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Tavern Liquor Supply v. Liquor Control Com.

OPINION FILED DECEMBER 27, 1978.

TAVERN LIQUOR SUPPLY CO., PLAINTIFF,

v.

ILLINOIS LIQUOR CONTROL COMMISSION ET AL., DEFENDANTS-APPELLEES. — (MIDWAY WHOLESALERS, INC., ET AL., INTERVENING PLAINTIFFS-APPELLANTS.)



APPEAL from the Circuit Court of Cook County; the Hon. RAYMOND K. BERG, Judge, presiding.

MISS JUSTICE MCGILLICUDDY DELIVERED THE OPINION OF THE COURT:

___ N.E.2d ___ Midway Wholesalers, Inc. (Midway), and Peerless Liquors, Inc. (Peerless), plaintiffs and intervenors in an action initially instituted by the Tavern Liquor Supply Co., appeal from an order of the Circuit Court of Cook County granting the defendants, the Illinois Liquor Control Commission and Thomas J. Murphy, a summary judgment while denying the plaintiffs' motion for such judgment. Tavern is not a party to this action.

On appeal, Midway and Peerless raise three issues for our review: (1) whether article VI, section 7a, of the Liquor Control Act (Ill. Rev. Stat. 1975, ch. 43, par. 126) (hereinafter section 126) requires that, as a precondition to the distribution of liquor in Illinois, duly licensed distributors of alcoholic liquors must enter into franchise agreements with the manufacturers of the liquor they distribute and register those agreements with the commission; (2) whether the trial court impermissibly based its conclusions upon personal opinion rather than the plain meaning of the statute, and (3) whether the commission is estopped from imposing sanctions upon the plaintiffs for the alleged violations of the statutory provision.

The facts of the dispute involved in this suit are substantially uncontroverted. The plaintiffs are engaged in the business of the wholesale distribution of alcoholic beverages. They are duly licensed by the commission under article V, section 1(b), of the Liquor Control Act (Ill. Rev. Stat. 1975, ch. 43, par. 115(b)), which permits them to undertake "the wholesale purchase and storage of alcoholic liquors and sale of alcoholic liquors" to other licensees. The plaintiffs do not deal directly with liquor manufacturers; they purchase liquor from other licensed wholesale distributors.

Section 126 establishes certain franchise and registration requirements for the sale and distribution of alcoholic beverages and provides, in pertinent part, as follows:

"Each manufacturer, distributor, importing distributor, or foreign importer who owns or controls the trade mark, brand or name of any alcoholic liquor shall register with the State Commission the name of each person to whom such manufacturer, distributor, importing distributor, or foreign importer grants the right to sell at wholesale in this State any such alcoholic liquor, specifying the particular trade mark, brand or name of alcoholic liquor as to which such right is granted, the geographical area or areas for which such right is granted and the period of time for which such rights are granted to such person. Such manufacturer, distributor, importing distributor, or foreign importer may grant the right to sell at wholesale any trade mark, brand or name of any alcoholic liquor in any geographical area to more than one person. Such registration shall be made on a form prescribed by the State Commission and the State Commission may require such registration to be on a form provided by it. No such registration shall be made by any other person or in any other manner * * *." Ill. Rev. Stat. 1975, ch. 43, par. 126.

The plaintiffs have not entered into any franchise agreements with the manufacturers who control the trademarks because they purchase no alcoholic liquor from them. They have entered into any franchise agreements with the distributors from whom they purchase alcoholic liquor because these distributors have no ownership or control over the trademarks, brands or names of the products they supply.

Subsequent to a citation issued against it by the defendants, Tavern Liquor filed its complaint in the Circuit Court of Cook County seeking both declaratory and injunctive relief. Tavern asked for a permanent injunction to prevent the defendants from imposing sanctions against it or against any members of the Illinois Wholesale Liquor Dealers for selling Tavern alcoholic liquor. Tavern also sought a declaratory judgment that section 126 does not require wholesalers registered thereunder, who do not own or control certain defined alcoholic liquors, to register Tavern, and that section 126 does not prohibit wholesalers registered thereunder from selling alcoholic liquors to Tavern, if such sales are made within the geographical area for which the wholesaler has a selling right.

On August 28, 1975, the trial court entered a preliminary injunction against the defendants restraining them from issuing any citations, proceedings or other sanctions for any alleged violation of section 126 against the plaintiff, or any other individual, firm or entity who does not own or control the trademarks, brands or names of alcoholic liquor, on account of sales of said liquor to the plaintiff. The following day, after Midway and Peerless intervened in the cause and filed complaints with substantially the same allegations as the complaint filed by Tavern, a preliminary injunction, identical to the one issued to Tavern, was granted to these plaintiffs-intervenors.

Subsequent to the reassignment of the suit to a new trial judge, both parties filed cross-motions for summary judgment. On January 26, 1977, the trial court entered summary judgment in favor of the defendants, finding:

"That for the reasons stated of record, the provisions of Ch. 43 Ill. Rev. Stat. § 126 and each of them apply to the Plaintiff and the Plaintiff-Intervenors and that the sale and distribution of alcoholic liquors at wholesale by the Plaintiff and the Plaintiff-Intervenors without having obtained a franchise from and being registered by the manufacturer, distributor, importing distributor, or foreign importer who owns or controls the trademark, brand or name of those alcoholic liquors pursuant to § 126 of the Illinois Liquor Control Act is a violation of the Act."

In explaining its ruling, the trial court made the following comments:

"I wanted to make one comment on the record. And that's that I have a philosophy which underlies my decision.

I really believe in my heart that a state should have the right to carefully control its liquor laws because liquor does, in my opinion, affect ...


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