Canada Dry Ginger Ale, Inc. v. F & a Distributing Co.

Heher, J.

(concurring in affirmance). I concur in the affirmance of the determination made by the Director, but subject to the views expressed by Mr. Justice Erancis on the quality and scone of the particular regulatory provisions of the statute.

The ban on “discrimination” in the sale of alcoholic liquors by distillers, importers and rectifiers of nationally *462 advertised brands to duly licensed wholesalers is peremptory. L. 1943, c. 364, N. J. S. A. 33 :1-93.1. A refusal to sell to “any individual wholesaler” or to “comply with the provisions of [the] act” is made reviewable by the Director, “to determine whether such refusal to sell is arbitrary or not.” N. J. S. A. 33 :l-93.3. But if the Director “is satisfied with the ability of the wholesaler to pay for such merchandise as ordered,” he “shall order” the distiller, importer or rectifier “to complete said sale of alcoholic liquor to the wholesaler,” and in the event of a refusal so to do, the Director shall issue an order to every licensed wholesaler prohibiting the purchase by such wholesaler of any alcoholic liquor products of the offending distiller, importer or rectifier, directly or indirectly, until there is strict compliance with the order. N. J. S. A. 33:1—93.3; 33 :l-93.4. And the Director is enjoined, N. J. 8. A. 33 :l-93.5, to adopt and promulgate such rules and regulations as may be necessary “to carry out and insure compliance with the provisions of [the] act.” But this does not mean, I would suggest, that the Director is thereby empowered to define the statutory “discrimination” in terms of his own unregulated discretion and judgment as to what is reasonable and not arbitrary. He cannot enlarge or detract from the declared policy and rule of action. It is fundamental law that the administrative authority is to be contained by a certain and definite legislative standard. State Board of Milk Control v. Newark Milk Co., 118 N. J. Eq. 504 (E. & A. 1935). Here, it is “discrimination,” without more, that is forbidden by this provision. And the only specific statutory criterion, N. J. S. A. 33 :1-93.3, is the ability of the wholesaler to pay for the “merchandise as ordered.” The policy and purpose of the act measure the significance of particular terms; and the Director is obliged to effectuate the intent of the lawgiver, and not to modify the legislative expression. The rule-making power concerns procedure alone; rules are mechanical aids to the fulfillment of the plan and course of action laid down by the Legislature.

*463 This provision against discrimination, the fruit of long experience, is designed to fulfill the basic statutory policy of temperance and the avoidance of the evils of undue competition, direct and indirect, in a field of business that has its own peculiar perils and is subject to strict regulation for the essential common and individual good. Paul v. Gloucester County, 50 N. J. L. 585 (E. & A. 1888); Butler Oak Tavern v. Division of Alcoholic Beverage Control, 20 N. J. 373 (1956); Crowley v. Christensen, 137 U. S. 86 , 11 S. Ct. 13 , 34 L. Ed. 620 (1890); United States v. Frankfort Distilleries, 324 U. S. 293, 300 , 65 S. Ct. 661 , 89 L. Ed. 951 (1945). Dealers denied access to “nationally advertised brands” are placed at a competitive disadvantage that could make for untoward consequences in relation to the beneficent policy of the act.

The design of the act, N. J. S. A. 33 :l-3, to which the particular statute is a supplement, is the supervision by the Director of the “manufacture, distribution and sale of alcoholic beverages in such a manner as to promote temperance and eliminate the racketeer and bootlegger.” The chapter is “intended to be remedial of abuses inherent in liquor traffic and shall be liberally construed” to that end. N. J. 8. A. 33 :l-73. And, as pointed out by Justice Francis, the introducer of the measure made known a purpose “to insure an equitable basis for competition between all licensed wholesalers of alcoholic beverages in New Jersey and to prevent any monopolistic freezing-out of one wholesaler by another by preventing the sale of certain products to him.” The legislative terms, in their normal usage, express this purpose.

We have no occasion in this setting to determine the essential significance of the “ability to pay” provision. It suffices to say that it is the only explicit standard of action in this regard; and, at all events, it suggests the imperative quality of the rule against discrimination. There is to be no erosion of the principle by illusory distinctions.

In Hoffman v. Hock, 8 N. J. 397 (1952), the distiller undertook to sell directly to retailers in the northern and *464 populous sections of New Jersey; and the holding was that it “is still open to the distiller to sell directly to retailers * * *,” and “[i]t may, of course, sell indirectly through the medium of duly licensed wholesalers, if it chooses, but in the latter event it may not discriminate between such wholesalers.”

Here, the distiller avows a purpose “to achieve a greater share of its potential” in New Jersey, that is to say, to carry on its business through wholesalers who will “push” the sale of its products, and thus to place its sales operation on the level of ordinary business pursuits, a conception alien to the statutory scheme—“company policy” as against state policy.

The distiller’s “national sales manager” testified that “several factors” were considered: “* * * our relationship with the five jobbers we proposed to retain”; “their sales executives, their sales personnel and feeling of these people towards our organization; the other competitive brands which they carry,” an undue interference with the wholesalers’ open business policy consistent with the statutory principle; “the aggressiveness of [the wholesalers’] sales force, the attitude of their executives towards discussions of advertising and sales potential for our brands”; “* * * we picpe¿ the wholesalers that we thought we could work best with”; “* * * we didn’t feel any one of the eleven [wholesalers] was doing the business they could do in our products.”

The Director’s conclusion is well founded.