Indianapolis Brewing Co. v. Liquor Control Commission

Decision Date03 February 1938
Docket NumberNo. 8269.,8269.
Citation21 F. Supp. 969
PartiesINDIANAPOLIS BREWING CO., Inc., v. LIQUOR CONTROL COMMISSION OF MICHIGAN et al.
CourtU.S. District Court — Western District of Michigan

Harris W. Wienner, of Detroit, Mich., and McHale, Arthur & Myers, of Indianapolis, Ind. (Thomas F. O'Mara, of Terre Haute, Ind., and Herbert J. Patrick, of Indianapolis, Ind., of counsel), for plaintiff.

James M. Barrett, Jr., of Fort Wayne, Ind., amicus curiae.

Raymond W. Starr, Atty. Gen., and Edmund E. Shepherd and George H. Heideman, Asst. Attys. Gen., for defendant.

Before SIMONS, Circuit Judge, and MOINET and O'BRIEN, District Judges.

SIMONS, Circuit Judge.

The plaintiff is a brewing corporation of the state of Indiana, and brings this suit by bill in equity against the members of the Michigan Liquor Control Commission, the Governor and Secretary of State as ex officio members of the Commission, and the state's Attorney General, to restrain by temporary and permanent injunction the enforcement of certain provisions of the State Liquor Law on the ground that they are violative of both Federal and State Constitutions. In conformity with law, a three-judge court was specially convened to consider the petition for interlocutory injunction. No answer having been filed — the defendants moving to dismiss — we find the facts, so far as necessary to decision, as alleged in the bill and its accompanying affidavits.

The plaintiff is engaged in the manufacture of beer in Indiana and its sale in interstate commerce. The defendants are residents and citizens of Michigan and public officers of that state charged with the duty of enforcing its liquor laws and proposing to do so. The plaintiff is a licensee of the Michigan Liquor Control Commission, qualified as an out-of-state manufacturer to ship beer into Michigan, and has built up a valuable business and good will for its product in that state. In July, 1937, Pub.Acts 1937, No. 281, § 1, the Michigan Legislature amended section 40, of Act No. 8, of the Public Acts of the Extra Session of 1933 to provide that after its effective date the Liquor Control Commission should forthwith adopt a regulation designating the states, the laws, rules or regulations of which (1) are found to require a licensed wholesaler of beer therein to pay an additional fee for the right to purchase, import, or sell beer manufactured in Michigan; or (2) which deny the issuance of a license authorizing the importation of beer to any duly licensed wholesaler of beer therein who may make application for such license; or (3) which prohibit licensed wholesalers of beer therein from possessing or selling beer purchased in Michigan, unless the one from whom it is purchased has secured a license and paid a fee therein, when such seller neither transports the beer into said state nor sells the same therein; or (4) impose any higher taxes or inspection fees upon beer manufactured in Michigan when transported into or sold therein than is imposed upon beer manufactured and sold within said state, and that the regulation so adopted shall prohibit all licensees from purchasing, receiving, possessing, or selling, any beer manufactured in any state therein designated; such regulation to become effective ninety days after its adoption.

Pursuant to the authority and direction of amended section 40, the defendant Liquor Control Commission on the 14th day of December, 1937, adopted a regulation as therein provided designating specific states, including Indiana, as discriminatory, and as a result the purchasing, receiving, possessing or selling of any beer manufactured in Indiana will become unlawful after the 14th day of March, 1938. The enforcement of this regulation will injure or destroy the business which the plaintiff has developed in Michigan. The discriminations against Michigan beer by the state of Indiana which led to the proscription of beer from that state by the regulation, are to be found in sections 8, 9, and 41 of the Indiana Liquor Control Act of 1935. Laws 1935, c. 226. They require that licensed Indiana wholesalers in order to secure an import privilege pay an additional fee of $1,500, and limit such permits to not more than 100. They require an additional bond for handling out-of-state beer of $10,000, and limit importation to beer which is the absolute property of the permittee.

While the bill assails validity in respect to numerous provisions of the Federal and State Constitutions, the issue, upon consideration of the decision in State Board of Equalization v. Young's Market Co. et al., 299 U.S. 59, 57 S.Ct. 77, 81 L.Ed. 38, followed and applied by a local three-judge court in Zukaitis et al. v. Fitzgerald et al., D.C., 18 F.Supp. 1000, has now been narrowed in argument and briefs to a consideration of the assailed statute in respect to invalidity under the "Equal Protection Clause" of the Fourteenth Amendment. This is the plaintiff's main reliance.

Conceding that under the Young's Market Case a state may in the exercise of its police power, now freed by the Twenty-First Amendment from the restraint of the commerce clause, Const. art. 1, § 8, cl. 3, discriminate against out-of-state beer, or against persons importing or dealing in such beer, and likewise conceding under compulsion of that decision that a classification which distinguishes in treatment as between local beer and out-state beer does not offend the equal protection clause, the plaintiff urges that a classification which differentiates the product of certain states from that of other states is wholly arbitrary and capricious, and void under the equal protection clause. There exists no reasonable basis, it says, for this difference of treatment, and the regulation has no relation to the exercise of the police power of the state in protecting the health, safety, morals, and welfare of its people. Nor does it aid in policing the state's regulatory laws governing the manufacture and sale of beer. Its purpose, it contends, is purely retaliatory and economic, for Michigan has no concern with the laws of other states and no power to impose its will by economic restrictions or prohibitions upon the lawmaking power of other states. Nor has it...

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5 cases
  • Ajax Distributors, Inc. v. Springer
    • United States
    • Court of Chancery of Delaware
    • November 25, 1941
    ...supra; Mahoney v. Joseph Triner Corp., 304 U.S. 401, 58 S.Ct. 952, 82 L.Ed. 1424; Indianapolis Brewing Co. v. Liquor Control Comm., D.C., 21 F.Supp. 969; Id., 305 U.S. 391, 59 S.Ct. 254, 83 L.Ed. 243; Finch & Co. v. McKittrick, D.C., 23 F.Supp. 244; Id., 305 U.S. 395, 59 S.Ct. 256, 83 L. Ed......
  • Bertelsen v. Cooney
    • United States
    • United States Courts of Appeals. United States Court of Appeals (5th Circuit)
    • May 20, 1954
    ...88 L.Ed. 1509; Day-Brite Lighting, Inc., v. State of Missouri, 342 U.S. 421, 72 S.Ct. 405, 96 L.Ed. 469; Indianapolis Brewing Co. v. Liquor Control Commission, D.C., 21 F. Supp. 969, affirmed 305 U.S. 391, 59 S.Ct. 254, 83 L.Ed. Petitioner concedes, as indeed he must in the light of the adj......
  • Joseph S. Finch & Co. v. McKittrick
    • United States
    • U.S. District Court — Western District of Missouri
    • February 25, 1938
    ...of Michigan in a similar case has reached the same conclusion as that indicated in this opinion. Indianapolis Brewing Co., Inc., v. Liquor Control Commission, D.C., 21 F.Supp. 969. Findings of Fact and Conclusion of We find the facts to be as stipulated by the parties, and conclude as a mat......
  • Ajax Distributors, Inc. v. Springer
    • United States
    • Court of Chancery of Delaware
    • November 25, 1941
    ...... WILLARD SPRINGER, JR., constituting the "Delaware Liquor Commission." Court of Chancery of Delaware, New ... Inc., v. Reeves, supra; Indianapolis. Brewing Co. v. Liquor Control Comm., 305 U.S. 391, 59. ......
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