Midcal Aluminum, Inc., v. Rice

CourtCalifornia Court of Appeals
Writing for the CourtREYNOSO; PUGLIA, P. J., and EVANS
Citation153 Cal.Rptr. 757,90 Cal.App.3d 979
Decision Date26 March 1979
Parties, 1979-1 Trade Cases P 62,612 MIDCAL ALUMINUM, INC., a California Corporation, Petitioner, v. Baxter RICE as Director of the Department of Alcoholic Beverage Control of the State of California, Respondent. California Retail Liquor Dealers Association, a California Corporation, Intervenor. Civ. 17992.

Page 757

153 Cal.Rptr. 757
90 Cal.App.3d 979, 1979-1 Trade Cases P 62,612
MIDCAL ALUMINUM, INC., a California Corporation, Petitioner,
v.
Baxter RICE as Director of the Department of Alcoholic Beverage Control of the State of California, Respondent.
California Retail Liquor Dealers Association, a California Corporation, Intervenor.
Civ. 17992.
Court of Appeal, Third District, California.
March 26, 1979.
Hearing Denied May 24, 1979.

[90 Cal.App.3d 980]

Page 758

Damrell, Damrell & Nelson, Frank C. Damrell and Scott T. Steffen, Modesto, for petitioner.

Evelle J. Younger, Atty. Gen., L. Stephen Porter, Asst. Atty. Gen. and George J. Roth, Deputy Atty. Gen., for respondent.

William T. Chidlaw, Sacramento, for intervenor.

REYNOSO, Associate Justice.

The recent Supreme Court opinion of Rice v. Alcoholic Bev. etc. Appeals Bd. (1978) 21 Cal.3d 431, 146 Cal.Rptr. 585, 579 P.2d [90 Cal.App.3d 981] 476, which invalidated California's price maintenance laws relating to retail sales of distilled spirits, gives rise to this litigation. By writ of mandate Midcal Aluminum, Inc., seeks a determination as to the validity of the fair trade and price posting laws regulating the sale, both wholesale and retail, of wine in this state. We hold, as a logical axle of the Rice wheel, that the fair trade and price posting laws relating to wine are invalid at the wholesale and retail level.

1. The Background

An accusation was filed against petitioner before the Department of Alcoholic Beverage Control charging that on or about July 21, 1978, it sold or caused to be sold to a licensed retailer 27 cases of wine at prices less than the selling prices contained in the effective price schedule filed with the Department by the E & J Gallo Winery. The second count charged that petitioner had sold or had caused to be sold to certain retailers wine for which there was no effective fair trade contract duly filed with the Department. The petitioner stipulated to the truthfulness of the facts set forth in the accusation.

Petitioner entered into a further stipulation that "(T)he Department may, subject to a judicial determination of the constitutionality

Page 759

of Section 24850 et seq., Business and Professions Code and Rule 101 of Chapter 1, Title 4, California Administrative Code, impose a monetary penalty or suspension of (petitioner's) licenses as provided in Section 24880 of the Business and Professions Code." 1 Petitioner proceeded to file its petition for writ of mandate, in this court. 2

2. Mandate Proceedings

Mandate is an appropriate writ for the review of the exercise of quasi-judicial power by a constitutionally authorized statewide agency such as the Department of Alcoholic Beverage Control. (Sail'er Inn, Inc. v. Kirby (1971) 5 Cal.3d 1, 7, 95 Cal.Rptr. 329, 485 P.2d 529.) The writ is particularly appropriate in light of the following. First, petitioner attacks the validity of the fair trade and price posting laws on [90 Cal.App.3d 982] their face; no material facts are in dispute. Second, important issues of statewide significance are raised. Third, petitioner is placed in the untenable position of having to choose to obey possibly conflicting federal and state laws and face a penalty under the one it chooses to disobey. Under such circumstances it would be improper to require petitioner to exhaust its administrative remedies. (Sail'er Inn, Inc. v. Kirby, supra, 5 Cal.3d at pp. 6-7, 95 Cal.Rptr. 329, 485 P.2d 529.)

We do not share respondent's fear that our assuming jurisdiction in this case will herald the inundation of similar petitions, attempting to bypass the Alcoholic Beverage Control Appeals Board for review of mere disciplinary orders through feigned constitutional issues. Petitioner has conceded the factual basis for the accusation and questions only the validity of the law. We do not review the accusation; we consider only the validity of the fair trade and price posting laws. It is doubtful that licensees in like position will feign constitutional issues; it is understood that if those issues are rejected the licensee will be left before the Department to face accusations which it has admitted.

3. The Rice Rationale

In Rice v. Alcoholic Bev. etc. Appeals Bd., supra, 21 Cal.3d 431, 146 Cal.Rptr. 585, 579 P.2d 476, the California Supreme Court held that the fair trade laws relating to the retail sale of distilled spirits violate the Sherman Anti-Trust Act (15 U.S.C. § 1 et seq.). 3 Their invalidity necessarily followed.

Page 760

In reaching its decision the court considered whether the fair trade laws are within the[90 Cal.App.3d 983] "state action" exception to the Sherman Anti-Trust Act and whether the Twenty-First Amendment to the United States Constitution allowed the state to enact such laws. Neither the state action exception nor the Twenty-First Amendment was found to provide a basis for upholding the fair trade laws relating to retail sale of distilled spirits.

The statutes and regulations relating to price maintenance of wine challenged in this proceeding bear no significant differences to the statutes and regulations relating to price maintenance of distilled spirits found to be invalid in Rice v. Alcoholic Bev. etc. Appeals Bd., supra, 21 Cal.3d 431, 146 Cal.Rptr. 585, 579 P.2d 476. Under Business and Professions Code section 24862 no licensee may sell or resell to a retailer, and no retailer may buy any item of wine except at the selling or resale price contained in an effective price schedule or in an effective fair trade contract. No licensee is permitted to sell or resell to any consumer any item of wine at less than the selling or resale price contained in an effective price schedule or fair trade contract. Under section 24866 each grower, wholesaler, wine rectifier or rectifier must make and file fair trade contracts and/or file schedules of the resale prices of wines. These sections result in price fixing in wine identical to that found to be repugnant to the Sherman Anti-Trust Act when applied to distilled spirits. (See Rice v. Alcoholic Bev. etc. Appeals Bd., supra, 21 Cal.3d at pp. 445-446, 146 Cal.Rptr. 585, 579 P.2d 476; see also, Capiscean Corporation v. Alcoholic Bev. etc. Appeals Bd. (1979) 87 Cal.App.3d 996, 151 Cal.Rptr. 492, holding the price maintenance provisions relating to the retail price of wine to be invalid under Rice.) Our consideration is controlled by the reasoning of the Supreme Court in Rice....

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13 practice notes
  • Battipaglia v. New York State Liquor Authority, No. 1381
    • United States
    • United States Courts of Appeals. United States Court of Appeals (2nd Circuit)
    • September 21, 1984
    ...Sec. 24862. In short, California had created a resale price maintenance system for wine. 6 Page 171 In Midcal Aluminum, Inc. v. Rice, 90 Cal.App.3d 979, 153 Cal.Rptr. 757 (1979), the petitioner, a licensed wholesaler, which had been accused of selling wine at prices below those contained in......
  • Fisher v. City of Berkeley, S.F. 24675
    • United States
    • United States State Supreme Court (California)
    • December 27, 1984
    ...retail price maintenance scheme for distilled liquor invalidated under § 1 of the Sherman Act]; Midcal Aluminum, Inc. v. Rice (1979) 90 Cal.App.3d 979, 982-984, 153 Cal.Rptr. 757 [enjoining enforcement of state wholesale price maintenance scheme for wine as invalid under § 1 of the Act], af......
  • California Retail Liquor Dealers Association v. Midcal Aluminum, Inc, No. 79-97
    • United States
    • United States Supreme Court
    • March 3, 1980
    ...that the wine-pricing system helps sustain small retailers or inhibits the consumption of alcohol by Californians. Pp. 110-114. 90 Cal.App.3d 979, 153 Cal.Rptr. 757, affirmed. William T. Chidlaw, Sacramento, Cal., for petitioner. Jack B. Owens, San Francisco, Cal., for respondents. George J......
  • Guild Wineries' & Distilleries v. J. Sosnick & Son
    • United States
    • California Court of Appeals
    • January 29, 1980
    ...585, 579 P.2d 476 (statutory liquor price-fixing scheme violates Sherman Antitrust Act) and Midcal Aluminum, Inc. v. Rice (1979) 90 Cal.App.3d 979, 153 Cal.Rptr. 757, cert. granted Sub nom. Calif. Retail Liquor Assn. v. Midcal Aluminum [102 Cal.App.3d 638] (1979) --- U.S. ----, at p. ----, ......
  • Request a trial to view additional results
13 cases
  • Battipaglia v. New York State Liquor Authority, No. 1381
    • United States
    • United States Courts of Appeals. United States Court of Appeals (2nd Circuit)
    • September 21, 1984
    ...Sec. 24862. In short, California had created a resale price maintenance system for wine. 6 Page 171 In Midcal Aluminum, Inc. v. Rice, 90 Cal.App.3d 979, 153 Cal.Rptr. 757 (1979), the petitioner, a licensed wholesaler, which had been accused of selling wine at prices below those contained in......
  • Fisher v. City of Berkeley, S.F. 24675
    • United States
    • United States State Supreme Court (California)
    • December 27, 1984
    ...retail price maintenance scheme for distilled liquor invalidated under § 1 of the Sherman Act]; Midcal Aluminum, Inc. v. Rice (1979) 90 Cal.App.3d 979, 982-984, 153 Cal.Rptr. 757 [enjoining enforcement of state wholesale price maintenance scheme for wine as invalid under § 1 of the Act], af......
  • California Retail Liquor Dealers Association v. Midcal Aluminum, Inc, No. 79-97
    • United States
    • United States Supreme Court
    • March 3, 1980
    ...that the wine-pricing system helps sustain small retailers or inhibits the consumption of alcohol by Californians. Pp. 110-114. 90 Cal.App.3d 979, 153 Cal.Rptr. 757, affirmed. William T. Chidlaw, Sacramento, Cal., for petitioner. Jack B. Owens, San Francisco, Cal., for respondents. George J......
  • Guild Wineries' & Distilleries v. J. Sosnick & Son
    • United States
    • California Court of Appeals
    • January 29, 1980
    ...585, 579 P.2d 476 (statutory liquor price-fixing scheme violates Sherman Antitrust Act) and Midcal Aluminum, Inc. v. Rice (1979) 90 Cal.App.3d 979, 153 Cal.Rptr. 757, cert. granted Sub nom. Calif. Retail Liquor Assn. v. Midcal Aluminum [102 Cal.App.3d 638] (1979) --- U.S. ----, at p. ----, ......
  • Request a trial to view additional results

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