Affiliated Distillers Brands Corp. v. State Liquor Authority

Rabin, J.

(dissenting). In furtherance of the legislative policies expressed in the Alcoholic Beverage Control Law, the State Liquor Authority, where appropriate, may promulgate regulations and otherwise implement such law if it does so within the powers granted to it by the Legislature. It may not, however, go beyond those powers and, in effect, write its own legislation, no matter how worthy its objectives. Because I believe it is attempting to do so here, I dissent and vote to affirm.

It is one thing to protect the New York market from price discrimination, but it is quite another matter to try to protect it from the withdrawal by a distributor of one of its products. The Legislature has authorized the State Liquor Authority to do the former but it has not given it any authority to do the latter.

The withdrawal by the petitioner of its six-year-old bourbon whiskey from the New York market, while selling it in some other States, may be a type of discrimination that some might think would call for sanctions. Yet, in the absence of any legislation making such withdrawal unlawful, the State Liquor Authority may not prohibit it. That is exactly what it is trying to do here. Calling the withdrawal by the petitioner of its six-year-old bourbon an attempt to circumvent the price discrimination law (Alcoholic Beverage Control Law, § 101-b) does not make it so. It would be quite different if the State Liquor Authority found that the six-year-old bourbon was the same product as the eight-year-old bourbon, which the State Liquor Authority refuses to register. In that event the withdrawal of the six-year-old product and the substitution of the eight-year-old at a higher price could be called price discrimination, notwithstanding an affirmation that the eight-year-old whiskey would be sold in New York at a price no higher than its lowest price in any other State. But the State Liquor Authority did not find the two bourbons to be the same. It concedes that they are different products. Indeed, on argument, counsel for the State Liquor Authority conceded that it would grant brand label registration for the eight-year-old bourbon if the petitioner continued to keep its six-year-old bourbon on the New York market.*

Having conceded that the six-year- and eight-year-old bourbons are different products there is no basis for the conclusion by the State Liquor Authority that the petitioner is attempting to circumvent the price discrimination law by withdrawing its *362six-year-old product. There is no subterfuge here. The petitioner is openly withdrawing its six-year-old bourbon from the market — which it may lawfully do. It also seeks to register its eight-year-old brand — which the State Liquor Authority concedes is a different product — at a price no higher than the lowest price at which that brand is sold in the United States.

Furthermore, there is nothing in the record to indicate that the granting of this brand label registration for this eight-year-old bourbon would not satisfy all of the prescribed standards as set forth in section 107-a of the Alcoholic Beverage Control Law which governs brand label registration. That section provides that the State Liquor Authority may enact regulations which ‘ shall be calculated to prohibit deception of the consumer; to afford him adequate information as to quality and identity; and to achieve national uniformity in this field insofar as possible. ’ ’ (Subd. 2.)

There is no deception involved for there is no question but that the bourbon sought to be registered has been truthfully described as required by these standards. Moreover, there is no suggestion that the petitioner has not complied with all of the State Liquor Authority’s requirements to effect brand label registration of its eight-year-old bourbon. As indicated, the Authority would be willing to grant such registration if the petitioner would refrain from withdrawing its six-year-old brand from the market.

It is clear then that the Liquor Authority is not really denying brand label registration of the eight-year-old whiskey, but it is attempting to prohibit the withdrawal of the six-year-old whiskey from the market.

Consequently, the refusal to grant such registration goes far beyond acting capriciously or arbitrarily. The Authority is acting pursuant to legislation of its own making and in so doing it is acting far beyond the scope of the jurisdiction granted to it by the Legislature. Such action may properly be reviewed because review of an administrative agency’s action may be had if it exceeds the authority granted by statute, or disregards the standards prescribed therein. (Matter of Guardian Life Ins. Co. v. Bohlinger, 308 N. Y. 174.)

Eager, J. P., Steuer and McNally, JJ., concur with Tilzer, J. Rabin, J., dissents in opinion.

Order and judgment (one paper), reversed, on the law, with $50 costs and disbursements to the appellant, and the petition dismissed.

It is to be noted that in various instances the State Liquor Authority has given separate registrations for the same brand and proof where the only difference is in age, e.g., Heaven Hill, 86 proof, six-year-old and Heaven Hill, 86 proof, eight-year-old.