Lippold v. Meade Cty. Bd. of Comm'rs ( 2018 )

#27976, #27993-r-JMK
2018 S.D. 7
IN THE SUPREME COURT
OF THE
STATE OF SOUTH DAKOTA
****
GARY LIPPOLD and JANE MURPHY,
and THE CITY OF STURGIS, a
South Dakota Municipal Corporation, Appellees,
v.
MEADE COUNTY BOARD OF
COMMISSIONERS, ALAN AKER,
ROBERT BERTOLOTTO, ROBERT
HEIDGERKEN, GALEN NEIDERWERDER,
and LINDA RAUSCH, Appellants,
and
BUFFALO CHIP CAMPGROUND, LLC, Intervenor and Appellant.
****
APPEAL FROM THE CIRCUIT COURT OF
THE FOURTH JUDICIAL CIRCUIT
MEADE COUNTY, SOUTH DAKOTA
****
THE HONORABLE JEROME A. ECKRICH, III
Retired Judge
****
MARK F. MARSHALL of
Bangs, McCullen, Butler,
Foye & Simmons, LLP
Rapid City, South Dakota Attorneys for appellees Gary
Lippold and Jane Murphy.
GREGORY J. BARNIER
Sturgis City Attorney
Sturgis, South Dakota Attorney for appellee City of
Sturgis.
****
ARGUED ON APRIL 25, 2017
OPINION FILED 01/24/18
JACK H. HIEB
ZACHARY W. PETERSON of
Richardson, Wyly, Wise,
Sauck & Hieb, LLP
Aberdeen, South Dakota Attorneys for appellants Meade
County Board of
Commissioners, Alan Aker,
Robert Bertolotto, Robert
Heidgerken, Galen
Neiderwerder, & Linda Rausch.
KENT R. HAGG
JOHN STANTON DORSEY of
Whiting, Hagg, Hagg,
Dorsey & Hagg, LLP
Rapid City, South Dakota Attorneys for appellant Buffalo
Chip Campground, LLC.
THOMAS H. FRIEBERG
Frieberg, Nelson & Ask, LLP
Beresford, South Dakota Attorneys for amicus South
Dakota Municipal League.
KERN, Justice
[¶1.] The City of Sturgis, Gary Lippold, and Jane Murphy appealed the
order of the Meade County Board of County Commissioners approving incorporation
of the proposed municipality of Buffalo Chip City, South Dakota, and setting an
election for voters to decide whether to assent to incorporation. The circuit court
denied a request to stay the election. After the election, the court heard the appeal
pursuant to SDCL 7-8-27 and issued a judgment declaring that the Board’s order
was invalid, that the election was a nullity, and that consequently, Buffalo Chip
City was void. The Board and Buffalo Chip Campground, LLC (Campground), an
intervenor, appeal the circuit court’s judgment. We reverse the circuit court and
vacate its judgment.
Facts and Procedural History
[¶2.] This case began with an attempt by area residents affiliated with the
Campground to incorporate a new city in western South Dakota near the city of
Sturgis, home of the famous Sturgis Motorcycle Rally. 1 This event draws hundreds
of thousands of motorcycle enthusiasts to Sturgis each year and usually occurs
during the first full week of August. On February 11, 2015, twenty-six Meade
County residents submitted a petition for the municipal incorporation of Buffalo
Chip City to the Board. They withdrew the petition, however, when they discovered
the boundary for the proposed city was impermissibly close to Sturgis. SDCL 9-3-
1.1 requires the boundary for a proposed city to be no closer than three miles from
the perimeter of any existing city.
1. Both Sturgis and Buffalo Chip City are located within Meade County.
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[¶3.] On February 20, 2015, seventeen Meade County residents submitted a
new petition for the municipal incorporation of Buffalo Chip City to the Board. The
new proposed boundary for Buffalo Chip City was more than three miles away from
Sturgis. The petitioners also filed a survey and map of the proposed city, which
were verified by an affidavit of the surveyor. Additionally, petitioners filed a census
for organization of the new city listing landowners and voters within the proposed
territory. The February 20 petition, however, contained a discrepancy between the
written legal description of the proposed boundary and the official map depicting
the proposed boundary.
[¶4.] A few hours after the February 20 petition was filed, the Sturgis City
Council passed a resolution to annex the Sturgis Municipal Airport, invoking an
emergency provision under SDCL 9-19-13 that allowed the resolution to take effect
immediately. The council based its use of the emergency provision on the need to
preserve the health and welfare of its citizens. On February 23, 2015, Sturgis filed
the airport annexation resolution with the Board. However, the Board considered
the annexation invalid, concluding that use of the emergency provision was
improper and that the filing lacked an accurate map of the annexed territory.
Further, the Board determined that the petitions to incorporate Buffalo Chip City
had priority because they were filed first. No party, however, has challenged the
validity of the annexation in a court of law.
[¶5.] On February 26, 2015, seventeen Meade County residents filed two
documents with the Board: an amended version of the February 20 petition and a
“new” petition for incorporation of Buffalo Chip City. The petitioners corrected the
discrepancy between the description and the map in both petitions. On February
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27, 2015, the Board held a public hearing and spent several hours listening to
testimony and discussing the petitions. Concluding the petitioners had satisfied the
requirements of SDCL chapter 9-3, the Board voted 3–2 to grant the amended
petition. Specifically, the Board found that the proposed area of incorporation had
more than thirty 2 voters as required by SDCL 9-3-1 and that more than a quarter of
the voters signed the amended petition in satisfaction of SDCL 9-3-5. Pursuant to
SDCL 9-3-6, the Board ordered the incorporation of Buffalo Chip City and scheduled
an election on May 7, 2015, for voters to decide whether to assent to incorporation.
Petitioners withdrew the “new” petition in light of the fact that the Board granted
the amended petition.
[¶6.] On March 27, 2015, Lippold, Murphy, and several other Meade County
residents asked the Meade County State’s Attorney to appeal the Board’s decision
ordering the incorporation of Buffalo Chip City and setting an election on the
matter. The Meade County State’s Attorney declined to appeal.
[¶7.] On March 31, 2015, Lippold and Murphy appealed the Board’s order to
the circuit court as persons aggrieved by the Board’s decision under SDCL 7-8-27.
Sturgis also appealed the decision. On April 20, 2015, the Campground moved to
intervene. 3 Shortly thereafter, the circuit court consolidated the cases.
[¶8.] On April 29, 2015, Sturgis filed a motion to stay the election and
requested a hearing before the circuit court. On May 1, 2015, the circuit court held
a teleconference with Sturgis’s attorney and counsel for the Board. The circuit court
2. The Legislature amended SDCL 9-3-1 in 2016, increasing the requirement
from thirty voters to forty-five. 2016 Sess. Laws ch. 48, § 1.
3. All parties stipulated to the intervention, and on June 10, 2015, the circuit
court granted the Campground’s motion to intervene.
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denied the motion for a stay, believing it could afford complete relief to Sturgis even
after the election and formal incorporation of Buffalo Chip City if the Board’s
decision were later reversed. Sturgis did not cite SDCL 9-3-20 in its motion to stay
the election. SDCL 9-3-20 provides that “[t]he regularity of the organization of any
acting municipality shall be inquired into only in an action or proceeding instituted
by or on behalf of the state.”
[¶9.] On May 7, 2015, the election occurred as scheduled, and a majority of
the voters chose to incorporate Buffalo Chip City. On May 13, the Board declared
Buffalo Chip City formally incorporated pursuant to SDCL 9-3-12. On May 20, the
Board filed Buffalo Chip City’s Articles of Municipal Incorporation with the South
Dakota Secretary of State.
[¶10.] On January 11, 2016, the South Dakota Municipal League moved to
intervene in the suit. On March 4, 2016, the circuit court denied the motion but
permitted the Municipal League to file an amicus brief. 4
[¶11.] The Campground moved to dismiss the appeal for a lack of subject-
matter jurisdiction, arguing that the Board’s order was not an appealable decision
and that Sturgis, Lippold, and Murphy lacked standing because they were not
persons aggrieved per SDCL 7-8-27. Additionally, the Campground argued they
lacked standing because SDCL 9-3-20 provides that only the State of South Dakota
or those acting on its behalf may challenge the regularity of the organization of a
municipality once it is incorporated. On March 28, 2016, the circuit court denied
the motion.
4. The Municipal League also filed an amicus brief with this Court in the
current appeal.
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[¶12.] Sturgis, Lippold, and Murphy next sought summary judgment on the
grounds that the petitioners failed to comply with the requirements of SDCL
chapter 9-3. They alleged that none of the residents who signed the petition and
none of the voters on the filed census who claimed to be residents actually lived
within the boundaries of the proposed city. In response, the Board moved for
partial summary judgment, arguing it had no duty to investigate the residency of
the individual voters who signed the petitions. The circuit court denied both
motions.
[¶13.] On April 6, 2016, James Walczak, Buffalo Chip City’s finance officer,
filed an affidavit on behalf of Buffalo Chip City seeking a writ of prohibition from
this Court. Buffalo Chip City petitioned this Court to prevent the circuit court
“from continuing to assert jurisdiction over the subject matter of the action,”
contending that SDCL 9-3-20 permits only the State or parties on the State’s behalf
to challenge the regularity of the organization of an acting municipality. On April
12, 2016, this Court issued an order denying the application for writ of prohibition.
[¶14.] On May 11, 2016, the circuit court held a one-day bench trial. Lippold
and Walczak testified in addition to Kirk Chaffee, the Meade County Director of
Planning, and Fay Bueno, a finance officer for Sturgis. On May 20, the court issued
a written opinion, and on August 24, the court issued detailed findings of fact,
conclusions of law, and a judgment reversing the Board’s February 27, 2015 order
incorporating Buffalo Chip City and scheduling an election.
[¶15.] In reversing the Board’s decision, the court found serious deficiencies
in the filings as well as errors in the Board’s procedural process. The court found
the “lots” listed as residences on the incorporation documents were mere patches of
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dirt, which were unoccupied except during the Sturgis Motorcycle Rally. Further,
the court found the amended petition and census for incorporating the proposed
Buffalo Chip City was “rife with false information.” The court concluded: (1) that
the amended petition was not properly filed with the Meade County Auditor; (2)
that the area to be incorporated “contained less than one hundred (100) legal
residents and contained less than thirty (30) legally registered voters” as required
by SDCL 9-3-1; (3) that the amended petition was signed by less than a quarter of
the qualified voters as required by SDCL 9-3-5; (4) that petitioners provided legally
inadequate notice of the amended petitions for the municipal incorporation of
Buffalo Chip City, South Dakota, and supporting documents before the February
27, 2015 meeting date; (5) that the Board did not provide adequate legal notice of its
intent to consider the amended petition for municipal incorporation at its special
meeting on February 27, 2015; and (6) that the amended petition and census were
inaccurate, contained false information, and failed to comply with the requirements
of SDCL chapter 9-3. As part of the August 24, 2016 judgment, the circuit court
declared the Board’s February 27, 2015 decision a nullity and ordered that “all
actions o[f] any kind or character undertaken by the Town of Buffalo Chip, SD are
void ab initio.”
[¶16.] The Board and the Campground (Appellants) appealed the circuit
court’s judgment, raising multiple issues for review. Additionally, Sturgis, Lippold,
and Murphy (Appellees) raised two issues by notice of review. However, we need
only address whether the court possessed subject-matter jurisdiction because that
issue is dispositive of the case.
Analysis and Decision
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[¶17.] “Subject matter jurisdiction is the power of a court to act such that
without subject matter jurisdiction any resulting judgment or order is void.” Cable
v. Union Cty. Bd. of Cty. Comm’rs, 2009 S.D. 59, ¶ 20, 769 N.W.2d 817, 825.
“Subject matter jurisdiction is conferred solely by constitutional or statutory
provisions.” Lake Hendricks Improvement Ass’n v. Brookings Cty. Planning &
Zoning Comm’n, 2016 S.D. 48, ¶ 15, 882 N.W.2d 307, 312. “Furthermore, subject
matter jurisdiction can neither be conferred on a court, nor denied to a court by the
acts of the parties or the procedures they employ.” Cable, 2009 S.D. 59, ¶ 20, 769
N.W.2d at 825. “The test for determining jurisdiction is ordinarily the nature of the
case, as made by the complaint, and the relief sought.” State v. Phipps, 406 N.W.2d
146, 148 (S.D. 1987).
[¶18.] Relevant to the existence of subject-matter jurisdiction is the doctrine
of standing. A litigant must have standing in order to bring a claim in court. Cable,
2009 S.D. 59, ¶ 21, 769 N.W.2d at 825-26. Although standing is distinct from
subject-matter jurisdiction, a circuit court may not exercise its subject-matter
jurisdiction unless the parties have standing. See Lake Hendricks Improvement
Ass’n, 2016 S.D. 48, ¶ 19, 882 N.W.2d at 313.
[¶19.] SDCL 9-3-20 is broadly written and provides that “[t]he regularity of
the organization of any acting municipality shall be inquired into only in an action
or proceeding instituted by or on behalf of the [S]tate.” (Emphasis added.)
Appellees assert that SDCL 9-3-20 is merely a personal defense for a municipality
in a lawsuit. However, they cite no authority supporting this proposition, and the
text of the statute does not conform to such a narrow reading. Rather, SDCL 9-3-20
bars standing to all parties other than the State or persons acting on the State’s
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behalf in any action or proceeding inquiring into the regularity of the organization
of any acting municipality.
[¶20.] In their notice of appeal filed with the circuit court, Appellees directly
challenged the legality of the Board’s decision to order incorporation of Buffalo Chip
City. Their proceeding was not “instituted by or on behalf of the state,” as the State
has taken no role in this litigation. Once Buffalo Chip City became an acting
municipality—after voters assented to the Board’s incorporation order—SDCL 9-3-
20 deprived Appellees of standing, and the circuit court lost jurisdiction to hear the
appeal.
[¶21.] This conclusion is supported by common-law precepts regarding de
facto corporations, by our precedent, and by precedent from other jurisdictions. It is
well established that
[a]n inquiry into the legal existence of a municipality is in
general reserved to the state in a proceeding by quo warranto or
other direct proceeding. With few exceptions, a private person
cannot ordinarily, either directly or indirectly, usurp this
function of government. Private individuals, as taxpayers or
otherwise, cannot maintain an action challenging the legality of
a municipal corporation nor can they collaterally attack its
existence where it is at least a de facto corporation.
1 Eugene McQuillin, The Law of Municipal Corporations § 3:107 (3d ed.), Westlaw
(database updated July 2017) (emphasis added). De facto means “[a]ctual; existing
in fact; having effect even though not formally or legally recognized.” Black’s Law
Dictionary (10th ed. 2014). A de facto corporation is “one so defectively created as
not to be a de jure corporation, but nevertheless the result of a bona [fide] attempt
to incorporate under existing statutory authority, coupled with the exercise of
corporate powers, and recognized by the courts as such on the ground of public
policy in all proceedings except a direct attack by the state questioning its corporate
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existence.” 1 McQuillin, supra, § 3.103. A de jure corporation stands in contrast to
a de facto corporation and is “[a] corporation formed in accordance with all
applicable laws and recognized as a corporation for liability purposes.” Black’s Law
Dictionary (10th ed. 2014).
[¶22.] We acknowledged the distinction between de facto and de jure
organizations and the general inability of the public to challenge the existence of a
de facto organization in Merchants’ National Bank v. McKinney, 2 S.D. 106, 48 N.W.
841 (1891). In McKinney, we addressed whether certain warrants issued by
Douglas County and sold to individuals were valid, which required “us to determine
the validity of the organization of said Douglas [C]ounty.” Id. at 112, 48 N.W. at
842. Douglas County was “unorganized until the spring of 1881, when a petition
purporting to be signed by the voters of said Douglas [C]ounty” was presented to the
governor of the Dakota Territory. Id. at 113, 48 N.W. at 842. The petition failed to
comply with the requirements for county incorporation, but “[t]he governor, without
any knowledge . . . that said petition was not what it purported to be” appointed
several county commissioners. Id. Douglas County became an acting but “illegal
organization” that “fraudulently issued” warrants, which were eventually sold to
the aggrieved plaintiffs. Id. at 114, 48 N.W. at 843.
[¶23.] The territorial code at the time, Chapter 21, Code 1877, governed
county organization and stated in relevant part:
Section 1. Whenever the voters of any unorganized county in
this territory shall be equal to fifty or upwards, and they shall
desire to have said county organized, they may petition the
governor, setting forth that they have the requisite number of
voters to form a county organization, and request him to appoint
the officers specified in the next section of this act.
Section 2. Whenever the voters of any unorganized county in
the territory shall petition the governor, as provided in the
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preceding section, and the said governor shall be satisfied that
such county has fifty legal voters, it shall be the duty of the
governor, and he is hereby authorized, to appoint three persons,
residents thereof, county commissioners for such county[.]
(Emphasis added.) Under the statute and the governor’s action, Douglas County
became a “de facto organization.” McKinney, 2 S.D. at 118, 48 N.W. at 844. We
explained why Douglas County, as a de facto organization, could not be collaterally
attacked:
The legislature evidently intended to vest in the executive
authority to organize new counties, and, to prevent questions
involving the legality of such organizations being raised in a
collateral proceeding, it intended to make his decision so far
conclusive as to make such an organization at least a de facto
organization. It cannot be presumed that the legislature
intended to leave so important a matter as the organization of a
new county, as respects the public and third persons, to be
determined by the courts, years perhaps after the organization of
such county, and when important rights have been acquired
under such organization. Can the public be expected to re-
examine the proceedings of the governor, ascertain whether or
not the signatures to the petition are genuine, take a census of
the county, and ascertain, at its peril, whether or not there
actually existed the required number of voters in the county to
authorize the governor to organize it, before it can transact
business with the county officers of such county? Should the
public be required to look further than to see that a county
organization actually exists, with officers performing the duties
usually performed by county officers of a county? We think not.
Id. at 116-17, 48 N.W. at 844 (emphasis added). Accordingly, we concluded that the
Douglas County Commissioners “constituted a de facto board” and that the
warrants they issued were “prima facie valid and binding upon the county.” Id. at
846.
[¶24.] While we decided McKinney based on the common law, SDCL 9-3-20 is
a statute enacted by the Legislature. “In applying legislative enactments, we must
accept them as written. The legislative intent is determined from what the
legislature said, rather than from what we or others think it should have said.” In
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re Petition of Famous Brands, Inc., 347 N.W.2d 882, 885 (S.D. 1984). SDCL 9-3-20
only permits the State or a person acting on the State’s behalf to inquire into the
regularity of the organization of any acting municipality, and we will adhere to the
Legislature’s command.
[¶25.] Further, the facts and legal issues in McKinney are substantively
similar to the Buffalo Chip City conundrum. The Legislature delegated the
authority to order the incorporation of proposed municipalities to the Board.
Petitioners sought to incorporate Buffalo Chip City. The Board found the
petitioners satisfied the statutory requirements, and the Board ordered
incorporation and set an election for voters to assent to or reject incorporation. The
voters assented and Buffalo Chip City became an acting municipality. Because it
was at least a de facto corporation, its status and actions were “good as to the public
and third persons.” McKinney, 2 S.D. at 115, 48 N.W.2d at 843. If the circuit court
had stayed the election, Buffalo Chip City would not have become an acting
municipality before the court decided the case. But Buffalo Chip City became and
still is an acting municipality. The evidence established at trial reveals Buffalo
Chip City is governed by an acting board of sworn trustees and is engaging in acts
of a municipality, including taking out loans and obtaining licenses and sales-tax
exemptions. It is at the very least a de facto corporation, and Appellees are barred
from seeking relief under both McKinney 5 and SDCL 9-3-20.
5. We have since affirmed McKinney in the context of de facto officers. State v.
Escalante, 458 N.W.2d 787 (S.D. 1990); State v. Smejkal, 395 N.W.2d 588
(S.D. 1986).
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[¶26.] Additionally, many courts have reached the same conclusion that the
validity of acting municipalities may only be challenged by the state. See, e.g.,
Tulare Irrigation Dist. v. Shepard, 185 U.S. 1, 14, 22 S. Ct. 531, 536, 46 L. Ed. 773
(1902); Nat’l Life Ins. Co. of Montpelier v. Bd. of Educ. of City of Huron, 62 F. 778,
787 (8th Cir. 1894); Jefferson v. State, 527 P.2d 37, 41 (Alaska 1974); Stroiney v.
Crescent Lake Tax Dist., 533 A.2d 208, 210 (Conn. 1987); Bishop v. Shawnee &
Mission Twps. Turkey Creek Main Sewer Dist. No. 1, Johnson Cty., 336 P.2d 815,
818 (Kan. 1959); State v. Bailey, 118 N.W. 676, 677-78 (Minn. 1908). Here, it is
undisputed that Buffalo Chip City is an acting municipality and that Sturgis,
Lippold, and Murphy are not appealing on behalf of the State of South Dakota.
Because the appeal from the County’s decision inquired into the regularity of the
organization of Buffalo Chip City, SDCL 9-3-20 deprived Appellees of standing and
thus the circuit court of subject-matter jurisdiction.
[¶27.] Citing our denial of Appellants’ writ of prohibition, Appellees respond
that even if SDCL 9-3-20 applies, res judicata bars its application. 6 While
acknowledging that “[a] writ of prohibition cannot be invoked merely as a substitute
6. Appellees also argue that this case is not an inquiry into the regularity of the
organization of Buffalo Chip City. Appellees observe that although “the ghost
of the town of Buffalo Chip haunts this case, the putative municipality is not
a party to this action.” They contend that while SDCL 9-3-20 might provide a
defense for a municipality under scrutiny, here, only the decision of the Board
is being challenged. However, the circuit court’s decision necessarily involved
an inquiry into the regularity of the organization of a municipality, and the
remedy it granted declared the incorporation of Buffalo Chip City void ab
initio. Further, we recently stated that, at least in cases involving quasi-
judicial decisions, “[a]ppeals involving county commissioner decisions should
be taken in the names of the parties whose interests are at stake.” Surat
Farms, LLC v. Brule Cty. Bd. of Comm’rs, 2017 S.D. 52, ¶ 8 n.2, 901 N.W.2d
365, 368 n.2. If Buffalo Chip City should have been named in the action, it is
through no fault of its own that it was not.
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for an appeal,” S.D. Bd. of Regents v. Heege, 428 N.W.2d 535, 538 (S.D. 1988),
Appellees observe that prohibition will lie due to a lack of subject-matter
jurisdiction, see Nelson v. Dickenson, 64 S.D. 456, 459, 268 N.W. 103, 104 (1936).
Because we denied Buffalo Chip City’s application for a writ of prohibition,
Appellees claim we conclusively determined the circuit court possessed subject-
matter jurisdiction despite SDCL 9-3-20.
[¶28.] However, res judicata does not bar Appellants’ argument that SDCL 9-
3-20 deprived the circuit court of jurisdiction. The doctrine of res judicata bars an
issue from being relitigated when four elements are satisfied:
(1) a final judgment on the merits in an earlier action; (2) the
question decided in the former action is the same as the one
decided in the present action; (3) the parties are the same; and
(4) there was a full and fair opportunity to litigate the issues in
the prior proceeding.
Farmer v. S.D. Dep’t of Revenue & Regulation, 2010 S.D. 35, ¶ 9, 781 N.W.2d 655,
659. We construe “the doctrine liberally, unrestricted by technicalities.” Id. ¶ 7.
“However, because the doctrine bars any subsequent litigation, it should not be used
to defeat the ends of justice.” Id. “A writ of prohibition is an extraordinary
remedy.” Cummings v. Mickelson, 495 N.W.2d 493, 495 (S.D. 1993). Other courts
have stated that generally, an unwritten denial of an application for a writ of
prohibition does not constitute a decision on the merits. E.g., Kowis v. Howard, 838
P.2d 250, 253-54 (Cal. 1992) (en banc); Topps v. State, 865 So. 2d 1253, 1258 (Fla.
2004); State ex rel. Albert v. Adams, 540 S.W.2d 26, 30 (Mo. 1976) (en banc);
Kennecott Copper Corp. v. Salt Lake Cty., 575 P.2d 705, 708 (Utah 1978).
[¶29.] Our order denying Buffalo Chip City’s application stated we
“considered the application and [were] fully advised in the premises[.]” But a short
statement summarily denying an application does not give the denial preclusive
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effect. See Kowis, 838 P.2d at 253. “There are many reasons why [this] [C]ourt
might have acted as it did,” Adams, 540 S.W.2d at 30, and “extraordinary writs may
be denied for numerous and a variety of reasons, some of which may not be based
upon the merits of the petition,” Topps, 865 So. 2d at 1257. Therefore, res judicata
does not prevent us from addressing whether SDCL 9-3-20 deprived Appellees of
standing and thus the circuit court of subject-matter jurisdiction.
[¶30.] The circuit court erred in denying the motion to dismiss pursuant to
SDCL 9-3-20. In denying Sturgis’s April 29, 2015 motion to stay, the court believed
it could still afford complete relief to the parties even if the election occurred.
However, once the voters decided to incorporate Buffalo Chip City, it became at the
very least a de facto corporation. At that point, the court lost subject-matter
jurisdiction. A lack of subject-matter jurisdiction extinguishes appellate review,
and we are constrained—irrespective of the merits of Appellees’ arguments about
the invalidity of Buffalo Chip City’s incorporation—to reverse.
Conclusion
[¶31.] Buffalo Chip City operates at minimum as a de facto corporation, and
SDCL 9-3-20 requires that any action challenging its incorporation be brought by
the State. Because Appellees did not bring their suit on behalf of the State, the
circuit court lacked subject-matter jurisdiction. We reverse and vacate the circuit
court’s judgment.
[¶32.] GILBERTSON, Chief Justice, SEVERSON, Justice, and WILBUR and
MEIERHENRY, Retired Justices, concur.
[¶33.] MEIERHENRY, Retired Justice, sitting for ZINTER, Justice,
disqualified.
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[¶34.] JENSEN, Justice, not having been a member of the Court at the time
this action was submitted to the Court, did not participate.
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