This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480A.08, subd. 3 (2006).

 

 

STATE OF MINNESOTA

IN COURT OF APPEALS

A06-1092

 

 

Dale Nathan,

Appellant,

 

vs.

 

Mark Ritchie, as Minnesota Secretary of State, et al.,

Respondents.

 

 

Filed May 8, 2007

Affirmed

Toussaint, Chief Judge

 

Ramsey County District Court

File No. C5-05-010879

 

 

Dale C. Nathan, 1230 Eagan Industrial Road, Suite 150, Eagan, MN 55121 (pro se appellant)

 

Lori Swanson, Attorney General, Kenneth E. Raschke, Jr., Nathan James Hartshorn, Assistant Attorneys General, 1800 Bremer Tower, 445 Minnesota Street, St. Paul, MN 55101-2134 (for respondents)

            Considered and decided by Toussaint, Chief Judge; Worke, Judge; and Crippen, Judge.*

U N P U B L I S H E D   O P I N I O N

TOUSSAINT, Chief Judge

Appellant Dale Nathan challenges the district court’s judgment dismissing his taxpayer’s lawsuit seeking a declaratory judgment that respondents Mark Ritchie, as Minnesota Secretary of State, Alberto Quintela, Jr. as Chief Deputy Secretary of State, Kathy Hjelm, as Fiscal & Administrative Services Manager, Minnesota Office of Secretary of State, and the State of Minnesota, acted unlawfully in cancelling a service contract for the state’s voter registration system.  Because appellant does not have standing to bring this lawsuit, we affirm. 

FACTS

            The State of Minnesota, through its then secretary of state, entered into a service contract with Election.com by which Election.com was to maintain the statewide voter registration system.  The contract provided that all services provided by Election.com must be “performed to the State’s satisfaction, as determined at the sole discretion of the State’s Authorized Representative and in accordance with all applicable federal, state, and local laws, ordinances, rules and regulations.”  The state reserved the rights to decline payment for unsatisfactory work and to cancel the contract for any reason.

            The secretary of state’s office notified Election.com that it was not fully satisfied with services rendered after July 2002 and did not pay a $68,000 invoice.  The parties subsequently entered into a letter of agreement cancelling the service contract.   The state agreed to pay $48,129.88 in full satisfaction of its obligations, and Election.com agreed to provide certain information to the state and to refresh the “source code” for the system.  The letter of agreement also stated that the parties “will not give either verbal or written statements to anyone as to the cancellation of this contract other than it was cancelled by reason of the State of Minnesota’s budget cuts.” 

            The legislative auditor’s routine audit of the secretary of state’s office specifically addressed the cancellation of the Election.com contract.[1]  The audit report specifically found that the secretary of state’s office did not follow “appropriate procedures” when it canceled the contract. The report made three “recommendations” for future contract cancellations:  (1) work with appropriate state agencies when cancelling contracts, (2) clearly document that work paid for has been satisfactorily performed, and (3) complete the required approval form when the contract is completed.  

            In the secretary of state’s response to the audit, she explained, among other things, that a federal law, passed after the contract was executed, changed the requirements for the registration system, rendering the old system obsolete.   She noted that the cancellation agreement required the secretary of state’s office to pay only for satisfactory work performed and for receipt of the “source code,” which was critical to becoming compliant with the federal law in time for the upcoming elections. 

            Appellant seeks a declaratory judgment against respondents, alleging that the letter of agreement cancelling the Election.com contract is null, void, and unenforceable; that payments made for unsatisfactory services must be recovered; and that the cancellation agreement included an illegal statement.  Appellant “is a citizen of Minnesota, a registered voter, a resident of Eagan, Minnesota, and a taxpayer” and asserts his claims “on behalf of himself and as a representative of all Minnesota taxpayers.”

            Respondents moved for summary judgment based, in part, on lack of standing.  Appellant filed a motion for discovery and for partial summary judgment.  The district court granted respondents’ motion and dismissed the action for lack of standing.  This appeal followed.

D E C I S I O N

            When documents outside of the pleadings are presented to and not excluded by the district court, the motion shall be treated as one for summary judgment and disposed of as provided for in Rule 56.  Minn. R. Civ. P. 12.03.  On appeal from summary judgment, this court examines the record to determine whether any genuine issues of material fact exist and whether the district court erred in applying the law.  State by Cooper v. French, 460 N.W.2d 2, 4 (Minn. 1990). 

 Appellant argues that he has standing to bring this action as a taxpayer “whose tax burden could be increased by illegal spending.”  Because appellant has not shown that he is the proper party to bring this lawsuit, the district court correctly dismissed the action.

A proper party to bring a lawsuit has a sufficient personal stake in a justiciable controversy.  State by Humphrey v. Philip Morris Inc., 551 N.W.2d 490, 493 (Minn. 1996).  A sufficient stake may exist if the party has suffered an “injury-in-fact” or if the legislature has conferred standing by statute.  Id.; see also Conant v. Robins, Kaplan, Miller & Ciresi, L.L.P., 603 N.W.2d 143, 146 (Minn. App. 1999), review denied (Minn. Dec. 21, 1999).  Absent express statutory authority, taxpayer suits in the public interest are generally dismissed unless the taxpayer can show some injury to the individual bringing the action which is special or different from the injury sustained by the general public.  Conant, 603 N.W.2d at 146.  Taxpayers without a personal or direct injury may have standing to maintain an action to restrain “unlawful disbursements of public money . . . [and] illegal action on the part of public officials.”   McKee v. Likins, 261 N.W.2d 566, 571 (Minn. 1977).  But an agency’s expenditures that are within the agency’s discretion are not unlawful and cannot serve as the basis for a taxpayer action.  Rukavina v. Pawlenty, 684 N.W.2d 525, 531 (Minn. App. 2004), review denied (Minn. Oct. 19, 2004).

Appellant does not meet the requirements for standing to bring this action.  First, he has not shown a direct injury distinct from the public’s injury.  Second, he has not identified express statutory authority to bring this action.  In contrast, the attorney general is vested with authority to prosecute if the secretary of state’s office violated a criminal statute.[2]  See Minn. Stat. § 16C.05, subd. 6 (2004) (authorizing attorney general to recover illegal payments made by agency).    Third, he has not shown that respondents, by the letter of agreement to cancel the original service contract, unlawfully disbursed public money or acted illegally.  Neither appellant nor the legislative auditor report identifies “illegal” action.  Cf. McKee, 261 N.W.2d at 571 (alleging violation of notice provisions in rulemaking); see also Arens v. Will of Rogers, 240 Minn. 386, 392, 61 N.W.2d 508, 514 (1953) (alleging unconstitutional establishment of municipal liquor store pursuant to statute).  Moreover, appellant does not challenge the legality of the original contract, which gave the secretary of state’s office sole discretion and authority to cancel.    Appellant’s mere disagreement with that office’s cancellation of the contract is insufficient to confer standing. 

Affirmed.