Wilson v. Connecticut Product Development Corp.

• Decision Date: 13 August 1974
• Citation: 167 Conn. 111,355 A.2d 72
• Parties: F. Perry WILSON, Jr., et al. v. CONNECTICUT PRODUCT DEVELOPMENT CORPORATION et al.
• Court: Connecticut Supreme Court

Page 72

355 A.2d 72

167 Conn. 111

F. Perry WILSON, Jr., et al. v. CONNECTICUT PRODUCT DEVELOPMENT CORPORATION et al.

Supreme Court of Connecticut.

Aug. 13, 1974.

Andrew G. Brucker, with whom, on the brief, was Richard S. Weinstein, Norwalk, for plaintiffs.

John K. Jepson, Asst. Atty. Gen., with whom, on the brief, was Robert K. Killian, Atty. Gen., for defendants.

Before HOUSE, C.J., and COTTER, SHAPIRO, LOISELLE and MacDONALD, JJ.

COTTER, Associate Justice.

The plaintiffs seek a declaratory judgment to determine the constitutionality of Public Act No. 248, adopted by the 1972 General Assembly, now chapter 581, §§ 32-32 through 32-46 inclusive of the General Statutes. The plaintiffs bring this action in their capacity as citizens, residents, and taxpayers of Connecticut. The superior court (Parksey, J.) ordered that proper notice of the pendency of the action be given to all Connecticut citizens, residents, and taxpayers by appropriate newspaper publication.

Under 1972 Public Acts, No. 248, the state may provide direct financial assistance to private enterprises for the development and exploitation of products and inventions in Connecticut. The act establishes a quasi-public instrumentality designated the 'Connecticut Product Development Corporation' (hereinafter referred to as 'corporation' or 'C.P.D.C.') to implement its provisions. General Statutes § 32-35. Its purpose is 'to stimulate and encourage the development of new products within Connecticut by the infusion of financial aid for invention and innovation in situations where such financial aid would not otherwise be reasonably available from commercial sources . . ..' General Statutes § 32-39. The corporation determines on a case-by-case basis which applicants are eligible to receive financial assistance to develop qualifying products and projects after instituting a staff investigation and reviewing its report. General Statutes §§ 32-39, 32-40. The corporation's powers are enumerated in § 32-39, subsections (1) through (14) inclusive.

The creation of the C.P.D.C. resulted from proposals emanating from a study conducted by the governor's strike force for full employment. The strike force, authorized by executive order number 8 (November 16, 1971) was charged to prepare a legislative program that will facilitate full employment and economic development in Connecticut. In the summer of 1972, the strike force submitted an action plan designed to deal with what it described as 'Connecticut's growing job crisis.' The plan called for legislation creating seven wholly innovative programs to respond to the overall economic and employment problems facing Connecticut in the 1970's. The C.P.D.C. proposal was one of the recommended programs.

The act provides for funding by authorizing the state bond commission to issue bonds not exceeding an aggregate amount of ten million dollars to carry out its provisions. General Statutes § 32-41. The defendants Barnes Engineering Company and Kurtz Diecraft, Inc., applied to the C.P.D.C. for financial aid under the act; upon the application of the C.P.D.C., the defendant state bond commission authorized the issuance of bonds with which to provide the requested aid.

Upon a stipulation of facts by the parties, the superior court has reserved the matter for the advice of this court. ¹

The plaintiffs have launched a constitutional attack upon the act. They claim, first, that contrary to the command of article first, § 1, of the Connecticut constitution that 'no man or set of men are entitled to exclusive public emoluments or privileges from the community' it authorizes the use of public funds for a private benefit and not for a public purpose. In addition, they argue that even if the purpose of the act is sufficiently 'public' in the constitutional sense, the standards which it articulates to limit the discretion granted to the officers of the C.P.D.C. are inadequate, such that the act delegate legislative power in a manner prohibited by article third, § 1, of the state constitution.

I

This court has long held that every presumption will be made in favor of the constitutionality of a legislative act. See, e.g., Troiano v. Zoning Commission, 155 Conn. 265, 269, 231 A.2d 536, and cases cited therein. Parties challenging the constitutionality of an act in a proceeding seeking declaratory relief have the burden of showing its invalidity beyond a reasonable doubt. Aunt Hack Ridge Estates, Inc. v. Planning Commission, 160 Conn. 109, 112, 273 A.2d 880; Hardware Mutual Casualty Co. v. Premo, 153 Conn. 465, 470, 217 A.2d 698. When the thrust of the challenge is that the act violates article first, § 1, of the state constitution, the plaintiffs have demonstrated such invalidity if they can show beyond a reasonable doubt that the legislation 'directs the granting of an emolument or privilege to an individual or class without any purpose, expressed or apparent, to serve the public welfare thereby.' Warner v. Gobb, 139 Conn. 310, 313, 93 A.2d 487, 488; Carilli v. Pension Commission, 154 Conn. 1, 6-7, 220 A.2d 439.

Confusion as to the precise meaning of such concepts as 'public purpose' has often thwarted a quick determination of whether a plaintiff has met his burden in an attack upon a legislative act under article first, § 1. The modern trend, both in Connecticut and in other states with similar constitutional provisions, has been to expand and construe broadly the meaning of 'public purpose.' Barnes v. New Haven, 140 Conn. 8, 15, 98 A.2d 523; State ex rel. Wisconsin Dev. Authority v. Dammann, 228 Wis. 147, 166, 227 N.W. 278, 280 N.W. 698; 63 Am.Jur.2d, Public Funds, § 59. As one court has stated, (a) slide-rule definition to determine public purpose for all time cannot be formulated; the concept expands with the population, economy, scientific knowledge, and changing conditions.' Mitchell v. Financing Authority, 273 N.C. 137, 144, 159 S.E.2d 745, 750. See also Barnes v. New Haven, supra, 140 Conn. 15, 98 A.2d 523; McSorley v. Fitzgerald, 359 Pa. 264, 270, 59 A.2d 142. Generally, if an act will promote the welfare of the state, it serves a public purpose. Tough v. Ives, 162 Conn. 274, 292, 294 A.2d 67. In deciding whether an act serves such a purpose this court has traditionally vested the legislature with wide discretion and suggested that the latter'sdetermination should not be reversed unless 'manifestly and palpably incorrect.' Barnes v. New Haven, supra, 140 Conn. 15, 98 A.2d 523.' ²

The plaintiffs argue that any benefit to the public in the way of increased employment and tax revenue sought to be achieved through the creation and operation of the C.P.D.C. is too remote and speculative to survive what they believe to be the demands of article first, § 1. In support of this claim, they call attention to the fact that before the state can receive any return on the money it advances to finance the risk ventures contemplated by the act, those ventures must ultimately prove their success in the marketplace; yet they contend that such success is unlikely since the projects that are eligible for the state's assistance under the act are the kind which most businessmen would characterize as commercially unattractive. They also claim that although the act requires assurances by appellants that the benefits of increased employment and revenues remain in Connecticut, there is no statutory guarantee that such assurances will be enforced. Since the appropriation of public funds to support such projects will produce no direct benefit to the people of Connecticut, the plaintiffs conclude the act must fail as an 'exclusive public emolument' lacking a genuine 'public purpose' contrary to the requirements of article first, § 1.

The presence of a direct benefit to the state from the expenditure of public funds is a useful factor in aiding the court's determination of whether a legislative act serves a public purpose. Beach v. Bradstreet, 85 Conn. 344, 350, 82 A. 1030; Legat v. Adorno, 138 Conn. 134, 142, 83 A.2d 185. But other factors serve a similar function. This court has found that an act serves a public purpose under article first, § 1, when it 'promote(s) the welfare' of the state; Tough v. Ives, supra, 162 Conn. 292, 294 A.2d 67; or when the 'principal reason' for the appropriation is to benefit the public. Roan v. Connecticut Industrial Building Commission, 150 Conn. 333, 339, 189 A.2d 399. 'The test of public use is not how the use is furnished but rather the right of the public to receive and enjoy its benefit.' Barnes v. New Haven, supra, 140 Conn. 15, 98 A.2d 523. The governor's strike force for full employment and the legislature which followed its recommendations in enacting 1972 Public Acts, No. 248, believed that the capital program envisioned as operating under the auspices of the C.P.D.C. would stimulate business in Connecticut by promoting the development of new kinds of products, technologies, and projects, which ordinarily do not attract conventional forms of financing. It was their considered opinion that the support of enterprises eligible for assistance under the act would result in an improved economy for the people of Connecticut by helping to keep new business in the state, to provide increased employment opportunities, and to establish a new source of public revenues. In claiming that the success of such enterprises is only 'speculative,' such that the ultimate benefits to be realized by the state are 'remote,' the plaintiffs merely dispute the business judgment of the legislature; they have not demonstrated that in exercising its judgment the general assembly violated the principle underlying the constitutional requirement that the act serve a public purpose. The strong presumption of the act's constitutionality will not be overcome simply because the plaintiffs' economic forecasts differ from those of the legislature. Schwartz v. Kelly, 140 Conn. 176, 179, 99 A.2d 89, appeal dismissed, 346 U.S. 891...