Adams Ford Belton, Inc. v. Missouri Motor Vehicle Com'n

• Decision Date: 27 May 1997
• Docket Number: No. 79563,79563
• Parties: ADAMS FORD BELTON, INC., Appellant, v. MISSOURI MOTOR VEHICLE COMMISSION, Respondent.
• Court: Missouri Supreme Court

Page 199

946 S.W.2d 199

ADAMS FORD BELTON, INC., Appellant, v. MISSOURI MOTOR VEHICLE COMMISSION, Respondent.

No. 79563.

Supreme Court of Missouri,

En Banc.

May 27, 1997.

Rehearing Denied June 17, 1997.

Robert O. Jester, Sharon Kennedy, Kansas City, for Appellant.

Jeremiah W. (Jay) Nixon, Attorney General, James R. Layton, Stephen R. Martin II, Assistant Attorneys General, Jefferson City, for Respondent.

HOLSTEIN, Chief Justice.

Adams Ford Belton, Inc., brought a declaratory judgment and injunction action seeking to have certain regulations of the Missouri Motor Vehicle Commission (Commission) declared unconstitutional and to terminate a disciplinary proceeding by the Commission against Adams Ford. That action was consolidated with a subsequent petition for review of the administrative disciplinary proceeding filed in the circuit court. The circuit court entered summary judgment in favor of the Commission in both cases. The judgment was appealed to the court of appeals. Because of the general interest or importance of the questions presented, the case is transferred to this Court. Mo. Const. art. V, sec. 10.

The issues presented here include whether the circuit court correctly upheld the constitutionality of state regulations prohibiting motor vehicle advertisements that refer to "invoice price" or that mention price matching without disclosing all limitations imposed by the dealer. Adams Ford challenges the regulations on equal protection, privileges and immunities, and First Amendment grounds. The regulations do not violate those constitutional provisions. The judgment of the circuit court is affirmed.

I.

At the outset, this Court must determine sua sponte whether it has jurisdiction of this appeal. The appeal was initially taken to the Missouri Court of Appeals, Western District. The court of appeals transferred this case because "it presents a real and substantial constitutional issue" involving the validity of certain regulations of the Commission. The court of appeals reasoned that because duly promulgated regulations have the force and effect of statutes and this Court has exclusive appellate jurisdiction over the constitutionality of statutes, this Court had exclusive jurisdiction over an appeal involving the constitutionality of a regulation.

The Supreme Court has exclusive appellate jurisdiction of all cases involving the validity of a statute. Mo. Const. art. V, sec. 3. No case cited or found has held that such jurisdiction extends to claims regarding the constitutionality of a regulation issued by an administrative agency. The constitution makes separate reference to administrative regulations and to statutes. For example, article III, sec. 34, provides for the revision, digesting and promulgation of statutes. However, article IV, sec. 16 makes different provision for the adoption of administrative rules and regulations. See also Mo. Const. art. V, sec. 18 (making special provision for judicial review of certain administrative agency rules).

From the above, it is obvious that the drafters of the constitution drew a clear distinction between statutes and administrative rules. When the word "statute" was used in article V, sec. 3 it plainly was not intended to include agency regulations.

This Court recently held that its appellate jurisdiction under article V, sec. 3 did not extend to the validity of a local ordinance because the constitutional questions did not directly involve the validity of a statute. Alumax Foils, Inc. v. City of St. Louis, 939 S.W.2d 907, 912 (Mo. banc 1997). Like local ordinances, administrative regulations enacted pursuant to an authorizing statute may have the force of law, but such regulations are not statutes. Here, no claim is made that the statutes authorizing the regulations are invalid. Because no claim involving the validity of a statute is involved, initial appellate jurisdiction lies with the court of appeals. Transfer on the grounds stated by the court of appeals was improvident.

Nevertheless, the constitution authorizes transfer by order of this Court before or after opinion because of the general interest or importance of the question involved in the case. This case involves important issues of general interest regarding commercial free speech rights in advertising. For that reason, this Court grants transfer. Mo. Const. art. V, sec. 10. Because the issues have been fully briefed and argued on the merits, the case is submitted.

II.

On April 2, 1994, Adams Ford, a car dealership in Missouri, placed an advertisement in the Kansas City Star, a newspaper distributed in Missouri and Kansas. The advertisement stated, "$5,000* GUARANTEES WE WILL BEAT ANY DEAL, ANYWHERE, ANY TIME." The asterisk referred to smaller print at the bottom of the advertisement, which stated, " *ALL APPLICABLE REBATES TO DEALER[.]" On May 28, 1994, Adams Ford placed another advertisement in the Kansas City Star, which read: "$100 OVER FORD FACTORY INVOICE ON ALL MODELS IN STOCK[.]"

After receiving a complaint from another dealership, the Commission charged Adams Ford with violating its advertising regulations. An administrative disciplinary proceeding was commenced pursuant to sec. 301.562. ¹ With respect to the April 2 advertisement, Adams Ford was charged with violating 12 C.S.R. 60-5.010(2)(AA), which provides: "[Licensed motor vehicle dealers] shall not make any reference to matching or bettering competitors' prices in any advertisement unless all limitations are clearly and conspicuously disclosed. Any policy shall not place an unreasonable burden on the consumer[.]" Adams Ford was also charged with violating 12 C.S.R. 60-5.010(2)(M) for its May 28 advertisement. This regulation prohibits licensed dealers from advertising "a motor vehicle with regards [sic] to the invoice price, dealer cost, or any similar term or phrase as consumers equate invoice with cost which is misleading and prohibited[.]"

Following a disciplinary hearing, the hearing officer concluded that Adams Ford violated both regulations. For violating 12 C.S.R. 60-5.010(2)(AA), a private letter of reprimand was to be issued. For violating 12 C.S.R. 60-5.010(2)(M), the hearing officer ordered the dealership license suspended for two days.

Adams Ford appealed the decision of the hearing officer to the Commission as provided by 12 C.S.R. 60-4.040(9). In an opinion dated May 23, 1995, the Commission concluded that the facts did not support the hearing officer's imposition of a two-day suspension. The Commission ordered a private reprimand for both violations.

On October 21, 1994, prior to the administrative hearing, Adams Ford filed a declaratory judgment action in the circuit court pursuant to sec. 536.050. Adams Ford claimed that the Commission's regulations violate its constitutional rights. On June 19, 1995, after the Commission issued its opinion, Adams Ford filed a petition in the circuit court seeking reviewing of the agency's decision. The circuit court consolidated both actions. The parties agreed that the record of the administrative proceeding would serve as the record for disposition of the case in the circuit court. The parties filed cross-motions for summary judgment. Summary judgment was entered upholding the constitutionality of the advertising regulations.

III.

In its first point on appeal, Adams Ford argues that the circuit court failed to state all of the relevant and undisputed facts in the court's finding of facts and conclusions of law. However, a circuit court's grant of summary judgment is reviewed de novo. ITT Commercial Fin. Corp. v. Mid-America Marine Supply Corp., 854 S.W.2d 371, 376 (Mo. banc 1993). Summary judgment is proper if the record, viewed in a light most favorable to the non-moving party, shows that no genuine issue of material fact exists and that the moving party is entitled to judgment as a matter of law. Rule 74.04(c)(3). This Court is not limited to consideration of the factual findings of the circuit court. In sum, any deficiency in the findings of fact is of no consequence in this appeal.

IV.

Adams Ford asserts that the advertising regulations violate equal protection in that the advertising regulations only apply to "resident" motor vehicle dealers. Minimal scrutiny is required unless it is shown that the regulation applies to a suspect class or the regulation impinges upon a fundamental right. There is nothing suspect about a class that includes only automobile dealerships doing business inside the state. In addition, as is further discussed under Part VI of this opinion, there is no free speech violation and, thus, no impingement on a fundamental right. Only minimal scrutiny is required, that is, an inquiry as to whether the regulations are rationally related to a legitimate governmental interest. See Dunagin v. City of Oxford, Miss., 718 F.2d 738, 752-53 (5th Cir.1983), cert. denied, 467 U.S. 1259, 104 S.Ct. 3553, 82 L.Ed.2d 855 (1984); see also Williams v. Vermont, 472 U.S. 14, 22-23, 105 S.Ct. 2465, 2471-72, 86 L.Ed.2d 11 (1985); Metropolitan Life Ins. Co. v. Ward, 470 U.S. 869, 881, 105 S.Ct. 1676, 1683, 84 L.Ed.2d 751 (1985).

The Commission's regulations serve a legitimate governmental interest by ensuring that consumers who purchase vehicles from car dealers doing business in this state are not misled by dealers' advertisements. Assuming, without deciding, that the legislature could have empowered the Commission to regulate in-state advertisement by all dealers, licensed or unlicensed, this conclusion is not dispositive. The state may proceed step-by-step to ameliorate a perceived evil or it may perceive evils in the same field to be of different dimensions and proportions, requiring different remedies. Williamson v. Lee Optical, 348 U.S. 483, 489, 75 S.Ct. 461, 465, 99 L.Ed. 563 (1955).

In this case, the legislature may have determined that it was difficult, if not impossible, for the Commission to enforce its regulations against out-of-state...