Blue v. McBride
| Decision Date | 16 April 1993 |
| Docket Number | No. 67778,67778 |
| Citation | 252 Kan. 894,850 P.2d 852 |
| Parties | Aleta BLUE; Donald R. Steele; Kansas Credit Union League; Catholic Family Federal Credit Union; Mid American Credit Union; Boeing Wichita Employees Credit Union; St. Joseph Medical Credit Union; and Credit Union of America, Appellees, v. Betty McBRIDE, Director of Division of Vehicles, Kansas Department of Revenue; and The State of Kansas, Appellants. |
| Court | Kansas Supreme Court |
Syllabus by the Court
1. The burden of proof is on the party challenging the constitutionality of a statute.
2. The constitutionality of a statute is presumed, all doubts must be resolved in favor of its validity, and before the statute
may be stricken down, it must clearly appear the statute violates the constitution.
3. Courts do not substitute their social and economic beliefs for the judgment of the legislative bodies and are not concerned with the wisdom, need, or appropriateness of legislation.
4. An economic regulation challenged on substantive due process grounds will not be overturned as long as there is an evil at hand for correction and it might be thought that the particular legislative measure was a rational way to correct it.
5. The due process clause does not prohibit states from anticipating and addressing problems which have yet to manifest themselves as long as the problem is at least rationally conceivable.
6. For legislative classification in economic regulation to be violative of the equal protection clause of the Fourteenth Amendment, the classification must amount to an invidious discrimination. Or, put another way, unless a statutory classification trammels fundamental personal rights or is drawn upon inherently suspect distinctions such as race, religion, or alienage, the constitutionality of statutory discrimination is presumed and the challenged classification will be upheld if rationally related to a State interest.
7. The legal interpretation of a statute by an administrative agency charged with its enforcement is entitled to a great deal of judicial deference.
8. In determining constitutionality, it is the court's duty to uphold a statute under attack rather than defeat it and, if there is any reasonable way to construe the statute as constitutionally valid, that should be done.
9. In an action challenging the constitutionality of S.B. 486 (L.1990, ch. 52), which abolishes the brokering of automobiles, the record is examined and it is held that the legislative enactment is not violative of the due process and equal protection clauses of the Fourteenth Amendment, and, as construed, is not violative of the First Amendment of the United States Constitution, all as is more fully set forth in the opinion.
L.N. Collier, Special Asst. Atty. Gen., argued the cause and was on the brief, for appellants.
David G. Seely, of Fleeson, Gooing, Coulson & Kitch, Wichita, and Curtis A. Loub, of Boyer, Donaldson & Stewart, Wichita, argued the cause, and Gerrit H. Wormhoudt, of Fleeson, Gooing, Coulson & Kitch, and Michael L. North, of Boyer, Donaldson & Stewart, were with them on the briefs, for appellees.
Patrick R. Barnes, of Scott, Quinlan & Hecht, Topeka, was on the brief, for amicus curiae Kansas Motor Car Dealers Ass'n.
This is an action by two individuals engaged in the automobile brokering business and six credit unions (who refer members interested in the purchase of new automobiles to automobile brokers) against the defendants Director of the Division of Vehicles of the Kansas Department of Revenue and the State of Kansas seeking: (1) a declaratory judgment that S.B. 486 (L.1990, ch. 52) is unconstitutional and void; (2) temporary and permanent injunctions preventing the enforcement of S.B. 486; and (3) attorney fees and costs pursuant to 42 U.S.C. § 1988 (1988). The purpose of S.B. 486 was to eliminate the business of brokering new and used automobiles in the State of Kansas. The district court: (1) held S.B. 486 was violative of the First and Fourteenth Amendments to the Constitution of the United States and the corresponding provisions of the Kansas Constitution; (2) entered temporary and permanent injunctions against the enforcement of S.B. 486; and (3) awarded plaintiffs attorney fees and costs. The defendants appeal from said orders and judgments.
Not all automobile brokering businesses operate in precisely the same manner, but they share many of the same characteristics. A good starting point would be a rather detailed statement of how the individual plaintiffs herein operate their businesses.
Ms. Blue operates a business known as Signature Fleet and Leasing (Signature). Ms. Blue holds licenses as a new automobile broker, a used vehicle dealer, and a new car salesman. The latter license is through Hofmeier Chevrolet of Harper, Kansas, and covers Chevrolet, Oldsmobile, and Pontiac automobiles. Ms. Blue's husband holds a salesman's license through John North Ford of Emporia. Signature handles Dodge, Chrysler, Jeep, and Eagle vehicles through Ely Rush, a licensed salesman with Zeller Motor Company of Arkansas City. Additionally, Signature handles some imports by direct contact with their dealers. Signature's office is in Andover, Kansas. Its staff is Ms. Blue and a secretary. It has no inventory of automobiles, showroom, parts, or repair departments. Ms. Blue's husband has a full-time job not involved with Signature. His involvement with Ms. Blue's business is with some but not all of the Ford sales.
Ms. Blue has an arrangement with the dealers involved whereby the dealers will sell vehicles to Signature's customers on the basis of invoice price plus $100. The dealer pays Signature/Ms. Blue a fee or commission for each vehicle sold under the arrangement. Most of the sales involved come through referrals from area credit unions with whom Ms. Blue has arrangements. No fees or commissions are paid to the referring credit unions by Ms. Blue, the dealers, or credit union members who purchase vehicles after having been referred to Ms. Blue. The credit union's gain from the transaction involves only good will through offering a service to its members and profit from the purchase loan if the purchase is financed through the referring credit union. The credit unions have no agreements or contacts with the participating dealers.
The system operates in the following manner. The credit union offers the service (it may or may not advertise the service) that: (1) Members may avoid the hassle of negotiating a new car purchase with a dealer by utilizing the credit union's service; (2) all vehicles involved may be purchased at $100 over the manufacturer's invoice price; (3) information may be obtained on prices, options, colors, standard equipment, warranties, and availability of any Ford, Chevrolet, Chrysler, etc. vehicles; and (4) reasonable financing may be obtained through the credit union. If a credit union member desires the service or just wants information on vehicles, he or she is referred to Ms. Blue. Through a computer software program, Ms. Blue can provide information to the customer on any vehicle models in the program. If the customer decides to purchase a vehicle, Ms. Blue writes up the order on forms provided by the dealer involved (Hofmeier Chevrolet if it is a Chevrolet, Pontiac, or Oldsmobile, for example). The customer gives Ms. Blue a deposit made out to the dealer. If the dealer accepts the order, the dealer fills out all of the required papers for securing the title, odometer statement, warranty information manual, etc., the same as the dealer would do if the customer were dealing directly with the dealer. Delivery of the vehicle may occur at the Signature office, the customer's home, the dealership, or other agreed upon place.
Mr. Steele lives in the Wichita area. He is licensed as a new car salesman through Zeller Motor Company but transacts business with many dealers. Mr. Steele's wife is a licensed salesman with Hofmeier Chevrolet. His daughter holds a license through John North Ford. Each of these women has other full-time avocations or occupations. Their involvement in automobile sales is minimal and irregular. Until the day before trial herein, Mr. Steele operated his business from a desk located in the Mid-American Credit Union in Wichita. No rent was paid, although Mr. Steele paid his telephone expense. Nothing about the appearance of the operation indicated Mr. Steele was not a credit union employee. From the credit union Mr. Steele moved to rented quarters. Like Ms. Blue, virtually all of the transactions he was involved in came through credit union referrals. Mr. Steele has no showroom, parts, or repair In summary then, Ms. Blue and Mr. Steele receive referrals of potential new car buyers from credit unions. They serve as middlemen between the customer and the participating dealer on sales. Additionally, they provide information to prospective customers on a wide variety of vehicles manufactured in the United States. Other variations in the operation of the brokering business may exist, but the middleman role appears to be a constant and may be considered the primary characteristic of a broker.
facilities. Arrangements exist for the handling of trade-ins, but the details thereof are of [252 Kan. 898] no particular significance herein. Services offered by the credit union and Mr. Steele, as well as the processing of orders, are essentially the same as outlined in our statements relative to Ms. Blue's operation.
The distribution and sales of new motor vehicles in Kansas is, as in most states, a highly regulated business. Persons and business entities engaged in virtually every aspect therein are required to be licensed whether they be manufacturers, distributors, factory representatives, distributor representatives, dealers, salesmen, etc. The Vehicle Dealers and Manufacturers Licensing Act (K.S.A. 8-2401 et...
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