A. & H. Transp., Inc. v. Mayor and City Council of Baltimore

• Decision Date: 11 April 1968
• Docket Number: No. 118,118
• Citation: 240 A.2d 601,249 Md. 518
• Parties: A. & H. TRANSP., INC., t/a Savon Gas Stations v. MAYOR AND CITY COUNCIL OF BALTIMORE et al. MARYLAND ASSOCIATION OF PETROLEUM RETAILERS, INC. and Mayor and City Council of Baltimore v. Gordon J. BAKER.
• Court: Maryland Court of Appeals

Page 518

249 Md. 518

240 A.2d 601

A. & H. TRANSP., INC., t/a Savon Gas Stations v. MAYOR AND CITY COUNCIL OF BALTIMORE et al.

MARYLAND ASSOCIATION OF PETROLEUM RETAILERS, INC. and Mayor and City Council of Baltimore v. Gordon J. BAKER.

No. 118.

Court of Appeals of Maryland.

April 11, 1968.

Melvin J. Sykes, Baltimore (Paul Berman, Baltimore, on the brief), for appellant.

Clayton A. Dietrich, Chief Asst. Solicitor (Joseph Allen, City Solicitor, Paul A. Dorf and Frank B. Cahn, II, Baltimore, on the brief), for appellees.

Clayton A. Dietrich, Chief Asst. Solicitor (Joseph Allen, City Solicitor on the brief), for Mayor and City Council of Baltimore, part of appellants.

Paul A. Dorf, Baltimore (Frank B. Cahn, II, Baltimore, on the brief), for Maryland Assn. of Petroleum Retailers, Inc., other appellants.

E. Thomas W. Stahl, Baltimore, for appellee.

Francis D. Murnaghan, Jr., Joseph H. H. Kaplan, Baltimore, for amicus curiae, George F. Rosner.

Thomas D. Washburne, Baltimore, for amicus curiae, Robert V. Patterson.

Before HAMMOND, C.J., and MARBURY, BARNES, McWILLIAMS and FINAN, JJ.

BARNES, Judge.

This is an appeal by the defendant below, Mayor and City Council of Baltimore (City), a municipal corporation, and intervening defendant below, Maryland Association of Petroleum Retailers, Inc. (the Association), a body corporate, from a decree of the Circuit Court of Baltimore City (Cardin, J.) declaring invalid and unconstitutional City Ordinance 735 which, inter alia, prohibits the display of any gasoline price sign other than two eight by ten inch signs affixed to a pump. ¹ Further, A. & H. Transp., Inc., t/a Savon Gas Stations (Savon), a body corporate, appeals, in case of reversal by this Court, the order denying Savon's motion to intervene as a plaintiff below.

Ordinance 735 was approved by the City on February 14, 1966, and on April 12, 1966, Gordon J. Baker (Baker), plaintiff below filed a bill of complaint naming the City and the acting Police Commissioner as defendants, praying a declaration that the ordinance be declared unconstitutional, and praying an injunction against its enforcement pending determination on the merits. After demurrers were overruled and the Association obtained an ex parte order allowing its intervention, Baker testified that he was a lessee operator of a gasoline service station and that on or before February 14, the day the ordinance was enacted, he had large signs advertising the sale of gasoline. Baker testified that following the passage of the ordinance he removed his signs and as a result immediately lost a great volume of business and was placed in a financially precarious postition. He stated that the business is very competitive, that once the customer is in the station buying gasoline he has a chance to service under the hood and thus perhaps sell a fan belt, generator, etc., if it is needed, and that a sign visible from the road stating a price for gasoline that is attractive to the motorists is important in getting his customers into his service station.

Ordinance 735, challenged here, is in part as follows:

'Section 1. Be It Ordained by the Mayor and City Council of Baltimore, That Section 49 of Article 15 of the Baltimore City Code (1950 Edition), title 'Inspections, Weights, and Measures,' subtitle 'Petroleum Products,' be and it is hereby repealed; and that a new Section 49 be and it is hereby ordained in lieu thereof, to stand in the place of the section so repealed and to read as follows: 49.

'(a) The City Council finds that the preservation of the natural beauty of Baltimore City requires the limitation of signs advertising prices of motor vehicle fuels at places dispensing fuels in Baltimore City. Such limitation will equally serve to protect the safety and recreational value of public travel on streets in the City and will better protect the public investment in its streets and highways. In furtherance of these purposes, the following limitations are enacted.

'(b) Every retail dealer in motor fuel shall publicly display and maintain on each pump or other dispensing device, from which motor fuel is sold by him at least one sign and not more than two signs stating the price per gallon of the motor fuel, the State and Federal taxes, and the total price, sold by him from such pump or device. Said sign or signs shall be of a size not larger than eight inches by ten inches. The price shown on each of such signs shall include an itemization of the cost per gallon of said motor fuel, the amount of Federal taxes and the amount of state taxes. All figures, including fractions, upon said signs, other than figures and fractions used in any price computing mechanism constituting a part of any such pump or dispensing device, shall be of the same size.

'(c) No signs stating or relating to the prices of motor fuel, and no signs designed or calculated to cause the public to believe that they state or relate to the price of motor fuel, other than the signs referred to in subsection (b) of this section and required to be displayed upon pumps and other dispensing devices, shall be posted or displayed on or about the premises where motor fuel is sold at retail, and within the view of any public highway or reservation.

'Section 2. And Be It Further Ordained, That this ordinance shall take effect from the date of its passage.

THEODORE R. McKELDIN, Mayor of Baltimore City.

Approved Feb. 14, 1966.'

In spite of the purposes set out in section (a), supra, most of the defendants' testimony tends to establish a situation not mentioned in the ordinance which the defendants argue the City meant to deal with by the passage of the ordinance. ² There was some testimony by defendants' seven witnesses, who either were or had been gas station operators, that the price signs they had used were eye sores, had often been placed on public property, and had on occasion interfered with the vision of motorists leaving the stations. Most of the testimony, however, tended to show that the signs advertising the price of gasoline were often supplied, at less than cost, by the large refining companies that supplied the gas being sold at a particular station and that the prices reflected on these signs were often determined by the pricing policies of the refining company. The refining companies were able to have their suggested prices in effect, the testimony shows, by pressuring the retailers through their rebate policies on the wholesale price of gasoline and by threatening not to renew lessee retailers' annual leases for the service stations unless prices were kept in line with the suggested price. The defendants' witnesses agreed that the refining companies were responsible for 'gas wars,' that the gas wars were harmful to the retailers and that they may be forced to sell gas at less than cost, that they were forced to meet a lower price of a competitor either by the refining company's pressure or the pressure of the public in refusing to buy at a price higher than that of a competitor, and that the gas wars could not be carried on without the use of large gasoline price signs visible from the road. One of the defendants' witnesses stated that there had been a twenty-eight percent decrease in gasoline business failures since the ordinance went into effect and that there had been no gas wars. There was further testimony that normal competition between retailers continues to exist, but no specific instances were given. On cross-examination it appeared that there had been no price changes since the ordinance went into effect save for increases to reflect increases in the wholesale price of gasoline.

Savon, a well known discount gasoline service station dealer, sought to intervene as a party plaintiff more than a week after all of the above testimony had been taken immediately upon being advised that the State's Attorney intended to nol pros the criminal case in the Criminal Court of Baltimore against Harry Waller, President of Savon, for violation of the ordinance, and thus deny Waller the opportunity to make a record with respect to the ordinance's validity. ³ Although Savon is satisfied with the judgment below, it points out that if it had been allowed to intervene it would have introduced as evidence:

'(a) numerous photographs of instances in Baltimore City of gasoline station signs and signs of other businesses other than price signs which are at least as 'offensive' in size and placement to the gasoline price signs which were the sole target of the Ordinance.

'(b) numerous photographs of gasoline station signs and promotional displays other than price signs which are larger and more garish than the gas price signs of the type generally in use before the passage of the Ordinance.

'(c) papers from the file of the City Council of Baltimore bearing on the illegality of the Ordinance under the anti-trust laws referred to in the opinion below at E. 140-141, including a letter from The Maryland Association of Petroleum Retailers, Inc. signed by its president, Al Collins, and addressed to Mayor McKeldin.

This letter points out that the Association's membership of '800 small businessmen' are 'the sponsors of this Bill;' that 'as dealers * * * in our search for a solution' to the economic problems of gasoline dealers 'working with our legal counsel (Paul A. Dorf, Esquire) we drafted this Ordinance.' In his argument for the Ordinance, Mr. Collins states 'We frankly admit that with the elimination of price signs it will help to stabilize the economics of the service station retailer. We are not against competition, but we realize we must make a fair profit in order to be sound businessmen.' (Emphasis in original.)

'(d) minutes of meetings and correspondence of The Maryland Association of Petroleum Retailers, Inc., which counsel believe will further show the anti-trust, anti-competitive, and price-fixing conspiracy tainting the Ordinance.

'(e) the text of the opinions of Judges Byrnes and...