*1
that after matter came to this impresses me grandmother in what Association, Inter Utah Retail Grocers events, the defendant not unnatural turn of Appellant. venor and Taylor (the against Mrs. made threats No. to dissuade mother) on several occasions Supreme Court of Utah. court, tell- bringing her the matter to from ing her that: Nov. out in court all of came
When this
my away me be- kids taken from would be * * * I left
fore the court failed, her
and that after he offered threats
money go away the time for until after passed.
the trial had only light-
I record have referred to the affair;
ly. indeed a and what sordid finally
should be done will- about I would duty
ingly juvenile leave to the court whose sickening, distressing,
it is. But such even by hoping will not vanish either
troubles brushing
they go away, them un- will rug.
der the can see either Nor I how situation,
instant the cause of law by a re- generally,
order will be benefited conviction, believe
versal of this which I be affirmed.
under established rules should
ELLETT, dissenting J., concurs in the
opinion Mr. Chief CROCKETT. Justice
433
4B4 *4 Gen., Floyd Atty. Hansen, G.
Phil L. Gen., City, Astin, Atty. for Lake Asst. Salt appellant. Waldo,
Jones, McDonough, tized for sale diverse articles of Holbrook & merchan- McDonough, dise, wearing Roger apparel products, H. R. Waldo and and foot and J. Centers, City, Skaggs Drug particular, toothpaste, Aqua Lake hair Salt for Net Inc., spray comparable Style respondent. spray, and the hair cigarettes cigarette vitamins, lighters, Mulliner, Mangum, Prince & Robert M. Bayer aspirin, cameras, Swinger Polaroid Morril, City, Yeates Denis R. Salt Lake & pants Lee’s men’s and frozen tur- tom Stores, Inc., respondent. for Central Grand keys below cost defined in the Unfair Practices Act. Christensen, Worsley, Snow Salt & Lake ' City, Assn., for Retail Grocers inter- Many by alleged the facts plain- appellant. venor and undisputed, they tiff having were been ad- by mitted defendants’ answer covered NELSON, Judge: District stipulation parties prior entered into This case comes to our attention on an defendant, however, alleged trial. Each appeal by plaintiff-appellant from the way plaintiff’s complaint answer that judgment trial court’s which held against failed state a claim the defend- entirety Unfair Practices Act in its uncon- upon ants prayed which could relief stitutional —void because of its violation of granted for the reason the Unfair Prac- the Fourteenth Amendment the United Act, particular tices and in Section 13-5-7 Constitution, infringement States and its thereof was unconstitutional. I, Article 1, 2, Sections 23 and 26, 1966, pursuant On December mo- VI, and Article Section and Article tion, the Utah Retail Association Grocers Section 20 of the Constitution of Utah. permitted party plain- was intervene as a complaint The record discloses a was tiff. be- Thereafter the matter was tried filed in the Court of District Salt Lake jury. fore the sitting district court without a County day September, on 16th deciding the hearing After case Utah, plaintiff, Trade Commission of Findings court entered its of Fact and charging defendant, Drug Skaggs Cen- Conclusions Judgment of Law and ters, Inc., defendant, on six counts and the against was for defendants Inc., Stores, Grand Central on five counts plaintiff and intervenor Utah Retail Gro- violating the Utah State Unfair Prac- plaintiff’s cers Association on each count charged tices Act. The counts that on dif- complaint. ferent during occasions the months of No- December, 1965, June, vember of the Unfair Practices the defendants and each applicable one of them adver- Act herein are: *5 proof defendants, any to the and of that hereby that ad- burden
(a) It is declared price fixing by legislature, sell, any constitutes vertising, or sale of offer to statutory merchandise, by (2) the definitions “cost” and whole- of either retailers or “replacement legiti- cost” exclude certain salers, defined than at less cost as place mate costs and discounts and an “un- purpose this act the intent and requir- reasonable on the burden” merchant purchase merchan- inducing of other dise, him to unfairly diverting ing trade from determine whether or not his or of Act, prices (3) are in competitor injuring a violation of the a com- or otherwise “unfairly prohibition intent divert prevents compe- petitor, impairs and fair competitor” tition, “injure trade from a a com- injures public is welfare, unfair petitor” vague and am- competition policy unconstitutionally is contrary public and phrase “legal price biguous, policy (4) act of this and is declared * * unconstitutionally competitor” vague, act, of a is be a this *. violation of ambiguous it re- unenforceable because The Unfair Practices Act amended de- as quires peril a at merchant to determine his “cost,” fines term the whole- “cost to competitor’s price whether or saler,” “replace- “cost to the retailer” and legal. ment cost.” provides appeal
The As stated Act further in effect: heretofore this involves constitutionality a direct challenge to the proof cost, In absence of of a lesser appears of the Unfair Practices Act. the cost defined in Act means as six conduct of the defendants did constitute a per (6%) replace- above invoice or cent Act, violation of the Unfair Practices discounts, except ment cost less trade cash which, however, trial found did court discounts, plus freight charges. At this punishable not constitute a offense because point it only noted should be an in- the Unfair Act Practices violated Four- junction defendants, against the and each teenth Amendment the United States alleged them violation of the Act is alleged Constitution and sections of the prayed penalties for and no criminal are Constitution. sought imposed Stat.e against to be the defendants.
The
judgment
court’s ruling
alleged
lower
An
violation
the Con
were
largely
based
on
specific
its conclusions
stitution
provision
must be of a
(1)
statutory presumption
particular
aof
cost
article
re
thereof. We have
6%
arbitrary,
peatedly
unreasonable and unconstitu-
held in order to be declared un
tional,
unconstitutionally
that it
constitutional,
shifts the
the statute
clearly
must
vio-
U.C.A.1953,
19, 1955,
1. Sec.
13-5-7
as amended
Ch.
Laws
Utah and as amended
Ch.
Laws
Utah 1965.
provision,
late some
and fur-
constitutional
All men shall have the inherent and
* * *
clear,
ther,
complete
must
violation
he
right
inalienable
acquire,
possess
unmistakable.2
protect property.6
general
All
laws of
nature shall have
only
section of
the Fourteenth
application.7
uniform
applicable
Amendment
case
this
any
Have
quoted provisions
any
that “No state shall make or enforce
*6
above set forth been
by the
violated
Utah
abridge
privileges
law which shall
or
Unfair Practices Act? In answering this
States,
immunities of
citizens of
United
question there
prin-
are some fundamental
deprive any
any
person
nor shall
State
of
ciples
keep
we should
in mind.
* * * property
process
without due
of
* * *
any
deny
person
law
nor
within
The
legislative
first is that the
of
jurisdiction
equal protection
of the
government
state is
powers
not a
of
laws.”
expressly
limited to those
granted, as is
government,
the federal
(as the federal
only pertinent provisions
The
of the State
says,
gradually being
Constitution
but
Constitution are:
state,
away).
legislature
eroded
of the
represents
people
which
Any
by individuals,
and thus the
combination
cor-
sovereign,
porations
power
has all of the residuum of
associations, having
or
for its
government,
of
object
except only
expressly
or
as
controlling
effect
of
by the
price
In
any products
soil,
restricted
Constitution.8
order to
of the
or of
preserve
independence
any
commerce,
integrity
and the
article of manufacture or
government,
of the three
or the
branches of
it is
exchange
transportation,
cost of
or
importance
judicial
prohibited,
utmost
that the
hereby
declared unlaw-
ful,
exercise restraint and not intrude
against public policy.
into
legislative prerogative.
It cannot strike
* * *
person
deprived
No
shall be
nullify legislative
a
enactment un
down
* * *3
property
proc-
due
without
clearly
expressly prohibited by
less it is
ess of law.4
the Constitution or in violation of some
* * *
bill
No
impairing
plain
law
mandate thereof. The court must
obligation
passed.5
of contracts shall be
every
presumption
make
reasonable
which
I,
7,
Gubler
Utah
Teachers’ Retire
4. Art.
Sec.
Constitution.
Utah
Board,
188,
580,
I,
ment
18,
113 Utah
192 P.2d
5. Art.
Sec.
Utah Constitution.
1022;
Keddington,
I,
2 A.L.R.2d
Snow v.
6. Art.
Sec. Utah Constitution.
234;
I,
State v.
7. Art.
Constitution.
Sec.
Nielsen,
Budge,
19 Utah 2d
P.2d
8. See Wood v.
Utah 2d
3. Art.
Sec.
Utah Constitution.
favors have duty investigate possible, unscrupulous a and, to insofar as correct of these conduct groups necessary gov- any reasonable avenues which vested it became discover adopt prac- upheld. Every can be (cid:127)ernment such statute reason- unfair trade question. able More- doubt must be resolved favor of tices acts as the one here in constitutionality weight the statute.10 Those over the the more overwhelming invalidity judicial who assert of the statute recent has decisions been favor showing legislation.12 of such must bear the burden of to be unconstitutional.11 There are those who maintain America argued purpose It has been upon principle been built free statutes such as the Utah Unfair Practices enterprise interpreted has been preserve competitive Act is climate practice mean the economic doctrine preventing large through business concerns private industry operate permitting with the unrestrained use and resources of size by government. a minimum of control alone, overwhelming destroying from Business, commonly used and under- their competitors. smaller These statutes stood, denoting is an inclusive term those it is preserve right claimed seek engaged production, consumption, in the ex- competitor compete to enter a market and change and distribution of commodities already operating. with those having material value. It has do *7 personal purchase the sale of real and and argued
It has been further
that unre-
property.
engaged
primarily
so
are
Those
price cutting
strained
aon massive scale
resulting
gain
concerned with financial
had
disastrous effect
the small inde-
on
and
from the excess of returns over costs
pendent
retailer with limited resources.
expenditure
given
in a
or
transaction
series
That the
selling
below cost
has become
Economically,
of
America is
transactions.
weapon
fight
in the
for markets and cus-
system. There are two
tomers,
and has been such a
characterized
deliberate ttse
asserting
thought contending,
schools
one
undercut,
to
selling
below cost
over-
years
general
that over the
there has been
destroy competition,
whelm and
all to
big
opposition
benefit
busi-
government
and further enrichment of
to
control of
Washington County
Walker,
Com-
R.
v. State Tax
11.
B. &
E.
9.
State v. J.
Inc.
,
564;
mission,
73,
523,
P.2d
P.2d
Utah
133
100
116
766.
103
Utah
Cordner,
Woolsulate, Inc.,
Keetch v.
Utah
62 P.2d
12.
106 Utah
90
Burt v.
52;
Ogden
203;
A.L.R.
v.
108
Newcomb
abuse has been made of voluntarily The court must re industry operate mitting private with by holding strictly strain itself to an exer by government. little or no control expression delegated cise and of its or in upon power The which both ground interpret adjudicate. common nate We may recognition group, that the upon stand is the have been called to state what constituting populace, must be whole law is and not what we think should be. only the individual’s question concerned with not The as to whether the statute in safety right, question but also and welfare economically not is or is sound or. group. decide, beneficial is for the court to but inquiry legislat
such an is a matter for the Cognizant contending only question ure.13 is to for us de forces, we must realize the field in which particular termine whether or not the stat operates the court is limited. It does not question ute in is constitutional. province pass lie within the the court to If, upon based the facts of this wisdom, upon need or the desira case, any court’s conclu one the lower
bility
any legislation,
be
nor to choose
inevitable,
judgment
sions
then
must
is
political philosophies.
opposing
tween two
sustained,
but if a
determina
different
not the function of the court to ameli
It is
reasonably
fairly
tion can be
reached
want,
orate the
nor
conditions of those
each
then the matter is tentative
instance
economic,
purpose
is its
social
solve
be a
and should be decided on what could
religious problems
and dissensions which
varied conclusion.
society. The
not the con
beset
court
is
people.
science of the
or its
It does
posi
agree
appellant’s
We
per
duty
express
fall within its
tion that the lower court’s conclusion
philosophy
personnel.
sonal desires or
of its
alter
presumption provides
no real
6%
“impractical”
“im
native because it is
The court does not determine who
possible”
under defend
prove
actual cost
large
is small
is rich
or who
nor who
conditions,
sup
ant’s
neither
operating
poor.
operates upon
or who it
state
it in
ported by
evidence,
nor is
accord
justice
of facts
effect
between contend
guidelines
this court has es
ance with
ing parties
determining
all in
the constitution-
and interests
accordance
tablished in
*8
Co.,
634,
83,
13. Wholesale Tobacco Dealers Bureau of
&
11
P.2d
Tobacco
Cal.2d
82
Candy
v.
Southern California
National
ality
opinion
are
The lower court erred
of a statute. We
in hold
holding
ing
pro
Act
the Act unconstitutional
the trial court erred in
re
because it
quires
penalties
All
must be exact.
vides criminal
and therefore the
cost
requires
figure
presumption unconstitutionally
statute
is a cost
arrived at
shifts
6%
accounting
proof
methods. A stat
reasonable
burden of
to the defendant.
It
ute
because
is
to be declared invalid
should be noted that this is a civil action
difficulty
applying
provisions.14
attempt
in
We
a criminal
and not
case. No
has
require
sufficiently
think
Act is
clear to
been made to invoke the criminal
compliance.15
constitutionality
a
against
respondents
the statute
questions of
statute is
to be decided on
therefore
criminal standards
should not
inconvenience,
difficulty
application
in
applied.
We have
made it
heretofore
of a cost
party
ques
standard.16
clear that
standing
has no
validity
tion the
of criminal sanctions which
argued
respondents
is
that
It
against
have not
invoked
him.18
been
But
retailers,
goods
given
rebates and free
applied
if the
even
were
criminal standard
computa
as was done in this case on exact
the defendants herein
then
have the
allocation,
tion and
could not be made.
responsibility
produce
evidence,
after
However,
reasonably
it is clear
ac
prima facie case had been shown.
curate allocation of those items could be
constitutionally permissible
even
crim
in a
purposes
compliance
made for
with the
inal case to include as an element
required by
Act which
all
that is
the Act.
prima facie case the failure of the defend
compliance
holdWe
that even if
explain
ant to
certain conduct.19
with the Act
would result
an increase of
The lower court’s conclusion
prices, the
operation
economic effect of its
presumption
price-fixing by
constitutes
6%
cannot
ruling
be considered when
on its
the legislature,
there is
because
realistic
no
constitutionality. We have held “neither
presumed cost,
alternative to the
cannot
the economic effects nor the moral effect
6%
of our
be sustained
any place
There is
(1)
determination
our
two reasons:
17
deliberations.”
no evidence as to whether there is a real
People
Kahn,
Cal.App.2d Supp.
14.
v.
19
Green,
17.
Fair
Utah State
Ass’n
68
v.
758,
P.2d
251,
60
596.
P.
249
1016.
Langley,
Wyo. 332,
15. State v.
Barlow,
53
84 P.
18. State v.
107 Utah
153 P.
767; People
Pay
Drug Store,
2d
Less
2d Cal.2d
Little,
111 cost, (2) legis- alternative of lesser the entering into a “combination” for the con- precluded has not by lature been the Utah trol prices.
n Constitution price-fixing. suggest We do purpose that a capture to divert or competitor’s a busi However, the Unfair Practices ness is wrong or perfectly unethical. It is price-fixing Act is not a measure. We legitimate long so as it is not carried out further hold the Article unfairly. The legislature simply has de apply Section legislat to the do clared accomplish it unfair through to ure.20 giving away goods selling or services or them for less than cost.23 pointed It has been out in A respondents sale at below cost numerable seeking times that correct with the limitation quantity obviously dis- application of statutes and constitutional regards profit both and turnover which provisions we look to the circumstances combined constitute purpose the whole brought being pur them and the into being in simple business. Even most pose sought accomplished. to be Neither analysis per- then would lead all reasonable gave in the circumstances which rise to respondents sons to conclude that the had provision, pur constitutional nor in the an activity this intent to attract custom- pose serve, any it was intended to is there ers upon expectation into the store that reason to that believe it was intended to they purchase other items not marked upon legislature a restriction to respondents below cost. Nor can the ex- prevent it enacting pur from a statute the plain activity this an over- on basis of pose protect public of which to was merchandise, stock of limitation since the inescapably business from abuses. It seems is inconsistent with motive clear out provision clear that constitutional was oversupply an of stock. If such were prevent private intended to from business they intent should to sell as be anxious engaging prices combinations fix possible each much the stock as cus- the disadvantage public.22 of the In no tomer. reasonable view of the situation it be can State, by
said that
businesses of the
disagree
We
with
lower court’s
law,
conforming
requirements
are
ruling
statutory
definition of cost
Riggins
Court,
respect
20.
v. District
89 Utah
from
22. In this
this case differs
Thrifty
Company
think this and the Con- dence not in accordance with the Constitution of and is authority. weight of stitution United States. court case remanded to district disagree trial Likewise with the we for the enforcement the Act. “unfairly di decision that the terms
court competitor” “in verting from a trade TUCKETT, JJ., con- CALLISTER juring competitor” vague am are cur. may present biguous. The terms difficul *10 difficulty is application, in but such ties CROCKETT, J., in the result. C. concurs sufficient to hold the Act unconstitutional. ELLETT, fact, (dissenting) : terms to have In the said have come Justice prac meanings definite certain in the and XII, 20, the I dissent. Article Sec. of of business. tice wholesale retail provides: Utah Constitution question vague, The Act in is not so individuals, Any by cor- combination respects indefinite or uncertain the in associations, porations, having for its or deny process, it is a claimed as to due but object controlling of the or effect the police power.24 valid exercise of the soil, price any products the or of of of commerce, any article of manufacture or defining In economic offenses transportation, exchange or the cost of may up setting there latitude in the be prohibited, hereby declared un- prohibited acts.25 exact nature of the lawful, against public policy. The process particular Due of law in each Legislature pass the en- shall laws for pow the an exercise of case means such by adequate forcement of this section government as settled ers of ** penalties, *. sanction, permit of maxims law by agree- The defendants could not an safeguards protec under such for compel among themselves each other rights of maxims ment tion individual those charge per than to at least six cent more prescribe for the class of cases to which question belongs.26 cost' when an article at retail. We hold was sold one compliance clearly to That such been adhered be in violation provision constitutional set herein. above out. States, Thomason, Mo., 373, 25. S.W. Nash v. United 229 U.S. 33 24.Borden Co. v. 353 780, L.Ed. 1232. 2d S.Ct. 57 Cooley Const.Lim. 441. - pass In duty legislature legislature 1937 the It is the of State of provisions regulate prices Utah undertook to retail for the laws enforcement clearly enacting a (Chapter It seems unconstitu- “Fair Trade Act” of Article XII. 20, pass 1937), a law Laws legislature provided of Utah tional for every (and goods other that when a compelling the defendants manufacturer of entered person into a that which would contract with one in the merchant) to do State do. goods price, of Utah to sell its them otherwise at a certain unconstitutional for all other retail merchants at that must sell “ * * * opinion says: The main [T]he price. same XII, do Article Section In the Company case of General Electric apply legislature,” and cites to the Thrifty Sales, Inc., v. 5 Utah 2d Riggins Court, District case 741, all arguments why P.2d as to support Utah the statute good people was or bad brought Riggins statement. was a case fully. of Utah holding were set out In prohibit Liquor Control Com- that the statute was in conflict with Article injunctions having issued mission from XII, Constitution, Sec. of our this court restraining against plaintiff and others in a page unanimous decision at said selling liquors. It contended from was them Reports, page at 751 of 301 P.2d: Liquor Act therein that the violated Control gave in that it Article Sec. difficulty “price type right the State of the exclusive fixing” question, here in it even if were liquor price sell and fix the thereof without salutary purposes for the contended any competition. plaintiff, whether it abe little lot, is that a violation of our provi- setting This court after forth *11 sin, Constitution. It is like sin: a little XII, above, sions of Article Sec. classified, if properly just so as defi- said, perceive “It that difficult nitely it, great quantity as a sin framers intended that Constitution hardly approved pretext to be under apply such the state should that it is amount that it can so small in itself.” really regarded as a virtue. concerning statement was made Although That we are aware of the fact that liquor entrance of the state into the business all doubts should in favor of be resolved authority saying and is that constitutionality, appears no for it nevertheless legislature require can any do that against that others from the interdiction “com- * * * which says they may object having Constitution not bination for its do. price effect the controlling or of the *
* * provides Act” Practices “Unfair article of manufacture any ”* * * selling price be not less than cost simply retail did the framers plus per six cent. fixing by any combination. price not want impel which would no reason We see combination, Any into whether entered plain vary from the ignore nor to us to law, voluntarily compelled which has Constitution, import of the words controlling object effect the may though have occurred events even any or of price product of the soil at the probably not foreseen were any article manufacture or commerce *** adopted. provision time the was it would be in that is unconstitutional exact- Thrifty is not Sales case While of our of Article Sec. violation one, ly nevertheless the same as the instant Constitution. have would each statute when enforced judgment of I affirm the to fix
tendency competition and to stifle lower court. Trade prices Fair of retail sales. The selling price be provided that the retail law HENRIOD, participate J., here- does price fixed the manu- than the less
facturer, in. denominated while the statute