compelling interest for infringing upon that right?

3. Did the District Court err in allowing irrelevant and prejudicial evidence of treatment which Wadsworth claimed he received prior to the termination of his employment?

4. Did the District Court err in allowing irrelevant and prejudicial evidence of treatment which other DOR employees claimed they received from DOR?

5. Did the District Court err in allowing improper opinion, speculation, and legal conclusion testimony?

BACKGROUND

Wadsworth began working as a real estate appraiser for DOR in 1974. On September 14, 1981, DOR enacted conflict-of-interest rule 81-2 precluding DOR appraisers from engaging in independent fee appraisals, real estate sales, or brokerage activities during their off-duty hours. Conflict-of-interest rule 81-2 provides:

The very nature of this Division’s work requires that our employees attain a high level of credibility and objectivity as viewed by the taxpaying public. When situations arise, such as conflicts of interest, that jeopardize either requirement, the integrity of the Department as well as the respective appraisal and assessor offices is detrimentally affected. Examples of conflicts of interest include, but are not limited to, fee appraising, selling real estate (excluding the sale of one’s personal residence or property), and operating or working for a real estate firm.
In such undertakings, the actual risk of and/or appearance of impropriety that occurs cannot be tolerated. Engaging in such activities will bring about immediate disciplinary action and may result in termination.

In December of 1981, Wadsworth received a letter informing him of the conflict-of-interest rule. He filed a grievance claiming that the rule is discriminatory, unfair, and unconstitutional.

The DOR Grievance Committee concluded that the rule was “unreasonable and unnecessary.” However, on July 27,1982, the Director of DOR, Ellen Feaver, rejected the Grievance Committee’s recommendation and found the policy statement to be rational and reasonable and thus sustained the rule’s application. Wadsworth petitioned the District Court of the Eighth Judicial District, Cascade County, to review Ellen Feaver’s decision and requested the court enter an order stating that DOR’s policy statement in rule 81-2 is unnecessary, unreasonable, and an arbitrary exercise of police power by DOR.

On October 20, 1986, the District Court ordered a new grievance hearing to be held because the tapes from the initial hearing were missing. DOR subsequently held another grievance hearing and submitted its recommendation to uphold the policy statement. The Director of DOR, Jon LaFaver, adopted the Grievance Committee’s recommendation as DOR’s final decision.

In its final decision, DOR denied Wadsworth’s grievance and gave Wadsworth 30 days to divest himself of all interests in fee appraising, selling real estate, or operating or working for a real estate firm, and that engaging in such activities would result in disciplinary action and possible termination. The State then moved to dismiss Wadsworth’s petition for judicial review for lack of subject matter jurisdiction. The District Court granted the State’s motion and dismissed Wadsworth’s petition for judicial review. Wadsworth did not appeal from this order.

In March of 1989, DOR directed Wadsworth to comply with the conflict-of-interest rule within 30 days. Wadsworth commenced a new grievance with DOR complaining of disciplinary action directed at him for violating the conflict-of-interest rule. The hearing examiner found that Wadsworth had to divest himself of his private fee appraisal business or face discharge. In a letter dated November 27, 1989, the Director of DOR adopted a final decision wherein he accepted the decision of the hearing officer, confirmed the policy statement in rule 81-2, sustained Wadsworth’s 9-day suspension without pay, and indicated that Wadsworth had 30 days to divest himself of his interests in fee appraising and selling real estate. On February 16, 1990, DOR terminated Wadsworth from his employment for refusing to give up his outside employment activities.

In November of 1990, Wadsworth filed a wrongful discharge suit in the District Court of the Eighth Judicial District, Cascade County. The State moved for summary judgment arguing that as a matter of law, Wadsworth’s termination was not wrongful and Wadsworth’s contention that DOR’s conflict-of-interest rule is contrary to the United States and Montana Constitutions was barred by his failure to appeal the dismissal of his petition for judicial review. The District Court denied the State’s motion for summary judgment. The State then filed a motion in limine seeking to exclude evidence regarding DOR’s treatment of Wadsworth prior to his termination. The District Court again denied the State’s motion and the case proceeded to trial. The State moved to dismiss Wadsworth’s wrongful termination claim as a matter of law at the close of Wadsworth’s case and renewed the motion at the close of the evidence. The District Court denied the State’s motions and submitted the case to the jury.

In submitting the case to the jury, the District Judge included instructions on fundamental rights and that fundamental rights may not be infringed by the State without a showing of a compelling state interest. The jury rendered a verdict in Wadsworth’s favor awarding him $85,000 in damages. DOR appeals the final judgment rendered following the jury trial.

DISCUSSION

1. Did the District Court err in not granting the State’s motion for summary judgment based on Wadsworth’s failure to appeal his petition for judicial review?

The State argues that the District Court erred in not dismissing as a matter of law, Wadsworth’s claim that his employment was wrongfully terminated. The State claims that Wadsworth raised his constitutional arguments when he challenged the application of the conflict-of-interest rule in his petition for judicial review and therefore the doctrine of res judicata bars him from raising them again in this matter. Conversely, Wadsworth argues that he brought the instant case under the Wrongful Discharge from Employment Act (WDFEA) and thus raises a different subject matter and different issues from those in his petition for judicial review. We review a district court’s ruling on a motion for summary judgment de novo. Mead v. M.S.B., Inc. (1994), 264 Mont. 465, 470, 872 P.2d 782, 785.

The State relies on our decision in Matter of Estate of Pegg (1984), 209 Mont. 71, 680 P.2d 316, as the sole authority for its argument. In Estate ofPegg, Walter Pegg was killed in a helicopter crash and died intestate. Pegg’s third wife, Virginia, sought appointment as the personal representative of his estate. Pegg’s ex-wives filed petitions requesting that Virginia be removed as personal representative of Pegg’s estate. The District Court concluded that there was no evidence to support removal of Virginia as personal representative and denied the petitions. The ex-wives again filed a petition for removal of Virginia as personal representative asserting new grounds for the removal. Estate of Pegg, 680 P.2d at 317-318. The district court orally denied these petitions. We held that the district court’s first order refusing to revoke Virginia’s status as administrator of Pegg’s estate was final and therefore appealable. The second petitions merely raised new grounds for removal and “had all the appearances of unjustified delaying tactic.” Therefore, we did not reach the merits of the arguments in support of removing Virginia as personal representative. Estate of Pegg, 680 P.2d at 320.

In the recent case, City of Bozeman v. AIU Ins. Company (1995), 272 Mont. 349, 900 P.2d 929, we discussed the doctrine of res judicata more thoroughly. The doctrine of res judicata includes the following four elements:

(1) the subject matter of each action must be the same;
(2) the parties or their privies of each action must be the same;
(3) the issues must be the same and relate to the same subject matter;
(4) the capacities of the persons must be the same and relate to the same subject matter and the issues between them.

City of Bozeman, 900 P.2d at 932 (citing State ex rel. Harlem Irr. Dist. v. Judicial Dist. Court (1995), 271 Mont. 129, 894 P.2d 943.)

Wadsworth’s present action does not meet the four criteria set forth in City of Bozeman. Wadsworth’s WDFEA claim involves a different subject matter from his petition for judicial review, different issues from his petition for judicial review, and the capacities of the parties had changed in relation to the subject matter and the issues between them. Initially, Wadsworth and two other DOR employees sought judicial review of the Director of DOR’s decision to reverse a three-person panel’s conclusion that the conflict-of-interest policy was unreasonable and sought review of her subsequent decision to re-implement the policy. In the instant case, after his termination, Wadsworth brought a WDFEA claim against the State. Although it involves the same parties and some of the same issues, it is a distinct and separate proceeding not subject to res judicata.

Wadsworth’s WDFEA claim is also distinguishable from Estate of Pegg in that it did not involve an unjustified delaying action nor was it a second action requesting the same relief relying on new grounds. Accordingly, as a matter of law, the District Court correctly denied the State’s motion for summary judgment.

2. Whether Wadsworth has a fundamental constitutional right to the opportunity to pursue employment and, if so, whether the State provided a compelling interest for infringing upon that right?

The State argues that the District Court incorrectly referred questions of law to the jury to determine. The State further argues that there are no questions of fact implicit in the analysis of whether the conflict-of-interest rule unconstitutionally infringed upon the right asserted by Wadsworth, only a question of law for the judge to determine.

Sections 26-1-201 and 26-1-202, MCA, delineate the province of the court and the jury. These sections provide as follows:

26-1-201. Questions of law. Except as provided in Article II, section 7, of the Montana constitution, all questions of law, including the admissibility of testimony, the facts preliminary to such admission, the construction of statutes and other writings, and other rules of evidence, must be decided by the court.
26-1-202. Questions of fact. If a trial is by jury, all questions of fact other than those mentioned in 26-1-201 must be decided by the jury, and all evidence thereon must be addressed to them, except as otherwise provided by law. If the trial of a question of fact is not by jury, all evidence thereon must be addressed to the trial court, which shall decide such question.

Sections 25-7-102 and 25-7-103, MCA, similarly set forth issues of law to be decided by courts and issues of fact to be decided by juries. Section 26-1-201, MCA, states that it is the province of the court to construe statutes and other writings. Montana’s constitution clearly constitutes an “other writing,” the interpretation of which is appropriately within the province of the judge not the jury.

For example, in State v. Poncelet (1980), 187 Mont. 528, 610 P.2d 698, we upheld a trial court’s ruling not to allow a witness to testify about the constitutionality of a law because

[t]he interpretation and application of the United States Constitution was a question of law and not a fact in issue. It was a determination to be made by the trial judge within his statutory powers.

Similarly, we have held a defendant’s attack on the constitutionality of Montana’s compulsory automobile liability insurance statutes presented only questions of law. State v. Turk (1982), 197 Mont. 311, 317, 643 P.2d 224, 228. A determination of the constitutionality of the statutes required an analysis of what rights were involved and the corresponding level of scrutiny to apply to the liability insurance statutes. Because the liability insurance statutes burdened a constitutional right but not a fundamental constitutional right, the State only had to show that the statutes were rationally related to a legitimate governmental objective. Turk, 643 P.2d at 227. We held that this analysis exclusively presented questions of law for the judge’s determination. Turk, 643 P.2d at 228; see also People v. Zinn (Co. 1993), 843 P.2d 1351, 1354 (whether challenged legislation bears a reasonable relationship to legitimate government interests is a question of law); State v. Holmes (Wis. 1982), 315 N.W.2d 703, 708 n.7 (constitutional questions are questions of law); Racine Steel Castings v. Hardy (Wis. 1988), 426 N.W.2d 33, 35 (constitutionality of a statute is a question of law); Valdez v. Gunter (10th Cir. 1993), 988 F.2d 91, 93, cert. denied 114 S.Ct. 151, 126 L.Ed.2d 113 (1993) (whether asserted right is a fundamental right is a question of law).

Moreover, in State v. Pastos (1994), 269 Mont. 43, 47, 887 P.2d 199, 202, we recognized that “when the government intrudes upon a fundamental right, any compelling state interest for doing so must be closely tailored to effectuate only that compelling interest.” We concluded that the compelling state interest analysis is a question of law. Pastos, 887 P.2d at 202. In Pastos, the legal question was whether there was a compelling state interest which justified a routine, administrative inventory search of the personal property on, or in the possession of, the arrestee at the station house following a lawful arrest. Pastos, 887 P.2d at 202.

The Fifth Circuit Court of Appeals has also held that the application of the strict scrutiny test is a question of law. Woodland v. City of Houston (5th Cir. 1991), 940 F.2d 134, 138. In Woodland, the circuit court stated that the question of whether the city police department’s interest in pre-employment polygraph testing outweighed the applicant’s privacy interest was a question of law and should not have been submitted to the jury. Woodland, 940 F.2d at 138; see also Evans v. Romer (Co. 1993), 854 P.2d 1270, cert. denied 114 S.Ct. 419, 126 L.Ed.2d 365 (1993) (holding that the question of whether an existing constitutional right is infringed is strictly a question of law)(citing Lafferty v. Cook (10th Cir. 1991), 949 F.2d 1546, 1550, cert. denied, 504 U.S. 911, 112 S.Ct. 1942, 118 L.Ed.2d 548 (1992)); Thompson v. Keohane (1995), 116 S.Ct. 457, 460, 133 L.Ed.2d 383 (noting the declaration that “in custody” question is one of law may guide police, unify precedent, and stabilize the law).

In the instant case, Wadsworth claimed that the conflict-of-interest rule unconstitutionally infringed upon his fundamental right to the opportunity to pursue employment. Wadsworth presented a question of law — i.e. whether he had a fundamental constitutional right and whether the State showed a compelling interest for infringing upon that right. Thus, the question before the District Court was a legal issue containing no implicit questions of fact.

Accordingly, we review as a conclusion of law, the District Court’s determination of whether the right Wadsworth asserted was a constitutionally protected right, and if constitutionally protected, whether it was a fundamental right, and if it was a fundamental right, whether the State provided a compelling interest for infringing upon it. We review questions of law de novo to determine whether the court’s interpretation of the law is correct. Carbon County v. Union Reserve Coal Co., Inc. (1995), 271 Mont. 459, 469, 898 P.2d 680, 686; Steer, Inc. v. Department of Revenue (1990), 245 Mont. 470, 474-75, 803 P.2d 601, 603.

Here, the District Court interpreted the law in its instructions to the jury as follows:

Instruction number 15: All persons have as an inalienable right the opportunity of pursuing life’s basic necessities. The right to terminate an employee is not absolute but subject to exercise in accordance with constitutional provisions.
Instruction number 9: You are instructed that the right: to pursue life’s basic necessities; to acquire, possess and protect property; to individual privacy are fundamental rights. Said rights shall not be infringed by the State without the showing of compelling State interest.

However, the District Court erred in submitting to the jury, questions of law that the court itself should have determined. We hold this to be harmless error, in that, as we shall point out, the jury came to the correct conclusion. Accordingly, we review the jury instructions de novo, as the statements of the law applicable to this case.

Wadsworth asserts that Article II, section 3 of the 1972 Montana Constitution establishes the inalienable right to pursue life’s basic necessities which right necessarily includes the opportunity to earn a living, and that DOR wrongfully terminated him because he asserted this constitutionally protected right. Article II of Montana’s constitution, entitled Declaration of Rights, enumerates various rights, among which are certain “inalienable rights” set forth at section 3. That section provides:

All persons are born free and have certain inalienable rights. They include the right to a clean and healthful environment and the rights of pursuing life’s basic necessities, enjoying and defending their lives and liberties, acquiring, possessing and protecting property, and seeking their safety, health and happiness in all lawful ways. In enjoying these rights, all persons recognize corresponding responsibilities.

While section 3 does not refer to “fundamental rights” per se, nevertheless, we have held a right may be “fundamental” under Montana’s constitution if the right is either found in the Declaration of Rights or is a right “without which other constitutionally guaranteed rights would have little meaning.” Butte Community Union v. Lewis (1986), 219 Mont. 426, 430, 712 P.2d 1309, 1311-13 (holding that Montana’s constitution does not create a right to welfare). The inalienable right to pursue life’s basic necessities is stated in the Declaration of Rights and is therefore a fundamental right.

While not specifically enumerated in the terms of Article II, section 3 of Montana’s constitution, the opportunity to pursue employment is, nonetheless, necessary to enjoy the right to pursue life’s basic necessities. See Globe Newspaper Co. v. Superior Court for Norfolk County (1982), 457 U.S. 596, 604, 102 S.Ct. 2613, 2618-19, 73 L.Ed.2d 248, 255 (First Amendment encompasses those rights that, while not specifically enumerated in the very terms of the Amendment, are nonetheless necessary to enjoyment of other First Amendment rights). As a practical matter, employment serves not only to provide income for the most basic of life’s necessities, such as food, clothing, and shelter for the worker and the worker’s family, but for many, if not most, employment also provides their only means to secure other essentials of modern life, including health and medical insurance, retirement, and day care. We conclude that without the right to the opportunity to pursue employment, the right to pursue life’s basic necessities would have little meaning, because it is primarily through work and employment that one exercises and enjoys this latter fundamental constitutional right. Accordingly, we hold that the opportunity to pursue employment, while not specifically enumerated as a fundamental constitutional right under Article II, section 3 of Montana’s constitution is, notwithstanding, necessarily encompassed within it and is itself a fundamental right because it is a right “without which other constitutionally guaranteed rights would have little meaning.” Butte, 712 P.2d at 1311. We also hold that the District Court correctly interpreted the law in its Instructions number 15 and 9.

This interpretation of Montana’s constitution is supported by the decisions of other jurisdictions which have held their state constitutions to encompass a fundamental right to the opportunity to pursue employment. For example, the right to pursue any proper vocation under the personal liberty clause of Indiana’s state constitution is a fundamental right. Kirtley v. State (Ind. 1949), 84 N.E.2d 712, 714 (holding that a statute regarding the sale of tickets interfered with the liberties and the personal and property rights of a ticket owner). In Kirtley, the Indiana Supreme Court construed Indiana’s personal liberty clause to confer not only freedom from servitude and restraint, but also “the right of everyone to be free in the use of their powers in the pursuit of happiness in such calling as they may choose subject only to the restraints necessary to secure the common welfare.”

Similarly, in Florida, “[t]he right to work, earn a living and acquire and possess property from the fruits of one’s labor is an inalienable right.” Lee v. Delmar (Fla. 1953), 66 So.2d 252, 255. In Lee, the Florida Supreme Court held that a resolution prohibiting a real estate salesperson from operating part-time was invalid as depriving the salesperson of his inalienable right to work and earn a living and as an excess of power granted to the Real Estate Commission. Lee, 66 So.2d at 255. In Town of Milton v. Civil Service Commission (Mass. 1974), 312 N.E.2d 188, 192, citing Truax v. Raich (1915), 239 U.S. 33, 41, 36 S.Ct. 7, 10, 60 L.Ed. 131, 135, the Supreme Court of Massachusetts stated that “[i]t is certainly true that the opportunity to earn a living is a fundamental right in our society.” But the court also clarified that “[i]t is an equally basic axiom that there is no right to public employment.” Milton, 312 N.E.2d at 192 (discussing durational residency requirements).

Likewise, we distinguish the right to a particular job or employment from the right to pursue life’s basic necessities through employment. ‘While the legislature may elect not to confer a property interest in [public] employment, it may not constitutionally authorize the deprivation of such an interest, once conferred, without appropriate procedural safeguards.” Boreen v. Christensen (1994), 267 Mont. 405, 410, 884 P.2d 761, 764 (quoting Cleveland Board of Education v. Loudermill (1985), 470 U.S. 532, 541, 105 S.Ct. 1487, 1493, 84 L.Ed.2d 494, 503). In essence, absent a contract, policy, regulation, or statute providing a specified term of employment, an employee does not have a property interest in a particular job. Boreen, 884 P.2d at 770. The Oregon Supreme Court made this germane distinction in Minielly v. State (Or. 1966), 411 P.2d 69, 73, by stating:

The conclusion to be drawn ... would appear that while a person does not have a constitutional right to be employed by the public, the government is not free to place unconstitutional prerequisites upon the securing of public employment nor does it have the right to ignore the constitution if it desires to terminate such employment.

Accordingly, while Article II, section 3 of Montana’s constitution encompasses the right to the opportunity to pursue employment generally as a necessary incident of the fundamental right to pursue life’s basic necessities, that provision of our constitution does not, without more, grant a right or property interest in any particular job or employment.

Wadsworth makes no claim to the contrary. Wadsworth does not claim a constitutional right to his state job, but instead claims that by pursuing employment in addition to his job with the State, he has the constitutional right to pursue life’s basic necessities, to acquire property, and to be free from the State’s interference with his lawful activities. Wadsworth claims that the State has infringed these fundamental rights, not that it deprived him of a right to a specific job.

The State argues that because cities or counties may restrict employees’ ability to work in outside jobs by placing restrictions on the residency of their employees, DOR may similarly restrict Wadsworth’s ability to pursue employment by placing restrictions on the type of outside employment he may pursue. It is true that cities may place police officers in a separate category and impose residence requirements on the officers because the duties and interests protected by police are of a sufficiently distinct character from those of other governmental employees. Brenckle v. Township of Shaler (Pa. 1971), 281 A.2d 920, 922 (a moonlighting case decided on right to travel grounds). However, cases discussing residency requirements have no application to the instant case because they hinge on the right to travel and do not discuss the right to life’s basic necessities or the right to the opportunity to pursue employment. See Shapiro v. Thompson (1969), 394 U.S. 618, 89 S.Ct. 1322, 22 L.Ed.2d 600; Memorial Hospital v. Maricopa County (1974), 415 U.S. 250, 94 S.Ct. 1076, 39 L.Ed.2d 306; Cole v. Housing Authority of City of Newport (1st Cir. 1970), 435 F.2d 807; Krzewinski v. Kugler (D.N.J. 1972), 338 F.Supp. 492 (compelling state interest existed in requiring police officers to reside in the municipality).

The State also cites a California Court of Appeals case in which an employee challenged a rule limiting the number of hours she could work in outside employment on the basis that the rule constituted an irrebuttable presumption. Baity v. Los Angeles County Civil Service Commission (1980), 162 Cal.Rptr. 812, 813. The courtiaBaity didnot analyze the rule in terms of its infringement upon the opportunity to pursue employment, but, instead, analyzed the rule in terms of an allegedly unlawful irrebuttable presumption. Moreover, the court did not acknowledge that any rights were involved in the opportunity to pursue employment and therefore found the county’s ability to restrict employment to be nearly unfettered.

Having concluded that the opportunity to pursue employment is a fundamental right as a necessary incident to the fundamental right to pursue life’s basic necessities, we must next determine the level of scrutiny to apply to the infringement of that right. In determining what level of scrutiny to apply to legislation or to a rule in question, we first determine what rights are involved. Eastman v. Atlantic Richfield Co. (1989), 237 Mont. 332, 337, 777 P.2d 862, 865. “The extent to which the Court’s scrutiny is heightened depends both on the nature of the interest and the degree to which it is infringed.” Memorial Hospital, 415 U.S. at 254-56, 94 S.Ct. at 1080-81 (holding that a classification unconstitutionally penalized persons who exercised their right to interstate migration); Laurence H. Tribe, American Constitutional Law § 16-33, at 1610 (2d ed. 1987). Thus the nature of the individual interest affected dictates which standard of review to apply. Matter of C.H. (1984), 210 Mont. 184, 198, 683 P.2d 931, 938. The most stringent standard, strict scrutiny, is imposed when the action complained of interferes with the exercise of a fundamental right or discriminates against a suspect class. Gulbrandson v. Carey (1995), 272 Mont. 494, 901 P.2d 573, 579 (citing Eastman, 772 P2d at 865). Strict scrutiny of a statute is required only when the classification impermissibly interferes with the exercise of a fundamental right. Arneson v. State, By Dept. of Admin. (1993), 262 Mont. 269, 272, 864 P.2d 1245, 1247.

Strict scrutiny of a legislative act requires the government to show a compelling state interest for its action. Shapiro, 394 U.S. at 634, 89 S.Ct. at 1331. When the government intrudes upon a fundamental right, any compelling state interest for doing so must be closely tailored to effectuate only that compelling state interest. Pastos, 887 P.2d at 202 (citing Zablocki v. Redhail (1978), 434 U.S. 374, 98 S.Ct. 673, 54 L.Ed.2d 618). In addition to the necessity that the State show a compelling state interest for invasion of a fundamental right, the State, to sustain the validity of such invasion, must also show that the choice of legislative action is the least onerous path that can be taken to achieve the state objective. Pfost v. State (1985), 219 Mont. 206, 216, 713 P.2d 495, 505.

In Robinson, et al. v. Cahill (N.J. 1973), 303 A.2d 273, 282, New Jersey Supreme Court Chief Justice Weintraub notes that it is difficult to define “fundamental right” and that

if a right is somehow found to be ‘fundamental,’ there remains the question as to what State interest is ‘compelling’ and there, too, we find little, if any, light. Mechanical approaches to the delicate problem of judicial intervention under either the equal protection or the due process clauses may only divert a court from the meritorious issue or delay consideration of it. Ultimately, a court must weigh the nature of the restraint or the denial against the apparent public justification, and decide whether the State action is arbitrary. In that process, if the circumstances sensibly so require, the court may call upon the State to demonstrate the existence of a sufficient public need for the restraint or the denial. In the instant case, while DOR’s conflict-of-interest policy or rule

is at issue rather than a statute, we, nevertheless, apply strict scrutiny analysis since the operation of that rule implicates Wadsworth’s fundamental right to the opportunity to pursue employment. The constitutionality of the conflict-of-interest rule itself is not the issue, but rather whether the State has infringed Wadsworth’s fundamental right without providing a compelling interest for doing so.

As we have held, employment is a necessary means to pursue life’s basic necessities, without which the latter fundamental constitutional right could not be enjoyed. As such, the right to the opportunity to pursue employment is itself a fundamental right and is encompassed within the right to pursue life’s basic necessitites as declared under Article II, section 3 of Montana’s constitution. Because the opportunity to work and to make a living is a fundamental right, it is incumbent upon the state to demonstrate a compelling interest before it may constitutionally infringe upon that right. Necessarily, demonstrating a compelling interest entails something more than simply saying it is so.

Based on the record established in the trial court, we conclude that, as a matter of law, the State failed to demonstrate a compelling interest for the conflict-of-interest rule restricting Wadsworth’s ability to pursue employment opportunities and thus pursue life’s basic necessities. Simply because the State alleges a compelling interest, does not obviate the necessity that the State prove the compelling interest by competent evidence.

Here, the State adopted the conflict-of-interest rule for the singular purpose of avoiding the appearance of impropriety of real estate appraisers. The evidence at trial established that there were no complaints about any appearance of impropriety when State appraisers appraised property outside of their DOR employment. Mr. Groepper, the Administrator of the Property Assessment Division, stated that none of the grievants nor anyone else had been or was being accused of any actual wrongdoing. The only semblance of a complaint consisted of a letter that Paul Pistoria wrote DOR stating that Wadsworth handed out his private business card while working for the Department. DOR presented no case in which an appearance of impropriety arose; DOR could not demonstrate that Wadsworth jeopardized the integrity of or detrimentally affected DOR or the appraisal or assessor offices in any way. In fact, no one ever expressed a lack of confidence in the integrity of the Property Tax Division or expressed a belief that outside employment activities undermined public confidence. Even Ellen Feaver, the Director of DOR who rejected the Grievance Committee’s recommendation that the conflict-of-interest rule was unreasonable and sustained the rule’s application, testified that she was aware of no incident of a DOR appraiser compromising the public trust on account of outside employment activities. She also testified that she had not considered the rule’s impact on individual appraisers nor did she consider § 2-15-112(f), MCA, which limits the rulemaking powers of the department heads to “statements concerning only the internal management of the agency and not affecting private rights or procedures available to the public.”

Dennis Burr, the DOR Administrator of the Property Tax Division, issued the conflict-of-interest rule but never enforced it. Nick Lazanas, the Director of the Cascade County Appraiser Office also chose not to enforce the rule; he did not believe in it nor did he see a reason for it. Additionally, the State’s expert witness, Gaylord Aldinger, a member of the International Order of Assessing Officers, admitted that his organization’s code of ethics did not preclude outside employment activities, and that in his state, he was not aware of any abuse of official duties by the activities in question. Moreover, the record is ambivalent as to whether the State considered the relevant constitutional provision before it applied the conflict-of-interest policy.

That is not to say that the State could never demonstrate a compelling interest for the conflict-of-interest rule or for some other rule restricting the outside employment of its employees. In this case, on the record here and as a matter of law, it simply did not.

In this regard we note that Article XIII, section 4 of Montana’s constitution requires the legislature to provide a code of ethics prohibiting conflict between public duty and private interest for, among others, state and local employees. We also note that the legislature has, pursuant to that constitutional mandate, enacted standards of conduct for public officers and employees, including a code of ethics, at Title 2, Chapter 2, MCA. Neither DOR nor Wadsworth raise any issue as to the application of either Article XIII, section 4 or those standards of conduct and code of ethics in this appeal. Notwithstanding, in the interest of completeness, we acknowledge both this constitutional provision and its implementing statutes and point out that there was no allegation made or evidence in this case that Wadsworth’s conduct was at anytime ever in violation of these statutes.

We hold that, because the State did not demonstrate a compelling interest for applying the conflict-of-interest rule at issue here, the State wrongfully terminated Wadsworth’s employment.

In this regard, Wadsworth brought his claim under Montana’s WDFEA, asserting that the conflict-of-interest rule violated public policy because it violated his fundamental right to pursue life’s basic necessities without a compelling state interest for doing so. In 1987, the Montana Legislature enacted the WDFEA establishing three elements of wrongful discharge. See § 39-2-904, MCA. Section 39-2-904, MCA, states that

A discharge is wrongful only if:

(1) it was in retaliation for the employee’s refusal to violate public policy or for reporting a violation of public policy;
(2) the discharge was not for good cause and the employee had completed the employer’s probationary period of employment; or
(3) the employer violated the express provisions of its own written personnel policy.

Moreover, § 39-2-903(7), MCA, defines public policy as “a policy in effect at the time of the discharge concerning the public health, safety, or welfare established by constitutional provision, statute, or administrative rule.”

Wadsworth contends that DOR terminated his employment in retaliation for his refusal to abide by a rule that was in contravention of public policy. Wadsworth asserts that the public policy in effect at the time of his discharge was the policy established by constitutional provision guaranteeing each person the right to pursue life’s basic necessities by earning a living. We agree.

Public policy is often based on constitutional provisions, especially those which on their face, create inalienable or fundamental rights. See Gantt v. Sentry Ins. (Cal. 1992), 824 P.2d 680, 687; see also Foley v. Interactive Data Corp. (Cal. 1988), 765 P.2d 373. For example, in Gantt the Supreme Court of California noted that public policy “must involve a matter that affects society at large rather than a purely personal or proprietary interest of the plaintiff or employer; in addition, the policy must be fundamental, substantial, and well established at the time of discharge.” Gantt, 824 P.2d at 684. In discussing the public policy exception to wrongful discharge, the court further noted that:

A public policy exception carefully tethered to fundamental policies that are delineated in constitutional or statutory provisions strikes the proper balance among interests of employers, employees and the public. The employer is bound, at a minimum, to know the fundamental public policies of the state and nation as expressed in their constitutions and statutes; so limited, the public policy exception presents no impediment to employers that operate within the bounds of law. Employees are protected against employer actions that contravene fundamental state policy. And society’s interests are served through a more stable job market, in which its most important policies are safeguarded.

Gantt, 824 P.2d at 688.

Article II, section 3 of Montana’s constitution explicitly protects the right to pursue life’s basic necessities as an inalienable or fundamental right, which, as stated above, includes the right to the opportunity to pursue employment as a necessary incident. Accordingly, Montana’s public policy in this regard is set forth in Article II, section 3.

Since we have determined that, on the record here, there was no demonstrated compelling interest for the State’s conflict-of-interest rule, it follows that the rule violated the public policy in favor of the right to pursue life’s basic necessities protected under Montana’s constitution. Accordingly, the State’s termination of Wadsworth in retaliation for his refusal to abide by a rule that was in contravention of the constitution violated the WDFEA.

3. Did the District Court err in allowing irrelevant and prejudicial evidence of treatment which Wadsworth claimed he received prior to the termination of his employment?
4. Did the District Court err in allowing irrelevant and prejudicial evidence of treatment which other DOR employees claimed they received from the Department?
5. Did the District Court err in allowing improper opinion, speculation, and legal conclusion testimony?

Because we hold that the State did not provide a compelling interest for its conflict-of-interest rule, and therefore wrongfully terminated Wadsworth in retaliation for his refusal to violate public policy, we need not address issues 3, 4, or 5. In order for this Court to reverse the District Court, the State had to show that the evidence complained of violated its substantial rights. The State was not able to do so because the parties agreed that Wadsworth was terminated for refusing to comply with the conflict-of-interest rule and was not terminated for any reasons pertaining to his treatment on the job prior to his termination. In short, there were no factual disputes as to why Wadsworth was fired. Accordingly, notwithstanding the District Court’s alleged error in admitting irrelevant evidence, such error, if any, was harmless because it did not affect the substantial rights of the State. See Abbey v. City of Billings Police Com’n (1994), 268 Mont. 354, 364, 886 P.2d 922, 928.

Moreover, the State made no showing of how the error may have prejudiced the amount of damages the jury awarded. The State could not have made such a showing because the WDFEA constrains the extent to which damages may be awarded to lost wages, fringe benefits, and the interest thereon, for a period not to exceed four years from the date of discharge. Therefore, we conclude that there was no error that affected the substantial rights of the State.

Affirmed.

CHIEF JUSTICE TURNAGE, JUSTICES GRAY and LEAPHART concur.

JUSTICE TRIEWEILER

specially concurring.

I concur with the majority’s resolution of Issues numbered 1, 3, 4, and 5. I specially concur with the majority’s resolution of Issue 2 because although I agree with the result arrived at in that section of the Court’s opinion, I disagree that the District Court erred by submitting underlying factual issues to the jury.

The majority correctly concludes that the opportunity to pursue employment is one of life’s basic necessities, and therefore, a fundamental right guaranteed by Article II, Section 3, of the Montana Constitution. I also agree that before the State can interfere with that fundamental right, it must establish a compelling state interest for doing so and that whether a particular interest, if proven, is “compelling” is a question of law. However, where the very facts which form the basis for the State’s alleged interest are disputed, the resolution of that dispute involves a question of fact.

For example, in this case, the State alleged that its conflict of interest rule served the interest of avoiding the appearance of impropriety by real estate appraisers. Had that fact been established by competent evidence, the determination of whether that fact established a compelling state interest would have been an issue of law. However Wadsworth, and numerous others who were qualified by training and experience, testified that the conflict of interest rule was unnecessary and bore no relationship to public confidence in real estate appraisers. Therefore, whether there was any relationship between the conflict of interest rule and public confidence raised ah issue of fact which must necessarily be decided by the finder of fact — in this case, the jury. As pointed out by the majority, § 26-1-202, MCA, provides as follows:

If a trial is by jury, all questions of fact other than those mentioned in 26-1-201 must be decided by the jury, and all evidence thereon must be addressed to them, except as otherwise provided by law. If the trial of a question of fact is not by jury, all evidence thereon must be addressed to the trial court, which shall decide such question.

That underlying questions of fact were at issue is evident from the majority’s opinion. In analyzing whether proof was offered of a compelling state interest, the majority opinion repeatedly refers to the evidence at trial. Evidence is considered for the sole purpose of resolving factual issues which are the unique responsibility of juries or the district court, as the case may be.

What the majority has, in effect, held is that in every case involving a constitutional issue with an underlying factual component, this Court is in the best position to resolve the factual issue de novo on appeal. The majority’s position is similar to the position of the majority on the Second Circuit Court of Appeals in United States v. A Motion Picture Film Entitled “I Am Curious-Yellow” (2d Cir. 1968), 404 F.2d 196. In that case, a jury, after being instructed on the constitutional standards for judging obscenity, concluded that the motion picture in question was obscene. The Second Circuit Court of Appeals concluded that:

• [I]n our view obscenity vel non is not an issue of fact with respect to which the jury’s finding has its usual conclusive effect. It is rather an issue of constitutional law that must eventually be decided by the court.

A Motion Picture Film, 404 F.2d at 199.

Based on its own review of the motion picture, the majority of that court concluded that it was not obscene because it did not satisfy the first two parts of the three-part test set forth by the U.S. Supreme Court.

In his dissent from the majority’s disregard for the jury’s fact-finding function, Chief Judge Lumbard made the following remarks, which I believe apply to the majority’s disregard for the jury’s fact-finding function in this case:

My colleagues give no satisfactory explanation why jurors are not as qualified as they to pass upon such questions. The conclusion is inescapable that they really think that the issue of obscenity can be entrusted to juries only if the judges themselves (or, as here, a majority of them) think the matters in question go beyond the limits allowed by law. I had not supposed that only those who wear federal judicial robes are qualified to decide whether a motion picture has any redeeming social value.
But the majority would take away from the jury the power to pass on these not too difficult and complicated questions by saying that obscenity is “an issue of constitutional law” rather than an issue of fact with respect to which the jury’s finding has its usual conclusive effect. To me this simply means that juries are not to be trusted where a majority of the judges disagree with them.
... There is no reason to suspect that judges are in any better position to pass judgment on these matters than are jurors. ...
With due deference to the very considerable intellectual attainments of my colleagues, I submit that when it comes to a question of what goes beyond the permissible in arousing prurient interest in sex, the verdict of a jury of twelve men and women is a far better and more accurate reflection of community standards and social value. The jurors are drawn from all walks of life and their less pretentious positions in the community qualify them to answer the questions put to them by Judge Murphy at least as well as circuit judges in their middle sixties who celebrate in the ivory towers of the judiciary.

A Motion Picture Film, 404 F.2d at 203-04 (Lumbard, J., dissenting) (footnotes omitted).

Chief Judge Lumbard’s dissent was cited at length and adopted by the Supreme Court of Wisconsin in Court v. State (1971), 188 N.W.2d 475, where that court struggled with the proper scope of review of a jury verdict that printed material was obscene.

After noting Chief Judge Lumbard’s dissent, that court held that: We agree with Mr. Chief Judge Lumbard’s dissent and adopt the principle which he espoused. The determination of obscenity is a factual matter to be resolved by a finder of fact following constitutional guidelines, subject to review by an appellant [sic] court which seeks to determine merely whether the evidence underpinning the verdict was sufficient in view of the record as a whole.

Court, 188 N.W.2d at 483.

In Collier v. Civil Service Commission (Tex. Ct. App. 1989), 764 S.W.2d 364, the Texas Court of Appeals was asked to decide whether “nepotism” rules adopted by the Civil Service Commission for the city of Wichita Falls violated the equal protection clause of the Texas Constitution. The nepotism rule provided that no person could be employed by the fire department if a member of that person’s immediate family was already employed by the department. The city contended that the rule was necessary in order to avoid impairment of one firefighter’s judgment when placed in a situation where a member of that person’s family was in peril.

The Texas court held that to decide the constitutional issue raised by the petitioners, several fact issues must first be resolved, including whether the rule advances legitimate government objectives. (A similar rational basis test would be applied by our Court if a fundamental interest was not at issue.) In holding that underlying factual issues must be resolved by the finder of fact before the constitutional issue could be resolved, the Texas court stated as follows:

Deciding the constitutionality of a statute necessarily involves several related fact questions. See Pine, [Speculation and Reality: The Role of Facts in Judicial Protection of Fundamental Rights, 136 U.Pa.L.Rev. 655 (1988)], 666-67. For example, Wichita Falls argues the nepotism rule will prevent a firefighter’s unavoidable impairment of judgment in a situation where a member of his immediate family is involved in a perilous situation. Appellants argue strong emotional bonds exist between firefighters even if they are not related by blood or marriage. These issues are relevant to whether the nepotism rule will advance the governmental objective of improving the safety of the fire department, but this court does not have any special knowledge of emotional ties between firefighters or the dangers found within burning buildings. This question involves social and emotional issues, but it is still a question of fact. Social facts may be developed through expert testimony, “Brandéis briefs” or requests for judicial notice. Pine, supra at 662-63. We are unwilling to base our decision on the unsupported generalizations contained in the briefs.
The trial court did not make any specific findings of fact; therefore, we do not consider the standard of review for findings of fact in a case involving constitutional rights. See generally, Louis, Allocating Adjudicative Decision Making Authority Between the Trial and Appellate Levels: A Unified View of the Scope of Review, The Judge / Jury Question, and Procedural Discretion, 64 N.C.L.Rev. 993 (1986). Appellants should have the opportunity to introduce evidence to support their challenge to the nepotism rule. Appellants’ third point of error is sustained.

Collier, 764 S.W.2d at 366 (citations omitted).

Likewise, in this case, a factual issue was raised by the State’s contention that its conflict of interest rule was necessary in order to retain public confidence in its real estate appraisers. Before the District Court or this Court could decide whether that need constituted a compelling state interest, someone first had to decide whether the allegation was true. Under our statutory system for resolving factual issues, that responsibility belonged to the jury. Therefore, I would conclude that the District Court did not err when it submitted that issue to the jury based on the proper instructions.

I otherwise agree with the majority opinion, including its conclusion that if the District Court did err by submitting issues regarding a compelling state interest to the jury, the error was harmless.

JUSTICE HUNT joins in the foregoing concurring opinion.

JUSTICE ERDMANN

specially concurring.

I join in the majority’s opinion on Issues 1, 3, 4, and 5. I write separately in order to state that my concurrence on Issue 2 is limited to the final result as I cannot agree with the Court’s reasoning and analysis with respect to the nature of the right at issue in this case.

The State failed to present evidence that Wadsworth’s activities as a private real estate appraiser had in fact harmed the DOR or undermined the public’s confidence in the tax appraisal system. I would therefore affirm the District Court’s determination that Wadsworth’s discharge was wrongful based on the fact that the State failed to provide any evidence to support its conflict of interest allegation. The State’s speculation that a conflict of interest existed was not sufficient reason to terminate Wadsworth’s employment and the jury’s verdict was proper.

With that said, however, I do not agree with the majority’s conclusion that Wadsworth has a fundamental right to pursue a particular job. The majority finds a fundamental right in the right to pursue employment in order to pursue life’s basic necessities. The majority, however, fails to construe the meaning of “life’s basic necessities.” In fact, there was no discussion in the majority opinion as to whether Wadsworth’s second job was needed in order for him to obtain these basic necessities. Life’s basic necessities cannot and should not be an infinite term. One person’s necessity can be another person’s luxury. The right to pursue employment is fundamental to the extent that employment provides those necessities.

In the majority’s opinion, Wadsworth has successfully evaded his responsibility of limiting his right to the basic necessities. In fact, Wadsworth failed to produce any evidence as to the basic necessities of which he was deprived. A more plausible right encompassing Wadsworth’s right to pursue employment would therefore be his right to acquire property. The right to acquire, possess, and protect property is also an inalienable right. Mont. Const, art. II, § 3. However, the right to pursue a particular job in order to acquire property is not fundamental.

The majority distinguishes the right to pursue employment generally as a necessary incident of the fundamental right to pursue life’s basic necessities from a right or property interest in any particular job or employment. Absent a specified term of employment, this Court has held that an employee does not have a property interest in a particular job. Boreen v. Christensen (1994), 267 Mont. 405, 420, 884 P.2d 761, 770. Nor should a right to acquire property impart a fundamental right to pursue employment in a particular job. In this respect, I see no significant difference in the right to hold a particular job and the right to pursue a particular job.

In Cecil v. Allied Stores (1973), 162 Mont. 491, 513 P.2d 704, nonretail sellers claimed a legislative act that denied them the right to charge the same finance charges as retail sellers was a violation of their constitutionally protected right to acquire property. Similar to the present case, the plaintiffs in Cecil argued that the act inhibited their ability to make money so that they may acquire property. This Court held that so long as the legislative classifications of the act are constitutional, it does not violate the right to acquire property. Cecil, 513 P.2d at 710.

As for the right to pursue a particular job, this Court has held that the practice of certain professions is not a fundamental right. Petition of Morris (1978), 175 Mont. 456, 458, 575 P.2d 37, 38. In Morris, the petitioner claimed that unification of the bar deprived him of his inalienable right to earn a living. Morris, 575 P.2d at 38. The Court held “[a]n individual has no inalienable right to earn a living practicing law. It is neither a vested right nor a property right. The practice of law is a privilege burdened with conditions.” Morris, 575 P.2d at 38 (citation omitted). The practice of real estate appraising is similar to the practice of law in that both provide a needed service that is regulated by a professional board and is subject to certain educational and ethical standards. See Rule 8.57.413, ARM; Application of Montana Bar Ass’n Pres. (1974), 163 Mont. 523, 525, 518 P.2d 32, 33.

Finally, the inalienable rights set forth in our constitution’s declaration of rights impart corresponding responsibilities. Mont. Const, art. II, § 3. Delegates to the 1971-72 Constitutional Convention expressed concern that people were accepting rights without recognizing that they create obligations. The convention committee concluded that the inclusion of such a statement would not infringe or impair the rights granted in the Declaration of Rights but would only accord a tone of responsibility to their exercise. Mont. Const. Conv. (1971-72) vol V, 1637. In this case, the majority has failed to acknowledge any corresponding responsibility on the part of Wadsworth in exercising his rights.

I would have found that Wadsworth did not have a fundamental right in pursuing a second job as a real estate appraiser. Therefore, the analysis of Wadsworth’s pursuit of that particular employment should not be subject to strict scrutiny but scrutiny of a lesser degree.


author: JUSTICE GRAY

text:
    RICHARD S. LARSON, ENOCH E. RICHWINE, TODD C. DUPUIS, ROBERT L. SHORES, JOHN HERAK, RODNEY L. SMART, ROLAND B. McKinley, WILLIAM DOUGLAS BAROCH, MR. and MRS. MARK GILROY, MARY DELANEY SCHOEPF, VERLIN A. SNOWBERG, SR., L.L.S. BROWNELL, JENNIFER L. McGINNIS, MR. and MRS. GEORGE R. MAHONEY, KATHY J. KORF, MR. and MRS. ROBERT A. PIERCE, PATRICIA ANNE EARLEY, CALVIN BROWN, BERTON N. SHULTZ, HAROLD F. ALEXANDER, MR. and MRS. JAMES W. JONES and THOMAS M. JONES, SONNY BENSON, WILLIAM N. FREER, FRED L. GILLEARD, C. DOUGLAS MORIGEAU, MR. and MRS. RICHARD J. WHEELER, CHARLES S. JENNISON, Petitioners/Applicants and Appellants, v. STATE OF MONTANA, DEPARTMENT OF JUSTICE, GAMBLING CONTROL DIVISION and its ADMINISTRATOR, JANET JESSUP, Respondents and Respondents.
    No. 95-452.
    Submitted on Briefs January 4, 1996.
    Decided February 27, 1996.
    53 St.Rep. 158.
    275 Mont. 314.
    912 P.2d 783.

      For Appellants: Dexter L. Delaney, Brian L. Delaney, Attorneys at Law, Missoula.
    For Respondents: Hon. Joseph P. Mazurek, Attorney General, Clay R. Smith, Ass’t Attorney General, Helena.
   JUSTICE GRAY

delivered the Opinion of the Court.

The appellants in this case (Business Owners) appeal from an order of the Twentieth Judicial District Court, Lake County, denying their petition for a writ of mandamus directing the State of Montana, Department of Justice, Gambling Control Division (State) to issue gambling licenses and permits to them. We affirm.

The issue on appeal is whether the District Court erred in denying the Business Owners’ petition for a writ of mandamus.

The relevant facts in this case are undisputed. The Business Owners operate various businesses located within the exterior boundaries of the Flathead Indian Reservation, which is “Indian country” as defined in 18 U.S.C. § 1151. In the past, the Business Owners have been licensed by the State to operate video gambling machines, which are gambling devices under the Johnson Act, 15 U.S.C. § 1171, and Class III gaming under the Indian Gaming Regulatory Act (IGRA), 25 U.S.C. § 2703.

In 1993, the United States Attorney for the District of Montana issued a press release stating that Class III gaming would no longer be lawful on Indian lands absent a Tribal-State compact properly executed pursuant to 25 U.S.C. § 2710(d). In May of 1994, on the basis of the United States Attorney’s determination regarding Class III gaming, the State notified the Business Owners by letter that it would not process gambling license and permit applications. In the State’s view, the operation of video gambling machines on the reservation would be unlawful under the Johnson Act and IGRA. The Confederated Salish and Kootenai Tribes of the Flathead Indian Reservation and the State still have not executed a compact for Class III gaming.

In September of 1994, the Business Owners filed a petition for a writ of mandamus directing the State to issue the gambling licenses and permits to them as required by §§ 23-5-176(2) and 23-5-612(1), MCA. The District Court issued an alternate writ ordering the State to issue the licenses and permits or to show cause why it had not done so. Thereafter, the parties agreed to vacate the show cause hearing; they subsequently submitted the case for resolution under stipulated facts. The District Court denied the Business Owners’ petition for a writ of mandamus and the Business Owners appeal.

Did the District Court err in denying the Business Owners’ petition for a writ of mandamus?

Section 27-26-102, MCA, sets forth the two requirements which must be met by a party seeking a writ of mandamus. The party must demonstrate both an entitlement to the performance of a clear legal duty and the absence of a speedy and adequate remedy in the ordinary course of law. Section 27-26-102, MCA; Franchi v. County of Jefferson (1995), [274 Mont. 272], 908 P.2d 210, 212. “A negative answer to the first question bars the issuance of the writ, and, irrespective of the answer to that question, an affirmative answer to the second, divests the court of authority to issue it.” State ex rel. Chisholm v. District Court (1986), 224 Mont. 441, 443, 731 P.2d 324, 325 (quoting State ex rel. County of Musselshell v. District Court (1931), 89 Mont. 531, 534, 300 P.2d 235, 236).

The District Court denied the Business Owners’ petition for a writ of mandamus based on its conclusion that the State did not have a clear legal duty to issue the gambling licenses and permits. A district court’s denial of a writ of mandamus calls for a conclusion of law which we review to determine if it is correct. Franchi, 908 P.2d at 212 (citing Phillips v. City of Livingston (1994), 268 Mont. 156, 161, 885 P.2d 528, 531).

The Business Owners argue that they qualified for gambling licenses and permits under the applicable Montana statutes and administrative rules and, therefore, the State was required by the mandatory language of §§ 23-5-176 and 23-5-612, MCA, to issue the licenses and permits. They point out that the State’s refusal to process their applications was based on its interpretation of IGRA, but that nothing in the Montana statutes allows the State to refuse to issue licenses and permits on that basis. They contend that the District Court erred in concluding that the State did not have a clear legal duty to issue the licenses and permits and, on the basis of that conclusion, in denying their petition. The Business Owners also contend that IGRA does apply to them because they are non-Indians.

The State argues that it does not have a clear legal duty to issue gambling licenses and permits to the Business Owners because, absent a Tribal-State compact, Class III gaming on the Flathead Indian Reservation is unlawful under IGRA. The State argues that the Business Owners cannot compel it to issue licenses and permits for an activity unlawful under federal law.

The resolution of this case requires consideration of the interplay between state and federal law regarding gambling. Montana gambling statutes are contained in Title 23, Chapter 5 of the Montana Code Annotated. Section 23-5-176, MCA, provides in relevant part:

(1) A person who the department determines is qualified to receive a license under the provisions of this chapter may, based on information available to, required by, or supplied to the department under department rules, be issued a state gambling license.
(2) Except as provided in subsection (4), the department shall issue a license unless the department can demonstrate that the applicant:
(a) is a person whose prior financial or other activities or criminal record:
(iii) creates a danger of illegal practices, methods, or activities in the conduct of gambling or in the carrying on of the business and financial arrangements incidental to gambling;

(Emphasis added.) Section 23-5-612(1), MCA, provides that “[t]he department, upon payment of the fee provided in subsection (2) and in conformance with rules adopted in this part, shall issue to the operator an annual permit for an approved video gambling machine.” (Emphasis added.)

On a stand-alone basis, these Montana statutes mandate the issuance of licenses and permits so long as the applicant is qualified and pays the appropriate fee, and the State does not establish one of the statutorily-enumerated bases for denial. The State argues that it demonstrated a specific, statutorily-authorized basis for denial of the Business Owners’ applications. Based on its interpretation that IGRA prohibits the operation of video gambling machines on the Flathead Indian Reservation, the State maintains that licensing the Business Owners “creates a danger of illegal ... activities in the conduct of gambling ...” under § 23-5-176(2)(a)(iii), MCA.

The State misreads the statute. As specifically provided in § 23-5-176(2)(a), MCA, an application can be denied under (iii) only where the State demonstrates that the applicant’s “prior financial or other activities or criminal record” creates the danger of the illegal gambling activity. Here, the State’s argument is entirely unrelated to these Business Owners and the State made no showing that anything in any of the Business Owners’ backgrounds created the danger of illegal gambling. Thus, we reject the State’s contention that § 23-5-176(2)(a)(iii), MCA, specifically authorized it to refuse to process the Business Owners’ applications.

Notwithstanding our rejection of the State’s contention, however, it is clear that federal legislation specifically addresses and regulates gambling on Indian reservations. Because the Business Owners seek to conduct gambling operations on the Flathead Indian Reservation, these federal statutes must be considered in conjunction with §§ 23-5-176 and 23-5-612, MCA.

In 1951, Congress enacted the Johnson Act, 15 U.S.C. §§ 1171-1178. In pertinent part, the Johnson Act provides that “[i]t shall be unlawful to manufacture, recondition, repair, sell, transport, possess, or use any gambling device ... in any possession of the United States, within Indian country as defined in section 1151 of title 18 ....” 15 U.S.C. § 1175(a). “Indian country’ is defined, insofar as it is relevant here, as “all land within the limits of any Indian reservation under the jurisdiction of the United States Government ....” 18 U.S.C. § 1151(a).

In 1988, Congress enacted IGRA, 18 U.S.C. §§ 1166-1168 and 25 U.S.C. §§ 2701-2721. IGRA provides specific exceptions to the Johnson Act regarding gaming on Indian reservations. IGRA separates gaming into three classes. See 25 U.S.C. § 2703. Here, the parties stipulated that only Class III gaming is at issue. See 25 U.S.C. § 2703(8). Class III gaming is unlawful on Indian lands, which, under IGRA, 25 U.S.C. § 2703(4)(A), is land within the limits of any Indian reservation, unless three requirements are met, one of which is the existence of a Tribal-State compact. 25 U.S.C. § 2710(d)(1). No Tribal-State compact exists between the State and the Confederated Salish and Kootenai Tribes.

State law which conflicts with the purpose and operation of a federal statute, regulation or policy is preempted by the federal law. See Cabazon Band of Mission Indians v. Wilson (9th Cir. 1994), 37 F.3d 430, 433 (citing Crow Tribe of Indians v. Montana (9th Cir. 1987), 819 F.2d 895, 898, aff’d 484 U.S. 997, 108 S.Ct. 685, 98 L.Ed.2d 638 (1988)). Congress has explicitly stated its policies and purposes in enacting IGRA. See 25 U.S.C. § 2702. One such purpose is

to declare that the establishment of independent Federal regulatory authority for gaming on Indian lands, [and] the establishment of Federal standards for gaming on Indian lands ... are necessary to meet congressional concerns regarding gaming and to protect such gaming as a means of generating tribal revenue.

25 U.S.C. § 2702(3). IGRA establishes a comprehensive regulatory scheme for gaming on Indian lands. See United Keetoowah Band of Cherokee Indians v. State of Oklahoma, ex rel. Moss (10th Cir. 1991), 927 F.2d 1170, 1176 (citations omitted). If IGRA does apply to the Business Owners, then State licensure of Class III gaming under these facts would frustrate the federal policy underlying IGRA by licensing the Business Owners pursuant to Montana statutes to conduct activities prohibited by federal law absent a Tribal-State compact.

The Business Owners concede that an appropriate federal court with jurisdiction has yet to rule on the applicability of IGRA to non-Indians such as themselves and that the issue is outside the scope of this mandamus case. A ruling by such a court in favor of the Business Owners could result in the State having a clear legal duty to issue gambling licenses and permits to the Business Owners. Absent such a ruling, however, and given the apparent conflict between Montana licensing statutes and federal statutes regulating gambling on Indian lands, we conclude that no clear legal duty exists requiring the State to issue gambling licenses and permits to the Business Owners.

Issuance of a writ of mandamus is precluded in this case by the Business Owners’ failure to demonstrate entitlement to the performanee of a clear legal duty. See State ex rel. Chisholm, 731 P.2d at 325. We hold, therefore, that the District Court did not err in denying the Business Owners’ petition for a writ of mandamus.

Affirmed.

JUSTICES NELSON, TRIEWEILER, HUNT and LEAPHART concur.