Opposition Brief — Florida Department of Business & Professional Regulation v. Rochambeau Wines & Liquors, Inc.

j Supreme Court, U.S. |

P FILED

J MAR 5 1998

No. 97-1263 OFFICE OF THE CLERK

IN THE

SUPREME COURT OF THE UNITED STATES

OCTOBER TERM, 1997

STATE OF FLORIDA, DEPARTMENT OF BUSINESS

AND PROFESSIONAL REGULATION, et ai.,

Petitioners,

ROCHAMBEAU WINES AND LIQUORS, et ai.,

Respondents.

ON PETITION FOR WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT

BRIEF OF RESPONDENTS

CALIFORNIA WINE CLUB, PASSPORT WINE CLUB,

AND WINE CLUB SANTA ANA

IN OPPOSITION

Roy C. Younc ROBERT T. WRIGHT, JR.

YOUNG, var ASSENDERP JONATHAN COHEN *

& VARNADOE, P.A. JEFFREY M. LANDAU

225 South Adams Street SHUTTS & BOWEN LLP

P.O. Box 1333 201 S. Biscayne Blvd.

Tallahassee, Florida 32302 Miami, Florida 33131

(904) 222-7206 (305) 358-6300

*Counsel of Record

Attorneys for Respondents

Calfornia Wine Club, Passport Wine Club,

and Wine Club Santa Ana.

[ADDITIONAL COUNSEL LISTED INSIDE FRONT COVet*;

Wesrington,0.C + THIEL PRESSE «+ (202) 328.3206

Of Counsel:

Joun A. HINMAN

HINMAN AND CARMICHAEL

244 California Street

San Francisco, California 94111

(415) 362-1215

i

QUESTION PRESENTED

Whether there is an implied federal cause of action

under the Webb-Kenyon Act, 27 U.S.C. § 122?

il

PARTIES TO THE PROCEEDING

The petition accurately lists the parties to the

proceeding.

a

ill

TABLE OF CONTENTS

Question Presented ........................... i

Parties to the Proceeding ...................... 1

Table of Contents ........................... iil

Table of Authorities ......................... iv

Counterstatement of the tee eee l

Reasons for Denying the Writ .................. 3

PREC Re en et OO Ae at ode 8

iv

TABLE OF AUTHORITIES

Cases

All Brand Importers, Inc. v. Department of

Liquor Control,

213 Conn. 184, 567 A.2d 1156 (Conn. 1989) ......

Anheuser-Busch, Inc. v. Dept. of Business Regulation,

Division of Alcoholic Beverages and Tobacco,

393 So.2d 1177 (Fla. Ist DCA 1981) ............

Belk-James, Inc. v. Nuzum,

358 So.2d 174 (Fla. 1978) ...............00008.

Cort v. Ash, 422 U.S. 66 (1975) .........020008-

Department of Revenue of the State of Florida v.

Share International, Inc.,

676 So.2d 1362 (Fla. 1996), cert. denied,

117 S.Ct. 685 (1997)

Division of Alcoholic Beverages and Tobacco, Dept.

of Business Regulation v. McKesson Corp., et al.,

524 So.2d 1000 (Fla. 1988), rev'd on other grounds,

SIG US. WE CIGIG) wn nc ccc cen cscsensecseses

Faircloth v. Mr. Boston Distiller Corp., et al.,

245 So.2d 240 (Fla. 1970)

Georgia v. Wenger,

94 F. Supp. 976 (E.D. Ill. 1950), affd.,

187 F.2d 285 (7th Cir. 1951), cert. denied,

pe eS re are 2,4

GMAC v. State, 11 So.2d 482 (Fla. 1943) ......... 6

Guiseppe Pizzeria v. Department of Business

Regulation, Division of Alcoholic Beverages

and Tobacco, 472 So.2d 1331 (Fla. 3d DCA 1985) .. 6

Ivey v. Bacardi Imports, Inc.,

oat GO.ae 1129 (Pim, I989) . ww ei cece 5,7

James B. Beam Distilling Co. v. Dept. of

Business Regulation, Division of Alcoholic

Beverages and Tobacco,

530 So.2d 450 (Fla. lst DCA 1988) ............. 6

James B. Beam Distilling Co. v. State,

259 Ga. 363, 382 S.E.2d 95 (Ga. 1989), reversed,

501 U.S. 529 (1991), appeal after remand,

437 S.E. 2d 782 (1993), cert. denied,

Rg a ee ee 5

Layne & Bowler Corp. v. Western Well Works, Inc.,

SE ST os oe kv he es 4

Miller Brewing Co. v. Florida Dept. of Business

Regulation, Division of Alcoholic Beverages

and Tobacco, et al.,

527 So.2d 450 (Fla. Ist DCA 1988) ............. 6

vi

Oregon Liquor Control Comm'n v. Coe,

163 Or. 646, 99 P.2d 29 (Or. 1940) .............. 6

Query v. 206 Cases of Assorted Liquor,

49 F. Supp. 693 (W.D. S.C. 1943) ............... 4

Schieffelin & Co. v. Dept. of Liquor Control,

194 Conn. 165 A.2d 1191 (Conn. 1984) .......... 6

Somerset Importers, Ltd. v. Dept. of Business

Regulation, Division of Alcoholic Beverages

and Tobacco, et al.,

428 So.2d 679 (Fla. Ist DCA 1983) ............. 6

West Virginia v. Adams Express Co.,

ri 2 ie, 20 Lee. Le ae 4

Williams v. Commonwealth,

190 Va. 280, 56 S.E.2d 537 (Va. 1950) ........... 6

Statutes

27 USA. § TA CW AR) wow ce ccesees 2

27 U.S.C. § 122 (Webb-Kenyon Act) ............ l

Me ts OE Ao 6 oo ee ]

Oo 56k se eee ea ea en ee 1

oe 6 ee err ree l

ok 68 er eer re ree ]

Se SS Dns Sib eden hdawscenceews l

y Chapter 561, Fla. Stat. (Beverage Law:

| ee re er eee err 6

Chapter 562, Fla. Stat. (Beverage Law:

No L Ware tdU iks, ain oa wwe wena es 6

Chapter 563, Fla. Stat. (Beer) .................. 7

Chapter 564, Fla. Stat. (Wine).................. 7

Chapter 565, Fla. Stat. (Liquor) ................. 7

Chapter 567, Fla. Stat. (Local Option Elections) .... 7

Chapter 568, Fla. Stat. (Intoxicating Liquors

in Counties Where Prohibited) ................. 7

2

1

COUNTERSTATEMENT OF THE CASE

Respondents are "wine clubs" located in California

who are engaged in the retail sale of wine products and

allegedly failed to comply with the State of Florida’s

"three-tier" alcoholic beverage law and taxation scheme.

Contrary to the statements made by Petitioners,

Respondents are not "illegal bootleggers" and no court has

ever held that their actions violate Florida law.

Florida's "three-tier" scheme provides that alcoholic

beverages imported into Florida may be shipped only to an

in-state licensed manufacturer or distributor. Fla. Stat. §

561.54. Florida further provides that only licensed

vendors physically located in Florida are allowed to sell

alcoholic beverages at retail, Fla. Stat. § 561.14, or make

deliveries away from their place of business, Fla. Stat. §

561.57.

After establishing a "sting" operation, through

which Petitioners allegedly obtained wine shipped by

Respondents to state agents in Florida, Petitioners brought

the instant action in the United States District Court for

the Northern District of Florida. Petitioners filed a five

count complaint, exclusively alleging violations of Florida

law and seeking both monetary damages and injunctive

relief.

Petitioners asserted that subject matter jurisdiction

was conferred on the basis of 28 U.S.C. §§ 1331 and

1337(a), based on their allegation that the action arose

under "Art. 1, Sec. 8, Cl. 3, United States Constitution

' As noted by the Court of Appeals, four of the five counts sought

monetary damages.

2

("Commerce Clause"); Amend. 21, Sec. 2, United States

Constitution, and 27 U.S.C. §§ 121 (the Wilson Act) and

122 (the Webb-Kenyon Act).” Petitioners alleged that

their state law claims were before the court based on

principles of supplemental jurisdiction. Although

Petitioners do not disclose this in their petition to the

Court, they have since abandoned their reliance on the

Twenty-First Amendment and the Wilson Act as a basis

for jurisdiction. See Petitioners’ Appendix, at v.

On May 3, 1996, the district court dismissed the

action for lack of subject matter jurisdiction, holding that

neither the Wilson nor Webb-Kenyon Acts, nor the

Twenty-First Amendment create a federal cause of action

on behalf of Petitioners, but rather, serve as enabling

authorities for the States to regulate the flow of alcohol

within their borders. As Petitioners had alleged no federal

claims in their complaint, the district court therefore

dismissed the action.

Petitioners timely appealed to the United States

Court of Appeals for the Eleventh Circuit. On October 24,

1997, the Court of Appeals affirmed the decision of the

district court. Petitioners’ Appendix, at i.

In its opinion, the Court of Appeals examined

longstanding precedent of the Seventh Circuit, the only

relevant precedent, which held that there was no implied

cause of action under the Webb-Kenyon Act. Georgia v.

Wenger, 94 F. Supp. 976 (E.D. Ill. 1950), aff’d., 187 F.

2d 285 (7th Cir.), cert. denied, 342 U.S. 822 (1951). The

Court of Appeals found Georgia v. Wenger directly "on

point." Surprisingly, Petitioners do not cite or discuss

Georgia v. Wenger in their petition.

In addition to examining Georgia v. Wenger, the

Court of Appeals applied this Court’s precedent,

3

established in Cort v. Ash, 422 U.S. 66 (1975) and its

progeny, in order to determine whether there is an implied

cause of action under the Webb-Kenyon Act. Petitioners

do not cite or discuss Cort v. Ash and its progeny either.

The Court of Appeals examined and applied all

four factors of the. Cort v. Ash test, including the

legislative history of the relevant statutes and

constitutional amendments, before concluding that

Petitioners had no implied federal cause of action under

the Webb-Kenyon Act. Accordingly, the Court of

Appeals affirmed the decision of the district court.

REASONS FOR DENYING THE WRIT

Other than a futile attempt to identify a non-existent

conflict, Petitioners have advanced none of the compelling

reasons established by this Court for the granting of

review upon certiorari.

Petitioners make no attempt to argue that the Court

of Appeals did not apply the correct precedent established

by this Court in determining whether or not an implied

federal cause of action exists under the Webb-Kenyon

Act. Petitioners merely state that they "believe that the

Court of Appeals did not understand the import of the

situation and read too narrowly this Court's private right of

action case law....". Petitioners’ Brief at 9. Reading a

properly stated rule of law "too narrowly” is not a basis for

granting certiorari.

Moreover, the Court of Appeals conducted a

detailed examination of this Court's precedent and

4

addressed each of the arguments raised by Petitioners

below. Certiorari is not a vehicle for rehearing.”

Surprisingly, Petitioners argue that a conflict exists

between the circuit courts based upon a eighty-three year-

old decision, West Virginia v. Adams Express Co., 219 F.

794 (4th Cir. 1915), that never discusses the issue, much

less does it hold, that an implied federal cause of action

exists under the Webb-Kenyon Act. Adams Express Co.

has never been cited by any court for this proposition in

the past eighty-three years. Adams Express Co. is clearly

not the "real and embarrassing conflict of opinion and

authority between the Circuit Courts of Appeals" required

to grant certiorari. Layne & Bowler Corporation v.

Western Well Works, Inc., 261 U.S. 387, 393 (1923). In

fact, there is no conflict whatsoever.

The Seventh Circuit, in Georgia v. Wenger, directly

and unambiguously held that a state has no implied federal

cause of action under the Webb-Kenyon Act. The Seventh

Circuit affirmed the district court which held the same.

The only district court ever to address this issue prior to

the instant case also has held the same. Query v. 206

Cases of Assorted Liquor, 49 F. Supp. 693 (W.D. S.C.

1943). No court has ever held the contrary.

For forty-six years Georgia v. Wenger was the only

appellate precedent. It apparently produced no drastic

results as it went unchallenged until now. The Eleventh

Circuit has now joined the Seventh Circuit based on this

? Point B of the petition, discussing the power of the States to regulate

liquor, was not an issue before the Court of Appeals, and thus is

irrelevant to the question presented by this petition. See Petitioners’

Brief at 10-19.

é

|

|

3

|

5

Court’s modern precedent, producing two appellate

opinions with identical results, despite being forty-six

years apart. One cannot imagine a more unattractive case

for granting certiorari.

Petitioners’ remaining reason for granting certiorari,

that "the states’ ability to regulate the interstate shipment

of alcoholic beverages has been greatly undermined by the

decisions below," has no basis in fact or law. As the

Court of Appeals noted, "[t]he State offers no clear reason

why it needs a federal forum," finding that "states have

been enforcing their liquor laws against out-of-state

distributors in state courts for years."(citations omitted).

Petitioners' Appendix, at xix. See also Ivey v. Bacardi

Imports, Inc., 541 So.2d 1129 (Fla. 1989); James B.

Beam Distilling Co. v. State, 259 Ga. 363, 382 S.E. 2d 95

(Ga. 1989), reversed, 501 U.S. 529 (1991), appeal after

remand, 437 S.E. 2d 782 (1993), cert. denied, 513 U.S.

1056 (1994); All Brand Importers, Inc. v. Department of

Liquor Control, 213 Conn. 184, 567 A.2d 1156 (Conn.

* Respondents object to Petitioners' characterization of the state court

proceeding cited at note | of the Petition. Petition, at 7 n.1. Petitioners

incorrectly state that the state court ruled that it did not have "personal

jurisdiction’ over the Respondents." Petition at 9. Respondents are not

parties to the state court proceeding. Furthermore, the trial court order

in that proceeding demonstrates that it is a straightforward personal

jurisdiction case, wholly unrelated to the question presented here.

Petitioners' Appendix, at xxxii. In that state court proceeding

Petitioners sought to "sting" businesses who, unlike some of their

purported customers, simply do not have "minimum contacts" with the

State of Florida. It is hard to believe that Petitioners are contending

that they are incapable of bringing a proper case in the state courts of

Florida in conformity with the 14th Amendment to the United States

Constitution.

6

1989); Division of Alcoholic Beverages and Tobacco,

Department of Business Regulation v. McKesson Corp., et

al., 524 So.2d 1000 (Fla. 1988), rev'd on other grounds,

496 U.S. 18 (1990); Schieffelin & Co. v. Department of

Liquor Control, 194 Conn. 165, 479 A.2d 1911 (Conn. :

1984); Williams v. Commonwealth, 190 Va. 280, 56 S.E.

2d 537 (Va. 1949); Oregon Liquor Control Comm'n v.

Coe, 163 Or. 646, 99 P.2d 29 (Or. 1940); GMAC v. State,

11 So.2d 482 (Fla. 1943); James B. Beam Distilling Co. v.

Department of Business Regulation, Division of Alcoholic

Beverages and Tobacco, 530 So. 2d 450 (Fla. Ist DCA

1988); Miller Brewing Co. v. Florida Department of

Business Regulation, Division of Alcoholic Beverages and

Tobacco, et al., 527 So.2d 891 (Fla. Ist DCA 1988);

Somerset Importers, Ltd. v. Department of Business

Regulation, Division of Alcoholic Beverages & Tobacco,

428 So.2d 679 (Fla. Ist DCA 1983); Anheuser-Busch, Inc.

v. Department of Business Regulation, Division of

Alcoholic Beverages and Tobacco, 393 §9.2d 1177 (Fla.

Ist DCA 1981); see also Belk-James, Inc. v. Nuzum, 358

So.2d 174, 176 n.5 (Fla. 1978); Faircloth v. Mr. Boston

Distiller Corp., et al., 245 So.2d 240 (Fla. 1970);

Guiseppe Pizzeria v. Department of Business Regulation,

Division of Alcoholic Beverages and Tobacco, 472 So.2d

1331 (Fla. 3d DCA 1985).

One is indeed puzzled by the purported interest of

Petitioners in seeking to have the federal courts become

the interpreters of the liquor laws of the fifty states, a field

traditionally left to the States. There simply is no reason

for the Federal courts to assume the burden of overseeing

the vast arena of state regulation of alcoholic beverages.

See, e.g., Chapter 561, Fla. Stat. (Beverage Law:

Administration); Chapter 562, Fla. Stat. (Beverage Law:

|

SN

7

Enforcement); Chapter 563, Fla. Stat. (Beer); Chapter 564,

Fla. Stat. (Wine); Chapter 565, Fla. Stat. (Liquor); Chapter

567, Fla. Stat. (Local Option Elections); Chapter 568, Fla.

Stat. (Intoxicating Liquors in Counties Where Prohibited).

As the Court of Appeals noted, and as the cases cited

above demonstrate, there is no indication that the States

have been unable to pursue their remedies in state courts.

Perhaps Petitioners’ real concern here is simple forum

shopping, since Florida state courts have twice held

Florida's Beverage Laws to be unconstitutional and hdve

recently held unconstitutional Florida's attempt to tax

goods shipped by mail order. See Department of Revenue

of the State of Florida v. Share International, Inc., 676

So.2d 1362 (Fla. 1996), cert. denied, 117 S.Ct. 685

(1997); Ivey v. Bacardi Imports Co., 541 So.2d 1129,

1140 (Fla. 1989); McKesson Corp., supra, 524 So.2d

1000 (Fla. 1989), rev'd on other grounds, 496 U.S. 18

(1990). Such a concern, however, is not a reason for

granting certiorari in this case.

8

CONCLUSION

For the foregoing reasons, Respondents respectfully

request that the petition for writ of certiorari be denied.

Respectfully submitted,

ROBERT T. WRIGHT, JR.

JONATHAN COHEN

JEFFREY M. LANDAU

SHUTTS & BOWEN LLP

201 S. Biscayne Blvd.

1500 Miami Center

Miami, Florida 33131

(305) 358-6300

and

ROY C. YOUNG

YOUNG, van ASSENDERP &

VARNADOE, P.A.

225 South Adams Street

P.O. Box 1833

Tallahassee, Florida 32302

(904) 222-7206

Attorneys for Respondents

California Wine Club,

Passport Wine Club, and

Wine Club Santa Ana

Of Counsel:

JOHN A. HINMAN

HINMAN AND CARMICHAEL

244 California Street

San Francisco, California 94111

(415) 362-1215