Document: 458 U.S. 654 102 S.Ct. 3294 73 L.Ed.2d 1042 Baxter RICE, Director, Department of Alcoholic Beverage Control California, Petitioner,v.NORMAN WILLIAMS COMPANY et al. BOHEMIAN DISTRIBUTING COMPANY, Petitioner, v. NORMAN WINE & SPIRITS WHOLESALERS OF CALIFORNIA, Nos. 80-1012, 80-1030 and 80-1052. Argued April 21, 1982. Decided July 1, Syllabus A provision California's alcoholic beverage laws states that a "licensed importer shall not purchase or accept delivery any brand distilled spirits unless he is designated as an authorized such by the owner his agent" (designation statute). The statute apparently was enacted in response to perceived extraterritorial effects Oklahoma's "open wholesaling" statutes, whereby licensed California who unable obtain through distiller's established distribution system could them from Oklahoma wholesalers. Prior designation statute's effective date, respondents sought extraordinary writ Court Appeal enjoin enforcement statute. court entered judgment for respondents, holding conduct contemplated per se illegal under § 1 Sherman Act because it gave distillers unfettered power restrain competition merely deciding may compete handling distillers' brands, thus on its face invalid pursuant Supremacy Clause Federal Constitution. Held : 1. being pre-empted Act. Pp. 659-662. (a). state statute, when considered abstract, be condemned antitrust only if mandates authorizes necessarily constitutes violation those all cases, places irresistible pressure private party violate order comply with Such condemnation will follow cases violation. If activity addressed does fall into category, therefore must analyzed rule reason, cannot abstract. 659-661. (b). invocation would subject illegality manufacturer's use vertical nonprice restraints illegal. Continental T.V., Inc. GTE Sylvania Inc., 433 36, 97 2549, 53 568. enforces decision intrabrand competition, preventing unauthorized wholesaler obtaining products outside chain. effect simply counteract laws, restoring ability determine which wholesalers import California. While manner distiller utilizes arrangements makes analysis there no basis condemning itself force 661-662. 2. 5(a) Alcohol Administration Act, prohibits establishing exclusive retail outlets. way requires outlets, terms even require wholesale arrangements. Pp.663-664 3. deny due process law. Respondents do possess constitutionally protected liberty property interest permission deal products, Due Process offended wholesaler's inability challenge decisionmaking. P. 664. 4. Nor Equal Protection discriminates between nondesignated rationally related legitimate purposes, enabling place foster interbrand competition. 665. 108 Cal.App.3d 348, 166 Cal.Rptr. 563, reversed remanded. John R. McDonough, Los Angeles, Cal., petitioners George J. Roth, Sacramento, petitioner 80-1012. G. Weickhardt, San Francisco, respondents. Justice REHNQUIST delivered opinion Court. these obtained prohibiting enforcing amendment State's liquor statutes. That held United States 563 (1980). We conclude mistaken application preemption principles, we reverse judgment. 2 * beverages brought State within are consigned importer. Cal.Bus. Prof.Code Ann. 23661 (West Supp. 1982). In 1979, Legislature amended control provide agent." 23672. This challenged become January 1980, understandably referred "designation statute."1 3 laws. At time, statutes were understood selling sell nondiscriminatory basis.2 Because "open-wholesaling" As result, desired rely contractual undertakings handle products. therefore, close off "Oklahoma connection" importers products.3 4 date benefiting connection," enjoining agreed conflicted 26 Stat. 209, amended, 15 U.S.C. 1.4 According court, "gives owners . compete." Cal.App.3d, at 356, Cal.Rptr., 569. distinguished T. V., 568 (1977), judged "rule reason" rather than illegality, ground did attack refuse business them, but "the provided authority prohibit trading others." 357, 570. 5 Supreme denied review. granted certiorari, 454 1080, 632, 70 613 (1981), now reverse. II A. 6 determining whether pre-empts apply principles similar employ considering federal Clause. typical pre-emption case, inquiry exists irreconcilable conflict regulatory schemes. existence hypothetical potential insufficient warrant scheme situation party's compliance might cause him preempted have anticompetitive effect. See,e.g., New Motor Vehicle Bd. Cal. Orrin W. Fox Co., 439 96, 110-111, 99 403, 412-413, 58 361 (1978); Exxon Corp. Governor Maryland, 437 117, 129-134, 98 2207, 2215-2218, 57 91 Joseph E. Seagram Sons, Hostetter, 384 35, 45-46, 86 1254, 1260-1261, 16 336 (1966). 7 successfully irreconcilably conflicts policy. Retail Liquor Dealers Assn. Midcal Aluminum, 445 97, 100 937, 63 233 (1980), examined required members wine industry file fair trade contracts price schedules State, producer had set prices contract, post resale schedule producer's brands. facially mandated maintenance, has long been regarded violation5 Id., 102-103, S.Ct., 941-942; see Dr. Miles Medical Co. D. Park Sons 220 373, 407-409, 31 376, 384-385, 55 L.Ed. 502 (1911). 8 By contrast, supra, rejected facial upon 9 York's Law,6 retailers monthly Authority accompanied affirmation charged higher lowest sales made anywhere during preceding month. 39-40, 1257-1258. found clear repugnancy laws: "The bare compilation, without more, information support affirmations filed Section imposes economic appellants requirements 9. On contrary, appears firmly anchored assumption deter attempts preserve their York level conspiring raise sold elsewhere country. 10 "Although possible envision circumstances discriminations proscribed Robinson-Patman compelled 9, entirely too speculative present posture this case. ." 1261 (citations omitted). 11 Our decisions area instruct us, Analysis reason examination underlying particular practice, lend conclusion inconsistent 12 It remains us B 13 promote concluded non-price should scrutinized reason. U.S., 57-59, 2561-2562. After our Sylvania, said every attempt manufacturer own 14 permits designate State. prevents impose kind; matter determine. number limited; imported specified location irrelevant purposes restrict imprimatur 412-413.7 which, once understood, operated deprive over nationwide. Thus, restored what taken away: respects, find much like upholding validity insulate scrutiny reason.8 There basis, however, Act.9 III 17 seek three grounds below. None contentions merit. 18 contend 49 981, 27 205(a).10 See S.Rep.No.1215, 74th Cong., 1st Sess., 6-7 (1935); H.R.Rep.No.1542, 10-11 (1935). other words, requiring retailer buy exclusion third party.11 terms, One able hypothesize arrangement enforced prohibited 5(a), invalidate "To hold otherwise ignore teaching Court's seeking out regulation where none clearly exists." Huron Portland Cement Detroit, 362 440, 446, 80 813, 817, 852 (1960). 19 denies "second tier licensing state's process," procedural protections regard decisions. Brief 36. 20 contention think permission. What really challenging Legislature's give criteria govern exercise power. authorize assess wisdom decision. SeeFerguson Skrupa, 372 726, 729-732, 83 1028, 1030-1032, 93 (1963). C 21 Finally, violates can little doubt purposes. Minnesota Clover Leaf Creamery 449 456, 461-470, 101 715, 722-727, 66 659 (1981). enables province consumers better decided connection." Vance Bradley, 440 93, 109, 939, 411-412, 59 171 (1979). 22 reversed, remanded proceedings opinion. 23 so ordered. 24 STEVENS, whom WHITE joins, concurring 25 Under each empowered decide regulate product designating product. contemplates market provides nonmarket mechanism Hybrid character different public one hand, see, e.g., 91; 336,1 purely restraint other, 568; 502. twice hybrid price-fixing Schwegmann Bros. Calvert Distillers Corp., 341 384, 71 745, 95 1035; Ass'n 233. both fix unsupervised facts Schwegmann, involving Louisiana marketing practices two out-of-state distributors gin whiskey, particularly instructive. individual written agreement they minimum distributors. These maintenance agreements, violated rendered lawful Miller-Tydings But Orleans refused sign distributors' cutrate prices. responded less fixed schedules. complaint unfair sale stipulated though contract. precluded nonsigner provision. Even agreements unlawful, distributor same using "club." 395, 751 (emphasis original). teaches facilitates restriction manufacturer, sufficient market, aid gives additional permissible pass muster Act.2 28 systems For restrictions drastically affected first "free export" provisions second amount significantly greater exist neither intervened market. Contrary perception, ante, 662,3 different. direct importers,4 whereas persuade resell importers. that, absent enforce agreements. more away 29 obviously presents difficult question presented Midcal.5 benefit conclusive presumption anticompetitive. involves species respect sure rules relating competition; also according make difference legality illegality. conceivably create unacceptable unnecessary risk result invalidation. removal legal obstacle imposition enhances possibility. 30 I agree invalidation remand club affords unreasonable degree enjoy free determined sophisticated inquiry, concur 23672 actually version invalidated Rice Appeals Bd., Cal.3d 431, 146 585, 579 P.2d 476 (1978), constituted 100-102, 940-941, Okla.Stat., Tit. 37, 533 Court, recently closed open-wholesaling destined consumption States. Central Okl., 640 1351 (1982). attractive 536.1 demise bearing disposition issues cases. Although phrase evident properly recognized jurisdiction entertain lawsuit Clayton 15. 354, n. 2, 568, Rather remedy against parties, unconstitutional application. Indeed, suit prior not, employed Instead, consideration circumstances. appropriate " 'which pernicious lack redeeming virtue conclusively presumed elaborate precise harm caused excuse use.' 50, 2557, quoting Northern Pacific States, 356 5, 78 514, 518, 545 (1958). surprising, instant yet put effect, Hostetter constitutionality. another stating applied concrete factual situations. 412-413. explained, declare void face. certainly conceivable, resolution issue, necessary consider saved doctrine Parker Brown, 317 341, 307, 87 315 (1943), Twenty-first Amendment. provides: "It unlawful person engaged distiller, brewer, rectifier, blender, producer, wholesaler, spirits, wine, malt beverages, bottler, warehouseman directly indirectly affiliate: "(a) Exclusive outlet require, otherwise, whole part offered persons interstate foreign commerce, requirement course engages practice extent substantially prevent transactions commerce prevent, deter, hinder, offering commerce." 205(a). CFR §§ 8.3, 8.11, 8.23 "much like" Ante, 662. Except fact involved quite imposed market; grant was, distinguishes most Whereas best illustrates treatment accorded restraints, perhaps either All fixed. Relying presumably fixing itself, empower parties undertake regulation. "Thus, California." Unless expressly designated, lawfully choose business. certain reasonable condition doing Subject exception Colgate 250 300, 39 465, 992, dictate ultimate consumers. From governing manufacturers, follows analyses.

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