*1 446 P.2d 958 a witness for (called as of the mother view defendant) testified: who Utah, State COMMISSION of TRADE * ** Utah, Appellant, Plaintiff and how children I don’t know up I’ve never age that stuff. could dream CENTERS, INC., Grand things like that. told them SKAGGS DRUG Stores, Inc., Warshaw’s Giant dba Central Taylor of Mrs. There also the evidence Drugs, Inc., De Food and Grand Central Respondents, fendants and through light

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. 374 P.2d 516. constitutionality.9 The courts interests. is further claimed that to

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 128 A.L.R. 1126. 146 P.2d City City Public School Teachers’ Retirement 10. State Tax Commis- Salt Lake 397; Commission, sion, 121 P.2d 2d Commission, Tax Howe v. State 10 Utah 2d P.2d general approval of the legal equitable free enter- with ness established rules great prise system, claiming regulations. other per- practice

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 118 A.L.R. 486. 440

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, 153 P.2d 9. 25 19. State v. Utah 2d 5 Hinckley, 289; Robert H. Inc. v. Tax Wood, State v. 2 Utah 2d Commission, 2d P.2d P.2d 998. 662; Geror, McElhone v. Minn. 292 N.W. 414.

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 51 P.2d 645. General v. Electric Snyder Clune, Sales, Inc., 21. 15 Utah 2d 2d P.2d 915. 741. Potello, 119 P. State v. 40 Utah question arbitrary. hold the Act in vague, ambiguous and We We requirements contrary comply does the evi- this conclusion is

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