United States v. Maryland State Licensed Bev. Ass'n
| Citation | 138 F. Supp. 685 |
| Decision Date | 10 January 1956 |
| Docket Number | No. 23212.,23212. |
| Parties | UNITED STATES of America v. MARYLAND STATE LICENSED BEVERAGE ASSOCIATION, Inc., et al. |
| Court | U.S. District Court — District of Maryland |
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George Cochran Doub, U. S. Atty., Baltimore, Md., Horace L. Flurry and Kenneth R. Lindsay, Sp. Assts. to the Atty. Gen., and Alan A. Dobey, Washington, D. C., Gordon B. Spivack, Silver Springs, Md., John F. Hughes, Washington, D. C., and Charles F. Rice, Attys. for Dept. of Justice, Arlington, Va., for plaintiff.
John Henry Lewin and David C. Green, Baltimore, Md., for Maryland Institute of Wine and Spirit Distributors, I. William Schimmel, R. W. L. Wine and Liquor Co., Inc. and Morris A. Kasoff.
Everett L. Buckmaster and Charles Mindel, Baltimore, Md., for Maryland State Licensed Beverage Ass'n, Inc., and John A. Menton.
William L. Marbury and John W. Hardwicke, Baltimore, Md., for National Distillers Products Corp., Robert E. Joyce, Jeffrey W. Clapp and B. C. Ohlandt.
Hilary W. Gans, Baltimore, Md., for Dant Distillery and Distributing Corp., Melrose Distillers Inc., CVA Corp., Schenley Distributors, Inc., Ralph T. Heymsfeld, Murrel J. Ades, Newton Kook and Max Sager.
Kronheim Co., Inc., Milton S. Kronheim and Bernard Cohen.
Read A. McCaffrey, C. Gordon Haines and John Henry Lewin, Baltimore, Md., for McCarthy-Hicks Inc. and Edward S. Buckler, Jr.
Morris Rosenberg, Baltimore, Md., and Hugh B. Cox and James C. McKay, Washington, D. C., for Hiram Walker & Sons, Inc., Hiram Walker, Inc., Gooderham & Worts Ltd., James Barclay & Co. Ltd., Ross Corbit, Raymond Revit, F. A. Wilson and N. M. MacDonald.
A. Adgate Duer and Robert C. Prem, Baltimore, Md., for The Crosse and Blackwell Co. and John T. Menzies.
G. C. A. Anderson, Baltimore, Md., for Joseph E. Seagrams and Sons, Inc., and Frederick J. Lind.
William D. Macmillan, Baltimore, Md., for Distillers Distributing Corp., Harold S. Lee and John O. Brownell.
David R. Owen, Baltimore, Md., for John B. Turner and Ellis D. Slater.
Robert E. Coughlan, Jr., Baltimore, Md., for McKesson and Robbins, Inc., and J. D. Cotler.
George D. Hubbard, Baltimore, Md., for Walter F. Terry.
C. Clifton Virts, Frederick, Md., for Lawrence K. Franklin.
Zanvyl Krieger and John Henry Lewin, Baltimore, Md., for Churchill Ltd. and I. Strouse.
John Henry Lewin and Edwin Harlan, Baltimore, Md., for Gillett-Wright, Inc., and Harry W. Wright.
Ellis Levin and Louis Hoffman, Baltimore, Md., for Reliable Liquors, Inc. and Irving Smith.
Eugene M. Feinblatt and Gordon, Feinblatt & Rothman, Baltimore, Md., for Madera Bonded Wine and Liquor Co. and Harvey Steinbach.
Isaac Hecht, Baltimore, Md., for Maryland Package Liquor Stores Ass'n, Inc., and Jack Wulfert.
The indictment in this case charges two associations of retailers, one association of wholesalers, fourteen manufacturers, seven wholesalers, and thirty-one individuals connected with them, engaged in the alcoholic beverage industry, with violations of Sections 1 and 2 of the Sherman Act, 15 U.S.C.A. §§ 1, 2.
Count One charges a conspiracy "to raise, fix, maintain, and stabilize the wholesale and retail prices of alcoholic beverages shipped into the State of Maryland from manufacturers located outside the State of Maryland" in restraint of trade and commerce and in violation of Section 1. The terms of the conspiracy are alleged to have been: (a) that fair trade prices be required to be established, and that manufacturers and wholesalers be required to enforce the observance of said prices and sell only to retailers who comply; (b) that retailers be required, induced or compelled to observe and adhere to such fair trade prices; (c) that no alcoholic beverages be sold directly by a manufacturer to the Department of Liquor Control for Montgomery County or to the Liquor Control Boards of other monopoly counties, or be sold to said purchasers indirectly through a wholesaler at prices less than the wholesaler's resale prices; and (d) that manufacturers, wholesalers, and retailers boycott and refuse to deal with, and induce and compel others to boycott and refuse to deal with, those who do not establish, enforce, observe and adhere to those terms. Count Two charges a conspiracy to monopolize said trade and commerce, in violation of Section 2. The terms of this conspiracy are alleged to have been the same as those of the conspiracy alleged in Count One. Count Three charges an attempt to monopolize said trade and commerce, also in violation of Section 2.
The defendants have moved to dismiss Counts One and Two on the grounds: (1) that they are too vague, confusing and contradictory to charge any offense under the Sherman Act; (2) that the State of Maryland, following the Twenty-first Amendment, has by statute and court decisions preempted the whole field of marketing alcoholic beverages in Maryland; that there is a conflict between the policy and terms of the Maryland law and the policy and terms of the Sherman Act; that the acts and conduct alleged to constitute the conspiracy in this case are permitted or at least not prohibited by the Maryland law, and implement the State policy; therefore they are not within the ambit of the Sherman Act, and any prosecution thereunder for such acts and conduct would be unconstitutional; and (3) that under the socalled "Rule of Reason" the alleged acts and conduct were justified by the circumstances, including all the applicable Federal and State laws and policies.1
The defendants have also moved to dismiss Count Two on the ground that it does not allege a conspiracy to monopolize violative of Section 2 of the Sherman Act, or, in the alternative, that the government be required to elect between Count One and Count Two, and to dismiss one or the other, on the ground that Count Two alleges no conspiracy different from the conspiracy alleged in Count One.
Certain individual defendants have filed separate motions to dismiss on the ground of vagueness, and separate motions to dismiss have been filed on behalf of three corporations which have been dissolved since the indictment.
Since the government has not yet supplied certain particulars of the offense charged in Count Three, the time for filing motions to dismiss that count has been extended.
I. The Defendants. Paragraphs 1 to 7 identify the defendants: twenty-four corporations, including two associations of retailers, one association of wholesalers, fourteen manufacturers, seven wholesalers, and thirty-one individuals connected with the corporations.
II. Definitions. Paragraph 8 defines "alcoholic beverages" to exclude beer, ale, porter and stout, and defines "manufacturer" as a person who operates a plant within the United States for distilling, rectifying, blending, fermenting, or bottling any alcoholic beverage, or imports into the United States any alcoholic beverage from outside the United States, or is a distributor of alcoholic beverages selling to a wholesaler for resale to a retailer.
III. Nature of Trade and Commerce Involved. Paragraph 9 alleges that alcoholic beverages are marketed in the State of Maryland in a continuous flow of shipments from manufacturers located outside the State, through wholesalers and retailers, to the consuming public; that under the laws of the State, alcoholic beverages shipped and sold by manufacturers are sold through the Department of Liquor Control for Montgomery County, and Liquor Control Boards in other monopoly counties, and wholesalers licensed as such under the laws of Maryland to county dispensaries and other retailers.
Paragraph 10 makes the following allegations: Alcoholic beverages shipped and sold by manufacturers are customarily sold in Montgomery County to the Department, in conformity with the laws of the State. The Department sells alcoholic beverages through county liquor dispensaries to the consuming public. The Department of Liquor Control for Montgomery County, under the laws of the State of Maryland, has customarily purchased as a wholesaler alcoholic beverages direct from manufacturers. In the counties of Caroline, Dorchester, Harford, Kent, Somerset, Worcester, and Wicomico, in the State of Maryland, alcoholic beverages are sold, under the laws of the State, through county liquor dispensaries. Said counties, however, have customarily purchased alcoholic beverages from wholesalers licensed as such under the laws of Maryland, and said counties have not customarily operated as wholesalers. Said counties, including Montgomery County, are monopoly counties. In all other counties in the State of Maryland in which alcoholic beverages are sold, such alcoholic beverages are shipped and sold by manufacturers to licensed wholesalers, who in turn sell to retailers licensed as such who sell to the consuming public. Said counties are open counties.
Paragraphs 11 and 12 allege that in 1954, 90% of the 6,235,971 wine gallons of alcoholic beverages sold by retailers in Maryland was produced outside the State; that about 5% of the total was sold through county dispensaries, mostly in Montgomery County; and that there were 32 wholesalers and 8,783 retailers in Maryland, apart from boards and dispensaries in monopoly counties.
IV. The Conspiracy. Paragraph 13 alleges that beginning about January, 1950, and continuously thereafter up to the date of the indictment, the defendants and other persons to the Grand Jurors unknown, "knowingly have entered into and engaged in an unlawful combination and conspiracy to raise, fix, maintain, and stabilize the wholesale and retail prices of alcoholic beverages shipped into the State of Maryland from manufacturers located outside the State of Maryland," in restraint of the aforesaid trade and commerce, and in violation of Section 1 of the Sherman Act.
Paragraph 14 alleges: "The...
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