Source: http://masscases.com/cases/sjc/401/401mass612.html
Timestamp: 2019-04-23 23:51:13+00:00

Document:
CIVIL ACTION commenced in the Superior Court Department on January 19, 1984.
The case was heard by Joseph S. Mitchell, Jr., J., on a master's report.
Evan T. Lawson (William F. Coyne, Jr., with him) for the plaintiff.
Mark A. Michelson (Andrew J. Freed with him) for M-H U.S.A. Corp.
Douglas H. Wilkins, Assistant Attorney General, for Alcoholic Beverages Control Commission.
Comm'n, 16 Mass. App. Ct. 156 (1983). The case was remanded to the ABCC for further consideration.
The ABCC reheard the case in September, 1983. The parties agreed that the rehearing would be based on the record developed during the original hearing. The ABCC again ruled in favor of M-H U.S.A. Pastene appealed to the Superior Court, where the judge referred the case to a special master. The parties stipulated to the relevant facts, and the special master recommended that the ABCC decision be upheld. On September 29, 1986, the Superior Court judge concluded that the findings and rulings contained in the first Superior Court decision were correct, and that the ABCC decision again should be affirmed. Pastene appealed to the Appeals Court, and we transferred the case on our own motion. We affirm.
sales to Pastene. These findings were adopted by the Superior Court.
The parties are bound by the facts contained in their stipulation to the Superior Court. See Dalton v. Post Publishing Co., 328 Mass. 595 , 599 (1952). Pastene, claiming it was misled by opposing counsel, urges this court to relieve it of the stipulation that Schieffelin was liquidated. See Pereira v. New England LNG Co., 364 Mass. 109 , 114 (1973) (party is bound by stipulation unless court "vacates it as improvident or not conducive to justice"). Pastene contends that Schieffelin actually was merged into M-H U.S.A. Pastene has made a motion to supplement the record pursuant to Mass. R. A. P. 8 (e), as amended, 378 Mass. 924 (1979), to include what appear to be documents filed with the State of Delaware in July of 1981, accomplishing the merger. This evidence was not presented to the ABCC nor did Pastene argue to the ABCC that Schieffelin was merged into M-H U.S.A. and not liquidated.
The ABCC's findings that Moet-Hennessy and M-H U.S.A. did not acquire and liquidate Schieffelin in order to circumvent Section 25E, and that M-H U.S.A. never made sales to Pastene, will be upheld if based on substantial evidence. See Boylston-Washington, Inc. v. Alcoholic Beverages Control Comm'n, 8 Mass. App. Ct. 396 , 398 (1979). The record of the first ABCC hearing which, by the parties' agreement, was used at the second hearing as well, consists of statements of fact related and agreed to by the parties' counsel, and the testimony of one witness. The facts, as stated, established that the acquisition of Schieffelin cost Moet-Hennessy in excess of $48,000,000, and the witness testified that the subsequent liquidation resulted in a tax saving of approximately $7,000,000. The agreed facts also indicate that new management was installed at Schieffelin and that M-H U.S.A. instituted operational changes once it was licensed and Schieffelin had been liquidated. These factors indicate that Moet-Hennessy and M-H U.S.A. had entered into a large scale corporate transaction with the intention of operating an ongoing liquor importing and distributing business. In sum, the record contains substantial evidence supporting the ABCC's finding that the acquisition and liquidation of Schieffelin was not undertaken in order to circumvent Section 25E. Similarly, counsels' statement that M-H U.S.A. never made sales to Pastene supports the ABCC's finding to that effect.
importer "has made regular sales of such brand item [to the wholesaler] during a period of six months preceding any refusal to sell." Pastene makes two arguments that, on the facts as found below, M-H U.S.A.'s refusal to sell it Moet-Hennessy brand items, as Schieffelin had prior to Schieffelin's liquidation, is a violation of Section 25E.
First, Pastene contends that, because Section 25E evinces a policy of avoiding vertical integration in the liquor distribution industry by protecting wholesalers from the superior economic position of manufacturers and importers, this court should rule that when M-H U.S.A. began distributing the products which Schieffelin had previously distributed, it assumed Shieffelin's Section 25E obligations. To rule otherwise, Pastene contends, would allow manufacturers such as Moet-Hennessy to avoid Section 25E obligations by shifting its intermediaries. Pastene claims that a number of ABCC rulings take this approach. Pastene's second argument is that Schieffelin's sales to Pastene from January 5, 1981, through June 30, 1981, when Schieffelin was a subsidiary of M-H U.S.A., should be attributed to M-H U.S.A., and thereby establish direct Section 25E obligations from M-H U.S.A. to Pastene.
The ABCC rejected Pastene's arguments. As to the first argument, the ABCC concluded that, because M-H U.S.A. had never made sales to Pastene, the protections afforded by Section 25E did not apply. [Note 4] As to the second argument, the ABCC ruled that there was no legal basis from which to impute the January 5, 1981, through June 30, 1981, Schieffelin sales to M-H U.S.A. The ABCC further ruled that, even if these sales were imputed to M-H U.S.A., those sales continued for a period of less than six months and, therefore, Section 25E was not satisfied.
We uphold the ABCC's ruling on Pastene's first argument. The ABCC found, and it is undisputed, that M-H U.S.A. made no direct sales to Pastene. Because Section 25E applies only if a supplier refusing to sell had previously sold to the wholesaler refused, M-H U.S.A. itself created no Section 25E obligations to Pastene. In order for Pastene to prevail on the first argument, therefore, there must be some basis for imputing Schieffelin's Section 25E obligations to M-H U.S.A. upon Schieffelin's liquidation.
six months. Such a construction distorts the plain meaning of the words the Legislature chose and, therefore, is to be rejected. See Burke v. Chief of Police of Newton, 374 Mass. 450 , 452, 453 (1978). Further, a review of G. L. c. 138 indicates that, where the Legislature has intended to focus on "any sale within" a preceding period of months, it has stated that intent in those words. See G. L. c. 138, Section 25A ("Any sale . . . within such thirty day period"); G. L. c. 138, Section 43 (evidence of unlawful sale "within one month"); G. L. c. 138, Section 69 (sale to person known to have been intoxicated "within the six months last preceding"). The absence of this language in Section 25E indicates that the Legislature intended that there be a regular course of dealing for a full six months before suppliers are obligated to continue sales to wholesalers. The Schieffelin sales that Pastene argues are attributable to M-H U.S.A. did not continue for the requisite six months.
[Note 1] M-H U.S.A. Corp.
[Note 2] General Laws c. 138, Section 25E (1986 ed.), provides as follows: "It shall be an unfair trade practice and therefor unlawful for any manufacturer, winegrower, farmer-brewer, importer or wholesaler of any alcoholic beverages, to refuse to sell, except for good cause shown, any item having a brand name to any licensed wholesaler to whom such manufacturer, winegrower, farmer-brewer, importer or wholesaler has made regular sales of such brand item during a period of six months preceding any refusal to sell.
"(e) failure to comply with the terms of sale agreed upon between supplier and wholesaler."
[Note 3] In its motion to supplement the record, Pastene also requested that a copy of a supplemental memorandum submitted to the Superior Court, but not included in the record on appeal, be added to the record. We grant that portion of Pastene's motion to supplement, so that our review will be of a full and complete record. See Mass. R. A. P. 8 (e).
[Note 4] In its brief, Pastene argues that the ABCC did not adequately rule on the argument that "as a matter of public policy the ultimate suppliers of alcoholic beverages must be bound by Section 25E, and that that responsibility cannot be avoided by adding, removing, or changing intermediaries." See G. L. c. 30A, Section 11 (8) (1986 ed.). We reject this argument because the ABCC decision contains sufficient reasoning to allow appellate review of the conclusion that "the protections afforded by . . . Section 25E do not apply" in the circumstances of this case. See Maddocks v. Contributory Retirement Appeal Bd., 369 Mass. 488 , 497 (1976).
[Note 5] Pastene's motion to remand this case in light of these later ABCC decisions was denied by the special master. Pastene's one-sentence statement to this court, that denial of the motion was an abuse of discretion, does not rise to the level of appellate argument. See Mass. R. A. P. 16 (a) (4), as amended, 367 Mass. 919 (1975). We conclude, in any event, that the ABCC decisions relied on are distinguishable. See Ruby Wines, Inc v. Champagne Louis Roederer, ABCC decision, April 29, 1986 (where manufacturer's agent made sales to wholesalers, the Section 25E obligations created are imputable to manufacturer when it begins direct distribution); Kelly-Dietrich, Inc. v. Austin-Nichols Co., ABCC decision, April 15, 1986 (where supplier assigns its right to distribute product, acquirer of right assumes existing Section 25E obligations); Classic Wine Imports, Inc. v. Sutter Home Winery, Inc., ABCC decision, April 9, 1986 (where manufacturer's agent made sales to wholesalers, Section 25E obligations created are imputable to manufacturer when it begins direct distribution). In the case before us, there is no finding of any agency relationship between Moet-Hennessy or M-H U.S.A. and Schieffelin, and no finding that there was an assignment of the rights to distribute products. Finally, the more recent ABCC decision in Martignetti Grocery Co. v. Seagram Wine Co., ABCC decision, June 4, 1987, brought to our attention in the ABCC's brief, does not make clear the underlying facts at issue. The decision is, therefore, of no assistance in determining the merits of this case.
[Note 6] Pastene also argues that Schieffelin's Section 25E obligations should be imputed to M-H U.S.A. as a matter of corporate law. First, Pastene contends that because Schieffelin was merged into M-H U.S.A., M-H U.S.A. acquired Schieffelin's Section 25E obligations. This argument is contrary to the stipulation that Schieffelin was liquidated. Second, Pastene contends that even if M-H U.S.A. acquired Schieffelin's assets, rather than merging with Schieffelin, it is proper to impute Schieffelin's Section 25E obligations to M-H U.S.A. because: (1) the transaction amounted to a merger; (2) no consideration was paid to Schieffelin at the time of the liquidation; and (3) M-H U.S.A. was a mere continuation of Schieffelin, citing Cyr v. B. Offen & Co., 501 F.2d 1145 (1st Cir. 1974). Because Pastene did not make this argument to the ABCC, it may not now be raised on appeal. Albert v. Municipal Court of the City of Boston, 388 Mass. 491 , 493 (1983).

References: v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v.