| California Retail Liquor Dealers Assn. v. Midcal Aluminum, Inc. | ||||||
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Supreme Court of the United States |
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| Argued January 16, 1980 Decided March 3, 1980 |
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| Full case name | California Retail Liquor Dealers Assn. v. Midcal Aluminum, Inc., et al. | |||||
| Citations | 445 U.S. 97 (more) 100 S. Ct. 937; 63 L. Ed. 2d 233 |
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| Prior history | 90 Cal. App. 3d 979, 153 Cal. Rptr. 757 (affirmed) | |||||
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| Case opinions | ||||||
| Majority | Powell, joined by a unanimous court. | |||||
| Brennan took no part in the consideration or decision of the case. | ||||||
| Laws applied | ||||||
| U.S. Const. amend. XXI | ||||||
In California Retail Liquor Dealers Assn. v. Midcal Aluminum, Inc., the United States Supreme Court created a two-part test for the application of the state action immunity doctrine that it had previously developed in Parker v. Brown.
Content adapted from the case syllabus at [1], which is in the public domain.
Contents |
A California statute requires all wine producers and wholesalers to file fair trade contracts or price schedules with the State. If a producer has not set prices through a fair trade contract, wholesalers must post a resale price schedule and are prohibited from selling wine to a retailer at other than the price set in a price schedule or fair trade contract. A wholesaler selling below the established prices faces fines or license suspension or revocation.
After being charged with selling wine for less than the prices set by price schedules and also for selling wines for which no fair trade contract or schedule had been filed, respondent wholesaler filed suit in the California Court of Appeal asking for an injunction against the State's wine-pricing scheme. The Court of Appeal ruled that the scheme restrains trade in violation of the Sherman Act, and granted injunctive relief, rejecting claims that the scheme was immune from liability under that Act under the "state action" doctrine of Parker v. Brown, 317 U.S. 341, 63 S.Ct. 307, 87 L.Ed. 315, and was also protected by § 2 of the Twenty-first Amendment, which prohibits the transportation or importation of intoxicating liquors into any State for delivery or use therein in violation of the State's laws.
1. California's wine-pricing system constitutes resale price maintenance in violation of the Sherman Act, since the wine producer holds the power to prevent price competition by dictating the prices charged by wholesalers. And the State's involvement in the system is insufficient to establish antitrust immunity under Parker v. Brown, supra. While the system satisfies the first requirement for such immunity that the challenged restraint be "one clearly articulated and affirmatively expressed as state policy," it does not meet the other requirement that the policy be "actively supervised" by the State itself. Under the system the State simply authorizes price setting and enforces the prices established by private parties, and it does not establish prices, review the reasonableness of price schedules, regulate the terms of fair trade contracts, monitor market conditions, or engage in any "pointed reexamination" of the program. The national policy in favor of competition cannot be thwarted by casting such a gauzy cloak of state involvement over what is essentially a private price-fixing arrangement. Pp. 102–106.
2. The Twenty-first Amendment does not bar application of the Sherman Act to California's wine-pricing system. Pp. 106–114.