New England Outdoor v. Commissioner 

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MAINE SUPREME JUDICIAL COURT					Reporter of Decisions
Decision:	2000 ME 66
Docket:	Ken-99-325
Argued:	January 5, 2000
Decided:	April 14, 2000

Panel:WATHEN, C.J., and CLIFFORD, RUDMAN, DANA, SAUFLEY, and ALEXANDER, JJ.

NEW ENGLAND OUTDOOR CENTER et al.{1}

v.

COMMISSIONER OF INLAND FISHERIES AND WILDLIFE

CLIFFORD, J.
	[¶1]  New England Outdoor Center and other whitewater outfitters
(collectively NEOC) appeal from a judgment of the Superior Court (Kennebec
County, Studstrup, J.) dismissing its appeal, brought pursuant to
M.R. Civ. P. 80C, of a decision of the Commissioner of Inland Fisheries and
Wildlife.  The Commissioner determined that the parties-in-interest,
Adventure Bound, Inc. and Northern Outdoors, Inc., were not "affiliated
outfitters" within the meaning of 12 M.R.S.A. § 7363(2) (Supp. 1999),{2} and
declined to take further action to seek revocation of their licenses as
commercial outfitters.  See 12 M.R.S.A. § 7365 (1994 & Supp. 1999).  NEOC
contends that the court erred when it dismissed the appeal based on the
court's determination that the Commissioner's decision was not a final
agency action within the meaning of 5 M.R.S.A. §§ 11001-11008 (1989) and
M.R. Civ. P. 80C. NEOC also contends that the Commissioner's decision was
arbitrary and capricious and a misapplication of law.  It further claims that it
had a due process right to a hearing because the Commissioner's decision
effectively deprives it of a property right to be free from unfair competition
in violation of 12 M.R.S.A. § 7369(2) (Supp. 1999).{3}  We affirm the Superior
Court's judgment of dismissal on the alternative ground that it is within the
discretion of the Commission to not pursue license revocation actions
against Adventure Bound and Northern Outdoors.
	[¶2]  NEOC, Adventure Bound, and Northern Outdoors all operate
whitewater rafting businesses on the Kennebec River.  As such, they are
subject to the Commercial Whitewater Rafting Act, 12 M.R.S.A.
§§ 7361-7370 (1994 & Supp. 1999).  The commercial outfitters subject to
the Act are licensed, see 12 M.R.S.A. § 7365, and the Act limits the total
number of passengers on the Kennebec River and the West Branch
Penobscot River, see 12 M.R.S.A. § 7368.   The Act limits the amount of
passengers each outfitter can carry on a given day.  See 12 M.R.S.A.
§ 7369(2).  Affiliated outfitters, as defined in section 7363(2), are
prohibited from operating simultaneously on "any river or stretch of river
for which a specific allocation [of passengers per day] is required, even on
days for which an allocation is not required."  12 M.R.S.A. § 7369(2).
	[¶3]  In 1998, NEOC wrote a letter to the Commissioner asking him to
investigate whether Adventure Bound and Northern Outdoors were
"affiliated outfitters" within the meaning of 12 M.R.S.A. § 7363(2).  NEOC
alleged that Adventure Bound and Northern Outdoors were affiliated, and
that therefore their simultaneous operation on the Kennebec River between
Harris Station and the Route 201 bridge was in violation of 12 M.R.S.A. §
7369(2).  NEOC based its allegation on the contention that, although
Adventure Bound and Northern Outdoors may ostensibly have been set up to
avoid the ten percent stock ownership limit set out in section 7363(2), the
companies nevertheless were under the control of a single party, namely,
Wayne Hockmeyer.{4}  NEOC's letter concluded with a request that it be
involved in the investigation and asked that it be allowed access to
documents having a bearing on the affiliated outfitter status of Adventure
Bound and Northern Outfitters.
	[¶4]  In response to NEOC's request, the Commissioner appointed an
investigator, and asked Adventure Bound and Northern Outdoors to disclose
"any and all documentation and factual information which will substantiate
previous assurances that both companies are in full compliance with
affiliation provisions of the Maine Commercial Whitewater Rafting Act." 
NEOC addressed a letter to the investigator illustrating its understanding of
the Act, and made specific suggestions regarding the evidence it felt the
investigator should seek.  In this letter, NEOC again requested that it be
involved in the investigation, and formally requested a public hearing "to
determine whether the Department should file a complaint in
Administrative Court to revoke the licenses of the two companies by reason
of the affiliation."
	[¶5]  After receiving and reviewing substantial written submissions
from Adventure Bound and Northern Outdoors, but without conducting a
public hearing, the Commissioner responded to the complaint by letter to
counsel for NEOC on September 8, 1998.  The Commissioner indicated that
the evidence presented did not demonstrate that Adventure Bound and
Northern Outdoors were "affiliated outfitters."  Noting that his letter did not
constitute a "final agency action," the Commissioner stated that, despite
NEOC's contention that the definition of "affiliated outfitter" is broad, the
Commissioner had applied the plain language of 12 M.R.S.A. § 7363(2) in its
determination the two outfitters were not affiliates.  The Commissioner
indicated that he understood NEOC not to contend that there were any
violations of subsections A, B, or C of section 7363(2), and he therefore
focused his discussion on subsection D.  As the Commissioner interpreted
that subsection, an inquiry into whether transactions between outfitters
were at arm's length becomes necessary only if it is shown that one outfitter
had received more than half of its services or real or personal property from
the other.  Because there was no evidence that either Adventure Bound or
Northern Outdoors had obtained more than one-half of their services or
property from the other, the Commissioner felt it was unnecessary to
proceed further with NEOC's complaint until such evidence was produced. 
The Commissioner also noted that no provision in the Act required
revocation of the licenses of Adventure Bound and Northern Outdoors even
in the event the companies were "affiliated outfitters."  The statute
prohibits only their simultaneous operation on any stretch of the river.
	[¶6]  On October 7, 1998, NEOC requested reconsideration of the
Commissioner's decision.  NEOC denied that it had not challenged the
relationship between Adventure Bound and Northern Outdoors on grounds
of section 7363(2)(A), (B), and (C), and asserted that the Commissioner's
response to its complaint not only unfairly placed a burden of production on
it but also "fail[ed] to recognize the burdens . . . on the constitutionally
protected rights of the complainants."  Pointing to 12 M.R.S.A. § 7363(8),
NEOC alleged that the Commissioner had failed to properly inquire into
whether Wayne Hockmeyer owned some kind of "beneficial interest" in
some "form of business association" that would trigger the 10% ownership
limitation.  From this, NEOC contended, the Commissioner was required by
the statutory language "to scrutinize [the companies' relationship's]
substance and reality," and that such scrutiny required an independent
investigation.  NEOC also alleged that it was unfair to essentially require it to
produce evidence of affiliation when the Commissioner had refused its
request for an independent investigation and for a hearing.  NEOC further
contended that the unfair competitive advantage that Adventure Bound and
Northern Outdoors retained as a result of the Commissioner's inaction
deprived it of a cognizable property right in violation of due process under
both the Maine and United States Constitutions.
	[¶7]  In response, on October 20, 1998, the Commissioner indicated
that his interpretation of the Act had not changed and noted that the
evidence before him remained the same.  He therefore refused NEOC's
request that an investigatory procedure be developed to further pursue the
matter.
	[¶8]  On November 23, 1998, NEOC filed its complaint in Superior
Court, seeking review of a final agency action and an independent action for
deprivation of property in violation of due process.  The Superior Court,
although acknowledging the potential competitive advantage that affiliated
outfitters might have if allowed to operate simultaneously, found that there
was no "final agency action" for it to review.  The court noted that there had
been no change in the licensing or allotments awarded, nor had any
regulation been adopted or discarded.  The only "action" the court found
was a decision that the case for affiliation was not "made to the
Commissioner's satisfaction," the court noting that the Commissioner had
not precluded future action if additional evidence of affiliation came to light. 
The court found that there had been no failure or refusal to act allowing
review pursuant to 5 M.R.S.A. § 11002, and pointed out that the
Commissioner had acted on NEOC's request and had issued an opinion.  The
court recognized that the Commissioner had the primary responsibility to
determine whether outfitters were affiliated, and concluded that it could not
second-guess the Commissioner's decision not to pursue a complaint in the
Administrative Court without violating the doctrine of separation of powers. 
The court further rejected NEOC's claim that it had a constitutionally
protected right to fair competition, and concluded that, to the extent NEOC
had a property right in its allocation, it had not lost any of that allocation. 
Accordingly, the Superior Court dismissed the appeal.  NEOC then filed this
appeal.
	[¶9]  Our law governing the separation of powers under the Maine
Constitution is well developed.  Article III, section 2 of our constitution
provides that "[n]o person or persons, belonging to one of [the legislative,
executive, or judicial] departments, shall exercise any of the powers
properly belonging to either of the others, except in the cases herein
expressly directed or permitted."  Me. Const. art III, § 2 (emphasis added);
see also State v. Hunter, 447 A.2d 797, 799 (Me. 1982).  Pursuant to this
provision, "the separation of governmental powers mandated by the Maine
Constitution is much more rigorous than the same principle as applied to
the federal government."  Hunter, 447 A.2d at 799.  Accordingly, in
addressing questions concerning the separation of powers, we ask whether
"the power in issue [has] been explicitly granted to one branch of state
government, and to no other branch?"  Id. at 800.
	[¶10]  Agencies of the executive branch are "accord[ed] . . . the
deference to which a co-equal branch of our state government is entitled." 
Kuvaja v. Bethel Savs. Bank, 495 A.2d 804, 806 (Me. 1985).  In Brown v.
State, Dep't of Manpower Affairs, 426 A.2d 880 (Me. 1981), we noted that

[t]he broad language of 5 M.R.S.A. § 8002(4) (defining final agency
action) and 5 M.R.S.A. § 11001(1) (conferring jurisdiction on the
Superior Court to review final agency action) must be read in light of
the constitutional doctrine of separation of powers.  The Legislature
may not constitutionally confer on the judiciary a commission to roam
at large reviewing any and all final actions of the executive branch. 
Some executive action is by its very nature not subject to review by an
exercise of judicial power.

  
Id. at 884 (citations omitted).  Thus, even when an agency action is final, it
does not follow that the action is subject to judicial review.  See id.
	[¶11]  In Bar Harbor Banking & Trust Co. v. Alexander, 411 A.2d 74
(Me. 1980), the Superior Court had enjoined a public investigatory hearing
by the Superintendent of the Bureau of Consumer Protection.  Id. at 75.  We
first determined that an exception to the final judgment rule allowed us to
review the issuance of the injunction, declaring that

[t]he constitutionally mandated separation of powers forbids
precipitous injunctive interference with the legitimate, ongoing
executive function.  Moreover, judicial interference with apparently
legitimate executive department activity not only disrupts the
administrative process but also encourages the circumvention of
statutorily authorized investigation and enforcement mechanisms.

Id. at 77 (citations omitted).  On the merits of the appeal we held that the
Superior Court's order "directly interfered with the performance by the
agency of its statutory duties.  Under such circumstances, the doctrine of
primary jurisdiction forbids the issuance of such a restraining order."  Id. at
78.  Although the decision in Bar Harbor Banking ultimately rested on the
fact that the agency was statutorily authorized to conduct the hearing, we
made clear that the temporary restraining order issued by the trial court
improperly interfered with the agency's investigation.
	[¶12]  In the present case, the Department is authorized to investigate
the affiliated status of any outfitter that seeks an allocation.  The statute,
however, does not require that an investigation be conducted in a specific
way, nor that it be formal and open to the public.  Accordingly, were a court
to order the Department to conduct such an investigation, it would be
improperly interfering with the agency's discretionary power to investigate. 
Such a result is inconsistent with settled principles of the separation of
powers.  We therefore affirm the judgment dismissing the appeal on this
ground.

	The entry is:
Judgment of dismissal affirmed.

Attorney for the plaintiffs:
Rufus E. Brown, Esq.		(orally)
Brown & Burke
75 Pearl St.
P.O. Box 7530
Portland, Maine 04112

Attorneys for the defendants:

Andrew Ketterer, A.G.
Dennis J. Harnish, A.A.G. 	(orally)
Office of the Attorney General
State House Station 6
Augusta, Maine 04333-0006

FOOTNOTES******************************** {1} . The other petitioners are Crab Apple Whitewater, Inc., Magic Falls Rafting Co., Maine Whitewater, Inc., North Country Rivers, Inc., Professional River Runners of Maine, Inc., Three Rivers Whitewater, Inc., Unicorn River Expeditions, and Windfall Rafting Co. {2} . The statute provides: "Affiliated outfitter" means: A. Any outfitter who owns directly, indirectly or through a chain of successive ownership 10% or more of the financial interest in any other outfitter; B. Any outfitter, 10% or more of whose financial interests are owned directly or indirectly or through a chain of successive ownership by any other outfitter; C. Any outfitter, 10% or more of whose financial interests are owned directly or indirectly or through a chain of successive ownership by a person who owns 10% or more of the financial interest in another outfitter; or D. Any outfitter who, in the year 1982 or thereafter: (1) Purchases, leases, borrows, accepts, receives or otherwise obtains on a nonarms-length basis from another whitewater outfitter, either directly or indirectly, more than 1/2 of its real or personal property; or (2) Receives from another outfitter on a nonarms-length basis more than 1/2 of the ordinary services related to the business of whitewater outfitting, including, but not limited to, mail, telephone, reservations, repair, maintenance, personnel training and management. A person may not be found to be an affiliated outfitter solely because of blood relationship, marriage or previous employment. An outfitter who purchases the business of another outfitter whose license has been returned to the Department as provided in section 7365, subsection 6, has 60 days from the date of sale to submit an affidavit applying for the selling outfitter's allocation, assuring that the level and quality of services of the selling outfitter will be maintained. If the Department transfers the selling outfitter's allocation to the buying outfitter or outfitters, these transferred allocations must be added to the buyer's allocations and may not be considered as affiliated. An outfitter may not receive more than the maximum allocations allowed under section 7369, subsection 3. 12 M.R.S.A. § 7363(2). The Act defines "financial interest to include "any voting or nonvoting security, partnership interest whether limited or general, trust interest, joint venture interest or any other beneficial interest in any form of business association." 12 M.R.S.A. § 7363(8). {3} . The statute provides: 2. Allocation required; affiliated outfitters restricted. Except as provided in subsection 10, operation of a commercial whitewater trip on the Kennebec River between Harris Station and West Forks or on the West Branch Penobscot River between McKay Station and Pockwockamus Falls without an allocation or in excess of an allocation is prohibited. An allocation is not required for other rivers or for other stretches of those rivers. Not more than one member of an affiliated group may conduct whitewater trips on any river or stretch of river for which a specific allocation is required, even on days for which an allocation is not required. Three or more years after the period of affiliation, the Department may, in its discretion, consider requests by any former member of an affiliated group to run passengers on allocated rivers. The burden rests on the former member of an affiliated group to demonstrate that the reasons for any finding of affiliation have been so diminished in effect that the public interest will be served by considering the former member's request to run passengers on an allocated river. 12 M.R.S.A. § 7369(2). {4} . Wayne Hockmeyer owned 80.2% of Adventure Bound, while Suzanne Hockmeyer and James Yearwood each owned 9.9%. In contrast, Suzanne (as trustee of the Suzanne Hockmeyer Revocable Living Trust) owned 70.3% of Northern Outdoors, while Wayne (as trustee of the Wayne Hockmeyer Revocable Living Trust), James Yearwood, and Douglas Hall each owned 9.9%.