Porter v. Investors Syndicate

Background

A person challenged an order issued by the Montana State Auditor and went to a federal court seeking to stop that order. The federal court had issued an injunction against enforcing the Auditor’s order. The challenger later acknowledged that the Montana law provided a remedy that mixed administrative and court procedures, including a suit in the state district court, and argued that the state law violated Montana’s constitutional separation of powers rule.

Reasoning

The Supreme Court reviewed whether the challenger had to use the Montana administrative and state-court process before asking a federal court to block the Auditor’s order. The Court held that the challenger had not exhausted the state remedy and so the federal court lacked the equitable power to enjoin enforcement. The Justices considered Montana court decisions showing that the state constitution does not clearly forbid giving administrative duties to district courts when those duties are ancillary to judicial work, and the Court therefore did not find the statute unconstitutional on its face.

Real world impact

The decision means people who disagree with actions by Montana officials must first use the administrative and state-court procedures provided by the Montana law before seeking a federal injunction. The opinion also leaves open the possibility that Montana’s own courts will finally decide whether the statute conflicts with the state constitution, but for now the earlier reversal stands and the State Auditor’s order is not blocked by federal equity relief.