M. H. Gordon & Son, Inc. v. Alcoholic Beverage Control Commission

• Decision Date: 28 December 1976
• Citation: 358 N.E.2d 778,371 Mass. 584
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court
• Parties: M. H. GORDON & SON, INC., et al. 1 v. ALCOHOLIC BEVERAGES CONTROL COMMISSION et al. 2

Page 778

358 N.E.2d 778

371 Mass. 584

M. H. GORDON & SON, INC., et al. ¹

v. ALCOHOLIC BEVERAGES CONTROL COMMISSION et al. ²

Supreme Judicial Court of Massachusetts.

Argued Jan. 7, 1976.

Decided Dec. 28, 1976.

Evan T. Lawson, Boston, for plaintiffs.

Michael Eby, Asst. Atty. Gen., for Alcoholic Beverages Control Commission.

Before REARDON, QUIRICO, BRAUCHER, KAPLAN and WILKINS, JJ.

QUIRICO, Justice.

This is an action under G.L. c. 30A, for judicial review of a decision of the Alcoholic Beverages Control Commission (commission), prohibiting Major Brands Delaware, Ltd. (Major Brands), from selling or supplying to M. H. Gordon & Son, Inc. (Gordon), any alcoholic beverages for which Major Brands is neither the brand owner nor the designated agent for sale thereof in the Commonwealth. The case is before this court on the plaintiffs' appeal from a judgment entered in the Superior Court affirming the decision of the commission. The court also enjoined Gordon, pending this appeal, from selling or supplying to retailers in this Commonwealth any alcoholic beverages obtained from any holder of a certificate of compliance under G.L. c. 138, § 18B, but who is not the brand owner or designated agent therefor within the meaning of G.L. c. 138, §§ 25B--25D.

We summarize the pertinent facts about which there is no disagreement. Major Brands is a Delaware corporation which supplies various brands of liquor to customers from its primary business location in Oklahoma. It holds a certificate of compliance issued by the commission under G.L. c. 138, § 18B. Gordon is a Massachusetts wholesaler and importer of alcoholic beverages, licensed under G.L. c. 138, § 18, which permits it to import alcoholic beverages from holders of certificates of compliance issued under G.L. c. 138, § 18B, and to sell such alcoholic beverages to licensed Massachusetts retailers.

For some time Gordon has attempted unsuccessfully to obtain certain popular brand name alcoholic beverages known as 'best sellers' from the brand owners of the beverages, from their designated agents, or from a limited number of Massachusetts wholesalers who, as favored distributors, are provided with a continued supply of certain best selling brands to the exclusion of other wholesalers. In order to obtain several of these 'best sellers' for distribution to Massachusetts retailers, Gordon and Major Brands entered into the following agreement. Major Brands procures name brand alcoholic beverages desired by Gordon from sources unavailable to Gordon, such as other non- Massachusetts wholesalers, and arranges for the products to be shipped for an amount computed to include (a) the price filed and affirmed in Massachusetts pursuant to G.L. c. 138, §§ 25B and 25D, by the brand owner of the alcoholic beverage, its designated agent or a commission approved wholesaler, ³ and (b) an additional service charge therefor at an agreed percentage of the amount due for the product shipped.

1. Importation of alcoholic beverages by Massachusetts wholesalers is regulated by several sections of c. 138 of the General Laws. Section 18, as amended through St.1973, c. 520, authorizes wholesalers 'to import alcoholic beverages into the commonwealth from holders of certificates issued under section eighteen B whose licensed premises are located in other states and foreign countries . . ..' Section 18B permits the commission to issue certificates of compliance to persons having a place of business and a license granted outside the Commonwealth and whose out-of-State license permits that person to sell alcoholic beverages to licensees in Massachusetts. ⁴ Section 25B(a) and (b) proscribes the sale of any brand of alcoholic beverage to a Massachusetts wholesaler unless a written, duly verified schedule of bottle and case prices to wholesalers for that brand has been filed with the commission. Section 25B(c), as appearing in St.1970, c. 140, § 2, directs that the schedule of prices 'shall be filed by (1) the owner of such brand, or (2) a wholesaler . . . who is designated as agent for the purpose of filing such schedule (if the brand owner) is not licensed by the commission, or (3) with the approval of the commission, by a wholesaler, in the event that the owner of the brand is unable to file a schedule or designate an agent for such purpose.' Furthermore, § 25B(d) explicitly prohibits the sale of any brand of alcoholic beverage to a Massachusetts wholesaler at any price except the price then in effect unless written permission is obtained from the commission for good cause shown.

General Laws c. 138, § 25D, which was originally inserted by St.1966, c. 706, after a message by the Governor stating reasons for further regulation of the pricing of alcoholic beverages brought into the Commonwealth for resale, ⁵ complements § 25B. Section 25D requires that the schedule of prices filed pursuant to § 25B be accompanied by an affirmation, duly verified by the brand owner or its designated agent, stating that the price set forth in the schedule is no higher than the lowest price at which the beverage is to be sold during the calendar month covered by the schedule to any wholesaler anywhere in the country or to any State or State agency which owns and operates retail liquor stores.

In its decision in the present case, the commission concluded that these regulatory provisions created a bar to the importation of alcoholic beverages by Massachusetts wholesalers from anyone but persons, who, in accordance with G.L. c. 138, §§ 25B and 25D, are authorized to file price schedules and affirmations pertaining to each posted price. The commission contends that its interpretation of the statutes implements the expressed legislative purpose of promoting orderly importation of alcoholic beverages and assuring that Massachusetts consumers do not pay prices which are inflated by discriminatory interstate pricing schemes. The plaintiffs disagree with the commission's interpretation. They contend that the regulatory scheme established by c. 138 does not prohibit Massachusetts wholesalers from importing alcoholic beverages from holders of certificates of compliance under G.L. c. 138, § 18B, where the certificate holder has not filed price schedules or affirmations for the brands of alcoholic beverages being imported.

Section 25B(a) proscribes importation of alcoholic beverages unless price schedules have been filed by persons qualified to do so by § 25B(c). Section 25D(a) requires that a properly verified affirmation be filed with and deemed part of the price schedule. Neither section, however, contains any language which even implicitly forbids the importation of alcoholic beverages from § 18B certificate holders who are not correspondingly authorized to file price schedules and affirmations pursuant to §§ 25B and 25D. Furthermore, § 18, while identifying § 18B certificate holders as a proper source from which Massachusetts wholesalers may obtain alcoholic beverages, does not require wholesalers to purchase alcoholic beverages solely from certificate holders who are authorized by §§ 25B and 25D to file price schedules and price affirmations. As long as Massachusetts wholesalers import alcoholic beverages, for which filed price schedules and affirmations are in effect, from § 18B certificate holders at the scheduled price, there are no provisions in the regulatory scheme created by c. 138 to prevent wholesalers from purchasing from a § 18B certificate holder who is not eligible to file price schedules or affirmations for the brands of alcoholic beverages involved. ⁶

The commission argues that prohibiting importation of alcoholic beverages from § 18B certificate holders who are not eligible to file price schedules and affirmations will insure an efficient and manageable system of bringing alcoholic beverages into Massachusetts. Although we give due consideration to the commission's expertise in administering the regulatory provisions of c. 138, the ultimate responsibility for interpreting the applicable statutes rests with this court. In discharging this responsibility the court must interpret the statutes as enacted by the Legislature and in a manner which will recognize the Legislature's policy decisions. '(O)missions cannot be supplied and . . . excrescences cannot be cut out by the judicial department of government. The court can only interpret according to the common and approved usages of the language the words used, without enlargement or restriction and without regard to its own conceptions of expediency.' Commonwealth v. S. S. Kresge Co., 267 Mass. 145, 148, 166 N.E. 558, 559 (1929). See Spellman v. Metropolitan Transit Authority, 328 Mass. 446, 450, 104 N.E.2d 493 (1952); Commissioner of Corps. & Taxation v. Assessors of Boston, 321 Mass. 90, 97, 71 N.E.2d 874 (1947); West's Case, 313 Mass. 146, 149, 46 N.E.2d 760 (1943); Brennan v. Election Comm'rs of Boston, 310 Mass. 784, 789, 39 N.E.2d 636 (1942); Gallagher v. Wheeler, 292 Mass. 547, 556, 198 N.E. 891 (1935). Cf. Cleary v. Cardullo's, Inc., 347 Mass. 337, 348, 198 N.E.2d 281 (1964). The plain language of c. 138 was drawn with care. If §§ 25B and 25D were interpreted in the manner urged by the commission, they would in effect be enlarged to include something which the Legislature, either by inadvertence or design, omitted therefrom. Courts and administrative tribunals must diligently respect the policy limits set by the Legislature in enacting a particular statute. United States v. Sisson, 399 U.S. 267, 298--299, 90 S.Ct. 2117, 26 L.Ed.2d 608 (1970). 62 Cases of Jam v. United States, 340 U.S. 593, 600--601, 71 S.Ct. 515, 95 L.Ed. 566 (1951). Iselin v. United States, 270 U.S. 245, 250--251, 46 S.Ct. 248, 70 L.Ed. 566 (1926).

General Laws c. 138, § 2, in conjunction with G.L. c. 6, § 44, delegates to the commission authority to promulgate regulations pertaining to the conduct of the alcoholic beverages industry. Additionally, G.L. c. 138, § 25D(h),...