### 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: 

# MAR29

## 1982 Filed: 

## MAR29

## 1982Mr. Chief Justice Frank I. Haswell delivered the Opinion of the Court. The City of Billings enacted an ordinance declaring uninvited door-to-door solicitationsa nuisance punishable asa 

### misdemeanor and exempting local merchants with regularly established places of business from its operation. The District Court held the ordinance valid. We reverse. Plaintiff Tipco Corporation is a foreign corporation with

no business office in Montana. Twelve sales agents of Tipco, licensed and bonded under Montana statutes, 

### were selling magazine subscriptionsdoor-to-door inBillingsduring March 1981. These 

### sales agents depended on door-to-door solicitations for their livelihood and income. The sales agents would forward subscriptions obtained from Billings customers 

### to ~ipco's main office in Indiana which would place the subscriptionswith various magazine publishers. The 

### sales agents

### were arrested and charged with 

### misdemeanors under the Billings ordinance. On March 20, 1981, Tipco filed a complaint in the Yellowstone County District Court to enjoin the City of Billings from enforcing 

### its ordinance contending it con£licted with overriding state statutes and 

### was unconstitutional under Federal and StateConstitutional provisions. The City responded with a motion 

### to dismiss alleging no conflictwith 

### state statute or constitutional provisions. The 

### ~istr ict Court, afternotice to the parties that it would treat the 

### case as submitted on 

### crossmotions for summary judgment, granted summary judgment to the City upholding the validity of the ordinance

# . Tipco appeals. Three issues arepresented on appeal: (1)Is the Billingsordinance invalid as con£licting with state statutesgoverning the licensing of itinerantvendors? (2)Is the Billings ordinance invalid 

### as conflicting with state statutesgoverning nuisances? (3) 

### Does the Billings ordinance unfairlydiscriminate againstTipco contrary

### to the 

### commerce clause of the United StatesConstitution and the due process and equal protection clausesof the United States and Montana Constitutions? The relevant 

### state statutesgoverning itinerantvendors



### are found inTitle7, Chapter 21, MCA, and provide as follows: "Part 23 "Licensing of -ItinerantVendors "Definitions

# . .. "(2)Within the meaning of thispart, an 'itinerant vendor' 

### is any person engaged or employed in the business of retailing to consumers by going from consumer 

### to consumer, eitheron the 

### streets or 

### to their places of residence 

### or employment and there soliciting, selling, 

### or offering 

### to sell

### or exhibiting for sale (bysample, by catalogue, 

### or otherwise) 

### or taking orders for futuredeliveryof any goods, 

### wares, 

### or merchandise 

### or for services 

### to be performed in the future

# ." 7-21-2301 (2), MCA. "Scope of part

# ..

# . -- "(2)Nothing contained in thispart is intended to operate so 

### as to impair, abridge, 

### or interferewith the right of any incorporated municipality within this 

### state to enact 

### local laws 

### or ordinances dealing with the subject of this part, provided that such municipality shall not impose any license fees inexcessof 

### twice the amount provided herein for county license fees

# ." 7-21-2302(2) 

## , MCA. An annual $15county license fee for itinerantvendors 

### is provided in the Act. Section 7-21-2303, MCA. The BillingsOrdinance provides inpertinent part: "ORDINANCE No. 5.20.050. SOLICITING PROHIBITED "The practice of going into private residences, business establishments, oroffices inthe City by 

### solicitors, peddlers, hawkers, itinerant merchants and transient vendors of merchandise, not having been requested 

### or invited 

### to do 

### so by the owner 

### or owners, occupant 

### or occupants of private residences, business establishments 

### or offices for the purpose of soliciting order 

### (sic)for the sale of goods, wares and merchandise, and/or for the purpose of disposing of and/or peddling 

### or hawking 

### same is herebydeclared to be a nuisance and punishable as a misdemeanor." "ORDINANCE NO. 5.20.060. EXCEPTIONS. "The provisions of thischapter shall not apply 

### to regularlyestablished places of business or 

### to bonafide merchants having regularly established places of business within said city, 

### or 

### to any regularly licensed auctioneer

### or toanyperson distributingby 

### sale, orotherwise, produced by him on owned orleased premises; provided such premises 

### are located within 150 miles of the City." The focus of the first issue is whether the City of Billings 

### is empowered 

### to prohibit uninvited door-to-door solicitationsby itinerantvendors under the state licensing statute

### or otherwise. Tipco argues that a statutory grantof power 

### to a municipality 

### to enact ordinances "dealing with" itinerant vendors does not empower a city to prohibit their activities, citing DeLong v. Downes (1977), 175Mont. 152, 573 P.2d 160 (astatute authorizing regulation of gambling licenses is not a grant of power to prohibit authorized forms of gambling); Winther v. Village of Wieppe (1967), 91 Idaho 798, 430 P.2d 689 (thepower toregulate a business 

### is not a grant of power 

### to prohibit it); and Combined Communications Corporation v. City and County of Denver (1975), 189Colo. 462, 542 P.2d 79 (thepower 

### to regulate does not include the power 

### to prohibit);and arguing that if the legislature intended to grant 

### cities the power to prohibit the activitiesof itinerantvendors, it could have plainly said 

### so. State statutesdefine itinerantvendors to include persons engaged indoor-to-door solicitations [section 7-21-2301 (2)

## , MCA], provide for licensing them [section7-21-2303, MCA], and 

### state that such statutes shall not impair the right of any incorporated city to enact ordinances dealing with the licensing of itinerantvendors [section 7-21-2302(2), MCA]

# . Other state 

### statutes provide that "a local governmental unit with selfgovernment powers may exercise any power not prohibited by the constitution, law, 

### or charter" and "these powers include but 

### are not limited to the powers granted to general power governments" section 7-1-101, MCA; and that "the powers and authority of a local government unit with self-government powers shall be liberallyconstrued" and "every reasonable doubt as to the existence of a local government power 

### or authority shall be resolved in favor of the existence of thatpower 

### or authority."Section 7-1-106, MCA. These statutes

### were enacted pursuant to the expansion of the powers of 

### local self-government provided by Montana's 1972Constitution, Article XI, Sections 4, 5 and 6. Thus 

### we find no conflict between state statutes licensing itinerantvendors and the Billings ordinance prohibiting one of their activities--uninvited door-to-door solicitations. A licensing statutedoes not legalize an activity otherwise prohibited. Stateex rel. Replogle v. Joyland Club (1950), 124Mont. 122, 220 P.2d 988. Since the City of Billingspossesses selfgovernment powers 

### it may exercise any power not prohibited by the Constitution, Law 

### or Charter and possesses powers granted to general power government, it is empowered 

### to prohibit uninvited door-to-door solicitationsby itinerantvendors. The situationheremust be distinguished from situations involving 

### state preemption of 

### a field of regulation 

### as inDeLong

v. Downes, supra; Stateex 

### rel. City of Libby v. Haswell (1966), 147Mont. 492, 414 P.2d 652; City of Billingsv. Herold (1956), 130Mont. 138, 296 P.2d 263; and Stateex rel. Wiley v. ~ist. Ct. (1945)

## , 118Mont. 50, 164 P.2d 358. There, unlike here, the state had preempted regulation of gambling, liquor control and other fields 

### to the exclusion of municipalities which 

### were prohibited from legislating in those areas. In the instant 

### case there has been no statepreemption 

### or prohibition. We expressly overrule statements inDeLong that a county, city

### or town can only exercise powers expressly conferred on it by the Constitution and statutes

### or arising by necessary implication and that any reasonable doubt concerning such powers should be resolved against the municipality. This was the lawunder Montana's 1889Constitution and cases decided thereunder. It is not the lawunder Montana's 1972Constitution and statutes enacted thereunder. Tipco next contends that the Billingsordinance is invalid because it conflictswith state statutesgoverning nuisances.Tipco points out that section 27-30-101(2), MCA, 

### states that nothing done 

### or maintained under the express authority of a statute can be declared a nuisance. Therefore, Tipco argues, the statutelicensing itinerantvendors impliedly indicates that their activities indoor-to-door solicitations 

### are not a nuisance. The fallacy inTipco's argument is that a licensing 

### statute does not legalize a prohibited activity. Stateex rel. Replogle v. Joyland Club, supra. There is no preemption by the state of regulation of nuisances. The City of Billings has declared uninvited door-to-door solici'tations by itinerantvendors

a nuisance. The 

### same analysis, the 

### same reasons and the same result applies to this issue as to the firstissue. We hold the Billings ordinance valid against thisattackby Tipco. However, 

### we hold that the Billingsordinance denies Tipco equal protection of the 

### law in violation of Federal and State Constitutional requirements. Fourteenth Amendment, Section 1, U. S. Constitution; Article 11, Section4, 1972Montana Constitution. The Billingsordinance exempts 

### local merchants having regularlyestablished places of business in the City from the prohibition against uninvited door-to-door salesman. It prohibitsTipco from engaging in the prohibited activity and permits 

### local merchants 

### to engage in the prohibited activity. This constitutes patent discrimination prohibited under constitutional equal protection requirements. The Billingsordinance 

### is not subject to the 

### "strict scrutiny" 

### test of equal protectionbecause it does not burden a fundamental right (Statev. Turk (No. 81-341, decided March 25, 1982; Searle & Co. v. Cohn (1982), U.S. -1 - S.Ct. I L.Ed.2d (No. 80-644 decided February 24, 1982); Stanleyv. Illinois (1972), 405 U.S. 645, 92 S.Ct. 1208, 31L.Ed.2d 551; Dunn v. Blumstein (1972), 405 U.S. 330, 92 S.Ct. 995, 31 L.Ed.2d 274) nor constitute invidious discrimination against a suspect -6-class (Grahamv. Richardson (1971), 403 U.S. 365, 91 S.Ct. 1848, 29 L.Ed.2d 534; Loving v. Virginia (1967)r 388 U.S. 1, 87 S.Ct. 1817, 18L.Ed.2d 1010). The "rational relationship" test determines whether the Billingsordinance satisfiesequal protection requirements, i.e. is the prohibition against uninvited door-to-door solicitation by Tipco and the permission for local merchants to engage in the 

### same activity rationally related 

### to the achievement of a legitimate governmental objective? We hold it is not. The onlyrational relationship that has been suggested is that the City can exercise control over local merchants and their uninvited door-to-door solicitations but cannot exercise such control over out-of-state firms and their 

### solicitors. This argument is difficult 

### to follow as the ordinance permits local merchants 

### to engage in the prohibited activity. Under such circumstances where is the control? This argument additionally loses 

### itsvitalitybecause state licensing statutes, equally applicable to local merchants and out-of-state firms, requireposting a bond of $250 as a condition of licensing to protect customers. Section 7-21-2306, MCA. A classification that is patently arbitraryand bears no rational relationship to a legitimate governmental interest offends equal protection of the 

### laws. Frontierov. Richardson (1973), 411 U.S. 677, 93 S.Ct. 1764, 36 L.Ed.2d 583; Sigety v. StateBoard of Health (1971), 157Mont. 48, 482 P.2d 574. As

### we have previously held, equal protection of the laws requires that allpersons be treated alike under like circumstances. Billings Associated Plumbing, Heating & Cooling Contractors v. StateBoard of Plumbers (1979), Mont. 

## , 602 P.2d 597, 36 St.Rep. 1996. Here uninvited door-to-door solicitors of local merchants are no less a nuisance than those of nonlocal firms. Thus, the classification 

### is arbitraryand offends the equal protection clause ofboth Federal and Montana Constitutions. The remaining federal constitutional attacks 

### are foreclosed by the United States Supreme Court decision inBreard

v. City of Alexandria (1951), 341U.S. 622, 71 S.Ct. 920, L.Ed 

# . In that case a Green River type ordinance like thatof Billings (minus the exemption for 

### local merchants) 

### was held not to violate the Federal Commerce clause, the FirstAmendment right of free speech, and the due process clause of the Fourteenth Amendment. We find no reason to hold otherwise under Montana's constitutional freedom of speech guarantee (Art. 11, Sec. 7, 1972 Montana Constitution) orMontana's due process clause (Art. 11, Sec. 17, 1972Montana Constitution). Montana's Constitution, unlike the Federal Constitution, contains no 

### commerce clause. In summary, we hold BillingsOrdinance 5.20.050 and 5.20.060 unconstitutional under the equal protection provisions of the United States and Montana Constitutions. Since

### we have no way of knowing whether the City of Billingswould enact the ordinance without the unconstitutional exemption contained in 5.20.060, we strikeboth 5.20.050 and 5.20.060 leaving that determination to the City. The judgment of the District Court is reversed in accordance with thisopinion.

Chief Justice