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Director of the Office of State Lands & Investments v. Merbanco6/6/2003
Merbanco, Inc., Christopher Johnston and his children, and the Wyoming Education Association (WEA) (referred to hereinafter as "challengers") seek a declaration that the Wyoming Constitution prohibits the exchange of state school lands without public auction and, consequently, the statutes and administrative rules which authorize such exchanges are void as unconstitutional. Case No. 01-261 came to us on a petition for a writ of review, which we granted, and, in Case No. 02-18, the district court reserved constitutional questions to this Court pursuant to W.R.C.P. 52(d). We hold the constitution requires public auctions only for sales of school lands; exchanges are not sales; and, in the absence of any other constitutional prohibitions, the legislature acted within its authority in adopting the statutes and authorizing the rules challenged here.
FACTS
This case arose out of a declaratory judgment action filed by Merbanco, an Ohio Merchant Banking Company which sought to purchase certain school lands in Teton County; Mr. Johnston, a resident of Teton County and the president of Merbanco; and the Johnston children who attend public school in the county. They filed suit against the Director of the Office of State Lands & Investments and the Board of Land Commissioners (board), the governmental authorities responsible for the administration of school lands. The dispute arose when the state undertook procedures to exchange Section 36, Township 42 North, Range 117 West of the 6th Principal Meridian, Teton County, for land of equal value without a public auction. The land in question was included within those lands granted to the state upon statehood for the support of the common schools and is located near Teton Village (Teton Village school section). Merbanco also sued Snake River Associates, a Wyoming limited partnership (SRA) which owns and operates a cattle ranch surrounding the section and has historically leased it for grazing purposes. SRA proposed acquiring ownership of the Teton Village school section in exchange for other SRA lands located adjacent to Teton Village which could be used for residential and commercial development.
SRA and other interested parties initiated discussions with the state through the board and its staff concerning the possible exchange. At the same time, Merbanco urged the board to initiate procedures to sell the Teton Village school section at public auction and, on June 7, 2001, offered an opening bid of $36.48 million. On June 14, 2001, the board approved pursuing the exchange with SRA consistent with its rules. Merbanco filed a petition for review on July 13, 2001, contending the decision to exchange the Teton Village school section violated the board's constitutional, statutory, administrative, and fiduciary duties. The district court granted the state's motion to dismiss the petition for review because no final agency action had occurred. On August 1, 2001, Merbanco filed a complaint for declaratory judgment and injunctive relief seeking to have the court declare the board's decision and the statutes and regulations upon which it was based unconstitutional for lack of a public auction. WEA, a nonprofit organization whose members are educators in the Wyoming public schools and parents of students who attend the public schools, intervened in support of Merbanco's position.
The state moved to dismiss Merbanco's complaint claiming the court did not have subject matter jurisdiction because none of the challengers had standing and, because no final action had occurred, the matter was not ripe for consideration by the court and no justiciable controversy existed. The district court denied the state's motion, and the state filed a
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