Steele v. State ex rel. Gorton, 43530

• Decision Date: 26 June 1975
• Docket Number: No. 43530,43530
• Citation: 85 Wn.2d 585,537 P.2d 782
• Court: Washington Supreme Court
• Parties: Ms. Florence J. STEELE, d/b/a Snelling & Snelling, et al., Respondent, v. STATE of Washington of the Relation of Slade GORTON, Attorney General, Appellant.

Page 585

85 Wn.2d 585

537 P.2d 782

Ms. Florence J. STEELE, d/b/a Snelling & Snelling, et al., Respondent, v. STATE of Washington of the Relation of Slade GORTON Attorney General, Appellant.

No. 43530.

Supreme Court of Washington, En Banc.

June 26, 1975.

Slade Gorton, Atty. Gen., D. Roger Reed, Sr., Asst. Atty. Gen., Spokane, for appellant.

Hamblen, Gilbert & Brooke, P.S., William F. Nielsen, Spokane, for respondent.

FINLEY, Associate Justice.

This case involves a challenge to a civil investigative demand served upon respondents' employment agency by the Attorney General pursuant to RCW 19.86.110(1)--a provision in the Consumer Protection Act. Respondents filed a petition in Spokane County Superior Court pursuant to RCW 19.86.110(7) to set aside the civil investigative demand. The superior court ruled that employment agencies are exempt from the Consumer Protection Act and, accordingly, set aside the civil investigative demand. The Attorney General appeals. We reverse the trial court.

The facts are not in dispute. The Attorney General served the civil investigative demand upon respondents because it believed that the employment agency was committing unfair and deceptive practices in violation of the Consumer Protection Act. No civil lawsuit had been filed by the Attorney General prior to the service of the civil investigative demand. The civil investigative demand required production of numerous records for inspection and copying by the Attorney General. The records to be furnished basically related to services rendered to applicants for employment; the manner of payment agreed upon by the applicant and respondent; training materials and manuals supplied by the franchisor to the respondent; applications for employment that had been placed in the inactive file in the past year; refunds to applicants or fee adjustments; certain pleadings filed in courts of record of this State in which respondent was a party; certain contracts between respondent and lending or financial institutions; and certain advertisements for employment placed by the agency in local newspapers.

Respondents' challenge to the instant civil investigative demand raises essentially two issues for our determination: (1) whether employment agencies are exempt from the provisions of the Consumer Protection Act; (2) whether the civil investigative demand constitutes an unreasonable search and seizure in violation of the Fourth Amendment.

Resolution of the first issue, I.e., whether employment agencies are exempt from the Consumer Protection Act, is solely a matter of statutory construction which turns upon the relationship between the exemption provision in the Consumer Protection Act and a subsequently enacted provision in the Employment Agency Act.

At the time the superior court rendered its decision in this matter, the exemption provision of the Consumer Protection Act provided in part: ¹Nothing in this chapter shall apply to actions or transactions otherwise Permitted, prohibited or regulated under laws administered By the insurance commissioner of this state, the Washington public service commission, the federal power commission Or any other regulatory body or officer acting under statutory authority of this state or the United States: . . .

(Italics ours.) Laws of 1967, ch. 147, § 1, p. 710.

The Employment Agency Act regulates employment agencies. In addition, in pertinent part regarding the statutory problem in this appeal, it provides:

The director may refer such evidence as may be available to him concerning violations of this chapter or of any rule or regulation adopted hereunder to the Attorney general or the prosecuting attorney of the county wherein the alleged violation arose, who May, in their discretion, with or without such a reference, In addition to any other action they might commence, Bring an action in the name of the state against any person to restrain and prevent the doing of any act or practice prohibited by this chapter: Provided, That This chapter shall be considered in conjunction with chapters 9.04 and 19.86 RCW, as now or hereafter amended, And the powers and duties of the attorney general and the prosecuting attorney As they may appear in the aforementioned chapters, shall apply against all persons subject to this chapter.

(Italics ours.) RCW 19.31.210.

There is no dispute but that employment agencies are extensively regulated by the Employment Agency Act, I.e., RCW 19.31. Our prior decisions have held that if a business or business activity is regulated by other statutory provisions, then that business or business activity is exempt from the Consumer Protection Act. See e.g., Williamson v. Grant County Pub. Hosp. Dist., 65 Wash.2d 245, 396 P.2d 879 (1964); Washington Osteopathic Medical Ass'n v. King County Medical Serv. Corp., 78 Wash.2d 577, 478 P.2d 228 (1970); Dick v. Attorney General, 83 Wash.2d 684, 521 P.2d 702 (1974). Superficially, at least, this may seem to indicate that employment agencies are exempt from the Consumer Protection Act. But, the instant case involves a factor not present in any of our prior decisions: the regulatory statute involved herein, I.e., the Employment Agency Act, contains an Additional provision referring to the Consumer Protection Act and ostensibly making the Consumer Protection Act applicable to employment agencies. See RCW 19.31.210 Supra. Therefore, the precise question for us to determine is whether the legislature intended RCW 19.31.210 to override the exemption provision in RCW 19.86.170 and to thereby place employment agencies within the purview of the Consumer Protection Act notwithstanding the fact that they are extensively regulated.

RCW 19.31.210 explicitly states that RCW 19.31 is to be 'considered in conjunction with . . . 19.86 RCW' (the Consumer Protection Act) and that 'the powers and duties of the attorney general and the prosecuting attorney as they may appear in (RCW 19.86 and RCW 9.04) shall apply against all persons subject to (RCW 19.31).' If this provision is to have any effect at all, we can perceive no other viable interpretation other than that the legislature intended to authorize the Attorney General to apply the powers he derives from RCW 19.86 (as well as from RCW 9.04) to employment agencies. We so hold.

This interpretation is solidly supported by the historical background pertinent to the enactment of RCW 19.31.210. The Consumer Protection Act--including its exemption provision contained in RCW 19.86.170--was enacted in 1961. In contrast, the Employment Agency Act--including RCW 19.31.210--was enacted 8 years later in 1969. Prior to 1969, employment agencies were obviously subject to the Consumer Protection Act because they were unregulated. In 1969, employment agencies became regulated with the enactment of the Employment Agency Act, but it does not follow that, ipso facto, they were to become exempt from the Consumer Protection Act. On the contrary, the insertion of the Additional provision, i.e., RCW 19.31.210, into the Employment Agency Act is indicative of a legislative intent to ensure that employment agencies would Continue to be subject to the Consumer Protection Act.

The arguments offered by respondents in support of their position that the legislature did not intend to subject employment agencies to the Consumer Protection Act are unpersuasive and can be disposed of readily.

First, respondents contend that RCW 19.31.210 deals generally with the subject of what businesses are and are not subject to the Consumer Protection Act. In contrast, it is said that the exemption provision in the Consumer Protection Act, I.e., RCW 19.86.170, constitutes specific treatment of this subject and under Knowles v. Holly, 82 Wash.2d 694, 513 P.2d 18 (1973), specific provisions must be given controlling effect. However, respondents have not articulated any justifiable reasons for attaching the label 'specific' to RCW 19.86.170 and the label 'general' to RCW 19.31.210. Indeed, two factors convince us that, if anything, RCW 19.31.210 should be deemed specific and RCW 19.86.170 should be deemed general: (1) RCW 19.31.210 was enacted Subsequent to RCW 19.86.170; and (2) RCW 19.86.170 deals with the entire spectrum of businesses in the State of Washington, while RCW 19.31.210 concerns itself solely with employment agencies and the relevance of the Consumer Protection Act thereto.

Respondent's second argument is that the reference in RCW 19.31.210 to RCW 19.86 necessarily includes a reference to the exemption provision in RCW 19.86.170. Thus, respondents urge that employment agencies are exempt from the Consumer Protection Act pursuant to RCW 19.86.170 because they are regulated by RCW 19.31. Obviously, this is circular ratiocination, which renders completely Nugatory the proviso in RCW 19.31.210 and contravenes the familiar rule of statutory construction that a statute should be construed to make it purposeful and effective rather than futile and meaningless. See DeGrief v. Seattle, 50 Wash.2d 1, 297 P.2d 940 (1956). Cf. Kelleher v. Ephrata School Dist., 56 Wash.2d 866, 355 P.2d 989 (1960).

Third, respondents suggest that even if the Consumer Protection Act is applicable to employment agencies, it can be so applied only if the Attorney General First files an action in the name of the State. But we do not find any language in RCW 19.31.210 supportive of such a conclusion. The proviso which grants to the Attorney General authority to apply the powers he derives from the Consumer Protection Act to employment agencies certainly contains no intimation that an action in the name of the State must first be filed. Indeed, RCW 19.31.210 makes clear that actions in the name of the State are totally discretionary because they May be commenced 'in addition to any other action' that may be brought. Thus, there is no basis for concluding that 'other actions' such as service of a civil investigative demand must be preceded by filing an action in...