State v. Carpenter

• Decision Date: 05 February 1980
• Docket Number: No. 163-78,163-78
• Court: Vermont Supreme Court
• Parties: , 25 Wage & Hour Cas. (BNA) 913, 118 Lab.Cas. P 56,575 STATE of Vermont v. Gardner CARPENTER.

Page 285

412 A.2d 285

138 Vt. 140, 25 Wage & Hour Cas. (BNA) 913,

118 Lab.Cas. P 56,575

STATE of Vermont v. Gardner CARPENTER.

No. 163-78.

Supreme Court of Vermont.

Feb. 5, 1980.

M. Jerome Diamond, Atty. Gen., and Richard A. Unger, Asst. Atty. Gen., Montpelier, for plaintiff.

James L. Morse, Defender Gen., and William A. Nelson, App. Defender, Montpelier, for defendant.

Before BARNEY, C. J., LARROW, BILLINGS and HILL, JJ., and SMITH, J. (Ret.), Specially Assigned.

BARNEY, Chief Justice.

This is a criminal prosecution in which the State has taken an interlocutory appeal under V.R.A.P. 5(b). The trial judge proposed to grant a motion by the defendant to dismiss the prosecution. The ground for the dismissal, and the principal question stated as controlling, concerns the constitutionality of the statute upon which the prosecution is based, 21 V.S.A. § 345. It reads:

Each employer who violates section 342 and 343 of this title and the officers of any corporation, cooperative or stock association, who fraudulently permit their corporation, or cooperative association to violate these sections, shall be fined not more than $500.00 or imprisoned not more than one year or both. Upon conviction, the court shall make an order requiring the payment of wages due and not paid.

Sections 342 and 343 require persons who have employees doing business in the state to pay them weekly by cash or check.

The defendant was charged with 28 counts of nonpayment of wages. He was the owner and operator of a dress manufacturing business. The unpaid wages amount to $1800.00. The defendant had indicated to the wage investigator for the Department of Labor and Industry that he did not have the money to pay the wages due.

The constitutional point raised is an equal protection issue. It questions the rationality of the distinction made by the statute between employers, who are held strictly liable for nonpayment of wages, and corporate officers, who are held liable only for fraudulent nonpayment.

The other controlling question stated relates to the construction of the statute in the face of constitutional attack. It is argued that if equal protection threatens to invalidate the statute, this Court should read into the criminal enactment the requirement that the prosecution prove the same fraudulent intent called for in the case of corporate officers. In this case such an alteration would be particularly inappropriate.

In 21 V.S.A. § 345a, the section following the statute in question here, the legislature did two things. First, in a wage setting involving a written agreement, it applied the test of fraudulent nonpayment to employers. Second, it provided that where the employer is a corporation the president and officers having control of funds are to be considered "employers" for the purpose of assigning criminal responsibility and penalty (which includes imprisonment).

It can only be said, in the presence of such particular language, that the legislature deliberately differentiated between the proofs required in these related offenses. For this Court to alter the standard of liability would most assuredly be in conflict with intentional legislative purpose. This is not a case of inadvertence or lack of clarity, or even statutory conflict. That being so, we must rule upon the statute as the legislature deliberately framed it. In re Lampman, 135 Vt. 226, 228, 373 A.2d 547, 548 (1977); State v. Cattanach, 129 Vt. 57, 60, 271 A.2d 828, 829-30 (1970). The constitutional conflict cannot be interpreted away.

The State, as appellant, contends that there is a supportable statutory basis for classifying employers differently from corporate officers. It denominates the statute as public welfare legislation and points out that it is entitled to the presumption of constitutionality. Re Montpelier & Barre R. R., 135 Vt. 102, 103-04, 369 A.2d 1379, 1380 (1977).

It has not been argued, nor do we think it could be argued, that the proper equal protection analysis to be applied to this case is other than the traditional test which asks whether a rational basis serving a legitimate public policy objective can be articulated in defense of the challenged statutory classification. L. Tribe, American Constitutional Law § 16-2 (1978).

Indeed, such a rational basis can be articulated to support the different treatment accorded to employers and corporate officers under 21 V.S.A. § 345. The intent of the statute is to foster the regular payment of wages to employees. It seeks to achieve this end by penalizing nonpayment. The penalties are imposed on employers strictly; that is, without regard for the employer's mental state at the time of the failure. It carves out an exception for corporate officers who fail to pay, but whose failure is without fraudulent intent. The exception recognizes an existing distinction between the two classes. Employers, be they sole proprietors or corporations, are by definition the captains of their own ships. It is true that such businessmen may find themselves unable to meet a payroll due to decisions that have already passed from their hands. Still, at one time or another employers have the authority, as well as the statutory responsibility, to make those decisions in such a way as to insure that workers do not labor without timely compensation.

Corporate officers are not always similarly situated. They are, after all, technically but a class of agents, whose authority finds its source and its limitations in a board of directors. 11 V.S.A. §§ 1892, 1895. Though they may, as a practical matter, frequently be invested with substantial discretion and authority, it does not invariably follow that the officers who are responsible for the payment of wages (and who are therefore in a position from which violation of 21 V.S.A. § 345 is possible) are the same individuals who make the decisions which determine a corporation's ability to pay its employees. Cf. People v. D. H. Ahrend Co., 308 N.Y. 112, 123 N.E.2d 799 (1954) (per curiam) purpose of a similar distinction in what was then Penal Law § 1272 was to exculpate nominal officers and others not actually aware of corporate affairs).

Undoubtedly this statutory distinction does not perfectly serve the purpose for which it was established. Certainly, it may exclude from its strict liability provisions, and thereby may eventually exculpate, some corporate officers who lack fraudulent intent but who are as culpable as the employers that the statute inculpates. But the Fourteenth Amendment does not require that statutory distinctions be perfect to be sustained, only that they be rational. Dandridge v. Williams, 397 U.S. 471, 485, 90 S.Ct. 1153, 1161, 25 L.Ed.2d 491 (1970). We need not conclude that as legislators we would adopt this statutory distinction in order to determine that, as jurists, we must sustain it.

The defendant further argues that the motion to dismiss was properly granted because, applied as a strict liability statute, 21 V.S.A. § 345 violates Chapter II, § 40 of the Vermont Constitution, which prohibits imprisonment for debt. The State contends that the issue is not properly before this Court since the issue was not certified by the trial court.

The idea that the scope of interlocutory review is limited to the issues certified is in large measure the legacy of our procedure before the 1971 promulgation of our present appellate rules. Under the old law such a limitation was strictly applied. Central Vermont Medical Center v. Town of Plainfield, 128 Vt. 557, 559, 268 A.2d 788, 789, (1970); In re Crescent Beach Association, 126 Vt. 448, 453, 236 A.2d 497, 500 (1967); Dresden School District v. Norwich Town School District, 124 Vt. 227, 230, 203 A.2d 598, 600 (1964).

But V.R.A.P. 5(b) does not refer to the older concept of certified questions. It speaks instead of "a controlling question of law," and we have interpreted the rule to require that the question be set out in the order. Lyon v. Bennington College Corp., 137 Vt. 135, 136, 400 A.2d 1010, 1011 (1979). Controlling questions of law under 5(b) have frequently been referred to as certified questions. E. g., Committee to Save the Bishop's House v. Medical Center Hospital of Vermont, Inc., 136 Vt. 213, 388 A.2d 827 (1978); Richard v. Richard, 131 Vt. 98, 99, 300 A.2d 637, 638 (1973).

V.R.A.P. 5(b) should not be allowed, by inadvertence, to become bound by the strictures of our prior law on certified questions. The considerations supporting those limitations could be more persuasively argued for interlocutory appeals under 5(a). That Rule contemplates the possibility of appeal at any stage in proceedings before the final judgment where the disposition of a legal issue would in at least one alternative determine an action. Because the procedural setting of such an appeal does not inherently limit the issues to be reviewed in this Court, there may be some need for such restraints on the scope of appeal. Yet even under 5(a) we have not continued the former limitation to certified questions. Reporter's Notes, V.R.A.P. 5 (main volume, 1971).

No similar need for an external limitation on the scope of review exists as to appeals taken under 5(b). The Rule provides that such an appeal may only be taken from "an interlocutory order or ruling." The scope of review is thereby limited to those issues necessary to determine the validity of the order or ruling from which appeal is taken. If the law were otherwise we would be left in the anomalous position of affirming orders riddled with prejudicial error where the error was not within the scope of the question certified. Judicial economy would not be served. Cf. Sexton v. Greer, 135 Vt. 343, 345, 376 A.2d 750, 751 (1977) (a correct decision will be affirmed even where based on erroneous reasoning).

V.R.A.P. 5(b) was based on 28 U.S.C. § 1292(b) and F.R.A.P. 5. Reporter's Notes, V.R.A.P. 5 (main volume, 1971). The federal courts, operating under those...