Source: https://www.legalcrystal.com/case/101405/seagram-sons-vs-hostetter
Timestamp: 2018-02-18 22:30:56
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Matched Legal Cases: ['§ 9', '§ 9', '§ 9', '§ 7', '§ 9', '§ 9', '§9', '§ 9', '§ 9', '§ 101', '§ 9', '§ 9', '§ 9', '§ 9', '§ 9', '§ 9', '§ 9', '§ 7', '§ 9', '§ 9', '§ 9', '§ 9', '§ 9', '§ 7', '§ 7', '§ 7', '§ 8', '§ 11', '§ 101']

Seagram and Sons Vs Hostetter - Citation 101405 - Court Judgment | LegalCrystal
Seagram and Sons Vs. Hostetter - Court Judgment
LegalCrystal Citation legalcrystal.com/101405
Case Number 384 U.S. 35
Appellant Seagram and Sons
Respondent Hostetter
seagram & sons v. hostetter - 384 u.s. 35 (1966) u.s. supreme court seagram & sons v. hostetter, 384 u.s. 35 (1966) seagram & sons v. hostetter no 545 argued february 23, 1966 decided april 19, 1966 384 u.s. 35 appeal from the court of appeals of new york syllabus appellants, distillers, wholesalers, or importers of distilled spirits, sued in a new york court to enjoin enforcement principally of § 9 of chapter 531, 1964 session laws of new york, and to secure a declaratory judgment of its unconstitutionality under the commerce clause, the supremacy clause, and the due process and equal protection clauses of the fourteenth amendment. section 9, part of a sweeping redirection of new york's policy regulating the sale of.....
Seagram & Sons v. Hostetter - 384 U.S. 35 (1966)
U.S. Supreme Court Seagram & Sons v. Hostetter, 384 U.S. 35 (1966)
1. The provisions of § 9 do not, on their face, unconstitutionally burden interstate commerce in violation of the Commerce Clause. Pp. 384 U. S. 41 -45.
(a) The Twenty-first Amendment, while not operating totally to repeal the Commerce Clause, affords wide latitude to the States in the area of liquor control. P. 384 U. S. 42 .
(b) New York's requirement that liquor prices to domestic wholesalers and retailers be as low as prices offered elsewhere in the country is not unconstitutional. P. 384 U. S. 43 .
(c) The effects of § 9 on appellants' business outside New York are largely conjectural. P. 384 U. S. 43 .
2. The bare compilation of price information on liquor sales to wholesalers and retailers does not, of itself, violate the Supremacy Clause by conflicting with the Sherman Act or the Robinson-Patman Act; any potential conflict with the latter Act is speculative on this record, and could be alleviated by the Liquor Authority's discretionary power under § 7 to change schedule requirements. Pp. 384 U. S. 45 -46.
3. The imposition of state maximum liquor price legislation to deal with the previous resale price maintenance system under which the distillers had exclusive price-fixing powers did not constitute an abuse of legislative discretion in violation of the Due Process Clause. The wisdom of such legislation is not a matter of judicial concern. Pp. 384 U. S. 46 -48.
4. The statutory definition of "related person" does not violate due process requirements by being unconstitutionally vague. Pp. 384 U. S. 48 -50.
(a) Where the determination of "related person" status is unclear, the Liquor Authority can be asked for clarification. P. 384 U. S. 49 .
(b) The number of wholesalers through whom distillers deal being relatively limited, it is not unduly burdensome on the face of § 9 for the distillers to determine the "related person" wholesalers and their prices. Pp. 384 U. S. 49 -50.
5. The exception of consumer sales and private label liquor brands from § 9's "no higher than the lowest price" requirement , and the reduced scope of price affirmations made concerning sales by non-"related persons" do not invidiously discriminate in violation of the Equal Protection Clause. The legislature could reasonably have believed that prices charged by those not covered by §9 would follow the reduced prices charged by distillers and "related persons," and that consumer prices would adequately reflect the reductions at the other levels. Pp. 384 U. S. 50 -51.
of the place of sale or delivery," and that schedules on sales to both wholesalers and retailers include "the net bottle and case price paid by the seller," are constitutional as serving a legitimate interest to regulate New York sales and, as construed by the New York Court of Appeals, can be waived by the Liquor Authority if unrelated to such sales. Pp. 384 U. S. 51 -52.
This appeal draws in question certain provisions of Chapter 531, 1964 Session Laws of New York, which worked substantial changes in the State's Alcoholic Beverage Control Law. The appellants are distillers, wholesalers, or importers of distilled spirits, who commenced this action in a New York court for an injunction and declaratory judgment against the appropriate state officials, upon the ground that § 9 of Chapter 531 violates the Federal Constitution in several respects. [ Footnote 1 ] The trial court upheld the constitutionality of the law, [ Footnote 2 ] and its
judgment was affirmed by the Appellate Division [ Footnote 3 ] and by the New York Court of Appeals. [ Footnote 4 ] The appellants brought the case here, [ Footnote 5 ] and we now affirm the judgment of the Court of Appeals.
Chapter 531 was enacted as the result of a sweeping redirection of New York's policy regulating the sale of liquor in the State. For more than 20 years, the Alcoholic Beverage Control Law (hereinafter ABC Law) had required brand owners of alcoholic beverages or their agents to file with the State Liquor Authority monthly schedules listing the bottle and case price to be charged to wholesalers and retailers within the State. These schedules were publicly displayed, and sales were prohibited except at the listed prices. [ Footnote 6 ] In 1950, the ABC Law was amended by the addition of a section which required brand owners or their agents to file price schedules listing the minimum retail price at which each brand could be sold to consumers and which prohibited retail sales at prices less than those fixed in the schedules. [ Footnote 7 ] The enforcement of these mandatory minimum retail prices was entrusted to the State Liquor Authority, rather than to private action, but the Authority was given no power to determine the reasonableness of the prices that were fixed.
Commission sponsored various study papers and issued a series of reports and recommendations. [ Footnote 8 ] It found unequivocally that compulsory resale price maintenance had had
It also found that New York liquor consumers had been the victims of serious discrimination because of the higher prices and reduced competition fostered by the mandatory minimum price maintenance provision of the law. [ Footnote 9 ] The Commission therefore recommended the repeal of that provision, [ Footnote 10 ] and the ultimate response of the legislature was the enactment of Chapter 531.
The legislature did not stop, however, with repeal of the mandatory resale price maintenance provision of the law. [ Footnote 11 ] In § 9 of Chapter 531, it imposed the additional requirement that the monthly price schedules for sales to wholesalers and retailers filed with the State Liquor Authority must be accompanied by an affirmation that "the bottle and case price of liquor . . . is no higher than the lowest price" at which sales were made anywhere in
Section 9 effects the "no higher than the lowest price" requirement by the addition of paragraphs (d)-(k) to § 101-b, subd. 3, of the ABC Law. The affirmation required by paragraph (d), which must be filed and verified by brand owners or their agents who sell to wholesalers in New York, must cover all sales to wholesalers anywhere in the United States by the brand owner, his agent, or any "related person." The less extensive affirmation required by paragraph (e), which applies to persons other than brand owners or their agents who file schedules for sales to wholesalers, need only cover sales elsewhere by the person filing the schedule. The affirmation required by paragraph (f), which must be filed by brand owners, their agents, or "related persons" who sell to retailers in New York, must be verified by the brand owner or his agent and must cover all sales to retailers anywhere in the United States by the brand owner, his agent, or any "related person." The less extensive affirmation required by paragraph (g), which applies to wholesalers who are not "related persons," need only cover sales elsewhere by the person filing the schedule. [ Footnote 12 ]
As this Court has consistently held, "[t]hat Amendment bestowed upon the states broad regulatory power over the liquor traffic within their territories." United States v. Frankfort Distilleries, 324 U. S. 293 , 324 U. S. 299 . Cf. Nippert v. City of Richmond, 327 U. S. 416 , 327 U. S. 425 , n. 15. Just two Terms ago, we took occasion to reiterate that
Hostetter v. Idlewild Bon Voyage Liquor Corp., 377 U. S. 324 , 377 U. S. 330 . See State Board of Equalization of California v. Young's Market Co., 299 U. S. 59 ; Mahoney v. Joseph Triner Corp., 304 U. S. 401 ; Ziffrin, Inc. v. Reeves, 308 U. S. 132 ; California v. Washington, 358 U. S. 64 . Cf. Indianapolis Brewing Co. v. Liquor Control Comm., 305 U. S. 391 ; Joseph S. Finch & Co. v. McKittrick, 305 U. S. 395 . As the Idlewild case made clear, however, the second section of the Twenty-first Amendment has not operated totally to repeal the Commerce Clause in the area of the regulation of traffic in liquor. In Idlewild, the ultimate delivery and use of the liquor was in a foreign country, and the Court held that, under those circumstances, New York could not forbid sales made under the explicit supervision of the United States Customs Bureau, pursuant to laws enacted by Congress under the Commerce Clause for the regulation of commerce with foreign nations. Cf. Dept. of Alcoholic Beverage Control. v. Ammex Warehouse Co., 378 U. S. 124 ; Collins v. Yosemite Park & Curry Co., 304 U. S. 518 .
company's operations elsewhere as to make the regulation invalid under the Commerce Clause. [ Footnote 13 ] See Baldwin v. G.A.F. Seelig, 294 U. S. 511 . No such situation is presented in this case. The mere fact that § 9 is geared to appellants' pricing policies in other States is not sufficient to invalidate the statute. As part of its regulatory scheme for the sale of liquor, New York may constitutionally insist that liquor prices to domestic wholesalers and retailers be as low as prices offered elsewhere in the country. The serious discriminatory effects of § 9 alleged by appellants on their business outside New York are largely matters of conjecture. It is by no means clear, for instance, that § 9 must inevitably produce higher prices in other States, as claimed by appellants, rather than the lower prices sought for New York. It will be time enough to assess the alleged extraterritorial effects of § 9 when a case arises that clearly presents them.
Osborn v. Ozlin, 310 U. S. 53 , 310 U. S. 62 . Cf. Hoopeston Canning Co. v. Cullen, 318 U. S. 313 ; South Carolina State Highway Dept. v. Barnwell Bros., 303 U. S. 177 , 303 U. S. 189 ; Baldwin v. G.A.F. Seelig, 294 U. S. 511 , 294 U. S. 528 .
State is no higher than the price charged in other States. In at least one of these States, the distillers are required to adjust the sales price to include all rebates and other allowances made to purchasers elsewhere, and the State has taken positive precautions to insure that the contractual commitments are fulfilled. [ Footnote 14 ] In some respects
In this as in other areas of coincident federal and state regulation, the "teaching of this Court's decisions . . . enjoin[s] seeking out conflicts between state and federal regulation where none clearly exists." Huron Portland Cement Co. v. City of Detroit, 362 U. S. 440 , 362 U. S. 446 . We find no such clear conflict in the present case. The bare compilation, without more, of price information on sales to wholesalers and retailers to support the affirmations filed with the State Liquor Authority would not, of itself, violate the Sherman Act. Maple Flooring Mfrs. Assn. v. United States, 268 U. S. 563 , 268 U. S. 582 -586; cf. American Column & Lumber Co. v. United States, 257 U. S. 377 . Section 9 imposes no irresistible economic pressure on the appellants to violate the Sherman Act in order to comply with the requirements of § 9. On the contrary, § 9 appears firmly anchored to the assumption that the Sherman Act will deter any attempts by the appellants to preserve their New York price level by conspiring to raise the prices at which liquor is sold elsewhere
in the country. Nothing in the Twenty-first Amendment, of course, would prevent enforcement of the Sherman Act against such a conspiracy. United States v. Frankfort Distilleries, 324 U. S. 293 , 324 U. S. 299 .
Although it is possible to envision circumstances under which price discriminations proscribed by the Robinson-Patman Act might be compelled by § 9, the existence of such potential conflicts is entirely too speculative in the present posture of this case to support the conclusion that New York is foreclosed from regulating liquor prices in the manner it has chosen. [ Footnote 15 ] Moreover, § 7 of Chapter 531 has amended the ABC Law by granting to the State Liquor Authority ample discretion to modify the schedule requirements. [ Footnote 16 ] We cannot presume that the Authority will not exercise that discretion to alleviate any friction that might result should the ABC Law chafe against the Robinson-Patman Act or any other federal statute.
Ferguson v. Skrupa, 372 U. S. 726 , 372 U. S. 728 -730.
Moreover, nothing in the Twenty-first Amendment or any other part of the Constitution requires that state laws regulating the liquor business be motivated exclusively by a desire to promote temperance. [ Footnote 17 ] The announced purpose of the legislature was to eliminate "discrimination against and disadvantage of consumers" in the State. [ Footnote 18 ] Frustrated by years of unhappy experience
with a state-enforced mandatory resale price maintenance system that placed exclusive price-fixing power in the hands of the distillers, the legislature adopted § 9 as the core of the liquor price reform contemplated by Chapter 531. We cannot say that the legislature acted unconstitutionally when it determined that only by imposing the relatively drastic "no higher than the lowest price" requirement of § 9 could the grip of the liquor distillers on New York liquor prices be loosened. [ Footnote 19 ] In a variety of cases in areas no more sensitive than that of liquor control, this Court has upheld state maximum price legislation. See Nebbia v. New York, 291 U. S. 502 ; Townsend v. Yeomans, 301 U. S. 441 ; O'Gorman & Young v. Hartford Fire Ins. Co., 282 U. S. 251 ; Gold v. DiCarlo, 380 U. S. 520 .
upon the term "principal or substantial." We cannot agree that that language is so vague as to be constitutionally invalid. The Deputy Commissioner of the State Liquor Authority testified in these proceedings that, where the determination of "related persons" is unclear, the appellants will have access to the Authority for a ruling to clarify the issue. [ Footnote 20 ] As the Court said in Board of Governors v. Agnew, 329 U. S. 441 , 329 U. S. 449 ,
Cf. Opp Cotton Mills v. Administrator, 312 U. S. 126 , 312 U. S. 142 -146; Bowles v. Willingham, 321 U. S. 503 , 321 U. S. 512 -516.
Further, as the record indicates, the structure of the liquor industry is such that even the largest national distillers deal through a relatively limited number of wholesalers. [ Footnote 21 ] Frequently, a wholesaler agrees with a distiller not to sell brands of competing distillers in the same price range, and the prices charged by these wholesalers are potentially subject to the influence of the distillers. [ Footnote 22 ] We cannot say, therefore, that § 9, on its face, imposes an unconstitutional burden on distillers or wholesalers in ascertaining the wholesalers who satisfy the
We do not find that these differentiations constitute invidious discrimination. The legislature could reasonably have believed that, once the prices on sales by distillers and "related persons" were reduced, the prices of private label brands and brands sold by non-"related persons" would follow suit. Nor was it necessary for the legislature to impose the "no higher than the lowest price" requirement on sales by retailers to consumers. The legislature might reasonably have concluded that consumer prices would adequately reflect the reductions in prices to wholesalers and retailers accomplished by § 9, even though the state fair trade statute, which permits private resale price maintenance agreements on sales to consumers, appears to have emerged unscathed by the enactment of Chapter 531. [ Footnote 23 ]
Ward, 279 U. S. 337 . "[T]he reform may take one step at a time, addressing itself to the phase of the problem which seems most acute to the legislative mind." Williamson v. Lee Optical Co., 348 U. S. 483 , 348 U. S. 489 .
Although the appellants' primary attack is upon the constitutionality of § 9, they also challenge two minor provisions added by § 7 of Chapter 531 to the schedule requirements of the ABC Law. The first provision, which requires the price schedules to cover sales to wholesalers "irrespective of the place of sale or delivery," is designed to bring wholesalers within the price publicity requirement of the law, even though they take delivery of the liquor outside New York for distribution within the State. The second provision, which requires the price schedules on sales to both wholesalers and retailers to include "the net bottle and case price paid by the seller," tends to promote publicity of the seller's profit margins. [ Footnote 24 ] There is no indication in the present record that the State Liquor Authority will require the appellants to file schedules of prices on sales unrelated to the distribution of liquor in New York. As the Court of Appeals observed with regard to these provisions,
U.S. 415, 371 U. S. 432 . As so construed, these provisions serve a clear and legitimate interest of New York in the exercise of its constitutional power to regulate the sale of liquor within its borders.
The appellants also challenged two minor provisions of § 7 of Chapter 531, 1964 Session Laws of New York. See pp. 384 U. S. 51 -52, infra. The relevant provisions of §§ 7, 8 and 9 of Chapter 531 are set out in the Appendix to this opinion.
Cf. United States v. Frankfort Distilleries, 324 U. S. 293 , 324 U. S. 299 , where we stated that the Twenty-first Amendment
Cf. State of Wisconsin v. Texaco, Inc., 14 Wis.2d 625, 630-631, 111 N.W.2d 918, 921; Safeway Stores v. Oklahoma Retail Grocers Assn., 360 U. S. 334 , 360 U. S. 342 , n. 7.
See State Board of Equalization v. Young's Market Co., 299 U. S. 59 ; Mahoney v. Joseph Triner Corp., 304 U. S. 401 ; Indianapolis Brewing Co. v. Liquor Control Comm., 305 U. S. 391 ; Joseph S. Finch & Co. v. McKittrick, 305 U. S. 395 ; Ziffrin, Inc. v. Reeves, 308 U. S. 132 ; California v. Washington, 358 U. S. 64 .
The preceding portion of § 8 states the intent of the legislature in enacting § 11 of Chapter 531, which repealed § 101-c, the mandatory resale price maintenance provision. See Appendix, infra, p. 384 U. S. 54 .
(f) There shall be filed in connection with and when filed shall be deemed part of any schedule filed for a brand of liquor pursuant to paragraph (b) of this subdivision by the owner of such brand of liquor, or by the wholesaler designated as agent for the purpose of filing such schedule if the owner of the brand of liquor is not licensed by the authority, or by a related person, an affirmation duly verified by such brand owner or such wholesaler designated as agent that the bottle and case price of liquor to retailers set forth in such schedule is no higher than the lowest price at which such item of liquor was sold by such brand owner of [ sic ] such wholesaler designated as agent, or any related person, to any retailer anywhere in any other state of the United States or in the District of Columbia, other than to any state (or state agency) which owns and operates retail liquor stores, at any time during the calendar month immediately preceding the month in which such schedule is filed. As used in this paragraph (f), the term "related person" shall mean any person (1) in the business of which such brand owner or wholesaler designated as agent has an interest, direct or indirect, by stock or other security ownership, as lender or lienor, or by interlocking directors or officers, or (2) the exclusive, principal or substantial business of which is the sale of a brand or brands of liquor purchased from such brand owner or wholesaler designated as agent, or (3) who has an exclusive franchise or contract to sell such brand or brands.