TO-RO TRADE SHOWS, d/b/a O'Loughlin Trade Shows, Petitioner,
v.
Grant COLLINS and Kathy Barrosfriedt, in her official capacity as the Director of the Department of Licensing, The State of Washington, and Robert Smith, and John Does 1 Through 5, Respondents.
Supreme Court of Washington, En Banc.
*1150 Mann, Johnson, Wooster & McLaughlin, Richard H. Wooster, Tacoma, for Petitioner.
Christine Gregoire, Atty. Gen., Rene David Tomisser, Asst. Atty. Gen., Olympia, for Respondent.
Daniel R. Warncke, Daniel F. Oberklein, Cincinnati, for Amicus Curiae.
OWENS, J.
We must decide whether a producer of recreational-vehicle (RV) trade shows presented a justiciable controversy under Washington's Uniform Declaratory Judgments Act (chapter 7.24 RCW) (the Act). To-Ro Trade Shows (To-Ro) brought a declaratory judgment action against the State after the Department of Licensing (DOL) enforced the dealer licensing statute (RCW 46.70.021) at To-Ro's 1994 Spokane RV show. To-Ro contended that the State's closure of that portion of its show dedicated to an unlicensed RV dealer violated To-Ro's rights under the Commerce Clause and the First and Fourteenth Amendments to the United States Constitution. The trial court dismissed To-Ro's claims, and the Court of Appeals affirmed, concluding that, because To-Ro had failed to "demonstrate a direct and certain financial impact" arising from the State's enforcement of the licensing statute, To-Ro lacked standing to pursue declaratory relief. To-Ro Trade Shows v. Collins,
FACTS
To-Ro produces a variety of consumer trade shows, including RV, boat, home and garden, and sportsman shows. To-Ro secures a site for an event, rents space to exhibitors, and charges admission to the public. To-Ro scheduled an RV show for April 7-10, 1994, at the Interstate Fairgrounds in Spokane. When a number of dealers in the local RV association decided not to rent space at the show, To-Ro invited an RV dealer from Coeur d'Alene, Idaho, to participate. Aware that the dealer, Lake City RV, was licensed to conduct business in Idaho but not in Washington, To-Ro's Robert O'Loughlin spoke with Grant Collins, a DOL investigator. Collins told O'Loughlin that a license *1151 was required and that the dealer should not participate without one. O'Loughlin then contacted DOL supervisors in Tacoma and Spokane, who also confirmed that an out-of-state dealer was required to have a Washington license in order to participate.
Before the event opened, DOL received an anonymous tip that an unlicensed dealership had brought its vehicles to the fairgrounds. Collins went to the fairgrounds and gave Douglas Foster, Lake City RV's sales manager, written notice that his dealership's participation would be unlawful. On Friday, the second day of the show, Collins returned to find that Lake City RV was indeed participating in the show. At a meeting in O'Loughlin's office, O'Loughlin tried to persuade Collins that Lake City RV could participate as long as it placed "For Display Only" signs on its vehicles, posted no prices, and sold no vehicles, but after checking with his superiors, Collins reiterated that a license was required for Lake City RV to participate.[1] While at the show on Friday, Collins observed that Lake City RV did not have any restrictive "For Display Only" signs on the vehicles. Lake City RV had posted manufacturer's suggested retail prices on its vehicles, as well as handwritten signs reading "show special" or "show prices." Report of Proceedings (RP) at 358-60. Collins asked Lake City RV to close and lock its vehicles, and Lake City RV complied. After the Lake City RV exhibit was closed, O'Loughlin posted a note on its vehicles stating that "show prices are good thru next Sunday April 17th." RP at 360-61, Ex. 13.
Alleging that DOL's enforcement of the statute violated To-Ro's constitutional rights under the Commerce Clause and the First and Fourteenth Amendments, To-Ro filed a declaratory judgment action in March 1995 challenging the constitutionality of RCW 46.70.021; To-Ro sought damages under 42 U.S.C. § 1983 and also claimed that DOL had tortiously interfered with To-Ro's business expectancy.[2] O'Loughlin claimed that, because Lake City RV was a major exhibitor in the Spokane RV show, patrons had demanded refunds after its exhibit was closed. O'Loughlin asserted that, to compensate for the exhibit's closure, he had offered free admission on Friday evening and had reduced ticket prices for Saturday and Sunday, and he cited as an additional loss his refund of Lake City RV's rental fee of $4,800.
On cross-motions for summary judgment, the trial court dismissed To-Ro's Commerce Clause claim for lack of standing. The court also dismissed To-Ro's claim that RCW 46.70.021 violated the First Amendment on its face, but the court simultaneously entered a second order ruling that the statute neither prohibited unlicensed dealers from displaying and pricing their RVs at trade shows nor precluded product representatives from accompanying those displayed vehicles.
When the case went to trial, the parties disagreed as to the meaning of the second order, so the court prohibited any mention of the order in opening statements. At the close of the evidence and outside of the jury's presence, the court dismissed all of To-Ro's causes of action. The court ruled that, because Lake City RV was unlicensed, it had no property interest that would give rise to a procedural due process claim and that, even if Lake City RV had had such a claim, To-Ro lacked standing to assert it. Having determined that To-Ro lacked standing to raise its Commerce Clause and due process claims, the court dismissed To-Ro's claim for damages under 42 U.S.C. § 1983, accepting as a *1152 second basis for dismissal the State's qualified immunity defense.
The court also addressed the implications of the second summary judgment order, which it termed a "stipulation ... without the court's independent ruling." RP at 517. In the court's view, the transcript of the summary judgment hearing showed that the court had never ruled on whether RCW 46.70.021 prohibited an unlicensed dealer from participating in a trade show on a "display only" basis. The court recognized that at trial the State had argued a position contrary to the stipulation and that To-Ro had not objected. Thus, contrary to the disputed order, the court ruled "that displaying products at a trade show where the products are physically present with the public is engaging in business ... as contemplated by the Department of Licensing regulations or statutes." RP at 586. The court rejected To-Ro's claim that RCW 46.70.021 violated the First Amendment. In ruling that the statute had been fairly applied to exclude Lake City RV, the court foreclosed the tortious interference claim because, as the State argued and the court agreed, To-Ro could have no valid business expectancy from a party in violation of the law.
After dismissing all claims, the court submitted, with the parties' approval, three questions to the jury.[3] The court reasoned that, if the State were indeed bound by the second summary judgment order (wherein the parties had stipulated that the licensing statute did not apply to dealers participating on a "display only" basis), the jury would need to resolve certain factual questions. Consequently, the jury was asked whether To-Ro had proven (1) that no prices were ever displayed on Lake City RV's vehicles, (2) that "For Display Only" signs had been posted on Lake City RV's vehicles at all times during the show, and (3) that the State's closure proximately caused To-Ro damages. The verdict form also asked the jury to state the amount of damages, should it answer the third question affirmatively. The jury answered "No" to all three questions.[4]
To-Ro appealed. The Court of Appeals affirmed the trial court, holding that To-Ro lacked standing to challenge the State's enforcement of RCW 46.70.021 against Lake City RV. To-Ro Trade Shows,
ISSUE
Did To-Ro present a justiciable controversy under the Uniform Declaratory Judgments Act?
ANALYSIS
To-Ro sought a declaration under the Uniform Declaratory Judgments Act that Washington's dealer licensing statute, RCW 46.70.021, unconstitutionally precluded unlicensed dealers from displaying their vehicles at trade shows held in Washington. The challenged licensing statute, which aims to protect Washington consumers from "frauds, impositions, and other abuses," makes it "unlawful for any person, firm, or association to act as a vehicle dealer ..., to engage in business as such, ... [or] solicit sales as such, ... without first obtaining and holding a current license as provided in this chapter." RCW 46.70.005, .021 (emphasis added). The trial court dismissed To-Ro's claims attacking the statute, and the Court of Appeals affirmed, denying relief under the Act. Recalling the Act's provision that "[a]ll orders, judgments and decrees under this chapter may be reviewed as other orders, judgments *1153 and decrees," we apply the customary principles of appellate review. RCW 7.24.070; see Nollette v. Christianson,
The Act provides in part that "[a] person ... whose rights, status or other legal relations are affected by a statute ... may have determined any question of construction or validity arising under the ... statute ... and obtain a declaration of rights, status or other legal relations thereunder." RCW 7.24.020. In Diversified Industries Development Corp. v. Ripley,
We agree with the Court of Appeals that To-Ro failed to meet the third justiciability requirement. See To-Ro Trade Shows,
Support for this conclusion is found in prior analogous cases. In Washington Beauty College, a hairdressing school challenged a Washington statute that required a person to obtain a high school education as a *1154 prerequisite to becoming a licensed hairdresser. The school claimed to have enrolled a number of students who would be unable to procure a high school education after completing the course. The school thus asserted that the statute unconstitutionally interfered with its right to contract with those students and with other prospective students. Affirming the trial court, this court concluded that "[n]o showing ha[d] been made of any direct or substantial injury threatened or suffered by [the beauty college] so as to present a justiciable issue." Washington Beauty Coll.,
We considered a similar circumstance in Yakima County (West Valley) Fire Protection District No. 12 v. City of Yakima,
To-Ro did not prove that DOL's enforcement of the statute against unlicensed dealers had harmed (or would harm) To-Ro directly and substantially. As a consumer show promoter, To-Ro makes money by renting exhibit space to dealers and charging admission to patrons. To-Ro did not show that there was a pool of RV dealers who wanted to forgo the licensing process and display their vehicles with no prices affixed. To the contrary, motor vehicle dealers testified that it was unimaginable that dealers would incur the expense of participating in an RV trade show if they were not allowed to sell vehicles at the show. Moreover, as the State pointed out, "[i]t is likely that licensed dealers would oppose unlicensed dealers enjoying the benefits of engaging in business in Washington without paying for a license." Resp't's Answer to Amicus at 9. Nor did To-Ro show that the statute caused To-Ro to miss out on a large market of patrons who were eager to attend shows featuring unlicensed out-of-state dealers exhibiting vehicles bearing no price tags. Therefore, just as we determined that the enforcement of the statute in Washington Beauty College and the validation of the agreements in Yakima County (West Valley) Fire Protection District No. 12 caused no direct, substantial financial harm to the beauty college or the fire district, here, we conclude that DOL's enforcement of the statute's prohibition against display by unlicensed dealers caused no demonstrably direct or substantial financial harm to To-Ro.
This third justiciability requirement of a direct, substantial interest in the dispute encompasses the doctrine of standing. To have standing to challenge the constitutionality of a statute, a party must show, in addition to "sufficient factual injury," that "`the interest sought to be protected ... is arguably within the zone of interests to be protected *1155 or regulated by the statute or constitutional guarantee in question.'" Seattle Sch. Dist. No. 1 v. State,
Although the Court of Appeals confined its analysis to the third justiciability factor, we reach the additional conclusion that To-Ro likewise failed to satisfy the first requirementdemonstration of "an actual, present and existing dispute, or the mature seeds of one, as distinguished from a possible, dormant, hypothetical, speculative, or moot disagreement." Diversified Indus. Dev. Corp.,
Where the four justiciability factors are not met, "the court steps into the prohibited area of advisory opinions." Diversified Indus. Dev. Corp.,
CONCLUSION
While we have acknowledged that the Uniform Declaratory Judgments Act provides a procedure "peculiarly well suited to the judicial determination of controversies concerning constitutional rights and ... the constitutionality of legislative action," we have resolutely maintained that no decisions should be made under the Act absent a "justiciable controversy." Seattle Sch. Dist. No. 1,
To-Ro's challenge to the State's enforcement of RCW 46.70.021, the dealer licensing statute, does not present a justiciable controversy under the Act. We agree with the Court of Appeals that To-Ro failed to prove a direct, substantial financial interest in the dispute sufficient to confer standing, and we further find that, in light of the jury's factual findings, To-Ro was unable to demonstrate an actual, immediate dispute. Having determined that To-Ro did not establish a justiciable controversy and that this case presents no issues of overwhelming public importance, we affirm the Court of Appeals.
ALEXANDER, C.J., and SMITH, JOHNSON, MADSEN, IRELAND, BRIDGE, and CHAMBERS, JJ., concur.
SANDERS, J., dissenting.
The majority should not be allowed the luxury of denying To-Ro Trade Shows its day in court through unchallenged and inconsistent application of the standing doctrine. We must avoid ad hoc, result-oriented decision making which cripples private litigants who seek to protect their constitutional rights against government infringement.
The majority here concludes To-Ro Trade Shows lacked standing to pursue declaratory relief "because it failed to present an actual, immediate dispute in which it had a direct, substantial interest." Majority at 1150. I disagree.
According to the Uniform Declaratory Judgments Act (chapter 7.24 RCW), "A person... whose rights, status or other legal relations are affected by a statute ... may have determined any question of construction or validity arising under the ... statute ... and obtain a declaration of rights, status or other legal relations thereunder." RCW 7.24.020. To-Ro asserts its rights, status, and legal relations are affected by the Washington dealer licensing statute, RCW 46.70.021. The dealer licensing statute provides in part:
It is unlawful for any person, firm, or association to act as a vehicle dealer or vehicle manufacturer, to engage in business as such, serve in the capacity of such, advertise himself, herself, or themselves as such, solicit sales as such, or distribute or transfer vehicles for resale in this state, without first obtaining and holding a current *1157 license as provided in this chapter....
RCW 46.70.021. To-Ro asserts the State's enforcement of this statute affects its legal rights, and questions the construction and validity of the statute pursuant to the Uniform Declaratory Judgments Act. Specifically To-Ro "seeks a declaration that RCW 46.70 is unconstitutional to the extent advertising, display or exhibition of products and pricing at a trade show is reserved exclusively to State licensed dealers." Pet. for Discretionary Review at 7.
We have previously held "before the jurisdiction of a court may be invoked under the act, there must be a justiciable controversy." Diversified Indus. Dev. Corp. v. Ripley,
(1) which is an actual, present and existing dispute, or the mature seeds of one, as distinguished from a possible, dormant, hypothetical, speculative, or moot disagreement, (2) between parties having genuine and opposing interests, (3) which involves interests that must be direct and substantial, rather than potential, theoretical, abstract or academic, and (4) a judicial determination of which will be final and conclusive.
Id. To-Ro meets each of these four factors and thus has standing to seek relief under the Uniform Declaratory Judgments Act, more so, I think, than did Amalgamated Transit Union which feared the loss of government expenditures through the initiative's repeal of a tax for general revenue purposes. Amalgamated Transit Union Local 587 v. State,
To-Ro is in the business of producing consumer shows. Producers of such events make money in two ways: (1) they rent space in a convention center or exhibit hall and then sell exhibit space to exhibitors; and (2) they charge an admission fee to members of the general public who wish to attend the show. Amicus Br. at 3. One of the exhibitors to whom To-Ro sold exhibit space for its 1994 Spokane Spring RV Show was Lake City RV. Trade show patrons demanded refunds directly from To-Ro when the Department of Licensing shut down the Lake City RV exhibit. Report of Proceedings (RP) at 228. To-Ro also had to offer free admission on the evening the exhibit was shut down and reduced ticket prices for the remainder of the show. RP at 229-31. Finally, To-Ro gave Lake City RV a refund of its $4,800 rental fee. RP at 262. To-Ro lost money as a result of the enforcement of this statute and therefore has standing to challenge it.
The majority erroneously concludes To-Ro does not satisfy the first prong of the test for determining whether a plaintiff presents a justiciable controversy for purposes of the Uniform Declaratory Judgments Act by weighing the facts. However we must judge the existence of a justiciable controversy from the facts as alleged by the plaintiff, not by the facts as ultimately proved. See Acme Finance Co. v. Huse,
To-Ro's pleadings clearly present an actual dispute or at least the mature seeds of one. Moreover the factual record establishes To-Ro's loss of revenue is real and demonstrable. To-Ro's assertionthat it will continue to lose money if dealers who are not licensed by the State of Washington are prohibited from participating in trade shows, even if they do so only to advertise their products is a logical imperative. The majority's criticism that To-Ro failed to show "that there are unlicensed dealers waiting in the wings to display their unpriced vehicles at a To-Ro trade show" is wrong. Majority at 1155. There very plainly are such dealers; Lake City RV is among them. Moreover, as amicus argues, the success of a trade show is contingent upon the reputation the show has with exhibitors and the general public. Amicus Br. at 3. Therefore the negative impact of forcing To-Ro to close a substantial portion of its 1994 Spokane Spring RV Show will at least arguably affect its ability to attract exhibitors and attendees in the future. Id. We are not, as the majority suggests, faced with a situation "where the event at issue has not yet occurred or remains a matter of speculation." Majority at 1155. Here the event, To-Ro's loss, has occurred and will arguably continue to occur.
Neither the majority here nor the Court of Appeals below contends the second justiciability *1158 requirement is not met. To-Ro and the Department of Licensing have genuine and opposing interests. To-Ro asserts RCW 46.70.021 is unconstitutional and the Department of Licensing asserts the constitutional challenge to the statute is without merit. Pet. for Discretionary Review at 5; Answer to Pet. at 9.
The majority and the Court of Appeals do however agree "To-Ro did not show that its `interests' in the dispute over DOL's [Department of Licensing] enforcement of the dealer licensing statute were `direct and substantial' as opposed to `potential, theoretical, abstract or academic.'" Majority at 1153 (quoting Diversified Indus. Dev. Corp.,
Further, the cases cited by the majority to support its conclusion must be distinguished. Yakima County (West Valley) Fire Protection District No. 12 v. City of Yakima,
Similarly, the majority's reliance on Washington Beauty College, Inc. v. Huse,
*1159 To-Ro however presents a different situation. Here the party seeking declaratory relief has suffered a direct and substantial injury including loss of cash and reputation. In contrast to the injury alleged in Washington Beauty College and Yakima County which was speculative and uncertain, the injury here is concrete and demonstrable.
To-Ro also meets the fourth justiciability factor. As previously indicated, a judicial determination of the constitutionality of the dealer licensing statute will resolve the dispute between To-Ro and DOL. If the statute is found unconstitutional, To-Ro must be permitted to sell exhibit space to out-of-state exhibitors who wish to participate in a trade show to advertise their products and should recover its damages.
In support of its First Amendment claim To-Ro likens its situation to that of a bookseller or theater owner, entities that have traditionally been given standing to vindicate the rights of third parties. To-Ro asserts it is a "`clearinghouse' for expression and as a practical matter is in a far better position to vindicate First Amendment rights, ensure public access and thwart excessive governmental intrusion upon the free exchange of ideas and information than individual show patrons or exhibitors." Pet. for Discretionary Review at 8. The Ninth Circuit concluded in Cinevision Corp. v. City of Burbank,
The majority asserts "To-Ro's interest in seeking declaratory relief lies outside the zone of interests regulated by RCW 46.70.021." Majority at 1154. But To-Ro must only show "`"the interest sought to be protected ... is arguably within the zone of interests to be protected or regulated by the statute or constitutional guarantee in question."'" Majority at 1154 (emphasis added) (quoting Seattle Sch. Dist. No. 1 v. State,
Finally, I am troubled by the majority's reliance on the jury's advisory verdict in this case. Majority at 1153. At the point the jury deliberated, there was really nothing for them to decide since all To-Ro's claims had been dismissed for lack of standing. Quixotically three questions were sent to the jury on an advisory basis only. Id. I cannot fathom why this Court should rely on a "highly unusual" advisory jury verdict that "has no binding legal effect." Majority at 1153 n. 6. Moreover the issue is whether To-Ro had standing, not whether it proved its damages to the jury's satisfaction. In any event a defense verdict on damages does not mean the plaintiff lacks standing to pursue the litigation, only that it couldn't convince the jury by a preponderance of evidence that it should be compensated. The majority's analysis is bootstrapping.
Based on the foregoing I believe To-Ro has presented a justiciable controversy and therefore has standing to invoke the Uniform Declaratory Judgments Act.
Accordingly, I dissent.
NOTES
[1] DOL's position was consistent with To-Ro's own manual for exhibitors, which stated that participating dealers must obtain Washington licenses and mentioned no licensing exception for vehicles that were marked "For Display Only."
Notes
[2] To-Ro's complaint, filed March 6, 1995, in Spokane County Superior Court (No. 95-2-01225-1), was not included in the clerk's papers. Under RAP 9.6(b)(1)(D), To-Ro was required to include in the clerk's papers, if not the final complaint and answer, a final pretrial order or other pleadings setting out the issues to be tried. In its summary judgment memorandum, To-Ro states that it seeks "a legal determination that RCW 49.70.021[sic] and RCW 49.70.023[sic] are unconstitutional on their face" and that "the manner in which the State carried out the enforcement actions ... was unconstitutional." Clerk's Papers (CP) at 78. To-Ro's trial brief provides that "[t]his case now comes on for trial on the plaintiff's claims for damages that the conduct of the state agents tortiously interfered with its business relations in violation of 42 U.S.C. § 1983." CP at 482.
[3] In its notice of appeal (which, contrary to RAP 9.6(b)(1)(A), To-Ro did not include in the clerk's papers), To-Ro refers to a March 10, 1998, order "[s]ubmitting advisory interrogatories to the jury." The Court of Appeals termed it an "advisory verdict." To-Ro Trade Shows v. Collins,
[4] See CP at 549. The Court of Appeals entered an order on April 21, 2000, unsealing the verdict and making it a public record.
[5] As we have noted, "under the Declaratory Judgments Act, the requirement of standing tends to overlap justiciability requirements." Amalgamated Transit Union Local 587 v. State,
[6] By repeatedly asserting that the State's enforcement of the dealer licensing statute harmed To-Ro financially, the dissent simply champions To-Ro's unproven claims. Even though the trial judge's submission of the special verdict form to the jury was highly unusual and has no binding legal effect, the jury in this six-day trial received To-Ro's evidence, heard its closing argument on damages, and concluded that the closure of the Lake City RV display did not proximately cause To-Ro's damages. See RP at 541-46, 549-50, 557-61.
[1] To receive sewer service from the City of Yakima landowners were required to sign a future petition for annexation. Yakima County (West Valley) Fire Prot. Dist. No. 12 v. City of Yakima,
