Prolerized New Eng. Co. v. City of Manchester

• Decision Date: 28 August 2014
• Docket Number: No. 2013–357,2013–357
• Citation: 166 N.H. 617,103 A.3d 217
• Parties: PROLERIZED NEW ENGLAND COMPANY v. CITY OF MANCHESTER
• Court: New Hampshire Supreme Court

166 N.H. 617

103 A.3d 217

PROLERIZED NEW ENGLAND COMPANY

v.CITY OF MANCHESTER

No. 2013–357

Supreme Court of New Hampshire.

Argued: March 5, 2014

Opinion Issued: August 28, 2014

Shaheen & Gordon, P.A., of Concord (Donald C. Crandlemire on the brief and orally), for the petitioner.

Office of the City Solicitor, of Manchester (Peter R. Chiesa on the brief and orally), for the respondent.

BASSETT, J.

The respondent, the City of Manchester (City), appeals an order of the Superior Court (Brown, J.) denying the City's motion to dismiss and granting the motion for summary judgment filed by the petitioner, Prolerized New England Company (Prolerized). The City argues that the trial court erroneously ruled that RSA chapter 322 preempts the City's ordinances regulating junk and scrap metal dealers. RSA ch. 322 (2011 & Supp. 2013). We reverse and remand.

The trial court found the following facts to be undisputed. Prolerized is engaged in the business of scrap metal recycling, and operates two scrap metal recycling centers in Manchester. There is one other licensed scrap metal yard within the City.

In 1995, the City adopted an ordinance requiring scrap metal dealers to maintain for inspection certain records regarding every transaction as a condition to the license to operate within the City. Manchester, N.H., Code of Ordinances § 114.03(B) (1995). The ordinance required dealers to document the proven identity of the seller, the date of the transaction, and to maintain an accurate, detailed description of each item purchased. Id .

In 2012, in an effort to combat the growing problem of scrap metal theft, the City adopted § 114.03(C), which requires scrap metal dealers to prepare transaction records electronically "as directed by the Chief of Police or his designee," and to forward them "to the Police Department or authorized data storage site ... no later than 24 hours after completion of the transaction." Manchester, Ordinances § 114.03(C) (2012). Subsection 114.03(C) also requires that the electronic transaction records include a digital photograph of the scrap metal seller and a color digital photograph of all items sold in the transaction. Id. The City also adopted § 114.03(D), which requires dealers to include a complete and accurate description of the seller's vehicle, as well as § 114.03(E), which levies a fee of fifty cents per electronic transaction for which a record must be prepared pursuant to § 114.03. Manchester, Ordinances § 114.03(D), (E) (2012).

Pursuant to § 114.03(C), the City designated a private company, LeadsOnline, as the authorized storage site for the electronic transaction records, and directed Prolerized to set up a user account and begin uploading data. Shortly thereafter, Prolerized filed a petition seeking declaratory and injunctive relief, arguing that § 114.03, as amended, is preempted by State law. Prolerized also argued that the fifty cent per transaction fee is an unlawful business tax because it raises revenues in excess of the reasonable costs to the City, and violates Prolerized's constitutional right to freedom of contract and equal protection. The City filed a motion to dismiss, and Prolerized filed a motion for summary judgment. The trial court denied the City's motion to dismiss and entered summary judgment for Prolerized, ruling that State law preempted § 114.03. Because of its preemption ruling, the trial court did not consider whether § 114.03 imposes an unlawful business tax or violates constitutional protections. This appeal followed.

"We review de novo the trial court's application of the law to the facts in its summary judgment ruling." EnergyNorth Natural Gas v. City of Concord, 164 N.H. 14, 15, 48 A.3d 960 (2012) (quotation omitted). "We consider all of the evidence presented in the record, and all inferences properly drawn therefrom, in the light most favorable to the non-moving party." Id . at 15–16, 48 A.3d 960. "If our review of that evidence discloses no genuine issue of material fact and if the moving party is entitled to judgment as a matter of law, then we will affirm the grant of summary judgment." Id . at 16, 48 A.3d 960 (quotation omitted).

On appeal, the City argues that its ordinance "relative to transaction fees, digital record keeping, and digital reporting neither expressly contradicts the statute nor intrudes upon an area reserved to the exclusive control of the General Court." Prolerized counters that the trial court properly concluded that, because § 114.03 and RSA chapter 322 conflict, the state statutory scheme preempts the City's ordinance.

I. General Principles

"Preemption is essentially a matter of statutory interpretation and construction." EnergyNorth Natural Gas, 164 N.H. at 16, 48 A.3d 960 (quotation omitted). "Statutory interpretation is a question of law that we review de novo ." Id. "We are the final arbiter of the intent of the legislature as expressed in the words of a statute considered as a whole." Id. "In interpreting a statute, we first look to the language of the statute itself, and, if possible, construe that language according to its plain and ordinary meaning." Id. "Unless we find statutory language to be ambiguous, we will not examine legislative history." Clare v. Town of Hudson, 160 N.H. 378, 384–85, 999 A.2d 348 (2010) (quotation omitted). "Furthermore, we interpret statutes in the context of the overall statutory scheme and not in isolation." EnergyNorth Natural Gas, 164 N.H. at 16, 48 A.3d 960.

"Preemption may be express or implied." N. Country Envtl. Servs. v. Town of Bethlehem, 150 N.H. 606, 611, 843 A.2d 949 (2004). Express preemption is not claimed here. One form of implied preemption exists "when there is an actual conflict between State and local regulation." Id . That is, "[a] conflict exists when a municipal ordinance or regulation permits that which a State statute prohibits or vice versa." Id . Even when a local ordinance does not expressly conflict with a State statute, it will be preempted when it frustrates the statute's purpose. Id .

A second form of "[i]mplied preemption may be found when the comprehensiveness and detail of the State statutory scheme evinces legislative intent to supersede local regulation." Id. "When the State has preempted the entire regulatory field, any local law on the subject is preempted, regardless of whether the terms of the local and State law conflict." Id . at 612, 843 A.2d 949. Nonetheless, "[t]he mere fact that a state law contains detailed and comprehensive regulations of a subject does not, of itself, establish the intent of the legislature to occupy the entire field to the exclusion of local legislation." Id . at 611, 843 A.2d 949 (quotation omitted). "To determine whether the legislature has intended to occupy the field, the court may look to the whole purpose and scope of the legislative scheme and need not find such intent solely in the statutory language." Id . "The very nature of the regulated subject matter may demand exclusive state regulation to achieve the uniformity necessary to serve the state's purpose or interest." Id . (quotation and brackets omitted).

[T]he following questions are pertinent in determining whether the state has preempted the field: does the ordinance conflict with state law; is the state law, expressly or impliedly, to be exclusive; does the subject matter reflect a need for uniformity; is the state scheme so pervasive or comprehensive that it precludes coexistence of municipal regulation; and does the ordinance stand as an obstacle to the accomplishment and execution of the full purposes and objectives of the legislature.

Id . at 611–12, 843 A.2d 949 (quotation and brackets omitted).

II. Comprehensiveness of State Statutory Scheme

RSA chapter 322 delegates to local authorities the general regulation of junk and scrap metal dealers. The legislature granted authority to "[t]he governing body of any town, city, or unincorporated place" to license, "in [its] discretion," junk and scrap metal dealers within the municipality. RSA 322:1 (2011). Local boards are authorized to issue and revoke licenses and "establish rules, regulations and restrictions," each of which "shall be incorporated in the license." RSA 322:2 (2011). These boards may designate the location for junk and scrap metal dealers to conduct business and to store their wares, RSA 322:1, and may, by regulation, designate areas of the city where these operations are prohibited. RSA 322:6 (2011). A dealer must keep "records sufficient to the licensing authority"—that is, the same municipal body—"of the accumulation, storage, and handling of commodities as a junk or scrap metal dealer." RSA 322:6–a (2011). RSA chapter 322 does not give the State a role in governing the management or operations of junk and scrap metal dealers. Thus, "[t]he design of the statute is to localize the junk-business, as well as to confine it to conduct by proper persons." Belmont v. Parent, 90 N.H. 249, 252, 7 A.2d 255 (1939).

Prolerized argues that RSA 322:6–a, RSA 322:7 (2011), and RSA 322:11 (2011) evince a legislative intent to establish a uniform statewide system of regulating junk and scrap metal dealers. However, each of these provisions grants control to the local board. Although RSA 322:6–a requires that the transaction records include certain information, it also requires each licensee to "keep records sufficient to the licensing authority," i.e. , the local board. RSA 322:7 authorizes any officer with jurisdiction to enter the licensed premises, which would include local law enforcement. See 63 C.J.S. Municipal Corporations § 632 (explaining powers of police officers), § 633 (generally the powers conferred on police officer must be exercised within territorial limits of municipality) (2011). RSA 322:11 requires a local board to establish the license fee and dictates that the fee be paid into the treasury of the city or town where the license is in force. Thus, not only do these provisions fail to demonstrate a...