Georgia Oilmen's Ass'n v. Dept. of Revenue
| Decision Date | 23 May 2003 |
| Docket Number | No. A03A0474, No. A03A0475. |
| Citation | 582 S.E.2d 549,261 Ga. App. 393 |
| Parties | GEORGIA OILMEN'S ASSOCIATION et al. v. DEPARTMENT OF REVENUE. Department of Revenue v. Georgia Oilmen's Association et al. |
| Court | Georgia Court of Appeals |
OPINION TEXT STARTS HERE
Schulten, Ward & Turner, David L. Turner, Lou Litchfield, Atlanta, for appellants.
Thurbert E. Baker, Atty. Gen., Daniel M. Formby, Deputy Atty, Gen., John B. Ballard, Jr., Senior Asst. Atty. Gen., William W. Banks, Jr., Asst. Atty. Gen., Troutman Sanders, Mark H. Cohen, Atlanta, for appellee.
Stack & Rogers, Ronald W. Rogers, Fred B. Kitchens, Jr., Atlanta, amici curiae.
In Case No. A03A0474, the Georgia Oilmen's Association and the Georgia Association of Convenience Stores ("the Association") appeal the trial court's dismissal of the Association's declaratory judgment action challenging the validity of various Georgia Department of Revenue ("DOR") regulations governing the wholesale distribution of malt beverages. In Case No. A03A0475, the DOR appeals the trial court's grant of summary judgment to the Association, thereby finding an interpretive DOR rule to be invalid. Both appeals are consolidated herein for review. For the reasons stated below, we affirm the trial court's decision in Case No. A03A0474 and vacate and remand in Case No. A03A0475.
As an initial matter, we point out that, although the Association's claims include a challenge to the constitutionality of a regulation, this Court, not our Supreme Court, has subject matter jurisdiction. The Georgia Constitution grants our Supreme Court exclusive appellate jurisdiction in "all cases in which the constitutionality of a law, ordinance, or constitutional provision has been drawn in question." Ga. Const., Art. VI, Sec. VI, Par. II. DOR regulations, however, are not "laws" under the meaning of the constitution, and therefore jurisdiction is not in the Supreme Court, but in this Court. Brosnan v. Undercofler.1
In this case, the Association challenges the validity of four sets of published DOR regulations governing distribution of malt beverages ("beer") in Georgia, contending that: (1) certain of these DOR regulations which require retailers to purchase beer only from designated wholesalers and to take delivery only on the retailer's premises impermissibly expand the scope of the statutes on which they are based and conflict with laws of general application and (2) certain other agency regulations which require the posting of wholesale prices and forbid wholesalers from arranging retail stock are not specifically authorized by their enabling statutes and are otherwise unreasonable.
Because the DOR regulations challenged by the Association are authorized by statute, have not been proven to be unreasonable, and do not conflict with other statutory law, we find no merit in the Association's contentions. Ga. Real Estate Comm. v. Accelerated Courses in Real Estate;2 Dept. of Human Resources v. Anderson;3 Ga. Hosp. Assn. v. Ledbetter;4 Quattlebaum v. Ga. Power Co.5
As an initial matter, all of the rules challenged by the Association in these appeals are authorized generally by OCGA § 3-2-2(a) of the Alcoholic Beverage Code ("the Code"), which permits promulgation of "reasonable rules and regulations not inconsistent with this title or other laws." The DOR's rule-making authority is not limited to those subjects expressly addressed in the Code, Glustrom v. State,6 so long as the rules regulate the manufacture, sale, distribution, storage, or transportation of alcohol and are not inconsistent with the Code or other laws. Atkins v. Manning.7 OCGA § 3-5-30 also authorizes the promulgation of regulations consistent with various policies set out in that statute.
1. The Association contends that the trial court erred by granting judgment on the pleadings in favor of the DOR on its claims that regulations requiring retailers to purchase from designated wholesalers and to take delivery only on the retailer's premises are invalid. We disagree.
We review the trial court's grant of judgment on the pleadings pursuant to OCGA § 9-11-12(c) to determine whether the undisputed facts that appear from the pleadings show the moving party is entitled to judgment as a matter of law. City of Decatur v. DeKalb County.8 All well-pleaded material allegations of fact are taken as true, but legal conclusions need not be accepted. Id. at 869, 567 S.E.2d 332.
(a) The Association contends that Ga. Comp. R. & Regs. r. ("Rule") 560-2-4-.02 is invalid because it: (i) impermissibly expands the scope of OCGA § 3-5-31, the statute on which it is modeled, and (ii) conflicts with Ga. Const., Art. III, Sec. I, Par. I; Ga. Const., Art. III, Sec. VI, Par. V; and OCGA § 13-8-2.
(i) Rule 560-2-4-.02, "Designation of Sales Territories," reads in pertinent part: "(2) Every manufacturer, shipper, or broker shall... designate ... sales territories for each of its brands or labels sold in Georgia[ ] and
shall name one licensed wholesaler in each territory who, within such territory[,] shall be the exclusive distributor of such brand or label within such territory."
OCGA § 3-5-31(b) of the Alcoholic Beverage Code reads in pertinent part:
Here, the rule and statute are virtually identical, and the rule "correctly reflects the plain language of the statute and comports with the legislative intent." Sawnee Elec. Membership Corp. v. Ga. Public Svc. Comm.9
The Association nonetheless argues that the statute does not absolutely prohibit retailers from buying beer from wholesalers outside of their territory, and the regulation conflicts with the statute by enforcing such a prohibition. This argument fails for two reasons. First, the DOR's interpretation of the statute is consistent with traditional canons of statutory interpretation, with other statutes in the Code, and with our Supreme Court's interpretation of the similarly worded OCGA § 3-6-22, involving distribution of wine. Chilivis v. Nat. Distrib. Co.10 Second, the Association's interpretation of the statute, permitting retailers to purchase beer from other than their designated distributors, would render the word "exclusive" meaningless and would restrict the statute's obvious, "plain language" meaning. Rules of statutory construction prohibit such an erroneous construction. City of Buchanan v. Pope;11 Integon Indem. Corp. v. Canal Ins. Co.;12 Curlee v. Mock Enterprises.13 And, the Association's reliance on interpretations of OCGA § 10-1-664 and OCGA § 31-6-40 et seq. does not change this result. These fundamentally different statutes regulate the location of auto dealers and health care providers, and, as such, have no bearing on our analysis of the Alcoholic Beverage Code. See OCGA § 31-6-1. The Association is similarly misguided in citing OCGA §§ 3-5-26 and 3-5-27 in support of its position. Neither of these statutes authorizes wholesalers to sell to any retailer licensed in the state, or authorizes retailers to purchase from any wholesaler licensed in the state.
(ii) The Association claims Rule 560-2-4-.02(2) conflicts with Ga. Const., Art. III, Sec. I, Par. I; OCGA § 13-8-2; and Ga. Const., Art. III, Sec. VI, Par. V. We disagree.
Ga. Const., Art. III, Sec. I, Par. I states that only the General Assembly is empowered to exercise legislative power by creating laws. Rule 560-2-4-.02 does not conflict with this provision because it is not a new law, but merely an administrative rule authorized by and consistent with a duly passed statute. Dept. of Transp. v. Del-Cook Timber Co.14 The second law, OCGA § 13-8-2, prohibits contracts between private parties in restraint of trade. Again, the DOR rule does not conflict with this provision because it is a law authorized by statute, not a private contract. Finally, Rule 560-2-4-.02 does not conflict with Ga. Const., Art. III, Sec. VI, Par. V(c). This paragraph states that "[t]he General Assembly shall not have the power to authorize any contract or agreement which may have the effect of or which is intended to have the effect of defeating or lessening competition, or encouraging a monopoly, which are hereby declared to be unlawful and void." In Plumb v. Christie,15 our Supreme Court held that because the authority to sell alcoholic beverages is a privilege and not a right, "[a] monopoly in such a business thus created by the General Assembly, by ... engaging in the traffic upon a body corporate, is not violative of ... the constitution of Georgia." See Acree v. Ragsdale16 (); Allstate Beer v. Julius Wile Sons & Co.17 (). See also Reeves v. Bridges,18 citing OCGA § 3-3-1 with approval.
(b) The Association contends that Rule 560-2-2-.07(1), which requires a retailer to take delivery of beverage alcohol only at its place of business (implicitly prohibiting delivery at the wholesaler's warehouse), Rule 560-2-2-.25, which prohibits retail dealers from transporting beverage alcohol, and Rules 560-2-4-.08 and 560-2-4-.10, which effectively require the wholesaler to deliver all malt beverages to the retailer's establishment, are invalid because: (i) they conflict with OCGA § 3-5-28 and (ii) they are unreasonable. These arguments lack merit.
(i) OCGA § 3-5-28 states:
All malt beverages sold by a wholesale dealer to a retail dealer shall be delivered only to the premises of a licensed retail dealer and transported only by a conveyance owned, or leased, and operated by [the] wholesale dealer.... The malt beverages so sold...
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