Opinion ID: 2034071
Heading Depth: 1
Heading Rank: 1

Heading: The Legitimacy of the Statute's Purpose

Text: The district court concluded that Minn. Stat. § 340.405 (1980) in its entirety, has as its purpose the prevention of vertical integration of the intoxicating malt beverage industry [i. e. between wholesalers and brewer-wholesalers on one hand, and retailers on the other] thereby encouraging competition and restricting monopolistic market power. Appellants contend that the record fails to support that conclusion and allege that the actual purpose of the statute is to bestow a `special privilege' or `valuable franchise'    upon the members of the MBWA, which is not a legitimate legislative purpose. Appellants, however, offer no evidence of legislative intent. They simply assert that the MBWA persuaded the legislature to pass the cash beer law but do not substantiate that claim, nor would it necessarily be relevant if proved. Discrepancies between a statute's apparent purpose and its discernible consequences do not refute the legislature's intent and render its enactments constitutionally infirm. The United States Supreme Court has observed, in the local economic sphere, it is only the invidious discrimination, the wholly arbitrary act, which cannot stand consistently with the Fourteenth Amendment. New Orleans v. Dukes, 427 U.S. 297, 303-304, 96 S.Ct. 2513, 2516, 49 L.Ed.2d 511 (1975). We do not find that whatever benefits accrue to the malt liquor wholesalers demonstrate invidious discrimination or constitute an arbitrary act. The prohibition against extending credit by wholesalers to retailers is one means the legislature has chosen to deal with the more general problem of ownership in or control over retailers, sometimes termed the tied-house evil. Under the Twenty-First Amendment the states have authority to adopt legislation to effectively minimize such practices. Federal Distillers, Inc. v. State, 304 Minn. 28, 39-40, 229 N.W.2d 144, 154 (1975). The appellants argue that the statute's alleged purpose of preventing vertical integration has ceased to be a legitimate objective since the decision of the United States Supreme Court in Catalano, Inc. v. Target Sales, Inc., 446 U.S. 643, 100 S.Ct. 1925, 64 L.Ed.2d 580 (1980). There, however, the Court held that a horizontal agreement among brewer wholesalers to withhold credit from retailers was a per se violation of § 1 of the Sherman Act, 15 U.S.C. § 1 (1976), quite a different matter from the denial of credit imposed by statute for the legitimate purposes to which we have alluded.