Petition — Castlewood International Corp. v. Distilled Spirits Council of the United States, Inc.

IN THE

Supreme Court of the Unite

OCTOBER TERM, 1976

No. 76-1004

CASTLEWOOD INTERNATIONAL CORPORATION,

Petitioner,

Vv.

DISTILLED SPIRITS COUNCIL

OF THE UNITED STATES, INC.,

Respondent.

PETITION FOR WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE DISTRICT OF COLUMBIA CIRCUIT

CARL L. SHIPLEY

Of Counsel:

1108 National Press Building

SHIPLEY, SMOAK Washington, D.C. 20045

& AKERMAN 7 ~

1108 National Press Building Attomey for Petitioner

Washington, D.C. 20045

ROBERT P. LIPPELMAN, Esquire

16565 Northwest 1 5th Avenue

Miami, Florida

January 20, 1977

SE ES SS LT

THE CASILLAS PRESS, INC.—1717 K Street. N. W.—Weshington, D. C.—223-1220

(i)

TABLE OF CONTENTS

Table of Authorities

Opinions Below .

Jurisdiction

Question Presented .

Statutes Involved

Statement of the Case .

Reasons for Granting the Writ

Conclusion

Appendix

TABLE OF AUTHORITIES

Cases:

Associated Press v. United States,

326 US. 1 (1945)

Bigelow v. Virginia,

421 U.S. 809 (1975)

Bragen v. Hudson County News Co.,

278 F.2d 615 (3d Cir. 1960) .

Continental Casualty Co. v. Beelar,

132 US. App. D.C. 1, 405 F.2d 377 (DC. Cir. 1968)

15

la

ll

13

(ii)

Deeson vy. Professional Golfers Association of America,

358 F.2d 165 (9th Cir.), cert. denied, 385 U.S. 846

(1966) Ae elle ere

Dnever Rockets v. All-Pro Management, Inc.,

325 F. Supp. 1049 (1971)

Eastern States Retail Lumber Dealers Association

y. United States, 234 U.S. 600 (1914) .

Fashion Originators Guild of America, Inc. v. F.T.C.,

312 US. 457 (1941)

First National Bank of Arizona v. Cities Service Co.,

391 US. 253 (1968)

Fortner Enterprises, Inc. v. United States Steel Corp.,

394 US. 495 (1969)

Hicks v. Miranda,

422 US. 332 (1975)

Interstate Circuit, Inc. v. United States,

306 U.S. 208 (1939)

Klors, Inc. v. Broadway-Hale, Inc.,

359 US. 207 (1959)

Molinas v. National Basketball Association,

190 F. Supp. 241 (S.D.N.Y. 1961) .

Oregon Restaurant & Beverage Association v. United

States, 429 F.2d 516 (9th Cir. 1970)

Poller v. Columbia Broadcasting System,

368 U.S. 464 (1962)

11,12

12

1]

14

7,8

14

11,12

11,14

6, 7, 8, 15

(iii)

Ruddy Brook Clothes v. British & Foreign Marine

Insurance Co., 195 F.2d 86 (7th Cir.), cert. denied,

344 US. 816(1952) , ey

Semaan v. Mumford,

118 U.S. App. D.C. 282, 335 F.2d 704 (D.C. Cir.

1964) ee ie eee os

Standard Sanitary Manufact-wring Co. v. United States,

226 U.S. 20 (1912) pa

United States v. General Motors,

384 US. 127 (1966)

United States v. Scenic Artists Local 829,

27 F.R.D. 499 (S.D.N.Y. 1961) .

United States v. United States Trotting Association,

1960 Trade Cas. 969,761 (S.D. Ohio 1960) .

United States vy. Western Winter Sports Representatives

Association, Inc., 1962 Trade Cas. 470,418 - D.

Cal. 1962) . <<. oe oo :

Virginia State Board of Pharmacy v. Virginia Citizens

Consumer Council, 423 U.S. 815 (1976) .

Washington State Bowling Proprietors Association v.

Pacific Lanes, Inc., 356 F.2d 371 (9th Cir.), cert.

denied, 382 U.S. 963 (1966) . :

White Motor Co. v. United States,

372 US. 253 (1963)

Winter Park Telephone Co. v. Southern Bell Telephone

& Telegraph Co., 181 F.2d 341 (Sth Cir. 1950)

11,12

11

11,14

11,12

13

13

12

7,8

Statutes:

15 U.S.C. § 1-3

15 US.C.§15

27 U.S.C. § 201 ef seq. .

27 US.C. § 205

28 US.C. § 1254 .

28 US.C. 81331 .

28 U.S.C. § 1332 .

28 U.S.C. § 1337 .

(iv)

. 3,10

. 2,10, 11

2

3

IN THE

Supreme Court of the United States

OCTOBER TERM, 1976

No. 76-1004

CASTLEWOOD INTERNATIONAL CORPORATION,

Petitioner,

v.

DISTILLED SPIRITS COUNCIL

OF THE UNITED STATES, INC.,

Respondent.

PETITION FOR WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Petitioner respectfully prays that a writ of certiorari be

granted to review the judgment and opinion of the United

} States Court of Appeals for the District of Columbia Cir-

cuit entered on October 22, 1976, entitled Castlewood

International Corporation, Inc. versus Distilled Spirits Coun-

cil of the United States, Inc.

2

OPINIONS BELOW

The opinion of the Court of Appeals for the District of

Columbia Circuit is unreported and is printed at Appendix

A. The judgment of the District Court for the District of

- Columbia is printed at Appendix B. The journal entry of

judgment of the District Court for the District of Colum-

bia is printed at Appendix C.

JURISDICTION

The petition seeks review of the judgment of the United

States Court of Appeals for the District of Columbia Cir-

cuit dated and entered October 22, 1976. There has been

no order in regard to rehearing, nor extension of time for

the filing of this petition. Review by certiorari is sought

pursuant to 28 U.S.C. § 1254(1) (1966).

QUESTION PRESENTED

Whether the Court of Appeals erred by affirming the

District Court’s order granting summary judgment in favor

of the defendant in contravention of the prior decisions of

the Supreme Court which strongly disfavor the allowance

of summary judgment in antitrust cases where the facts

showed consciously parallel action and raised questions of

intent and credibility for the trier of fact.

STATUTES INVOLVED

This case involves the Sherman Antitrust Act Sections

1-3, 15 U.S.C. Sections 1-3, vol. 3 U.S.C. 2978-2979 (1970

ed., 1971); and the Federal Alcohol Administration Act,

section 5, 27 U.S.C. Section 205, vol. U.S.C.

These statutes are set out in Appendix D hereto.

3

STATEMENT OF CASE

The Petitioner herein, Castlewood International Corpora-

tion (Castlewood), brought suit against two trade associa-

tions, Distilled Spirits Council of the United States, Inc.

(DISCUS) and National Association of Alcoholic Beverage

Importers, Inc., alleging antitrust violations and interfer-

ence with business relationships. Jurisdiction in the court

of first instance, the United States District Court for the

District of Columbia, was founded upon Section 4 of the

Clayton Act, 15 U.S.C. $15 (1973), upon 28 U.S.C.

§§ 1331, 1332 (1966), and upon 28 U.S.C. § 1337 (1976).

The District Court granted DISCUS’ motion for sum-

mary judgment without opinion, and the Court of Appeals

affirmed the order of the District Court with a terse para-

graph stating that no genuine issues for trial had been

shown by Castlewood.

Castlewood owns and operates some 140 cocktail loun-

ges and package liquor stores in Florida and California.

There is a substantial flow of the products Castlewood

buys and sells in interstate commerce. Advertising and

market development are of vital importance to Castlewood’s

retail operations in order to obtain and retain customers.

In July of 1973, Castlewood began to organize a trade

show or exposition to be known as Big Daddy’s Interna-

tional Wine Expo and Tasting to be held at the Miami

Beach, Florida, Convention Hall on March 22-24, 1974.

Manufacturers, wholesalers, and distributors of wines and

similar products were invited to purchase exhibition space

at $550 per booth, a price determined by costs, a reason-

able profit, and comparable trade or market development

activities of others. Space was available to all interested

persons and companies, and Castlewood incurred substan-

4

tial costs in organizing the exposition. In response to the

invitations, Castlewood received thousands of dollars in

commitments and payments for booths from industry mem-

bers, including members of the defendant trade associations.

However, on October 25, 1973, DISCUS issued a mem-

orandum to its members on the subject of the Castlewood

exposition which stated:

It is not our intention to interfere with the com-

mercial relationships of our members, but we have

learned that this corporation has been advised by

BATF, [Bureau of Alcohol, Tobacco, and Firearms],

both orally and by letter, that this Expo has in it

the possible proscribed elements of inducement and

exclusion under Section 5, Federal Alcohol Admin-

istration Act and that any participation by manu-

facturers, wholesalers or distributors could possibly

place their basic permits in jeopardy. -

This activity is also in conflict with the DISCUS

Code of Good Practice. Sec. Il, Contributions to

Wholesalers or Retailers Functions, provides in part:

“No member of the Distilled Spirits Council

of the United States, Inc., directly or indirectly,

shall contribute anything of value in furtherance

of any exhibit, show, exposition, convention, ban-

quet, dinner, outing, cruise or similar affair, con-

ducted by or on behalf of any association of

wholesaler or retail liquor dealers; .. .”

It may be that, because of the foregoing informa-

tion, you may wish to review your company’s partici-

pation.

5

On November 12, 1973, the defendant National Associa-

tion of Alcoholic Beverage Importers, Inc. relayed to its

members the quoted language of the DISCUS letter.

Subsequently, participants withdrew from Castlewood’s

exposition, and Castlewood lost over $50,000 in lost costs

and anticipated profits, and was handicapped in its ability

to compete, losing a business opportunity. Castlewood and

the public Jost a marketing opportunity, and the competi-

tion which would have been fostered by participation of

manufacturers, wholesalers, and distributors in the eXposi-

tion was lost.

In regard to the defendants’ reference to the BATF warn-

ings, the actual statement from BATF, by letter of August

29, 1973, was:

The Federal Alcohol Administration Act proscribes

wholesalers, manufacturers, and distributors from,

directly or indirectly, engaging in certain activities

or trade practices if they result in the exclusion in

whole or in part of products sold or offered for

sale in interstate or foreign commerce. Although

the activities outlined in your letter are not on

their face violations of the Act, they would cer-

tainly be closely scrutinized by this Bureau.

Any wholesaler, manufacturer, or distributor par-

ticipating in your exposition would, in our opin-

ion, be placing his permit in jeopardy because

such activities would likely result in the proscribed

elements of inducement and exclusion.

The position of BATF was clarified by the Treasury De-

partment in an advisory opinion of January 4, 1974, stating:

6

In our opinion, the activities described in these let-

ters would not on their face constitute violations

of the Act. However, the possibility that such

consequences may ensue cannot entirely be ig-

nored. The Bureau of Alcohol, Tobacco and

Firearms, in carrying out its statutory responsi-

bilities, may monitor the exposition and subse-

quent events to determine whether violations

occur. Any wholesaler, manufacturer, or dis-

tributor participating in your exposition should

be on notice that if the events that actually oc-

cur result in the proscribed elements of induce-

ment and exclusion under 19 U.S.C.A. 205, ap-

propriate action will be taken.

REASONS FOR GRANTING THE WRIT

Both the District Court and the Court of Appeals. below

in the present case have decided a federal question in a way

in conflict with applicable decisions of the Supreme Court.

The case turns upon the intent of DISCUS in formulating

its rule against member participation in trade shows con-

ducted by associations of wholesale or retail liquor dealers,

and upon the meaning of the documents at issue herein.

This Court set a stringent standard for granting summary

judgment in antitrust cases in Poller v. Columbia Broadcast-

ing System, Inc., 368 U.S. 464 (1962), stating:

We believe that summary procedures should be

used sparingly in complex antitrust litigation where

motive and intent play leading roles, the proof is

largely in the hands of the alleged conspirators,

and hostile witnesses thicken the plot. It is only

when the witnesses are present and subject to cross-

7

examination that their credibility and the weight

to be given their testimony can be appraised.

Trial by affidavit is no substitute for trial by

jury which so long has been the hallmark of

“even handed justice.”

368 U.S. at 473.

The Poller standard has been subsequently re-endorsed by

this Court. Fortner Enterprises, Inc. v. United States Steel

Corp., 394 U.S. 495, 500 (1969); White Motor Co. v. United

States, 372 U.S. 253, 259 (1963). Notwithstanding the clear

standard stated and adhered to by Supreme Court decisions,

the courts below in the instant case have granted and affirmed

summary judgment where the heart of the case goes to the

intent of DISCUS in adopting its rule on trade shows, to the

intent of the defendants in circulating that rule at the time

they did so, and to the motive of the nonparticipants in the

Castlewood trade show.

The evidence herein shows that members of the defendant

organizations withdrew from the Castlewood exposition after

receiving memoranda from their trade associations which sug-

gested to the members that “you may wish to review your

company’s participation.” (DISCUS letter of October a

1973, and NAABI letter of November 12, 1973). The evi-

dence thus makes out a situation comparable to Jnterstate Cir-

cuit, Inc. v. United States, 306 U.S. 208 (1939), in which an

antitrust violation was found where one party had made a

proposal to change the business practices of motion picture

distributors in a particular manner. All the recipients of the

proposal were aware of the identity of the other recipients.

The proposed changes were instituted, and this Court held

that the consciously parallel action of the defendants justi-

fied an inference of conspiracy to support a conviction for

violation of the Sherman Act.

8

The Court of Appeals in the instant case cited First Na-

tional Bank of Arizona v. Cities Service Co., 391 U.S. 253

(1968), in support of the decision appealed from. Cities

Service was inappropriately relied on, however. There, this

Court held that Poller did not apply where the only fact

shown was a refusal to deal. There was an utter absence

of evidence beyond that sole fact in Cities Service. Addi-

tionally, there was a reason shown besides the alleged con-

spiracy which was more likely to have caused the refusal to

deal than was the alleged conspiracy, in light of the fact

that the defendant’s interests coincided with and favored

dealing with the plaintiff rather than coinciding with the

interests of the alleged co-conspirators. Thus, for a plain-

tiff to show only a bald refusal to deal may not be enough

to withstand summary judgment under Cities Service. Pol-

ler, supra, was distinguished and was not criticized in Cities

Service. The present case shows refusals to deal by vari-

ous companies which are members of the defendants.

These refusals followed upon the heels of the defendant’s

letters informing members that BATF had stated that “any

participation by manufacturers, wholesalers or distributors

could possibly place their basic permits in jeopardy.”” The

letter then continued on to state the DISCUS rule against

participation, and suggested review of any planned participa-

tion. Such a fact situation brings the present case into line

with Poller, supra; White Motor Co., supra; and Fortner En-

terprises, supra. By relying upon Cities Service, the Court

of Appeals read the Poller case out of the law, and this it

could not do. The decisions of the Supreme Court are

binding upon lower federal courts until the Supreme Court

instructs otherwise. See, e.g., Hicks v. Miranda, 422 U.S.

332 (1975). Poller stands as a decision uncriticized and

uneroded by this Court. Therefore, the Court of Appeals’

decision affirming summary judgment on a federal question

9

is a decision made in conflict with the applicable decisions

of the Supreme Court.

Moreover, the substantive law does not support summary

judgment in favor of DISCUS. On summary judgment, in-

ferences should not be drawn from the facts, Bragen v. Hud-

son County News Co., 278 F.2d 615, 618 (3d Cir. 1960),

particularly if conflicting inferences might be drawn; United

States v. Scenic Artists Local 829, 27 F.R.D. 499, 501

(S.D.N.Y. 1961); Winter Park Telephone Co. v. Southern

Bell Telephone & Telegraph Co., 181 F.2d 341 (Sth Cir.

1950).

If any inferences are drawn, they must be resolved against

the moving party. Continental Casualty Co. v. Beelar, 132

U.S. App. D.C. 1, 405 F.2d 377 (D.C. Cir. 1968); Semaan v.

Mumford, 118 U.S. App. D.C. 282, 335 F.2d 704 (D.C. Cir.

1964).

DISCUS has asserted that it was governmental action, by

BATF, that caused non-participation in the trade exposition.

This position is untenable here because it entails drawing an

inference from the facts and resolving it in favor of the mov-

ant rather than in favor of the opponent of summary judg-

ment. The BATF opinion and the DISCUS rule against par-

ticipation in trade shows were circulated by DISCUS in one

memorandum. Only a trier of fact may draw inferences as

to which spectre raised by DISCUS resulted in the non-par-

ticipation. Also, only a trier of fact may determine DISCUS’

intent in adopting its rule and in circulating the memoran-

dum of October 25, 1973.

The reference to the BATF opinion should not preclude

the possibility that a trier of fact might find that the non-

participation resulted from the DISCUS rule. The BATF

letter was based on the Federal Alcohol Administration Act,

10

27 U.S.C. § 201 et seq. The section of that Act at issue is

Section 205 wherein certain practices, inducements, exclu-

sions, commercial briberies, etc., are prohibited. Section

205 mentions neither trade shows nor participation in them.

Further, BATF indicated that mere participation in the show

would not violate section 205. A violation would occur only

if a manufacturer or distributor participated in the trade

show and also committed an affirmative act prohibited by

Section 205 (BATF letter of August 29, 1973, and Depart-

ment of Treasury letter of January 4, 1974).

Given the strict regulation of the liquor industry, it can-

not be presumed that DISCUS members did not know what

affirmative acts would violate section 205. They must have

known that they could have participated in the trade show

without losing their permits simply by refraining from the

commission of any of the clearly delineated acts set forth

in Section 205. The contention by DISCUS that its mem-

bers boycotted the trade show because of the BATF letter

would seem to require a finding that the members intended

to use the trade show only as a cover for committing illegal

acts under Section 205, and that they would thus have no

reason for participating once it was clear that the BATF

would monitor the show. In short, the argument of DIS-

CUS on this issue either impugns the honesty of its mem-

bers or is logically indefensible.

However, violation of the DISCUS Code would arise by

mere participation and is backed up by the possibility of

expulsion from the trade association. A member would be

in violation of the DISCUS Code without engaging in any

acts prohibited by Section 205.

If the trier of fact finds that the DISCUS Code was the

cause of the nonparticipation, then a cause of action for a

group boycott would be made out. Group boycotts are

proscribed by the antitrust laws. United States v. General

Motors, 384 U.S. 127 (1966). They are proscribed when

they result from the by-laws or rules of business trade as-

sociations, Associated Press v. United States, 326 U.S. 1

(1945); Eastern States Retail Lumber Dealers’ Association

v. United States, 234 U.S. 600 (1914); Standard Sanitary

Manufacturing Co. v. United States, 226 U.S. 20 (1912).

A case similar in principle to the present case is Oregon

Restaurant & Beverage Association v. United States, 429

F.2d 516 (9th Cir. 1970). The case involved the sale by

wholesalers of beer to the public “off the dock.” Un-

der Oregon law, some such sales were legal and others ille-

gal. The wholesalers were told by the defendant tavern

operators to cease making “off the dock” sales to the pub-

lic or they would lose the tavern operator’s business. No

distinction was made between the legal and illegal sales,

but the court held that:

[Slince it was their intent to stop al! “off the

dock”’ selling, their conduct was violative (of Sec.

1 of the Sherman Act) notwithstanding the fact

that some of the sales were illegal.

429 F.2d at 517. Similarly, here the DISCUS Code seeks

to stop all participation in Castlewood’s trade show, and

not merely to prevent activities prohibited by 27 U.S.C.

§ 205.

In the proceedings below, DISCUS has pointed to Dee-

son v. Professional Golfer’s Association of America, 358

F.2d 165 (9th Cir.), cert. denied, 385 U.S. 846 (1966);

Molinas v. National Basketball Association, 190 F. Supp.

241 (S.D. N.Y. 1961); United States v. United States Trot-

ting Association, 1960 Trade Cas. 469,761 (S.D. Ohio

1960); and Ruddy Brook Clothes v. British & Foreign Ma-

rine Insurance Co., 195 F.2d 86 (7th Cir.), cert. denied,

12

344 U.S. 816 (1952), as showing that the DISCUS Rule

and memorandum are not within the scope of group boy-

cotts. However, in United States Trotting Association,

the defendant prevailed because no boycott was shown.

Deeson and Molinas involved regulation of professional

sports which the courts there found reasonable. More

specifically, these cases involved association actions direc-

ted at a specified member, after a committee assessed the

plaintiff's performance in Deeson and where the plaintiff

had admitted improper conduct in Molinas. Ruddy Brook

Clothes did involve a boycott by insurance companies of

the plaintiff who was the subject of a report circulated

among the defendants. However, the court found that

denial of insurance to one individual had no appreciable

effect upon interstate commerce, and that it was reason-

able to attempt to exclude poor risks from coverage; in-

deed, it was an obligation owed to the companies’ policy-

holders. These cases dealing with trade association, ac-

tions vis-a-vis a single individual are irrelevant here whére

a rule of general application is challenged. The distinction

is well illustrated by Denver Rockets v. All-Pro Management,

Inc., 325 F. Supp. 1049 (1971), where a player eligibility

rule was struck down because it provided for an absolute

boycott of certain atheletes without any provision for a

hearing or consideration of individual cases. On this ground

the court distinguished Deeson, supra, and instead followed

another Ninth Circuit decision, Washington Siute Bowling

Proprietors Association v. Pacific Lanes, Inc., 356 F.2d 371

(9th Cir.), cert. denied, 384 U.S. 963 (1966), which struck

down an association rule as constituting a group boycott in

violation of the antitrust laws.

Similar to Denver Rockets and Washington State Bowling

Proprietors, in the instant case, DISCUS has propounded a

tule of general application, with neither a hearing provision

13

nor any opportunity for an individual sponsoring a trade

show to present the merits of his show for consideration.

This blanket prohibition constitutes an actionable group boy-

cott which infringes upon competition by inhibiting DISCUS

members from exercising their First Amendment right to ad-

vertise. This Court has recently recognized the extreme im-

portance of advertisement to both the businessman and to

the consumer. Virginia State Board of Pharmacy v. Vir-

gina Citizens Consumer Council, 423 U.S. 815 (1976); Bi-

gelow v. Virginia, 421 U.S. 809 (1975). While these cases

are not directly applicable, they do show judicial recogni-

tion of the crucial role of commercial speech to both the

businessman and consumer.

Trade shows, like Castlewood’s exposition, by providing a

forum for wine tasting, stimulate competition in the indus-

try by exposing consumers to a variety of wines which

otherwise the consumer might not be exposed to because

he would not buy an entire bottle of an unknown wine

merely to conduct his own taste test. In United States v.

Western Winter Sports Representative Association, Inc., 1962

Trade Cas. § 70,418 (N.D. Cal. 1962), the court held that

the complaint stated a claim for relief under Section | of

the Sherman Act and entered a consent decree enjoining

and restraining the defendant trade association from, inter

alia:

(A) Prohibiting or regulating the issuance by

any exhibitor of invitations to retailers to attend

any trade show;

(B) Prohibiting or restricting the attendance at

any trade show of any retailers holding such an

invitation in writing;

Id. at 76,683. The court further ordered the defendant,

14

to rescind all of fts bylaws, code of ethics, rules

and regulations, which contravene or conflict in

any way with the provisions of this Final Judg-

ment.

Id.

This case presents a trade association rule which on its

face presents a group boycott of trade shows. Whether the

DISCUS rule or BATF position caused the damage to Castle-

wood’s trade show is a question to be inferred from the facts

by the jury. In this connection, it is important to remember

that the DISCUS rule sought to preclude all participation in

the trade show, regardless of the legality of such participa-

tion, while BATF’s interest was restricted to any affirmative

violations which might arise in the setting of the trade show,

which BAFT regarded as lawful in and of itself. To the ex-

tent that DISCUS sought to impede lawful activity, it is not

protected by the BATF activity. See Oregon Restaurant &

Beverage Association, supra.

Group boycotts are illegal per se. United States v. Gen-

eral Motors, supra; Klors, Inc. v. Broadway-Hale, Inc., 359

U.S. 207 (1959); Fashion Originators Guild of America, Inc.

v. F.T.C., 312 U.S. 457 (1941). Even if the rule of reason

is applicable to judge this restraint on trade, the courts be-

low did not consider evidence of the reasonableness of Sec-

tion 2 of the DISCUS Code or its effect upon commerce,

and in the absence of such consideration, the allowance of

summary judgment was erroneous.

With the DISCUS rule constituting an unlawful group boy-

cott on its face, the determination of whether there was a

conspiracy or combination in restraint of trade causing dam-

age to Castlewood is for the jury, based on such factors in

this case as the rule itself, the circulation of that rule by

15

memorandum with the statement that the rule applied to

the Castlewood exposition, and the effect of the statements

relating to BAFT. These factors may support a finding of

conspiracy, Jnterstate Circuit, Inc., supra. They are essen-

tially questions of motive and intent, and credibility of wit-

nesses, questions properly for the jury and not for the Court

on summary judgment. Poller, supra.

Thus, the lower courts errneously granted and affirmed

summary judgment in this case. In doing so the courts de-

cided a federal question in a way in conflict with applicable

decisions of the Supreme Court, most particularly, the Pol-

ler case and its progeny.

CONCLUSION

Because the lower federal courts have granted summary

judgment in a manner in conflict with the decisions of this

Court, this petition for a writ of certiorari should be granted,

and on review of the decision below, the decision of the

Court of Appeals should be reversed.

Respectfully submitted,

Carl L. Shipley

Counsel for Petitioner

APPENDIX A

UNITED STATES COURT OF APPEALS

FOR THE DISTRICT OF COLUMBIA CIRCUIT

No. 76-1016 September Term, 1976

Castlewood International Corporation, CIVIL 74-641

a Florida Corporation, Appellant

v.

Distilled Spirits Council of the United

States, Inc, a New York Corporation, et al

No. 76-1190

Castlewood International Corporation,

a Florida Corporation, Appellant

v.

Distilled Spirits Council of the United

States, Inc., a New York Corporation, et al

APPEALS FROM THE UNITED STATES DISTRICT COURT FOR

THE DISTRICT OF COLUMBIA

Before: BAZELON, Chief Judge, TAMM and ROBB, Circuit Judges

JUDGMENT

These causes came on to be heard on the record on appeal

from the United States District Court for the District of Co-

lumbia and were argued by counsel. On consideration of the

foregoing, it is

ORDERED AND ADJUDGED by this Court that the judg-

ments of the District Court appealed from in these causes are

hereby affirmed.

The appellant set forth no facts showing there was a genu-

ine issue for trial. Fed. R. Civ. P. 56(e); Dewey v. Clark, 86

U.S. App. D.C. 143, 180 F.2d 766 (1950); Thompson y.

Evening Star Newspaper Co., 129 U.S. App. D.C. 299, 394

F.2d 774, cert. denied, 393 U.S. 884 (1968); First National

Bank v. Cities Service Co., 391 U.S. 253, 289-90 (1968).

2a

The cost of the depositions used in support of the motion

for summary judgment and the cost of copies of papers ob-

tained for use in the case were properly taxed to the appel-

lant. Per Curiam

For the Court

/s/ George A. Fisher

George A. Fisher, Clerk

3a

APPENDIX B

UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLUMBIA

[Filed Nov 4, 1975]

CASTLEWOOD INTERNATIONAL

CORPORATION,

v. wane Civil Action

DISTILLED SPIRITS COUNCIL OF No. 74-641

THE UNITED STATES, INC.

and

NATIONAL ASSOCIATION OF ALCOHOLIC

BEVERAGE IMPORTERS, INC.

Defendants.

ORDER

Upon consideration of defendant Distilled Spirits Council

of the United States, Inc.’s Motion to Dismiss or in the Al-

ternative for Summary Judgment, with a Memorandum of

Points and Authorities in Support of such Motion, and plain-

tiffs opposition to such Motion,

IT IS HEREBY ORDERED that Summary Judgment be,

and hereby is, granted for the defendant Distilled Spirits

Council of the United States, Inc.

Dated this 3rd day of November, 1975.

/s/ William B. Bryant

United States District Judge

4a

APPENDIX C

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLUMBIA

CASTLEWOOD INTERNATIONAL

CORPORATION,

Plaintiff,

v. Civil Action No. 74-560

SECRETARY OF THE

TREASURY,

Defendant.

[Dated July 17, 1974]

MEMORANDUM AND ORDER

This is an action for declaratory judgment and comes be-

fore the court on defendant’s motion to dismiss, or, in the

alternative, for summary judgment.

Plaintiff, an alcoholic beverage retailer, wrote to the Bu-

reau of Alcohol, Tobacco, and Firearms, an agency of the

Treasury Department, seeking advice as to whether a pro-

posed “‘wine exposition,” to be conducted by plaintiff in

Miami during March of 1974, would violate the Federal Al-

cohol Administration Act or any other Federal statute. The

agency staff replied on August 29, 1973, that the proposed

activities “are not on their face violations of the Act,” but

that they “would likely result in the proscribed elements of

inducement and exclusion.” Because of this danger, the

staff warned that it would closely scrutinize the exposition

and that anyone participating in it would “be placing his

permit in jeopardy.”’ When plaintiff sought clarification of

this letter from the Treasury Department, Deputy Assistant

Secretary Brent F. Moody replied on January 4, 1974, that

the proposed exposition appeared to be legal as described,

—_————— 2.0

Sa

but added that it would be scrutinized and suggested that

participants should be warned that violations of the law

would result in “appropriate action” by the Government.

Although the March exposition had already fallen through,

plaintiff brought this action seeking a declaratory judgment

holding that defendant’s actions as reflected by the corres-

pondence were unlawful, arbitrary and capricious and that

the wine exposition “as proposed by plaintiff for March 22-

24, 1974, and in the future would not place their permits

in jeopardy.” Thus, plaintiff evidently still wishes to as-

sure potential participants that contemplated future expo-

sitions will not involve participants in legal difficulties.

Defendant contends that its letters did not constitute final

agency action under 5 U.S.C. § 704 and are consequently

not reviewable by the courts. This position is well founded.

The staff letter of August 29, 1973, constituted an informal

advisory opinion of an agency staff, and is not subject to

judicial review. Kixmiller v. S.E.C., 492 F.2d 641 (D.C. Cir.

1974). The Court need not reach the question of whether

or not the Assistant Secretary had the authority to issue

definitive, binding orders subject to challenge in the courts,

because it is clear that his letter of January 4, 1974, like

the staff letter before it, did not even purport to be such

a document. Far from informing plaintiff that its proposed

activities would violate the law, it stated that the proposal

appeared legal on its face, and merely warned that such vio-

lations as did in fact arise would prompt agency action.

Such vague language concerning a hypothetical future expo-

sition lacks the finality, formality and clarity necessary to

render agency determinations ripe for judicial review. Medi-

cal Comm. for Human Rights v. S.E.C., 432 F.2d 659 (D.C.

Cir. 1970), vacated as moot, 404 U.S. 403 (1972); National

Automatic Laundry & Cleaning Council v. Shultz, 443 F.2d

6a

689 (D.C. Cir. 1971). Nor will the Court render an advisory

opinion as to the legality of the proposed exposition apart

from the agency’s actions, for the controversy between these

parties is neither sufficiently concrete nor sufficiently adverse

at this time to warrant judicial resolution. Aetna Life Ins.

Co. v. Haworth, 300 U.S. 227 (1937); Massachusetts v. Mellon,

262 U.S. 447 (1923).

It is therefore

ORDERED that defendant’s motion to dismiss is granted.

/s/ Gerhard A. Gessell

UNITED STATES DISTRICT

July 17, 1974. JUDGE

a lee

7a

APPENDIX D

15 U.S.C. Sections 1 - 3

§ 1. Trusts, etc., in restraint of trade illegal: exception

of resale price agreements; penalty

Every contract, combination in the form of trust or other-

wise, or conspiracy, in restrain of trade or commerce among

the several States, or with foreign nations, is declared to be

illegal: Provided, That nothing contained in sections | to

7 of this title shall render illegal, contracts or agreements

prescribing minimum prices for the resale of a commodity

which bears, or the label or container of which bears, the

trademark, brand, or name of the producer or distributor

of such commodity and which is in free and open competi-

tion with commodities of the same general class produced

or distributed by others, when contracts or agreements of

that description are lawful as applied to intrastate transac-

tions, under any statute, law, or public policy now or here-

after in effect in any State, Territory, or the District of

Columbia in which such resale is to be made, or to which

the commodity is to be transported for such resale, and the

making of such contracts or agreements shall not be an unfair

method of competition under section 45 of this title: Pro-

vided further, That the preceding proviso shall not make

lawful any contract or agreement, providing for the establish-

ment or maintenance of minimum resale prices on any com-

modity herein involved, between manufacturers, or between

producers, or between wholesalers, or between brokers, or

between factors, or between retailers, or between persons,

firms, or corporations in competition with each other.

Every person who shall make any contract or engaged in

any combination or conspiracy declared by sections | to 7

of this title to be illegal shall be deemed guilty of a misde-

meanor, and, on conviction thereof, shall be punished by

8a

fine not exceeding fifty thousand dollars, or by imprison-

ment not exceeding one year, or by both said punishments,

in the discretion of the court.

July 2, 1890, c. 647, § 1, 26 Stat. 209; August 17, 1937,

c. 690, Title VIII, 50 Stat. 693; July 7, 1955, c.281, 69

Stat. 282.

§ 2. Monopolizing trade a misdemeanor; penalty

Every person who shall monopolize, or attempt to mono-

polize, or combine or conspire with any other person or per-

sons, to monopolize any part of the trade or commerce

among the several States, or with foreign nations, shall be

deemed guilty of a misdemeanor, and, on conviction there-

of, shall be punished by fine not exceeding fifty thousand

dollars, or by imprisonment not exceeding one year, or by

both said punishments, in the discretion of the court.

July 2, 1890, c. 647, § 2, 26 Stat. 209; July 7, 1955, c.

281, 69 Stat. 282.

§ 3. Trusts in Territories or District of Columbia illegal;

combination a misdemeanor

Every contract, combination in form of trust or otherwise,

or conspiracy, in restraint of trade or commerce in any Ter-

ritory of the United States or of the District of Columbia,

or in restraint of trade or commerce between any such Ter-

ritory and another, or between any such Territory or Terri-

tories and any State or States or the District of Columbia,

or with foreign nations, or between the District of Colum-

bia and any State or States or foreign nations, is declared

illegal. Every person who shall make any such contract or

engage in any such combination or conspiracy, shall be

deemed guilty of a misdemeanor, and, on conviction there-

of, shall be punished by fine not exceeding fifty thousand

9a

dollars, or by imprisonment not exceeding one year, oF by

both said punishments, in the discretion of the court.

July 2, 1890, c.647, § 3, Stat. 209; July 7, 1955, c.281,

60 Stat. 282.

10a

27 U.S.C. 205

§ 205. Unfair competition and unlawful practices

It shall be unlawful for any person engaged in business

as a distiller, brewer, rectifier, blender, or other producer,

or as an importer or wholesaler, of distilled spirits, wine,

or malt beverages, or as a bottler, or warehouseman and

bottler, or distilled spirits, directly or indirectly or through

an affiliate:

(a) Exclusive outlet. To require, by agreement or other-

wise, that as retailer engaged in the sale of distilled spirits,

wine, or malt beverages, purchase any such products from

such person to the exclusion in whole or in part of dis-

tilled spirits, wine, or malt beverages sold or offered for

sale by other persons in interstate or foreign commerce, if

such requirement is made in the course of interstate or

foreign commerce, or if such person engages in such prac-

tice to such an extent as substantially to restrain or pre-

vent transactions in interstate or foreign commerce in any

such products, or if the direct effect of such requirement

is to prevent, deter, hinder, or restrict other persons from

selling or offering for sale any such products to such re-

tailer in interstate or foreign commerce, or

(b) “Tied house”. To induce through any of the fol-

lowing means, any retailer, engaged in the sale of distilled

spirits, wine, or malt beverages, to purchase any such pro-

ducts from such person to the exclusion in whole or in

part of distilled spirits, wine, or malt beverages sold or

offered for sale by other persons in interstate or foreign

commerce, if such inducement is made in the course of

interstate or foreign commerce, or if such person engages

in the practice of using such means, or any of them, to

such an extent as substantially to restrain or prevent

ila

transactions in interstate or foreign commerce in any such

products, or if the direct effect of such inducement is to

prevent, deter, hinder, or restrict other persons from sell-

ing or offering for sale any such products to such retail-

er in interstate or foreign commerce: (1) By acquiring

or holding (after the expiration of any existing license)

any interest in any license with respect to the premises

of the retailer; or (2) by acquiring any interest in real

or personal property owned, occupied, or used by the

retailer in the conduct of his business; or (3) by fur-

nishing, giving, renting, lending, or selling to the retailer,

any equipment, fixtures, signs, supplies, money services,

or other thing of value, subject to such exceptions as the

Secretary of the Treasury shall by regulation prescribe,

having due regard for public health, the quantity and value

of articles involved, established trade customs not contrary

to the public interest and the purposes of this subsection;

or (4) by paying or crediting the retailer for any advertis-

ing, display, or distribution service; or (5) by guaranteeing

any loan or the repayment of any financial obligation of

the retailer; or (6) by extending to the retailer credit for

a period in excess of the credit period usual and custom-

ary to the industry for the particular class of transactions,

as ascertained by the Secretary of the Trea.ury and pre-

scribed by regulations by him; or (7) by requiring the re-

tailer to take and dispose of a certain quota of any of such

products; or

(c) Commercial bribery. To induce through any of the

following means, any trade buyer engaged in the sale of

distilled spirits, wine, or malt beverages, to purchase any

such products from such person to the exclusion in whole

or in part of distilled spirits, wine, or malt beverages sold

or offered for sale by other persons in interstate or foreign

12a

commerce, if such inducement is made in the course of

interstate or foreign commerce, or if such person engages

in the practice of using such means, or any of them, to

such an extent as substantially to restrain or prevent trans-

actions in interstate or foreign commerce in any such pro-

ducts, or if the direct effect of such inducement is to pre-

vent, deter, hinder, or restrict other persons from selling

or offering for sale any such products to such trade buyer

in interstate or foreign commerce: (1) By commercial

bribery; or (2) by offering or giving any bonus, premium,

or compensation to any officer, or employee, or represen-

tative of the trade buyer; or

(d) Consignment sales. To sell, offer for sale, or con-

tract to sell to any trade buyer engaged in the sale of dis-

tilled spirits, wine, or malt beverages, or for any such trade

buyer to purchase, offer to purchase, or contract to pur-

chase, any such products on consignment or under condi-

tional sale or with the privilege of return or on any basis

otherwise than a bona fide sale, or where any part of such

transaction involves, directly or indirectly, the acquisition

by such person from the trade buyer or his agreement to

acquire from the trade buyer other distilled spirits, wine,

or malt beverages — if such sale, purchase, offer, or con-

tract is made in the course of interstate or foreign com-

merce, or if such person or trade buyer engages in such

practice to such an extent as substantially to restrain or

prevent transactions in interstate or foreign commerce in

any such products, or if the direct effect of such sale, pur-

chase, offer, or contract is to prevent, deter, hinder, or

restrict other persons from selling or offering for sale any

such products to such trade buyer in interstate or foreign

commerce: Provided, That this subsection shall not apply

to transactions involving solely the bona fide return of mer-

13a

chandise for ordinary and usual commercial reasons arising

after the merchandise has been sold; or

(e) Labeling. To sell or ship or deliver for sale or

shipment, or otherwise introduce in interstate or foreign

commerce, or to receive therein, or to remove from cus-

toms custody for consumption, any distilled spirits, wine,

or malt beverages in bottles, unless such products are bot-

tled, packaged, and labeled in conformity with such regu-

lations, to be prescribed by the Secretary of the Treasury,

with respect to packaging, marking, branding, and label-

ing and size and fill of container (1) as will prohibit de-

ception of the consumer with respect to such products or

the quantity thereof and as will prohibit, irrespective of

falsity, such statements relating to age, manufacturing pro-

cesses, analyses, guarantees, and scientific or irrelevant mat-

ters as the Secretary of the Treasury finds to be likely to

mislead the consumer; (2) as will provide the consumer

with adequate information as to the identity and quality

of the products, the alcoholic content thereof (except that

statements of, or statements likely to be considered as

statements of, alcoholic content of malt beverages are pro-

hibited unless required by State law and except that, in

the case of wines, statements of alcoholic content shall be

required only for wines containing more than 14 per cen-

tum of alcohol by volume), the net contents of the pack-

age, and the manufacturer or bottler or importer of the

product; (3) as will require an accurate statemen’ in the

case of distilled spirits (other than cordials, liqueurs, and

specialties) produced by blending or rectification, if neu-

tral spirits have been used in the production thereof, in-

forming the consumer of the percentage of neutral spirits

so used and of the name of the commodity from which

such neutral spirits have been distilled, or in case of neu-

tral spirits or of gin produced by a process of continuous

l4a

distillation, the name of the commodity from which dis-

tilled: (4) as will prohibit statements on the label that

are disparaging of a competitor’s products or are false,

misleading, obscene, or indecent; and (5) as will prevent

deception of the consumer by use of a trade or brand

name that is the name of any living individual of public

prominence, or existing private or public organization, or

is a name that is in simulation or is an abbreviation there-

of, and as will prevent the use of a graphic, pictorial, or

emblematic representation of any such individual or organi-

zation, if the use of such name or representation is likely

falsely to lead the consumer to believe that the product

has been indorsed, made, or used by, or produced for, or

under the supervision of, or in accordance with the speci-

fications of, such individual or organization: Provided,

That this clause shall not apply to the use of the name

of any person engaged in business as a distiller, brewer,

rectifier, blender, or other producer, or as an importer,

wholesaler, retailer, bottler, or warehouseman, of distilled

spirits, wine, or malt beverages, nor to the use by any per-

son of a trade or brand name used by him or his predeces-

sor in interest prior to August 19, 1935; including regula-

tions requiring, at time of release from customs custody,

certificates issued by foreign governments covering origin,

age, and identity of imported products: Provided further,

That nothing herein nor any decision, ruling, or regulation

of any Department of the Government shall deny the right

of any person to use any trade name oF brand of foreign

origin not presently effectively registered in the United

States Patent Office which has been used by such person

or predecessors in the United States for a period of at

least five years last past, if the use of such name or brand

is qualified by the name of the locality in the United States

in which the product is produced, and, in the case of the

-

15a

use of such name or brand on any label or in any adver-

tisement, if such qualification is as conspicuous as such

name or brand.

It shall be unlawful for any person to alter, mutilate,

destroy, obliterate, or remove any mark, brand, or label

upon distilled spirits, wine, or malt beverages held for sale

in interstate or foreign commerce or after shipment there-

in, except as authorized by Federal law or except pursuant

to regulations of the Secretary of the Treasury authorizing

relabeling for purposes of compliance with the requirements

of this subsection or of State law.

In order to prevent the sale or shipment or other intro-

duction of distilled spirits, wine, or malt beverages in inter-

state or foreign commerce, if bottled, packaged, or labeled

in violation of the requirements of this subsection, (1) no

bottler of distilled spirits, no producer, blender, or whole-

saler of wine, or proprietor of a bonded wine storeroom,

and no brewer or wholesaler of malt beverages shall bottle,

and (2) no person shall remove from customs custody, in

bottles, for sale or any other commercial purpose, distilled

spirits, wine, or malt beverages, respectively, after such date

as the Secretary of the Treasury fixes as the earliest prac-

ticable date for the application of the provisions of this

subsection to any class of such persons (but not later than

August 15, 1936, in the case of distilled spirits, and De-

cember 15, 1936, in the case of wine and malt beverages,

and only after thirty days’ public notice), unless, upon ap-

plication to the Secretary of the Treasury, he has obtained

and has in his possession a certificate of label approval cov-

ering the distilled spirits, wine, or malt beverages, issued by

the Secretary in such manner and form as he shall by regu-

lations prescribe: Provided, That any such bottler of dis

tilled spirits, or producer, blender, or wholesaler of wine,

16a

or proprietor of a bonded wine storeroom, or brewer or

wholesaler of malt beverages shall be exempt from the re-

quirements of this subsection if, upon application to the

Secretary, he shows to the satisfaction of the Secretary

that the distilled spirits, wine, or malt beverages to be bot-

tled by the applicant, are not to be sold, or offered for

sale, or shipped or delivered for shipment, or otherwise

introduced, in interstate or foreign commerce. Officers

of internal revenue are authorized and directed to with-

hold the release of distilled spirits from the bottling plant

unless such certificates have been obtained, or unless the

application of the bottler for exemption has been granted

by the Secretary; and customs officers are authorized and

directed to withhold the release from customs custody of

distilled spirits, wine, and malt beverages, unless such certi-

ficates have been obtained. ‘The District Courts of the

United States, and the United States court for any Terri-

tory shall have jurisdiction of suits to enjoin, annul, or

suspend in whole or in part any final action by the Secre-

tary upon any application under this subsection; or

(f) Advertising. To publish or disseminate or cause to

be published or disseminated by radio broadcast, or in any

newspaper, periodical or other publication or by any sign

or outdoor advertisement or any other printed or graphic

matter, any advertisement of distilled spirits, wine, or malt

beverages, if such advertisement is in, or is calculated to

induce sales in, interstate or foreign commerce, OF is dis-

seminated by mail, unless such advertisement is in conform-

ity with such regulations, to be prescribed by the Secretary

of the Treasury, (1) as will prevent deception of the con-

sumer with respect to the products advertised and as will

prohibit, irrespective of falsity, such statements relating to

age, manufacturing processes, analyses, guaranties, and scien-

tific or irrelevant matters as the Secretary of the Treasury

17a

finds to be likely to mislead the consumer; (2) as will

provide the consumer with adequate information as to the

identity and quality of the products advertised, the alco-

holic content thereof (except the statements of, or state-

ments likely to be considered as statements of, alcoholic

content of malt beverages and wines are prohibited), and

the person responsible for the advertisement; (3) as will

require an accurate statement, in the case of distilled spir-

its (other than cordials, liqueurs, and specialties) produced

by lending or rectification, if neutral spirits have been used

in the production thereof, informing the consumer of the

percentage of neutral spirits so used and of the name of

the commodity from which such neutral spirits have been

distilled, or in case of neutral spirits or of gin produced

by a process of continuous distillation, the name of the

commodity from which distilled; (4) as will prohibit state-

ments that are disparaging of a competitor’s products or

are false, misleading, obscene, or indecent; (5) as will pre-

vent statements inconsistent with any statement on the la

beling of the products advertised. This subsection shall

not apply to outdoor advertising in place on June 18, 1935,

but shall apply upon replacement, restoration, or renova-

tion of any such advertising. The prohibitions of this sub-

section and regulations thereunder shall not apply to the

publisher of any newspaper, periodical, or other publica-

tion, or radio broadcaster, unless such publisher or radio

broadcaster is engaged in business as a distiller, brewer, rec-

tifier, or other producer, or as an importer or wholesaler,

of distilled spirits, wine, or malt beverages, or as a bottler,

or warehouseman and bottler, of distilled spirits, directly

or indirectly or through an affiliate.

The provisions of subsections (a), (b), and (c) of this

section shall not apply to any act done by an agency of

a State or political subdivision thereof, or by any officer

or employee of such agency.

18a

In the case of malt beverages, the provisions of subsec-

tions (a), (b), (c), and (d) of this section shall apply to

transactions between a retailer or trade buyer in any State

and a brewer, importer, or wholesaler of malt beverages

outside such State only to the extent that the law of such

State imposes similar requirements with respect to similar

transactions between a retailer or trade buyer in such State

and a brewer, importer, or wholesaler of malt beverages in

such State, as the case may be. In the case of malt bever-

ages, the provisions of this subsection and subsection (3) of

this section shall apply to the labeling of malt beverages so

sold or shipped or delivered for shipment or otherwise in-

troduced into or received in any State from any place out-

side thereof, or the advertising of malt beverages intended

to be sold or shipped or delivered for shipment or other-

wise introduced into or received in any State from any

place outside thereof, only to the extent that the law of

such State imposes similar requirements with respect to the

labeling or advertising, as the case may be, of malt bever-

ages not sold or shipped or delivered for shipment or other-

wise introduced into or received in such State from any

place outside thereof.

The Secretary of the Treasury shall give reasonable public

notice, and afford to interested parties opportunity for hear-

ing, prior to prescribing regulations to carry out the provi-

sions of this section. (Aug. 29, 1935, c. 814, § 5, 49 Stat.

981: Feb. 29, 1936, c. 105, § 2, 49 Stat. 1152; June 25,

1936, c. 804, 49 Stat. 1921; June 26, 1936, c. 830, Title

V, % 505, 506, 49 Stat. 1965, 1966; Reorg. Plan No. Ill,

§ 2, eff. June 30, 1940, 5 Fed.Reg. 2108, 54 Stat. 1232;

Apr. 20, 1942, c. 244, § I(h), 56 Stat. 219.)