Atlas Distributing Co. v. Alcoholic Beverages Control Commission
| Decision Date | 03 June 1968 |
| Parties | ATLAS DISTRIBUTING COMPANY et al. v. ALCOHOLIC BEVERAGES CONTROL COMMISSION (and a companion case). |
| Court | United States State Supreme Judicial Court of Massachusetts Supreme Court |
Christopher J. Armstrong, Asst. Atty. Gen., for Alcoholic Beverages Control Commission.
Harold Hestnes, Boton, for Atlas Distributing Co. and others.
Before WILKINS, C.J., and WHITTEMORE, KIRK, SPIEGEL, and REARDON, JJ.
One of these cases is a petition for review brought by a number of wholesale liquor distributors (wholesalers) against the Alcoholic Beverages Control Commission (commission) under G.L. c. 30A, 14, seeking judicial review of a decision of the commission 'which declared that minimum consumer retail price schedules filed pursuant to the provisions of G.L. c. 138, § 25C would automatically be disapproved if such schedules did not reflect in their entirety 'post-offs' granted retailers by wholesalers as reflected in schedules filed by the * * * (wholesalers) for prices charged retailers as required by G.L. c. 138, § 25B.' The other case is a suit for declaratory relief brought by the wholesalers against the commission seeking a decree declaring a 'ruling' 1 of the commission to be 'null and void and permanently enjoining the enforcement and implementation of * * * (the) ruling.' The commission filed a demurrer to the petition for review and appealed from an interlocutory decree overruling the demurrer. The cases were consolidated for trial in the Superior Court and were heard on a statement of agreed facts. The trial judge made 'findings of fact, rulings of law, and order for decree.' A final decree was entered in each case in which the ruling of the commission was 'declared to be null and void' and the commission was 'enjoined * * * from implementing or enforcing the ruling.' The commission appealed from these decrees and the cases are here on a consolidated appeal.
The parties agreed to admit in evidence several 'document.' We refer to those which may be pertinent.
1. A letter dated January 12, 1967, from the commission to minimum consumer resale price (MCRP) 'filers relative to the public hearing to be held Junuary 24, 1967.'
2. A telegram dated Junuary 25, 1967, from the commission to the MCRP filers 'indicating vote of the (c)ommission disapprovng certain prices filed for March and April.'
3. Letter dated Junuary 26, 1967, from the commission to all MCRP filers 'indicating the (c)ommission will receive new filings for items that were disapporved as indicated in the telegram of Junuary 25, 1967.'
4. A letter of the commission dated February 24, 1967, 'to all filers of MCRPs indicating procedure for filing period of March 1--10, 1967.'
We state the pertinent facts. 'A 'post-off' is a reduction in price offered by a distributor-wholesaler of alcoholic beverages to a retailer thereof. A post-off takes the form of a stated reduction in the wholesale price per case of a specific brand item for a period of one month. * * *
'Approximately 60% of the volume of wholesale sales to retailers are on 'posted-off' brand items. Approximately 95% of all brand items sold in the Commonwealth by wholesalers to retailers are 'posted-off' at sometime during the calendar year. * * * The amount of 'post-off' ranges from 50cents per case * * * to a maximum of $15 per case. * * *
'Prior to the Commission's ruling relating to the requirement that 'post-offs' granted in the wholesale price schedules be reflected in their entirety in the MCRP schedules, the practice of wholesalers, with respect to 'post-offs', was as follows:
'a. Brands with the most consumer acceptance (large selling brands) would 'post-off' less often and in a lesser amount than brands in the same category which enjoyed less consumer acceptance but were considered by the brand owners to be of the same quality.
'b. The normal wholesaler to retailer price (exclusive of 'post-offs') of brand items in a category considered by the brand owners to be of equal quality would be substantially the same.
'c. The MCRP per bottle of a brand item with greater consumer acceptance would be substantially the same as that of a competitive brand item of less consumer acceptance despite the fact that the wholesale(r) to retailer price of the latter item was 'posted-off.'
'd. Brands which have the highest consumer acceptance either do not 'post-off' at all or 'post-off' infrequently and in minimum amounts. * * *
'Wholesalers 'post-off' for the following reasons:
'a. To stimulate sales of slow moving brands.
'b. To stimulate sales of a brand in its slow moving season.
'c. To introduce new products to the market.
'd. To expand distribution or increase shelf space of a particular brand.
'e. To compensate the retailer for the increased inventory costs accruing from handling slower selling brand items and promoting sale of same. * * *
'The first notice given by the Commission to the effect that MCRP shedules of an item would not be approved if they did not reflect 'post-offs' was at the hearing of January 24, 1967, called for the purpose of approving MCRP schedules for the months of March and April, 1967. * * * The first written notices were the telegram dated January 25, 1967, * * * and the letter of explanation dated January 26, 1967. * * *
'The pronouncement by the Commission that * * * (it) would not approve MCRP schedules that did not reflect 'post-offs' was not approved by the Governor and Council, nor was it filed with the Secretary of State. * * *
'Following the letter of January 26, 1967, * * * most wholesalers, by permission of the Commission, withdrew their 'post-off' in Section 25B filings in January, to be effective for the month of February, and MCRP schedules as originally filed to be effective for the months of March and April, 1967, were then approved. * * *
'Section 25B schedules filed by wholesalers for March, 1967, reflected 175 'post-offs.' For the month of March, 1966, 1,924 brand items were 'posted-off.' Many items which wholesalers had 'posted-off' for March, 1966, or which otherwise would have been 'posted-off' in March of 1967 were not 'posted-off' as a result of the pronouncement of the Commission as stated in its letter of February 24, 1967. * * *
'No notice of a public hearing was given and no public hearing was held with respect to the adoption of the ruling referred to in the letter of February 24. * * *
The trial judge ruled as a matter of law that the commission 'acted arbitratily, capriciously and unreasonably and inconsistently with the intent of the legislature as expressed in G.L. c. 138, § 25C' because '(n)o notice of a public hearing was given and no public hearing was held'; the ruling of the commission 'would be impossible of fair application' since 'it would discriminate against the smaller retailer in favor of the larger retailer because * * * the larger retailer could take advantage of the 'post-off' in greater quantity and thus suppress the price for a longer period of time'; the ruling 'would discriminate against the wholesaler and/or the manufacturer of the less popular brands * * * because it appears that he must rely (at least in part) upon this marketing technique to encourage the retailer to purchase his less popular brand'; and the ruling 'in no way would benefit the public' because under it 'this particular marketing technique would immediately cease since the incentive for the retailer to purchase the less popular brand would * * * disappear.'
THE PETITION FOR REVIEW.
A petition for review may be brought only by one 'aggrieved by a final decision of any agency in an adjudicatory proceeding.' G.L. c. 30A, § 14. Hayeck v. Metropolitan Dist. Commn., 335 Mass. 372, 140 N.E.2d 210. The petition here seeks to prevent the implementation of the commission's stated requirement that 'post-offs' must be reflected in minimum consumer retail prices. This policy is but one element in the commission's determination of prices. The only 'final decision' which appears is the commission's approval of prices submitted in compliance, however reluctant, with the...
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