Opinion
No. 60273-0-I.
July 7, 2008.
Appeal from a judgment of the Superior Court for King County, No. 99-2-20202-3, Linda Lau, J., entered June 30, 2006.
Affirmed by unpublished opinion per Schindler, C.J., concurred in by Grosse and Cox, JJ.
The legislature in former RCW 72.09.100(1) (2002), "Class I: Free Venture Industries," authorized the Department of Corrections (DOC) to contract with private businesses to hire inmates and operate a prison work program. In 1995, Jet Holdings, Ltd., d/b/a MicroJet (MicroJet) entered into a contract with DOC to employ inmates and operate its water jet cutting business at the Monroe Corrections Center. In 1999, a number of other water jet industry businesses, identifying themselves as the Washington Water Jet Workers Association (Water Jet), sued DOC, claiming former RCW 72.09.100(1) and the contract with MicroJet violated the prohibition in the Washington State Constitution against contracting for prisoner labor, article II, section 29. Water Jet also claimed former RCW 72.09.100(1) violated the Ashurst-Sumners Act, 18 U.S.C. § 1761 and 42 U.S.C. § 1983. In Wash. Water Jet Workers Ass'n v. Yarbrough, 148 Wn.2d 403, 61 P.3d 309 (2003), (Water Jet I) aff'd in part and rev'd in part, 151 Wn.2d 470, 90 P.3d 42 (2004), cert. denied, 543 U.S. 1120, 125 S. Ct. 1070, 160 L.Ed.2d 1068 (2005) (Water Jet II), the court held that the Class I Industries prisoner work program under former RCW 72.09.100(1) did not violate article II, section 29 of the Washington State Constitution. The court also affirmed dismissal of Water Jet's claims under the 42 U.S.C. § 1983 and Ashurst-Sumners Act. But on reconsideration, the Washington Supreme Court held that former RCW 72.09.100(1) violated article II, section 29, and remanded to the trial court. Wash. Water Jet Workers Ass'n v. Yarbrough, 151 Wn.2d 470, 90 P.3d 42 (2004), cert. denied, 543 U.S. 1120, 125 S. Ct. 1070, 160 L.Ed.2d 1068 (2005).
On remand, plaintiffs filed an amended complaint for damages. The complaint alleged (1) that RCW 72.09.100(1) created a duty to protect businesses from unfair competition and to require Class I Industries work programs to pay prisoners a prevailing wage, (2) tortious interference, and (3) violation of due process and 42 U.S.C. § 1983. The plaintiffs also alleged a tort claim for damages based on violation of the state constitution. On cross motions for summary judgment, the trial court dismissed the amended complaint for damages. We conclude that the plaintiffs do not have an express or implied cause of action for damages under former RCW 72.09.100(1), that they cannot establish DOC intentionally interfered with a contractual relationship or business expectancy for an improper purpose or used improper means, and cannot establish a violation of a right to due process. And because our supreme court has refused to recognize a cause of action for damages based on a constitutional tort theory, we affirm.
FACTS
Enacted in 1935, the Ashurst-Sumners Act, 18 U.S.C. § 1761, prohibited transporting prisoner-made goods. In 1979, Congress amended the Ashurst-Sumners Act to allow the interstate transport of goods made by prisoners for certain prisoner work programs certified by the Bureau of Justice Assistance Private Sector/Prison Industry Enhancement Certification Program (PIECP). 18 U.S.C. § 1761. The purpose of the federal PIECP program is to "increas[e] benefits to the public including crime victims" and to "provid[e] purposeful work for inmates . . . while increasing job skills and opportunities for rehabilitation." 50 Fed. Reg. 12664 (1985).
In 1981, in response to the amendment to the Ashurst-Sumners Act, the Washington State Legislature authorized the Department of Corrections (DOC) to provide a comprehensive work program for prisoners and enacted legislation to create five different classes of prison work programs. The five classes are: "Class I: Free Venture Industries, Class II: Tax Reduction Industries, Class III: Institutional Support Industries, Class IV: Community Work Industries, and Class V: Community Restitution Programs." Former RCW 72.09.100. For a work program to obtain certification under PIECP, prisoner participation in the work programs had to be voluntary and prisoners paid wages comparable to local workers. 18 U.S.C. § 1761(c).
In 1994, the legislature directed DOC to increase the number of inmates participating in the Class I: Free Venture Industries (Class I industries work program) and Class II: Tax Reduction Industries (prisoner work programs). RCW 72.09.111(4) (1994). In 1995, DOC entered into a contract with MicroJet to operate a Class I industries work program under RCW 72.09.100(1). The purpose of the contract was to provide "work or training and/or vocational training for offenders of the Washington State Reformatory" at the Monroe Corrections Center. DOC agreed to refer prisoners to MicroJet to work as employees, and based on the interviews MicroJet decided whether to offer a position to the prisoners. MicroJet paid the wages to DOC as the trustee for the prisoners. Under the contract, MicroJet was allowed to use industrial space at the Monroe Corrections Center rent free and with utilities at a discounted rate.
Water Jet I, 148 Wn.2d at 425.
In 1999, a number of water jet industry businesses, identifying themselves as Washington Water Jet Workers Association (Water Jet), sued DOC, Howard Yarbrough both as the Director of Correctional Industries and in his individual Page 5 capacity, and MicroJet. Water Jet alleged that the Class I industries prisoner work program under RCW 72.09.100(1) and the contract between MicroJet and DOC violated article II, section 29 of the Washington Constitution, the Ashurst-Sumners Act, and 42 U.S.C. § 1983. Water Jet appealed summary judgment dismissal of its lawsuit.
Water Jet also sued two of MicroJet's owners, Kenneth and Sharon Piel. The claims against the Piels were dismissed and are not at issue on appeal.
In Water Jet I, the court in a 5-4 decision held that the Class I industries prisoners work program did not violate art. II, § 29 because the statute "prohibits only the contract system of labor, not the private, voluntary employment of prisoners." Water Jet I, 148 Wn.2d at 428. The court also affirmed the dismissal of Water Jet's claims based on the Ashurst-Sumners Act and 42 U.S.C. § 1983. Water Jet I, 148 Wn.2d at 427.
But on reconsideration in another 5-4 decision, the Court reversed in part and held that the Class I industries prisoner work program under RCW 72.09.100(1) violated article II, section 29. Water Jet II, 151 Wn.2d at 502. However, the court again expressly affirmed dismissal of Water Jet's claims under the Ashurst-Sumners Act and 42 U.S.C. § 1983. Water Jet II, 151 Wn.2d at 503. The court denied the parties' motions for reconsideration and issued a mandate on August 18, 2004. DOC directed the Class I industries work programs to begin dismantling the programs and to cease employing prisoners by September 9, 2004.
Former article II, section 29 provided:
After the first day of January eighteen hundred and ninety the labor of convicts of this state shall not be let out by contract to any person, copartnership, company, or corporation, and the legislature shall by law provide for the working of convicts for the benefit of the state.
On remand, the trial court granted the motion of a number of other businesses in the water jet cutting industry to file an amended complaint. The seven water jet industry businesses named in the amended complaint, Definitive Solutions and Technologies, Inc., Cutting Technology, Inc., Jetpoint Technologies, LLC, Specialty Metals, Corp., Pegasus Northwest, Inc., Maxtec, Inc., and Talon Industries (collectively "Talon"), asserted tort claims for damages and also asserted that DOC and Yarbrough violated the Consumer Protection Act (CPA), chapter 19.86 RCW, their due process rights, and 42 U.S.C. § 1983. On cross motions for summary judgment, the court in June 2006, dismissed Talon's lawsuit against DOC and Yarbrough. Talon appeals. In 2007, article II, section 29 was amended by referendum to allow prisoners to work in Class I industries work programs.
Article II, section 29 now provides:
The labor of inmates of this state shall not be let out by contract to any person, copartnership, company, or corporation, except as provided by statutes, and the legislature shall by law provide for the working of inmates for the benefit of the state, including the working of inmates in state-run inmate labor programs. Inmate labor programs provided by statute that are operated and managed, in total or in part, by any profit or nonprofit entities shall be operated so that the programs do not unfairly compete with Washington businesses as determined by law.
ANALYSIS
Talon contends the trial court erred in dismissing its claims for damages against DOC and Yarbrough. Talon alleges it was entitled to damages based on (1) DOC's statutory duty under former RCW 72.09.100(1) to require certified Class I industries work programs to pay prisoners a comparable wage in order to protect private businesses from unfair competition, (2) tortious interference with Talon's contracts and business expectancies by improper means, and (3) violation of Talon's due process rights and 42 U.S.C. § 1983. In the alternative, Talon asked the court to recognize a constitutional cause of action for damages for violation of the state constitution.
We review summary judgment de novo and engage in the same inquiry as the trial court. Heath v. Uraga, 106 Wn. App. 506, 512, 24 P.3d 413 (2001). Summary judgment is proper if the pleadings, depositions, answers, and admissions, together with the affidavits, show that there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. CR 56(c). Questions of law are reviewed de novo. Wilson Court Ltd. Pshp. v. Tony Maroni's, Inc., 134 Wn.2d 692, 698, 952, P.2d 590 (1998). RCW 72.09.100(1)
Talon contends that it has a cause of action for damages under former RCW 72.09.100(1) based on DOC's failure to ensure that MicroJet paid the prisoners a prevailing wage in order to protect private businesses from certain competition. The meaning of a statute is a question of law that we review de novo. Dep't of Ecology v. Campbell Gwinn LLC, 146 Wn.2d 1, 9, 43 P.3d 4 (2002). The primary objective in statutory interpretation "is to ascertain and give effect to the intent of the legislature." King County v. Taxpayers of King County, 104 Wn.2d 1, 5, 700 P.2d 1143 (1985).
Former RCW 72.09.100(1), the Class I industries work program, allowed DOC to contract with profit and nonprofit businesses to operate and manage a prisoner work program and hire prisoners. Before entering into a contract, the statute directed the Correctional Industries Board of Directors to review the proposed industry and analyze "the potential impact of the proposed products and services on the Washington state business community and labor market." Consistent with PIECP, former RCW 72.09.100(1) requires prisoners who worked in a Class I industries work program do so by choice, to be paid a comparable wage for similar work in the local industry as determined by the director of correctional industries, and, if a comparable wage cannot be determined, then to be paid federal minimum wage. Former 72.09.100(1) (2002) provides in pertinent part:
(1) CLASS I: FREE VENTURE INDUSTRIES. The employer model industries in this class shall be operated and managed in total or in part by any profit or nonprofit organization pursuant to an agreement between the organization and the department. The organization shall produce goods or services for sale to both the public and private sector.
The customer model industries in this class shall be operated and managed by the department to provide Washington state manufacturers or businesses with products or services currently produced or provided by out-of-state or foreign suppliers. The correctional industries board of directors shall review these proposed industries before the department contracts to provide such products or services. The review shall include an analysis of the potential impact of the proposed products and services on the Washington state business community and labor market.
. . .
Inmates who work in free venture industries shall do so at their own choice. They shall be paid a wage comparable to the wage paid for work of a similar nature in the locality in which the industry is located, as determined by the director of correctional industries. If the director cannot reasonably determine the comparable wage, then the pay shall not be less than the federal minimum wage.
This is the version of RCW 79.02.100(1) in effect from 1992 to 2004. In 2004, the legislature amended and expanded RCW 79.02.100(1).
Talon does not dispute that former RCW 72.09.100(1) does not expressly create a private cause of action for damages. But Talon contends RCW 72.09.100(1) creates an implied private cause of action for damages.
The Washington Supreme Court has adopted a three part test to determine whether a statute creates an implied cause of action:
[F]irst, whether the plaintiff is within the class for whose 'especial' benefit the statute was enacted; second, whether legislative intent, explicitly or implicitly, supports creating or denying a remedy; and third, whether implying a remedy is consistent with the underlying purpose of the legislation.
Bennett v. Hardy, 113 Wn.2d 912, 920-21, 784 P. 2d 1258 (1990) (citation omitted).
Applying the first prong of the Bennett test, Talon does not establish that the legislature enacted the statute for the "especial" benefit of private businesses. And the plain language of RCW 72.09.100(1) does not expressly grant rights to an identifiable class or to private businesses. Talon also does not cite any legislative history that indicates the legislature intended to create a remedy for private businesses.
Talon also fails to establish the second and third prongs of the Bennett test. The purpose of the Class I industries work program is to benefit the prisoners and society in general. The legislature expressly states that the purpose of RCW 72.09.100 is to give DOC the authority to adopt a comprehensive work program and to remove the statutory restrictions which previously limited those programs. The stated intent of the legislature is to provide prisoners with work experience, training, and the opportunity to develop a work ethic. Former RCW 72.09.100 (2002) provides in pertinent part:
It is the intent of the legislature to vest in the department the power to provide for a comprehensive inmate work program and to remove statutory and other restrictions which have limited work programs in the past. For purposes of establishing such a comprehensive program, the legislature recommends that the department consider adopting any or all, or any variation of, the following classes of work programs . . .
The court in Water Jet II also addressed the purpose of RCW 72.09.100(1), stating "[t]he legislature intended to avoid inmate idleness, encourage adoption of the work ethic, provide opportunities for inmate self-improvement, and provide a means for payment of restitution." Water Jet II, 151 Wn.2d at 474. And when the prevailing wage requirement was amended in 1992, the Bill Report directed DOC to develop and implement programs designed to offer prisoners employment, work experience and training, and stated that the inmate work programs "contribute more to Washington's economy than the private sector would by manufacturing the same product with the same profit motive and the same labor to capital mix. This is due to the benefits taxpayers receive in the form of reduced cost to corrections and reduced recidivism." ESHB 2268 (1992).
Talon's assertion that the Ashurst-Sumners Act, 18 U.S.C. § 1761, and federal case law support its argument that the purpose of RCW 72.09.100(1) is to protect private businesses is also unpersuasive. Section (a) of the Ashurst-Sumners Act broadly prohibits the transportation of goods made by prisoners in interstate commerce. But sections (b) and (c) exempt prison-made goods manufactured for government or made by prisoners participating in certified prison work programs. 18 U.S.C. § 1761(b), (c)(2). One of the requirements of PIECP is that the private industry participants pay inmates a wage at a "rate which is not less than that paid for work of a similar nature in the locality in which the work is to be performed." 64 Fed. Reg. 17009 (1999).
"This requirement benefits society by allowing for the development of prison industries while protecting the private sector labor force and business from unfair competition that could otherwise stem from the flow of low-cost, prisoner-made goods into the marketplace." 64 Fed. Reg. 17009 (1999).
Under federal law, it is well established that the Ashurst- Sumners Act provides no private cause of action. McMaster v. Minnesota, 819 F. Supp. 1429 (D. Minn. 1993); Wentworth v. Solem, 548 F.2d 773, 775, (8th Cir. 1977). In Wentworth, the court held that there was no private right of action under Ashurst-Sumners to enforce the Act's wage provisions. Wentworth, 548 F.2d at 775. The court in McMaster also concluded that the inmates did not have a private right of action under the Ashurst-Sumners Act. McMaster, 819 F.Supp. at 1439-41. In reaching this conclusion the court stated:
The legislative history cited by plaintiffs does indicate that in enacting the prevailing wage provision, Congress had more in mind than merely safeguarding against unfair competition; Congress also intended the Prison Industry Certification Program and its prevailing wage requirement to help reduce inmate idleness, recidivism rates, and the costs of incarceration. Those benefits, however, accrue not specifically to inmates, but to prison administrators and to society in general. Moreover, although the prevailing wage provisions were intended to help inmates meet their financial obligations while incarcerated, it is again society in general that benefits from the inmates' ability to do so: society gains if prisoners pay taxes, support their families, and compensate their victims.
In short, the legislative history cited by plaintiffs indicates that the primary purpose of the prevailing wage provision was to benefit society in general by eliminating unfair competition, reducing the direct and indirect costs of incarceration, and enhancing rehabilitation efforts.
Although federal case law recognizes that one of the purposes of the Ashurst-Sumners Act is to protect small businesses from unfair competition, this is not the only purpose, and federal law does not recognize a private right of action to protect businesses harmed by unfair competition. Other recognized purposes of the Act include reducing the costs of incarceration, enhancing rehabilitation, and benefiting society in general.
Likewise, we conclude that former RCW 72.09.100 was not enacted to protect only private businesses or create a private cause of action for damages. The express purpose of the statute is to provide a comprehensive prisoner work program. Although RCW 72.09.100(1) requires an analysis of the potential impact of a Class I industries work program contract on private businesses and the labor market, the primary purpose of the statute is to benefit society by providing job training, opportunity to develop a work ethic, and a means to pay restitution to the victims.
Under the three-prong Bennett test, we hold that former RCW 72.09.100(1) does not create an implied private cause of action for damages. The legislature did not enact RCW 72.09.100(1) for the especial benefit of private businesses, legislative intent does not support creating a remedy, and implying a remedy is inconsistent with the underlying purpose of the legislation.
Tortious Interference
Talon contends the trial court erred in dismissing the tortious interference cause of action. Talon claims that DOC and Yarbrough intentionally interfered with a contractual relationship or business expectancy by improper means.
To establish tortious interference with a contractual relationship or business expectancy, the plaintiff must prove:
(1) the existence of a valid contractual relationship or business expectancy; (2) that defendants had knowledge of that relationship; (3) an intentional interference inducing or causing a breach or termination of the relationship or expectancy; (4) that defendants interfered for an improper purpose or used improper means; and (5) resultant damage.
Leingang v. Pierce County Medical Bureau, Inc., 131 Wn.2d 133, 157, 930 P.2d 288 (1997). A plaintiff must establish all of the essential elements to support a claim of tortious interference. See Boyce v. West, 71 Wn. App. 657, 665, 862 P.2d 592 (1993) ("A defendant who can point out to the trial court that the plaintiff lacks competent evidence to support an essential element of the plaintiff's case is entitled to summary judgment because a complete failure of proof concerning an element necessarily renders all other facts immaterial.").
Talon's tortious interference claim fails because Talon cannot establish that DOC and Yarbrough interfered with a contractual relationship or business expectancy or for an improper purpose or used improper means. Talon relies on Pleas v. Seattle, 112 Wn.2d 794, 804, 774 P.2d 1158 (1989), to argue that by violating the state constitution, DOC interfered for an improper purpose and by improper means. Pleas is distinguishable. In Pleas, city officials intentionally prevented, blocked, and delayed issuing a building permit despite a court decision that the City's actions were arbitrary and capricious. Pleas, 112 Wn.2d at 798-99.
Here, unlike Pleas, DOC's actions were not arbitrary and capricious. The Washington Supreme Court initially decided the Class I industries work program under RCW 72.09.100(1) did not violate the constitution. Water Jet I, 148 Wn.2d at 403. But on reconsideration, the court decided RCW 72.09.100(1) was contrary to article II, section 29. Water Jet II, 151 Wn.2d 470. After the mandate was issued on August 18, 2004, DOC immediately directed all Class I industries to begin dismantling work programs and to stop employing prisoners by September 9. On this record, Talon cannot establish tortious interference with a business expectancy claim. 42 U.S.C. § 1983
There is also no evidence in the record of any contracts or business expectancies or that DOC or Yarbrough intentionally interfered with Talon's contracts or business expectancies.
Talon also claims the trial court erred in dismissing its claim for damages under 42 U.S.C. § 1983. To prevail under 42 U.S.C. § 1983, Talon must establish that DOC and Yarbrough deprived it of its constitutional rights. Daniels v. Williams, 474 U.S. 327, 330-31, 106 S. Ct. 662, 664-65, 88 L.Ed.2d 662 (1986). Because Talon fails to present any evidence establishing the existence of a federally protected liberty or property interest related to operation of the Class I industries work program under RCW 72.09.100(1), Talon cannot establish a § 1983 claim against DOC.
Additionally, even if Talon could establish a federal constitutional right, Yarbrough is entitled to qualified immunity. Qualified immunity provides that "government officials performing discretionary functions generally are shielded from liability for civil damages insofar as their conduct does not violate clearly established statutory or constitutional rights of which a reasonable person would have known." Harlow v. Fitzgerald, 457 U.S. 800, 818, 102 S. Ct. 2727, 73 L.Ed.2d. 396 (1982). Yarbrough merely implemented the legislative directive to establish a Class I industries work program. Qualified immunity "must be granted when the law or right allegedly violated is not clearly established." Robinson v. City of Seattle, 119 Wn.2d 34, 65, 830 P.2d 318 (1992).
Talon did not show that the Class I industries work programs violated the federal constitution. Harlow, 457 U.S. at 818. Here, Yarbrough acted in his official capacity to implement the prisoner work program authorized by the legislature in 1981. After the Washington Supreme Court issued Water Jet II, both parties filed motions for reconsideration. The mandate was issued on August 18, 2004. Yarbrough took reasonable steps to terminate the program, instructing MicroJet to dismantle its program and stop using prisoners as employees by September 9. Because Yarbrough is entitled to qualified immunity, the trial court did not err in dismissing Talon's claims under 42. U.S.C. § 1983.
Constitutional Tort
As an alternative argument, Talon contends that the court should recognize a constitutional cause of action for damages based on violation of the state constitution. Because our appellate courts have consistently refused to recognize a state constitutional tort for damages, we decline to do so. See Reid v. Pierce County, 136 Wn.2d 195, 213-14, 961 P.2d 333 (1998) (refusing to recognize a constitutional cause of action when plaintiffs did not present a reasoned or principled basis for one nor establish that it would be more appropriate than common law causes of action); Blinka v. Wash. State Bar Ass'n, 109 Wn. App. 575, 591, 36 P.3d 1094 (2001) (Washington courts will not recognize a cause of action based on constitutional violations without legislative guidance).
Because we affirm dismissal of Talon's lawsuit, we need not address the arguments raised in the cross appeal.
WE CONCUR: