Court Opinion

ID: 5756824
Source: CourtListenerOpinion
Date Created: 2022-01-12 17:07:49.996907+00
Date Added: 2024-06-11T08:41:26.382576
License: Public Domain

Eager, J.
(dissenting). I would confirm the determination of the State Liquor Authority.
The statute expressly provides that it shall be unlawful for any manufacturer or wholesaler of liquors to “ render any service of any kind whatsoever, directly or indirectly, to any person licensed under this chapter [Alcoholic Beverage Control Law] which in the judgment of the liquor authority may tend to influence such licensee to purchase the product of such manufacturer or wholesaler.’? (Alcoholic Beverage Control Law, § 101, subd. 1, par. [c]). The “ judgment ” in a given case as to whether a particular “ service ” rendered by a manufacturer or wholesaler to a retail licensee has a tendency to influence the latter to purchase the products of the former is one for the Authority to make. Here, the judgment of the Authority was an informed judgment, and the court has no right to substitute its judgment in place thereof; and where there is a rational basis *289for the determination of the Authority and the determination is supported by substantial evidence, it may not be annulled. (■See 1 N. Y. Jur., Administrative Law, §§ 181-185.)
The hearing officer, on the basis of evidence produced before him, found that the Schenley Charge Plan was instituted by petitioner (Schenley) “as a good will gesture and to spread the name of Schenley throughout the restaurant industry ’ ’. The plan contemplates the issuance of credit cards to Schenley employees and to employees and representatives of affiliated companies, vendors, suppliers, public relations firms, advertising agencies, newspapers and periodicals having business relations with .Schenley. Of the nearly 1,000 credit cards already issued, more than two thirds of them are held by persons who are employees of third persons doing business with Schenley. It is a reasonable inference, as argued by respondent, that eventually the credit card holders will number at least 3,000, the greatest number of whom will not be employed directly by Schenley.
The Schenley credit card holders will be inclined to patronize the places of business of those restaurant licensees who will extend credit to them without question. The credit card holders using the business facilities of such licensees will generally be accompanied by members of their families, their friends or business guests; and participating licensees should substantially benefit from the patronage. Furthermore, inasmuch as such licensees actually receive a guarantee of full payment of the charges incurred by the credit card holders, they are enabled to extend credit to such holders without the necessity of incurring the expense incident to credit investigations and collection of accounts. One licensee testified that he welcomed the plan because it relieved him of the necessity and expense of furnishing photocopies of accounts required for tax purposes; instead of separate billing to the individual customer, the plan permitted a consolidation into one convenient operation.
One of the special benefits to the participating restaurant of this Schenley credit card plan is that it is cost-free. Many restaurants are agreeable to and pay charges of from 5% to 7% of the bills for the privilege of servicing the customers of other credit card plans. But, under the Schenley plan, its .subsidiary services the accounts, collecting the bills of the restaurant customers and remitting to the restaurants, without any charge to them.
Also, the credit card holders themselves, benefitted by Schenley ’s courtesy in the issuance of cards to them, will be inclined *290to favor Sehenley products in their patronage of participating establishments. This in turn could very well generally increase the demand for and popularity of such products in such establishments with the result that they will be under ‘ ‘ influence * * * to purchase the product ” of Sehenley.
It is only natural for one who is benefitted by any free service to feel under obligation to his benefactor. It is an old adage that one hand is expected to wash the other. A participating licensee, who has profited substantially from the Sehenley charge plan accounts, would be inclined to favor Sehenley products in the ordering and selling of liquors. It is unrealistic to believe that a restaurant licensee, in response to favorable treatment by a particular manufacturer or wholesaler, will not and cannot accelerate the sale of its products.
Certainly, the proofs before the Authority and reasonable inferences therefrom furnish adequate support for a finding that the Sehenley credit card plan does furnish a beneficial service to the participating restaurant licensees; and there is abundant basis for the conclusion of the Authority that the service “ tended to influence such retail licensees to purchase the products of the distiller licensee ” [Sehenley].
In the interest of public health, safety and welfare, the Legislature has wisely vested the State Liquor Authority with broad discretion in the matter of the regulation of the conduct of manufacturers, wholesalers and other licensees in their dealings in intoxicating liquors. (See Alcoholic Beverage Control Law, §§ 10-17; 2 N. Y. Jur., Alcoholic Beverages, § 4, p. 518.) It is well settled that the court should not disturb the exercise of administrative discretion conferred upon the Authority unless the action complained of is shown to be arbitrary, capricious or unreasonable. Where, as here, there is a rational basis for a particular determination of the Authority in furtherance of its regulatory discretion, the court should not take upon itself the prerogatives of the Authority and set aside the determination.
Rabin, J. P., Stevens and Steuer, JJ., concur in Per Curiam opinion; Eager, J., dissents in opinion in which Bastow, J., concurs.
Determination of the respondent State Liquor Authority annulled on the law, with $50 costs and disbursements to petitioner.