Foster's Inc. v. City of Laramie

• Decision Date: 29 April 1986
• Docket Number: No. 85-11,85-11
• Citation: 718 P.2d 868
• Parties: FOSTER'S INC., d/b/a Foster's Country Corner, William Murphy and Maureen Murphy, d/b/a Travelodge Motel, D And R Enterprises, Inc. d/b/a Camelot Motel, Ethyl Wadell, d/b/a 2 Bar S, Walker Enterprises, d/b/a Downtowner Motel and Gaslight Motel, Appellants (Petitioners), v. CITY OF LARAMIE and Wyoming Community Development Authority, Appellees (Respondents).
• Court: Wyoming Supreme Court

Page 868

718 P.2d 868

FOSTER'S INC., d/b/a Foster's Country Corner, William Murphy and Maureen Murphy, d/b/a Travelodge Motel, D And R Enterprises, Inc. d/b/a Camelot Motel, Ethyl Wadell, d/b/a 2 Bar S, Walker Enterprises, d/b/a Downtowner Motel and Gaslight Motel, Appellants (Petitioners), v. CITY OF LARAMIE and Wyoming Community Development Authority, Appellees (Respondents).

No. 85-11.

Supreme Court of Wyoming.

April 29, 1986. ^*

C.M. Aron (argued) of Aron and Hennig and Warren A. Lauer, Laramie, for appellants (petitioners).

Thomas S. Smith, City Atty. and Kathleen A. Hunt (argued), Asst. City Atty., Laramie, for appellee (respondent) City of Laramie.

David R. Nicholas (argued), and John M. Burman of Corthell and King, Laramie, and Alvin L. Wiederspahn of Oitzinger, Mullendore and Martin, Cheyenne, for appellee (respondent) Wyoming Community Development Authority.

Before THOMAS, C.J., and ROSE, ^** ROONEY, ^*** BROWN and CARDINE, JJ.

CARDINE, Justice.

In this appeal we must decide whether the Wyoming Community Development Authority (WCDA) and Laramie City Council should have granted a full evidentiary hearing to motel owners who opposed the issuance of economic development project bonds. The WCDA and the City Council held only limited hearings before issuing the bonds to finance a new convention center at the Holiday Inn of Laramie. We will hold that the hearings were sufficient to satisfy both statutory and constitutional requirements.

BACKGROUND

The legislature created the WCDA in 1975, defining it as "a body corporate operating as a state instrumentality operated solely for the public benefit." Section 9-7-104(a), W.S. 1977, Cum.Supp.1985; §§ 9-7-101 through 9-7-124, W.S.1977, Cum.Supp.1985 (Wyoming Community Development Authority Act). The legislature amended the Act in 1984 to permit the WCDA to "[i]ssue bonds for purposes of financing any economic development projects." Section 9-7-122(a)(i), W.S.1977, Cum.Supp.1985. Section 9-7-103(a)(iv) defines "economic development project" to include a wide variety of undertakings. ¹

The WCDA must comply with the procedural and substantive provisions of § 9-7-122, W.S.1977, Cum.Supp.1985, when it issues economic development project bonds (EDP bonds). The local governing body of the municipality or county in which the project is located must approve the project, and the governing body and the agency must hold a joint public hearing. Section 9-7-122(b) and (c), W.S.1977, Cum.Supp.1985. The bonds may issue only after the WCDA and the governing body determine that the project would:

"(i) Create new or additional employment opportunities;

"(ii) Expand the tax base and increases [increase] sales, property or other tax revenues to the municipality, county or state;

"(iii) Maintain and promote a stable, balanced and diversified economy among agriculture, natural resource development, business, commerce and trade;

"(iv) Promote or develop use of agricultural, manufactured, commercial or natural resource products within or outside the state; and "(v) Not result in an unfair competitive disadvantage for existing business in the municipality, county or state." Section 9-7-122(d), W.S.1977, Cum.Supp.1985.

FACTS

In July 1984, Sagebrush Properties, Inc. petitioned the WCDA and the City of Laramie to issue an EDP bond in an amount not to exceed $5,500,000 to finance a new convention facility for the Holiday Inn of Laramie. The Laramie City Council and WCDA scheduled a joint public hearing to consider the proposal and published notices of the hearing in Laramie and Casper newspapers.

Various Laramie motel owners or their representatives appeared at the joint hearing on August 9, 1984, and objected to the proposed bond issue on the ground that it would put their businesses at an unfair competitive disadvantage. Proponents of the project spoke of the advantages the facility would bring to the community including increased employment and tax revenues. They argued that the convention center would enhance, rather than impair, the business of existing motels. The proponents based many of their comments on a market study prepared for Sagebrush Properties by an accounting firm. The study was not submitted to the city council at the hearing nor made available to the opponents of the project. However, a written summary of the study was provided to the council after the hearing. The motel owners objected to these informal procedures as a denial of their rights to confront the proponents' evidence.

On August 21, 1984, the city council adopted a resolution approving the convention center as an economic development project qualified for financing by the WCDA. On the question of unfair competitive disadvantage, the city council specifically found

"that after the proposed Project is in full operation, the Project should:

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"(f) not result in unfair competitive disadvantage for any existing business in the City since, among other things, there are no other large commercial convention centers or Holidome-type facilities in Laramie. The presently existing 100 guest rooms, and the 59 new guest rooms are in the intermediate price range, which is a price range above other hotels and motels located in Laramie. Of the 59 new guest rooms, 13 will be two-room suites. Presently, no other motel or hotel in Laramie offers such two-room suites. Although equivalent facilities exist in Casper, Cheyenne, and Sheridan, this Project will not compete unfairly with any existing business in those cities or elsewhere in the State."

On October 5, 1984, based on the record of the joint public hearing and the resolution adopted by the city council, the WCDA authorized the issuance of the EDP bonds.

Invoking the Wyoming Administrative Procedure Act, §§ 16-3-101 through 16-3-115, W.S.1977, the motel owners petitioned the district court for review of the actions taken by the city council and the WCDA in authorizing the bond issue. The court dismissed the petition against the City of Laramie on the ground that the city's governing body is not an agency subject to the review provisions of the Wyoming Administrative Procedure Act but certified the action against the WCDA directly to this court pursuant to Rule 12.09, W.R.A.P. We must decide whether the city was properly dismissed and whether the WCDA properly issued the bonds.

ISSUES

The motel owners raise the following issues for review:

"A. Does § 9-7-122, Wyoming Statutes (1977) impose on the administrative agency and the governing body the requirement to provide notice and a hearing to affected parties?

"B. Is a constitutionally protected property interest created, with the resulting right to a full due process hearing, by a statute which grants to an existing business the right to be free from unfair competitive disadvantage?"

The proponents raise additional questions concerning the jurisdiction of this court to consider the petitions for review and the standing of the motel owners to complain about the bond authorization.

JURISDICTION OVER THE CITY COUNCIL

The project proponents contend that neither the Laramie City Council nor the WCDA is an agency governed by the review provisions of the Wyoming Administrative Procedure Act, supra, and, therefore, the motel owners' petitions for review must be dismissed. The Administrative Procedure Act provides only for judicial review of action or inaction taken by an agency. Section 16-3-114(a), W.S.1977. An agency is

"any authority, bureau, board, commission, department, division, officer or employee of the state, a county, city or town or other political subdivision of the state, except the governing body of a city or town, the state legislature and the judiciary." Section 16-3-101(b)(i), W.S.1977.

Administrative decisions by a city council are not reviewable pursuant to the procedures of the Administrative Procedure Act because a city council is not an agency. City of Evanston v. Whirl Inn, Inc., Wyo., 647 P.2d 1378 (1982). The district court properly dismissed the petition for review.

The WCDA, unlike the city council, is an agency or instrumentality of the state and falls within the purview of the Administrative Procedure Act. Witzenburger v. State ex rel. Wyoming Community Development Authority, Wyo., 575 P.2d 1100, 1131 (1978); § 16-3-101(b)(i), W.S.1977. The district court, therefore, had jurisdiction to review the action taken by the WCDA as a result of the timely petition to that court. This court obtained jurisdiction over the matter upon certification by the district court.

STANDING

Section 16-3-114(a) authorizes judicial review of an agency action only for those persons "aggrieved or adversely affected in fact" by the challenged action. The WCDA contends that the motel owners have not demonstrated a direct injury from the bond's approval and, therefore, have no standing to challenge the agency's decision in court.

We thoroughly analyzed the requirements for standing to seek judicial review of an administrative decision in Matter of Various Water Rights in Lake DeSmet Reservoir, Wyo., 623 P.2d 764 (1981). We said that a potential litigant must show injury or potential injury:

" 'Standing to sue' is a right to relief and goes to the existence of a personal claim for relief. It includes a legal disability, such as insanity or infancy, but it is more. It involves a sufficient stake in an otherwise justiciable controversy to obtain judicial resolution of that controversy. It is closely related to the doctrine of mootness. It requires sufficient personal interest in the outcome of litigation by way of injury or potential injury to warrant consideration by the court." 623 P.2d at 767.

To establish the requisite injury, a petitioner must allege a perceptible, rather than a speculative, harm resulting from the agency action:

"[A] party is not considered 'aggrieved' when there is only a remote possibility of injury.

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" '[P]leadings must be something more than an ingenious...