Chilivis v. National Distributing Co., Inc.
| Decision Date | 08 September 1977 |
| Docket Number | No. 32258,32258 |
| Parties | Nick P. CHILIVIS, Commissioner v. NATIONAL DISTRIBUTING COMPANY, INC. |
| Court | Georgia Supreme Court |
Arthur K. Bolton, Atty. Gen., David A. Runnion, Asst. Atty. Gen., Atlanta, for appellant.
Carl E. Sanders, John L. Taylor, Jr., John P. Tucker, Jr., Troutman, Sanders, Lockerman & Ashmore, Atlanta, Leon Farmer, Jr., Athens, Arnall, Golden & Gregory, Cleburne E. Gregory, Jr., Jonathan Golden, Atlanta, for appellee.
Nick P. Chilivis, State Revenue Commissioner, appeals from an order denying his motion to dismiss, or, in the alternative, for summary judgment. This court granted the application for interlocutory appeal.
National Distributing Company, Inc., brought its action against Nick P. Chilivis, State Revenue Commissioner, and Premium Distributing Company, Inc. No relief was prayed against Premium. National alleged: It is a licensed wholesaler of wine in the State, and Premium is a designated sub-jobber or salesman for it in the distribution of wines from named out-of-state wineries. National has continuing and exclusive commitment from these wineries whereby it purchases wine directly from them for distribution in the State. On August 19, 1975 Premium filed a complaint with the Commissioner requesting that he hold a hearing on the subject of the contractual relationship between National and Premium, and that he issue an order allowing Premium to purchase wine directly from the wineries, which would be in violation of National's rights and in contravention of National's contractual relationship with Premium. The Commissioner issued an order on September 3, 1975, asserting jurisdiction over the subject matter of the complaint, and directing National to appear at a hearing on October 20, 1975. The Commissioner has no authority, either under the laws of Georgia, or under the rules and regulations of the Department of Revenue, to hold a hearing on Premium's complaint of August 19, 1975, and the former Commissioner had no authority to issue an order dated April 23, 1973; that such orders and hearings are ultra vires, beyond the scope of the Commissioner's statutory and regulatory authority, outside of the jurisdiction of the Department of Revenue, and unlawful. Regulation by the Commissioner of the contractual rights of the parties is in contravention of National's due process rights under the Constitutions of the United States and the State of Georgia.
National prayed that the court enter a judgment declaring that the Commissioner had no authority to issue the order of September 3, 1975, or hold the hearing ordered therein, and the former Commissioner had no right to issue the previous order of April 23, 1973; and that the Commissioner be enjoined from enforcing the orders.
The order of John A. Blackmon, then State Revenue Commissioner, dated April 23, 1973, was issued on the complaints of Premium Beverage Sales Company, Inc., and Southern Sales Company, Inc., against National, and ordered that the complainants are the exclusive wholesalers as to three named wineries for the brands and territories listed, the sales to be made from the wineries to National and then by resale to the complainants.
The complaint to the Commissioner, filed August 19, 1975, by Premium against National alleged: Premium is a licensed wholesaler of wine located in Clarke County, Georgia, and wholesales wine in named counties in the northeast area of the State. Premium filed its complaint in 1973 with the Commissioner because National was selling Premium's brands of wine in Premium's designated territory. National has not acted in good faith since the hearing in 1973. It has refused to sell certain items of wine to Premium, including several new items of wine, and has refused to sell certain items of wine that Premium had traditionally distributed to the licensed retailers in northeast Georgia. Premium is the designated wholesaler of the wineries as shown in the records of the State Department of Revenue for all the items of wine presently being sold by these wineries in the State, and under the rules and regulations of the Department of Revenue, is the exclusive distributor of these items of wine to the licensed retailers located in the counties listed in the complaint, and is the designated wholesaler of certain items of wine traditionally sold by it to the licensed retailers in the designated area. Premium is faced with the situation of having to purchase many of its major items of wine through one of its competitors, National, and this is an unhealthy business relationship. Direct shipments from the wineries to it would eliminate this problem. The present method of distribution places Premium in a noncompetitive position on pricing in its northeast Georgia marketing area.
Premium prayed that the Commissioner issue a citation to National to show cause why its State wine license should not be revoked; that upon hearing evidence, the Commissioner revoke National's wine license, or place it on a long-term probation; that the Commissioner issue an order, or adopt a regulation, that would allow Premium to purchase its brands of wine directly from the wineries; and for other relief.
The rule of the Department of Revenue under which the Commissioner was acting in taking jurisdiction of Premium's complaint is 560-8-7-.15, entitled, "Designation of Sales Territories." The second paragraph of this rule is as follows: "Every...
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