NATIONAL GAS DISTRIBUTORS, Plаintiff-Appellant, v. SEVIER COUNTY UTILITY DISTRICT of Sevier County, Tennessee, Defendant-Appellee. and PAUL G. SUMMERS, Attorney General and Reporter for the State of Tennessee, Intervening Defendant-Appellee.
C/A NO. 03A01-9902-CH-00077
IN THE COURT OF APPEALS OF TENNESSEE AT KNOXVILLE
July 13, 1999
HON. TELFORD E. FORGETY, JR., CHANCELLOR
SEVIER CHANCERY; AFFIRMED AND REMANDED
DONALD K. VOWELL, VOWELL & ASSOCIATES, Knoxville, for Plaintiff-Appellant.
ROBERT E. COOPER, JR., and W. SCOTT SIMS, BASS, BERRY & SIMS, PLC., Nashville, and RONALD E. SHARP, SHARP & RIPLEY, Sevierville, for Defendant-Appellee.
PAUL G. SUMMERS, Attorney General and Reporter, MIKE E. MOORE, Solicitor General, and JANET M. KLEINFELTER, Senior Counsеl, Financial Division, Nashville, for Intervening Defendant-Appellee.
OPINION
Franks, J.
Plaintiff appeals from a
Plaintiff‘s principal place of business is in Knoxville, Tennessee, and it sells and distributes propane in Sevier County, Tennessee. Defendant is a utility
Initially, plaintiff alleged that the
Subsequently, plaintiff amended its complaint to allege that after the original complaint was filed, defendant рroceeded to contact certain members of the Tennessee General Assembly and cause those members to assist in enacting a law that would free the defendants from liability. The law which was enacted by the General Assembly, amended the
Any district providing propane gas service on April 15, 1998, is empowered to provide such service within the county or counties in which it is providing service on that date without any further proceedings before or approvals of any county executive, the utility management rеview board or any other person or agency; provided, the authorization contained in this subsection shall not preclude any other person, firm or corporation, public or private, from furnishing propane gas service within the area served by thе district.
Plaintiff‘s amended complaint stated the statute is impermissible under
It specifically alleged that the statute would operate to suspend the general law for the benefit of seven favored utility districts, thereby giving them a special privilege to sell proрane, which is not available to the other utility districts. It stated that the amendment creates two classes of propane dealers, with one being granted special privileges and the other not. It also averred that the amendment places a spеcial burden on private propane dealers doing business in territories of the seven favored utility districts that is not placed on propane dealers doing business in the rest
After the statute came under attack, the Attorney General was permitted to intervene, and defendant again moved to dismiss the amended complaint. The motion was granted by the Trial Judge and this аppeal ensued.
Whether the complaint was properly dismissed for failure to state a claim upon which relief can be granted, essentially presents two questions: 1. Whether plaintiff has standing to challenge the statute, and 2. If plaintiff has standing, whether the cоmplaint states a claim for relief.
We are required to construe the allegations of the complaint in plaintiff‘s favor, and accept the allegations of fact as true. However, inferences to be drawn from the facts or legal conclusions set forth in the complaint are not required to be taken as true. Riggs v. Burson, 941 S.W.2d 44, 47-48 (Tenn. 1997), cert. denied 118 S. Ct. 444 (1997).
There are twenty-one utility districts in Tennessee, of which seven were providing propane service on April 15, 1998, including defendant.
Standing is a judge-made doctrine “used to refuse to determine the
(1) that it sustained a distinct and palpable injury, (2) that the injury was caused by the challenged conduct, and (3) that the injury is apt to be redressed by a remedy that thе court is prepared to give.
Metro. Air Research Testing Auth., Inc. v. Metro. Gov. of Nashville, 842 S.W.2d 611, 615 (Tenn. App. 1992) (citing Allen v. Wright, 468 U.S. 737, 752 (1984); Morristown Emergency & Rescue Squad, Inc. v. Volunteer Dev. Co., 793 S.W.2d 262, 263 (Tenn. App. 1990)). See also Price v. State, 806 S.W.2d 179, 181 (Tenn. 1991); Davis v. Allen, 307 S.W.2d 800 (Tenn. App. 1957) perm. to app. denied. Even if a statute is unconstitutional,
only those who have a right to raise a question of its unconstitutionality may invoke the aid of the courts to have it judicially set aside, and the constitutionality of a legislative act is open to attack by those persons whose rights are affected thereby. Before a law can be assailed by any person on the ground that it is unconstitutional, he must show that he has an interest in the question in that the enforcement of the law would be an infringemеnt on his rights. Assailants must therefore show the applicability of the statute to them and that they are thereby injuriously affected.
Parks v. Alexander, 608 S.W.2d 881, 885 (Tenn. App. 1980) (quoting 16 Am. Jur. 2d Constitutional Law § 188 (1979)).
Plaintiff argues that the classifications among utility districts are a violation of due process and equal protection under United States and Tеnnessee Constitutions. It states that it is injured because it is forced to compete with utility districts that have a substantial advantage because they do not pay taxes, among other things. Thus, its injury is due to having to compete for business with utility districts, not due to either some utility districts being allоwed to sell propane and some not, or some districts being allowed to sell propane without going through the approval process, and some not. As such, it cannot establish the causal element of standing,
Plaintiff argues, however, that it does have standing because defendant is engaging in illegal and unfair competition and that plaintiff has been harmed by this competition. In support of its position, it cites an Alabama case which says, “[c]learly, the threat of competition is sufficient to provide standing to contest the legality of a competitor‘s facility,” Traders & Farmers Bank of Haleyville v. Central Bank of Ala., 320 So.2d 638, 641 (Ala. 1975), and a federal case which states, “. . . where, as here, the threatened competition arises from an allegеdly illegal facility, the appellee state banks have standing . . . .” Whitney Nat. Bank v. Bank of New Orleans, 323 F.2d 290, 300 (D.C. Cir. 1963). While plaintiff may have standing to challenge illegal competition, it admits that the amendment authorizes defendant to sell propane. As such, the activity is not illegal, as it is explicitly authorized by statute. Plaintiff, to have standing, must have an interest harmed by the classification of the statute, which it has not alleged.
Plaintiff could have standing to challenge any classifications that may have been created between private and public propane deаlers, but it failed to state this claim because, as the Trial Judge found, there is a rational basis to allow utility districts to sell propane. Plaintiff did not allege any intentional discrimination in the enactment of the statute. The Amendment, as applied to private propane dealers, is neutral on its face, and there is no allegation that the statute violates plaintiff‘s due process or equal protection.
Plaintiff argues the classifications in the amendment violate the
The Tennessee Supreme Court has held that the due process guarantees
Similarly, while the “equal protection provisions of the Tennessee Constitution and the Fourteenth Amendment are historically and linguistically distinct,” the
Both the United States Supreme Court and the Tennessee Supreme Court utilize three standards of scrutiny in examining equal protection claims, depending on the right asserted. Tenn. Small Sch. Sys., 851 S.W.2d at 153 (citing City of Memphis v. International Brotherhood of Elec. Workers Union, 545 S.W.2d 98, 101 (Tenn. 1976) (reduced scrutiny); Mitchell v. Mitchell, 594 S.W.2d 699, 701 (Tenn. 1980) (heightened scrutiny); Doe v. Norris, 751 S.W.2d 834, 840 (Tenn. 1988) (strict scrutiny)). Equal рrotection “requires strict scrutiny of a legislative classification only
If legislation arbitrarily confers upon one class benefits, from which others in a like situation are excluded, it is a grant of a special right, privilege, or immunity, prohibited by the Constitution, and a denial of the equal protection of the laws to those not included. If the legislation, without good reason and just basis, imposes a burden upon one class which is not imposed upon others in like circumstances or engaged in the same business, it is a denial of the equal proteсtion of the laws to those subject to the burden and a grant of an immunity to those not subject to it.
State v. Nashville C. & St. L. Ry. Co., 124 Tenn. 1, 135 S.W. 773, 775 (1911).
However, “[u]nder this standard, if some reasonable basis can be found for the classification, or if any state of facts may reasonably be conceived to justify it, the clаssification will be upheld.” Tenn. Small Sch. Sys., 851 S.W.2d at 153.
The equal protection arguments and the due process arguments can be dealt with together, because they both require the same analysis. If there is a rational basis for the statute, and if the statute is not discriminatory, then it must be upheld. Here, the trial court specifically found that the legislature had a rational basis for enacting this legislation. The Court indicated that if it was reasonable to create a utility district to provide services such as natural gas, water, and sewer, then it was reasonablе to allow utility districts to provide propane to its customers.
Ensuring that the citizens of the state have access to needed utilities, like natural gas and propane, is a proper legislative purpose. It is rational to allow utility
The amendment, on its face, does not discriminate against any class of private propane dealers. It applies only to utility districts. The only mention made of private dealers is the section stating that the amendment will not prevent any other рerson or entity from selling propane gas, which does not establish any discrimination against any person or entity.
Plaintiff, however, essentially argues the amendment is discriminatory because the downstream effects create a disparate impact on private propane dealers because they are subject to taxation and other burdens which do not apply to the utility districts. While violations of equal protection have been found in cases where a statute is neutral on its face, but has a dispаrate impact on particular classes, those cases involve discrimination against suspect or quasi-suspect classes, like race, age, or gender. See Yick Wo v. Hopkins, 118 U.S. 355 (1886); Arlington Heights v. Metropolitan Housing Dev. Corp., 429 U.S. 252 (1977); Personnel Adm‘r of Mass. V. Feeney, 442 U.S. 256 (1979).
This case does not involve a suspect or quasi-suspect class, and to establish any violation of due process or equal protection by the amendment, plaintiff must show that the Legislature intended to discriminate against such dealers when it enacted the amendment. Plaintiff would be required to illustrate that the Legislature “selected or reaffirmed a particular course of action at least in part ‘because of,’ not merely ‘in spite of,’ its adverse effects on an identifiable group.” Feeney, 442 U.S. at 279. Plaintiff‘s allegations do not assert that the Legislature enacted
We affirm the judgment of the Trial Court for the foregoing reasons, and remand with cost of the appeal assessed to plaintiff.
Herschel P. Franks, J.
CONCUR:
Charles D. Susano, Jr., J.
William H. Inman, Sr.J.