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People v. Carter

OPINION FILED DECEMBER 17, 1982.

THE PEOPLE OF THE STATE OF ILLINOIS, APPELLANT,

v.

DALE M. CARTER, APPELLEE.



Appeal from the Appellate Court for the First District; heard in that court on appeal from the Circuit Court of Cook County, the Hon. Robert J. Collins, Judge, presiding.

JUSTICE GOLDENHERSH DELIVERED THE OPINION OF THE COURT:

Rehearing denied September 30, 1983.

Following a jury trial in the circuit court of Cook County, defendant, Dale M. Carter, was convicted of violations of the Franchise Disclosure Act (hereafter the Act) (Ill. Rev. Stat. 1977, ch. 121 1/2, par. 701 et seq.) and sentenced to three years in the custody of the Department of Corrections. Defendant appealed and the appellate court, holding that section 12 of the Act was unconstitutional (Ill. Rev. Stat. 1977, ch. 121 1/2, par. 712), reversed the judgment. (102 Ill. App.3d 796.) We allowed the People's petition for leave to appeal as a matter of right. 73 Ill.2d R. 317.

The facts are adequately stated in the opinion of the appellate court. In a four-count indictment it was charged that defendant, chairman of the board of Pie Tree, Inc., violated various provisions of the Act in the sale of a franchise to Roger Collier. Count I charged the sale of an unregistered franchise, a violation of sections 4(1) and 16 of the Act; count II charged failure to provide Collier with a disclosure document as required by section 4(2) of the Act; count III charged failure to place into escrow the moneys received in the sale, in violation of section 6 of the Act; and count IV charged the failure to register all franchise sale persons, in violation of section 16.1 of the Act.

In pertinent part section 12 provided:

"The [Attorney General] may by rule or order, and subject to such terms and conditions as he may prescribe, exempt any franchise, franchisor, subfranchisor, franchise broker, or salesperson from Sections 4, 16 * * * of this Act if he finds that the enforcement of this Act is not necessary in the public interest * * *." (Ill. Rev. Stat. 1977, ch. 121 1/2, par. 712.)

The appellate court concluded:

"[T]he phrase `in the public interest' is not an intelligible limitation on the exemption power in the context of an F.D.A. criminal prosecution. Consequently, when considered in conjunction with section 20, section 12 of the F.D.A. is an unconstitutional delegation of legislative power." 102 Ill. App.3d 796, 800.

The People contend that the defendant was without standing to attack the validity of the Act. Although this contention is not entirely without merit, we have elected to consider the constitutional question presented. Defendant contends that "in the public interest" is "not an intelligible standard" and that the statute creates an invalid delegation of legislative authority. We do not agree.

This court has enunciated the criteria relevant to examining the validity of a legislative delegation of power to an administrative agency. In Hill v. Relyea (1966), 34 Ill.2d 552, 555, this court stated:

"Absolute criteria whereby every detail necessary in the enforcement of a law is anticipated need not be established by the General Assembly. The constitution merely requires that intelligible standards be set to guide the agency charged with enforcement [citations], and the precision of the permissible standard must necessarily vary according to the nature of the ultimate objective and the problems involved. [Citations.]"

See also Polich v. Chicago School Finance Authority (1980), 79 Ill.2d 188, 206; Polyvend, Inc. v. Puckorius (1979), 77 Ill.2d 287, 300.

We are of the opinion that "in the public interest" is not an improper standard for delegation. In International Ry. Co. v. Public Service Com. (1942), 264 A.D. 506, 36 N.Y.S.2d 125, the Appellate Division of the Supreme Court of New York persuasively refuted defendant's argument:

"It must be conceded that a criterion of `public interest,' standing alone, presents a standard of immense and varied implications. And if it can only be interpreted as setting up a standard so embracive and indefinite as to confer unlimited power, then, of course, it runs counter to the rule against the complete delegation of legislative power. [Citation.] But in our opinion it need not be and should not be so interpreted. Rather, it should be construed with reference to the general purposes and the subject matter of the [law in question], and if it may be logically found that the criterion of `public interest' is directly related and limited to the general purposes of such law then it is a sufficient guide. [Citations.]" (264 A.D. 506, 510, 36 N.Y.S.2d 125, 131, aff'd (1943), 289 N.Y. 830, 47 N.E.2d 435.)

In American Power & Light Co. v. Securities & Exchange Com. (1946), 329 U.S. 90, 104, 91 L.Ed. 103, 115, 67 S.Ct. 133, 142, the Supreme Court noted that delegation standards should not be tested in isolation because "They derive much meaningful content from the purpose of the Act, its factual background and the statutory context in which they appear." In Northern Illinois Auto Wreckers & Rebuilders Association v. Dixon (1979), 75 Ill.2d 53, 61, this court recognized that in order to determine whether a rule promulgated by the Secretary of State was consistent with the "public interest" depended upon the purposes of the pertinent statute.

With respect to the act involved here, the legislative findings and statement of purposes contained in the Act (see Ill. Rev. Stat. 1977, ch. 121 1/2, par. 702) make it clear that the purposes of the Act are to protect the investments of people buying franchises and to insure that before entering into a franchise agreement they are fully informed of the franchisor's financial condition. Section 5 of the Act sets forth the information that must be contained in the disclosure statement which under section 4 of the Act must be provided a purchaser and under section 16 must be filed with the Attorney General. Franchisors whose shares are registered with Securities Commissions and listed on Securities Exchanges are required to furnish statements containing at least as much information as is required under section 5. Where the information is thus readily available through other sources, the Attorney General might find that enforcement of the Act is not necessary. When considered in light of the purposes of the Act the standard "in the public interest" is an intelligible standard which survives constitutional scrutiny.

The delegation here is certainly no broader or more unintelligible than the delegation in Hill v. Relyea (1966), 34 Ill.2d 552. In Hill, the statute gave the superintendent of the hospital in which a mentally retarded person was being treated the power and authority to discharge patients "as the welfare of such person and the community may require." (34 Ill.2d 552, 555.) This court noted that the superintendent of the hospital and his staff were in a much more advantageous position to determine when the welfare of the person and of the community required a discharge of a hospitalized mentally retarded person and that "The nature of the objectives to be achieved and the problems to be solved negate the usefulness of setting more precise legislative standards." (34 Ill.2d 552, 556.) Here the expertise and the availability of the information necessary to determine when prospective franchisees do not require the protection of escrowed moneys and financial disclosure statements place the Attorney General in a position to determine when "the enforcement of this Act is not necessary in the public interest" (Ill. Rev. Stat. 1977, ch. 121 1/2, par. 712) and negate the desirability of more precise standards.

Defendant contends that the statute, in violation of the equal protection and due process clauses of the United States and Illinois constitutions, grants the Attorney General "unrestricted future exemption power." He contends further that delegation to the Attorney General of such unrestricted criminal-exemption power violates the separation of powers clause found in section 1 of article II of the 1970 Constitution. The rules promulgated by the Attorney General pursuant to section 27 of the Franchise Disclosure Act (Ill. Rev. Stat. 1977, ch. 121 1/2, par. 727) and in accordance with the Illinois Administrative Procedure Act (Ill. Rev. Stat. 1977, ch. 127, par. 1001 et seq.) provide the procedure for securing an order of exemption. The Illinois Administrative Procedure Act (Ill. Rev. Stat. 1977, ch. 127, par. 1001 et seq.) provided:

"No action by any agency to adopt, amend or repeal a rule after this Act has become applicable to the agency shall be valid unless taken in compliance with this Section." (Ill. Rev. Stat. 1977, ch. 127, par. 1005(c).)

Section 5(a)(1) of the Illinois Administrative Procedure Act provided for the giving of notice to the general public, at least 45 days in advance of a rule's effective date, as to the text of the rule, the statutory authority giving the agency the power to promulgate the rule, and other pertinent information. (Ill. Rev. Stat. 1977, ch. 127, par. 1005(a)(1).) Section 29 of the Franchise Disclosure Act (Ill. Rev. Stat. 1977, ch. 121 1/2, par. 729) provided that all final administrative decisions of the administrator are reviewable under the Administrative Review Act. With these safeguards it is difficult to conclude that the Attorney General is vested with either "unrestricted criminal exemption power" or that the statute, as applied, fails to provide either equal protection or due process. Defendant's contention that the "delegation to the Attorney General of an unrestricted criminal exemption power violates the separation of powers" rests on the erroneous premise that the power is arbitrary and unrestricted. Clearly, the power, as delegated, does not violate the separation of powers.

Defendant contends that the indictment is insufficient in that it fails to charge a criminal offense. Insofar as his challenge is directed to counts I, II and IV it falls with our holding that sections 12 and 20 of the Act are not ...


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