Constitutional – Equal Protection – Smoking Ban – Exemptions – Private Clubs – For Profit vs. Nonprofit

Edwards v. Morrow (Lawyers Weekly No. 12-07-0325, 19 pp.) (Linda Stephens, J.) (Cheri Beasley, J., concurring) Appealed from Pitt County District Court. (G. Galen Braddy, J.) N.C. App. Full-text opinion.

Holding: We read G.S. § 130A-496 to exempt private, nonprofit country clubs from the general prohibition on smoking in restaurants and bars; however, private, for-profit country clubs are not exempt from the ban. Given the General Assembly’s motive for enacting the ban – protection of the public from secondhand smoke – this is a rational, and therefore constitutional, distinction.

We reverse the trial court’s ruling that § 130A-496 is unconstitutional as applied to petitioners.

Respondent, as director of the Pitt County Health Department, notified petitioners that their four for-profit clubs were in violation of the smoking ban set out in G.S. §§ 130A-491 et seq. Petitioners sought and obtained a ruling that the smoking ban violated their equal protection rights.

While generally prohibiting smoking “in all enclosed areas of restaurants and bars,” § 130A-496 of the smoking ban provides, “Smoking may be permitted in … [a] private club.” Section 130A-492(11) defines a “private club” as follows: “A country club or an organization that [(1)] maintains selective members, [(2)] is operated by the membership, [(3)] does not provide food or lodging for pay to anyone who is not a member or a member’s guest, and [(4)] is either [(a)] incorporated as a nonprofit corporation in accordance with Chapter 55A of the General Statutes or [(b)] is exempt from federal income tax under the

Internal Revenue Code as defined in [§] 105-130.2(1). For the purposes of this Article, private club includes country club.”

The statute creates two distinct types of private clubs that are exempt from the smoking ban: (1) country clubs, and (2) non-country club organizations meeting the four listed qualifications.

Petitioners argue that, because § 130A-492(11) exempts all country clubs, for-profit country clubs are exempt while for-profit non-country club organizations are not.

“Country club” is not defined in our statutes. Moreover, dictionaries offer no clear, unambiguous definition of the term.

Therefore, as used in § 130A-492(11), “country club” is ambiguous. As such, we must interpret that ambiguous statutory language to give effect to legislative intent and avoid a construction of the statute which operates to defeat or impair the object of the statute.

As specified in § 130A-491, titled “Legislative findings and intent”, “It is the intent of the General Assembly to protect the health of individuals in public places … from the risks related to secondhand smoke.”

An interpretation of “country club” that gives effect to the legislative intent of the statutes would be one that only exempts private country clubs from the smoking ban. Conversely, an interpretation that allows smoking in public country clubs would defeat or impair the object of the statute. Thus, we conclude that the legislature’s exemption of country clubs from the smoking ban applies only to private country clubs and does not exclude public country clubs.

There is no bright-line rule for distinguishing private clubs from non-private clubs. Likewise, there is no clear answer to the question of when a country club is a private country club.

We conclude that the legislature’s exemption of private country clubs applies only to nonprofit country clubs and does not, as petitioners suggest, exempt for-profit country clubs.

Initially, we note that the vast weight of authority uses nonprofit status as a factor weighing in favor of — or as a requisite for — a determination that a club is truly private.

The primary aim of a for-profit entity is profit maximization. The necessary results of profit-driven decision-making will be minimal membership requirements (a non-exclusionary membership fee), expanded membership (open to anyone willing to pay the fee), and, ultimately, a near-publicly accessible country club (at least for anyone who can afford the fee). Contrasted with a nonprofit private country club — whose ownership and membership decisions are not based on profit maximization, but rather on furtherance of the private social and recreational purposes for which the club was established — the for-profit club is far less likely to exhibit those characteristics associated with truly private organizations, i.e., more selective membership and operation by members for membership rather than by owner for profit. Accordingly, an interpretation of “country club” that allows smoking in only those truly private, nonprofit country clubs and that bans smoking in quasi-public, for-profit country clubs best effectuates the legislature’s intent to protect the health of individuals in public places.

The legislature, while attempting to protect individuals in public places, also sought to limit the impact of the smoking ban on the rights of association of members of organizations that are truly private. Interpreting the country club exemption to apply only to nonprofit private country clubs effectuates this intent by allowing smoking in clubs that are established and operated in the furtherance of a private, social or recreational purpose, while protecting from the risks of secondhand smoke citizens patronizing those organizations that are nominally private, but allow nearly unrestricted public access.

Clearly, the drafters of the smoking ban’s private club exception intended that all clubs qualifying under that exception would be nonprofit clubs.

Accordingly, we conclude that an interpretation that accomplishes just that result best effectuates the legislature’s intent, as shown by the wording and legislative history of the statute.

Therefore, we need only determine the constitutionality of the smoking ban’s exemption of private, nonprofit country clubs, but not the petitioners’ for-profit establishments.

In Liebes v. Guilford County Department of Public Health, 713 S.E.2d 546, disc.

review denied, 718 S.E.2d 396 (2011), this court noted several plausible reasons why our legislature would exempt nonprofit non-country club organizations, but not for-profit non-country club organizations, such as the potential impairment of the legislative intent accompanying a broader definition of “private club” and  more objective enforcement resulting from the ready discernibility of nonprofit status. Those same reasons justify the legislature’s exemption of only nonprofit country clubs and not for-profit non-country club organizations such as the petitioners’ establishments. Accordingly, we conclude that the smoking ban’s private club exception does not irrationally classify the establishments, and that the Board of Health’s enforcement of the smoking ban against petitioners does not violate petitioners’ constitutional right to equal protection.

Therefore, the trial court erred in declaring the challenged section of the smoking ban unconstitutional.

Reversed.

Concurrence

(Beasley, J.) I agree with the majority’s reliance on Liebes to resolve this issue, but I believe that the majority’s interpretation of the country club exemption unduly narrows the force and effect of the statute.

I do not believe that the legislature intended to limit the “country club” exception to non-profit country clubs, especially where juxtaposed to the term “country club”, the legislature made another exception for non-profit organizations. The majority’s approach to applying the “country club” exception creates a redundancy and unnecessarily limits the reach of the statute.