STIHL, Inc. v. State

• Decision Date: 27 October 2015
• Docket Number: No. 2014–0619,2014–0619
• Citation: 126 A.3d 1192,168 N.H. 332
• Parties: STIHL, INC. v. The STATE of New Hampshire
• Court: New Hampshire Supreme Court

168 N.H. 332

126 A.3d 1192

STIHL, INC.

v.The STATE of New Hampshire

No. 2014–0619

Supreme Court of New Hampshire.

Argued: May 13, 2015

Opinion Issued: October 27, 2015

Wadleigh, Starr & Peters, P.L.L.C., of Manchester (James C. Wheat and Pierre A. Chabot on the brief, and Mr. Wheat orally), and McGuire Woods LLP, of Richmond, Virginia (James H. Walsh and Bethany Gayle Lukitsch on the brief), for the plaintiff.

Joseph A. Foster, attorney general (Francis C. Fredericks, assistant attorney general, on the brief and orally), for the State.

LYNN, J.

In this declaratory judgment action, the defendant, the State of New Hampshire, appeals an order of the Superior Court (Smukler , J.) granting summary judgment to the plaintiff, STIHL Incorporated, individually and doing business as Northeast STIHL (STIHL). The State argues that the trial court erred in finding that STIHL is not subject to RSA chapter 357–C, which regulates business practices between motor vehicle manufacturers, distributors, and dealers. See RSA ch. 357–C (2009 & Supp. 2014). We affirm.

The trial court's order relies upon the following facts. STIHL is a corporation that manufactures, distributes, and sells an array of handheld power and non-power tools such as chain saws, leaf blowers, hedge trimmers, axes, pruners, and mauls. Although many of its products have engines, none has wheels, engine and transmission, or is capable of transporting a person from one location to another. Except for a limited number of national account customers, STIHL does not sell its products directly to consumers. Instead, it authorizes certain retailers to sell STIHL brand tools. In New Hampshire, STIHL has approximately seventy-eight authorized retailers, along with six national account customers.

In 1981, the legislature enacted RSA chapter 357–C, the so-called "dealer bill of rights," to regulate, among others, automotive manufacturers and dealers. See Laws 1981, ch. 477. That statute provided certain protections for motor vehicle dealers from the actions of manufacturers, see generally Laws 1981, 477:2, and, over time, the legislature increased the level of regulation it imposed, see, e.g., Laws 1996, 263:8 (creating the New Hampshire Motor Vehicle Industry Board to enforce the statute); Laws 2002, 215:4, :6 (expanding the definition of motor vehicle). As the legislature expanded RSA chapter 357C, it also enacted RSA chapter 347–A, a similar but less comprehensive regulatory scheme providing protections to equipment dealers. See Laws 1995, ch. 210. In 2013, through Senate Bill (SB) 126, the legislature repealed RSA chapter 347–A, and brought certain equipment manufacturers and dealers under the aegis of RSA chapter 357–C. See Laws 2013, ch. 130. In so doing, the legislature modified the definition of "motor vehicle" in RSA chapter 357–C to "include equipment if sold by a motor vehicle dealer primarily engaged in the business of retail sales of equipment," and defined "equipment" to include, among other things, "forestry equipment" and "yard and garden equipment." Laws 2013, 130:1.

After the enactment of SB 126, STIHL sought a declaratory judgment that RSA chapter 357–C, as amended, did not apply to it. The State countered that, as a "forestry" and "yard and garden" equipment manufacturer, STIHL was subject to regulation under RSA chapter 357–C. Both parties moved for summary judgment. The trial court found that RSA chapter 347–A, before it was repealed, regulated STIHL's agreements with its dealers because, under that statutory scheme, the legislature chose to broadly define the term "equipment."¹ Nevertheless, the court concluded that because STIHL produces only handheld, not ground-supported or wheeled, equipment, it falls outside of the purview of amended RSA chapter 357–C. This appeal followed.

The only issue on appeal is whether the provisions of RSA chapter 357–C apply to STIHL. The State contends that the plain language of the statute supports its position that RSA chapter 357–C applies to STIHL. As a threshold matter, the State argues that the terms "forestry equipment" and "yard and garden equipment" unambiguously include products made by STIHL. Moreover, the State argues that, under the statute's plain language, whether a manufacturer is subject to RSA chapter 357–C ultimately depends upon the character of the manufacturer-dealer relationship. The State contends that STIHL's relationship with its dealers is materially similar to the relationships between tractor and automobile manufacturers and their dealers, entities which are covered by RSA chapter 357–C. Finally, the State argues that because definitional language from RSA chapter 347–A was incorporated into RSA chapter 357–C, the legislature intended that RSA chapter 347–A substantively "live on" in amended RSA chapter 357–C.

STIHL counters that reading the term "equipment" within the definition of the term "motor vehicle," and within the broader context of the motor vehicle statute as a whole, shows that handheld tools are not included within the plain meaning of equipment. STIHL also argues that the "now-obsolete" RSA chapter 347–A is irrelevant to properly construing RSA chapter 357–C, which is "far more onerous, complex and comprehensive than anything contemplated by RSA 347–A." Finally, STIHL contends that the applicability of RSA chapter 357–C cannot turn upon a fact-based, case-by-case inquiry into each manufacturer-dealer relationship because, as a threshold matter, there "first has to be a ‘motor vehicle’ and a ‘motor vehicle dealer.’ "

To resolve this issue, we must engage in statutory interpretation. "The interpretation of a statute is a question of law, which we review de novo. " Favazza v. Braley, 160 N.H. 349, 351, 999 A.2d 1088 (2010) (quotation omitted). "In matters of statutory interpretation, we are the final arbiters of the legislature's intent as expressed in the words of the statute considered as a whole." Id. "When construing its meaning, we first examine the language found in the statute, and where possible, we ascribe the plain and ordinary meanings to the words used." Id. "When statutory language is ambiguous, however, we will consider legislative history and examine the statute's overall objective and presume that the legislature would not pass an act that would lead to an absurd or illogical result." Id. (citation omitted). "We interpret statutory provisions in the context of the overall statutory scheme." Id.

A manufacturer is subject to RSA chapter 357–C if it "engages directly or indirectly in purposeful contacts within this state in connection with the offering or advertising for sale of, or has business dealings with respect to, a motor vehicle within the state." RSA 357–C:2 (2009) (emphasis added). As amended by SB 126, the statute's definitional section provides, in pertinent part, that:

I. "Motor vehicle" means every self-propelled vehicle manufactured and designed primarily for use and operation on the public highways and required to be registered and titled under the laws of New Hampshire. Motor vehicle shall include equipment if sold by a motor vehicle dealer primarily engaged in the business of retail sales of equipment.... "Equipment" means farm and utility tractors, forestry equipment, industrial equipment, construction equipment, farm implements, farm machinery, yard and garden equipment, attachments, accessories, and repair parts.

....

VIII. (a) "Motor vehicle dealer" means any person engaged in the business of selling, offering to sell, soliciting or advertising the sale of new or used motor vehicles or possessing motor vehicles for the purpose of resale....

RSA 357–C:1 (Supp. 2014). Based upon the statutory language, "motor vehicle" can include "equipment" in certain circumstances. While "equipment" is defined broadly, the type of equipment that subjects manufacturers to regulation under the statute is limited to that which is "sold by a motor vehicle dealer primarily engaged in the business of retail sales of equipment." RSA 357–C:1, I (emphasis added). Whether items qualify as "motor vehicles," therefore, depends not only upon the definition of "equipment," but also upon the definition of "motor vehicle dealer." See id. "Equipment" is a "motor vehicle" only if it is "sold by a motor vehicle dealer primarily engaged in the business of retail sales of equipment." Id. (emphasis added). The definition of a "motor vehicle dealer," in turn, incorporates RSA 357–C:1, I, in that a dealer, in part, is someone who sells "motor vehicles." RSA 357–C:1, VIII(a). Consequently, when the two definitions are read together, a "motor vehicle dealer" becomes, in relevant part, "any person engaged in the business of selling, offering to sell, soliciting or advertising the sale of new or used [equipment if sold by a motor vehicle dealer]." Id.

This largely circular definition provides little clarity as to which manufacturers or sellers of equipment fall within the purview of the statute. What does seem clear, however, is that if the legislature had intended that the statute apply to any items of "equipment" that meet the criteria specified in the fourth sentence of RSA 357–C:1, I, and which are "sold by a ... dealer primarily engaged in the business of retail sales" thereof, there would have been no reason for the second sentence of that section to include the term "motor vehicle dealer." That it did include such term indicates that the legislature intended the statute to have a more restrictive scope with respect to the "equipment" that falls within its reach. See State Employees Assoc. of N.H. v. N.H. Div. of Personnel, 158 N.H. 338, 345, 965 A.2d 1116 (2009) (noting the "elementary principle of statutory construction that all of the words of a statute must be given effect and that the legislature is presumed not to have used superfluous or redundant words" (quotation omitted)). Given the definitional circularity, even assuming without deciding that STIHL sells "equipment," we cannot...