State v. Texaco, Inc.

111 N.W.2d 918, 14 Wis. 2d 625, 1961 Wisc. LEXIS 318

• Court: Wisconsin Supreme Court
• Decided: November 17, 1961
• Status: Published

Opinions

Dieterich, J.

Texaco in support of the demurrer contends that the complaint fails to state a cause of action because there has been no determination made by the department of agriculture that Texaco has violated a department order. It further contends that orders secs. Ag 112.01 and Ag 112.03, 1 Wis. Adm. Code, adopted by the department of agriculture pursuant to sec. 100.20 (2), Stats., are unconstitutional in their application to Texaco because of an alleged conflict with congressional policy as expressed in the Robinson-Patman Act and that proceedings instituted by the federal trade commission under the Robinson-Patman Act in Virginia preclude this state from also prosecuting for allegedly similar violations in Milwaukee.

We find no merit in the defendant’s contention that the state of Wisconsin is precluded from bringing the action. General orders of secs. Ag 112.01 ¹ and Ag 112.03,² 1 Wis. Adm. Code, became a part of sec. 100.20, Stats.,³ upon their adoption by the Wisconsin department of agriculture. The action was commenced pursuant to secs. 100.24 (3), (4) ⁴ and 280.02, Stats.,⁵ which authorize the enforcing of the provisions of sec. 100.20, Stats.

The conflict between the federal and state statute, if any, cannot be considered in the abstract. The defense must plead specific facts and parties when it alleges a defense based on a conflict of federal and state policy. Until this court knows what the facts are it cannot determine whether a conflict, if any, exists. The question of conflict is moot until it is presented in a factually concrete manner. Because of the alleged conflict with the Robinson-Patman Act, 15 USCA, sec. 13 (p. 104, pocket part),⁶ it is of the utmost importance that the pertinent facts be brought as fully into the record as possible before a decision is reached.

The federal case in Virginia is pending and if at all applicable must be pleaded as a matter of defense. The factual basis of the defense is not before us however, because in the instant case no answer has been filed or evidence submitted. Whether these cases are in fact prosecution for the same violation cannot be decided in a factual vacuum. This state is not precluded from the exercise of its police power on the mere possibility that a conflict of jurisdiction exists with the federal government; such conflict must be factually verified.

The constitutionality of a statute may be raised by a general demurrer where a cause of action depends on that statute. Ocean Accident & Guarantee Corp. v. Poulsen (1943), 244 Wis. 286, 12 N. W. (2d) 129.

However, whether or not this court, when confronted with an issue of the constitutionality of a statute, will require a judicial investigation through trial of facts, or whether it will inform itself through independent research and the taking of judicial notice, is something that lies entirely within the court’s sound discretion. Associated Hospital Service v. Milwaukee (1961), 13 Wis. (2d) 447, 473, 109 N. W. (2d) 271.

The validity or invalidity of the statute in this case is dependent upon facts other than those of which the court can take judicial notice. To make a determination on the constitutionality of a regulation statute like sec. 100.20, the court must determine whether propositions which the legislature deemed to be facts, and upon which it presumably based its decision to legislate, may be reasonably conceived (as facts) in the mind of the court. Ritholz v. Johnson (1944), 244 Wis. 494, 12 N. W. (2d) 738.

A statute will be held constitutional unless the court can say that no state of facts can reasonably be conceived that would sustain it. State v. Neveau (1941), 237 Wis. 85, 294 N. W. 796, 296 N. W. 622. The burden rests with the party challenging a statute to negate every conceivable basis which may reasonably support the statute’s constitutionality. Texaco has not met this burden.

We hold that the complaint states facts sufficient to state a cause of action under the provisions of secs. 100.24 (3), (4) and 280.02, Stats. An answer is required so that evidentiary facts may be produced at the trial level. This court and the trial court will then have relevant evidentiary facts now denied to it. White House Milk Co. v. Reynolds (1960), 12 Wis. (2d) 143, 106 N. W. (2d) 441.

By the Court. — Order affirmed. The defendant to be granted twenty days from the return of the remittitur to file an answer.

1 Ag 112.01 “Rebates. No wholesaler of gasoline who sells gasoline to retailers thereof shall pay to any such retailer a so-called ‘commission’ which is in reality a rebate off the purchase price; no wholesaler of gasoline shall, by any other device of like effect, discriminate in the price at which such wholesaler sells gasoline to retailers thereof.”

2 Ag 112.03 “Discrimination. No wholesaler of gasoline shall enter into any agreement or arrangement whereby discrimination is made in the price at which said wholesaler sells gasoline to retailers thereof, where the effect of such discrimination may be to substantially lessen competition or to tend to create a monopoly in the marketing of gasoline in the community in which said wholesaler is thus selling at lower price; provided, that it shall be a justification for such a discrimination in price if the difference, made by said wholesaler in the price to the retailer to whom said wholesaler sells at the lower figure, is merely commensurate with an actual difference in the quality or quantity of gasoline sold to said retailer or in the transportation charges or other expense of marketing involved in the sale to said retailer.”

3 “100.20 Methods of competitioN and trade practices. (1) Methods of competition in business and trade practices in business shall be fair. Unfair methods of competition in business and unfair trade practices in business are hereby prohibited.

“(2) The department, after public hearing, may issue general orders forbidding methods of competition in business or trade practices in business which are determined by the department to be unfair. The department, after public hearing, may issue general orders prescribing methods of competition in business or trade practices in business which are determined by the department to be fair,

“(3) The department, after public hearing, may issue a special order against any person, enjoining such person from employing any method of competition in business or trade practice in business which is determined by the department to be unfair. The department, after public hearing, may issue a special order against any person, requiring such person to employ the method of competition in business or trade practice in business which is determined by the department to be fair.

“(4) The attorney general may file a written complaint with the department alleging that the person named therein is employing unfair methods of competition in business or unfair trade practices in business or both. Whenever such a complaint is filed it shall be the duty of the department to proceed, after proper notice and in accordance with its rules, to the hearing and adjudication of the matters therein alleged, and the attorney general may appear before the department in such proceedings. He shall be entitled to judicial review of the decisions and orders of the department as provided in chapter 227.

“(5) Any person suffering pecuniary loss because of a violation by any other person of any order issued under this section may sue for damages therefor in any court of competent jurisdiction and shall recover twice the amount of such pecuniary loss, together with costs, including a reasonable attorney’s fee.”

4 “100.24 Revocation of corporate authority; ouster. . . .

“(3) Any foreign corporation which shall violate any order issued under sec. 100.20, . . . shall, upon proof thereof, in any court of competent jurisdiction, have its license or authority to do business in this state canceled.

“(4) Upon complaint being made to the attorney general and evidence presented to him which shall satisfy him that any foreign corporation has violated any order issued under sec. 100.20, . . . he shall forthwith bring an action in the name of the state to have the license or authority of such corporation to do business in this state canceled, and to oust such corporation from all business of every kind and character in this state.”

5 “280.02 Injunction against public nuisance, time extension. An action to enjoin a public nuisance may be commenced and prosecuted in the name of the state, either by the attorney general upon his own information, or upon the relation of a private individual, or a county, having first obtained leave therefor from the court. ... No stay of any order or judgment enjoining or abating, in any action under this section, may be had unless the appeal be taken within five days after notice of entry of such judgment or order or service of the injunction. Upon appeal and stay, the return to the supreme court shall be made immediately.”

See State ex rel. Abbott v. House of Vision (1951), 259 Wis. 87, 47 N. W. (2d) 321.

6 “(a) It shall be unlawful for any person engaged in commerce, . . . either directly or indirectly, to discriminate in price between different purchasers of commodities of like grade and quality, where either or any of the purchases involved in such discrimination are in commerce, . . . where the effect of such discrimination may be substantially to lessen competition or tend to create a monopoly in any line of commerce, or to injure, destroy, or prevent competition with any person who either grants or knowingly receives the benefit of such discrimination, or with customers of either of them: Provided, That nothing herein contained shall prevent differentials which make only due allowance for differences in the cost of manufacture, sale, or delivery resulting from the differing methods or quantities in which such commodities are to such purchasers sold or delivered: . . .

“(b) Upon proof being made, at any hearing on a complaint under this section, that there has been discrimination in price or services or facilities furnished, the burden of rebutting the prima facie case thus made by showing justification shall be upon the person charged with a violation of this section, . . . Provided, however, That nothing herein contained shall prevent a seller rebutting the prima facie case thus made by showing that his lower price or the furnishing of services or facilities to any purchaser or purchasers was made in good faith to meet an equally low price of a competitor, or the services or facilities furnished by a competitor ”