Legal Document

355 U.S. 24 78 Supreme Court Reporter 106 2 United States Reports Lawyer’s Edition 2d Series KF101.8 U54 5 Joseph Federal KF105 F3 BLACK, Assistant Regional Commissioner, Alcohol and Tobacco Tax Division (Dallas Region), Internal Revenue Service, Petitioner,v.MAGNOLIA LIQUOR COMPANY, Inc., Number 14. Argued Oct. 17, 1957. Decided Nov. 12, Mr. Daniel M. Friedman, Washington, D.C., for petitioner. Moise S. Steeg, Jr., New Orleans, La., respondent. Justice DOUGLAS delivered the opinion of Court. 1 Petitioner seeks to suspend respondent's wholesale liquor permit issued under Administration Act (49 Statutes-at-Large 977, 27 Code KF62 § 201, Annotated KF65 U5 201 et seq.) having made 'quota' sales alcoholic beverages in violation 5(a) (b) Act. The agency ordered suspension 15 days that violation. Appeals set order aside, Cir., 231 Reporter, 2nd 941. case is here on a petition writ certiorari, which we granted (352 877, 77 103, 79) because conflict between decision below Distilled Brands, versus Dunigan, 222 867, from Second Circuit. Section makes it unlawful wholesaler induce retailer purchase distilled spirits 'to exclusion whole or part spirits' offered by other persons 'by requiring take dispose certain quota any such products,' where, inter alia, effect 'substantially restrain prevent transactions interstate foreign commerce products.' 3 facts are during period question Johnny Walker Scotch Seagram's V. O. Whiskey were short supply, while Ancient Bottle Gin 7-Crown plentiful, being poor seller. Respondent, increase its Whiskey, compelled retailers buy them, they did not desire, obtain two whiskeys desire. found within meaning Act, affected adversely competing brands, 'excluded, part, * sale commerce'—all end substantially restraining preventing commerce. concluded complained of, although tie-in sales, violate 4 Tying agreements one commodity conditioned another have been repeatedly condemned antitrust laws, since serve no purpose beyond suppression competition. Standard Oil company California Stations States, 337 293, 305—306, 69 1051, 1058, 93 L.Ed. 1371; Paramount Pictures, 334 131, 156—159, 68 915, 928—929, 92 1260; International Salt 332 392, 20; Mercoid Corporation Minneapolis Honeywell Regulator Co., 320 680, 64 278, 88 396. One aim Congress present legislation was prohibit practices 'analogous those prohibited laws,' (see H.R.Rep. 1542, 74th Cong., 1st Sess., Page 12). involved seem us run afoul policy, coerced into buying he would otherwise purchased at time, sellers products extent excluded market exist when demand arose. A who compels an unwanted inventory as condition acquisition needed articles exacts excludes wholesalers statutory sense. court relied countervailing considerations. It noted headed 'Exclusive outlet' 5(b) 'Tied house.' These titles enough, thought, raise doubts concerning clauses, 'tied house' 'exclusive outlet,' but only victim these particular tied-in sales. constrained read narrowly, conceived be penal nature forfeited do business. But deal with remedial whose language should given hospitable scope. See Securities Exchange Commission C. Joiner Leasing Corp., 344, 353, 355, 120, 124, 125, 88. will thwarted if gave strictest construction possible. fair our guide; seems too clear extended argument sale, though falls creating exclusive outlet permanently house,' violates 6 consideration upon letter written 1947 asking amendment had doubt 'whether violations statute could established through 'tie-in' sales.' administrative practice, advised, has quite consistently reflected view banned Annual Report, Commissioner 1946, Pages 45—46; id., 1947, 49. fact sought clarifying is, therefore, significance. Wong Yang Sung McGrath, 339 33, 47, 70 445, 452, 94 616; Turley, 352 407, 415, note 14, 397, 401, 430. judgment reversed remanded proceedings conformity this opinion. 7 Reversed.

Classification Label: 7