Branson v. Port of Seattle

Bridge, J.

Douglas Branson sued the Port of Seattle (Port), claiming that airport concession fees charged to rental car companies conducting business at Seattle Tacoma International Airport (Sea Tac) violate the 1945 Revised Airports Act (RAA), chapter 14.08 RCW. Specifically, he asserts that the concession fees deny the public equal and uniform use of airport property. He also contends that the concession fees are not uniform for the same class of service, they are unreasonable, and they were not established with due regard to the property used and the expense of airport operation. Branson seeks both declaratory relief and damages.

We conclude that the airport concession fees at issue in this case do not deny the public equal and uniform use of the airport because the fees in no way impact public use of airport property. We also conclude that because the airport fees at issue here are only those that the Port charges to concessionaires, Branson has not established that he has standing to challenge the reasonableness, uniformity, or basis for establishing the fees themselves. In addition, Branson has not shown that declaratory judgment in his favor would be appropriate given limitations imposed under the Uniform Declaratory Judgments Act (UDJA), chapter 7.24 RCW.

*867I

Facts and Procedural History

The Port operates Sea Tac as a self-sustaining business unit of the Port. Sea Tac’s largest source of revenue is its contract with the airlines. The second largest source of revenue is “landside or ‘ground access’ operations,” which include concessionaire contracts with rental car companies. Clerk’s Papers (CP) at 819.

There is limited space for operation of rental car facilities at Sea Tac, so rental car companies must compete for space in a public bidding process. Five companies become full service providers, four become limited service providers, and the rest may become off-airport concessionaires. Full service providers rent both counter space in the airport building and airport garage space to park and maintain their cars. Limited service providers rent counter space in the terminal building but do not rent space in the airport parking garage, so their customers must take a shuttle to an off-site location to pick up a rental car. Off-airport rental car providers do not maintain either counter space or garage space at the airport; those providers pick up customers at the airport and drive them to another location to complete the car rental transaction. Only the limited service contracts are at issue in this case.

The limited service providers pay the airport a fixed rent for use of counter space at the airport, plus a concession fee of 10 percent of their gross airport revenues. In contrast, full service providers pay a higher rent for their more extensive use of airport property, along with 10 percent of their gross airport revenues. Off-airport rental car providers pay a fee of 4 percent of monthly airport revenues in excess of $40,000 plus a per trip charge for shuttle pickups.

Before 1998, the Port’s contracts with rental car companies included a provision prohibiting the companies from separately adding fees to a customer’s bill based on concession fees or any other airport charge. Therefore, before *8681998, rental car bills did not include a line item attributing part of the customer’s bill to airport fees. In 1997, Dollar Rent A Car objected to this provision on First Amendment grounds. The Port concluded that the company’s objection was reasonable and has since included a provision in its rental car concession contracts stating that “[t]he Port does not require but will not prohibit this pass through of the Concession Fee to Airport Customers.” CP at 1068, 822. The contracts also now include conditions for disclosing information about the pass through to customers.

Douglas Branson is a resident of Pennsylvania who regularly travels to Seattle. He rented cars from limited service rental car providers five times during the period of 1998-2000. On each occasion, his bill included a separate line item charge to cover the concession fee paid to Sea Tac.

Branson brought a class action lawsuit against the rental car companies and the Port, claiming that the concession fees charged by the Port violate the RAA’s requirement that airport fees allow for uniform public use of airport property. See RCW 14.08.120(6). He also claimed that the Port’s concession fees are not uniform, reasonable, or established with due regard to the property used and the expense of its operation. Finally, Branson argued that the rental car companies’ practice of passing the fees through to customers violates the Consumer Protection Act (CPA), chapter 19.86 RCW. The parties stipulated to postpone class certification until the court ruled on summary judgment motions. The parties later stipulated to dismissal of the claims against the rental car companies. The trial court then granted the Port’s motion for summary judgment, finding that the Port’s 10 percent concession fee, charged to the rental car companies, is authorized by RCW 14.08.120 as a matter of law.

Branson appealed. The Court of Appeals affirmed, concluding that the Port’s 10 percent concession fee complies with RCW 14.08.120(6), which provides that airport fees may not deny the public of equal and uniform use of airport property and requires that airport fees be reasonable and *869uniform for the same class of service. Branson v. Port of Seattle, 115 Wn. App. 695, 697, 63 P.3d 830 (2003).

II

Analysis

On appeal from summary judgment, this court engages in the same inquiry as the trial court. Okeson v. City of Seattle, 150 Wn.2d 540, 548, 78 P.3d 1279 (2003). Summary judgment is appropriate if there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Clark v. Baines, 150 Wn.2d 905, 910-11, 84 P.3d 245 (2004). This court reviews issues of statutory interpretation de novo. Okeson, 150 Wn.2d at 548-49.

The RAA authorizes a municipality to raise funds for the operation of its airport. RCW 14.08.100(1). The act specifically authorizes municipalities:

[t]o determine the charges or rental for the use of any properties under its control and the charges for any services or accommodations, and the terms and conditions under which such properties may be used: PROVIDED, That in all cases the public is not deprived of its rightful, equal, and uniform use of the property. Charges shall be reasonable and uniform for the same class of service and established with due regard to the property and improvements used and the expense of operation to the municipality.

RCW 14.08.120(6) (emphasis added).1 Additionally, the legislature directed the courts to interpret the RAA “to make uniform so far as possible the laws and regulations of *870this state and other states and of the government of the United States having to do with the subject of aeronautics.” RCW 14.08.340.

As an initial matter, Branson argues that any interpretation of the RAA depends in part upon whether the power to set concession fees is governmental or proprietary. Generally, a municipality acts in either a governmental or proprietary capacity. Okeson, 150 Wn. 2d at 549. The principal test for determining whether a function is governmental or proprietary is “whether the act performed is for the common good of all, or whether it is for the special benefit or profit of the corporate entity.” Id. at 550. If this court classifies a statutorily granted municipal power as proprietary, then the extent of that municipal power can be liberally construed. 2A Eugene McQuillin, The Law of Municipal Corporations § 10.22, at 378 (Dennis Jensen & Gail O’Gradney eds., 3d ed. rev. vol. 1996). If a municipal function is governmental in nature, then “less opportunity exists for invoking the doctrines of liberal construction and of implied powers.” City of Tacoma v. Taxpayers of City of Tacoma, 108 Wn.2d 679, 694, 743 P.2d 793 (1987).

The acts of setting airport fees and entering into contracts are generally considered to be proprietary functions. See, e.g., Hite v. Pub. Util. Dist. No. 2, 112 Wn.2d 456, 460, 772 P.2d 481 (1989); Alamo Rent-A-Car, Inc. v. Bd. of Supervisors, 221 Cal. App. 3d 198, 205, 272 Cal. Rptr. 19 (1990); Jacksonville Port Auth. v. Alamo Rent-A-Car, Inc., 600 So. 2d 1159, 1164 (Fl. Dist. Ct. App. 1992). However, the specific powers granted in the RAA have been declared by the legislature to be governmental in nature. RCW 14.08.020 (“the . .. operation of airports and other air navigation facilities, and the exercise of any other powers herein granted to municipalities, are hereby declared to be public, governmental, county and municipal functions, exercised for a public purpose” (emphasis added)). While governmental powers may not be liberally construed, Taxpayers of City of Tacoma, 108 Wn.2d at 694, the RAA authorizes the municipality to exercise all powers necessarily incidental to the powers *871enumerated in RCW 14.08.120. RCW 14.08.120(7). Thus, even if the operation of airports were a governmental function in Washington limiting our ability to liberally construe the authority available to a municipality under RCW 14.08.120, the statute itself contemplates that some powers are implied.

Furthermore, if the method for exercising a municipal power is not specifically prescribed, the mode or means by which a municipality may exercise powers granted by the legislature will not be strictly construed. See Taxpayers of City of Tacoma, 108 Wn.2d at 692. There is a “range of reasonableness within which a municipality’s maimer and means of exercising [its] powers will not be interfered with or upset by the judiciary.” 2A McQuillin, supra, § 10.18.10, at 366. Here, the legislature has not prescribed the specific means by which municipalities must set airport concession fees. See RCW 14.08.120(6). Therefore, the Port has discretion to set airport fees in the manner it chooses, so long as the resulting fees comply with the basic limitations set forth in RCW 14.08.120(6).

It is in this statutory context that we analyze Branson’s specific claims. Branson challenges the Port’s practice of entering into contracts with rental car companies wherein the companies agree to pay a concession fee of 10 percent of the gross revenues arising from airport customer rentals.2 He attacks the validity of airport concession fees based on two provisions within RCW 14.08.120(6). First, he claims that the fees deny the public equal and uniform use of airport property. RCW 14.08.120(6) (the “equal and uniform public use” provision). Second he claims that the fees are *872not uniform, reasonable, or established with due regard to the property and improvements used and the expense of airport operation. RCW 14.08.120(6) (the “reasonable and uniform” provision).

A. Equal and Uniform Public Use

The RAA states that airport fees must not deprive the public of equal and uniform use of airport property. RCW 14.08.120(6). This is the only relevant provision that refers explicitly to the impact of airport charges on members of the public, regardless of who is actually charged the fee. See id. Branson claims that because the rental car companies recoup the expense of the concession fee by charging customers 10 percent on each transaction, a customer who rents a car for a long period of time must pay more towards recoupment of the concession fee (because his total bill is more expensive) than a customer who rents a car for a short period of time. Because these customers use the airport in identical ways, Branson asserts that airport customers are therefore charged different rates for the same use of airport property in violation of RCW 14.08.120(6).

Branson’s argument fails to take into account the fact that the Port charges rental car companies concession fees for the companies’ use of airport property. CP at 819-20; see also Alamo Rent-A-Car, Inc. v. Sarasota-Manatee Airport Auth., 906 F.2d 516, 520 (11th Cir. 1990) (recognizing that the 10 percent fee represents the car rental company’s use of the airport facility). The fees are imposed to compensate for the burden of rental car companies’ use of airport property and the benefit that the airport brings to the companies in the form of access to a market of potential customers. See, e.g., Enter. Leasing Co. v. Metro. Airports Comm’n, 250 F.3d 1215, 1220-21 (8th Cir. 2001). While the rental car companies are permitted to recoup the expense of the airport concession fees by passing them through to their customers, the Port does not require the companies to do so. CP at 1068, 822. Most importantly, Branson points to *873nothing in the record that indicates that the airport charges rental car concession fees to compensate for airport customers’ use of the airport. Airport customers who pay the companies’ recoupment charge are not paying for their own use of airport property. Rather, they are indirectly paying for the rental car companies’ use of airport property, but only because the rental car companies choose to pass this expense through to their customers. Thus, the “equal and uniform public use” provision is not implicated by airport rental car concession fees. See RCW 14.08.120(6).

Additionally, the plain language of the statute requires only that the public enjoy equal and uniform use of airport property. See RCW 14.08.120(6). Branson has not made it clear how an airport customer’s use of the airport is restricted by the rental car company concession fee. Although the recoupment charge imposed by the rental car companies may make customer payments for rental cars variable, rental cars are not airport property. Branson has not shown that the recoupment charge imposed by the rental car companies impacts the airport customers’ use of airport property.

Perhaps to address this problem, Branson notes that an airport customer who leaves the airport in a hotel shuttle, rather than a rental car, pays no specific recoupment fee. He argues that because a shuttle customer arguably engages in the same use of the airport but pays no recoupment charge, rental car customers are deprived of equal and uniform use of the airport.3 However, the Port does charge a fee to airport shuttle services, CP 877-79, but those businesses apparently have not chosen to pass those fees through to customers in the form of a line item on each customer’s bill. See Suppl. Br. of Resp’t at 5. In contrast, rental car companies have chosen to pass their fees through *874to the customer, but the Port does not mandate or control this practice. CP at 1068, 822.4

Branson also relies on a 1992 attorney general opinion, which provides an example describing two customers who receive identical services from two rental car companies but for whom the companies would be charged different amounts based on the duration of the car rental. 1992 Op. Att’y Gen. No. 18, at 6. Because the attorney general opinion clearly refers to uniform treatment of businesses, rather than individual airport customers, it is unclear how the opinion relates to Branson’s current argument that the concession fees are not uniform with regard to individual customers. More fundamentally, the attorney general opinion cites to no authority to support its reading of the RAA. Id. at 5-6.5

Therefore, Branson has failed to establish that the Port’s concessions fees deny the public equal and uniform use of the airport in violation of RCW 14.08.120(6). The Port does *875not charge the concession fees to members of the public and the Port’s concession fees in no way limit the public’s use of airport property.

B. Reasonable and Uniform Charges

The “reasonable and uniform” provision of the RCW 14.08.120(6) requires that airport charges be “reasonable and uniform for the same class of service and established with due regard to the property and improvements used and the expense of operation to the municipality.” RCW 14.08.120(6). The only fees at issue in this case are those that the Port charges to the rental car companies', as stated above, the Port does not charge concession fees to rental car customers. While the Port has concluded that it cannot legally prevent rental car companies from recouping their concession fees from their individual customers, the Port does not endorse the practice, let alone require it. CP at 1068, 822. It is the rental car company that ultimately decides if the concession fees will be recouped through a line item charge on its customers’ bills. Id. Therefore, we question whether Branson has standing to pursue a claim against the Port based on the “reasonable and uniform” provision and whether he may do so in a case that no longer includes the airport rental car companies as parties.6

This court has established a two-part test for determining whether a party has standing to bring a particular action. Grant County Fire Prot. Dist. No. 5 v. City of Moses Lake, 150 Wn.2d 791, 802, 83 P.3d 419 (2004) (Grant County II); 1519-1525 Lakeview Blvd. Condo. Ass’n v. Apartment Sales Corp., 144 Wn.2d 570, 576 n.3, 29 P.3d 1249 (2001). First, we ask whether the interest asserted is arguably within the zone of interests to be protected by the statute or constitutional guaranty in question. Grant County II, 150 *876Wn.2d at 802. Second, we consider whether the party seeking standing has suffered from an injury in fact, economic or otherwise. Id. Both tests must be met by the party seeking standing. Id.; High Tide Seafoods v. State, 106 Wn.2d 695, 702, 725 P.2d 411 (1986) (noting that even if the plaintiffs could show adequate injury, they would fail the zone of interest test).

We conclude that Branson lacks standing to challenge the Port’s concession fees under the “reasonable and uniform” provision because a plaintiff other than the entity that the Port actually charges is not within the zone of interests intended to be protected by that particular statutory requirement. While the plain language of RCW 14-.08.120(6)’s “equal and uniform public use” provision indicates that it is intended to protect the public by ensuring that airport fees do not deny the public equal and uniform use of airport property, the provision requiring fees to be reasonable and uniform protects only those entities to whom the Port actually charges fees. Nothing in the language of the “reasonable and uniform” provision indicates that it is intended to reach beyond fees charged by the Port. RCW 14.08.120(6). In this case, the Port does not charge fees to Branson or any other car rental customers; Branson paid a recoupment fee to the rental car companies, not the Port. Therefore, a plain reading of RCW 14.08.120(6) reveals that Branson does not fall within the zone of interests to be protected by the “reasonable and uniform” provision of RCW 14.08.120(6).7

*877 Because Branson seeks declaratory relief, we also consider the limitations of the Uniform Declaratory Judgments Act (UDJA), chapter 7.24 RCW, which governs declaratory judgments in Washington. Under the UDJA, a person whose rights, status, or other legal relations are affected by a statute may have any question of the construction of that statute determined by a court. RCW 7.24.020. In addition, the UDJA allows for an interested person to have any question arising under the validity of a contract determined, so long as the UDJA’s underlying requirements are met. RCW 7.24.020. In order to have standing to seek declaratory judgment under the act, a person must present a justiciable controversy:

“(1)... an actual, present and existing dispute, or the mature seeds of one, as distinguished from a possible, dormant, hypothetical, speculative, or moot disagreement, (2) between parties having genuine and opposing interests, (3) which involves interests that must be direct and substantial, rather than potential, theoretical, abstract or academic, and (4) a judicial determination of which will be final and conclusive.”

To-Ro Trade Shows v. Collins, 144 Wn.2d 403, 411, 27 P.3d 1149 (2001) (emphasis added) (quoting Diversified Indus. Dev. Corp. v. Ripley, 82 Wn.2d 811, 815, 514 P.2d 137 (1973)). Absent these elements, the court “ ‘steps into the prohibited area of advisory opinions.’” Walker v. Munro, 124 Wn.2d 402, 411-12, 879 P.2d 920 (1994) (quoting Diversified Indus., 82 Wn.2d at 815). Inherent in the justiciability determination is the traditional limiting doctrine of standing. To-Ro Trade Shows, 144 Wn.2d at 411; Grant County II, 150 Wn.2d at 802 (“This statutory right is clarified by the common law doctrine of standing, which prohibits a litigant from raising another’s legal right.”).

Branson has not shown that the controversy arising out of the “reasonable and uniform” provision is currently between parties having genuine and opposing interests on the issue. By challenging the validity of the Port’s airport concession fees based on the reasonableness and uniformity *878of the fees, Branson seems to be raising not his own legal right, but that of the concessionaires. See Grant County II, 150 Wn.2d at 802. Because the Port does not charge fees to rental car customers, it is not clear that Branson’s interests are genuinely opposed to the Port’s. In a similar vein, it seems that Branson’s complaint would more properly be addressed by a claim against the rental car companies because they, not the Port, actually charged Branson the fee about which he complains.8 In this case, Branson and the Port are not sufficiently opposed to satisfy the third justiciability requirement under the UDJA.9

In sum, we conclude that common law principles of standing and the justiciability requirements underlying the UDJA prevent Branson from challenging the fees based on the “reasonable and uniform” provision of the RAA. Rental car customers’ interests are not within the zone of interests intended to be protected by that provision of RCW 14.08.120(6), Branson and the Port are not genuinely opposed, and without participation from the rental car companies themselves, declaratory judgment in this case would be inappropriate. Therefore, Branson has not established that he is entitled to relief under RCW 14.08.120(6).

*879III

Conclusion

Branson challenges only the Port’s practice of entering into contracts with rental car companies, under which the companies agree to pay a concession fee of 10 percent of gross revenues arising from airport rentals. The concession fees do not deprive the public of equal use of airport property. Furthermore, Branson has not established that he has standing to challenge these fees based on the “uniform and reasonable” requirement of the RAA. We affirm the Court of Appeals and dismiss Branson’s claims.

Alexander, C.J., and Ireland, Owens, and Fairhurst, JJ., concur.

The Washington statute is similar to many others in effect around the nation. See, e.g., N.C. Gen. Stat. § 63-53(5) (2003) (requiring uniform public use of airport property and reasonable and uniform fees set with due regard to the property used and the expense of its operation); see also Alaska Stat. § 02.15.090(a) (2002) (same); Del. Code Ann. tit. 2, § 706 (2001) (same); Md. Code Ann., Transp. § 5-408(b)(l) (2003) (same); Miss. Code Ann. § 61-3-21(1) (2003) (same); N.D. Cent. Code § 2-06-11(1) (2003) (same); Or Rev. Stat. § 836.055(2) (2003) (same); S.D. Codified Laws § 50-6A-38 (Michie 2003) (same); Tenn. Code Ann. § 42-3-112(2) (2003) (same).

The Port has concluded that it cannot prohibit the rental car companies from recouping these fees from customers or from including the concession fee recoupment charge as a separate line item on rental car bills. The dismissal of the claims against the rental car companies has not been challenged and their practice of passing the concession fee expense through to customers is no longer an issue in this case. In addition, rental car customers have previously argued that the rental car companies’ practice of charging customers separately for airport concession fees violates the CPA. Robinson v. Avis Rent A Car Sys., 106 Wn. App. 104, 108-09, 22 P.3d 818 (2001), review denied, 145 Wn.2d 1004 (2001). In Robinson, the Court of Appeals rejected this claim. Id. at 123.

Branson, presents no evidence that shuttle customers and limited service rental car customers use the airport in an identical way. The customers of limited service rental car providers utilize the counter space at the airport. CP at 820. But Branson has not shown that shuttle customers also utilize airport counter space.

Several courts have rejected lack of uniformity arguments based on the disparity between rental car concession fees and fees charged to shuttle services. See Allright Colo., Inc. v. City & County of Denver, 937 F.2d 1502, 1512-13 (10th Cir. 1991) (finding rational basis existed for different fees); Alamo Rent-A-Car, Inc. v. Sarasota-Manatee Airport Auth., 825 F.2d 367, 370-71 (11th Cir. 1987) (upholding different charges in the face of an equal protection challenge where a rational basis existed for the difference in fees).

In the context of his “equal and uniform public use” argument, Branson seems to contend that the Port’s concession fee system conflicts with Okeson, 150 Wn.2d 540. In 1999, the City of Seattle passed an ordinance that shifted the cost of streetlight operation from Seattle’s general budget to Seattle City Light customers. Id. at 543. In Okeson, this court applied the test set forth in Covell v. City of Seattle, 127 Wn.2d 874, 905 P.2d 324 (1995) and determined that the ordinance imposed a tax, rather than a regulatory fee. Okeson, 150 Wn.2d at 551-54. Branson claims the airport concession fees in this case similarly are not valid regulatory fees. However, municipalities may charge fees that are not purely regulatory in nature. Hugh D. Spitzer, Taxes vs. Fees: A Curious Confusion, 38 Gonz. L. Rev. 335, 343-49 (2003) (discussing commodity charges and burden offset charges). See also Teter v. Clark County, 104 Wn.2d 227, 232, 704 P.2d 1171 (1985) (recognizing that a county may charge for contribution to increased surface water runoff); Twitchell v. City of Spokane, 55 Wash. 86, 89, 104 P. 150 (1909) (explaining that when paying a water rate, the consumer pays for a “commodity which is furnished for his comfort and use”). Fees for access to or use of a public facility can be characterized as a commodity charge. See Spitzer, supra, at 344. The fees at issue here are, at least in part, commodity charges because concessionaires, including rental car companies, pay the fees in return for access to and use of airport property. Thus, they do not suffer the same fate as the charges analyzed in Okeson.

Although the Port does not claim that Branson lacks standing, Suppl. Br. of Resp’t at 4, we may raise the issue sua sponte. See, e.g., Johnson v. Allsteel, Inc., 259 F.3d 885, 887 (7th Cir. 2001); see also High Tide Seafoods v. State, 106 Wn.2d 695, 702, 725 P.2d 411 (1986) (“If a plaintiff lacks standing to bring a suit, courts lack jurisdiction to consider it.”).

When evaluating whether a party’s interests are within the zone of interests to be protected by a statute, courts often refer to the general purpose of the statute. See, e.g., To-Ro Trade Shows v. Collins, 144 Wn.2d 403, 414-15, 27 P.3d 1149 (2001). While the RAA declares that airports are to be built and operated for public benefit, RCW 14.08.020, we do not interpret this general purpose to reflect an intent to protect members of the public from fees charged to them by third parties like rental car companies. Compare RCW 14.08.020 with To-Ro Trade Shows, 144 Wn.2d at 414-15 (considering statute specifically intended to protect public from fraud and other abuses by vehicle dealers) and Grant County II, 150 Wn.2d at 802 (recognizing that the petition method of annexation was adopted “specifically to protect the interest of property owners”). The plain language of the “reasonable and uniform” provision indicates that the provision is intended to protect only the entities to which the Port actually charges fees. RCW 14.08.120(6).

Branson stipulated to dismissal of his claims against the companies. CP at 1803.

RCW 7.24.110 of the UDJA also suggests that declaratory judgment in this case would be improper at this time. That section requires that all parties who will potentially be affected by a declaratory judgment must be joined. See also Treyz v. Pierce County, 118 Wn. App. 458, 464, 76 P.3d 292 (2003) (refusing to decide a case based on RCW 7.24.110 where the plaintiff failed to join those parties with the biggest stake in the outcome of the litigation), review denied, 151 Wn.2d 1022 (2004). A party is a “necessary party” under RCW 7.24.110 if it is “ ‘one whose ability to protect its interest in the subject matter of the litigation would be impeded by a judgment’” in the current case. Treyz, 118 Wn. App. at 462 (quoting Primark, Inc. v. Burien Gardens Assocs., 63 Wn. App. 900, 907, 823 P.2d 1116 (1992)); N.W. Greyhound Kennel Ass’n, Inc. v. State, 8 Wn. App. 314, 319, 506 P.2d 878 (1973) (relying on RCW 7.24.110 to dismiss where plaintiff failed to join a party whose rights would be affected by the proposed remedy). Because the rental car companies pay the fees in question, they are the very parties who would be most impacted by the current litigation. Although they were originally defendants in this action, they have never been joined as to the issue of whether the fees they pay to the Port are valid under RCW 14.08.120(6). Thus, RCW 7.24.110 also suggests that declaratory judgment in this case would be improper without the rental car companies’ input as to this issue.