Martin v. State

Annotate this Case
Martin v. State (2003-214); 175 Vt. 80; 819 A.2d 742

2003 VT 14

[Filed 07-Feb-2003]

       NOTICE:  This opinion is subject to motions for reargument under
  V.R.A.P. 40 as well as formal revision before publication in the Vermont
  Reports.  Readers are requested to notify the Reporter of Decisions,
  Vermont Supreme Court, 109 State Street, Montpelier, Vermont 05609-0801 of
  any errors in order that corrections may be made before this opinion goes
  to press.

                                 2003 VT 14
                                No. 2001-214

  Carol Ann Martin	                         Supreme Court

                                                 On Appeal from
       v.	                                 Washington Superior Court

  State of Vermont, Agency of Transportation
  Department of Motor Vehicles	                 March Term, 2002

  Matthew I. Katz, J.

  John H. Bloomer, Jr. of McClallen & Bloomer, P.C., Rutland, for

  William H. Sorrell, Attorney General, William E. Griffin, Chief Assistant
    Attorney General, and Bridget C. Asay, Assistant Attorney General, 
    Montpelier, for Defendant-Appellee.

  PRESENT:  Amestoy, C.J., Dooley, Morse, Johnson and Skoglund, JJ.

       ¶  1.  AMESTOY, C.J.   Plaintiff Carol Ann Martin appeals the
  superior court's decision upholding the Department of Motor Vehicle's (DMV)
  refusal to issue her a special motor vehicle license plate displaying the
  letters "IRISH."  We conclude that the administrative regulation upon which
  DMV based its ruling is inconsistent with, and thus unauthorized by, the
  governing statute.  Accordingly, we reverse the superior court's decision.

       ¶  2.  This case is an example of what can happen when law and common
  sense depart.  The governing statute provides that the Commissioner of DMV
  "may refuse to honor any [vanity plate] request that might be offensive or
  confusing to the general public."  23 V.S.A. § 304(d).  Neither DMV in
  refusing to grant the "IRISH" plate, nor the State in its argument before
  this Court, have asserted that "IRISH" is a word that might be offensive to
  the public - undoubtedly because the general public would find the
  assertion more offensive than the word. (FN1)   Rather, DMV's decision, the
  superior court's opinion upholding that decision, and the State's defense
  of both rely upon an administrative regulation that seeks to insulate the
  vanity plate program from constitutional attack by removing the
  Commissioner's statutory obligation to determine a requested plate's
  potential to offend the general public. (FN2)   That the Legislature could
  relieve the Commissioner of such an obligation we have no doubt.  But until
  that body has chosen to do so by amending the statute currently granting
  the Commissioner the authority to refuse only those requests that "might be
  offensive or confusing to the general public," we cannot find a legal basis
  to uphold a regulation that assumes powers greater than those set forth in
  the statute purportedly authorizing the regulation.
       ¶  3.  The instant case arose when Martin submitted a special plate
  application to DMV listing two choices, "IRISH" and "IRISH1."  Martin
  received a letter from DMV stating that her application could not be
  processed because the Commissioner may deny any special plate request that
  might be offensive or confusing to the general public. (FN3)   Martin
  requested an administrative hearing, which was held before a DMV hearing
  officer.  At the hearing, DMV did not offer any specific evidence
  indicating that the requested plate might be offensive to the general
  pubic, but rather relied exclusively upon the new regulation's categorical
  exclusion of references to ethnic heritage.  In her written decision
  upholding the denial of Martin's request, the hearing officer concluded
  that the Commissioner has the authority to deny a request for special
  plates referring to ethnic heritage, irrespective of whether the reference
  is a positive or negative connotation.

       ¶  4.  Martin appealed that ruling to the superior court pursuant to
  V.R.C.P. 74 (appeals from decisions of governmental agencies).  The court
  held a hearing at which both Martin and the State presented oral argument. 
  In its written decision following the hearing, the court rejected Martin's
  request for declaratory relief based on the following rationale:

    Given the statutory authority to ban the offensive, and the
    constitutional mandate to avoid viewpoint discrimination, the
    Commissioner's regulation to place ethnic references off the table
    for license plates is reasonable, statutorily authorized and
    constitutionally necessary if the state is to preserve its vanity
    license plate program and also avoid the issuance of patently
    offensive license plates.
       ¶  5.  On appeal to this Court, Martin argues that the amended
  regulation is invalid because it is contrary to the intent of the
  Legislature, overbroad, and arbitrary.  Martin also argues that both the
  regulation and its governing statute, 23 V.S.A. § 304(d), violate the First
  Amendment of the United States Constitution because they give DMV
  unfettered discretion to discriminate based on the viewpoint of the
  applicant.  The State responds that the regulation is consistent with §
  304(d), and is necessary both to insulate the statute from constitutional
  challenges and to alleviate DMV's administrative burden.  The State also
  contends that Martin's constitutional arguments were waived  and, in any
  event, are without merit.

       ¶  6.  This case is unusual in that it is the anticipation of a
  constitutional challenge that formed the basis of not only the superior
  court's decision and the State's defense of the case, but also of the
  challenged regulation itself.  Through regulation, the State sought to
  resolve a legal dilemma - how does one constitutionally implement a statute
  when the Commissioner's discretion to issue vanity plates must be grounded
  in a determination of what might offend the public, given the
  susceptibility of such a statute to constitutional attack for allowing
  viewpoint discrimination in a designated or nonpublic forum?  It is the
  attempt of the State's lawyers to address this legal dilemma that frames
  this case.

       ¶  7.  To be sure, the State's sensitivity to the potential
  constitutional complications of a vanity plate program is well founded. 
  While a special plate program limiting requests to names and places would
  negate all but the most frivolous challenges, the decision of state
  legislatures to authorize more expansive (and lucrative) vanity plate
  programs has implicated more significant First Amendment concerns. 
  Although courts and commentators have differed on the extent to which the
  establishment of a vanity plate regime implicates free speech rights, there
  is little doubt that there are some constitutional limitations on the
  government's authority in this area. (FN4)  See generally M. Herald,
  Licensed to Speak: The Case of Vanity Plates, 72 U. Colo. L. Rev. 595
  (2001); L. Jacobs, The Public Sensibilities Forum, 95 Nw. U. L. Rev. 1357

       ¶  8.  But though the State's preemptive strike is understandable,
  neither its lawyers nor this Court is free to ignore the plain meaning of a
  legislative enactment in contemplation of its perceived legal infirmities. 
  Indeed, the State has cited no case law, and we have found none, suggesting
  that an administrative agency can promulgate regulations inconsistent with
  an unambiguous statute to save the statute from a potential constitutional
  attack.  Rather, the State cites In re G.T., 170 Vt. 507, 517, 758 A.2d 301, 308 (2000) for the unremarkable proposition that in "exceptional
  circumstances," this Court "must narrow the reach of a broadly worded
  statute to make it consistent with other statutes or to avoid serious
  questions of constitutionality."  Of course, "[u]nlike courts, which are
  granted their power by the Constitution, see Vt. Const. ch. II, § 4,
  administrative bodies have only the adjudicatory authority conferred on
  them by statute."  Workers' Comp. Div. v. Hodgdon, 171 Vt. 526, 529, 759 A.2d 73, 77 (2000) (mem.).

       ¶  9.  Even assuming that DMV stood on par with this Court in terms of
  insulating §  304(d) from constitutional attack, see Elks Lodges 719 & 2021
  v. Dep't of Alcoholic Beverage Control, 905 P.2d 1189, 1202 (Utah 1995) (as
  with court, agency must prefer constitutional reading of statute over
  unconstitutional interpretation), the agency's attempt to protect the
  statute is misplaced because, as discussed in more detail below, § 304(d)
  is not ambiguous. (FN5)   If a statute is unambiguous, an agency cannot
  insulate it from constitutional attack by adopting a new interpretation
  unsupported by the statutory language.  See Nat'l Rifle Ass'n of Am. v.
  Reno, 216 F.3d 122, 127 (D.C. Cir. 2000) (quoting Chevron U.S.A.  Inc. v.
  Natural Res. Def. Council, Inc., 467 U.S. 837, 842-43 (1984) for
  proposition that "the court, as well as the agency, must give effect to
  unambiguously expressed intent of Congress"); see also United States v.
  Robel, 389 U.S. 258, 267 (1967) (task of writing legislation within
  constitutional bounds is "committed to Congress"); Scales v. United States,
  367 U.S. 203, 211 (1961) ("Although this Court will often strain to
  construe legislation so as to save it against constitutional attack, it
  must not and will not carry this to the point of perverting the purpose of
  a statute.").

       ¶  10.  The obligation to refrain from rewriting a statute to insulate
  it from constitutional attack is particularly strong, even for courts, when
  the revised reading of the statute would create new policy among several
  choices - especially when those policy choices implicate constitutional
  rights.  Where a number of choices are available, judicial (or agency)
  statutory restructuring necessarily implicates "troublesome policy
  considerations which should in the first instance be dealt with by our
  Legislature rather than this Court."  State v. Rosenfeld, 303 A.2d 889, 894
  (N.J. 1973).  For these reasons, we find unavailing the State's argument
  that promulgation of the challenged regulation was necessary to avoid a
  constitutional challenge to the statute.
       ¶  11.  Moreover, even if we were inclined to uphold the challenged
  regulation and, in effect, allow DMV to rewrite § 304(d), we would not do
  so here.  From the beginning, Martin's position has been that the amended
  regulation is inconsistent with § 304(d).  For the first time on appeal -
  and only in response to the State's constitutional necessity defense -
  Martin argues that both the amended regulation and § 304(d) are
  unconstitutional.  Because these arguments were not raised before the
  superior court, they are not preserved for review here.  See Jakab v.
  Jakab, 163 Vt. 575, 581, 664 A.2d 261, 264 (1995) ("Even with respect to
  constitutional claims, we ordinarily require that the issue on appeal be
  raised below.").

       ¶  12.  Absent a squarely presented constitutional challenge, we
  decline to make an unchartered foray into an unsettled area of
  constitutional law.  Compare Lewis v. Wilson, 253 F.3d 1077, 1080-81 (8th
  Cir. 2001) (statute that agency relied upon in rejecting "ARYAN-1" plate as
  contrary to public policy violated First Amendment), cert. denied, 535 U.S. 986 (2002); Pruitt v. Wilder, 840 F. Supp. 414, 417-18 (E.D. Va. 1994) (DMV
  policy banning reference to deities violated First Amendment because it
  regulated speech in non-public forum based on viewpoint) with Perry v.
  McDonald, 280 F.3d 159, 163 (2d Cir. 2001) (applicant does not have First
  Amendment right to vanity plates bearing letters "SHTHPNS"); Kahn v. Dep't
  of Motor Vehicles, 20 Cal. Rptr. 2d 6, 11-13 (Cal. Ct. App. 1993) (state
  has substantial interest in protecting its plates from degradation, and
  there was ample evidence that request would have been offensive to
  reasonable person). (FN6)  Notably, the United States Supreme Court has not
  addressed a First Amendment challenge pertaining to vanity plates, and, as
  the dissent repeatedly points out, its law on viewpoint neutrality is not a
  model of clarity.  See, e.g., Pruitt, 840 F. Supp.  at 417-18 (discussing
  viewpoint neutral analysis in Lamb's Chapel v. Ctr. Moriches Union Free
  Sch. Dist., 508 U.S. 384 (1993)).

       ¶  13.  In short, the situation presented here - no direct
  constitutional challenge and no definitive or controlling law in this area
  - is not one that tempts us to bypass our normal rule requiring that issues
  be preserved for appeal.  Cf. In re Sealed Documents, 172 Vt. 152, 156, 772 A.2d 518, 523 (2001) (our tradition of addressing issues of constitutional
  significance only when they are "squarely and necessarily presented
  counsels restraint and forbearance" as to broader First Amendment
  questions); Herald Ass'n, Inc. v. Ellison, 138 Vt. 529, 533, 419 A.2d 323,
  326 (1980) (although First Amendment appears to be implicated, decisions of
  United States Supreme Court do not clearly determine whether First
  Amendment violation exists; in face of such uncertainty, "the wisdom of our
  traditional rule of self-restraint - that we do not needlessly decide
  constitutional issues - is all the more apparent" (internal citations

       ¶  14.  Although we find unavailing the State's argument that
  promulgation of the challenged regulation was constitutionally necessary,
  we recognize that an expansive administrative reading of § 304(d) is of
  particular concern because the statute and the regulation implicate First
  Amendment protections.  Where citizens' constitutional rights are
  concerned, we must be especially vigilant in assuring that elected
  officials - and not appointed administrators - are making policy.  With
  this in mind, we now consider Martin's principal argument that the
  challenged regulation is inconsistent with, and thus beyond the authority
  provided by, § 304(d), its governing statute.

       ¶  15.  It is axiomatic that an administrative agency's power to
  promulgate regulations may extend only as far as its legislative grant of
  authority.  Bowen v. Georgetown Univ. Hosp., 488 U.S. 204, 208 (1988); see
  In re Vt. Gas Sys., 150 Vt. 34, 39, 549 A.2d 627, 630 (1988) ("An
  administrative agency's rule-making authority cannot support an expansive
  interpretation of its own powers.").  Thus, while we generally presume the
  validity of regulations within the agency's authority, we will uphold an
  administratively adopted regulation only "where we can do so without
  compromising the intent of the statute which authorized it."  In re Agency
  of Admin., 141 Vt. 68, 74, 444 A.2d 1349, 1351-52 (1982); see Vt. Ass'n of
  Realtors, Inc. v. State, 156 Vt. 525, 530, 593 A.2d 462, 465 (1991) ("[W]e
  will not countenance any agency rule that exceeds the authority delegated
  to the agency under its enabling act.").  If an agency operates outside the
  bounds, or for purposes other than those, authorized by the enabling
  legislation, "this Court will intervene."  In re Agency of Admin., 141 Vt.
  at 75, 444 A.2d  at 1352.
       ¶  16.  The fundamental principle served by these tenets is the
  doctrine of separation of powers.  See 1A N. Singer, Statutes and Statutory
  Construction § 31.06, at 544 (5th ed. 1993).  Courts have generally upheld
  broad delegations of authority to administrative agencies, but agency
  action that "transcends the delegation will not be sustained."  1 J. Stein,
  G. Mitchell, & B. Mezines, Administrative Law § 3.03[5], at 3-110 (2002).  
  Confining delegated lawmaking authority within its intended bounds helps to
  assure that ultimate control over policymaking rests with the legislative
  branch of government rather than unelected administrative officials.  1 N.
  Singer, Statutes and Statutory Construction § 4.15, at 166 (5th ed. 1994);
  see Chambers v. St. Mary's Sch., 697 N.E.2d 198, 202 (Ohio 1998)
  (legislative accountability is cornerstone of democratic process that
  justifies general assembly's role as lawmaker and restricts administrative
  rule-making to placing general assembly's policy into effect).

       ¶  17.  Here, the Legislature has given the Commissioner the general
  authority to assign a combination of numbers and letters for each
  registered motor vehicle, see 23 V.S.A. § 304(a), and to issue vanity
  plates and specialty plates for safety or service organizations, see id. §
  304(b).  Under the statute, the Commissioner "shall issue" vanity plates
  "at the request of the registrant of any motor vehicle," except as
  otherwise provided.  Id. 304(b)(1).  Section 304(d) provides that vanity
  plates "shall be issued" in any combination of seven or less numbers and
  letters that do not duplicate or resemble a regular-issue plate.  The
  Commissioner may, however, refuse to honor or revoke "any request that
  might be offensive or confusing to the general public."  Id. § 304(d).

       ¶  18.  Plainly, the Legislature intended to allow applicants to
  obtain vanity plates in any combination of seven or less numbers and
  letters, as long as the requested plate is not similar to a regular-issue
  plate, confusing to identify, or offensive.  See State v. Lussier, 171 Vt.
  19, 23, 757 A.2d 1017, 1020 (2000) ("Our primary duty in construing a
  statute is to discern the intent of the Legislature by examining the
  language of the entire statute, along with its purpose, effects, and
  consequences.").  Put differently, the applicant gets what she wants unless
  the Commissioner, in her discretion, determines that the request would be
  offensive or confusing and hence incompatible with the official state
  function served by license plates. 
       ¶  19.  The plain intent of the statute is revealed by closely
  examining the critical sentence at issue: "The commissioner may refuse to
  honor any request that might be offensive or confusing to the general
  public."  Notably, the sentence does not give the Commissioner the
  discretion to refuse to honor any request - period.  Rather, the
  Commissioner "may" refuse to honor only those requests that might be
  confusing or offensive.  In other words, the Commissioner may not refuse to
  honor a request unless she determines that the request might be offensive
  or confusing.  This point is further supported by the language in § 304(b)
  and (d) instructing that the Commissioner "shall issue" requested plates
  not found to be offensive, confusing, or otherwise outside the statutory

       ¶  20.  Rather than make categorical exclusions with respect to vanity
  plates, the Legislature has given the Commissioner the discretion to reject
  any "request" that might be offensive or confusing.  The Legislature
  certainly knows how to exclude entire categories, as evidenced by §
  304(b)(2)(C), which requires organizations applying for specialty plates to
  "present the commissioner with a name and emblem that is not obscene,
  offensive or confusing to the general public and does not promote,
  advertise or endorse a product, brand or service provided for sale, or
  promote any specific religious belief or political party." (Emphasis
  added.).  The Legislature elected not to set forth categorical exclusions
  with respect to vanity plates, however.

       ¶  21.  Nonetheless, the challenged regulation extends beyond the
  statutory language and permits the Commissioner to reject requests for
  vanity plates that are themselves inoffensive but belong in one of several
  designated categories that include words with the potential to offend. 
  Indeed, in the case at bar, Martin's request for "IRISH" was refused, not
  because it might be offensive - there was no evidence or argument to that
  effect - but rather because it refers to ethnicity, a topic that would also
  include offensive ethnic slurs.
       ¶  22.  DMV's policy is not limited to ethnicity, however; it also
  applies to each of the other topics set forth in the challenged regulation. 
  Plainly inoffensive requests such as "BLUE" (color), "GREEN"
  (color/political affiliation), or  "ALLGIRLS" (gender) are excluded under
  the regulation without any determination that they are offensive.  Names
  such as "ROSE," "SCARLET" and "VIOLET" are also excluded.  These examples
  demonstrate that, by promulgating the challenged regulation, DMV is
  imposing its own policy with respect to vanity plate requests - one that is
  distinct from, and inconsistent with, the one adopted by the Legislature.

       ¶  23.  Under DMV's policy, certain topics the agency considers too
  sensitive are off limits, even if the individual "requests" within that
  subject area have no potential to offend.  In effect, DMV has cut the
  statutorily required nexus between the denial of the plate and the
  potential to offend.    I agree with the dissent that the Commissioner has
  considerable discretion to interpret § 304(d) in a way that is reasonable,
  but blanket regulations intended to prohibit the issuance of potentially
  offensive vanity plates cannot be characterized as reasonable when the
  result is to prohibit words such as "IRISH" or "BLUE."
       ¶  24.  DMV's promulgation of a regulation containing categorical
  exclusions of topics irrespective of their potential to offend was
  apparently prompted by a suit against DMV based on the agency's denial of a
  request for the plate "SHTHPNS."  See Perry v. McDonald, 280 F.3d 159 (2d
  Cir. 2001).  In defending DMV's decision in Perry - a determination made
  before the regulation at issue in this case was promulgated - the State
  relied on DMV's exercise of its authority to prohibit offensive plates
  through an unwritten policy of denying requests referencing scatological
  terms.  In upholding the DMV's decision as reasonably serving legitimate
  governmental interests in a nonpublic forum, the Second Circuit Court of
  Appeals observed that § 304(d) "concerns offensive scatological terms, not
  just scatological terms."  Id. at 170 (emphasis in original).

       ¶  25.  The new regulation excises the very nexus that the Second
  Circuit identified as critical - the link between DMV's denial of a request
  and the request's potential to offend.  A similar situation arose in Carr
  v. Dir. of Revenue, 799 S.W.2d 124 (Mo. Ct. App. 1990).  There, the agency
  involved had rejected a request for "ARYAN-1" because it violated an agency
  regulation prohibiting any personalized license plates " 'containing or
  suggesting any profane, obscene, inflammatory or patently offensive word or
  phrase or otherwise conflicting with an overriding public policy.' "  Id.
  at 126 (quoting Mo. Code Regs. tit. 12, § 10-23.100(6)).  The car owner
  appealed, arguing that the regulation was contrary to its governing
  statute, which provided that " 'no plates shall be issued containing any
  profane or obscene word or phrase.' "  Id. (quoting Mo. Rev. Stat. §
  301.144).  The court agreed, reversing the agency's decision because the
  regulation imposed additional restrictions beyond those set forth in the
  governing statute and thus was void in part.  Id.  The same reasoning
  applies here.

       ¶  26.  The State argues, however, that the Legislature, through the
  Legislative Committee on Administrative Rules, endorsed the approach taken
  by DMV in the amended regulation.  The Committee minutes reveal that, at
  the first meeting in which the new regulation was reviewed, some of the
  Committee members expressed concerns about the additional restrictions
  imposed by the proposed regulation.  The Committee decided to continue its
  review.  Ultimately, at a later meeting, five members of the Committee
  elected not to object to the regulation, with one member dissenting.
       ¶  27.  The Committee's actions are hardly a ringing endorsement of
  the regulation.  In any event, it is this Court, not the Committee, that
  must determine whether the challenged regulation is consistent with its
  governing statute.  The Administrative Procedures Act (APA) requires that
  agencies file proposed rules with the Committee.  3 V.S.A. § 841(a).  The
  Committee may object that the rule is arbitrary, beyond the authority of
  the agency, or contrary to the intent of the Legislature, and recommend
  that the agency withdraw or amend the proposal.  3 V.S.A. § 842(a)-(b).  If
  the committee objects to the rule, the burden is on the agency, in any
  action for judicial review or enforcement of the rule, to establish that
  the part of the rule objected to is not arbitrary, outside the agency's
  delegated authority, or inconsistent with the intent of the Legislature. 
  Id. § 842(b).  "If the agency fails to meet its burden of proof, the court
  shall declare the whole or portion of the rule objected to invalid."  Id. 
  Thus, under the APA, the Committee has no authority to determine the
  validity of a proposed administrative regulation, but rather can indicate
  only whether it will object to the proposed regulation.


       ¶  28.  Finally, the State argues that the challenged regulation is a
  valid exercise of DMV's authority because it is administratively necessary. 
  Again, we find this argument unpersuasive.  Agencies generally may not
  choose to ignore "their statutory mandate because they believe it is
  administratively inefficient or infeasible."  Campbell v. U.S. Dep't of
  Agric., 515 F. Supp. 1239, 1249 (D.D.C. 1981) (agency cannot decide not to
  allow food stamp recertifications at social security offices because of
  practical problems they perceive in doing so).
       ¶  29.  In very limited circumstances, "administrative necessity may
  be a basis for finding implied authority for an administrative approach not
  explicitly provided in the statute."  Ala. Power Co. v. Costle, 636 F.2d 323, 358 (D.C. Cir. 1979).  A court may uphold streamlined agency
  approaches or procedures involving categorical exemptions not explicitly
  provided by statute when a case-by-case approach would, as a practical
  matter, prevent the agency from carrying out its legislatively authorized
  mission.  Id.  But the agency's burden to justify its actions "in such a
  case is especially heavy."  Id. at 359.

       ¶  30.  The State has not met that heavy burden here.  Cf. Pub.
  Citizen, Inc. v. Shalala, 932 F. Supp. 13, 17 (D.D.C. 1996) (FDA failed to
  demonstrate administrative impossibility of applying statute's nutrition
  content and health claim provisions to restaurant menus).  There is no
  evidence that DMV could not carry out its statutory mandate without
  imposing overbroad categorical exclusions that sever the statutory nexus
  between the denial and the offensiveness of the requested plate.
       ¶  31.  In support of its administrative necessity argument, the
  State states simply that the Commissioner would be unable to handle the
  growing number of special plate applications without regulatory standards
  to implement the program.  We do not suggest otherwise.  DMV may promulgate
  regulations consistent with the statute, and, in doing so, may establish
  lists of combinations of numbers and letters that might be offensive.  DMV
  may also, consistent with § 304(d), exclude entire categories comprised
  exclusively of words that might offend the general public.  Cf.  McMahon v.
  Iowa Dep't of Transp., 522 N.W.2d 51, 55-57 (Iowa 1994) (upholding
  regulation disallowing combinations of numbers and letters that have sexual
  connotations or that are defined in dictionaries as terms of vulgarity,
  contempt, prejudice, hostility, insult, or racial or ethnic degradation);
  Higgins v. DMV, 13 P.3d 531, 533 n.3-4 (Or. Ct. App. 2000) (en banc)
  (construing regulation defining "ethnic words" as words that refer to
  definable class of persons, and that ridicule or support superiority of
  that class).  The agency may not, however, claim the authority to establish
  policy unauthorized by statute solely because the task is fraught with
  difficulty.  If the Legislature has set DMV "with an impossible task, their
  remedy is with [the Legislature], not this Court."  Campbell, 515 F. Supp.  at 1249.


       ¶  32.  In sum, we conclude that the amended regulation may not
  support the decision to deny the "IRISH" plate in that it "prescribes a
  standard which [the Legislature] has not authorized the Commissioner . . .
  to fix."  Lynch v. Tilden Prod. Co., 265 U.S. 315, 321 (1924); see Millette
  v. N.H. Ret. Sys., 683 A.2d 531, 534 (N.H. 1996) ("The legislature's grant
  of rulemaking authority to an agency is not a grant of power to change or
  modify statutory law by regulation.").  We do not underestimate the
  challenge of crafting a vanity plate program that balances administrative
  efficiency with First Amendment concerns.  But the response to that
  challenge cannot circumvent the branch of government responsible for making
  the law.  That responsibility and authority resides in the Legislature, not
  the Department of Motor Vehicles.

       ¶  33.    Concerned about the possibility of future litigation, the
  dissent would have us instruct the administrative agency on how to carry
  out its legislative mandate.  The dissent's prediction that the vanity
  plate program will continue to be litigated is a safe one, given the
  uncertain state of federal law on forum analysis and viewpoint neutrality. 
  The issue in this case, however, is whether DMV's regulation is
  unauthorized by the governing statute.  We do not question the difficulty
  of promulgating a vanity plate program predicated on a statute that
  requires a nexus to offensiveness.  The agency's removal of entire
  categories of subjects may be one way through the constitutional thicket of
  viewpoint analysis.  But the agency's approach must be authorized by the
  governing statute.  The current regulation fails to satisfy that
       The Department of Motor Vehicle's Rule 16 I.(f)(4) is stricken, and
  the superior court's April 19, 2001 decision is reversed.

                                       FOR THE COURT:

                                       Jeffrey L. Amestoy, Chief Justice  


       ¶  34.  JOHNSON, J., dissenting.   In implementing the vanity plate
  program, DMV found itself caught between a rock and a hard place.  On the
  one hand, the agency was empowered to deny "any [vanity plate] request that
  might be offensive or confusing to the general public."  23 V.S.A. § 304(d)
  (emphasis added).  On the other hand, federal courts interpreting the First
  Amendment hold that government restrictions on speech that discriminate on
  the basis of viewpoint are unconstitutional.  The agency had to develop a
  method of implementing the vanity plate program that would enable it to
  refuse potentially offensive plate applications yet would not be arbitrary
  or appear to discriminate on the basis of viewpoint.  Put plainly, the
  Commissioner had to avoid the viewpoint discrimination that would result if
  she allowed "IRISH" but rejected "NOIRISH" or "MICK."  Promulgating a
  regulation that banned certain topics altogether as potentially "offensive
  or confusing" was very likely the only reasonable way the agency could
  implement the Legislature's vanity plate program while complying with the
  statute and First Amendment requirements.  This is what the trial court
  held, and it should be affirmed.  I respectfully dissent.
       ¶  35.  The majority narrowly confines this case to a question of
  administrative law: whether the Commissioner of DMV, in prohibiting ethnic
  references on vanity plates, has promulgated a regulation in conflict with
  the statute, because the plate challenged here, "IRISH," cannot be
  considered offensive.  Its premise is that the statute is unambiguous and
  therefore affords no discretion to the Commissioner to fill in the blanks,
  so to speak, even if the reason for filling in the blanks is to comply with
  the Constitution. 
       ¶  36.  Where I depart from the majority is that it is hard for me to
  conceive of a more ambiguous statute than the one before us.  The statute
  provides no definition for two key terms:  "offensive" and "confusing." 
  This Court has held that "words in a statute without definition are to be
  given their plain and commonly accepted use."  Shetland Props., Inc. v.
  Town of Poultney, 145 Vt. 189, 194, 484 A.2d 929, 932 (1984) (internal
  quotations omitted).  The words "offensive" and "confusing," however, are
  susceptible to a variety of meanings, and 23 V.S.A. § 304(d) allows the
  agency to reject requests that are not necessarily offensive or confusing,
  but "might be."  The Commissioner, therefore, has considerable discretion
  to interpret the statute in a way that is reasonable.  See In re Smith, 169
  Vt. 162, 169, 730 A.2d 605, 611 (1999) ("[W]here a statute is silent or
  ambiguous regarding a particular matter this Court will defer to agency
  interpretation of a statute within its area of expertise as long as it
  represents a permissible construction of the statute.").  See also Solid
  Waste Agency of N. Cook County v. U.S. Army Corps of Eng'rs, 531 U.S. 159,
  172-73 (2001) (holding that when Congress intends for an agency to
  implement a statute in a way that risks unconstitutionality, the Court
  "expect[s] a clear indication that Congress intended that result. . . .
  [because of] our prudential desire not to needlessly reach constitutional
  issues and our assumption that Congress does not casually authorize
  administrative agencies to interpret a statute to push the limit of
  congressional authority."). 

       ¶  37.  When interpreting statutes, moreover, agencies are required by
  law to follow controlling judicial precedents.  Nat'l Labor Relations Bd.
  v. Ashkenazy Prop. Mgmt. Corp., 817 F.2d 74, 75 (9th Cir. 1987)
  ("Administrative agencies are not free to refuse to follow circuit
  precedent in cases originating within the circuit [without] good faith
  intention of seeking review of the particular proceeding by the Supreme
  Court.").  Agencies must heed constitutional restrictions in part because
  reviewing courts will do so, and an agency that acts without considering
  the constitutional implications of its policy risks having the offending
  policy or regulation stricken following judicial review.  Between a
  construction of the vanity plate statute that renders it constitutional and
  one that creates substantial constitutional doubt, "we are required to take
  the path that results in clear constitutionality."  Apache Survival
  Coalition v. United States, 21 F.3d 895, 903 (9th Cir. 1994); see also
  Blodgett v. Holden, 275 U.S. 142, 148 (1927) ("[A]s between two possible
  interpretations of a statute, by one of which it would be unconstitutional
  and by the other valid, our plain duty is to adopt that which will save the
  Act.") (Holmes, J., concurring). 
       ¶  38.  The majority opinion envisions an exceedingly unwieldy system
  of administrative law, under which courts alone are allowed to consider
  constitutional principles and to "narrow the reach of a broadly-worded
  statute . . . to avoid serious questions of constitutionality."  In re
  G.T., 170 Vt. 507, 517, 758 A.2d 301, 308 (2000).  If this framework were
  implemented literally, agencies would interpret statutes without
  considering constitutional limitations, and citizens whose fundamental
  rights were abridged would need to bring the offending agencies to court to
  vindicate their rights.  The deficiencies in this unworkable system are
  exacerbated by the majority's position that it will find regulations
  invalid but it will never advise the agency on what regulation will be
  found valid.  In the context of the particular statute before us today, the
  majority's opinion  guarantees that we will see the legality of the state's
  vanity plate program litigated over and over again as the state experiments
  with different methods of drawing the line between offensive and
  non-offensive, without any definitive guidance from this Court and with
  each line offensive to a different plaintiff.  

       ¶  39.  I agree with the majority that an agency has no authority to
  choose an interpretation of a statute that is not reasonably available. 
  See Whitman v. Am. Trucking Ass'ns, 531 U.S. 457, 471 (2001) ("No matter
  how severe the constitutional doubt, courts may choose only between
  reasonably available interpretations of a text."); In re Agency of Admin.,
  141 Vt. 68, 74-75, 444 A.2d 1349, 1352 (1982) ("[C]onstruction of statutes
  by those charged with their execution will be followed unless there are
  compelling indications that the construction is wrong.").  If the vanity
  plate statute had unambiguously directed that DMV reject only those
  applications for vanity plates that were actually offensive, DMV probably
  would not have been permitted to establish categorical prohibitions based
  on subject matter, as it has done.  Unlike the agency in American Trucking,
  DMV is not interpreting a statute in a way that "contradicts what in our
  view is quite clear."  531 U.S.  at 481.  On the contrary, DMV regulation,
  at least insofar as it pertains to references to ethnicity, is a
  permissible interpretation of the vanity plate statute's prohibition on
  plates that might cause offense or confusion.
       ¶  40.  To the extent that the majority insists that the vanity plate
  statute must be construed as written without reference to authoritative
  constitutional decisions, the majority is advocating an approach to
  statutory construction that conflicts with the approach taken by the United
  States Supreme Court in construing state statutes imposing restrictions on
  free speech.  In the context of a facial challenge to a state obscenity
  statute, the Supreme Court reads the statute in conjunction with
  authoritative state and federal decisions.  In the absence of evidence to
  the contrary, the Supreme Court presumes that the state law will be applied
  in accordance with the limitations articulated by court precedents.  The
  classic example of this analysis in the First Amendment context is the case
  Ward v. Illinois, 431 U.S. 767 (1977), where the United States Supreme
  Court upheld an Illinois obscenity statute that would have been
  unconstitutionally overbroad if it had not been construed to incorporate
  judicial precedents.  An earlier case, Miller v. California, 413 U.S. 15,
  24 (1973), had established a requirement that a state obscenity law "as
  written or authoritatively construed" (emphasis added) had to delineate
  with specificity the kinds of sexual conduct the description or
  representation of which the state intended to proscribe.  In its Ward
  decision, the United States Supreme Court held that the Illinois statute
  was not unconstitutionally overbroad even though the statute on its face
  failed to identify specifically the kinds of sexual conduct the depiction
  of which was to be prohibited.  Ward, 431 U.S.  at 774-76.  The Supreme
  Court found that because prior decisions of the Illinois Supreme Court
  incorporated the Miller guidelines into the obscenity statute, the Illinois
  statute was constitutional.  Ward, 431 U.S.  at 776-777. 
       ¶  41.  I read Ward to stand for the proposition that rulings of
  federal courts and this Court are relevant to the appropriate construction
  of the vanity plate statute.  Authoritative judicial decisions are relevant
  and should guide an agency's discretion when interpreting a statute that is
  ambiguous.  Of special relevance for Vermont's vanity plate program is a
  Second Circuit decision examining whether Vermont's vanity plate
  restrictions represent an unconstitutional prior restraint on speech.  This
  decision, Perry v. McDonald, 280 F.3d 159, 169-70, 172-73 (2d Cir. 2001),
  holds that any speech restrictions in the context of vanity plates must be
  viewpoint neutral, supporting DMV's interpretation of the statute.

       ¶  42.  The decision in Perry makes clear that the free speech
  interests at stake in vanity plates are limited.  "Because vanity plates
  are physically restricted by size and shape and by the state's interests,
  including that of vehicle identification, vanity plates are a highly
  limited and extremely constrained means of expression."  Id. at 168. 
  Nevertheless, whenever the government becomes involved in limiting
  expression in any way, First Amendment concerns become paramount.  Federal
  courts have developed an analytical method known as "forum analysis" to
  determine what types of speech restrictions are permissible.  Under forum
  analysis, all government property is classified as a nonpublic forum, a
  designated public forum, or a public forum.  See, e.g., Cornelius v. NAACP
  Legal Def. & Educ. Fund, Inc., 473 U.S. 788, 802 (1985); Perry Educ. Ass'n
  v. Perry Local Educators' Ass'n, 460 U.S. 37, 45-46 (1983); Perry v.
  McDonald, 280 F.3d  at 166.  Whether a speech restriction is permissible
  depends upon what kind of forum is in play.  
       ¶  43.  The Second Circuit reviewed Vermont's vanity plate program in
  2001, and concluded that Vermont vanity plates are a nonpublic forum, as
  opposed to a public forum, for the following reasons.  Perry v. McDonald,
  280 F.3d  at 167.  First, the stated goal of Vermont in issuing vanity
  plates, and all license plates, is to aid in vehicle identification.  Id. 
  Second, Vermont's vanity plate program is designed to earn revenue, not to
  provide Vermonters with a venue for public expression. Id.  Third,
  expression on vanity plates is subject to many restrictions, such as
  limitations on the number of letters that can appear on a plate and the 23
  V.S.A. § 304(d) provision allowing the commissioner to deny a request for a
  special plate that might be considered "offensive or confusing to the
  general public."  Id. at 167-68.  Fourth, the statute requires that
  Vermonters obtain permission from the State to obtain a vanity plate,
  rather than allowing them to obtain a plate automatically.   Id. at 166. 
  Once vanity plates have been found to be a nonpublic forum, forum analysis
  defines what speech limits are tolerated by the Constitution.  In a
  nonpublic forum, restrictions on expressive activity are allowed as long as
  they are reasonable and viewpoint neutral.  Perry Educ. Ass'n, 460 U.S.  at
  46; Cornelius, 473 U.S.  at 800; Perry v. McDonald, 280 F.3d  at 166. (FN7)
       ¶  44.  The reasonableness standard is easily met in the case of
  vanity plates.  The interest of the State in not alienating members of the
  public who see government property being used to send a message they find
  offensive or confusing is sufficient.  Because the vanity plate
  restrictions do not prevent motor vehicle owners from communicating
  messages on their automobiles through the use of bumper stickers, the State
  can demonstrate that the regulation is reasonably "directed not to
  suppressing, but to disassociating the [state] from [plaintiff's] speech." 
  Gen. Media Communications, Inc. v. Cohen, 131 F.3d 273, 281 n.10 (2d Cir.
  1997); see also Perry v. McDonald, 280 F.3d  at 169-70. 

       ¶  45.  Having found the regulation reasonable, viewpoint neutrality
  is left as the principal limitation on the government's discretion to limit
  speech in a nonpublic forum. (FN8)   See L. Jacobs, The Public
  Sensibilities Forum, 95 Nw. U. L. Rev. 1357, 1371-72 (2001).  Viewpoint
  neutrality is a difficult hurdle for the government, and it is concern with
  meeting this requirement that led DMV to issue the regulation banning all
  ethnic terms that is at issue in this case. 
       ¶  46.  The Second Circuit has interpreted viewpoint neutrality as
  permitting the government to prohibit speech on a particular subject, as
  long as the government does not prohibit the expression of particular views
  about otherwise permissible subjects.  Perry v. McDonald, 280 F.3d  at 170
  (explaining that "the government may reasonably restrict expressive
  activity in a nonpublic forum on the basis of content, but not on the basis
  of the speaker's viewpoint"). (FN9)  See also Lebron v. Nat'l R.R.
  Passenger Corp., 69 F.3d 650, 658-59 (2d Cir. 1995) (upholding Amtrak's
  categorical ban on political advertising on an Amtrak-owned billboard as
  permissible because ban covers entire subject rather than being used to
  screen out only certain views).  Although categorical bans have been held
  to be viewpoint neutral, the line between viewpoint regulation and content
  regulation is not always clear.  The Supreme Court has noted that viewpoint
  regulation is an impermissible form of content discrimination, suggesting
  that there is no "either-or" distinction but, instead, that certain types
  of content restrictions are unlawful as viewpoint discrimination. 
  Rosenberger v. Rector & Visitors of  Univ. of Va., 515 U.S. 819, 829 (1995)
  ("Viewpoint discrimination is . . . an egregious form of content
  discrimination.  The government must abstain from regulating speech when
  the specific motivating ideology or the opinion or perspective of the
  speaker is the rationale for the restriction."). 
       ¶  47.  As the majority in Rosenberger observed, the distinction
  between content and viewpoint discrimination "is not a precise one."  Id.
  at 831.  This imprecision  makes for unclear law, inconsistent decisions,
  and as the case before us today demonstrates, creates uncertainty about the
  constitutionality of government programs.  Nowhere is the murkiness of the
  term viewpoint neutrality more apparent than in a review of case law
  involving vanity plates where state governments have unsuccessfully tried
  to defend rules restricting plate content.  See Lewis v. Wilson, 253 F.3d 1077, 1080-82 (8th Cir. 2001) (striking Missouri statute prohibiting plates
  that are "contrary to public policy" as discriminating on the basis of
  viewpoint and ordering state to issue ARYAN plate); Sons of Confederate
  Veterans, Inc. v. Holcomb, 129 F. Supp. 2d 941, 946 (W.D. Va. 2001)
  (finding impermissible viewpoint-based discrimination in a Virginia statute
  that had prevented the Sons of Confederate Veterans from placing their
  logo, which incorporates the Confederate battle flag, on a specialty
  license plate); Pruitt v. Wilder, 840 F. Supp. 414, 417-19 (E.D. Va. 1994)
  (ordering State to issue "GODZGUD" plate despite ban on references to
  deities because barring references to deities while allowing other types of
  religious speech discriminates on the basis of the speaker's viewpoint). 

       ¶  48.  None of these vanity plate decisions provides a clear
  definition for the term "viewpoint discrimination." (FN10)  Two general
  principles can be gleaned from them, however, about the factors that courts
  look to as indications of possible viewpoint neutrality violations.  First,
  the more specific a prohibition is within a broad category, the more likely
  it is to be viewpoint discrimination instead of a permissible content
  restriction (i.e, religious speech can be banned entirely, but references
  to deities only has been found to violate viewpoint neutrality).  Second,
  the government must provide procedural protections to ensure that its
  agencies do not engage in viewpoint discrimination.  

       ¶  49.  The term "viewpoint neutral" is probably a source of more
  confusion than clarity in judicial decisions.  Nevertheless, my reading of
  the case law leads me to conclude that DMV's regulation banning all
  references to ethnicity on vanity plates meets the test for viewpoint
  neutrality.  The regulation provides a crystal-clear standard for DMV staff
  to use in evaluating plate applications, preventing possible bias towards
  one ethnicity or another by banning them all.  The motivation for the ban
  is not to insult a particular ethnicity but simply to take a controversial
  area of discourse off of state-issued license plates.  By banning all
  references to ethnicity, the agency has ensured that decisions will not be
  arbitrary or viewpoint-based.  

       ¶  50.  The majority never proposes a method that DMV could use to
  evaluate vanity plates that would both ensure that all rejected plates were
  "offensive" (in whatever sense the Legislature intended in §304(d)) and
  ensure viewpoint neutrality.  The majority proposes that DMV "may establish
  lists of combinations of numbers and letters that might be offensive . . .
  . [and] exclude entire categories comprised exclusively of words that might
  offend the general public."  Ante, at  31.  The majority's proposal
  effectively throws viewpoint neutrality out the window.  Any list would
  reflect the viewpoint of its makers as to where to draw the lines in terms
  of what terms are ethnic insults and what terms are positive expressions of

       ¶  51.  The Legislature has not specifically indicated to DMV that it
  wishes the agency to ignore the First Amendment in implementing the vanity
  plate program.  Given the requirements of viewpoint neutrality, DMV was
  justified in promulgating a regulation that took certain categories
  containing potentially offensive terms off the table.  
       ¶  52.  I am authorized to state that Justice Dooley joins in this

                                       Associate Justice


FN1.  Moreover, any contention that DMV has either the expertise or
  information to gauge the sensitivity of the general public to the offense
  generated by "IRISH" would leave unexplained why, in the previous fifteen
  years, DMV had approved Martin's requests for an "IRISH" truck plate, an
  "IRISH1" conservation plate, and "IRISH1" and "IRISH2" car plates.

FN2.  In relevant part, the June 2000 amended regulation provides that
  requests for combinations of letters and numbers "that might be offensive
  or confusing to the general public" will not be issued.  DMV Rule 16I.(f)
  (Registration Plates), 8A Code of Vt. Rules 14 050 025-2 to 14 050 025-3
  (2000).  The regulation sets forth seven categories making up a
  non-exhaustive list of combinations that will not be issued, including "(4)
  Combination of letters, or numbers that refer, in any language, to a race,
  religion, color, deity, ethnic heritage, gender, sexual orientation,
  disability status, or political affiliation."  DMV Rule 16I.(f)
  (Registration Plates), 8A Code of Vt. Rules 14 050 025-3 (2002).

FN3.  A plate would be "confusing" if its combination of letters and numbers
  made it difficult to read or to identify in relation to other similar
  plates.  No one is suggesting that "IRISH" is confusing.

FN4.  The United States Supreme Court has employed a "forum" analysis in
  determining the level of protection provided by the First Amendment when
  the government seeks to restrict speech in connection with the use of its
  property.  See Cornelius v. NAACP Legal Def. & Educ. Fund, Inc., 473 U.S. 788, 802 (1985); Perry v. McDonald, 280 F.3d 159, 166 (2d Cir. 2001). 
  Government regulation of speech in traditional public fora (property such
  as public streets and parks that has been devoted by long tradition to
  assembly and debate)  and designated public fora (property in which the
  government has purposefully opened a nontraditional forum for public
  debate) is subject to strict scrutiny under the First Amendment.  Perry,
  280 F.3d  at 166.  Other government properties are considered nonpublic fora
  in which the government may impose restrictions on speech as long as the
  restrictions are reasonable and viewpoint-neutral.  Id.

FN5.  While the word "offensive" may be susceptible to different meanings,
  as the dissent points out - for example, it may mean aggressive or
  repugnant, or it may even designate on what side of the ball a football
  player is lined up - neither the word "offensive" nor the word "confusing"
  in the context of § 304(d) makes that statute ambiguous.  

FN6.  The dissent seems to suggest that DMV's regulation was compelled by
  federal case law - in particular, Perry v. McDonald, 280 F.3d 159 (2d Cir.
  2001).  The dissent's reliance on Perry is misplaced.  In that case, the
  Second Circuit Court of Appeals held that the Vermont vanity plate
  applicant did not have a First Amendment right to use vanity plates bearing
  the letters "SHTHPNS."  Id. at 163.  In rejecting the applicant's argument
  that the State had engaged in viewpoint discrimination by allowing plates
  referencing "cute" scatological terms while rejecting his request, the
  court emphasized that § 304(d) concerns "offensive scatological terms, not
  just scatological terms."  Id. at 170.  According to the court, the
  difference between the applicant's request and others was not that the
  others were "cute," but rather that they did not include easily
  recognizable profanities, as did the applicant's.  Id.  As the court
  stated, the relevant difference between "shit" and "pooper" is that the
  former is a profanity, and therefore offensive.  Id. at 170-71.  Thus,
  Perry indicates what the court would have done with "MICK," not what it
  would have done with "IRISH." In any event, Perry certainly does not
  suggest that DMV's regulation is the only reasonable way for the agency to
  implement the Legislature's vanity program without running afoul of the
  First Amendment.

FN7.  If I were writing at a time before nonpublic forum analysis became an
  entrenched part of First Amendment case law, I would not impose the First
  Amendment protections that the Second Circuit and the United States Supreme
  Court have determined are necessary for a nonpublic forum upon Vermont's
  vanity plate program.  The vanity plate program is the State's program,
  aimed at making money and identifying vehicles, not at providing a forum
  for meaningful speech.  As the Second Circuit stated, "[a]utomobile license
  plates are governmental property intended primarily to serve a governmental
  purpose, and inevitably they will be associated with the state that issues
  them. . . . The state has a legitimate interest in not communicating the
  message that it approves of the public display of offensive . . . terms on
  state license plates."  Perry v. McDonald, 280 F.3d  at 169.  Accord Higgins
  v. DMV, 13 P.3d 531, 534 (Or. Ct. App. 2000) (en banc) ("[T]he opportunity
  to propose a message does not change the fact that the plates constitute a
  state communication for a state purpose.").  Moreover, I do not find the
  speech interest compelling because prohibiting a term on a vanity plate
  does not prevent vehicle owners from conveying the same message through a
  bumper sticker affixed to their car.  Bumper stickers have historically
  provided Vermonters with a much more expressive forum than vanity plates
  and Vermonters have shown no reluctance to use them to make humorous,
  political, and religious statements.  For a thoughtful analysis of the
  limits of such a "public sensibilities forum," see L. Jacobs, The Public
  Sensibilities Forum, 95 Nw. U. L. Rev. 1357, 1436 (2001) (proposing that in
  contexts such as vanity plates where the government is creating a speech
  opportunity and an unwilling audience will likely view the resulting
  communication, the government and the public it serves should not be
  required to tolerate "the same range of 'outrageous' speech" that they must
  in other contexts as long as appropriate procedural safeguards are

FN8.  Appellant cites R.A.V. v. City of St. Paul, 505 U.S. 377, 382 (1992)
  for the proposition that "[c]ontent-based regulations are presumptively
  invalid," but this case is not on point because it does not involve a
  nonpublic forum.  Cf. Cornelius, 473 U.S.  at 800 (noting that "the Court
  has adopted a forum analysis as a means of determining when the
  Government's interest in limiting the use of its property to its intended
  purpose outweighs the interest of those wishing to use the property for
  other purposes" and that "[a]ccess to a nonpublic forum . . . can be
  restricted as long as the restrictions . . . [are] not an effort to
  suppress expression merely because public officials oppose the speaker's
  view" (internal quotations omitted)). 

FN9.  The majority emphasizes the parts of the Perry v. McDonald decision
  recognizing § 304(d)'s reference to "offensive" plates.  It asserts that
  nothing in Perry v. McDonald precludes the agency from including
  offensiveness among the criteria for rejecting plates.  I agree that the
  Second Circuit does not pass judgment on exactly how DMV must interpret its
  vanity plate regulation to ensure that the regulation passes constitutional
  muster in cases less egregious then a license plate bearing a profanity. 
  Perry v. McDonald is unwavering, however, in its insistence that in a
  nonpublic forum such as state-issued vanity plates, Vermont cannot restrict
  expression on the basis of viewpoint.  Perry v. McDonald, 280 F.3d  at 167,
  169-70, 172-73.  So the question becomes, how does DMV figure out what
  policies would ensure that it does not engage in unconstitutional
  viewpoint-based discrimination?  Perry v. McDonald is not the end of the
  story and does not control the outcome of this case.  What it does do is
  provide DMV with a legal basis for interpreting its vanity plate
  regulations in a way that is intended to conform as closely as possible
  with existing case law on viewpoint neutrality.  Whether DMV has an
  adequate basis for the regulation is subject to review by state courts, as
  we are asked to do today.  Because I find that free speech considerations
  are inextricably intertwined with the issues at stake in this case, I would
  recognize DMV's obligation to look at decisions such as Perry v. McDonald
  as it develops its vanity plate regulatory program for judicial guidelines
  on what is meant by viewpoint neutrality.  While Perry v. McDonald does
  suggest that DMV may consider "offensiveness" in distinguishing between
  "cute" scatological terms and profanities, id. at 169, 170-71, the
  regulation on ethnicity approaches much more sensitive areas of speech,
  bound up with identity, and thus the ability of the agency to consider
  "offensiveness" in this context while maintaining viewpoint neutrality is
  more doubtful. 

FN10.  Nor can a clear definition be found in the United States Supreme
  Court's nonpublic forum jurisprudence.  The Supreme Court has split
  repeatedly over the proper application of the requirement of viewpoint
  neutrality since the concept was introduced as the required standard for a
  nonpublic forum.  See Perry Educ. Ass'n, 460 U.S.  at 49, 64-65 (5-4
  decision) (split over whether discrimination on the basis of the identity
  of speaker constitutes viewpoint discrimination); Rust v. Sullivan, 500 U.S. 173, 194, 209 (1991) (5-4 decision) (split over whether gag rule
  imposed on recipients of federal funding was viewpoint discrimination);
  Rosenberger, 515 U.S.  at 831, 893 (5-4 decision) (split over whether denial
  of subsidies by a public university to a religious student organization is
  impermissible viewpoint discrimination).