source: Caselaw Access Project

author:
Simons, J.
      Jasen, J. Kaye, J.

license: Public Domain

text:
    In the Matter of J.A.J. Liquor Store, Inc., Respondent, v New York State Liquor Authority, Appellant. In the Matter of 324 Liquor Corp., Doing Business as Yorkshire Wine & Spirits, Respondent, v Edward J. McLaughlin et al., Appellants.
    Argued February 7, 1985;
    decided April 2, 1985

      POINTS OF COUNSEL

      Robert Abrams, Attorney-General (August L. Fietkau, Robert Hermann, Peter H. Schiff, Frederick K. Mehlman and Richard G. Liskov of counsel), for appellant in the first above-entitled matter.
    I. The court below incorrectly held that Alcoholic Beverage Control Law § 101-bb is in conflict with the Sherman Antitrust Act § 1. (Matter of Admiral Wine & Liq. Co. v State Liq. Auth., 61 NY2d 858; United States v Colgate & Co., 250 US 300; House of Materials v Simplicity Pattern Co., 298 F2d 867; Carbon Steel Prods. Corp. v Wood Steel Co., 289 F Supp 584; Fisher Foods v Ohio Dept. of Liq. Control, 555 F Supp 641; Rice v Williams Co., 458 US 654; Serlin Wine & Spirit Merchants v Healy, 512 F Supp 936, affd sub nom. Morgan v Division of Liq. Control, 664 F2d 353; Seagram & Sons v Hostetter, 384 US 35; Matter of Mezzetti Assoc. v State Liq. Auth., 51 NY2d 761.) II. Even if Alcoholic Beverage Control Law § 101-bb mandated antitrust activity the statute is nevertheless exempt from challenge under the “State action” doctrine. (Parker v Brown, 317 US 341; California Liq. Dealers v Midcal Aluminum, 445 US 97; Morgan v Division of Liq. Control, 664 F2d 353.) III. The court below incorrectly held that Alcoholic Beverage Control Law § 101-bb is not otherwise protected under the 21st Amendment. (Seagram & Sons v Hostetter, 384 US 35; California Liq. Dealers v Midcal Aluminum, 445 US 97.) IV. Substantial evidence in the record supports the administrative finding that petitioner violated Alcoholic Beverage Control Law § 63 (4) and § 101-bb. (300 Gramatan Ave. Assoc. v State Div. of Human Rights, 45 NY2d 176; Matter of Avon Bar & Grill v O’Connell, 301 NY 150; Matter of Levine v Whalen, 39 NY2d 510; People ex rel. Nauss v Graves, 283 NY 383; Matter of Howard v Wyman, 28 NY2d 434.)

      Seymour Howard for respondent in the first above-entitled matter.
    I. The statutory minimum resale pricing scheme constitutes price fixing by a private party without any real participation, supervision or review by the State and thus violates the provisions of the Sherman Antitrust Act and the United States Constitution. (California Liq. Dealers v Midcal Aluminum, 445 US 97; Schwegmann Bros. v Calvert Corp., 341 US 384; Rice v Williams Co., 458 US 654.) II. The court below correctly held that the 21st Amendment does not shield the statutory minimum retail pricing scheme of liquors in New York. (Seagram & Sons v Hostetter, 16 NY2d 47,384 US 35,967; Matter of Mezzetti Assoc. v State Liq. Auth., 51 NY2d 761.) III. The court below was correct in concluding that respondent did not engage in another business.

      Victor Feingold, for Wine, Liquor & Distillery Workers Union Local 1, AFL-CIO and others, amici curiae in the first above-entitled matter.
    I. Section 101-bb (2) does not violate the Sherman Act since it is a permissible exercise under the State action rule. (Battipaglia v New York State Liq. Auth., 745 F2d 166; Seagram & Sons v Hostetter, 384 US 35; Morgan v Division of Liq. Control, 664 F2d 353; Fisher Foods v Ohio Dept. of Liq. Control, 555 F Supp 641.) II. Section 101-bb does not conflict with this court’s ruling in Mezzetti II nor with the Mideal decision of the United States Supreme Court. (Morgan v Division of Liq. Control, 664 F2d 353; House of Spirits v Doyle, 72 Misc 2d 1036, 43 AD2d 880, 36 NY2d 815.) III. The minimum consumer’s resale price set by section 101-bb is solely State action and therefore exempt from the Sherman Act under the Parker doctrine. (Matter of Admiral Wine & Liq. Co. v State Liq. Auth., 61 NY2d 858.) IV. Balancing the State’s demonstrated interest articulated in section 101-bb outweighs the Federal interest in the Sherman Act.

      Martin P. Mehler for Metropolitan Package Store Association, Inc., and others, amici curiae in the first above-entitled matter.
    I. Alcoholic Beverage Control Law § 101-bb in no way violates the Sherman Antitrust Act. (Matter of Admiral Wine & Liq. Co. v State Liq. Auth., 61 NY2d 858; Battipaglia v New York State Liq. Auth., 745 F2d 166; Rice v Williams Co., 458 US 654; Matter of Mezzetti Assoc. v State Liq. Auth., 51 NY2d 761; California Liq. Dealers v Midcal Aluminum, 445 US 97.) II. Section 101-bb is immune from a violation of the Sherman Act under the doctrine of State action as it was decided under Parker v Brown. (Parker v Brown, 317 US 341; Serlin Wine & Spirit Merchants v Healy, 512 F Supp 936, affd sub nom. Morgan v Division of Liq. Control, 664 F2d 353.) III. The purposes of Alcoholic Beverage Control Law § 101-bb when balanced against the antitrust challenge clearly weigh in favor of the State statute and as such are protected by the 21st Amendment. (California v LaRue, 409 US 109; House of Spirits v Doyle, 72 Misc 2d 1036, 43 AD2d 880, 36 NY2d 815.)

      Lawrence Kill, Steven M. Pesner, Daniel N. Sang, Scott B. Schreiber, Lee H. Karlin, Michael Whiteman and Anthony A. Dean for Peerless Importers, Inc., and others, amici curiae in thev first above-entitled matter.
    I. Section 101-bb does not conflict with the Sherman Act because it does not operate through private agreements or conspiracies. (Morgan v Division of Liq. Control, 664 F2d 353; Rice v Williams Co., 458 US 654; Seagram & Sons v Hostetter, 384 US 35; New Motor Vehicle Bd. v Fox Co.,
      439 US 96; Exxon Corp. v Governor of Md., 437 US 117; Copperweld Corp. v Independence Tube Corp., 467 US —, 104 S Ct 2731; Fisher Foods v Ohio Dept. of Liq. Control, 555 F Supp 641; Matter of Admiral Wine & Liq. Co. v State Liq. Auth., 61 NY2d 858; Enrico’s, Inc. v Rice, 551 F Supp 511, 730 F2d 1250; Schnapps Shop v Wright & Co., 377 F Supp 570.) II. The restraints that section 101-bb directly imposes are State action within the meaning of Parker and therefore exempt from antitrust challenge. (Bates v State Bar of Ariz., 433 US 350; Morgan v Division of Liq. Control, 664 F2d 353; Fisher Foods v Ohio Dept. of Liq. Control, 555 F Supp 641; Goldfarb v Virginia State Bar, 421 US 773; California Liq. Dealers v Midcal Aluminum, 445 US 97; Battipaglia v New York State Liq. Auth., 745 F2d 166.) III. The 21st Amendment confers an added presumption of legality to section 101-bb. (Battipaglia v New York State Liq. Auth., 745 F2d 166; Seagram & Sons v Hostetter, 384 US 35; New York State Liq. Auth. v Bellanca, 452 US 714; California v LaRue, 409 US 109; Hostetter v Idlewild Liq. Corp., 377 US 324; Bacchus Imports v Dias, 468 US_, 104 S Ct 3049; Capital Cities Cable v Crisp, 467 US_, 104 S Ct 2694; House of Spirits v Doyle, 72 Misc 2d 1036, 43 AD2d 880, 36 NY2d 815.)

      Robert Abrams, Attorney-General (August L. Fietkau, Robert Hermann, Peter H. Schiff, Richard G. Liskov and Robert S. Hammer of counsel), for appellants in the second above-entitled matter.
    I, II and III are the same as the first above-entitled matter. IV. Bulletin No. 471 has no impact on the validity of Alcoholic Beverage Control Law § 101-bb (2) and is otherwise in conformity with the Sherman Act and relevant provisions of the Alcoholic Beverage Control Law. (Ahern v South Buffalo Ry.. Co., 303 NY 545, affd sub nom. South Buffalo Ry. Co. v Ahern, 344 US 367; House of Spirits v Doyle, 72 Misc 2d 1036; Loretto v Teleprompter Manhattan CATV Corp., 58 NY2d 143; Rice v Williams Co., 458 US 654; Matter of Admiral Wine & Liq. Co. v State Liq. Auth., 61 NY2d 858; Metropolitan Package Store Assn. v Koch, 89 AD2d 317; Fisher Foods v Ohio Dept. of Liq. Control, 555 F Supp 641.)

      Seymour Howard for respondent in the second above-entitled matter.
    I and II are the same as the first above-entitled matter. III. Where the Alcoholic Beverage Control Law prohibits wholesalers from offering quantity discounts of more than 2% on purchases of liquor by retailers, the Liquor Authority does not have the right or power to permit wholesalers to circumvent that prohibition. (Matter of Picone v Commissioner of Licenses, 241 NY 157; Matter of Barry v O’Connell, 303 NY 46; Mancini v McLaughlin, 54 NY2d 860.)
   OPINION OF THE COURT

Simons, J.

Section 101-bb of the Alcoholic Beverage Control Law prohibits the retail sale of liquor for off-premises consumption at less than “cost” — the price per bottle offered by a wholesaler to a retailer plus a 12% mark-up on that price. Petitioners, retail liquor store licensees, concede that they have sold liquor below this statutory “cost”, but contend that section 101-bb sanctions retail price maintenance in violation of the Sherman Antitrust Act (15 USC § 1 et seq.). They contend, therefore, that respondent’s charges and findings of guilt based on these sales should be annulled as unlawful. The Appellate Divisions reviewing these proceedings agreed and, in each case, rejected respondent’s contentions that the statute was protected by the State action exception to antitrust enforcement under Parker v Brown (317 US 341) or by application of the 21st Amendment. Subsidiary issues are also involved. In J.A.J. Liq. Store, the court construed the scope of the prohibition on engaging in another business on licensed premises set forth in Alcoholic Beverage Control Law § 63 (4) and found no substantial evidence petitioner had violated it and in 324 Liq. Corp., the court reviewed the validity and potential anticompetitive effect of Bulletin 471 and invalidated it. We hold that section 101-bb is a proper exercise of the State’s power under the 21st Amendment which does not conflict with the Sherman Act and that in J.A.J. Liq. Store there was no substantial evidence of a violation of section 63 (4) and we therefore modify the judgment of the Appellate Division, Second Department. We reverse the order of the Appellate Division, First Department, in 324 Liq. Corp.

I

J.A.J. LIQUOR STORE

Petitioner J.A.J. Liquor, Inc., is a licensed retailer of liquor for off-premises consumption in Hicksville, New York. On February 20,1980 respondent State Liquor Authority, the agency responsible for administering the Alcoholic Beverage Control Law, instituted a proceeding to cancel or revoke petitioner’s license based on the following two charges: first, that petitioner violated Alcoholic Beverage Control Law § 63 (4) by engaging in another business on the licensed premises and second, that on January 25, 1980 petitioner violated Alcoholic Beverage Control Law § 101-bb (2) by selling alcoholic beverages below cost to a State Liquor Authority investigator. Petitioner pleaded not guilty and a statutory hearing was held before a hearing officer designated by respondent.

The evidence adduced at the hearing indicated that respondent’s investigators went to petitioner’s premises on the date alleged and purchased a bottle of Johnny Walker Red Label Scotch Whiskey for $9.50 together with a bottle of Bacardi Rum for $6.09. At the time of the sale, the minimum resale price for those products established pursuant to section 101-bb was $9.99 and $6.36, respectively. The evidence supporting the charged violation of Alcoholic Beverage Control Law § 63 (4) was that petitioner sold a stuffed animal to the investigators with a bottle of Black and White Scotch for $18. Petitioner’s president testified that he sold the liquor and stuffed animal as a gift package; that he purchased the stuffed animals for $8 each; that the retail price of the liquor was $8.99; and, that he paid an additional sum for wrapping paper and bow which accompanied the gift package. He further testified that he had never sold any of the animals separately and would never do so.

Respondent adopted the findings of the hearing officer, sustained the charges and assessed a penalty of a $2,000 fine and 20 days deferred suspension. Petitioner then instituted an article 78 proceeding contending that respondent’s determination concerning the sales of liquor below cost was unlawful because Alcoholic Beverage Control Law § 101-bb violates the Sherman Antitrust Act and that the determination that it had unlawfully engaged in another business was not supported by substantial evidence. The Appellate Division, Second Department, granted the petition, annulled respondent’s determination and dismissed the charges. It found that the statutory minimum pricing scheme for liquor embodied in Alcoholic Beverage Control Law § 101-bb was virtually indistinguishable from the parallel retail price maintenance sections for wine invalidated in California Liq. Dealers v Midcal Aluminum (445 US 97,102) and Matter of Mezzetti Assoc. v State Liq. Auth. (51 NY2d 761). Following the Midcal reasoning, the court concluded that the regulation of liquor sales under section 101-bb is not immune from antitrust legislation under Parker v Brown (317 US 341, supra) and that the 21st Amendment does not shield the State from the antitrust laws. The court also ruled that respondent’s determination that petitioner violated Alcoholic Beverage Control Law § 63 (4) by engaging in another business on the licensed premises was not supported by substantial evidence.

324 LIQUOR CORP.

Petitioner 324 Liquor Corp. was also charged by respondent with violating Alcoholic Beverage Control Law § 101-bb arising from the sale of liquor for off-premises consumption at a price less than cost. A statutory hearing was convened at which the parties stipulated that a Liquor Authority investigator purchased two bottles of liquor at petitioner’s premises, a 1.75 liter bottle of Chatham Gin for $9.45 and a 1.75 liter bottle of Smirnoff’s Vodka, 80 proof, for $11.59, at a time when the minimum consumer retail price was $9.65 for Chatham Gin and $11.89 for Smirnoff’s Vodka. Respondent sustained the charge and imposed a penalty of 10 days suspension plus a $1,000 bond forfeiture. Petitioner then commenced an article 78 proceeding to review and annul respondent’s determination on the ground that the minimum retail pricing scheme for liquor violates the antitrust laws. Petitioner also contended that respondent acted ultra vires in promulgating its rule 16 (9 NYCRR 65.4), which requires that the price per bottle must exceed the price per case in which it is contained by $1.92 divided by the number of bottles in the case, because it lacks the statutory authority to compel wholesalers to add any amount to their prices. Further, petitioner maintains that respondent exceeded its statutory powers by issuing Bulletin 471. That Bulletin permits wholesalers to “post-off” or reduce the legal case price in any month without fully passing through the “post-off” to the consumer on the bottle price. Thus, petitioner alleges that Bulletin 471 allows wholesalers to offer quantity discounts for the benefit of the retailer in excess of those permitted by Alcoholic Beverage Control Law § 101-b. Special Term rejected each of petitioner’s claims and dismissed the petition. The Appellate Division, First Department, reversed and annulled respondent’s determination, ruling that section 101-bb was a price maintenance scheme which violated the Sherman Antitrust Act. It further held that Bulletin 471 improperly granted wholesalers the authority to determine if price reductions made during “post-off” periods should be passed through on single bottle prices and thereby encouraged private price maintenance. The court did not reach the issue of whether respondent acted ultra vires in promulgating rule 16.

On these appeals, respondent State Liquor Authority contends that Alcoholic Beverage Control Law § 101-bb does not violate the Sherman Act because the antitrust law condemns concerted action in the nature of “contracts], combination[s] * * * or conspiracies]” which unreasonably restrain trade (15 USC § 1), not minimum mark-up price provisions of State law which do not compel anticompetitive activity. Alternatively, respondent maintains that this issue is not determinative because section 101-bb is exempt from challenge under the “State action” immunity doctrine enunciated in Parker v Brown (317 US 341, supra), and that it is otherwise protected under the 21st Amendment.

II

The statutory provision in issue on this appeal was originally enacted in 1964 as part of a sweeping revision of our liquor laws based upon recommendations made by a specially appointed Moreland Commission. These statutes attempt to balance price protection for consumers on the one hand and to prevent retail licensees from obtaining unfair advantage over their competitors on the other. The consumers are protected by price affirmation and posting requirements intended to keep New York’s prices in line with those of other States. Small retailers are protected by regulations governing minimum pricing, wholesale discounts and other means of obtaining competitive advantage so that the large dealers may not drive the small ones out of business. Thus, at the initial stage in the distribution process, manufacturers and distillers are required to file monthly schedules with the Liquor Authority which include their prices to wholesalers. Each manufacturer or distiller must file with the schedules an affirmation stating that the prices charged are no higher than the lowest prices charged wholesalers in any other State (Alcoholic Beverage Control Law § 101-b [3] [a], [d]; see, Seagram & Sons v Hostetter, 384 US 35, affg 16 NY2d 47 [requirement that liquor prices to domestic wholesalers be as low as prices offered elsewhere in the country held not to violate the Supremacy Clause or to conflict with the Sherman Act or the Robinson-Patman Act]; Matter of Brown-Forman Distillers Corp. v State Liq. Auth., 64 NY2d 479 [decided herewith]). Thereafter, the wholesaler is free to fix the prices of the brands without statutory control, but it must also file schedules with the Liquor Authority each month which set forth its “case” and “bottle” price to retailers for all brands it markets (Alcoholic Beverage Control Law § 101-b [3] [b]). Within 10 days after the filing, the Authority must make the schedules or a composite of them available for inspection by other licensees and within three days after the date provided for such inspection, a wholesaler may amend its filed schedule for sales to retailers in order to meet lower competing prices and discounts “provided such amended prices are not lower and discounts are not greater than those to be met” (Alcoholic Beverage Control Law § 101-b [4]). This is a constitutionally permissible price-posting statute which does not authorize anyone to determine prices which bind others in violation of the Sherman Antitrust Act (see, Matter of Admiral Wine & Liq. Co. v State Liq. Auth., 61 NY2d 858; Battipaglia v New York State Liq. Auth., 745 F2d 166 [2d Cir, Sept. 21, 1984], cert denied_US_, 105 S Ct 1393).

Exercising its statutory authority to reduce prices to meet competition (see, § 101-b [4]), respondent also has issued Bulletin 471 which permits wholesalers to temporarily “post-off” on, or reduce, the case price. They may also “post-off” on the bottle price at the previous list price or at a price which is proportionately equivalent to the reduction in the case price. At the end of the “post-off” period, the wholesaler may return to but not exceed the “legal” maximum price reflected in the schedule filed with respondent.

Finally, section 101-bb, the section challenged on this appeal, provides for a legal minimum retail price. It prohibits retailers selling for off-premises consumption from selling below “cost”. The cost or legal minimum retail price, however, is the “bottle price” filed by the wholesaler in the month the retailer makes a sale plus 12% of that “bottle price”, a constant which reflects “the average minimum overhead necessarily incurred in connection with the sale by the retailer of such item of liquor” (Alcoholic Beverage Control Law § 101-bb [2] [b]). Section 101-bb (3) permits retailers to charge less than cost, however, after obtaining prior written permission from the Liquor Authority and after establishing good cause for doing so. This section was designed to protect small retailers from unfair competition (see, Alcoholic Beverage Control Law § 101-bb [1]).

Petitioners specifically challenge the validity of section 101-bb but the implications of this litigation are much broader than the attempt to invalidate that section. If they are successful liquor prices will be deregulated and other statutory provisions designed to protect small retailers from unfair competition such as those specifying the maximum discounts permitted by law (§ 101-bb [2] [b]), prohibiting wholesalers from granting discriminatory discounts, prohibiting wholesalers from granting free merchandise or other inducements (§ 101-b [2] [b]; cf. Matter of Brown-Forman Distillers Corp. v State Liq. Auth., 64 NY2d 479 [decided herewith], supra), and provisions limiting the credit period afforded to retailers by wholesalers (§ 101-a [2]) will lose much of their force.

“2. No licensee authorized to sell liquor at retail for off-premises consumption shall sell, offer to sell, solicit an order for or advertise any item of liquor at a price which is less than cost. As used in this section, the term:
“(a) ‘liquor’ shall mean liquor bearing a brand or trade name, and of like age and quality, which has been duly registered with and approved by the liquor authority pursuant to section 107A of this chapter, and “(b) ‘cost’ shall mean the price of such item of liquor to the retailer plus twelve percentum of such price, which is declared as a matter of legislative determination to represent the average minimum overhead necessarily incurred in connection with the sale by the retailer of such item of liquor. As used in this paragraph (b) the term ‘price’ shall mean the bottle price to retailers, before any discounts, contained in the applicable schedule filed with the liquor authority pursuant to section one hundred one-b of this chapter by a manufacturer or wholesaler from whom the retailer purchases liquor and which is in effect at the time the retailer sells or offers to sell such item of liquor; except, that where no applicable schedule is in effect the bottle price of the item of liquor shall be computed as the appropriate fraction of the case price of such item, before any discounts, most recently invoiced to the retailer.”

¡II

Turning to the merits of the appeals, a preliminary determination must be made whether “State action” immunity or the 21st Amendment insulates section 101-bb from challenge under the antitrust laws. If either doctrine applies, the State enactment must be sustained and it is unnecessary to determine whether section 101-bb violates the antitrust laws.

A. State action Immunity under Parker v Brown

Parker v Brown (317 US 341, supra) involved an antitrust challenge to a California statute authorizing collective raisin marketing programs which eliminated pricing competition among producers. In upholding the marketing program, the Supreme Court noted that the challenged restraint derived from statutory command, not from any agreement among private persons, and it held that the Federal antitrust laws do not prohibit a State “as sovereign” from imposing certain anticompetitive restraints “as an act of government” (id., at p 352). Two standards must be met before this State action immunity attaches: first, the challenged restraint must be “ ‘one clearly articulated and affirmatively expressed as state policy’ and second, the policy must be “actively supervised” by the State itself (see, California Liq. Dealers v Midcal Aluminum, 445 US 97, 105, supra). The Appellate Divisions held the immunity inapplicable in the appeals before us because the statutory scheme which permitted liquor prices to be set by wholesalers without any control by the State did not satisfy the active supervision requirement. We agree with those rulings.

In Midcal (supra), the Supreme Court reviewed a challenge to California’s system of resale price maintenance for wine. Under the California statutory scheme, wine producers, wholesalers or rectifiers were required to file fair trade contracts or price schedules with the State, and no licensed wine merchant was allowed to sell wine to a retailer at a price other than that set forth in the filed contract or schedule (Cal Bus & Prof Code Ann §§ 24862, 24866). The prices were set in the first instance by the producers, wholesalers or rectifiers, and the State exercised no regulatory control over them. In applying the Parker criteria, the court found that although the requirement that the restraint be expressed as State policy was satisfied by the statutes themselves, the second requirement of the test had not because the State merely authorized price setting without exercising control or review over the prices established (California Liq. Dealers v Midcal Aluminum, supra, at pp 105-106). Having determined that no State action antitrust immunity was available, the court held that California’s wine pricing system constituted resale price maintenance which violated the Sherman Antitrust Act (id., at p 103).

New York’s pricing system for liquor similarly satisfies the first requirement of the test because the State policy of promoting the orderly distribution of liquor is “clearly articulated and affirmatively expressed” in the statute itself (Alcoholic Beverage Control Law § 101-bb [1]). As with California, however, New York does not actively supervise resale prices under its system of price maintenance. Liquor prices are set by the wholesalers and the State has no power to change the prices or review their reasonableness.

To contrast Connecticut’s liquor price maintenance system has been held immune from the Sherman Act under the State action doctrine (Morgan v Division of Liq. Control, 664 F2d 353, affg 512 F Supp 936). Unlike contrast to the California and New York statutes, the Connecticut statute creates a tripartite pricing system by which the manufacturer or out-of-State shipper unilaterally establishes and files its offering price but the State then regulates the mark-ups allowed to the wholesaler and to the retailer. The wholesaler’s prices cannot be less than its “cost”, which is defined as actual cost from the manufacturer and such charges as transportation, insurance and a minimum mark-up of 11% on hard liquor, 20% on beer, 20% on wine not bottled in Connecticut, and 36% on wine bottled in Connecticut (Conn Gen Stat §§ 30-68, 30-68e, 30-68J), and retailers may not sell below their “cost”, which is defined as the retailer’s “bottle price” from the wholesaler plus a mark-up of 21.5% on spirits, 28% on cordials, 23% on beer, and 33.3% on wine (Conn Gen Stat §§ 30-68b, 30-68j). Although the manufacturer’s prices are uncontrolled, the Morgan court found Parker’s active supervision requirement satisfied by the Connecticut statute because the State participated in the anticompetitive activity by strictly regulating the “cost” at which both the wholesaler and the retailer could mark-up and sell their products.

B. Twenty-First Amendment

Section 1 of the 21st Amendment repealed the 18th Amendment’s prohibition on the manufacture, sale or transportation of liquor. Section 2 provides that: “The transportation or importation into any State, Territory, or possession of the United States for delivery or use therein of intoxicating liquors, in violation of the laws thereof, is hereby prohibited.” The amendment, by its terms, gives the States broad regulatory powers over liquor traffic within their territories and that control “logically entails considerable regulatory power not strictly limited to importing and transporting alcohol” (California Liq. Dealers v Midcal Aluminum, 445 US 97, 107, supra; California v LaRue, 409 US 109; Seagram & Sons v Hostetter, 384 US 35, 42, supra; United States v Frankfort Distilleries, 324 US 293, 299). Because the States have the power to prohibit absolutely the manufacture, sale or possession of intoxicants within their borders, they may permit those acts only under carefully prescribed conditions. “The greater power includes the less[er]” (Ziffrin, Inc. v Reeves, 308 US 132,138). Notwithstanding the “wide latitude” granted them by the 21st Amendment, however, important Federal interests have survived its ratification (Seagram & Sons v Hostetter, supra, at p 42). Specifically, Congress has retained authority to regulate interstate commerce in liquor under the Commerce Clause (see, Bacchus Imports v Dias, 468 US —, —, 82 L ed 2d 200, 211-212; Hostetter v Idlewild Liq. Corp., 377 US 324, 332), and that Commerce Clause authority may also be exercised by enforcement of the antitrust laws (California Liq. Dealers v Midcal Aluminum, supra). There is no bright line dividing the areas of State and Federal primacy, “[b]oth the Twenty-first Amendment and the Commerce Clause are parts of the same Constitution. Like other provisions of the Constitution, each must be considered in the light of the other, and in the context of the issues and interests at stake in any concrete case” (Hostetter v Idlewild Liq. Corp., 337 US, at p 332, supra). The court must analyze “ ‘whether the interests implicated by a state regulation are so closely related to the powers reserved by the Twenty-first Amendment that the regulation may prevail’” notwithstanding a conflict between its provisions and Federal policies (Bacchus Imports v Dias, supra, at p —, at p 212, quoting Capital Cities Cable v Crisp, 467 US_, 81 L ed 2d 580).

This interest analysis was applied in California Liq. Dealers v Midcal Aluminum (supra), and by the California Supreme Court in Rice v Alcoholic Beverage Control Appeals Bd. (21 Cal 3d 431, 579 P2d 476). In Rice, the California court invalidated a statute establishing resale price arrangements for distilled spirits as in violation of the Sherman Antitrust Act, holding that neither the State action exception nor the 21st Amendment provided a basis to uphold that State’s fair trade laws. (Significantly, the California statutes do prohibit sales below cost [see, 21 Cal 3d 431, at p 458, 579 P2d, at p 494]). In applying interest analysis to determine the applicability of the 21st Amendment, it ruled that the stated purposes of California’s liquor price maintenance laws were to promote temperance and orderly market conditions. Reviewing the evidence offered in support of these aims, the court concluded that the law had no impact on temperance and that it adversely affected market conditions. It based its decision in part on a report of the California Senate Committee which stated that the price maintenance system “has resulted in the elimination of any semblance of competition within the industry” resulting in higher retail prices (1 Sen Select Comm Rep on Laws Relating to Alcoholic Beverages, at 9 [1974]). Thus, the court held that the asserted State interests were not furthered by California liquor price maintenance laws and, in contrast, that the Federal policy of promoting competition which underlies the Sherman Act was clearly violated (see, Northern Pac. Ry. Co. v United States, 356 US 1, 4-5). Balancing the strong Federal policy against the weakly supported State interests, the court concluded that the Federal interest predominated and that the 21st Amendment did not bar application of the Sherman Act.

In Midcal, the Supreme Court relied upon the California court’s decision in Rice and found that the 21st Amendment did not bar application of the antitrust laws to California’s wine industry. It explicitly refrained from deciding “whether the legitimate state interests in temperance and the protection of small retailers ever could prevail against the undoubted federal interest in a competitive economy” (445 US, at pp 113-114; see also, United States v Frankfort Distilleries, 324 US 293, 299, supra [in which defendants were convicted of illegal price fixing under the Sherman Act because there was no regulatory State act which conflicted with the Federal statute], and esp concurring opn of Frankfurter, J., at pp 300-303).

New York’s experience in regulating alcoholic beverages has been markedly different from that of California. The legislative history of section 101-bb forcefully demonstrates that an important reason for its enactment and amendment to its present form was to protect small retailers and the number of retail liquor outlets selling for off-premises consumption. The statute was first enacted following widespread charges of corruption and abuse which prompted a Moreland Commission investigation into irregularities in the administration of New York’s Alcoholic Beverage Control laws. At the conclusion of its investigation, the Commission published five Study Papers in which it proposed extensive revision of the existing statutes. The Commission’s major findings were that New York consumers suffered from serious price discrimination when compared to liquor consumers in other States and that a severe lack of competition existed in the New York retail market. It proposed that changes be made in the method of regulating retail prices, that more retail licenses be issued for off-premises consumption, that artificial restrictions on the location and transfer of licensed retail stores be eliminated and that inhibiting restrictions on their operation be reduced (for a general background of this history and of the Commission’s findings and recommendations see, Seagram & Sons v State Liq. Auth., 16 NY2d 47, affd 384 US 35, supra; Matter of Hub Wine & Liq. Co. v State Liq. Auth., 16 NY2d 112; Matter of Great E. Liq. Corp. v State Liq. Auth., 30 AD2d 307, 309, affd 25 NY2d 525; Moreland Commission Report, 1964 NY Legis Ann, at 484-489; Statement by Governor Rockefeller on April 12, 1964, 1964 NY Legis Ann, at 403-408). Paradoxically, the principal purposes of the legislation resulting from these proposals and which is now challenged on antitrust grounds were the same as those underlying the Sherman Act — to promote market competition and protect consumers.

Section 101-bb (L 1964, ch 531) was enacted as a result of these proposals. It expressed the legislative determination that “the declared policy of the state” was to regulate and control the manufacture, sale and distribution of liquor within the state and to “eliminate retail sales of liquor at less than cost” (Alcoholic Beverage Control Law § 101-bb [1]). The validity of the statute was affirmed by this court and by the Supreme Court (Seagram & Sons v Hostetter, 16 NY2d 47, affd 384 US 35, supra).

By 1971 it had become apparent that further amendment was needed to protect small retailers because hundreds of package stores were being forced out of business by the predatory pricing practices of large discount dealers (see, 1971 NY Legis Ann, at 80-82; cf. Safeway Stores v Oklahoma Grocers, 360 US 334; Nebbia v New York, 291 US 502). The Excise Committee of the New York Senate investigated the situation and found that after the 1964 revisions there was an inordinate and continuing emphasis on price cutting and price promotions in the industry, that the continued employment of “lossleader” selling had resulted in a rapidly accelerating concentration of volume in the hands of a relatively few stores, and that this concentration interfered with the attainment of “normal” competition and threatened the survival of the entire retail economy of the liquor industry. The Committee’s Final Report stated: “Since it seems patent that the mass of small retailers are unable to compete with the large volume outlets that have emerged, most appear doomed barring the adoption of some formula that will permit the co-existence of both types of outlets. This leaves New York’s consumers facing the future prospect of being relatively poorly served only by mass merchandisers” (NY State Legis, Senate Excise Committee, Final Report of the Senate Excise Committee, April 5,1971, at 29-30, as quoted in House of Spirits v Doyle, 72 Misc 2d 1036, 1040). Although these practices produced temporary price reductions to the consumer, but the benefits could prove transitory, threatening to drive small retailers out of business and consolidating control of the market in the hands of a relatively few mass distributors who could then dictate prices to the ultimate injury of consumers and market competition generally.

The Legislature responded to this threatened danger by enacting the minimum mark-up amendment to section 101-bb (L 1971, ch 191). It was expressly designed to preserve competition in New York’s retail liquor industry by stabilizing the retail market and protecting the economic position of small liquor retailers. We approved the amendment and recognized the important public policy which prompted it when we affirmed House of Spirits v Doyle (72 Misc 2d 1036, affd 43 AD2d 880, affd 36 NY2d 815). There have been criticisms of the statute since 1971 and efforts to repeal it, as the dissent notes, but the Legislature has refused to do so and indeed has considered amendments seeking to increase the permitted minimum mark-up (see, 1984 NY Legis Record and Index, S 6541).

This history demonstrates New York’s commitment to protect its small retailers and the investigative determinations upon which the statutes intended to do so are premised. Having experienced problems in the intrastate retail liquor market, the Legislature exercised its powers under the 21st Amendment to correct them. The statute in question responds to this perceived State interest and is thus distinguishable from the California statutes considered in the Rice and Midcal decisions. Additionally, we note that New York’s history and experience have dictated that if the consumer of alcoholic beverages in this State is to be protected from inflated prices and to enjoy the benefits to be derived from market competition, then the regulatory provisions in section 101-bb and related sections best serve that purpose. Inasmuch as those charged with enacting and enforcing the laws in this area of State responsibility have identified the statute as embodying an important public policy that policy should prevail over the generalized concerns of the Sherman Antitrust Act (see, Battipaglia v New York State Liq. Auth., 745 F2d 166, 178-179 [2d Cir, Sept. 21, 1984], cert denied _ US _, 105 S Ct 1393, supra).

Matter of Mezzetti Assoc. v State Liq. Auth. (51 NY2d 761, supra), which invalidated parallel pricing provisions for wine (Alcoholic Beverage Control Law § 101-bbb) does not require a different result. New York has historically regulated traffic in distilled spirits strictly. Implicit in the brief Mezzetti decision, however, was a recognition that the degree of protection New York has accorded its wine industry is not significantly different from that in California as reviewed in the Midcal decision. Thus, all liquor distillers and manufacturers must meet statutory affirmation requirements and file price schedules (Alcoholic Beverage Control Law § 101-b [3] [d]), but wine dealers need not file affirmations and they are permitted exceptions to the price schedule requirements (Alcoholic Beverage Control Law § 101-bbb [3] [d]). Wineries may sell wine at retail at any time (9 NYCRR 63.6), they may sell in bulk to persons outside the State (Alcoholic Beverage Control Law § 77) and they may manufacture other products and carry on other related business on the licensed premises (Alcoholic Beverage Control Law § 77 [4]). Indeed, New York recently enacted legislation permitting wine products to be sold in grocery stores (L1984, ch 502) and broadly expanding the retail sale privileges accorded wineries (L 1984, chs 500-505). Liquor stores enjoy none of these advantages, which evidence a clear recognition by the Legislature that the need to protect wine sellers from unfair competition does not require the intensive regulation and control requirements that the liquor industry generally requires. Indeed, one of the principal arguments in support of the newly enacted wine-marketing bills was that the industry needed economic encouragement through greater deregulation if it was to survive (see, Governor’s Memorandum, 1984 McKinney’s Session Laws of NY, at 3607).

Accordingly, we conclude not only that the State interest in protecting retailers which underlies our statutes is of sufficient magnitude to override the Federal policy expressed in the antitrust laws, but also that the State policy of regulating prices to protect consumers and maintain extensive retail outlets is consistent with the Federal statutes. We hold, therefore, that the 21st Amendment shields the State from the provisions of the Sherman Antitrust Act and in view óf our holding, that portion of respondent’s determination in each case which found petitioners to have violated section 101-bb must be reinstated.

IV

In J.A.J. Liq. Store, the Appellate Division concluded that respondent’s determination that petitioner had engaged in another business on the licensed premises was not supported by substantial evidence. We agree with that portion of the Appellate Division’s decision.

Alcoholic Beverage Control Law § 63 (4) provides that “[n]o licensee under this section shall be engaged in any other business on the licensed premises.” The statute is intended to prohibit a separate profit generating business. Thus, in Matter of Anchor Liqs. v State Liq. Auth. (31 AD2d 812), the court held that there was substantial evidence of a violation of the statute because petitioner ran a complete catering service on the licensed premises. The uncontroverted evidence in this proceeding established that petitioner was not engaged in the business of selling stuffed animals because the animals were sold only as part of gift packages of liquor and the sale of the animals themselves did not generate a profit.

V

In 324 Liq. Corp., the First Department viewed State Liquor Authority Bulletin 471 as giving wholesalers the power to set minimum mark-ups above 12% and it invalidated section 101-bb partially because of that finding. The court also held Bulletin 471 was invalid because its provisions exceeded respondent’s authority.

Preliminarily, the Appellate Division erred in using the purported anticompetitive effect of Bulletin 471 as a basis for invalidating section 101-bb. Constitutional problems created by a regulation should be resolved by invalidation of the regulation alone, not invalidation of both the statute and regulation (cf. Loretto v Teleprompter Manhattan CATV Corp., 58 NY2d 143, 154) In addition, the Bulletin is a proper exercise of the Liquor Authority’s rule-making power under Alcoholic Beverage Control Law § 101-b (3) (b) and Alcoholic Beverage Control Law § 101-b (4).

Bulletin 471 allows individual wholesalers to decide whether to “post-off” reductions on case prices accompanied by corresponding reductions in bottle prices. In some situations, the wholesaler may choose to grant a smaller price reduction on the bottle price, or no reduction at all. This practice is consistent with Alcoholic Beverage Control Law § 101-b (3) which does not mandate any price ratio between scheduled case and bottle prices.

The Appellate Division concluded that the Bulletin is invalid, in part, because it permits a “post-off” on a case which is not followed by an equivalent “post-off” on a bottle price with the result that a retailer may charge a mark-up in excess of 12%. Bulletin 471 does not authorize such a practice. In reselling a bottle of liquor which was purchased by the retailer as part of a full case, the minimum mark-up price is derived from the statute by referring to the scheduled bottle price and adding 12%, rather than by dividing the case price by the number of bottles in the case and then adding 12% to each bottle to be individually resold. As a result, the “post-off” price of a bottle of liquor is the governing figure, not the case price. A retailer pays the scheduled post-off price regardless of the number of cases or bottles purchased.

Accordingly, in Matter of J.A.J. Liq. Store v State Liq. Auth., the judgment of the Appellate Division should be modified, with costs to appellant, and the matter remitted to Supreme Court, Nassau County, with directions to remand to the State Liquor Authority for further proceedings in accordance with this decision and, as so modified, the order is affirmed.

In Matter of 324 Liq. Corp. v McLaughlin, the order of the Appellate Division is reversed, with costs, and judgment of Supreme Court, New York County, reinstated.

Jasen, J.

(concurring). While I agree with the majority that the 21st Amendment shields the challenged regulatory scheme from antitrust liability (Battipaglia v New York State Liq. Auth., 745 F2d 166, 168-170, affg 583 F Supp 8, cert denied_US_, 105 S Ct 1393), I concur in reversing the order of the Appellate Division upon two additional grounds. I believe that the State activity in controlling the sale of alcoholic beverages does not contravene Federal antitrust policy, and is, in any event, immunized from antitrust liability by the state action doctrine.

The threshold question is whether New York’s liquor price maintenance program violates the Sherman Antitrust Act (15 USC § 1). (California Liq. Dealers v Midcal Aluminum, 445 US 97, 102.) The Sherman Act provides, in pertinent part, that “[ejvery contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is declared to be illegal”. (15 USC § 1.) Section 1 of the Sherman Act is directed only at joint action and does not proscribe independent business actions and decisions. (Modern Home Inst. v Hartford Acc. & Indem. Co., 513 F2d 102, 108-109.) The statute embraces a fundamental distinction between concerted and independent action. (Copper-weld Corp. v Independence Tube Corp., 467 US_, 104 S Ct 2731, 2740.) Unlike the California statute in Midcal, the New York regulatory scheme does not authorize or compel private parties to enter contracts or combinations in restraint of trade, nor does it condone agreements between independent businessmen. (Morgan v Division of Liq. Control, 664 F2d 353, 355, affg sub nom. Serlin Wine & Spirit Merchants v Healy, 512 F Supp 936; see, Fuchs Sugars & Syrups v Armstar Corp., 602 F2d 1025, 1029, cert denied 444 US 917.) A wholesaler may freely set prices under the New York regulatory system; his conduct is strictly unilateral. The language of the Sherman Act should not be extended to preempt a system of state regulation where the challenged conduct involves a matter of special state interest (US Const 21st amend), and there is no agreement or joint action in restraint of trade at issue.

The Supreme Court has traditionally been hesitant to apply the Sherman Act in a manner which would defeat the policy of a State. (United States v Frankfort Distilleries, 324 US 293, 299 [Black, J.].) This is especially true in the field of liquor control within state borders, where the 21st Amendment, as a matter of constitutional law, accords state regulation of alcoholic beverages a preferred status. (United States v Frankfort Distilleries, 324 US 293, 300-301, supra [Frankfurter, J., concurring].) Programs of state regulation, such as the challenged liquor pricing scheme, whose anticompetitive efforts are felt wholly within the enacting states, should be beyond the reach of the Sherman Act. (See, Easterbrook, The Court and the Economic System, 98 Harv L Rev 4, 51, n 120; Easterbrook, Antitrust and Economics of Federalism, 26 J L & Econ 23.) The statute’s wholly intrastate character virtually eliminates any conflict with the antitrust laws enacted on authority of the Commerce Clause (Serlin Wine & Spirit Merchants v Healy, 512 F Supp 936, 943, affd sub nom. Morgan v Division of Liq. Control, 664 F2d 353, supra; cf. Battipaglia v New York State Liq. Auth., 745 F2d 166, 172, n 9, cert denied_US_, 105 S Ct 1393, supra).

Moreover, the aim of the antitrust laws, the maximization of consumer welfare, is not hindered by New York’s liquor pricing scheme. As aptly demonstrated by the majority (at pp 513-514), the scheme protects consumer interests by avoiding an integrated system of liquor distribution. Economic liberty in New York’s liquor industry is of paramount state concern, and New York’s system of regulation is not to be preempted by the Federal antitrust laws simply because it might hypothetically have an anticompetitive effect. (Rice v Williams Co., 458 US 654, 659.) This State’s regulatory scheme may be easily reconciled with section 1 of the Sherman Act (15 USC § 1; cf. Matter of Admiral Wine & Liq. Co. v State Liq. Auth., 61 NY2d 858, modfg 89 AD2d 522), by recognizing that: the regulatory scheme is of a clear intrastate character, no question of joint action in restraint of trade is involved, the distribution of alcoholic beverages has been constitutionally denominated a matter of proper concern for the States, and New York’s liquor pricing scheme is congruous with the Federal policy favoring competition. Thus, Federal antitrust policy has not realistically been contravened by New York’s regulation of liquor prices.

In the event that the operation of New York’s liquor pricing system is thought to implicate Federal antitrust interests, the “state action” doctrine immunizes this State’s scheme from antitrust liability. (Parker v Brown, 317 US 341; see also, Olsen v Smith, 195 US 332.) Application of the state action exemption is contingent upon satisfaction of the two-part standard set forth in California Liq. Dealers v Midcal Aluminum (445 US 97, 105, supra): “First, the challenged restraint must be ‘one clearly articulated and affirmatively expressed as state policy’; second, the policy must be ‘actively supervised’ by the State itself. City of Lafayette v Louisiana Power & Light Co., 435 U. S. 389, 410 (1978) (opinion of Brennan, J.) [n omitted].” Inasmuch as there is no question that this challenged liquor pricing scheme represents a clearly articulated and affirmatively expressed State policy, I turn to the question whether there has been active State supervision of the pricing scheme. Under Midcal, simply authorizing price setting and enforcing the prices established by private parties are insufficient state acts to confer Parker immunity. Rather, the Supreme Court establishes the following state actions which may be deemed indicia of active state supervision: price establishment, review of the reasonableness of the price schedules, regulation of the terms of fair trade contracts, the monitoring of market conditions, or any pointed reexamination of the program. (Midcal, supra, at pp 105-106.)

The Supreme Court’s clear articulation and active supervision test is intended to prevent the “casting * * * [of] a gauzy cloak of state involvement over what is essentially a private price-fixing arrangement”. (Midcal, supra, at p 106; see also, Serlin Wine & Spirit Merchants v Healy, 512 F Supp 936, 941-942, n 15, affd sub nom. Morgan v Division of Liq. Control, 664 F2d 353, supra.) The test was borne of “the widespread perception that resourceful lawyers and ambitious state officials had built on the precepts of Parker so creatively that large and important areas of each state’s economy were alleged to be protected from antitrust scrutiny by what must have seemed in some cases to be a rather flimsy veil of state action”. (Shenefield, The Parker v Brown State Action Doctrine and The New Federalism of Antitrust, 51 Antitrust LJ 337, 340.) The posture of the instant appeals before this court is markedly different than the typical controversies in which private parties seek to invoke Parker immunity. Here, we are not presented with an attempt by a private party to seek safe harbor within the state action exemption. Rather, antitrust immunity is sought to be invoked by an instrumentality of the State on behalf of private entities, which has acted in a sovereign capacity, pursuant to clear legislative command. I submit that within the context of this action, the concerns sought to be remedied by the Midcal test are simply not present. The second test of Midcal has, in any event, been met by the State Liquor Authority’s active supervision of the pricing scheme.

The case of Morgan v Division of Liq. Control (supra) is instructive as to the resolution of the question whether there has been active state supervision of the challenged program. Of critical importance in the Second Circuit’s determination that Connecticut’s statutory regulation of the price of alcoholic beverages was actively supervised by that State was the fact that Connecticut established a minimum mark-up upon each type of alcoholic beverage offered for sale. (Morgan v Division of Liq. Control, 664 F2d 353, 355-356, supra.) In New York, a closely analogous statutory mark-up is directly imposed by the State. Off-premises retailers are generally not authorized to sell liquor at a price which is less than “cost” (Alcoholic Beverage Control Law § 101-bb [2].) “Cost” is defined as “the price of such item of liquor to the retailer plus twelve percentum of such price, which is declared as a matter of legislative determination to represent the average minimum overhead necessarily incurred in connection with the sale by the retailer of such item of liquor.” (Alcoholic Beverage Control Law § 101-bb [2] [b] [emphasis added].)

It has been said that a state sales-below-cost statute, which mandates minimum mark-ups, constitutes adequate supervision by the state, since the provision “not only reflects a legislative judgment that retailers should be required to charge certain minimum prices, but reflects a judgment as to what those prices should be.” (Posner, The Proper Relationship Between State Regulation and the Federal Antitrust Laws, 49 NYU L Rev 693, 722.) The 12% mark-up, as well as the requirement that manufacturers or distillers may only sell at prices which are no higher than the lowest prices charged wholesalers in any other state (Alcoholic Beverage Control Law § 101-b [3]), represent legislative policy determinations to displace unfettered competition at two critical stages of the distributive chain. Such restrictions constitute active state supervision.

The Supreme Court has held that active state supervision may be established if the state “monitor[s] market conditions” or engages in any “pointed reexamination” of the pricing program. (California Liq. Dealers v Midcal Aluminum, 445 US 97, 106, supra.) In order to closely tailor the regulatory scheme to changing market conditions, the State Liquor Authority has conducted careful reexaminations of the price maintenance program. For example, Bulletin 471, which has been challenged and upheld on the instant appeal (majority opn, at pp 522-523), advises wholesalers that “there developed a situation during post-off periods which resulted in what became known as a ‘two bottle’ price. The Authority has recognized this as undesirable, if not illegal”. This policy statement manifestly demonstrates that the Authority both “monitor[s] market conditions” and engages in “pointed reexamination”, thus satisfying the Midcal requirement of active state supervision. Moreover, the Authority is authorized to respond to market forces in individual cases where wholesalers or retailers are aggrieved. Alcoholic Beverage Control Law § 101-b (3) (b) provides that a wholesaler may pass through increased costs of labor or other operating costs on the written permission of the Authority, for good cause shown and for reasons not inconsistent with the Alcoholic Beverage Control Law. Also, wholesalers may be relieved of selling at the posted price if the prior written permission of the Authority, upon good cause shown, is secured. (Alcoholic Beverage Control Law § 101-b [3] [b].) A retailer may offer to sell liquor at a price less than cost provided that prior written permission therefor is granted by the Authority for good cause shown and for reasons not inconsistent with the Alcoholic Beverage Control Law and under such terms and conditions as the Authority deems necessary. (Alcoholic Beverage Control Law § 101-bb [3].) The State Liquor Authority may determine the continued desirability of certain proscriptions as applied to the industry at large, or in individual cases involving hardships upon retailers and wholesalers. Such determinations, which respond to changing market conditions, are strong evidence of continuing regulatory supervision of the liquor pricing scheme. (See, Morgan, Antitrust and State Regulation: Standards of Immunity After Midcal, 35 Ark L Rev 453, 470.)

Another indicia of active state supervision is evidence that the Legislature has frequently debated the merits of the pricing system. (Morgan v Division of Liq. Control, 664 F2d 353, 355, supra.) It cannot be seriously disputed that the legislative branch has periodically conducted a “pointed reexamination” of the challenged program. (California Liq. Dealers v Midcal Aluminum, 445 US 97, 106, supra.) As well established by the majority (at pp 518-520), New York’s pervasive regulation of the distribution of alcoholic beverages is the result of extensive legislative hearings during the last two decades. (See, House of Spirits v Doyle, 72 Misc 2d 1036, affd 43 AD2d 880, affd 36 NY2d 815, supra.) Indeed, the liquor pricing program of this State remains a subject of substantial controversy in the New York State Legislature. (See, e.g., Vol 1, 1985 NY Legis Digest, A 5151; 1984 NY Legis Record and Index, S 6541; Page, Antitrust, Federalism, and the Regulatory Process: A Reconstruction and Critique of the State Action Exemption After Midcal Aluminum, 61 BU L Rev 1099, 1136, n 210.) There can be no question that the challenged program has historically and periodically been subjected to pointed reexamination by means of official, legislative oversight.

Based upon the 12% minimum mark-up imposed upon the price of liquor to be sold by the retailer, the monitoring of market conditions affecting the liquor industry and individuals, the pointed reexamination of the pricing scheme by the executive and legislative branches, and the substantial legislative debate upon the pricing scheme, I would hold that there exists continuous and active state supervision of the regulatory scheme so as to confer antitrust immunity.

Kaye, J.

(dissenting). I would affirm the Appellate Division orders for the reasons stated by Justice Lawrence J. Bracken (102 AD2d 240) and Justice E. Leo Milonas (102 AD2d 607).

The 21st Amendment does not vest States with unlimited power to regulate alcoholic beverages in disregard of Federal law. Rather, when such regulation is challenged we must make a “pragmatic effort to harmonize state and federal powers” (California Liq. Dealers v Midcal Aluminum, 445 US 97, 109), and to determine “whether the interests implicated by a state regulation are so closely related to the powers reserved by the Twenty-first Amendment that the regulation may prevail, notwithstanding that its requirements directly conflict with express federal policies” (Capital Cities Cable v Crisp, 467 US_, 104 S Ct 2694, 2708). The question, then, is whether New York can continue a system of resale price maintenance for alcoholic beverages, when price-fixing is condemned as a per se violation of the Sherman Act (see, e.g., Monsanto Co. v Spray-Rite Serv. Corp., 465 US 752, 104 S Ct 1464, 1469-1470).

Implicit in any analysis of State regulation under the 21st Amendment is an assumption that the State policy supporting its regulation is not illusory. Neither of the two policies declared to support the scheme of resale price maintenance — the promotion of temperance and the maintenance of an orderly market for alcoholic beverages — has substantial basis. The Moreland Commission concluded that “[n]either temperance nor respect for law is promoted by the artificially maintained high prices that sacrifice the interest of the consumer to the benefit of the liquor industry” (Moreland Commission Report and Recommendations No. 3, at 1). Even if the pricing scheme could be upheld as furthering a State policy to protect small retailers against unfair competition, it goes well beyond, and by fixing minimum resale prices effectively and unnecessarily forecloses all competition. Predatory pricing drives, followed by oligopolistic market conduct, are not an inevitable consequence of free competition in alcoholic beverages or any other industry, as evidenced by the many retail businesses in which large chains and small proprietorships exist side by side. With the full panoply of antitrust and other laws at their disposal, New Yorkers are hardly powerless to deal with unfair competition.

I note in addition that repeated dissatisfaction has been expressed with the compulsory resale price maintenance scheme today upheld by this court. The Moreland Commission itself recommended in 1964 the repeal of provisions requiring minimum consumer resale prices (Moreland Commission Report and Recommendations No. 3, at 30). More recently, a Senate Committee recommended “the repeal of all controls on the price of alcoholic beverages (other than the requirement that manufacturers charge New Yorkers no more than their lowest price in all other states)” because such “controls unreasonably interfere with the proper and economic functioning of the alcoholic beverage industry.” (Recommendation of the Senate Standing Committee on Investigations and Taxation for Revisions of Alcoholic Beverage Control Law, at 7 [June 25, 1981].)

Chief Judge Wachtler and Judges Meyer and Lynch concur with Judge Simons; Judge Jasen concurs in a separate opinion; Judge Kaye dissents and votes to affirm in another opinion; Judge Alexander taking no part.

Matter of JA.J. Liq. Store v New York State Liq. Auth.: Judgment modified, etc.

Matter of 324 Liq. Corp. v McLaughlin: Order reversed, etc.

      . The section states:

      . On the important matter of price regulation, the Commission noted that under the former statute the manufacturer was permitted to fix the price of liquor and the retailer could not sell it for less (Alcoholic Beverage Control Law former § 101-c). The assumption behind this law was that high prices promoted temperance. The Commission’s studies led it to believe, however, that the assumed favorable relation of high-priced liquor to temperance did not exist (Moreland Commn Report No. 1, at 3,17). The principal benefit from the statutory price provision went to the liquor interests who, after setting their own prices, had them enforced by State investigators. This regulation, the Commission said, served only “to insure the profit margins of the various segments of the industry” (Report No. 3, at 19). Moreover, the Commission found gross price discrimination against the New York consumer by the industry. Indeed, it found that the retail price for a fifth of a well-known brand of liquor was lower in Washington, D.C. than the wholesale price in New York (see, Report No. 3, at 5,6). “For almost every fifth of whiskey that he buys”, the Report stated, “the New York consumer pays from 50 cents to $1.50 more than the price at which it is available in at least seven freer price markets” (id., at 3).

      . Other courts have recognized that antitrust liability for minimum mark-up statutes does not attach where the statutes do not immunize or implement agreements to restrain trade. (See, e.g., Fisher Foods v Ohio Dept. of Liq. Control, 555 F Supp 641; Little Rock School Dist. v Borden, Inc., 1980-2 Trade Cas [CCH], fl 63,493 [ED Ark, Aug. 5,1980]; Cochran Co. v Comptroller, 292 Md 3, 437 A2d 194; Walker v Bruno’s, Inc., 650 SW2d 357 [Tenn].)

      . See, Posner, Antitrust Laws: An Economic Perspective, at 8, 18-20; Bork, The Antitrust Paradox: A Policy at War With Itself, at 81; 1 Areeda & Turner, Antitrust Law, at ¶¶103-105.)

       Designated pursuant to NY Constitution, article VI, § 2.


author: Jasen, J. Kaye, J.

text:
    The People of the State of New York, Respondent, v Jose Tineo, Appellant.
    Argued February 15, 1985;
    decided April 4, 1985

      POINTS OF COUNSEL

      Richard A. Greenberg and David S. Zapp for appellant.
    Disqualification of retained counsel on the eve of trial of serious criminal charges, based only on a “possibility” of conflict resulting from counsel’s previous representation of a prosecution witness, violates a defendant’s right to counsel guaranteed by the New York and Federal Constitutions, or at least constitutes an abuse of discretion. (People v Arroyave, 49 NY2d 264; Matter of Abrams [John Anonymous], 62 NY2d 183; United States v Cunningham, 672 F2d 1064; United States v Armedo-Sarmiento, 524 F2d 591; United States v James, 708 F2d 40; People v Hall, 46 NY2d 873, 444 US 848; Board of Educ. v Nyquist, 590 F2d 1241; In re Yarn Processing Patent Validity Litig. v Leesona Corp., 530 F2d 83; Island Pa-Vin Corp. v Klinger, 47 AD2d 627.)

      Robert M. Morgenthau, District Attorney (Susan Corkery and Norman Barclay of counsel), for respondent.
    I. Defendant’s guilt was proved beyond a Reasonable doubt. II. The trial court properly granted defense counsel’s motion to be disqualified on the ground that he had previously represented the People’s confidential informant, and correctly rejected the lawyer’s subsequent request to be reinstated. (Matter of Abrams [John Anonymous], 62 NY2d 183; United States v James, 708 F2d 40; People v Medina, 44 NY2d 199; United States v Fisher, 563 F Supp 1369; United States v Ostrer, 597 F2d 337; People v Hall, 46 NY2d 873, 444 US 848; People v Gomberg, 38 NY2d 307; People v Arroyave, 49 NY2d 264; United States v Rogers, 471 F Supp 847, affd sub nom. United States v Raife, 607 F2d 1000; People v De Chiaro, 48 AD2d 54, 423 US 894.)
   OPINION OF THE COURT

Jasen, J.

We are asked on this appeal whether the trial court erred in granting defense counsel’s motion to be relieved on the ground that he had previously represented the People’s confidential informant, and rejecting counsel’s subsequent request, three days later, to be reinstated.

This criminal prosecution arose from the participation of defendant, Jose Tineo, in a scheme to sell heroin to an undercover police officer during October and early November of 1978. Defendant was arrested on November 16, 1978, and the indictment, filed on November 22, 1978, charged defendant and a coconspirator with two counts of criminal sale of a controlled substance in the first degree, one count each of conspiracy in the second degree and criminal sale of a controlled substance in the second and third degrees, and six related counts of criminal possession of a controlled substance in various degrees.

On January 4, 1980, during a pretrial hearing which was to precede the selection of a jury, defendant sought to discharge his retained attorney, Kenneth Linn. Defendant contended that Linn was “not cooperating” and had “done nothing” for him. The court denied the motion, noting that defendant had not previously voiced dissatisfaction with counsel, defense counsel was capable and had thoroughly prepared for trial, and the motion, made on the eve of trial, was a dilatory tactic. On the morning of January 7, 1980, Linn informed the court that a confidential informant would testify at trial on behalf of the People and that Linn had previously represented the informant. Linn advised the court that there could very easily be a conflict of interest, and requested that the court relieve him as defense counsel. Upon Linn’s own application, the court “reluctantly” relieved Linn. Although present in court, defendant did not object to the removal of his retained lawyer.

On January 10,1980, Frederick Seligman appeared as defendant’s assigned lawyer, and asserted that he was “ready, willing, and able to proceed” provided that he secured a continuance of one or two weeks. Linn and Seligman informed the court of defendant’s objection to representation by Seligman, and Linn informed the court that he had reassessed his earlier position and now sought to be reinstated as defense counsel. Linn, who never unequivocally stated that he had no confidential information derived from his prior relationship with the informant, asserted that any potential conflict of interest resulting from his previous representation of the confidential informant could be avoided by limiting his cross-examination of the informant to matters contained in the informant’s criminal record (“rap sheet”). The court, in response to Seligman, noted that defendant had made an application on the previous Friday to have Linn removed or relieved. The prosecutor objected to reinstatement of Linn based on his view that “it’s a clear conflict of interest for an attorney to be cross-examining a former client while he is representing him as an attorney.” The record does not reveal whether or not the confidential informant had a view as to Linn’s removal.

In response to Seligman and Linn, the court observed that “trial delay” would result from removal, the reason for relieving him must be a “very important issue”, potential prejudice could result if “Linn knew something about the confidential informant that he learned from his relationship as an attorney”, and the court and parties had advance knowledge of the potential conflict. Defendant supported Linn’s application for reinstatement, stating that he was no longer dissatisfied with his representation and thought that Linn was “more familiar with the case” than Seligman, further delay would be undesirable, and Linn had already been paid for his services. The court adhered to its earlier decision relieving Linn, but permitted Linn to assist with the defense, if Linn wished, albeit in a position other than attorney of record.

Defendant, dissatisfied with assigned counsel, represented himself at certain pretrial hearings and at trial. Assigned counsel Seligman, acting as legal advisor to defendant, also participated in the proceedings. Supreme Court, New York County, convicted defendant, upon a jury verdict, of criminal sale of a controlled substance in the first degree and lesser related offenses, and sentenced him to concurrent terms of imprisonment with a maximum of life imprisonment and a minimum of 15 years imprisonment. The Appellate Division, First Department, affirmed the judgment, without opinion, and leave to appeal was granted by this court. For the reasons that follow, the order of the Appellate Division should be affirmed.

On appeal to this court, defendant claims that the trial court’s order relieving his retained attorney was error. Notably, he makes no argument that he was deprived of effective assistance of counsel at trial, only that he was deprived of counsel of his choice. This alleged error is not preserved for our review as defendant did not voice any objection to his attorney’s application to be relieved as defense counsel. The only question properly before us is whether the trial court correctly denied, in its discretion, defendant’s request to reinstate his former counsel to defend him.

There can be little doubt that the right to counsel, as guaranteed by both the State and Federal Constitutions (NY Const, art I, § 6; US Const 6th amend) incorporates the right of a criminal defendant to representation by an attorney of his own choosing (People v Arroyave, 49 NY2d 264, 270; Chandler v Fretag, 348 US 3, 9) and that judicial restriction or governmental intrusion upon the exercise of this fundamental right will be carefully scrutinized (United States v Hobson, 672 F2d 825; Matter of Abrams [John Anonymous], 62 NY2d 183, 196). The constitutional contours of an individual’s right to select an attorney of his own choice, prior to the commencement of a criminal proceeding, have been recently explored in Matter of Abrams (John Anonymous) (supra). In that case, we held that until defendants are charged with a crime, they are free, absent a clear showing of extraordinary circumstances or overriding public necessity, to employ the attorney or attorneys of their choice without judicial interference. (Matter of Abrams [John Anonymous], 62 NY2d 183, 200, supra.) The right to counsel of choice is not diminished once the criminal action has been commenced. However, when the case is pending in the courts, a request to change counsel previously retained or assigned must be addressed to the Trial Judge’s discretion to insure that the defendant’s purported exercise of the right does not serve to delay or obstruct the criminal proceedings. (People v Arroyave, 49 NY2d 264, supra, at p 271.) That discretion is especially broad when the defendant’s actions with respect to counsel place the court in the dilemma of having to choose between undesirable alternatives, either one of which would theoretically provide the defendant with a basis for appellate review.

Under the circumstances present in this case, it cannot be said, as a matter of law, that the trial court abused its discretion upon granting defense counsel’s motion to be relieved or denying the said counsel’s subsequent motion for reinstatement. Linn’s own motion to be relieved was made on the eve of trial, supported by his own assertion that a conflict of interest could very easily arise, and not contested by defendant. Under these circumstances, the trial court did not err, as a matter of law, in granting Linn’s application to be relieved. Nor did the trial court err in denying Linn’s motion for reinstatement. It is no abuse of discretion for a trial court, acting on the eve of trial, to consider the interests of judicial economy, the integrity of the criminal process, and continuous vacillation of both defendant and counsel, in denying a motion for reinstatement. (People v Arroyave, 49 NY2d 264, 270, 273, supra.)

Accordingly, the order of the Appellate Division should be affirmed.

Kaye, J.

(dissenting). The majority gives insufficient weight to defendant’s right to counsel of his choice, and strikes an improper balance between this right and perceived countervailing considerations.

Embraced within the right to counsel, guaranteed by both the Federal and State Constitutions, is the right of a criminal defendant to be represented by counsel of his own choosing (People v Arroyave, 49 NY2d 264, 270). This right is not limited to the period before trial begins, so long as the exercise of defendant’s right is not employed for delay (id., at p 271). While the right is not absolute, restrictions must be carefully scrutinized (Matter of Abrams [John Anonymous], 62 NY2d 183,196). This judicial reluctance to interfere with choice of counsel serves many vital interests, among them fostering an atmosphere of trust which facilitates the free communication necessary for effective representation (People v Arroyave, 49 NY2d 264, 270, supra). Accordingly, as this court has recently held, an individual’s right to select counsel “will not yield unless confronted with some overriding competing public interest” (Matter of Abrams [John Anonymous], 62 NY2d 183, 196, supra).

The question presented is whether any overriding competing public interest was shown supporting the denial of defendant’s right to counsel of his choice.

Counsel’s prior representation of a prosecution witness does not on this record support the denial. Faced with similar questions, this court and others have balanced defendant’s constitutional right to counsel against the prosecution’s legitimate interest in protecting its witnesses from unfair tactics (see, e.g., People v Hall, 46 NY2d 873, cert denied 444 US 848; United States v James, 708 F2d 40; United States v Cunningham, 672 F2d 1064, cert denied_US_, 104 S Ct 2154; United States v Armedo-Sarmiento, 524 F2d 591). An important consideration in the balance is the effect of the prior representation on the witness’s willingness to testify. In Cunningham, for instance, the defendant’s attorney had previously represented a prosecution witness and the prosecutor moved to disqualify him. The witness, while refusing to waive the attorney-client privilege, did not object to the participation of defense counsel. The defendant having waived his right to an attorney without the conflict of interest, the court held that his interest in representation by counsel of his choice outweighed the prosecution’s interest in disqualifying his attorney (see also, United States v Armedo-Sarmiento, 524 F2d 591, supra). On the other hand, in Hall, defense counsel discovered that he had previously represented an important prosecution witness and joined the People’s disqualification motion. The witness backed away from identifying defendant when he learned of counsel’s representation of defendant. Noting that courts should be hesitant to interfere in an established attorney-client relationship even where the attorney joins the motion, we nonetheless found disqualification proper under those circumstances (see also, United States v James, 708 F2d 40, supra).

Here, there was no indication that the witness in any way objected to cross-examination by Linn, and no basis appears in the record to conclude that the witness would have been inhibited in testifying. The sole ground for the prosecutor’s objection, accepted by the trial court, was a possible conflict inherent in the situation. However, as counsel informed the court — and no one questioned — he had no access to information beyond that present in the witness’s record of arrests and convictions. The court took no steps to determine if there was indeed any conflict, or even a realistic potential for conflict that could delay a trial. The information before the court did not establish a conflict requiring disqualification and did not support denial of defendant’s right to counsel of his choice.

The trial court rested its decision only on the perceived conflict. But even if the other considerations now identified by this court are taken into account, the result is unchanged.

The majority’s concern for delay or the interest of judicial economy does not in this case support the denial of defendant’s right. As distinct from Arroyave, the question here arose not during trial but “on the eve of trial.” When the court appointed Linn’s replacement, an attorney unfamiliar with the case, defendant had a right to retain a different attorney, so long as the exercise of that right was not employed for delay (People v Arroyave, 49 NY2d 264, 271, supra). Indeed, as the court recognized, had defendant at that time selected any attorney other than Linn, the substitution would have been permitted. Since the reinstatement of Linn would have enabled the trial to go forward immediately, whereas denial of the motion and any substitution of counsel for defendant required postponement of the trial date to permit new counsel to learn the case, the interest of judicial economy was hardly served, and was in fact disserved, by denial of the motion.

Nor does the “continuous vacillation of both defendant and counsel” referred to by the majority support the denial of defendant’s right to counsel of his choice. In the brief few days between January 4 and 10, defendant changed his mind once and counsel changed his mind once, and both gave their reasons on the record. Defendant’s change of mind regarding Linn does not justify the denial of his right to counsel of his choice, and the court properly did not base its decision on that ground. Facing a life sentence, defendant was justifiably concerned with obtaining adequate representation. A defendant incarcerated for months pending trial and having seen his attorney infrequently might feel neglected and complain to the court about counsel’s performance even if the attorney was diligently preparing for trial, and might understandably change his mind after conferring with counsel and learning of his efforts. Defendant’s failure to object on Monday, January 7, to counsel’s request to be relieved demonstrates no more than a failure to appreciate the ramifications of a change so late in the proceedings. As defendant personally explained to the court on January 10, he and Linn had straightened out their prior misunderstanding, he had paid Linn for his representation, and he wanted him to remain because of his familiarity with the case. Similarly, Linn explained that, having further reflected and having conferred with other defense attorneys, it was his belief that he could and should stay on the case. This was not a picture of “continuous vacillation” or manipulation of the court, and the change of mind in the brief period was wholly without consequence. Indeed, the court rested its decision on what it believed to be an ethical conflict, not any “vacillation” of defendant or his counsel.

The right to counsel of choice is not diminished once the criminal action has been commenced (majority opn, at p 536). The measure of discretion permitted a trial court does not reduce its responsibility to make appropriate inquiry so that, in a choice between difficult or undesirable alternatives (id.), defendant’s rights will be protected and the risk of reversible error will be mitigated. Here, defendant’s right to counsel of his choice was denied on nothing more than a theoretical possibility of conflict. The proceedings would not have been delayed if counsel had been reinstated. On this record, no overriding competing public interest has been shown justifying the denial of defendant’s right to counsel of his choice. I would therefore reverse the conviction and order a new trial.

Chief Judge Wachtler and Judges Simons and Lynch* concur with Judge Jasen; Judge Kaye dissents and votes to reverse in a - separate opinion in which Judge Meyer concurs; Judge Alexander taking no part.

Order affirmed.

      . The court relieved Linn in the following manner:
      “the court: * * * I learned this morning that there is a confidential informant in the case and I also learned that Mr. Linn, the attorney for Mr. Tineo, has previously represented, as an attorney, the confidential informant; and, since the confidential informant is going to testify in this case, as I am advised, there could very easily be a conflict of interest, and, under those circumstances, Mr. Linn, on your own application, I’m going to relieve you.
      “mr. linn: Yes.
      “the court: I do it reluctantly because it means postponing the case. However, I’m going to put the case down for Thursday, Mr. Linn.
      “mr. linn: Yes, sir.”

      . While the confidential informant’s case was still pending, Linn no longer represented the informant at the time of this pretrial hearing.

      . This observation, of course, represents an appropriate concern for the trial delay that would necessarily arise if the conflict were to cause disqualification of counsel during the trial.

      . In view of the fact that no question of effective assistance of counsel has been raised, the dissent’s assertion that “defendant was justifiably concerned with obtaining adequate representation” is superfluous.

      . This court’s decision in Matter of Abrams (John Anonymous) (62 NY2d 183) was expressly limited to interference with an individual’s choice of counsel before a criminal proceeding has been commenced. (Matter of Abrams [John Anonymous], supra, at p 197, n 5.)

      . The sentiments expressed by the dissent underscore the impropriety of displacing a trial court’s properly founded exercise of discretion. For example, the dissent questions the basis of the trial court’s decision to relieve Linn. Such concern is misplaced since Linn, the only individual with actual knowledge of the prejudicial impact that the prior representation of the confidential informant could have upon the instant proceeding, represented to the trial court that a conflict of interest could very easily arise. To justify defendant’s original decision to discharge Linn, the dissent hypothesizes that under the circumstances, defendant “might feel neglected” and his change of mind to retain Linn was “understandable”. It is emphatically not the function of this court to investigate the feelings or state of mind of a defendant in an effort to uncover conceivable rationalizations for his conduct. Such considerations are to be weighed by the trier of fact.

      . While no question of effective assistance is raised, attention to the facts of the case, as well as defendant’s situation, can hardly be dismissed as “superfluous” or otherwise disparaged (see, majority opn, nn 4, 5). So long as this court chooses to consider defendant’s initial complaint and change of mind regarding Linn’s representation as among the “circumstances” supporting the disqualification, it is relevant and entirely appropriate to consider the explanations.

      . While defendant on January 7 made no objection to his attorney’s application to be relieved, the issue is without doubt preserved for our review. On January 7, defendant, in effect left without counsel by virtue of his attorney’s application to withdraw, was never asked his view of the application. On the very next return date, only three days later, defendant voiced his objection, and the precise issue was fully ventilated.

       Designated pursuant to NY Constitution, article VI, § 2.


text:
    Max Maleh et al., Appellants, v New York Property Insurance Underwriting Association, Respondent.
    Decided November 27, 1984

      APPEARANCES OF COUNSEL

      Jonathan J. Wilkofsky for appellants.

      Charles T. Rubin for respondent.
   OPINION OF THE COURT

Memorandum.

The order of the Appellate Division should be affirmed, with costs.

Consistent with our decision in Igbara Realty Corp. v New York Prop. Ins. Underwriting Assn. (63 NY2d 201), plaintiffs’ submission of documentation and participation in oral examinations did not discharge their obligation to submit sworn proofs of loss within 60 days after the insurer’s demand. Since it is undisputed that plaintiffs failed to submit sworn proofs of loss within 60 days after receipt of the insurer’s request, as required by the terms of the standard fire insurance policy and sections 168 and 172 of the Insurance Law, the Appellate Division correctly affirmed the dismissal of plaintiffs’ first cause of action arising from the loss of January 15, 1982.

Chief Judge Cooke and Judges Jasen, Jones, Wachtler, Meyer, Simons and Kaye concur.

On review of submissions pursuant to section 500.4 of the Rules of the Court of Appeals (22 NYCRR 500.4), order affirmed, with costs, in a memorandum.


text:
    Raymond Satiro, Appellant, v City of New Rochelle, Respondent. (And a Third-Party Action.)
    Decided November 27, 1984

      APPEARANCES OF COUNSEL

      Harry H. Lipsig for appellant.

      Leonard A. Weiss for respondent.
   OPINION OF THE COURT

On review of submissions pursuant to section 500.4 of the Rules of the Court of Appeals (22 NYCRR 500.4), order affirmed, with costs, for reasons stated in the memorandum at the Appellate Division (102 AD2d 821).

Concur: Chief Judge Cooke and Judges Jasen, Jones, Wachtler, Meyer, Simons and Kaye.


text:
    Ismael Mickens, Appellant, v Prudential Insurance Corp. of America, Respondent.
    Decided November 27, 1984

      APPEARANCES OF COUNSEL

      Stanley F. Meltzer for appellant.

      Margaret M. Herrmann for respondent.
   OPINION OF THE COURT

On review of submissions pursuant to section 500.4 of the Rules of the Court of Appeals (22 NYCRR 500.4), order affirmed, with costs, for the reasons stated in the memorandum at the Appellate Division (102 AD2d 815; see, also, Strunk v Zoltanski, 62 NY2d 572).

Concur: Chief Judge Cooke and Judges Jasen, Jones, Wachtler, Meyer, Simons and Kaye.