United States Brewers Ass'n, Inc. v. Healy

Citation532 F. Supp. 1312
Decision Date16 February 1982
Docket NumberCiv. No. H-81-836.
CourtUnited States District Courts. 2nd Circuit. United States District Court (Connecticut)
PartiesUNITED STATES BREWERS ASSOCIATION, INC., et al. v. John F. HEALY, et al.

Henry L. Fisher, Lieberman & Segaloff, New Haven, Conn., William H. Allen, Richard A. Friedman, H. Thomas Austern, Sarah E. Burns, Covington & Burling, Washington, D. C., Richard M. Reynolds, Ralph C. Dixon, Day, Berry & Howard, Hartford, Conn., William H. Mulligan, Skadden, Arps, Slate, Meagher & Flom, New York City, for plaintiffs.

Carl Ajello, Atty. Gen., State of Conn., Robert Langer, John R. Lacey, Asst. Attys. Gen., Hartford, Conn., Richard M. Sheridan, Robert Vacchelli, Asst. Attys. Gen., Newington, Conn., for defendants.

RULING ON CROSS-MOTIONS FOR SUMMARY JUDGMENT

BLUMENFELD, Senior District Judge.

Plaintiff, United States Brewers Association,1 brings this action challenging the constitutionality of sections 30-63a(b),2 30-63b(b)3 and 30-63c(b)4 of the Connecticut Liquor Control Act, Connecticut General Statutes, Title 30, Ch. 545, as amended by Public Act No. 81-294, June 8, 1981 (hereafter referred to as the "beer price affirmation act," "the statute," or "the Act"). Plaintiff is a non-profit corporation representing brewers and importers of beer, many of whom sell beer in Connecticut and the three bordering states, New York, Massachusetts, and Rhode Island. Plaintiffs request a declaratory judgment holding these sections of the price affirmation statute unconstitutional as applied to them on the grounds that the Act violates the Supremacy Clause (art. VI, cl. 2) and the Commerce Clause (art. I, § 8, cl. 3) of the United States Constitution.5 In addition, plaintiffs seek a permanent injunction restraining the defendants, the members of the Department of Liquor Control of the State of Connecticut, from enforcing the provisions of the statute.6 Jurisdiction in this court is based on 28 U.S.C. § 1331(a) which provides for federal court jurisdiction over civil actions arising under the laws or Constitution of the United States, and 28 U.S.C. § 1337 which confers jurisdiction over any civil action arising under any act of Congress regulating commerce.

The plaintiffs have submitted affidavits from seven brewers and six importers outlining the structure of the beer market in general and in the four-state market in particular. The affidavits outline the possible effects of the beer price affirmation statute on the brewers' business, and indicate the variety of responses open to the brewers. Plaintiffs have also submitted an affidavit of Dr. Bruce Owen, an economist, supporting their position that the statute will have anticompetitive effects on the beer industry in the four-state area. On November 10, 1981, a hearing on plaintiffs' motion for preliminary injunction was held. Subsequently, in a ruling dated November 25, 1981, the court denied the motion for a temporary injunction, finding that plaintiffs had failed to demonstrate either irreparable injury or a likelihood of success on the merits. United States Brewers Association v. Healy, Civil No. H-81-836, Ruling on Plaintiffs' Motion for Preliminary Injunction (D.Conn. Nov. 25, 1981). The brewers then moved for summary judgment in an effort to obtain an expedited resolution of this matter. The defendants responded with a cross-motion for summary judgment, supported by the affidavits of Charles W. Kasmer, a defendant and Secretary of the Department of Liquor Control, and Dr. Paul Weiner, an economist. In addition, the defendants submitted a statement of material facts pursuant to local rule 9(d) contesting some of the "material facts not in dispute" contained in plaintiffs' 9(d) statement. The parties waived oral argument on these motions in order to hasten the court's decision.

I. Summary Judgment Principles
The requirements for granting summary judgment are well established. There must be "no genuine issue as to any material fact," and a party must be "entitled to a judgment as a matter of law." Fed. R.Civ.P. 56(c). "The burden is on the moving party `to demonstrate the absence of any material factual issue genuinely in dispute.' Heyman v. Commerce & Industry Insurance Co., 524 F.2d 1317, 1319-20 (2d Cir. 1975)." American International Group, Inc. v. London American International Corp., 664 F.2d 348 (2d Cir. Nov. 13, 1981).

Schwabenbauer v. Board of Education, 667 F.2d 305, 313 (2d Cir. 1981). "A material fact is one which may affect the outcome of the litigation," Commodity Futures Trading Commission v. Savage, 611 F.2d 270, 282 (9th Cir. 1979) (citation omitted) or which "constitutes a legal defense to an action." Kennett-Murray Corp. v. Bone, 622 F.2d 887, 892 (5th Cir. 1980) (citation omitted).

Not only must there be no genuine issue as to the evidentiary facts, but there must also be no controversy as to the inferences to be drawn from them. E.g., Phoenix Savings & Loan, Inc. v. Aetna Casualty & Surety Co., 381 F.2d 245, 249 (4th Cir. 1967). In determining whether or not there is a genuine factual issue, the court should resolve all ambiguities and draw all reasonable inferences against the moving party. United States v. Diebold, Inc., 369 U.S. 654, 655 82 S.Ct. 993, 994, 8 L.Ed.2d 176 (1962) (per curiam); Quinn v. Syracuse Model Neighborhood Corp., 613 F.2d 438, 445 (2d Cir. 1980).... The fact that both sides have moved for summary judgment does not mean that the court must grant judgment as a matter of law for one side or the other. E.g., Home Insurance Co. v. Aetna Casualty & Surety Co., 528 F.2d 1388, 1390 (2d Cir. 1976) ("The fact that both sides ... sought summary judgment does not make it more readily available."); Rhoads v. McFerran, 517 F.2d 66, 67 (2d Cir. 1975).

Schwabenbauer, at 313-314.

"The Court does not assume that no material facts remain in dispute simply because both parties moved for summary judgment." Matter of Citizens Loan & Savings Co., 621 F.2d 911, 913 (8th Cir. 1980) (citation omitted). Rather, the court must evaluate each party's motion on its own merits to determine if summary disposition is appropriate.

"It is well settled however that even genuine disputed issues of fact will not preclude summary judgment unless they are material to the legal issues in the case." Milwaukee Typographical Union No. 23 v. Newspapers, Inc., 639 F.2d 386, 392 n.5 (7th Cir.) (citation omitted), cert. denied, ___ U.S. ___, 102 S.Ct. 144, 70 L.Ed.2d 119 (1981); accord, British Airways Board v. Boeing Co., 585 F.2d 946, 952-53 (9th Cir. 1978), cert. denied, 440 U.S. 981, 99 S.Ct. 1790, 60 L.Ed.2d 241 (1979).

Applying these principles to the instant matter, the court concludes that this is an appropriate case for summary judgment. The defendants' objections to certain of the statements alleged to be "material facts not in dispute" in plaintiffs' 9(d) statement do not bar granting summary judgment, because these statements are either not material, or not facts at all. The objections to the brewers' statements relating to the nature of the beer industry are not material to the resolution of the legal issues presented by these motions.7 The separate 9(d) statement submitted by Anheuser-Busch, Inc. concerns itself solely with the purpose behind the beer price affirmation statute. To the extent that Anheuser-Busch's statements are factual, the defendants' objections are not material.8 To the extent the 9(d) statement states arguments or conclusions, the court is entitled to disregard them.

The statements of material facts submitted by the parties, along with the supporting affidavits, reveal the following pertinent facts:

1. Connecticut residents cross state borders in significant numbers to purchase beer at lower retail prices.9
2. The purpose of the beer price affirmation statute is to lower the price of beer to Connecticut consumers10 thereby increasing the purchase of beer by Connecticut residents within the state, and generating increased tax revenues.11
3. There are no breweries in Connecticut.12
4. In each of the four relevant states the beer distribution system consists of three tiers as required by state licensing laws: brewers and importers, wholesalers, and retailers.13
5. The brewers and importers doing business in the four-state area have the following choices of how to comply with the beer price affirmation statute:14
(a) the Connecticut price can be lowered to equal the lowest price in a bordering state;
(b) lower prices in border states can be raised to the Connecticut level;
(c) the brand or brands that sell at lower prices in the border states can be withdrawn from Connecticut;
(d) the brand or brands that sell for lower prices in the border states can be withdrawn from the markets where the price is lower than the Connecticut price.

The court takes judicial notice of the following facts:

1. Connecticut's statutory scheme regulating the liquor industry contains the following provisions:

A. Price Posting. All brewers and importers of beer must file with the Department of Liquor Control a schedule of prices that they will charge to Connecticut wholesalers. Conn.Gen.Stat. § 30-63(c), Pub.Act 81-294 § 10(c). These "posted prices" apply to all sales to Connecticut wholesalers. They are subject to changes that can be filed on or before the thirteenth day of any month to become effective on the first day of the next month. The posted prices are per bottle, can, or case prices for every brand of beer in every size bottle or can without distinction based on the way the bottles or cans are packaged or even whether they are further packaged. Connecticut wholesalers must also post their prices. Posted prices cannot be changed between monthly posting dates.

B. Discounts. Neither brewers nor wholesalers may offer discounts or other inducements of any kind to their customers. Conn.Gen.Stat. § 30-63(b), Pub.Act 81-294 § 10(b). However, the Department of Liquor Control allows beer price alterations by brewers and importers known in the industry as a ...

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