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Best Way Beer & Soda Distributors, Inc. v. New York State Liquor Authority
Citations: 99 A.D.2d 727; 472 N.Y.S.2d 350; 1984 N.Y. App. Div. LEXIS 17082
Court: Appellate Division of the Supreme Court of the State of New York; February 22, 1984; New York; State Appellate Court
The determination by the New York State Liquor Authority, dated February 15, 1983, imposed a 20-day suspension on Best Way Beer, with 10 days to be served immediately and 10 days deferred, alongside a $5,000 bond claim. This ruling is modified to allow reconsideration of the penalty while confirming other aspects without costs. The petitioner was found to have violated subdivision 2 of section 55-b of the Alcoholic Beverage Control Law by raising beer prices within 180 days after a decrease. Specifically, Best Way Beer sold Miller beer at $7.90 per case, lowered the price to $7.60, and then raised it back to $7.90 within the stipulated timeframe. The petitioner does not contest the determination on evidentiary grounds but argues that the statute violates the Sherman Antitrust Act by promoting price fixing and restraining trade. However, it is asserted that the statute aims to prevent such practices by ensuring that large wholesalers cannot drive out smaller competitors through predatory pricing. The purpose of section 55-b is framed as maintaining an orderly market and preventing destructive competition, as articulated by the Legislature. A dissenting opinion suggests that the statute may indeed discourage competition, yet courts are bound to respect legislative intent where the statute's wording is clear. The dissent also notes that federal antitrust laws do not preclude states from imposing certain restraints to achieve market order, as established in Parker v. Brown. The Supreme Court's decision in California Liquor Dealers v. Midcal Aluminum is differentiated, emphasizing that for antitrust immunity, the state policy must be clearly articulated and supervised by the state. The case California Liq. Dealers v. Midcal Aluminum confirms that the first criterion of the challenged section of the Alcoholic Beverage Control Law is met. The second criterion, however, indicates that section 55-b does not allow private parties to engage in resale price maintenance in violation of the Sherman Act. Specifically, after a price decrease by a brewer or wholesaler, they cannot raise the price for 180 days, a scheme administered by the State Liquor Authority rather than the brewers or wholesalers themselves. Even if the statute's purpose is deemed anticompetitive, it is considered a state-directed regulation and thus immune from the Sherman Act under Parker v. Brown. The court finds the penalty imposed on the petitioner to be excessively severe relative to the misconduct, as the violation was unintentional, lasted only a week, and the petitioner fully cooperated with the investigation. Given these circumstances, a fine would be a more suitable penalty. The matter is remanded for the respondent authority to reassess the appropriate penalty.