Opinion
No. WD 52837
Filed: December 24, 1996
APPEAL FROM COLE COUNTY CIRCUIT COURT, THE HONORABLE PATRICIA JOYCE, JUDGE.
Robert Jester, Suite 2121, 1100 Main, KCMO 64105, for appellant.
Stephen R. Martin, II, Attorney General Office, P.O. Box 899, Jefferson City, MO 65102, for respondent.
Before Smart, P.J., Spinden and Ellis, JJ.
Adams Ford Belton, Inc., appeals the Missouri Motor Vehicle Commission's decision to discipline Adams Ford's motor vehicle dealer license for violating state advertising regulations. Adams Ford contends that the regulations were unconstitutional and that the commission acted without jurisdiction because it did not find that Adams Ford's advertisements were false. It also complains about the circuit court's failure to make certain findings of fact when it reviewed the commission's decision. Because Adams Ford presents a real and substantial issue of the constitutionality of one of the commission's regulations, we transfer the case to the Supreme Court of Missouri.
Adams Ford is a car dealership. On Saturday, April 2, 1994, it placed an advertisement in a Kansas City newspaper: "$5,000* GUARANTEES WE WILL BEAT ANY DEAL, ANY WHERE, ANY TIME." The asterisk referred to smaller print which said, "ALL APPLICABLE REBATES TO DEALER[.]" Other conditions applied, but they did not appear in the ad. On May 28, 1994, Adams Ford placed another advertisement in the same newspaper: "$100 OVER FORD FACTORY INVOICE ON ALL MODELS IN STOCK[.]"
In August 1994, the commission filed a complaint against Adams Ford alleging that the two advertisements violated the commission's advertising regulations, 12 CSR 60-5.01(2)(AA) and 12 CSR 60-5.010(2)(M). Regulation 12 CSR 60-5.010(2)(AA) says, "Licensees shall not make any reference to matching or bettering competitors' prices in any advertisement unless all limitations are clearly and conspicuously disclosed. Any policy shall not place an unreasonable burden on the consumer[.]" Regulation 12 CSR 60-5.010(2)(M) says, "Licensees shall not advertise a motor vehicle with regards to the invoice price, dealer cost, or any similar term or phrase as consumers equate invoice with cost which is misleading and prohibited[.]" The commission asserted that § 301.562.2(6), RSMo 1994, authorized it to discipline Adams Ford's motor vehicle dealer license.
That section says that the commission may discipline licensees for "[v]iolation of . . . any lawful rule or regulation adopted pursuant to sections 301.550 to 301.572[.]"
On October 28, 1994, the commission's hearing officer held a hearing. The hearing officer concluded that Adams Ford violated 12 CSR 60-5.010(2)(AA) and ordered that a private letter of admonition be issued. They hearing officer also determined that Adams Ford violated 12 CSR 60-5.010(2)(M) and ordered that Adams Ford's motor vehicle dealer's license be suspended for two days. Adams Ford filed its application for review with the commission. The commission found that the facts did not support the hearing officer's decision to impose a two day suspension. The commission ordered that Adams Ford be issued a private reprimand for both of the violations of the regulations.
Before the hearing with the commission, Adams Ford filed a declaratory judgment action with the circuit court alleging that the commission's regulations violated its constitutional rights. After the hearing, it also filed a petition seeking review of the administrative hearing with the circuit court. The circuit court consolidated the cases, and the parties agreed that the record of the administrative hearing would serve as the record for the disposition of the declaratory judgment case and the administrative review case. The circuit court upheld the constitutionality of the advertising regulations and affirmed the final decision of the commission.
The Supreme Court has exclusive jurisdiction of all cases involving the validity of a statute. Mo. Const. art. V, § 3 (1945). Duly-promulgated regulations have the force and effect of statutes; therefore, review of a regulation's constitutionality also falls within the Supreme Court's exclusive jurisdiction. Department of Social Services v. Villa Capri Homes, Inc., 684 S.W.2d 327, 329, 332 (Mo. banc 1985); Cosada Villa of Missouri, Inc. v. Department of Social Services, 868 S.W.2d 157, 160 (Mo.App. 1994). If any point on appeal involves such an issue, the entire case must be transferred to the Supreme Court. In re Estate of Potashnick, 841 S.W.2d 714, 718 (Mo.App. 1992) (citing State ex rel. Union Electric v. Public Service Commission, 687 S.W.2d 162, 165 (Mo. banc 1985)). If the constitutionality issue is substantial, and not merely colorable, exclusive jurisdiction rests with the Supreme Court. Duncan v. Missouri Board for Architects, Professional Engineers and Land Surveyors, 744 S.W.2d 524, 530-31 (Mo.App. 1988). A claim is:
[S]ubstantial when, upon preliminary inquiry, the contention discloses a contested matter of right, involving some fair doubt and reasonable room for controversy; but, if such preliminary inquiry discloses that the contention is so obviously unsubstantial and insufficient, either in fact or in law, as to be plainly without merit and a mere pretense, the claim may be deemed to be merely colorable.
Kansas City Star Company v. Shields, 771 S.W.2d 101, 103 (Mo.App. 1989) (quoting State v. Egan, 272 S.W.2d 719, 725 (Mo.App. 1954)). See also Postashnick, 841 S.W.2d at 718.
Adams Ford contends that the commission's regulation, 12 CSR 60-5.010(2)(M) violates its rights of free speech guaranteed by the U.S. Const. amend. I and Mo. Const. art. I, § 8 (1945). It claims that the regulation is unconstitutional because: (1) its advertisement was truthful, (2) "invoice" is not inherently misleading — only potentially misleading; and (3) the commission's proscription of "invoice" is not narrowly-tailored to serve an important state interest.
The parties agree that the advertisements involve commercial speech and that commercial speech receives less protection than non-commercial speech. Central Hudson Gas and Electric Corporation v. Public Service Commission of New York, 447 U.S. 557, 563 (1980). In analyzing commercial speech cases, the courts use this four-part test:
At the outset, we must determine whether the expression is protected by the First Amendment. For commercial speech to come within that provision, it at least must concern lawful activity and not be misleading. Next, we ask whether the asserted governmental interest is substantial. If both inquiries yield positive answers, we must determine whether the regulation directly advances the governmental interest asserted, and whether it is not more extensive than is necessary to serve that interest.
The Supreme Court explained that the last prong of the test requires "a `fit' between the legislatures ends and the means chosen to accomplish those ends, . . . a fit that is not necessarily perfect, but reasonable[.]" Board of Trustees v. Fox, 492 U.S. 469, 480 (1989).
The Supreme Court explained that the last prong of the test requires "a `fit' between the legislatures ends and the means chosen to accomplish those ends, . . . a fit that is not necessarily perfect, but reasonable[.]" Board of Trustees v. Fox, 492 U.S. 469, 480 (1989).
Id. at 566. As the Central Hudson court explained, "[T]here can be no constitutional objection to the suppression of commercial messages that do not accurately inform the public about lawful activity. The government may ban forms of communication more likely to deceive the public than to inform it[.]" Id. at 563.
Determining whether the use of "invoice" in a car dealer's advertisements is more likely to deceive the public rather than inform it presents a real and substantial constitutional issue. We, therefore, transfer the case to the Supreme Court for its determination.
Although Adams Ford challenged the regulations on other constitutional grounds, its free speech challenge to 12 CSR 60-5.010(2)(M) was the only constitutional challenge which we found to be real and substantial.
Smart, P.J., and Ellis, J., concur.