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Missouri Supreme Court Makes Dramatic Shift in Determining What Constitutes a Special Law

| Feb 18, 2020 | News |

In a pair of rulings handed down on December 24, 2019, the Missouri Supreme Court upended years of precedent on what constitutes a special law.

Article III of the Missouri Constitution prohibits lawmakers from passing “any local or special law.” In prior decisions, the Missouri Supreme Court determined whether or not a law was special by looking at whether the classifications in the law were drawn using open-ended criteria, such as the population of the affected and excluded areas, or classifications drawn using closed-ended or immutable criteria, such as a geographical feature or simply the names of affected and excluded persons or places.  If the law’s application was based on closed-ended criteria, the law was determined to be a “facially” local or special law and was presumptively constitutionally invalid. However, if there was a “substantial justification” for the closed-ended criteria, the law would be upheld.

On December 24th, 2019, the Missouri Supreme Court announced it was abandoning that line of cases, finding that the burden-shifting and substantial justification test have no basis under the Missouri Constitution. According to the Court, previous rulings had conflated the question of whether the local or special law at issue was one where a general law could be made applicable, with the question of whether that local or special law was substantially justified. “The resulting confusion from these errors diluted the constitutional language and generated complex and confusing criteria for analyses of whether a statute is a prohibited special law.” Accordingly, in two separate cases, the Missouri Supreme Court held that if a law’s classification is supported by a rational basis, then “the law is not local or special and the analysis ends.” “Under a rational basis review, this Court will uphold a statute if it finds a reasonably conceivable state of facts that provide a rational basis for the classifications. Identifying a rational basis is an objective inquiry that does not require unearthing the general assembly’s subjective intent in making the classification.”

The first case, City of Aurora v. Spectra Communications Group LLC, d/b/a CenturyLink, involved a state law that generally prohibited political subdivisions from recovering payments from public utility right-of-way users in excess of the political subdivision’s management costs. This prohibition did not apply to all political subdivisions because the state legislature “grandfathered” cities that already had such fees in place prior to May 1, 2001. CenturyLink argued that the “grandfathered” political subdivision exemption created a closed-ended class based on an immutable, historical fact and was, therefore, a constitutionally invalid special law. However, the Missouri Supreme Court determined that “the criteria used to exclude certain political subdivisions sheds light on whether there was a rational basis for the legislature’s decision to exclude certain members.” The Court found the distinction created by the “grandfathered” political subdivision exemption survives the rational basis test as the “grandfather” provision was a rational way for the state legislature to impose a new policy and limit use fees without disrupting the revenue streams of those cities that already imposed such fees. Therefore, the Court held that the “grandfather” provision was not a special law.

The second case, City of Chesterfield et al. v. State of Missouri, involved a challenge by the City of Chesterfield against the St. Louis County sales tax system. The City argued that it only receives a small portion of the sales tax revenue generated by businesses within the City from the St. Louis County sales tax pool. The City argued that sharing sales taxes in the county was an unsupportable “special law” that violated the Missouri Constitution. According to the Missouri Supreme Court, the tax-sharing arrangement is appropriate because “unlike other counties in the state, St. Louis has a large population, lacks a central city, has 90 separate municipalities within its orders, and has a large, unincorporated area.” Further, the Court found that “St. Louis County is responsible for providing municipal-type services, such as police, street maintenance, and zoning, to the unincorporated areas while simultaneously providing county-type services, including court systems, jails, and roads, to the county as a whole.” Because of these distinctive features of St. Louis County, the Court found that there was a rational basis for the tax system, and the challenged law was not an unconstitutional special law.