117 N.H. 533 | N.H. | 1977
To The Honorable Senate:
The undersigned justices of the supreme court submit the following answers to the questions contained in your resolution submitted to this court on May 23, 1977. Memoranda on behalf of various interested individuals and corporations were filed on or before June 1, 1977, in accordance with the previous order of this court.
The questions submitted to this court are: “Can the general court within the provisions of the constitution of New Hampshire
1. N.H. Const, pt. II, art. 83.
Under N.H. Const, pt. II, art. 83, the general court may enact laws “to prevent the operations within the state of all . . . trusts and corporations . . . who endeavor to raise the price of any article of commerce or to destroy free and fair competition . . . .” This broad mandate allows the general court to enact laws which prevent abuse in the marketplace and promote free competition. Senate bill 75, which imposes certain limitations on oil suppliers doing business in the state, is within the power of the general court. Other statutes have been enacted by the legislature to promote free competition. See RSA 356:2, which outlaws all trusts which restrict trade or commerce, and RSA ch. 358, the Unfair Sales Act, prohibiting wholesalers and retailers from selling below the wholesale or retail price, and which parallels the requirement of RSA 339-C: 12 of the proposed bill. This bill will amend various provisions of RSA ch. 339-C (Supp. 1975), regulating gasoline franchises. The existence of other nonconflicting statutes which promote free and fair competition does not preclude the general court from enacting the proposed bill. Brunswick Corp. v. Pueblo Bowl-o-Mat., Inc., 429 U.S. 477 (1977).
2. Due Process of Law.
The function of courts in reviewing state economic legislation is limited, the wisdom and expediency of statutes are not subject to judicial review. If there is an evil to be corrected, and the legislative measure enacted in response is rational and does not abridge fundamental rights, the statute is constitutional. Opinion of the Justices, 102 N.H. 106, 108, 151 A.2d 236, 238 (1959); Williamson v. Lee Optical Co., 348 U.S. 483, 488 (1954). Although some contend that the bill may not succeed completely in achieving its purpose of promoting free and fair competition, the general court may reasonably conclude that suppliers’ control of the retail gasoline market would adversely affect free competition. Statistics presented to the Senate Committee on Energy and Consumer Affairs show a 300% increase in company-operated stations from 1974 to 1976. (Mobil Oil Corporation exhibit B, at 2.) This increase, coupled with a 25% decrease in the number of stations
3. Equal Protection of the Law.
Unless a legislative classification is drawn upon an inherently suspect distinction, or abridges fundamental personal rights, the sole requirement is that the challenged classification rationally relates to a legitimate state interest. Valley Bank v. State, 115 N.H. 151, 154, 335 A.2d 652, 654 (1975); City of New Orleans v. Dukes, 427 U.S. 297, 303 (1976). Senate bill 75, which prohibits suppliers of petroleum products as a class from operating retail gasoline stations, involves neither a suspect classification nor a fundamental right. Because the legislation may promote free and fair competition by eliminating suppliers from the retail marketplace, the classification is rational and sufficiently related to the achievement of the legislative goal.
4. Just Compensation Clause.
Senate bill 75 if applied prospectively only is not a compensable taking, but rather a permissible legislative regulation. A regulation becomes a taking when it rises to the level where private property is appropriated for public use. The amended bill would bar suppliers from one particular phase of business — retail operations. They may still lease or sell their retail outlets. Deprivation of the most profitable use of property does not necessarily constitute a taking. United States v. Central Eureka Mining Co., 357 U.S. 155, 168 (1958). The restrictions imposed by Senate bill 75 applied prospectively would not constitute a taking, because suppliers may use their property for retail purposes so long as they do not operate the stations themselves or through company employees. The property may still be owned; only its mode of operation is altered.
In our opinion, however, the proposed legislation, if applied retrospectively to the thirteen retail gasoline stations which are presently operated by suppliers would violate N.H. Const, pt. I,
5. Commerce Clause.
The state may regulate matters of local concern if there is no discrimination against interstate commerce, a state interest is being served, and that interest outweighs any national interest in the prevention of state restrictions. Cities Service Co. v. Peerless Co., 340 U.S. 179, 186-87 (1950). Unlike the statutes struck down in H. P. Hood & Sons v. DuMond, 336 U.S. 525 (1949), and Baldwin v. G.A.F. Seelig,, 294 U.S. 511 (1935), the purpose of Senate bill 75 is to preserve free competition, not to protect local economic interests by discriminating against interstate commerce. In Dean Milk Co. v. Madison, 340 U.S. 349 (1951), a statute which effectively raised an economic bar to protect local industries was struck down as a violation of the commerce clause. Here, the statute even-handedly excludes all New Hampshire and out-of-state suppliers from retail operations. Products may flow unrestrictedly in interstate commerce under the proposed bill; the only limitation is placed upon the mode of retail operation within the state. An out-of-state nonsupplier may operate retail gasoline stations. Thus, there is no discrimination against out-of-state interests, no burden on the free flow of goods in commerce, and the state’s goal, of promoting free competition is furthered. The Maryland Court of Appeals, in upholding a similar statute, stated “it has long been recognized that the states have the power to pass legislation, to promote competition by preventing monopolistic activity in restraint of trade.” Governor of Maryland v. Exxon Corp., 370 A.2d 1102, 1116 (1977).
6. Preemption.
a. Federal Emergency Petroleum Allocation Act.
Senate bill 75 is proposed to promote free competition, provide for the uniform availability of voluntary allowances and rental equipment, and require that petroleum products be allocated on an equitable basis during periods of shortage. The Federal Emergency Petroleum Allocation Act, 15 U.S.C. §§ 751-756 (Supp. 1975), provides that regulations for the equitable allocation of re
The federal act specifically preempts only those state regulations and laws which directly conflict with .regulations promulgated under the act. 15 U.S.C. § 755(b). Allocation under the proposed bill would be on an equitable and nondiscriminatory basis. As long as enforcement of this general standard is accomplished in accordance with federal regulations promulgated under the Federal Petroleum Allocation Act, the proposed bill does not conflict with the act and is not preempted. The existence of a conflict cannot be assumed where no specific rules for the enforcement of the standard have been promulgated. Rice v. Board of Trade, 331 U.S. 247, 255 (1947). A similar statute was upheld as harmonious with the federal act which “expressly preserves the power of the states to regulate the allocation of refined petroleum products.” Governor of Maryland v. Exxon Corp., 370 A.2d 1102, 1120-21 (1977).
b. Robinson-Patman Act.
RSA 339-C:ll of the proposed bill would require that suppliers and distributors extend voluntary allowances and equipment rentals uniformly to all of their dealers. “Voluntary allowances” have been construed to mean “temporary price reductions in the wholesale price to a retail dealer to enable the dealer to meet the lower price of a competing retail dealer.” Governor of Maryland v. Exxon Corp., 370 A.2d 1102, 1122 (1977). Section 2(a) of the Clayton Act, amended by the Robinson-Patman Act, 15 U.S.C. § 13(a), states that persons cannot discriminate in price between different purchasers when the effect of the discrimination will lessen competition. A defense to a charge of price discrimination is provided to a seller by § 2(b). The seller may show that his
The § 2(b) defense is not available to a supplier granting a discriminatory price cut to a dealer enabling it to meet a second dealer’s lower price where the second dealer did not receive a price cut from its supplier. Federal Trade Comm’n v. Sun Oil Co., 371 U.S. 505, 529 (1963). The Supreme Court did not decide, however, if the § 2(b) defense could be raised when a seller lowers the price for its dealer to meet a price cut made by the seller’s competitor to the dealer of that competitor. Lower federal courts have disagreed on this point. See Enterprise Indus. v. Texas Co., 136 F. Supp. 420 (D. Conn. 1955), rev’d on other grounds, 240 F.2d 457 (2d Cir.), cert. denied, 353 U.S. 965 (1957), and Bargain Car Wash, Inc. v. Standard Oil Co., 466 F.2d 1163 (7th Cir. 1972). We adopt the conclusion of the Maryland Court of Appeals that “the § 2(b) defense is available only where the discriminatory price reduction is to meet the equally low price offered to the same buyer by a competing seller,” (citing Enterprise, 136 F. Supp. at 421.) Governor of Maryland v. Exxon Corp., 370 A.2d 1102, 1124 (1977).
Senate bill 75 requires that voluntary allowances, which are the price reductions granted to retail dealers to meet the lower price of other retail dealers, be extended uniformly to all dealers purchasing from the supplier. The § 2(b) defense is available only when a seller lowers the price to meet the price offered to the same dealer by a competitor of the seller. Thus there is no conflict with the provisions of the Robinson-Patman Act.
7. Void for Vagueness.
“The constitutional requirement of definiteness is violated by a criminal statute that fails to give a person of ordinary intelligence fair notice that his contemplated conduct is forbidden by the statute.” United States v. Harriss, 347 U.S. 612, 617 (1954). The statute need not be precise, but simply “be expressed in language as specific as the subject will allow.” State v. Hewitt, 116 N.H. 711, 366 A.2d 487 (1976). When a statute regulates business activity, the standard of ordinary intelligence is ordinary commercial knowledge. Courts may reasonably construe the statute to render it constitutionally definite. United States v. Harriss, 347 U.S. at 618. The provisions of the proposed bill are defined with
To the extent that the proposed bill would apply retrospectively to gasoline stations already operated by suppliers, it is unconstitutional. Otherwise, the answer to your first question is, “Yes, the general court may enact the statute proposed in Senate bill 75 as amended under the constitution of New Hampshire.” The proposed bill raises many constitutional questions that may be more sharply focused in the context of a litigated case with a record, and, hopefully, some legislative findings or history. Your second question is answered, “No, the proposed bill does not violate any provision of the Constitution of the United States.” The second question would be definitively answered by the federal judicial system should the Supreme Court review the decision of the Maryland Court of Appeals in Governor of Maryland v. Exxon Corp., 370 A.2d 1102 (1977), now on appeal.
To The Honorable Senate:
The undersigned justices of the supreme court return the following reply to the questions presented in your resolution adopted on May 19, 1977, and filed in this court on May 23, 1977.
We conclude that the proposed statute is constitutional in all respects and therefore the answer to your first question is “Yes”; the answer to your second question is “No.” For the purpose of determining whether the proposed bill violates the “just compensation” clause of the fifth amendment to the United States Constitution as it applies to the states through the fourteenth amendment
The majority’s treatment of this issue is unsound. A comprehensive and award-winning law review article, which the majority does not cite, clearly concludes that even statutes requiring suppliers to divest themselves completely of retail outlets they already own do not violate the prohibitions against taking property without just compensation. Note, Gasoline Divestiture Statutes: A Preliminary Constitutional and Economic Assessment, 28 Vand. L. Rev. 1277, 1297-98 (1975). A fortiori, Senate bill 75, which is substantially less restrictive (in that it only requires present suppliers to cease “operating” the stations themselves) is constitutional.
In explaining why Senate bill 75 is a “permissible legislative regulation,” the majority states “[t]hey may still lease or sell their retail outlets.” The “they” can only refer to the suppliers who already operate the thirteen stations. It is analytically difficult to understand how the majority can state first that the proposed statute would be a constitutional regulation as applied to those suppliers in a position to “lease or. sell their retail outlets” and then turn around in the next paragraph and assert that the. statute, if applied to those very same suppliers, would be unconstitutional.
The majority does not distinguish Opinion of the Justices, 103 N.H. 268, 169 A.2d 762 (1961). In that case this court unanimously agreed that a statute requiring the removal of existing billboards and signs located along interstate highways would be constitutional. We stated “[t]he argument that the proposed law would deprive owners of property without compensation and would operate retrospectively does not require. extended consideration.” Id. at 271, 169 A.2d at 765. No substantive distinction exists between the impact of that legislation »and the consequences of the statute proposed in this case.
Recently, in a comprehensive, well-reasoned opinion, the Court of Appeals of Maryland sustained a statute — virtually identical to Senate bill 75 — against the same constitutional objections raised in this case. Governor of Maryland v. Exxon Corp., 370 A.2d 1102
