Oklahoma Alcoholic Beverage Control Bd. v. Heublein Wines, Intern.

• Decision Date: 12 July 1977
• Docket Number: No. 49955,49955
• Parties: OKLAHOMA ALCOHOLIC BEVERAGE CONTROL BOARD, Appellant-Cross-Appellee, v. HEUBLEIN WINES, INTERNATIONAL, Appellee-Cross-Appellant.
• Court: Oklahoma Supreme Court

Page 1158

566 P.2d 1158

OKLAHOMA ALCOHOLIC BEVERAGE CONTROL BOARD, Appellant-Cross-Appellee, v. HEUBLEIN WINES, INTERNATIONAL, Appellee-Cross-Appellant.

No. 49955.

Supreme Court of Oklahoma.

July 12, 1977.

Appeal from the District Court, Oklahoma County; Joe Cannon, District judge.

On appeal to the district court from an order of the Oklahoma Alcoholic Beverage Control Board (Board) suspending the alcoholic beverage license of Heublein Wines International (Heublein), for thirty (30) days, the district court: (1) vacated Board's order of suspension because there was insufficient evidence to sustain a finding that Heublein was guilty of any willful misconduct that would justify a suspension or revocation of its license, and (2) determined that Art. 27, § 5, of the Oklahoma Constitution and 37 O.S.1971, § 516, which prohibit advertising the sale of alcoholic beverages, did not contravene the Commerce Clause of the U.S. Constitution.

Board appealed from that part of the district court's order which vacated Board's order suspending Heublein's alcoholic beverage license for thirty (30) days.

Heublein cross-appealed from that part of the order which upheld the constitutionality of Oklahoma laws which prohibit advertising the sale of alcoholic beverages.

AFFIRMED.

Larry Derryberry, Atty. Gen. of Oklahoma, Daniel J. Gamino, Asst. Atty. Gen. of Oklahoma, for appellant-cross-appellee.

John B. Hayes, Watts, Looney, Nichols, Johnson & Hayes, Oklahoma City, for appellee-cross-appellant.

IRWIN, Justice:

The Oklahoma Alcoholic Beverage Control Board (Board) suspended the alcoholic beverage license (non-resident seller's) of Heublein Wines International (Heublein) for thirty days for the alleged violation of Art. 27, § 5, ¹ of the Oklahoma Constitution, and 37 O.S.1971, § 516. These provisions, with one narrowly defined exception, prohibit advertising the sale of alcoholic beverages within the State of Oklahoma. Heublein was charged with permitting an Oklahoma television station to broadcast a commercial which advertised the sale of wines.

Heublein appealed Board's order to the district court and also sought a declaratory judgment declaring the above prohibitory provisions unconstitutional when measured against the provisions of the Commerce Clause of the U.S. Constitution. U.S. Const, Art. 1, § 8. The district court vacated Board's order of suspension because the evidence was insufficient to sustain a finding that Heublein was "guilty of any willful misconduct" which would justify a suspension or revocation of its license. It also found Oklahoma's laws which prohibit advertising the sale of alcoholic beverages were not an undue burden on interstate commerce and not in violation of the U.S. Constitution.

Board appealed that part of the trial court's order which vacated its suspension order. Heublein cross-appealed from that part which upheld the constitutionality of the advertising prohibitions.

Heublein is a national concern engaged in the importation and wholesale distribution of wines and liquors and is the holder of a nonresident seller's license. 37 O.S.1971, § 524(a). ² Heublein purchased prime time television advertising on national networks as a part of its national marketing efforts. On three separate occasions television commercials originating as a part of national network programming, were televised in Oklahoma by local network affiliates. Either the national networks had failed to advise the local affiliate of the commercial or the local affiliate had inadvertently or mistakenly failed to "block out" that part of the national network commercials which advertised Heublein's products.

After the first of these telecasts, Board by letter notified Heublein, among other non-resident seller licensees, that national network affiliated stations in Oklahoma had been airing wine commercials. Approximately a year later, after a second such telecast, Board's Director conducted an informal inquiry into the appearance of Heublein's commercials on Oklahoma television. Board and Heublein stipulated that before Board's letter giving notice of possible violation of Oklahoma law and after that time, Heublein has continuously advised the television networks to take whatever steps were necessary to assure that Heublein's wine commercials would not be telecast by Oklahoma based affiliated stations. The record also demonstrates that in response to their advertiser's request, the national networks implemented a system of checks by which to assure notification to local affiliates of when and in what order Heublein's commercials would appear so they could be effectively "blocked out." Nevertheless, a third incident did occur and it was this last telecast of a Heublein wine commercial which resulted in the charge of unlawfully advertising and the subsequent thirty (30) day suspension.

The first issue presented is whether the trial court erred in holding Heublein had to be guilty of willful misconduct before its license could be suspended for unlawful advertising. The parties place in issue 37 O.S.1971, § 524(c) and § 528(1)(a). Sec. 524(c) provides:

"The Board may, subject to the provisions of this Act requiring notice and hearing in the case of sanctions against holders of licenses, suspend or revoke a nonresident seller's license for any violation of this Act by the holder thereof." (Emphasis ours.)

Board contends that the above statute is a special statute relating to a non-resident seller's license only and that Heublein is subject to sanctions for any violation and the trial court erred in holding that the violation had to be "willful."

Heublein contends that § 524(c) is not applicable but the controlling provision is § 528(1)(a), which provides:

"Any license issued hereunder shall, by order of the Board, after due notice and hearing: (a) be revoked, or suspended for such period as the Board deems appropriate, if the Board finds that the licensee has wilfully violated any of the provisions of this Act".

Sec. 528, is a general provision governing the revocation or suspension of a license and under it the Board shall suspend or revoke "for such period as the Board deems appropriate" for a willful violation. Under § 524(c) the Board may suspend for any violation. Apparently Board proceeded under § 528 instead of § 524, because § 528 is mentioned in Board's "notice of Contemplated Suspension" and § 524 is not; and also, in its order of suspension, Board found Heublein did wilfully allow and permit the advertising. It is apparent that if Board's contentions are sustained sanctions may be imposed against a non-resident seller licensee for unintentionally doing certain acts whereas if the same acts were unintentionally done by a resident seller licensee, sanctions could not be imposed.

Extending this line of reasoning to another statutory provision we find that 37 O.S.1971, § 536, which relates to price discrimination and rebates, makes no distinction between non-resident and resident seller licensees. However, if we follow Board's argument to its logical conclusion, Board could impose greater sanctions against a non-resident seller licensee for price discrimination under § 524(c) than it could impose against a resident seller licensee under § 536.

In our opinion, the Legislature did not intend and our statutes may not be construed as providing a different standard for the imposition of sanctions for non-resident seller licensees and resident seller licensees. We hold the trial court correctly determined that before sanctions could be imposed against Heublein for the complaint against it, Heublein had to be guilty of wilfully allowing and permitting the unauthorized television commercial. In the alternative, Board contends the evidence supports the suspension because Heublein "wilfully allowed and permitted the unauthorized advertisement."

The record will not support a finding that Heublein wilfully allowed the unauthorized advertising. We are concerned here with nationwide network television programming which serves all fifty states. The programs and commercials emanate from the headquarters of network television companies and are transmitted to affiliated stations in Oklahoma and elsewhere. It is possible for affiliate stations to "block out" any part of the network's programming or commercials, provided the affiliates have sufficient advanced notice of the telecast. If it is not "blocked out," it is instantaneously transmitted via the broadcast towers of the affiliate stations. Those companies desiring to advertise their alcoholic products nationally generally rely on the national networks to accurately inform their Oklahoma affiliates concerning the exact time the commercials will be telecast and the affiliates then "block" them out. Heublein and other similarly situated will not purchase and the national networks will not accept alcoholic beverage advertising unless it will be "blocked out" by the affiliates in Oklahoma and Mississippi. ³ This is so even though the national networks transmit their programs and commercials to all their affiliates or those located in a particular area.

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