Norman's on the Waterfront, Inc. v. Wheatley

444 F.2d 1011, 8 V.I. 372, 15 Fed. R. Serv. 2d 184, 1971 U.S. App. LEXIS 9496, 1971 Trade Cas. (CCH) 73,606
Court of Appeals for the Third Circuit·Decided June 17, 1971·No. No. 19,428·Published·Cited by 2 cases

Opinion

OPINION OF THE COURT

ADAMS, Circuit Judge

This case presents a difficult problem regarding the effect of the antitrust laws upon the validity of the Virgin Islands Alcoholic Beverages Fair Trade Law, 8 V.I.C. §§ 150-160. The Legislature of the Virgin Islands enacted this law on February 10, 1969, but on March 12, 1969, before the law was to become effective, Norman’s on the Waterfront, Inc. (Norman’s) brought this suit in the United States District Court for the District of the Virgin Islands. Norman’s sought declaratory and injunctive relief against enforcement of the law by the Board of Alcoholic Beverages (Board). A hearing was postponed several times but the Board agreed not to enforce the law until the District Court made its ruling.

On January 22, 1970, four corporations which were engaged in the importation and sale of liquor in the Virgin Islands — Charles Bellows & Co., Ltd., A. H. Riise Liquor Store, Inc., The General Trading Corporation and International Liquors, Inc. — moved to intervene as defendants in opposing the suit. Norman’s consented to the intervention and the District Court granted the motion on February 2, 1970. The United States filed a brief as amicus curiae both in the District Court and in this Court, urging that the relief sought by Norman’s be granted.

On March 11, 1970, oral argument was held before the Honorable Almeric L. Christian. Judge Christian filed an opinion on August 14, 1970, declaring the law violative of § 3 of the Sherman Act, 15 U.S.C. § 3, and finding Norman’s entitled to injunctive relief. A final order consistent [376] with the opinion was entered on October 5, 1970. From the order, three of the intervenors appealed, but the Board of Alcoholic Beverages did not.

I.

The threshhold question presented here is whether the intervenors have a right to appeal from the District Court’s order. If they have such a right, we must then decide whether the law, or portions of it, are valid under the McGuire Fair Trade Act, 15 U.S.C. § 45, or under the doctrine of governmental action enunciated in Parker v. Brown, 317 U.S. 341 (1943), or under the twenty-first amendment to the Constitution.

The Virgin Islands Alcoholic Beverages Fair Trade Law contains mandating and contractual provisions. 8 V.I.C. § 150-160. Section 152 requires that all importers and wholesalers register with the Board and list their wholesale price for each brand of liquor sold, and Section 156 commands that the brand owner or his licensee also file a list of the minimum retail prices at which his brands of liquor may be sold in the Virgin Islands. No sales are permitted below such minimum prices.

In addition to these mandatory features, Sections 153 to 155 permit wholesalers to enter contracts with retailers specifying the minimum price at which liquor may be sold! Such contracts bind non-signing retailers as well as those who are a party to the contract.

Norman’s contends the intervenors have no standing to appeal because no relief was sought or granted against them. By its terms, the District Court’s order enjoined only the Board of Alcoholic Beverages and its chairman. However, this fact alone does not necessarily preclude the intervenors’ appeal. Fishgold v. Sullivan Drydock & Repair Corp., 328 U.S. 256 (1946). According to one leading commentator, “[t]he intervenor, once intervention has been [377] allowed, has the right to appeal from all interlocutory and final orders which affect him” (emphasis added).1 Put another way, “[o]ne who has become a party by intervention ... is entitled, if aggrieved, to appeal” (emphasis added).2 The order of the District Court certainly affects the intervenors since they, as 'wholesalers and retailers, are parties to be protected by the law. Under § 155 of the law, they would have the right to sue for damages from retailers who fail to sell liquor in conformity with the price schedules established under either the mandatory or contractual provisions of the law. In addition, an interest of the intervenors, who are. exclusive importers and wholesalers for certain brands, arguably protected by the law is their property rights in particular brand names and trademarks. See Norman Morris Corp. v. Hess Brothers, Inc., 243 F.2d 274 (3rd Cir. 1957). This Court in Morris found that the exclusive national distributor of “Omega” watches had a right to set fair trade prices under the Pennsylvania Fair Trade Act although the Act did not specify who could properly stipulate the prices. Here, §§152 and 156 of the Virgin Islands law explicitly vest either the producer or the wholesaler with that right or obligation. Norman’s relies on Milgram v. Loews, Inc., 192 F.2d 579 (3rd Cir. 1951) as precluding the intervenors’ appeal. Judge Staley said in Milgram that intervening downtown-theater operators were not adversely affected by a district court decision holding that distributors of motion pictures violated the antitrust laws by limiting first-run exhibitions to downtown theaters. Apart from the fact that the downtown operators were not parties to the decree, the crux of the decision appears to be the statement at page 586 that “. . . [the exhibitors] can hardly contend that they have a legal right to be free from competition.” Yet in this case, [378] the intervening liquor importers and wholesalers do have a colorable claim that the Virgin Islands law gives them a right to be free from some competition. This contention is much like the one found to provide standing for an appeal in City of Chicago v. Atchison, Topeka & Santa Fe R. Co., 357 U.S. 77 (1958), decided seven years after Milgrana. In City of Chicago an ordinance of Chicago was declared unconstitutional by the Court of Appeals for the Seventh Circuit. The ordinance sought, in effect, to protect an older motor carrier (Parmelee) from competition by a new motor carrier (Transfer) by requiring the acquisition from the City of a certificate of convenience and necessity to operate. Before holding the ordinance unconstitutional, the Supreme Court considered whether the old motor carrier had standing to appeal :

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Norman's on the Waterfront, Inc. v. Wheatley, 444 F.2d 1011, 8 V.I. 372, 15 Fed. R. Serv. 2d 184, 1971 U.S. App. LEXIS 9496, 1971 Trade Cas. (CCH) 73,606 (3d Cir. 1971).

444 F.2d 1011 (Norman's on the Waterfront, Inc. v. Wheatley) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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