Laird & Company v. Cheney

414 P.2d 18, 196 Kan. 675, 1966 Kan. LEXIS 333
CourtSupreme Court of Kansas
DecidedMay 7, 1966
Docket44,423
StatusPublished
Cited by7 cases

This text of 414 P.2d 18 (Laird & Company v. Cheney) is published on Counsel Stack Legal Research, covering Supreme Court of Kansas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Laird & Company v. Cheney, 414 P.2d 18, 196 Kan. 675, 1966 Kan. LEXIS 333 (kan 1966).

Opinion

The opinion of the court was delivered by

Harman, C.:

At issue here is the constitutionality of certain enactments of the 1961 Kansas legislative session, now appearing as K. S. A. 41-1111 to 41-1121, and particularly K. S. A. 41-1112, relative to price control of liquor sold by manufacturers or suppliers to licensed distributors.

Brief discussion of a portion of our liquor law will be helpful in understanding the issues involved. When the legislature in 1949, in implementation of the newly adopted amendment of article 15, section 10, of the Kansas constitution, enacted laws legalizing the liquor industry, it recognized, for our purposes here, three levels of business enterprise therein, namely, (1) manufacturers or distillers or their marketing subsidiaries or distributors of alcoholic liquor bottled in a foreign country (hereinafter referred to as suppliers), *676 (2) distributors, and (3) retailers, with licenses being required for the latter two categories and for the resident manufacturer.

In an effort to avoid certain evils associated with the liquor traffic, it determined that, unlike many other states, there would be no authorization for exclusive distributorships and no discrimination in prices from suppliers to distributors and from distributors to retailers. This was accomplished through the adoption of that which, as now amended, appears as K. S. A. 41-1101. Subsection (1) thereof provides that it shall be unlawful for a distributor to purchase alcoholic liquor from a supplier unless the supplier shall have filed with the state director of alcoholic beverage control (hereinafter referred to as the director) a written sworn statement wherein he agrees he will sell his brands or kinds of liquor to any licensed distributor in the state at the same current price and without discrimination. The supplier is to file with the director as often as may be required but at least quarterly a list of current prices of his particular liquors to be offered. This subsection further provides that if any supplier violates his agreement by refusing to sell to any licensed distributor or by discriminating in current prices then the director shall notify all licensed distributors in this state of such violation, whereupon it becomes unlawful for the distributors to purchase liquor from such supplier and the license of any distributor making such purchase shall be revoked. Thus it is seen that instead of licensing the out-of-state suppliers the state has chosen to exert control over them by authorizing distributors to purchase only from such suppliers who are willing to comply with our price regulations. Subsection (2) contains similar provisions governing prices from distributors to retailers. Other sections of the liquor control act have the effect of completely divorcing retail sales of liquor from manufacturing and wholesaling (see, State, ex rel., v. Kansas Retail Liquor Dealers Foundation, Inc., 192 Kan. 293, 387 P. 2d 171).

A further step in legislative control of liquor price was taken with the enactment of Laws 1959, Chapter 217, which purported to authorize the director to fix minimum prices for sales of liquor by distributors to retailers and for sales by retailers to consumers, based on suggested price lists therefor filed by the supplier. This act was held unconstitutional upon the basis it contained two unauthorized delegations of the lawmaking power (State, ex rel., v. Mermis, 187 Kan. 611, 358 P. 2d 936).

*677 Thereafter the 1961 legislature enacted the provisions now under attack (Laws 1961, Chap. 241), section 1 of which (now K. S. A. 41-1111) expresses policy as follows:

“In the public interest and in order to promote the orderly sale and distribution of alcoholic liquor, to foster temperance and to promote the public welfare, in the state of Kansas, the legislature finds: (a) That sales prices of alcoholic liquor sold by manufacturers and others to distributors licensed in this state should be no higher than the lowest price for which the same is sold to distributors anywhere in the continental United States; and (b) that minimum sale prices for alcoholic liquor sold by distributors and retailers licensed in this state should be determined and regulated by law.”

Section 2 (K. S. A. 41-1112), the chief subject of this controversy, provides as follows:

“The prices filed by manufacturers and others authorized to sell alcoholic liquors to licensed distributors, pursuant to subsection (1) of section 41-1101 of the General Statutes Supplement of 1959, shall be the current prices, F. O. B. point of shipment, and said price as filed by each manufacturer or vendor shall be as low as the lowest price for which the item is sold anywhere in any state in the continental United States by such manufacturer or vendor: Provided, That in determining the lowest price for which an item of alcoholic liquor is sold in any such state there shall be taken into consideration all advertising, depletion and promotional allowances and rebates of every kind whatsoever made' to purchasers in such state by the vendor.”

Sections 3 to 7 (K. S. A. 41-1113 to 41-1117) provide for the fixing by the state alcoholic beverage control board of review of minimum sale prices for sales from distributors to retailers ,and from retailers to consumers. Sections 8 and 9 (K. S. A. 41-1118 and 41-1119) provide for the promulgation of rules and regulations necessary to carry out the provisions of the enactment. Section 10 (K. S. A. 41-1120) states legislative intent to make the act a part of our liquor control act, and finally, section 11 (K. S. A. 41-1121) provides that any person violating any provisions of the act shall be guilty of a misdemeanor and upon conviction punished as provided by law.

On May 19, 1961, the director issued a memorandum requesting suppliers to file price lists for a three-month period commencing August 1, 1961, in accordance with the new enactment. On June 14,1961, eighteen out-of-state suppliers, part of the appellees herein, filed this action for declaratory judgment and injunctive relief against enforcement of the act, and at the same time obtained a temporary order restraining enforcement of the act. Thereafter this order was modified to restrain only the requirement of price filings *678 by suppliers under 41-1112 and the enforcement of criminal sanctions under 41-1121. On July 14, 1961, appellants, the enforcing officers, filed an answer denying allegations of unconstitutionality. Thereafter appellants sought unsuccessfully to have the temporary restraining order vacated. Meanwhile seventeen more suppliers were permitted to become party plaintiffs in the action and to avail themselves of the temporary restraining order. Trial to the court was had December 9, 10 and 11, 1963. Appellees offered into evidence testimony in the form of depositions of officers of five appellee corporations and of a marketing consultant to the liquor industry as to the anticipated effect of the new law, along with certain exhibits concerning the liquor industry. Appellants offered in evidence copies of sworn written statements of forty-two suppliers filed with the director pursuant to 41-1112.

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Cite This Page — Counsel Stack

Bluebook (online)
414 P.2d 18, 196 Kan. 675, 1966 Kan. LEXIS 333, Counsel Stack Legal Research, https://law.counselstack.com/opinion/laird-company-v-cheney-kan-1966.