Wine & Spirits Specialty, Inc. v. Daniel

666 S.W.2d 416, 1984 Mo. LEXIS 242
Supreme Court of Missouri·Decided March 20, 1984·No. No. 64984·Published·Cited by 5 cases

Opinions

DONNELLY, Judge.

This is an appeal from a declaratory judgment that §§ 311.332, 311.334, 311.336 and 311.338, RSMo 1978, more commonly known as price posting laws, and the analogous regulation of the Department of Liquor Control, 11 C.S.R. 70-2.190, violate the Sherman Act, 15 U.S.C. § 1 et seq. (1976). This Court has exclusive appellate jurisdiction. Mo. Const, art. V, § 3.

The facts are stipulated. The General Assembly has enacted liquor control laws to regulate various phases of the liquor industry. Under these laws manufacturers, wholesalers and retailers are characterized as separate “phases” of liquor traffic requiring separate licenses. Appellants, Director of the Department of Public Safety and Supervisor of the Department of Liquor Control (hereinafter Supervisor), enforce and administer these liquor control laws. The parties acknowledge that while these laws “may at times have the effect of inhibiting price competition, [they] do not compel or authorize wholesalers to agree among themselves for the purpose of contracting, combining or conspiring to fix * * prices.”

At trial, respondent, a duly licensed wholesale distributor, sought to enjoin the enforcement of Missouri’s price posting laws. Section 311.332 makes it unlawful for any wholesaler to discriminate between retailers or to grant, directly or indirectly, any discount, rebate or free goods except a quantity and payment discount not in excess of one percent apiece. Sections 311.-334 and 311.336 require each wholesaler to file monthly a schedule of the prices it intends to charge and the discounts it intends to grant to its retail customers during the upcoming month. The Supervisor then aggregates this information and makes it available for inspection by all wholesalers. Within three days thereafter each wholesaler may reduce (but not increase) its prices to meet (but not to go below) lower competing prices and discounts. Section 311.336 additionally empowers the Supervisor to “make such rules and regulations as shall be appropriate to carry out [these laws].” Pursuant thereto the Supervisor promulgated 11 C.S.R. 70-2.190 to effectuate these provisions. Section 311.338 provides that if a wholesaler violates any of the aforementioned provisions, its license will be either suspended for not less than fifteen days or revoked.

The trial court found these laws: (1) are per se illegal as constituting resale price maintenance, price fixing and a restraint of trade, (2) authorize or compel conduct viola-tive of the Sherman Act, and (3) place irresistible pressure on private parties to violate the Sherman Act. We disagree.

The Sherman Act makes illegal:

Every contract, combination * * * or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations * * *.

15 U.S.C. § 1 (1976). In Rice v. Norman Williams Co., 458 U.S. 654, 102 S.Ct. 3294, 73 L.Ed.2d 1042 (1982), the Supreme Court articulated the test to be used on this appeal:

A party may successfully enjoin the enforcement of a state statute only if the statute on its face irreconcilably conflicts with federal antitrust policy. * * *
[A] state statute, when considered in the abstract, may be condemned under [418] the antitrust laws only if it mandates or authorizes conduct that necessarily constitutes a violation of the antitrust laws in all cases, or if it places irresistible pressure on a private party to violate the antitrust laws in order to comply with the statute. Such condemnation will follow under § 1 of the Sherman Act when the conduct contemplated by the statute is in all cases a per se violation. If the activity addressed by the statute does not fall into that category, and therefore must be analyzed under the rule of reason, the statute cannot be condemned in the abstract. Analysis under the rule of reason requires an examination of the circumstances underlying a particular economic practice, and therefore does not lend itself to a conclusion that a statute is facially inconsistent with federal antitrust laws. (Emphasis supplied.)

Id. 458 U.S. at 659, 661, 102 S.Ct. at 3299, 3300. Thus, the essential question is whether Missouri’s price posting laws constitute a per se violation in all cases.

Relying on California Retail Liquor Dealers Assn. v. Midcal Aluminum, Inc., 445 U.S. 97, 100 S.Ct. 937, 63 L.Ed.2d 233 (1980), respondent asserts that Missouri’s price posting laws constitute resale price maintenance, a per se violation of the Sherman Act. Rice, 458 U.S. at 659-60, 102 S.Ct. at 3299-3300. Although the Supreme Court held in Midcal that California’s price posting laws constituted resale price maintenance, those provisions are dissimilar to the provisions challenged here. California’s liquor control laws required producers and wholesalers to enter into fair trade contracts whereby the producer established not only the price it charged the wholesaler but also the price the wholesaler charged retailers. If they failed to enter into such an agreement the wholesaler was subsequently required to post a price schedule which bound all other wholesalers in the area. Midcal Aluminum, Inc. v. Rice, 90 Cal.App.3d 979, 153 Cal.Rptr. 757 (1979), aff’d sub nom. Midcal, supra. California’s price posting scheme was “not one which merely requirefd] each distributor to specify prices, [but rather was] for the purpose of fixing prices.” Id. 153 Cal.Rptr. at 761. The Supreme Court had no difficulty in determining that California’s wine pricing system facially conflicted with the Sherman Act because it mandated resale price maintenance. Midcal, 445 U.S. at 103, 100 S.Ct. at 942; Rice, 458 U.S. at 659, 102 S.Ct. at 3299.

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Wine & Spirits Specialty, Inc. v. Daniel, 666 S.W.2d 416, 1984 Mo. LEXIS 242 (Mo. 1984).

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