Samson Market Co. v. Alcoholic Beverage Control AppealsBd.

Citation81 Cal.Rptr. 251,459 P.2d 667,71 Cal.2d 1215
Parties, 459 P.2d 667 SAMSON MARKET COMPANY, Inc., Petitioner, v. ALCOHOLIC BEVERAGE CONTROL APPEALS BOARD et al., Respondents; Edward J. KIRBY, as Director, etc., Real Party in Interest. L.A. 29584.
Decision Date21 October 1969
CourtCalifornia Supreme Court

Leslie, Rebin & Teplin, by Lawrence Teplin, Beverly Hills, for petitioner.

Thomas C. Lynch, Atty. Gen., Henry G. Ullerich and L. Stephen Porter, Deputy Attys. Gen., for respondents and for real party in interest.

MOSK, Justice.

We review a decision of the Alcoholic Beverage Control Appeals Board (board) which affirmed a decision of the Department of Alcoholic Beverage Control (department) revoking the retail off-sale general liquor license of Samson Market Company (licensee). (See Bus. & Prof.Code, § 23090 at seq.) 1

On May 24, 1967, the department filed an amended accusation in two counts against the licensee doing business as Samson's, 6656 Sunset Boulevard, Los Angeles, charging in count I that on December 7, 1966, and in count II that on December 9, 1966, said licensee sold distilled spirits for a sum less that the effective minimum retail price of such beverages. After setting forth the licensee's record of prior violations, the accusation averred that by reason of the facts alleged grounds for the suspension or revocation of such license existed and that the continuance of such license would be contrary to public welfare and morals, as set forth in article XX, section 22, of the California Constitution and section 24200, subdivision (a), of the Business and Professions Code. It was also alleged that additional grounds for suspension or revocation existed under section 24200, subdivisions (a) and (b), in that the licensee had violated or permitted the violation of section 24755 and of rule 99 of the department's rules. (Cal.Admin.Code, tit. IV, § 99.)

In response to the amended accusation, the licensee filed a notice of defense asserting certain objections and affirmative defenses. After a hearing, the hearing officer issued his proposed decision finding that the charges of the amended accusation were true and recommending that the license be revoked on each count. The department adopted the proposed decision. The licensee appealed to the board which affirmed the department's decision. We thereafter issued a writ of review.

The contentions the licensee raises require us to confront three broad issues: (1) the constitutionality of the retail price maintenance provisions of the Alcoholic Beverage Control Act (act); (2) the sufficiency of the publication of the minimum retail price schedules involved in the instant case; and (3) the constitutionality of section 24755.1, which, among other things, purports to prohibit revocation or suspension of a license for violation of such retail price maintenance provisions. We note that while the licensee makes the broad contention that 'the findings are not supported by substantial evidence in the light of the whole record,' its supporting argument is confined solely to the publication of the price schedules. The licensee does not challenge the findings that the sales were made by it on the dates and at the prices charged.

As to the first issue, we have held on two distinct occasions that the retail price maintenance provisions of the act are constitutional. (Wilke & Holzheiser, Inc. v. Dept. of Alcoholic Bev. Control (1966) 65 Cal.2d 349, 55 Cal.Rptr. 23, 420 P.2d 735; Allied Properties v. Dept. of Alcoholic Bev. Control (1959) 53 Cal.2d 141, 346 P.2d 737.)

In Wilke & Holzheiser we thoroughly reconsidered our initial holding to that effect so as 'to foreclose any possibility that our silence might engender unwarranted speculation about the continued vitality of Allied Properties.' (65 Cal.2d[71 Cal.2d 1219] at p. 357, 55 Cal.Rptr. at p. 29, 420 P.2d at p. 741.) After such re-examination of the issue, we reaffirmed our conviction 'that the price maintenance provisions do not transgress constitutional requirements * * *.' (Id., at p. 355, 55 Cal.Rptr. at p. 27, 420 P.2d, at p. 739.) We do not feel compelled to essay a third review of the issue.

We take this opportunity, however, to make one pertinent observation. Our holdings in Allied Properties and in Wilke & Holzheiser involved the provisions of section 24755 as they read prior to their amendment in 1961. Before such amendment, mandatory retail price maintenance of distilled spirits was effected through fair trade contracts fixing the resale price of alcoholic beverages which bore the trademark, brand, or name of the producer or owner and which were in fair and open competition with others of the same general class. (See § 24750, which is still in effect.) At that time section 24755 required all retail sales of distilled spirits to be made pursuant to fair trade contracts executed in accordance with chapter 10 of the act (§§ 24750--24757) and prohibited any violation of such contracts.

As amended in 1961, section 24755 provides that no package of distilled spirits shall be sold at retail unless a minimum retail price therefor shall have been filed with the department and that no off-sale licensee shall sell any such package at a price less than the effective filed price. 2 In short, after the 1961 amendment of section 24755 and corresponding revision of the department's rules, mandatory retail price maintenance of distilled spirits no longer required the negotiation and filing of a fair trade contract; nor is it required under the amended statute and rules that the brands of distilled spirits for which minimum retail price schedules are filed be in fair and open competition with others of the same general class.

The above described change in the mechanism of establishing retail prices for distilled spirits does not furnish support to the licensee's contention that the retail price maintenance provisions of the act as amended in and since 1961 constitute an unlawful delegation of legislative power and a 'price-fixing' statute in conflict with section 1 of the Sherman Act. (15 U.S.C.A. § 1.) In a word, these changes do not impart merit to a constitutional challenge rejected by us in both Allied Properties and Wilke & Holzheiser or compel us to modify our holding on the constitutionality of the retail price maintenance provisions in those cases. We there expressly rejected the contention that such provisions 'unlawfully delegate legislative power by enabling each producer and wholesaler to set the price below which retailers may not sell his product.' (Wilke & Holzheiser, Inc. v. Dept. of Alcoholic Bev. Control (1966) supra, 65 Cal.2d at p. 365, 55 Cal.Rptr 23, 420 P.2d 735.) We said in Wilke & Holzheiser: 'To contend that the Alcoholic Beverage Control Act unlawfully delegates legislative power is to misconceive the nature of the power which is purportedly delegated. The power we analyze here finds expression in the private act of the producer in entering into a contract setting a price for the resale of his own brand. * * * To argue that the Alcoholic Beverage Control Act unlawfully delegates legislative power because it is a 'price-fixing act' is to overlook the crucial distinction between the fixing of a price for All products in a given market and the setting by the producer of the retail price at which His own product is to be sold.' (Original italics.) (Id., at pp. 365--366, 55 Cal.Rptr., at p. 34, 420 P.2d, at p. 746.)

We conclude that it makes no difference that in both Allied Properties and Wilke & Holzheiser we dealt with retail prices established through fair trade contracts whereas under that statute (§ 24755) as amended in and since 1961, and applicable to the case before us, retail prices are established unilaterally by filing a minimum price schedule. As the court said in Reimel v. Alcoholic Bev. etc. Appeals Bd. (1967) 256 Cal.App.2d 158, 173, 64 Cal.Rptr. 26, 34, 65 Cal.Rptr. 251, 259: 'We cannot agree that the former requirement that a producer establish a minimum price for his product by securing a fair trade contract with at least One retailer before it became binding on all retailers was in substance or practical effect any different from the present section 24755 requirement that he unilaterally fix such a price. In each case the producer effectively sets the price for which his own product is to be sold. The competition between producers and their respective brands is not affected.' (Original italics.) We reaffirm our holdings in Allied Properties and in Wilke & Holzheiser and further conclude that they have continued vitality in their application to the retail price maintenance provisions of the act as amended in and since 1961. 3 No new serious question has been raised concerning the constitutionality of the statutes involved. 4

We next take up the question of the publication of the minimum retail price schedules involved in the instant case. The licensee asserts that in order to sustain the finding that it violated section 24755, the department must prove that the price schedules for the brand name whiskey were effective. It contends that in order for such schedules to be effective, the former provisions of section 24755, subdivision (b), required that (1) they be published in such a manner as to advise each retailer affected of the contents of such schedules, and (2) they be published prior to their effective dates. The licensee contends that the department has failed to prove these two elements and as such the finding that the licensee violated section 24755 cannot be sustained.

The evidence concerning publication of the price schedules involved herein consisted in part of the introduction of several pages from the December 1966 issue of Patterson's California Beverage Gazetteer (Patterson's) which showed the minimum retail prices to be those alleged in the accusation. In addition, certified copies of the 'Distilled Spirits Minimum Retail Price...

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