Jim Wayne in His Official Capacity as State Representative v. Commonwealth of Kentucky Office of the Governor Matthew Bevin in His Official Capacity as Governor

RENDERED: SEPTEMBER 22, 2016
TO BE PUBLISHED
Suprrtur Gurf ttlfuritv
2016-SC-000272-TG
(2016-CA-000738-MR)
COMMONWEALTH OF KENTUCKY, EX REL.
ANDY BESHEAR, ATTORNEY GENERAL APPELLANT
ON APPEAL FROM FRANKLIN CIRCUIT COURT
V. HONORABLE THOMAS D. WINGATE, JUDGE
NO. 16-CI-00389
COMMONWEALTH OF KENTUCKY OFFICE OF THE
GOVERNOR, EX REL. MATTHEW BEVIN, IN HIS OFFICIAL
CAPACITY AS GOVERNOR; COMMONWEALTH OF
KENTUCKY FINANCE AND ADMINISTRATION CABINET, EX
REL. WILLIAM M. LANDRUM, IN HIS OFFICIAL CAPACITY AS
SECRETARY; COMMONWEALTH OF KENTUCKY OFFICE OF
THE STATE BUDGET DIRECTOR, EX REL. JOHN CHILTON,
IN HIS OFFICIAL CAPACITY AS STATE BUDGET DIRECTOR;
COMMONWEALTH OF KENTUCKY DEPARTMENT OF THE
TREASURY, EX REL. ALLISON BALL, IN HER OFFICIAL
CAPACITY AS TREASURER; JIM WAYNE, IN HIS OFFICIAL
CAPACITY AS STATE REPRESENTATIVE; DARRYL OWENS,
IN HIS OFFICIAL CAPACITY AS STATE REPRESENTATIVE;
MARY LOU MARZIAN, IN HER OFFICIAL CAPACITY AS STATE
REPRESENTATIVE APPELLEES
AND 2016-SC-000273-TG
(2016-CA-000745-MR)
JIM WAYNE, IN HIS OFFICIAL CAPACITY AS STATE
REPRESENTATIVE; MARY LOU MARZIAN, IN HER
OFFICIAL CAPACITY AS STATE REPRESENTATIVE;
DARRYL OWENS, IN HIS OFFICIAL CAPACITY AS
STATE REPRESENTATIVE APPELLANTS
ON APPEAL FROM FRANKLIN CIRCUIT COURT
V. HONORABLE THOMAS D. WINGATE, JUDGE
NO. 16-CI-00389
COMMONWEALTH OF KENTUCKY OFFICE OF THE
GOVERNOR, EX REL. MATTHEW BEVIN, IN HIS OFFICIAL
CAPACITY AS GOVERNOR; COMMONWEALTH OF
KENTUCKY FINANCE AND ADMINISTRATION CABINET,
EX REL. WILLIAM M. LANDRUM, IN HIS OFFICIAL
CAPACITY AS SECRETARY; COMMONWEALTH OF
KENTUCKY OFFICE OF THE STATE BUDGET DIRECTOR,
EX REL. JOHN CHILTON, IN HIS OFFICIAL CAPACITY AS
STATE BUDGET DIRECTOR; COMMONWEALTH OF
KENTUCKY DEPARTMENT OF THE TREASURY, EX REL.
ALLISON BALL, IN HER OFFICIAL CAPACITY AS
TREASURER; COMMONWEALTH OF KENTUCKY, EX REL.
ANDY BESHEAR, ATTORNEY GENERAL APPELLEES
OPINION OF THE COURT BY JUSTICE NOBLE
REVERSING AND REMANDING
This case presents two questions. First, does the Attorney General or an
individual member of the General Assembly have standing to challenge the
Governor's actions as violating a statute or the constitution? The Court
concludes that the Attorney General has standing but that the individual
legislators in this case do not. Second, may the Governor reduce the amount of
money made available to a state university under a legislative appropriation
whether by revising the university's allotment under KRS 48.620(1), by
withholding the allotment to the extent the university has adequate trust and
agency funds under KRS 45.253(4), or by otherwise requiring a state university
not to spend appropriated funds? This Court concludes that the Governor does
not have that authority. The judgment of the Franklin Circuit Court is thus
reversed.
2
I. Background
Upon taking office in 2016, Governor Matt Sevin ordered an across-the-
board 4.5% budget reduction for the executive branch in the fourth quarter of
the 2015-2016 fiscal year. This reduction extended to the state's nine
institutions of higher education, which consist of several universities and the
community college system (collectively, "the Universities").
The Universities' reductions were delineated in a letter to the Secretary of
the Finance and Administration Cabinet and the State Budget Director
directing that their fourth-quarter allotments be reduced. The letter was dated
March 31, 2016 and stated in relevant part:
Pursuant to the authority provided to me in KRS 48.620(1), this is
to certify that the allotments for the following budget units of the
Executive Branch for April 1, 2016 drawn-downs [sic] by each unit
under the 2015-2016 Executive Branch budget should be reduced
by 4.5% of the 2015-2016 allotments:
■ Eastern Kentucky University
■ Kentucky State University
■ Morehead State University
■ Murray State University
■ Northern Kentucky University
■ University of Kentucky
■ University of Louisville
■ Western Kentucky University
■ Kentucky Community and Technical College System
On April 19, 2016, the Governor sent another letter, again to the
Secretary of the Finance and Administration Cabinet and the State Budget
Director. This letter recounted the previous letter's contents and then ordered
"pursuant to the same statutory authority that the 2015-2016 allotments to
each ... institution[] should be further revised." As to Kentucky State
3
University, the 4.5% reduction was restored. As to the other eight institutions,
the letter ordered that their budget reductions be amended from 4.5% to 2%. 1
The Attorney General filed a declaratory-judgment action against the
Governor, the State Budget Director, the Secretary of the Finance and
Administration Cabinet, and the State Treasurer challenging this action. 2 Three
members of the House of Representatives joined as intervening plaintiffs. By
agreed order, the funds at issue were placed in a separate account and were
"recorded as a disbursement of FY 2016 appropriations but w[ould] not be
transferred until further order of the Court at which time the funds w[ould] be
disbursed to the institutions or returned to the Commonwealth's general fund."
The Governor moved to dismiss the case, claiming both that the Attorney
General and the legislators lacked standing and that his actions were legal. As
to the latter claim, he relied primarily on two statutes, KRS 48.620(1), which
was cited in his letters, and KRS 45.253(4). He claimed that KRS 48.620(1)
allowed him to reduce the "allotments" to the Universities without changing the
legislative appropriations. He claimed that KRS 45.253(4) allowed him to
withhold appropriations until the Universities had spent their trust and agency
funds (that is, funds generated by tuition, etc.). The statutes combined, he
1 Specifically, it stated: "The allotments ... should be further revised so as to
restore 2.5% of the 4.5% downward revisions." If read literally, this latter action would
have had the effect of restoring only .1125% of the Universities' budgets (that is, 2.5%
of the 4.5% reduction). But it is understood by all involved that this provision changed
the overall budget reduction from 4.5% to 2%.
2 The Governor's counsel represents the Governor, along with the State Budget
Director and the Secretary of the Finance and Administration Cabinet. The Treasurer
is represented by her own counsel. Their positions, however, appear to align in all
respects, and reference to "the Governor" includes all of the Appellees.
4
claimed, gave him "great discretion" in whether to provide the appropriated
funds.
The Attorney General disputed that KRS 48.620 gave the Governor such
broad authority and argued that any such reading of the statute would violate
the separation-of-powers doctrine and constitute an improper delegation of
authority by the General Assembly. The Attorney General also claimed that the
Governor's actions would unlawfully suspend the budget bill and that KRS
45.253(4) did not apply to the Universities, which had elected to operate under
KRS Chapter 164A.
The Franklin Circuit Court concluded that the Attorney General had
standing to bring the suit, but nevertheless granted summary judgment in the
Governor's favor on the merits. The court concluded primarily that KRS
48.620(1) and KRS 45.253(4) delegated the authority "to address budget
concerns within the executive branch." Specifically, the court concluded that
these "statutes ... grant [the Governor] the authority to revise downward the
Universities' allotments." The court also stated: "The Universities ... are under
the Governor's control as part of the executive branch," at least in the context
of the budget bill. The court concluded that the Governor's actions did not
violate Kentucky's strict separation-of-powers doctrine. In this respect, the
court concluded that the allotment revision was not, in fact, a reduction in the
appropriation by another name, and was instead an exercise of legislatively
granted power. Finally, the court concluded that there remained a check on the
Governor's power, in that the judiciary could "realign[] the balance of power" if
he "purports to wield divine power over another branch, or even over a division,
5
cabinet or program within the executive branch, to the point that funding levels
reached constitutionally impermissibly low levels."
The Attorney General and the House members filed notices of appeal and
a motion to transfer the case from the Court of Appeals to this Court. That
motion was granted, and thus the appeal is before this Court.
II. Standing
Before reaching the merits of this dispute, this Court must address the
claim that the Attorney General and intervening state representatives lack
standing to prosecute this action. We answer this question first because if
neither the Attorney General nor the individual legislators have standing to
challenge the Governor's actions, then we would be left with a non justiciable
cause of action, which would call for dismissal without addressing the merits.
See, e.g., Lawson v. Office of Att'y Gen., 415 S.W.3d 59, 67 (Ky. 2013)
("Standing,' of course, in its most basic sense, refers to an integral component
of the justiciable cause' requirement underlying the trial court's jurisdiction."
(citing Ky. Const. § 112; Rose v. Council for Better Educ., 790 S.W.2d 186 (Ky.
1989))).
A. The Attorney General has standing to seek declaratory and
injunctive relief to vindicate the public interest against
alleged unauthorized and unconstitutional actions of the
Governor.
To have standing to sue in Kentucky, the basic rule is that the person
must have a "judicially recognizable interest in the subject matter of the suit."
E.g., Ashland v. Ashland FOP No. 3, 888 S.W.2d 667, 668 (Ky. 1994). Does the
Attorney General have such an interest in the Governor's reductions of the
Universities' budgets?
At the outset, the Attorney General argues that this Court's holding in
Commonwealth ex rel. Conway v. Thompson, 300 S.W.3d 152 (Ky. 2009), on the
issue of the Attorney General's standing to sue other executive branch officials
for declaratory and injunctive relief, should control outright without need for
further analysis. In that case, we overruled our prior decision in
Commonwealth ex rel. Cowan v. Wilkinson, 828 S.W.2d 610 (Ky. 1992), to the
extent that it required the Attorney General to have a "personal interest" in the
outcome of the case to have standing. Thompson, 300 S.W.3d at 172-74. In
doing so, we "state[d] categorically ... that the Attorney General of the
Commonwealth of Kentucky has standing to seek injunctive relief on behalf of
the citizens of the Commonwealth." Id. at 172. That was because "the Attorney
General ha[d] a sufficient personal right in these types of cases by virtue of the
office and the duties commensurate with that high office." Id. at 173 (emphasis
added).
That italicized language, clarifying our holding in Thompson, is indeed
the key to unlocking the issue of the Attorney General's standing in this case.
Further analysis, however, is required to determine whether in this case duty
calls upon the Attorney General (and, thus, confers on him standing) to
vindicate the public rights of the people of the Commonwealth. As we explain
below, guided by history and precedent, we conclude that it does.
As we alluded in Thompson, the Attorney General's standing is dictated
by the powers and duties of that office. Under the Kentucky Constitution, the
7
Attorney General is an elected constitutional officer whose "duties ... shall be
such as prescribed by law." Ky. Const. § 91; see also id. § 93 ("The duties and
responsibilities of the[] [constitutional] officers shall be prescribed by law ....").
The General Assembly has prescribed the Attorney General's duties and
responsibilities in KRS 15.020, which in relevant part provides:
The Attorney General is the chief law officer of the Commonwealth
of Kentucky ... and shall exercise all common law duties and
authority pertaining to the office of the Attorney General under the
common law, except when modified by statutory enactment. ... [H]e
shall appear for the Commonwealth in all cases in the Supreme
Court or Court of Appeals wherein the Commonwealth is
interested, and shall also commence all actions or enter his
appearance in all cases, hearings, and proceedings in and before
all other courts, tribunals, or commissions in or out of the state,
and attend to all litigation and legal business in or out of the state
required of him by law, or in which the Commonwealth has an
interest ....
Whether the Attorney General has the power to bring a given action on
behalf of the people of the Commonwealth (at least where there is no statute
governing the subject) turns on whether that action falls under, the "common
law duties and authority pertaining to the office of the Attorney General under
the common law," and whether the action is one "in which the Commonwealth
has an interest." KRS 15.020.
Historians, scholars, and jurists agree that clearly defining the Attorney
General's common-law duties is not easily done. See generally Comm. on the
Office of Att'y Gen., Nat'l Ass'n of Att'ys Gen., Common Law Powers of State
Attorneys General 13-19 (Jan. 1975) (summarizing historical commentary and
judicial holdings on the common-law powers of the Attorney General). 3 An
exhaustive definition of the Attorney General's common-law powers and duties
is not required today. Instead, it suffices to analyze the parameters of that
office's prerogative to seek, on behalf of the people, injunctive relief against
other government actors when the Commonwealth has an interest in the case.
To begin, we reiterate: "It is unquestioned that lalt common law, [the
Attorney General] had the power to institute, conduct and maintain suits and
proceedings for the enforcement of the laws of the state, the preservation of
order, and the protection of public rights.'" Thompson, 300 S.W.3d at 173
(alterations in original) (quoting Commonwealth ex rel. Hancock v. Paxton, 516
S.W.2d 865, 867 (Ky. 1974)). Significantly, the Attorney General was
empowered under the common law to bring any action thought "necessary to
protect the public interest." Id. (quoting 7 Am. Jur. 2d Attorney General § 6
(2009)). Indeed, the Attorney General has not only the power to bring suit when
he believes the public's legal or constitutional interests are under threat, but
appears to have even the duty to do so. Cf. Wilkinson, 828 S.W.2d at 618
(Leibson, J., dissenting) ("It is the Attorney General's responsibility to file suit
to vindicate public rights, as attorney for the people of the State of Kentucky.").
And, notably, this "broad grant of authority ... includes the power to act to
enforce the state's statutes." Thompson, 300 S.W.3d at 173 (quoting 7 Am. Jur.
2d Attorney General § 6 (2009)).
3 This publication is available at
https:/ /www.ncjrs .gov/pdffiles1 /Digitization/ 16297NCJRS.pdf.
9
It is widely recognized that the Attorney General's common-law authority
to represent the interests of the people derives from the broad powers that
office initially possessed in representing the legal interests of the English
crown. As one former Attorney General succinctly explained:
As guardian of royal prerogative, the Attorney General of England
possessed a broad range of powers. ... [W]hen state governments
were organized and recognized in this country, there was no
monarch in whom the government prerogatives were vested. Since
the essential power of government resided and emanated from the
people, the prerogatives had to be exercised on their behalf. Just
as the Attorney General safeguarded royal prerogatives at common
law, similarly, the official authority, an obligation to protect public
rights and enforce public duties on behalf of the general public,
became vested by the states in the Attorney General. And it is this
obligation inherited from the common law to represent the public
interest which has shaped and colored the role which the Attorney
General fulfills today.
Common Law Powers of State Attorneys General, supra, at 2 (quoting Arthur
Sills, Proceedings of the Conference of the Nat'l Ass'n of Att'ys Gen. 102 (1967)).
Based on that widely accepted understanding of the nature of the Attorney
General's inherited prerogatives, it is clear that the Attorney General has a
judicially cognizable interest here, namely, in fulfilling his common-law
obligation to protect public rights and interests by ensuring that our
government acts legally and constitutionally.
Our predecessor court long ago recognized and adopted this view of the
Attorney General's authority. Indeed, that court stated:
[T]he source of authority of the Attorney General is the people who
establish the government, and his primary obligation is to the
people. ... The Attorney General, as chief law officer of this
Commonwealth, charged with the duty of protecting the interest of
all the people ... had such a vital interest in this litigation that he
10
had a right to intervene at least insofar as the public issues
advanced in the action were involved.
Hancock v. Terry Elkhorn Mining Co., 503 S.W.2d 710, 715 (Ky. 1974); accord
Paxton, 516 S.W.2d at 867 ("But under the democratic form of government now
prevailing the people are the king, so the Attorney General's duties are to that
sovereign rather than to the machinery of government." (citation omitted)). Our
predecessor court made clear that KRS 15.020, "in stating at the outset that
the Attorney General is 'the chief law officer of the Commonwealth,' intends
that in case of a conflict of duties the Attorney General's primary obligation is
to the Commonwealth, the body politic, rather than to its officers, departments,
commissions, or agencies." Paxton, 516 S.W.2d at 868. Thus, in addition to the
unquestioned "right of the Attorney General to appear and be heard in a suit
brought by someone else in which the constitutionality of a statute is involved,"
id. (citing CR 24.03; KRS 418.075), 4 the Court held that the Attorney General's
"constitutional, statutory and common law powers include the power to initiate
a suit questioning the constitutionality of a statute," id.
The holding in Paxton thus leads to an inevitable conclusion: If the
Attorney General has the power to initiate a suit questioning the
constitutionality of a statute, he must also have the power to initiate a suit
questioning the constitutionality or legality of an executive action. There are no
grounds for treating allegedly unconstitutional executive actions differently
from allegedly unconstitutional legislative actions. It is certainly in "the interest
4 Not only does the Attorney General have such power, no judgment declaring a
statute constitutionally infirm may be entered without his having been given notice
and an opportunity to be heard on the question. KRS 418.075.
11
of all the people" that there be no unconstitutional or illegal governmental
conduct. And standing must be determined at the beginning of an action, not
retrospectively after the merits have been sorted out.
A plain reading of Thompson and Paxton and other authorities thus
establishes that the Attorney General has standing to bring this action
questioning the authority for and constitutionality of the Governor's actions.
The Governor, however, argues that the Attorney General's authority and
standing to bring suit in the public interest should be limited to only those
cases where there are no identifiable parties with particularized injuries (such
as the Universities in this case). In support of this position, he cites Johnson v.
Commonwealth ex rel. Meredith, 165 S.W.2d 820 (Ky. 1942), for the proposition
that by enacting KRS 12.210, which authorizes state agencies to hire outside
counsel, the General Assembly acted to limit the Attorney General's common-
law power.
This is an overreading of Johnson. That case answered only whether the
legislature "may withdraw [discrete common-law] powers and assign them to
others or may authorize the employment of other counsel for the departments
and officers of the state to perform them." Id. at 829. In other words, Johnson
signed off on the General Assembly's authority to divest some of the powers of
the Attorney General (i.e., serving as legal counsel to a given state entity) and
invest them in another (i.e., private counsel of the entity's choosing). It did not
hold, as the Governor states, that "when a state agency hires, or can hire, its
own attorneys pursuant to statutory authority, the Attorney General no longer
12
.
has authority to unilaterally decide to act for that agency." To the contrary,
Johnson explicitly left that question open:
As to what extent [KRS 12.210] should be construed as affecting
the supremacy of the Attorney General as the chief law officer of
the Commonwealth, or to what extent it deprives him of the power
and right to represent the Commonwealth as a distinct entity in
litigation in which any of the departments employing counsel are
involved, or in any other respect, we express no opinion, for they
are questions not presented in this suit.
Id. at 829. Indeed, our predecessor thought it sufficient to express only its
"opinion that the Act does not deprive the Attorney General of his hereditary
and statutory prerogatives to the extent or degree that it can be said that he is
left without substantial duties, responsibilities and rights." Id. KRS 12.210, as
interpreted by Johnson, is not nearly the limitation on the Attorney General's
authority as the Governor claims.
But the "supremacy of the Attorney General as the chief law officer of the
Commonwealth" is squarely before us here. The simple answer is that
delegating day-to-day operational powers—in this case, to the Universities' own
counsel—does not preclude a need for the Attorney General to protect "the
interest of all the people" when unconstitutional or unlawful conduct is claimed
either by or toward those universities. The Governor's invitation to so constrain
the traditional powers and duties of the Attorney General to protect the
interests of the people of the Commonwealth could result in unconstitutional or
unlawful conduct that would go unaddressed, against the interest of the
people, if the Universities and their counsel for political, financial, or other
reasons chose not to seek redress.
13
There is no valid justification for cutting off the "hereditary" prerogative
of. the Attorney General to challenge the legality and constitutionality of a state
action merely because the state actor has (or could) employ other legal counsel.
Indeed, the words of our predecessor in Paxton, by extension, ring just as true
here as they did there: "We think that if the Constitution is threatened by an
item of legislation For act of the Executive], the Attorney General may rise to the
defense of the Constitution by bringing a suit, and is not required to wait until
someone else sues." 516 S.W.2d at 868. Likewise, the Attorney General must
defend duly adopted statutory enactments that are not unconstitutional.
In fact, the soundness of this position becomes even more apparent in
light of the realities (and costs) to public entities of challenging executive or
legislative actions. The ongoing functions of such entities and the costs of such
litigation, in money and political good will, could make a legal challenge
prohibitive despite whatever disagreement they may have with a Governor's or
legislature's action. Because the Attorney General is the chief law officer of the
Commonwealth, he is uniquely suited to challenge the legality and
constitutionality of an executive or legislative action as a check on an allegedly
unauthorized exercise of power. Cf. State ex rel. Sorensen v. State Bd. of
Equalization, 242 N.W. 609, 610 (Neb. 1932) ("[T]he Attorney General has the
right, in cases where ... the interests of the public are directly concerned, to
institute suit ... for their protection. The state is not left without redress in its
own courts, because no private citizen chooses to encounter the difficulty of
defending it, but has appointed this high public officer, on whom it has cast
the responsibility, and to whom, therefore, it has given the right of appearing in
14
its behalf and invoking the judgment of the court on such questions of public
moment."); Comment, An Attorney General's Standing before the Supreme Court
to Attack the Constitutionality of Legislation, 26 U. Chi. L. Rev. 624, 631 (1959)
("[T]he basic constitutional principle that the judiciary is to serve as a check on
the legislature would be avoided unless the Attorney General is granted
standing to present the constitutional question concerning legislation which
seriously jeopardizes the interests of the government as a whole."). 5
This view of the authority of the Attorney General is in line with that
taken by most of our sister jurisdictions. Indeed, the facts of a fairly recent
case from South Carolina are notably similar to the facts presented here. In
State ex rel. Condon v. Hodges, 562 S.E2d 623 (S.C. 2002), the South Carolina
Supreme Court upheld the power of the Attorney General to sue to enjoin the
Governor from circumventing provisions of an appropriations bill. Noting that
"[t]he way in which public funds are handled and whether a violation of the
separation of powers doctrine has occurred are clearly questions in which the
State has an interest," id. at 627, the South Carolina Supreme Court held that
"the Attorney General has the authority to sue the Governor when he is
bringing the action in the name of the State for the purpose of asserting that a
separation of powers violation has occurred," id. at 628. See also id. ("[T]he
Attorney General can bring an action against the Governor when it is necessary
5 For a discussion of the Attorney General's role as intra-branch check and
balance on the Governor, see generally William P. Marshall, Break Up the Presidency?
Governors, State Attorneys General, and Lessons from the Divided Executive, 115 Yale
L.J. 2446, 2464-68 (2006). See also id. at 2449-55 (discussing, generally, common-
law origins of the Office of the Attorney General and the development in most states of
a "divided executive").
15
for the enforcement of the laws of the State, the preservation of order, and the
protection of public rights.").
And courts in numerous other states have reached similar conclusions
about the powers and duties of the Attorney General. See, e.g., State ex rel.
Landis v. S.H. Kress & Co., 155 So. 823 (Fl. 1934); People ex rel. Scott v. Illinois
Racing Bd., 301 N.E.2d 285 (Ill. 1973); Lund ex rel. Wilbur v. Pratt, 308 A.2d
554 (Me. 1973); Jacobsen v. Parks & Rec. Comm'n, 189 N.E.2d 199 (Mass.
1963); Att'y Gen. v. Trustees of Boston Elevated R.R. Co., 67 N.E.2d 676 (Mass.
1946); Fordice v. Bryan, 651 So. 2d 998 (Miss. 1995); State ex rel. Douglas v.
Thone, 286 N.W.2d 249 (Neb. 1979); State ex rel. Meyer v. Peters, 199 N.W.2d
738 (Neb. 1972); Hetherington v. McHale, 311 A.2d 162 (Pa. 1973); Yett v. Cook,
218 S.W. 837 (Tex. 1926); Hansen v. Barlow, 456 P.2d 177 (Utah 1969). Of the
minority of states that have ruled otherwise, their Attorneys General are
typically invested with no common-law powers. See, e.g., State v. Rankin, 282
N.E.2d 851 (Ind. 1972); State v. Burning Tree Club, 481 A.2d 785 (Md. 1984). In
contrast, Kentucky's Attorney General is expressly given such powers by
statute.
Finally, we find particularly apt the following comments by Justice Erwin
of the Florida Supreme Court:
The Attorney General is elected by the people; he is
entrusted by them with the common law power to legally represent
them or some of them in matters deemed by him to affect the
public interest. He has a discretionary duty under the common law
rarely modified by statute to protect the public interests of any of
the people who elected him.
It is his discretionary duty to choose those legal matters in
the area of public litigation or quasi-judicial administration in
16
which he believes it is his official duty to intervene, except in those
instances when it is mandated by the legislature for him to
intervene or to refrain from intervening. If he is mistaken in his
legal advocacy, the courts and quasi-judicial tribunals always
retain the power to rule against him and often do on the merits but
this power does not affect his standing to become a party of
interest in the cause or proceeding. Regardless of the effectiveness
of his efforts in particular public legal situations, at least the
people have the continuing satisfaction of knowing that their
elected Attorney General has the right to exercise his conscientious
official discretion to enter into those legal matters deemed by him
to involve the public interest, even though not expressly authorized
by statute. The presumption is that he will not enter strictly
private litigation and a great degree of latitude must of necessity be
extended to him in the exercise of his right to intervene in behalf of
public interests.
State ex rel. Shevin v. Yarborough, 257 So. 2d 891, 895 (Fla. 1972) (Erwin, J.,
specially concurring); see also Mundy v. McDonald, 185. N.W. 877, 880 (Mich.
1921) ("A broad discretion is vested in [the Attorney General] in determining
what matters may, or may not, be of interest to the people generally.").
In the end, we are left with only one conclusion: the Attorney General, as
chief law officer of Kentucky, has broad authority to sue for declaratory and
injunctive relief against state actors, including the Governor, whose actions the
Attorney General believes lack legal authority or are unconstitutional. It is that
poWer which the Attorney General has invoked to support bringing the present
action—to wit, the Attorney General seeks to enjoin the Governor's reductions
of the final quarterly allotments of the Universities' 2015-2016 appropriations
as exceeding the Governor's statutory and constitutional authority and
violating the separation-of-powers doctrine. And we must take these allegations
at face value in undertaking this standing analysis. See City of Louisville v.
Stock Yards Bank & Tr. Co., 843 S.W.2d 237, 328 (Ky. 1992) ("[I]t is neither the
17
province of the trial court nor of this Court to consider whether Appellant may
be able to prove its allegations or ultimately prevail. On review, this Court will
confine itself to a determination of whether the matters alleged in the
complaint establish appellant's standing to bring the action or whether it is
without a 'substantial interest' in the subject matter of the controversy."
(citations omitted)).
The Attorney General, therefore, has standing in this case.
B. The individual legislators do not have standing.
The intervening individual legislators claim to have standing in this case
because the Governor's actions constituted a "grave infringement of their
fundamental Constitutional [sic] duty to enact a biennial budget on behalf of
their constituents." As the Governor describes it, they claim, in essence, that
he has nullified their votes in favor of the budget bill.
We begin with the legislators' claim that it has been the practice of this
Court to allow members of the General Assembly to "defend the Kentucky
Constitution's 'forceful command' that the powers of the Legislative Branch be
protected from invasion by the Executive Branch." This Court's practice, at
least in the cases cited by the legislators, has not been nearly so broad as
claimed. The legislators cite, for example, Fletcher v. Commonwealth, 163
S.W.3d 852 (Ky. 2005), in which many members of the General Assembly,
including at least one of the members in this case, intervened to challenge
gubernatorial action. The question of the legislators' standing, however, was
not raised in that case. And, as this Court has held, a claimed lack of standing
18
is a defense that must be timely raised or else be deemed waived. Harrison v.
Leach, 323 S.W.3d 702, 708 (Ky. 2010). Thus, while Fletcher may be a factual
precedent for individual legislators' having intervened in a case, it is not legal
precedent for their having standing to challenge the Governor's actions.
As to the legal substance of the claim, unlike the Attorney General,
individual legislators do not have the role of chief legal officer for the public.
The individualized role of a legislator is to represent those who have elected
him or her and to participate in the decision-making that becomes the laws of
the Commonwealth, including participating in the passage of budget bills. The
idea that individual legislators have standing to challenge an action by the
Governor—under the premise of an injury to an interest in a statute being
carried out properly or the legislators' duty to vote on legislation—is simply too
attenuated to create a justiciable controversy. A legislator has no individual
ownership of any enacted piece of legislation and certainly can pass no
legislation as an individual. Asserting that a governor's disposition of budgeted
funds is an infringement on their duty to enact a budget is a non sequitur.
Nonetheless, the legislators claim that this Court has seemed in the past
to take a "broad[] view of when a public official can go to court to defend the
prerogatives of office." (Quoting Paul E. Salamanca, The Constitutionality of an
Executive Spending Plan, 92 Ky. L.J. 149, 200 (2004)). In this context, Professor
Salamanca discussed Legislative Research Commission v. Brown, 664 S.W.2d
907 (Ky. 1984), wherein the Legislative Research Commission sued "to validate
its authority under certain parts of the legislation, and the original defendants,
the Governor and Attorney General of Kentucky, had by counterclaim called in
19
question other parts." Salamanca, supra, at 200. But Brown, like Fletcher, is
not support for the existence of individual-legislator standing, if only because
individual legislators were not the plaintiffs in that case. More importantly,
standing again was not raised in that case, at least not before this Court. See
id. (noting that "the issue of representative standing was not addressed in the
Legislative Research Commission court's opinion").
Obviously, legislators with a particularized, personal injury have
standing to seek redress for that injury. Thus, for example, a legislator could
sue for the loss of salary. See Powell v. McCormack, 395 U.S. 486 (1969). But
that is not what we have here. Instead, the legislators are claiming some
nebulous harm to their duties as legislators.
Individual legislators simply do not have a sufficient personal stake in a
dispute over the execution or constitutionality of a statute, even when the
claim is that another branch of government is violating the separation of
powers. The United States Supreme Court reached the same conclusion when
members of Congress sought to challenge the constitutionality of the Line Item
Veto Act in the 1990s. See Raines v. Byrd, 521 U.S. 811, 830 (1997). There the
Court held that "individual members of Congress do not have a sufficient
`personal stake' in this dispute and have not alleged a sufficiently concrete
injury to have established Article III standing." Id. Although Article III does not
dictate the contours of the law of standing before this state's courts, we
generally require the same particularized, personal injury when individuals
seek to bring a claim.
20
The individual legislators have not shown that they are representative of
the entire body of the General Assembly. They "have not been authorized to
represent their respective Houses ... in this action." Id. at 829. They are not
numerous enough to demonstrate that they represent a sufficient bloc of votes
to act on behalf of the whole legislature, as was the case in Coleman v. Miller,
307 U.S. 433 (1939). Indeed, they constitute only three of one hundred
members of the House (and no members of the Senate). And, finally, they are
not presiding officers of either house, whose "unique status" may give them "an
enhanced capacity to maintain suit to prevent non-legislative disbursements
from the treasury." Salamanca, supra, at 201. We need not decide today
whether satisfaction of any of these conditions would suffice to give standing,
however, as it is clear that the individual legislators in this case have met none
of them.
Finally, it must be noted that the legislators did not actually file an
original complaint in this case. Instead, they permissively intervened under
Civil Rule 24.02. Whether that intervention was proper has not been argued to
the Court, and we therefore leave that question for another day.
C. Conclusion
As recounted above, the Attorney General is the state's chief legal officer
and, as such, he has broad powers under statutory and common law to defend
the public interest. This includes challenging conduct that he believes violates
the Constitution's strict separation of powers or is otherwise unlawful. For that
21
reason, he has standing to bring his claims challenging the Governor's actions
in this case.
The individual legislators, on the other hand, do not enjoy such a broad
power of representing the full Commonwealth. To have standing, they must
allege some type of particularized injury. They have not done so here. Thus, the
individual legislators in this case do not have standing to challenge the
Governor's actions.
We note, however, that no one has asked that the legislators be
dismissed from the claim. Instead, the legislators' standing has been
challenged in the context of a two-pronged attack that depends on the Attorney
General also not having standing. If both lack standing, then the entire case
should be dismissed. But the Governor's standing claim is framed as an
alternative ground for affirming the Franklin Circuit Court's decision, and he
acknowledges that it would require this court to conclude "that none of the
parties have standing." (Emphasis added.) Even so, as to justiciability of this
action, clearly only one plaintiff need have standing for the case to proceed.
Since the Attorney General does have standing, this case remains a justiciable
action properly before this Court. And since the Governor has asked only that
the case—and not the individual parties—be dismissed, and because this is the
Court of last resort in this matter, the propriety of the legislators participating
in this case is moot.
22
III. Does the Governor have authority to reduce the Universities' fourth-
quarter allotments or otherwise require them not to spend funds?
Having addressed standing, we begin our discussion of the merits with a
brief overview of the budgeting process. That process consists largely of two
steps: (1) the appropriation of funds and (2) the expenditure of funds.
The first step consists primarily of the legislative appropriation process,
as required by the Constitution. By default, the state treasury may not be
accessed without legislative action, in the form of an appropriation. See Ky.
Const. § 230 ("No money shall be drawn from the State Treasury, except in
pursuance of appropriations made by law ...."). As the Governor points out, an
appropriation sets a ceiling on an expenditure, as it is for "a sum of money not
in excess of the sum specified." KRS 48.010. Although this is correct, it is only
half the story. An appropriation is also "an authorization by the General
Assembly to expend a sum of money." Id.
The second stage of the budgeting process is the spending of money as
authorized in the appropriation. Appropriated funds are not usually expended
all at once. Instead, they are divided into quarterly allotments, to be used over ,
the course of the fiscal year. KRS 48.610. The expenditure of funds itself
ordinarily occurs though the issuance of warrants to the Treasurer, who then
writes a check or transfers the money to whomever it is owed. KRS 45.456. But
the Universities differ from most of state government in that .their
appropriations are made directly available to them. KRS 164A.555.
There is no question that the Governor has the authority to make budget
reductions in limited circumstances. Specifically, where there is a budget
23
shortfall of 5% or less, the General Assembly has authorized the Governor (and
the heads of the other branches of government) to reduce appropriations under
a legislatively prescribed budget-reduction plan. KRS 48.130.
But that statute does not authorize the Governor's action in this case.
There was no budget shortfall in the final quarter of the 2015-2016 fiscal year.
In fact, there was a surplus. Nonetheless, the Governor sought to reduce the
fourth-quarter allotments so that the funds could possibly be used for other
future spending. Specifically, he hoped to buttress Kentucky's state pension
systems.
The primary question in this case is whether the Governor has authority
to reduce the Universities' fourth-quarter allotments in this manner and under
these circumstances, or to otherwise require the Universities not to spend the
funds. The Governor, as the chief executive of this Commonwealth, has only
the authority and powers granted to him by the Constitution and the general.
law. He is the chief executive of the Commonwealth. Ky. Const. § 69. But the
Governor, like everyone, is bound by the law. Indeed, the Governor has a
special duty with respect to the law, as he is commanded to "take care that the
laws be faithfully executed." Ky. Const. § 81.
Although questions about the constitutional separation of powers have
been raised in this case, the issue is primarily whether the statutes controlling
the budgeting process give the Governor the authority that he claims and
whether his authority with respect to the expenditure of appropriated funds
has been limited by other statutes. The Governor has identified three possible
sources for his authority. Two of these are explicitly statutory—KRS 48.620(1)
24
and 45.253(4). The third is his general authority over executive branch budget
units and the power to require those units not to spend appropriated funds. We
address each in turn.
We also note that the Attorney General claims the Governor's actions and
these statutes violate the Constitution's requirement of strict separation of
powers among the branches of government. See Ky. Const. §§ 27-28. This
Court, like most, follows "the principle that constitutional adjudication should
be avoided unless it is strictly necessary for a decision in the case." Trigg v.
Commonwealth, 460 S.W.3d 322, 330 (Ky. 2015). For that reason, the first
consideration is whether the Governor has exceeded his authority under the
statutes rather than whether his actions or the statutes violate the
Constitution. Only if the statutes give the Governor the authority he claims, or
do not otherwise limit his authority, would we need to address the
constitutional question. Given our resolution of the statutory questions in this
case, we need not specifically address the constitutional question.
A. The statutory claims
Before turning to the statutes themselves, it is helpful to examine the
role of judges when confronted with a statute. We did not enact the law. That is
the role of the legislature. We do not execute the law. That is the role of the
executive. Rather, we interpret and apply the law. As Chief Justice John
Marshall stated: "Courts are the mere instruments of the law, and can will
nothing. ... Judicial power is never exercised for the purpose of giving effect to
the will of the Judge; always for the purpose of giving effect to the will of the
25
Legislature; or, in other words, to the will of the law." Osborn v. Bank of U.S.,
22 U.S. 738, 866 (1824). Our task, then, is to read the statutes and discern
their meaning, and nothing more.
This is not always an easy task. Statutory interpretation can, at times, be
complex, just as statutes can be complex. We begin, perhaps obviously, with
the language of the statutes, but we often cannot end there. "Such is the
character of human language, that no word conveys to the mind, in all
situations, one single definite idea ...." M'Culloch v. Maryland, 17 U.S. 316, 414
(1819). We thus resort to an arsenal of interpretive tools, referred to variously
as canons of construction or rules of interpretation, in an effort to arrive at a
fair reading of the controlling statutory language.
1. Revising allotments under KRS 48.620.
The first question is whether reducing an allotment, without increasing
other allotments by an equal amount, is a permissible revision of the allotment
under KRS 48.620(1). This Court concludes that the statute does not give the
Governor the authority to revise allotments in this way.
We reach this conclusion after examining the statute in context, both
that within KRS 48.620(1) itself and that in other provisions of KRS Chapter
48. When the statute speaks of revising allotments, it refers to the schedule of
allotments, that is, the timing of the payments throughout the fiscal year. Not
only does KRS 48.620(1) refer expressly to revising the schedule, other
provisions of KRS Chapter 48 and the budget bill itself require that the
allotment conform to the General Assembly's appropriations. The only way for
26
this to happen is if the full amount appropriated is included in allotments over
the year. Moreover, this reading is compelled by an examination of the
statutory—as opposed to legislative—history of KRS Chapter 48, which shows
that allotment revision has always been about revising the schedule of
allotments.
a. The language of the statute in context requires revision of
allotments to refer to scheduling, not just the amount, of the
allotments.
Again, we begin with the language of the statute:
Allotments shall be made as provided by the allotment schedule,
and may be revised upon the written certification of the Governor,
the Chief Justice, and the Legislative Research Commission for
their respective branches of government. No revisions of the
allotment schedule may provide for an allotment or allotments in
excess of the amount appropriated to that budget unit in a branch
budget bill, or for expenditure for any other purpose than specified
in a branch budget bill.
KRS 48.620(1). Although the statute does not group the words together as a
single term, it is clear that we are concerned generally with the meaning of an
allotment revision. 6
"Allotment" is not a statutorily defined term. Its meaning, however, is
fairly clear: a "share or portion of a thing that is given to someone or
something." Black's Law Dictionary (10th ed. 2014). It is "[s]omething allotted,"
and "allot," in turn, means "[t]o parcel out; distribute or apportion" or "[t]o
assign as a portion; allocate." American Heritage Dictionary of the English
6 We note that KRS 48.620(1) starts with the word "allotments," which, as the
Governor points out, is modified by a clause beginning with the words "may be
revised." Thus, there is little question that the statute is addressed to "allotment
revision," and that the Governor claims to have made such a revision.
27
Language (5th ed. 2011). In this context, it means a portion of a given
appropriation.
Allotments are made on a quarterly basis, rather than the full amount of
each appropriation being made available at the beginning of the fiscal year.
This reflects the dual reality that expenses do not arise all at once, and that the
state is rarely flush with sufficient cash to pay all those expenses at once and
must instead rely on the revenue stream from taxes. In short, the quarterly
allotment system is a means of coordinating revenues with expenditures.
"Revise" means "No alter or edit (a text)." Id. An "act ... of revising" is a
"revision." Id.
The Governor reduced the fourth-quarter allotment for the Universities
by 2%. In a sense, this is a "revision"—in that it is literally an alteration of the
allotment amount. The Governor claims that his action was allowed by the
statute, as its only express limits are on revisions that would "provide for an
allotment or allotments in excess of the amount appropriated to that budget
unit in a branch budget bill, or for expenditure for any other purpose than
specified in a branch budget bill." KRS 48.620(1). This, he claims, allows for
revisions of allotments down—a reduction without a corresponding increase of
other allotments—under the doctrine of expressio unius (otherwise known as
the negative-implication canon). In other words, because the statute expressly
includes a limit on revision, other limits are not included.
The Attorney General instead claims that the statute is about the timing
of payments, not in the literal sense of whether the payment should be on the
first or the fifteenth of a month, but in the sense of in which quarter any given
28
penny is allotted. In other words, according to the Attorney General, the power
to revise an allotment is simply the power to move a penny from one quarter to
another, either by advancing money to one allotment or putting it off to
another. The Governor responds that the plain language of KRS 48.620(1) says
nothing about the revision going to the schedule of allotments because
"allotments," in the first sentence, are what "may be revised." And the
allotment is the amount of money available in any given quarter.
But allotment revision is not the only description of revision in the
statute. The second sentence of KRS 48.620(1) refers to "revisions of the
allotment schedule." That sentence cannot be ignored because statutes "must
be read as a whole and in context with other parts of the law." Lewis v. Jackson
Energy Co-op. Corp., 189 S.W.3d 87, 92 (Ky. 2005).
This is the "whole-text canon, which calls on the judicial interpreter to
consider the entire text, in view of its structure and of the physical and logical
relation of its many parts." Antonin Scalia & Bryan A. Garner, Reading Law:
The Interpretation of Legal Texts 167 (2012). The canon recognizes that discrete
statutory language falls within a larger context, and that "[c]ontext is a primary
determinant of meaning." Id.
And the second sentence of KRS 48.620(1) greatly affects the statute's
meaning. It literally says that the revision allowed by KRS 48.620 will be to the
allotment schedule. Given this context, allotment revision in the first sentence
cannot be read to mean that any change constitutes a permissible revision
under the statute. Just as the Governor would have us consider the second
29
sentence's prohibition on allotments exceeding appropriations, so too must we
consider its use of "revisions of the allotment schedule."
With this context in mind, we conclude that revision of an "allotment" in
KRS 48.620(1) refers to revising the schedule of allotments. Obviously, the
statute allows a reduction of an allotment. It also allows an increase in an
allotment. But when an allotment is revised up or down, there must be a
corresponding revision of at least one other allotment. If the fourth-quarter
allotment is reduced by 2%, then other allotments must be increased to
balance the reduction, so that the sum of the quarterly allotments reflects the
appropriated amount. If the revision is attempted too late, so that the other
allotments cannot be revised, then revision is not allowed.?
This allows the allotments to comply with the requirements of KRS
48.610, which commands: "Allotments shall conform with the appropriations
in the enacted branch budget bills or other appropriation provisions." This
reading also allows compliance with the 2014 Executive Branch Budget Bill
itself, which commands that laillotments within appropriated sums for the
activities and purposes contained in the enacted Executive Budget shall
conform to KRS 48.610." 2014 Ky. Acts Ch. 117, Part III, § 4. 8 KRS 48.610, of
7 This understanding of the operation of allotments within appropriations is
also consistent with prior decisions governing the legislative appropriation authority.
See generally James v. State University, 114 S.W. 767 (Ky. 1908) (suggesting that the
executive (there the auditor) cannot alter how (and to whom) appropriations are paid
out so as to make it impractical, through exhaustion of the treasury funds, to pay
some of them at the end of the budget term); Rhea v. Newman, 156 S.W. 154 (Ky.
1913) (requiring Treasurer to pay out all appropriated sums despite protestations that
would result in a deficit).
8 Interestingly, that same provision also commands that "[a]llotments within
appropriated sums for the activities and purposes contained in the enacted Executive
30
course, requires that allotments conform to appropriations, but it also creates
the "schedule of quarterly allotments of appropriations for each budget unit of
the branch." KRS 48.610. Allotments can only conform to KRS 48.610 if they
conform to the quarterly allotment schedule.
Only by having the full schedule of allotments comport with the
appropriation can this be accomplished. Under the Governor's proposed
reading of KRS 48.620(1), it cannot. Not only is KRS 48.610 an additional
element of context in which KRS 48.620(1) is to be considered, it is a direct
command that allotments are to conform to the appropriations made by the
General Assembly. That command cannot be ignored.
This reasoning carries with it the weight of logic and considers the effect
of other statutory references to "allotments." It thus offers a sounder basis for
interpreting the statute than relying on expressio unis as applied to the
appropriation-maximum qualification in KRS 48.620(1). Although that is
unquestionably a legitimate principle of statutory interpretation, it should be
Budget ... may be revised pursuant to KRS 48.605 and this Act." 2014 Ky. Acts Ch.
117, Part III, § 4. A broad application of the expressio unius canon would suggest that
KRS 48.620, which is not mentioned as a means by which an allotment may be
revised, is not applicable to revising allotments under this bill. But that canon "must
be applied with great caution, since its application depends so much on context."
Scalia & Garner, supra, at 107. Indeed, it "properly applies only when the unius (or
technically, unum, the thing specified) can reasonably be thought to be an expression
of all that shares in the grant or prohibition involved. Common sense often suggests
when this is or is not so." Id. Nothing in the bill suggests that KRS 48.620 was
intended not to apply to the 2014 Executive Branch Budget Bill (unlike the one passed
in 2016, at least with respect to the Universities). Common sense, especially in light of
how the allotment-revision statute works, as explained in this opinion, suggests that it
was in effect and could be used to revise allotments. This same limit on expressio
unius, however, shows why the Governor's reliance on it to read only an upward limit
to revisions is untenable.
31
used cautiously and simply cannot control here as explained in footnote 8. The
other approach discussed provides a better indication of meaning here.
b. The meaning of allotment revision throughout the statute's
history also requires it to be read as referring to the scheduling of
allotments, and not just amounts.
The whole-text canon—as applied to the immediate context of the
statute—is not the only one showing that KRS 48.620(1) allows only revision of
the schedule of allotments. An examination of the statute's history 9 also
demonstrates that it has always been concerned with revising the allotment
schedule, rather than reducing a single allotment.
Thus we apply the fixed-meaning canon. This canon would have words
"be given the meaning they had when the text was adopted." Scalia 86 Garner,
supra, at 78. KRS 48.620 was adopted in 1982, and the language at issue in
subsection (1) has not changed since that time. Thus, it bears the same
meaning that it had at that time.
But KRS 48.620 does not exist in a vacuum, nor did it in 1982. Indeed,
the statutory scheme at issue here has a long history and includes more than
the provision allowing revision of allotments. Some understanding of the larger
existing scheme, and how it came to be (in terms of amendments), sheds light
on what allotment revision in KRS 48.620 meant in 1982 and now. We thus
9 Here, we refer to the history of the statutory language over time in light of
amendments. This is "quite separate from legislative history," Scalia 86 Garner, supra,
'at 256, which concerns committee reports, floor speeches, and other instances of
legislative activity that are not reflected in the language of the statute. Statutory
history is part of the context of the existing statutory language and is amore reliable
indicator of the statute's meaning.
32
also apply the principle that "[s]tatutes in pari materia are to be interpreted
together as though they were one law." Scalia & Garner, supra, at 252.
KRS 48.400 to .810 address general monitoring and revision of the
budget during the course of the biennium. Included in this scheme is KRS
48.620 allowing the Governor to revise allotments. It also includes KRS 48.605,
which allows revisions of allotments at the request of the head of a budget unit.
Also included in this scheme is express authorization for the Governor to
reduce an appropriation under certain circumstances. See KRS 48.600.
Generally speaking, this statute very narrowly and specifically grants the
Governor the authority to reduce appropriations when there is an estimated or
actual revenue shortfall in the general fund of 5% or less. KRS 48.600(1).
Even then, the Governor is not given free rein. Instead, he may reduce
appropriations only "in accordance with the budget reduction plan included in
the enacted branch budget bill," id., and no reductions under the plan are
permitted "in excess of the actual or projected revenue shortfall,"
KRS 48.600(2). And if the shortfall exceeds or is expected to exceed 5%, then
action can only be taken by the General Assembly. See KRS 48.130(3) ("Any
revenue shortfall in the general fund or road fund of greater than five percent
(5%) shall require action by the General Assembly.").
On its face, the Governor's claim to broad authority under KRS 48.620(1)
to change the amount of money available to the Universities when there is a
budget surplus is inconsistent with his needing legislative authorization to do
the same thing when there is an actual or anticipated budget shortfall under
KRS 48.600. And when the statutes' history is reviewed, it is evident that they
33
are, in fact, very different powers, and that only one has been given to the
Governor.
From 1982 to 2009, when faced with budget shortfalls, the Governor
could not reduce appropriations.m Rather, he could reduce allotments under
those circumstances. See KRS 48.600(1) (1982) (commanding the Governor to
"make any allotment reductions for the budget units" that were necessary). He
was also required to "take any steps to revise allotments for [his] respective
branch[] that [we]re necessary to prevent a cash deficit." Id.
KRS 48.620, the allotment-revision statute, also existed at that time. Its
first two sections read much as they do now:
(1) Allotments shall be made as provided by the allotment
schedule, and may be revised upon the written certification of
the Governor, the Chief Justice, and the Legislative Research
Commission for their respective branches of government. No
revisions of the allotment schedule may provide for an allotment
or allotments in excess of the amount appropriated to that
budget unit in a branch budget bill, or for expenditure for any
other purpose than specified in a branch budget bill and a
budget memorandum provided for by KRS 48.300.
(2) Revisions of allotments under this section shall be reported and
reviewed as provided by subsection (4) of KRS 48.500.
KRS 48.620 (1990). 11
But the pre-2009 version included two additional provisions:
(3) When the actual tax receipts accruing to the general fund or
road fund, as appropriate, do not permit all the allotments
provided for by the schedules of allotments of all branches of
10 Before 1982, these matters were handled under a different set of statutes.
Those were repealed in 1982 and replaced by KRS 48.400 to .810.
11 These provisions essentially read as they did when enacted in 1982. In 1990,
they were amended slightly to add "branch budget bill" instead of "joint budget
resolution." And they were later amended to delete the language "and a budget
memorandum provided for by KRS 48.300" from subsection (1), and to change the
cross-reference in subsection (2). Otherwise, the language has been stable.
34
government, the secretary of the Finance and Administration
Cabinet shall notify all branches of government and each
branch shall take appropriate action concerning allotments.
(4) This subsection shall not apply in the event of a projected or an
actual deficit in tax receipts of the general or road funds as
determined by KRS 48.130.
KRS 48.620 (1982). 12
These provisions are important indicators of the meaning that allotment
revision had when the first subsection was originally enacted. Subsection (3)
required the Finance and Administration Cabinet to give notice when actual tax
receipts would not permit all of the allotments, and the affected branches of
government were to take appropriate action, presumably, by revising
allocations as allowed under subsection (1).
On its surface, insufficient actual tax receipts sounds like a budget
deficit, but subsection (4) stated that KRS 48.620 was not to apply in the event
of a projected or actual deficit. Instead, upon such an occurrence, assuming
the deficit was less than or equal to 5%, KRS 48.600 went into effect. Again,
under the version of that statute then in effect, the Governor was allowed to
make both allocation reductions and allocation revisions. But the two were
unquestionably different acts, as the former was only allowed in the event of a
deficit.
So when was the revision process laid out in KRS 48.620 to be
implemented? "When the actual tax receipts accruing to the general fund or
road fund, as appropriate, d[id] not permit all the allotments," KRS 48.620
12 These provisions were not amended until repealed in 2009.
35
(1982), but not when there was a projected or actual deficit. What is the
difference between the two scenarios? An actual deficit is when the state has
literally run out of money for the year, but still has unpaid expenses. A
projected deficit is when the state is projected to run out of money before the
end of the year while still having projected expenses.
But tax receipts can be insufficient temporarily to pay out an allotted
amount without there being an expected deficit overall for the year. Just as
"the Commonwealth does not receive all its anticipated receipts on the first day
of the fiscal year," Aff. of Kathleen Marshal1 13 at 4, it is possible that
anticipated receipts may not be received on the day they are actually expected
or simply do not coincide with the timing of an allotment. That is when KRS
48.620 was set to go into effect. If, for example, actual tax receipts in the first
quarter were insufficient to pay a full allotment, but the funds were expected to
be available in the second quarter, then the allotments could be revised to
reflect the reality of, and expectations about, the state's revenue stream. This
indicates that revision of allotments, as allowed under subsection (1), was
about changing the schedule of payments.
Moreover, the version of KRS 48.600 then in effect demonstrates that a
reduction of an allotment, which was allowed when there was a deficit, was
different from a revision of an allotment. Revision of an allotment was also
allowed when there was a deficit, but short of a deficit, only a revision was
allowed, not a reduction.
13 Ms. Marshall is an Analyst in the Office of the State Budget Director.
36
Under the fixed-meaning canon, the meaning of allotment revision, thus,
must still refer to changing the schedule of the allotments. If one allotment
goes down, another must go up, resulting in the same overall appropriated
amount being allotted over the course of the fiscal year. Revision, in this
context, differs from reduction, which means a departure down from the
appropriated amount. Reduction was allowed in 1982 only when there was a
deficit; the same holds true now.
The obvious response to this analysis is that subsections (3) and (4) are
no longer the law, having been repealed in 2009. That, however, does not mean
that subsection (1)'s meaning was changed. Unquestionably, "a significant
change in language is presumed to entail a change in meaning." Scalia 8;
Garner, supra, at 256. But the language in subsection (1) was not changed,
even though the overall statute was amended. Indeed, that subsection (1)'s
language was left intact suggests that its meaning remained fixed intentionally.
And, as explained above, as used before 2009, revision of an allotment
necessarily meant something different from reducing an allotment. Thus, even
if allotment revision were ambiguous under the current statutes, "it is fair to
argue that giving an ambiguous term one meaning rather than another would
cause it to make no sense as used in an earlier-enacted statute ... so that such
an interpretation should be rejected." Id. at 323. The Governor's proposed
reading of the statute would not have made sense under the pre-2009 version
of the statute, even though the language in question has not been changed. For
that reason, that interpretation must be rejected.
37
Still other changes made in 2009 suggest that revision of an allotment
continues to mean a change in the timing of payments, rather than a reduction.
KRS 48.600 was amended at that time so that reductions in the event of a
deficit (now "revenue shortfall") were to be made to appropriations, rather than
allotments. And instead of allowing these reductions to be made as "deemed
necessary" by the head of the branch of government, they are now to be made
"in accordance with the budget reduction plan included in the enacted branch
budget bill." At the same time, subsections (3) and (4) of KRS 48.620 were
repealed. These provisions were no longer necessary to clearly establish the
difference in when KRS 48.600 and .620 were to be used because the
reduction-revision distinction was clarified. But that was because the
distinction between a revision of an allotment and what had been called a
reduction of an allotment (now a reduction of an appropriation) had been
clarified.
In light of this statutory history, it is evident that KRS 48.620(1) has
always been addressed to revising the schedule of allotments. Nothing in the
amendments in 2009 suggests that this language means something different
now.
2. Withholding allotments when there are trust and agency funds
under KRS 45.253(4).
As an alternative, the Governor claims that his action, in substance, was
permitted by KRS 45.253(4), which allows the Secretary of the Finance and
Administration Cabinet to "withhold allotment of general fund appropriations
to the extent trust and agency funds are available." As noted above, the
38
Governor presented evidence that the Universities had available adequate trust
and agency funds to cover the reductions he made, and thus there would be
nothing unlawful about the Secretary withholding allotment of 2% of the fourth
quarter's general-fund appropriations.
The problem with the Governor's position, however, is that the financial
administration of state universities is governed by KRS 164A.555 to .630. 14
AndKRS164.30(2)staepciflyh"[]noterpvisfKRS
Chapter[] ... 45 ... to the contrary notwithstanding, KRS 164A.555 to 164A.630
shall govern the financial management of higher education." 15 Thus, to the
extent that KRS Chapter 45, including 45.253(4), is inconsistent with KRS
164A.555 to .630, the latter set of provisions controls.
The Governor argues that there is no inconsistency and, that to the
extent there could be one, any conflict should be resolved in favor of reading
these statutes in harmony if possible. It is unquestionable "that where two
statutes are in apparent conflict, their inconsistencies should be reconciled if
possible." Commonwealth v. Martin, 777 S.W.2d 236, 238 (Ky. App. 1989); see
also Scalia 86 Garner, supra, at 180 ("The provisions of a text should be
interpreted in a way that renders them compatible, not contradictory."). The
question is whether the statutes can be read in harmony.
14 Technically speaking, these provisions require the Universities to have opted
into their governance. KRS 164A.560. The Universities all appear to have done so.
15 That statute includes an exception not applicable to this case: "with the
exception of KRS 45.990 and 45A.990 having to do with penalties which shall be
applicable to violations of KRS 164A.555 to 164A.630."
39
The Governor notes that the financial-management provisions of Chapter
164A are about the internal financial management of the Universities, whereas
KRS 45.253(4) applies to the Finance and Administration Cabinet. Because
they govern different entities, goes the argument, they cannot be in conflict.
This is largely correct, as most provisions of KRS 164A.555 to .630 are directed
to the internal financial management of the Universities.
But not every provision is. Indeed, the very first provision, KRS
164A.555, is instead directed at the Finance and Administration Cabinet. It
states:
The secretary of the Finance and Administration Cabinet shall
issue warrants authorizing the Treasurer of the Commonwealth of
Kentucky to pay to the treasurer of each institution any amounts
due by virtue of the state appropriations for that institution, or
transfer the amount due electronically if electronic transfer is
authorized by statute. The transfer of funds shall be handled in a
manner to assure a zero (0) balance in the general fund account at
the university.
KRS 164A.555. This statute specifically directs the secretary to bypass the
ordinary process of issuing warrants to the Treasurer to pay expenses on
behalf of a government body and to instead issue warrants to the Treasurer to
pay "any amounts due" directly to the Universities.
The Governor argues that this statute accomplishes only one thing: it
allows the Universities to pay their own bills, rather than relying on the
Finance and Administration Cabinet and the Treasurer as each bill comes due.
It certainly has that effect, but that is not all the statute does. It is a direct
command to the Secretary of Finance and Administration Cabinet to pay "any
amounts due by virtue of the state appropriations for that institution."
40
KRS 164A.555. The "amounts due by virtue of the state appropriations" is
exactly that: the amount appropriated—the full amount.
Again, the Governor disputes that this requires the full amount, and
argues that "any amounts due" simply "refers to any amount up to the
appropriated amount." He notes again his argument that an appropriation is
only a ceiling and that not every penny must be spent. Again, this is true but is
not the full story. An appropriation is also an authorization for the expenditure
of funds.
More importantly, KRS 164A.555 is simply not ambiguous. To the extent
an amount is authorized by an appropriation, KRS 164A.555 recognizes that
amount is "due" to the Universities. Although the word "due" has many uses
and meanings, its relevant meaning here—in the context of an amount of
money—is "[playable immediately or on demand" or "[o]wed as a debt; owing."
American Heritage Dictionary of the English Language (5th ed. 2011). Indeed,
the usage example offered for this latter definition is "the amount still due." Id.
Although the first use is more common in modern English, see Bryan A.
Garner, Garner's Dictionary of Legal Usage 300 (3d ed. 2011), both meanings
,
demonstrate that whatever amounts are "due" under the appropriations are
amounts to which the Universities are entitled, whether immediately or as a
debt. Either way, the statute orders the Secretary of Finance and
Administration to issue warrants for those amounts. ("Due" is limited here to
some extent by the statutes requiring quarterly allotments; in other words, the
full amount does not become due at the beginning of the fiscal year.)
41
And the word "any" further confirms this understanding that the full
amount must be paid. Although it has multiple senses, the word as used here
means "every" or "all." See American Heritage Dictionary of the English
Language (5th ed. 2011) ("Every: Any dog likes meat."); Bryan A. Garner,
Garner's Modern English Usage 57 (4th ed. 2016) (noting that "any" has six
uses as an adjective but that "[i]n affirmative sentences, it means 'every' or 'all'
... "). Thus,
the statute cannot mean that an amount less than the full appropriation can
be paid to the Universities. Instead, a warrant for all of the amount or every
amount due must be issued by the Secretary. Any action less would not
comport with the directive of KRS 164A.555. 16
And that the full amount is due is further confirmed by the budget bill
itself. Specifically, the 2014 Executive Branch Budget Bill commanded "that
the Executive Branch shall carry out all appropriations and budgetary
language provisions as contained in the State/Executive Budget." 2014 Ky.
Acts Ch. 117, Part III, § 27. The only way to do so was to comply with KRS
164A.555.
In short, the conflict between KRS 164A.555 and 45.253(4) is
inescapable. The two cannot be read together without ignoring the plain
meaning of the language in KRS 164A.555. Because KRS 164A.630(2)
16The proof in this case included an affidavit from Kathleen Marshall, an
analyst in the Office of the State Budget Director, stating that the Universities do not
actually draw their full allotment at the beginning of each quarter, though it is
ordinarily available to them. Our reading of the statute does not render this practice
unlawful. As long as the appropriated funds are made available, the statute is
complied with.
42
commands that the provisions of KRS Chapter 164A control over KRS Chapter
45 if there is a conflict, KRS 164A.555 must control. Thus, the Finance and
Administration Cabinet cannot withhold the Universities' allotments even if
they have sufficient trust and agency funds to cover their expenses.
Any concerns the Governor raises about an appropriation not requiring
the expenditure of the full amount—of every penny—are alleviated by the fact
that any funds paid to the Universities on the Secretary's warrant but not
spent will lapse back to the general fund. See KRS 164A.565(2) (" Any
uncommitted state general funds remaining after the close of business on the
last day of the fiscal year shall lapse and be returned to the Treasury of the
Commonwealth."). 17 Thus, it is evident that the Universities, like any other
state agency with discretion in how it spends money, are not required to
expend every penny appropriated to them. Nor is that money lost to the state,
as it is returned if not spent.
B. The Governor's authority to decline to spend appropriated funds is
statutorily limited with respect to the Universities.
The Governor has not explicitly claimed the inherent authority to require
the Universities not to spend their funds. But this understanding of executive
power is implicit in his argument. Indeed, he emphasizes in his brief that while
the power of the purse belongs to the legislature, "administering an
appropriation and spending money is an executive function." And he claims
that he has acted within that realm, having "taken the purse of money provided
17 Funds appropriated for capital construction are excluded from this lapse.
KRS 164A.565(6).
43
by the legislature and having] reasonably decided that the legislature's will can
be satisfied without spending all of the money in the purse." We recognize that
the Governor has disclaimed the existence of "unfettered power to withhold
appropriated money and reduce spending," and instead claimed authority for
his actions under the statutes addressed above. At the same time, however, he
claims, under the guise of laying out a limiting principle on his authority, that
he "may direct budget units to spend less than the full amount of an
appropriation so long as 'he has determined that such a decision will not
compromise the achievement of underlying legislative purposes and goals."'
(Quoting Opinion of the Justices to the Senate, 376 N.E.2d 1217, 1223 (Mass.
1978)). The acknowledgement of this limiting principle, however, contains in it
a suggestion of an authority that does not exist with respect to the Universities.
The existence and breadth of such an authority generally is not before
us. Thus we do not address whether the Governor's exercise of such authority
in other areas of the executive budget might create a constitutional challenge
as the Attorney General has claimed. Here, the statutory language is clear that
the legislature has not given the Governor control over the Universities'
appropriated funds regardless of whether such authority exists in regard to
other budget units.
In suggesting that reducing the Universities' allotments has been
essentially a decision not to spend the money, the Governor relies heavily on
the notion that an appropriation is a ceiling on spending. There is little
question that an appropriation does not mandate the expenditure of all the
funds authorized (unless the appropriation says otherwise). Indeed, the budget
44
bill at issue in this case itself notes that "[t]here is appropriated ... the following
discrete sums, or so much thereof as may be necessary." 2014 Ky. Acts Ch.
117, Part I, § (1).
So the question is simple: May the Governor order the Universities not to
spend their funds? Or, as the trial court suggested, are "[t]he Universities ...
under the Governor's control as part of the executive branch"? Although the
Universities are state agencies and are attached to the executive branch for
budgetary purposes, they are not part of the executive branch in the same
sense as the program cabinets and boards directly under the Governor's
control.
Unlike those cabinets and boards, the Universities' boards are separate
"bod[ies] corporate, with the usual corporate powers." 18 KRS 164.350; see also
KRS 164.460 (same for the University of Kentucky); KRS 164.830(1) (same for
the University of Louisville). They are expressly excluded from being part of the
Department of Education. KRS 164.285. 19 In some ways, they are akin to
municipal or public corporations, having a separate existence from the main
body of government, although retaining many of the government's
characteristics, such as immunity from suit.
18 Indeed, the Governor's counsel emphasized at oral argument, albeit in
discussing the standing question, that the Universities were separate corporations
from the rest of state government.
19 That statute went so far as to repeal any statute suggesting that the
Universities are part of the Department of Education: "KRS 156.010 and 64.640 and
any other statute, to the extent that they provide that the University of Kentucky,
Eastern Kentucky State University, Western Kentucky State University, Murray State
University, and Morehead State University shall be included in the Department of
Education and constitute a division thereof, are hereby repealed." KRS 164.285.
45
The Universities' boards have close to plenary power over the operation of
their respective institutions. For example, they have exclusive control over
appointments, qualifications, and salaries of faculty and employees. KRS
164.365(1); KRS 164.220 (UK); KRS 164.830 (U of L).
And the Universities are all generally given authority to receive and
spend money from all sources. The Universities other than the University of
Kentucky and the University of Louisville are given the power to receive and
spend money under KRS 164.350(1): "Each board may: (a) Receive grants of
money and expend the same for the use and benefit of the university or college
...." If they opt to proceed under KRS 165.555 to .630, which the Universities
have done, they may "receive, deposit, collect, retain, invest, disburse, and
account for all funds received or due from any source including, but not limited
to, state and federal appropriations." KRS 164A.560(2)(a). This grant of
authority is even more explicit with respect to the boards of the University of
Kentucky and University of Louisville, both of which are expressly given the
authority to receive and spend appropriations and allotments. See KRS
164.160 (giving UK board power to "receive, hold and administer ... all
revenues from ... appropriations, [and] allotments"); KRS 164.830(1)(d) (stating
powers of U of L board include "receipt, retention, and administration ... [of] all
revenues accruing from ... appropriations, [and] allotments").
There are, of course, some limits on how the boards operate. For
example, certain expenditures must be approved by the Finance and
Administration Cabinet or the Council on Postsecondary Education. See KRS
164A.575 (requiring cabinet approval for real property purchases); KRS
46
164.020(11)(a) (giving council power to approve certain capital construction
projects). But that does not otherwise bring the financial decision-making—the
choice whether to spend funds—back within the purview of the Governor.
The Governor also has some say with respect to the Universities' boards.
For example, he gets to appoint most of the members of the boards. See KRS
164.131(1) (e) (UK); KRS 164.821(1) (U of L); KRS 164.321(1) (a) (other
universities). And he may remove members for cause. See KRS 63.080(2); KRS
164.131(1)(d) (UK); KRS 164.821(1)(b) (U of L); KRS 164.321(10) (other
universities); KRS 164.325 (specifically applying 63.080(2) to boards of
regents).
These provisions, however, do not undermine the university boards'
fundamental independence. A large portion of this independence is financial
self-control. The authority over the expenditure of funds appropriated to the
Universities has been statutorily lodged with independent boards that head
these institutions. Those boards may decline to spend funds appropriated to
them, in which case the funds will lapse. 20 But by giving that authority to the
boards, the General Assembly has necessarily deprived the Governor of it. We
thus conclude that the Governor cannot order the boards of the Universities
not to spend funds appropriated to them.
The Governor's authority with respect to the boards differs
fundamentally from his authority with respect to those state entities and
20 Like the rest of state government, the Universities are subject to a lapse
provision if they do no spend state funds before the end of the fiscal year. See KRS
164A.565(2) (providing for lapse of "uncommitted state general funds remaining after
the close of business on the last day of the fiscal year").
47
employees that answer to him, such as the program cabinets and secretaries
who head those cabinets. In this sense, the Universities are much more like
private entities. And their authority over spending their money is largely
independent of the executive branch.
Indeed, this is likely why the Universities, unlike other government
entities, are given their own money to be held in their own accounts, rather
than relying on the Finance and Administration Cabinet's submitting warrants
to the Treasurer, who would then write checks to third parties owed money by
the Universities:
The secretary of the Finance and Administration Cabinet shall
issue warrants authorizing the Treasurer of the Commonwealth of
Kentucky to pay to the treasurer of each institution any amounts
due by virtue of the state appropriations for that institution, or
transfer the amount due electronically if electronic transfer is
authorized by statute. The transfer of funds shall be handled in a
manner to assure a zero (0) balance in the general fund account at
the university.
KRS 164A.555.
This illustrates why the Governor's suggestion that he has simply
stopped the money from being spent mischaracterizes what he has actually
done. Rather than ordering the Universities not to spend money, which he
cannot do, and thereby allowing those funds to lapse back to the General Fund
at the end of the fiscal year, he has instead effectively intercepted the funds
before they became available to the Universities. By reducing the final quarterly
allotment, the Governor has essentially frustrated the overall appropriation by
the General Assembly. Money that the General Assembly made available to the
Universities through its appropriations was made unavailable by the
48
Governor's actions. Simply put, there is a difference between exercising an
authority not to spend money once it has been made available and preventing
the money from being made available to the entity that has the power to decide
not to spend it.
Again, this is not to say that every penny appropriated must be spent. As
the Governor points out, such a legal requirement would be fiscally
irresponsible. And the budget bill itself recognizes this by authorizing the
spending of appropriations "or so much thereof as may be necessary." But the
Governor does not have the power to make that decision for the Universities.
And if the Governor does not have discretion over whether to spend the
money because the funds were appropriated for an entity over which he does
not have control, then the transfer of funds "is a ministerial, mechanical, non-
discretionary act." People ex rel. Bakalis v. Weinberger, 368 F. Supp. 721, 726
(N.D. Ill. 1973). Indeed, KRS 164A.555, discussed above, further demonstrates
how this is a ministerial act: it commands the secretary of the Finance and
Administration Cabinet to issue warrants for the payment of the Universities'
"any amounts due by virtue of the state appropriations for that institution."
That statute also necessarily limits the Governor's authority, as he cannot
legally compel the secretary to act contrary to law. And, again, the budget bill
itself commanded "that the Executive Branch shall carry out all appropriations
and budgetary language provisions as contained in the State/Executive
Budget." 2014 Ky. Acts Ch. 117, Part III, § 27. This limit makes the Governor's
conduct with respect to entities over which he has no control purely
ministerial.
49
Consequently, we need not address the constitutionality of the actions
the Governor claims he is entitled to make, because our statutory analysis
makes it clear that he does not have the legal authority to take such actions.
IV. Conclusion
The Governor's reduction of the allotments of the Universities in this case
exceeded his statutory authority to revise allotments under KRS 48.620(1) and
his authority to withhold allotments under KRS 45.253(4). Whatever authority
he might otherwise have to require a budget unit not to spend appropriated
funds does not extend to the Universities, which the legislature has made
independent bodies politic with control over their own expenditures. We
therefore do not reach the question of whether his actions were constitutional,
as the statutes do not give him the authority to act as he proposed. For these
reasons, the Franklin Circuit Court's order upholding the Governor's actions is
reversed, and this matter is remanded for further proceedings consistent with
this opinion.
All sitting. Minton, C.J.; Cunningham, Hughes, and Keller, JJ., concur.
Venters, J., dissents by separate opinion. Wright, J., dissents by separate
opinion in which Venters, J., joins.
VENTERS, J., DISSENTING: I respectfully disagree with the majority's
conclusion that the Attorney General has standing to assert the claim his office
presents in the absence of affected universities. The majority has no express
constitutional or direct statutory authority to support its conclusion that the
Attorney General has standing to sue the chief executive to enjoin an executive
action, and so it bases its opinion on the vague notion that such authority was
50
available to attorneys general at common law. As explained below, that notion
is flat-out wrong. No attorney general in the entire common law history ever
had that authority, and neither the majority opinion nor the Attorney General
himself cites even a single common law precedent for such power.
I agree with the majority's conclusion that Representatives Wayne,
Owens, and Marzian have no standing, either personally or as proxies for the
legislative branch of government, to assert claims contesting the Governor's
executive order to reduce allotments to state-supported universities for the
final quarter of the 2015-2016 fiscal year. 21 I join Justice Wright's dissent and
I agree with his reasoning that the affected state universities are the proper
parties to bring the claim. Since the only affected parties with a claim to assert
have reached an accommodation with the Governor and chosen not to litigate,
there is no justiciable controversy. The only correct resolution is dismissal of
the case without addressing the merits. Lawson v. Office of Attorney General,
415 S.W.3d 59, 67 (Ky. 2013); Rose v. Council for Better Education, 790 S.W.2d
186 (Ky. 1989); Ky. Const. § 112.
The doctrines of standing and justiciability prevent interlopers from
asserting claims that legally belong to others. The doctrines exists because we
learned long ago in the common law tradition that it is unwise for the courts to
21 The General Assembly as a body politic in its own right needs no standing
because it need not resort to the courts for help in fending off an encroachment by the
Governor upon the legislature's rightful powers. The legislative branch has a full
constitutional quiver of legislative arrows with which to defeat any executive intrusion
into the legislative prerogative and to cure any distortion of the legislature's will
caused by such an intrusion. If, rather than using its own constitutional authority to
reassert its legislative prerogative, the General Assembly also sought a judicially-
imposed remedy, its standing would also have to be properly established.
51
litigate claims asserted by those who have no personal interest at stake. That is
especially true when those who actually have a cognizable claim have declined
to do so. To have standing to sue, "[a] plaintiff must have a real, direct, present
and substantial right or interest in the subject matter of the controversy."
Housing Authority of Louisville v. Service Employees International Union, Local
557, 885 S.W.2d 692, 695 (Ky. 1994). "In order to have standing to sue, a
plaintiff need only have a real and substantial interest in the subject matter of
the litigation, as opposed to a mere expectancy." Rose, 790 S.W.2d at 202. To
restate the standing concept in more colloquial terms: to have standing to
assert a claim in court, "you have to have skin in the game."
Standing to invoke the authority of the courts for redress of an injury is
acquired in two, and only two, ways. First, as noted above, one who suffers a
direct and immediate judicially-cognizable injury or has an interest deserving
of legal protection has standing. Second, the legislature may by statute confer
standing upon an entity even if it lacks a direct and immediate injury. See Tax
Ease Lien Investments 1, LLC v. Commonwealth Bank & Trust, 384 S.W.3d 141,
143 (Ky. 2012) (quoting City of Ashland v. Ashland F.O:P. # 3, Inc., 888 S.W.2d
667, 668 (Ky. 1994)); In re Pappas Senate Committee, 488 N.W.2d 795, 797
(Minn. 1992); and Pennsylvania National Mutual Casualty Insurance Co. v.
PWAB, 715 A.2d 1068, 1071 (Pa. 1998).
The majority first relies upon our decision in Commonwealth ex rel.
Conway v. Thompson, 300 S.W.3d 152 (Ky. 2009), as a source for the Attorney
General's claim of standing in this matter. In Thompson we recognized that the
attorney general has standing to seek injunctive relief on behalf of the citizens
52
to prevent the early release of inmates from prison in derogation of the
judicially-imposed sentences. Id. at 172. Implicit in that holding was our
recognition that every single sentence affected by the planned prisoner release
arose from a case in which the Commonwealth of Kentucky was an actual
party, and in many instances, was actually represented by the Office of the
Attorney General. Because the objective of that litigation fell squarely and
indisputably within the criminal law enforcement interest and duties of the
attorney general, we concluded that Attorney General Conway had "a sufficient
personal right in these types of cases by virtue of the office and the duties
commensurate with that high office." Id. at 173 (emphasis added).
However, as the majority expressly acknowledges, the claim pressed by
Attorney General Beshear in this litigation is not one of those "type of cases."
The claim now asserted falls far beyond the range of the Attorney General's
criminal law enforcement function. The Thompson case provides no support for
the Attorney General's stance in this case. The majority then looks to find other
law supporting the Attorney General's standing in this "type of case," and
naturally begins with Section 91 of the Kentucky Constitution.
Section 91 simply provides that the attorney general has whatever
"duties and responsibilities" have been "prescribed by law." The Attorney
General, therefore, has no constitutionally-ordained authority that confers
standing to enjoin the Governor, the Treasurer, or others from implementing
the budget reduction plan for the state universities. Section 91 supports only
the specific duties that have been "prescribed by law." Consequently, we look
53
to the relevant statutes enacted by the General Assembly addressing the
matter.
No statute expressly provides or even obliquely suggests that the
Attorney General has the authority to sue the Governor to enjoin any executive
action. The only statute that is even conceivably applicable is the generic
provision of KRS 15.020 that provides the Attorney General with the obligation
to "exercise all common law duties and authority pertaining to the office .. .
under the common law, except where modified by statutory enactment." The
whole case boils down to whether "under common law" an attorney general had
the authority to sue the chief executive for perceived violations of the law.
The majority readily acknowledges that "defining the Attorney General's
common law duties is not easily done" and I agree. But we need not define all
the common law duties of an attorney general to sustain Attorney General
Beshear's claim of standing; rather, we need only find one common law duty
that authorizes the suit he now asserts. I respectfully submit there are none to
be found because at common law, suing the executive in the civil courts is
simply not what attorneys general were empowered to do. See Nat'l Ass'n of
Att'ys Gen., State Attorneys General Powers and Responsibilities 31 (Emily
Myers, ed., 3d ed. 2013) (quoting Edwards, The Law Offices of the Crown 27
(1964)).
In its search to find common law precedent for the unprecedented, the
majority looks to Commonwealth of Kentucky ex rel. Hancock v. Paxton, 516
S.W.2d 865 (Ky. 1974), which held that an attorney general has standing to
54
initiate a lawsuit to ascertain the constitutionality of a state statute. 22 But that
is not the question before this Court. Attorney General Beshear does not
challenge the constitutionality of any statute.
The salient fact of the Paxton case is that Attorney General Ed Hancock
never challenged to any degree the legality of an executive action or executive
authority despite naming as nominal parties the Department of Transportation
and its commissioner. Although the Paxton decision does not cite a common
law precedent allowing an attorney general to challenge the constitutionality of
a statute, the existence of such a precedent would not be surprising given the
well-documented legal battles, some of which involved actual armed warfare,
waged over the centuries between the English monarch and the English
parliament. In any event, Paxton's lack of common law precedent allowing the
attorney general to challenge the constitutionality of a statute does not logically
indicate the existence of a power at common law to sue the executive to enjoin
executive action.
The Paxton court offers up a weak rationalization for the existence of
such power and it is based upon a flawed depiction of American political theory
which the majority adopts. Paxton opines that since the attorneys general
under the common law of England served the king and therefore lacked the
authority to sue the sovereign, attorneys general in the democracies of the
American states in which "the people are king" serve the people, and therefore
The challenged statutes authorized special automobile license plates for
22
members of the General Assembly and for ham radio operators.
55
are not so constrained. That exercise of logic ignores the core of American
constitutional theory: the people, as an exercise of their natural sovereignty,
collectively acted to "institute" a government "of the people, by the people, for
the people," and thus by the constitutional process they transferred their
sovereignty to the state they created. The king is not sovereign in America, but '
neither are the people king. 23
A more obvious contradiction to the Paxton theory is the undeniable fact
that the people of Kentucky, the "king" as Paxton would have it, have NEVER
directly or through their chosen representatives in the General Assembly
granted the Attorney General the power he now asserts. There was no common
law precedent for an attorney general suing the head of state when the state
was a royal monarchy and the creation of the American states did not
manufacture such precedent. 24
Attorney General Beshear does not challenge the constitutionality of any
state statute. Instead, he does what no attorney general at common law ever
had the authority to do: he seeks a court order to enjoin an action of the state's
chief executive, the Governor, and the state's treasurer, finance secretary, and
budget director. The Attorney General deserves credit for earnestly
undertaking a difficult issue that he deeply regards as important and
23 After all, the king enjoyed sovereign immunity, a tribute of sovereignty now
enjoyed-not by the people, but by the state.
24 Although not strictly an application of this common law restraint, it may be
recalled by many that U.S. Attorney General Elliot Richardson and Deputy Attorney
General William Ruckelshaus resigned their respective offices, in part, because they
expressly lack the authority to challenge the head of state, President Richard Nixon.
56
meritorious. I certainly do not suggest that executive authority should not be
challenged. For a nation and a state founded upon principles of individual
liberties, challenging the chief executive's authority can be a good thing.
However, the question before us is not whether the Governor's action should be
challenged; the question is whether the Attorney General has the authority to
litigate the budget reduction issue by seeking to enjoin the Governor and the
other executive officers. By the majority's analysis, the Attorney General's only
viable claim to standing is that he is exercising a prerogative held by attorneys
general at common law. The inconvenient fact is that no attorney general at
common law ever had the authority to challenge the executive.
The majority also cites Johnson v. Commonwealth ex rel. Meredith, 165
S.W.2d 820 (Ky. 1942), as supporting the Attorney General's standing.
Although Johnson lends interesting historical context to the issue at hand, it is
ultimately inconsequential for two reasons. First, in Johnson as in Paxton, the
Attorney General challenged the constitutionality of a statute rather than
seeking to enjoin an executive action. Even more significant, however, is the
fact that the Attorney General in Johnson had direct, conventional standing
because he was directly injured by the statute being challenged. The statute
he challenged expressly "divest[ed] the Attorney General of a major portion of
his powers and prerogatives" so as to render the office "inoperative." Id. at 824.
Thus, the Attorney General's standing in Johnson was in no way dependent
upon the powers and duties of attorneys general at common law. Here, the
challenged governmental action has no direct effect upon the Attorney General
or his office that confers standing in the traditional sense. His only source of
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standing is statutory, specifically KRS 15.020, which requires a common law
precedent, and that precedent simply does not exist.
In Commonwealth ex rel. Ferguson v. Gardner, 327 S.W.2d 947, 948 (Ky.
1959), Attorney General Ferguson sought to intervene in a civil action on behalf
of a charitable trust. Like the current Attorney General in this case, Attorney
General Ferguson had no direct or immediate interest in the controversy to
confer standing, and in the absence of direct statutory authority, he claimed
the common law power to intervene "predicated on the ancient English doctrine
that the King, as parens patriae, superintended the administration of charities
and acted by the attorney general, who was his proper officer in that respect."
The Court rejected that claim because "the Attorney General . . . failed to show
that there was any established and recognized law of England to the effect prior
to 1607" allowing his office to assert a claim in that kind of litigation. Id. at
949. 25
Several available sources of legal scholarship trace the common law
history of the office of attorney general and the development of its powers and
duties. See Comm. on the Office of Att'y Gen., Nat'l Ass'n of Att'ys Gen.,
Common Law Powers of State Attorneys General (Jan. 1975); Nat'l Ass'n of
Att'ys Gen., State Attorneys General Powers and Responsibilities (Emily Myers,
ed., 3d ed. 2013). An authoritative summary can be found in People v. Miner, 2
25 The year 1607 is determinative because Kentucky has expressly adopted all
of English common law in force prior to 1607, the fourth year of the reign of James I.
See Aetna Insurance Company v. Commonwealth, 51 S.W. 624, 627-628 (Ky. 1899);
Ray v. Sweeney, 77 Ky. 1, 9-10 (Ky. 1878); and Lathrop v. Commercial Bank of Scioto,
38 Ky. 114, 121 (Ky. 1839). After 1607, Kentucky acknowledges the common law of
Virginia until the 1792 establishment of Kentucky as a sovereign state.
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Lans. 396 (N.Y. App. Div. 1868), which identifies the following common law
powers:
Most, if not all, of the colonies appointed attorney-generals, and
they were understood to be clothed, with nearly all the powers, of
the attorney-generals of England, and as these powers have never
been defined we must go back to the common law in order to
ascertain them. The attorney-general had the power, and it was
his duty:
1st. To prosecute all actions, necessary for the protection and
defense of the property and revenues of the crown.
2d. By information, to bring certain classes of persons accused of
crimes and misdemeanors to trial.
3d. By scire facias, to revoke and annul grants made by the crown
improperly, or when forfeited by the grantee thereof.
4th. By information, to recover money or other chattels, or
damages for wrongs committed on the land, or other possessions of
the crown.
5th. By writ of quo warranto, to determine the right of him who
claims or usurps any office, franchise or liberty, and to vacate the
charter, or annul the existence of a corporation, for violations of its
charter, or for omitting to exercise its corporate powers.
6th. By writ of mandamus, to compel the admission of an officer
duly chosen to his office, and to compel his restoration when
illegally ousted.
7th. By information to chancery, to enforce trusts, and to prevent
public nuisances, and the abuse of trust powers.
8th. By proceedings in rem, to recover property to which the crown
may be entitled, by forfeiture for treason, and property, for which
there is no other legal owner, such as wrecks, treasure trove, 86c.
(3 Black. Corn., 256-7, 260 to .266; id., 427 and 428; 4 id., 308,
312.)
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9th. And in certain cases, by information in chancery, for the
protection of the rights of lunatics, and others, who are under the
protection of the crown. (Mitford's Pl., 24-30, Adams' Equity, 301-
2.)
Significantly, not listed among these enumerated powers in Miner or in
any other source I can find is the common law authority to challenge the
actions of the chief executive. It remains abundantly clear that at common law
in England and as transplanted in the American colonies, and then in the
sovereign American states, attorneys general never had the duty or the power
to sue the executive to enjoin executive actions, and no Kentucky statute has
subsequently granted that power.
Historically, the core function of the attorney general at common law was
to assert the legal interests of the government, particularly the executive head
of the government, and the office was accorded the powers and duties essential
to the performance of that function. Certainly, the legislature could modify
that authority by enacting a statute to vest attorneys general with a plenary
power to police the executive branch of government and to initiate civil
litigation as their discretion warrants; but it has not chosen to do so.
Johnson v. Commonwealth ex rel. Meredith provides a summary of
common law authority that agrees with the history outlined above.
The office of Attorney General existed in England from an early
date. Most of the American colonies established an office of the
same name, and it was carried into the succeeding state
governments. Legal historians are not in accord as to just what
were the powers and prerogatives of the Attorney General in the
mother country, but they are agreed that he was the chief law
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officer of the Crown, managing all the king's legal affairs, attending
to all suits, civil and criminal, in which he was interested, and
exercising other high duties and prerogatives, some of which were
quite foreign to the legal.
165 S.W.2d at 826. The Johnson court acknowledged uncertainty in
determining the "undefined powers [that] attached to the same office in this
country," and was only "certain that the Attorney General has been the chief
law officer of the federal or the state governments with the duty of representing
the sovereign, national or state in such capacity." Id.
I respectfully submit that absolutely nothing in the review of the common
law duties of attorneys general supports the conclusion that the Attorney
General of Kentucky has the legal authority, i.e., the standing, to assert the
claims he now asserts against the Governor, the Finance Cabinet Secretary, the
State Budget Director, and the Treasurer. Indeed, the majority relies upon the
nebulous notion that "duty calls upon the Attorney General (and, thus, confers
on him standing) to vindicate the public rights of the people of the
Commonwealth."
The majority grants to the office of the Kentucky Attorney General virtual
carte blanche to challenge any action of every officer of the executive branch of
government, from the lowest county official to the office of the Governor,
including the universities themselves, anytime the sitting attorney general
deems it to be in the "public interest" to do so. Such unprecedented authority
is an unwise departure from the common law and is totally unsubstantiated by
any statutory directive.
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The majority addresses a situation in which none of the aggrieved parties
with a real interest to protect wish to do so. By cloaking the Attorney General
with unbridled authority to assert in any action virtually any claim his office
deems to be of "public interest," even when the affected parties choose not to
do so, the majority sets a dangerous, disruptive precedent that is contrary to
centuries of English and American common law tradition. The majority's
ruling on standing paves the way for the resolution of an injusticiable issue,
and it opens the gate for future adjudication of political issues best left to be
resolved within the political branches or by litigation initiated by a party
seeking redress for a direct and immediate injury.
WRIGHT, J., DISSENTING: I respectfully dissent. The majority does not
reference the fact that the state university presidents met with the Governor
and reached an agreement. The agreement was memorialized that same day in
a letter signed by eight of the nine presidents. The letter stated that the
presidents were "prepared to manage reductions in accord with the Governor's
final offer of 2 percent in the current year if it is determined by the courts to be
permissible . . . ." What the letter leaves unclear is what, exactly, was left to be
determined as permissible by the courts. What's more, the universities did not
file or join a case before the courts to determine what was permissible.
This language is ambiguous. On the one hand, the presidents could
have been referring to whether they had the power to spend less funds than
allocated. On the other, the presidents could have been referring to whether it
was permissible for the Governor to reduce their already-allocated funds for the
current fiscal year. The majority does address one of these issues by finding
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that the universities are not required to spend every penny of the money
provided them under the budget. But this still does not address the ambiguity
of the letter.
The trial court relies on the letter's language two different times in its
opinion and order—stating that "[i]n fact, as the Universities have come to an
agreement with the Governor" in the first instance and referring to the
agreement again later in its opinion and order. We do not set aside the trial
court's findings of fact unless they are clearly erroneous. Lawson v. Loid, 896
S.W.2d 1, 3 (Ky. 1995). I do not believe that they are.
The Governor's second letter reducing the allotment for eight of the state
universities referred to this agreement. The initial reduction of 4.5% was cut to
2% for the institutions whose presidents signed the letter. Kentucky State—the
only state school which did not agree that it could reduce its spending—had its
allotment completely restored. Clearly, the eight presidents who signed the
letter agreed to the reduction and the one president who did not agree (the
president of Kentucky State) received the full budgeted amount. There is no
evidence of record as to whether the presidents had the authority to enter into
such an agreement—and that is not at issue before this Court.
The universities did not join the lawsuit and neither party so much as
deposed their representatives. The Attorney General does say in passing in his
brief that the trial court erred referring to the agreement as a "fact" in its
opinion and order. However, the Attorney General does not provide any
evidence to support his contention that the trial court's finding was clearly
erroneous and fails to further flesh out the argument.
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On these facts, I would affirm the Franklin Circuit Court's grant of
summary judgment, as the trial court found that there was an agreement
between the universities and the Governor, thus rendering all other issues
moot.
Venters, J., joins.
COUNSEL FOR COMMONWEALTH OF KENTUCKY, EX REL. ANDY BESHEAR,
ATTORNEY GENERAL:
Andy Beshear, Attorney General of Kentucky
John Michael Brown, Deputy Attorney General
La Tasha Arnae Buckner, Executive Director Civil Division
Mitchel Terence Denham, Assistant Deputy Attorney General
Joseph Newberg
Office of the Attorney General
Capitol Building
700 Capital Avenue, Suite 118
Frankfort, Kentucky 40601
COUNSEL FOR COMMONWEALTH OF KENTUCKY OFFICE OF THE
GOVERNOR, EX REL. MATTHEW BEVIN, IN HIS OFFICIAL CAPACITY AS
GOVERNOR; COMMONWEALTH OF KENTUCKY FINANCE AND
ADMINISTRATION CABINET, EX REL. WILLIAM M. LANDRUM, IN HIS
OFFICIAL CAPACITY AS SECRETARY; COMMONWEALTH OF KENTUCKY
OFFICE OF THE STATE BUDGET DIRECTOR, EX REL. JOHN CHILTON, IN
HIS OFFICIAL CAPACITY AS STATE BUDGET DIRECTOR:
Michael T. Alexander
Mark Stephen Pitt
Stephen Chad Meredith
Office of the Governor
700 Capital Avenue, Suite 101
Frankfort, Kentucky 40601
64
COUNSEL FOR COMMONWEALTH OF KENTUCKY DEPARTMENT OF THE
TREASURY, EX REL. ALLISON BALL, IN HER OFFICIAL CAPACITY AS
TREASURER:
Noah Robert Friend
1050 U.S. Highway 127 South, Suite 100
Frankfort, Kentucky 40601
COUNSEL FOR JIM WAYNE, IN HIS OFFICIAL CAPACITY AS STATE
REPRESENTATIVE; DARRYL OWENS, IN HIS OFFICIAL CAPACITY AS STATE
REPRESENTATIVE; MARY LOU MARZIAN, IN HER OFFICIAL CAPACITY AS
STATE REPRESENTATIVE:
Pierce Butler Whites
Speaker's Office
Senior Counsel
303 Capitol Annex
Frankfort, Kentucky 40601
65