Ruiz v. Economics Laboratory, Inc.
Decision Date | 05 October 1967 |
Docket Number | Civ. No. 400-67. |
Citation | 274 F. Supp. 14 |
Parties | Carlos M. RUIZ, d/b/a A. Alemany Caubet, Sucrs., Plaintiff, v. ECONOMICS LABORATORY, INC. and Soilax International, C. A., Defendants. |
Court | U.S. District Court — District of Puerto Rico |
McConnie, Canales & Ferrer, San Juan, P. R., for plaintiff.
O'Neil & Borges, San Juan, P. R., for defendants.
Defendants have moved to dismiss the complaint herein, alleging that:
The Dealer's Act (Law number 75, approved on June 24, 1964, as amended, 10 L.P.R.A. § 278 et seq.) is void and unconstitutional: (a) because it is an arbitrary exercise of the police power of the Commonwealth of Puerto Rico; (b) because it cannot be applied to contracts which were in existence prior to the effective date of the law; (c) because it violates the due process clause in that it sets up vague, indefinite and uncertain standards so that men of common intelligence must guess at its meaning; (d) because it violates equal protection of the laws since it is class legislation protecting existing dealers only; and denies to newcomers the opportunity to contract or attempt to contract with manufacturers in Puerto Rico; (e) because it denies freedom of contract; (f) because it forces violations of Federal and local anti-trust legislation; (g) because it imposes burdens on manufacturers who are using distributors in Puerto Rico on the date of the adoption of the Law and its various amendments, not imposed on other manufacturers who distribute directly in Puerto Rico to (sic) their own employees; (h) because the law contains no requirement that the parties act in good faith with the consuming public.
Counsel for both parties having submitted extensive memoranda in support of their respective contentions, the Court hereby denies defendants' motion, on the following grounds:
Points (a) and (h)—The allegation that the Dealer's Act is an arbitrary exercise of the police power of the Commonwealth of Puerto Rico has been previously raised before this Court in United Medical Equipment Corp. v. S. Blickman, Inc., 260 F.Supp. 912 (1966) and was expressly denied (see 260 F. Supp. at p. 913) on the authority of the holding in Volkswagen Interamericana S. A. v. Rohlsen (1 Cir. 1966) 360 F.2d 437.
In the Volkswagen Interamericana case, the Court of Appeals, referring to the Federal Dealer's Act, answered the allegation as follows (p. 444):
The reasonings underlying this holding by the Court of Appeals are applicable to the Puerto Rico Dealers' Act. This act was approved in the context of legislative findings of widespread abuse by principals of their franchised dealers. The Act's Statement of Motives reads as follows:
The Puerto Rico act is clearly responsive to the need to protect dealers, as a class, against widespread abuses, and such an exercise of the police power is unquestionably within constitutional bounds.
Points (b) and (e)—Defendants contend that the Dealer's Act is void because it impairs contractual obligations, especially if it is applied to contracts which were in existence prior to the effective date of the law.
These two points are denied on the authority of Willys Motors, Inc. v. Northwest. Kaiser-Willys, Inc. (D.C.Minn. 1956) 142 F.Supp. 469; Ford Motor Company v. Pace, (1960) 206 Tenn. 559, 335 S.W.2d 360; Kuhl Motor Co. v. Ford Motor Co. (1955) 270 Wis. 488, 71 N.W. 2d 420; Blenke Brothers v. Ford Motor Co. (N.D.Ind.1962) 203 F.Supp. 670; United Medical Equipment Corp. v. S. Blickman Inc., (D.C.P.R.1966) 260 F. Supp. 912.
As was said by the Supreme Court of the United States in Manigault v. Springs, 199 U.S. 473, 26 S.Ct. 127, 50 L.Ed. 274:
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