Document: 63 L.Ed.2d 233 100 S.Ct. 937 445 U.S. 97 CALIFORNIA RETAIL LIQUOR DEALERS ASSOCIATION, Petitioner,v.MIDCAL ALUMINUM, INC., et al. No. 79-97. Argued Jan. 16, 1980. Decided March 3, Syllabus A California statute requires all wine producers and wholesalers to file fair trade contracts or price schedules with the State. If a producer has not set prices through contract, must post resale schedule are prohibited from selling retailer at other than in contract. wholesaler below established faces fines license suspension revocation. After being charged for less by also wines which no contract had been filed, respondent filed suit Court of Appeal asking an injunction against State's wine-pricing scheme. The ruled that scheme restrains violation Sherman Act, granted injunctive relief, rejecting claims was immune liability under Act "state action" doctrine Parker v. Brown, 317 341, 307, 87 L.Ed. 315, protected § 2 Twenty-first Amendment, prohibits transportation importation intoxicating liquors into any State delivery use therein laws. Held: 1. California's system constitutes maintenance since holds power prevent competition dictating wholesalers. And involvement is insufficient establish antitrust immunity supra. While satisfies first requirement such challenged restraint be "one clearly articulated affirmatively expressed as state policy," it does meet policy "actively supervised" itself. Under simply authorizes setting enforces private parties, prices, review reasonableness schedules, regulate terms contracts, monitor market conditions, engage "pointed reexamination" program. national favor cannot thwarted casting gauzy cloak over what essentially price-fixing arrangement. Pp. 102-106. 2. Amendment bar application system. 106-114. (a) Although States retain substantial discretion liquor regulations above those governing sale structure distribution system, controls may subject federal commerce appropriate situations. 106-110. (b) There basis disagreeing view courts asserted interests behind promoting temperance protecting small retailers competition. Such reasonable supported evidence, there nothing indicate helps sustain inhibits consumption alcohol Californians. 110-114. 90 Cal.App.3d 979, 153 Cal.Rptr. 757, affirmed. William T. Chidlaw, Sacramento, Cal., petitioner. Jack B. Owens, San Francisco, respondents. George J. Roth, California, amicus curiae, special leave Court. Mr. Justice POWELL delivered opinion 1 In state-court action, Midcal Aluminum, Inc., distributor, presented successful challenge posting statutes wholesale trade. issue this case whether laws shielded either 315 (1943), Amendment. * 24866(b) Business Professions Code, producers, wholesalers, rectifiers State.1 producer's brands. 24866(a). No state-licensed merchant sell "either effective . ." 24862 (West Supp.1980). 3 divided three trading areas administration pricing single each brand sets transactions within given area. §§ 24862, 24864, 24865 Similarly, provide posted area bind Inc. Rice, 983-984, 760 (1979). licensee fines, suspension, outright Cal.Bus. & Prof.Code Ann. 24880 Supp.1980).2 direct control dealers. 4 distributor southern California. July 1978, Department Alcoholic Beverage Control 27 cases E. Gallo Winery. alleged sold filed. stipulated allegations were true could fine suspend its transgressions. App. 19-20. then writ mandate Third Appellate District 5 15 U.S.C. seq. court relied entirely on reasoning Rice Appeals Bd., 21 Cal.3d 431, 146 585, 579 P.2d 476 (1978), where Supreme struck down parallel restrictions distilled liquors. case, held because played only passive part pricing, Brown 6 "In program before us, plays role whatever retail prices. according their own economic interests, without regard actual potential anticompetitive effect; state's restricted enforcing specified producers. 'pointed re-examination,' insure policies 'unnecessarily subordinated' policy." Cal.3d, 445, Cal.Rptr., 595, P.2d, 486. 7 rejected claim insulates regulation many restrictions. determined should prevail maintenance—the promotion preservation establishments. emphasized permitted vertical but frequently resulted horizontal fixing. program, comparable brands marketed identical prices.3 Referring congressional legislative studies, observed little positive impact stores. See infra, 112-113. 8 instant found analysis squarely controlling. Cal.App.3d, 984, 760. ordered enforce Department, sought certiorari Court, did appeal ruling case.4 An brought Retail Liquor Dealers Association, intervenor.5 declined hear Association We writ, 444 824, 45, 62 31 (1979), now affirm decision court. II 9 threshold question plan violates Act. This consistently illegally Dr. Miles Medical Co. John D. Park Sons Co., 220 373, 407, 376, 384, 55 502 (1911), arrangements "designed maintain ., among who [competing goods]." Albrecht Herald 390 145, 88 869, 19 998 (1968); United Parke, Davis 362 29, 80 503, 505 (1960); A. Schrader's Son, 252 85, 40 251, 64 471 (1920). For years, however, Miller-Tydings 1937 authorize maintenance. 50 Stat. 693. goal allow protect establishments Congress thought might otherwise driven marketplace large-volume discounters. But 1975 permission rescinded. Consumer Goods Pricing 1975, 89 801, repealed related legislation.6 Consequently, Act's ban applies unless industry enjoys immunity. 10 plainly Schwegmann Bros. Calvert Corp., 341 71 745, 95 1035 (1951); see supra; Kiefer-Stewart Joseph Seagram Sons, 340 211, 259, 219 As Hughes pointed out Miles, destroys effectively if "formed combination endeavored same agreement other." U.S., 408, S.Ct., 384.7 Moreover, can intrastate beyond reach Burke Ford, 389 320, 443, 554 (1967) (per curiam ). 11 Thus, we consider price-setting sufficient (1943). That regulatory programs grounded our structure. dual government which, Constitution, states sovereign, save constitutionally subtract authority, unexpressed purpose nullify officers agents lightly attributed Congress." Id., 351, 313. powers. Because directed "individual action," concluded violate it. 352, 314. 12 Parker, Agricultural Prorate Advisory Commission authorized organization local cooperatives develop marketing raisin crop. Commission, appointed Governor, approve cooperative following public hearings: "It created machinery establishing prorate [I]t state, acting adopts Ibid. extensive official oversight, wrote, apply. Without result have different. expressly noted "a give authorizing them it, declaring action lawful 13 Several recent decisions applied analysis. Goldfarb Virginia Bar, 421 773, 2004, 44 572 (1975), fee enforced association mandated ethical standards therefore attack. enough conduct 'prompted' action; rather, activities compelled direction sovereign." 791, 2015. Cantor Detroit Edison 428 579, 96 3110, 49 1141 (1976), majority conferred when agency passively accepted utility's tariff. contrast, Arizona rules lawyer advertising they "reflect[ed] clear articulation professional behavior" "subject re-examination policymaker—the Court—in enforcement proceedings." Bates Bar Arizona, 433 350, 362, 2691, 2698, 53 810 (1977). 14 Only last Term, requiring approval location new automobile dealerships. New Motor Vehicle Bd. Cal. Orrin W. Fox 439 96, 99 403, 58 361 (1978). provided would hold hearing franchisee protested establishment relocation competing dealership. 103, 408. active role, held, "clearly expressed" "displace unfettered business freedom matter dealerships." 109, 412. These two Brown. First, policy"; second, City Lafayette Louisiana Power Light 435 389, 410, 98 1123, 1135, 364 (1978) (opinion Brennan, J.).8 standard. forthrightly stated permit second parties. neither establishes nor reviews schedules; contracts. conditions program.9 teaches, III 16 Petitioner contends even bars case. Section Eighteenth Amendment's prohibition manufacture, sale, liquor. section reserved certain traffic liquor: "The State, Territory, possession liquors, thereof, hereby prohibited." remaining us permits countermand policy—adopted power—in 17 determining powers focused primarily language provision rather history Board Young's Market 299 59, 63-64, 57 77, 78-79, 81 38 (1936).10 terms, gives "transportation importation" territories. Of course, logically entails considerable strictly limited importing transporting alcohol. Ziffrin, Reeves, 308 132, 138, 60 163, 166, 84 128 (1939). not, lose sight explicit grant authority. 18 Court's early recognized great jurisdictions. Market, supra, concerned interstate imports alcohol; another law restricting types imported States, Mahoney Triner 304 401, 952, 82 1424 (1938); others involved "retaliation" barring proscribed shipments S. Finch McKittrick, 305 395, 59 256, 83 246 (1939); Indianapolis Brewing Comm'n, 391, 254, 243 upheld authority largely States' "importation transportation" Yet acted resisted contention "freed upon police provisions Constitution." 229 64, 79. Subsequent "wide latitude" regulation, Hostetter, 384 35, 42, 86 1254, 1259, 336 (1966), stressed important matters survived ratification tax Export-Import Clause. Revenue James Beam 377 1247, (1964). Nor insulate Fourteenth requirements equal protection, Craig Boren, 429 190, 204-209, 451, 460-463, 397 due process, Wisconsin Constantineau, 400 433, 436, 91 507, 509, 515 (1971). 20 More difficult define, extent power. directly qualified 2, Federal Government retains some Commerce Clause Jameson Morgenthau, 307 171, 804, 1189 (1939) ), whiskey-labeling prescribed Alcohol Administration 977. uphold Kentucky's licensing haulers until satisfied reasonable. 139, 167. contours Congress' sharpened Hostetter Idlewild 324, 331-332, 1293, 1298, 350 22 "To draw conclusion somehow operated 'repeal' wherever would, absurd oversimplification. pro tanto 'repealed,' left foreign patently bizarre demonstrably incorrect." 23 added significant, elementary, observation: "Both parts Constitution. Like considered light other, context issues stake concrete case." 332, 1298. 206, 461.11 24 pragmatic effort harmonize evident several companies liable Frankfort Distilleries, 324 293, 65 661, 951 (1945). (1951), example, manufacturer attempted force comply Louisiana's similar respects here. violated distributor. Fifteen years later, York dealers attest "no higher lowest price" anywhere States. exerted irresistible pressure [dealers] order comply," cautioned "[n]othing Act" conspiracy fix 45-46, 1261. 25 demonstrate bright line between grants virtually complete how regulations, reconciled after careful scrutiny concerns "concrete B 26 interest both familiar substantial. "Antitrust general, particular, Magna Carta free enterprise. They free-enterprise Bill Rights protection fundamental personal freedoms." Topco Associates, 405 596, 610, 92 1126, (1972). 28 Northern Pacific R. 356 1, 4, 78 514, 517, 545 (1958). constitutional provision, "exercis[ed] possessed" approved Atlantic Cleaners Dyers 286 427, 435, 52 607, 609, 76 1204 (1932); 398, 1129. acknowledge importance procompetition policy. 29 identified 983, 760, 598, 490.12 findings conclusions binding undercut rights guaranteed Hooven Allison Evatt, 652, 659, 870, 874, 1252 (1945); Creswill Knights Pythias, 225 246, 261, 32 822, 827, 56 1074 (1912). Nevertheless, accords "respectful consideration weight views highest court" law, Indiana ex rel. Anderson Brand, 303 95, 100, 446, 685 (1938), customarily accept factual absence "exceptional circumstances." Lloyd Fry Roofing Wood, 344 157, 160, 73 204, 168 (1952). 30 "controlled [California] [supra]." Therefore, turn opinion's treatment purposes maintenance: "to promote orderly conditions." 599, 490.13 correlation temperance. It cited study showing 42% increase per capita 1950 1972, while effect. 457-458, 602-603, 494, citing Dept. Finance, State: Reappraisal Policies, xi, (1974). "at very least raise doubt regarding justification ground temperance." 603, 494.14 primary "protect[ing] licensees predatory large retailers." 456, 602, 493.15 gauging interest, adopted Beverages Rice. "rejected argument necessary survival enacted revealed "states percent rate firm failures states, growth stores 1956 1972 cent laws." Ibid., S.Rep. 94-466, p. (1975). Pointing abandonment 102, persuasive continue "fair eliminate 457, 494. came respect 33 evaluation reasonable, evidence Nothing record suggests Neither petitioner Attorney General his brief demonstrated need legitimate ever undoubted competitive economy. unsubstantiated put forward stature goals 34 conclude correctly decided provides shelter caused program.16 judgment Appeal, District, 35 Affirmed. 36 BRENNAN take provides: "Each grower, licensed wine, rectifier, rectifier shall: "(a) Post consumers governed made person owns brand. "(b) Make he resold consumers." 24866 1964). Licensees damages suits unfair 24752 1976 five leading gin $4.89 fifth gallon, Scotch whiskey $8.39 $8.40 fifth. 454, nn. 14, 600, 491-492, 16. Capiscean Corp. 996, 151 492 used invalidate sales consumers. independent 3,000 members. Reports accompanying repeal alter (1975); H.R.Rep. 94-341, n. U.S.Code Cong. Admin.News, 1569. effect Part III, infra. 101, 3. specific finding "cannot reasons declared invalid Rice." Norman's On Waterfront, Wheatley, F.2d 1011, 1018 (CA3 1971); Asheville Tobacco FTC, 263 502, 509-510 (CA4 1959); Note, Revisited: Action Doctrine Goldfarb, Cantor, Bates, 77 Colum.L.Rev. 898, 916 contrasts approach completely boundaries. g., Va.Code 4-15, 4-28 comprehensive freedom" 412, (1978); 63, 78, (1936). sound canons interpretation demonstrates wise reluctance wade complex currents beneath proposal conventions. Senate sponsor resolution said restore absolute affecting Cong.Rec. 4143 (1933) (remarks Sen. Blaine). statements supporting Midcal's designed ensure "dry" forced Cong.Rec., 4140-4141. sketchy records conventions reflect consensus thrust although delegates hope begin immediately. Ratification Constitution 104 (1938) (Wilson, President Idaho Convention); id., 191-192 (Darnall, Maryland 247 (Gaylord, Chairman Missouri 469-473 (resolution Washington Convention calling traffic"). generally Effect Twenty-First Authority Intoxicating Liquors, 75 1578, 1580 Economic Localism Laws—Experience 72 Harv.L.Rev. 1145, 1147 (1959). Nippert Richmond, 327 416, 66 586, (1946), commented footnote: "[E]ven degree control, altogether power, conflicts imposed 425, 15, 591, 15. unusual posture reflects, shown enthusiastic noted, responsible administering Appeal. 101-102; Tr. Oral Arg. 20. Instead, maintained intervenor. intervenor General, curiae support scheme, opinions text. additional 760-761. suggestion industry, pointing "do distinguish wines." 39, 1258, (1966) (citing concluding significant alcoholic beverages"). "reduce excessive consumption, thereby encouraging 493. concern temperance, Since requested relief court, involving

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