Curtis S. Ridlon v. New Hampshire Bureau of Securities Regulation

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THE SUPREME COURT OF NEW HAMPSHIRE
___________________________
Merrimack
No. 2018-0035
CURTIS S. RIDLON
v.
NEW HAMPSHIRE BUREAU OF SECURITIES REGULATION
Argued: October 24, 2018
Opinion Issued: July 24, 2019
Preti Flaherty, PLLP, of Concord (Brian M. Quirk and Nathan R.
Fennessy on the brief, and Mr. Quirk orally), for the plaintiff.
Gordon J. MacDonald, attorney general (K. Allen Brooks, senior assistant
attorney general, and Scott E. Sakowski, assistant attorney general, on the
brief, and Mr. Brooks orally), for the defendant.
LYNN, C.J. In this appeal we are asked to determine whether Part I,
Article 20 of the New Hampshire Constitution guarantees that a party subject
to an administrative enforcement action undertaken by the defendant, the New
Hampshire Bureau of Securities Regulation (Bureau), be afforded a jury trial.
The Superior Court (McNamara, J.) answered the question in the affirmative.
We disagree and therefore reverse.
The following relevant facts are derived from the record. The plaintiff,
Curtis S. Ridlon, was formerly employed as an investment adviser. In April
2017, the Bureau brought an administrative enforcement action against
Ridlon, alleging that he charged clients approximately $2.8 million in improper
fees. The relief sought by the Bureau included civil penalties of up to
$3,235,000, restitution in the amount of $1,343,427.20, and disgorgement of
up to $1,513,711.09. See RSA 421-B:6-604(d)-(e) (2015) (amended 2018).1 By
agreement of the parties, Ridlon filed a declaratory judgment petition in the
trial court asserting that he was constitutionally entitled to a jury trial and
seeking to enjoin the administrative proceedings from continuing. In response,
the Bureau filed a motion to dismiss. The trial court denied the Bureau’s
motion, ruling that Part I, Article 20 of the State Constitution affords Ridlon
the right to a jury trial, and enjoining any further administrative proceedings
by the Bureau. This appeal followed.
Ridlon argues that the trial court correctly ruled that he has a
constitutional right to a jury trial because the Bureau seeks penalties in excess
of $6 million and, in the alternative, because the action against him “amounts
to an action for common law fraud.” Because we are the final arbiter of the
meaning of both statutes, Appeal of Laconia Patrolman Assoc., 164 N.H. 552,
555 (2013), and the State Constitution, Petition of Below, 151 N.H. 135, 139
(2004), we review the trial court’s decision de novo, Linehan v. Rockingham
County Comm’rs, 151 N.H. 276, 278 (2004).
Part I, Article 20 of the New Hampshire Constitution governs jury trials
in civil cases. It provides:
In all controversies concerning property, and in all suits between
two or more persons except those in which another practice is and
has been customary and except those in which the value in
controversy does not exceed $1,500 and no title to real estate is
involved, the parties have a right to a trial by jury. This method of
procedure shall be held sacred, unless, in cases arising on the high
seas and in cases relating to mariners’ wages, the legislature shall
think it necessary hereafter to alter it.
N.H. CONST. pt. I, art. 20. Although “[i]t is beyond dispute that the right to a
jury trial is a fundamental one under our State Constitution in both the civil
and the criminal contexts,” State v. Morrill, 123 N.H. 707, 711 (1983), it is
1 We note that RSA chapter 421-B was repealed and reenacted in 2015, during the course of
Ridlon’s alleged conduct. See Laws 2015, 273:1 (eff. Jan. 1, 2016). At least some of this conduct
would arguably be governed by the previous iteration of the chapter. See RSA 421-B:7-701(a)
(2015). Because the parties apply the 2016 version on appeal, for purposes of this appeal, we
assume that the 2016 version of the chapter applies. See In the Matter of White & White, 170
N.H. 619, 621 (2018) (applying the current version of a statute where the trial court and the
parties did same).
2
equally irrefutable that in civil cases the right is considerably more limited than
it is in criminal cases, State v. Bilc, 158 N.H. 651, 653 (2009). Specifically, in
civil cases the right “extends only to those cases for which the jury trial right
existed when the constitution was adopted in 1784.” Morrill, 123 N.H. at 712.
As we have explained, “Part I, Article 20 did not create or establish a right to a
jury trial not before existing.” Hair Excitement v. L’Oreal U.S.A., 158 N.H. 363,
368 (2009) (quotation and brackets omitted). Rather, “[i]t was a recognition of
an existing right, guaranteeing it as it then stood and was practiced, guarding
it against repeal, infringement, or undue trammel by legislative action, but not
extending it so as to include what had not before been within its benefits.” Id.
(quotation omitted).
“To resolve whether a party has a right to trial by jury in a particular
action, we generally look to both the nature of the case and the relief sought,
and ascertain whether the customary practice included a trial by jury before
1784.” Id. (quotation omitted). “Partly as a result of this test, and at times
independently thereof, it has been decided that a guaranty of trial by jury
cannot be invoked in special, statutory or summary proceedings unknown to
the common law.” Hallahan v. Riley, 94 N.H. 338, 339-40 (1947); accord In re
Sandra H., 150 N.H. 634, 636 (2004).
Relying on state and federal case law, the trial court concluded that the
Bureau “cannot seek a fine of $2,500 for a violation of RSA 421-B without a
jury determination of liability.” At the outset of our analysis, we observe that,
to the extent the trial court relied on federal precedent interpreting the Seventh
Amendment to the United States Constitution, such reliance was misplaced.
The jury trial guaranty enshrined in the Seventh Amendment is not among the
federal rights that have been held to be encompassed within the Fourteenth
Amendment’s due process clause and thus binding in state court actions. See
Gasperini v. Center for Humanities, Inc., 518 U.S. 415, 432 (1996) (recognizing
that the Seventh Amendment “governs proceedings in federal court, but not in
state court”); Opinion of the Justices, 121 N.H. 480, 482-83 (1981) (noting that
“the Seventh Amendment is one of the few remaining provisions in the Bill of
Rights which has not been held to be applicable to the states through the
Fourteenth Amendment” (quotation omitted)); see also 47 Am. Jur. 2d Jury § 5,
at 630 (2006). More importantly, as the Bureau points out, the analysis we
use in determining whether the jury trial right conferred by Part I, Article 20
applies in a given case differs from that employed by federal courts in making
similar determinations under the Seventh Amendment. Compare, e.g., Tull v.
United States, 481 U.S. 412, 420-21 (1987) (cautioning that the Seventh
Amendment may require “trial by jury in actions unheard of at common law,”
and noting that “characterizing the relief sought is more important than finding
a precisely analogous common-law cause of action in determining whether the
Seventh Amendment guarantees a jury trial” (quotation and brackets omitted)),
with Franklin Lodge of Elks v. Marcoux, 149 N.H. 581, 592 (2003) (explaining
that focusing solely upon the nature of damages “fails to address whether . . .
3
the right remedied in this case . . . was recognized at common law in 1784 and
customarily resolved by jury trial,” and “makes no effort to appraise the
seemingly comprehensive nature of the” statutory scheme). In light of this
divergence, and because neither party has asked us to eschew our traditional
methodology in favor of the federal approach, we decline to give controlling
weight to Seventh Amendment jurisprudence when determining whether Part I,
Article 20 affords a state court litigant the right to a jury trial.
Moreover, the cases cited by the trial court, and relied upon by Ridlon on
appeal for the proposition that claims involving statutory penalties above the
constitutional limit obligate a trial by jury, do not address the applicability of
the jury trial right under the State Constitution to what we have described as
“purely statutory” causes of action. See Pomponio v. State, 106 N.H. 273, 274
(1965). When assessing the right to a jury trial in such circumstances, we
have explained that we must “consider the comprehensive nature of the
statutory framework to determine whether the jury trial right extends to the
action.” Hair Excitement, 158 N.H. at 368 (quotation omitted). State securities
laws, commonly referred to as “Blue Sky Laws,” are designed to prevent fraud
and protect the public. 79A C.J.S. Securities Regulation § 482, at 534-36
(2009). They seek to create “a balanced regulatory scheme to cope with the
problems of modern securities markets” in a given state. Id. at 534. “The first
legislative attempts to regulate securities transactions were effected on the
state level, with the first general securities law being said to have been enacted
by the State of Kansas in 1911, and with 48 jurisdictions having enacted such
statutes by 1933.” Brenner v. Oppenheimer & Co. Inc., 44 P.3d 364, 371 (Kan.
2002) (quotation omitted). New Hampshire enacted its first blue sky law in
1917. See Laws 1917, ch. 202. In its original form, the statute made
violations of its terms “punishable upon conviction . . . by a fine of not more
than two thousand dollars, or by imprisonment for not more than six months,
or by both such fine and imprisonment,” and also provided that “such false or
misleading statements or information so furnished shall be evidence in court
. . . in a suit to recover damages on account of loss sustained . . . .” Laws
1917, ch. 202, at 762-63. The statute was amended in 1981 to include a
provision that gave the attorney general the authority to seek “civil penalties for
violations of” the statute. See Laws 1981, ch. 214, at 214. The amendments
further granted the commissioner of insurance the authority to impose an
administrative fine of not more than $2,500 for knowing violations of “any rule
or order” issued by the commissioner. Laws 1981, ch. 214, at 216.2 In 2015,
amendments to the statute as a whole created the current statutory scheme.
See Laws 2015, 273:1.
In its current form, the Uniform Securities Act is comprised of 55
sections contained in seven separate articles. See RSA 421-B:1-101 to B:7-701
2At the time, the commissioner of insurance was charged with administering the statute. Laws
1981, ch. 214, at 213.
4
(2015) (amended 2017, 2018). The Act specifies detailed requirements for the
registration of securities, see RSA 421-B:3-301 to -307, and those who sell
them, see RSA 421-B:4-401 to -412. It charges the secretary of state with
administering the Act, and confers upon the secretary “all powers specifically
granted or reasonably implied in order to perform the substantive
responsibilities imposed by this chapter,” RSA 421-B:6-601(d), including the
power to “bring administrative actions to enforce the securities law” and
“investigate and impose penalties for violations of” said laws, RSA 421-B:6-
601(b)(4)-(5). When the secretary of state believes provisions of the Act have
been, or are about to be, violated, the secretary may bring an administrative
enforcement action under RSA 421-B:6-604. See RSA 421-B:6-604. The
hearings procedures at the administrative level are governed by RSA 421-B:6-
613. See RSA 421-B:6-613(a). These “[a]dministrative hearings shall not be
bound by common law or statutory rules of evidence, nor by technical or formal
rules of procedure,” and “[a]ll relevant, material, and reliable evidence shall be
admissible.” RSA 421-B:6-613(u). Following a hearing, the presiding officer
“shall issue a written decision stating the action to be taken by the
department,” which “shall be reached upon the basis of a preponderance of the
evidence.” RSA 421-B:6-613(v). The actions may include the imposition of “a
civil penalty up to a maximum of $2,500 for a single violation,” RSA 421-B:6-
604(d), as well as “an order of rescission, restitution, or disgorgement,” RSA
421-B:6-604(e). All “[f]inal orders issued by the secretary of state under this
chapter are subject to judicial review in accordance with RSA 541,” RSA 421-
B:6-609, meaning that upon satisfying the statutory rehearing procedures, an
aggrieved party may appeal directly to this court, see RSA 541:6 (2007).
As the above recitation demonstrates, the statutory procedures
established by the legislature for the regulation of securities “militate[ ] against
any implication of a trial by jury.” Hallahan, 94 N.H. at 340. The rights and
obligations that govern “depend entirely upon the statute.” Pomponio, 106
N.H. at 274. They are comprehensive in their scope, see Hair Excitement, 158
N.H. at 368, and “designed to facilitate a simple and speedy determination” of
the claims brought by the secretary, Hallahan, 94 N.H. at 340; see, e.g., RSA
421-B:6-613(o) (outlining informal conference procedures intended to simplify
the issues, reach agreements or stipulations which “avoid unnecessary proof,”
and consider “[a]ny other matters which might contribute to the prompt,
orderly, and fair conduct of the proceeding”). Thus, even if we were to assume,
as Ridlon posits, that the types of relief that may be sought by the secretary
under the statute — i.e., civil penalties, fines, restitution, and disgorgement (all
of which remedies the statute describes as “penalties,” see RSA 421-B:6-
601(b)(5), :6-604(d)-(e)) — bear certain similarities to a common law claim in
debt as to which a right to trial by jury would have existed in 1784, see Tull,
481 U.S. at 420, consideration of the overall statutory scheme fashioned by the
Securities Act persuades us that the administrative enforcement mechanism it
created was unknown to the common law in 1784 and is not compatible with
trial by jury.
5
The trial court acknowledged our precedents as cited above, but
reasoned that they were not controlling because, in its view: (1) Part I, Article
20 applies differently when the State seeks to recover a penalty from a private
party; and (2) the action against Ridlon is akin to common law fraud. With
respect to the first point, it is true that there are certain circumstances in
which the State is treated differently from a private party when it comes to the
availability of a jury trial under Part I, Article 20. For example, the
constitutional right to a jury trial is not available to the State at all, whether it
be a plaintiff or defendant in litigation. See Wooster v. Plymouth, 62 N.H. 193,
201 (1882). We have also explained that there is “no right under article 20 to a
trial by jury in an action [brought] against the State.” Newell v. N.H. Div. of
Welfare, 131 N.H. 88, 90 (1988) (emphasis added). But the differential
treatment described in Newell stems from the “established principle of
jurisprudence in all civilized nations that the sovereign cannot be sued in its
own courts, or in any other, without its consent and permission,” and where it
does waive this privilege, “it may prescribe the terms and conditions on which
it consents to be sued, and the manner in which the suit shall be conducted.”
Wooster, 62 N.H. at 204; see 47 Am. Jur. 2d Jury § 43, at 661-62. However,
our case law offers no support for the view that a person’s right to a jury trial
enjoys an enhanced status when it is the State, rather than a private party,
that brings the claim.3 The authorities relied upon by the trial court in so
holding are readily distinguishable from the case at hand.
For example, in Morrill we were asked to determine whether the
sanctions, including a fine of up to $1,000, “attached to [driving while
intoxicated, first offense] take it outside the realm of petty offenses not
requiring trial by jury” under Part I, Article 15. Morrill, 123 N.H. at 712
(quotation and brackets omitted). We held that they did, explaining “that the
framers of our constitution did not intend that individual criminal defendants
be denied a jury trial in cases where fines may be levied which are greater than
the amount constitutionally entitling civil litigants to a jury determination.” Id.
(emphasis added). In our view, it was illogical to believe that a civil litigant
would be entitled to a jury trial pursuant to Part I, Article 20 when the amount
in controversy exceeded $500,4 but a criminal litigant would not be afforded
3 Ridlon attempts to distinguish this case from Hair Excitement on the basis that that case dealt
with a statutory claim (under the Consumer Protection Act) made by a private party as plaintiff,
whereas this case involves a statutory claim (under the Securities Act) brought by the State
against a private party as defendant. The distinction is unavailing, however, because our Article
20 cases have never suggested either that the right to a jury trial, where it exists, is not equally
available whether the party claiming it is a plaintiff or a defendant, or that the jury right enjoys
some special status when the claim at issue is brought against a private party by an agency of
government. Thus, in determining whether a constitutional right to a jury trial is available to a
private party, the fact that such party’s opponent in the litigation is the State, as in this case, as
opposed to a private party, as in Hair Excitement, is immaterial.
4 In 1988, Part I, Article 20 of the State Constitution was amended to increase the threshold
beyond which a jury trial was required from $500 to $1,500. See Gilman v. Lake Sunapee Props.,
159 N.H. 26, 30 (2009) (providing a brief outline of Article 20’s history).
6
that same right when “charged with offenses under our penal code.” Id. at 713
(emphasis added). Thus, although the offense at issue in Morrill was classified
as a violation, which does not constitute a crime, see RSA 625:9, II(b) (2016),
our analysis referenced Part I, Article 20, not because it was substantively
applicable to the case, but merely for comparison purposes, in determining
whether the fine called for by the statute was sufficiently severe to confer the
right to a jury trial applicable to criminal cases under Part I, Article 15.
Nor does our decision in Town of Henniker v. Homo, 136 N.H. 88 (1992),
compel a different conclusion. There, the defendants were fined by the
superior court “for maintaining a junk yard on their property without a license,
in violation of RSA 236:114 and the Henniker Zoning Ordinance.” Town of
Henniker, 136 N.H. at 88. Based on the language of the relevant statutes, we
concluded that the defendants had committed a separate violation on each day
they continued to operate the junk yard without a license, resulting in 606
separate violations. See id. at 89-90. We assumed, without deciding, that the
defendants would be constitutionally entitled to a jury trial if the maximum
fine per violation exceeded the threshold of Part I, Article 20. See id. at 89.
Because the ordinance limited the maximum fine per violation to $100, we held
that the defendants did not have a right to a jury trial on any of their
violations, id. at 90, even though the superior court “imposed fines which
totalled in excess of the amount that constitutionally entitles civil litigants to a
jury trial,” id. at 89 (emphasis added). Consequently, neither Morrill nor Town
of Henniker stand for the proposition that the State Constitution affords the
right to a jury trial to a person facing a governmental action to collect a civil
penalty that exceeds the $1,500 threshold specified in the current version of
Part I, Article 20.5
Likewise, we disagree with Ridlon’s argument, as well as the trial court’s
conclusion, that the statutory claim against him can be considered equivalent
to a common law cause of action for fraud. In Hair Excitement, we compared a
statutory claim brought under the Consumer Protection Act with a common
law claim for fraud or deceit. See Hair Excitement, 158 N.H. at 369-70. After
comparing the elements and proofs of the two claims, we concluded that the
two actions were dissimilar. Id. Here also, the secretary’s action against
Ridlon is dissimilar to common law fraud in significant respects. To start, the
Act specifically states in its definitional section that the terms “‘[f]raud,’ ‘deceit,’
and ‘defraud’ are not limited to common law deceit.” RSA 421-B:1-102(17).
Thus, the Act is designed to encompass a broader class of claims than the
common law tort.
5Ridlon’s reliance on State v. Jackson, 69 N.H. 511 (1899), and East Kingston v. Towle, 48 N.H.
57 (1868), to support the trial court’s decision is similarly unavailing. Jackson expressly dealt
with the right to a jury trial under Part I, Article 15, see Jackson, 69 N.H. at 512, and Towle dealt
with “the right of trial in all controversies relating to property” under Part I, Article 20, see Towle,
48 N.H. at 63.
7
Furthermore, the claims brought against Ridlon are readily
distinguishable from a common law action for fraud or deceit. The claims are
brought by the secretary to enforce compliance with the statute, see RSA 421-
B:6-604(a), in response to financial injuries sustained by third-party clients of
Ridlon. The secretary alleges that Ridlon violated RSA 421-B:5-502(a), which
provides:
It is unlawful for any person that advises others for compensation,
either directly or indirectly or through publications or writings, as
to the value of securities or the advisability of investing in,
purchasing, or selling securities or that, for compensation and as
part of a regular business, issues or promulgates analyses or
reports relating to securities:
(1) to employ a device, scheme, or artifice to defraud
another person; or
(2) to engage in an act, practice, or course of business that
operates or would operate as a fraud or deceit upon
another person.
RSA 421-B:5-502(a). Therefore, the Act first requires that the offending party
be a “person that advises others for compensation,” and that the conduct
specifically relate to the purchase and sale of securities. Id. It must then be
established that the party employed “a device, scheme, or artifice,” or engaged
“in an act, practice, or course of business” designed to defraud another. RSA
421-B:5-502(a)(1) to (2). The above requirements must be established by a
preponderance of the evidence. RSA 421-B:6-613(v).
By contrast, in order to prove common law fraud or deceit, a plaintiff
must prove that a defendant intentionally made materially false statements to
the plaintiff, which the defendant knew to be false or which he had no
knowledge or belief to be true, for the purpose of causing, and which did cause,
the plaintiff reasonably to rely to his detriment. See Hair Excitement, 158 N.H.
at 369. Thus, in a common law fraud action, the party bringing the claim must
establish that it was personally harmed by the defendant’s conduct, prove
justifiable reliance, and “specifically allege the essential details of the fraud and
the facts of the defendants’ fraudulent conduct.” Snierson v. Scruton, 145
N.H. 73, 77 (2000). In addition, to prevail, the plaintiff must meet the more
demanding burden of proving fraud by clear and convincing evidence. Snow v.
American Morgan Horse Assoc., 141 N.H. 467, 468 (1996). In short, like the
Consumer Protection Act claim at issue in Hair Excitement, the administrative6
6 We note that the Securities Act appears to permit the attorney general or the secretary of state to
forgo administrative enforcement and instead initiate enforcement proceedings directly in superior
court. See RSA 421-B:6-603. We have no occasion to consider in this case whether a person
8
proceeding brought against Ridlon by the secretary under the Securities Act is
not analogous to common law fraud or deceit because it “require[s] proof of
significantly different elements and satisfaction of a different standard of
proof.” Hair Excitement, 158 N.H. at 370. Accordingly, Ridlon is not entitled
to a jury trial under Part I, Article 20 of the State Constitution.
We do not share the dissent’s view that the comprehensiveness analysis
outlined in Hallahan pertained only to whether there existed an implied
statutory right to a jury trial, rather than one under the State Constitution.
Although we acknowledge that Hallahan does not specifically indicate which
portions of the analysis pertained to the constitutional interpretation as
opposed to the statutory interpretation, we disagree with the dissent’s assertion
that the discussion of the comprehensiveness of the statutory scheme in
Hallahan applied only to the court’s statutory analysis. In fact, later cases
have referenced and applied the framework outlined in Hallahan in the
constitutional context. See Hair Excitement, 158 N.H. at 368-69; Franklin
Lodge, 149 N.H. at 591.
Furthermore, although we agree with the dissent as to the importance of
the jury trial right, we are bound by the law as set forth in our past cases. See
Ford v. N.H. Dep’t of Transp., 163 N.H. 284, 290 (2012) (discussing the
doctrine of stare decisis). Yet, if we were to adopt the dissent’s rationale, we
would be hard pressed to understand how Hair Excitement would remain good
law. In this regard, we note that one of the remedies provided for in the
Consumer Protection Act is an award of $1,000 per violation, which can be
multiplied by up to three times by the court if it determines that the
defendant’s conduct was a willful or knowing violation of the Act. See RSA
358-A:10, I (2009); Simpson v. Young, 153 N.H. 471, 474-75 (2006). Given
that this recovery is allowed whether a plaintiff suffered actual damages or not,
it seems that this remedy could easily be characterized as a “civil penalty” and
thus subject to a jury trial under the dissent’s view. Such a ruling would
effectively overrule Hair Excitement or, at a minimum, cast constitutional
doubt on its continued validity.
For the reasons stated above, we reverse the judgment of the trial court.
Reversed.
HICKS and BASSETT, JJ., concurred; HANTZ MARCONI, J., with whom
DONOVAN, J., joined, dissented.
HANTZ MARCONI, J., with whom DONOVAN, J., joins, dissenting. We
respectfully dissent because we believe that Ridlon is entitled to a jury trial
against whom an enforcement proceeding is commenced in superior court enjoys a right to a jury
trial.
9
under Part I, Article 20 of the New Hampshire Constitution. See N.H. CONST.
pt. I, art. 20. The State of New Hampshire, acting through the Bureau of
Securities Regulation, seeks millions of dollars in civil penalties against Ridlon
for alleged violations of the New Hampshire Uniform Securities Act (Act). See
RSA ch. 421-B (2015) (amended 2017, 2018). Because the Bureau is seeking
civil penalties in excess of $1,500 per violation in this action in debt, Ridlon
has a right to a jury trial under Part I, Article 20. See Tull v. United States,
481 U.S. 412, 418-19 (1987) (concluding, based on historical analysis, that
“[a]ctions by the Government to recover civil penalties under statutory
provisions” are “one type of action in debt” that required a jury trial at common
law); N.H. CONST. pt. I, art. 20 (requiring “the value in controversy” to exceed
$1,500). The Act’s failure to provide for a jury trial under such circumstances
contravenes the protections afforded by our State Constitution. Therefore, we
respectfully dissent from the majority opinion.
I
The Bureau instituted an administrative enforcement action against
Ridlon in 2017 for conduct spanning 2007 to 2016. See RSA 421-B:6-604
(governing administrative enforcement proceedings). Among other relief, the
Bureau sought civil penalties under RSA 421-B:6-604(d), which authorizes the
secretary of state to “impose a civil penalty up to a maximum of $2,500 for a
single violation” in its final order. The Act currently limits judicial review of
administrative enforcement actions to appeals of final orders taken to this
court, governed by the procedures in RSA chapter 541. See RSA 421-B:6-609;
RSA 541:6 (2007). The predecessor to the current Act provided for a de novo
appeal to superior court when the secretary of state ordered certain kinds of
relief, but the legislature repealed this provision in 2009.7 Compare Laws
1994, 388:22 (enacting de novo appeal provision), with Laws 2009, 128:3
(repealing de novo appeal provision).
The majority focuses on whether a jury trial must be provided in an
administrative enforcement action in the first instance, i.e., in the
administrative proceeding itself. This focus heavily influences its conclusion
that Ridlon has no constitutional right to a jury trial. We view the pertinent
inquiry differently. The relevant New Hampshire authority suggests that the
legislature can require claims for which there is a constitutional right to a jury
trial to first be adjudicated by an administrative agency, so long as there is a
reasonably unfettered right of appeal to a court where a jury trial can be held.
ICS Communications v. Fitch, 145 N.H. 433, 434-35 (2000); see also Opinion of
the Justices, 113 N.H. 205, 214 (1973); Copp v. Henniker, 55 N.H. 179, 202-03
(1875); cf. Opinion of the Justices (DWI Jury Trials), 135 N.H. 538, 541-42
(1992) (explaining that Part I, Article 15 of the State Constitution guarantees
7 We did not have occasion to consider whether the de novo appeal provision required a trial by
jury as a matter of statutory interpretation or constitutional law.
10
the right to a jury trial, either in the first instance or on appeal to the superior
court, to all criminal defendants facing the possibility of incarceration).
Acknowledging this authority, Ridlon concedes that if the Act allowed the
aggrieved party to appeal the secretary of state’s final order in the
administrative action to the superior court for a de novo jury trial, “there would
be no constitutional problem” under Part I, Article 20. The Act currently
contains no such provision, however. See RSA ch. 421-B. Therefore, the
question we must answer is this: when the government seeks civil penalties in
excess of $1,500 per violation in an administrative enforcement action, does
the Act’s failure to provide an appeal to a court where a jury trial can be held
contravene Part I, Article 20? As explained below, we believe that it does.
II
The jury trial “has been steadily regarded, from the earliest judicial
history in England, as the great safeguard of the lives, liberty, and property of
the subject against the abuses of arbitrary power, as well as against undue
excitements of popular feeling.” Wooster v. Plymouth, 62 N.H. 193, 194 (1882)
(quotation omitted). Indeed, “the jury is a cornerstone of our democratic
system of government.” State v. Elbert, 121 N.H. 43, 44 (1981); see also Pena-
Rodriguez v. Colorado, 137 S. Ct. 855, 860 (2017). The founders of this
country viewed the right to trial by jury and the right to vote as “the heart and
lungs, the main spring, and the center wheel” of our liberties. Letter from John
Adams to William Pym (Jan. 27, 1766), in 1 Papers of John Adams 164, 169
(Robert J. Taylor et al. eds., 1977).
The constitutional right to trial by jury is “not a protection of the
government, but a protection of the subject against the government, and of the
weak subject against the powerful subject.” Wooster, 62 N.H. at 201 (emphasis
added); see also East Kingston v. Towle, 48 N.H. 57, 64 (1868) (noting that
“trial by jury [is] secured to the subject by the constitution” (emphasis added)).
Our State Constitution guards this right “against repeal, infringement, or
undue trammel by legislative action.” Gilman v. Lake Sunapee Props., 159
N.H. 26, 31 (2009) (quotation omitted); accord Hair Excitement v. L’Oreal
U.S.A., 158 N.H. 363, 368 (2009).
The right to a jury trial is enshrined in several places in the New
Hampshire Constitution’s Bill of Rights. See N.H. CONST. pt. I, arts. 15, 16,
20; see also Wooster, 62 N.H. at 196, 202-03. The right to a jury trial in civil
causes is guaranteed by Part I, Article 20, which provides:
In all controversies concerning property, and in all suits between 2
or more persons except those in which another practice is and has
been customary and except those in which the value in controversy
does not exceed $1,500 and no title to real estate is involved, the
11
parties have a right to a trial by jury. This method of procedure
shall be held sacred unless, in cases arising on the high seas and
in cases relating to mariners’ wages, the legislature shall think it
necessary to alter it.
N.H. CONST. pt. I, art. 20. “In those civil cases in which trial by jury is a
constitutional right, that right is as sacred as it is in criminal cases. Its
sacredness is not a matter of degree: it is absolute.” Copp, 55 N.H. at 195.
Further, our precedent “indicate[s] a strong tendency to uphold the right of
trial by jury whenever possible.” Hampton v. Palmer, 99 N.H. 143, 146 (1954).
In Part I, Article 20, the people of New Hampshire “reserved to
themselves the right of jury trial, except in cases in which it has been
heretofore otherwise used and practiced.” Daley v. Kennett, 75 N.H. 536, 537
(1910) (quotation omitted); see State v. Saunders, 66 N.H. 39, 72 (1889)
(explaining that “‘heretofore’ means before 1784” in the context of Part I, Article
20).8 This constitutional provision “was a recognition of an existing right,
guaranteeing it as it then stood and was practised”; it did not extend the right
to trial by jury to cases that “had not before been within its benefits.” Davis v.
Dyer, 62 N.H. 231, 235 (1882).
“To resolve whether a party has a right to trial by jury in a particular
action, we generally look to both the nature of the case and the relief sought,
and ascertain whether the customary practice included a trial by jury before
1784.” Gilman, 159 N.H. at 30-31 (quotation omitted); accord Hair Excitement,
158 N.H. at 368; Employers Assurance Co. v. Tibbetts, 96 N.H. 296, 298
(1950). “[T]he cases in which it had been otherwise used and practised are
shown by common-law principles and by history.” Wooster, 62 N.H. at 203
(citations omitted); accord Daley, 75 N.H. at 537. “Our analysis, therefore,
requires a historical discussion.” Gilman, 159 N.H. at 31; see also HSBC Bank
USA v. MacMillan, 160 N.H. 375, 377 (2010); In re Sandra H., 150 N.H. 634,
636 (2004). We must be “extremely cautious in asserting, without the most
thorough and critical examination, that a party in any case was not entitled to
trial by jury before the adoption of the constitution.” Copp, 55 N.H. at 190.
In conducting the historical inquiry under Part I, Article 20, we also
consider Part II, Article 90 of the State Constitution. See Saunders, 66 N.H. at
75-76. Enacted in 1784, Part II, Article 90 provides in relevant part:
8 Until 1988, Part I, Article 20 described the exception as applying to “‘cases in which it has been
heretofore otherwise used and practiced.’” Gilman, 159 N.H. at 29-30 (quoting Laws 1788 at 12).
In 1988, that language was changed to “those [cases] in which another practice is and has been
customary.” N.H. CONST. pt. I, art. 20; see Gilman, 159 N.H. at 29-30. The meaning of the
exception, however, has not changed. See Gilman, 159 N.H. at 30.
12
All the laws which have heretofore been adopted, used, and
approved, in the province, colony, or state of New Hampshire, and
usually practiced on in the courts of law, shall remain and be in
full force, until altered and repealed by the legislature; such parts
thereof only excepted, as are repugnant to the rights and liberties
contained in this constitution . . . .
N.H. CONST. pt. II, art. 90 (emphasis added). As used in Article 90,
“‘heretofore’ means before 1784.” Saunders, 66 N.H. at 72.
“The English common law, modified by American conditions, is one of the
laws which have heretofore been adopted, used, and approved in the province
of New Hampshire and usually practised on in the courts.” Id. at 73 (quotation
and ellipsis omitted). This body of common law continued “in force here upon
the organization of the provincial government” in the 1600s, State v. Albee, 61
N.H. 423, 426-27 (1881), and remained in effect after 1784 by virtue of Part II,
Article 90 so long as it was not “repugnant to the rights and liberties contained
in [our] constitution,” N.H. CONST. pt. II, art. 90; see State v. Santamaria, 169
N.H. 722, 724-25 (2017). The historical discussion in this case therefore
begins with English common law.
“Jury trial was an established right of British subjects long before the
earliest settlement of this state.” Wooster, 62 N.H. at 194 (quotation omitted).
In our own country, almost from its earliest settlement, the trial by
jury was claimed by the people as the birthright of Englishmen,
and as the most valuable of the rights of freemen; and in the great
struggle which secured our national independence, no right of the
colonists was more urgently and strenuously insisted upon.
Opinion of Justices, 41 N.H. 550, 550-51 (1860); accord Wooster, 62 N.H. at
194. Indeed, the colonists were “full of the English passion for trial by jury,
intensified, if possible, by their experience in this country.” Gilman, 159 N.H.
at 31 (quotation omitted); accord Copp, 55 N.H. at 187.
“At common law, suits for civil penalties were tried as actions for debt,
and actions for debt were triable before a jury.” State v. Credit Bureau of
Laredo, Inc., 530 S.W.2d 288, 292 (Tex. 1975); see also Grossblatt v. Wright,
239 P.2d 19, 26 (Cal. Dist. Ct. App. 1951) (noting that “[a] jury trial was a
matter of right in the common-law action of debt”); cf. Woart v. Winnick, 3 N.H.
473, 481 (1826) (“[A]n action of debt to recover a penalty is a civil cause.”). As
relevant here, “[a]ctions by the Government to recover civil penalties under
statutory provisions . . . historically have been viewed as one type of action in
debt requiring trial by jury.” Tull, 481 U.S. at 418-19.9 Thus, the available
9 While we agree with the majority that this court must be circumspect in relying on case law that
13
historical evidence supports Ridlon’s position that the Bureau’s action to
recover civil penalties against him pursuant to the Act renders this an action in
debt, for which there was a right to a jury trial at common law.
The common law right to a jury trial continued in force in New
Hampshire through and after 1784 via Part II, Article 90, as part of the existing
body of laws. See Saunders, 66 N.H. at 75-76. Unlike other areas of common
law, however, this right was withheld from the legislative power of alteration
and repeal by the jury trial provisions in the State Constitution’s Bill of Rights.
See id. Therefore, the law concerning the right to trial by jury for actions in
debt, “brought to this country by the first settlers, is in force so far as it had
not been altered by usage or legislation before 1784.” Id. at 75.
The Bureau has not identified any authority that suggests the common
law right to a jury trial for actions in debt changed prior to the adoption of the
New Hampshire Constitution. See Nationwide Biweekly Admin., Inc. v.
Superior Court, 234 Cal. Rptr. 3d 468, 479 (Ct. App.), review granted, 426 P.3d
302 (Cal. 2018); Gallo v. Traina, 166 N.H. 737, 740 (2014) (appealing party has
the burden of demonstrating reversible error). Additionally, the available
historical evidence indicates that, both before and after 1784, English common
law treated civil penalty suits as actions in debt that required trial by jury. See
Tull, 481 U.S. at 418. Given the importance of the jury trial right in the
founding of this country, it is fair to say that “[m]en who had enjoyed [the right
to trial by jury for actions in debt] under the British crown would not be likely
to surrender it after engaging in an exhaustive war for seven years to establish
their independence.” Albee, 61 N.H. at 427-28. Indeed, “the right of trial by
jury was held in such esteem by the colonists that its deprivation at the hands
of the English was one of the important grievances leading to the break with
England.” Parklane Hosiery Co. v. Shore, 439 U.S. 322, 340 (1979) (Rehnquist,
J., dissenting). Accordingly, we conclude that the nature of the case here — an
action in debt by the government for civil penalties pursuant to a statute —
supports the existence of a right to trial by jury under Part I, Article 20. See
Gilman, 159 N.H. at 30-31.
The nature of the relief requested — specifically, the civil penalties
sought under RSA 421-B:6-604(d) — further supports the existence of a right
to a jury trial under Part I, Article 20. See id. A “civil penalty” is “[a] fine
assessed for a violation of a statute or regulation.” Black’s Law Dictionary
1313 (10th ed. 2014); see also Ellett Bros., Inc. v. U.S. Fidelity & Guar. Co.,
275 F.3d 384, 388 (4th Cir. 2001) (stating that “civil penalties” are “fines or
interprets the Seventh Amendment to the United States Constitution, reliance on decisions from
federal and other state courts with respect to matters of historical fact is entirely appropriate.
See, e.g., Nationwide Biweekly Admin., Inc. v. Superior Court, 234 Cal. Rptr. 3d 468, 479-80 (Ct.
App.), review granted, 426 P.3d 302 (Cal. 2018). Indeed, “Tull’s discussion of the historical legal
facts establishing the types of actions triable by jury at common law is highly pertinent to the
instant case.” Id. at 479.
14
assessments payable to the government”). “A civil penalty was a type of remedy
at common law that could only be enforced in courts of law.” Tull, 481 U.S. at
422. Thus, the nature of the relief authorized by the civil penalty provision of
RSA 421-B:6-604 “was traditionally available only in a court of law.” Id. at
423; see RSA 421-B:6-604(d) (authorizing the secretary of state to “impose a
civil penalty up to a maximum of $2,500 for a single violation” of the Act).
“[C]ourts of common law . . . proceed to the trial of contested facts by means of
a jury.” Saunders, 66 N.H. at 76 (quotation omitted). Consequently, “a
government action seeking civil penalties” such as those contained in RSA 421-
B:6-604(d) “is the kind of case that, under the historic English common law,
would have been tried in the courts of law and as to which” Ridlon has a right
to a jury trial. Nationwide Biweekly Admin., 234 Cal. Rptr. 3d at 480-81.
The final consideration is whether the amount in controversy exceeds the
$1,500 threshold of Part I, Article 20. See N.H. CONST. pt. I, art. 20. The Act
provides that “the secretary of state may impose a civil penalty up to a
maximum of $2,500 for a single violation” in an administrative enforcement
action. RSA 421-B:6-604(d). Because the maximum penalty per violation
exceeds $1,500, the amount in controversy requirement is met. Cf. Town of
Henniker v. Homo, 136 N.H. 88, 89-90 (1992) (assuming that state
constitutional right to jury trial applied to zoning enforcement action seeking
civil fines in superior court, amount in controversy requirement was not met
where zoning ordinance limited maximum fine to $100 per violation).
In conclusion, because the government, i.e., the Bureau, seeks civil
penalties pursuant to statute in excess of $1,500 per violation, both the nature
of the case and the nature of the relief sought support the conclusion that
Ridlon has a right to a jury trial under Part I, Article 20 of the New Hampshire
Constitution. Because the Act does not provide an avenue of appeal to a court
where the jury trial right can be exercised, the administrative enforcement
proceeding seeking civil penalties against Ridlon violates Part I, Article 20.
III
Instead of addressing whether the administrative enforcement action
constitutes an action in debt, the majority rests its analysis upon the premise
that the comprehensiveness of the statutory scheme determines the existence
and scope of the constitutional right to trial by jury under Part I, Article 20. A
careful review of our case law demonstrates that the reference to statutes’
comprehensive nature originated in dicta in Franklin Lodge of Elks v. Marcoux,
149 N.H. 581, 591 (2003), and resurfaced in Hair Excitement, 158 N.H. at 368.
Our vast body of Part I, Article 20 jurisprudence demonstrates that these
statements in Franklin Lodge and Hair Excitement were isolated departures
from our well-settled constitutional inquiry, under which we consider “whether
the controversy was one that was resolved by a jury at the time of the
constitution’s adoption” in 1784. Gilman, 159 N.H. at 30. Accordingly, unlike
15
our colleagues, we believe that the comprehensive nature of the Act does not
determine whether Ridlon has a constitutional right to a civil jury trial in this
matter.
For at least a century, we have consistently described the pertinent
inquiry under Part I, Article 20 in language referencing the nature of the case
and the nature of the relief sought. See, e.g., Daley, 75 N.H. at 540; Employers
Assurance, 96 N.H. at 298; Palmer, 99 N.H. at 145; Gilman, 159 N.H. at 30-31.
In Daley, for example, we stated: “The nature of the case and of the relief
sought must be looked to for the settlement of the constitutional question.”
Daley, 75 N.H. at 540. We have also maintained that “[t]he extent of the right
to trial by jury is settled by ascertaining how it was used and practiced before
1784.” Hallahan v. Riley, 94 N.H. 338, 339 (1947) (quotations omitted); accord
Douglas v. Company, 81 N.H. 371, 374 (1924).
Prior to 2003, we had never indicated that the comprehensive nature of a
statutory scheme had any bearing on the constitutional question of whether
there was a right to a jury trial under Part I, Article 20. See Franklin Lodge,
149 N.H. at 591-92. Indeed, in Hallahan, we resolved the constitutional issue
by relying on the rule that “a guaranty of trial by jury cannot be invoked in
special, statutory or summary proceedings unknown to the common law.”
Hallahan, 94 N.H. at 339-40.
We also examined in Hallahan whether a statutory right to trial by jury
“c[ould] be fairly implied” from the provision that governed appeals to the
superior court from the “Appeal Tribunal of the [Bureau of Labor’s]
Unemployment Compensation Division.” Id.; see id. at 339 (“Since the statute
does not expressly provide for trial by jury, plaintiffs can prevail only if it can
be fairly implied or it is required by virtue of the state constitution.” (emphasis
added)). In conducting the statutory analysis, we observed that “[t]he
procedure for filing and obtaining unemployment compensation benefits is
comprehensive and designed to facilitate a simple and speedy determination of
benefit claims.” Id. at 340. We concluded that the “elaborate procedure for
administrative and judicial review provided by the statute militates against any
implication of a trial by jury,” and thus, as a matter of statutory interpretation,
“the appellants [were] not entitled to a trial by jury” in their appeal to the
superior court. Id. Our use of the phrase “implication of a trial by jury,” id.
(emphasis added), signaled that this sentence concerned our analysis of
whether a jury trial “c[ould] be fairly implied” from the statute, not whether it
was “required by virtue of the state constitution,” id. at 339 (emphasis added).
More than fifty years after we decided Hallahan, we relied on the
statutory portion of our analysis in that case to support a new proposition
regarding the constitutional right to a jury trial:
16
When a plaintiff seeks relief for breach of codified rights, we further
consider the comprehensive nature of the statutory framework to
determine whether the jury trial right extends to the action. See
Hallahan v. Riley, 94 N.H. 338, 340 (1947) (elaborate procedure for
administrative and judicial review provided by unemployment
compensation statute militates against any implication of a trial by
jury).
Franklin Lodge, 149 N.H. at 591. We did not explain why the constitutional
right to a jury trial should depend on whether the statutory scheme at issue is
comprehensive. See id. at 591-92. More importantly, however, the foregoing
statement in Franklin Lodge is dicta because we did not analyze the merits of
the appellant’s argument that it had a right to trial by jury under Part I, Article
20. See id.; see, e.g., In re Search Warrant for Records of AT&T, 170 N.H. 111,
115 (2017) (holding that certain language in a prior case was “dicta” and,
therefore, “not controlling” because those “comments were unnecessary to the
decision”); State v. Burris, 170 N.H. 802, 810-11 (2018). Instead we stated
that the appellant had failed to address aspects of our state constitutional
inquiry, and “[w]ithout adequate appellate argument, we decline[d] to address
the [appellant]’s argument any further.” Franklin Lodge, 149 N.H. at 592.
Therefore, Franklin Lodge is not binding precedent on the issue before this
court. See, e.g., AT&T, 170 N.H. at 115.
Although we repeated the aforementioned dicta in Hair Excitement and
observed that the statutory scheme at issue was “comprehensive,” Hair
Excitement, 158 N.H. at 368 (quotation omitted), our holding did not appear to
turn on that observation, see id. Accordingly, these statements in Hair
Excitement can also be classified as dicta. See, e.g., Arcam Pharmaceutical
Corp. v. Faria, 513 F.3d 1, 3 (1st Cir. 2007) (“Dictum is superfluous content —
‘an assertion in a court’s opinion of a proposition of law which does not explain
why the court’s judgment goes in favor of the winner.’” (quoting Pierre N. Leval,
Judging Under the Constitution: Dicta About Dicta, 81 N.Y.U. L. Rev. 1249,
1256 (2006))).
The doctrine of stare decisis does not compel us to perpetuate dicta, see,
e.g., AT&T, 170 N.H. at 115; Burris, 170 N.H. at 810-11, and we would decline
to do so in this case. Indeed, “[i]t is a fundamental rule of that doctrine that a
decision is not authority for what is said in the opinion but only for the points
actually involved and actually decided.” Childers v. Childers, 168 P.2d 218,
221 (Cal. Dist. Ct. App. 1946) (emphasis omitted). Thus, while the majority
appears to view its decision as compelled by stare decisis, we disagree. In our
view, the comprehensiveness of the Act is not a basis for concluding, as the
majority does, that Ridlon has no right to a jury trial under the State
Constitution.
17
We believe that the existence of the state constitutional right to trial by
jury should be determined by relying on the well-settled legal principles
established by our Part I, Article 20 jurisprudence. The comprehensiveness of
the statutory scheme is not germane to the considerations we have identified
as relevant to our inquiry under Part I, Article 20. By contrast, the nature of
the case and the nature of the relief sought are relevant to whether the action
would have been tried in a court of law, which had jury trials, or a court of
equity, which did not, at the time of the State Constitution’s adoption. See
Saunders, 66 N.H. at 76. Thus, the nature of the case and the nature of the
relief sought bear upon whether the customary practice in 1784 included a
jury trial. The comprehensive nature of the statutory framework sheds no
such light on the inquiry of whether a right to trial by jury existed in 1784.
Accordingly, considering the comprehensive nature of the statutory scheme
does not assist in “the settlement of the constitutional question.” Daley, 75
N.H. at 540.
Furthermore, elevating comprehensiveness to the forefront of the
analysis, as the majority does here, suggests that the nature of the case and
the nature of the relief sought are less important than the existence of a
comprehensive statutory scheme, out of which the claim at issue arises. In
effect, this approach allows the legislature to “nullify the [c]onstitutional right
of trial by jury by mere statutory enactments. It is by such methods that
courts lose their power to enforce the Bill of Rights.” Grossblatt, 239 P.2d at
27 (quotation omitted). The legislature, however, “cannot, under pretence of
regulating, injuriously limit or restrain” the constitutional right to a civil jury
trial. Copp, 55 N.H. at 194. Indeed, “the constitutional guaranty of trial by
jury puts a plain limitation upon legislative power.” Id. at 202. “If trial by jury
be regarded as in many cases expensive, inconvenient, and behind the
intelligence of the age, that may show that the constitution requires
amendment, but it cannot be amended by an act of the legislature or a decision
of the court.”10 Id. at 209. “A constitutional right, inconvenient in the highest
degree, is as sacred as the most convenient one.” Id. at 206. “It is one of the
rights not surrendered by the people when they formed themselves into a state,
and by its reservation they exempted themselves from the authority of the
government they created to abridge it.” State v. Almy, 67 N.H. 274, 280 (1892).
IV
In sum, we believe that Ridlon has a right to a jury trial under Part I,
Article 20 of the New Hampshire Constitution because the Bureau is seeking
10It is worth noting that, on multiple occasions, the citizens of New Hampshire have rejected
amendments to Part I, Article 20 that would limit the scope of its protections by increasing the
amount in controversy requirement. See Lawrence Friedman, The New Hampshire State
Constitution 88 (2d ed. 2015). The voters did so in 1984, for example, “despite the argument
made by proponents of the change that [the proposed increase to $5,000] was needed to reduce
the growing backlog in superior court cases.” Id.
18
civil penalties in excess of $1,500 per violation of the New Hampshire Uniform
Securities Act. See RSA 421-B:6-604(d). Therefore, the Act’s failure to provide
an avenue of appeal to a court where trial by jury can be held violates our State
Constitution.
Given our conclusion, we need not address the Bureau’s argument that
the other forms of relief it sought constitute equitable remedies for which there
is no right to trial by jury. Cf. McElroy v. Gaffney, 129 N.H. 382, 386 (1987)
(plurality opinion) (recognizing that there is no right to a jury trial under Part I,
Article 20 in “purely equitable proceedings,” but noting that the right is not lost
where equitable and legal claims are joined in the same action).
We also do not reach the issue of whether the action “is in essence one
for common law fraud.” However, we have misgivings about whether Hair
Excitement comports with our state constitutional framework. See Hair
Excitement, 158 N.H. at 369-70 (holding that Consumer Protection Act claim
brought in private action was not “analogous to” claim for common law fraud or
deceit, based upon differences in elements and burdens of proof). As a result,
we believe that the majority’s use of Hair Excitement as a template for
addressing the fraud argument, while understandable, risks extending an
analysis that is untethered from our established framework under Part I,
Article 20. In the discharge of our duty to construe and uphold the New
Hampshire Constitution, this court must be vigilant in ensuring that
questionable precedent “be not extended by mere analogy to a different case if
the result will be to weaken or subvert” our constitutional principles. Dimick v.
Schiedt, 293 U.S. 474, 485 (1935). While the issue must wait for another day,
parties in future cases would be wise to address how our analysis of the fraud
argument in Hair Excitement can be reconciled with the historical inquiry
required under Part I, Article 20 of our State Constitution.
For all of the foregoing reasons, we respectfully dissent from the majority
opinion.
19