Opinion ID: 2396681
Heading Depth: 3
Heading Rank: 3

Heading: Discrimination Against Interstate Commerce & Fairly Related To Services Provided By The State

Text: Travelscape argues the Accommodations Tax discriminates against interstate commerce because the Department has not imposed the tax on travel agents located in South Carolina. [9] In addition, Travelscape asserts the tax is not fairly related to the services provided by the State because as an out-of-state company it receives no services from the State such as police and fire protection. We find these issues are not preserved for appellate review. Initially, we take this opportunity to clarify our law regarding the power of an ALC to determine the constitutionality of a statute. [10] It is well settled in this State that ALCs, as part of the executive branch, are without power to pass on the constitutional validity of a statute or regulation. Video Gaming Consultants, Inc. v. S.C. Dep't of Revenue, 342 S.C. 34, 38, 535 S.E.2d 642, 644 (2000). In Video Gaming Consultants, we said those challenges present an exception to our preservation rules and should be raised for the first time on appeal to the circuit court. Id. at 39, 535 S.E.2d at 345. However, the legislature has since amended the process for appeals from the ALC, providing for a direct appeal to the court of appeals instead of the circuit court. S.C.Code Ann. § 1-23-610(A) (Supp.2009). This procedural change results in a conundrum for litigants bringing as-applied constitutional challenges to a statute or regulation: they must first bring an inherently factual issue before a tribunal generally not suited to make factual determinations. While we have not addressed this issue, the court of appeals, in a case arising before the change in the governing statutes, said, While it is true that AL[C]s cannot rule on a facial challenge to the constitutionality of a regulation or a statute, AL[C]s can rule on whether a law as applied violates constitutional rights. Dorman v. Dep't of Health & Envtl. Control, 350 S.C. 159, 171, 565 S.E.2d 119, 126 (Ct.App.2002) (citing Ward v. State, 343 S.C. 14, 18, 538 S.E.2d 245, 247 (2000)). We find the principle enunciated in Dorman and Ward to be sound and hold that ALCs are empowered to hear as applied challenges to statutes and regulations. ALCs are better suited for making the factual determinations necessary for an as applied challenge, and finding a statute or regulation unconstitutional as applied to a specific party does not affect the facial validity of that provision. We wish to reiterate that our decision today does not affect the ALC's inability to decide facial challenges to a statute or regulation; those are legal questions that are properly raised for the first time on appeal or in a declaratory judgment action before the circuit court. Thus, the ALC in the case before us had jurisdiction to determine whether section 12-36-920 violates the Dormant Commerce Clause as applied to Travelscape. [11] Accordingly, all of our preservation and exhaustion of remedies rules apply before the ALC and other administrative tribunals with respect to an as applied challenge. The ALC did not rule on arguments relating to the final two elements of the Complete Auto test in its final order. See Lucas v. Rawl Family Ltd. P'ship, 359 S.C. 505, 510-11, 598 S.E.2d 712, 715 (2004) (stating generally, an issue must be raised to and ruled upon by the trial court in order to be preserved for appellate review). As such, it was incumbent upon Travelscape to make a Rule 59(e) motion. See Wilder Corp. v. Wilke, 330 S.C. 71, 77, 497 S.E.2d 731, 734 (1998) (noting that proper use of a Rule 59(e) motion is to preserve issues raised to but not ruled upon by the trial court); Walsh v. Woods, 371 S.C. 319, 325, 638 S.E.2d 85, 88 (Ct.App.2006). Because Travelscape failed to do so, we find these issues are not preserved for appellate review. See State v. Powers, 331 S.C. 37, 42, 501 S.E.2d 116, 118 (1998) (finding Constitutional arguments are no exception to the error preservation rule).