MC, Inc. v. Cascade City-County Bd. of Health

• Decision Date: 24 February 2015
• Docket Number: No. DA 14–0014.,DA 14–0014.
• Citation: 2015 MT 52,378 Mont. 267,343 P.3d 1208
• Parties: MC, INC., a Montana Corporation, Players, Inc., a Montana Corporation, Douglas Palagi, an individual, and K.C. Palagi, an individual, Plaintiffs and Appellees, v. CASCADE CITY–COUNTY BOARD OF HEALTH, a Local Board of Health, Defendant and Appellant.
• Court: Montana Supreme Court

378 Mont. 267

343 P.3d 1208

2015 MT 52

MC, INC., a Montana Corporation, Players, Inc., a Montana Corporation, Douglas Palagi, an individual, and K.C. Palagi, an individual, Plaintiffs and Appellees

v.CASCADE CITY–COUNTY BOARD OF HEALTH, a Local Board of Health, Defendant and Appellant.

No. DA 14–0014.

Supreme Court of Montana.

Submitted on Briefs Nov. 19, 2014.

Decided Feb. 24, 2015.

For Appellant: Mark F. Higgins ; Cathy J. Lewis, Ugrin, Alexander, Zadick & Higgins, PC; Great Falls, Montana, Brian J. Hopkins ; Carey Ann Shannon, Cascade County Attorney's Office; Great Falls, Montana.

For Appellees: Gregory G. Smith ; Stephanie A. Oblander, Smith Oblander; Great Falls, Montana.

For Amici: Brian J. Miller, Morrison, Sherwood, Wilson & Deola PLLP; Helena, Montana (American Cancer Society Cancer Action Network, Inc.), Shannon McDonald, Special Assistant Attorney General; Helena, Montana (Department of Public Health and Human Services).

Opinion

Justice JIM RICE delivered the Opinion of the Court.

¶ 1 The Cascade City–County Board of Health (Board) appeals two orders of the Eighth Judicial District Court, Cascade County. The first order granted summary judgment and declaratory relief to MC, Inc., Players, Inc., Douglas J. Palagi, and K.C. Palagi (collectively, Casino Owners). The District Court determined that two smoking structures owned by the Casino Owners were in compliance with the Montana Clean Indoor Air Act (MCIAA). The second order awarded the Casino Owners attorney fees that were incurred in the preliminary injunction proceeding. We reverse both orders.

¶ 2 1. Did the District Court err by granting the Casino Owners' motion for summary judgment?

¶ 3 2. Did the District Court abuse its discretion by awarding attorney fees to the Casino Owners for the preliminary injunction proceeding?

FACTUAL AND PROCEDURAL BACKGROUND

¶ 4 The Casino Owners own and operate Golds Casino and Players Casino in Great Falls. In 2011, the Casino Owners constructed smoking structures or shelters that were attached to the casinos. The structures have four walls, including a common wall with the casinos with multiple large glass windows, inside entrances, a roof, carpeting, heating, air conditioning, electricity, and gaming machines. The structures also have several small openings near the top of the exterior walls that are several inches high and several feet wide. The openings run parallel to the ceiling, are not obstructed from the inside of the structure, have a cover on the outside, and have no mechanism for closure. Except for the openings, the structures have all the appearances of being an enclosed structure. The Casino Owners require adults who enter the structures to join a “Smokers' Club.”

¶ 5 After construction, Casino Owners sought approval from the City Building Department, Fire Department, and the Board for the structures. Jim Page, a license architect retained by the Casino Owners, submitted the smoking structures' blue prints to the three respective agencies and the agencies subsequently approved them. On August 22, 2011, after inspecting the structure located at Golds Casino, Bruce Treis, the Registered Sanitarian and Environmental Health Specialist for the Board, approved the structure, indicating it met all of the Department of Health standards. On September 2, 2011, Treis likewise approved the structure attached to Players Casino.

¶ 6 On November 7, 2011, Teddy Nault, Health Educator and Tobacco Prevention Specialist for the Board, received a purported anonymous complaint concerning smoking in the smoking structures; Nault later admitted to filing the complaint himself. Nault's complaint prompted the Board to commence enforcement steps under the MCIAA. The Board issued a letter of education, written warnings, and a reprimand letter serving as “final notice prior to legal action taking place.”

¶ 7 In January 2012, the Casino Owners initiated an action against the Board seeking a declaration that the structures were in compliance with the MCIAA. The parties stipulated to a stay of the proceedings. On February 5, 2013, the District Court vacated the stay. On February 6, 2013, the Board moved for a preliminary injunction that would prohibit the Casino Owners from allowing smoking in the structures. The District Court denied the Board's request. The court found it significant that several other casinos in Cascade County had constructed roofed smoking structures similar to the Casino Owners' structures; the Board had not initiated action against the several other casino owners; the Board refused to adopt an articulable standard for determining whether structures fell under the MCIAA; the Board delayed filing its motion for a over a year after litigation commenced; and ultimately the Board appeared to be punishing the Casino Owners for seeking a legal declaration. The Board did not appeal the denial of its motion for a preliminary injunction.

¶ 8 The Casino Owners moved for summary judgment. The Board filed a cross-motion for summary judgment. During discovery, the Board admitted that the small openings made the structures “partially open to the outside air.” The District Court did not interpret any of the MCIAA's provisions, but reasoned that “the Board's admissions establish the MCIAA is inapplicable to [Casino Owners'] shelters.” The Court granted summary judgment to Casino Owners, noting that, had the Board “not made those admissions, the case may have resulted in a different analysis of the MCIAA and its application here.” Thereafter, the District Court awarded attorney fees to the Casino Owners for the costs associated with the Board's motion for a preliminary injunction.

¶ 9 The Board appeals the District Court's grant of summary judgment and the award of attorney fees.

STANDARD OF REVIEW

¶ 10 We review a district court's summary judgment order de novo, based on the same criteria applied by the district court. Lewis & Clark Cnty. v. Hampton, 2014 MT 207, ¶ 22, 376 Mont. 137, 333 P.3d 205. We determine whether the district court applied the law correctly. Hardy v. Vision Service Plan, 2005 MT 232, ¶ 10, 328 Mont. 385, 120 P.3d 402. We review a district court's interpretation and construction of a statute de novo. State v. Triplett, 2008 MT 360, ¶ 13, 346 Mont. 383, 195 P.3d 819.

¶ 11 We review a district court's determination of whether a statement constitutes a judicial admission for an abuse of discretion. Bilesky v. Shopko Stores Operating Co., 2014 MT 300, ¶ 10, 377 Mont. 58, 338 P.3d 76. “Whether a statement is one of fact or law, for the purpose of determining if the statement should be considered a judicial admission, is a question of law we review for correctness.” Bilesky, ¶ 10.

DISCUSSION

¶ 12 1. Did the District Court err by granting the Casino Owners' motion for summary judgment?

¶ 13 The Board argues that the District Court erred in what should be “a simple case of statutory interpretation.” It argues that “bars,” which the MCIAA defines as including “casinos,” are clearly delineated on the statute's list of public places wherein smoking is prohibited, and that the court erred by improperly applying discovery admissions that were immaterial to the interpretation of the statute. The Casino Owners respond with three arguments in support of their contention that the District Court did not err. First, they argue the structures are not subject to the smoking prohibition of the MCIAA. Second, they argue the admission made by the Board in discovery constitutes a judicial admission and precludes the Board from contending the structures are not subject to the MCIAA. Lastly, they argue the Board should be equitably estopped from enforcing the MCIAA. We address these arguments in turn.¹

Applicability of the MCIAA

¶ 14 We construe a statute by “reading and interpreting the statute as a whole, ‘without isolating specific terms from the context in which they are used by the Legislature.’ ” Triplett, ¶ 25 (quoting Mont. Sports Shooting Ass'n v. State, 2008 MT 190, ¶ 11, 344 Mont. 1, 185 P.3d 1003). “Statutory construction is a holistic endeavor and must account for the statute's text, language, structure and object.” Triplett, ¶ 25 (internal quotations omitted). We must also “read and construe each statute as a whole so as to avoid an absurd result and to give effect to the purpose of the statute.” Triplett, ¶ 25 (internal quotations omitted).

¶ 15 The MCIAA provides that “smoking in an enclosed public place is prohibited.” Section 50–40–104(1), MCA (emphasis added). The MCIAA defines “enclosed public place” as “an indoor area, room, or vehicle that the general public is allowed to enter or that serves as a place of work, including but not limited to the following: (a) restaurants; (b) stores; ... (h) bars” Section 50–40–103(3), MCA.² “Bar” is further defined as an “an establishment with a license issued pursuant to Title 16, chapter 4, that is devoted to serving alcoholic beverages for consumption by guests or patrons on the premises and in which the serving of food is only incidental to the service of alcoholic beverages or gambling operations. The term includes but is not limited to taverns, night clubs, cocktail lounges, and casinos.” Section 50–40–103(1), MCA.

¶ 16 The parties initially dispute how this statutory structure—an operative definition of “enclosed public place” followed by the delineation of 11 named categories of places—is intended to be applied. Casino Owners argue their smoking structures must satisfy the definition of “enclosed public place” in order for smoking to be prohibited, but that the structures fail to do so because they are neither open to the “general public” nor serve as a “place of work.” The Board argues it is unnecessary to analyze whether the smoking structures satisfy the operative definition of “enclosed public place,” because “bars,” which in turn is defined to include “casinos,” are delineated on the list of places following the definition. Citing a dictionary definition, the Board offers that “c...