Reynolds v. Louisiana Bd. of Alcoholic Beverage Control

• Decision Date: 08 November 1965
• Docket Number: 47821,47820,Nos. 47788,s. 47788
• Citation: 185 So.2d 794,249 La. 127
• Court: Louisiana Supreme Court
• Parties: Lawrence J. REYNOLDS, d/b/a Larry & Katz v. LOUISIANA BOARD OF ALCOHOLIC BEVERAGE CONTROL. David Y. MARTIN, Jr., d/b/a Martin's Wine Cellar v. LOUISIANA BOARD OF ALCOHOLIC BEVERAGE CONTROL. SCHWEGMANN BROTHERS GIANT SUPER MARKETS v. LOUISIANA BOARD OF ALCOHOLIC BEVERAGE CONTROL.

Page 794

185 So.2d 794

249 La. 127

Lawrence J. REYNOLDS, d/b/a Larry & Katz v. LOUISIANA BOARD OF ALCOHOLIC BEVERAGE CONTROL.

David Y. MARTIN, Jr., d/b/a Martin's Wine Cellar v. LOUISIANA BOARD OF ALCOHOLIC BEVERAGE CONTROL.

SCHWEGMANN BROTHERS GIANT SUPER MARKETS v. LOUISIANA BOARD OF ALCOHOLIC BEVERAGE CONTROL.

Nos. 47788, 47820, 47821.

Supreme Court of Louisiana.

Nov. 8, 1965.

On Rehearing April 1, 1966.

Further Rehearing Denied May 2, 1966.

George A. Bourgeois, Baton Rouge, for defendant-appellant.

Triche & Sternfels, Risley C. Triche, Napoleonville, for intervenors.

Stone, Pigman & Benjamin, Saul Stone, Paul O. H. Pigman, New Orleans, for appellees.

HAMLIN, Justice.

The defendant, Louisiana Board of Alcoholic Beverage Control, and intervenors, Retail Liquor Dealers Association of Louisiana, Inc., John Signorelli, John V. Ponsaa, Alcide Hughes, Ed Manthey, James Daigrepont, John Mansueto, Horace Ruiz, Harry Rogers, Rene Dessommes, Bill Bosio, John Boesch, Jr., Louis Smith, Sr., Robert France, Henry Caranek, John Crespino, Frank Musso, Vincent Signorelli, Gene Ricca, Curry Rozas, Dudley Rozas, Boyd Gammill, Paul Gardshene, John Cicero, W. R. Motes, A. R. Knippers, Nick Cordaro, Tev Allen, John O'Keefe, Tom Bedmarski, and Fred Beam, appeal to this Court (Art. VII, Sec. 10(2), La. Const. of 1921) from judgments of the trial court which decreed Act 290 of 1964 unconstitutional; which made the rules for permanent injunctions absolute; which ordered, adjudged, and decreed that permanent injunctions issue in favor of plaintiffs, Lawrence J. Reynolds, d/b/a Larry & Katz, David Y. Martin, Jr., d/b/a Martin's Wine Cellar, and Schwegmann Brothers Giant Super Markets, and against defendant, Louisiana Board of Alcoholic Beverage Control, permanently enjoining, restraining, and prohibiting it from enforcing Act 290 of 1964; and which dismissed the petitions of intervention filed in these proceedings at intervenors' cost.

Separate but almost identical suits, attacking the constitutionality of Act 290 of 1964 and praying for injunctive relief, were filed by plaintiffs in the trial court. They were consolidated for trial, and separate but identical judgments were rendered in each matter. The cases were consolidated in this Court by formal oral motion made on the day of argument, and one judgment will be rendered herein.

Upon the filing of their suits, plaintiffs were granted temporary restraining orders; the defendant Board took suspensive appeals from the orders. On application by plaintiffs for remedial writs of certiorari, prohibition, and mandamus, the Court of Appeal, First Circuit, stated that the temporary restraining orders issued by the trial court had expired under their own terms, and the matters were remanded to the district court for further proceedings. This Court denied applications for writs. The trial court then denied plaintiffs' request for preliminary injunctions, and the matters proceeded to trial on the merits. The instant judgments, supra, ensued.

Appellant, Louisiana Board of Alcoholic Beverage Control, (joined by the Retail Liquor Dealers Association of Louisiana and a large number of service retailers, mostly single purpose dealers who deal in one commodity--principally alcoholic beverages--and adhere generally to higher markups than volume dealers) contends that the district court erred:

1. In holding that Act 290 of 1964 is unconstitutional;

2. In holding that the act is an unreasonable exercise of the police power of the State;

3. In failing to find from the law and the evidence that a problem existed in the liquor industry, that the legislature furnished the solution thereto, and that a reasonable relationship exists between the problem sought to be solved and the means provided to solve it;

4. In holding that plaintiffs had proved the act unconstitutional; and

5. In placing on defendant the burden of proving the existence of an economic problem or other condition which moved the Legislature to act, plus the additional burden of justifying the means adopted to cope with the problem or other condition.

Appellees, volume retailers, submit to this Court that the price-fixing provisions of Act 290 of 1964 are patently unconstitutional in the light of this Court's decision in Schwegmann Brothers v. Louisiana Board of Alcoholic Beverage Control, 216 La. 148, 43 So.2d 248, 14 A.L.R.2d 680.

In the Schwegmann case supra (1949), this Court concluded:

'From all of which we conclude that the provisions of Act 360 of 1948 which relate to the mandatory minimum mark ups (Sections 1(s), 24 and 26) do not tend, in a degree that is perceptible and clear, toward the accomplishment of the announced purpose of the statute, namely the regulation and control of the liquor traffic so that it 'may not cause injury to the economic, social and moral well-being of the people of the State.' They, in other words, are inappropriate for the achievement of the legitimate object described in the statute. Accordingly, we hold that such provisions are manifestly unreasonable within the contemplation of the state's police power, and, hence, are Unconstitutional in that they violate the due process clauses of our state and federal constitutions.

'* * * here we are concerned only with specific mandatory mark up provisions of a particular statute, with respect to the enactment of which the police power was not validly exercised. * * *' (Emphasis supplied.)

In the instant matter, the trial judge stated:

'* * * It was Mr. Schwegmann who filed a suit in 1949 that resulted in Act 360 of 1948 being held unconstitutional by our Supreme Court insofar as that Act sought to require fixed mark-ups in the sale both at wholesale and retail of alcoholic beverages. * * * I have given a very careful line by line study of Act 360 of 1948 and Act 290 of 1964. For the life of me I can't find any essential difference in the particular mandatory provisions, except the differences in percentages of the mark-ups * * *.

'* * * Also, the two Acts being exactly the same so far as the procedural provisions are concerned and the Supreme Court having passed on such procedure, I don't know any way I can get out of following that decision of Schwegmann versus the Control Board in 1949. * * *'

The trial judge denied a motion for a new trial which alleged in part that, 'The Court was in error in not recognizing and taking judicial notice of the official policy of the State of Louisiana towards regulation of alcoholic beverages; the official policy is the promotion of temperance; and the Court was in error in failing to hold that Act 290 of 1964 had for its purpose the promotion of temperance, and did in fact reduce the volumes of sales, and in turn, consumption of alcoholic beverages.' In denying the motion, the judge stated, '* * * I find in considering all of these phases of these cases that Act 290 of 1964 does not contain any language to indicate the promotion of moderation in the indulgence of natural appetites as being the purpose of the price regulation and neither did Act 360 of 1948. * * *'

A determination of the question of the similarity vel non of the provisions of Act 360 of 1948, which related to mandatory minimum markups (Sections 1(s), 24, and 26), with Act 290 of 1964 stands at the threshold of this case. We, therefore, direct our immediate attention to it.

The above sections of the 1948 Act recited:

Section 1(s) "Cost', invoice price to the dealer plus freight or cartage, if not included in the invoice, without any deduction for any discounts or concessions of any kind, plus all taxes, but not including sales tax and the emergency war tax of the United States of $3.00 per proof gallon, which became effective April 1, 1944.'

Section 24. 'That Board shall adopt and promulgate rules and regulations to prevent any unfair practices in the sale of any 'regulated beverages' and to enforce the following minimum mark up by every dealer over his cost:

'(a) The wholesaler's minimum selling price to a retailer shall be his cost, as herein defined, plus 15% On liquor; 20% On cordial liquers and specialties; and 25% On sparkling and still wines.

'(b) The retailer's minimum selling price shall be his cost, as herein refined, plus 33 1/3% On liquor; 45% On cordials, liquers and specialties; and 50% On sparkling and still wines.

'Provided, that the rules shall prescribe that no retailer shall expose any such beverages for sale without showing the selling price thereof in easily read figures, and it shall be unlawful for any retailer to ask or receive Any other price for such beverages, except that the retailers shall add to said price, and collect from the purchaser, all sales taxes that may be due on each transaction.

'Provided further, that where a wholesaler bottles wine in the State, there shall be added to his 'cost', the cost of bottles and supplies plus 10% Of said total.

'Provided, also, that no mandatory mark up shall be required when the transaction is between two wholesalers for resale at wholesale, or between two retailers, and that the cost for the minimum mark up on the resale in such transaction shall be the same cost as that of the original wholesaler or retailer, as hereinbefore fixed; and provided further that the provisions of this section shall not apply to sales at wholesale made in the State for export beyond its borders.' (Emphasis supplied.)

Section 26. 'As a condition to the sale of any dealer's product in the State, every manufacturer and every wholesaler shall file with the Board a detailed list of their selling prices, Which may be supplemented or changed from time to time, but not oftener than once in every 30 days, in such manner as the Board may prescribe. Said lists shall be posted by the Board and distributed to all licensed dealers within the State. No change in prices shall become effective until thirty days after the filing of notice thereof with the Board. Provided, that no discounts or...