State ex rel. Nixon v. Telco Directory Pub.

• Decision Date: 28 September 1993
• Docket Number: No. 75356,75356
• Citation: 863 S.W.2d 596
• Parties: STATE ex rel. Jeremiah W. NIXON, Attorney General, 1 Respondent, v. TELCO DIRECTORY PUBLISHING, d/b/a Telco National Business Directory, and Scott Wilcox, Appellants.
• Court: Missouri Supreme Court

Page 596

863 S.W.2d 596

STATE ex rel. Jeremiah W. NIXON, Attorney General,¹ Respondent, v. TELCO DIRECTORY PUBLISHING, d/b/a Telco National Business Directory, and Scott Wilcox, Appellants.

No. 75356.

Supreme Court of Missouri En Banc.

Sept. 28, 1993.

Rehearing Denied Oct. 26, 1993.

Walter M. Henritze, Frank J. Shannon, Atlanta, GA, Keith W. Brunstrom, Jefferson City, for appellants.

Jeremiah W. (Jay) Nixon, Atty. Gen., Anne E. Schneider, Asst. Atty. Gen., Jefferson City, for respondent.

ROBERTSON, Judge.

In State v. Shaw, 847 S.W.2d 768 (Mo. banc 1993), this Court upheld the constitutionality of the criminal penalties imposed by Section 407.020.3, RSMo 1986, for a violation of Section 407.020.1, RSMo 1986, against a vagueness challenge. In this case, we consider a similar constitutional challenge to Section 407.100.6, RSMo 1986. That statute permits a trial court to impose civil penalties for a violation of Section 407.020.1.

The trial court found that appellants had violated Section 407.020.1, enjoined appellants from further use of a particular advertising device, and imposed civil penalties. Appellants appealed to the Court of Appeals, Western District, claiming, among other things, that Section 407.100.6 violates the Due Process Clause of the United States Constitution. U.S. Const., Amend. XIV. As a result of the constitutional issue, the court of appeals transferred the case to this Court. We have jurisdiction, Mo.Const. art. V, § 3, reverse the judgment of the trial court and remand for further proceedings. Aside from the constitutional issues, we address only those issues relevant on remand.

I.

Scott D. Wilcox does business as Telco Directory Publishing, a sole proprietorship. Wilcox publishes the Telco National Business Directory, a directory that includes listings in various business and professional categories. To further his sales efforts, Wilcox designed and mailed a solicitation to potential customers across the country. Those who purchased the directory automatically received a free listing in the directory for the next year.

In October, 1986, Wilcox mailed a number of his solicitations to persons and businesses in Missouri. Fifty-five Missouri businesses and individuals purchased the directory. Ten other individuals, who received the solicitation but did not purchase the directory, complained to the Attorney General's Office about the deceptive nature of the solicitation they received.

The solicitation appears in full in Appendix A. It consists of a single sheet of paper printed to bear a resemblance to an invoice. The paper is perforated so that the top can be detached and returned in an envelope that accompanied the solicitation. The front side of the bill also includes the words, "This is not an invoice. Use this form to place your order," in bold black letters immediately above the perforation.

The backside of the solicitation sets forth the full terms of the solicitation, including the explanation that the amount requested on the front is payment for a directory and that purchase of the directory entitles the purchaser to a free listing in the next year's directory. The wording on the backside of the form is not susceptible to misinterpretation. However, it is printed in light gray ink. Wilcox testified that he used the light gray ink to avoid "bleed through." Persons who received the solicitation testified that the light colored ink made the back difficult to read.

Upon receiving the complaints, the attorney general filed an action under Sections 407.100.1 and 407.100.6 seeking an injunction against Wilcox and civil penalties. At trial the attorney general presented live testimony of two witnesses and deposition testimony of eight others. The individuals all testified about their office practices, the details of their receipt of this solicitation, and the impressions the solicitation made on them. All of the witnesses initially believed that the solicitation was a bill of some sort. However, all of the witnesses also discovered that the solicitation was not a bill, although some did so only after their secretaries read it more carefully. None of the witnesses purchased a directory.

The trial court entered findings of fact and conclusions of law. The trial court believed that the solicitation had the "capacity to deceive." Based on this standard, the trial court found that the solicitation was a "deception" in violation of Section 407.020.1. The trial court enjoined Wilcox from using the words "final notice" without a further explanation of the nature of the final notice and from using a solicitation format that caused the reader to believe the solicitation was a bill or an invoice. The court also imposed fines totalling $10,000 and ordered Wilcox to pay the merchandising practices revolving fund the costs of prosecution. This appeal followed.

II.

Wilcox raises two preliminary jurisdictional points. First, he asserts that neither the Missouri long-arm statute nor the Due Process Clause of the Fourteenth Amendment permits Missouri courts to exercise personal jurisdiction over him. Second, he argues that Article I, Section 8, Clause VII of the United States Constitution preempts any attempt by the state to regulate the use of the United States mails.

In State ex inf. Danforth v. Reader's Digest Association, Inc., 527 S.W.2d 355, 358 (Mo. banc 1975), this Court resolved the issues raised by appellants in this case against appellants. We reaffirm that decision, holding again that Missouri may properly exercise personal jurisdiction over Wilcox and may regulate unfair and deceptive merchandising practices even when the relevant matters are sent through the mails. The first two points are denied.

III.

In pertinent part, the statutes at issue here are set out.

Section 407.020.1, RSMo 1986, provides that:

The act, use or employment by any person of any deception, fraud, false pretense, false promise misrepresentation, unfair practice or the concealment, suppression or omission of any material fact in connection with the sale or advertisement of any merchandise in trade or commerce ... in or from the state of Missouri, is declared to be an unlawful practice.... Any act, use or employment declared unlawful by this subsection violates this subsection whether committed before, during or after the sale, advertisement or solicitation.

Section 407.100 provides that:

1. Whenever it appears to the attorney general that a person has engaged in, is engaging in, or is about to engage in any method, act, use, practice or solicitation, or any combination thereof, declared to be unlawful by this chapter, he may seek and obtain, in an action in a circuit court, an injunction prohibiting such person from continuing such methods, acts, uses, practices, or solicitations, or any combination thereof, or engaging therein, or doing anything in furtherance thereof.

* * * * * *

6. The court may award to the state a civil penalty of not more than one thousand dollars per violation....

Section 407.130 provides that:

In any action brought under the provisions of section 407.100, the attorney general is entitled to recover as costs, in addition to normal court costs, the costs of the investigation and prosecution of any action to enforce the provisions of this chapter.

A.

Wilcox assigns error to the trial court's judgment claiming that the attorney general failed to meet certain prerequisites to relief commonly required in nonstatutory actions.

1.

First, Wilcox argues that the attorney general may not obtain relief under Section 407.100 unless he first exhausts all alternative remedies. Section 407.100 does not impose any requirement that the attorney general pursue other remedies first. To impose such a requirement by judicial fiat would conflict with the plainly expressed intent of the legislature that the attorney general be free to choose from several statutory options to remedy unlawful merchandising practices quickly, fairly, and efficiently. The point is denied.

2.

Second, Wilcox assumes that an action under Section 407.100 is a traditional equitable action and argues that the trial court erred in issuing its injunction under Section 407.100 absent proof by the state that no adequate legal remedy exists. An action under Section 407.100 is a statutory action, not a traditional equitable proceeding. The statute contains no requirement that the attorney general show the inadequacy of legal remedies. This Court will not impose such a requirement. The point is denied.

B.

Next, Wilcox argues that Section 407.025.1 limits relief to those circumstances in which someone purchases merchandise for household or personal use, citing Jackson v. Charlie's Chevrolet, 664 S.W.2d 675 (Mo.App.1984).

Charlie's Chevrolet deals with a private right of action created by Section 407.025.1. That statute permits "[a]ny person who purchases or leases goods or services primarily for personal, family or household purposes and thereby suffers an ascertainable loss ... as a result of [an unlawful practice to] bring a private civil action ... to recover actual damages." The legislature did not impose a similar requirement of purchase for personal or household use as a condition precedent to the attorney general's exercise of power to obtain relief. Section 407.100. The point is denied.

C.

Wilcox next asserts that the trial court erred in permitting certain live and deposition testimony at trial.

First, Wilcox claims that any witness testifying in an action brought by the attorney general for civil fines or any injunction must have "standing," i.e., must meet Section 407.025.1 requirements for bringing a private action. There is no such requirement in the law of evidence. We will not impose one. The point is denied.

Second, Wilcox argues that the testimony of the witnesses constituted improper lay opinion as to whether the solicitation was deceptive. While some of the witnesses may have expressed "opinions" as...