Title: McLane Company, Inc. v. Richard A. Weiss, Director of the Arkansas Department of Finance and Administration et al.

State: arkansas

Issuer: Arkansas Supreme Court

Document:

McCLANE COMPANY, INC. v. Richard A. WEISS, 
Director of the Arkansas Department of
Finance and Administration, and 
Tim Leathers, Commissioner of Revenue for the
State of Arkansas. 
Earl Gill Wholesale, Inc.; Glidewell
Distributing, Inc.; Shinn Wholesale Co.,
Inc.; Tom Fitts Tobacco Co., Inc.; Warehouse
Distributing Co., Inc.; Southern Cigar &
Candy, Inc.; M & K Grocer Co., Inc.;
Northwest Tobacco & Candy Co., Inc.; and
Douglas Tobacco Co., Inc., Intervenors

97-559                                             ___ S.W.2d ___

                    Supreme Court of Arkansas
                Opinion delivered March 19, 1998


1.   Statutes -- Unfair Cigarette Sales Act -- pertinent
     provisions. -- The Unfair Cigarette Sales Act defines the cost
     to wholesalers as the wholesaler's basic cost of the
     cigarettes plus the cost of doing business as evidenced by the
     standards and methods of accounting regularly employed by the
     wholesaler; the Act provides that, in the absence of proof of
     a lesser or higher cost of doing business by the wholesaler
     making the sale, the cost of doing business shall be presumed
     to be two percent of the basic cost of the cigarettes to the
     wholesaler plus cartage to the retailer outlet, which cartage
     cost in the absence of proof of a lesser or higher cost, shall
     be presumed to be three-fourths of one percent of the
     wholesaler's basic cost of the cigarettes. 

2.   Statutes -- Miscellaneous Tax Regulations 1988-2 -- pertinent
     provisions. -- Under the enforcement authority granted by the
     Unfair Cigarette Sales Act, the Director of the Department of
     Finance and Administration promulgated Miscellaneous Tax
     Regulations 1988-2, which provides that a wholesaler's cost of
     doing business is presumed to be four percent, not the two
     percent set out in the Act; the regulation stated that the
     four percent cost of doing business had been determined as a
     result of cost surveys and other information compiled and
     received.  

3.   Appeal & error -- dismissal argument previously considered --
     argument not addressed. -- Intervenors' initial argument that
     appellant's appeal should be dismissed for its having failed
     to comply with Ark. R. App. P. 5(b) by obtaining an improper
     extension and filing an untimely record was not addressed
     where intervenors' dismissal motion was previously considered
     and denied by the supreme court. 

4.   Appeal & error -- vagueness argument not addressed below --
     argument not reached on appeal. -- Where the intervenors'
     preservation-of-issue argument concerning appellant's
     contention that both the Act and the Regulation were so vague
     that they could be and had been arbitrarily enforced was not
     addressed in the chancellor's order, and the chancery court
     did not rule on the issue, the supreme court did not reach the
     matter. 

5.   Appeal & error -- argument that Regulation 1988-2 was facially
     inconsistent with Act adequately preserved. -- Intervenors'
     preservation-of-issue arguments concerning appellant's
     contention that Regulation 1988-2 was facially inconsistent
     with the Unfair Cigarette Sales Act was adequately preserved
     for review where appellant, in its summary-judgment motion,
     contended that Regulation 1988-2 was contrary to the Act and
     invalid, and, in response, the trial court summarily rejected
     appellant's contention by ruling that the regulation was
     neither arbitrary nor contrary to the Act.  

6.   Appeal & error -- intervenor's claim that appellant was
     precluded from arguing Unfair Cigarette Sales Act's validity
     under Due Process Clause in Art. 2,  8, of Arkansas
     Constitution without merit -- issue preserved for review. --
     Appellant's reliance on Ports Petroleum v. Tucker, 323 Ark.
     680, 916 S.W.2d 749 (1996), and Wal-Mart Stores, Inc. v.
     American Drugs, Inc., 319 Ark. 214,