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Perdue, Inc. v. Rounds

May 5, 2010

PERDUE, INC., A SOUTH DAKOTA CORPORATION; RP SOUTH DAKOTA REAL ESTATE LIMITED PARTNERSHIP, A SOUTH DAKOTA CORPORATION; DONALD PERDUE; AND RICHARD PERDUE, PLAINTIFFS AND APPELLANTS,
v.
M. MICHAEL ROUNDS, GOVERNOR OF THE STATE OF SOUTH DAKOTA; TIM REISCH, SECRETARY OF THE SOUTH DAKOTA DEPARTMENT OF CORRECTIONS; DON A. TEMPLETON, EXECUTIVE SECRETARY OF THE SOUTH DAKOTA BUILDING AUTHORITY; AND AMES & LAMPY, LLC, A SOUTH DAKOTA LIMITED LIABILITY COMPANY, DEFENDANTS AND APPELLEES.



APPEAL FROM THE CIRCUIT COURT OF THE SEVENTH JUDICIAL CIRCUIT PENNINGTON COUNTY, SOUTH DAKOTA, HONORABLE A. PETER FULLER Judge.

The opinion of the court was delivered by: Konenkamp, Justice

ARGUED MARCH 22, 2010

[¶1.] House Bill 1271 authorized the South Dakota Department of Corrections (DOC) to acquire land and buildings for a combined minimum security and parole facility in Rapid City. Section 8 of the bill stated that "prior to purchasing any property with the proceeds of the revenue bonds described in section 1," the DOC "shall conduct public meetings to solicit input from and share information with citizens, business owners, and school administrators located within two miles of the property to be purchased." In this declaratory judgment action, plaintiffs asked the circuit court to declare invalid a purchase agreement executed by the DOC before it held the required public meetings. The circuit court ruled that the execution of the purchase agreement was not a purchase as contemplated in the bill. Plaintiffs appeal, and we affirm because we conclude that the enactment was not violated.

Background

[¶2.] In 2003, the Legislature passed House Bill 1280 allowing the DOC to acquire a 200-bed facility in the Black Hills for a minimum-security prison. In 2004, the DOC leased a building at 2317 Creek Drive in Rapid City, South Dakota. This facility was considered temporary while the DOC was considering prospects for a permanent site. One such prospect, near the temporary site, was proposed in House Bill 1060. The public objected, and the Legislature removed the site from consideration by amending the bill to allow the purchase of land near the Rapid City landfill. The landfill site was eventually abandoned by the DOC, and the search for a permanent site continued.

[¶3.] In early 2009, the DOC selected a building on Elk Vale Road in Rapid City. It sought legislative approval through House Bill 1271 (HB 1271). DOC Secretary Tim Reisch signed an agreement to purchase the property. But HB 1271 met public opposition and was amended to remove the Elk Vale Road property from consideration. The bill was also amended to include section 8:

Prior to purchasing any property with the proceeds of the revenue bonds described in section 1, the secretary of the Department of Corrections shall conduct public meetings to solicit input from and share information with citizens, business owners, and school administrators located within two miles of the property to be purchased.

HB 1271 passed in the House on February 24, 2009, in the Senate on March 10, 2009, and Governor M. Michael Rounds signed it into law on March 12, 2009.

[¶4.] After the Elk Vale Road site was rejected, but before passage of HB 1271, DOC Secretary Reisch located another prospective property. It was owned by Ames & Lampy, LLC, and was near the temporary prison. On March 4, Secretary Reisch executed a purchase agreement with Ames & Lampy. The purchase agreement was conditioned on, among other things, HB 1271 passing. The agreement set the closing date for July 15, 2009.

[¶5.] After executing the purchase agreement, Secretary Reisch conducted a public meeting on April 29, 2009, to solicit input from and share information with nearby citizens, business owners, and school administrators in accord with the requirements of section 8 in HB 1271. A second meeting for the same purposes was held on May 18, 2009. One of the plaintiffs, Perdue, Inc., a South Dakota corporation with a furniture manufacturing business just south of the Ames & Lampy site, objected to the location selected. Perdue's owners, Donald and Richard Perdue, attended the public meetings and expressed their opposition. They were concerned that the location of the prison would destroy the protections attendant to a heavy industrial zone. They also expressed concern that work release inmates walking to and from the prison would be negatively affected by the heavy semi-truck traffic, as well as by the noise, dust, and odors. In light of these concerns, they urged the DOC to seek an alternative site. Although Secretary Reisch proposed resolutions for many of the concerns expressed, he stated that no alternative sites would be considered because a purchase agreement had already been executed.

[¶6.] On July 1, 2009, plaintiffs brought suit against the State and its agencies for injunctive and declaratory relief.*fn1 The complaint sought a declaration that the DOC violated HB 1271 when it executed the purchase agreement before holding the required public meetings. According to plaintiffs, the execution of the purchase agreement was an act of "purchasing" under HB 1271, and the meetings were to be held "[p]rior to purchasing any property[.]" The DOC responded that the purchase agreement was only an agreement to purchase at a future date, and therefore, HB 1271 was not violated.

[¶7.] Following a bench trial, the circuit court issued oral findings of fact and conclusions of law. Even though Secretary Reisch had declined to consider alternative sites, the court found that no act of "purchasing" occurred simply because a purchase agreement was executed. Plaintiffs appeal asserting that the court erred when it concluded that HB 1271 was not violated and that it abused its discretion when it refused admission of certain evidence.*fn2

Analysis and Decision

[ΒΆ8.] Resolution of this case hinges on the meaning of the clause "[p]rior to purchasing any property with the proceeds of the revenue bonds described in section 1, the secretary of the Department of Corrections shall conduct public meetings to solicit input from and share information with [people and entities] located within two miles of the property to be purchased." HB 1271, section 8. Nothing in this bill defines what is intended by the term "purchasing." Nor does this enactment specify any penalty for failure to hold the prescribed meetings. Plaintiffs maintain that the Legislature intended for the public meetings to be held before the execution of a purchase agreement based on the fact the Legislature amended HB 1271 after the public vehemently opposed the DOC's selection of the Elk Vale Road site. The resulting amendment, plaintiffs contend, was "intended to provide members of the public the opportunity to provide meaningful input prior to the decision to purchase property for the prison site." The State responds that no purchase had occurred at ...


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