McLane Southern, Inc. v. Arkansas Tobacco Control Board
2010 Ark. 498
| Ark. | 2010Background
- McLane Southern, Inc. challenged Arkansas Tobacco Control Board opinions via the APA and sought declaratory relief.
- Board opinions 2005-12-12 and 2007-003/002/004/001 addressed patronage dividends, price matching, concessions, and border-zone pricing.
- Court held patronage dividends are rebates under Ark. Code Ann. § 4-75-708; cooperatives are buying pools but still retailers for the Act, making patronage dividends rebates.
- Board opinions were withdrawn and reissued in 2007; 2007-003 redefined buying pools and patronage dividends; 2007-002/004/001 addressed pricing and concessions.
- Circuit court found no arbitrary or capricious action by ATCB on several points, and McLane lacked standing for some declaratory claims; appellate court reverses some findings and affirms others.
- Final disposition: Board affirmed in part and reversed in part; circuit court order affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Patronage dividends as rebates | McLane: patronage dividends are rebates under 4-75-708. | Board: cooperatives are buying pools; patronage dividends not rebates. | Patronage dividends are rebates; Board erred (reversed). |
| Price matching with patronage dividends | McLane may meet cooperative price net of patronage dividend. | Patronage dividends are not rebates; price matching limited to delivery cost; no netting. | Board's interpretation upheld; McLane cannot match cooperative price net of patronage dividend. |
| Concessions: free devices and shelf services | Opinion 2007-004 mischaracterized; may chill competition; vague enforcement. | Opinion 2007-004 reasonable; advisory; not ultra vires. | Not arbitrary or capricious; not standing-related; upheld that advisory opinion. |
| Standing for declaratory relief on Opinions 2007-004 and 2007-001 | McLane has present rights affected; seeks declaratory relief. | No case or controversy; hypothetical questions; lack of standing. | McLane lacks standing for both declaratory claims. |
| Constitutional claim (special legislation) moot | ATCB interpretations create special advantage to cooperatives. | Constitutionality presumed; moot given corrected rebates. | Claim moot; affirmed on other grounds. |
Key Cases Cited
- Houck v. Birmingham, 230 S.W.2d 952 (Ark. 1950) (patronage dividends considered rebates)
- Cummings v. City of Fayetteville, 741 S.W.2d 638 (Ark. 1987) (standing and declaratory relief requirements; ripeness)
- Northport Health Servs. v. Arkansas Dep’t of Human Servs., 368 S.W.3d 308 (Ark. 2009) (APA review scope and deference to agency findings)
- Ryan & Co. AR, Inc. v. Weiss, 263 S.W.3d 489 (Ark. 2007) (statutory interpretation standards; plain meaning rule)
- Poff v. Peedin, 366 S.W.3d 347 (Ark. 2010) (clearly erroneous standard in bench trial)