Friday v. Ethanol Corp.

• Decision Date: 30 December 1988
• Citation: 539 So.2d 208
• Parties: Rachel FRIDAY and Mike Neely v. ETHANOL CORPORATION and Southeastern Energy Corporation. 87-306.
• Court: Alabama Supreme Court

Page 208

539 So.2d 208

Rachel FRIDAY and Mike Neely v. ETHANOL CORPORATION and Southeastern Energy Corporation.

87-306.

Supreme Court of Alabama.

Dec. 30, 1988.

Rehearing Denied April 21, 1989.

Philip H. Butler of Robison & Belser, Montgomery, for appellants.

Lloyd W. Gathings of Gathings & Davis, Birmingham, for appellees The Ethanol Corp. and Southeastern Energy Corp.

Wesley Romine of Morrow, Romine & Pearson, Montgomery, for appellees/intervenors Alabama Oil Supply, et al.

Robert A. Huffaker and Holley C. Knowles of Rushton, Stakely, Johnston & Garrett, Montgomery, for amici curiae Alabama Farm Bureau Federation, John Dorrill, Sam J. Darwin, and F.B. Ellison.

HOUSTON, Justice.

The Alabama Legislature, in its 1987 Regular Session, enacted Act No. 87-277. This Act became law under Article V, § 125, Alabama Constitution of 1901, without approval by the Governor. This Act amended Ala.Code 1975, § 8-17-82, which had previously provided:

"(a) Each person selling, offering for sale, storing or using in the state any petroleum product must label, or cause to be labeled, each tank car, tank, barrel, pump or other container in which such petroleum product is contained or marketed with the words 'guaranteed legal standards' and with an additional word or words denoting the precise character of the petroleum product in the container so labeled. Each word in such label shall be legibly printed in letters not less than one-half inch in height.

"(b) An alternate manner for container and other labeling information as required under this section may be prescribed by the board of agriculture and industries pursuant to rules and regulations which shall be consistent with the evident intent and purposes of this section."

That Code section was amended by adding the following as subsection (c):

"(c) In addition to the requirements of subsections (a) and (b) of this section each person selling, offering for sale, storing or using in the state any petroleum product to be used as a motor fuel containing a minimum of 10% blend of ethyl alcohol of a purity of at least 99% denatured in conformity with one of the approved methods set forth by the U.S. Department of Treasury Division of Alcohol, Tobacco and Firearms and derived from agricultural or forest products or other renewable resource products commonly known as gasohol must label or cause to be labeled each container, pump, or dispenser from which such petroleum product is sold or dispensed with the word 'GASOHOL.' Each such container or pump shall be conspicuously, clearly and distinctly labeled on each side which faces the motor vehicle and readily visible in an upright position with the word vehicle and readily visible in an upright position with the word [these last eleven words were repeated in the Act] 'GASOHOL' printed in black letters at least three inches in height and one-quarter inch in width on a yellow background. The board of agriculture and industries shall have authority to make and issue rules and regulations relating to the implementation of the provisions of this subsection; provided, however, no alternate method of labeling shall be prescribed by such board for this subsection nor shall the requirements of this subsection be in any manner delayed."

The Ethanol Corporation and Southeastern Energy Corporation, who market, distribute, and retail ethanol in the State of Alabama, filed this declaratory judgment action in the Circuit Court of Montgomery County, seeking a temporary restraining order, preliminary injunction, and permanent injunction against the enforcement of subsection (c) of Act No. 87-277, contending that subsection (c) violated the due process and equal protection guarantees of the Alabama and United States Constitutions.

The Attorney General of the State of Alabama and the Commissioner of the State of Alabama Department of Agriculture and Industry were defendants in the circuit court. The trial court permitted Rachel Friday and Mike Neely, Alabama citizens who use motor fuels in Alabama, to intervene as defendants.

A temporary restraining order was entered by the trial court, and all parties agreed to treat the hearing for the preliminary injunction as a final hearing on the merits for a permanent injunction. The testimony was heard ore tenus by the trial court over a period of three days. Thereafter, the trial court entered the following order:

"This matter having come before the Court, ore tenus, for trial on the merits, and the Court having taken oral testimony from witnesses for all of the parties, and having reviewed all exhibits and considered the legal authorities and arguments submitted by the parties, and further understanding and concluding that the legal standard to be applied in this matter is 'beyond a reasonable doubt', State ex rel. Wilkinson v. Murphy, 186 So. 487 & 237 Ala. 332 (1939), finds that it has been proven by the plaintiffs beyond a reasonable doubt that there are no discernible differences between gasoline petroleum [sic] and gasohol.

"Further, it has been proven that the public is not in any greater danger by using gasohol than it is by using gasoline. Consequently, the Court fails to find any greater legitimate governmental interest in alerting the public to the presence or availability of 'gasohol' as opposed to the presence or availability of 'gasoline'.

"It is, therefore, the Court's opinion that Act No. 87-277 is unconstitutional on its face; it is discriminatory on the basis that it singles out gasohol as a more noticeable petroleum than it does gasoline. The Court can find no rational governmental interest or reason why labeling of the products should be different. There is no basis for the distinction.

"Additionally, the Act, supra, is vague and ambiguous and would be virtually impossible to enforce. The Act states that the pumps 'shall be conspicuously, clearly and distinctly labeled on each side which faces the motor vehicle and readily visible in an upright position with the word vehicle and readily visible in an upright position with the word Gasohol printed in black letters at least three inches in height and one-quarter inch in width on a yellow background.' Persons of common intelligence would have to guess as to what this language means.

"A statute which ... requires the doing of an act in terms so vague that men of common intelligence must necessarily guess at its meaning and differ as to its application is unconstitutional, Zwickler v. Koota, 389 U.S. 241 [88 S.Ct. 391, 19 L.Ed.2d 444] (1967).

"Based on the foregoing, it is hereby ORDERED, ADJUDGED and DECREED that Act No. 87-277 is declared unconstitutional, null and void."

The Attorney General and the intervenors, Friday and Neely, appealed to this Court. Subsequently, the Attorney General's appeal (87-305), was dismissed, pursuant to his motion for voluntary dismissal.

The first issue presented to us is whether the ore tenus standard of review applies.

This Court in Keeton v. Bank of Red Bay, 466 So.2d 937, 940 (Ala.1985), wrote:

"[I]t is fundamental law in Alabama that when the trial judge sits as the trier of fact, and hears ore tenus evidence, his resolution of the factual issues, based upon that evidence, is presumed correct and will be affirmed by this Court if, under any reasonable aspect, it is supported by any credible evidence."

If the ore tenus standard of review applies, we must presume that the following factual findings are correct:

(1) "[T]here are no discernible differences between gasoline ... and gasohol."

(2) "[T]he public is not in any greater danger by using gasohol than it is by using gasoline."

We have studied the excellent briefs submitted by the parties and the amici curiae and have reviewed the testimony and exhibits. The factual findings are supported by credible evidence. They are not plainly erroneous, for there is no error that is obvious to this Court's mind or senses or distinctly recognizable by this Court. The factual findings, while perceived by the appellants in their adversarial position as unjust, are not readily or instantly perceived by this Court as being so, so they are not manifestly unjust.

Likewise, the trial court used the "beyond a reasonable doubt" standard, which this Court has held is the proper standard to use when the constitutionality of an act is challenged; see Eagerton v. Exchange Oil & Gas Corp., 404 So.2d 1, 7 (Ala.1981), aff'd in part, rev'd in part, 462 U.S. 176, 103 S.Ct. 2296, 76 L.Ed.2d 497 (1983), on remand, 440 So.2d 1031 (Ala.1983).

If the ore tenus standard is the correct standard of review, then we must test the constitutionality of Act No. 87-277, with the trial court's findings of fact as established facts and in doing so must find that the Legislature exercised its police power arbitrarily or capriciously and therefore the Act must be held to be unconstitutional. Alabama State Federation of Labor v. McAdory, 246 Ala. 1, 13, 18 So.2d 810 (1944), cert. dismissed, 325 U.S. 450, 65 S.Ct. 1384, 89 L.Ed. 1725 (1945); Reed v. Brunson, 527 So.2d 102, 116 (Ala.1988).

By using the ore tenus standard when the constitutionality of legislation is challenged, this Court would permit the findings of a single circuit judge, elected by the electors within a single circuit, to invalidate legislation enacted by the Legislature elected by the electorate throughout the State of Alabama and invested with the legislative power of the state by Article IV, § 44, Alabama Constitution of 1901, which legislation was permitted to become law by the Governor, who was elected by the electorate of the State of Alabama.

Article III, § 42, Alabama Constitution of 1901, provides as follows:

"The powers of the government of the State of Alabama shall be divided into three distinct departments, each of which shall be confided to a separate body of magistracy, to wit: Those which are legislative, to one; those which are executive, to another; and those which are judicial, to...