Grand Union Co. v. Sills
| Decision Date | 28 October 1963 |
| Docket Number | No. L--981,L--981 |
| Citation | 81 N.J.Super. 65,194 A.2d 591 |
| Parties | The GRAND UNION COMPANY, a Delaware Corporation, Home Liquors, a New Jersey Corporation, Packard-Bamberger & Co., Inc., a New Jersey Corporation, Vornado, Inc., a Kansas Corporation, Chicken Barn, Inc., a New Jersey Corporation, Herman Szokolar, Maurice Willner and Herbert Hubschman, Plaintiffs, v. Arthur J. SILLS, Attorney General of New Jersey, William Howe Davis, Director of the Division of Alcoholic Beverage Control of New Jersey, Herman Ades and Abe Stern, t/a Waverly Liquors; Louis and Anne Kandel, t/a Crown Wine & Liquor Co.; Irving Lipton t/a Lipton's Wines and Liquors; Philip Sosni, t/a Haddon Liquor Store, Inc., Joseph Kelley, t/a Jaykay Liquor; and South Jersey Retail Liquor Stores Ass'n., Defendants. |
| Court | New Jersey Superior Court |
Meyner & Wiley, Newark, attorneys for plaintiff (Stephen B. Wiley, Newark, of counsel; G. Douglas Hofe, Jr., So. Orange, on the brief).
Arthur J. Sills, Atty. Gen., pro se, and attorney for defendant William Howe Davis, Director of Div. of Alcoholic Beverage Control (David J. Goldberg, Trenton, of counsel).
Shanley & Fisher, Newark, attorneys for defendants Herman Ades and others (Samuel Moskowitz, Union City, of counsel; John Kandravy, Newark, on the brief).
Richman, Berry & Ferren, Camden, attorneys for defendants Phillip Sosni and others (Grover C. Richman, Jr., Camden, of counsel; Robert W. Page, Camden, on the brief).
LYONS, J.C.C. (temporarily assigned).
This is an action in lieu of prerogative writs. Plaintiffs, holders of retail liquor licenses or having interests therein, seek a declaratory judgment that chapter 152 of the Laws of 1962, N.J.S.A. 33:1--12.31 et seq., is unconstitutional. The original defendants, the Attorney General of New Jersey and the Director of Alcoholic Beverage Control, have been joined by certain other defendants connected with the retail liquor industry, whose petitions to intervene were not contested.
Briefly put, the statute in question limits the number of retail alcoholic beverage licenses that may be held by any one person to two. The curb is prospective only. Plaintiffs and those similarly situated will not be disturbed in their present multiple license holdings, but they are prohibited from acquiring additional licenses.
Plaintiffs' attack moves along diverse lines. I shall first deal with the complaint that the statute bears no reasonable relation to the attainment of any proper public objective, and that it is, in fact, designed solely to advance the interests of the distillers of national brands, so-called.
All of the evidence in this case has been produced by plaintiffs. The range of proof is quite comprehensive, covering the relation of the statute to such subjects as enforcement of the liquor laws, bootlegging, public health, temperance, the retail dispensing structure, and the economic effects of such a law. Expert testimony was furnished by two professors of economics, Drs. Baldwin and Markham, which delineated in large part the adverse effects that would be visited upon the public and upon certain segments in the chain of supply from the distiller to the ultimate consumer.
The paths of the professors were beset by frequent objections to their competency to go beyond the field of economics and to make expert appraisals of the likely effects of such legislation on bootlegging, law enforcement, temperance and other problems that feature the highly specialized field of alcoholic beverage distribution. In the interest of avoiding the need for a later remand to this court to take additional evidence in the event that an appellate court might desire additional information, the record was made as expansive as possible so that it might include all that could possibly be said to be germane to the resolution of the issues.
Of course, the obvious starting point for discussion is to state the general rule that the instant enactment enjoys a presumption of constitutionality and that it is the duty of the court to sustain the legislation, if at all possible. Two Guys from Harrison, Inc., v. Furman,32 N.J. 199, 225, 160 A.2d 265 (1960). Since the Legislature has not declared its purpose by preamble or other statement, the search of the court must, if need be, cover the exploration of all reasonable tenable grounds.
From my reading of the testimony and the exhibits there emerges the impression that plaintiffs have presented a frank espousal of the free enterprise system, with its accordant benefits to the wide-awake, energetic retailer and the thrifty, price-conscious buyer. The vehicle of favor to both in the field of alcoholic beverages is the continued development of competition between private brand beverages and those that are called national brands. While it appears that even the small one-store retailer may acquire a stock of private brands, the price advantage offerable by him to the consumer is not nearly so great as that which can be offered by chain retailers, since their great volume of sales leads to the attainment of a much lower unit price than is obtainable by the small retailer, whose blending, bottling and labeling has to be done in small quantities. It is notable that in the case of chain buying of stocks, the licensed wholesaler's position in the transaction is often merely nominal, since all negotiations subsequent to the placing of the order are carried on directly by the buyer with the distiller. Reaching a large segment of the consumer market is an easier task when the purveying of package goods is done by a supermarket. Here, it is said, there is a well-founded expectation that the housewife will count it a part of her shopping chores to procure the liquor for the 'polite social affairs' that are a part of the life of the household
In the 30 years that have passed since our Alcoholic Beverage Control Act was promulgated, almost 600 licenses have come into the hands of multiple holders. About two-thirds of these are held by owners of two outlets. Of the remaining multiple operations, almost 200 are controlled by 11 licensees who have acquired five or more licenses, each. Outstanding in this small number of retailers are five who control groups of outlets in varying numbers from 14 to 77. The largest holder is a wellknown supermarket chain. Two chains of stores dealing solely in alcoholic beverages control a total of 49 licenses. Thus, certain examples of 'bigness' stand out sharply in the retail field.
One of the witnesses stated it to be a fair assumption that in the absence of such restriction as the statute imposes, the chains would continue to expand their retail liquor operations by acquiring more licenses in choice locations. He emphasized that it would not be economically sound for a chain to overcultivate any particular area, since their stores would then be competing with each other. Dispersion would continue to be a characteristic of their expansion. It was admitted that the business prospects of small dealers would be adversely affected by chain competition, particularly in the pricing field, but it was said that the effects of this competition could be softened in several ways: by the burgeoning demands for liquor generated by increased population; by the opportunity of the small retailer to gain and hold business by credit extension, home deliveries, catering and the performance of other special services not feasible in chain operations, and by the fact that many consumers will always cleave to national brands.
It is patent that the decision of this case cannot turn solely on economic considerations. The cogency of plaintiffs' proofs cannot be measured by the tenets of the market place. What is recognized as sound, aggressive marketing in the grocery business may be positively abhorrent in the sale of alcoholic beverages. Control of the liquor traffic has...
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Grand Union Co. v. Sills
...to limit retail liquor licenses to two per person without, however, disturbing present multiple holdings. Grand Union Co. v. Sills, 81 N.J.Super. 65, 194 A.2d 591 (1963). An appeal was taken to the Appellate Division and while it was pending there we certified it. R.R. The plaintiffs are co......
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Wilke & Holzheiser, Inc. v. Department of Alcoholic Beverage Control
...illegal shortcuts to maintain their solvency, to the detriment of the industry and the harm of the public.' (Grand Union Co. v. Sills (1963) 81 N.J.Super. 65, 194 A.2d 591, 595, affd. Grand Union Co. v. Sills, supra, 204 A.2d 853. See also Schwartz v. Kelly, supra, 140 Conn. 176, 180, 99 A.......
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