Galesburg Const. Co. Inc. of Wyoming v. Board of Trustees of Memorial Hospital of Converse County

• Decision Date: 09 March 1982
• Docket Number: No. 5607,5607
• Citation: 641 P.2d 745
• Parties: GALESBURG CONSTRUCTION COMPANY, INC. OF WYOMING, Plaintiff, v. The BOARD OF TRUSTEES OF MEMORIAL HOSPITAL OF CONVERSE COUNTY, Defendant.
• Court: Wyoming Supreme Court

Page 745

641 P.2d 745

GALESBURG CONSTRUCTION COMPANY, INC. OF WYOMING, Plaintiff, v. The BOARD OF TRUSTEES OF MEMORIAL HOSPITAL OF CONVERSE COUNTY, Defendant.

No. 5607.

Supreme Court of Wyoming.

March 9, 1982.

Don W. Riske, Andrews, Andrews & Riske, P. C. (argued), Cheyenne, for plaintiff.

Steven F. Freudenthal, Atty. Gen., Bruce A. Salzburg, Senior Asst. Atty. Gen., and I. Vincent Case, Jr. (argued), Douglas, for defendant.

Before ROSE, C. J., and RAPER, THOMAS, ROONEY and BROWN, JJ.

RAPER, Justice.

We are presented in this case with a reserved question pursuant to § 1-13-101, W.S.1977. ¹ The question set out in plaintiff's brief is whether § 9-8-302, W.S.1977, violates Art. I, § 6, of the Wyoming Constitution, ² Art. I, § 3, of the Wyoming Constitution ³ and § 1 of the Fourteenth Amendment to the United States Constitution. ⁴ The questioned statute, § 9-8-302, supra provides:

"Whenever a contract is let by the state, or any department thereof, or any county, city, town, school district, high school district, or other public corporation of the state for the erection, construction, alteration, or repair of any public building, or other public structure, or for making any addition thereto, or for any public work or improvements, such contract shall be let, if advertisement for bids is not required, to a resident of the state. If advertisement for bids is required the contract shall be let to the responsible resident making the lowest bid if such resident's bid is not more than five percent (5%) higher than that of the lowest responsible nonresident bidder."

We shall uphold the statute.

On June 1, 1981, Galesburg Construction Company (Galesburg) was issued its Certificate of Incorporation by the Secretary of State for the State of Wyoming. In July of that year, the Board of Trustees of Memorial Hospital of Converse County (Hospital) announced bidding would be held for a construction project in Douglas. Galesburg submitted a bid on the project to the Hospital. On August 27, 1981, the bids were opened and it was discovered that Galesburg was the lowest bidder for the project. However, on September 14, 1981, the Hospital informed Galesburg that, since it did not qualify as a "resident" of the state of Wyoming, as that term is defined in § 9-8-301, W.S.1977, ⁵ and because its bid was not more than five percent lower than the lowest resident bidder under § 9-8-302, supra, it would not be awarded the project.

On September 23, 1981, Galesburg filed suit seeking to have § 9-8-302 as applied to it declared unconstitutional. ⁶ On October 7, 1981, the parties and the Wyoming Attorney General entered into a stipulation setting forth the uncontroverted facts and requesting that the question of the statute's constitutionality be reserved to this court. Pursuant to that request, the district judge filed his findings of fact and ordered that the constitutional question be reserved. The district court fully complied with the rule that all preliminary matters including factual questions must first be disposed of before the supreme court will consider a reserved constitutional question. State v. Rosachi, Wyo., 549 P.2d 318 (1976).

I

When presented with a constitutionally based challenge to a statute, this court presumes the statute to be constitutional unless the party mounting the challenge proves otherwise. Nickelson v. People, Wyo., 607 P.2d 904 (1980). This is because there exists a strong presumption in favor of constitutionality. Sorenson v. State, Wyo., 604 P.2d 1031 (1979). Any doubt in the matter must be resolved in favor of the statute's constitutionality. Washakie County School District Number One v. Herschler, Wyo., 606 P.2d 310 (1980), cert. denied 449 U.S. 824, 101 S.Ct. 86, 66 L.Ed.2d 28. Thus, before we will strike down a statute we must find that it clearly violates one of the principles of our state and national constitutions by which we are bound. When there is a transgression of either of those documents, we must not and will not hesitate to declare the legislative enactment invalid. Washakie County School District Number One v. Herschler, supra.

II

Though Galesburg stated the question for us in terms which included challenges based upon Art. I, §§ 3 and 6 of the Wyoming Constitution, these provisions were not argued as authority in the brief, and, in fact, were not mentioned other than in the statement of the issues. A constitutional question reserved to the supreme court from the district court is too important to be answered at random and it will not be answered unless fully presented and argued. Salt Creek Transportation Company v. Public Service Commission, 37 Wyo. 488, 263 P. 621 (1928). The real crux of Galesburg's challenge can be found in the two-tiered equal protection-due process analysis which has been developed by the United States Supreme Court in connection with the Fourteenth Amendment, supra. Galesburg has argued that under such an approach § 9-8-302, supra, must fall.

The test for determining whether a legislative enactment passes muster under an equal-protection or due-process challenge exists on two levels. The decision as to which level of scrutiny should be employed has often been as important as the actual application of the test. Strict scrutiny, which requires a much more rigorous examination, is used when the statute in question employs a suspect classification or traverses a fundamental right. Under strict scrutiny, before the statute can be upheld, the reviewing court must find that the statute serves some compelling state interest and that it is narrowly drawn so as to not unnecessarily interfere with a fundamental right or use a suspect classification. Washakie County School District Number One v. Herschler, supra.

Under a lower level of scrutiny, the reviewing court must merely determine whether the statute serves a legitimate state interest. If so, all that is required is that the statute be rationally related to the advancement of that interest. Unless these conditions are shown not to exist, the statute must be upheld. Washakie County School District Number One v. Herschler, supra. ⁷

III

Galesburg argues that we should evaluate the constitutionality of § 9-8-302, supra, with strict scrutiny. It supports this position by string citing other cases in which durational residency requirements were subjected to strict scrutiny. However, Galesburg failed to carefully consider why each of those cases deserved the higher level of scrutiny. ⁸

In each of the cited cases either a fundamental right or a suspect classification was implicated. The fundamental rights generally found injured by durational residency requirements in those cases were the right of interstate travel and the right to vote. Dunn v. Blumstein, 405 U.S. 330, 92 S.Ct. 995, 31 L.Ed.2d 274 (1972); Shapiro v. Thompson, 394 U.S. 618, 89 S.Ct. 1322, 22 L.Ed.2d 600 (1960); State v. Van Dort, Alaska, 502 P.2d 453 (1972); Jarmel v. Putnam, 179 Colo. 215, 499 P.2d 603 (1972); Delgiorno v. Huisman, Wyo., 498 P.2d 1246 (1972). These fundamental rights have never been extended to corporations under the Fourteenth Amendment. In fact, the language in the Amendment seemingly excludes corporations by referring to "(a)ll persons born or naturalized in the United States." Corporations are fictitious entities incapable of being born (in a biological sense), voting, or traveling. They do not possess those fundamental rights.

Neither can we accept that Galesburg is a member of a suspect classification. Such status is usually only awarded to racial and nationality, minorities, victims of invidious discrimination. McLaughlin v. Florida, 379 U.S. 184, 192, 85 S.Ct. 283, 288, 13 L.Ed.2d 222 (1964). There is nothing in the record showing Galesburg to belong to such a minority. Further, such status has never been given to corporations since the Fourteenth Amendment was designed to protect people not business organizations. Accordingly the statute as applied to Galesburg does not warrant strict scrutiny, and thus we must employ the lower level of scrutiny.

IV

The recognized testing criteria to determine whether a state statute violates equal protection rights under the rational-basis standard are summarized in Morey v. Doud, 354 U.S. 457, 463-464, 77 S.Ct. 1344, 1 L.Ed.2d 1485 (1957):

" '1. The equal protection clause of the Fourteenth Amendment does not take from the State the power to classify in the adoption of police laws, but admits of the exercise of a wide scope of discretion in that regard, and avoids what is done only when it is without any reasonable basis and therefore is purely arbitrary. 2. A classification having some reasonable basis does not offend against that clause merely because it is not made with mathematical nicety or because in practice it results in some inequality. 3. When the classification in such a law is called in question, if any state of facts reasonably can be conceived that would sustain it, the existence of that state of facts at the time the law was enacted must be assumed. 4. One who assails the classification in such a law must carry the burden of showing that it does not rest upon any reasonable basis, but is essentially arbitrary.' (Citation.)"

Viewing the statute, as it is applied to Galesburg, under the lower level of scrutiny, we must determine whether the statute serves a legitimate state interest and whether it is rationally related to the advancement of that interest. Previously it has been said that the purpose of § 9-8-302, supra, was "to encourage local industry." Opinions, Attorney General of Wyoming, No. 49, June 24, 1963, at page 240. ⁹ We agree that this appears to have been the legislature's likely intent. We further hold that this is definitely a legitimate state interest. Accordingly, the only question left is whether the statute as drawn is rationally related to the advancement of this state interest. We hold that it is.

By giving Wyoming corporations ¹⁰ a...