Petstel, Inc. v. County of King

459 P.2d 937, 77 Wash. 2d 144, 1969 Wash. LEXIS 573, 1969 Trade Cas. (CCH) 72
CourtWashington Supreme Court
DecidedOctober 23, 1969
Docket39863
StatusPublished
Cited by88 cases

This text of 459 P.2d 937 (Petstel, Inc. v. County of King) is published on Counsel Stack Legal Research, covering Washington Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Petstel, Inc. v. County of King, 459 P.2d 937, 77 Wash. 2d 144, 1969 Wash. LEXIS 573, 1969 Trade Cas. (CCH) 72 (Wash. 1969).

Opinion

Neill, J.

This is an appeal from a decree upholding the validity of a King County resolution fixing maximum rates to be charged by employment agencies.

On December 12, 1966, the King County Board of Commissioners passed resolution No. 32792 regulating employment agencies. The resolution contains provisions requiring bonds, licenses and records, prohibiting charges on the promise of future work, prohibiting division of fees, and established a schedule of maximum fees which could be charged clients by employment agencies.

The resolution was passed after a public hearing at which proponents and opponents of the proposed resolution, including plaintiff, were allowed to present views. The commissioners had letters from employment agencies objecting to the fee structure set by a prior resolution (which .contained lower maximum rates than the resolution now in *147 question). There was one letter from an agency approving the rates adopted by resolution No. 32792. The county had also received an unspecified number of citizen complaints about excessive charges by employment agencies. Other than this hearing, the county conducted no special investigation of rates charged by employment agencies, and, so far as appears from the record, the above material was all that was available to the commissioners when considering the resolution.

Plaintiff brought this declaratory judgment action seeking a decree that the resolution is unconstitutional and for a permanent injunction against its enforcement. Findings of fact and conclusions of law were entered after trial which, insofar as relevant to this appeal, concluded (1) that the county may, in the exercise of its police power, regulate employment agencies; (2) that the resolution’s provision fixing maximum rates is a reasonable exercise of this power; (3) that the rates set were not patently unreasonable; (4) that the resolution did not conflict with general laws; (5) that the resolution is not discriminatory against plaintiff or employment agencies as a class; and (6) that resolution No. 32792 is valid and constitutional. Accordingly, the relief sought by plaintiff was denied.

Plaintiff’s primary contention is that the King County resolution fixing maximum rates for employment agencies violates the due process clause of U.S. Const, amend. 14 and Const, art. 1, § 3. The validity of the resolution as a regulation of a private business must rest upon the police power delegated to the counties by Const, art. 11, § 11:

Any county, city, town or township may make and enforce within its limits all such local police, sanitary and other regulations as are not in conflict with general laws.

The early view of the due process limitations upon the states’ power to regulate prices is exemplified by Ribnik v. McBride, 277 U.S. 350, 72 L. Ed. 913, 48 S. Ct. 545, 56 A.L.R. 1327 (1928). It was there held that a price-fixing regulation, in order to be valid, must concern a business “affected with a public interest.” (p. 355.) To be affected *148 with a public interest, a business must have been devoted to a public use “and an interest in effect granted to the public in that use.” An employment agency was not deemed to be such a business and a New Jersey, law regulating the fees charged by these agencies was declared unconstitutional.

Within 6 years after Ribnik, the United States Supreme Court began a retreat from this view of due process. A New York statute fixing the minimum and maximum retail prices of milk was upheld in Nebbia v. New York, 291 U.S. 502, 78 L. Ed. 940, 54 S. Ct. 505, 89 A.L.R. 1469 (1934). A Washington statute authorizing the setting of minimum wages for minors and women was upheld in West Coast Hotel Co. v. Parrish, 300 U.S. 379, 81 L. Ed. 703, 57 S. Ct. 578, 108 A.L.R. 1330 (1937). A Georgia statute setting maximum warehouse rates for leaf tobacco was approved in Townsend v. Yeomans, 301 U.S. 441, 81 L. Ed. 1210, 57 S. Ct. 842 (1937). The price fixing provisions of the Bituminous Coal Act of 1937 were upheld in Sunshine Anthracite Coal Co. v. Adkins, 310 U.S. 381, 84 L. Ed. 1263, 60 S. Ct. 907 (1940). The minimum wage and maximum hour provisions of the Fair Labor Standards Act of 1938 were upheld in United States v. Darby, 312 U.S. 100, 85 L. Ed. 609, 61 S. Ct. 451, 132 A.L.R. 1430 (1941).

This decline of due process limitations and consequent expansion of the police power was noted by this court as early as 1936 in Shea v. Olson, 185 Wash. 143, 154, 53 P.2d 615, 111 A.L.R. 998 (1936):

While, formerly, the power was viewed as one of strict and direct application, it has now come to be more favored on account of changed and changing economic and social conditions, and at present is frequently relied on to sustain laws which affect the common good in only an indirect way. ... A large discretion is therefore vested in the legislature to determine what the public interest demands and what measures are necessary to secure and protect the same.

This more permissive view of the due process clause as it affects price regulation resulted in a reappraisal of the “af *149 fected with a public interest” concept. This was fully discussed in Nebbia v. New York, supra, at 531:

But we are told that because the law essays to control prices it denies due process. Notwithstanding the admitted power to correct existing economic ills by appropriate regulation of business, even though an indirect result may be a restriction of the freedom of contract or a modification of charges for services or the price of commodities, the appellant urges that direct fixation of prices is a type of regulation absolutely forbidden. His position is that the Fourteenth Amendment requires us to hold the challenged statute void for this reason alone. The argument runs that the public control of rates or prices is per se unreasonable and unconstitutional, save as applied to businesses affected with a public interest; that a business so affected is one in which property is devoted to an enterprise of a sort which the public itself might appropriately undertake, or one whose owner relies on a public grant or franchise for the right to conduct the business, or in which he is bound to serve all who apply; in short, such as is commonly called a public utility; or a business in its nature a monopoly.
We may as well say at once that the dairy industry is not, in the accepted sense of the phrase, a public utility. We think the appellant is also right in asserting that there is in this case no suggestion of any monopoly or monopolistic practice. . . .

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Cite This Page — Counsel Stack

Bluebook (online)
459 P.2d 937, 77 Wash. 2d 144, 1969 Wash. LEXIS 573, 1969 Trade Cas. (CCH) 72, Counsel Stack Legal Research, https://law.counselstack.com/opinion/petstel-inc-v-county-of-king-wash-1969.