Stiff v. ALABAMA ALCOHOLIC BEV. CONTROL BD.

Decision Date02 May 2003
Citation878 So.2d 1138
PartiesWilliam D. STIFF v. ALABAMA ALCOHOLIC BEVERAGE CONTROL BOARD et al.
CourtAlabama Supreme Court

Jim L. DeBardelaben of DeBardelaben, Norwood & Westry, P.C., Montgomery, for appellant.

Randy A. Dempsey, F. Wade Steed, and Jonathan D. Green of Dempsey, Steed & Stewart, P.C., Birmingham, for appellees.

SEE, Justice.

The State of Alabama levies excise taxes on wine under the Alabama Table Wine Act and formerly under the Alabama Native Farm Winery Act. William Stiff appeals from the Montgomery Circuit Court's judgment holding that he lacks standing to challenge the Alabama excise taxes on wine under the Commerce Clause of the Constitution of the United States1 and from the circuit court's summary judgment in favor of the Alabama Alcoholic Beverage Control Board ("ABC Board") on his claim that the ABC Board violated the Alabama Administrative Procedure Act, § 41-22-1 et seq., Ala.Code 1975, when it failed to establish a procedure for the markup of table wine.2 We reverse and remand.

In 1979, the Legislature passed the "Native Farm Winery Act," § 28-6-1 et seq., Ala.Code 1975.3 The Native Farm Winery Act levied an excise tax of $.05 per gallon on all native farm wine sold in Alabama or dispensed as free samples at a native farm winery. § 28-6-4(b), Ala.Code 1975. In 1980, the Legislature passed the "Alabama Table Wine Act," § 28-7-1 et seq., Ala.Code 1975. The Table Wine Act levied an excise tax of $.45 per liter on all table wine "sold to [a] wholesale licensee or [the ABC] board, to be collected from the purchaser by the board or by a licensed retailer." § 28-7-16, Ala.Code 1975.4 The Table Wine Act exempted native farm wine from the table wine excise tax.5 § 28-7-24, Ala.Code 1975.

William Stiff is an Alabama domiciliary and a consumer of table wine. On September 27, 1999, Stiff sued the ABC Board alleging that the ABC Board had violated the Commerce Clause of the Constitution of the United States, Art. I, § 8, cl. 3, by imposing and collecting an excise tax of $.45 per liter on all table wine imported into Alabama, but imposing and collecting an excise tax of only $.05 per gallon on native farm wine produced and sold in Alabama.

Stiff also alleged that the ABC Board had violated § 41-22-5, Ala.Code 1975, a part of the Alabama Administrative Procedure Act, by failing to establish a procedure by which the price of table wine is marked up and by failing to publish such a procedure in the Alabama Administrative Monthly so that "interested persons" would have an opportunity to submit to the ABC Board comments or proposals about the procedure.

The ABC Board moved for a summary judgment; it argued that Stiff lacked standing to bring the Commerce Clause challenge and that the ABC Board had not violated the Alabama Administrative Procedure Act. The trial court ordered mediation, which was unsuccessful, and the ABC Board again moved for a summary judgment. On September 14, 2001, the trial court entered a judgment in favor of the ABC Board; it held (1) that Stiff does not have standing to challenge the excise-tax scheme under the Commerce Clause, and (2) that the ABC Board did not violate the Alabama Administrative Procedure Act when it failed to establish and publish notice of its markup procedure for table wine. Stiff appeals, arguing that the trial court erred on both grounds when it entered the summary judgment.

"`The standard of review applicable to a summary judgment is the same as the standard for granting the motion, that is, we must determine whether there was a genuine issue of material fact and, if not, whether the movant was entitled to a judgment as a matter of law. Our review is further subject to the caveat that this Court must review the record in a light most favorable to the nonmovant and resolve all reasonable doubts against the movant. Wilson v. Brown, 496 So.2d 756, 758 (Ala.1986); Harrell v. Reynolds Metals Co., 495 So.2d 1381 (Ala.1986). See also Hanners v. Balfour Guthrie, Inc., 564 So.2d 412 (Ala.1990).'"

Gonzalez, LLC v. DiVincenti, 844 So.2d 1196, 1200-01 (Ala.2002)(quoting Brewer v. Woodall, 608 So.2d 370, 372 (Ala.1992)). "For purposes of ruling on a motion to dismiss for want of standing, both the trial and reviewing courts must accept as true all material allegations of the complaint, and must construe the complaint in favor of the complaining party." Warth v. Seldin, 422 U.S. 490, 501, 95 S.Ct. 2197, 45 L.Ed.2d 343 (1975).

Standing

Stiff argues that he has standing to challenge the manner in which Alabama levied its excise taxes on wine under the Table Wine Act and the Native Farm Winery Act. To establish that he has standing to bring a challenge under the Commerce Clause, Stiff must demonstrate the existence of: (1) an actual concrete and particularized "injury in fact""an invasion of a legally protected interest"; (2) a "causal connection between the injury and the conduct complained of"; and (3) a likelihood that the injury will be "redressed by a favorable decision." Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992). Stiff also must demonstrate that "he is a proper party to invoke judicial resolution of the dispute and the exercise of the court's remedial powers." Warth, 422 U.S. at 518, 95 S.Ct. 2197. At an irreducible minimum, Stiff must "`show that he personally has suffered some actual or threatened injury as a result of the putatively illegal conduct'" of the ABC Board. Bender v. Williamsport Area School Dist., 475 U.S. 534, 542, 106 S.Ct. 1326, 89 L.Ed.2d 501 (1986)(quoting Gladstone, Realtors v. Village of Bellwood, 441 U.S. 91, 99, 99 S.Ct. 1601, 60 L.Ed.2d 66 (1979)).6 Stiff argues that he has standing to challenge the manner in which Alabama levied its tax on table wine because, he says, he was compelled under the tax scheme to pay an unconstitutional tax.7 The trial court found that Stiff lacks standing because the excise tax on table wine "is assessed on and collected from the wholesaler," not from Stiff, who is a retail customer. The trial court concluded that Stiff does "not seek to do business across state lines, nor [does he or could he] seek to directly purchase the goods subject to the tax." The ABC Board argues on appeal that Stiff is asserting "generalized grievances," that Stiff is not entitled to assert claims seeking lower wine prices, and that he is not asserting claims that would protect his own rights. (ABC Board's brief at 4.) The ABC Board also argues that Stiff lacks standing because, it argues, he is not a representative of the wine industry and has not demonstrated that he is entitled to protect the interests of the wine industry.

Consumers who suffer an injury from "regulation forbidden under the Commerce Clause satisfy the standing requirements of Article III." General Motors Corp. v. Tracy, 519 U.S. 278, 286, 117 S.Ct. 811, 136 L.Ed.2d 761 (1997).8 In Tracy, General Motors argued that Ohio's scheme for taxing natural gas violated the Commerce Clause because Ohio taxed gas purchased directly by consumers from out-of-state providers at a higher rate than it taxed gas purchased by consumers from in-state local gas distribution companies. The Supreme Court of Ohio held that General Motors was "without standing to raise this Commerce Clause challenge because the company is not one of the sellers said to suffer discrimination under the challenged tax laws." Tracy, 519 U.S. at 286, 117 S.Ct. 811. The Supreme Court of the United States reversed the judgment of the Ohio Supreme Court and held that General Motors, as a customer burdened by the tax, had standing to bring a Commerce Clause challenge:

"But cognizable injury from unconstitutional discrimination against interstate commerce does not stop at members of the class against whom a State ultimately discriminates, and customers of that class may also be injured, as in this case where the customer is liable for payment of the tax and as a result presumably pays more for the gas it gets from out-of-state producers and marketers."

Tracy, 519 U.S. at 286,117 S.Ct. 811. The Supreme Court in Tracy analogized the case to Bacchus Imports, Ltd. v. Dias, 468 U.S. 263, 104 S.Ct. 3049, 82 L.Ed.2d 200 (1984), and stated that General Motors had standing for the same reason that in-state liquor wholesalers in Bacchus had standing to bring a Commerce Clause challenge to a Hawaii tax scheme exempting liquor produced in Hawaii from liquor taxes.

"Although the wholesalers were not among the class of out-of-state liquor producers allegedly burdened by Hawaii's law, we reasoned that the wholesalers suffered economic injury both because they were directly liable for the tax and because the tax raised the price of their imported goods relative to the exempted in-state beverages."

Tracy, 519 U.S. at 287, 117 S.Ct. 811.

Stiff argues that as a consumer of imported table wine he stands in the same position as did General Motors in Tracy and the in-state liquor wholesalers in Bacchus. We agree.

In the case before us, the trial court found that Stiff could not stand in the same position as did General Motors in Tracy, because whereas General Motors had purchased natural gas directly from out-of-state suppliers, under Alabama's three-tiered system of alcoholic-beverage distribution Stiff is forbidden from purchasing wine directly from out-of-state producers. Wine wholesalers purchase wine from out-of-state suppliers and distribute the wine to retailers. Consumers like Stiff may purchase wine only from licensed retail outlets, not directly from wholesalers or from out-of-state producers. See § 28-7-4, Ala.Code 1975.

The fact that Stiff may not purchase wine directly from out-of-state producers is, however, immaterial, because the trial court erroneously concluded that "the [discriminatory] tax is assessed on and collected from the wholesaler."9 The trial court ignored the plain language of the...

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