Snell v. Engineered Systems & Designs, Inc.

669 A.2d 13, 24 Media L. Rep. (BNA) 1001, 1995 Del. LEXIS 338, 1995 WL 558095
CourtSupreme Court of Delaware
DecidedSeptember 13, 1995
Docket486, 1994
StatusPublished
Cited by23 cases

This text of 669 A.2d 13 (Snell v. Engineered Systems & Designs, Inc.) is published on Counsel Stack Legal Research, covering Supreme Court of Delaware primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Snell v. Engineered Systems & Designs, Inc., 669 A.2d 13, 24 Media L. Rep. (BNA) 1001, 1995 Del. LEXIS 338, 1995 WL 558095 (Del. 1995).

Opinion

VEASEY, Chief Justice:

In this appeal from the Court of Chancery, we consider whether Section 2825 of the Delaware Professional Engineers’ Act, 24 Del.C., chapter 28 (the “Act”), may constitutionally prohibit Engineered Systems and Designs (“ESD”) from using the term “engineered” in its trade name. The Council of the Delaware Association of Professional Engineers (the “Council”) brought this action for a declaratory judgment and injunctive relief, claiming that Section 2825 bars ESD’s use of that term and that the statute is constitutional. ESD counterclaimed under 42 U.S.C. § 1988, alleging that Section 2825 violates its federal constitutional right to commercial free speech. The Court of Chancery denied the Council’s application to enjoin ESD from using “engineered” in its trade name, denied the Council’s request for a declaratory judgment that Section 2825 is constitutional on its face, and dismissed ESD’s counterclaim. The Council appeals and ESD cross-appeals.

We agree with the Court of Chancery on this record that the Council did not prove that ESD could be constitutionally prohibited from using the term “engineered” and we conclude that the Court of Chancery correctly denied the Council’s motion for injunctive relief, but we reach these conclusions on different grounds and, thus, reverse in part. We hold that the Court of Chancery erred when it held that ESD’s use of the term “engineered” is a per se violation of Section 2825 and that the Act is unconstitutional as applied to ESD. We agree with the Court of Chancery that ESD’s counterclaim should be dismissed, but in view of our analysis of the case, we hold that it should be dismissed as moot. We remand to the Court of Chancery with directions to enter an appropriate declaratory judgment, to dismiss ESD’s counterclaim as moot, and for other proceedings consistent with this Opinion. Accordingly, we: (1) REVERSE the holding that Section 2825 is unconstitutional as applied to ESD; (2) AFFIRM the denial of injunctive relief; (3) AFFIRM the dismissal of ESD’s counterclaim; and (4) REMAND for proceedings consistent with this Opinion.

1. STATUTORY HISTORY

The Act 2 regulates the practice of engineering within Delaware so as to “safeguard life, health and property and to promote the public welfare.” 24 Del. C. § 2802. In furtherance of this goal, the Act defines the term “engineer,” 24 Del.C. § 2803(5), provides for the qualifications of persons as engineers, 24 Del.C. §§ 2817-21, and prevents those persons not qualified as engineers from holding themselves out to the public as engineers. 3 It accomplishes this last task by regulating the use of the word “engineer,” its modifications and derivatives. 24 Del.C. § 2825(2)-(3). It is this provision which is at the heart of this controversy. See Section III, infra.

The Act establishes the Delaware Association of Professional Engineers (“DAPE”) to self-regulate the practice of engineering in Delaware. 24 Del.C. § 2804. The Act also establishes the Council of DAPE, which gov *16 erns DAPE and its members. 24 Del. C. § 2807(a), and authorizes it to bring actions on behalf of DAPE in the Court of Chancery to enjoin acts or practices that violate the Act. 24 Dei. C. § 2826.

II. THE FACTS

As the record in the Court of Chancery shows, there is no disputed issue of material fact, thus presenting matters of law for the plenary review of this Court. See Hoechst Celanese v. Certain Underwriters at Lloyd’s, London, Del.Supr., 656 A.2d 1094, 1099 (1995).

ESD is a Delaware corporation with its principal place of business in New Castle County. Its primary activities include the development, manufacture and sale of instruments for measuring various parameters of water and instruments for measuring radiation. ESD is not licensed to practice engineering, does not practice engineering, and does not employ anyone who engages in the practice of engineering as defined in the Act. ESD has never held itself out as an engineering firm and has responded to all inquiries regarding its activities by stating that it is “a manufacturing concern and does not provide any engineering services.” It nonetheless has used the word “engineered” as an adjective in its business name and advertising since 1975. 4

ESD admits to being in “potential” violation of Section 2825 due to its use of the term “engineered.” 5 It has refused to comply, however, with the Council’s requests either to: (1) discontinue use of the word “engineered” after an eighteen-month transition period; or (2) include a disclaimer in its business documents stating that it does not offer engineering services. The Council then filed this suit in the Court of Chancery.

The trial court found, in response to a motion for summary judgment, that Section 2825 imposed a complete ban on ESD’s use of the term “engineered.” The court held, however, that ESD’s use of the term “engineered” was not actually or inherently misleading, but only “potentially misleading” as those terms are used in the commercial speech jurisprudence of the United States Supreme Court.

Based on that analysis the Court of Chancery held that Section 2825 unconstitutionally infringed upon ESD’s right to “commercial speech” under the First Amendment. The court then denied the Council’s motion for declaratory judgment and related motion for injunctive relief. The court also dismissed ESD’s counterclaim, finding that ESD did not allege an actionable “deprivation” under 42 U.S.C. § 1983, and that its claim was not ripe for adjudication. The Council appealed and ESD cross-appealed.

III. THE STATUTE AND APPLICABLE PRINCIPLES OF STATUTORY CONSTRUCTION

Section 2825 prohibits any person or organization not authorized to practice engineering under the Act from using:

... any name, title, description or designation, either orally or in writing, that will lead to the belief that such person is entitled to practice engineering as defined in this chapter, including without limitation *17 the words “engineer” or “engineering” or any modification or derivative of those words; ...

(emphasis added). The Court of Chancery interpreted Section 2825 as a per se ban of all uses of the term “engineer” and its derivatives by anyone not certified to practice the profession of engineering. The court then proceeded on this assumption when it analyzed Section 2825 under commercial free speech jurisprudence. Snell v. Engineered Systems & Designs, Del.Ch., C.A. No. 12865, slip op. at 3-4, 6-10, 1994 WL 672680 (Nov. 18, 1994). Despite the fact that ESD admits this purported breadth of the statutory ban, 6 we view the statute differently.

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Bluebook (online)
669 A.2d 13, 24 Media L. Rep. (BNA) 1001, 1995 Del. LEXIS 338, 1995 WL 558095, Counsel Stack Legal Research, https://law.counselstack.com/opinion/snell-v-engineered-systems-designs-inc-del-1995.