Miller v. Hedlund
| Citation | 813 F.2d 1344 |
| Decision Date | 06 April 1987 |
| Docket Number | No. 84-3749,84-3749 |
| Parties | 1986-2 Trade Cases 67,336, 1987-1 Trade Cases 67,515 Elsie Viola MILLER and Oretta Bernice Lancaster, doing business as the Junction Cafe and Tavern; Taylor's Coffee Shop, Inc., dba Rennie's Landing; Wian, Inc., dba Barney's Cable, individually and as representatives of others similarly situated, Plaintiffs-Appellants, v. William H. HEDLUND; Sylvia S. Bedingfield; Reuben A. Worster; Stan Auderkirk and Jill Thorne, individually in their representative capacities as the Commissioners of the Oregon Liquor Control Commission; C. Dean Smith, individually in his capacity as Administrator for the Oregon Liquor Control Commission, Spear Beverage Co., Inc., and Coast Distributors, Inc.; individually and as representatives of others similarly situated, Defendants- Appellees. |
| Court | United States Courts of Appeals. United States Court of Appeals (9th Circuit) |
David W. Axelrod, Portland, Or., for plaintiffs-appellants.
Robert W. Muir, Salem, Or., for defendants-appellees.
Appeal from the United States District Court for the District of Oregon.
Before BROWNING, Chief Judge, ALARCON, Circuit Judge, and STEPHENS, * District Judge.
The opinion in this case was originally filed on October 31, 1986. On December 19, 1986, the opinion was withdrawn and the submission of this case was vacated pending resolution by the United States Supreme Court of 324 Liquor Corp. v. Duffy, No. 84-2022. 324 Liquor Corp. was decided on January 13, 1987 and is reported in --- U.S. ----, 107 S.Ct. 720, 93 L.Ed.2d 667 (1987). This case was resubmitted on January 21, 1987.
324 Liquor Corp. confirms the reasoning and conclusions set forth in the opinion that was withdrawn. It is hereby ordered that the opinion filed on October 31, 1986 STEPHENS, District Judge:
and withdrawn on December 19, 1986 be refiled with this order.
This is an appeal from a summary judgment rejecting plaintiffs' antitrust challenge to certain Oregon regulations governing the sale and distribution of beer and wine. The district court's judgment is reversed and remanded for further proceedings in accordance with this opinion.
The Oregon Liquor Control Act was enacted in 1933. It established a distribution structure for alcoholic beverages among manufacturers, wholesalers and retailers in Oregon. See O.R.S. sections 471.205, et seq. It also established a six-member Oregon Liquor Control Commission (OLCC) to administer its provisions. See O.R.S. section 471.705. The Oregon Liquor Control Act gave the OLCC extensive power to promulgate rules and regulations to carry out the purposes of the Act. O.R.S. sections 471.040, 471.730, 471.045; Van Ripper v. Oregon Liquor Control Commission, 228 Or. 581, 591, 365 P.2d 109 (1961). Oregon Revised Statutes sections 471.210, et seq. set forth requirements for the licensing of wholesalers of beer and wine. Other provisions in the Oregon Revised Statutes prohibit a licensee's selling at both the wholesale and retail levels (O.R.S. section 471.452); restrict a wholesaler or manufacturer from having an interest in a retailer (O.R.S. section 471.455); and prevent a manufacturer or wholesaler from providing any financial assistance to any retailer (O.R.S. section 471.465).
In 1978, Miller, Lancaster and other tavern owners in Oregon (the retailers) sued the OLCC and several wholesalers of beer and wine, contending that certain regulations promulgated by the OLCC, specifically Oregon Administration Rules section 845-10-210 and 845-06-090 (1980) 1 have In 1979, the district court stayed proceedings to allow the Oregon courts to review the validity of the challenged regulations with respect to the OLCC's enabling legislation. The Oregon Court of Appeals held that the regulations were valid and reasonably designed to further statutory purposes. Miller v. Oregon Liquor Control Commission, 42 Or.App. 555, 600 P.2d 954 (1979) (Miller I ).
the effect of stabilizing and maintaining the prices of beer and wine in Oregon in violation of the Sherman Act, 15 U.S.C. section 1, et seq. 2 The plaintiffs objected to the following four features of the rules: the prohibition of quantity discounts; the requirement that licensees post prices ten days prior to their effective dates; the requirement that price decreases generally remain effective after posting for a period of 180 days for malt beverages and 30 days for wine; and the requirement that the posted price be the delivered price regardless of transportation costs. The retailers sought declaratory and injunctive relief restraining the OLCC from enforcing the regulations
In 1980, the district court granted defendants' motion to dismiss the retailers' federal suit on the ground that Oregon's involvement in the regulation and control of the liquor industry was sufficient to establish immunity from federal antitrust law under the state action exemption first articulated by the Supreme Court in Parker v. Brown, 317 U.S. 341, 63 S.Ct. 307, 87 L.Ed. 315 (1943). On appeal, this court reversed the district court's dismissal, holding that Oregon's regulatory policy is not "actively supervised" by the state itself, which supervision the court considered necessary in order to invoke Parker immunity. Miller v. Oregon Liquor Control Commission, 688 F.2d 1222, 1227 (9th Cir.1982) (Miller II ). No opinion was expressed regarding the existence of an antitrust violation or the Twenty-first Amendment.
On remand, the plaintiffs moved for summary judgment. The defendants filed a cross-motion for summary judgment on the grounds that they had not engaged in a combination, conspiracy, or agreement in restraint of trade and that the regulations do not authorize or require any concerted activity. Defendants further argued that Oregon's enforcement of the regulations should be accorded state action immunity under Parker v. Brown, or be held valid under the Twenty-first Amendment to the United States Constitution.
The district court denied plaintiffs' motion, and granted the defendants' motion, holding that the regulation requiring wholesalers to publicly post their prices and adhere to those prices for certain periods of time do not conflict with federal antitrust policy since they only require "unilateral" action by individual wholesalers, rather than the concerted action necessary for a violation of the Sherman Act, 579 F.Supp. 116. The court determined that the regulations requiring the posted price to be the delivered price and forbidding quantity discounts conflicted with the Sherman Act, but nonetheless upheld them on the basis of Parker immunity, relying on certain intervening changes in Oregon law. The court's decision did not include a discussion of the applicability of the Twenty-first Amendment. The court also held in favor of the wholesalers, because of the absence of any concerted activity on their part.
The plaintiff retailers appealed the district court's order granting summary judgment to defendants. They contended that the posting and post-off provisions and the The issues which must be decided are (1) whether the regulations effect a per se violation of the Sherman Act; (2) if they do, whether they fall within the Parker exemption; (3) and whether the Twenty-first Amendment saves the regulation from the antitrust challenge.
delivered price rule 3 conflict with the Sherman Act because of the conduct they require, and that it is not necessary that a separate agreement in restraint of trade be formed in order to find a violation of the Sherman Act. The retailers further claim that the challenged regulations are not exempt from the Sherman Act under Parker v. Brown because the state does not actively supervise the prices set by the wholesalers and because the state has not articulated a policy to displace competition in the wholesale distribution of beer and wine. Finally, they argue that the Twenty-first Amendment does not save the regulations from a Sherman Act challenge.
This court reviews a grant of summary judgment de novo "to determine whether there are any genuine issues of material fact and whether the district court correctly applied the relevant substantive law." Ashton v. Cory, 780 F.2d 816, 818 (9th Cir.1986).
The analytical framework that structures the approach to the antitrust issue is set forth in Rice v. Norman Williams Co., 458 U.S. 654, 102 S.Ct. 3294, 73 L.Ed.2d 1042 (1982).
In determining whether the Sherman Act preempts a state statute, we apply principles similar to those which we employ in considering whether any state statute is pre-empted by a federal statute pursuant to the Supremacy Clause. As in the typical preemption case, the inquiry is whether there exists an irreconcilable conflict between the federal and state regulatory schemes. The existence of a hypothetical or potential conflict is insufficient to warrant the preemption of the state statute. A state regulatory scheme is not pre-empted by the federal antitrust laws simply because in a hypothetical situation a private party's compliance with the statute might cause him to violate the antitrust laws. A state statute is not pre-empted by the federal antitrust laws simply because the state scheme might have an anticompetitive effect.
A party may successfully enjoin the enforcement of a state statute only if the statute on its face irreconcilably conflicts with federal antitrust policy.
Id. at 659, 102 S.Ct. at 3298 (citations omitted). The court went on to add the following:
[A] state statute, when considered in the abstract, may be condemned under the antitrust laws only if it mandates or authorizes conduct that necessarily constitutes a violation of the antitrust laws in all cases, or if it places irresistible pressure on a private party to violate the antitrust laws in order to comply with the statute. Such condemnation will follow...
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