White Light Corp. v. Manila

Manila Ordinance No. 7774, approved on December 3, 1992, prohibited "short-time admission" and "wash-up rate" schemes in hotels, motels, inns, lodging houses, pension houses and similar establishments in Manila. Short-time admission was defined as admitting guests and charging room rates for less than twelve hours, or renting out rooms more than twice a day. Violators faced a fine, imprisonment or both, and automatic cancellation of the business license on a later conviction. Malate Tourist and Development Corporation sued for declaratory relief in the Manila RTC, then withdrew. Petitioners White Light Corporation, Titanium Corporation and Sta. Mesa Tourist and Development Corporation, operators of hotels and motels, intervened. The RTC declared the ordinance void. The City's petition to the Supreme Court was referred to the Court of Appeals. Before the CA, the City invoked Section 458 (4)(iv) of the Local Government Code and the Revised Manila Charter. The CA reversed and upheld the ordinance. It held that the ordinance did not violate privacy or freedom of movement because it penalized only the establishments, and that it had a lawful object, curbing immoral activities, and a lawful method, because the establishments could still operate. Petitioners then filed a Rule 45 petition.

1. 1Whether petitioners have standing to assert the constitutional rights of their patrons
2. 2Whether Ordinance No. 7774 is a valid exercise of police power consistent with due process

The petition was granted. On standing, the Court applied third-party standing. Petitioners suffered injury-in-fact to their business, had a close relation to their patrons, and the patrons faced hindrances to suing on their own. Alternatively, the overbreadth doctrine applied. So petitioners could invoke their clients' rights. On the merits, a valid ordinance must be within corporate powers, be enacted by the proper procedure, and meet six substantive requisites. Among them, it must not contravene the Constitution or a statute, must not be unfair or oppressive, and must not be unreasonable. The case was decided under substantive due process (Section 1, Article III). The Court described the standards of review: rational basis, intermediate scrutiny and strict scrutiny. It held that the patrons' liberty and privacy interests, as recognized in City of Manila v. Laguio and Morfe v. Mutuc, were at stake. Curbing illicit sex, prostitution and drug use is a legitimate aim. But the means must be reasonably necessary and not unduly oppressive, and no less intrusive alternative must be available. The ordinance was "a blunt and heavy instrument". It made no distinction between establishments, blocked legitimate short stays such as families waiting out power outages or travelers washing up between trips, and could be evaded by paying the full-day rate. Enforcing existing laws against prostitution and drugs would be less intrusive. The Court reiterated that "individual rights may be adversely affected only to the extent that may fairly be required by the legitimate demands of public interest or public welfare." Disposition: the CA decision was reversed, the RTC decision reinstated, and Ordinance No. 7774 declared unconstitutional.