Introduction

In Gottlob v. DesRosier, 2025 MT 56, the Supreme Court of Montana affirmed a Ninth Judicial District Court order certifying a class of Glacier County property taxpayers alleging unlawful county disbursements in excess of appropriations. The case squarely addresses two threshold questions for public finance litigation in Montana: whether county taxpayers have standing to sue based on allegations of increased tax burdens and reduced services, and whether such claims can proceed as a class action under Montana Rule of Civil Procedure 23.

The decision also clarifies a significant procedural point: a prior dismissal for lack of standing is without prejudice and does not trigger claim or issue preclusion. Substantively, the Court recognizes that municipal taxpayers suffer a common injury when their local government makes illegal expenditures, thereby supporting Rule 23 class certification even if individual experiences with specific service reductions vary.

Parties include named plaintiffs and Glacier County taxpayers Jeff Gottlob, Elaine Mitchell, and James Childress (on behalf of similarly situated taxpayers), as well as Glacier County and several current and former County Commissioners. The Montana Association of Counties and its Property & Casualty Trust are also defendants, though the appeal before the Court centers on standing and class certification rather than ultimate liability or immunity.

Summary of the Opinion

• The Court affirms class certification for Count II (negligence per se based on alleged violations of § 7-6-4005(1), MCA) for a class defined as “Property taxpayers of Glacier County who have paid their property taxes for tax years 2012 to 2020.”
• Standing: Plaintiffs adequately alleged concrete economic injury—incurred tax obligations and loss of county services—satisfying Montana’s injury-in-fact requirement. This distinguishes their case from Mitchell v. Glacier County, where injuries were deemed merely “foreseeable.”
• Preclusion: The Court holds that previous dismissals for lack of standing (as in Mitchell) are jurisdictional, without prejudice, and thus not a final judgment on the merits; claim and issue preclusion do not apply.
• Rule 23(a): Plaintiffs satisfied numerosity, commonality, and typicality; adequacy was uncontested.
• Rule 23(b)(3): Common questions predominate and a class action is superior; individualized issues about specific service usage do not defeat predominance.
• Merits defenses (e.g., governmental immunity, negligence per se elements) are reserved for later proceedings and do not bear on whether Rule 23 is satisfied.
• The Court reiterates the flexibility of trial courts to alter class certification as litigation proceeds.

Factual and Procedural Background

The litigation stems from longstanding concerns about Glacier County’s budgeting and audit compliance. In prior related litigation (Mitchell v. Glacier County, 2017 MT 258), taxpayers alleged systemic failures under the Single Audit Act and Local Government Budget Act, but the Montana Supreme Court concluded those plaintiffs lacked standing because their alleged injuries (future tax increases and service reductions) were only “foreseeable.”

While the Mitchell appeal proceeded, the current plaintiffs paid their property taxes under protest and, beginning in 2017, filed suit alleging (among other claims) that the County:

• Unlawfully liquidated the special protest fund in violation of § 15-1-402(4)(a), MCA (a claim on which plaintiffs won partial summary judgment, not at issue in this appeal); and
• Made expenditures or incurred obligations exceeding appropriations for fiscal years 2012–2020 in violation of § 7-6-4005(1), MCA, which, if proven, would trigger personal liability under § 7-6-4005(2), MCA.

Plaintiffs alleged they have already incurred additional tax obligations and suffered actual reductions in county services (including ambulance, museum, and home health services). They sought certification of a class for Count II. The District Court granted certification, and the County appealed, challenging both standing and class certification.

Detailed Analysis

1) Precedents Cited and Their Influence

• Mitchell v. Glacier County, 2017 MT 258: The earlier taxpayer challenge failed for lack of standing because the alleged injuries were speculative. Gottlob distinguishes Mitchell by emphasizing present, concrete injuries (already-incurred tax obligations and actual service cuts). The Court also clarifies that the Mitchell dismissal was jurisdictional and thus not preclusive.
• Helena Parents Commission v. Lewis & Clark County Commissioners, 277 Mont. 367, 922 P.2d 1140 (1996): Plaintiffs there alleged illegal investments led to economic injury through increased tax burdens and reduced services; the Court found standing. Gottlob adopts that analysis, holding that economic harms of this kind, alleged as present or imminent realities, satisfy standing.
• Davenport v. Kleinschmidt, 6 Mont. 502, 13 P. 249 (1887), and Frothingham v. Mellon, 262 U.S. 447 (1923), ASARCO Inc. v. Kadish, 490 U.S. 605 (1989), Cammack v. Waihee, 932 F.2d 765 (9th Cir. 1991): These authorities (especially Davenport in Montana) recognize municipal taxpayer standing where the “peculiar relation” between taxpayers and their local government makes their interest in the proper use of municipal funds “direct and immediate.” Gottlob leverages this tradition to explain why allegedly unlawful county disbursements inflict a common injury on all county taxpayers for commonality purposes.
• Denturist Ass’n of Montana v. State, 2016 MT 119; Hawkes v. Montana Department of Corrections, 2008 MT 446; Hells Canyon Preservation Council v. USFS, 403 F.3d 683 (9th Cir. 2005); Brereton v. Bountiful City Corp., 434 F.3d 1213 (10th Cir. 2006); Fleck & Associates, Inc. v. City of Phoenix, 471 F.3d 1100 (9th Cir. 2006); Stalley v. Orlando Regional Healthcare System, Inc., 524 F.3d 1229 (11th Cir. 2008): These cases, together with Rule 41(b), support the Court’s non-preclusion holding: dismissals for lack of standing are jurisdictional and ordinarily without prejudice, and thus not “on the merits” for claim/issue preclusion purposes.
• Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338 (2011): Cited for commonality’s requirement that claims depend on a common contention capable of classwide resolution; Gottlob applies this to hold that the alleged illegality under § 7-6-4005 supplies common questions that are central to all claims.
• Tyson Foods, Inc. v. Bouaphakeo, 577 U.S. 442 (2016): Supports that common questions may predominate even when individualized damages issues exist; Gottlob uses this to reject the County’s argument that variations in individual service usage defeat predominance.
• Byorth v. USAA Casualty Insurance Co., 2016 MT 302; Worledge v. Riverstone Residential Group, LLC, 2015 MT 142; Rogers v. Lewis & Clark County, 2022 MT 144; Cook v. Buscher Construction & Development, Inc., 2024 MT 137; Jacobsen v. Allstate Ins. Co., 2013 MT 244; Diaz v. Blue Cross & Blue Shield of Montana, 2011 MT 322; Sangwin v. State, 2013 MT 373: These Montana cases supply the Rule 23 standards and reinforce the deference to district courts’ certification decisions, the “rigorous analysis” requirement, and flexibility to modify certification.
• Prindel v. Ravalli County, 2006 MT 62: The County invoked Prindel’s negligence per se framework, but the Court appropriately held that merits assessments (e.g., whether plaintiffs are within the protected class of a statute) are distinct from, and generally not part of, the Rule 23 analysis.
• Cross v. State, 2024 MT 303; Heffernan v. Missoula City Council, 2011 MT 91; Schoof v. Nesbit, 2014 MT 6; Plan Helena, Inc. v. Helena Regional Airport Authority Board, 2010 MT 26: Provide the justiciability and standing framework for Montana courts—an essential backdrop for the Court’s standing resolution.

2) The Court’s Legal Reasoning

The Court’s analysis proceeds in three principal steps: (a) justiciability and preclusion; (b) Rule 23(a) prerequisites; and (c) Rule 23(b)(3)’s predominance and superiority.

a) Standing and the Non-Preclusive Effect of Prior Standing Dismissals

• Standing as a threshold, jurisdictional issue. Although an order denying a motion to dismiss is generally not appealable, the Court reached standing because courts must ensure jurisdiction at every stage of litigation.
• Concrete injury alleged. Plaintiffs alleged they “have incurred and will incur tax obligations” and “have lost Glacier County services” due to the County’s alleged violations of § 7-6-4005(1), MCA. Affidavit evidence referenced suspension or elimination of ambulance, museum, and home health budgets—facts demonstrating a present, not hypothetical, economic injury consistent with Helena Parents Commission.
• Preclusion does not bar the claims. The prior Mitchell dismissal was for lack of standing—jurisdictional under Montana law—and thus, under Rule 41(b) and persuasive federal authority, not an adjudication on the merits. Without a final judgment on the merits, neither claim nor issue preclusion applies.

b) Rule 23(a): Numerosity, Commonality, Typicality, Adequacy

• Numerosity. Plaintiffs needed only “some evidence” or a reasonable estimate of class size. The District Court previously certified a 1,020-person subclass of taxpayers who paid under protest; the broader class of “all Glacier County property taxpayers” necessarily exceeds that figure, making joinder impracticable.
• Commonality. The class asserts two common questions: whether the County violated § 7-6-4005(1) by making disbursements or incurring obligations in excess of appropriations for FY2012–2020, and whether commissioners are personally (or jointly and severally) liable under § 7-6-4005(2). The Court held that municipal taxpayers share a common injury from allegedly unlawful expenditures. Differing experiences with specific service reductions go to the scope of damages or relief, not to the existence of a classwide injury or the legal questions at the core of Count II.
• Typicality. Plaintiffs’ claims arise from the same alleged course of conduct (illegal disbursements over multiple fiscal years) and rest on the same legal theory (negligence per se under § 7-6-4005(1) triggering liability under § 7-6-4005(2)). Typicality, a low threshold and often overlapping with commonality, was met.
• Adequacy. Uncontested on appeal; not addressed by the Court as a challenge.
• Merits defenses deferred. The County’s arguments about governmental immunity and the elements of negligence per se are merits issues and do not bear on whether Rule 23’s prerequisites are satisfied. They can be litigated later and, if successful, would apply classwide.

c) Rule 23(b)(3): Predominance and Superiority

• Predominance. The class’s core questions—statutory violation and commissioner liability—predominate over any individualized questions (such as the extent to which particular taxpayers experienced service reductions). Under Tyson Foods, common issues can predominate even with individualized damages inquiries.
• Superiority. Given thousands of similarly situated taxpayers and common questions central to liability, a class action is superior to numerous, duplicative suits. Concentrating claims in a single forum advances judicial economy and consistent adjudication.
• Flexibility. The Court underscores district courts’ authority under Rule 23(c)(1)(C) to alter or amend certification orders before final judgment—an important safety valve in complex public finance litigation.

Impact and Significance

Key Doctrinal Developments

• Non-preclusive effect of standing dismissals (Rule 41(b)). Gottlob cements that dismissals for lack of standing are without prejudice and non-preclusive in Montana. This is a critical procedural clarification for litigants—especially where a plaintiff refiles with strengthened factual allegations to cure standing defects.
• Concrete injury for taxpayer standing. Allegations that county taxpayers have already borne increased tax obligations and experienced reductions in county services suffice for standing. Plaintiffs need not quantify exact amounts at the pleading stage so long as injuries are actual or imminent, not speculative.
• Municipal taxpayer common injury. The Court revitalizes longstanding taxpayer-standing principles (Davenport and kindred federal authorities) to confirm that allegedly unlawful county disbursements inflict a common, classwide injury on all taxpayers. This is pivotal for Rule 23(a)(2) commonality and Rule 23(b)(3) predominance analyses in public finance cases.
• Class certification in local government budgeting disputes. The decision signals that claims under § 7-6-4005(1) and (2), MCA, are particularly amenable to class treatment where plaintiffs challenge a uniform course of conduct across fiscal years.

Practical Consequences

• For plaintiffs and taxpayer groups: Gottlob offers a roadmap: plead present economic injury (e.g., increased tax burdens, concrete service reductions) and focus class allegations on common statutory violations and uniform county practices. Evidence from related proceedings (e.g., numbers of taxpayers paying under protest) can shore up numerosity.
• For counties and local officials: The risk of class-wide exposure, including potential personal liability for commissioners under § 7-6-4005(2), increases the stakes for strict compliance with the Local Government Budget Act. Counties should ensure appropriations controls are robust and that any “taxes paid under protest” are handled strictly in accordance with § 15-1-402(4)(a), MCA.
• For insurers and pooling arrangements (e.g., MACo PCT): Coverage and immunity defenses remain live on remand. Gottlob does not resolve the availability or scope of indemnity for personal liability imposed by § 7-6-4005(2). Those issues may have significant fiscal and risk-management implications.
• For courts: Gottlob reaffirms a restrained merits inquiry at the certification stage. Immunity and negligence per se elements should be addressed later. Courts retain the flexibility to refine, narrow, or decertify the class as the record develops.

Complex Concepts Simplified

• Standing: To sue, plaintiffs must show a real injury to their rights that a court ruling can help fix. In this case, actual higher taxes and reduced county services are “real injuries.”
• Dismissal “without prejudice” for lack of standing: If a case is dismissed because the plaintiffs lacked standing, it is not a decision on the merits. Plaintiffs can try again with better allegations.
• Municipal taxpayer injury: When a city or county unlawfully spends public money, all taxpayers share the harm because the public purse is diminished and services may be cut or taxes increased.
• Rule 23(a) prerequisites:
  • Numerosity: Too many people to practically join individually.
  • Commonality: At least one important question the whole class can answer together.
  • Typicality: The representatives’ claims are similar to the class’s claims.
  • Adequacy: The representatives and their lawyers will fairly protect the class’s interests.
• Rule 23(b)(3) predominance and superiority: Common issues must be more important than individual ones, and a class action must be the best way to resolve the dispute efficiently and fairly.
• Negligence per se (in this context): If officials violate a statute that sets a standard of conduct (here, the Local Government Budget Act’s prohibition on spending beyond appropriations), the violation can establish negligence as a matter of law—subject to proving the statute’s applicability and other elements.
• § 7-6-4005(1)-(2), MCA: Bars county disbursements or obligations beyond total appropriations; violators may be “personally” liable for the excess amounts.
• Taxes paid under protest fund (§ 15-1-402(4)(a), MCA): Taxes paid under protest must be kept in a special fund until final resolution; liquidating that fund prematurely is unlawful (the trial court’s ruling on that issue stands but was not at issue in this appeal).

Conclusion

Gottlob v. DesRosier is a consequential decision for Montana public finance litigation and class actions. The Court confirms that a dismissal for lack of standing is jurisdictional and non-preclusive, clearing the way for plaintiffs to cure defects and refile. It also aligns Montana practice with longstanding municipal taxpayer principles: illegal local government disbursements inflict a common injury on all taxpayers, supporting class certification when the gravamen is a uniform course of unlawful fiscal conduct.

By affirming class certification under Rule 23(a) and (b)(3), the Court ensures that broad, systemic challenges to county budgeting practices can be litigated efficiently and cohesively. Although substantive defenses—including governmental immunity and the contours of negligence per se—remain to be resolved on remand, Gottlob provides a clear procedural path for taxpayer suits alleging violations of the Local Government Budget Act and seeking personal liability from officials under § 7-6-4005(2). In the broader legal context, the decision enhances accountability mechanisms for local fiscal management while clarifying key doctrinal rules on standing, preclusion, and class certification in Montana.

Citation

Gottlob v. DesRosier, 2025 MT 56 (Supreme Court of Montana, Mar. 25, 2025), DA 24-0235.