Trenton Beverage Co. v. Berkshire

DOBIE, Circuit Judge.

This case is before us under the Federal Alcohol Administration Act, 27 U.S.C.A. § 201 et seq. (hereinafter called the Alcohol Act), to review an administrative order of the Alcohol Tax Unit suspending, for a period of thirty days, the Wholesaler’s and Importer’s Basic Permits of the Trenton Beverage Company, Incorporated (hereinafter called Trenton). The grounds on which the revocation was based were alleged violations by Trenton of the Emergency Price Control Act of 1942, 50 U.S.C.A.Appendix § 901 et seq., hereinafter called the Emergency Act) as amended, *228and regulations and orders issued pursuant thereto, in that Trenton sold beer to one Pearl Laschitzki and whiskey to one Renato Canzonese at prices above the maximum price fixed under the Emergency Act.

Authority for the suspension of Trenton’s permit is found in section 4(d) of the Alcohol Act, 27 U.S.C.A. § 204(d), which reads:

“Conditions. A basic permit shall be conditioned upon compliance with the requirements of section 205 of this title (relating to unfair competition and unlawful practices) and of section 206 of this title (relating to bulk sales and bottling), with the twenty-first amendment and laws relating to the enforcement thereof, and with all other Federal laws relating to distilled spirits, wine, and malt beverages, including taxes with respect thereto.” (Italics ours.)

And since there was no violation by Trenton of any of the conditions expressly set out in this section, the suspension here is valid if, but only if, Trenton’s violation of the Emergency Act comes within the italicized portion of this section. In other words, the suspension is proper only if the Emergency Act falls within the statutory category of “all other Federal laws relating to distilled spirits, wine, and malt beverages,, including taxes with respect thereto.” We believe that the Emergency Act is quite outside this ambit of the Alcohol Act. Accordingly, the suspension order must be set aside.

It is a matter of common knowledge, certainly it is elementary learning to federal judges, that there is a vast body of federal statutes dealing with “distilled spirits, wine, and malt beverages.” All of Title 27 in the United States Code Annotated, occupying a complete volume, is given to Intoxicating Liquors. These statutes are far-reaching, rather complete in themselves, and, what is more important for our problem, quite distinctive. We are, therefore, convinced that the phrase “Federal laws relating to distilled spirits, wine, and malt beverages,” as used in section 204(d) of Title 27, meant (and meant only) what it seems to say — this distinctive body of statutes dealing with these beverages. It requires a rather vivid imagination to find that Congress, by these words, could have meant to include a future emergency statute, of almost universal scope, passed in a world war to keep down the prices of commodities of multitudinous classes and characters.

This conclusion is strengthened by either an analytical, a historical or a functional approach to the two statutes involved the Alcohol Act and the Emergency Act. In the report which accompanies H. R. 8870 (that later became the Alcohol Act) is found (House Report 1542, 74th Congress, 1st Session, page 4) this language:

“All provisions relating to open-price competition, including posting of prices and prohibition of guarantees against decline in price and of refunds, rebates, and concessions have been omitted.”

And, when the Alcohol Bill was debated before the House of Representatives, Congressman Cullen made the statement (79 Cong.Rec. p. 11714) : “Price fixing * * * (is) not contained in this bill.” Other utterances of the lawmakers seem to indicate quite clearly that price fixing was in no way contemplated under the Alcohol Act. On the other hand, the Emergency Act, comprehensive and complete in itself, is an emergency measure (as indicated by its title) enacted for the express purpose of stabilizing prices and preventing inflation, as an effective means of aiding the speedy and victorious prosecution of World War II. Hardly could Congress have intended that this great statute was in any sense to be deemed an appendage to the Alcohol Act.

The distinction between the two acts (the Alcohol Act and the Emergency Act) becomes of tremendous practical importance when we consider the question of procedure for the purpose of suspending permits. Each act makes specific provision for such procedure; and the two procedures present wide differences in aspects that must be deemed essential. It is, therefore, a vital matter to an alleged violator (as in the instant case) whether he be proceeded against under the one act or the other.

Under the Alcohol Act, the procedure may be quite summary in character, no warning is necessary to the violator thereof, and the suspension of a permit may be effected (as here) by the administrative agency, acting alone without the sanction of the court. Whereas, under the Emergency Act, as was aptly said by Senator Brown (Senate Report 931, 77th Congress, 2d Session, at page 9) :

*229"Suspension of a license, which is limited to a maximum period of 12 months, maybe ordered only by a court. The Administrator has no power to suspend or revoke a license under the committee substitute. Grounds for suspension do not exist until a licensee has first received from the Administrator a warning notice that he has violated a provision of the license or of any regulation, order, price schedule, or requirement which may be applicable to him. If he ignores such a warning notice, and again violates, the Administrator may apply to the local, State, or territorial court for a suspension order or, in certain circumstances, he may apply to the appropriate United States district court. If the court suspends the license, the licensee may appeal and may secure a stay pending the appeal if his case merits it.”

And quite germane here are the remarks of Congressman Wolcott on the so-called “kangaroo courts” (90 Congr.Rec. at page 5927).

We, therefore, think that the Alcohol Unit exceeded its authority when, under the Alcohol Act and the procedure thereunder prescribe, it suspended Trenton’s Basic Permit issued under that Act, for a violation of Maximum Price Regulation 445 of the Emergency Act. The sanctions of the Emergency Act are entirely adequate for any violations of this measure. We see no practical or legitimate reason for using the Alcohol Act to enforce the Emergency Act — a procedure leading (as in the case before us) to both uncertainty and unfairness.

The two statutes, the Alcohol Act and the Emergency Act, are quite separate and distinct, each from the other. Violators of the Emergency Act should be proceeded against under the sanctions and procedure of that Act, whether such violators are dealers in liquor, groceries or other commodities. This course of action is demanded by the orderly administration of justice. The mere fact that Trenton’s activities are controlled by two different statutes affords no adequate reason for the application of cross sanctions.

Finally, we observe that under the decisions of the Supreme Court, the penalty provisions of the Alcohol Act should be construed rather strictly. See the opinion of Mr. Justice Strong in Tiffany v. National Bank of Missouri, 85 U.S. 409, 410, 18 Wall. 409, 21 L.Ed. 862; and the opinion of Mr. Justice White in Keppel v. Tiffin Savings Bank, 197 U.S. 356, 362, 25 S.Ct. 443, 49 L.Ed. 790.

Our opinion makes it unnecessary for us to consider any further contentions advanced by counsel for Trenton.

The order of the Alcohol Tax Unit suspending Trenton’s Basic Permit is set aside.

Order set aside.