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Hale v. State

March 24, 2010

ROBERT HALE, PLAINTIFF,
v.
STATE OF NORTH DAKOTA, BY AND THROUGH THE NORTH DAKOTA DEPARTMENT OF COMMERCE; SHANE GOETTLE, DIRECTOR, IN HIS OFFICIAL CAPACITY AS DIRECTOR OF THE DEPARTMENT OF COMMERCE; THE MINOT AREA DEVELOPMENT CORPORATION; AND THE CITY OF MINOT, DEFENDANTS.



The opinion of the court was delivered by: Daniel L. Hovland, Chief Judge United States District Court

ORDER FOR REMAND

Before the Court are three motions to dismiss and a motion to amend the complaint. See Docket Nos. 2, 5, 20 and 29. Defendant City of Minot filed a "Motion to Dismiss or in the Alternative for a More Definite Statement" on September 15, 2009. See Docket No. 2. Defendant Minot Area Development Corporation (MADC) filed a "Motion to Dismiss" on October 1, 2009. See Docket No. 5. Defendant State of North Dakota/Shane Goettle (State) filed a Motion to Dismiss or in the Alternative for a More Definite Statement" on November 12, 2009. See Docket No. 20. Plaintiff Robert Hale (Hale) has responded to all the motions. See Docket Nos. 11, 19, and 28. All three Defendants have also filed reply briefs. See Docket Nos. 24, 26, and 27. Hale has requested a hearing on the motions. See Docket No. 12.

Hale filed a motion to amend the complaint on December 14, 2009. See Docket No. 29. The City of Minot filed a response in opposition to the motion on December 23, 2009. See Docket No. 32. MADC filed a response in opposition on December 24, 2009. See Docket No. 33. The State has not responded to the motion. For the reasons set forth below, the matter is remanded to the Burleigh County District Court.

I. BACKGROUND

The state court action was commenced on or about August 24, 2009. This case was removed to federal court on September 11, 2009, by the City of Minot. See Docket No. 1. The basis for removal was federal question jurisdiction. 28 U.S.C. § 1331. Hale is a North Dakota resident and taxpayer. Defendant Shane Goettle is the Director of the North Dakota Commerce Department. The City of Minot is a political subdivision of the State of North Dakota. The Minot Area Development Corporation is a North Dakota non-profit corporation. Diversity jurisdiction is not present.

The action is one for declaratory judgment as provided by Section 32--23-01 of the North Dakota Century Code. The original complaint contains essentially one claim, the main thrust of which is that the Defendants have engaged in economic development activities including direct expenditures, loan guarantees and grants, in violation of Article X, Section 18 of the North Dakota Constitution.

Article X, Section 18 of the North Dakota Constitution provides as follows: The state, any county or city may make internal improvements and may engage in any industry, enterprise or business, not prohibited by article XX of the constitution, but neither the state nor any political subdivision thereof shall otherwise loan or give its credit or make donations to or in aid of any individual, association or corporation except for reasonable support of the poor, nor subscribe to or become the owner of capital stock in any association or corporation.

The only mention of federal law in the body of the complaint is found in paragraph 14 which reads as follows:

Under the 14th Amendment of the United States Constitution's due process and equal protection clauses--and similar provisions contained in Article I, Section 16 of the North Dakota Constitution--a state or political subdivision may expend public funds only for public purposes, and only where that public purpose is met. See Docket No. 1-1

The prayer for relief also makes mention of federal law. It states as follows: WHEREFORE, Robert Hale requests that the district court

1. declare that Article X section 18 of the North Dakota Constitution prohibits the direct and indirect disbursement of public funds, grants, loans guarantees, and the giving of credit to private persons, associations, and corporations for reasons other than the support of the poor as required under Article X section 18 of the North Dakota Constitution, and that under the 14th Amendment of the United States Constitution's due process and equal protection clauses -- and the similar provisions contained in Article I, Section 16 of the North Dakota Constitution -- a state or political subdivision may expend public funds only for public purposes, and only where that public purpose is met, and

2. declare that such prohibition applies to the State of North Dakota, the North Dakota Department of Commerce, Shane Goettle, Director, in his official capacity as Director of the Department of Commerce; the Minot Area Development Corporation; and the City of Minot.

See Docket No. 1-1. ...


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