State v. Mo. Dep't of Revenue & Its Dir. & Tesla Motors, Inc.
| Decision Date | 05 December 2017 |
| Docket Number | WD80331,C/w WD80335 |
| Parties | STATE OF MISSOURI ex rel. MISSOURI AUTOMOBILE DEALERS ASSOCIATION, et al., Respondents, v. MISSOURI DEPARTMENT OF REVENUE AND ITS DIRECTOR and TESLA MOTORS, INC., Appellants. |
| Court | Missouri Court of Appeals |
Appeal from the Circuit Court of Cole County, Missouri
The Honorable Daniel R. Green, Judge
Before Division IV: Mark D. Pfeiffer, Chief Judge, and James Edward Welsh and Gary D. Witt, Judges
The Missouri Department of Revenue ("Department") and Tesla Motors, Inc. ("Tesla") appeal from the judgment entered by the Circuit Court of Cole County, Missouri, granting summary judgment in favor of Missouri Automobile Dealers Association ("MADA"), Reuther Ford, Inc. ("Reuther Ford"), and Osage Industries, Inc. ("Osage Industries") (collectively, "Plaintiffs") on their petition for declaratory judgment and writ of prohibition. The Department and Tesla each assert that the trial court erred in recognizing the Plaintiffs' standing and in finding that Tesla's application did not satisfy the requirements for a dealer license. Consistent with every appellate court ruling in the country that has addressed standing in similar Tesla license challenges in other states, we reverse and remand with directions that the trial court dismiss Plaintiffs' petition for lack of standing.
Factual and Procedural History
Tesla is a foreign corporation registered to do business in Missouri. Tesla manufactures motor vehicles and holds a manufacturer's license issued by the Department. Tesla submitted an application to the Department for a new motor vehicle dealer license. Tesla's application included a document titled "Franchise Agreement Confirmation," which stated that Tesla Motors, Inc., as franchisor, authorized Tesla Motors, Inc. to sell Tesla vehicles. In April 2013, the Department issued to Tesla license number D649 for a Tesla dealership in University City, Missouri. In 2014, the Department issued to Tesla license number D270 for a Tesla dealership in Kansas City, Missouri.1 Thereafter, the Department renewed these licenses.
MADA is the largest professional association of motor vehicle dealers in Missouri. A MADA "franchise member" is a new motor vehicle dealer that has entered into a franchise agreement with a motor vehicle franchisor. Reuther Ford is a new motor vehicle dealer licensed by the Department and is a member of MADA. Osage Industries is a motor vehicle manufacturer, licensed as a manufacturer by the Department, and a member of MADA.
On January 22, 2015, MADA, Reuther Ford, and Osage Industries filed a petition for declaratory judgment and writ of prohibition. The Plaintiffs asserted that Tesla failed to meet the statutory requirements for obtaining a new motor vehicle dealer license, citing Chapters 301 and 407 of the Missouri Revised Statutes. Plaintiffs also alleged that they were aggrieved astaxpayers because the Department had expended public taxpayer funds with regard to license number D649 and would continue to do so each year that Tesla applies for license renewal.
On February 11, 2015, Tesla moved to intervene as a defendant/respondent. The trial court granted Tesla's motion on February 27, 2015.
Both the Department and Tesla filed motions to dismiss for lack of standing, asserting that Plaintiffs lacked standing under Chapter 536 of the Missouri Administrative Procedures Act, and Plaintiffs lacked standing as economic competitors of Tesla and as Missouri taxpayers because they had no legally protectable interest at stake in the Department's decision to grant and renew Tesla's dealer licenses. The Department and Tesla also asserted that MADA lacked associational standing because none of its members had standing to bring the action. The trial court denied both motions without explanation.
Thereafter, Plaintiffs, the Department, and Tesla each filed motions for summary judgment.
On August 31, 2016, the trial court granted Plaintiffs' motion for summary judgment and again denied the Department's and Tesla's motions for summary judgment. In a footnote, the trial court denied the Department's challenge to Plaintiffs' standing in its motion for summary judgment with another cursory denial of the standing challenge without explanation.2 The trial court entered a permanent writ of prohibition prohibiting the Department from: renewing Tesla's new motor vehicle dealer licenses; issuing any new motor vehicle dealer license to Tesla;and issuing or renewing any new motor vehicle dealer license to any entity that is not a franchisee or does not file a valid franchise agreement with the Department.
The Department and Tesla each timely appealed, and this court ordered the cases consolidated.
Analysis
Point I - Standing
In the first point of the Department's and Tesla's briefs, they assert that the Plaintiffs lacked standing to bring this action as economic competitors of Tesla and as Missouri taxpayers.3 In response, Plaintiffs argue that they have competitor, taxpayer, and ministerial standing. Our ruling on Point I is dispositive of the appeal.4
"Standing is a question of law, which is reviewed de novo." Manzara v. State, 343 S.W.3d 656, 659 (Mo. banc 2011). "Regardless of an action's merits, unless the parties to the action have proper standing, a court may not entertain the action." E. Mo. Laborers Dist. Council v. St. Louis Cty., 781 S.W.2d 43, 45-46 (Mo. banc 1989). "In order to have standing in a declaratory judgment action, the plaintiff must have a legally protectable interest at stake." Columbia Sussex Corp. v. Mo. Gaming Comm'n, 197 S.W.3d 137, 145 (Mo. App. W.D. 2006) (internal quotation omitted).
"A legally protectable interest means a pecuniary or personal interest directly in issue or jeopardy which is subject to some consequential relief either immediate or prospective." Id. (internal quotation omitted). "Similarly, in order to have standing to pursue a writ of prohibition, the party seeking relief must have a legally cognizable interest in the subject matter." Id.(internal quotation omitted). The party seeking relief has "the burden of establishing that they have standing." Manzara, 343 S.W.3d at 659.
To determine whether the legislature intended to confer standing on a third party to challenge licensure, we look to the governing statutes. "Missouri's motor vehicle dealer licensing requirements are found in sections 301.550 to 301.573." Shiplet v. Copeland, 450 S.W.3d 433, 436 n.4 (Mo. App. W.D. 2014). Sections 301.559 and 301.560 contain application requirements for the issuance of, among others, licenses for motor vehicle dealers. A "motor vehicle dealer" or "dealer" is defined as:
any person who, for commission or with an intent to make a profit or gain of money or other thing of value, sells, barters, exchanges, leases or rents with the option to purchase, or who offers or attempts to sell or negotiates the sale of motor vehicles or trailers whether or not the motor vehicles or trailers are owned by such person[.]
§ 301.550.1(8). Dealers are divided into nine classes; here, the relevant class is "[f]ranchised new motor vehicle dealers." § 301.550.3(2). Section 301.562.1 specifically gives the applicant or licensee the right to file a complaint with the Administrative Hearing Commission if the Department refuses to issue or renew any license required pursuant to sections 301.550 to 301.580:
The department may refuse to issue or renew any license required pursuant to sections 301.550 to 301.580 . . . . The department shall notify the applicant or licensee in writing . . . of the reasons for the refusal to issue or renew the license and shall advise the applicant or licensee of his or her right to file a complaint with the administrative hearing commission as provided by chapter 621.
By the express wording of the statute, the legislature has limited appeals of licensing decisions by the Department to persons who have been aggrieved by the Department's decision refusing to issue a license or revoking a license already issued. The statute does not authorize appeals from the Department's decision to grant a license. See State ex rel. Christian Health Care ofSpringfield, Inc. v. Mo. Dep't of Health & Senior Servs., 229 S.W.3d 270, 277 (Mo. App. W.D. 2007) (). "From this, we can infer that the legislature did not intend to confer standing on a third party, not otherwise a party to the licensing proceeding, to challenge the [Department's] decision to grant a license to a competitor." Id. (). Plaintiffs fail to identify any statutory language evincing an intent by the legislature to include them within the "zone of interest" covered by Chapter 301, conferring them with standing to appeal a motor vehicle dealer licensing decision by the Department in which they are not a licensee or applicant aggrieved by a licensing decision by the Department.
Competitor Standing
Even though the Chapter 301 licensing statutes do not expressly or impliedly confer standing on Plaintiffs to challenge the issuance of the license to Tesla, Plaintiffs contend that their status as economic competitors of Tesla gives them a legally protected interest and confers standing. Plaintiffs alleged in their petition that the Department's decision to issue and renew new motor vehicle dealer licenses to Tesla created a "non-level playing field." Plaintiffs claim that they will be at a disadvantage competing with Tesla because they are required to establish a bona fide place of business and sell vehicles through a properly licensed...
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