Evans v. State

• Decision Date: 23 June 1998
• Docket Number: No. 970146,970146
• Citation: 963 P.2d 177,1998 WL 327681
• Parties: 1998-1 Trade Cases P 72,192, 346 Utah Adv. Rep. 3 Steven L. EVANS, Plaintiff and Appellee, v. STATE of Utah, Defendant and Appellant. Joseph L. EVANS, Evans Broadcasting, Inc., and Country Gold Broadcasting Inc., Plaintiffs and Appellees, v. STATE of Utah, Defendant and Appellant.
• Court: Utah Supreme Court

Page 177

963 P.2d 177

1998-1 Trade Cases P 72,192, 346 Utah Adv. Rep. 3

Steven L. EVANS, Plaintiff and Appellee, v. STATE of Utah, Defendant and Appellant.

Joseph L. EVANS, Evans Broadcasting, Inc., and Country Gold

Broadcasting Inc., Plaintiffs and Appellees, v. STATE of Utah, Defendant and Appellant.

No. 970146.

Supreme Court of Utah.

June 23, 1998.

George A. Hunt, Salt Lake City, for Steven Evans.

Gayle F. McKeachnie, Clark A. McClellan, Vernal, for Joseph Evans, Evans Broadcasting, and Country Gold Broadcasting.

Jan Graham, Att'y Gen., R. Wayne Klein, Asst. Att'y Gen., Salt Lake City, for the State.

RUSSON, Justice:

INTRODUCTION

The State appeals a district court order granting petitions to quash antitrust civil investigative demands the State issued to Joseph Evans, Steven Evans, Evans Broadcasting, Inc., and Country Gold Broadcasting, Inc. The State sought information relating to possible antitrust violations between radio stations in the Uintah Basin; however, the district court ruled that the State had not met its burden under Utah Code Ann. § 76-10-917(7)(b)(ii) to maintain an investigation and that the radio stations were exempt from investigation under section 76-10-915(1)(a). We reverse and remand.

BACKGROUND

In 1996, a merchant in the Uintah Basin contacted the Antitrust Division of the Utah The Division conducted a preliminary investigation into the merchant's allegations and found that there are only four radio stations in the Uintah Basin--two stations are located in Roosevelt, and two are located in Vernal. The two radio stations in Roosevelt, KNEU and KFIX, are both owned by Evans Broadcasting, Inc., and Country Gold Broadcasting, Inc. Joseph Evans, the owner of these corporations, manages KNEU and KFIX. The radio stations in Vernal, KVEL and KLCY, are owned by Ashley Communications, Inc., which is owned by James Davis. ¹ Joseph Evans' son, Steven Evans, is the general manager of KVEL and KLCY. The real estate and buildings where the Vernal radio stations are located are owned by DEE Properties, L.L.C., a limited liability corporation with six members: James Davis, Steven Evans, Joseph Evans, and their wives.

Attorney General's office ("Division") and complained of possible collusion in the pricing of radio station advertising in the Vernal and Roosevelt radio markets. The merchant had compared advertising rates in the area and informed the Division that the rates charged by the radio stations in Vernal were identical to those in Roosevelt. The merchant also reported that he had been offered a discount on advertising rates if he would advertise on radio stations in both cities.

The four radio stations operate under licenses granted by the Federal Communications Commission (FCC) as required by the FCC for lawful operation. The FCC does not actively regulate prices charged by radio stations for advertising.

In December 1996, pursuant to Utah Code Ann. § 76-10-917, the Division issued civil investigative demands (CIDs) to Steven Evans, Joseph Evans, Evans Broadcasting, Inc., and Country Gold Broadcasting, Inc. The CIDs requested testimony and documents related to the advertising prices and collusion among the four radio stations.

Plaintiffs filed separate petitions to quash the CIDs, and the district court consolidated the petitions at a hearing on February 14, 1997. In granting the petitions, the court concluded that (1) the State failed to meet its burden to show that it had "reasonable cause" to believe a violation had occurred under Utah Code Ann. § 76-10-917(7)(b)(ii), and (2) the radio stations were exempt from investigation under Utah Code Ann. § 76-10-915(1)(a) because they are "subject to regulation" by the FCC.

On appeal, the State raises the following two arguments: first, the court incorrectly applied a "probable cause" standard and therefore incorrectly ruled that the State had not met its statutory burden, and second, the court erred in finding that plaintiffs' activities are exempt from the Act.

STANDARD OF REVIEW

We are asked to review whether the district court erred in ruling that the State had not met its statutory burden of showing "reasonable cause" to believe a civil antitrust violation had occurred. This is a question of first impression. However, we believe the standard of review is similar to the standard we apply in the area of criminal law regarding similar questions.

We have stated that " 'a trial court determination of whether a specific set of facts gives rise to reasonable suspicion is a determination of law and is reviewable nondeferentially for correctness.' " State v. Hodson, 907 P.2d 1155, 1157 (Utah 1995) (quoting State v. Pena, 869 P.2d 932, 939 (Utah 1994)). Nevertheless, because the legal standard for "reasonable suspicion" and "probable cause" is highly fact dependent, we have afforded a "measure of discretion" to such determinations. Id.; State v. Poole, 871 P.2d 531, 533 (Utah 1994). Therefore, 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. Id.

However, the court's ruling that plaintiffs' activities are exempt from the Act is a matter of statutory interpretation, which involves a question of law. We will therefore review that ruling for correctness without deference. S.H. v. Bistryski, 923 P.2d 1376, 1379 (Utah 1996).

ANALYSIS

I. THE "REASONABLE CAUSE"

STANDARD UNDER

UTAH CODE ANN. § 76-10-917

The first issue we must decide is whether the district court correctly determined that the State had not met its burden of showing that it was justified in issuing the CIDs. The Utah Antitrust Act authorizes the attorney general to issue CIDs "[w]hen the attorney general has reasonable cause to believe that any person may be in possession, custody or control of any information relevant to a civil antitrust investigation." Utah Code Ann. § 76-10-917(1) (1995) (emphasis added). If the CID recipient fails to comply with the demand, the attorney general may file a petition for an order compelling compliance with the demand. Id. § 76-10-917(7)(a). Thereafter, the court must hold a hearing at which the attorney general has the burden of establishing "that the demand is proper, that there is reasonable cause to believe that there has been a violation of this act, and that the information sought or document or object demanded is relevant to the violation." Id. § 76-10-917(7)(b)(ii) (emphasis added).

Initially, the State asserts that the court incorrectly relied on a "probable cause" standard rather than on the significantly lower "reasonable cause" standard and therefore erred in ruling that the State had not met its statutory burden. To support its claim, the State relies on the record from the hearing, in which the court made repeated references to probable cause.

For example, during the hearing the judge asked whether it is true that "you have got to show, before you can issue a civil investigative demand, some probable cause to believe, that there is a violation, and that probable cause rises to the level of, let's say, just short of the evidence that would be required in a preliminary hearing." (Emphasis added.) Thereafter, at counsel's request, the court explained its ruling from the bench, stating, "[I]n relation to the issue of probable cause, I don't find adequate information in the affidavit to support the notion that there was an agreement [between plaintiffs]." (Emphasis added.)

Although the court referred to probable cause several times during the hearing, in its written order the district court concluded, "The State failed to meet its burden to show that reasonable cause existed to warrant investigation of the activities described in the Civil Investigative Demands." (Emphasis added.) The State's ultimate concern is that while the court used "reasonable cause" in its written order, what it really meant was "probable cause."

Regardless of the language used during the hearing, the language in the court's final written order controls, and we will presume the order is correct unless affirmatively shown otherwise. See Pena, 869 P.2d at 935-36. However, the State does not assert, nor does the record indicate, that the State objected in a timely manner to the written order's use of "reasonable cause." ² Rule 4-504(2) of the Utah Rules of Judicial Administration provides: "Copies of the proposed findings, judgments, and orders shall be served upon opposing counsel before being presented to the court for signature unless the court otherwise orders. Notice of objections shall be submitted to the court and counsel within five days after service." Utah Code of Judicial Admin. R4-504(2). Whether the district court erroneously referred to "probable cause" during the hearing is immaterial, because the State accepted the court's use of "reasonable cause" in the written order. Having failed to properly object, the State waived its right to challenge the order in this regard on appeal. We therefore hold that the trial court used the correct "reasonable cause" standard in its final written order.

While the district court used the correct statutory standard, we must still determine whether it correctly applied that standard to the facts in this case. This court has never expressly defined "reasonable cause" as that term is used in the Act. According to the Act, "[t]he legislature intends that the courts, in construing this act, will be guided by interpretation given by the federal courts to comparable federal antitrust statutes and by other state courts to comparable state antitrust statutes." Utah Code Ann. § 76-10-926. Therefore, we will look to federal and state courts for guidance as to the proper definition of "reasonable cause" in the context of antitrust law.

Federal antitrust law authorizes the issuance of CIDs "[w]henever the Attorney General, or the Assistant Attorney General in charge of the ...