Schwartz v. Kelly

• Decision Date: 21 July 1953
• Citation: 99 A.2d 89,140 Conn. 176
• Court: Connecticut Supreme Court
• Parties: SCHWARTZ et al. v. KELLY et al. Supreme Court of Errors of Connecticut

Page 89

99 A.2d 89

140 Conn. 176

SCHWARTZ et al. v. KELLY et al.

Supreme Court of Errors of Connecticut.

July 21, 1953.

Appeal Dismissed Nov. 30, 1953.

See 74 S.Ct. 227.

H. L. Koizim and G. A. Vardamis, South Norwalk, with whom, on the brief, were A. D. Slavitt and Robert A. Slavitt, South Norwalk, for appellants (plaintiff).

Louis Weinstein, Asst. Atty. Gen., with whom, on the brief, was William L. Beers, Deputy Atty. Gen., for appellees (defendants).

Joseph E. Klau, Hartford, with whom, on the brief, were E. Gaynor Brennan, Joseph K. Sherman, Stamford, and David M. Shea, Hartford, argued the cause as amicuscuriae.

Before BROWN, C. J., and BALDWIN, INGLIS, O'SULLIVAN and CORNELL, JJ.

INGLIS, Associate Justice.

In this action the plaintiffs, a group of package store permittees, seek to enjoin the liquor control commission from enforcing Public Act No. 200, enacted by the 1951 General Assembly, General Statutes, Cum.Supp.1951, §§ 904b-907b. The trial court rendered judgment for the defendants and from that judgment the plaintiffs have appealed.

The act in question provides that no out-of-state shipper, manufacturer of wholesaler permittee shall sell or offer for sale any alcoholic liquor the container of which bears a label stating the brand or the name of the owner or producer, unless a schedule of minimum consumer resale prices for each brand has been filed with the liquor control commission and such schedule is then in effect. An exception is made providing that permission for such sale or offer may be granted by the liquor control commission 'for good cause shown and for reasons not inconsistent with the purposes of [the act], and under such terms and conditions as the liquor control commission deems necessary.' Cum.Supp.1951, § 904b.

The schedules of retail prices so filed are to continue operative for such periods as the commission shall specify, not exceeding four months, and are to be given wide publicity in various prescribed ways. The act further provides: 'No permittee authorized to sell alcoholic liquor at retail for off-premises consumption shall sell, offer to sell, solicit an order for or advertise any alcoholic liquor at a price less than a minimum consumer resale price then in effect, unless written permission of the liquor control commission is granted for good cause shown and for reasons not inconsistent with the purposes of [the act], and under such terms and conditions as the liquor control commission deems necessary.' § 904b(c). The commission is authorized, § 905b, to adopt regulations for the enforcement of the act and to permit noncompliance when practical difficulties or unnecessary hardships will otherwise ensue. A violation of the act or any regulation thereunder is punishable by suspension or revocation of the violator's permit and by other penalties. § 906b.

The claim of the plaintiffs is that the act is unconstitutional on three grounds: (1) It violates the due process clauses of both the federal and the state constitutions, (a) because it is not within the police power and (b) because it is discriminatory; (2) it provides for an improper delegation of legislative power; (3) it contravenes the interstate commerce clause of the federal constitution.

In passing upon the constitutionality of a statute, a court is bound to make every presumption and intendment in favor of the statute and to sustain it unless it is clearly invalid. Northeastern Gas Transmission Co. v. Collins, 138 Conn. 582, 586, 87 A.2d 139; Mills v. Gaynor, 136 Conn. 632, 637, 73 A.2d 823; Lyman v. Adorno, 133 Conn. 511, 514, 52 A.2d 702. This fundamental principle applies with full force in the determination of whether a statute is within the police power and, therefore, does not deprive a person of his liberty or property without due process of law. In such a consideration it is not for the court to pass upon the economic advantages or disadvantages of the statute. It is not for the court to say whether the legislation is wise. The court's only function is to determine whether the object of the enactment is within the power of the legislature and, if so, whether the particular statute bears a reasonable and substantial relation to the object sought to be accomplished and is neither arbitrary nor discriminatory. Carroll v. Schwartz, 127 Conn. 126, 129, 14 A.2d 754.

Although the act here in question does not contain a statement of the objects sought to be accomplished, the purposes which the General Assembly had in mind in adopting it are easily discernible. They were both to promote temperance in the consumption of intoxicating liquor and, by stabilizing the industry, to encourage observance of the Liquor Control Act by those who are permitted to sell liquor not to be consumed on the premises. It may reasonably be presumed that, without the establishment of a minimum retail price for branded liquor, price wars among retail dealers are apt to occur. The cutting of prices which occurs during such wars may induce persons to purchase, and therefore consume, more liquor than they would if higher prices were maintained. Moreover, the cutthroat competition which ensues is apt to induce the retailers to commit such infractions of the law as selling to minors and keeping open after hours in order to withstand the economic pressure. To prevent the occurrence of such conditions promotes public health, safety and welfare. Like all reasonable restrictions on the liquor traffic, such a purpose is well within the police power of the state. Francis v. Fitzpatrick, 129 Conn. 619, 621, 30 A.2d 552, 145 A.L.R. 505; State v. Zazzaro, 128 Conn. 160, 166, 20 A.2d 737; Crowley v. Christensen, 137 U.S. 86, 90, 11 S.Ct. 13, 34 L.Ed. 620.

To accomplish this purpose, the General Assembly has, in this instance, adopted the method of permitting wholesalers to fix minimum prices at which each brand of liquor may be sold at retail. Price fixing is well recognized as a method reasonably suited to effectuate such a purpose and, therefore, is not a violation of due process. Burroughs Wellcome & Co. v. Johnson Wholesale Perfume Co., 128 Conn. 596, 601, 24 A.2d 841; Nebbia v. New York, 291 U.S. 502, 537, 54 S.Ct. 505, 78 L.Ed. 940. Clearly, the act which requires wholesalers as a condition of doing business in this state to schedule minimum prices at which their brands of liquor may be sold and prohibits permittees from selling at retail for less than those prices is within the police power of the state.

Legislation, even though it is within the police power, may be violative of due process if it is discriminatory in that it deals differently with different classes of persons without the existence of some natural and substantial difference, germane to the subject and purposes of the legislation, between those within the class included and those whom it leaves untouched. State v. Cullum, 110 Conn. 291, 295, 147 A. 804; Lyman v. Adorno, 133 Conn. 511, 521, 52 A.2d 702. The plaintiffs claim that the act now before us indulges in such discrimination. The fact that the act treats those who deal in intoxicating liquor differently from those who deal in other commodities cannot be the basis for such a claim. Since the liquor traffic is a possible source of danger to the public which is not inherent in other businesses, those who engage in it constitute a class which is subject to regulations which might not be properly applicable to others. Francis v. Fitzpatrick, 129 Conn. 619, 621, 30 A.2d 552, 145 A.L.R. 505.

So far as wholesalers are concerned the act is not discriminatory, because wholesalers of liquor are all treated alike. They must all file their schedules of prices. See State Board of Equalization v. Young's Market Co., 299 U.S. 59, 61, 57 S.Ct. 77, 81 L.Ed. 38. The act does make a differentiation between permittees for the retail sale of liquor not to be consumed on the premises and other retail permittees. It does not apply to the latter. There is, however, a reasonable distinction between the two classes. There is not the same likelihood of a price war with its attendant evils among those who sell liquor by the drink as there is among those who sell it by the package. This distinction is one which is germane to the purposes of the legislation. To make illegal the retail sale of liquor at less than a minimum price by permittees authorized to sell for off-premises consumption only is not discriminatory to the extent that the act is thereby rendered unconstitutional.

Since the act is within the...