Court Opinion

ID: 9447427
Source: CourtListenerOpinion
Date Created: 2023-08-03 22:34:51.645198+00
Date Added: 2024-06-11T17:31:02.262922
License: Public Domain

HOLLAND, Senior District Judge,
Designate (dissenting).
This is a case involving Section 5213 (a) of the Internal Revenue Code of 1954, as amended by 72 Stat. 1373 (1958), 26 U.S.C.A. § 5291, both in its interpretation and its application.
The plaintiff was before the Court as a corporation committed to the observance of all applicable laws in the conduct of its grocery business. There is nothing in the record to warrant any other characterization of the plaintiff corporation, in its management and conduct by its officers and agents.
First I take up the matter of interpretation of the Section. A careful reading of this Section indicates that it refers to the obtaining of information by the Alcohol and Tobacoo Tax Unit only as to sales of merchandise in the past. The evident purpose of the Section was to aid the Alcohol and Tobacco Tax Unit in obtaining evidence for the prosecution of a violation in the past, that is, an allegedly past occurrence. This is so whether the information would be helpful in the presentation of a conspiracy case involving the seller itself as a defendant, or whether it was desired only in connection with a manufacturer, a moonshiner, in simple words. The plaintiff here was ordered to give information daily as to its sales of sugar in specified quantities, which would be of a future occurrence date, that is, a sale that would take place after the receipt of the demand letter. The Congressional Act is properly construed as referring to a past sale, and anything in the regulation which would extend the Act itself to future sales, is beyond the scope of the Congressional Act. Thus interpreted, and I think clearly so, I could stop here and justify my conclusion that the case should be reversed.
However, I go further, and adopting a contrary interpretation of the Act, to-wit, that such demand letters could be properly written by the Alcohol and To*85bacco Tax Unit asking for information as to all sales of sugar in designated quantities of a future occurrence, and even under this interpretation, this case should be reversed. Having received the letters from the Alcohol and Tobacco Tax Unit, the plaintiff brings this suit, maintaining that it is a law-abiding corporation, that compliance would work tremendous additional expense on the plaintiff in order to comply with the demands made of it, that it, the plaintiff, would be grievously damaged in its good reputation among its present and prospective customers by having to gain from the customer all the information about the customer, which the letters demand ; maintaining that such letter to it would affect, to its disadvantage, the plaintiff’s ability to make sales in the future, inasmuch as a customer would, under ordinary circumstances, pass on to a competitor, who could sell to the customer without having to give to the selling merchant all this type of information, and with this position justifiably taken by the plaintiff, the Court is asked to inquire into the justification of the Alcohol and Tobacco Tax Unit for such action taken by it as to the plaintiff. In the •complaint, this corporation was entitled to maintain, as I have stated, to-wit, that it was a law-abiding corporation, and that the Court should inquire into whether the plaintiff was in fact itself conspiring with others in knowingly aiding the illegal manufacture of distilled spirits, or whether the plaintiff was unduly aiding an alleged moonshiner in his purchase of unusually large quantities of sugar. By this suit, the plaintiff was entitled to a judicial inquiry on the matter of unjust discrimination, in that all the grocers in the area had not been ordered to give this requested information, the complaint presenting a clear case of alleged discrimination in that the demands were not made of all of the grocers in the area, to the serious disadvantage of this plaintiff. There was a prayer in the complaint not only for a permanent injunction, but also for a temporary injunction. Compliance temporarily would seriously damage the plaintiff in an irreparable manner. At the hearing, nothing was produced, either by cross-examination of the plaintiff, or by independent evidence from the Alcohol and Tobacco Tax Unit, to warrant the selection by the Alcohol and Tobacco Tax Unit of this plaintiff for the giving of such information, and not requiring it of the plaintiff’s competitors. The record warrants the conclusion that the plaintiff would be greatly damaged during the interval before a final hearing on the prayer for a permanent injunction.
In conclusion, I am of the opinion that the letter from the Alcohol and Tobacco Tax Unit as to future sales was not warranted by the statute. This alone, in my judgment, would warrant the reversal of this case. But further, I am of the opinion that under a construction of the statute, which would include request for information as to future sales, that this plaintiff was entitled to a temporary injunction, since there was nothing in the record calculated to justify the Alcohol and Tobacco Tax Unit in picking out this plaintiff from all the grocers in the area to require of it the giving of such information as to future sales.
I would reverse the case and remand to the District Court, directing the granting of the temporary injunction, or requiring that the Alcohol and Tobacco Tax Unit produce some evidence which would justify the demand from the plaintiff for the giving of such reports, which its competitors, or some of them, were not so required to give.