Opinion ID: 1662059
Heading Depth: 1
Heading Rank: 4

Heading: Public Interest and Welfare

Text: The second, more nebulous ground for the M.V.C.'s refusal to grant Benson & Gold the requested license was that the licensing of two Chevrolet dealers to compete in the same market area in such close proximity would be potentially destructive to the economic vitality of both dealers and the interest of the general public, which was thought to be best served by healthy competition which produces stable, long lasting automotive dealerships. In short, the M.V.C. determined that the entry of Benson & Gold into the same geographical area of metropolitan New Orleans as Bryan Chevrolet would be financially ruinous of one or both dealerships. As noted, the M.V.C. is authorized to consider any information that relates to the public interest and welfare when it evaluates an application for a license. The public policy underlying the regulatory legislation which the M.V.C. administers was partly concerned with prevention of the inevitable train of undesirable consequences, including economic depression, that might result when an automobile dealer failed because of unfair practices and competition. R.S. 32:1251. Another stated purpose of the law was to foster and keep alive vigorous and healthy competition, by prohibiting unfair practices by which fair and honest competition is destroyed or prevented ... R.S. 32:1251. While we do not dispute the M.V.C.'s basic finding of factthat the relocation of Benson & Gold could be financially harmful to one or both of the dealersit is necessary to determine whether this consideration forms part of the fabric of the public interest and welfare which the M.V.C. is empowered to safeguard. To begin, the M.V.C.'s voiced concern over the financial future of Benson & Gold has little logic to recommend it. Benson & Gold chose to accept Chevrolet's relocation requirement precisely because such a move, in its estimation, would bring financial rewards. Whether the decision was a prudent one, and whether it will produce the anticipated benefits, are matters at the risk of Benson & Gold. Benson & Gold does not complain that the competition which will result from its relocation will be unhealthy, dishonest, or the product of unfair practices. Indeed, if officers of Benson & Gold believed that the consequences of relocation would be ruinous, it is unrealistic to believe that Chevrolet could have induced them to enter the franchise agreement. From the standpoint of Benson & Gold, then, the decision of the M.V.C. does nothing to promote franchising equity or advance the public interest. See discussion by Mashaw, Constitutional Deregulation: Notes Toward a Public, Public Law, 54 Tul.L.Rev. 849 (1980). When Benson & Gold is eliminated as the object of legislative solicitude in this matter, the motivating factor underlying the license denial becomes clear: the M.V.C. determined that Bryan Chevrolet would be financially harmed should it have to face more intense competition from a nearby, same make dealership. It was entirely proper for the M.V.C. to consider this factor. The declaration of public policy contained in R.S. 32:1251 specifically mentions the prevention of bankruptcy, with its attendant economic harms, as one of the goals of the regulatory legislation. However, the law does not contemplate that no automobile dealers will become bankrupt under the protection of regulation, nor does it anticipate that all automobile dealerships will attain equal financial success: the law expressly states that it is the bankrupting of dealers because of unfair practices and competition that is undesirable. Throughout § 1251, the expression unfair practices is used. The statute states that it is the purpose of the law to foster and keep alive vigorous and healthy competition, by prohibiting unfair practices by which fair and honest competition is destroyed or prevented ... (Emphasis added). The purpose of the M.V.C. is not to keep every automobile dealership in Louisiana secure from financial loss, however desirable a prospect that may be; it is to prevent the unfair practices by which financial loss occurs. If a dealership's profits are reduced because of vigorous and healthy competition from another dealership, that is both fair and honest, the M.V.C. is powerless to interpose its authority. Indeed, it is the M.V. C.'s mission to foster such competition. In the present case, neither the M.V.C.'s findings of fact nor its conclusions of law even allude to any suspicion that Benson & Gold's proposed relocation is an unfair practice perpetrated by Chevrolet. The findings of fact do indicate that Bryan Chevrolet was offered an opportunity to relocate to the Veterans Boulevard area several times during a period of four years. Bryan, however, was unable to meet the conditions imposed by Chevrolet. And, although the record does reflect that Benson & Gold was offered more generous terms in relocating than was Bryan Chevrolet, nothing indicates that this was an unfair practice. In addition, mention is made of the fact that Bryan Chevrolet expanded its facilities in 1976, but was never expressly notified of Chevrolet's intent to place another dealership in the Kenner-Metairie area. Again, however, this recital of fact is unaccompanied by any indication that Chevrolet was engaged in any sort of deliberate deception aimed at undermining the business of Bryan Chevrolet. In fact, the record indicates that Chevrolet had advised Bryan, at least as early as 1970, that it planned to relocate one of the dealerships in downtown New Orleans to the Kenner-Metairie area. Notwithstanding the fact that the M.V.C. may have been accurate in predicting that Bryan Chevrolet could be harmed by the relocation of Benson & Gold, the M.V.C. did not find that the relocation was unfair. The principle that courts are the ultimate arbiters of the law has been entrenched in the American legal system since Marbury v. Madison, 5 U.S. (1 Cranch) 60, 2 L.Ed. 60 (1803). And, although an administrative agency might have the first word in interpreting the law which it administers, the last word on statutory interpretation belongs to the courts: ... Undoubtedly questions of statutory interpretation, especially when arising in the first instance in judicial proceedings, are for the courts to resolve, giving appropriate weight to the judgment of those whose special duty is to administer the questioned statute.... National Labor Relations Bd. v. Hearst Publications, 322 U.S. 111, 130-31, 64 S.Ct. 851, 860, 88 L.Ed. 1170, 1184 (1944). The principle has been affirmed in decisions involving judicial review of administrative actions that are too numerous to cite. See, e. g., authorities collected in K. Davis, Administrative Law of the Seventies § 30.00 (1976); 4 K. Davis, Administrative Law Treatise § 30.12 (1st ed. 1958); 5 Mezines, Stein & Gruff, Administrative Law § 51.01 (1980). The principle is itself embodied in the relevant laws which govern this court's review of administrative adjudications. R.S. 49:964(G). See also R.S. 32:1256(E). The M.V.C. was correct in determining that its authority to evaluate all considerations involving public interest and public welfare, established in R.S. 32:1254(B), entitled it to refer to the public policy articulated by the legislature in R.S. 32:1251. However, the M.V.C. incorrectly interpreted that law as giving it a mandate to deny a license application whenever the issuance of such a license could have a harmful financial effect upon an already established dealership. As interpreted by this court, R.S. 32:1251 simply gives the M.V.C. the authority to prevent unfair practices, frauds, abuses, undue control by manufacturers and the like. Without a finding that Benson & Gold's relocation constitutes such an unfair practice, the M.V.C.'s determination that a denial of the license was in the public interest is baseless. When an administrative agency such as the M.V.C. denies an application for a license, it is governed by the same provisions in the law that relate to adjudications. R.S. 49:961(A). When an administrative adjudication is judicially reviewed, the courts are empowered to reverse or modify any decision by an agency that violates constitutional or statutory provisions, exceeds the agency's delegated authority, or is affected by other error of law. R.S. 49:964(G). In addition, R.S. 32:1256(E) specifically provides that a court reviewing an action taken by the M.V.C. shall enter such order with respect thereto as it shall deem just and equitable. We find, consistent with the trial court's decision, that the M.V. C.'s denial of the license application was based upon an erroneous construction of the law; we further hold that, when an applicant meets the general standards established by law, the application may be denied on the grounds of public interest and public welfare only if an unfair practice or a disruption of the system of distribution of motor vehicles to the public are involved. Since the M.V.C. found that the conditions of R.S. 32:1254(B) had been satisfied by Benson & Gold, and because there is no evidence that the relocation is an unfair practice, Benson & Gold is entitled to be granted a license upon paying the license fees imposed by law. R.S. 32:1254(C), (E).