Schwegmann Brothers Giant Super Mkts. v. McCrory

112 So. 2d 606, 237 La. 768, 1959 La. LEXIS 1036
CourtSupreme Court of Louisiana
DecidedJune 1, 1959
Docket44550
StatusPublished
Cited by60 cases

This text of 112 So. 2d 606 (Schwegmann Brothers Giant Super Mkts. v. McCrory) is published on Counsel Stack Legal Research, covering Supreme Court of Louisiana primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Schwegmann Brothers Giant Super Mkts. v. McCrory, 112 So. 2d 606, 237 La. 768, 1959 La. LEXIS 1036 (La. 1959).

Opinion

FOURNET, Chief Justice.

The plaintiff, Schwegmann Brothers Giant Super Markets, a commercial partnership engaged in the business of selling, at retail, food and other commodities and conducting three very large establishments in New Orleans and its environs, sought an injunction in the Nineteenth Judicial District Court for the Parish of East Baton *773 Rouge against the Commissioner of Agriculture & Immigration of this State, Sidney J. McCrory, restraining enforcement of the provisions of Act 193 of the Legislature of 1958, known as the Orderly Milk Marketing Act, and attacking its constitutionality on various grounds. Certain producers and processors of milk and milk products, domiciled in various parts of the State, twenty-one in number, 1 were allowed to intervene and join with the defendant in defending the legality and constitutionality of the Act. After a full hearing 2 there was judgment decreeing that the rule nisi be recalled, vacated and set aside and plaintiff’s suit be dismissed at its cost; and the plaintiff has appealed.

The said Act — -a supplement and amendment to Part VII of Chapter 4 of Title 40 of the Revised Statutes and designated R.S. 40:940.i to 940.15 — according to its title, is “ * * * to protect and preserve the orderly marketing of milk, milk products and frozen desserts listed or referred to herein * * 3 and contains a preamble declaring the Legislature’s recognition of the development in the State of unfair competition and trade practices in the sale and distribution of those products, its further recognition of the necessity to protect and *775 preserve orderly marketing and to prevent certain unfair trade and marketing practices, and expressing the lawmakers’ intent to prevent the economic destruction of many dairy farmers and others dealing in said products because of discriminatory trade practices engaged in by certain financially strong- business organizations to stifle competition — thus presenting “a situation detrimental to the health, welfare and economy of the people of this State.” Among the practices engaged in by the plaintiff and other large chain stores, and sought to be abolished by provisions of the Act, were a system of rebates or discounts from invoice prices; trade concessions, including the furnishing of display and storage equipment, contributions for free use of refrigeration equipment, advertising paid for by those from whom the dairy products were bought; and trucking of the product from North Louisiana, the entire length of the State (by financially powerful distributors and processors not parties here) and offered for sale at prices cut in half and substantially below the market in the locality from which the product was shipped.

The first section of the Act lists the items covered by its provisions, i. e., the various kinds of milk, milk products and “frozen desserts” (40:940.1); the next section contains a definition of terms, including “Non-processing Retailer” which fits plaintiff’s business, and “Cost” which “shall include the cost” of the product to the non-processing retailer plus cost of doing business— which latter shall include but not be limited to labor costs, including executive salaries, cost of receiving, cooling, processing, packaging, manufacturing, rent, depreciation, power, supplies, selling costs, delivery costs, storing, maintenance of plant and equipment, advertising, transportation, all types of licenses, taxes, fees, insurance, and all other costs of doing business as determined by the Commissioner; and cost shall be allocated proportionately to each unit of product sold “and in no case can any item or unit be sold for less than the unit cost; * * *.” 4 (940.2) By the following section (940.3), headed “Disruptive Sales Practices,” it is declared to be a violation for a processor, handler, distributor or bulk milk handler 5 to do certain described acts, *777 including (a) “To discriminate in price between non-processing retailers or between consumers who purchase any of the products listed * * * where such products are offered for sale in the same size and type of .container”, (b) “To give or offer any discount or rebates on products sold * * * ”, (c) “To furnish, give, lend, sell or rent any signs and display material except those advertising only his own products,” and the name or products of the non-processing retailer are not to be included in such signs or display material- — except in the case of installations in place as of July 30, 1958. 6 The method is then provided (940.4) of arriving at minimum prices to producers so as to achieve orderly marketing, and is reproduced in full in the margin. 7

*779 Succeeding sections (940.5 and 940.6), prohibiting certain acts by processors, handlers and/or distributors, need not be detailed. With reference to sales by a non-processing retailer, the Act provides (940.7) : “No non-processing retailer shall with the intent or with the effect of unfairly diverting trade from a competitor, or of otherwise injuring a competitor, or of destroying competition, or of creating a monopoly, advertise, give, offer to sell or sell within the state of Louisiana, any of the items listed or referred to * * * for less than cost, as defined in R.S. 40:940.2. Proof of the advertising, giving, offer to sell or sale of such products by a non-processing retailer for less than cost to such non-processing retailer shall be prima facie evidence of a violation of this Section.” Like provisions are applicable to sales by bulk milk handlers (940.8), followed by prohibition (940.9) of combination sales involving milk products with any other commodity or service at a price less than the aggregate of the prices for each, with intent or’effect of injuring a competitor, destroying competition or creating a monopoly. 8 Rebates, discounts, and other trade practices by processors, handlers or distrubutors with intent to destroy competition are prohibited (940.10) except upon final liquidation of business, items sold under court order, where the prices of similar or comparable products are made in good faith to meet legal competition, or bids are made in response to invitation from governing bodies. Non-processing retailers as well as other named handlers of milk are required (940.11) to be licensed by the Commissioner; the method for obtaining the license and provision for revocation are incorporated in this Section. The Commissioner, designated “the instrumentality of the state” for administering the Act and “to execute the legislative intent herein expressed” (940.12), is vested with certain powers deemed appropriate and necessary to that end, including subpoena power; he promulgates regulations pertaining to the purchases and sales of the affected products, and is empowered to issue licenses for the sum of one dollar annually.

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Bluebook (online)
112 So. 2d 606, 237 La. 768, 1959 La. LEXIS 1036, Counsel Stack Legal Research, https://law.counselstack.com/opinion/schwegmann-brothers-giant-super-mkts-v-mccrory-la-1959.