State Ex Rel. Morrison v. Oshman Sporting Goods Co. KansasState Ex Rel. Morrison v. Oshman Sporting Goods Co. Kansas
- Reporters:
- , ,
- Before:
- Luckert
The opinion of the court was delivered by:
Luckert, J.:
Oshman Sporting Goods Co. Kansas, d/b/a Oshman’s Supersports USA (Oshman) appealed the district court’s imposition of civil penalties for overcharges on merchandise in violation of the weights and measures statutes,
Facts
In 1998, the Kansas Department of Agriculture randomly chose Oshman as the subject of a price verification inspection. The in
Between March 1998 and June 1999, Oshman failed seven price verification inspections. There were a total of 25 overcharges amounting to $142.64, and a total of 44 undercharges amounting to $435.57. In any single inspection, the highest failure rate was 8 overcharges totaling $49.24 and 14 undercharges totaling $112.03.
On January 13, 2000, the Johnson County District Attorney filed a petition alleging that the price discrepancies discovered during the inspections constituted violations of the KCPA and
The Court of Appeals reversed in a published opinion, with one judge dissenting.
State ex rel. Morrison v. Oshman Sporting Goods Co. Kansas,
30 Kan. App. 2d 383, 42 P.3d 197 (2002). The majority ruled that
The Trial Court and Court of Appeals Decisions
Oshman principal argument to both the trial court and Court of Appeals was that the State’s allegations did not state a claim under
The Court of Appeals found the pivotal issue in the case to be whether a point-of-sale system was included within the definition of a weighing device. The majority acknowledged the parties’ arguments regarding various uses of the terms “weights and measures,” “weighing and measuring devices,” and “point-of-sale systems” within the weights and measures statutes, finding that “under the present ambiguities of the statutory scheme it is less than clear that a point-of-sale system comes within the definition of a measuring device.” 30 Kan. App. 2d at 385. The majority focused on legislative amendments to the statutes in 1994 and 1996 as the source of the ambiguity:
“In 1994, the legislature amendedK.S.A. 83-201 to include die definition of a point-of-sale system. See L. 1994, ch. 83, § 1. At the same time, the legislature also amendedK.S.A. 83-219(a) to include subsections (13) through (16), which seem to address the misuse of point-of-sale systems. See L. 1994, ch. 83, § 4. At the hearing on this bill, the Director of the Division of Inspections of the Kansas Department of Agriculture commented: ‘The purpose of this bill is to address technology changes in tire industry and to provide the agency with clear authority to inspect and regulate point of sale or electronic price scanning equipment (scanners) which are currently used in commerce.’ H.B. 3023, attachment 5.
“At the time of the 1994 amendments, the intent of the legislature seems to have been forK.S.A. 83-219(a) to apply to point-of-sale systems. Subsection (a) read: ‘It shall be unlawful for any person’ to commit the unlawful acts. This clarity was clouded in 1996 when the legislature again amendedK.S.A. 83-219(a) and changed ‘person’ to ‘owner of a commercial weighing and measuring device.’ See L. 1996, ch. 146, § 24. The legislative history does not explain the reason for this change.
“We find that the legislative intent to include point-of-sale systems in the definition of ‘weights and measures’ after the 1996 amendments is not clear. We find that the trial court erred in applying K.S.A. 83-219(a)(16) to Oshman.” 30 Kan. App. 2d at 386-87.
Judge Knudson dissented, finding it was not plausible that the legislature intended to negate the 1994 amendments necessary to inspect and regulate modem pricing computers by its enactment of the 1996 amendment to
Statutory Interpretation ofKS.A. 83-201 and 83-219
In its petition for review, the State contends that the Court of Appeals’ majority erroneously interpreted the weights and measures statutes,
The interpretation of statutes is a question of law, and this court’s review is unlimited. Babe Houser Motor Co. v. Tetreault, 270 Kan. 502, 506, 14 P.3d 1149 (2000).
Again, the statute at issue,
A “point-of-sale system” is defined as “any combination of a cash register or other devices, or system, such as a scanner, capable of recovering stored information related to tire price or computing the price of any individual item which is sold or offered for sale at retail.
A point-of-sale system may also include or be attached or connected to a weighing or measuring device.”
(Emphasis added.)
These terms are used inconsistently throughout the weights and measures statutes. Given the ambiguity of the terminology and its usage, this court must look to the design and language of the statute as a whole, as well as to external aids, that may reveal the intent of the legislature. Several canons of statutory construction support the conclusion that
First, “[i]n construing statutes and determining legislative intent, several provisions of an act or acts, in pari materia, must be construed together with a view of reconciling and bringing them into workable harmony if possible. [Citation omitted.]” Petty v. City of El Dorado, 270 Kan. 847, 852, 19 P.3d 167 (2001). “Effect must be given, if possible, to the entire act and every part thereof. To this end, it is the duty of the court, as far as practicable, to reconcile the different provisions so as to make them consistent, harmonious, and sensible. The court must give effect to the legislature’s intent even though words, phrases, or clauses at some place in the statute must be omitted or inserted. [Citation omitted.]” State v. Engles, 270 Kan. 530, 533, 17 P.3d 355 (2001).
As the dissent noted, the majority of the Court of Appeals disregarded the unifying definition of “weights and measures” found in
When these provisions are read together, Oshman, by owning a scanner, owned a “point-of-sale system” which is a “weight and measure.” A weight and measure is a “measuring device.” The provisions of
Additionally, the reading adopted by the Court of Appeals’ majority did not give meaning to all provisions of the applicable statutes. If
Additionally, it is appropriate for this court to consider the legislative history of the weights and measures statutes. “Although appellate courts will not speculate as to the legislative intent of a plain and unambiguous statute, [citation omitted] where the construction of a statute on its face is uncertain, the court may examine the historical background of the enactment, the circumstances attending its passage, the purpose to be accomplished, and the effect the statute may have under various suggested interpretations. [Citation omitted.]” Estate of Soupene v. Lignitz, 265 Kan. 217, 220, 960 P.2d 205 (1998). The Court of Appeals did consider some legislative history but did not consider other relevant portions of the legislative histoxy.
At hearings on the bill, the Director of the Division of Inspections for the Department of Agriculture offered the following testimony:
“The purpose of this bill is to address technology changes in the industiy and to provide the agency with clear authority to inspect and regulate point of sale or electronic price scanning equipment (scanners) which are currently used in commerce.
“Current law addresses weighing and measuring devices but does not speak to point of sale systems such as scanners.
“I am sure that many of you have seen recent TV shows reflecting the economic fraud that can occur when point of sale systems are manipulated by unscrupulous individuals or where errors occur due to employee error or bar code problems.
“Our Weights and Measures program has been actively involved in checking scanners in Kansas and believe we are achieving compliance. This bill legalizes our activities and provides us with appropriate language in the unlawful acts section.” Minutes, House Comm, on Agriculture, February 22, 1994 (H.B. 3023), attach. 1.
Although the 1994 amendments might have been drafted more artfully, it is clear that the legislature intended point-of-sale sys
The problem arises with the 1996 amendment to
Ms. Jordan’s testimony mentioned scanners:
“Scanners — in supermarkets, department and a variety of other stores — are a relatively new addition to the responsibilities of weights and measures officials. Assuring that prices scanned are the same as advertised is the function of price verification inspections. The inspection is not truly of the device, but rather of the accuracy of the price data regularly input into the store or chain’s computer database. In turn, each scanner at a check-out counter is tied to the computer database. The state’s population of scanners, estimated by the numbers of establishments, is at around 7,000 and growing rapidly. The state is still developing its inventory of these devices. . . .
“Because of the large number of scanners . . . statistical testing provides the best and most economically feasible method of inspection to ensure accuracy. . . . [T]he state will design a random statistical test based upon the universe of scanners .... State inspectors will conduct statistical tests, follow up on consumer complaints and conduct investigations.” Minutes, House Comm, on Agriculture, March 7, 1996 (Sub. S.B. 705), attach. 1.
Further, the wording of the 1996 amendment was reversed in 2001, when the legislature amended
“K.S.A. 83-219 . There are 25 unlawful acts contained in this statute, 19 of which do not require using a commercial weighing or measuring device. For example, it is unlawful to ‘misrepresent or represent in a manner calculated or tending to mislead or deceive an actual or prospective purchaser, the price of an item offered, exposed or advertised for sale at retail.’ Owning a commercial weighing or measuring device is not required for an individual or organization to misrepresent the price of an item. However, as it is currently written, it is unlawful only for an owner of a weighing or measuring device. The statute could create problems if an individual is using a commercial weighing or measuring device, but does not own it. The proposed amendment will allow the agency to take action against any entity that has committed unlawful acts, including businesses that rent or lease weighing or measuring devices.” Minutes, House Comm, on Agriculture, January 31, 2001 (H.B. 2102), attach. 3.
Obviously, the Department of Agriculture recognized two problems with die language of
Although courts ordinarily presume that by changing the language of a statute the legislature intended to change its effect, this presumption may be strong or weak, according to the circumstances, and may be wanting altogether in a particular case. Board of Education of U.S.D. 512 v. Vic Regnier Builders, Inc., 231 Kan. 731, 736, 648 P.2d 1143 (1982). Furthermore, “[w]hen a statute is ambiguous, amendment of the statute may indicate a legislative purpose to clarify the ambiguities in the statute rather than to change the law.” 1A Singer, Statutes and Statutory Construction § 22.01 (6th ed. 2002).
The legislative history reveals that the 2001 amendment of
Oshman offers one last argument, i.e., that the weights and measures statutes are quasi-criminal; thus, the rule of lenity applies, citing United States v. Granderson, 511 U.S. 39, 54, 127 L. Ed. 2d 611, 114 S. Ct. 1259 (1994). Oshman argues it must receive the benefit of any ambiguity. In a case involving civil penalties assessed against an oil company by the Kansas Department of Health and Environment, the Court of Appeals recognized that a penalty provision in a statute should be strictly construed in favor of the person being penalized. Radke Oil Co., Inc. v. Kansas Dept. of Health and Environment, 23 Kan. App. 2d 774, Syl. ¶ 2, 936 P.2d 286 (1997). However, even in the context of a criminal statute, the rule of lenity is subordinate to the rule that judicial interpretation must be reasonable and sensible to effect legislative design and intent. State v. McGill, 271 Kan. 150, 154, 22 P.3d 597 (2001).
Violations of Kansas Consumer Protection Act
Having found that there was no violation of the weights and measures statutes, the Court of Appeals considered whether there were any violations of the KCPA, specifically
Because the Court of Appeals determined there were no statutory violations, it did not address the other issues raised on appeal. This court’s order granting the State’s petition for review did not limit the questions on review. Because this is a civil case, this court may consider and decide the issues under Supreme Court Rule 8.03(g)(1) and (h)(3) (2002 Kan. Ct. R. Annot. 56), and we elect to do so.
Substantial Competent Evidence
Oshman argues that the trial court blindly accepted the State’s allegations and disregarded evidence introduced by Oshman to explain the price discrepancies discovered by inspectors. The State responds that there was substantial competent evidence to support the trial court’s findings.
This court is being asked to review the trial court’s factual findings that Oshman committed 25 violations of
Oshman called two witnesses who explained that if an Oshman’s employee saw a price ending in $.98 on shoes or clothing, the employee would know that an additional 25% should be deducted. The witnesses also explained that some items are ticketed with a sales tag or clearance sticker to alert the cashier of any discount. The witnesses believed the fact that inspectors entered the computer information instead of Oshman’s employees might have explained some of the overcharges.
This testimony was offset by one witness’ admission that he had been too busy to observe the inspections and did not contact the Department of Agriculture when he discovered errors in the inspector’s report. Also, even though both witnesses testified that the consumer would always get the lowest price in the event of a difference between the posted price and the price retrieved by the computer, both acknowledged it would be up to the consumer or the cashier to notice the discrepancy.
The trial court acknowledged Oshman’s evidence “might have cast some doubt on whether all of those overcharges were intentional overcharges, or whether they might be explained by some system or not . . . .” However, the court did not find that evidence persuasive, stating: “[I]t appears to the Court that the scanners were set up to charge, or attempt to charge, a value which is more than the price which is advertised, posted or quoted.”
Based upon the testimony of the inspectors and their inspection reports, there was substantial competent evidence to support the trial court’s factual findings.
Amount of Fine
The remaining issues relate to the imposition of the fine which was imposed under the KCPA. First, Oshman argues that the trial court erred in determining that each overcharge rather than each failed inspection was a violation of the KCPA.
The trial court found Oshman’s overcharges were violations of
Oshman also argues, that
When
“would clarify that a continuing violation constitutes a separate violation each day the practice continues, and is not just a single violation. This addresses situationssuch as the gasoline pump labeling cases where specific consumer transactions could not easily be identified, and where the deceptive label remained in place for weeks. A single civil penalty became insignificant in comparison to the volume of consumers involved. A civil penalty for each day the practice continued would have made the practice less profitable for the supplier.” Minutes, House Comm, on Agriculture, March 17, 1993 (S.B. 245), attach. 2.
Clearly, it was not intended that this provision would apply when there was an identifiable transaction as in this case. Therefore, the trial court correctly applied
Finally, Oshman argues that the $50,000 fine is “shocking,” given that the 25 overcharges totaled only $142.64, especially in light of the fact that this case involved no actual damages and, according to Oshman, no intentional conduct.
We agree. We note several considerations in reaching this conclusion: There was no evidence offered regarding any actual sales of the overcharged items to consumers; the nature of the violations was not particularly egregious; there was no allegation that Oshman intentionally overcharged consumers; and the total amount of the overcharges was only $142.64. In fact, the undercharges discovered by inspectors were greater in number and total amount than the overcharges. We find the fine of $50,000 to be excessive. See Ray v. Ponca/Universal Holdings, Inc., 22 Kan. App. 2d 47, 51-52, 913 P.2d 209 (1995). We reverse and remand for imposition of an appropriate fine.
In making this determination, we are mindful that the KCPA provides no guidelines for the trial court in determining the amount of a civil penalty, aside from the upper limit of $5,000 per violation. However, if the State had sought civil penalties pursuant to
We reverse the Court of Appeals on the issue of whether there was a violation of