author: DIXON, Chief Justice. BLANCHE, Justice MARCUS, Justice LEMMON, Justice,

text:
    STATE of Louisiana v. Glenn A. MACK.
    No. 80-KA-2349.
    Supreme Court of Louisiana.
    May 18, 1981.
    Rehearing Denied Sept. 4, 1981.
    Concurring Opinion Sept. 15, 1981.
    William J. Guste, Jr., Atty. Gen., Barbara Rutledge, Asst. Atty. Gen., Harry F. Con-nick, Dist. Atty., Louise S. Korns, and Judith A. Lombardino, Asst. Dist. Attys., for plaintiff-appellee.
    John M. Standridge, Supervising Atty., New Orleans, Jack Wright, Jr., Student Practitioner, Loyola Law School Clinic, for defendant-appellant.
   DIXON, Chief Justice.

Glenn A. Mack was charged by bill of information with simple burglary, R.S. 14:62, and convicted after a jury trial of attempted simple burglary, R.S. 14:27; 14:62. He was sentenced to twelve years at hard labor under the multiple offender provisions of R.S. 15:529.1. The single assignment of error relied upon in this appeal requires that the conviction and sentence be reversed.

According to the evidence adduced at trial, the instant offense occurred in a parking lot adjacent to a New Orleans hotel. The hotel manager saw the defendant park his own car in the lot, then break into a hotel guest’s car. The guest was notified, and when he went out to the lot he found the defendant rummaging through the glove compartment.

Defendant’s assignment of error contests the trial judge’s jury charge on reasonable doubt. Defendant maintains that the judge did not comply with C.Cr.P. 804, which provides in part:

“A. In all cases the court shall charge the jury that:
* * * * , * *
(2) It is the duty of the jury, in considering the evidence and in applying to that evidence the law as given by the court, to give the defendant the benefit of every reasonable doubt arising out of the evidence or out of the lack of evidence in the case ...”

Instead, the jury was instructed:

“. .. You are prohibited by law and your oath from going beyond the evidence to seek for doubts upon which to acquit the defendant, but must confine yourself strictly to a dispassionate consideration of the testimony given upon the trial. You must not resort to extraneous facts or circumstances in reaching your verdict. That is, you must not go beyond the evidence to find facts or circumstances creating doubts, but must restrict yourselves to the evidence that you heard on the trial of this case.. . . ”

This portion of the jury charge is clearly wrong. C.Cr.P. 804(A)(2) states that reasonable doubt may arise from the lack of evidence in the case. In the instant case, the trial judge specifically limited the jurors to the evidence before them to support a reasonable doubt. This jury instruction tracks verbatim a charge criticized by this court in State v. Gibbs, 355 So.2d 1299 (La.1978). We characterized the charge as “patently erroneous,” and stated that it “should not be given.” Id. at 1301. In Gibbs, however, the defendant did not complain of the erroneous charge until his appeal before this court. Consequently, no reversible error was found. In the instant case, defense counsel lodged his objection to the erroneous charge after the jury had retired for deliberation. As far as the record shows, it was the first opportunity available to defense counsel to object to the charge. Defense counsel stated his objection, specifically pointing out the violation of C.Cr.P. 804 by omitting the instruction that defendant is entitled to the benefit of every reasonable doubt arising out of (not only the evidence but) “the lack of evidence in the case.” The judge replied:

“I included all of that in my general charge. Of course, there was no special charge submitted on behalf of the defendant, so, he can’t reserve any error in the judge’s charge as a result.”

The judge then declined to hear any more argument.

The judge was in error. The defendant is not required to submit special charges before he can effectively make an objection and reserve an assignment of error on an adverse ruling.

The state advances two arguments in support of its position that the instant charge presents no reversible error. First, the state contends that defense counsel’s objection was untimely because not lodged until after the jury had retired. Second, the state maintains that the judge’s instructions on reasonable doubt, when read as a whole, provide substantial compliance with C.Cr.P. 804(A)(2).

Timeliness of the Objection

C.Cr.P. 804 states that “[i]n all cases the court shall charge the jury ...” The duty imposed by this article is mandatory, and exists without the necessity of a special request by counsel. If, at the conclusion of the jury charge, the trial judge has not informed the jury that reasonable doubt may arise from the lack of evidence in the case, then the judge has not discharged his statutory duty.

Of course, a defendant may not wait until his appeal before he complains of the trial judge’s failure to comply with C.Cr.P. 804. See State v. Gibbs, supra. But see State v. Williamson, 389 So.2d 1328 (La.1980) (exception carved out for jury charge which misdefines the crime with which defendant is charged). Rather, he must bring the error to the attention of the trial judge at a time when the judge can cure the error. State v. Lee, 346 So.2d 682, 685 (La.1977). Otherwise, his objection shall be deemed waived. C.Cr.P. 841.

In the past, this court has held that objections to the judge’s general charge are untimely if lodged after the jury has retired for deliberations. See, e. g., State v. Jefferson, 379 So.2d 1389 (La.1980); State v. Williams, 366 So.2d 1365 (La.1978); State v. Beard, 312 So.2d 278 (La.1975). These cases are premised on the belief that, once the jury has retired, it is too late for the trial judge to correct his error.

State v. Jefferson, supra, involved a charge given after the jury returned. Defendant objected, in a general way, after the jury again retired to deliberate. We held, not only that the issue was not before us (because of the lack of a contemporaneous objection), but that there was no merit in the assignment. State v. Williams, supra, and State v. Beard, supra, were cited as authority.

The Code of Criminal Procedure of 1928 provided, in article 391 (later preserved in R.S. 15:391 but omitted from the Code of Criminal Procedure of 1966, see Acts 311, 312 and 313 of 1966) that objections to the charge or to the failure to give a special requested charge “shall be by means of a bill of exceptions reserved before the jury shall have retired to deliberate.” The omission was for simplicity, since the matter was covered by Title 38 of the Code of Criminal Procedure dealing with bills of exceptions, arts. 841-845.

C.Cr.P. 841 was amended in 1974 to eliminate bills of exceptions, around which a body of technical jurisprudence had arisen. C.Cr.P. 841 contains the following:

“... It is sufficient that a party, at the time the ruling or order of the court is made or sought, makes known to the court the action which he desires the court to take, or of his objections to the action of the court, and the grounds therefor.”

We recognize today that trial judges may, and frequently do, recall the jury for further instructions. See C.Cr.P. 808, providing for additional charges in open court with the defendant and counsel for both sides present. We hold therefore, that an objection to the judge’s general charge is properly preserved if made immediately after the jury is retired, particularly if that is the first opportunity to object. Defense counsel is not required to interrupt the judge during the charge and have the jury removed while the point is argued. Careful practice would suggest that C.Cr.P. 801 be followed, and the charge reduced to writing on defendant’s request and copy provided to defendant before reading. In busy courts today, however, we recognize that this course would use precious time of judge, jury and counsel.

State v. Jefferson, supra; State v. Williams, supra and State v. Beard, supra, are therefore overruled to the extent that they are in conflict with this opinion.

Whether “Substantial Compliance” Occurred

The state contends that the judge’s instructions on reasonable doubt, when read as a whole, substantially comply with the intent of C.Cr.P. 804. Reliance is placed on State v. Henderson, 362 So.2d 1358 (La.1978). In that case, the defense’s request that C.Cr.P. 804 be read to the jury was denied on the ground that the matter was covered in the general charge.

This court found that the general charge did not convey the substance of 804 in a straightforward manner. However, the judge had informed the jury that reasonable doubt could be based upon unsatisfactory evidence, and that the jurors were to determine which facts were not proven. Although this charge was found to be less clear and less direct than the statutory language, we held that “. . . the instructions given by the trial court substantially complied with the legislative intent of Article 804....” Id. at 1366. Our holding was qualified by the following caveat:

“... Our approval of the trial court’s formulation, however, is limited to the particular charge given within the context of the particular instant case. It would have been preferable for the trial court to have read the exact language of Article 804 to the jury, and future use of the general charge used in the instant case could easily result in reversible error. See, State v. Gibbs, 355 So.2d 1299 (La.1978).” Id.

The state correctly points out that the instant charge, when read as a whole, includes the same statements reluctantly labeled substantial compliance in Henderson. The trial in the instant case occurred a full seven months after Henderson announced our dissatisfaction with unclear and indirect interpretations of C.Cr.P. 804. Our caveat in Henderson has been unheeded, and we decline to sanction jury instructions which substitute misleading and unclear statements for the direct statutory language of C.Cr.P. 804.

A correct understanding of reasonable doubt is essential in every criminal jury trial. A vital part of that definition is the statutory formulation of C.Cr.P. 804 — reasonable doubt may arise out of the lack of evidence in the case. This concept is best explained by the exact wording of the statute. Its essential ingredients are not supplied by jury instructions which merely hint at the idea embodied in the statute. In Henderson we stated that a reading of the exact language of C.Cr.P. 804 would have been preferable; today we hold such a reading to be mandatory.

For the reasons assigned, the conviction and sentence are reversed, and the cause remanded to the district court for a new trial.

BLANCHE, J., dissents with reasons.

MARCUS, J., dissents and assigns reasons.

WATSON, J., dissents for reasons assigned by MARCUS, J.

BLANCHE, Justice

(dissenting).

I respectfully dissent. This writer would not overrule this Court’s previous holdings that an objection to the court’s charge after the jury has retired is untimely. State v. Jefferson, 379 So.2d 1389 (La.1979); State v. Williams, 366 So.2d 1365 (La.1978); State v. Beard, 312 So.2d 278 (La.1974).

MARCUS, Justice

(dissenting).

La.Code Crim.P. art. 841 provides that “[a]n irregularity or error cannot be availed of after verdict unless it was objected to at the time of occurrence.” (Emphasis added.) In applying this statutory rule of procedure to objections to the trial judge’s general charge, this court has consistently held that the objections are untimely if made after the jury has retired for deliberations. I see no reason to change this rule. Moreover, I consider that the orderly processes of the trial court dictate the wisdom of the rule. Accordingly, I respectfully dissent.

LEMMON, Justice,

Concurring in the Denial of Application for Rehearing.

The purpose of the rule requiring that objections to jury instructions be interposed timely is to afford the trial judge an opportunity to correct the error pointed out by the objection. The corollary of the timely objection rule is the concept that a party should not be allowed to remain silent until after the verdict and then complain for the first time that the instructions were improper and prejudicial.

This case presents the following question: At what point must a party object to jury instructions in order for the objection to be timely?

On original hearing the court held that an objection to a “patently erroneous” jury instruction was not untimely “if made immediately after the jury is retired”. The erroneous instruction given in this case was previously condemned in State v. Gibbs, 355 So.2d 1299 (La.1978). Thus, defense counsel had no reason to anticipate that it would be given. Obviously, both respect for the trial court and good tactics would dictate that defense counsel not interrupt the trial court while in the process of instructing the jury. If defense counsel had waited until the end of the instructions and requested that he be permitted to object (and set forth the grounds for his objection) out of the presence of the jury, he would have unquestionably been entitled to do so, and if the trial court had denied him such opportunity, I would unhesitatingly find that the objection was properly preserved. To force defense counsel to object in the jury’s presence on the ground presented here (and be overruled) would be to compound the damage. Because I perceive little difference between an objection out of the jury’s presence immediately after the instructions and an objection out of the jury’s presence immediately after the jury’s retirement, I joined the opinion of the court and concur in the denial of rehearing.

It is evident that an objection, to be considered timely, must be interposed at a point in time when the trial judge can effectively correct any error in the instructions. Ideally, the court should conduct a conference with counsel, between the close of the evidence and the delivery of the instructions, at which the judge rules on requests relative to jury instructions and affords counsel an opportunity to make appropriate objections on the record to general and special instructions. Again ideally, the court should afford counsel, after delivery of the instructions, an opportunity to object (at the bench or outside the jury’s presence) to the general charge, in order that corrections or clarifications be made before the jury retires. However, the Code of Criminal Procedure contains no requirement that the trial judge either conduct such conferences or otherwise afford counsel a specific opportunity to make objections prior to the jury’s retiring to deliberate.

In the federal system F.R.Cr.P. 30 expressly requires that counsel object to jury instructions before the jury retires to consider its verdict and that the court provide an opportunity to make such objection. However, objections made immediately after the jury retires have been considered timely. 2 Wright, Federal Practice and Procedure § 484 (1969); United States v. Parnell, 581 F.2d 1374 (10th Cir. 1978), cert. denied, 439 U.S. 1076, 99 S.Ct. 852, 59 L.Ed.2d 44. Federal appellate courts also reverse for plain error in the instructions, even in the absence of an objection. F.R.Cr.P. 52.

Unlike F.R.Cr.P. 30, our Code contains no explicit statement barring complaints about jury instructions unless raised “before the jury retires to consider its verdict”. Compare C.C.P. Art. 1793. Former R.S. 15:391 (Article 391 of the 1928 Code of Criminal Procedure) contained an explicit requirement that objections to the instructions be made “before the jury shall have retired to deliberate under their verdict”. Because this language was not continued in the 1966 Code of Criminal Procedure, it is arguable that the jury’s retirement is not an absolute point beyond which no objection can be raised, especially since the Code also lacks a requirement that the court provide counsel an opportunity to object before the jury retires.

According to the court reporter’s note, defense counsel in the present case objected to the general charge after the jury retired to deliberate. (Presumably, this was immediately after the jury retired, since the proceedings were still “on the record” when the objection was entered.) The record does not reveal that counsel was afforded any earlier opportunity to object for the record; rather, the record indicates that at the completion of the testimony, the court immediately proceeded into closing arguments and jury instructions and then sent the jury to consider its verdict.

There was no significant difference between an objection just before or just after the jury retired. In either case the judge, if inclined to correct the error, would have had to reinstruct the jury on reasonable doubt. Although defense counsel could have interrupted the jury instructions (and requested retirement of the jury to argue the objection) at some point after the erroneous instruction was read, recalling the jury from the deliberation room at the outset of deliberations would not have caused a significantly greater disruption. In either case, the purpose of the Code’s timely objection rule was served. The simple way to avoid the problem was for the trial judge to conduct an instruction conference or to otherwise afford counsel an opportunity for objections on the record before the jury retired.

Finally, the erroneous instruction in this case involved fundamental law, and the error deprived defendant of having the jury instructed that a reasonable doubt may arise out of the lack of evidence. C.Cr.P. Art. 804. This erroneous instruction was devastating to defendant’s right to a fair trial before a jury properly instructed on reasonable doubt and the presumption of innocence, which are basic components of a fair trial. Thus, this error in the instruction affected the integrity of the jury’s exclusive factfinding function.

      . A different situation is presented when the defendant is contesting a special charge. In that case, the burden is on the defendant to timely submit a proposed charge, C.Cr.P. 807, and his failure to do so bars appellate review. Once he has submitted his proposed charge to the judge, he need not thereafter object if the judge rejects his proposed charge and substitutes therefor an erroneous statement of law. State v. Marmillion, 339 So.2d 788 (La.1976).

      . Even in civil cases, the rule prevails. La. Code Civ.P. art. 1793 provides that “[a] party may not assign as error the giving or the failure to give an instruction unless he objects thereto before the jury retires to consider its verdict, stating specifically the matter to which he objects and the grounds of his objection. Opportunity shall be given to make the objection out of the hearing of the jury.”

      . If this were not the rule, then counsel could “sit on an error” until an adverse verdict is rendered and then obtain a new trial because of an error that might have been corrected if pointed out timely. See C.Cr.P. Art. 841, Comment (a).

      . Defense counsel could have, as pointed out by the court, requested a written copy of the instructions in advance. C.Cr.P. Art. 801. However, as also noted, this imposes a substantial burden on the trial court and need not be encouraged.

      . In either case the jury would have to be called back into court after completion of instruction, if the trial court agreed with the objection and decided to correct the error.

      . In State v. Williamson, 389 So.2d 1328 (La.1980), this court recognized its authority, despite a lack of any objection in the trial court, to consider on appeal an error in a jury instruction “of such importance and significance as to violate fundamental requirements of due process”. 389 So.2d at 1331. The error in Williamson involved the definition of the offense. I concurred in Williamson. For an excellent discussion of the “plain error” doctrine of F.R.Cr.P. 52 regarding review of jury instructions see United States v. Frady, 636 F.2d 506 (D.C.Cir.1980). For an excellent discussion of our review of erroneous instructions during the sentencing phase of capital cases, see Justice Dennis’ opinion in State v. Sonnier, 379 So.2d 1336 (La.1980).


source: Caselaw Access Project

author: DIXON, Chief Justice. DENNIS, Justice, WATSON, Justice,

license: Public Domain

text:
    BENSON & GOLD CHEVROLET, INC. v. The LOUISIANA MOTOR VEHICLE COMMISSION et al.
    No. 81-CA-0286.
    Supreme Court of Louisiana.
    June 22, 1981.
    Rehearings Denied Sept. 18, 1981.

      William J. Guste, Jr., Atty. Gen., Kendall L. Vick, John R. Flowers, Jr., Lois C. Davis, Asst. Attys. Gen., David R. M. Williams, Staff Atty., Edwin A. Stoutz, Jr., New Orleans, Oscar W. Boswell, II, Reggie, Harrington & Boswell, Crowley, for defendant-appellant.

      Michael F. Little, William Wright, Jr., Jerome Reso, Jr., Monica T. Surprenant, Baldwin & Haspel, New Orleans, for inter-venor-appellant.
    Herschel C. Adcock, Adcock, Dupree & Shows, Baton Rouge, for intervenor-appel-lee.
    Russ M. Herman, Maury A. Herman, Herman & Herman, New Orleans, for plaintiff-appellee.
   DIXON, Chief Justice.

The record in this case discloses the following facts:

Benson & Gold Chevrolet, Inc., a Louisiana corporation, purchased the assets of an existing Chevrolet dealership in November, 1978. The business location of the dealership was in downtown New Orleans, in Orleans Parish. At the same time, Benson & Gold entered into a conditional franchise agreement with the Chevrolet Division of General Motors Corporation. The franchise contract included an ancillary agreement requiring Benson & Gold to relocate its newly acquired business to a site “in the vicinity of the intersection of Williams Boulevard and 35th Street,” which is in Jefferson Parish. Since at least 1974, Chevrolet had recommended that another Chevrolet dealership be added to this burgeoning area of metropolitan New Orleans; the opportunity to implement this recommendation was seized when Benson & Gold acquired its franchise. The relocation was required to be completed no later than October 31, 1980.

Benson & Gold was duly issued a license to operate an automobile dealership by the appropriate state agency, the Louisiana Motor Vehicle Commission (M.V.C.).

Subsequently, Benson & Gold began considering sites for the future relocation. An option to purchase property at 2800 Veterans Memorial Boulevard was obtained in October, 1979. Chevrolet approved the site. The M.V.C. was notified, and a meeting was held that year to determine whether Benson & Gold should be issued a new license to operate its business at the proposed site of relocation.

At this point it is pertinent to note that another Chevrolet dealership, Bryan Chevrolet, Inc., was already located at 8200 Airline Highway, within about 2.5 miles of Benson & Gold’s proposed location. Bryan Chevrolet had been doing business in the same site for more than twenty years — the only Chevrolet dealer on the East Bank of Jefferson Parish. James Bryan, the president and major shareholder of Bryan Chevrolet, objected to the establishment of another Chevrolet dealership within the immediate vicinity of his own business. Mr. Bryan is also a member of the M.V.C. He recused himself from the proceedings relating to Benson & Gold’s application, although he continued to oppose the application through an intervention.

On January 11, 1980 the M.V.C. formally denied Benson & Gold’s application for a new license at the proposed site in Jefferson Parish. The written notice of the denial indicated that the members of the M.V.C. had concluded that “it would not be in the public interest to license a new Chevrolet dealership in such close proximity to a presently existing Chevrolet dealership.” The written notice goes on to state:

“The Commission determined that the licensing of two dealers to compete in sales and service of the same make motor vehicles in such close proximity to each other, and within the same general market area, is potentially destructive of [the] economic well being of both dealers and thus ultimately of the public interest and welfare, which requires the maintenance of healthy competition, productive of stable and long lasting automotive dealership businesses.
Additionally the Commission was not convinced that the existing Chevrolet dealer doing business in the community or territory concerned is not furnishing its manufacturer adequate representation.”

Pursuant to R.S. 32:1256, Benson & Gold requested a hearing to review the M.V.C.’s denial of its application. The hearing was held in January and February of 1980, and concluded with a ratification and readoption of the initial denial.

Benson & Gold appealed the M.V.C.’s decision to the district court for a trial de novo of the issues, as authorized by R.S. 32:1256(E). Bryan Chevrolet intervened, contending that the M.V.C. had decided the matter correctly. Trial began in June, 1980, and lasted more than twenty days. At the conclusion of the trial, judgment was rendered in favor of Benson & Gold. The trial court’s reasons for judgment contain the following conclusions: (1) the M.V.C. misapplied the pertinent law governing re-locations of licensed dealerships; (2) R.S. 32:1254(E) is unconstitutional, in that it arbitrarily and discriminatorily requires a new license to be issued when a dealership is moved from one parish to another, but does not require a new license when reloca-tions are made within the same parish; (3) the regulatory scheme which the M.V.C. administers, R.S. 32:1251 et seq., is violative of the Sherman Anti-Trust Act (15 U.S.C. § 1 et seq.) in that it is a “restraint of trade” not within the “state action exemption;” and (4) the composition of the M.V.C., as governed by R.S. 32:1253(A), violates the equal protection and due process clauses of the federal and state constitutions.

Because portions of two state statutes were declared unconstitutional by the trial court, an appeal was taken directly to this court under the authority of Article 5, § 5(D)(1) of the Louisiana Constitution of 1974. Since this is an appeal from an adjudication by an administrative agency, the provisions of Louisiana’s Administrative Procedure Act are applicable. See R.S. 49:951 et seq.

On appeal, the M.V.C. argues that the trial court’s decision was wrong in every respect. Before considering the issues, however, a review of the legislative background is appropriate.

Legislative Background

Chapter 6 of Title 32 of the Louisiana Revised Statutes, entitled “Distribution and Sale of Motor Vehicles” and comprised of §§ 1251-59, was originally enacted in 1954. Acts 1954, No. 350, § 1. The legislation was drafted in response to a growing concern, nationwide, over automobile dealers’ vulnerability to unfair practices perpetrated by automobile manufacturers. Automobile dealers were thought to be the “economic dependents of the company whose cars they sell,” subject to unscrupulous practices by automobile producers. Ford Motor Co. v. United States, 335 U.S. 303, 323, 69 S.Ct. 93, 103, 93 L.Ed. 24, 38 (1948) (Black, J., dissenting). By 1957 at,least nineteen states had enacted statutes attempting to regulate the manufacturer-dealer relationship. Brown & Conwill, “Automobile Manufacturer-Dealer Legislation,” 57 Colum.L.Rev. 219 (1957). Federal legislation was also enacted at that time. See 15 U.S.C. §§ 1221-25. Federal lawmakers recognized that legislation was required “to remedy the manifest disparity in the ability of franchised dealers of automotive vehicles to bargain with their manufacturers.” 1956 U.S. Code Cong. & Ad. News 4596, 4597. See also New Motor Vehicle Bd. v. Orrin W. Fox Co., 439 U.S. 96, 99 S.Ct. 403, 58 L.Ed.2d 361 (1978).

Although the legislative history of Louisiana’s statutory scheme has not been documented, there is little doubt that Louisiana lawmakers were prompted by the same considerations that motivated lawmakers in other states to pass legislation protecting automobile dealers from unfair and oppressive practices of manufacturers. Simply stated, the purpose of the law was “to furnish the dealer with some protection against unfair treatment by the manufacturer.” Forest Home Dodge, Inc. v. Karns, 29 Wis.2d 78, 85, 138 N.W.2d 214, 218 (1965). The legislative purpose of providing automobile dealers with some safeguards in their transactions with automobile manufacturers is clearly evidenced by the regulatory scheme itself. R.S. 32:1251, a declaration of public policy, is a reflection of the legislative concern:

“The legislature finds and declares that the distribution and sale of motor vehicles in the state of Louisiana vitally affects the general economy of the state and the public interest and the public welfare, and that in order to promote the public interest and the public welfare, and in the exercise of its police power, it is necessary to regulate and to license motor vehicle manufacturers, distributors, and dealers doing business in Louisiana, in order to prevent frauds, impositions, and other abuses upon its citizens, and avoid undue control of the independent motor vehicle dealer by the motor vehicle manufacturing and distributive organizations and foster and keep alive vigorous and healthy competition, by prohibiting unfair practices by which fair and honest competition is destroyed or prevented, and to protect the public against the creation or perpetuation of monopolies and practices detrimental to the public welfare, to prevent the practice of requiring the buying of special features, appliances and equipment not desired or requested by the purchaser, to prevent false and misleading advertising, to prevent unfair practices by motor vehicle dealers, manufacturers and distributing organizations, to promote the public safety and prevent disruption of the system of distribution of motor vehicles to the public and prevent deterioration of facilities for servicing motor vehicles and keeping same safe and properly functioning, and prevent bankrupting of motor vehicle dealers, who might otherwise be caused to fail because of such unfair practices and competition, thereby resulting in unemployment, disruption of leases, and nonpayment of taxes and loans, and contribute to an inevitable train of undesirable consequences, including economic depression.”

In the spirit of this policy, the legislature created an eight member Motor Vehicle Commission, empowered to regulate the automobile industry in order to prevent frauds and abuses upon the citizens of Louisiana by automobile dealers and manufacturers, and to forestall undue control and unfair trade practices imposed upon dealers by manufacturers. The commission is entirely composed of Louisiana residents, appointed by the Governor, who have been “actually engaged in the manufacture, distribution or sale of motor vehicles in the state of Louisiana for not less than five consecutive years” in the period preceding the appointment. R.S. 32:1253(A). The legislature granted the M.V.C. all of the powers necessary to carry out the provisions and objects of the law which it administers. R.S. 32:1253(E).

The heart of the regulatory scheme is contained in R.S. 32:1254, which requires all automobile dealers to be licensed by the M.V.C. In addition, the statute makes it a misdemeanor offense for automobile dealers to engage in certain sorts of practices with the public, and for automobile manufacturers to engage in certain sorts of conduct in their transactions with automobile dealers. R.S. 32:1254(A). For example, the statute forbids false or misleading advertisement; it prohibits automobile dealers from representing demonstrator models as “new and unused;” and it proscribes the unfair cancellation of dealers’ franchises by manufacturers, as well as the use of the threat of cancellation as an instrument of coercion. Cf. Forest Home Dodge, Inc. v. Karns, supra.

This court has observed before that “the production, transportation and marketing of automobiles is unquestionably a proper subject of regulation by the Legislature under its police power.” Louisiana Motor Vehicle Commission v. The Wheeling Frenchman, 235 La. 332, 344, 103 So.2d 464, 469 (1958). The regulation of automobile distribution industry is a matter of importance to the public interest, and the parties to this suit do not argue otherwise. What the parties do question, and what this court must decide, is: whether the M.V.C. properly denied Benson & Gold’s application for a new license; and whether certain portions of the regulatory law are in violation of constitutional and statutory provisions.

Application of the Regulatory Scheme

In order for an automobile dealer to obtain a license from the M.V.C., certain standards must be met under the terms of § 1254(B). For example, the license application must contain “information relating to the applicant’s financial standing, the applicant’s business integrity, whether the applicant has an established place of business and is primarily engaged in the pursuit, avocation, or business for which a license” application is made, as well as “such other pertinent information consistent with the safeguarding of the public interest and public welfare.” R.S. 32:I254(B). In addition, the applicant must provide a copy of the franchise agreement with the manufacturer or distributor, together with satisfactory evidence that adequate space can be provided for the display of automobiles and that adequate facilities will be available for repairs and service. These qualifications obviously relate to the dealer’s capacity to afford honest, fair and competent service to the public.

Benson & Gold, having met the above standards, was issued a license by the M.V.C. in 1978. When the M.V.C. denied the application of Benson & Gold for a new license in 1980, it issued “findings of fact” and “conclusions of law” in support of its determination. R.S. 49:958. The latter “conclusions” comprise the M.V.C.’s understanding of the relevant legislation which it administers, as applied to the facts of this case. These conclusions can be grouped into two basic categories. First, the M.V.C. determined that a new license was required whenever a dealer relocated to another parish. If the applicant proposed to relocate to a site within the same “community” or “territory” as another same make dealer, the applicant was required to show that the existing dealer had not furnished “adequate representation” to the particular manufacturer. It was then concluded that Benson & Gold had failed to prove that Bryan Chevrolet had not been providing “adequate representation” of Chevrolet automobiles within the pertinent area. Second, the M.V.C. determined that it was empowered to consider all factors bearing on the public interest. It then found that the licensing of two Chevrolet dealerships “in such close proximity” would be economically disadvantageous to both, thereby undermining the welfare of the general public. Ultimately, it is evident that the M.V.C.’s decision rested upon its perception that the location of two same make dealerships 2.5 miles from each other would be potentially destructive of one or both of the dealers, a disservice to the public interest and welfare.

These two grounds for the M.V.C.’s decision will be treated separately.

“Adequacy of Representation”

In its conclusions of law, the M.V.C. made reference to § 1254(E), which states in part:

“The license issued to each motor vehicle dealer . . . shall specify the location of the . . . office or branch thereof. In case such location ... is changed, the commission shall endorse the change of location ... on the license without charge if it be within the same parish. A change of location to another parish . . . shall require a new license.” (Emphasis added). (Amended by Acts 1976, No. 119, § 1).

Since Benson & Gold proposed to move from Orleans Parish to Jefferson Parish, the M.V.C. required the issuance of a new license. Fresh consideration was then given to the requirements of § 1254(B), regarding the standards an applicant must meet to obtain a license.

As a matter of statutory construction, the M.V.C. misapplied § 1254(E). The language in the paragraph clearly states that the commission “shall endorse the change of location” (emphasis added) on the license. The only exception is that, if the dealer is moving from one parish to another, a new license must be obtained and fees paid therefor. The two preceding paragraphs of the statute respectively treat the schedule of license fees and the penalties for failing to apply for a license as required. When these three paragraphs are read in pari materia, it is clear that the new license requirement of paragraph (E) does nothing more than impose an obligation to pay an additional set of fees for a new license upon an applicant who wishes to move from one parish to another. The provision has nothing at all to do with the applicant’s qualifications for a license, which the M.V.C. is free to review at any time. Simply as a matter of statutory interpretation, then, the M.V.C.’s preliminary reliance upon § 1254(E) was misplaced. And, since no complaint is made by Benson & Gold of the additional fees that it must pay for a new license under this provision, it is unnecessary to consider the provision’s constitutionality.

The proper point of beginning in this matter is § 1255, which specifically provides for license applications:

“The commission may deny an application for a license, or revoke or suspend a license after it has been granted, for any of the following reasons:
(1) On satisfactory proof of unfitness of the applicant or the licensee, as the case may be, under the standards established and set out in this Chapter.
(2) For fraud practiced or any material misstatement made by an applicant in any application for license under the provisions of this Chapter.
(3) For any willful failure to comply with any provision of this Chapter or with any rule or regulation adopted and promulgated by the commission under authority vested in it by this Chapter.
(4) Change of condition after license is granted or failure to maintain the qualifications for license.
(5) Continued or flagrant violation of any of the rules or regulations of the commission.
(6) For any willful violation of any law relating to the sale, distribution or financing of motor vehicles.”

In referring to “the standards established and set out in this Chapter,” paragraph (1) of § 1255 obviously incorporates the standards contained in § 1254(B). It should be noted that the M.V.C., in its “findings of fact,” negatived each and every ground for disqualification contained in § 1255, except for paragraph (4), dealing with a “change of condition after [a] license is granted.” Although this consideration was not specifically mentioned in the M.V.C.’s “conclusions of law,” it must be inferred that the M.V.C. concluded that Benson & Gold’s proposed “change of condition” was a proper basis for denying the application, in that it altered Benson & Gold’s qualifications under the standards established by law. In all other respects, the M.V.C. explicitly admitted that the Benson & Gold dealership had maintained the qualifications for a license.

Only one exception was found with regard to Benson & Gold’s qualifications under § 1254(B). The statute contains a significant proviso:

“... provided, that if the applicant was not duly licensed as a motor vehicle dealer under the provisions of this Chapter for the year immediately prior to the year as to which license is applied for, the applicant must also furnish satisfactory evidence that the existing licensed motor vehicle dealer or dealers doing business in the community or territory concerned have not furnished the particular manufacturer adequate representation in such community or territory.”

It is this proviso that is at the core of the dispute. The proviso does not apply to Benson & Gold. Benson & Gold had been duly licensed as an automobile dealer in the year preceding its application. Only new applicants for licenses must show the failure of existing dealerships to serve the manufacturer. No doubt realizing this, the M.V.C. cited language in § 1254(B) which requires production of “such other pertinent information consistent with the safeguarding of the public interest and public welfare.” From this general language the M.V.C. reasoned that the proviso’s requirement had been imposed by the legislature to safeguard the public interest; and, since the M.V.C. was authorized to consider all information relating to the public interest, it concluded that it was entitled to impose the proviso’s requirement upon Benson & Gold. This approach is not sound.

By its unambiguous terms, the proviso is directed toward regulating the situation where an applicant wishes to start a new business (or, at least, a business not licensed the year before) in the same community or territory as an existing, same make dealership; it is not directed toward same make dealerships already in existence that propose to relocate. The two situations are obviously not the same: it can be inferred that the legislative concern was with the overloading of a market area when a manufacturer franchised a new entry into the business, in direct competition with an existing dealer. Depending upon the manufacturer’s conduct in regard to the two dealers, the fresh competition might virtually destroy the older franchisee. In this manner, the manufacturer could accomplish by indirection that which the law directly prohibits: the unfair termination of a dealer’s franchise. The legislature expressly stated its concern over this practice. See R.S. 32:1254(A)(4)(c). Cf. Wis.Stat. § 218.-01(3)(f).

However, the statute simply does not evince a legislative concern with the consequences that might result when an existing dealership, doing business in the same market area as another, same make dealership, moves its business location to a point nearer the other dealer. In these circumstances, the relocation of the same make dealer might intensify the competition between the two dealerships, but it would not create competition where none had existed before. The legislature expressed its interest in regulating the latter situation, not the former. The proviso’s requirement is perfectly coextensive with the practical problem that might arise should an automobile manufacturer franchise a new dealer to be in direct competition with an existing dealership that had previously faced no such competition within its own market area.

The proviso should not have been expanded beyond its own terms:

“... it is established by repeated decisions that a statute aimed at what is deemed an evil, and hitting it presumably where experience shows it to be. most felt, is not to be upset by thinking up and enumerating other instances to which it might have been applied equally well, so far as the court can see. That is for the legislature to judge unless the case is very clear.” Keokee Consol. Coke Co. v. Taylor, 234 U.S. 224, 227, 34 S.Ct. 856, 857, 58 L.Ed. 1288, 1290 (1914).

Although a regulatory agency is entitled to a certain amount of hegemony over the statutes it is entrusted to administer, it cannot go too far afield from the letter of the law even if it perceives that it is furthering the law’s spirit. While the jurisprudence of this state has not frequently treated matters of administrative law, the principle is well established that an administrative agency must act in conformity with its statutory authority, which it cannot exceed. See, e. g., Charbonnet v. Board of Architectural Examiners, 205 La. 232, 17 So.2d 261 (1944); Realty Mart, Inc. v. Louisiana Board of Tax Appeals, 336 So.2d 52 (La.App. 1st Cir. 1976); Pearce v. Kramer, 128 So.2d 304 (La.App.3d Cir. 1961); Hunter v. Hussey, 90 So.2d 429 (La.App. 1st Cir. 1956); Kramer v. State Board of Veterinary Medical Examiners, 55 So.2d 93 (La.App. 1st Cir. 1951). The M.V.C. was not entitled to impose a restriction upon Benson & Gold when the statutes themselves failed to provide such a restriction.

This conclusion is bolstered by the fact that the legislature, in its 1980 session, amended R.S. 32:1254(B) specifically to provide standards for reviewing the application of a dealer to relocate an existing dealership to a site within five miles of another, same make dealer. See Acts 1980, No. 672, § 1. This was the first substantial alteration of the statute since its inception, and was no doubt enacted because the legislature perceived that the lacuna in the law invited problems of the sort that this case presents. At least eighteen other states have passed specific legislation dealing with such intrabrand competition. See New Motor Vehicle Bd. v. Orrin W. Fox Co., supra, n. 7 and accompanying text. However foresighted the M.V.C. might have been in discerning legislative changes, it was without authority to anticipate those changes and incorporate them into its guidelines. The applicant, Benson & Gold, had a right to rely upon the law as it was written when the application was made. At that time, nothing in the statutes inhibited a licensed automobile dealership from relocating to an area closer to another dealer selling automobiles of the same make. The M.V.C. overreached its legislative mandate in applying the proviso in § 1254(B) to Benson & Gold.

“Public Interest and Welfare”

The second, more nebulous ground for the M.V.C.’s refusal to grant Benson & Gold the requested license was that “the licensing of two Chevrolet dealers to compete in the same market area in such close proximity” would be “potentially destructive to the economic vitality of both dealers and the interest of the general public,” which was thought to be “best served by healthy competition which produces stable, long lasting automotive dealerships.” In short, the M.V.C. determined that the entry of Benson & Gold into the same geographical area of metropolitan New Orleans as Bryan Chevrolet would be financially ruinous of one or both dealerships.

As noted, the M.V.C. is authorized to consider any information that relates to the public interest and welfare when it evaluates an application for a license. The public policy underlying the regulatory legislation which the M.V.C. administers was partly concerned with prevention of the “inevitable train of undesirable consequences, including economic depression,” that might result when an automobile dealer failed because of “unfair practices and competition.” R.S. 32:1251. Another stated purpose of the law was to “foster and keep alive vigorous and healthy competition, by prohibiting unfair practices by which fair and honest competition is destroyed or prevented ...” R.S. 32:1251.

While we do not dispute the M.V.C.’s basic finding of fact — that the relocation of Benson & Gold could be financially harmful to one or both of the dealers — it is necessary to determine whether this consideration forms part of the fabric of the public interest and welfare which the M.V.C. is empowered to safeguard. To begin, the M.V.C.’s voiced concern over the financial future of Benson & Gold has little logic to recommend it. Benson & Gold chose to accept Chevrolet’s relocation requirement precisely because such a move, in its estimation, would bring financial rewards. Whether the decision was a prudent one, and whether it will produce the anticipated benefits, are matters at the risk of Benson & Gold. Benson & Gold does not complain that the competition which will result from its relocation will be unhealthy, dishonest, or the product of unfair practices. Indeed, if officers of Benson & Gold believed that the consequences of relocation would be ruinous, it is unrealistic to believe that Chevrolet could have induced them to enter the franchise agreement. From the standpoint of Benson & Gold, then, the decision of the M.V.C. does nothing to promote franchising equity or advance the public interest. See discussion by Mashaw, “Constitutional Deregulation: Notes Toward a Public, Public Law,” 54 Tul.L.Rev. 849 (1980).

When Benson & Gold is eliminated as the object of legislative solicitude in this matter, the motivating factor underlying the license denial becomes clear: the M.V.C. determined that Bryan Chevrolet would be financially harmed should it have to face more intense competition from a nearby, same make dealership. It was entirely proper for the M.V.C. to consider this factor. The declaration of public policy contained in R.S. 32:1251 specifically mentions the prevention of bankruptcy, with its attendant economic harms, as one of the goals of the regulatory legislation. However, the law does not contemplate that no automobile dealers will become bankrupt under the protection of regulation, nor does it anticipate that all automobile dealerships will attain equal financial success: the law expressly states that it is the bankrupting of dealers because of unfair practices and competition that is undesirable. Throughout § 1251, the expression “unfair practices” is used. The statute states that it is the purpose of the law to “foster and keep alive vigorous and healthy competition, by pro hibiting unfair practices by which fair and honest competition is destroyed or prevented ...” (Emphasis added). The purpose of the M.V.C. is not to keep every automobile dealership in Louisiana secure from financial loss, however desirable a prospect that may be; it is to prevent the unfair practices by which financial loss occurs. If a dealership’s profits are reduced because of “vigorous and healthy competition” from another dealership, that is both “fair” and “honest,” the M.V.C. is powerless to interpose its authority. Indeed, it is the M.V. C.’s mission to foster such competition.

In the present case, neither the M.V.C.’s findings of fact nor its conclusions of law even allude to any suspicion that Benson & Gold’s proposed relocation is an unfair practice perpetrated by Chevrolet. The findings of fact do indicate that Bryan Chevrolet was offered an opportunity to relocate to the Veterans Boulevard area several times during a period of four years. Bryan, however, was unable to meet the conditions imposed by Chevrolet. And, although the record does reflect that Benson & Gold was offered more generous terms in relocating than was Bryan Chevrolet, nothing indicates that this was an unfair practice. In addition, mention is made of the fact that Bryan Chevrolet expanded its facilities in 1976, but was never expressly notified of Chevrolet’s intent to place another dealership in the Kenner-Metairie area. Again, however, this recital of fact is unaccompanied by any indication that Chevrolet was engaged in any sort of deliberate deception aimed at undermining the business of Bryan Chevrolet. In fact, the record indicates that Chevrolet had advised Bryan, at least as early as 1970, that it planned to relocate one of the dealerships in downtown New Orleans to the Kenner-Metairie area. Notwithstanding the fact that the M.V.C. may have been accurate in predicting that Bryan Chevrolet could be harmed by the relocation of Benson & Gold, the M.V.C. did not find that the relocation was unfair.

The principle that courts are the ultimate arbiters of the law has been entrenched in the American legal system since Marbury v. Madison, 5 U.S. (1 Cranch) 60, 2 L.Ed. 60 (1803). And, although an administrative agency might have the first word in interpreting the law which it administers, the last word on statutory interpretation belongs to the courts:

“. . . Undoubtedly questions of statutory interpretation, especially when arising in the first instance in judicial proceedings, are for the courts to resolve, giving appropriate weight to the judgment of those whose special duty is to administer the questioned statute. . . . ” National Labor Relations Bd. v. Hearst Publications, 322 U.S. 111, 130-31, 64 S.Ct. 851, 860, 88 L.Ed. 1170, 1184 (1944).

The principle has been affirmed in decisions involving judicial review of administrative actions that are too numerous to cite. See, e. g., authorities collected in K. Davis, Administrative Law of the Seventies § 30.00 (1976); 4 K. Davis, Administrative Law Treatise § 30.12 (1st ed. 1958); 5 Mezines, Stein & Gruff, Administrative Law § 51.01 (1980). The principle is itself embodied in the relevant laws which govern this court’s review of administrative adjudications. R.S. 49:964(G). See also R.S. 32:1256(E).

The M.V.C. was correct in determining that its authority to evaluate all considerations involving “public interest and public welfare,” established in R.S. 32:1254(B), entitled it to refer to the public policy articulated by the legislature in R.S. 32:1251. However, the M.V.C. incorrectly interpreted that law as giving it a mandate to deny a license application whenever the issuance of such a license could have a harmful financial effect upon an already established dealership. As interpreted by this court, R.S. 32:1251 simply gives the M.V.C. the authority to prevent unfair practices, frauds, abuses, undue control by manufacturers and the like. Without a finding that Benson & Gold’s relocation constitutes such an unfair practice, the M.V.C.’s determination that a denial of the license was in “the public interest” is baseless.

When an administrative agency such as the M.V.C. denies an application for a license, it is governed by the same provisions in the law that relate to “adjudications.” R.S. 49:961(A). When an administrative adjudication is judicially reviewed, the courts are empowered to reverse or modify any decision by an agency that violates constitutional or statutory provisions, exceeds the agency’s delegated authority, or is affected by “other error of law.” R.S. 49:964(G). In addition, R.S. 32:1256(E) specifically provides that a court reviewing an action taken by the M.V.C. “shall enter such order with respect thereto as it shall deem just and equitable.” We find, consistent with the trial court’s decision, that the M.V. C.’s denial of the license application was based upon an erroneous construction of the law; we further hold that, when an applicant meets the general standards established by law, the application may be denied on the grounds of “public interest and public welfare” only if an unfair practice or a “disruption of the system of distribution of motor vehicles to the public” are involved. Since the M.V.C. found that the conditions of R.S. 32:1254(B) had been satisfied by Benson & Gold, and because there is no evidence that the relocation is an unfair practice, Benson & Gold is entitled to be granted a license upon paying the license fees imposed by law. R.S. 32:1254(C), (E).

Constitutional and Anti-Trust Questions

Having decided the merits of the case in favor of Benson & Gold, the trial judge went further to declare that two provisions of the law were unconstitutional, and that the entire regulatory scheme did not constitute “state action” so as to be exempt from the provisions of the Sherman Anti-Trust Act, which it violated.

One statute which was declared unconstitutional was R.S. 32:1253(A), which governs the composition of the M.V.C. The trial court’s determination was primarily based upon its conclusion that a regulatory agency comprised entirely of automobile dealers could not provide an impartial hearing to other automobile dealers. The fact that the automobile dealers might have a personal interest in the matters they are called upon to adjudicate was said to be a violation of due process. See, e. g., Gibson v. Berryhill, 411 U.S. 564, 93 S.Ct. 1689, 36 L.Ed.2d 488 (1973); Wall v. American Optometric Association, Inc., 379 F.Supp. 175 (N.D.Ga.1974), affirmed, 419 U.S. 888, 95 S.Ct. 166, 42 L.Ed.2d 134 (1974). But see also Friedman v. Rogers, 440 U.S. 1, 99 S.Ct. 887, 59 L.Ed.2d 100 (1979).

Because we affirm the trial court’s initial determination — that the denial of the license application was improper — it is unnecessary to address the constitutionality of the statutes. It is a long standing judicial principle that courts will not consider constitutional challenges unless necessary to the resolution of a dispute. See, e. g., Orleans Parish School Board v. Williams, 312 So.2d 647 (La.1975); State in Interest of Toler, 262 La. 557, 263 So.2d 888 (1972); Tafaro’s Investment Co. v. Division of Housing Improvement, 261 La. 183, 259 So.2d 57 (1972); Aucoin v. Dunn, 255 La. 823, 233 So.2d 530 (1970); Doss v. Board of Commissioners of Mermentau Levee District, 117 La. 450, 41 So. 720 (1906); Parish of St. Landry v. Stout, 32 La.Ann. 1278 (1880).

The soundness of this principle is demonstrated by the circumstances of this case. The legislature substantially changed many of the provisions contained in R.S. 32:1251 et seq. See Acts 1980, No. 672, § 1. Specifically, § 1254(E) was amended so as to eliminate constitutional objections discussed by the district court. A decision upholding the constitutional objection to the former statute would be of little value: the parties would gain nothing in the way of relief beyond that which has already been granted, and there is apparently no other party who has claimed to have been aggrieved by the former law. We therefore vacate that part of the trial court’s judgment which declared R.S. 32:1253(A) and R.S. 32:1254(E) unconstitutional.

The final aspect of the district court’s decision which requires consideration is the holding that the regulatory scheme which the M.V.C. administers is vio-lative of the Sherman Anti-Trust Act, 15 U.S.C. § 1, which states in part:

“Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is declared to be illegal.. . . ”

The district court found that the provisions of the regulatory scheme which restrict an automobile dealership’s right of relocation constituted a “restraint of trade” in violation of the antitrust laws.

In addition, the trial court found that Louisiana’s regulatory scheme did not constitute “state action” so as to be exempt from the antitrust legislation.

The “state action” exemption has its origin in Parker v. Brown, 317 U.S. 341, 63 S.Ct. 307, 87 L.Ed. 315 (1943). In that decision, the United States Supreme Court, after examining the legislative history of the Sherman Act, found no indication that the act’s provisions were “intended to restrain state action or official action directed by a state.” 317 U.S. at 351, 63 S.Ct. at 313, 87 L.Ed. at 326. In effect, the court held that the Sherman Act did not apply to regulatory laws which were adopted and enforced by a state. The immunity granted by the Parker doctrine has been consistently applied over the years. See, e. g., California Liquor Dealers v. Midcal Aluminum, 445 U.S. 97, 100 S.Ct. 937, 63 L.Ed.2d 233 (1980); New Motor Vehicle Bd. v. Orrin W. Fox Co., supra; Lafayette v. Louisiana Power & Light Co., 435 U.S. 389, 98 S.Ct. 1123, 55 L.Ed.2d 364 (1978); Bates v. State Bar of Arizona, 433 U.S. 350, 97 S.Ct. 2691, 53 L.Ed.2d 810 (1977); Cantor v. Detroit Edison Co., 428 U.S. 579, 96 S.Ct. 3110, 49 L.Ed.2d 1141 (1976); Goldfarb v. Virginia State Bar, 421 U.S. 773, 95 S.Ct. 2004, 44 L.Ed.2d 572 (1975).

The most recent formulation of the Parker doctrine’s “state action” exemption can be found in California Liquor Dealers v. Midcal Aluminum, supra, in which the United States Supreme Court, after reviewing the opinions cited above, stated:

“These decisions establish two standards for antitrust immunity under Parker v. Brown. First, the challenged restraint must be ‘one clearly articulated and affirmatively expressed as state policy’; second, the policy must be ‘actively supervised’ by the State itself....” 445 U.S. at 105, 100 S.Ct. at 943, 63 L.Ed.2d at 243.

Consistent with this approach, we find that the policy of the State of Louisiana in enacting a program to regulate automobile dealerships has been clearly articulated and affirmatively expressed. See R.S. 32:1251. As has been explained above, that policy is to prevent the citizens of this state from being subjected to unfair practices perpetrated by automobile dealers and manufacturers, and to furnish automobile dealers with protection against unfair treatment by automobile manufacturers. The state policy could not be plainer, notwithstanding any defects in its legislative drafting.

We also find that the action taken by the M.V.C. clearly constitutes “active supervision” by the state itself in executing governmental policy. The trial court expressed some concern that: the M.V.C. has never independently determined the market area for any dealership; that it has never conducted studies of market conditions to discover instances of price fixing; that it has never made any follow-up determination to ascertain that a dealership’s floor area or service facilities remain adequate; and that the M.V.C. has never suspended or revoked a dealership’s license because of failure to maintain the qualifications for a license. While these considerations might be thought to indicate a certain laxity on the part of the M.V.C. in carrying out its statutory duties, we do not believe that this passivity in exercising its regulatory powers withdraws the M.V.C. from the state action exemption. Immunity from antitrust legislation is conditioned upon a state policy being actively supervised by the state itself, rather than by private parties. The decisions of the United States Supreme Court make it clear that the evil to be eliminated is that which occurs when essentially private interests claim immunity from antitrust legislation by inducing some involvement by the state in regulation which is basically protective of private interests. See, e. g., California Liquor Dealers v. Mid cal Aluminum, supra (“a gauzy cloak of state involvement over what is essentially a private price fixing arrangement”); Cantor v. Detroit Edison Co., supra (“state authorization, approval, encouragement, or participation in restrictive private conduct confers no antitrust immunity”); Goldfarb v. Virginia State Bar, supra (“it cannot fairly be said that the State of Virginia ... required the anticompetitive activities”).

The fact that the M.V.C. may not be as active as some may wish does not affect its eligibility for this immunity; nor does the fact that the substantive provisions of the regulatory scheme may not always seem to harmonize with the public policy underlying the legislation obscure the clear purpose of the law. Sometime in the future the courts might be faced with a record of the failure of the M.V.C. to act as a state agency in effectuating the public policy announced in R.S. 32:1251. If it should be shown that the M.V.C. has become not a genuine agency of the state, but, instead, a shelter for the private economic interests of automobile dealers, it would forfeit its “state action” immunity from the antitrust laws. Such a showing has not been made.

Therefore, the actions taken by the M.V.C. pursuant to its duties under R.S. 32:1251 et seq. constitute “state action” for the purposes of immunity under the Sherman Anti-Trust Act.

The decision of the district court is affirmed only insofar as it held that the license application of Benson & Gold should have been granted by the M.V.C.; in all other respects, the judgment is vacated, as we have pretermitted discussion of the constitutionality of the affected statutes and have found that Louisiana’s regulatory law governing automobile dealerships is exempt from the provisions of 15 U.S.C. § 1. All costs of these proceedings are taxed equally to the intervenor, Bryan Chevrolet, Inc., and the defendant, the Louisiana Motor Vehicle Commission.

DENNIS and WATSON, JJ., dissent and assign reasons.

DENNIS, Justice,

dissenting.

I respectfully dissent.

To prevent automobile dealership proliferation, La. R.S. 32:1254(B) requires a person seeking to open a new dealership in a community to prove inadequate representation of a manufacturer by existing dealers. The majority interprets the statute so as to exempt from this requirement any person who held a license for a dealership anywhere in the state during the preceding year. In my opinion, the Motor Vehicle Commission’s interpretation is reasonable and more in keeping with the legislative aim: any applicant who was not licensed in the community during the preceding year must prove the need for an additional dealership to provide adequate representation of his manufacturer.

The Commission reasonably found that, due to the nature of the thickly populated New Orleans area, North Rampart and 2800 Veterans are not located within the same community. The record is devoid of any proof that Bryan has failed to provide Chevrolet adequate representation within its Jefferson Parish community. Since there is warrant in the record and a reasonable basis in law for the regulatory agency’s decision, it should not be overturned by this court.

WATSON, Justice,

dissenting.

I respectfully dissent. The Motor Vehicle Commission (M.V.C.) acted within its authority when it denied Benson & Gold’s application for a new license.

LSA-R.S. 32:1255 allows the M.V.C. to deny a license for a number of reasons The denial here was based on paragraph '•), which refers to “[cjhange of condition after license is granted. . . . ” The move of Benson & Gold into the same geographical area of metropolitan New Orleans as Bryan Chevrolet is such a change of condition.

M.V.C. concluded that:

“To grant the license applied for would result in the licensing of two Chevrolet dealers to compete in the same market area in such close proximity as to be potentially disruptive to the economic viability of both dealers and the interest of the general public which is best served by healthy competition which produces stable, long-lasting automotive dealerships.”

The M.V.C.’s findings of fact support this conclusion: Benson & Gold’s proposed new location is only 2.5 miles away from Bryan’s pre-existing dealership. In 1978, Bryan had completed, with Chevrolet’s consent and encouragement, an expansion of its facilities at a total cost of over $1,000,000. When Bryan was planning this expansion, it was not told of Chevrolet’s plan to move another dealer into the Metairie-Kenner area.

The M.V.C. noted a similar situation involving two Ford dealerships in the same area. In 1979, Norton Ford was relocated from downtown New Orleans to Kenner, about five miles away from Metairie Ford in Metairie. In 1979, Metairie Ford experienced a 35% decrease in new car sales and a 23% decrease in new truck sales, while Ford sales in the New Orleans area had a 15.4% decrease in car sales and a 2.4% increase in truck sales. The distance between Bryan Chevrolet and the proposed Benson & Gold location is one-half that between Norton Ford and Metairie Ford. The M.V.C. was justified in concluding that two dealerships so close together would produce undesirable financial consequences.

The M.V.C.’s concern with economic harm to both dealers was a proper factor to be considered in reaching a decision on the license application. The “Declaration of Public Policy” in LSA-R.S. 32:1251 provides for regulation of the distribution and sale of motor vehicles in order to promote the public interest and welfare. Regulation of dealers is declared necessary for a number of reasons: to “foster and keep alive vigorous and healthy competition”; to “prevent unfair practices”; to “prevent disruption of the system of distribution of motor vehicles to the public and prevent deterioration of facilities for servicing motor vehicles”; and to “prevent bankrupting of motor vehicle dealers ... because of ... unfair practices and competition.”

The M.V.C. concluded that economic harm would result to both dealers if the relocation were approved. Distribution of motor vehicles might be disrupted and deterioration of service facilities might also result. The M.V.C. found that the close proximity of the dealers would constitute unfair rather than healthy competition. The M.V.C. was justified in concluding that the relocation of Benson & Gold was not in the public interest, and in denying the license.

      . All references to statutes made in this opinion relate to the laws in effect at the time this dispute arose. The amendments made to certain statutes in 1980 are not applicable.


author: DENNIS, Justice. MARCUS, Justice BLANCHE, Justice LEMMON, Justice,

text:
    Dolores Faciane, wife of/and Joseph C. DeBATTISTA v. ARGONAUT-SOUTHWEST INSURANCE COMPANY, et al.
    No. 80-C-1772.
    Supreme Court of Louisiana.
    June 22, 1981.
    Dissenting Opinion Sept. 17, 1981.
    Rehearing Denied Sept. 18, 1981.

      Abbott J. Reeves, Gretna, for applicant.
    George E. Cain, Jr., William S. Penick, Lemle, Kelleher, Kohlmeyer & Matthews, New Orleans, for defendants-respondents.
    William J. Guste, Jr., Atty. Gen., Joseph W. Thomas, Staff Atty., New Orleans, for appellee.
   DENNIS, Justice.

One of the plaintiffs, Mrs. Joseph C. De-Battista, contracted hepatitis following a blood transfusion. She and her husband sued among others the Southern Baptist Hospital Blood Bank, the processor and distributor of the blood transfused, and the blood bank’s liability insurer.

The court of appeal, 385 So.2d 518, affirmed the district court’s dismissal of the suit, finding that the plaintiffs failed to prove that the blood was unwholesome or that Mrs. DeBattista contracted hepatitis from this source. The district judge, however, either resolved these factual issues differently or never reached them. He dismissed the suit stating only that there could be no implied warranty in connection with the sale of the blood and that there was no proof of negligence in its preparation, storage or infusion. We granted certiorari to consider the correctness of the factual findings and the district court holding that a blood bank which distributes diseased blood without negligence cannot be held for damage caused to a person who contracts hepatitis after a transfusion because of its unwholesome condition.

Facts

Mrs. DeBattista had surgery performed at Southern Baptist Hospital on February 14, 1973. Her treating physician ordered a transfusion of three units of blood in conjunction with the surgery and post-operative care. Each unit had been drawn and processed by the Southern Baptist Hospital Blood Bank and administered by Southern Baptist Hospital personnel. Roughly one month after the transfusions, Mrs. DeBat-tista began to experience symptoms of hepatitis. Her doctor diagnosed her condition as Type B serum hepatitis after hospitalizing her in mid-April.

A donor of one of the units of blood which Mrs. DeBattista had received was subsequently rejected as a donor because of a positive reaction to a hepatitis test. Robert Watson, a paid donor, gave one of the units of blood which Mrs. DeBattista received at Southern Baptist on January 28, 1973, and his blood was tested the next day. The testing did not disclose the presence of hepatitis. Watson had a history of mental disease and syphilis. Had he answered the screening questionnaire regarding venereal disease correctly, his donation of blood would have been rejected. Two months later, however, Watson again sought to give blood and was rejected after hepatitis testing conducted March 27, 1973 revealed a positive reaction indicating that he had been exposed to hepatitis virus at some time. The blood bank notified Watson that he had been disqualified as a donor and that he should consult a physician for further testing. The blood he had given the day before was destroyed. Watson’s physician retested him and found no reaction on the hepatitis test. Watson’s doctor and the blood bank personnel did not notice that he had any visible symptoms of hepatitis.

The other two units of the transfusion administered to Mrs. DeBattista in February had been obtained by the blood bank from voluntary donors. The same procedures were followed as were used to obtain Watson’s blood. There is no evidence in the record that these donors were suspected of having hepatitis.

The trial judge did not expressly determine whether Mrs. DeBattista contracted hepatitis from the transfusion. Since the court of appeal’s judgment may constitute a reversal of the trial judge’s implicit factual finding, however, we have carefully considered the pertinent evidence.

In this civil case, the plaintiffs’ burden is to prove causation by a preponderance of the evidence. This burden may be met either by direct or, as in this case, by circumstantial evidence. Jordan v. Travel ers Ins. Co., 257 La. 995, 245 So.2d 151 (1971); Naquin v. Marquette Cas. Co., 244 La. 569, 153 So.2d 395 (1963).

Taken as a whole, circumstantial evidence must exclude other reasonable hypotheses with a fair amount of certainty. This does not mean, however, that it must negate all other possible causes. Otherwise, the mere identification by the record of another possibility, although not shown to be causally active, would break the chain of causation. Weber v. Fidelity & Cas. Ins. Co. of N.Y., 259 La. 599, 608-09, 250 So.2d 754, 757 (1971).

The evidence shows that, approximately one month after receiving a transfusion of blood which came from defendant’s blood bank, Mrs. DeBattista became ill with hepatitis. The medical evidence showed that this delay in manifestation of the disease is consistent with contagion through transfusion. The type hepatitis she had is most commonly contracted by blood transfusion. The risk of contracting hepatitis through a transfusion is significantly higher when the blood is accepted from paid, rather than voluntary, donors. At the time the blood bank accepted the blood ultimately given Mrs. DeBattista, the test for this type hepatitis was only 30% effective. It is possible for a person carrying hepatitis virus to display no visible symptoms of illness. It is possible, also, for blood from a person infected with hepatitis to test positive on one occasion and negative on another. Under these circumstances, the most reasonable hypothesis for the cause of Mrs. DeBattis-ta’s hepatitis is that it entered her body with the blood she received from the blood bank.

The defendants have failed to produce any evidence which convinces us that the blood transfusion was not the most probable source of Mrs. DeBattista’s hepatitis. The court of appeal stated Mrs. DeBattista might have contracted hepatitis from her sister. Her sister had contracted the disease one year earlier and was asymptomatic at the time Mrs. DeBattista entered the hospital in February. Expert testimony in the record establishes, however, that Type B hepatitis is generally transmitted paren-terally, most commonly by a transfusion of hepatitis-infected blood. The timing of the onset of symptoms and the subsequent clinical diagnosis is also best explained by plaintiffs’ theory that Mrs. DeBattista was exposed to hepatitis during her February hospitalization.

However, after reviewing the evidence, we are convinced that the trial court correctly found that the blood bank was not negligent in any respect. Accordingly, we must consider whether it can be held liable without a finding of negligence.

Liability for Distribution of Defective Blood Under Article 2815

Articles 2315-24 of the Louisiana Civil Code comprise the code’s entire chapter of legal principles regulating offenses and quasi-offenses.

The underlying principle is provided by Article 2315: “Every act whatever of man that causes damage to another obliges him-by whose fault it happened to repair it. * * * ” The remaining articles constitute amplifications as to what constitutes “fault” and under what circumstances a defendant may be held liable for his act or that of a person or thing for which he is responsible. Loescher v. Parr, 324 So.2d 441 (La.1975).

Definitions of “fault” are actually indefinite generalities and usually not illuminating when applying the concept. Colin and Capitant have said that fault signifies that conduct which a man should not have engaged in — that is, that he has acted as he should not have acted. 2 Colin et Capitant, Cours elèmentaire de droit civil français (8e Ed. 1935) § 190. Defining fault is a logo-machy. Because of the difficulty in finding fault for all times and purposes and instead of defining fault by listing numerous activities which constitute fault (much as we enumerate the activities which constitute criminal conduct in our criminal code) our law has left this determination in the hands of the court. Langlois v. Allied Chemical Corp., 258 La. 1067, 1076, 249 So.2d 133, 137 (1971).

In defining “fault” for purposes of products liability in Weber v. Fidelity & Cas. Co. of N.Y., 259 La. 599, 250 So.2d 754 (1971), this court held:

“A manufacturer of a product which involves a risk of injury to the user is liable to any person, whether the purchaser or a third person, who without fault on his part, sustains an injury caused by a defect in the design, composition, or manufacture of the article, if the injury might reasonably have been anticipated. However, the plaintiff claiming injury has the burden of proving that the product was defective, i. e., unreasonably dangerous to normal use, and that the plaintiff’s injuries were caused by reason of the defect.
u* * *
“If the product is proven defective by reason of its hazard to normal use, the plaintiff need not prove any particular negligence by the maker in its manufacture or processing; for the manufacturer is presumed to know the vices in the things he makes, whether or not he has actual knowledge of them.” Id. 250 So.2d at 755-756.

Defendant blood bank contends that plaintiffs may not recover in tort under Weber because the blood was not defective, i. e., “unreasonably dangerous to normal use,” for three reasons: (1) The judgment of whether the product is “unreasonably dangerous to normal use” must be based on the manufacturer’s entire line or his total activity, rather than the single product used by plaintiff. (This is implicitly assumed by defendant, not expressly argued); (2) The social utility of the distribution of blood greatly outweighs the risk of its harm; and (3) Blood banks have no way of preventing distribution of the relatively small amounts of unwholesome blood that cause harm. In essence, defendant relies on an argument that the activity of distributing blood involves danger, but a reasonable danger which should be tolerated for its benefits, and that consumers must bear the cost of the inherent risks involved.

Defendant’s arguments, however, misconstrue the “unreasonably dangerous” limitation. These words were included within the definition of legal fault to prevent manufacturers from becoming insurers of their own products. “Unreasonably dangerous” means simply that the article which injured the plaintiff was dangerous to an extent beyond that which would be contemplated by an ordinary consumer.

The history of strict liability in Louisiana indicates the requirement that a defective product must be “unreasonably dangerous” came into our jurisprudence due to the pervasive influence of section 402A of the Restatement (Second) of Torts after its publication in 1965. Louisiana’s law in the products liability area has been described by commentators as closely approximating that of common law states following the Restatement (Second) of Torts § 402A. See Andrus, Strict Liability Under Civil Code Articles 2317, 2318 and 2321: An Initial Analysis, 25 La.Bar J. 105 (1977); Robertson, Manufacturers’ Liability for Defective Products in Louisiana Law, 50 Tul.L.Rev. 50 (1975). This view has also been taken by federal courts interpreting Louisiana law. See Perez v. Ford Motor Co., 497 F.2d 82 (5th Cir.1974); Welch v. Outboard Marine Corp., 481 F.2d 252 (5th Cir.1973). After using the “unreasonably dangerous” limitation in Weber as a condition to legal fault under Article 2315, this court employed a similar requirement in summarizing the principles of legal fault under Articles 2317, 2318, 2320, 2321, 2322. We held that strict liability results from the conduct or defect of a person or thing which creates an “unreasonable risk” of harm to others. Loescher v. Parr, supra.

Furthermore, this court in Loescher clearly expressed the underlying reason for the legal fault arising from these code provisions, sometimes referred to as strict liability:

“Thus, the person to whom society allots the supervision, care, or guardianship (custody) of the risk-creating person or thing bears the loss resulting from creation of the risk, rather than some innocent third person harmed as a consequence of his failure to prevent the risk.” Id., 324 So.2d p. 446.

According to the original comment to Section 402A, a “defective condition” is one “not contemplated by the ultimate consumer, which will be unreasonably dangerous to him.” Restatement (Second) Torts, § 402A comment g. Comment i, defining “unreasonably dangerous,” states: “The article must be dangerous to an extent beyond that which would be contemplated by the ordinary consumer who purchases it, with the ordinary knowledge common to the community as to its characteristics.” See Welch v. Outboard Marine Corp., supra; Loyocano v. Continental Ins. Co., 283 So.2d 302 (La.App. 4th Cir.1973). A consumer expectation approach is particularly appropriate in Louisiana which has aligned itself with those jurisdictions showing particular concern for consumer interests. Media Production Consultants, Inc. v. Mercedes-Benz of North America, Inc., 262 La. 80, 90, 262 So.2d 377, 381 (1972). Examples given in comment i make it clear that such innocuous products as sugar and butter, unless contaminated, would not give rise to a strict liability claim merely because the former may be harmful to a diabetic or the latter may aggravate the blood cholesterol level of a person with heart disease. Presumably such dangers are squarely within the contemplation of the ordinary consumer. Cronin v. J. B. E. Olson Corp., 8 Cal.3d 121, 104 Cal.Rptr. 433, 441, 501 P.2d 1153, 1161 (1972). Prosser, the reporter for the Restatement, suggests that the “unreasonably dangerous” qualification was added to foreclose the possibility that the manufacturer of a product with inherent possibilities for harm (for example butter, drugs, whiskey and automobiles) would become “automatically responsible for all the harm that such things do in the world.” Prosser, Strict Liability to the Consumer in California, 18 Hastings L.J. 9, 23 (1966).

We recognize that the words “unreasonably dangerous” may serve the beneficial purpose of preventing the manufacturer from being treated as the insurer of its products. We conclude, however, that the term may be used only for this purpose, and certainly not to burden the injured plaintiff with proof of an element which rings of negligence. Otherwise, the formulation of strict liability in practice rarely would lead to a different conclusion than would have been reached under the laws of negligence. Cronin v. J. B. E. Olson Corp., supra, 104 Cal.Rptr. at 442, 501 P.2d at 1162. See, Comment, 40 La.L.Rev. 207 (1979). Yet the very purpose of strict liability is to relieve the plaintiff from problems of proof inherent in. pursuing negligence and warranty remedies, and thereby to insure that the costs of injuries resulting from defective things are borne by those responsible for them. See Loescher v. Parr, supra, at 446.

Courts in a number of jurisdictions abrogated the requirement that the defect be “unreasonably dangerous,” concluding that requiring plaintiff only to prove the existence of a defect is more consistent with the policies giving rise to products liability initially and lessens the risk that negligence elements are injected into the plaintiff’s case. E. g., Butand v. Suburban Marine & Sporting Goods, Inc., 543 P.2d 209 (Alaska 1975); Cronin v. J. B. E. Olson Corp., supra; Glass v. Ford Motor Co., 123 N.J.Super. 599, 304 A.2d 562 (1973). In their view, the protective end of preventing the seller from becoming an insurer of his products is attained by the necessity of proving that there was a defect in the manufacture or design of the product and that such defect was a proximate cause of the injuries. We have determined, nevertheless, that the requirement of an unreasonable risk as a condition to strict liability should be retained. It must be carefully applied, however, with its true purpose in mind.

Accordingly, we conclude that blood contaminated with hepatitis virus is defective, i. e., unreasonably dangerous to normal use. The risks involved in receiving a transfusion of blood in this condition are certainly greater than a reasonable consumer would expect. See, e. g., L. Frumer and M. Friedman, Products Liability § 16A[4][f][i] at pp. 3B-124, 126 (1980); 1 M. Dixon, Drug Product Liability § 9.08[4] at pp. 9-119 (1980); Boland, Strict Liability in Tort for Transfusing Contaminated Blood, 23 Ark.L.Rev. 236 (1969); Verlander, Article 2317 Liability: An Analysis of Louisiana Jurisprudence Since Loescher v. Parr, 25 Loy.L.Rev. 263, 268 (1979); Note, 71 Colum.L.Rev. 487 (1971); Note, 46 N.Y.U.L. Rev. 703 (1971).

Application of These Principles to the Present Facts

In the present case, plaintiffs proved (a) that the blood which Mrs. DeBattista received by transfusion was defective, i. e., unreasonably dangerous to normal use, (b) that it was a product which had been processed and distributed by the defendant blood bank, (c) that Mrs. DeBattista’s injury might reasonably have been anticipated by one having actual or constructive knowledge of the defect, and (d) that Mrs. DeBat-tista’s injuries were caused by reason of the defect. The defendants did not present any proof that the damage was caused by the fault of the plaintiffs. The blood bank, therefore, is liable to the plaintiffs.

Inapplicability of Article 1764

Defendant blood bank contends it cannot be held liable for damages caused another by its distribution of unwholesome blood unless the damagéd person proves the harm resulted from the blood bank’s negligence. However, for this proposition the blood bank relies on Article 1764, one of the general provisions on conventional obligations, which clearly does not govern tort liability.

Article 1764(A) sets forth general rules applicable to various classes of contracts. Among these, it provides that a warranty is implied in every sale but may be modified or renounced, without changing the character of the contract or destroying its effect. Art. 1764(A)(2). As an exception to this general rule, Article 1764(B)(1) provides that the implied warranties of merchantability and fitness shall not be applicable to a contract for the sale of human blood, blood plasma or other human tissue or organs from a blood bank, and that such sales shall be considered sales of services, not commodities. That section provides:

“Notwithstanding the provisions of Paragraph (A)(2) of this Article, the implied warranties of merchantability and fitness shall not be applicable to a contract for the sale of human blood, blood plasma or other human tissue or organs from a blood bank or reservoir of such other tissues or organs. Such blood, blood plasma or tissue or organs shall not for the purposes of this Article be considered commodities subject to sale or barter but shall be considered as medical services.”

To impose strict liability on the preparer and distributor of blood under the circumstances of this case, however, it was not necessary for plaintiffs to establish an implied warranty as defined by Article 1764. A distributor of blood is strictly liable in tort when blood he places on the market creates an unreasonable risk of harm to others and, in fact, results in injury or disease to a human being. Although strict liability can also be based on a theory of an implied warranty running from the manufacturer to the plaintiff, Philippe v. Browning Arms, 395 So.2d 310 (La.1981), Media Production Consultants, Inc. v. Mercedes-Benz of North America, Inc., 262 La. 80, 262 So.2d 377 (1972), for the reasons set forth in Weber and this opinion, we think it clear that the liability is not one governed by the law of contractual warranties but by the law of strict liability in tort. Accordingly, rules defining and governing warranties that were developed to meet the needs of commercial transactions cannot properly be invoked to supersede Civil Code Article 2315 which serves the much broader purpose of governing the liability of a manufacturer or processor to those injured by his defective products.

Moreover, Article 1764(B) is clear and free from all ambiguity. It abrogates nothing more than the “warranty of merchantability and fitness” implied by sales of blood. It provides that “for the purposes of this Article” only that blood, plasma, tissue and organs shall be regarded as services not commodities. To read between the lines of Article 1764 an unspoken legislative intent to modify the strict tort liability of blood banks under Article 2315, while curiously leaving intact blood banks’ liability for their negligent acts under Articles 2315 and 2316, would disregard the letter of the law under the pretext of pursuing its spirit and violate our cardinal rule for the application and construction of laws. Article 13. Indeed, it would not even pursue the true spirit of our law which, as expressed by Articles 2315 and 2317, requires the person to whom society allots the supervision, care or guardianship of the risk-creating thing to bear the loss resulting from creation of the risk, rather than some innocent third person harmed as a consequence of his failure to prevent the risk. Loescher v. Parr, supra, at 446.

The court of appeal opinions disregarding the positive codal provisions under the pretext of pursuing their spirit do not represent correct interpretations of our law. E. g., Martin v. Southern Baptist Hospital, 352 So.2d 351 (La.App. 4th Cir.1977), writ denied, 354 So.2d 210 (La.1978); Adams v. New Orleans Blood Bank, Inc., 343 So.2d 363 (La.App. 4th Cir.1977); Juneau v. Interstate Blood Bank, Inc. of Louisiana, 333 So.2d at 354 (La.App.3d Cir.), writ denied, 337 So.2d 220 (La.1976); Koppenol v. St. Tammany Parish Hospital, 341 So.2d 1242 (La.App. 1st Cir.1976), writ denied, 343 So.2d 1067 (La.1977). The refusal of writs by this court, which is usually based upon incomplete records and ex parte applications and without hearing, is not decisional law. Garlington v. Kingsley, 289 So.2d 88 (La.1974). In a civilian jurisdiction such as ours, in which courts are bound to follow the positive law, case law should not supplant legislative or constitutional authority. Ardoin v. Hartford Accident & Indemnity Co., 360 So.2d 1331 (La.1978); Garlington v. Kingsley, supra.

Conclusion

Because the defendants prevailed in both lower courts, no assessment of the plaintiffs’ damages has been made. Therefore, the case will be remanded to the court of appeal for an assessment of quantum. Dorry v. Lafleur, 399 So.2d 559 (La.1981); Chappuis v. Sears Roebuck & Co., 358 So.2d 926 (La.1978); Holland v. Buckley, 305 So.2d 113 (La.1974).

REVERSED AND REMANDED TO COURT OF APPEAL.

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MARCUS, LEMMON, and BLANCHE, JJ., dissent and assign reasons.

MARCUS, Justice

(dissenting).

I agree with the majority that the blood bank was not negligent. I disagree with the majority’s conclusion that La.Civ.Code art. 1764(B)(1) is inapplicable in the instant case. The relationship between the blood bank and plaintiff is that of seller and purchaser. The warranty implied in every contract of sale as set forth in art. 1764(A)(2) would apply to the contract of sale here but for paragraph (B)(1) which states:

Notwithstanding the provisions of Paragraph (A)(2) of this Article, the implied warranties of merchantability and fitness shall not be applicable to a contract for the sale of human blood, blood plasma or other human tissue or organs from a blood bank or reservoir of such other tissues or organs. Such blood, blood plasma or tissue or organs shall not for the purposes of this Article be considered commodities subject to sale or barter but shall be considered as medical services.

Where, as here, the legislature has limited the implied warranty of the thing sold, I do not think that the blood bank can be held liable in contract nor under principles of strict liability in tort. Hence, I agree with the holding of the district court, affirmed by the court of appeal, that a blood bank which distributed diseased blood without negligence cannot be held liable for damages caused by a person who contracts hepatitis after a transfusion because of its unwholesome condition.

Accordingly, I respectfully dissent.

BLANCHE, Justice

(dissenting).

I respectfully dissent. The majority states that the words “unreasonably dangerous” were included within the definition of legal fault to prevent manufacturers from becoming insurers of their own products. Then it concludes that blood contaminated with undetected and undetectable hepatitis virus, notwithstanding the use of “state of the art” testing procedures, is unreasonably dangerous to normal use because the risk created when a person receives tainted blood is greater than the “reasonable consumer” would expect. The result of the holding is that health care providers must always provide wholesome blood regardless of their present scientific inability to do so, or pay damages for injuries caused by tainted blood. If this result does not make blood providers insurers of their product, this writer is hard pressed to discern how.

The legislature, apparently concerned with the inherent dangers in blood transfusions, has clearly stated that warranties of merchantability and fitness shall not be applicable to contracts for the sale of blood. C.C. art. 1764(B)(1). This statement, made at a time prior to this Court’s “divining” of non-negligent fault theories from Civil Code Articles 2315-24, was clearly intended to prevent liability on the part of blood suppliers merely because transfused blood caused sickness, and was addressed to the only theory then considered available (until today) for the pursuit of such a claim. To draw a distinction now between “fitness” in contract and “unreasonable danger” in non-negligent fault tort for purposes of this action destroys the very meaning which the legislature sought to impose in the passage of Article 1764(B)(1).

Even assuming the inapplicability of Art. 1764(B)(1) to this case, plaintiff should not be entitled to recover on the basis of unreasonable danger in normal use.

The majority interprets the term “unreasonably dangerous” to mean that “the [specific] article which injured the plaintiff was dangerous to an extent beyond that which would be contemplated by an ordinary consumer.” Such an approach places blood transfusions in the same category as shampoos, deodorants, candy bars, toasters, automobiles, oil changes and other everyday commodities and services about which a reasonable consumer can be expected to know something. It compares apples and oranges. Blood is necessary to the sustenance of life. The normal use of a blood transfusion is to preserve life. Without the ability to transfuse blood, the medical profession would be effectively prevented from all but the most minor surgical procedures. Unfortunately, at present, there is just no way that science can detect hepatitis virus in all blood units at all times. Thus, some people who receive blood transfusions will become ill with hepatitis. The only way to absolutely insure against hepatitis infection from blood transfusions is to refrain from administering them. However, doctors, in light of their training and experience, must often recommend the performance of medical procedures which will require blood transfusions. Such decisions, made with the informed consent of patients, are based upon a balancing of the probability of reaching the desired medical effect and the possibility of harmful side effects. The risk of contracting hepatitis is but one chance a patient necessarily takes when he agrees to allow a blood transfusion. Thus, the expectations of a “reasonable consumer” concerning blood transfusions in general should be irrelevant.

* * * * * *

LEMMON, Justice,

dissenting.

While I agree that the supplying of defective blood may give rise to a tort action based on fault, I disagree that the decision should be based on liability without fault.

The term “unreasonable risk of harm”, as applied to the strict liability imposed by C.C. Art. 2317, is the key consideration in this case. The strict liability theory is that a person who has a thing under his control should be absolutely responsible for the damages caused by a defect in the thing, even though the person has no knowledge of the defect, when the defect creates an unreasonable risk of harm. In determining the reasonableness of the risk, a court must look to the benefits derived from the use of the thing and must weigh those benefits against the probability and degree of harm associated with the use.

In Jones v. City of Baton Rouge, 388 So.2d 737 (La.1980) this court held that a municipality was absolutely liable for a broken grate on a drainage opening in the street when a person fell through the grate and received injuries. However, in Shipp v. City of Alexandria, 392 So.2d 1078 (La.1980) the court held that the city was not liable for a defective minor variation in the surface of the street, although a person without fault on her own part suffered an injury because of that defect, because the defect did not create a risk of harm which was unreasonable when compared to the benefits derived by the public from the government’s furnishing of streets.

In the present case the hospital furnished blood to patients in need of a transfusion, and a certain percentage of that blood was contaminated with hepatitis, which at that time could only be detected with 20% accuracy. The degree of probability of hepatitis in the blood furnished to patients thus created a risk of harm to the patients, but that risk of harm must be weighed against the benefits to be derived from a blood transfusion. When all facts and circumstances are considered and properly weighed, I cannot conclude that the risk of harm is so unreasonable as to require imposition of absolute liability on the furnisher of blood.

It is entirely possible in this case that, as a question of fact, the supplier of blood was negligent in failing to warn plaintiff as soon as the supplier discovered that the blood donor’s test for hepatitis was positive in his subsequent attempt to sell blood. But the supplier of blood should not be held strictly liable, as a matter of law, because the blood contained hepatitis when the supplier was unable to test effectively for this danger or to prevent its occurrence.

      . Of course, this conclusion would not defeat a claim based on failure to obtain informed consent.