Cape Motor Lodge, Inc. v. City of Cape Girardeau

In Missouri, cities could be chartered or unchartered. The Missouri constitution contained a home-rule provision, which granted charter cities all the power that the legislature could grant. The City of Cape Girardeau (defendant) was a constitutional charter city. In 1982, the city wished to jointly finance and construct a multi-use facility with a state college, Southeast Missouri State University (SEMO). City voters widely approved the measure. Subsequently, the city council enacted an ordinance that levied certain taxes on hotels, motels, and restaurants to be used to pay for the financing of the multi-use facility. The city and SEMO drafted an agreement that provided for the joint design and construction of a public multi-use building. The city passed ordinance 174, which approved and authorized the agreement. A group of local hotel, motel, and restaurant owners (collectively, the hotels) (plaintiffs) sued the city, alleging that the city had no power to enter the agreement with SEMO and that ordinance 174 was invalid. Specifically, the hotels argued that a state statute, § 70.220, limited the city’s powers. Section 70.220 provided that any municipality “may contract and cooperate with any other municipality” for the purposes of developing public improvements or common services. SEMO was not a municipality. The city responded that its power to pass ordinance 174 was derived from the constitution’s home-rule provision and was not limited by § 70.220. The trial court ruled in the hotels’ favor, and the city appealed.