Case Name: WILKE AND HOLZHEISER, INC., Plaintiff and Appellant, v. DEPARTMENT OF ALCOHOLIC BEVERAGE CONTROL et al., Defendants and Respondents
Court: Supreme Court of California
Jurisdiction: California
Decision Date: 1966-12-01
Citations: 65 Cal. 2d 349
Docket Number: S. F. No. 22212
Parties: WILKE AND HOLZHEISER, INC., Plaintiff and Appellant, v. DEPARTMENT OF ALCOHOLIC BEVERAGE CONTROL et al., Defendants and Respondents.
Judges: 
Reporter: California Reports
Volume: 65
Pages: 349–392

Head Matter:
[S. F. No. 22212.
In Bank.
Dec. 1, 1966.]
WILKE AND HOLZHEISER, INC., Plaintiff and Appellant, v. DEPARTMENT OF ALCOHOLIC BEVERAGE CONTROL et al., Defendants and Respondents.
Cerf, Robinson & Leland, Marcel E. Cerf and Herbert A. Leland for Plaintiff and Appellant.
M. Mitchell Bourquin, Barbagelata, Broderick, Carmazzi & Arnold, Rinaldo A. Carmazzi, Leslie, Schiffer & Rubin and Daniel A. Schiffer as Amici Curiae on behalf of Plaintiff and Appellant.
Thomas C. Lynch, Attorney General, E. G. Funke, Assistant Attorney General, Wiley W. Manuel, L. Stephen Porter and Harold W. Teasdale, Deputy Attorneys General, for Defendants and Respondents.
Shirley, Saroyan, Cartwright & Peterson and Lowell H. Sucherman as Amici Curiae on behalf of Defendants and Respondents.

Opinion:
TOBRINER, J.
Plaintiff Wilke and Holzheiser, Inc., appeals from four separate judgments, each denying a writ of mandate seeking review of administrative decisions of the Department of Alcoholic Beverage Control which suspended or revoked the licenses of plaintiff's San Francisco liquor stores. In each decision the department found that plaintiff had sold distilled spirits in violation of the mandatory retail price maintenance provisions of the Alcoholic Beverage Control Act. (Bus. & Prof. Code, § 24749-24757.)
Plaintiff asks that we reverse these judgments on the grounds that the price maintenance provisions violate constitutional imperatives and that, in any event, section 24755.1 of the Business and Professions Code precludes the imposition of the penalties of license suspension and revocation. Plaintiff further asks that we reverse the judgments because of errors in the administrative proceedings which the trial court refused to review. For reasons which we explain hereinafter, we hold that the price maintenance provisions do not transgress constitutional requirements, that section 24755.1 does not apply to the instant case, and that the alleged errors in the administrative proceedings do not call for reversal.
1. Constitutionality of the retail price maintenance provisions
At the outset we note that several' states in addition to our own have adopted measures requiring that each producer of liquor establish a price below which retail distributors may not sell his brand. The courts which have passed on the constitutionality of such measures have reached divergent conclusions. In this court the matter is not one of first impression:
In Allied Properties v. Department of Alcoholic Beverage Control (1959) 53 Cal.2d 141 [346 P.2d 737], we held that the retail price maintenance provisions here involved were constitutional. In so deciding, we rejected the arguments which plaintiff asks us to accept now.
Plaintiff urges us to reconsider Allied Properties on the ground that the majority of other state courts which have subsequently passed on the constitutionality of general fair trade legislation authorizing retail price maintenance agreements have held such legislation unconstitutional as applied to nonsigners. Not one of these subsequent decisions, however, has brought to light any relevant consideration which was not thoroughly argued when we decided Allied Properties. Under such circumstances, we would ordinarily be most reluctant to reopen a matter so recently and so unequivocally settled by a decision of this court. We have decided to do so here only because of the importance of the issue raised and because of plaintiff's contention as to the contrary trend of the decisions in other jurisdictions; we seek to foreclose any possibility that our silence might engender unwarranted speculation about the continued vitality of Allied Properties, Having reconsidered Allied Properties, we reaffirm its holding that the mandatory retail price maintenance provisions of the Alcoholic Beverage Control Act are constitutional.
The provisions in question operate as follows: Section 24750 of the Business and Professions Code authorizes fair trade contracts prohibiting the buyer from reselling, except at the price stipulated by the seller, alcoholic beverages which bear the trade-mark, brand, or name of the producer or owner and are in fair and open competition with others of the same general class. Section 24752 declares that wilfully and knowingly advertising, offering for sale, or selling any alcoholic beverage at less than the price stipulated in any such contract, whether the person so doing is or is not a party to the contract, constitutes unfair competition and founds an action by any person damaged thereby. Section 24755, as it read at the time of the transactions under consideration, required that any branded liquor sold at retail be sold pursuant to a contract executed under the above provisions and prohibited the violation of such contracts by liquor licensees.
Section 24757 authorizes the Department of Alcoholic Beverage Control to adopt such rules as it finds necessary for the administration of section 24755. Rule 99, as adopted and effective at the time of the instant transactions, provided in part that no manufacturer or wholesaler should sell branded liquor except pursuant to a fair trade contract as provided for by sections 24750 and 24755, that copies of such contracts should be filed with the department, and that no licensee should advertise, offer for sale, or sell alcoholic beverages at a retail price less than the minimum resale price stipulated in a contract filed with the department pursuant to this rule. (Cal. Admin. Code, tit. 4, § 99, subds. (a), (b), (f).) Business and Professions Code section 24200 provides in relevant part that the department may suspend or revoke a license when the licensee has violated any rule promulgated by the department pursuant to the Alcoholic Beverage Control Act or any other penal prohibition or regulation of the sale of alcoholic beverages.
Plaintiff first contends that these provisions are unconstitutional because they exceed the police power of the state.
In passing upon the validity of that contention, we exercise an extraordinary power over a coordinate branch of government and perform a correspondingly narrow function: we simply determine whether the statute reasonably relates to a legitimate governmental purpose. In so doing, we find the requisite relationship in the absence of an unquestionable contrary showing. (Los Angeles Met. Transit Authority v. Public Utilities Com. (1963) 59 Cal.2d 863, 867 [31 Cal.Rptr. 463, 382 P.2d 583] ; Wholesale Tobacco Dealers v. National etc. Co. (1938) 11 Cal.2d 634, 646 [82 P.2d 3, 118 A.L.R. 486].) We must not confuse reasonableness in this context with wisdom. " 'The doctrine . . . that due process authorizes courts to hold laws unconstitutional when they believe the legislature has acted unwisely . . . has long since been discarded . . .' Ferguson v. Skrupa, 372 U.S. 726, 728-730 [10 L.Ed.2d 93, 83 S.Ct. 1028, 95 A.L.R.2d 1347]." (Joseph E. Seagram & Sons, Inc. v. Hostetter (1966) 384 U.S. 35, 47 [16 L.Ed.2d 336, 86 S.Ct. 1254].)
To incant these precepts in form and ignore them in substance is to disregard the most basic postulates of representative government; yet, as one court has observed, "the courts of last resort that have rejected fair trade acts on Constitutional grounds seem to have . . . done so because of an unwillingness to accept the legislative judgment as to the economic facts." (Home Utilities Co. v. Revere, etc., Inc., supra, 209 Md. 610, 617.) On such debatable matters the Legislature properly serves as the court of last resort. When, as in this case, "appeal is made to liberties which derive merely from shifting economic arrangements" (Kovacs v. Cooper (1949) 336 U.S. 77, 95 [93 L.Ed. 513, 69 S.Ct. 448, 10 A.L.R.2d 608] (Frank furter, J., concurring)), the judgment of the Legislature reaches this tribunal with a momentum for respect lacking when the Legislature tampers with "those liberties of the individual which history has attested as the indispensable conditions of an open as against a closed society." (Ibid.) With these admonitions in mind, we turn to plaintiff's contention that the retail price maintenance provisions of the Alcoholic Beverage Control Act bear no reasonable relation to any legitimate governmental purpose.
The Legislature adopted the Alcoholic Beverage Control Act "for the protection of the safety, welfare, health, peace, and morals of the people of the State, to eliminate the evils of unlicensed and unlawful manufacture, selling, and disposing of alcoholic beverages, and to promote temperance in the use and consumption of alcoholic beverages." (Bus. & Prof. Code, § 23001.) With regard to the retail price maintenance provisions specifically, the Legislature made its purpose plain: "It is the declared policy of the State that it is necessary to regulate and control the manufacture, sale, and distribution of alcoholic beverages . . . for the purpose of fostering and promoting temperance in their consumption and respect for and obedience to the law. In order to eliminate price wars which unduly stimulate the sale and consumption of alcoholic beverages and disrupt the orderly sale and distribution thereof, it is hereby declared as the policy of this State that the sale of alcoholic beverages should be subjected to certain restrictions and regulations. The necessity for the enactment of provisions of this chapter is, therefore, declared as a matter of legislative determination." (Bus. & Prof. Code, § 24749.)
The promotion of temperance in the consumption of alcoholic beverages and of orderly conditions in their marketing clearly constitute proper legislative objectives. The declared purposes of the Alcoholic Beverage Control Act in general and of its retail price maintenance provisions in particular are therefore entirely legitimate, and we must sustain the price maintenance provisions if they bear a reasonable relationship to any of those purposes.
We turn first to the purpose of promoting temperance. The retail price maintenance provisions proceed on the assumption that "the elimination at the retail level of price cutting, bargain sales, and advertising of low prices tends to reduce excessive purchases of alcoholic beverages." (Allied Properties v. Department of Alcoholic Beverage Control, supra, 53 Cal.2d 141, 148.) We cannot call such an assumption irrational. In upholding the validity of a state statute limiting retail liquor licenses to two per person, the New Jersey Supreme Court held that in formulating its policy the Legislature could properly accept "widely held views as to sound liquor control," including the "beliefs that the consumption of liquor is elastic rather than inelastic, [and] that price cuttings and their advertisement, along with comparable practices, are undesirable in the liquor field as tending to stimulate consumption. . . ." (Grand Union Co. v. Sills (1964) 43 N.J. 390 [204 A.2d 853, 859].)
Our Legislature may have sought to prevent the special inducement to purchase liquor which results from loss leaders, price-cutting, and bargain sales at the retail level. (Allied Properties v. Department of Alcoholic Beverage Control, supra, 53 Cal.2d 141, 148-149.) That the Legislature did not also seek to prevent intemperance by limiting the volume of liquor sales, by regulating competition among producers and wholesalers, or by establishing high liquor prices generally, creates no constitutional infirmity. As we said in Board of Education v. Watson (1966) 63 Cal.2d 829, 833 [48 Cal.Rptr. 481, 409 P.2d 481], "The Legislature is not bound, in order to adopt a constitutionally valid statute, to extend it to all eases which might possibly be reached, but is free to recognize degrees of harm and to confine its regulation to those classes of cases in which the need is deemed to be the most evident."
The selectivity of our Legislature's approach to the problem of intemperance might reflect a variety of entirely legitimate considerations. Thus the Legislature could have reasoned that some people might respond more impulsively to bargain sales of their preferred brand than to bargains offered by competing brands. Or the Legislature might have concluded that unregulated competition among the relatively few liquor producers and wholesalers would not unduly stimulate liquor consumption but that similar competition among the large number of retailers, who come into direct contact with consumers and who are more vulnerable to economic pressure, would stimulate selling practices calculated to induce intemperance. We cannot say that all of these suppositions would have been " 'palpably arbitrary and beyond rational doubt erroneous. ' " (In re De La O (1963) 59 Cal.2d 128, 153 [28 Cal.Rptr. 489, 378 P.2d 739, 98 A.L.R2d 705]; State of California v. Industrial Acc. Com. (1957) 48 Cal.2d 365, 371 [310 P.2d 7].)
Plaintiff calls our attention to the fact that the New York Moreland Commission (see New York State Legislative Annual (1964) 401-408, 484-489, 498-500) found that mandatory-retail price maintenance did not significantly reduce the consumption of alcoholic beverages. We note, however, that the response to the Moreland Commission Report in New York came from the Legislature (Session Laws of New York, 1964, ch. 531, § 11), not the courts. Legislative revision of a statute cannot be equated to its death knell by judicial decree.
We turn to the second legislative purpose: the promotion of the orderly sale and distribution of alcoholic beverages. Retail price wars among liquor distributors may encourage retailers, struggling to withstand the pressure of ruinous competition, to sell liquor below cost in violation of Business and Professions Code section 17043 or to transgress the regulatory laws governing retail liquor distribution (Bus. & Prof. Code, § 25600-25666) , To the extent that the retail price maintenance provisions eliminate retail price wars in the liquor industry, they undeniably discourage such disruptive practices.
The Legislature may likewise have concluded that giant retailers and chain markets should be afforded no opportunity to use loss leaders in branded liquor to attract customers in disregard of Business and Professions Code section 17044 and thus ultimately to force smaller retailers out of business. Such tactics, the Legislature may have thought, would disrupt orderly distribution by endangering the continued vitality of one method of marketing: the corner grocery store. The Legislature may have decided not to expose these channels of distribution to possible economic destruction through manipulation, by powerful competitors, of so highly volatile and attractive a product as branded liquor.
Plaintiff answers that the instant legislation reaches unnecessarily far in this respect because the kinds of market ing disruptions that we have described may be curtailed by present statutes. But, in the first place, even assuming that the Legislature did no more than fashion further means of proscribing previously prohibited practices (Bus. & Prof. Code, § 25600-25666; Id., § 17000-17101), we see no ground for unconstitutionality in such duplication. The possibility that "other less stringent . . . regulations might have sufficed is not our concern; that is a matter lying within the discretion of the legislative body." (Natural Milk etc. Assn. v. City & County of San Francisco (1942) 20 Cal.2d 101, 115 [124 P.2d 25].)
In the second place, the Legislature may have intended more than the fortification of existing statutory regulations. It may have sought to fill the gap between price-cutting procedures pursued in practice and those proscribed by law. The Unfair Practices Act (Bus. & Prof. Code, § 17000-17101) does not offer a facile means for the prevention of all below cost and loss leader selling; the requirements of proof of such selling under the act are stringent and- for this reason the act is rarely invoked. The Legislature could certainly have concluded that such legislation would be of small comfort and little aid to independent retailers in their struggle against large-scale price-cutting competitors.
Whatever dangers the Legislature thought implicit in disorderly marketing, we cannot question the wisdom of its concern. As we said in another context, "Where the Legislature has determined that a defined condition or activity is a nuisance, it would be a usurpation of the legislative power for a court to arbitrarily deny enforcement merely because in its independent judgment the danger caused by a violation was not significant." (City of Bakersfield v. Miller (1966) 64 Cal.2d 93,100 [48 Cal.Rptr. 889,410 P.2d 393].)
Finally, plaintiff contends that the retail price maintenance provisions, even if reasonably related to either or both of their declared objectives, cannot be justified as an exercise of the police power because their "real" purpose and effect is not to regulate the sale of alcoholic beverages in the public interest but to swell the profits of the liquor industry.
Insofar as plaintiff's contention focuses on the legislative purpose, it amounts to a suggestion that we should not take the Legislature at its word but should instead decide for ourselves, by a process which remains unexplained, what the Legislature "really" intended to achieve by enacting the provisions in question. Although several courts have acceded to that suggestion, we do not believe that we are either authorized or equipped to undertake so ill-defined and hazardous an inquiry. " [T]his court may not presume that in reaching its decision [the Legislature] acted upon improper motives. '. . . a judiciary must judge by results, not by the varied factors which may have determined legislators' votes . . .' [citations]." (Werner v. Southern Cal. etc. Newspapers, supra, 35 Cal.2d 121, 129.) "Nor can legislation be set aside by courts because of the fact, if it be such, that it has been sponsored and promoted by those who advantage from it [footnote omitted]." (Cohen v. Beneficial Loan Corp. (1949) 337 U.S. 541, 551 [93 L.Ed. 1528, 69 S.Ct. 1221].)
Insofar as plaintiff's contention focuses on the legislative effect, we cannot fail to recognize it as an invitation to hold the law invalid because we disagree with its desirability. As we have said, we cannot invalidate legislation merely because we do not approve of its potentially beneficent impact upon a particular segment of society.
At its base, the argument that the statute is unconstitutional because of its supposed bias in favor of the liquor industry rests upon a wholly unrealistic view of the legislative process. As our social and economic life grows in complexity, legislation- necessarily increases in the differentiation of its techniques and in the specialization of its objectives. Thus the endeavor to achieve the general welfare of the whole through the special welfare of each part becomes ever more necessary. By protecting the interests of complaining constituents through legislation tailored to meet their particular needs, the Legislature can seek to maximize the satisfaction of society as a whole. Surely courts should not inject themselves into this inherently pluralistic process of compromise by attempting to reserve to themselves a power to veto the balance struck because of a bare belief in its undesirability.
Plaintiff's second basic challenge to the constitutionality of the retail price maintenance provisions is that they unlawfully delegate legislative power by enabling each producer and wholesaler to set the price below which retailers may not sell his product. We rejected precisely that contention in Allied Properties v. Department of Alcoholic Beverage Control, supra, 53 Cal.2d 141, 149-152, just as we rejected a similar contention in sustaining the general Pair Trade Act (Bus. & Prof. Code, § 16900-16905) against a challenge of unlawful delegation in Scovill Mfg. Co. v. Skaggs etc. Drug Stores, supra, 45 Cal.2d 881, 888. We see no reason to depart from those holdings.
To contend that the Alcoholic Beverage Control Act unlawfully delegates legislative power is to misconceive the nature of the power which is purportedly delegated. The power we analyze here finds expression in the private act of the producer in entering into a contract setting a price for the resale of his own brand. Scovill tells us that this act is not the performance of a legislative function and not the exercise of an unlawfully delegated power. Nor does plaintiff directly question Scovill. Yet, if the producer's contractual designation of a resale price binding on all retailers is not the exercise of an unlawfully delegated legislative power, the statutory requirement that he designate that price cannot transform his act into the exercise of such a power. The statutory requirement clearly confers no power on the producer that he would not have possessed without it.
Allied Properties makes this point abundantly clear. In describing the alleged delegation, the opinion in Allied Properties states that "the function performed by the persons who assertedly exercise delegated legislative powers is the same under the general Pair Trade Act and the Alcoholic Beverage Control Act." (P. 149.) The opinion points out that the act of designating a resale price binding on all retailers is " 'no more legislative in character than are other acts . of private parties undertaken as a prerequisite to the application of a statute. ' " (P. 149.)
To argue that the Alcoholic Beverage Control Act unlawfully delegates legislative power because it is a "price-fixing act" is to overlook the crucial distinction between the fixing of a price for all products in a given market and the setting by the producer of the retail price at which Ms own product is to be sold. As Allied Properties explains (pp. 151-152), this distinction finds dramatic illustration in the difference between the instant legislation and the statute involved in State Board of Dry Cleaners v. Thrift-D-Lux Cleaners, Inc. (1953) 40 Cal.2d 436 [254P.2d 29],
The court in Thrift-D-Lux declared unconstitutional a statute which delegated to the State Board of Dry Cleaners the power to fix minimum prices. (Bus. & Prof. Code, § 9560-9567, repealed by Stats. 1957, ch. 1691, §11.) The statute entrusted the board with the power to decide, in terms of the public health and safety, which cities should have minimum price schedules, which services should be included in those schedules, and what prices should be charged for the services. As Allied Properties points out, the court in Thrift-D-Lux, in holding the statute unconstitutional, "relied on the ground that there was a delegation of legislative power without ascertainable standards to an administrative board composed mainly of members of the industry who would participate in fixing prices to be charged by their competitors . On the other hand it was held in Seovill Mfg. Co. v. Skaggs etc. Drug Stores, supra, 45 Cal.2d 881, 887-888, that there was no delegation of legislative power wliere manufacturers, acting in their private capacity under the general Fair Trade Act, fixed the prices for which their own products were to be sold at retail by persons who were not their competitors. The distinguishing factor is that the dry cleaners' board was directed to fix uniform minimum prices for the services of all dry cleaners in limited areas on the basis of what it believed was required by public health and safety, whereas under the general Fair Trade Act each manufacturer is to fix retail prices for his own products in accord with his personal interest." (Allied Properties v. Department of Alcoholic Beverage Control, supra, 53 Cal.2d 141,151-152.)
When the power which the Legislature purports to confer is the power to regulate the business of one's competitors, as in Thrift-D-Lux, or the power to exclude potential competitors from an entire industry or occupation, as in Blumenthal v. Board of Medical Examiners (1962) 57 Cal.2d 228, 235-236 [18 Cal.Rptr. 501, 368 P.2d 101], a real danger of abuse arises, and the courts accordingly insist upon stringent standards to contain and guide the exercise of the delegated power.
A similar insistence upon stringent standards would serve little if any purpose in the case of the Alcoholic Beverage Control Act. As we noted in Allied Properties (pp. 151-152), that act authorizes no individual or group to exercise either regulatory or exclusionary power over any competitor, actual or potential. The Legislature has not authorized anything resembling "price-fixing" in the traditional, horizontal sense: it has authorized no one to fix the price charged by a competitor. Thus the Alcoholic Beverage Control Act does not create the special danger threatened by a statute which delegates industry-wide regulatory power to interested members of the regulated industry.
To the extent that the retail price maintenance provisions enable a producer to control the bargaining process between those who sell and those who buy his own product, the Legislature could reasonably assume that competition among producers, coupled with the bargaining power of those low-overhead retailers who desire lower retail prices, would provide a safeguard against excessive prices. In all probability, that safeguard is at least as effective as any which the Legislature could be expected to provide by promulgating explicit standards for the setting of retail prices, enforeible by an administrative or judicial agency. To impose a requirement of expressed legislative standards would here reflect "little more than a judicial fetish for legislative language, the recitation of which [would provide] no additional safeguards to persons affected by the exercise of the delegated authority. " (Warren v. Marion County (1960) 222 Ore. 307, 314 [353 P.2d 257] ; see also 1 Davis, Administrative Law Treatise, § 2.15, pp. 148-151 and 1965 Supp., pp. 52-55; Jaffe, Law Making by Private Groups (1937) 51 Harv.L.Rev. 201, 248-251.)
In light of these observations, we And transparently erroneous the arguments that the statute unlawfully delegates "price-fixing" power because (1) the producer must set the price which will be observed in resale; (2) the law imposes an obligation upon all people in this state to observe that price; and (3) the violation of the act is a "public offense."
All three arguments ignore the basic difference between a statute requiring the unilateral designation by each producer of the resale price of his own product and a statute requiring the multilateral observance by all competitors of a fixed minimum price of a commodity. That the private act of specifying a resale price is lifted by the statute beyond the contracting producer and retailer to a publicly enforced observance by all retailers within the state does not convert the legislation into a "price-fixing" statute, since the law still empowers no one to regulate the retail price of .any commodity.
Although the Alcoholic Beverage Control Act requires (Bus. & Prof. Code, § 24755), whereas the Pair Trade Act merely permits (Bus. & Prof. Code, § 16902), producers and wholesalers to set retail prices, this mandatory aspect of the Alcoholic Beverage Control Act ' does not render the function of a producer or wholesaler legislative in character but, to the contrary, decreases his discretion since he is not free to determine whether fair trading should occur. While mandatory fair trading means that retailers cannot obtain merchandise free from price restrictions, this is due to the determination of the Legislature, not the action of the producers and wholesalers." (Allied Properties v. Department of Alcoholic Beverage Control, supra, 53 Cal.2d 141, 150.) The mandatory feature of the act endangers none of the interests which the anti-delegation doctrine seeks to protect, since it threatens neither the principle that truly fundamental issues should be resolved by the Legislature nor the precept that a grant of authority should be accompanied by safeguards adequate to prevent its abuse. Thus it provides no reason to hold that the act unconstitutionally delegates legislative power.
Similarly, the fact that the Alcoholic Beverage Control Act authorizes public enforcement in the form of administrative sanctions (Bus. & Prof. Code, § 24200) and criminal penalties (Bus. & Prof. Code, § 25617) does not furnish a basis for finding an unlawful delegation of legislative power. As we said in Allied Properties, "this aspect of the act does not involve any delegation of power, the sanctions being prescribed by the Legislature, not by the producers or wholesalers." (53 Cal.2d at p. 150.) A rule does not assume "a legislative character because the violation thereof is punished as a public offense." (United States v. Grimaud (1911) 220 U.S. 506, 521 [55 L.Ed. 563, 31 S.Ct. 480].) So long as the Legislature itself prescribes the terms of the sanctions and defines the circumstances in which they apply, their presence in a statute in no way undermines either the concern for legislative resolution of basic questions of policy or the concern for legislative restriction of the opportunity for abuse. Accordingly, the provision of public sanctions can hardly convert an otherwise constitutional grant of authority into an unconstitutional delegation of legislative power.
It follows, then, that we could not hold the retail price maintenance provisions unconstitutional on delegation grounds without overruling not only Allied Properties but also Scovill, with the result that the entire fair trade program of this state would be rendered unenforceable by judicial fiat. We are convinced that such an assertion of judicial power would gravely misplace the locus of responsibility in our form of government. We therefore hold the retail price maintenance provisions of the Alcoholic Beverage Control Act constitutional.
2. Applicability of section 24755.1
As a second basic proposition, plaintiff urges us to reverse the judgments on the ground that section 24755.1 of the Busi ness and Professions Code precludes the imposition of the penalties of license suspension and revocation rendered in the instant cases. But, as we point out in more detail hereinafter, the general assumption that a legislative change does not operate retroactively applies with special force in the instant situation in which the Legislature has altered the method of enforcement of the statute. Secondly, and independently, any attempt to give the statute retroactive effect would require us to resolve the constitutional issue whether we could thus impose potentially more severe penalties than those provided by the prior statute; we should not espouse an interpretation which invites constitutional difficulties.
Prior to the enactment of section 24755.1 (Stats. 1965, ch. 742, §1; effective September 17, 1965), violation of the retail price maintenance provisions of the Alcoholic Beverage Control Act subjected the transgressor not only to the discretionary suspension or revocation of his license (Bus. & Prof. Code, § 24200) but also to punishment as a misdemeanant by a fine of not more than $500 and/or a county jail term of not more than six months (Bus. & Prof. Code, § 25617). By enacting section 24755.1 the Legislature replaced this method of enforcement with a system of mandatory fines leviable by the Department of Alcoholic Beverage Control in the amount of $250 for the first illegal sale and $1,000 for each subsequent such sale in any three-year period. Pending any appeal from the imposition of a fine, the new section required a licensee to pay under protest a fine, which was recoverable with interest if the appeal succeeded, or to execute a surety bond in the amount of the fine. The failure to perform either undertaking within 30 days provoked an automatic suspension of the license pending performance.
Article XX, section 22, of the California Constitution empowers the Department of Alcoholic Beverage Control "in its discretion" to "deny, suspend or revoke any specific alcoholic beverage license if it shall determine for good cause that the granting or continuance of such license would be contrary to public welfare or morals, . . ." At the same time, section 22 empowers the Legislature to "provide for the issuance of all types of [alcoholic beverage] licenses" and gives to the Department of Alcoholic Beverage Control "the exclusive power . in accordance with laws enacted by the Legislature, to license the . . . sale of alcoholic beverages. . . ." (Italics added.)
If we were to hold section 24755.1 applicable to the judgments here on appeal, we would be compelled to decide, first, whether that section constitutes an invalid limitation upon the power vested in the department by article XX insofar as it eliminates the department's discretionary power to suspend or revoke a license for violation of the retail price maintenance provisions; and, second, whether that section constitutes an invalid extension of the power vested in the department by article XX insofar as it adds the power to impose mandatory fines for violation of the retail price maintenance provisions. We reach neither of these two constitutional questions, however, since we hold that section 24755.1 does not apply to any of the four judgments here on appeal.
We begin with the general presumption that legislative changes do not apply retroactively unless the Legislature expresses its intention that they should do so. Three of our basic codes provide that no part thereof is retroactive "unless expressly so declared" (Civ. Code, §3; Code Civ. Proc., § 3; Pen. Code, § 3) ; we have held that this language does no more than codify a general rule of construction, applicable as well to statutes containing no such provision. (DiGenova v. State Board of Education (1962) 57 Cal.2d 167, 172-173 [18 Cal.Rptr. 369, 367 P.2d 865] ; see generally, State of California v. Industrial Acc. Com. (1957) 48 Cal.2d 355 [310 P.2d 1], and Aetna Cas. & Surety Co. v. Industrial Acc. Com. (1947) 30 Cal.2d 388 [182 P.2d 159].)
This presumption of nonretroactivity rests in part upon the fact that the purpose of a legislative alteration would not often attain significant advancement by application of the amended legislation to transactions which preceded the legislative change. Of course the legislative purpose may on occasion entail retroactive as well as prospective implications. Thus, for example, when the Legislature not only abolishes a penalty or forfeiture but also repeals the underlying duty which the penalty had been designed to enforce, no purpose would be served by imposing the penalty in a case still pending on appeal on the date of abolition. In such a case, therefore, we have given retroactive effect to the abolition notwithstanding the Legislature's silence on the matter. (People v. One 1953 Buick (1962) 57 Cal.2d 358, 364 [19 Cal.Rptr. 488, 369 P.2d 16].) In particular, if the Legislature abolishes a penalty in order to encourage conduct formerly prohibited, public policy may dictate abatement of pending actions designed to exact the penalty. (See, e.g., Hamm, v. Rock Hill (1964) 379 U.S. 306 [13 L.Ed.2d 300, 85 S.Ct. 384], and Blow v. North Carolina (1965) 379 U.S. 684 [13 L.Ed.2d 603, 85 S.Ct. 635].) Even if the Legislature retains the underlying duty but simply abolishes or mitigates the penalty fixed for its violation, we may properly say that the Legislature has "expressly determined that its former penalty was too severe and that a lighter punishment is proper." (In re Estrada (1965) 63 Cal.2d 740, 745 [48 Cal.Rptr. 172, 408 P.2d 948].) In such a ease, to hold that the new, lighter penalty now deemed sufficient should not apply to a case still pending on appeal "would be to conclude that the Legislature was motivated by a desire for vengeance." (Ibid.)
The Legislature's alteration of the method for enforcement of a statute, however, ordinarily reflects its decision that the revised method will work greater future deterrence and achieve greater administrative efficiency. Yet the design for efficacy of deterrence and efficiency of administration hardly affects the case which has already reached a final administrative decision based upon the old procedure. The enactment of section 24755.1 constitutes just such an attempted improvement in the machinery of enforcement. The Legislature determined that the imposition of mandatory fines, which become immediately payable despite appeal or mandate, would prove more effective in enforcing the statute than criminal prosecution, or discretionary suspension and revocation of licenses, which often involve substantial procedural delays. (See, e.g., the stay provisions of Code Civ. Proc., § 1094.5, subd. (f).)
Whatever advantages the Legislature may have contemplated by the new procedure, such benefits could not inure in the instant litigation. However cumbersome or slow the old machinery may have been, it has done its work. To undo it now and begin anew with the more streamlined mechanism would not fulfill the legislative design. Indeed, the legislative purpose would be served better by a decision which terminates this litigation than by a remand for further proceedings on charges which, in some instances, have extended over a decade.
The incongruity of remanded proceedings in this case becomes even clearer in light of the prospective functioning of part of the amended statute. An integral segment of the new enforcement system is the provision of section 24755.1 requiring prompt payment or execution of a surety bond pending appeal. That central provision is necessarily prospective in operation. Section 24755.1 clearly does not apply to a license suspension or revocation preceding its effective date.
A second and alternative reason for holding that section 24755.1 operates only prospectively lies in the fact that the contrary interpretation raises possible constitutional objections in view of the prohibition against ex post facto punishment (U.S. Const., art. I, § 9, el. 3; Cal. Const., art. I, § 16). In the instant case we deal with a statute which imposes penalties potentially more severe than those authorized by the prior law. The maximum fine that could have been levied on plaintiff under the previous statute was $500 per conviction, whereas the amount that must be imposed under the new law is $1,000 per sale after the first sale in any three-year period. Although, conceivably, the Constitution might not prohibit the Legislature from giving retroactive effect to these increased monetary penalties, the matter is not free from doubt. We are reluctant to thrust upon the Legislature a constitutionally suspect choice when its silence is at least as compatible with a construction subject to no such potential infirmity.
Although arguably the revised statute provides penalties in some respects more, and in others less, severe than those previously imposed, we cannot sever the less onerous provisions and give retroactive effect to them alone in order to avoid the constitutional issue; such legal surgery would clearly violate the legislative compromise reflected in the statute. Finding just such an obstacle in In re Griffin (1965) 63 Cal.2d 757 [48 Cal.Rptr. 183, 408 P.2d 959], we refused to give retroactive effect to any part of a statute which reduced the minimum sentence for selling marijuana while postponing eligibility for parole. As applied to the petitioner in Griffin, the new law, considered as a whole, operated more harshly and hence could not constitutionally be given retroactive effect. Having been relieved of the burdens imposed by the new law, petitioner could not avail himself of its benefits. (Id. at p. 761.)
Accordingly, we hold that, in the instant case, absent a contrary expression of legislative intent, a decrease in penalties which is not readily severable from an accompanying increase will be given prospective effect only. The provision in section 24755.1 which abrogates the penalties of discretionary license suspension and revocation thus does not apply to the present case, since all of the violations in question preceded the effective date of that section.
3. Procedural and evidentiary grounds for reversal
We set forth, finally, our reasons for rejecting plaintiff's third basic proposition: that procedural errors invalidated the judgments in that (1) the evidence at the administrative proceedings failed to show that the beverages involved in the accusations against plaintiff were in fair and open competition; (2) the trial court erroneously prevented plaintiff from adducing evidence of unfair competition submitted to the court by the affidavit filed with plaintiff's motion for a new trial; and (3) the evidence before the department did not support the finding that the retail prices had been properly published.
As to plaintiff's first contention, we note that the department submitted evidence that all of the brands set forth in the accusations were "in fair and open competition with alcoholic beverages of the same general class produced by others" (Bus. & Prof. Code, § 24750). In the proceedings which resulted in the first three judgments, plaintiff offered no evidence to rebut this showing. It now seeks to explain its omission on the ground that such proceedings all occurred prior to the decision in DeMartini v. Department of Alcoholic Beverage Control (1963) 215 Cal.App.2d 787 [30 Cal.Rptr. 668], The DeMartini decision, however, did not change the law; plaintiff in each of the proceedings in question was clearly entitled to produce evidence to rebut that offered by the department. Since it did not do so, we cannot uphold its contention.
In the proceedings involved in the fourth judgment, plaintiff did attempt, without success, to overcome the department's evidence of fair and open competition; plaintiff now complains of four rulings which supposedly curtailed that attempt.
First, plaintiff argues that the hearing officer improperly quashed a subpoena duces tecum by which plaintiff sought to compel the production of certain documents possessed by the department. The officer quashed the subpoena in its entirety only with respect to brands of alcoholic beverages set forth in those counts of the accusations which were subsequently dismissed, thereby rendering moot the validity of this portion of the ruling. Regarding matters pertinent to the other counts of the accusations against plaintiff, the officer granted the motion to quash only with respect to certain records of departmental investigations which had not resulted in any official action.
We need not decide whether the involved records contained "communications made [to a public officer] in official confidence" and thus became privileged (Code Civ. Proc., § 1881, subd. 5; Chronicle Publishing Co. v. Superior Court (1960) 54 Cal.2d 548, 566 [7 Cal.Rptr. 109, 354 P.2d 637]), since we hold that the ruling did not effect such prejudice as to require reversal. The matters in question were relevant, at best, to the possibility that persons other than plaintiff might have engaged in certain unfair trade practices. Even if plaintiff had shown that others were guilty of such illegal conduct, the record would still have amply supported the conclusion that "there are on the market commodities produced by others which are so similar in character . . . that they provide competition which is not hampered by unlawful trade restraints." (Scovill Mfg. Co. v. Skaggs etc. Drug Stores, supra, 45 Cal.2d 881, 889; see also DeMartini v. Department of Alcoholic Beverage Control, supra, 215 Cal.App.2d 787, 807-808.)
Second, plaintiff argues that the hearing officer improperly refused to permit the examination of a witness as to. his knowledge of secret rebates which allegedly encouraged unfair competition by retailers. To the extent that the testimony would not have been hearsay, as well as merely cumulative of documentary evidence already subpoenaed by plaintiff, it would, at best, have yielded evidence which plaintiff had unsuccessfully sought to obtain by subpoena. Having properly quashed the subpoena, the officer acted within his discretion in preventing plaintiff's effort to circumvent the prior ruling.
' Third, plaintiff argues that the hearing officer improperly refused to grant a continuance in order that plaintiff might obtain copies of press releases issued by the director of the department in connection with disciplinary action taken against various licensees. Since plaintiff moved for the continuance one year after the date of the filing of the accusations and six months after the commencement of the hearings, and since nothing indicates that the press releases would have disclosed any evidence that plaintiff had not already obtained by its subpoena, we find no abuse of discretion in the ruling of the hearing officer.
• Fourth, plaintiff argues that the hearing officer erroneously excluded an article from a trade journal containing excerpts from a speech which allegedly referred to unfair practices in the sale of unspecified brands of alcoholic beverages. Although relevant hearsay evidence may be admitted at an administrative hearing if it is the kind of statement upon which "responsible persons are accustomed to rely in the conduct of serious affairs" (Gov. Code, § 11513, subd. (c); Mast v. State Board of Optometry (1956) 139 Cal.App.2d 78, 85 [293 P.2d 148]), the speech in question attained neither the relevance nor the character required by the rule. Moreover, such evidence could have furnished no more than slight corroboration for the documentary evidence already obtained by subpoena. Accordingly, the hearing officer did not abuse his discretion by excluding the article.
Plaintiff's second procedural contention is that the trial court erroneously prevented it from producing additional.evidence of unfair- competition, which it brought to the attention of the court by an affidavit filed with its motion for new trial. Yet in a mandate proceeding under section 1094.5 of the Code of Civil Procedure, the recognized rule precludes the introduction of evidence which the proponent neglected to offer before the administrative agency. (Housman v. Board of Medical Examiners (1948) 84 Cal.App.2d 308, 312-313 [190 P.2d 653, 192 P.2d 45].)
Plaintiff's third and final procedural contention is that the evidence before the department failed to support the finding that the retail prices of alcoholic beverages involved in the accusations had been properly published. Even if this contention had been seasonably advanced, we would doubt its validity.
At the time plaintiff committed the acts involved in the various accusations, section 24755 of the Business and Professions Code contained no requirement of publication and rule 99 called only for publication "in a trade journal or industry price book." (Cal. Admin. Code, tit. 4, §99, subd. (d).) In 1961 the Legislature amended section 24755 to provide that any person filing a minimum retail price schedule should "cause such schedule to be published in a manner which will result in each retailer affected by such schedule being advised of the contents of such schedule prior to the effective date thereof." (Stats. 1961, ch. 635, §4.) Rule 99, as repromulgated in 1961, has continued to require publication in a trade journal of general circulation in the trading areas affected. (Cal.Admin. Code, tit. 4, § 99, subd. (k).) Plaintiff concedes that all of the above requirements have been met.
Government Code section 6040, upon which plaintiff predicates its argument that the prices must be published in a "newspaper of general circulation," does not apply to this case; that section operates only when the matter in question "is required by law to be published in a newspaper"; no such requirement existed at any time relevant to the instant proceedings. Nor do we find any basis for plaintiff's remaining argument that the person filing the minimum retail price schedule must publish it personally and must keep it current.
Having concluded for the reasons set out above that the
retail price maintenance provisions possess no constitutional infirmity, that section 24755.1 does not apply to the present case, and that plaintiff's evidentiary and procedural objections cannot stand, we must affirm the judgments.
The judgments are affirmed.
Traynor, C. J., Peek, J., Mosk, J., and Burke, J., concurred.
The first judgment involved decisions suspending the license of plaintiff's Market Street store for a total of 150 days and suspending the license of plaintiff's Minna Street store pending transfer of the license to an acceptable licensee; the second and third judgments each involved decisions suspending both licenses for 15 days; and the fourth judgment involved decisions revoking both licenses. All four judgments were rendered on April 1, 1964, and all claimed violations occurred prior to 1961.
Mandatory price maintenance provisions requiring compliance with minimum liquor prices set by producers were held constitutional in Schwartz v. Kelly (1953) 140 Conn. 176 [99 A.2d 89]; Reeves v. Simons (1942) 289 Ky. 793 [160 S.W.2d 149]; Supreme Malt Products Co., Inc. v. Alcoholic Beverages Control Com. (1956) 334 Mass. 59 [133 N.E.2d 775]; Gaine v. Burnett (1939) 122 N.J.L. 39 [4 A.2d 37], affd. per curiam, 123 N.J.L. 317 [8 A.2d 604]. Such provisions were held unconstitutional in Scarborough v. Webb's Cut Rate Drug Co., Inc. (1942) 150 Fla. 754, 772 [8 So.2d 913] ; State ex rel. Anderson v. Mermis (1961) 187 Kan. 611 [358 P.2d 936]; Reynolds v. Louisiana Board of Alcoholic Beverage Control (1965) 249 La. 127 [185 So.2d 809], cert. den. (1966) 385 U.S. 946 [17 L.Ed.2d 225, 87 S.Ct. 318]; Drink, Inc. v. Babcock (N.M. 1966) 421 P.2d 798.
The federal courts have uniformly found no conflict between such legislation and the federal Constitution. (See G.E.M. Sundries Co. v. Johnson & Johnson, Inc. (9th Cir. 1960) 283 F.2d 86, 90-92; see the cases collected in Parke, Davis & Co. v. G.E.M., Inc. (D.Md. 1962) 201 F.Supp. 207, at 211-213; see also Hudson Distributors, Inc. v. Eli Lilly & Co. (1964) 377 U.S. 386 [12 L.Ed.2d 394, 84 S.Ct. 1273], rejecting the federal constitutional claim by implication.)
The validity of fair trade laws as applied to nonsigners has been upheld by 16 state courts: General Elec. Co. v. Telco Supply Inc. (1958) 84 Ariz. 132 [325 P.2d 394]; Scovill Mfg. Co. v. Skaggs etc. Drug Stores (1955) 45 Cal.2d 881 [291 P.2d 936]; Burroughs Wellcome & Co. v. Johnson Wholesale Perfume Co. (1942) 128 Conn. 596 [24 A.2d 841]; General Elec. Co. v. Klein (1954) 34 Del.Ch. 491 [106 A.2d 206] ; Kinsey etc. Sales Co. v. Foremost Liquor Stores, Inc. (1958) 15 I11.2d 182 [154 A.2d 290]; Home Utilities Co. v. Bevere etc., Inc. (1956) 209 Md. 610 [122 A.2d 109]; W. A. Sheaffer Pen Co. v. Barrett (1950) 209 Miss. 1 [45 So.2d 838] ; Corning Glass Works v. Max Dichter Co. (1960) 102 N.H. 505 [161 A.2d 569]; Lionel Corp. v. Grayson-Robinson Stores (1954) 15 N.J. 191 [104 A.2d 304]; Bourjois Sales Corp. v. Dorfman (1937) 273 N.Y. 167 [7 N.E.2d 30, 110 A.L.R. 1411]; Eli Lilly & Co. v. Saunders (1939) 216 N.C. 163 [4 S.E.2d 528, 125 A.L.R. 1308]; Hudson Distributors, Inc. v. Upjohn Co. (1963) 174 Ohio 487 [190 N.E.2d 460]; Miles Laboratories, Inc. v. Owl Drug Co. (1940) 67 S.D. 523 [295 N.W. 292]; Plough, Inc. v. Hogue & Knott Super Market (1963) 211 Tenn. 480 [365 S.W.2d 884]; Standard Drug Co. v. General Elec. Co. (1960) 202 Va. 367 [117 S.E.2d 289] ; Weco Products Co. v. Reed Drug Co. (1937) 225 Wis. 474 [274 N.W. 426].
Pair trade acts have been held unconstitutional as applied to non-signers in 24 states. The courts in two of these have relied on state constitutional provisions prohibiting price-fixing by private contract: Union Carbide & Carbon Corp. v. Skaggs Drug Center, Inc. (1961) 139 Mont. 15 [359 P.2d 644]; General Elec. Co. v. Thrifty Sales Inc. (1956) 5 Utah 2d 326 [301 P.2d 741], In the remaining 22 states, the courts have held that legislation binding nonsigners to minimum retail prices established by producers exceeds the police power, violates due process, or unlawfully delegates legislative power: Bulova Watch Co. v. Zale Jewelry Co. (1962) 274 Ala. 270 [147 So.2d 797]; Union Carbide & Carbon Corp. v. White River Distributors, Inc. (1955) 224 Ark. 558 [275 S.W.2d 455] ; Olin Mathieson Chemical Corp. v. Francis (1956) 134 Colo. 160 [301 P.2d 139]; Miles Laboratories v. Eckerd (Fla. 1954) 73 So.2d 680; Cox v. General Elec. Co. (1955) 211 Ga. 286 [85 S.E.2d 514]; Bissell Carpet Sweeper Co. v. Shane Co., Inc. (1957) 237 Ind. 188 [143 N.E.2d 415] ; Bulova Watch Co. v. Robinson Wholesale Co. (1961) 252 Iowa 740 [108 N.W.2d 365] ; Quality Oil Co. v. E. I. Du Pont De Nemours & Co. (1958) 182 Kan. 488 [322 P.2d 731]; General Elec. Co. v. American Buyers Coop. (Ky. 1958) 316 S.W.2d 354; Dr. G. H. Tichenor etc. Co. v. Schwegmann Bros. etc. Markets (1956) 231 La. 51 [90 So.2d 343, 60 A.L.R.2d 410]; Shakespeare Co. v. Lippman's etc. Sporting Goods Co. (1952) 334 Mich. 109 [54 N.W.2d 268]; Remington Arms Co. Inc. v. G.E.M. Inc. (1960) 257 Minn. 562 [102 N.W.2d 528] ; Zale-Las Vegas, Inc. v. Bulova Watch Co. (1964) 80 Nev. 483 [396 P.2d 683]; Skaggs Drug Center v. General Elec. Co. (1957) 63 N.M. 215 [315 P.2d 967]; American Home Products Corp. v. Homsey (Okla. 1961) 361 P.2d 297; General Elec. Co. v. Wahle (1956) 207 Ore. 302 [296 P.2d 635] ; Olin Mathieson Chemical Corp. v. White Cross Stores (1964) 414 Pa. 95 [199 A.2d 266] ; United States Time Corp. v. Ann & Hope Factory Outlet (R.I. 1964) 205 A.2d 125 [unconstitutional delegation only as applied to nonsigners who purchase without actual notice of resale price restrictions] ; Rogers-Kent, Inc. v. General Elec. Co. (1957) 231 S.C. 636 [99 S.E.2d 665]; Remington Arms Co. v. Skaggs (1959) 55 Wn.2d 1 [345 P.2d 1085]; General Electric Co. v. A. Dandy Appliance Co. (1958) 143 W.Va. 491 [103 S.E.2d 878] ; Bulova Watch Co. v. Zale Jewelry Co. (Wyo. 1962) 371 P.2d 409.
Each of the remaining 10 states either has no general fair trade law authorizing retail price maintenance agreements binding on nonsigners or has such legislation but has not yet passed on its validity. In one of these 10 states, Nebraska, the Legislature repealed the fair trade provisions after the highest court of that state had held them unconstitutional. (McGraw Electric Co. v. Lewis & Smith Drug Co. (1955) 159 Neb. 703 [68 N.W.2d 608].)
In 1961 the Legislature changed section 24755 in several respects (Bus. & Prof. Code, § 24755, as amended by Stats. 1961, eh. 635, § 4), but since these amendments became effective on September 15, 1961, after all of the transactions and administrative decisions which are the subject of the present action, they do not affect the instant case. (Cf. pp. 28-36, infra.)
Business and Professions Code section 25617, which is not directly involved in the instant case, declares that the violation of any of the provisions of the Alcoholic Beverage Control Act for which the act does not specifically provide another penalty is a misdemeanor punishable by a fine of not more than $500 or by imprisonment in the county jail for not more than six months, or both. The court in Peck's Liquors, Inc. v. Superior Court (1963) 221 Cal.App.2d 772 [34 Cal.Rptr. 735], held section 25617 applicable to violations of section 24755. Since section 25617 is not involved here, we need not decide either the correctness of Peck's Liquors or the effect of section 24755.1 upon section 25617.
We have recognized and applied these propositions in a long series of decisions. (See, e.g., Allied Properties v. Department of Alcoholic Beverage Control, supra, 53 Cal.2d 141, 146-147; Werner v. Southern Cal. etc. Newspapers (1950) 35 Cal.2d 121, 129-130 [216 P.2d 825, 13 A.L.R.2d 252] ; Lelande v. Lowery (1945) 26 Cal.2d 224, 234 [157 P.2d 639, 175 A.L.R. 1109]; Bodinson Mfg. Co. v. California Employment Com. (1941) 17 Cal.2d 321, 325 [109 P.2d 935]; Wholesale Tobacco Dealers v. National etc. Co., supra, 11 Cal.2d 634, 646-650; Max Factor & Co. v. Kunsman (1936) 5 Cal.2d 446, 454-458 [55 P.2d 177].)
See, e.g., Union Carbide Carbon Corp. v. White River Distributors, Inc., supra. 224 Ark. 558, 563; Miles Laboratories v. Eckerd, supra, 73 So.2d 680, 682; Cox v. General Elec. Co., supra, 211 Ga. 286, 290-291; Reynolds v. Louisiana Board of Alcoholic Beverage Control, supra, 185 So.2d 794, 809, 811-812; Shakespeare Co. v. Lippman's etc. Sporting Goods Co., supra, 334 Mich. 109, 115-117; American Home Products Corp. v. Homsey, supra, 361 P.2d 297, 302-304; General Elec. Co. v. Wahle, supra, 207 Ore. 302, 318-319, 321.
See footnote 9, infra.
As one court put it, ' The liquor industry is sui generis. If conditions of competition come about that threaten the economic existence of a vast number of small retailers, there exists a real threat that they may take illegal shortcuts to maintain their solvency, to the detriment of the industry and the harm of the public." (Grand Union Co, v. Sills (N.J. 1963) 81 N.J. Super. 65 [194 A.2d 591, 595], affd. Grand Union Co. v. Sills, supra, 204 A.2d 853. See also Schwartz v. Kelly, supra, 140 Conn. 176, 180; Supreme Malt Products Co., Inc. v. Alcoholic Beverage Control Com., supra, 334 Mass. 59, 62.)
The principle that even a legitimate governmental purpose " cannot be pursued by means that broadly stifle fundamental personal liberties when the end can be more narrowly achieved" (Shelton v. Tucker (1960) 364 U.S. 479, 488 [5 L.Ed.2d 231, 81 S.Ct. 247]) has no application to a purely economic regulation, impinging in no significant way upon the dignity or freedom of the individual.
See Note (1948) 57 Yale L.J. 391, 417.
See, e.g., Union Carbide & Carbon Corp. v. White River Distributors, Inc., supra, 224 Ark. 558, 563; Zale-Las Vegas, Inc. v. Bulova Watch Co., supra, 396 P.2d 683, 689; Skaggs Drug Center v. General Elec. Co., supra, 63 N.M. 215, 226; American Home Products Corp. v. Homsey, supra, 361 P.2d 297, 302; General Elec. Co. v. Wahle, supra, 207 Ore. 302, 317, 322.
The Alcoholic Beverage Control Act delegates to the producer no power which he could not in theory achieve unilaterally. The producer could, subject of course to the antitrust laws (see, e.g., Simpson v. Union Oil Co. (1964) 377 U.S. 13 [12 L.Ed.2d 98, 84 S.Ct. 1051]), maintain his own retail outlets or place Ms goods on consignment and thereby reserve full control over their retail price without the aid of price maintenance legislation of any kind. The infeasibility of such vertical integration in the liquor industry should not be permitted to obscure the fact that the Legislature has simply attempted to simulate some of the marketing conditions which would prevail if vertical integration were to take place.
In Blwmenthdl, for example, we treated the absence of suitable safeguards as a consideration reinforcing our conclusion that the statute in question, giving licensed opticians virtually absolute power over those required to serve under them in order to enter the profession, was so arbitrary as to deny equal protection of the laws. (P. 235.)
At the time of the transactions in question, section 24755 of the Business and Professions Code required, and section 24750 permitted, retail price maintenance only as to brands which were ' ' in fair and open competition with alcoholic beverages of the same general class. ' ' Although some commentators took the view that this limitation had little practical effect (see, e.g., Herman, Free and Open Competition (1957) 9 Stan.L.Rev. 323, 327), the Legislature could reasonably have reached a different conclusion. Moreover, apart from the "fair and open competition" clause, the Legislature, as we said in Allied Properties (p. 148), ' ' could reasonably proceed on the theory that the public will be adequately protected against excessive prices by the ordinary play of competition between manufacturers."
The extraordinary difficulty of formulating meaningful price guidelines suggests that any legislative effort to do so here might well have proven utterly futile. (See, e.g., Fulda, Resale Price Maintenance (1954) 21 U.Chi.L.Rev. 175, 182 fn. 33.)
See generally Jaffe, An Essay on Delegation of Legislative Power (1947) 47 Colum.L.Rev. 359, 561.
No fines are directly involved in these proceedings, but the provisions of section 24755.1 are clearly inseverable, and if we were to decide that article XX invalidates the provision requiring the department to impose fines, then we should be compelled to conclude, as a matter of legislative interpretation, that all of section 24755.1, including its prohibition against license suspension or revocation, is inoperative.
To the extent that the Legislature intended to create a more effective deterrent, we find little reason to apply the new method of enforcement to a transaction occurring before its enactment. To the extent that the Legislature intended to reduce the cost or the delay involved in invoking the old enforcement mechanism, we can see some reason to apply the new method to a transaction preceding its enactment, but none if, prior to enactment, that transaction had already triggered the imposition of penalties under the old enforcement machinery.
The licensee may of course avoid paying the higher fine by accepting the alternative of indefinite suspension of the license for failure to pay, an alternative no more burdensome than the revocation imposed under the prior law.
We note that this consideration applies to all transactions preceding the effective date of the new enactment, whether or not proceedings under the prior law had been terminated, or even commenced, prior to that date.
Even in civil eases, we have carefully avoided the retroactive imposition of increased liabilities. (See Estate of Skinker (1956) 47 Cal.2d 290, 297-298 [303 P.2d 745, 62 A.L.R.2d 1137] ; see also Helm v. Bollman (1959) 176 Cal.App.2d 838, 841-842 [1 Cal.Rptr. 723].) Significantly, none of our cases giving retroactive effect to the abrogation or reduction of civil penalties has involved the substitution of other, perhaps more severe, penalties. (See, e.g., People v. One 1953 Buick, supra, 57 Cal.2d 358; Meriwether Inv. Co. v. Lampton (1935) 4 Cal.Sd 697, 707-708 [53 P.2d 147]; Anderson v. Byrnes (1898) 122 Cal. 272, 274 [54 P. 821].)
Since plaintiff failed to raise this issue before either the department or the appeals board, we would be justified in completely disregarding it at this late data (See Harris v. Alcoholic Beverage Control Appeals Board (1961) 197 Cal.App.2d 182, 187 [17 Cal.Rptr. 167]; Bohn v. Watson (1954) 130 Cal.App.2d 24, 37 [278 P.2d 454].)