Seagram & Sons v. Hostetter, 384 U.S. 35 (1966)
Seagram & Sons v. Hostetter
No 545
Argued February 23, 1966
Decided April 19, 1966
384 U.S. 35
APPEAL FROM THE COURT OF APPEALS OF NEW YORK
Syllabus
Appellants, distillers, wholesalers, or importers of distilled spirits, sued in a New York court to enjoin enforcement principally of § 9 of Chapter 531, 1964 Session Laws of New York, and to secure a declaratory judgment of its unconstitutionality under the Commerce Clause, the Supremacy Clause, and the Due Process and Equal Protection Clauses of the Fourteenth Amendment. Section 9, part of a sweeping redirection of New York’s policy regulating the sale of liquor in the State, requires that monthly price schedules for sales to wholesales and retailers filed with the State Liquor Authority must be accompanied by an affirmation that the bottle and case price of liquor is "no higher than the lowest price" at which sales were made anywhere in the country in the preceding month by the brand owner, his agent, or a "related person." The latter term includes any person a substantial part of whose business is the sale of brand liquor purchased from the brand owner or his agent. Consequently, before a "related person" wholesaler may sell brand liquor to a New York retailer, he must secure an affirmation from the brand owner or his agent that the price charged does not exceed the lowest price at which the brand was sold to any retailer in any other part of the country by any wholesaler doing "substantial" business with the brand owner. A brand owner doing business in New York must therefore keep himself informed of prices charged by all "related persons" throughout the country. Affirmations by a person other than a brand owner, his agent, or a "related person" need only cover sales elsewhere by the person filing the schedule. The trial court’s judgment upholding the constitutionality of the law was affirmed on appeal. Because of various stays, § 9 has not gone into effect.
Held:
1. The provisions of § 9 do not, on their face, unconstitutionally burden interstate commerce in violation of the Commerce Clause. Pp. 41-45.
(a) The Twenty-first Amendment, while not operating totally to repeal the Commerce Clause, affords wide latitude to the States in the area of liquor control. P. 42.
(b) New York’s requirement that liquor prices to domestic wholesalers and retailers be as low as prices offered elsewhere in the country is not unconstitutional. P. 43.
(c) The effects of § 9 on appellants’ business outside New York are largely conjectural. P. 43.
2. The bare compilation of price information on liquor sales to wholesalers and retailers does not, of itself, violate the Supremacy Clause by conflicting with the Sherman Act or the Robinson-Patman Act; any potential conflict with the latter Act is speculative on this record, and could be alleviated by the Liquor Authority’s discretionary power under § 7 to change schedule requirements. Pp. 45-46.
3. The imposition of state maximum liquor price legislation to deal with the previous resale price maintenance system under which the distillers had exclusive price-fixing powers did not constitute an abuse of legislative discretion in violation of the Due Process Clause. The wisdom of such legislation is not a matter of judicial concern. Pp. 46-48.
4. The statutory definition of "related person" does not violate due process requirements by being unconstitutionally vague. Pp. 48-50.
(a) Where the determination of "related person" status is unclear, the Liquor Authority can be asked for clarification. P. 49.
(b) The number of wholesalers through whom distillers deal being relatively limited, it is not unduly burdensome on the face of § 9 for the distillers to determine the "related person" wholesalers and their prices. Pp. 49-50.
5. The exception of consumer sales and private label liquor brands from § 9’s "no higher than the lowest price" requirement , and the reduced scope of price affirmations made concerning sales by non-"related persons" do not invidiously discriminate in violation of the Equal Protection Clause. The legislature could reasonably have believed that prices charged by those not covered by §9 would follow the reduced prices charged by distillers and "related persons," and that consumer prices would adequately reflect the reductions at the other levels. Pp. 50-51.
6. Provisions in § 7, also challenged by appellants, which require that price schedules be filed to cover sales to wholesalers "irrespective of the place of sale or delivery," and that schedules on sales to both wholesalers and retailers include "the net bottle and case price paid by the seller," are constitutional as serving a legitimate interest to regulate New York sales and, as construed by the New York Court of Appeals, can be waived by the Liquor Authority if unrelated to such sales. Pp. 51-52.
16 N.Y.2d 47, 109 N.E.2d 701, affirmed.