IN THE SUPREME COURT OF THE STATE OF KANSAS
No. 86,035
STATE OF KANSAS, EX REL.
PAUL J. MORRISON, DISTRICT ATTORNEY,
TENTH JUDICIAL DISTRICT,
Appellee
v.
OSHMAN SPORTING GOODS CO. KANSAS,
D/B/A OSHMAN'S SUPERSPORTS USA,
Appellant.
SYLLABUS BY THE COURT
1. The interpretation of statutes is a question of law, and this court's review is unlimited.
2. In construing statutes and determining legislative intent, several provisions of an act or acts, in pari materia, must be construed together with a view of reconciling and bringing them into workable harmony if possible. Effect must be given, if possible, to the entire act and every part thereof. To this end, it is the duty of the court, as far as practicable, to reconcile the different provisions so as to make them consistent, harmonious, and sensible. The court must give effect to the legislature's intent even though words, phrases, or clauses at some place in the statute must be omitted or inserted.
3. K.S.A. 83-201 and K.S.A. 83-219(a), of the weights and measures statutes, are interpreted and applied.
4. Although appellate courts will not speculate as to the legislative intent of a plain and unambiguous statute, where the construction of a statute on its face is uncertain, the court may examine the historical background of the enactment, the circumstances attending its passage, the purpose to be accomplished, and the effect the statute may have under various suggested interpretations.
5. Although courts ordinarily presume that by changing the language of a statute the legislature intended to change its effect, this presumption may be strong or weak, according to the circumstances, and may be wanting altogether in a particular case. When a statute is ambiguous, amendment of the statute may indicate a legislative purpose to clarify the ambiguities in the statute rather than to change the law.
6. A penalty provision in a statute should be strictly construed in favor of the person being penalized. However, even in the context of a criminal statute, the rule of lenity is subordinate to the rule that judicial interpretation must be reasonable and sensible to effect legislative design and intent.
7. A point-of-sale system is a measuring device, and K.S.A. 83-219(a) applies to the use of such a system.
8. The function of an appellate court is to determine whether the trial court's findings of fact are supported by substantial competent evidence. The appellate court does not weigh conflicting evidence, pass on credibility of witnesses, or redetermine questions of fact.
9. K.S.A. 83-219 and K.S.A. 50-636, penalty provisions of the weight and measures statutes and the Kansas Consumer Protection Act, are interpreted and applied.
Review of the judgment of the Court of Appeals in 30 Kan. App. 2d 383, 42 P.3d 197 (2002). Appeal from Johnson district court. WILLIAM O. ISENHOUR, JR., judge. Judgment of the Court of Appeals reversing the district court on the single issue subject to our grant of review is reversed. Judgment of the district court is affirmed in part, reversed in part, and remanded with directions. Opinion filed May 30, 2003.
Daniel O. Herrington, of Armstrong Teasdale LLP, of Kansas City, Missouri, argued the cause and was on the briefs for appellant.
David L. Harder, assistant district attorney argued the cause, and Steven J. Obermeier assistant district attorney, and Paul J. Morrison, district attorney, were on the brief for appellee.
The opinion of the court was delivered by:
LUCKERT, J.: Oshman Sporting Goods Co. Kansas, d/b/a Oshman's Supersports USA
(Oshman) appealed the district court's imposition of civil penalties for overcharges on
merchandise in violation of the weights and measures statutes, K.S.A. 83-201 et
seq., and the
Kansas Consumer Protection Act (KCPA), K.S.A. 50-623 et seq. The Court of
Appeals reversed
in a published decision with one judge dissenting, and this court granted the State's petition for
review.
Facts
In 1998, the Kansas Department of Agriculture randomly chose Oshman as the subject of
a price verification inspection. The inspector randomly selected 100 items to price test, wrote
down the product number of each item, manually entered each item into the point-of-sale system,
recorded the price retrieved by the point-of-sale system, and then compared it to the advertised
price of each item, noting any discrepancies. A 98% accuracy rate, counting both overcharges
and undercharges, was considered a passing rate. A score below 98% prompted additional
follow-up inspections.
Between March 1998 and June 1999, Oshman failed seven price verification inspections.
There were a total of 25 overcharges amounting to $142.64, and a total of 44 undercharges
amounting to $435.57. In any single inspection, the highest failure rate was 8 overcharges
totaling $49.24 and 14 undercharges totaling $112.03.
On January 13, 2000, the Johnson County District Attorney filed a petition alleging that
the price discrepancies discovered during the inspections constituted violations of the KCPA and
K.S.A. 83-219. After a bench trial, the trial court found that each of the 25 overcharges
constituted a violation of K.S.A. 83-219(a)(16) and that each violation of K.S.A. 83-219(a)(16)
was also a violation of the KCPA pursuant to K.S.A. 83-219(d). The court imposed a civil
penalty of $2,000 per violation, for a total fine of $50,000. Oshman timely appealed.
The Court of Appeals reversed in a published opinion, with one judge dissenting.
State
ex rel. Morrison v. Oshman Sporting Goods Co. Kansas, 30 Kan. App. 2d 383, 42 P.3d
197
(2002). The majority ruled that K.S.A. 83-219(a) applied only to the owner of a commercial
weighing or measuring device, not the owner of a point-of-sale system; therefore, the statute did
not apply to Oshman. 30 Kan. App. 2d at 387. The majority also rejected the State's alternative
argument that Oshman's overcharges were violations of the KCPA independent of K.S.A.
83-219(a). The majority held that because an inspection by the Department of Agriculture was
not a
consumer transaction, no violations of the KCPA had occurred. 30 Kan. App. 2d at 387. This
court granted the State's petition for review.
The Trial Court and Court of Appeals Decisions
Oshman principal argument to both the trial court and Court of Appeals was that the
State's allegations did not state a claim under K.S.A. 83-219(a). The trial court found that
Oshman had violated K.S.A. 83-219(a)(16) which makes it unlawful for "(a) . . . any owner of a
commercial weighing or measuring device: (16) . . . to charge or attempt to charge, at the time of
the sale of an item or commodity, a value which is more than the price which is advertised,
posted or quoted." Oshman argued that K.S.A. 83-219(a) did not apply because it was not the
owner of a commercial weighing or measuring device; rather, it was the owner of a point-of-sale
system that was not included within the definition of a measuring device. The trial court
disagreed, finding that the legislature intended a point-of-sale system to be a weighing or
measuring device under K.S.A. 83-219.
The Court of Appeals found the pivotal issue in the case to be whether a point-of-sale
system was included within the definition of a weighing device. The majority acknowledged the
parties' arguments regarding various uses of the terms "weights and measures," "weighing and
measuring devices," and "point-of-sale systems" within the weights and measures statutes,
finding that "under the present ambiguities of the statutory scheme it is less than clear that a
point-of-sale system comes within the definition of a measuring device." 30 Kan. App. 2d at
385. The majority focused on legislative amendments to the statutes in 1994 and 1996 as the
source of the ambiguity:
"In 1994, the legislature amended K.S.A. 83-201 to include the definition of a
point-of-sale
system. See L. 1994, ch. 83, § 1. At the same time, the legislature also amended K.S.A.
83-219(a) to include subsections (13) through (16), which seem to address the misuse of
point-of-sale
systems. See L. 1994, ch. 83, § 4. At the hearing on this bill, the Director of the Division
of
Inspections of the Kansas Department of Agriculture commented: 'The purpose of this bill is to
address technology changes in the industry and to provide the agency with clear authority to
inspect and regulate point of sale or electronic price scanning equipment (scanners) which are
currently used in commerce.' H.B. 3023, attachment 5.
"At the time of the 1994 amendments, the intent of the legislature seems to have
been for
K.S.A. 83-219(a) to apply to point-of-sale systems. Subsection (a) read: 'It shall be unlawful for
any person' to commit the unlawful acts. This clarity was clouded in 1996 when the
legislature
again amended K.S.A. 83-219(a) and changed 'person' to 'owner of a commercial weighing and
measuring device.' See L. 1996, ch. 146, § 24. The legislative history does not explain the
reason
for this change.
"We find that the legislative intent to include point-of-sale systems in the
definition of
'weights and measures' after the 1996 amendments is not clear. We find that the trial court erred
in applying K.S.A. 83-219(a)(16) to Oshman." 30 Kan. App. 2d at 386-87.
Judge Knudson dissented, finding it was not plausible that the legislature intended to
negate the 1994 amendments necessary to inspect and regulate modern pricing computers by its
enactment of the 1996 amendment to K.S.A. 83-219(a). Although he found no legislative history
to explain the 1996 amendment, he opined that the term "person" may have been thought overly
broad, subjecting a mere clerk to civil penalties. He also noted that the legislature had not
rescinded K.S.A. 83-219(a) subsections (13) through (16) which address the misuse of
point-of-sale systems and that the unifying definition of "weights and measures" at K.S.A.
83-201(a)
continued to include point-of-sale systems. 30 Kan. App. 2d at 388-89.
In its petition for review, the State contends that the Court of Appeals' majority
erroneously interpreted the weights and measures statutes, K.S.A. 83-201 and 83-219.
Specifically, the State disagrees with the majority's findings regarding the legislative history and
legislative intent behind the 1994 and 1996 amendments to those statutes.
The interpretation of statutes is a question of law, and this court's review is unlimited.
Babe Houser Motor Co. v. Tetreault, 270 Kan. 502, 506, 14 P.3d 1149 (2000).
Again, the statute at issue, K.S.A. 83-219(a)(16) makes it unlawful for "any owner of a
commercial weighing or measuring device . . . to charge or attempt to charge, at the
time of the
sale of an item or commodity, a value which is more than the price which is advertised, posted or
quoted." (Emphasis added.) A "measuring device" is defined to include "all weights,
scales,
beams, measures of every kind, instruments and mechanical devices for weighing or
measuring,
and any appliances and accessories connected with any or all such instruments." (Emphasis
added.) K.S.A. 83-201(k). The terms "weights" and "measures" are not defined separately, but
the definition of the term "weights and measures" means "all commercial weights or measures of
every kind, instruments and devices for weighing and measuring, and any appliance and
accessories associated with any or all such instruments and devices and any point-of-sale
system." (Emphasis added.) K.S.A. 83-201(a).
A "point-of-sale system" is defined as "any combination of a cash register or other
devices, or system, such as a scanner, capable of recovering stored information related to the
price or computing the price of any individual item which is sold or offered for sale at retail.
A
point-of-sale system may also include or be attached or connected to a weighing or measuring
device." (Emphasis added.) K.S.A. 83-201(l).
These terms are used inconsistently throughout the weights and measures statutes. Given
the ambiguity of the terminology and its usage, this court must look to the design and language of
the statute as a whole, as well as to external aids, that may reveal the intent of the legislature.
Several canons of statutory construction support the conclusion that K.S.A. 83-219(a) was
intended to apply to point-of-sale systems even after the 1996 amendment.
First, "[i]n construing statutes and determining legislative intent, several provisions of an
act or acts, in pari materia, must be construed together with a view of reconciling
and bringing
them into workable harmony if possible. [Citation omitted.]" Petty v. City of El
Dorado, 270
Kan. 847, 852, 19 P.3d 167 (2001). "Effect must be given, if possible, to the entire act and every
part thereof. To this end, it is the duty of the court, as far as practicable, to reconcile the different
provisions so as to make them consistent, harmonious, and sensible. The court must give effect
to the legislature's intent even though words, phrases, or clauses at some place in the statute must
be omitted or inserted. [Citation omitted.]" State v. Engles, 270 Kan. 530, 533, 17
P.3d 355
(2001).
As the dissent noted, the majority of the Court of Appeals disregarded the unifying
definition of "weights and measures" found in K.S.A. 83-201(a). The statute alleged to have
been violated applied to owners of "measuring devices." K.S.A. 83-219(a). A "measuring
device" includes "all weights . . . [and] measures." K.S.A. 83-201(k). "'Weights and measures'
means all commercial weights or measures of every kind, instruments and devices for weighing
and measuring, and any appliance and accessories associated with any or all such instruments and
devices and any point-of- sale system." (Emphasis added.) K.S.A. 83-201(a).
Point-of-sale
systems include scanners. K.S.A. 83-201(l).
When these provisions are read together, Oshman, by owning a scanner, owned a
"point-of-sale system" which is a "weight and measure." A weight and measure is a "measuring
device." The provisions of K.S.A. 83-219(a) apply to Oshman.
Additionally, the reading adopted by the Court of Appeals' majority did not give meaning
to all provisions of the applicable statutes. If K.S.A. 83-219(a) is construed to be inapplicable to
point-of-sale systems, then all of the other references to point-of-sale systems within the weights
and measures statutes become meaningless. In other words, if it is not unlawful to misrepresent
or miscalculate the price of merchandise using a point-of-sale system, why would the Department
of Agriculture be required to inspect and test point-of-sale systems under K.S.A. 83-206(f) and
approve or reject point-of-sale systems under K.S.A. 83-206(g)? Why would the Department of
Agriculture be required to adopt rules and regulations concerning technical requirements for
point-of-sale systems under K.S.A. 83-207? These statutes were amended to include references
to point-of-sale systems in 1994, see L. 1994, ch. 83, §§ 2, 3, and the references
have remained
intact since then.
Additionally, it is appropriate for this court to consider the legislative history of the
weights and measures statutes. "Although appellate courts will not speculate as to the legislative
intent of a plain and unambiguous statute, [citation omitted] where the construction of a statute
on its face is uncertain, the court may examine the historical background of the enactment, the
circumstances attending its passage, the purpose to be accomplished, and the effect the statute
may have under various suggested interpretations. [Citation omitted.]" Estate of Soupene
v.
Lignitz, 265 Kan. 217, 220, 960 P.2d 205 (1998). The Court of Appeals did consider
some
legislative history but did not consider other relevant portions of the legislative history.
In 1994, the legislature amended the weights and measures statutes to include
point-of-sale systems by inserting references to point-of-sale systems throughout those statutes.
In
K.S.A. 83-201(a), the term "point-of-sale" system was added to the definition of the term
"weights and measures." Definitions of the terms "point-of-sale system" and "scanner" were
added at K.S.A. 83-201(l) and (m). K.S.A. 83-206, which sets out the duties of the Secretary of
Agriculture with respect to the administration of the weights and measures inspection program,
was amended to require the secretary to inspect and test commercial point-of-sale systems used
in recovering stored information related to the price of any item sold at retail and to approve or
reject those point-of-sale systems. K.S.A. 83-207, which authorizes the Secretary of Agriculture
to adopt rules and regulations for the administration and enforcement of Chapter 83 was
amended to include reference to point-of-sale systems. Finally, K.S.A. 83-219, which lists
unlawful acts, was amended to include four new unlawful acts, 83-219(a)(13) through (16), all
related to misrepresentations and miscalculations of price. L. 1994, ch. 83, §§ 1-4.
At hearings on the bill, the Director of the Division of Inspections for the Department of
Agriculture offered the following testimony:
"The purpose of this bill is to address technology changes in the industry and to
provide
the agency with clear authority to inspect and regulate point of sale or electronic price scanning
equipment (scanners) which are currently used in commerce.
"Current law addresses weighing and measuring devices but does not speak to
point of
sale systems such as scanners.
"I am sure that many of you have seen recent TV shows reflecting the economic
fraud
that can occur when point of sale systems are manipulated by unscrupulous individuals or where
errors occur due to employee error or bar code problems.
"Our Weights and Measures program has been actively involved in checking
scanners in
Kansas and believe we are achieving compliance. This bill legalizes our activities and provides
us
with appropriate language in the unlawful acts section." Minutes, House Comm. on Agriculture,
February 22, 1994 (H.B. 3023), attach. 1.
Although the 1994 amendments might have been drafted more artfully, it is clear that the
legislature intended point-of-sale systems to be inspected and regulated by the Department of
Agriculture as part of its weights and measures inspection program.
The problem arises with the 1996 amendment to K.S.A. 83-219(a) changing "person" to
"owner of a commercial weighing and measuring device." L. 1996, ch. 146, § 24. The
Court of
Appeals found no legislative history explaining this amendment and stated that the legislative
intent to include point-of-sale systems in the definition of "weights and measures" after the 1996
amendments was not clear. However, the minutes of the 1996 House and Senate Agriculture
Committee meetings and the testimony offered regarding the 1996 Substitute for Senate Bill 705
offer some insight. The bill contained a variety of amendments to many of the weights and
measures statutes. See L. 1996, ch. 146. At hearings on the bill, Carole Jordan, Program Analyst
for the Department of Agriculture, offered testimony to the House Agriculture Committee, giving
a history of the weights and measures program and the results of a Legislative Post Audit report
identifying problems with the program and with the accuracy of weights and measures devices in
the state. The bill contained changes proposed by the Department of Agriculture in response to
the audit report. Minutes, House Comm. on Agriculture, March 7, 1996 (Sub. S.B. 705), attach.
1.
Ms. Jordan's testimony mentioned scanners:
"Scannersin supermarkets, department and a variety of other
storesare a relatively new
addition to the responsibilities of weights and measures officials. Assuring that prices scanned
are
the same as advertised is the function of price verification inspections. The inspection is not
truly
of the device, but rather of the accuracy of the price data regularly input into the store or chain's
computer database. In turn, each scanner at a check-out counter is tied to the computer database.
The state's population of scanners, estimated by the numbers of establishments, is at around
7,000
and growing rapidly. The state is still developing its inventory of these devices. . . .
. . . .
"Because of the large number of scanners . . . statistical testing provides the best
and
most economically feasible method of inspection to ensure accuracy. . . . [T]he state will design a
random statistical test based upon the universe of scanners . . . . State inspectors will conduct
statistical tests, follow up on consumer complaints and conduct investigations." Minutes, House
Comm. on Agriculture, March 7, 1996 (Sub. S.B. 705), attach. 1.
Remembering that the term "scanner" is included within the statutory definition of a
point-of-sale system at K.S.A. 83-201(l), this testimony shows that the Department of
Agriculture, at least, fully intended to continue inspecting and regulating point-of-sale systems
after the 1996 amendments to the weights and measures statutes. Since the bill was drafted by
the Department of Agriculture, no amendment contained within that bill could have been
intended to eliminate point-of sale systems from the application of the weights and measures
statutes. This particular legislative history shows the intention of the Department of Agriculture
when it interprets the statutes it is charged with enforcing; such an interpretation is entitled to
judicial deference. See GT, Kansas, L.L.C. v. Riley County Register of Deeds, 271
Kan. 311,
317, 22 P.3d 600 (2001).
Further, the wording of the 1996 amendment was reversed in 2001, when the legislature
amended K.S.A. 83-219(a) by again making it unlawful for any "person" to commit any of the
listed acts. L. 2001, ch. 175, § 5; see K.S.A. 2002 Supp. 83-219(a). However, at the
hearing on
the 2001 House Bill 2102 amendment to K.S.A. 83-219(a), the Department of Agriculture
offered the following testimony regarding the purpose of the amendment:
"K.S.A. 83-219. There are 25 unlawful acts contained in this statute, 19 of which
do not
require using a commercial weighing or measuring device. For example, it is unlawful to
'misrepresent or represent in a manner calculated or tending to mislead or deceive an actual or
prospective purchaser, the price of an item offered, exposed or advertised for sale at retail.'
Owning a commercial weighing or measuring device is not required for an individual or
organization to misrepresent the price of an item. However, as it is currently written, it is
unlawful only for an owner of a weighing or measuring device. The statute could create
problems
if an individual is using a commercial weighing or measuring device, but does not own it. The
proposed amendment will allow the agency to take action against any entity that has committed
unlawful acts, including businesses that rent or lease weighing or measuring devices." Minutes,
House Comm. on Agriculture, January 31, 2001 (H.B. 2102), attach. 3.
Obviously, the Department of Agriculture recognized two problems with the language of
K.S.A. 83-219(a): (1) that many of the unlawful acts listed in the statute did not require use of a
commercial weighing and measuring device, and (2) that the statute as written only applied to an
owner - - not a user or lessor - - of a commercial weighing and measuring device. The first
problem is the very one at issue in this case. It appears the Department of Agriculture realized
that the language of K.S.A. 83-219(a) was inadequate to cover pricing misrepresentations and
was attempting to remedy the problem by introducing the amendment.
Although courts ordinarily presume that by changing the language of a statute the
legislature intended to change its effect, this presumption may be strong or weak, according to
the circumstances, and may be wanting altogether in a particular case. Board of Education
of
U.S.D. 512 v. Vic Regnier Builders, Inc., 231 Kan. 731, 736, 648 P.2d 1143 (1982).
Furthermore, "[w]hen a statute is ambiguous, amendment of the statute may indicate a legislative
purpose to clarify the ambiguities in the statute rather than to change the law." 1A Singer,
Statutes and Statutory Construction § 22.01 (6th ed. 2002).
The legislative history reveals that the 2001 amendment of K.S.A. 83-219(a) was
intended as a clarification of an ambiguous statute rather than as a change in the law. The clear
legislative intent was for point-of-sale systems to be inspected and regulated by the Department
of Agriculture as part of its weights and measures inspection program.
Oshman offers one last argument, i.e., that the weights and measures statutes
are quasi-criminal; thus, the rule of lenity applies, citing United States v.
Granderson, 511 U.S. 39, 54, 127
L. Ed. 2d 611, 114 S. Ct. 1259 (1994). Oshman argues it must receive the benefit of any
ambiguity. In a case involving civil penalties assessed against an oil company by the Kansas
Department of Health and Environment, the Court of Appeals recognized that a penalty provision
in a statute should be strictly construed in favor of the person being penalized. Radke Oil
Co.,
Inc. v. Kansas Dept. of Health and Environment, 23 Kan. App. 2d 774, Syl. ¶ 2, 936
P.2d 286
(1997). However, even in the context of a criminal statute, the rule of lenity is subordinate to the
rule that judicial interpretation must be reasonable and sensible to effect legislative design and
intent. State v. McGill, 271 Kan. 150, 154, 22 P.3d 597 (2001).
Reading all of the weights and measures statutes together, especially the unifying
definition of "weights and measures" which includes point-of-sale system devices, and
considering the legislative history behind the 1994, 1996, and 2001 amendments to those
statutes, it is clear that the legislature intended point-of-sale systems to be included in the
application of K.S.A. 83-219(a). Oshman's arguments fail.
Violations of Kansas Consumer Protection Act
Having found that there was no violation of the weights and measures statutes, the Court
of Appeals considered whether there were any violations of the KCPA, specifically K.S.A.
50-626(b). The trial court did not make such a finding and based its ruling solely on K.S.A.
83-219(d), which provides: "Violation of this section shall be deemed a deceptive act and
practice as
defined by K.S.A. 50-626 . . . ." Because we find, as did the trial court, that there were violations
of the weights and measures statutes and because the State presents the KCPA violations as an
alternative to the violations of the weight and measures statutes, we need not address the
application of K.S.A. 50-626(b).
Because the Court of Appeals determined there were no statutory violations, it did not
address the other issues raised on appeal. This court's order granting the State's petition for
review did not limit the questions on review. Because this is a civil case, this court may consider
and decide the issues under Supreme Court Rule 8.03(g)(1) and (h)(3) (2002 Kan. Ct. R. Annot.
56), and we elect to do so.
Substantial Competent Evidence
Oshman argues that the trial court blindly accepted the State's allegations and disregarded
evidence introduced by Oshman to explain the price discrepancies discovered by inspectors. The
State responds that there was substantial competent evidence to support the trial court's findings.
This court is being asked to review the trial court's factual findings that Oshman
committed 25 violations of K.S.A. 83-219(a)(16). The function of an appellate court is to
determine whether the trial court's findings of fact are supported by substantial competent
evidence. Unrau v. Kidron Bethel Retirement Services, Inc., 271 Kan. 743, 747, 27
P.3d 1
(2001). "The court does not weigh conflicting evidence, pass on credibility of witnesses, or
redetermine questions of fact." State ex rel. Stovall v. Meneley, 271 Kan. 355, 387,
22 P.3d 124
(2001).
Oshman called two witnesses who explained that if an Oshman's employee saw a price
ending in $.98 on shoes or clothing, the employee would know that an additional 25% should be
deducted. The witnesses also explained that some items are ticketed with a sales tag or clearance
sticker to alert the cashier of any discount. The witnesses believed the fact that inspectors
entered the computer information instead of Oshman's employees might have explained some of
the overcharges.
This testimony was offset by one witness' admission that he had been too busy to observe
the inspections and did not contact the Department of Agriculture when he discovered errors in
the inspector's report. Also, even though both witnesses testified that the consumer would
always get the lowest price in the event of a difference between the posted price and the price
retrieved by the computer, both acknowledged it would be up to the consumer or the cashier to
notice the discrepancy.
The trial court acknowledged Oshman's evidence "might have cast some doubt on
whether all of those overcharges were intentional overcharges, or whether they might be
explained by some system or not . . . ." However, the court did not find that evidence persuasive,
stating: "[I]t appears to the Court that the scanners were set up to charge, or attempt to charge, a
value which is more than the price which is advertised, posted or quoted."
Based upon the testimony of the inspectors and their inspection reports, there was
substantial competent evidence to support the trial court's factual findings.
The remaining issues relate to the imposition of the fine which was imposed under the
KCPA. First, Oshman argues that the trial court erred in determining that each overcharge rather
than each failed inspection was a violation of the KCPA.
Oshman relies upon the National Institute of Standards and Technology (NIST)
Handbook 130 (1997) to support its argument that the unit of violation is the failed inspection,
not the individual overcharge. The Kansas Department of Agriculture has adopted the NIST
Handbook 130 and follows its guidelines regarding price verification inspections. According to
the NIST Handbook 130, 98% accuracy is the passing rate. Although both overcharges and
undercharges are counted for purposes of determining accuracy, fines and penalties are assessed
only when overcharges exceed 2% on the verification sample. Of the seven failed inspections in
this case, two of those inspections involved only two overcharges. Therefore, Oshman argues the
trial court should have imposed fines based on 5 violations, rather than 25.
The trial court found Oshman's overcharges were violations of K.S.A. 83-219(a)(16)
which prohibits charging or attempting to charge a value at the time of sale more than the price
advertised, posted, or quoted. K.S.A. 83-219(d) deems any violation of the weights and
measures statutes to be a deceptive act and practice under the KCPA. The clear language of
K.S.A. 83-219(a)(16) indicates that the unit of violation is the overcharge or attempted
overcharge, not the failed inspection.
Oshman also argues, that K.S.A. 50-636(d) should have been considered by the trial
court. The trial court imposed civil penalties pursuant to K.S.A. 50-636(a), which states that any
act or practice deemed to be a violation of the KCPA renders the violator liable for up to $5,000
per violation. K.S.A. 50-636(d) provides: "Any act or practice declared to be a violation of this
act not identified to be in connection with a specific identifiable consumer transaction but which
is continuing in nature shall be deemed a separate violation each day such act or practice exists."
Oshman contends application of this section results in 5 days of violations (for the five failed
inspections).
When K.S.A. 50-636 was amended in 1993 to include subsection (d), see L. 1993, ch.
177, § 3, the Attorney General's office informed the legislature that the new provision:
"would clarify that a continuing violation constitutes a separate violation each day the
practice
continues, and is not just a single violation. This addresses situations such as the gasoline pump
labeling cases where specific consumer transactions could not easily be identified, and where the
deceptive label remained in place for weeks. A single civil penalty became insignificant in
comparison to the volume of consumers involved. A civil penalty for each day the practice
continued would have made the practice less profitable for the supplier." Minutes, House
Comm.
on Agriculture, March 17, 1993 (S.B. 245), attach. 2.
Clearly, it was not intended that this provision would apply when there was an
identifiable transaction as in this case. Therefore, the trial court correctly applied K.S.A.
50-636(a) rather than 50-636(d). We affirm the trial court's determination that each of the 25
overcharges was a violation of the KCPA.
Finally, Oshman argues that the $50,000 fine is "shocking," given that the 25 overcharges
totaled only $142.64, especially in light of the fact that this case involved no actual damages and,
according to Oshman, no intentional conduct.
We agree. We note several considerations in reaching this conclusion: There was no
evidence offered regarding any actual sales of the overcharged items to consumers; the nature of
the violations was not particularly egregious; there was no allegation that Oshman intentionally
overcharged consumers; and the total amount of the overcharges was only $142.64. In fact, the
undercharges discovered by inspectors were greater in number and total amount than the
overcharges. We find the fine of $50,000 to be excessive. See Ray v. Ponca/Universal
Holdings, Inc., 22 Kan. App. 2d 47, 51-52, 913 P.2d 209 (1995). We reverse and remand
for
imposition of an appropriate fine.
In making this determination, we are mindful that the KCPA provides no guidelines for
the trial court in determining the amount of a civil penalty aside from the upper limit of $5,000
per violation. However, if the State had sought civil penalties pursuant to K.S.A. 83-501, rather
than the KCPA, the trial court would have been required to take the following into consideration:
"(1) The extent of harm caused by the violation; (2) the nature and persistence of the violation;
(3) the length of time over which the violation occurs; (4) any corrective actions taken; and (5)
any and all relevant circumstances." K.S.A. 83-501(b). While these considerations are not
directly applicable, they offer guidance in assessing the fine to be imposed.
We reverse the Court of Appeals on the issue of whether there was a violation of K.S.A.
83-219(a)(16). We affirm the trial court on all issues except the amount of fine, which we
reverse and remand for determination of an appropriate fine.
ABBOTT and GERNON, JJ., not participating.
LARSON, S.J., and WAHL, S.J., assigned.
1REPORTER'S NOTE: Judges Ed Larson and Richard Wahl
were appointed to hear case No.
86,035 vice Justices Abbott and Gernon pursuant to the authority vested in the Supreme Court by
K.S.A. 20-2616.