*1 tionment issue not been raised having municipality, a remand on our own initiative will not be ordered.
The judgment appealed from is affirmed. For Justice and Justices Weietteaub, affirmance—Chief Hei-ieb, Wacheeteeld, Buelietg, Jacobs, Ebaetcis Peootoe—7.
For reversal—None. ALE, INC., APPELLANT, CANADA DRY GINGER v. F & A CO., CO., INC., DISTRIBUTING GILLHAUS BEVERAGE CO., MERCHANTS WINE AND LIQUOR AND DIVISION CONTROL, OF ALCOHOLIC BEVERAGE RESPONDENTS. Argued 5, November Decided December1958. *3 Mr. Edward J. for the O’Mara the cause argued appellant O’Mara, Schumann, & Davis (Messrs. Lynch, attorneys). Mr. Harold for the H. Fisher the cause argued respond- E Co., Co., Inc., & A Distributing ents Gillhaus Beverage Merchants Wine Green A Co. Liquor (Messrs. Yanoff, Fisher, A attorneys; Shanley Messrs. of counsel). General,
Mr. Samuel B. Helfand, Deputy Attorney argued the cause for the Division of Beverage Alcoholic Control (Mr. Furman, David D. Attorney General, attorney). was opinion court delivered This is an appeal Canada Dry Ginger
Proctor, Ale, Inc., 4:88—8, under B. of the B. from order Director Division of Alcoholic Control Beverage granting relief on three separate petitions filed to N. J. pursuant S. 33:1-93.1 et This seq. section Alcoholic Law, N. J. A. 33 :1-1 et Beverage prohibits dis- seq., tiller of alcoholic liquors sell arbitrarily refusing licensed wholesaler. The E A& petitioners, Dis- Co., Inc., tributing Co., Gillhaus Merchants Wine and Co., licensed New Liquor duly Jersey whole- salers of alcoholic Canada liquors. engaged Dry manufacture, distilling adver- importing nationally tised brands of alcoholic liquors. Each petition sought same relief under statute, the refusal of alleging sell products its to the petitioner was “arbi- *4 trary, and unreasonable The issue discriminatory.” being the same in case, each the hearer consolidated three peti- consent after a by tions and filed a hearing single report in he which concluded that the petitioners had established that the action of Canada was Dry and discriminatory. Exceptions the hearer’s were with report filed the Director Canada by by also & Joseph Seagrams Sons, E. Inc., which had been to intervene. The permitted Director accepted the recommendation of the hearer and entered an order Canada “sell directing Dry to and continue to sell on terms three alcoholic petitioners beverages
to each of the Dry].” normally required by respondent usually [Canada Dry’s prior We certified on our own motion appeal Canada Division. by Appellate to its consideration arises decision to case from Canada present Dry’s its distributors Jersey reduce number of New wholesale were the six 5. The petitioners among have Complete products lines of Canada Dry eliminated. & A SO years, E Co. over by Distributing been carried Co., since and Merchants by Gillhaus Inc. by Wine Co. since 1953. No written contracts and Liquor the company, were entered into between the petitioners were no restrictions and so far as it there territorial appears in be Dry products within the State which Canada might 11 wholesalers. original sold In Paul was advanced toDry J. Burnside Canada He Alfred national position manager. sales informed Division LaPorte, Dry’s manager, Eastern sales P. that the was with sale its company displeased products, New non-scotch and he asked items, Jersey particularly him to the market and submit recommendations to survey the situation. LaPorte visited each improve Accordingly, the 11 a number of times and discussed with advertising them future and increased sales plans regarding Thereafter, he crews. recommended Burnside “for a reduction New Dry’s betterment of our brand” of Canada 5. It was wholesalers from 11 to LaPorte’s belief Jersey would sales reduction increase by concentrating and that “the distribution outlets five would remaining have a deal more interest in our line and would great our selling pro- do much better on items.” Such job cedure had been successful other United major States specified markets. He also his choice of the five whole- be retained. In salers who should how he made explaining he stated: selection very making “A. It was a difficult decision but I the decision just my experience business, felt, through type in the of or- types ganization would retain would that we that seemed to show *5 aggressiveness them, in the few I conferences that had with that selling ample in to had an force order sell our line. Those were into factors that I took consideration.” He later testified: asking you specifically, I “Q. Now am what factors into entered
your drop determination Well, retain and to these five these six? before, the factors as outlined consideration other houses, force, aggressiveness, my lines within the the sales the re- force, aggressiveness action to their sales the attitude their advertising potential executives towards discussions of and sales for together our brands. All this me consider made this move.” Past sales were considered but emphasis more was on placed the future LaPorte admitted on potential. cross-examina- tion that wholesaler had no shown in greater increase non-scotch E A purchases petitioner items than & Co. Canada was all the scotch Distributing selling items it was to allocate New able Jersey.
Burnside with LaPorte agreed reduction number of wholesalers from 11 to 5 should made be be- cause “we are just pie too cutting pieces.” many As to the be specific dropped and the others to be retained, Burnside said: Well, relationship “A. we considered several factors. One was our jobbers proposed retain; with the we five we also considered executives, personnel feeling
their sales their sales these people organization; competitive towards our other brands which they carry. Hi H< H* H* Hi sk picked thought A. We wholesalers say that we we could work best might time, example, with and I at as an if we had picked applicants position five, eleven and we that doesn’t mean any good. opinion in our our con- other six are But judgment sidered we felt that we selected five could do best job company.” for our He further testified: and which 3: “Q. determining Do I 3! were understand, which of these wholesalers were going Ü Mr. dropped? Burnside, [*] then [*] going you [*] used no to be continued standard 3! *6 any particular is no standard chart or there A. We have don’t may you you determining retain for which distributor can set that given
in a market. Burnside, reaching conclusion, Now, there Mr. were Q. you requirements up any the to which wholesalers were that set meet to be retained? order A. No.” he it with reached his decision discussed
After Burnside Red, Jr., a the vice-president W. his John superior, with the reasons listed LaPorte company, agreed who of the five for their selection wholesalers. and Burnside He testified: you give me those that were Will reasons listed? “Q. on, Well, I a them which have touched there are number of organizations themselves as is the attitude of the
Mr. Green. One management organi- men; the attitude of the indicated to our competitive lines; salesmen; ; the number zation the number general organization; opinion, aggressiveness our our ability job judgment good do to a on the considered of their business Dry line; general being interest a Canada their distributor.” that petitioners they 1957 LaPorte advised On March as of 1st. The May were discontinued as distributors being throughout was that only given country reason number of its distributors and reducing was company to the best interest of reduce company was for 11 to 5. The in New Jersey petitioners’ number was not On merchandise ability pay questioned. to was Burn- 11 this decision confirmed letter from April between the side. discussions concern- Subsequent parties fruitless. proved ing reconsideration se- Dry’s The hearer determined that Canada method of wholesalers was and dis- the retained lecting “arbitrary He rejected argument the selection criminatory.” because it resulted from arbitrary was sound business concurred, The Director that Canada judgment. holding continue sell its advertised nationally “refusal to Dry’s while sell such petitioners, products continuing situated, to other wholesalers was without products similarly reasonable or adequate cause constituted dis- crimination within the of the statute.” meaning
The statute here involved was added by chapter Laws A. 33:1-93.1 as (N. 93.5), a sup to the Alcoholic plement Law, N. J. S. A. 33 :1-1 et seq., provides follows: liquors There shall be no “1. discrimination in the sale of alcoholic
by distillers, importers, nationally and rectifiers of advertised brands liquors duly liquors of alcoholic licensed wholesalers of alcoholic in this State. any distiller, importer, 2. In the event or rectifier shall refuse to *7 any any liquor sell to comply individual wholesaler amount of alcoholic or provisions act, with the of this then the wholesaler shall petition Beverage setting the Commissioner of Alcoholic Control demanding hearing forth and the facts a thereon to determine arbitrary whether such refusal to sell is or not. Beverage If3. the Commissioner of Alcoholic Control is satisfied ability pay with the of the wholesaler to for such merchandise as ordered, distiller, importer, he shall order the or rectifier to com- plete liquor said sale of alcoholic to the wholesaler. distiller, importer, 4. In the event the or rectifier refuses to com- plete comply the sale or with the terms of the order of the Com- missioner, every the shall Commissioner issue an order to licensed prohibiting purchase by wholesaler the such wholesaler of al- liquor product distiller, importer coholic rectly of the said or rectifier di- indirectly compliance by distiller, until is there strict importer, or rectifier with Beverage Control. of the order the Commissioner of Alcoholic 5. The State Commissioner of Alcoholic Control shall adopt promulgate regulations may necessary and such and rules be carry compliance provisions to out and insure with the of this act.” The title of Commissioner was to changed Director by 1948, L. 16, c. p. (N. 52:175-16). §
The above has been the act subject only one judicial Hock, decision. v. 8 N. J. 397 (1952). In that Hoffman distiller, a a case who was also licensed wholesaler in this State, determined to sell directly to retailers in the northern State, of the part thereby eliminating wholesalers in that with section whom had dealt. previously It continued to wholesalers in operate through the southern and western One of the parts State. wholesalers who had been orders for specified quantities two
eliminated presented refusal fill distiller. the latter’s to Upon with the liquor a orders, proceeding the wholesaler instituted before a as to whether the afore- for determination the Director within the intendment of the arbitrary refusal was said court, denial in the Director’s affirming This statute. did not intend that the held that statute the petition, is the sole test to determine pay of the wholesaler ability a refusal to sell is whether or not discrimi- prohibit held that the statute It further does natory. if to retailers products directly its selling distiller dictates, it is licensed do so policy provided its business in- is not within the so; policy discriminatory that such as all wholesalers situated similarly of the statute tendment for the treated alike. Justice Ackerson court speaking said: * “® ® prohibited by legislation act of what is is an arbi- trary in the discrimination between wholesalers distiller sale grant nationally product in order advertised that relief a provided only complaining find Director not must for the product pay is able ordered but wholesaler or distributor discriminatory to him refusal to sell and arbi- the distiller’s solely
trary, inquiry must be limited such considerations. scope question apparent statute is to found sale of which bars ‘discrimination alcoholic thereof section * * * nationally by distillers, liquors advertised brands’ *8 * * liquors duly alcoholic ‘to licensed wholesalers of thereof directly open to retail dealers is distiller to sell Thus it still the indirectly course, through may, of sell the if licensed so to do. It chooses, wholesalers, duly but if it so in the licensed medium may between such wholesalers.” discriminate event it not latter pages at N. 408-409. 8 J. in the discrimination retention arbitrary no The court found in the southern wholesalers of its the distiller It the said: State. parts western * ® * operates through still whole- the distiller “The fact that parts State, whose authoriza- southern western salers areas, its action with such does make are limited to tions counties, respect where retailers closer crowded northern the
453 arbitrary reached, easily together unfair discrimi- an and more against author- in such counties whose distributors its former nation page Id., N. J. at 410. 8 confined thereto.” izations had been the asserts that initially on this Dry appeal Canada it upon burden of proof the placed erroneously Director must bear normally who than upon petitioners, rather further It administrative proceeding. in an that burden were that proof petitioners that there was no contends were retained. wholesalers who than the five qualified better statements of the following from proceed These arguments Director: carefully I am entire record herein and examined the “I have concerning justification respondent’s action find unable to respondent’s petitioners. fair and ade- action is based on If three quate cause, m record. is not reflected * * * position petitioners be in a have been shown to respondent.” way retained no different anything beyond not been to show obliged has Dry Canada that have shown Petitioners what the statute requires. them while deal further with has refused to Dry in is wholesalers. Canada to sell to other continuing why than the to know petitioners a far better position it to come It reasonable to require was taken. action statement that and factual so explanation forward with duty fulfill his effectively statutory may Director sell was the result of whether the refusal determine the statu- arrived at or was within fairly decision manner in This is the feasible which only tory prohibition. Wigmore, be conducted. See 9 can statutory hearing Neeld, N. 2486; Swain v. 28 Evidence ed. 1940), (3d § Stillwell, National Bank v. County Ocean (1958); & In 337, order to 1938). N. J. Eq. (E. for the to show necessary petitioners it was not prevail to the retained wholesalers. The superior were they those similar are en- positions statute contemplates treatment. titled to similar
454 next contends that: arguendo “Accepting three
the Director’s basic were finding petitioners wholesalers, as retained ultimate his equally qualified that Canada selection of the five retained finding Dry’s deprives wholesalers was Can discriminatory law, ada without due of its inherent Dry, process right its own business.” Reliance is manage placed upon Act, number of cases under the Sherman Anti-Trust 15 U. S. 1 et upholding C. manufacturer’s seq., right § to select distributors of his among particular product. See Co.,& United States v. 250 g., Colgate 300, e. U. S. 39 S. 465, Ct. L. Ed. 63 992 Packard Motor Car (1919); Co. v. Co., Webster Motor Car 100 D. C. 161, U. S. 243 F. App. 2d 418 C. Cir. These 1957). cases do not (D. apply situation. Our present Division in Appellate Eskridge Control, v. Division Alcoholic 30 N. J. Super. 472, 474 Div. 1954) stated (App. appropriately that: “* * * common, inherent, is no there natural or constitutional right engage selling liquor. power in the business of The of the intoxicating beverages plenary. State over the sale ‘It is a subject by itself, analogies to the treatment which all the of the topics appropriate applied.’ law to other cannot Paul v. Glouces County, 585, (E. 1888).” ter N. L. 50 595 & A.
The inherent social dangers of liquor industry evident and the State the business may rightly prohibit it to continue under severe restric entirety permit very Inc., X-L 444, tions. v. 17 N. J. Liquors, Taylor, Inc., Reeves, Ziffrin, 132, v. (1955); U. S. 60 S. 128, Ct. 84 L. Ed. The statute in the (1939). case, 93.5, N. J. A. 33:1-93.1 present is one section control the State comprehensive which exercises over all phases of the liquor industry. correctness of the Director’s decision must be determined di inquiry rected to whether he has ascertained the correctly legisla tive intent embodied in this statute and has accordingly applied record before him. If the Director has this, done the fact that his decision restricts Canada Dry’s
455 deprive does not degree in some prerogative management constitutionally protected right. it any of the attained by to be goal sought The ultimate legis of liquor in the entire scheme statute in question, the through promotion the public of lation, protection is and boot of the racketeer and elimination temperance of this accomplish :l-3. In to J. A. 33 order N. legger. as necessary as far statute seeks to achieve purpose A distillers. wholesaler of wholesalers independence mer a sought-after supply distiller for upon dependent the non-legiti with comply be to tempted chandise might discon if the latter were free to of the distiller mate desires of strengthening will. Eor the purpose tinue the at supply a distiller’s wish if confronted with wholesaler’s resistance the public policy and thus negate sales to over-stimulate pro a desire to other engage in favor or temperance sales, seeks acts, prevent tie-in the statute to g., hibited e. the source of to supply from arbitrarily closing the distiller end, both the statute a wholesaler. To effectuate will liberally the Director be to authority delegated v. Division Alcoholic Butler Oak Tavern See construed. Sutherland, Control, 3 N. Beverage (1956); ed. 7203. act 1943), Construction Statutory (3d § A. 33 :l-73. a construction. N. J. S. itself dictates such the Director authority 2 of the statute gives Section a distiller to sell to a determine whether a refusal therein is a recog is or not. Implicit wholesaler justi there in which a distiller may nition that is area even the latter refuse to sell to wholesaler though fiably initial decision to Dry’s is financially responsible. does not reduce number of wholesalers within State its the statute. While the Director is not in itself contravene to command a distiller to distribute his product authorized it, wholesaler desires to the Director every purchase who determine whether a reasonable method empowered has a distiller the selection of whole been employed by Hock, he will will not v. salers with whom deal. Hoffman a reasonable method em- Whether such has been supra. reduce by Canada its decision to ployed implementing its the number was the issue precise determination, course, Director’s re- subject, judicial If view. the selection five wholesalers be retained basis, was determined on a rational consistent with the Law, overall Alcoholic policy petitioners’ claims cannot sustained.
The Director concluded the record fails to disclose petitioners stand in different position than the retained, five wholesalers who have been and that *11 of any absence for the which justification distinction made, Canada has selection Dry must be viewed as arbi “ trary and prohibited by statute. means ‘Arbitrary’ discretion,’ is, will on or that not ‘[djepending governed fixed or by any rules standards.” Paul v. Board Zoning 40, 619, 142 Conn. 110 A. 2d Appeals, Err. (Sup. Ct. Then, 1955); see also State v. 114 N. L. 418-419 Ct. 1935). The executives of Canada who testi (Sup. Dry fied, asserted that the individual repeatedly selections were the result of a faith good business decision and as such viewed could be have arbitrary. as We no reason to doubt their But an individual’s credibility. bona busi fide ness in the field policy must liquor yield traffic to the Quill etc., Hoboken, v. policy State. Mayor, J. 574 N. a business (1956). Clearly, which results policy in arbitrary discrimination would be violative of the statute. In order effectuate to the statutory provisions, lack of arbi trariness must from the appear whole record. There must be a the selection of certain showing wholesalers to made the exclusion of others was on the basis of a standard reasonably to the legitimate related business goal sought be achieved and not conducive to the evils which the act This standard designed prevent. must be of such a objective nature as will enable tangible the Director from the to determine whether its proofs application to the wholesalers in question could result reasonably the dis tinction distiller has made. The which case, Hoffman e., standard, illustrate such i. serves 'to one supra, territorial course, location of wholesalers. Of there are other objective factors wherein a distinction made. Their may proper in each case is sufficiency to be determined in first instance realize Director. We that some subjective considerations enter into all business decisions. But if the statute is to have any alone cannot be con- meaning they sidered aas basis sufficient distiller’s severance of his business relations with certain while he wholesalers continues to operate others. through
Canada has set forth the Dry factors which it con sidered in its were, Some of these making selection. characterized Director, “subjective factors of nebulous e., quality.” others, There were i. the number of competitive lines, the sales, number salesmen and that were past an objective nature. Their could have been application However, demonstrated. made no attempt document its and there is objective criteria in the nothing record to show that the five wholesalers who have been retained can be on the basis these criteria distinguished from the To sanction petitioners. different treatment situated would tend similarly those engender evils which the statute seeks to On the prevent. present record we cannot say Director erred. Appellant’s *12 failed reveal in showing depth facts from underlying which the Director could evaluate the reasonableness of the actions, appellant’s selection, the basis of in the including of the statutory described above. We light policy frankly the statute appreciate that involved immediately is not as it explicit as be. To might distillers the Director guide well might adopt at an implementing regulations date early which would delineate the and the nature grounds of the In these circumstances we showing required. reserve to leave to to the appellant apply Director for a at rehearing time which it adduce srreh additional may testimony as be relevant in view may of this opinion. decision of the Director is therefore affirmed, without prejudice to such for application rehearing.
Francis, I in the J. concur affirmance of (concurring). under review. But the effect of the majority order a is that distiller select certain number of opinion may wholesalers and deal with them the exclusion of all others, and done the only duty imposed once so having by the statute is to refrain from discrimination among them in the sale of his In products. my approval judgment, the Director’s order should be premises. reached on broader
When is clear and language employed by Legislature unambiguous, interpretive function of the branch judicial is and confined. The law government simple should be as written. Under our applied tripartite system gov- ernment, we cannot concern ourselves with matters of legis- lative wisdom If the constitutional exists policy. power fiat, it must promulgate particular even accepted if we personally believe it to be a mistake. legislative Nor can the under the judiciary read guise interpretation an into enactment more limited than that policy which into clearly projected action the words of the law- makers.
I think the statute in J. question, N. 33:1-1 et that all seq.j says licensed duly Director of Alcoholic an Beverage Control have equal right pur- chase the products of distillers in New operating Jersey, that if have the they therefor, financial capacity pay they cannot be refused arbitrarily. Prima all wholesalers facie must be treated aon parity, prima distillers facie cannot limit with number whom will they deal. The impact of statute under ordinary circumstances is any reasonably competent and financially capable wholesaler is entitled to be served and cannot be discriminated against arbitrarily. The fact would be more convenient or more feasible or more efficient distiller to deal with a limited number would not of itself provide escape from condemnation as arbitrary discrimination. Such is the burden imposed by N. S. A. 33:1-1 et on this seq. highly regulated industry. Any lessening of that burden must *13 come from the source which it. imposed Let us look at the statute It was enacted in 1942. closely. 1942, L. c. 264. It ordains that shall be no dis- “[t]here crimination in the sale of alcoholic distillers liquors by * * * * * to licensed wholesalers *.” Section 1. duly Here it should that a wholesaler is defined as be noted person who sells alcoholic for “[a]ny beverage pur- a a of resale either to licensed wholesaler or to licensed pose retailer, z; or both.” N. S. A. 33:1-1 subd. also that J. Director, wholesale licenses are issued N. J. S. A. by :1-11; No limitation on the number appears :1-18. “entitled, in the act. Such rules licensees to subject sell and distribute alcoholic to regulations, beverages retailers and wholesalers.” N. S. A. 33:1-11. [licensed] Whenever distiller refuses sell individual “to whole- Director, saler” amount of alcoholic on "any” liquor, wholesaler, is to determine if the complaint required is L. 2. If arbitrary. refusal section is supra, found to be and the Director is satisfied that the is he “shall order” the ability present, sale pay completed. Section In the event failure 3. Director comply, must forbid licensed wholesaler” “every from purchasing distiller’s Section 4. products.
It is difficult to more imagine imperative language. administrative supervisory machinery be set motion may refusal to sell to wholesaler amount “any” “any” It rather than liquor. legislating to read interpreting into section the refusal to sell qualification must be to wholesaler with whom the distiller has been dealing regularly.
Not do the words used only demonstrate the intent of the make all licensed wholesalers Legislature prima facie distillers, entitled to from the purchase but the introducer’s statement It emphasizes fact. says: purpose equitable “The this act is to insure an basis com- petition beverages between all licensed alcoholic Jersey prevent any monopolistic freezing-out and to New of one by preventing products wholesaler another the sale of certain to him.”
460
It is a matter of in common knowledge past in various brands of were shorter or liquor supply greater exists, demand than others. When such a situation if are those brands localized the hands of one or few wholesalers, retailers will obviously be more anxious to deal with him or them in order to obtain a supply of scarce will commodity therefore be inclined to their purchase other related of alcoholic from him requirements beverages or them to the detriment of the not so favored wholesalers. The Legislature may well have believed that such a situation would known to be produce practices inimical to the public interest. And when it is recalled that in 1942 when the statute was adopted the was at war and country imported scarce, were liquors unusually is not difficult to conjure up the reason for the desire legislative to secure equitable basis for all If competition among wholesalers. the reason has adoption regulation then disappeared, of power to the Legislature give recognition change is plenary.
If this is the view proper act, of me it is inescapable, then case must present approached from that It 'is standpoint. conceded that the excluded wholesalers have sufficient financial capacity pay for their There is no substantial purchases. evidence in the record to indicate that they not reasonably competent to engage in the business as wholesalers or that have they not done so. There has been no suggestion engagement trade improper proscribed practices. proof Uo was offered of any disparagement of distiller’s products or of unfair preferment in sales efforts for those of a In competitor. the face of the mandate adduced, statute and the proof the elimination of these wholesalers must be deemed arbi- trarily discriminatory.
In the field of strictly private
such a
enterprise
curtail
ment of the
prerogatives
management might well be
invalid. Great Atlantic &
Tea Co. v. Cream
Pacific
Co.,
Wheat
Heher, concur the determination made affirmance of Director, but expressed by to the views Mr. Justice subject on Erancis of the particular the quality scone regulatory provisions the statute. “discrimination” in the The ban on sale of alcoholic distillers, and rectifiers importers liquors by nationally is peremptory. advertised to licensed wholesalers duly brands L. A refusal sell 1943, c. A. 33 :1-93.1. to S. N. to individual wholesaler” or to with “any “comply pro Director, made visions of act” is reviewable [the] determine such refusal sell is or “to whether N. J. A. 33 But if the Director “is satis not.” S. :l-93.3. for such pay fied with wholesaler ability distiller, im ordered,” as he “shall order” the merchandise or rectifier “to said sale of alcoholic complete liquor porter wholesaler,” do, and in the event of refusal so issue an licensed whole every the Director shall order to saler such wholesaler of purchase by prohibiting distiller, alcoholic liquor products importer offending rectifier, until there is or strict com directly indirectly, 33:1—93.3; N. J. with order. :l-93.4. pliance :l-93.5, And the Director is N. J. 8. A. 33 enjoined, such rules adopt promulgate regulations may and insure with the “to out necessary carry compliance mean, act.” But does not I would provisions [the] the Director is define thereby empowered to suggest, “discrimination” in his terms of own statutory unregu *16 and as to what is reasonable and lated discretion judgment He cannot or detract from the arbitrary. enlarge declared and rule of action. It fundamental law that is policy is administrative to be contained a certain authority by standard. and definite State Board Milk legislative of Co., Newark Milk 118 N. J. 504 & A. Control Eq. v. (E. “discrimination,” Here, more, it is without 1935). is this And the forbidden by provision. only specific statutory A. criterion, :1-93.3, N. J. 33 is the of the ability S. whole the “merchandise as The for ordered.” pay saler policy the act measure the and of of purpose significance particular terms; and the Director is to effectuate the obliged intent and modify not to legislative expression. lawgiver, alone; concerns power procedure The rules are rule-making aids to the fulfillment of the and plan mechanical course of laid down by Legislature. action
463
This provision against discrimination,
the fruit of long
experience,
to fulfill the
designed
basic statutory policy
and the
temperance
avoidance
evils of undue com
petition,
indirect,
direct
in a field of business that has
its own
and is
peculiar perils
subject
to strict regulation
essential common and individual
Paul v.
good.
50
Gloucester
N. J.
585
&
County,
L.
1888); Butler
(E. A.
Control,
Oak Tavern v. Division
Alcoholic Beverage
20
N. J. 373
Christensen,
(1956); Crowley v.
137
86,
U. S.
13,
11 Ct.
S.
The the act, N. J. design :l-3, to which the statute is a particular is the supplement, supervision by “manufacture, Director of the distribution and sale of alcoholic a manner such as beverages to promote temper- ance and eliminate the racketeer and The bootlegger.” is “intended to be chapter remedial of abuses inherent traffic shall be liquor construed” liberally to that end. N. J. A. And, 8. 33 :l-73. out pointed Justice Francis, the introducer of the measure made known a purpose “to insure an basis for equitable competition between all licensed wholesalers of alcoholic in New beverages Jersey prevent any monopolistic of one freezing-out wholesaler by another the sale of certain preventing products to him.” terms, in their legislative normal usage, express this purpose.
We have no occasion setting determine the essential significance “ability to pay” provision. It suffices to that it is the say only explicit standard of action and, events, in this at all regard; suggests impera- tive of the rule against *17 quality discrimination. There is to be no erosion of principle by illusory distinctions. Hock, In v. 8 N. J. 397 (1952), the distiller Hoffman undertook to sell to retailers directly in the northern and sections of New and
populous Jersey; that holding was it “is still open to distiller to sell directly to retailers [*] [*] *,” “[i]t may, course, sell indirectly through the medium licensed duly wholesalers, if it chooses, but in the latter event it may discriminate between such wholesalers.”
Here, the distiller “to achieve purpose avows a greater share of its New in that potential” Jersey, say, on its carry business wholesalers who through will “push” its to place the sale of thus its sales products, operation level of business ordinary pursuits, conception on the alien state statutory scheme—“company against to the policy” policy. “national sales testified that The distiller’s manager” “* * * considered: our factors” were relation-
“several retain”; we jobbers proposed with the five “their ship executives, their sales personnel feeling sales these other competitive organization; towards our people with the an undue interference carry,” which they brands the statu- with business consistent policy wholesalers’ open “the aggressiveness wholesalers’] tory principle; [the discus- towards of their executives force, the attitude sales brands”; for our potential and sales advertising sions of ** “* we we thought we picpe¿ * “* * feel one with”; we didn’t best work could they was the business doing eleven [wholesalers] in our products.” could do founded. is well conclusion Director’s The majority apparently (dissenting). Waohekteeld, statute interpreting question. difficulty encountered they find that in the fact although lies difficulty My and an faith informed good exercised absolute Ganada to reduce number determining judgment business the company’s classify nevertheless wholesalers, they its This seems en- and discriminatory. as arbitrary decision may accurately act if inconsistent tirely *18 as described one which is non-rational capricious, pro- a ceeding judgment untempered reason or logic. The majority recites: opinion “* * * Dry testified, repeatedly The executives of Canada who good
asserted that the individual selections were the result a faith arbitrary. business decision and such as could not be viewed as *” * * credibility. (Emphasis We have no reason to doubt their supplied.)
If the credibility of these officials is and unquestioned their selections were the result a faith business “good decision,” then it would seem that there was no “arbitrary discrimination,” the prohibited by statute in question. Dry
Canada was justified, on the basis of its success with like schemes in other sections of the country, concluding it would be financially advantageous to company a certain drop number of distributors. The determination as to would which distributors be retained was not founded whim but, on mere other on Mr. among things, LaPorte’s evaluations of sales forces and respective their aggressive- ness, the importance to each distributor Canada Dry line in comparison to its sales of other lines, the attitude various executives of the distributors towards plans for increased sales advertising expansion of of Canada which Dry products. criteria the appellant’s officers used cannot be formulated in are, but figures, they nonethe- less, The statute in tangible legitimate. question was not intended eliminate entirely profit motive aas consideration nor was it to interfere with designed honest, reasoned business practice.
I think the who wholesaler violation charges statute should have burden of a prima proving facie case, but here the majority places burden proof upon Dry. Thus, decision majority requires the ap- pellant prove proposition, negative namely, it did in an arbitrary act fashion. The usual judicial procedure the burden places of proof makes an upon party who accusation that his rights
have been But that been shifted transgressed. burden has because, appellant state, “Canada majority is in a far better position than the petitioners know why this action was taken.” If in the applied realm generally law, would, civil reasoning instances, many change *19 the current and accepted placement of the burden of proof. And here that burden has not shifted to the only been distiller but the essence of it has been defined as “This standard must be of such a tangible objective nature as will enable the Director to determine from the proofs whether its application to wholesalers in could question reasonably result the distinction which distiller has made.” (Em- phasis supplied.)
The shift of the burden and the establishment of its our quality supplied by adjudication, as the statute con- tains no such This is provisions. perilously close to what ordinarily would be decried as judicial legislation, which we on other occasions have lugubriously deplored.
I would reverse the decision of the Director Division of Alcoholic Control. J., in result. concurring
Eranois, For without prejudice—Chief Justice Wein- affirmance and Justices traub, Burling, Jacobs, Eranois and Proctor —5. in toto n —Justice Heoeer—1.
For affirmance For reversal—Justice Wacheneeld—1.