Netzer v. State

11/16/2022
DA 22-0109
Case Number: DA 22-0109
IN THE SUPREME COURT OF THE STATE OF MONTANA
2022 MT 234NETZER LAW OFFICE, P.C. and
DONALD L. NETZER,
Plaintiffs and Appellants,
v.
STATE OF MONTANA by and through
AUSTIN KNUDSEN in his official capacity
as Attorney General and LAURIE ESAU,
Montana Commissioner of Labor and Industry,
Respondents and Appellees.
APPEAL FROM: District Court of the Seventh Judicial District,
In and For the County of Richland, Cause No. DV-21-89
Honorable Olivia Rieger, Presiding Judge
COUNSEL OF RECORD:
For Appellants:
Jared R. Wigginton, Good Steward Legal, PLLC, Whitefish, Montana
Joel G. Krautter, Netzer Law Office, P.C., Sidney, Montana
For Appellees:
Austin Knudsen, Montana Attorney General, David M.S. Dewhirst,
Solicitor General, Brent Mead, Assistant Solicitor General, Helena,
Montana
Emily Jones, Special Assistant Attorney General, Jones Law Firm,
PLLC, Billings, Montana
Submitted on Briefs: October 5, 2022
Decided: November 16, 2022
Filed:
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__________________________________________
Clerk
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Chief Justice Mike McGrath delivered the Opinion of the Court.
¶1 This is an appeal from a Seventh Judicial District Court order denying an application
filed by Netzer Law Office, P.C. and Donald L. Netzer (collectively, “Netzer”)1 to
preliminarily enjoin the State of Montana from enforcing House Bill 702, as enacted by
the Montana State Legislature and signed by the Governor.
¶2 We restate the issues on appeal as follows:
Issue One: Did the District Court err by not evaluating whether House Bill 702
contained only one subject, clearly expressed in its title, as required by Article V,
Section 11(3), of the Montana Constitution?
Issue Two: Did the District Court manifestly abuse its discretion in declining to
preliminarily enjoin § 49-2-312, MCA, based on alleged infringement of Netzer’s
fundamental rights?
Issue Three: Did the District Court err by not evaluating § 49-2-312, MCA, under
any level of constitutional scrutiny?
We affirm in part and remand for further proceedings consistent with this Opinion.
FACTUAL AND PROCEDURAL BACKGROUND
¶3 During the 2021 legislative session, the Montana State Legislature passed HB 702,
codified as § 49-2-312, MCA. The bill was titled “An act prohibiting discrimination based
on a person’s vaccination status or possession of an immunity passport; providing an
exception and an exemption; providing an appropriation; and providing effective dates.”
1
Netzer Law Office, as a corporation, is not entitled to the same constitutional protections and
remedies as citizens, such as the fundamental rights in Article II, Section 3, of the Montana
Constitution at issue in this case. For simplicity and clarity, this Opinion collectively refers to the
Netzer Law Office and Netzer, as an individual, as “Netzer.”
3
Sections 1, 2, 4, 5, and 6 of the bill went into effect on May 7, 2021; Section 3 went into
effect on July 1, 2021.
¶4 The bill declared the following as unlawful discriminatory practices:
(a) a person or a governmental entity to refuse, withhold from, or deny to
a person any local or state services, goods, facilities, advantages, privileges,
licensing, educational opportunities, health care access, or employment
opportunities based on the person’s vaccination status or whether the person
has an immunity passport;
(b) an employer to refuse employment to a person, to bar a person from
employment, or to discriminate against a person in compensation or in a
term, condition, or privilege of employment based on the person’s
vaccination status or whether the person has an immunity passport; [and]
(c) a public accommodation to exclude, limit, segregate, refuse to serve,
or otherwise discriminate against a person based on the person’s vaccination
status or whether the person has an immunity passport.
Section 49-2-312(1)(a-c), MCA. The statute allows employers to recommend that an
employee receive a vaccine and provides certain accommodations for health care facilities
to obtain the vaccination status of employees, but does not allow those facilities to require
employees, patients, or visitors to be vaccinated. Section 49-2-312(3)(a-b), MCA.2 That
prohibition does not apply to schools or daycare facilities. Section 49-2-312(2), MCA.
¶5 As noted by the District Court, the COVID-19 pandemic continues to spread across
Montana.3 The SARS-Co-V-2 virus, which causes COVID-19 infections, transmits itself
through respiratory fluids. Exposure to the virus occurs predominately through three ways:
inhalation of respiratory droplets and aerosol particles; droplets and particles encountering
2
Further, “[a]n individual may not be required to receive any vaccine whose use is allowed under
an emergency authorization or any vaccine undergoing safety trials.” Section 49-2-312(4), MCA.
3
Facts are restated from the District Court’s findings of fact.
4
exposed mucous membranes; and the touching of hands spotted with virus-containing
respiratory fluids to mucous membranes. Though HB 702 became law during the
COVID-19 pandemic, its provisions apply to all vaccines.
¶6 The Center for Disease Control (CDC) identified numerous ways to prevent the
spread of COVID-19. Vaccination is one such way but breakthrough infections—instances
in which vaccinated individuals are infected by the virus and have the capacity to spread
the virus to others—do occur. Furthermore, vaccines vary in their effectiveness based on
the reaction of each person’s body; no vaccine is 100% effective against a disease. Regular
testing, wearing a mask, washing hands, and working from home are strategies that
vaccinated and non-vaccinated individuals can use to reduce the odds of being infected
with and spreading COVID-19.
¶7 Netzer is an employee and majority shareholder of Netzer Law Office, which
employs three attorneys and two legal assistants. On October 26, 2021, in response to the
ongoing COVID-19 pandemic, Netzer sought to preserve the ability to enforce a vaccine
mandate on current and prospective employees by filing this action and simultaneously
applying to enjoin the State’s enforcement of HB 702. Netzer alleged that the statute
violated several of his fundamental rights as set forth in the Montana Constitution. On
November 15, 2021, the State responded by opposing the application for a preliminary
injunction and moving to dismiss the case.
¶8 On December 14, 2021, the District Court held a hearing on Netzer’s motion for a
preliminary injunction. On February 1, 2022, the court issued its Findings of Fact,
Conclusions of Law, and Order Denying Plaintiffs’ Application for Preliminary Injunction.
5
The court concluded that Netzer failed to satisfy his burden of establishing a prima facie
case that he will suffer irreparable harm caused by the implementation of the law prior to
the final resolution of the case on the merits. Given that shortcoming, the court did not
assess which level of constitutional scrutiny should apply to the law. The court dismissed
Netzer’s claim that the title of HB 702 violated Article V, Section 11(3), of the Montana
Constitution as “redundant” because the bill’s title does not appear in the codified text,
§ 49-2-312, MCA.
STANDARD OF REVIEW
¶9 We review a district court’s grant or denial of a preliminary injunction for a manifest
abuse of discretion. Stand Up Mont. v. Missoula Cty. Pub. Schs., 2022 MT 153, ¶ 6, 409
Mont. 330, 514 P.3d 1062. This review does not include a review of the underlying merits
of the case. Benefis Healthcare v. Great Falls Clinic, Ltd. Liab. P’ship, 2006 MT 254,
¶ 19, 334 Mont. 86, 146 P.3d 714. A district court abuses its discretion when it acts
arbitrarily, without employment of conscientious judgment, or in excess of the bounds of
reason, resulting in a substantial injustice. Stand Up Mont., ¶ 6. The abuse of a district
court’s discretion must be obvious, evident, or unmistakable to constitute a manifest abuse
of discretion. Stand Up Mont., ¶ 6.
¶10 The legal conclusions of a district court receive de novo review by this Court.
Stand Up Mont., ¶ 6. If a district court relied on legal conclusions to rule on a motion for
preliminary injunction, we review whether the district court correctly interpreted the law.
Driscoll v. Stapleton, 2020 MT 247, ¶ 12, 401 Mont. 405, 473 P.3d 386. A district court’s
findings of fact receive clear error review. Larson v. State, 2019 MT 28, ¶ 16, 394 Mont.
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167, 434 P.3d 241. Clearly erroneous findings of fact lack support by substantial evidence,
result from the district court’s misapprehension of the effect of evidence, or emerge from
what this Court is convinced was a mistake by the district court. Larson, ¶ 16.
DISCUSSION
¶11 Issue One: Did the District Court err by not evaluating whether House Bill 702
contained only one subject, clearly expressed in its title, as required by Article V,
Section 11(3), of the Montana Constitution?
¶12 Netzer argues that the District Court should have voided HB 702 because its title
misled the public and members of the Legislature about the subjects it embraced in
violation of the Montana Constitution. Netzer specifically claims that the title violated
Article V, Section 11(3), of the Montana Constitution, which requires that:
Each bill, except general appropriation bills and bills for the codification and
general revision of the laws, shall contain only one subject, clearly expressed
in its title. If any subject is embraced in any act and is not expressed in the
title, only so much of the act not so expressed is void.
According to Netzer, a constitutionally permissible title would have referred to the effect
the bill had on vaccine mandates. The District Court did not examine this issue because it
determined that the codified version of HB 702 did not contain the bill’s title, which
rendered Netzer’s claim “redundant.”
¶13 Codification of a bill does not render a court’s analysis of whether a bill’s title
satisfies the single-subject requirement moot or “redundant.” For many years, this Court
has assessed the constitutionality of a bill’s title, despite the codification of that bill.
7
See, e.g., State v. Cunningham, 35 Mont. 547, 90 P. 755 (1907).4 Nothing in the record or
in the briefs of the respective parties justifies the district court abandoning that practice.
This Court remands with instructions for the District Court to evaluate HB 702 under
Article V, Section 11(3), of the Montana Constitution, as it considers the merits of Netzer’s
other claims.
¶14 Issue Two: Did the District Court manifestly abuse its discretion in declining to
preliminarily enjoin § 49-2-312, MCA, based on alleged infringement of Netzer’s
fundamental rights?
¶15 This issue turns on whether Netzer has demonstrated that the District Court
manifestly abused its discretion in determining that Netzer will not suffer harm prior to
final resolution on the merits of each of his claims of infringement of his fundamental
rights. Our decision is narrow, as it is well established that a court does not decide the
merits of a claim in a preliminary injunction proceeding; rather, it must remain focused on
the limited purpose of a preliminary injunction—to preserve the status quo and minimize
the harm pending final resolution on the merits. Driscoll, ¶ 14 (citations omitted).
¶16 Section 27-19-201, MCA, provides that a preliminary injunction may be granted in
the following cases:
(1) when it appears that the applicant is entitled to the relief demanded
and the relief or any part of the relief consists in restraining the commission
or continuance of the act complained of, either for a limited period or
perpetually;
(2) when it appears that the commission or continuance of some act
during the litigation would produce a great or irreparable injury to the
applicant . . . .
4
Article V, Section 11(3), of the Montana Constitution is “substantively identical” to Article V,
Section 23, of the 1889 Montana Constitution. MEA-MFT v. State, 2014 MT 33, ¶ 8, 374 Mont.
1, 318 P.3d 702.
8
These sections are written in the disjunctive. BAM Ventures, LLC v. Schifferman, 2019
MT 67, ¶ 14, 395 Mont. 160, 437 P.3d 142. In BAM, we held that “all requests for
preliminary injunctive relief require some demonstration of threatened harm or injury,
whether used under the ‘great or irreparable injury’ standard of subsection (2), or the lesser
degree of harm implied within the other subsections of § 27-19-201, MCA.” BAM, ¶ 16.
“In considering whether to issue a preliminary injunction, a district court must exercise its
otherwise broad discretion only in furtherance of the limited purpose of a preliminary
injunction: to preserve the status quo and minimize the harm to all parties pending final
resolution on the merits.” Driscoll, ¶ 14 (citations omitted).
¶17 If a preliminary injunction will not accomplish its limited purpose, then it should
not issue. In Davis v. Westphal, we explained that preliminary injunctive relief is an
equitable remedy governed by general principles of equity codified in Title 27, chapter 19,
MCA, and that injunctive relief is an extraordinary remedy not available as a matter of
right. 2017 MT 276, ¶ 24, 389 Mont. 251, 405 P.3d 73. Further, “injunctive relief is highly
discretionary and critically dependent on the particular facts, circumstances, and equities
of each case.” Davis, ¶ 24. Where appropriate on balance of the equities, injunctive relief
is available as a supplemental remedy to afford complete relief on a claim. Thus, “even
on proof of any grounds enumerated in § 27-19-201, MCA, a preliminary injunction should
not issue absent an accompanying prima facie showing, or showing that it is at least
uncertain, that the applicant will suffer irreparable injury prior to the final resolution on the
merits.” Davis, ¶ 24; see Porter v. K & S Partnership, 192 Mont. 175, 181, 627 P.2d 836,
839 (1981); Rea Bros. Sheep Co. v. Rudi, 46 Mont. 149, 160, 127 P. 85, 87 (1912). With
9
these principles in mind, we turn to whether the District Court manifestly abused its
discretion in denying Netzer’s request for preliminary injunctive relief pending final
resolution on the merits.
¶18 Considering § 27-19-201(1), MCA, the District Court, after a review of the alleged
economic harms, concluded that Netzer failed to make out the requisite prima facie case.
The District Court relied on substantial evidence, such as evidence from the CDC, to reach
its conclusion that the potential economic losses alleged by Netzer would have occurred
even if the injunction had been granted. For example, if Netzer could enforce vaccine
mandates on its employees, the firm would likely still have to provide clients and guests,
as well as employees, with masks. Similarly, Netzer failed to set forth sufficient facts to
show that enforcement of vaccine mandates would allow the firm to avoid office closures
due to outbreaks. The court noted that such closures could occur where individuals are
vaccinated. The alleged economic harm to the law firm is minimal. Without addressing
the appropriateness of equitable injunctive relief where economic damages may suffice,
we conclude the court did not manifestly abuse its discretion in finding Netzer had not
demonstrated he would suffer an injury prior to final resolution on the merits sufficient to
justify supplemental preliminary injunctive relief based on § 27-19-201(1), MCA.
¶19 Next, we focus our inquiry on § 27-19-201(2), MCA, and Netzer’s claims that
§ 49-2-312, MCA, violates certain fundamental rights afforded to him and his employees
by the Montana Constitution—namely, the right to a clean and healthful environment, the
right to pursue life’s basic necessities, the right to enjoy and defend one’s life and liberties,
the right to acquire, possess and protect property, and the right to seek health and safety.
10
Netzer argues that the District Court manifestly abused its discretion by not concluding
that enforcement of § 49-2-312, MCA, would infringe those rights.
¶20 The loss of a constitutional right constitutes harm or irreparable injury for the
purposes of issuing a preliminary injunction. Mont. Democratic Party v. State, 2020 MT
244, ¶ 15, 401 Mont. 390, 472 P.3d 1195; see Driscoll, ¶¶ 20, 24-25 (concluding that a
district court did not abuse its discretion by enjoining legislation where the evidentiary
record demonstrated the likelihood of irreparable injury due to the loss of a right to vote).
Although Netzer alleges the violation of several constitutional rights, he still must
demonstrate, as with all subsections of § 27-19-201, MCA, that, upon balance of the
equities, facts, and particular circumstances of his case, he would suffer an irreparable
injury prior to final resolution on the merits if the highly discretionary relief of preliminary
injunctive relief were not granted.
The Right to a Clean and Healthful Environment
¶21 The Montana Constitution establishes an inalienable right “to a clean and healthful
environment.” Mont. Const. art II, § 3. Netzer interprets “environment” to include indoor
environments. The District Court, like Netzer, found that “environment” as used in Article
II, Section 3, of the Montana Constitution includes indoor environments. Still, because the
court did not find that § 49-2-312, MCA, prevented Netzer from enjoying a clean and
healthful environment in his office, it concluded that his fundamental right had not been
infringed. The court noted that § 49-2-312, MCA, did not prevent Netzer or any other
employer from taking myriad measures to reduce the odds of the indoor environment being
a threat to the health of any employee.
11
¶22 The District Court did not manifestly abuse its discretion in determining that
§ 49-2-312, MCA, would not cause Netzer to suffer an irreparable injury prior to final
resolution on the merits. As noted by the court, § 49-2-312, MCA, does not thwart
employers from taking other significant and effective measures to maintain a clean and
healthful environment in their office. The District Court considered the facts and particular
circumstances of the case and concluded that it was not reasonable to enjoin the statute
because Netzer would not suffer an irreparable injury prior to final resolution on the merits.
We conclude there was no manifest abuse of discretion.
The Right to Pursue Life’s Basic Necessities
¶23 Article II, Section 3, of the Montana Constitution grants Montanans the right to
“pursue life’s basic necessities.” Netzer regards the right to safely operate a business as
one such necessity and claims that § 49-2-312, MCA, would unconstitutionally infringe on
his pursuit of that necessity. The District Court agreed with Netzer that the right includes
owning and operating a business, but Netzer did not identify any means by which
§ 49-2-312, MCA, would interfere with the right and the various pursuits to which it applies
and protects.
¶24 Netzer did not establish a prima facie case that he would suffer, prior to trial, an
irreparable injury due to the alleged unconstitutional burden imposed by § 49-2-312, MCA,
on his right to pursue life’s basic necessities. The court exercised its discretion under the
particular facts and circumstances of this case to conclude that considerations of equity did
not justify issuing a preliminary injunction before trial on the merits. The court reasoned
that Netzer had not demonstrated how the inability to fire and hire employees based on
12
vaccination status would prevent him from pursuing the ownership and operation of his
business. We conclude the court did not manifestly abuse its discretion.
The Right to Enjoy and Defend One’s Life and Liberties
¶25 Article II, Section 3, of the Montana Constitution grants Montanans the right of
“enjoying and defending their lives and liberties[.]” The District Court agreed with Netzer
that the right applies to more situations than just the exercise of self-defense when faced
with an unlawful use of force—the State, however, maintains that the right solely covers
that latter situation. The court, however, refrained from explicitly endorsing Netzer’s
interpretation—that “[t]he plain language of [the right] necessarily includes the right to
defend against deadly diseases and government actions that unnecessarily or seriously
threaten one’s life by increasing exposure to such diseases”—prior to trial on the merits.
Instead, the court acknowledged that the right was broader than the State’s interpretation.
¶26 However, the District Court determined that Netzer failed to establish a prima facie
case that he would suffer, prior to trial, an irreparable injury. The court concluded that
§ 49-2-312, MCA, does not stop employees and employers alike from taking myriad steps
to reduce the odds of their exposure to the COVID-19 virus. The court reasoned that the
purpose of the statute, protecting the public’s welfare by reducing a form of discrimination
in the workplace, is an appropriate exercise of the State’s police power. We make no
conclusions as to the ultimate merits of Netzer’s claim; we only conclude that the court’s
rationale was not arbitrary, unreasonable, or resulted in a substantial injustice under these
particular facts and circumstances. The court’s decision to deny preliminary injunctive
relief did not constitute a manifest abuse of discretion.
13
The Right to Acquire, Possess and Protect Property
¶27 Article II, Section 3, of the Montana Constitution grants Montanans the right of
“acquiring, possessing and protecting property[.]” Netzer claims that § 49-2-312, MCA,
infringes his ability to protect and manage his property—the Netzer Law Firm offices.
¶28 The District Court determined that § 49-2-312, MCA, does not impose any unjust
limitations on Netzer with respect to the operation of the Netzer Law offices. As the court
pointed out, Netzer is not foreclosed from protecting his property through the
implementation of numerous and effective health and safety measures through trial on the
merits. We conclude the court’s rationale was not unreasonable, arbitrary, or that it resulted
in a substantial injustice and, therefore, the court did not manifestly abuse its discretion in
denying preliminary injunctive relief prior to final resolution on the merits.
The Right to Seek Safety, Health, and Happiness
¶29 Article II, Section 3, of the Montana Constitution grants Montanans the right to seek
“their safety, health and happiness[.]” Netzer alleges that this right grants him the authority
to implement “proven health and safety measures during an ongoing pandemic[.]” The
right’s reference to “health” carries great weight in Netzer’s interpretation of its meaning.
Citing only the ordinary meaning of “health” and an isolated quote from the 1972 Montana
Constitutional Convention,5 he concludes that the “undisputed plain language of this
provision supports” his position. Netzer does not cite any caselaw in support of his
interpretation.
5
“[L]ife without health is a very sorry proposition.” Montana Constitutional Convention,
Verbatim Transcripts, March 7, 1972, Vol. V, 1637.
14
¶30 The District Court reasoned that while Montanans have a right to seek health, they
must comply with lawful state regulations while doing so. “[T]he right to seek health is
circumscribed by the State’s police power to protect the public health and welfare.”
Mont. Cannabis Indus. Ass’n v. State, 2012 MT 201, ¶ 22, 366 Mont. 224, 286 P.3d 1161(internal citation omitted). The State explained the purpose of § 49-2-312, MCA, as
protecting the public’s welfare by reducing a form of discrimination in the workplace.
¶31 Netzer’s opening brief used four sentences—one of which stated the law and
another his conclusion—to allege this error. Given the particular facts and circumstances
of this case, two sentences will not suffice to demonstrate the District Court manifestly
abused its discretion in denying preliminary injunctive relief for this claim. Netzer did not
establish a prima facie case that enforcement of § 49-2-312, MCA, should be enjoined on
the balance of equities prior to trial on the merits.
¶32 Issue Three: Did the District Court err by not evaluating § 49-2-312, MCA, under
any level of constitutional scrutiny?
¶33 Netzer asserts that the District Court incorrectly failed to declare § 49-2-312, MCA,
unconstitutional because the law infringes on fundamental rights and the State did not
demonstrate both a compelling state interest and that § 49-2-312, MCA, is closely tailored
to effectuate that interest.
¶34 The government need not demonstrate that a law survives strict scrutiny or any level
of scrutiny where the movant fails to make out a prima facie case of a violation of its
constitutional rights. See Driscoll, ¶ 39. For the reasons stated above, Netzer failed to
15
make a prima facie case of an infringement of any of the constitutional rights he advanced
through trial on the merits.
¶35 The District Court did not manifestly abuse its discretion. Given Netzer’s failure to
shift the burden to the State, the court had no obligation to review which level of scrutiny
it may have applied to a review of the constitutionality of the statute.
CONCLUSION
¶36 We remand with instructions that the District Court evaluate HB 702 under Article
V, Section 11(3), of the Montana Constitution. In all other respects, we conclude the
court’s rationale was not unreasonable, arbitrary, or that it resulted in a substantial injustice
and, therefore, the court did not manifestly abuse its discretion in denying injunctive relief
prior to resolution of the final merits. The District Court properly denied Netzer’s motion
for preliminary injunction.
¶37 Affirmed in part and remanded for further proceedings consistent with this Opinion.
/S/ MIKE McGRATH
We Concur:
/S/ LAURIE McKINNON
/S/ INGRID GUSTAFSON
/S/ BETH BAKER
/S/ JIM RICE
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