Amicus Curiae Brief — Mahoney v. Joseph Triner Corp.

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om, é “> y

OPRY _ APR 22 1939

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SUPREME COURT OF THE wITED STATES,

OCTOBER TERM, 1937.

No. 761,

WILLIAM MAHONEY, as Liquor Control Commissioner of the

State of Minnezota, et al., |

Appellants,

V.

JOSEPH TRINER CORPORATION,

: Appellee.

BRIEF OF THE STATE OF INDIANA AS

AMICUS CURIAE.

OMER S, JACKSON,

Attorney-General of Indiana,

, A. J. STEVENSON,

First Assistant Attarney-General

of Indiana,

Counsel for Amicus Curiae,

Sr. Lovis Law Parintine Co., 415 North Eighth Street. CE ntral 4477,

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SUBJECT INDEX.

Page.

1. The interest of the amicus curiae, the State of Indi-

OED bcc cacaneuhensacecdareiess Lean ereeunes ‘1

- 2. The purpose of the brief of amicus curiae (II)..... 3

3. Cases under the Michigan and Missouri Acts (III).. 4

4.The statutes of Michigan and Missouri (IV). ge 4

5. The bearing of case upon retaliatory type of stat-

UE ED ic ckk sc ukacnn Sanat cakes POT te Les tc

' 6. The retaliatory type of statute as threatening the

integrity of the Twenty-first Amendment (VI).... 8

7.¢he construction of the Twenty-first Amendment

EEE 66S ba 6 OAD ESD OD ROT EA GAR OLN eRe hae 11

OE EC TEE TT OP Ee FORCE re 18

Exhibit A. Pertinent por .vns of Missouri statute

(Section 1, subsection 7 and subsection 8; Section 4,

_+ Laws of Missouri 1937, p. 536)........5....00.000. 21

Table of Cases. ; :

Bain Peanut Co. v. Pinson, 282 U. S. 499, 501........ 12

Board of Equalization v. Young’s Market Co., 299

ok 2 2 err rere Borer ut A 11, 16

Clark Distilling Co. v. Western Maryland Railway Co.,

ee We eR ORs oo awd ba nk Fh seens kwkeseaRa< 8

Coyle v. Smith, 221 U. S. 559, 567, 580............... 15 -

Kisner v. Macomber, 252 U. S. 189, 205, 206.......... be

li

Hivans v. Gore, 254 0: &. 245, B50... cece ccna cee 13

Fiske v. State of Missouri, 62 Fed. (2d) 150, 154..... 14

Gompers v. United States, 233 U. S. 604, 609......... 12

In Re Opinion of Justices (Mass.), 197 N. E. 99...... ‘14

Indianapolis Brewing Co., Inc., v. Liquor Control Com-

mission of State of Michigan, 21 Fed. Supp. 969... 4,9

Joseph Finch & Co. v. Roy McKittrick (Equity No.

668, Western District Missouri, not officially re-

MUNIN «dy cn ccx su pera vns ce ee eee 4

Leisy v. Harden, 135 U. S. 100, 109......... Tae a ope ree

Marbury v. Madison, 1 Cranch. 137..............5.... ‘18

United States v. Lefkowitz, 285 U. S. 452, 467.-...... 12

Table of Statutes.

Michigan, Section 40 of Act No. 8, Public Acts, Extra

Session 1933 as amended by Act No. 281, Public

Acts of Michigan, Regular Session: 1937......... :4,5,9

Missouri, Section 4, Laws of Missouri 1937, p. 536... .5, 24

j

ds MYO IS tee

SUPREME COURT OF THE UNITED STATES.

OCTOBER TERM, 1937.

No. 761.

WILLIAM MAHONEY, as Viewie Control Commissioner of the |

State of Minnesota, et al.,

| Appellants,

Ve

JOSEPH TRINER CORPORATION, :

| Appellee.

_ BRIEF OF THE STATE OF INDIANA AS

AMICUS CURIAE.

Omer S. Jackson, Attorney-General of Indiana, for and

on behalf of the State of Indiana, as amicus curiae herein,

submits to the Court the following considerations relative

to the.constitutional questions involved in this case:

|

The Interest of the State of Indiana in the Legal Doctrines

Which May Be Enunciated by the Court in

Deciding the Pending Cause. ~

The instant case involves the validity of Chapter 390 of

the Laws of Minnesota, which provides: :

‘“No licensed manufacturer or wholesaler shall im-

port any brand or brands of intoxicating liquors con-

—2—

taining more than 25 per cent: of alcohol by volume

ready for sale without further processing unless such

brand or brands sHall be duly registered in the Patent

Office of the United States.’’

The statutory three-judge court from whose decision

this appeal has been taken by the State Liquor Control

Commissioner of the, State of Minnesota held that such

statute has no reasonable relation to the regulation or

control of the liquor traffic within the State of Minnesota;

‘that the Twenty-first Amendment to the United States

Constitution has not freed the states from all restrictions

upon their police power which are to be found in such

Constitution; that such statute violates the equal protec-

tion clause, and that it is therefore invalid. |

While the State of Indiana does not have any enactment

similar to the Minnesota statute here involved, neverthe- .

less, since the validity of such statute hinges upon ‘the

interpretation to be given to the second section of the

Twenty-first Amendment, the State of Indiana is gravely

concerned therein because of certain retaliatory liquor

legislation which has been passed by the States of Michi-

gan and Missouri directly affecting exports of beer manu-

factured in Indiana into such states. By way of explana-

tion, the State of Indiana in 1935 enacted a law requiring

licensed wholesalers of Indiana desiring to also engage

in the importation of beer into such state from other states

to obtain a ‘‘port of entry’’ license from the State of In-

diana at a cost of $1,500.00 per year, and limiting the-

number of such port of entry licenses to one hundred. The

States of Michigan and Missouri, feeling that laws of this

character might have a harmful effect: on the export busi-

ness which their respective manufacturers of beer might

otherwise be able to establish in the State of Indiana and

—3—

certain other states having laws of similar character,

enacted certain retaliatory statutes to prohibit the dis-

tribution, possession or sale of any beer manufactured in

the State of Indiana or in such other states having similar

statutory provisions. A more détailed statement of the

provisions of the Michigan and Missouri statutes will be

found in paragraph IV and Exhibit A of this brief. The

validity of both of these statutes is involved in pending

litigation which will shortly come before this tribunal.

While the State of Indiana fully realizes that the valid-

ity of the Michigan and Missouri statutes is not, and can-

not, be involved in this appeal, nevertheless it confidently

believes that this Court may welcome its views as amicus

curiae in the instant case, in order that the Court may be

thereby assisted in understanding more clearly and from

all angles the situation as a whole, as well as the perplex-

ing questions which are confronting not only the State of

Indiana, but its various sister states in their control of

the liquor traffic and their relations with each other.

Consequently, while the factual situation under the Min-

nesota statute and that obtaining under the Michigan and

Missouri statutes have little, if anything, in common, a

determination of the*extent to which the provisions of the

Twenty-first Amendment free a state from the operation

-of the Commerce Clause and the Fourteenth Amendment

_ is pertinent in considering the validity of both types of

_ legislation. | |

TI.

The Purpose of the Brief of Amicus Curiae.

The enactment of these statutes in the States of Mich-

igan and Missouri, if proper under the Twenty-First

Amendment, has created a serious question of policy for

the State of Indiana. It must either see its breweries lose

ear etegee®

cae

large markets for their products within such states, or it

must surrender its sovereign power as a state and suffer

itself to be coerced into repealing certain purely police

regulations which have heretofore been found successful

in minimizing certain evils of the liquor traffic within its

borders. Therefore, the State of Indiana desires to ascer-

tain, before the time arrives for it to make alterations in

its laws at the regular session of the néxt General As-

sembly, which convenes early in January; 1939, whether

such retaliatory type of laws is constitutional under the

Commerce Clause and the Fourteenth Amendment con- —

sideted in connection with the second ° section of the

Twenty-first Amendment. These precise questions, your

amicus curiae is advised, will be presented in the near

future to this Court in cases arising under both the Mich-’

igan and Missouri statutes.

ITT.

Cases Which Have Arisen Under the Michigan

and Missouri Acts.

Indianapolis Brewing Co., Inc., Plaintiff, v. The Liquor

Control Commission of the State of Michigan et al., in

equity, No. 8259, U. S. District Court, Eastern District of

Michigan, Southern Division (three judges), 21 Fed. Supp.

969 (current advance sheets March 21).

Joseph Finch & Co. v. Roy McKittrick et al., In Equity,

No. 668 (not reported).

IV.

Statutory Provisions of Michigan am Missouri

Which Are Involved.

Section 40 of Act No. 8 of the Public Acts of the State

_ of Michigan, Extra Session 1933, as amended by Act No.

281 of the Public Acts of Michigan, regular session 1937.

a ae, oe

Section 4, Laws of Missouri 1937, p. 536. °

_ For the convenience of the Court the pertinent provi-,

sions of the Missouri law are set out in Appendix A.

The pertinent provisions of the Michigan Act being

fewer in. number, although of the same general nature as

the Missouri Act, are now substantially set out.

Amended Section 40 of the Michigan Act cited above

provides:

‘The. commission shall forthwith adopt a regula-

tion designating the states, the laws, or the rules or

regulations of which are found to require a licensed

wholesaler of beer therein to pay an additional fee

for the right to purchase, import, or sell beer manu-

‘factured in this state; or which deny the issuance of

a license authorizing the importation of beer to any

duly licensed wholesaler of beer therein: who may

make application for such license; or which prohibit

licensed wholesalers of beer therein from possessing

or selling beer purchased in this state, unless the one

from whom purchased has secured a license and paid

a fee therein, when such seller neither transports the

beer into said state nor sells the same therein; or

which impose any higher taxes or inspection fees

upon beer manufactured in this state when transport-

ing into or sold therein, than is imposed upon beer

manufactured and sold within said state, the regula-

tion adopted shall prohibit all licensees from purchas-

ing, receiving, possessing, or selling any beer manu-

factured in any state therein designated, said regula-

tion to become effective ninety days after its adoption.

. Any licensee or person adversely affected shall - be

entitled to review by certiorari to the proper court

the question as to whether the commission has acted

illegally or in excess of authority in making its finding

with respect to any state.’’

_—6—

The foregoing provisions of amended section 40 disclose

that Michigan has prescribed four so-called grounds for

exclusion, and that the importation, possession and sale

within. Michigan, of beer produced in any sister state, de-

pends entirely upon whether any of the laws or regula-

tions of the latter state fall within one or more of such

four classifications, regardless of whether the offending

provisions are found necessary by such state for the proper

control of the traffic within its borders.

On December 14, 1937, the Liquor Control Commission of

Michigan adopted a regulation designating the State of

Indiana as having in full foree and effect a statute con-

taining some or all of the obnoxious provisions. _Subse-

quently the Liquor Control Commission of that state de-

ferred the effective date of the regulation until the early

part of the year 1939. It is the validity of tHis regulation

and of amended section 40 that is involved in the case of

Indianapolis Brewing Co., Inc., plaintiff, v. The Liquor

Control Commission of the State of Michigan et al., re-

ferred to in paragraph’ III of this brief.

V.

‘The Bearing of the Present Case Upon the Problems Pres.

ently Arising for the Consideration of This Court

Under the Retaliatory Type of Statute.

Should the present case be decided upon the ground that

the provisions of the Minnesota statute involved in this

appeal have a reasonable relation to the control of the

liquor traffic within the State of Minnesota, such decision —

would imply that the dispensation accorded by the Twenty-

first Amendment, to the states from the operation of the

Commerce Clause and the Fourteenth Amendment does

not avail where the state statute involved has no reason-

——

—_ pan

able relation to the control of the liquor traffic within its

borders or is not reasonably adapted to achieve such pur-

pose. In other words, such holding: would be within the |

decision of the Court in the Young’s Market Case which

upheld the statute of the State of California imposing a

different license fee upon wholesalers importing foreign

beer than was imposed upon the -wholesalers of domestic

beer because there was a reasonable ground for differen-

tiation. The latter holding also implied that the Twenty-

first Amendment was coextensive in its operation with

the purpose which brought this amendment into being,

namely, to enable the state properly to regulate or pro-

hibit the alcoholic traffic to the extent required for police

purposes, without being hampered in so doing by the

Commerce Clause.

Likewise, if the Court should decide that there was no

such reasonable relation between this legislation of Min-

nesota and the control or policing of the liquor traffic

therein and that the same must therefore fall, this Court

would be recognizing the same principle of construction

of the Twenty-first Amendment.

However, if this Court were to construe the Twenty-

first Amendment as upholding any species of state legis-

lation, enacted with due formalities, however unrelated to

the accomplishment of the suppression of the evils of the

_ alcoholic traffic within its borders, the effect of such a

holding would be to supply constitutional warrant for the

retaliatory type of legislation such as has been enacted in

Michigan and Missouri.

iin.

VI.

. The Retaliatory Type of Legislation as a Serious Threat

to the Integrity of the Twenty-first

' Amendment Itself.

Of course, before the enactment of the Wilson Act and

the Webb-Kenyon Act, the Fourteenth Amendment and

the Commerce Clause of the Constitution enabled the

out-of-state dealers in alcoholic liquors under the protec-

tion of these constitutional provisions to ship goods into

a prohibition state and thus break down the domestic

policy of a state in its efforts to control the alcoholic traf-

fic within its borders. Leisy v. Harden, 135 U. S. 100,

109 (1889). The classic purpose of the Webb-Kenyon

Act, as stated by Chief Justice White in Clark Distilling -

Co. v. Western Maryland Railway Co., 242 U. S. 311, 324

(1917), was ‘‘to prevent the immunity characteristic of

interstate commerce from being used to permit the receipt

of liquor through such commerce in states contrary to their

laws and thus, in effect, afford a means of subterfuge and

indirection to set such laws at naught.’

. It has commonly been accepted that the Twenty-first

Amendment, following closely the language of the Webb-

Kenyon Act, was intended to incorporate the policy of the

Webb-Kenyon Act into the Constitution. In fact, such

was expressly declared to be its purpose in the congres-

sional discussion occurring during the formulation of the

amendment. Senator Borah, speaking ‘of conditions aris-

' ing from the inability of the states to exercise their police

powers upon interstate commerce, in his discussion of this.

amendment on the floor of the Senate (Vol. 76, Congres-

sional Record, page 4172), said:

‘All this was sought to be remedied by the Webb- _

p,m

Kenyon Act, and I am very glad indeed the able

Senator from Arkansas has seen fit to recognize the

justice and fairness to the’ states of incorporating it

permanently in the Constitution of the United States.’’

: However, the so-called retaliatory laws, such as are in-

stanced in this brief as having been enacted in the States

of Michigan and Missouri, do not’ have the same purpose

or object as the state laws which the Webb-Kenyon Act

was enacted to support. For instance, the opinion of the

three-judge District Court in Indianapolis Brewing Co.,

Inec., v. the Liquor Control Commission of the State of

Michigan, 21 Fed. Supp. 969, does not profess to hold that .

amended Section 40 of the Michigan Act No. 8 (A. D.

1937), containing the so-called standards of exclusion based

upon the provisions of the Indiana laws, has, as its object,

the policing of the alcoholic traffic within the State of

Michigan, although police powers, from their very nature,

must be restricted in their operation to the territorial

jurisdiction of the state exercising them.

On the contrary, this opinion of the three- jadee Dis-

trict Court bottoms the validity of the Michigan statute

“upon the power of the State of Michigan to enact legisla-

tion designed’ for one purpose only, namely, to promote

the sale and distribution of beer made in Michigan

throughout the other states of the Union by constraining

the Legislatures of such states to remove any police regu-

lations of such states which apply different methods: of

treatment of foreign beer’*as compared to domestic. beer,

and holds that since such legislation would ‘tend to pro-

mote the development of the beer industry within the

State of Michigan, it is related to the promotion of the

prosperity of the people of Michigan and therefore within

the police power of a state and, consequently, within the

oa

protection accorded to its laws under the Twenty-first

Amendment as against the operation of the Commerce

Clause and the Fourteenth Amendment. The view of the

Twenty-first Amendment which is implied in this holding

of the three-judge court in- Michigan contemplates that

the dispensation accorded by the amendment to the sev-

eral states may be employed to promote the growth and

development of the alcoholic industry within such states

by extending the market for their alcoholic industries

throughout the whole United States. Under this view

the amendment becomes not a shield, designed to pro-

tect a state from interference in the administration of its

domestic policy, but a sword to advance the commercial

intergsts of the liquor industry domiciled within the state.

But this view belies the object of the Webb-Kenyon Act

and of the second section of the Twenty-first Amendment,

which incorporated the policy of the Webb-Kenyon Act

in the Constitution of the United States.’ That ‘which is

not within the policy of the Twenty-first Amendment can |

scarcely be regarded as within its terms. The second sec- |

tion of the Twenty-first Amendment attempted to -:perpetu-

ate the advantages of the Webb-Kenyon Act. The Webb-

Kenyon Act was enacted in a period of increasing restraint

and regulation of the liquor traffic and it would be an

anachronism to represent that statute as being intended

to enable a state to. promote the growth and development

of the business of its manufacturers of alcohol throughout

the other states of the country. These retaliatory laws,

in fact, are diametrically opposed to the raison d’etre

of the Twenty-first Amendment. This is patently re-

vealed by the published propaganda of the supporters of

the retaliatory type of legislation. We quote from an

article in Brewery Age (Feb. Number, 1938, p. 8):

“States which have discriminatory laws then will

Ip — —

=)

have but two alternatives; either to remove all dis-

criminations or to have highty-- important outstate

markets closed to them. They will, we are confident,

take the former course, with the net result that ulti-

mately beer will enjoy the same freedom in interstate

commerce afforded to all other legitimate articles of

commerce, a status that is to be highly desired for

the good of the brewing industry as a whole.’’

The purpose of the Webb-Kenyon Act and of the second

section of the Twenty-first Amendment was not ‘‘that ulti-

mately beer will enjoy the same freedom in interstate com-

merce afforded all other legitimate articles of commerce.”’

On the contrary, the purpose of this provision of the

Twenty-first Amendment was to prevent beer from flowing

freely in interstate commerce to the extent that sproper

police legislation of the several states might under the

protection of the amendment interfere therewith.

Can an interpretation of the second section of the

Twenty-first Amendment be regarded as sound which will

lead to the defeat of the purpose of the amendment?

VIL.

Considerations Affecting the Construction of the

Twenty-first Amendment.

Those who urge the view that the Twenty-first Amend-

ment supports economic barriers, destgned through retalia-

tion to promote the sale of the beer manufactured in the

enacting state throughout the other states of the Union base

their position upon a literal construction of the second

section of the Twenty-first Amendment and upon certain

general language: in agg of Equalization v. Young’s

Market Co., 299 U.S

at,

a

A merely literal interpretation of a constitutional pro- |

vision has been many times refused by this Court.

In Bain Peanut Co. v. Pinson, 282 U. S. 499, 501 (75 Law.

ed. 482, 491 [1930], Mr. Justice Holmes, speaking for the

majority of the Court, said:

‘“‘The interpretation of constitutional principles

must not be too literal.’’

He also said, speaking for a majority of the Court, in

Gompers v. United States, 233 Uz S. 604, 609 (68 Law. ed.

~ 1115, 1120 [1913]):

‘‘But the provisions of the constitution are not

mathematical formulas having their essence in form;

they are organic, living institutions transplanted from

English soil. Their significance is vital, not formal;

it is to be gathered not simply by taking the words

in a dictionary, but by ~eamaeasioe | their origin and

the line of their growth.”’

In United States v. Lefkowitz, 285 U. S. 452, 467 (76

Law. ed. 877, 883 [1913]), Mr. Justice Butler, speaking for

a majority of the Court, said:

‘And this Court has always construed the provi-

sions of the Constitution having regard to the princi-

ples upon which. it was established. . The direct opera-

tion or literal meaning. of the words used do not

measure the purpose or scope of its provisions.’’

In Eisner v. Macomber, 252 U. S. 189, 205, 206 (1919),

this Court had occasion to construe the Sixteenth Amend-

ment of the Constitution authorizing a federal income tax

from the standpoint of the taxability of a stock dividend;

and in that connection to consider the bearing upon the

new amendment of certain pre-existing provisions in the

ae, ee

Constitution requiring apportionment according to popta-

lation for direct taxes upon real or personal property.

‘- The Court there said:

‘A proper regard for its genesis, as well as its very

clear language, requires’ also that this Amendment

shall not be extended by loose construction, so as to

repeal or modify, except as applied to income, those

provisions of the Constitution that require an.appor-

tionment according to population for direct taxes

upon property, real and personal.’’ |

The more recent case of Evans v, Gore, 254 U. S. 245,

259 (1920), is a clear instance of the discriminating con-

struction applied by this Court. to the new amendment

from the standpoint of its relation to pre-existing provi-

sions of the Constitution, and Mr. Justice Van Devanter,

speaking for the Court, said:

‘‘Preliminarily we observe that, unless there be

some real conflict between the Sixteenth Amendment

and the prohibition in Article III, Sec. 1, making the

compensation of the judges undiminishable, effect

must be given to the latter as well as to the former;

and also that a purpose to depart from or imperil a

constitutional principle so widely esteemed and so

vital to our system of government as the independence

of the judiciary is not lightly to be assumed.’’

In Marbury v. Madison, 1 Cranch. 137 (2 Law. ed. 60);

this Court declared:

**A construction which raises a conflict between

parts of the constitution is inadmissible when by any

reasonable interpretation they may be.made to har-

- monize.”’ ,

a, a

In Fiske vy. State of Missouri (1933), 62 Fed. (2d) 150,

154 (C. C. A. 8th), the Court said:

‘‘The Amendment does not stand alone, and no con-

struction of: its meaning based upon sach hypothesis

can be sound. It is only a part of the Constitution,

and must be construed as such. Like all instruments,

the Constitution is subject to the rational rule of con-

struction that the parts must be understood in rela-

tion to each other and to the entirety in order to

preserve the fullest vitality of the whole instrument

in all of its parts. ‘It cannot be presumed that any

clause in the Constitution is intended to be without

effect * * * unless the words require it.’ Marbury

v. Madison, 1 Cranch. 137, 174, 2 L. Ed. 60; Prout v.

Starr, 188 U. S. 537, 543, 23 S. Ct. 398, 47 L. Ed. 584.

Therefore, when some particular clause, in its bare

wording, seems to destroy or limit or qualify some

other clause, it is the office of the Court to examine the

involved parts in the light of the entire instrument

with a view to preserving such extent of each as ‘can

harmoniously live together. Such rule has been ap-

plied to this Amendment.’’

In re Opinion of the Justices (Mass. 1933), 197 N. E. 99, °

the Court said:

‘‘Articles 48 and 64 of the Amendments are equally

parts of the Constitution. They stand on the same

footing. They are to be construed and interpreted in

combination with each other and all other parts of

the Constitution as forming a’ single harmonious in-

strument for the government of the Commonwealth.

Tax Commissioner v. Putnam, 227 Mass. 522, 524, 116

N. E. 904, L. R. A. 1917 F, 806; a of the Justices

(Mass.), 196 N. E. 260." -

Taking into congideration that the patent object of re-

—15— ek

taliatory legislation is to constrain a sister state to forego

a part of its constitutional liberty to enact purely police

regulations, incidentally discriminating against the prod-

ucts of a foreign state, though not of a retaliatory type,

in order to avoid the loss of the foreign markets of beer

produced within the state, it is well to view the second

section of the Twenty-first Amendment from the stand-

point of its effect upon the relationship between the sov-

ereign states constituting the Union. In this connection

the following language becomes pertinent:

‘‘To this we may add that the constitutional equality

of the States is essential to the harmonious operation

of the scheme upon which the republic was organized.

When that equality disappears we may remain a free

people, but the union will not be the union of the

Constitution. ”’

Coyle v. Smith, 221 U. S. 559, 567, 580 (55 L. Ed.

853, 858, 863) (1910).

Undoubtedly the Commerce Clause was intended to pre-

vent retaliation by one state against the products of an-

other moving: in interstate commerce. This clause, of

course, was adopted not only to secure the freedom of

interstate commerce, but to preserve harmonious rela-

tions among the states. The second section of the Twenty-

first Amendment was undoubtedly enacted, as indicated

above, to enable a state to preserve its jurisdiction intact

in respect to the regulation or the prohibition of liquor

traffic within its borders. The objects of both these con-

.Stitutional provisions are still public desiderata. The

people of the United States are entitled to enjoy ‘the bene-

fits of both of these constitutional provisions. These pro-

visions are susceptible of harmonious construction. Any

apparent conflict may be reconciled so as to carry out all

ow 16

_ of these objects. They may be reconciled along the lines’

of a formula which on the one hand will uphold the polic-

ing regulations of a state, though incidentally discrimi-

nating against the alcoholic products of other states, pro-

“vided always the true object of such regulations reason-

ably appertains to the’ control of the traffic, but, on the

other hand, will demounce legislation if the true object

thereof is retaliation and not the policing of the domestic

traffic.

Support is claimed for the retaliatory type of legislation

on account of certain general language used by this Court

in the introductory portion of its opinion in State Board

of Equalization v. Young’s Market Co., 299 U. S. 59, 62

(81 Law. Ed. 38, 41) (1936), where Mr. Justice Brandeis,

speaking for the Court,-said:

‘‘The words used are apt to confer upon the State .

the power to forbid all importations which do not

comply with the conditions which it prescribes.’’

It is urged that a state may lay down any kind of a con-

dition whatsoever as a prerequisite to the importatiqn of

out-of-state beer into its borders, however retaliatory such

provisions may be and however unrelated to any object

within the police power.

This interpretation of the Court’s decision, however,

seems to ignore the subsequent language and reasoning in

‘this opinion. The Court said at page 64:

‘‘The piaintiffs insist that to sustain the exaction of

the importer’s license fee would involve a declaration

that the Amendment has in respect to liquor freed the

States from all restrictions upon the police power to

a= 17 —.

be found in other provisions of the Constitution. The

question for decision requires no such generalization.”

It appears from this language that this Court distinctly

refused to hold that the Twenty-first Amendment freed

the states from restrictions of the police power to be

found in other provisions of the Constitution, The latter

view is borne out by subsequent portions of the opinion.

For the Court said on the same page:

**Moreover the classifi.utions in taxation made by

California rests on conditions requiring different

treatment. Beer sold within the State comes from

two sources. The brewer of the domestic article may

be required to pay 4 license fee for the privilege of

manufacturing it: and under the California statute is

obliged to pay $750 a year. Compare Brown-Foreman

Co. v. Kentucky, 217 U. S. 563. (54 L. Ed. 883). The

’ brewer of the foreign article cannot be so taxed; only

the importer can be reached. He is subjected to a

- license fee of $500.”? 7

The Court was careful to ground the validity of the dis-

criminating treatment of the importer of foreign beer as

compared with the brewer of the domestic product upon

the actualities of the situation and the necessity arising

out of the situation for a different method of control.

Earlier in the opinion (p. 63) the Court had spoken of the

undoubted right of the State to ‘‘channelize desired im-

portations by confining them to a single consignee.’’ Sep-

arate channelization of the streams of imported and do-

mestic beer is the substance of the provisions of the In-

diana Law of which Michigan complains and which fall

within the standards of exclusion provided in amended

Section 40 of the Michigan Act. The Michigan Act in

ee.

— wa

effect declares that if Indiana avails itself of its constitu-

tional right to channelize separately foreign and domestic

beer it may do so only at the cost of retaliation against

the manufacturer of Indiana beer.

A fair reading of the opinion in the Young’s Market Co,

case lends no support to the construction of the second

section of the Twenty-first Amendment insisted upon by

the authors of the Michigan and Missouri legislation, but,

on the contrary, this opinion tends strongly to support the

view that the Court was not intending to uphold the

merely retaliatory type of legislation — foreign im-

portations, ©

Conclusion.

Counsel for the State of Indiana sincerely believe that

the considerations urged above will enable this Court to

apprehend more clearly the present status of legislation

throughout the country which will presently come before

this Court for review and will enable this Court to ap-

preciate more thoroughly and sympathetically. the difficult

and delicate problems confronting the several states in

dealing with the ever-present problems of the liquor traffic

in so far as the second section of the Twenty- first Amend-

ment has a bearing thereon.

In closing, we suggest that it appears quite feasible to

draw the line of demarcation along boundaries which will,

on the-one hand, leave the states perfectly free to deal

with their domestic problems of liquor control without in-

terference by other states, and, on the other hand, will

not permit undue interference with interstate commerce

by upholding retaliatory legislation designed to thwart

=—

and not to secure the beneficent objects of the second

section of the Twenty-first Amendment.

Respectfully submitted,

STATE OF INDIANA,

By: OMER 8S. JACKSON,

Attorney-General of Indiana,

A. J. STEVENSON,

First Assistant Attorney-General

of Indiana,

Counsel for Amicus Curiae.

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EXHIBIT A.

PERTINENT PORTIONS OF MISSOURI STATUTE.

(Section 1, Subsection 7 and Subsection 8; Section 4,

Laws of Missouri 1937, p. 536.)

“(7) The phrase ‘discriminatory laws’ means the laws

of any state, or the rules or regulations of any administra-

tive officer, commission or body thereof, which

(a) impose any tax, impost, or licensé fee upon the right

to transport or import into such state any alcoholic liquor

manufactured in this state; or

(b) prohibit the importation, transportation, or sale of

any alcoholic liquor manufacturéd in this State unless the

manufacturer obtains a license or pays a tax or fee when

such manufacturer neither imports nor transports such

liquor into said state nor sells the same therein; or

(c) prohibit or restrict any licensee in said state from

purchasing, or from importing or transporting into said

state, aleoholic liquor for the purpose of sale at wholesale

therein from any manufacturer or wholesaler in this state,

if such licensee may lawfully purchase the same kind of

alcoholic liquor for the purpose of resale at wholesale

therein from a manufacturer in said state without such

restrictions or prohibition; or |

(d) impose any different warehousing requirements or

higher warehousing fees or inspection fees upon any

alcoholic liquor manufactured in this State and imported

or transported into such state than is imposed upon the

same kind of alcoholic liquor manufactured in such

state; or

— 99 —

(e) prohibit any manufacturer or wholesaler in this

State or the agents or representatives of either from exer-

cising the privilege of soliciting orders for the sale of

alcoholic liquor manufactured in this State to any licensed

wholesaler in said State, if the sale-is to be made outside

thereof, or to any retailer if such orders are to be filled

therein by or through a licensed wholesaler in said State,

if licensed manufacturers or wholesalers of the same kind

of alcoholic liquor in said State or the agents er repre-

sentatives of either are authorized to solicit orders for the

sale of such alcoholic liquor manufactured in said State

to licensed wholesalers or retailers; or requires manufac-

turers or wholesalers in this State, or the agents or rep-

resentatives of either, to secure a license or pay a fee for

said privilege, if no additional license or further fee is re-

quired of licensed manufacturers. or wholesalers in said

State for the privilege of soliciting orders from whole-

salers or retailers; or impose upon a manufacturer or

wholesaler in this State, or upon the agents or representa-

tives of either, a higher fee for the privilege of soliciting

orders for the sale of alcoholic liquors manufactured in

this State than is imposed upon any person therein for the

sole privilege of soliciting orders for the sale of the same .

kind of alcoholic liquor manufactured in said state; or

(f) impose any higher fees or taxes upon alcoholic

liquor manufactured in this state when imported, trans-

ported, or sold therein than is imposed upon the same

kind of alcoholic liquor manufactured and sold within

said state; or

(g) impose any inher fee for the privilege of selling

or handling-any alcoholic liquor manufactured i in this state

than is imposed for the privilege of handling or selling

— . ae

the same kind of alcoholic liquor manufactured within

said state; or |

(h) impose any prohibition against or limitations,- re-

strictions, or condition, upon the purchase, sale, or solicita-

tion of orders for the sale of alcoholic liquor ‘manufactured

within this state, or upon. any person purchasing, soliciting

orders for the sale, or selling the same that is not imposed

upon the same kind of. alcoholic liquor manufactured

within such state, or upon persons purchasing, selling, or -

soliciting orders for the sale of the same; or

(i) impose, directly or indirectly, any other prohibition,

restrictions, or condition, upon the receipt, possession, dis-

position, or transportation of alcoholic liquor manufac-

tured in this state, which is not equally imposed upon the

same kind of alcoholic liquor manufactured in said state,

and in such manner as to place the alcoholic liquor manu-

‘factured in this state ‘at a disadvantage in competition

therein with the same kind of aleoholic liquor manufac-

tured in said state. Provided, however, that the phrase

‘‘discriminatory laws,’’ as above defined, shall not be

deemed to include any requirement by ‘law, rule or regu-

lation of any state for (1) the furnishing of a bond by an

importer or person first in possession of alcohotic liquor

' within such state, if the bond as required does not exceed

“the sum of $5,000 or in any event the amount of the bond

required of any licensed manufacturer of the same kind of

alcoholic liquor within such state, or (2) the making of

reports as to the kind and quantity of liquor received or

sold by such person, or (3) the obtaining of a separate

license authorizing only importation if no fee is required

to be paid therefor, and if such license may be obtained by

any person authorized to sell at wholesale, upon applica-

tion therefor; and provided, further, that in order to

ED. ,

eneas

secure said importer’s license it shall not be required of

any corporation applying therefor that any percentage of

its stockholders or directors or officers be citizens or resi-

dents of said state; or (4) the limiting of the right to im-

port or transport into said state to those who are duly

licensed to sell such liquors at wholesale.”? -

“¢(8) The phrase ‘state in which discrimination exists’

means any state of the United States as to which the At- -

torney-General finds and certifies, as herein provided, that

discriminatory laws exist, and so long as the certificate

remains effective any state so certified by him shall be a

‘state in which discrimination exists.’ ”’

‘‘Section 4. The transportation or importation into this

state, or the purchase, sale, receipt, or possession herein,

by any licensee, of any alcoholic liquor manufactured in 2

state in which discrimination exists is hereby pro-

. hibited, and it shall be unlawful for any licensee to trans-

port or import into this state, or to purchase, receive,

possess, or sell in this state, any alcoholic liquor manu-

factured in any state in. which discrimination exists as

herein defined. Provided, however, that

(a) As to alcoholic liquor manufactured in any state as

to which the Attorney-General certifies that discrimina-

tory laws exist, where no appeal is taken from his finding,

the prohibition of this section shall become effective forty-

five (45) days after the publication of the notice pro-

vided in Section 2 hereof;

(b) As to alcoholic liquor anutactored in any state

as to which the Attorney-General certifies that discrimina-

tory laws exist and an appeal is taken from his finding,

the prohibition of this section shall become effective thirty

(30) days after the order or judgment of the court or

judge, if such finding is affirmed.’’

SUPREME COURT OF THE UNITED STATES.

No. 761.—OctToser TERM, 1937.

William Mahoney, Liquor Control ] On Appeal from the Dis-

Commissioner, Appellant, trict Court of the, United

vs. States for the District

Joseph Triner Corporation. of Minnesota.

[May 23, 1938.] -

Mr. J ustice BRANDEIS delivered the opinion of the Court.

Section 2 of the Twenty-first Amendment to the Federal Consti-

tution provides: —

“The transportation or importation into any State, Territory, or

possession of the United States for delivery or use therein of in-

toxicating liquors, in violation of the laws thereof, is hereby pro-

hibited.’’

The adoption of the Amendment was proclaimed December 5,

1933. In February, 1934, Joseph Triner Corporation, an Illinois

_corporation engaged there in the manufacture of intoxicating

liquors, complied with the Minnesota foreign corporations law; se-

cured from the Liquor Control Commissioner a license to sell such

liquors within Minnesota at wholesale; and thereafter carried on

in that State the business of selling to retailers liquors manufac-

tured by it in Illinois. The Legislature of Minnesota enacted Chap-

ter 390, approved April 29, 1935, which provides:

‘*No licensed manufacturer or wholesaler shall import any brand

or brands of intoxicating liquors containing more than 25 percent

of aleohol by volume ready for sale without further processing un-

' less such brand or brands shall be duly registered in the patent .

office of the United States.’’

The business of Joseph Triner Corporation in Minnesota included

~ selling many brands of liquors containing more than 25 per cent.

of aleohol which had not been registered in the Patent Office; and

at the time of the enactment of the statute it had there a stock of:

such liquors. To enjoin the Liquor Control Commissioner of Minne- |

sota from interfering with the business. it brought this suit in the

as.

"2 _ Mahoney vs. Joseph Triner Corporation.

federal court for that State; alleged that the statute of 1935 vio-

lated the equal protection clause of the Fourteenth Amendment of

the Federal Constitution ; alleged danger of irreparable injury;

and sought both a preliminary and a permanent injunction. The

several state officials charged with the duty of enforcing the statute

were joined as defendants.

- The case was heard by three judges under Section 266 of the Ju-

dicial Code. : The court, holding that it had both federal and equity

jurisdiction, granted a preliminary injunction, 11 F. Supp. 145;

and later a permanent injunction, 20 F. Supp. 1019. The state

officials appealed to this Court. The sole contention of Joseph

Triner Corporation is that the statute violated the equal protection

clause. The state officials insist that the provision of the statute

is a reasonable regulation of the liquor traffic; and-also, that since

‘ the adoption of the Twenty-first Amendment, the equal protection

clause is not applicable to imported intoxicating liquor. As we

are of opinion that the latter contention is sound, we shall not

discuss whether the statutory provision is a reasonable regulation

of the liquor traffic. , Piston

First. The statute clearly discriminates in favor of liquor pro-

cessed within the State as against liquor completely processed else-

where. For only that locally processed may be sold regardless of

whether the brand has been registered. That, under the Amend-

ment, discrimination against imported liquor is permissible al-

though it is not an incident of reasonable regulation of the liquor

traffic, was settled by State Board of Equalization v. Young’s

Market Co., 299 U. S. 59, 62, 63. There, it was contended that, by

reason of the discrimination involved, a statute imposing a $500

license fee for importing beer violated both the commerce clause

and the equal protection clause. In sustaining its validity we said:

‘““The words used [in thé Amendment] are apt to confer upon

the State the power to forbid all importations which do not comply

with the conditions which it [the State] prescribes. Aer

“‘The plaintiffs argue that limitation of the broad language of

the Twenty-first Amendment is sanctioned by its history ; and by

the decisions ‘of this Court on the Wilson Act, the Webb-Kenyon

Act and the Reed amendment. As we think the language of the

Amendment is clear, we do not discuss these matters. :

“‘The claim that the statutory provisions and the regulations are

void under the equal protection clause may be briefly disposed of.

Mahoney vs. Joseph Triner Corporation. 3

A classification recognized by the Tw enty-first Amendment cannot

be deemed forbidden by the Fourteenth.’’

Second. Joseph Triner Corporation insists that the statute is

unconstitutional because it permits unreasonable discrimination

.between imported brands. That is, the registered brands of other.

foreign manufacturers may be imported while. its unregistered

brands may not be, although ‘‘identical in kind, ingredient and

quality’’. We are asked to limit the power conferred by the

Ameniinand so that only those importations may be forbidden

which, in the opinion of the Court, violate a reasonable regulation

of the liquor traffic. To do so would, as stated in the Young’s

Market ease, p. 62, ‘‘involve not a construction of the Amendment,

- but a rewriting of it.’’

Third. The fact that Joseph Triner Corporation had, when the

Statute was passed, a valid license and a stock of liquors in Minne-

sota imported under it, is immaterial. Independently of the

Twenty-first Amendment, the State had power to terminate the

license. . Mugler v. Kansas, 123 U. 8. 623; Premier-Pabst Sales Co. zak

v. Grosscup, 298 U. S. 226, 228.

Reversed.

Mr. Justice REED concurs in the result.

Mr. Justice CarD0z0 took no part in the consideration or decision .

of this case.

A true copy.

Test :

Clerk, Supreme Court, U. 8.