BRIXEN & CHRISTOPHER ARCH. v. State

• Decision Date: 28 June 2001
• Docket Number: No. 20000318-CA.,20000318-CA.
• Court: Utah Court of Appeals
• Parties: BRIXEN & CHRISTOPHER ARCHITECTS, P.C., a Utah professional corporation, Petitioner and Appellee, v. STATE of Utah, Respondent and Appellant.

29 P.3d 650

2001 UT App 210

BRIXEN & CHRISTOPHER ARCHITECTS, P.C., a Utah professional corporation, Petitioner and Appellee, v. STATE of Utah, Respondent and Appellant.

No. 20000318-CA.

Court of Appeals of Utah.

June 28, 2001.

Mark L. Shurtleff and R. Wayne Klein, Assistant Attorney General, Salt Lake City, for Appellant.

Hardin A. Whitney, Moyle & Draper, and Robert G. Wing, Prince Yeates & Geldzahler, Salt Lake City, for Appellee.

Before JACKSON, Associate P.J., DAVIS, and THORNE, JJ.

OPINION

JACKSON, Associate Presiding Judge:

¶ 1 The State appeals the trial court's grant of Brixen & Christopher, P.C.'s (Brixen) Petition to Quash Antitrust Civil Investigative Demand (Brixen's Petition). We reverse and remand to the trial court for entry of an order consistent with this opinion.

BACKGROUND

¶ 2 Architects in Utah prepare building designs for bids on public building projects. The designs contain specifications for door hardware: crash bars, hinges, and so forth. The distribution chain of door hardware is the focus of a civil antitrust investigation by the Utah Attorney General (AG).

¶ 3 The AG began investigating a bid-rigging scheme in September 1998. The AG's office heard allegations that door hardware specifications in the building designs used by architects to bid on public building projects favored a certain manufacturer of door hardware (Manufacturer) to the exclusion of other manufacturers. The AG's investigation concluded the following: (1) Manufacturer, a dominant market player, provides door hardware to three high-margin distributors in Utah (Distributors) at a variable wholesale price set at Manufacturer's discretion; (2) Manufacturer and Distributors offer free door hardware specification writing services for architects who submit bids on public buildings; (3) there are no independent door hardware specification writers in Utah; (4) some bids are submitted with specifications that designate one manufacturer's door hardware with a direction that no substitution with competitors' products be made, and a clear majority of these "no-substitution specifications" identify the products of Manufacturer as the products to be used; (5) if specifications are written such that they exclude competitor door hardware products, Manufacturer charges the normal wholesale price, but if specifications are written such that competing products qualify, Manufacturer reduces wholesale prices by up to 40%; (6) if one of the Distributors writes a door hardware specification for building plans that excludes competitor products, Manufacturer pays a "bonus" to that distributor; (7) Manufacturer can pay the bonus because the wholesale price is much higher than if competition had been allowed; (8) the bonus payments create incentive for Distributors to write specifications that exclude competitors' products; (9) the free specification writing services restrain trade by preventing other brands from qualifying to be included in bids on public building projects; (10) the free specification writing services arrangement results in the State paying higher prices for door hardware than it would if the specifications were written without excluding all but Manufacturer's products.

¶ 4 In June, 1999, the AG sent letters to a number of architectural firms, including Brixen, asking for information about the preparation of door hardware specifications. No architectural firm responded to this inquiry. In November, 1999, the AG sent civil investigative demands (CIDs), pursuant to Utah Code Ann. § 76-10-917 (1999) (the "CID Statute"), to two architectural firms inquiring how the firms used specification-writing consultants. After analyzing the information returned by these two firms, the AG sent out additional CIDs to nineteen architectural firms. Only Brixen failed to respond.

¶ 5 Brixen filed a petition to set aside the CID on January 25, 2000. The trial court quashed the CID in its March 28, 2000 order, without setting forth any findings of fact or conclusions of law beyond a statement quashing the CID.¹ The State appealed to the Utah Supreme Court, which transferred the appeal to us pursuant to Utah Code Ann. § 78-2-2(4) (1996).

ISSUES AND STANDARD OF REVIEW

¶ 6 The issue before us is whether the trial court erred in granting Brixen's Petition. The trial court failed to set forth its reasons for granting Brixen's Petition. Further, Brixen's Petition failed to assert any specific basis for setting aside the CID. See Utah Code Ann. § 76-10-917(7)(b)(i) (1999) ("The petition shall specify each ground upon which the petitioner relies in seeking the relief sought."). However, we recognize Brixen's right to require the AG to establish the propriety of the CID. Thus, we are left to review the statutory requirements the State must meet to defend the CID to determine whether the State met its burden. See id. § 76-10-917(7)(b)(ii).

¶ 7 An enforceable CID must satisfy a three-prong test (CID Test) that requires the State to "establish [first,] that the demand is proper, [second,] that there is reasonable cause to believe that there has been a violation of [the antitrust laws], and [third,] that the information sought or document or object demanded is relevant to the violation." Id. The State argues it met its burden, and Brixen contests each prong.

¶ 8 First, the State argues that it had "reasonable cause to believe that there has been a violation of [the antitrust laws]." Id. When we evaluate whether the State has reasonable cause to believe a violation has occurred, "we will review the district court's decision for correctness while affording a `measure of discretion' to that court in our application of the correctness standard to a given set of facts." Evans v. State, 963 P.2d 177, 179 (Utah 1998) (citation omitted). Here, we apply this standard to undisputed facts.

¶ 9 Next, Brixen counters that the CID is "unfair" because it includes language stating that Brixen is a "target," and that the information obtained from Brixen through the CID may be used in a "criminal proceeding." This argument addresses the first prong of the CID Test, namely, whether "the demand is proper." Utah Code Ann. § 76-10-917(7)(b)(ii) (1999). The definition of a "proper demand" is an issue of first impression in Utah. Thus, our evaluation of whether the CID issued to Brixen was proper is a matter of statutory construction, which we review for correctness as a matter of law. See Esquivel v. Labor Comm'n, 2000 UT 66, ¶ 13, 7 P.3d 777

.

¶ 10 Finally, Brixen also counters that the State has not shown how the information it seeks from Brixen is relevant to an antitrust violation. "`Whether certain evidence is relevant ... is a question of law, which we review under a correction-of-error standard.'" Lucas v. Murray City Civ. Serv. Comm'n, 949 P.2d 746, 756 (Utah Ct.App. 1997) (quoting State v. Gonzalez, 822 P.2d 1214, 1216 (Utah Ct.App.1991)).

ANALYSIS

¶ 11 The State appeals the district court's grant of Brixen's petition to quash the CID. The court did not announce any reasons nor specific grounds for granting Brixen's petition. Accordingly, we evaluate whether the State met its statutory burden under each prong of the CID Test. See Utah Code Ann. § 76-10-917(7)(b)(ii) (1999). We address each prong in order.

I. Proper Demand

¶ 12 Brixen argues that the language in the CID is "unfair." The language alerts Brixen that "information produced under the CID may be used against [Brixen] in criminal or civil proceedings," and states that Brixen "is a target of the investigation." The CID Statute requires the State to establish that the demand is proper, not that it is fair. However, Brixen's argument questions whether the demand was proper. Thus, we address this issue.

¶ 13 We determine the definition of a proper demand as a matter of law, see Esquivel v. Labor Comm'n, 2000 UT 66

at ¶ 13, 7 P.3d 777 (applying a correctness standard of review to statutory interpretation), in light of rules of statutory construction and case law interpreting similar statutory requirements in other jurisdictions. See Utah Code Ann. § 76-10-926 (1999) ("The legislature intends that the courts, in construing this act, will be guided by interpretations given by the federal courts to comparable federal antitrust statutes and by other state courts to comparable state antitrust statutes.").

A. Statutory Construction and Supporting Case Law

¶ 14 The "`primary objective in construing [statutory language] is to give effect to the legislature's intent.'" Lyon v. Burton, 2000 UT 19, ¶ 17, 5 P.3d 616 (citation omitted). When "`statutory language is plain and unambiguous, we do not look beyond the language's plain meaning to divine legislative intent.'" State v. Lindsay, 2000 UT App 379, ¶ 5, 18 P.3d 504 (quoting Horton v. Royal Order of the Sun, 821 P.2d 1167, 1168 (Utah 1991)). Utah courts have a "long history of relying on dictionary definitions to determine plain meaning." State v. Redd, 1999 UT 108, ¶ 11, 992 P.2d 986. We note, however, that the dictionary does not give clear direction on the plain meaning of "proper" in the context of a "proper demand." "Suitable" or "appropriate" and "rigorously correct" or "exact" are possible definitions of "proper." The American Heritage Dictionary 993 (2d college ed.1985). However, these definitions are at odds. A suitable or appropriate demand would allow substantial compliance with statutory language, but a rigorously correct or exact demand would require strict compliance with the statute, to the exclusion of extra language.

¶ 15 We have recognized "`"that the meaning of a word cannot be determined in isolation, but must be drawn from the context in which it is used."'" State v. In, 2000 UT App 358, ¶ 5, 18 P.3d 500 (citations omitted). Accordingly, "we interpret `"the terms of a statute ... as a comprehensive whole and not in piecemeal fashion."'" Hercules, Inc. v. Tax Comm'n, 2000 UT App 372, ¶ 22, 21 P.3d 231 (Thorne, J., dissenting) (...