Nelson v. Reilly

SHINN, P. J.

Appellant, B. B. Nelson, filed his petition for a writ of mandate directed to the members of the State Board of Equalization, commanding them to rescind and set aside a certain regulation of the board, effective March 1, 1947, known as Amended Rule 99 (4 Cal. Adm. Code 99), which rule requires those licensed to sell whiskey or domestic brandy to enter into fair trade contracts for which provision is made by section 55.5 of the Alcoholic Beverage Control Act. (Stats. 1935, p. 1123; 2 Deering’s Gen. Laws, Act 3796.) He alleged that he is duly licensed under the laws of the State of California to engage in the business of retailing intoxicating liquors and is so engaged, and that the said regulation ■ is unreasonable, contrary to law and will, if enforced, cause him irreparable damage in that it will deprive him of the right to fix or establish the retail selling price of his merchandise. The general demurrer of the respondents to the petition was sustained without leave to amend and the proceeding was dismissed by judgment rendered June 23, 1947. Petitioner appeals.

Appellant’s attack upon the rule is based upon a state of the law which no longer exists. A premise from which his argument proceeds is that at the time the regulation was promulgated by the board, fair trade contracts of the type described in the rule were declared by section 55.5 of the control act to be láwful but were permissible only, whereas, by the rule they are made compulsory. Appellant contends that no

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authority had been or could be delegated to the board by the Legislature to enact regulations having the force of law which would require retail licensees to enter into and comply with fair trade contracts. The theory appears to be that such a regulation would not be within the policy and purpose of the control act and that the Legislature alone had the power to require licensees to operate under fair trade contracts.

Section 55.5 declares that no contract relating to the sale or resale of any alcoholic beverage which bears the trademark, brand, or name of the producer or owner, and which is in fair and open competition with alcoholic beverages of the same general class produced by others, shall be deemed in violation of any law of the state by reason of provisions therein (1) that the buyer will not resell such alcoholic beverage except at the price stipulated by the vendor; (2) that the producer or vendee of the alcoholic beverage require, on the sale thereof to another, that such purchaser agree that he will not, in turn, resell except at the price stipulated by such producer or vendee. Further provision is made respecting conditions under which alcoholic beverages may be resold without reference to the agreement, but such provisions are not here involved.