Court Opinion

ID: 7821795
Source: CourtListenerOpinion
Date Created: 2022-09-07 17:57:05.49291+00
Date Added: 2024-06-11T16:30:45.364539
License: Public Domain

Darrell Hickman, Justice, dissenting. The majority’s decision is wrong for four reasons. First, there is no movement of the product in interstate commerce. Wometco sought a license to operate vending machines to sell cigarettes retail, not wholesale. Consequently, the question is reduced to whether a Florida corporation, acting through a subsidiary North Carolina corporation, has a constitutional right to sell cigarettes retail in Arkansas. The statute is unconstitutional only if no reasonable state of facts can be conceived that would justify Arkansas limiting the privilege to sell to Arkansas residents and those corporations principally owned by Arkansans. McGowen v. Maryland, 366 U.S. 420 (1961). Taxes collected on tobacco products are substantial and the avoidance of such taxes by illicit sales, or “bootlegging,” is a legitimate concern of the state. How are these provisions to be enforced against a nonresident? The statement of the majority that “there is no provision in this or any other act in this state relating to health, safety or welfare of tobacco ... purchases” is incorrect. Ark. Stat. Ann. § 41-2465 (Repl. 1977) reads: “It shall be unlawful for any person, other than the parent or guardian, to give, barter, or sell to a minor under eighteen years of age tobacco in any form or cigarette papers.” Ark. Stat. Ann. § 41-2406 (Repl. 1977) defines such an act as contributing to the delinquency of a minor, a Class A misdemeanor. Arkansas does regulate tobacco sales to some degree. Since there is no movement of the goods in interstate commerce and there is a reasonable justification for the law, the law is not in violation of the Interstate Commerce Clause. Second, not all laws favoring state residents are unconstitutional. In Exxon Corp. v. Governor of Maryland, 437 U.S. 117 (1978), a Maryland statute was upheld that essentially barred out-of-state producers and refiners of petroleum products from selling gasoline retail in Maryland. The Court stressed the fact that the Commerce Clause “protects the interstate market, not particular interstate firms from prohibitive burdensome regulations.” In Williamson v. Lee Optical Co., 348 U.S. 483 (1955), the Court upheld an Oklahoma law that severely restricted opticians and favored optometrists and opthalmologists. In doing so the Court laid down the constitutional test regarding state protectionist statutes: The day is gone when this Court uses the Due Process Clause of the Fourteenth Amendment to strike down state laws, regulatory of business and industrial conditions, because they may be unwise, improvident, or out of harmony with a particular school of thought. . . . For protection against abuses by legislatures the people must resort to the polls, not to the courts. ... The prohibition of the Equal Protection Clause goes no further than the invidious discrimination. [Emphasis added.] In City of New Orleans v. Dukes, 427 U.S. 297 (1976), the Court upheld a New Orleans city ordinance that favored experienced street vendors over newcomers. In upholding this ordinance the Court said: When local economic regulation is challenged solely as violating the Equal Protection Clause, this Court consistently defers to legislative determinations as to the desirability of particular statutory discriminations. Unless classification trammels fundamental personal rights or is drawn upon inherently suspect distinctions such as race, religion, or alienage, our decisions presume the constitutionality of the statutory discriminations and require only that the classification challenged be rationally related to a legitimate state interest. States are accorded wide latitude in the regulation of their local economies under their police powers, and rational distinctions may be made with substantially less than mathematical exactitude. ... In short, the judiciary may not sit as a superlegislature to judge the wisdom or desirability of legislative policy determinations made in areas that neither affect fundamental rights nor proceed along suspect lines. [Emphasis added.] Recently the United States Supreme Court dealt with legislation that favored a Minnesota industry over out-of-state firms. In upholding this law the Court said: A nondiscriminatory regulation serving substantial state purposes is not invalid simply because it causes some business to shift from a predominantly out-of-state industry to a predominantly in-state industry. Only if the burden on interstate commerce clearly outweighs the State’s legitimate purposes does such a regulation violate the Commerce Clause. Minnesota v. Clover Leaf Creamery Co., 101 S.Ct. 715 (1981). When these decisions are applied to the facts before us, it is clear to me that Arkansas can prohibit a Florida corporation from operating through yet another foreign corporation to sell cigarettes retail in Arkansas. The third reason for disagreeing with the majority opinion is that this case involves a privilege. There is no right to sell cigarettes. States are given wide latitude in regulating privileges; a privilege can be banned altogether. Rodgers v. Southland Racing Corp., 247 Ark. 1115, 450 S.W. 2d 3 (1970); Hinebaugh v. James, 119 W.Va. 162, 192 S.E. 177 (1937). Finally, the majority’s decision is wrong because it misapplies two of our decisions. In Rodgers v. Southland Racing Corp., supra, we upheld a law that required all officers and all directors of Southland to not only be residents of Arkansas but residents of Crittenden County for two years. In doing so we clearly stated why Arkansas could so act: The operation of a dog track, with legalized gambling, is unquestionably a privilege which the state might prohibit altogether if it chose to do so. Fortune telling and the sale of intoxicating liquors fall in that same category and may be similarly prohibited ... that being true, the State may impose conditions upon the exercise of the privilege beyond those that might be imposed upon the enjoyment of matters of common right. Statutes restricting the issuance of liquor licenses to local residents have frequently been sustained. ... Such a statute is a permissible exercise of the State’s police power. Later we upheld a law that denied any nonresident the right to operate “juke boxes.” Brown v. Cheney, 233 Ark. 920, 350 S.W. 2d 184 (1961), cert. denied 369 U.S. 796 (1962). Juke boxes are hardly a great factor in the health, safety or welfare of Arkansans. The General Assembly simply decided that a license to operate a juke box was a privilege that should be taxed. We upheld the law. Contrary to the majority’s statement, there is no “regulation” of juke boxes in Arkansas related to health, welfare or safety. In doing so we said: It is significant we think that our legislature, without successful challenge, has many times favored residents over nonresidents in regulating certain privileges, such as: The manufacture and sale of wine (Ark. Stats. § 48-110); Retail beer dealers (§ 48-515); Fur dealers (§ 47-202); The taking of mussels (§ 47-601, C.), and The practice of optometry (§ 72-806). Appellant’s contention that Act 120 violates Article 2, §§ 2, 3, 18, 19 and 29 of the State Constitution has been examined and found without merit. Section 2 deals with inalienable rights — not with privileges; Section 3 refers to discrimination based on race or color; Section 18 refers to discriminations between citizens or class of citizens; Section 19 refers to monopolies; and, Section 29 deals with rights retained by the people. We are unable to see how any of the above sections are related to or are violated by Act 120. The majority too easily ignores the statutes, our decisions, and the United States Supreme Court decisions. The majority decision simply cannot be squared with the facts or the law. I respectfully dissent, finding the Arkansas law constitutional as it is presumed to be. Adkisson, C.J., and Purtle, J., join in this dissent.