Schieffelin & Co. v. Department of Liquor Control, FOREMOST-M

• Court: Supreme Court of Connecticut
• Writing for the Court: PARSKEY
• Citation: 194 Conn. 165,479 A.2d 1191
• Parties: SCHIEFFELIN & COMPANY v. DEPARTMENT OF LIQUOR CONTROL, et al.cKESSON, INC. v. LIQUOR CONTROL COMMISSION of the State of Connecticut et al.
• Decision Date: 07 August 1984
• Docket Number: FOREMOST-M

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479 A.2d 1191 194 Conn. 165 SCHIEFFELIN & COMPANY
v.
DEPARTMENT OF LIQUOR CONTROL, et al.
FOREMOST-McKESSON, INC.
v.
LIQUOR CONTROL COMMISSION of the State of Connecticut et al. Supreme Court of Connecticut. Argued May 4, 1984.
Decided Aug. 7, 1984.

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[194 Conn. 166] Robert F. Vacchelli, Asst. Atty. Gen., with whom, on the brief, were Joseph I. Lieberman, Atty. [194 Conn. 167] Gen., and Richard M. Sheridan, Asst. Atty. Gen., for appellant (named defendant).

Walter B. Schatz, Hartford, with whom were Samuel J. Henderson, Hartford, and, on the brief, Alfred F. Wechsler, Hartford, for appellants (defendant Brescome Distributors Corp. et al.).

John C. Yavis, Jr., and James A. Wade, Hartford, with whom were Sally S. King, Hartford, Barry J. Waters, West Hartford,

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and, on the brief, Bonnie J. MacEslin, Bridgewater, for appellee (plaintiff).

Lawrence A. Slitt, Glastonbury, for appellant (defendant Conn. Distributors, Inc.).

Morton Siegel, Chicago, Ill., with whom, on the brief, was Harold V. Gorman, for appellant (defendant Heublein, Inc.).

Before [194 Conn. 165] PETERS, PARSKEY, GRILLO, SANTANIELLO and BIELUCH, JJ.

[194 Conn. 168] PARSKEY, Associate Justice.

The consolidated cases involved in these appeals concern the termination of liquor distributorships. The principal questions raised by these appeals are (1) whether Public Acts 1981, No. 81-367 (act) applies to distributorships in existence prior to the effective date of the act and (2) if so, whether the act as so applied is constitutional. The trial court ruled that the act did not apply and therefore did not reach the constitutional issues. We hold that the act does apply and is constitutional.

The plaintiff Schieffelin & Co. (Schieffelin) is an interstate distributor of liquors and wines, which holds an out-of-state shipper's liquor permit issued by the Connecticut department of liquor control (department). The defendants Brescome Distributors Corporation (Brescome) and Eder Brothers, Inc. (Eder), since September, 1980, have been approved distributors of products for which Schieffelin held Connecticut liquor licenses. The plaintiff Foremost-McKesson, Inc. (Foremost) holds various Connecticut liquor and out-of-state liquor and beer licenses. The defendant Connecticut Distributors, Inc. (CDI) is an in-state wholesale liquor distributor, since September 2, 1980, of several brands of wine and liquor for Foremost. ¹ The defendant Heublein, Inc. (Heublein), a producer and importer of a variety of alcoholic beverages, and Brescome were permitted to intervene as party defendants in the Foremost action. These appeals arise out of the various proceedings in two separate cases.

[194 Conn. 169] To put these cases in proper context, a brief legislative overview of General Statutes § 30-17 ² is instructive. Prior to 1971

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there were no statutory restrictions on the termination of liquor distributorships. In 1971, by Public Acts 1971, No. 605, the legislature amended General Statutes § 30-17 by adding a provision which prohibited a manufacturer or out-of-state shipper from terminating a twenty-four month distributorship except on one year's notice or at an earlier date for "just and sufficient cause." In 1979, by Public Acts 1979, No. 79-131, the one year notice was deleted leaving "just [194 Conn. 170] cause" as the only basis for terminating such distributorships. In 1981, upon learning that CDI, Brescome and Eder were threatened with termination of their distributorships, the General Assembly, in Public Acts 1981, No. 81-367, further amended § 30-17 by reducing the durational period for "just cause" terminations to six months. In the Schieffelin case, following the sending by Schieffelin of a termination notice to Brescome and Eder, Schieffelin petitioned the department for a hearing, pursuant to General Statutes § 30-17(a)(2), [194 Conn. 171] on whether Schieffelin had just and sufficient cause for the terminations. The department decided that Public Acts 1981, No. 81-367 was applicable to these terminations and that since the termination notice did not set forth the cause of termination as required by the act, the notice was invalid and therefore ineffectual to accomplish its intended purpose. On Schieffelin's appeal to the Superior Court, that court ruled that the act did not apply retroactively to the terminations in question and sustained the appeal, from which the department, Brescome and Eder have appealed to this court.

Following the sending of a termination notice to CDI, Foremost, pursuant to General Statutes § 4-176, petitioned the department for a declaratory ruling on whether the act was applicable to the termination of the CDI distributorship and, if so, whether the act was unconstitutional on several specified grounds. The department ruled that the act was applicable, that the termination notice was mailed after the act took effect, and declined to rule on the constitutional questions. Foremost took an administrative appeal to the Superior Court from the department's decision. This appeal was dismissed by the court on the ground that it could not disturb the department's factual finding. No further action has been taken on the administrative matter.

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Foremost also brought a declaratory judgment action pursuant to General Statutes §§ 4-175 and 52-29, seeking a judicial determination of the constitutionality of the act. As in Schieffelin, the trial court held that the act did not apply retroactively to the Foremost-CDI relationship and did not reach the constitutional issues, from which judgment the department, CDI, Brescome and Heublein appealed ³ to this court.

[194 Conn. 172] I

APPLICABILITY OF PUBLIC ACTS 1981, NO. 81-367

Public Acts 1981, No. 81-367, ⁴ effective May 29, 1981, provided that the holder of a

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wholesale permit who had a distributorship for the sale of various alcoholic beverages for six months could not have that distributorship terminated or diminished by the manufacturer or out-of-state shipper except for just and sufficient cause. All of the wholesalers involved in the present litigation had held their distributorships for the requisite period at the time of their purported terminations.

[194 Conn. 173] It cannot be doubted that the act, by its very language, was intended to apply to any termination of a liquor distributorship which occurred after the act became effective. Thus the only question of statutory construction is whether the act was intended to affect existing distributorships, as claimed by the several defendants, or whether, as contended by the plaintiffs, the act is limited in its application to those distributorships which came into being after the act became effective. Were we to show the great deference which courts [194 Conn. 174] normally accord to the construction given the statute by the agency charged with its enforcement; Anderson v. Ludgin, 175 Conn. 545, 555, 400 A.2d 712 (1978); in this case the department, our inquiry would end at this point with a conclusion in favor of the position advanced by the defendants. But since the department's construction is only of recent vintage it lacks the persuasiveness of a practical construction placed on legislation over many years; see Wilson v. West Haven, 142 Conn. 646, 657, 116 A.2d 420 (1955); and we will pursue an independent inquiry into the proper construction of the act.

It is important to note at the outset that the mere fact that a statute is retrospective does not in itself render it invalid. Mazurkiewicz v. Dowholonek, 111 Conn. 65, 68, 149 A. 234 (1930); Atwood v. Buckingham, 78 Conn. 423, 427, 62 A. 616 (1905). Thus, General Statutes § 55-3, which provides that "[n]o provision of the general statutes, not previously contained in the statutes of the state, which imposes any new obligation on any person or corporation, shall be construed to have a retrospective effect," establishes a rule of presumed legislative intent; Nagle v. Wood, 178 Conn. 180, 186, 423 A.2d 875 (1979); rather than a rule of law. If a legislative enactment contains language which unequivocally and certainly embraces existing business relationships, there is nothing in § 55-3 which would prevent it from so operating. Little v. Ives, 158 Conn. 452, 457, 262 A.2d 174 (1969).

The language of the act clearly refers to distributorships in existence at the time of its passage. This results from the use of the phrase "has had," in subsection (a)(2) of the act, which is the present perfect tense of the word "have." Words and phrases are to be construed according to the commonly approved usage of the language. General Statutes § 1-1(a); Caldor, Inc. v. Hefferman, 183 Conn. 566, 570, 440 A.2d 767 (1981). [194 Conn. 175] The use of the present perfect tense of a verb indicates an action or condition that was begun in the past and is still going on or was just completed in the present. Thus, although the act applies prospectively to terminations of distributorships, the criteria upon which such terminations are to be considered might well arise either before or after its effective date. Cf. Hartford v. Suffield, 137 Conn. 341, 343, 77 A.2d 760 (1950).

An examination of the circumstances of the act's passage is an additional aid in determining legislative intent. During the legislative debates on the bill, Representative Robert Carragher remarked: "Quite frankly, the reason for the change to six months is because we have a situation in Connecticut right now where an out-of-state manufacturer has decided to drop his relationship with three Connecticut wholesalers and give the entire State of Connecticut business for his product to only one wholesaler. And under current law, he can do this within a twenty-four month period. This amendment would change that period to six months and would thereby save the business of these three wholesalers and hopefully prevent this out-

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of-state manufacturer from doing...