Case Title: TIPCO v CITY OF BILLINGS

Citation: 

Docket Number: 

State: montana

Court: Montana Supreme Court

Date: 1982-03-28T00:00:00Z

Document:
No. 81-330 IN THE SUPREME COURT OF THE STATE OF MONTANA 1982 TIPCO CORPORATION, INC. Plaintiff and Appellant, VS. THE CITY OF BILLINGS, Defendant and Respondent. Appeal from: District Court of the Thirteenth Judicial District, In and for the County of Yellowstone Honorable William J. Speare, Judge presiding. Counsel of Record: For Appellant: Stephens & Cole, Billings, Montana Larry Cole argued, Billings, Montana For Respondent: Peterson Law Offices, Billings, Montana V . Joe Leckie argued, Billings, Montana Submitted: March 1, 1982 Decided: MAR 2 9 1982 Filed: MAR 2 9 1982 M r . Chief J u s t i c e Frank I. Haswell d e l i v e r e d t h e Opinion of t h e C o u r t . The C i t y of B i l l i n g s enacted an o r d i n a n c e d e c l a r i n g unin- v i t e d door-to-door s o l i c i t a t i o n s a n u i s a n c e p u n i s h a b l e a s a m i s - demeanor and exempting l o c a l merchants w i t h r e g u l a r l y e s t a b l i s h e d p l a c e s of b u s i n e s s from its o p e r a t i o n . The District Court held t h e o r d i n a n c e v a l i d . W e r e v e r s e . P l a i n t i f f Tipco C o r p o r a t i o n is a f o r e i g n c o r p o r a t i o n w i t h no b u s i n e s s o f f i c e i n Montana. Twelve sales a g e n t s of Tipco, l i c e n s e d and bonded under Montana s t a t u t e s , were s e l l i n g magazine s u b s c r i p t i o n s door-to-door i n B i l l i n g s d u r i n g March 1981. These sales a g e n t s depended on door-to-door s o l i c i t a t i o n s f o r t h e i r l i v e l i h o o d and income. The s a l e s a g e n t s would forward s u b s c r i p - t i o n s o b t a i n e d from B i l l i n g s customers to ~ i p c o ' s main o f f ice i n I n d i a n a which would p l a c e t h e s u b s c r i p t i o n s w i t h v a r i o u s magazine p u b l i s h e r s . The sales a g e n t s were a r r e s t e d and charged w i t h m i s - demeanors under t h e B i l l i n g s o r d i n a n c e . On March 20, 1981, Tipco f i l e d a c o m p l a i n t i n t h e Yellowstone County District Court t o e n j o i n t h e C i t y of B i l l i n g s from e n f o r c i n g its o r d i n a n c e contending it con£ l i c t e d w i t h o v e r r i d i n g s t a t e s t a t u t e s and was u n c o n s t i t u t i o n a l under F e d e r a l and S t a t e C o n s t i t u t i o n a l p r o v i s i o n s . The C i t y responded w i t h a motion to d i s m i s s a l l e g i n g no c o n f l i c t w i t h state s t a t u t e o r c o n s t i t u t i o n a l p r o v i s i o n s . The ~ i s t r ict Court, a f t e r n o t i c e to t h e p a r t i e s t h a t it would treat t h e case a s submitted on cross- motions f o r summary judgment, g r a n t e d summary judgment to t h e C i t y upholding t h e v a l i d i t y of t h e o r d i n a n c e . Tipco a p p e a l s . Three i s s u e s a r e p r e s e n t e d on appeal: (1) Is t h e B i l l i n g s o r d i n a n c e i n v a l i d a s con£ l i c t i n g w i t h s t a t e s t a t u t e s governing t h e l i c e n s i n g of i t i n e r a n t vendors? ( 2 ) Is t h e B i l l i n g s o r d i n a n c e i n v a l i d as c o n f l i c t i n g w i t h s t a t e s t a t u t e s governing n u i s a n c e s ? ( 3 ) Does t h e B i l l i n g s o r d i n a n c e u n f a i r l y d i s c r i m i n a t e a g a i n s t Tipco c o n t r a r y to t h e commerce c l a u s e of t h e United S t a t e s C o n s t i t u t i o n and t h e due p r o c e s s and e q u a l p r o t e c t i o n c l a u s e s of t h e United S t a t e s and Montana C o n s t i t u t i o n s ? The r e l e v a n t state s t a t u t e s governing i t i n e r a n t vendors are found i n T i t l e 7, Chapter 21, MCA, and p r o v i d e as f o l l o w s : " P a r t 23 " L i c e n s i n g o f - I t i n e r a n t Vendors " D e f i n i t i o n s . . . " ( 2 ) Within t h e meaning of t h i s p a r t , an ' i t i n e r a n t vendor' is any p e r s o n engaged o r employed i n t h e b u s i n e s s of r e t a i l i n g to con- sumers by going from consumer to consumer, e i t h e r on t h e streets or to t h e i r p l a c e s of r e s i d e n c e or employment and t h e r e s o l i c i t i n g , s e l l i n g , or o f f e r i n g to s e l l or e x h i b i t i n g f o r sale ( b y sample, b y c a t a l o g u e , or o t h e r w i s e ) or t a k i n g o r d e r s f o r f u t u r e d e l i v e r y of any goods, wares, or merchandise or f o r s e r v i c e s to be per- formed i n t h e f u t u r e ." 7-21-2301 ( 2 ) , MCA. "Scope o f p a r t . . . -- " ( 2 ) Nothing c o n t a i n e d i n t h i s p a r t is intended t o o p e r a t e s o as to i m p a i r , a b r i d g e , or i n t e r - f e r e w i t h t h e r i g h t of any i n c o r p o r a t e d munici- p a l i t y w i t h i n t h i s state to e n a c t local laws or o r d i n a n c e s d e a l i n g w i t h t h e s u b j e c t of t h i s p a r t , provided t h a t such m u n i c i p a l i t y s h a l l n o t impose any l i c e n s e f e e s i n e x c e s s of twice t h e amount provided h e r e i n f o r county l i c e n s e f e e s ." 7-21-2302(2) , MCA. An annual $15 c o u n t y l i c e n s e f e e f o r i t i n e r a n t vendors is p r o v i d e d i n t h e A c t . S e c t i o n 7-21-2303, MCA. The B i l l i n g s Ordinance p r o v i d e s i n p e r t i n e n t p a r t : "ORDINANCE N o . 5.20.050. SOLICITING PROHIBITED "The p r a c t i c e of going i n t o p r i v a t e r e s i d e n c e s , b u s i n e s s e s t a b l i s h m e n t s , o r o f f i c e s i n t h e C i t y b y solicitors, p e d d l e r s , hawkers, i t i n e r a n t m e r c h a n t s and t r a n s i e n t vendors of merchandise, n o t having been r e q u e s t e d or i n v i t e d to do so by t h e owner or owners, o c c u p a n t or o c c u p a n t s of p r i v a t e r e s i d e n c e s , b u s i n e s s e s t a b l i s h m e n t s or o f f i c e s f o r t h e purpose of s o l i c i t i n g o r d e r ( s i c ) f o r t h e sale of goods, wares and merchandise, and/or f o r t h e purpose of d i s p o s i n g of and/or peddling or hawking same is h e r e b y d e c l a r e d to be a n u i s a n c e and p u n i s h a b l e a s a misdemeanor." "ORDINANCE NO. 5.20.060. EXCEPTIONS. "The p r o v i s i o n s of t h i s c h a p t e r s h a l l n o t a p p l y t o r e g u l a r l y e s t a b l i s h e d p l a c e s of b u s i n e s s o r t o b o n a f i d e merchants having r e g u l a r l y e s t a b l i s h e d p l a c e s of b u s i n e s s w i t h i n s a i d c i t y , or to any r e g u l a r l y l i c e n s e d a u c t i o n e e r or to any p e r s o n d i s t r i b u t i n g by sale, o r o t h e r w i s e , produced by him on owned o r l e a s e d premises; p r o v i d e d such premises are l o c a t e d w i t h i n 150 miles of t h e C i t y . " The f o c u s of t h e f i r s t i s s u e is whether t h e C i t y of B i l l i n g s is empowered to p r o h i b i t u n i n v i t e d door-to-door s o l i c i - t a t i o n s by i t i n e r a n t vendors under t h e s t a t e l i c e n s i n g s t a t u t e or o t h e r w i s e . Tipco a r g u e s t h a t a s t a t u t o r y g r a n t of power to a m u n i c i p a l i t y to e n a c t o r d i n a n c e s " d e a l i n g w i t h " i t i n e r a n t vendors d o e s n o t empower a c i t y to p r o h i b i t t h e i r a c t i v i t i e s , c i t i n g DeLong v. Downes ( 1 9 7 7 ) , 1 7 5 Mont. 152, 573 P.2d 160 ( a s t a t u t e a u t h o r i z i n g r e g u l a t i o n of gambling l i c e n s e s is n o t a g r a n t of power to p r o h i b i t a u t h o r i z e d forms of gambling); Winther v. V i l l a g e of Wieppe ( 1 9 6 7 ) , 91 Idaho 798, 430 P.2d 689 ( t h e power t o r e g u l a t e a b u s i n e s s is n o t a g r a n t of power to p r o h i b i t it) ; and Combined Communications C o r p o r a t i o n v. C i t y and County of Denver ( 1 9 7 5 ) , 189 Colo. 462, 542 P.2d 79 ( t h e power to r e g u l a t e d o e s n o t i n c l u d e t h e power to p r o h i b i t ) ; and a r g u i n g t h a t i f t h e l e g i s l a t u r e intended to g r a n t cities t h e power to p r o h i b i t t h e a c t i v i t i e s of i t i n e r a n t vendors, it could have p l a i n l y s a i d so. S t a t e s t a t u t e s d e f i n e i t i n e r a n t vendors to i n c l u d e p e r s o n s engaged i n door-to-door s o l i c i t a t i o n s [ s e c t i o n 7-21-2301 ( 2 ) , MCA], p r o v i d e f o r l i c e n s i n g them [ s e c t i o n 7-21-2303, MCA], and state t h a t such s t a t u t e s s h a l l n o t impair t h e r i g h t of any incor- p o r a t e d c i t y to e n a c t o r d i n a n c e s d e a l i n g w i t h t h e l i c e n s i n g of i t i n e r a n t vendors [ s e c t i o n 7-21-2302(2), M C A ] . O t h e r state sta- t u t e s p r o v i d e t h a t "a local governmental u n i t w i t h s e l f - government powers may e x e r c i s e any power n o t p r o h i b i t e d by t h e c o n s t i t u t i o n , law, or c h a r t e r " and " t h e s e powers i n c l u d e b u t are n o t l i m i t e d to t h e powers g r a n t e d to g e n e r a l power governments" s e c t i o n 7-1-101, MCA; and t h a t " t h e powers and a u t h o r i t y of a local government u n i t with s e l f -government powers s h a l l be l i b e r a l l y c o n s t r u e d " and " e v e r y r e a s o n a b l e doubt as to t h e e x i s t e n c e o f a local government power or a u t h o r i t y s h a l l be r e s o l v e d i n f a v o r of t h e e x i s t e n c e of t h a t power or a u t h o r i t y . " S e c t i o n 7-1-106, MCA. These s t a t u t e s were enacted p u r s u a n t to t h e expansion of t h e powers of local self-government provided by Montana's 1972 C o n s t i t u t i o n , Article X I , S e c t i o n s 4, 5 and 6. Thus we f i n d no c o n f l i c t between state s t a t u t e s l i c e n s i n g i t i n e r a n t vendors and t h e B i l l i n g s o r d i n a n c e p r o h i b i t i n g one of t h e i r a c t i v i t i e s - - u n i n v i t e d door-to-door s o l i c i t a t i o n s . A l i c e n s i n g s t a t u t e does n o t l e g a l i z e an a c t i v i t y o t h e r w i s e prohi- b i t e d . S t a t e ex rel. Replogle v. Joyland Club ( 1 9 5 0 ) , 124 Mont. 122, 220 P.2d 988. S i n c e t h e C i t y of B i l l i n g s p o s s e s s e s s e l f - government powers it may e x e r c i s e any power n o t p r o h i b i t e d by t h e C o n s t i t u t i o n , Law or C h a r t e r and p o s s e s s e s powers g r a n t e d to g e n e r a l power government, it is empowered to p r o h i b i t u n i n v i t e d door-to-door s o l i c i t a t i o n s by i t i n e r a n t vendors. The s i t u a t i o n h e r e must be d i s t i n g u i s h e d from s i t u a t i o n s i n v o l v i n g state preemption of a f i e l d of r e g u l a t i o n as i n DeLong v . Downes, s u p r a ; S t a t e ex rel. C i t y of Libby v. H a s w e l l ( 1 9 6 6 ) , 147 Mont. 492, 414 P.2d 652; C i t y of B i l l i n g s v. Herold ( 1 9 5 6 ) , 130 Mont. 138, 296 P.2d 263; and S t a t e ex rel. Wiley v. ~ i s t . C t . ( 1 9 4 5 ) , 118 Mont. 50, 164 P.2d 358. There, u n l i k e h e r e , t h e s t a t e had preempted r e g u l a t i o n of gambling, l i q u o r c o n t r o l and o t h e r f i e l d s to t h e e x c l u s i o n of m u n i c i p a l i t i e s which were prohi- b i t e d from l e g i s l a t i n g i n t h o s e a r e a s . I n t h e i n s t a n t case t h e r e h a s been no s t a t e preemption or p r o h i b i t i o n . W e e x p r e s s l y o v e r r u l e s t a t e m e n t s i n DeLong t h a t a county, c i t y or town can o n l y e x e r c i s e powers e x p r e s s l y c o n f e r r e d on it b y t h e C o n s t i t u t i o n and s t a t u t e s or a r i s i n g by n e c e s s a r y implica- t i o n and t h a t any r e a s o n a b l e doubt concerning such powers should b e r e s o l v e d a g a i n s t t h e m u n i c i p a l i t y . T h i s w a s t h e l a w under Montana's 1889 C o n s t i t u t i o n and c a s e s decided t h e r e u n d e r . It is n o t t h e l a w under Montana's 1972 C o n s t i t u t i o n and s t a t u t e s e n a c t e d t h e r e u n d e r . Tipco n e x t c o n t e n d s t h a t t h e B i l l i n g s o r d i n a n c e is i n v a l i d because it conf l i c t s w i t h state s t a t u t e s governing n u i s a n c e s . Tipco p o i n t s o u t t h a t s e c t i o n 27-30-101(2), MCA, states t h a t n o t h i n g done or maintained under t h e e x p r e s s a u t h o r i t y of a sta- t u t e can be d e c l a r e d a n u i s a n c e . T h e r e f o r e , Tipco a r g u e s , t h e s t a t u t e l i c e n s i n g i t i n e r a n t vendors i m p l i e d l y i n d i c a t e s t h a t t h e i r a c t i v i t i e s i n door-to-door s o l i c i t a t i o n s are n o t a n u i s a n c e . The f a l l a c y i n T i p c o ' s argument is t h a t a l i c e n s i n g sta- t u t e d o e s n o t l e g a l i z e a p r o h i b i t e d a c t i v i t y . S t a t e ex rel. Replogle v. Joyland Club, s u p r a . There is no preemption by t h e state of r e g u l a t i o n of n u i s a n c e s . The C i t y of B i l l i n g s h a s d e c l a r e d u n i n v i t e d door-to-door solici'tations by i t i n e r a n t vendors a n u i s a n c e . The same a n a l y s i s , t h e same r e a s o n s and t h e same r e s u l t a p p l i e s to t h i s i s s u e as t o t h e f i r s t i s s u e . W e hold t h e B i l l i n g s o r d i n a n c e v a l i d a g a i n s t t h i s a t t a c k by Tipco. However, w e hold t h a t t h e B i l l i n g s o r d i n a n c e d e n i e s Tipco e q u a l p r o t e c t i o n of t h e law i n v i o l a t i o n of Federal and S t a t e C o n s t i t u t i o n a l r e q u i r e m e n t s . F o u r t e e n t h Amendment, S e c t i o n 1, U. S. C o n s t i t u t i o n ; Article 11, S e c t i o n 4, 1972 Montana C o n s t i t u t i o n . The B i l l i n g s o r d i n a n c e exempts local merchants h a v i n g r e g u l a r l y e s t a b l i s h e d p l a c e s of b u s i n e s s i n t h e C i t y from t h e p r o h i b i t i o n a g a i n s t u n i n v i t e d door-to-door salesman. It pro- h i b i t s Tipco from engaging i n t h e p r o h i b i t e d a c t i v i t y and p e r m i t s local merchants to engage i n t h e p r o h i b i t e d a c t i v i t y . T h i s c o n s t i t u t e s p a t e n t d i s c r i m i n a t i o n p r o h i b i t e d under c o n s t i t u t i o n a l e q u a l p r o t e c t i o n r e q u i r e m e n t s . The B i l l i n g s o r d i n a n c e is n o t s u b j e c t to t h e "strict s c r u t i n y " test of e q u a l p r o t e c t i o n because it does n o t burden a fundamental r i g h t ( S t a t e v. Turk ( N o . 81-341, decided March 25, 1982; S e a r l e & Co. v . Cohn ( 1 9 8 2 ) , U.S. - 1 - S.Ct. I L.Ed.2d (No. 80-644 d e c i d e d F e b r u a r y 24, 1 9 8 2 ) ; S t a n l e y v. I l l i n o i s ( 1 9 7 2 ) , 405 U.S. 645, 92 S.Ct. 1208, 3 1 L.Ed.2d 551; Dunn v. Blumstein ( 1 9 7 2 ) , 405 U.S. 330, 92 S.Ct. 995, 3 1 L.Ed.2d 274) n o r c o n s t i t u t e i n v i d i o u s d i s c r i m i n a t i o n a g a i n s t a s u s p e c t - 6 - class (Graham v. Richardson ( 1 9 7 1 ) , 403 U.S. 365, 9 1 S.Ct. 1848, 29 L.Ed.2d 534; Loving v. V i r g i n i a ( 1 9 6 7 ) r 388 U.S. 1, 87 S.Ct. 1817, 1 8 L.Ed.2d 1 0 1 0 ) . The " r a t i o n a l r e l a t i o n s h i p " test d e t e r m i n e s whether t h e B i l l i n g s o r d i n a n c e s a t i s f i e s e q u a l p r o t e c t i o n r e q u i r e m e n t s , i . e . is t h e p r o h i b i t i o n a g a i n s t u n i n v i t e d door-to-door s o l i c i t a - t i o n by Tipco and t h e p e r m i s s i o n f o r local merchants t o engage i n t h e same a c t i v i t y r a t i o n a l l y r e l a t e d to t h e achievement of a l e g i t i m a t e governmental o b j e c t i v e ? W e hold it is n o t . The o n l y r a t i o n a l r e l a t i o n s h i p t h a t h a s been suggested is t h a t t h e C i t y can e x e r c i s e c o n t r o l o v e r local merchants and t h e i r u n i n v i t e d door-to-door s o l i c i t a t i o n s b u t cannot e x e r c i s e such c o n t r o l o v e r o u t - o f - s t a t e f i r m s and t h e i r solicitors. T h i s argument is d i f f i c u l t to f o l l o w as t h e o r d i n a n c e p e r m i t s l o c a l merchants to engage i n t h e p r o h i b i t e d a c t i v i t y . Under such c i r c u m s t a n c e s where is t h e c o n t r o l ? T h i s argument a d d i t i o n a l l y l o s e s its v i t a l i t y because state l i c e n s i n g s t a t u t e s , e q u a l l y a p p l i c a b l e to local merchants and o u t - o f - s t a t e f i r m s , r e q u i r e p o s t i n g a bond of $250 as a c o n d i t i o n of l i c e n s i n g t o p r o t e c t customers. S e c t i o n 7-21-2306, MCA. A c l a s s i f i c a t i o n t h a t is p a t e n t l y a r b i t r a r y and b e a r s no r a t i o n a l r e l a t i o n s h i p to a l e g i t i m a t e governmental i n t e r e s t o f f e n d s e q u a l p r o t e c t i o n of t h e laws. F r o n t i e r o v . Richardson ( 1 9 7 3 ) , 411 U.S. 677, 93 S.Ct. 1764, 36 L.Ed.2d 583; S i g e t y v. S t a t e Board of H e a l t h ( 1 9 7 1 ) , 157 Mont. 48, 482 P.2d 574. A s w e have p r e v i o u s l y h e l d , e q u a l p r o t e c t i o n of t h e laws r e q u i r e s t h a t a l l p e r s o n s be t r e a t e d a l i k e under l i k e c i r c u m s t a n c e s . B i l l i n g s A s s o c i a t e d Plumbing, Heating & Cooling C o n t r a c t o r s v. S t a t e Board o f Plumbers ( 1 9 7 9 ) , Mont. , 602 P.2d 597, 36 St.Rep. 1996. Here u n i n v i t e d door-to-door s o l i c i t o r s of local merchants are no less a n u i s a n c e t h a n t h o s e of n o n l o c a l f i r m s . Thus, t h e classi- f i c a t i o n is a r b i t r a r y and o f f e n d s t h e e q u a l p r o t e c t i o n c l a u s e of b o t h F e d e r a l and Montana C o n s t i t u t i o n s . The remaining f e d e r a l c o n s t i t u t i o n a l a t t a c k s are f o r e c l o s e d by t h e United S t a t e s Supreme Court d e c i s i o n i n Breard v . C i t y of A l e x a n d r i a ( 1 9 5 1 ) , 341 U.S. 622, 7 1 S.Ct. 920, L.Ed . I n t h a t case a Green R i v e r t y p e o r d i n a n c e l i k e t h a t of B i l l i n g s (minus t h e exemption f o r local merchants) was h e l d n o t t o v i o l a t e t h e F e d e r a l Commerce c l a u s e , t h e F i r s t Amendment r i g h t o f f r e e s p e e c h , and t h e due p r o c e s s c l a u s e of t h e F o u r t e e n t h Amendment. W e f i n d no r e a s o n to hold o t h e r w i s e under Montana's c o n s t i t u t i o n a l freedom of speech g u a r a n t e e ( A r t . 11, Sec. 7, 1972 Montana C o n s t i t u t i o n ) o r Montana's due p r o c e s s c l a u s e ( A r t . 11, Sec. 1 7 , 1972 Montana C o n s t i t u t i o n ) . Montana's C o n s t i t u t i o n , u n l i k e t h e F e d e r a l C o n s t i t u t i o n , c o n t a i n s no commerce c l a u s e . I n summary, w e hold B i l l i n g s Ordinance 5.20.050 and 5.20.060 u n c o n s t i t u t i o n a l under t h e e q u a l p r o t e c t i o n p r o v i s i o n s o f t h e United S t a t e s and Montana C o n s t i t u t i o n s . S i n c e we have no way of knowing whether t h e C i t y of B i l l i n g s would e n a c t t h e o r d i - nance w i t h o u t t h e u n c o n s t i t u t i o n a l exemption c o n t a i n e d i n 5.20.060, we s t r i k e b o t h 5.20.050 and 5.20.060 l e a v i n g t h a t d e t e r m i n a t i o n t o t h e C i t y . The judgment of t h e District Court is r e v e r s e d i n accord- a n c e w i t h t h i s o p i n i o n . Chief J u s t i c e