Lead Opinion
OPINION
¶ 1 Brent Brown Dealerships (Brent Brown) seeks judicial review of a final decision of an Administrative Law Judge (ALJ) upholding a $135,000 fine levied by the Utah State Tax Commission (Commission) against Brent Brown for allowing unlicensed salespeople to sell ears. See Utah Code Ann. §§ 41-3-201(2), -210(6), -702(l)(c)(vii) (2005). We affirm.
BACKGROUND
¶ 2 The Motor Vehicle Enforcement Division (MVED) of the Commission received a tip from a former employee of Brent Brown that salespeople at Brent Brown were selling cars without first obtaining licenses. MVED began investigating four dealerships of the Brent Brown Automotive Group, including Brent Brown Toyota, Brent Brown Chevrolet/Buick, Brent Brown Dodge/Chrysler/Jeep, and the Orem Auto Plaza.
¶ 3 Sergeant Eric MacPherson headed the investigation and assembled a team of investigators that visited the dealerships on February 10, 2004. During this visit, MacPher-son and his team discovered that none of the salespeople carried licenses as required by sections 41-3-201(2) and 41-3-210(6). See id. §§ 41-3-201(2), -210(6). The investigators then examined the personnel files of the salespeople and learned that at least fifty-one salespeople had sold 306 vehicles over a period of twenty months without motor vehicle sales licenses as required by statute. Brent Brown asserted that because it had acquired a number of dealerships, it centralized human resources and payroll into one position, which was filled by Erlene Ashburn. Brent Brown stated that Ashburn was instructed to take care of licensing as part of her human resources duties. Brent Brown further stated that once a salesperson was hired at one of the four dealerships, that dealership would make sure that the new employee had completed a license application form and would issue a check for the $30 licensing fee, and then forward the form and the check to Ashburn, who was to send them to the Commission. However, investigators failed to find any evidence of license applications in the personnel files of the unlicensed salespeople. Instead, salespeople who were interviewed stated that they were unaware that they needed a license. None of those interviewed indicated that they had completed licensing forms.
¶4 During the investigation, MacPherson assisted Brent Brown in obtaining licenses on an expedited basis for all of its salespeople. Two days after the investigators visited the dealerships, all salespeople at Brent Brown had licenses.
¶ 5 MacPherson determined that Brent Brown had violated section 41-3-201(2), which prohibits a person from acting as a vehicle salesperson without first obtaining a license, and section 41-3-210(6), which prohibits a dealer from assisting unlicensed salespeople in sales of motor vehicles. See id. Section 41-3-702 sets forth a graduated schedule of penalties for assisting an unlicensed salesperson in sales of motor vehicles: $250 for the first offense, $1000 for the second offense, and $5000 for third and subsequent offenses. See id. §§ 41-3-702(l)(c)(vii), —702(2) (a) (iii). MacPherson recommended assessing a penalty of $1,168,000. He calculated this figure by determining that an “offense” under the statute occurred every time an unlicensed salesperson sold a vehicle.
¶ 6 MVED later reduced the fine to $135,000, determining that an “offense” occurred when an unlicensed salesperson sold at least one vehicle during the relevant time period, from June 2002 to February 2004. Thus, MVED decided that offenses should
¶ 7 On July 6, 2004, MVED sent notices of the violations to each of the four dealerships. Brent Brown requested a hearing before the Appeals Division of the Commission, and on August 17, 2004, the Commission held an initial hearing. The ALJ upheld the $135,000 fine. Brent Brown appealed that decision and requested a formal hearing, which was held on February 28, 2005, before a different ALJ of the Appeals Division of the Commission. The ALJ upheld the decision from the initial hearing and the imposition of the $135,000 fine. Brent Brown then appealed to the Utah Supreme Court, which transferred the case to this court.
ISSUES AND STANDARDS OF REVIEW
¶ 8 When reviewing the Commission’s decision, we “grant the [C]ommission deference concerning its written findings of fact, applying a substantial evidence standard on review.” Utah Code Ann. § 59-l-610(l)(a) (2004). We “grant the [Commission no deference concerning its conclusions of law, applying a correction of error standard, unless there is an explicit grant of discretion contained in the statute at issue before the appellate court.” Id. § 59 — 1—610(l)(b). Regarding the statutes at issue in this case, “the parties have not cited us to, and we have been unable to find, any explicit grant of discretion” to the Commission “to interpret or apply the language of [those] sectionfs].” OSI Indus., Inc. v. Utah State Tax Comm’n,
ANALYSIS
¶ 9 Brent Brown contends that the Commission’s decision should be reversed because (1) the ALJ incorrectly interpreted the meaning of the term “offense” in section 41-3-702; (2) the $135,000 fine violates the Excessive Fines Clause of the United States and Utah Constitutions; (3) the fine violates due process because no notice of the violations was given before the fine was assessed; and (4) MVED departed from its prior practice by falling to give notice of the violations before assessing the fine. Each of these arguments is addressed below.
I. Interpretation of the Term “Offense”
¶ 10 Brent Brown first contends that the ALJ incorrectly interpreted the term “offense” in section 41-3-702(2)(a)(iii). See Utah Code Ann. § 41-3-702(2)(a)(iii). Section 41-3-210(6) states that “[a] dealer may not assist an unlicensed dealer or salesperson in unlawful activity through active or passive participation in sales, or by allowing use of his facilities or dealer license number, or by any other means.” Id. § 41-3-210(6). Similarly, section 41-3-201(2) prohibits a person from acting as a vehicle salesperson without “having procured a license issued by the [motor vehicle enforcement] administrator.” Id. § 41-3-201(2). Section 41-3-702 provides the penalties for violating these rules: “[Assisting an unlicensed dealer or salesperson in sales of motor vehicles” is a Level III violation, id. § 41-3-702(l)(e)(vii), which is subject to a fine of “$250 for the first offense, $1,000 for the second offense, and $5,000 for the third and subsequent offenses.” Id. § 41-3-702(2)(a)(iii).
¶ 11 Brent Brown argues that the term “offense” in section 41-3~702(2)(a)(iii) could be interpreted several different ways. Brent Brown contends that this provision could mean that it was guilty of only one
When interpreting statutes, our primary goal is to evince the true intent and purpose of the [l]egislature. To discover that intent, we look first to the plain language of the statute. When examining the statu: tory language we assume the legislature used each term advisedly and in accordance with its ordinary meaning. [TJhus, the statutory words are read literally, unless such a reading is unreasonably confused or inoperable. Furthermore, we avoid interpretations that will render portions of a statute superfluous or inoperable.
State v. Haltom,
¶ 12 In this case, we need not look beyond the plain meaning of the terms in the statute to determine that the AL J’s construction was correct. The ALJ focused on the language that prohibits “assisting an unlicensed dealer or salesperson in sales of motor vehicles,” Utah Code Ann. § 41-3-702(l)(c)(vii) (emphasis added), and concluded that because “dealer” and “salesperson” are singular and “sales” is plural, the dealership committed an “offense” under the penalty provision of the statute each time an unlicensed salesperson sold one or more cars. See id. § 41-3-702(2)(a)(iii); see also id. § 41-3-210(6) (stating that “[a] dealer may not assist an unlicensed dealer or salesperson in unlawful activity through active or passive participation in sales ” (emphasis added)). We assume that the legislature advisedly made “dealer” and “salesperson” singular and “sales” plural; therefore, the ALJ properly considered the plain and literal meaning of these terms as written. To have determined, for instance, that Brent Brown had committed one continuing “offense” subject to a mere fíne of $250 would have rendered these precise terms “inoperable.” Haltom,
II. Excessive Fines Clause
¶ 13 Brent Brown next challenges the fine assessed against the dealerships as excessive under both the United States and the Utah Constitutions.
¶ 14 In United States v. Bajakajian,
¶ 15 In considering that issue, the United States Supreme Court stated, “The touchstone of the constitutional inquiry under the Excessive Fines Clause is the principle of proportionality: The amount of the forfeiture must bear some relationship to the gravity of the offense that it is designed to punish.” Id. at 334, 118 S.Ct. 2028. Recognizing that proportionality is a relative concept, the Supreme Court relied on two considerations in deriving a constitutional excessiveness standard. The first of these is that “judgments about the appropriate punishment for an offense belong in the first instance to the legislature.” Id. at 336,
¶ 16 Although the case before us is not a forfeiture ease, the Bajakajian analysis is helpful in evaluating the challenge to the statutory penalties imposed on Brent Brown. See id. at 328,
¶ 17 In Truman Mortensen Family Trust, the Utah Supreme Court conducted its gross disproportionality analysis by comparing the fine assessed to the maximum fine that could have been levied under the applicable administrative rule, and by taking into account the nature of the defendant’s conduct in dealing with asbestos in her apartment building. See id. at ¶ 36. In determining that the fine was not grossly disproportional, the court considered that the defendant could have faced a maximum fine of $41,000 but was only assessed $23,000. See id. The court also noted that the defendant’s violations of the regulations were severe because she hired workers to remove asbestos from her apartment building without ensuring that they were qualified to do so. See id. at ¶¶ 4,
¶ 18 Other courts have considered similar factors in conducting their Eighth Amendment analyses. For example, in MacLean v. State Board of Retirement,
¶ 19 Applying these factors here, we conclude that the $135,000 fine assessed against Brent Brown is not grossly disproportional. In reaching this conclusion, we first note that the Commission correctly narrowed the definition of “offense” to include only the number of unlicensed salespeople who had sold at least one car, and by not counting unlicensed salespeople who had not sold any vehicles, the Commission properly imposed the penalty scheme adopted by the legislature. That scheme provides a mathematical formula that calculates the precise amount of the fine, rather than a range. Thus, there is no difference between the maximum fine allowed and what was imposed.
¶20 Furthermore, Brent Brown’s failure to comply with the licensing statutes was egregious. MVED officials testified that this was the most extensive violation of the licensing statutes they had ever seen. And the Commission concluded that Brent Brown’s significant non-compliance was not merely the failure of a single employee, Ashburn, to file the appropriate paperwork. Rather, it appears that Brent Brown did not have a basic process in place for licensing new salespeople, as evidenced by the at least fifty-one unlicensed salespeople who sold 306 vehicles over a period of twenty months. Many of the unlicensed salespeople stated they had never completed any licensing paperwork and did not know they were required to obtain a license. See United States v. Emerson,
¶ 21 The fine is also not grossly disproportional when compared to the monetary value Brent Brown gained by participating in the prohibited activity — i.e., the selling of cars by unlicensed salespeople. See MacLean,
¶22 Brent Brown argues, however, that we should not look at the fine in relation to the sales price of each car, but rather to “Brent Brown’s profit on the sale. Clearly, a $5,000 fine will quickly swallow that profit.” We reject this argument for several reasons. First, Brent Brown did not supply us with the amount that it profits on each vehicle sold, so it is impossible for us to conduct such an analysis. Second, it would be incorrect for us to compare Brent Brown’s profit, assuming we had that figure, to a $5000 fine on each vehicle. As explained above, the fine was not calculated based on the number of vehicles sold, but rather on the number of unlicensed salespeople who may have sold several vehicles each. So, not every vehicle sold was subject to a $5000 fine. Also, not every unlicensed salesperson was counted as a third offense warranting a $5000 fine. Each of the four Brent Brown dealerships was assessed a first offense, triggering the $250 fine, and a second offense, triggering the $1000 fine. We accordingly reject this argument.
¶23 Brent Brown also argues that the $135,000 fine was excessive because its failure to license salespeople did not result in any harm. See United States v. Bajakajian,
¶ 24 We agree that the known harm in this case was minimal.
III. Due Process
¶25 Brent Brown also argues that the fine in this case violated the requirements of due process because the Commission did not notify Brent Brown of the violations before applying the statute’s enhancement provisions. Brent Brown asserts that “as the result of a single investigation, and without any previous notice that any violation of the statute had occurred, Brent Brown found itself facing a $135,000 fine.” Brent Brown likens this
¶ 26 Utah’s Due Process Clause provides that “[n]o person shall be deprived of life, liberty!,] or property, without due process of law,” Utah Const, art. I, § 7, and is “substantially the same as the due process guarantees contained in the Fifth and Fourteenth amendments to the United States Constitution.” In re Worthen,
¶ 27 The Commission complied with these due process requirements in this case. The notice requirement was met because the Commission sent letters informing Brent Brown of exactly what statutes they had violated and of the fine that was to be assessed. See Utah Code Ann. § 63^46b-3(2) (2004) (setting forth requirements for commencing an agency action, including what the first notice must contain). Brent Brown also had the opportunity to be heard in two separate administrative proceedings, a formal one and an informal one. Our due process jurisprudence does not contain the requirement, as Brent Brown suggests, that notice of a violation must be given before statutory penalties may be applied.
¶ 28 Brent Brown relies on BMW of North America, Inc. v. Gore,
¶ 29 Gore does not compel reversal in this case. There, the Court was dealing with a jury award, whereas here we are examining the application of legislatively crafted penalties in a statute. See United States v. Bajakajian,
IV. The Commission’s Prior Practice
¶ 30 Brent Brown’s final argument is that the Commission departed from its prior prac
¶31 As noted above, Utah Code section 59-1-610 governs appellate review of formal adjudicative proceedings in Commission cases. Section 59-1-610 states explicitly that “[t]his section supersedes [sjection 63-46b-16 pertaining to judicial review of formal adjudicative proceedings.” Id. § 59-1-610(2); see also 49th St. Galleria v. Utah State Tax Comm’n,
CONCLUSION
¶ 32 The Commission correctly interpreted the term “offense” in Utah Code section 41-3 — 702(2)(a)(iii). Furthermore, the $135,000 fine was not grossly disproportional in violation of the Eighth Amendment, nor did the imposition of the fine violate the notice requirements of due process.. Finally, we find it unnecessary to analyze Brent Brown’s argument that the Commission departed from prior practice by not giving notice of the violations before imposing the fine. We affirm.
¶ 33 I CONCUR: RUSSELL W. BENCH, Presiding Judge.
Notes
. We also respectfully disagree with the concurring opinion to the extent that it suggests we have not been asked to rule on the correct interpretation of the statute. The parties devoted substantial portions of their briefs to arguments of statutory construction, and we believe the issue is squarely before us.
. In its brief, Brent Brown states that it "does not challenge the [c]onstitutionality of [section] 41-3-702, but rather of the fine levied pursuant to that section.” At oral argument, Brent Brown stated that it was making an as-applied challenge to the statute rather than a facial one, and we analyze it as such. We thus reject the Commission’s contention that this court must only examine the constitutionality of the $250, $1000, and $5000 penalties provided for in the statute rather than the aggregate $135,000 fine.
. The Commission noted at oral argument, however, that no investigation of the 306 sales transactions has been conducted to determine whether any irregularities exist.
. Brent Brown also relies on State v. Starlight Club,
. We note, however, that even if we were to consider this argument, Brent Brown would likely be unsuccessful. Citation to one Commission case involving a statutory violation different than the one at issue here is insufficient to show departure from prior practice. Cf. Pickett v. Utah Dep't of Commerce,
Concurrence Opinion
(concurring in the result):
¶ 34 I concur in both the result reached by the majority opinion and its analysis, except for its interpretation of the word “offense” as used in Utah Code section 41-3-702(2). See Utah Code Ann. § 41-3-702(2) (2005). I do not believe that Brent Brown’s arguments in this case necessitate a formal and final interpretation of that term, or the underlying prohibition on licensed dealers assisting unlicensed salespersons in unlawful activity, see id. § 41-3-210(6) (2005). Accordingly, I would decline to interpret either statute at this time and instead reserve the issue until a question of statutory interpretation is presented to us directly.
¶ 35 My objection to the majority opinion’s approach is that Brent Brown does not challenge the Commission’s interpretation of the statutory terms as incorrect — indeed, Brent Brown characterizes the Commission’s interpretation as reasonable. Rather, Brent Brown’s argument regarding the statutory terms is that there are multiple reasonable interpretations, and that this multitude of possibilities inherently grants the Commission discretion to decrease the civil penalties established under section 41-3-702. Brent Brown’s contention in this regard is easily disposed of as a matter of law without reach
¶36 The existence of multiple reasonable interpretations of a statute does not create discretion in an interpreting agency. Rather, such multiple interpretations render a statute ambiguous. See Li v. Zhang,
¶ 37 Thus, even if one or more statutory terms determining Brent Brown’s liability are ambiguous, the licensing and civil penalty scheme adopted by the legislature has only one correct interpretation, to be determined as a matter of law. The Commission either correctly divined that interpretation or it did not, but either way there is no discretion on the part of the Commission to interpret the statute as it sees fit depending on the circumstances before it.
¶ 38 Although I would not reach the question, I do not necessarily disagree with the majority opinion’s interpretation of section 41-3-702 and, by implication, section 41-3-210. I cannot join, however, in the assumption that the meaning of the licensing and civil penalty scheme as a whole is so clear as to allow us to decide the issue sua sponte based on the plain language of the statutes. The majority opinion will bind both the Commission and its licensees to a statutory interpretation made by this court without the benefit of reasoned argument and authority from adverse parties. I can envision arguments for alternative interpretations that may pi'ove persuasive if properly supported. Although I express no opinion on whether any of these arguments might prevail if properly presented, I point them out as potential issues that are foreclosed by the majority opinion’s unnecessary interpretation of the licensing statutes.
¶39 For example, the majority opinion’s interpretation would seem to bar the Commission from pursuing violations where a dealer employs an unlicensed salesperson who attempts, but fails, to complete the sale of a vehicle. The actual violation at issue is “assisting] an unlicensed ... salesperson in unlawful activity through active or passive participation in sales, or by allowing use of his facilities or dealer license number, or by any other means.” Utah Code Ann. § 41-3-210(6) (emphasis added). A person acts as a salesperson if he or she is employed by a dealer “to sell, purchase, or exchange or to negotiate for the sale, purchase, or exchange of motor vehicles,” id. § 41-3-102(25) (2005) (emphasis added), and those acts are unlawful unless the person is licensed as a salesperson, see id. § 41-3-201(2) (2005). Thus, in the appropriate circumstances, the Commission might argue that it is entitled to seek a civil penalty when an unlicensed sales
¶ 40 From the licensee’s perspective, there appears to be at least an argument that a dealer’s uninterrupted employment of multiple unlicensed salespersons at a single dealership might constitute but a single violation. See id. § 68-3-12(1) (2004) (stating as a general rule of statutory construction that the words in the singular include the plural unless such a construction would be inconsistent with the manifest intent of the legislature or repugnant to the context of the statute). Similarly, the Commission’s decision, affirmed by the majority opinion, to charge first, second, and third offenses in a single action also seems as if it could present legal arguments not raised by Brent Brown.
¶ 41 Of the two positions presented to us on appeal, I find the Commission’s more persuasive. And, in the absence of reasoned argument to the contrary, I am willing to accept the Commission’s interpretation of the licensing statutes as supporting a separate violation for each unlicensed salesperson that sold a vehicle in this case.
. The violations at issue in this matter are statu-toiy, and "[a]bsent a grant of discretion, an agency's interpretation or application of statutory terms should be reviewed under the correction-of-error standard.” Bonneville Asphalt v. Labor Comm’n,
. This is not to suggest that- the Commission lacks discretion in making charging decisions under the licensing scheme. Like any other plaintiff or prosecutor, the Commission may decide to charge fewer or lesser violations than the evidence might support. However, any successful charge must ultimately satisfy the single legal definition of the violation at issue.
. At the other end of the spectrum, the Commission might argue for a separate civil penalty for each vehicle actually sold, a result that was initially contemplated in this matter.
. For example, section 41-3-702(2)(b) states that "[w]hen determining under this section if an offense is a second or subsequent offense, only prior offenses committed within the 12 months prior to the commission of the current offense may be considered.” Utah Code Ann. § 41-3-702(2)(b). On its face, the Commission’s decision reflects that Brent Brown's violations occurred from June 2002 through February 2004, a period exceeding eighteen months. Depending on the actual record of offenses established by the Commission, it would seem that a party in Brent Brown's position should be able to argue the effect of the statute’s twelve-month cap on considering prior offenses.
. As noted above, it is within the discretion of the Commission to charge fewer violations than the evidence might support. Thus, I do not find the fact that the Commission limited itself to a particular theoty of violation in this case, and the ALJ accepted that theory as an appropriate use of the statutes, to have any bearing on the proper interpretation of the statutes or the ultimate limits of the Commission's authority to charge multiple violations.