Schwegmann Bros. Giant Super Markets v. Louisiana Milk Commission

• Decision Date: 18 February 1974
• Docket Number: No. 54056,54056
• Citation: 290 So.2d 312
• Parties: SCHWEGMANN BROTHERS GIANT SUPER MARKETS, Opponent to Injunction-Appellee-Relator, v. LOUISIANA MILK COMMISSION, Mover for Injunction-Appellant-Respondent.
• Court: Louisiana Supreme Court

Page 312

290 So.2d 312

SCHWEGMANN BROTHERS GIANT SUPER MARKETS, Opponent to Injunction-Appellee-Relator, v. LOUISIANA MILK COMMISSION, Mover for Injunction-Appellant-Respondent.

No. 54056.

Supreme Court of Louisiana.

Feb. 18, 1974.

Paul O. H. Pigman, Michael R. Fontham, Stone, Pigman, Walther, Wittmann & Hutchinson, New Orleans, for plaintiff-applicant.

Ellis C. Magee, John V. Parker, Sanders, Miller, Downing & Kean, Baton Rouge, for defendant-respondent.

TATE, Justice.

These proceedings arise from an effort by the Louisiana Milk Commission to enforce its regulatory powers with regard to price-fixing under the Orderly Milk Marketing Law, La.R.S. 40:940.1--40:940.23 (as amended through 1972).

Briefly stated, the Commission seeks to enjoin Schwegmann Brothers from giving or offering to give refunds in connection with purchases of milk and dairy products. The trial court granted a limited injunction, but the intermediate court broadened the injunction somewhat so as to enjoin refunds even on the limited basis allowed by the trial court. 282 So.2d 865 (La.App.1st Cir. 1973). We granted certiorari, 284 So.2d 770 (La.1973), on the sole complaint that such broadening of the injunction was incorrect.

At the outset, we are met with the contention by Schwegmann Brothers that our grant of certiorari brings the whole case up before us, see Broussard v. National Food Stores of La., Inc., 258 La. 493, 246 So.2d 838 (1971), so that therefore it may here once again urge the unconstitutionality of the statute permitting price-fixing for dairy products. This ingenious and complex argument is based upon the rather complicated procedural stance of this litigation. ¹ Nevertheless, the only issue before us is that upon which certiorari was granted:

The judgment here reviewed is based upon the Commission's motion for injunctive relief. By this motion, a preliminary injunction was sought, by rule to show cause, La.C.Civ.P. arts. 3601, 3602, with proof to be by affidavit, La.C.Civ.P. art. 3609. Schwegmann's answer to the motion admitted all of the allegations except those relating to the 1972 refund offers being made by Schwegmann Brothers. The Commission sought only to prohibit refund offers by Schwegmann.

Thus, the pleadings put at issue Only those allegations seeking an injunction against Schwegmann Brothers's offers of refunds for milk purchased since May, 1972. Schwegmann did not, by answer or any other pleading to the Commission's motion, raise any issue of the unconstitutionality of the statute upon which the Commission's action was based.

Under these circumstances, the only issue before us concerns the correctness or not of the court of appeal judgment insofar as it prohibited refunds, the only error of which Schwegmann Brothers complained in its application for certiorari and the only specified error upon which certiorari was granted. Jordan v. Travelers Insurance Co., 257 La. 995, 245 So.2d 151 (1971). ² The issue of unconstitutionality is not before us not only for that reason, but also because it was not raised in the trial court within the frame of the pleadings upon which is based the judgment here reviewed. Summerell v. Phillips, 258 La. 587, 247 So.2d 542 (1971).

The relatively minor issue before us arises in this context:

In state courts, Schwegmann Brothers lost earlier litigation attacking as unconstitutional the price-fixing of dairy products. See footnote 1 above. It thereupon pressed a suit in federal court to have such price-fixing there declared unconstitutional as offending federal rights. ³

While this federal litigation was pending, Schwegmann Brothers instituted an advertising campaign offering refunds to its customers of 6$ per half-gallon and 12$ per gallon on milk purchased. The refund was conditioned on the Repeal of the price-fixing act Or upon its being declared unconstitutional in the federal litigation. The Commission then brought this injunctive proceeding to bar such refund offers as illegal price-competition (i.e., by giving free a thing of value with the product purchased, so as to reduce its price below the minimum net selling price permitted).

The preliminary injunction application was tried on the basis of an affidavit executed by a Schwegmann Brothers official, to which certain exhibits were attached. The trial court granted the Commission an injunction, but only insofar as the pending offers were conditioned upon a repeal of the statute or upon a non-retroactive judicial holding that the price-fixing was unconstitutional. ⁴ However, the court limited the injunction issued by providing that such refund offers were prohibited 'unless such offers to refund are conditioned upon an adjudication of Retroactive unconstitutionality.' ⁵ (Italics ours.)

The court of appeal reversed the trial court insofar as it permitted Schwegmann Brothers to make refund offers conditioned upon an adjudication of retroactive unconstitutionality. Certiorari was granted by us solely to review this reversal. ⁶

The court of appeal reasoned that, since this is not a declaratory judgment action, the only refund offer before the court was that complained of by the Commission. This offer had broadly offered refunds to become effective if ever price-fixing was repealed or held unconstitutional. The court of appeal stated: 'What Schwegmann may do in the future in the way of making refund offers, or the conditions he may attach to such offers, are not before us at this time.' 282 So.2d 867.

We cannot agree to such procedural ruling.

The Commission had sought a preliminary injunction prohibiting Schwegmann Brothers 'from giving or offering to give refunds to customers in connection with purchases of milk.' The opponent denied the right of the Commission to any injunction whatsoever. Under the trial judge's reasoning, the broad and unrestricted injunctive prohibition sought could not apply to a certain type of refund offer. Therefore, in granting the injunction, he exempted from the prohibition that type of refund offers he felt were legal and proper.

In so doing, he was within his procedural power. He did not have to either grant or deny the full injunction sought. Instead, he could (as he did) give only that partial relief to which the applicant or the opponent was entitled under the showing made. As provided by La.C.Civ.P. art. 862: '* * * a final judgment shall grant the relief to which the party in whose favor it is rendered is entitled, even if the party has not demanded such relief in his pleadings and the latter contain no prayer for general and equitable relief. ⁷

At last we arrive at consideration of the substantive merit of the trial court's ruling. In limiting the injunction so as to exclude a prohibition of refund offers solely conditioned upon a retroactive judicial declaration of unconstitutionality, the court reasoned:

'Absent any offer or statement of intention to do so, Schwegmann could, undoubtedly, subsequent to a declaration of retroactive invalidity (void ab initio status resulting from a judgment declaring the Law unconstitutional), lawfully and legally make refunds to his customers. However, in attempting to make such refunds he would encounter the practical problem of knowing how much refund each customer is entitled to. To declare at this time, while the matter is pending, his intention to refund if and when he is in a legal position to do so and to suggest to his customers an accounting device or acceptable method of proof as to the amount due each not only appears perfectly legal but also most practical.

'This Court accepts the argument of Schwegmann that this offer is a means of protecting the potential constitutional rights of consumers. Schwegmann is stating, as he undoubtedly has a right to do, what he would charge for milk but for the pricing order. Promising to make a future adjustment if and when in a legal position to do so does not reduce the present price of milk, and the payment upon retroactive declaration of invalidity is certainly not prohibited when it is made subsequent to a declaration that says in effect that no order existed at the time of the original sales.'

We are aware of the force of the Commission's argument that the refund-offer campaign was more of an advertising gimmick in the nature of subtle price-competition, rather than a good faith effort to enable customers to prove their entitlement to refund in the event the price-fixing statute is declared unconstitutional retroactively. ⁸

Nevertheless, under the showing made in this hearing for a Preliminary injunction, the trial judge did not abuse the sound discretion granted to him to grant or deny such relief.

Ordinarily, a preliminary injunction is a procedural device interlocutory in nature designed to preserve a status pending final determination of an action. The main difference between a preliminary injunction and a...