Opinion ID: 1630142
Heading Depth: 1
Heading Rank: 2

Heading: The Scotts' Vagueness Argument

Text: The Scotts argue that the ordinances are unconstitutionally vague, i.e., that they violate their rights to due process under the Fifth and Fourteenth Amendments of the United States Constitution and Article I, § 6, of the Alabama Constitution, because (1) the ordinances fail to define the circumstances under which a person will be considered to be engaged in the business of ... leasing under Ordinance No. 959, or engaged in leasing, under the ordinances at issue here, and (2) Ordinances No. 1178, No. 1188, No. 1293, and No. 1330 fail to make clear how property owners are to compute gross annual receipts. Federal caselaw provides that [a] statute is vague if it fails to afford a `person of ordinary intelligence a reasonable opportunity to know what is prohibited, so that he may act accordingly.' Bama Tomato Co. v. United States Dep't of Agriculture, 112 F.3d 1542, 1547 (1997)(quoting Grayned v. City of Rockford, 408 U.S. 104, 108, 92 S.Ct. 2294, 33 L.Ed.2d 222 (1972)). Thus, [v]ague laws are objectionable as transgressions of due process guarantees on two grounds: (1) they fail to provide fair warning to citizens charged with their observance, and (2) by failing to provide clear guidelines, they lend themselves to arbitrary applications by those charged with their enforcement. Bama Tomato, 112 F.3d at 1547 (quoting Familias Unidas v. Briscoe, 619 F.2d 391, 399 n. 8 (5th Cir.1980)). We consider the ordinances by applying those tests in connection with the following additional principles established by Alabama caselaw: It is, without question, a settled rule of law in Alabama that: `municipal ordinances are presumed to be valid and reasonable, to be within the scope of the powers granted municipalities to adopt such ordinances, and are not to be struck down unless they are clearly arbitrary and unreasonable.' Hall v. City of Tuscaloosa, 421 So.2d 1244, 1247 (Ala.1982)(quoting Cudd v. City of Homewood, 284 Ala. 268, 270, 224 So.2d 625, 627 (1969)). Mere difficulty of ascertaining its meaning or the fact that it is susceptible of different interpretations will not render a statute or ordinance too vague or uncertain to be enforced. City of Birmingham v. Samford, 274 Ala. 367, 372, 149 So.2d 271, 275 (1963).
This Court has stated that [c]ity ordinances are subject to the same general rules of construction, as are acts of the Legislature. Ex parte City of Orange Beach Bd. of Adjustment, 833 So.2d 51 (Ala.2001). We further stated in Orange Beach: In John Deere Co. v. Gamble, 523 So.2d 95, 99-100 (Ala.1988), this Court, quoting Clark v. Houston County Comm'n, 507 So.2d 902, 903-04 (Ala.1987), set out the following general rules of statutory construction, which also apply to the construction of municipal ordinances: `The fundamental rule of statutory construction is to ascertain and give effect to the intent of the [city council] in enacting the [ordinance]. Advertiser Co. v. Hobbie, 474 So.2d 93 (Ala. 1985); League of Women Voters v. Renfro, 292 Ala. 128, 290 So.2d 167 (1974). If possible, the intent of the [city council] should be gathered from the language of the [ordinance] itself. Advertiser Co. v. Hobbie, supra ; Morgan County Board of Education v. Alabama Public School & College Authority, 362 So.2d 850 (Ala.1978). If the [ordinance] is ambiguous or uncertain, the court may consider conditions which might arise under the provisions of the [ordinance] and examine results that will flow from giving the language in question one particular meaning rather than another. Studdard v. South Central Bell Telephone Co., 356 So.2d 139 (Ala.1978); League of Women Voters v. Renfro, supra .' In Ex parte Dorough, 773 So.2d 1001, 1003 (Ala.2000) (citing Ex parte Pfizer, Inc., 746 So.2d 960, 964 (Ala.1999)), this Court stated: ``When the language of a statute is plain and unambiguous, ... courts must enforce the statute as written by giving the words of the statute their ordinary plain meaningthey must interpret that language to mean exactly what it says and thus give effect to the apparent intent of the Legislature.'... ``In determining the meaning of a statute, this Court looks to the plain meaning of the words as written by the legislature. As we have said: ```Words used in a statute must be given their natural, plain, ordinary, and commonly understood meaning, and where plain language is used a court is bound to interpret that language to mean exactly what it says. If the language of the statute is unambiguous, then there is no room for judicial construction and the clearly expressed intent of the legislature must be given effect.''' 833 So.2d at 55-56. Further, it is established that taxing statutes should be strictly construed against the taxing power. State v. Seals Piano Co., 209 Ala. 93, 95 So. 451 (1923). Where the language of a taxing statute is reasonably capable of two constructions, the interpretation most favorable to the taxpayer must be adopted. Williams v. Pugh, 24 Ala.App. 57, 129 So. 792 (1930). Alabama Farm Bureau Mut. Cas. Ins. Co. v. City of Hartselle, 460 So.2d 1219, 1223 (Ala.1984). The rule that tax statutes are to be construed in favor of taxpayers and strictly against the taxing power applies to municipal corporations and municipal taxing ordinances. City of Mobile v. GSF Props., Inc., 531 So.2d 833, 837 (Ala.1988) (citing Al Means, Inc. v. City of Montgomery, 268 Ala. 31, 36, 104 So.2d 816 (1958); State ex rel. Woodruff v. Centanne, 265 Ala. 35, 38, 89 So.2d 570 (1956)). Consistent with the rules governing construction of a tax statute, Alabama courts have refused to expand the language and scope of a tax statute. City of Mobile, 531 So.2d at 837 (citing Misener Marine Constr., Inc. v. Eagerton, 423 So.2d 161, 163 (Ala.1982)). Although the Scotts argue that the City has failed to define leasing in the ordinances, we note that the Scotts assert in their initial and reply briefs to this Court that leasing involves more than mere ownership of property and an execution of a lease. A lease is defined as [a] contract by which a rightful possessor of real property conveys the right to use and occupy that property in exchange for consideration, usu[ally] rent. Black's Law Dictionary 898 (7th ed.1999). The word leasing means the act of granting a lease. In the context of the ordinances, we conclude that leasing means conveying the right to use and to occupy property in exchange for consideration during the applicable period each ordinance was effective. The word engage is defined as [t]o employ or involve oneself; to take part in; to embark on. Black's Law Dictionary 549 (7th ed.1999). Engaged means to engage, and is used in the present tense. Therefore, in the context of the ordinances, we conclude that engaged means to engage during the period enumerated by each individual ordinance. The Scotts contend that Alabama courts have, on occasion, construed the term engage in business to mean employment which occupies the time, attention and labor of the person so engaged in business. That which a man occasionally engages in, as opportunity offers, or inclination prompts, is, for the time being his business; yet the law uses that term to indicate a regular and legal employment, not one that is occasional, irregular, or illegal. Rowe v. State, 19 Ala.App. 602, 603, 99 So. 748, 749 (1924); see also Jones v. State, 25 Ala.App. 410, 149 So. 855 (1933). In Rowe, the court continued and stated, in pertinent part: `Single acts are not licensed, but only a series of acts prosecuted with the intention of reaping a profit or making a livelihood.' [ Harris v. State, 50 Ala. 127 (1874)]. See also [ Weil v. State, 52 Ala. 19 (1875)]. Doing a single act, pertaining to a particular business, will not be considered, as has been held, engaging in or carrying on the business, yet a series of such acts would be so considered. [ Lemons] v. State, 50 Ala. 130 [(1874)]; [ McPherson v. State, 54 Ala. 221, 224 (1875)]. A single act, however, may be sufficient to constitute an `engaging in or carrying on the business' according to the intent with which the act is done, and all other proof in the case. If a person makes all necessary preparations to carry on a business, holds himself out for the business, intending to continue therein, he is engaged in or carrying on the business within the meaning of the law. Abel v. State, 90 Ala. [631,] 633, 8 South. 760 [(1891)]; Morningstar v. State, 135 Ala. 66, 33 South. 485 [(1903)]. Rowe, 19 Ala.App. at 603, 99 So. at 749. In Weil v. State, 52 Ala. 19 (1875), this Court examined whether a defendant was engaged in the business of vending spirituous liquors for purposes of paying a license fee. In stating the core question of such an inquiry, this Court quoted Harris v. State, 50 Ala. 127, 129 (1874): `Has that business been engaged in, and pursued by the defendant for a profit, or as a means of livelihood? If it has, he should have obtained a license, and failing to do so, is a violator of the law. It is not necessary that it should be the sole or exclusive business or occupation. It may be pursued while pursuing another business, or in connection with another, and in either case the party would be punishable. It is true, the doing a single act pertaining to a particular business will not be considered engaging in, or carrying on the business, yet a series of such acts would be so considered. The true inquiry is, and one which a jury will seldom fail correctly to solve, what was the intent of the party? Was it to derive a profit, or the means of livelihood from retailing, or from any of the other occupations mentioned in the statute? If it was, he is guilty; if it was not, he should not be convicted.' Whether actual profit is derived from the acts imputed to the defendant, and which are supposed to be evidence of his having engaged in, or carried on a business, is not a material inquiry. There is no business which may not be so conducted as not to yield a profit. The inquiry is, was it the purpose to derive profit? 52 Ala. at 21. See also Owens v. Grant, 569 So.2d 707 (Ala.1990)(citing Weil for guidance in interpreting the term profit-motivated in a statute). We also note, as did the trial court, that for purposes of state taxation in the sales and use tax context, business is defined as [a]ll activities engaged in, or caused to be engaged in, with the object of gain, profit, benefit, or advantage, either direct or indirect.... § 40-23-1(a)(12), Ala.Code 1975 (emphasis added). Thus, we conclude that the phrase contained in Ordinances No. 959, No. 1178, and No. 1188engaged in the business of leasingrequires an act or acts of leasing, accompanied by the intent to derive a gain, profit, benefit, or advantage from such action or actions. The revisions made to the ordinances, beginning with Ordinance No. 1293, which amended Ordinance No. 1178 and substituted the phrase engaged in leasing for the phrase engaged in the business of leasing, support a conclusion that the phrase engaged in leasing is intended to be somewhat broader than engaged in the business of leasing. We recognize that each ordinance before, after, and including Ordinance No. 1293, contained or incorporated a clause substantially similar to the following, taken in pertinent part from Ordinance No. 1341: Section 3. License Schedule The following schedule of licenses is hereby fixed and imposed for and upon the businesses, occupations, professions, trades and vocations which may be engaged in or conducted in the City for the year beginning January 1, 1995 and for each year thereafter (sometimes hereinafter referred to, individually, as `business' and, collectively, as `businesses') and every person engaged in any of the businesses enumerated or referred to in this ordinance after December 31, 1994 shall pay for and take out such license as required by this ordinance, and such licenses, until repealed or modified, shall be in such amounts as are hereinafter provided. This sentence in the ordinances acts as a catchall to encompass the engaged in language; as a consequence, the City may require a license for the privilege of being engaged in the businesses, occupations, professions, trades and vocations involved in leasing. We conclude that, by changing the requirement for the license in Ordinance No. 1293 and those ordinances subsequent to it from engaged in the business of leasing to engaged in leasing, and by separating leasing into two componentsdwellings and nondwellingsthe City intended to require licenses from all those leasing premises other than dwellings, if the leasing activity fell within the grant of the power given to the City by § 11-51-90, Ala.Code 1975. Because the ordinances require a license for engaging in the business of leasing and in businesses, occupations, professions, trades and vocations, we conclude that the terms engaged in the business of leasing and engaged in leasing are not unconstitutionally vague.
To determine whether a means for calculating the business license tax exists, we look to the ordinances. The ordinances do not use the term gross annual receipts, as the Scotts state, in determining the amount owed for the license tax, but instead use the term gross receipts. Ordinance No. 1178 provides a definition of, and a method to compute, gross receipts. Ordinance No. 1178, Section 9.(a), provides: SECTION 9.(a) Definition of `receipts' and `sales.' Where the amount of the license tax is based upon receipts, including gross receipts, or sales, in the absence of any other specific provision therefor, the receipts and sales referred to are those of such business for the year next preceding the year for which the license is being obtained; provided, however, that if such business did not operate during the entire preceding year, the license tax shall be based upon the amount which bears the same relation to the amount of receipts or sales during the preceding year as the entire year bears to the portion of the preceding year during which such business operated. If the operation of a business commences after the first day of any year, a license shall be issued for the minimum license tax required for such classification, or the sum of $200.00 if no minimum license tax is required for such classifications, and, three months after the commencement of the operation of such business a license tax for the partial year during which the business was started shall be payable, the amount of which shall be computed in the manner set out in the preceding sentence, except that the gross receipts or gross sales shall be those of the business for such three-month period. Section 9.(b) of Ordinance No. 1178 explains that gross receipts mean the entire receipts of the business, occupation, profession or trade engaged in, including all receipts from sales .... Because Ordinance No. 1178 explains how gross receipts are calculated and what is meant by that term, Ordinance No. 1178 is not unconstitutionally vague. Regarding the other individual ordinances complained of by the Scotts, we note that (1) Ordinance No. 1188 amended Section 3.6.D of Ordinance No. 1178, but did not change or repeal Sections 9.(a) or 9.(b); (2) Ordinance No. 1293 amends Section 3.6.D of Ordinance No. 1178 and also provides specifically for the time periods, i.e., calendar year, to be used when calculating gross receipts; and (3) Ordinance No. 1330 amends Ordinance No. 1178, and defines gross receipts and gross commissions, both of which are based on receipts collected during the preceding calendar year. Thus, we conclude that the term gross receipts as used in the remaining ordinances is not unconstitutionally vague. Although the Scotts also allege that because the ordinances fail to provide clear guidelines for their applications, the ordinances lend themselves to arbitrary applications by those charged with their enforcement (Scotts' brief, at 25), our conclusion removes any need to examine this argument further. Moreover, the record contains no evidence tending to show that the ordinances were enforced arbitrarily. We next consider the Scotts' argument that the ordinances violate the overbreadth doctrine.