Opinion ID: 1662059
Heading Depth: 1
Heading Rank: 5

Heading: Constitutional and Anti-Trust Questions

Text: Having decided the merits of the case in favor of Benson & Gold, the trial judge went further to declare that two provisions of the law were unconstitutional, and that the entire regulatory scheme did not constitute state action so as to be exempt from the provisions of the Sherman Anti-Trust Act, which it violated. One statute which was declared unconstitutional was R.S. 32:1253(A), which governs the composition of the M.V.C. The trial court's determination was primarily based upon its conclusion that a regulatory agency comprised entirely of automobile dealers could not provide an impartial hearing to other automobile dealers. The fact that the automobile dealers might have a personal interest in the matters they are called upon to adjudicate was said to be a violation of due process. See, e. g., Gibson v. Berryhill, 411 U.S. 564, 93 S.Ct. 1689, 36 L.Ed.2d 488 (1973); Wall v. American Optometric Association, Inc., 379 F.Supp. 175 (N.D.Ga.1974), affirmed, 419 U.S. 888, 95 S.Ct. 166, 42 L.Ed.2d 134 (1974). But see also Friedman v. Rogers, 440 U.S. 1, 99 S.Ct. 887, 59 L.Ed.2d 100 (1979). Because we affirm the trial court's initial determinationthat the denial of the license application was improperit is unnecessary to address the constitutionality of the statutes. It is a long standing judicial principle that courts will not consider constitutional challenges unless necessary to the resolution of a dispute. See, e. g., Orleans Parish School Board v. Williams, 312 So.2d 647 (La.1975); State in Interest of Toler, 262 La. 557, 263 So.2d 888 (1972); Tafaro's Investment Co. v. Division of Housing Improvement, 261 La. 183, 259 So.2d 57 (1972); Aucoin v. Dunn, 255 La. 823, 233 So.2d 530 (1970); Doss v. Board of Commissioners of Mermentau Levee District, 117 La. 450, 41 So. 720 (1906); Parish of St. Landry v. Stout, 32 La.Ann. 1278 (1880). The soundness of this principle is demonstrated by the circumstances of this case. The legislature substantially changed many of the provisions contained in R.S. 32:1251 et seq. See Acts 1980, No. 672, § 1. Specifically, § 1254(E) was amended so as to eliminate constitutional objections discussed by the district court. A decision upholding the constitutional objection to the former statute would be of little value: the parties would gain nothing in the way of relief beyond that which has already been granted, and there is apparently no other party who has claimed to have been aggrieved by the former law. We therefore vacate that part of the trial court's judgment which declared R.S. 32:1253(A) and R.S. 32:1254(E) unconstitutional. The final aspect of the district court's decision which requires consideration is the holding that the regulatory scheme which the M.V.C. administers is violative of the Sherman Anti-Trust Act, 15 U.S.C. § 1, which states in part: Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is declared to be illegal.... The district court found that the provisions of the regulatory scheme which restrict an automobile dealership's right of relocation constituted a restraint of trade in violation of the antitrust laws. In addition, the trial court found that Louisiana's regulatory scheme did not constitute state action so as to be exempt from the antitrust legislation. The state action exemption has its origin in Parker v. Brown, 317 U.S. 341, 63 S.Ct. 307, 87 L.Ed. 315 (1943). In that decision, the United States Supreme Court, after examining the legislative history of the Sherman Act, found no indication that the act's provisions were intended to restrain state action or official action directed by a state. 317 U.S. at 351, 63 S.Ct. at 313, 87 L.Ed. at 326. In effect, the court held that the Sherman Act did not apply to regulatory laws which were adopted and enforced by a state. The immunity granted by the Parker doctrine has been consistently applied over the years. See, e. g., California Liquor Dealers v. Midcal Aluminum, 445 U.S. 97, 100 S.Ct. 937, 63 L.Ed.2d 233 (1980); New Motor Vehicle Bd. v. Orrin W. Fox Co., supra; Lafayette v. Louisiana Power & Light Co., 435 U.S. 389, 98 S.Ct. 1123, 55 L.Ed.2d 364 (1978); Bates v. State Bar of Arizona, 433 U.S. 350, 97 S.Ct. 2691, 53 L.Ed.2d 810 (1977); Cantor v. Detroit Edison Co., 428 U.S. 579, 96 S.Ct. 3110, 49 L.Ed.2d 1141 (1976); Goldfarb v. Virginia State Bar, 421 U.S. 773, 95 S.Ct. 2004, 44 L.Ed.2d 572 (1975). The most recent formulation of the Parker doctrine's state action exemption can be found in California Liquor Dealers v. Midcal Aluminum, supra, in which the United States Supreme Court, after reviewing the opinions cited above, stated: These decisions establish two standards for antitrust immunity under Parker v. Brown. First, the challenged restraint must be `one clearly articulated and affirmatively expressed as state policy'; second, the policy must be `actively supervised' by the State itself.... 445 U.S. at 105, 100 S.Ct. at 943, 63 L.Ed.2d at 243. Consistent with this approach, we find that the policy of the State of Louisiana in enacting a program to regulate automobile dealerships has been clearly articulated and affirmatively expressed. See R.S. 32:1251. As has been explained above, that policy is to prevent the citizens of this state from being subjected to unfair practices perpetrated by automobile dealers and manufacturers, and to furnish automobile dealers with protection against unfair treatment by automobile manufacturers. The state policy could not be plainer, notwithstanding any defects in its legislative drafting. We also find that the action taken by the M.V.C. clearly constitutes active supervision by the state itself in executing governmental policy. The trial court expressed some concern that: the M.V.C. has never independently determined the market area for any dealership; that it has never conducted studies of market conditions to discover instances of price fixing; that it has never made any follow-up determination to ascertain that a dealership's floor area or service facilities remain adequate; and that the M.V.C. has never suspended or revoked a dealership's license because of failure to maintain the qualifications for a license. While these considerations might be thought to indicate a certain laxity on the part of the M.V.C. in carrying out its statutory duties, we do not believe that this passivity in exercising its regulatory powers withdraws the M.V.C. from the state action exemption. Immunity from antitrust legislation is conditioned upon a state policy being actively supervised by the state itself, rather than by private parties. The decisions of the United States Supreme Court make it clear that the evil to be eliminated is that which occurs when essentially private interests claim immunity from antitrust legislation by inducing some involvement by the state in regulation which is basically protective of private interests. See, e. g., California Liquor Dealers v. Midcal Aluminum, supra (a gauzy cloak of state involvement over what is essentially a private price fixing arrangement); Cantor v. Detroit Edison Co., supra (state authorization, approval, encouragement, or participation in restrictive private conduct confers no antitrust immunity); Goldfarb v. Virginia State Bar, supra (it cannot fairly be said that the State of Virginia ... required the anticompetitive activities). The fact that the M.V.C. may not be as active as some may wish does not affect its eligibility for this immunity; nor does the fact that the substantive provisions of the regulatory scheme may not always seem to harmonize with the public policy underlying the legislation obscure the clear purpose of the law. Sometime in the future the courts might be faced with a record of the failure of the M.V.C. to act as a state agency in effectuating the public policy announced in R.S. 32:1251. If it should be shown that the M.V.C. has become not a genuine agency of the state, but, instead, a shelter for the private economic interests of automobile dealers, it would forfeit its state action immunity from the antitrust laws. Such a showing has not been made. Therefore, the actions taken by the M.V.C. pursuant to its duties under R.S. 32:1251 et seq. constitute state action for the purposes of immunity under the Sherman Anti-Trust Act. The decision of the district court is affirmed only insofar as it held that the license application of Benson & Gold should have been granted by the M.V.C.; in all other respects, the judgment is vacated, as we have pretermitted discussion of the constitutionality of the affected statutes and have found that Louisiana's regulatory law governing automobile dealerships is exempt from the provisions of 15 U.S.C. § 1. All costs of these proceedings are taxed equally to the intervenor, Bryan Chevrolet, Inc., and the defendant, the Louisiana Motor Vehicle Commission. DENNIS and WATSON, JJ., dissent and assign reasons.