author: CALLAHAN, C. J.

text:
    JOHN R. SLIMP ET AL. v. DEPARTMENT OF LIQUOR CONTROL ET AL.
    (15454)
    Callahan, C. J., and Berdon, Norcott, Palmer and Peters, Js.
    Argued November 6
    officially released December 31, 1996

      Morton Siegel, with whom was John W. Bradley, Jr., for the appellants (plaintiffs).

      Robert F. Vacchelli and Steven M. Rutstein, assistant attorneys general, with whom, on the brief, was Richard Blumenthal, attorney general, for the appellees (defendants).
   CALLAHAN, C. J.

This appeal arises out of a license suspension ordered, after a hearing, by the department of liquor control (department). The plaintiffs, Gambrinus Importing Company, Inc., backer, and John R. Slimp, permittee, were summoned to the hearing to show cause why their out-of-state shipper’s beer permit should not be suspended or another penalty imposed for certain alleged violations of the Liquor Control Act and departmental regulations. After the hearing, the department found that the plaintiffs had committed multiple violations of General Statutes §§ 30-94 and 30-63 (b), and § 30-6-A29 (a) and (f) of the Regulations of Connecticut State Agencies. As a consequence, the department imposed a 400 day suspension of the plaintiffs’ out-of-state shipper’s beer permit for each violation, the penalties to ran concurrently, or in lieu of suspension, a fine of $30,000.

Pursuant to General Statutes § 4-183 (a), the plaintiffs appealed the department’s decision to the Superior Court. The trial court upheld the department’s determination of statutory and regulatory violations and concluded that the department had not abused its discretion by imposing the penalty. The trial court also concluded that the plaintiffs had standing to challenge the constitutionality of General Statutes § 30-63 (c), the price posting statute, even though the department had not alleged or found a violation of § 30-63 (c). On the merits, however, the trial court found no per se violation of the Sherman Antitrust Act, and hence rejected the plaintiffs’ constitutional claim that § 30-63 (c) violates the supremacy clause of article six of the United States constitution. The plaintiffs appealed from the trial court’s judgment to the Appellate Court, and we transferred the appeal to this court pursuant to Practice Book § 4023 and General Statutes § 51-199 (c).

On appeal the plaintiffs claim that the trial court improperly concluded that: (1) § 30-6-A29 (f) is a valid exercise of the department’s regulatory authority because its terms can be interpreted so as to be consistent with the substantive provisions of the Liquor Control Act; (2) § 30-63 (c) did not violate § 1 of the Sherman Antitrust Act and, therefore, did not implicate the supremacy clause of the United States constitution; and (3) the imposition of a 400 day suspension of the plaintiffs’ out-of-state shipper’s permit was not an abuse of the department’s administrative discretion. We affirm the decision of the trial court regarding the first and third issues; as to the second issue, we conclude that the plaintiffs did not have standing to challenge the constitutionality of § 30-63 (c), and therefore, remand the case to the trial court with direction to dismiss the plaintiffs’ constitutional claim.

The facts are not in dispute. The plaintiffs are out-of-state shippers who sell Corona beer products to various wholesalers in Connecticut. In 1992 and 1993, the plaintiffs sponsored a program that returned to Connecticut wholesalers of Corona beer $1.15 for each case of Corona beer that the wholesaler sold during a specified time period. The plaintiffs characterized this program as a product promotion; the industry denominates such a program as a “depletion allowance.” Connecticut wholesalers desiring to participate in the plaintiffs’ program were required to complete a promotional tracking form, a retail price letter, and a depletion report reflecting the wholesaler’s beginning and ending inventory and the amount of sales for the particular period. The wholesalers were not restricted in their use of the funds obtained as a result of the depletion allowance program.

Our standards of review concerning administrative appeals are statutorily mandated: “The court shall not substitute its judgment for that of the agency as to the weight of the evidence on questions of fact. The court shall affirm the decision of the agency unless the court finds that substantial rights of the person appealing have been prejudiced because the administrative findings, inferences, conclusions, or decisions are: (1) In violation of constitutional or statutory provisions; (2) in excess of the statutory authority of the agency; (3) made upon unlawful procedure; (4) affected by other error of law; (5) clearly erroneous in view of the reliable, probative, and substantial evidence on the whole record; or (6) arbitrary or capricious or characterized by abuse of discretion or clearly unwarranted exercise of discretion.” General Statutes § 4-183 (j).

I

The first issue on appeal concerns the scope of protection afforded the plaintiffs’ program of depletion allowances under the product promotion exception in § 30-6-A29 (f). This is an issue of statutory interpretation, and as such, this court “can do no more than decide whether the commission upon the facts has mistaken the law and so has acted illegally, or whether it has reached a conclusion untenable in the light of logic and reason.” Aminti v. Liquor Control Commission, 144 Conn. 550, 553, 135 A.2d 595 (1957).

The plaintiffs argue that § 30-6-A29 (f) specifically exempts them from complying with §§ 30-94 and 30-63 (b) and § 30-6-A29 (a). In support of their argument, they point to the following language of § 30-6-A29 (f): “Notwithstanding any provisions of this section to the contrary, an out-of-state shipper or manufacturer licensee may offer to wholesaler licensees funds to be used for product promotion as permitted by federal law . ...” (Emphasis added.) The plaintiffs contend that this regulation provides an exception not only to the regulation but also to the statutes that they are charged with violating. They base their argument on a perceived change in public policy over the years. The plaintiffs argue that §§ 30-94 and 30-63 (b) and § 30-6-A29 (a) express a policy of heavy handed regulation and that such a policy is outdated and no longer viable. The plaintiffs then cite § 30-6-A29 (f) as embodying the current policy regarding liquor control, which, they claim, mirrors federal policy in the area of the regulation of intoxicating liquors. The plaintiffs argue that the policy evidenced in § 30-6-A29 (f) supersedes the policy expressed in §§ 30-94 and 30-63 (b) and § 30-6-A29 (a). The plaintiffs’ ultimate conclusion is that their depletion allowance program is permitted by federal law, and they therefore cannot be found to have transgressed the state statutory and regulatory provisions that they were charged with violating. We are unpersuaded.

The basis of the plaintiffs’ argument is that they are exempted from compliance with §§ 30-94 and 30-63 (b) and § 30-6-A29 (a) as a result of certain language of § 30-6-A29 (f). It is solely by the exception set forth in § 30-6-A29 (f) that the plaintiffs claim that the department incorrectly found violations of the Connecticut statutes and regulations. Therefore, if the exception does not apply, the plaintiffs’ argument fails. In support of their argument, the plaintiffs submitted into evidence a letter from Harry L. McCabe, chief of the market compliance branch of the Bureau of Alcohol, Tobacco and Firearms. The letter stated: “Assuming such payments are in compliance with State law, adherence to 27 CFR 10.23 will enable your client to safely act within the purview of the Federal Alcohol Administration Act.” The plaintiffs cite the letter as proof that federal law permitted their promotional scheme. They conclude, therefore, that they were provided an exemption from state law pursuant to § 30-6-A29 (f).

The plaintiffs’ argument fails for two reasons. First, in his letter, McCabe stated that in rendering his opinion he assumed the plaintiffs’ scheme was in compliance with state law. Because the plaintiffs’ compliance with state law is still in question, they can only claim that their scheme may be permitted by federal law. The letter supports nothing more. Second, § 30-6-A29 (f) contains restrictions in addition to those contained in 27 C.F.R. § 10.23. It provides that out-of-state shippers may offer promotional funds only “as permitted by federal law and in accordance with the following [additional restrictions].” (Emphasis added.) In this regard, the trial court noted that “[t]he agency was . . . warranted in finding a violation of regulation § 30-6-A29 (f) [2] in that the rebates were not paid for promotional puiposes ‘without discrimination in any manner among wholesalers authorized to distribute the products to be promoted’ but were paid according to discriminations made on the basis of amount of product sold.” Without reference to a possible conflict between § 30-6-A29 (1) and §§ 30-94 and 30-63 (b), the record supports the department’s conclusion that the plaintiffs had not acted in accordance with § 30-6-A29 (f), specifically, subsection (f) (2).

At the department hearing, the named plaintiff testified that the formula used by the plaintiffs to distribute funds was less discriminatory than a formula based upon population. Regardless of the discriminatory or nondiscriminatory effect of the plaintiffs’ distribution formula, however, § 30-6-A29 (f) required the plaintiffs to provide the department with a detailed exposition of the distribution formula thirty days before beginning any distribution of funds. They were also required to obtain the department’s approval of any formula for the distribution of funds. The plaintiffs conceded at oral argument that they had given no notice and had received no approval.

Because the department found that the plaintiffs had not acted “in accordance with” the provisions of § 30-6-A29 (f), we conclude that the trial court was correct in determining that the plaintiffs were not exempted from compliance with state law by reason of the “as permitted by federal law” language of § 30-6-A29 (f). The trial court was correct, therefore, in affirming the department’s rulings that the plaintiffs had violated §§ 30-94 and 30-63 (b) and § 30-6-A29 (a) and (f).

II

The plaintiffs’ second claim concerns the trial court’s conclusion that § 30-63 (c) did not violate § 1 of the Sherman Antitrust Act and, therefore, was not unconstitutional pursuant to the supremacy clause of article six of the United States constitution. The trial court ruled that the plaintiffs had standing to bring the constitutional claim because it found that the department’s rationale for enforcing § 30-94 “was the consequential charging of less than the posted price through the operation of the volume rebate, a violation of § 30-63 (c).” While the trial court found that the plaintiffs had standing to raise the constitutional claim, it also found that “the plaintiffs [had] not established that the prohibition on giving discounts or rebates based on volume is on its face a violation of the Sherman Act even though it may, in combination with the posting requirements, have an anticompetitive effect.” The plaintiffs contend that § 30-63 (c), the price posting statute, is a per se violation of § 1 of the Sherman Antitrust Act and cannot be saved by the state action doctrine or a balancing test under the twenty-first amendment to the United States constitution. Since we conclude that the plaintiffs lack standing to raise the constitutional issue, we do not reach the merits of the plaintiffs’ claim.

“Standing ... is not a technical rule intended to keep aggrieved parties out of court; nor is it a test of substantive rights. Rather it is a practical concept designed to ensure that courts and parties are not vexed by suits brought to vindicate nonjusticable interests and that judicial decisions which may affect the rights of others are forged in hot controversy, with each view fairly and vigorously represented. See, e.g., Baker v. Carr, 369 U.S. 186, 204, 82 S. Ct. 691, 7 L. Ed. 2d 663 (1962); Stern v. Stern, 165 Conn. 190, 192, 332 A.2d 78 (1973). . . . Board of Pardons v. Freedom of Information Commission, 210 Conn. 646, 648-49, 556 A.2d 1020 (1989).” (Internal quotation marks omitted.) Light Rigging Co. v. Dept. of Public Utility Control, 219 Conn. 168, 172, 592 A.2d 386 (1991). “One who has not been harmed by a statute cannot challenge its constitutionality. Salgreen Realty Co. v. Ives, 149 Conn. 208, 215, 177 A.2d 673 [1962]. The question of the validity of the statute must be tested by its effect on its attacker under the particular facts of his case. Karen v. East Haddam, 146 Conn. 720, 727, 155 A.2d 921 [1959].” Riley v. Liquor Control Commission, 153 Conn. 242, 247, 215 A.2d 402 (1965).

In the present case, the plaintiffs have failed to show how § 30-63 (c) had any impact on them. Section 30-63 (c) simply was not invoked. The department did not cite the plaintiffs for a violation of § 30-63 (c), and the notice and particulars sent to the plaintiffs to apprise them of the complaints against them similarly did not mention a violation of § 30-63 (c). Additionally, the department did not submit evidence of the prices posted by the plaintiffs during the time periods in question or of any reduced prices at which the department claimed they had sold their beer. The trial court determined, however, that the department’s enforcement of § 30-94 was necessarily an enforcement of § 30-63 (c). We agree with the trial court that the plaintiffs would have had standing to challenge the constitutionality of § 30-63 (c) if their inducements necessarily implicated price posting or if § 30-63 (c) was enforced against them. Under the circumstances, however, we conclude that the necessary predicates for invoking § 30-63 (c) have not been met and therefore disagree with the trial court.

The statutes and regulations in question evidence two fundamental concerns of the legislature. First, the legislature was concerned that there be no favoritism, i.e., no discrimination, in the liquor industry in Connecticut. Section 30-63 (b) serves this purpose because it prohibits discrimination in “any manner in price discounts between one permittee and another.” Section 30-63 (c), the price posting statute, also serves this purpose. It requires manufacturers, wholesalers, and out-of-state sellers to post the price at which they will sell their product for the following month and to sell the product at that price for that month. It does not control the price posted by the sellers, but only requires them to sell their product at the posted price to all their customers, large or small.

The second fundamental concern evinced by the statutes and regulations is the legislature’s concern that artificial inducements to purchase liquor will result in increased consumption. Section 30-63 (b) also addresses this concern in that it forbids manufacturers, wholesalers, and out-of-state shippers from allowing “in any form any discount, rebate, free goods, allowance or other inducement for the purpose of making sales or purchases.” (Emphasis added.) The quintessential inducement statute, however, is § 30-94. Enacted as No. 377 of the 1955 Public Acts, § 30-94 was the rewrite and codification of a liquor control commission regulation that had been in effect since 1939. The purpose of the act, entitled “An Act Concerning Illegal Inducements to Purchase,” is clear from the legislative history. In a liquor control committee session on April 6, 1955, Gaynor Brennan, an attorney representing the Connecticut Wholesaler Liquor Dealers, commented on the proposed bill, SB-1111, as follows: “The purpose is to prevent artificial stimulation of sales of liquor at any level.” Conn. Joint Standing Committee Hearings, Liquor, 1955 Sess., p. 79. Senator James E. Foley, who moved for passage of the bill in the state Senate, explained the provision as follows: “This is what we call the inducement bill and it tries to make impossible a tie-in . . . .It is an inducement to purchase this liquor by a consumer or if a wholesaler wanted to sell a stock of goods to some retailer he could try to do it with some kind of tie-in. This is to prevent that kind of an inducement, or else he could give an alarm clock or some similar merchandise. It is illegal.” 6 S. Proc., Pt. 4, 1955 Sess., p. 1206. The purpose of § 30-94 was to eliminate incentive or inducement programs that would artificially increase the consumption of alcohol by tying an additional benefit to its purchase.

The trial court implicitly agreed with the position that § 30-94 does not necessarily implicate § 30-63 (c). It stated in its memorandum of decision that “the agency might be in the position of enforcing only § 30-94 if a shipper offered a gift or a prize to a customer . . . .” The trial court, however, also found that if money were exchanged, “the issue of the price posting scheme is part of the enforcement proceeding and is fairly raised as an issue in the appeal.” (Emphasis added.) We disagree. We believe it is more appropriate to analyze the structure of the promotion challenged rather than the form of the benefit given to determine whether the promotion is properly characterized as an inducement to the sale of more alcohol or a scheme to reduce the sales price of the plaintiffs’ product below the posted price.

A depletion allowance program, the type of program used by the plaintiffs, consists of a seller’s compensating a buyer according to the amount of goods the buyer has sold during a specified time period. The benefit given to the buyer is contingent upon the buyer’s success in selling the product to consumers. Because the size of the benefit is tied to the number of sales, a depletion allowance program induces the buyer to sell as much of the product as possible. The obvious purpose and direct result of the plaintiffs’ depletion allowance product promotion, therefore, was the inducement of sales from the wholesalers to retailers, not the reduction of the effective sales price of the product.

Moreover, the plaintiffs’ depletion allowance program regularly altered the specific products that were the subject of the promotion. The promotion at different times targeted the plaintiffs’ different labels, i.e., Corona Extra, Corona Light, Negra Modelo, and Pacifico Clara, by tying the benefit to the product. The targeting of specific products for depletion allowances supports the conclusion that the primary goal of the program was the inducement of sales of the plaintiffs’ selected products and not the effective reduction of the sales price.

In sum, we determine that the product promotion program run by the plaintiffs, as evidenced by the structure of the program itself, was an inducement to sell more alcohol. Any consequent theoretical reduction of the sales price does not by itself implicate § 30-63 (c). Furthermore, even if the department could have charged the plaintiffs with a violation of § 30-63 (c), it did not do so. We conclude, consequently, that the plaintiffs have no standing to challenge the constitutionality of § 30-63 (c) and therefore do not address the merits of their constitutional claim.

Ill

The plaintiffs’ third issue is whether the penalty imposed by the department on the plaintiffs for their statutory and regulatory violations constituted an abuse of discretion. Our standard of review is derived from § 4-183 (j) (6), which requires us to affirm the department’s decision unless it is “arbitrary or capricious or characterized by abuse of discretion or clearly unwarranted exercise of discretion.”

The plaintiffs’ penalty consisted of a 400 day suspension of their out-of-state shipper’s beer permit for each violation, the suspensions to run concurrently. The plaintiffs were given the option of paying a $30,000 fine in lieu of the suspension. The plaintiffs claim the penalty imposed is an abuse of the department’s discretion because it is excessive on its face and in light of the circumstances surrounding the promotion. The plaintiffs provide no evidence in the record by which we can examine the claimed excessiveness of the penalty. Without at least some evidence of penalties previously imposed by the department, and the circumstances of their imposition, we cannot conclude that the penalties imposed in this instance were an abuse of the department’s discretion. We have no evidence by which to gauge any claimed deviation.

Moreover, despite the plaintiffs’ argument to the contrary, the fact that certain mitigating factors claimed by the plaintiffs were not explicitly mentioned in the department’s memorandum of decision does not require a conclusion that the department abused its discretion; it may well have considered those factors in arriving at the penalty. “[T]he court cannot, on an appeal, substitute its discretion for that vested in the liquor control commission .... DeMond v. Liquor Control Commission, [129 Conn. 642, 646, 30 A.2d 547 (1943)].” (Internal quotation marks omitted.) Sumara v. Liquor Control Commission, 165 Conn. 26, 31-32, 327 A.2d 549 (1973). “[T]he granting, revocation and suspension of liquor permits [are] primarily administrative functions in the exercise of the executive power of government, and if a court were to substitute its discretion for that of the commission, it would be unconstitutionally exercising an executive function.” Id., 31. General Statutes § 30-55 authorizes the department of liquor control to revoke or suspend permits “upon cause found” after a hearing. The statute provides no additional factors in addition to “cause” that must be taken into consideration when the department imposes any penalty, including revocation. If the department had the power to revoke a permit, it necessarily had the power to suspend the permit for a period of time, even a lengthy period of time. We conclude that we have no evidence that the department abused its discretion when imposing penalties on the plaintiffs.

The judgment is affirmed as to both the first and third issues; as to the second issue, i.e., the constitutionality of § 30-63 (c), the judgment is reversed and the case is remanded with direction to dismiss the plaintiffs’ constitutional claim.

In this opinion the other justices concurred.

       Gambrinus Importing Company, Inc., is a Texas corporation.

       The plaintiffs ship Corona beer products into Connecticut.

       General Statutes § 30-94 provides: “No permittee or group of permittees licensed under the provisions of this chapter in transaction with another permittee or group of permittees shall directly or indirectly offer, furnish or receive any free goods, gratuities, gifts, prizes, coupons, premiums, combination items, quantity prices, cash returns, loans, discounts, guarantees, inducements or special prices, or other inducements with the sale of alcoholic beverages or liquors. No permittee shall require any purchaser to accept additional alcoholic liquors in order to malee a purchase of any other alcoholic liquor.”

       General Statutes § 30-63 (b) provides: “No manufacturer, wholesaler or out-of-state shipper permittee shall discriminate in any manner in price discounts between one permittee and another on sales or purchases of alcoholic liquors bearing the same brand or trade name and of like age, size and quality, nor shall he allow in any form any discount, rebate, free goods, allowance or other inducement for the purpose of making sales or purchases.”

       Section 30-6-A29 (a) of the Regulations of Connecticut State Agencies provides: “No permittee in transactions with another permittee shall directly or indirectly offer, furnish, solicit or receive any free goods, discounts, gratuities, gifts, prizes, coupons, premiums, combination items, quantity prices, cash returns, loans, guarantees, inducements or special prices, or other inducements with the sale of alcoholic liquors.”

       Section 30-6-A29 (f) of the Regulations of Connecticut State Agencies provides: “Notwithstanding any provisions of this section to the contrary, an out-of-state shipper or manufacturer licensee may offer to wholesaler licensees funds to be used for product promotion as permitted by federal law and in accordance with the following:
      “(1) There shall be no restrictions or obligations on the use of such funds, except that such funds shall be used for promotion of the produet(s) identified;
      “(2) Funds shall be offered without discrimination in any manner among wholesalers authorized to distribute the products to be promoted, except that funds may be pro-rated among such wholesalers based upon population of their authorized geographic territory for the product(s) involved, as determined by the most recently completed decennial census; or based upon any other formula not prohibited by section 30-63 or 30-94 of the general statutes;
      “(3) Out-of-state shippers and manufacturers shall file with the Department, at least thirty days before the distribution of funds, written notice listing the following:
      “(A) The total amount of funds to be distributed and the proposed date of distribution;
      “(B) The product(s) to be promoted and the wholesalers authorized to distribute such products;
      “(C) If funds are distributed based on population served, the population in the geographic territories of each wholesaler, and the eligible share of funds expressed as a percentage;
      “(D) If any other formula is used, a detailed exposition of such formula used; and
      “(E) The amount, of promotional funds each is to receive.
      “(4) No promotional funds shall be distributed to any wholesaler without approval of the Department.”

       General Statutes § 4-183 (a) provides: “A person who has exhausted all administrative remedies available within the agency and who is aggrieved by a final decision may appeal to the superior court as provided in this section. The filing of a petition for reconsideration is not a prerequisite to the filing of such an appeal.”

       General Statutes § 30-63 (c) provides: “Each manufacturer, wholesaler and out-of-state shipper permittee shall post with the department, on a monthly basis, the bottle, can and case price, and for beer, the price per keg or barrel or fractional unit thereof, of any brand of goods offered for sale in Connecticut, which price when so posted shall be the controlling price for such manufacturer, wholesaler or out-of-state permittee for the month following such posting. Notice of all manufacturer, wholesaler and out-of-state shipper permittee prices shall be given to permittee purchasers by direct mail or advertising in a trade publication having circulation among the retail permittees except a wholesaler permittee may give such notice by hand delivery. Price postings with the department setting forth wholesale prices to retailers shall be available for inspection during regular business hours at the offices of the department by manufacturers and wholesalers until three o’clock p.m. of the first business day after the last day for posting prices. A manufacturer or wholesaler may amend his posted price for any month to meet a lower price posted by another manufacturer or wholesaler with respect to alcoholic liquor bearing the same brand or trade name and of like age, vintage, quality and unit container size; provided that any such amended price posting shall be filed before three o’clock p.m. of the fourth business day after the last day for posting prices; and provided further such amended posting shall not set forth prices lower than those being met. Any manufacturer or wholesaler posting an amended price shall, at the time of posting, identity in writing the specific posting being met.”

       Section 1 of the Sherman Antitrust Act, 15 U.S.C. § 1, provides in relevant part: “Every contract, combination in the form of a trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is declared to be illegal.”

       The parties stipulated to the relevant facts at the administrative hearing.

       See footnote 6.

       The plaintiffs contend that the statutes and regulation in question were a tie-in to the resale price maintenance program statutes; General Statutes (Rev. to 1981) §§ 30-68a through 30-68c, §§ 30-68e through 30-G8h and § 30-68j; which were repealed by No. 81-294 of the 1981 Public Acts. The resale price maintenance program required sellers to sell at or above their “cost.” “Cost” was statutorily defined to include a legislatively chosen markup from the seller’s purchase price. In this way, the state was assured that liquor would maintain a certain minimum retail price.

       Section 10.23 of title 27 of the Code of Federal Regulations provides in relevant part: “Although industry members are not prohibited from offering or giving money or other things of value to a wholesale entity . . . the wholesaler will be considered as acting as a mere conduit between its officers, employees, or representatives and the industry member if,
      “(a) There is an agreement or understanding, implied or explicit, that the money or thing of value will be passed on to the officers, employees, or representatives, or
      “(b) It is obvious by the very nature of the item given (such as a free trip) that a pass through to the officers, employees, or representatives is clearly contemplated, or
      “(c) The records of the recipient wholesaler do not accurately reflect such money or item as an asset of the wholesale entity, thus being subject to all ensuing tax consequences as distinguished from the receipt of the money or item as apersona! asset of an officer, employee, or representative. ”

       See footnote 6.

       Section 30-6-A29 (f) (2) authorizes discrimination “based upon population of their authorized geographic territory for the produces) involved, as determined by the most recently completed decennial census; or based upon any other formula not prohibited by section 30-63 or 30-94 of the general statutes.”

       See footnote 6.

       See footnote 6.

       Even if we were to conclude that the plaintiffs had complied with § 30-6-A29 (f) and were protected by its “notwithstanding” language, we could not conclude that the regulation somehow cures the plaintiffs’ noncompliance with the statutes in question. An administrative regulation is presumed valid unless it is shown to be inconsistent with or beyond the authorizing statute. See, e.g., Mass v. United States Fidelity & Guaranty Co., 222 Conn. 631, 649, 610 A.2d 1185 (1992); Travelers Ins. Co. v. Kulla, 216 Conn. 390, 399, 579 A.2d 525 (1990). If a regulation is shown to be inconsistent with a statute, the regulation is invalidated, not the statute.

       The trial court affirmed the department’s ruling relying, in part, upon its interpretation that “[Regulation § 30-6-A29 (f) authorizes only those promotional payments that are expressly authorized by federal law. The cited federal regulation refers back to state regulations, and therefore the prohibitions of § 30-6-A29 (a) are unaffected by any federal provision and are applicable.” Because we do not reach this issue in our decision, we make no comment on the trial court’s interpretation.

        Parker v. Brown, 317 U.S. 341, 63 S. Ct. 307, 87 L. Ed. 315 (1943), and its progeny established two st andards for antitrust immunity for state action. “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 [98 S. Ct. 1123, 55 L. Ed. 2d 364] (1978).” (Internal quotation marks omitted.) California Retail Liquor Dealers Assn. v. Midcal Aluminum, Inc., 445 U.S. 97, 105, 100 S. Ct. 937, 63 L. Ed. 2d 233 (1980).

       The twenty-first amendment to the United States constitution provides in relevant part: “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.”

       If a state statute is not. saved from antitrust scrutiny under the state action doctrine, the court, must then decide whether “the state’s interest should prevail under the balancing process . . . prescribed for cases where the procompetition policy of the federal antitrust laws comes in conflict with a state’s exercise of the authority reserved to it by § 2 of the Twenty-First Amendment.” Battipaglia v. New York State Liquor Authority, 745 F.2d 166, 177 (2d Cir. 1984).

       In reaching its conclusion, the trial court relied upon a statement made by the department in its memorandum of decision: “[We see] in this same set of facts a program of ‘cash returns,’ ‘rebates,’ and ‘discounts’ in violation of Statutory Sections 30-94, 30-63 (b), and Regulatory Section 30-6-A29 (a), respectively. This is because funds were distributed based on what and how much was sold and thereby illegally induc[ed] more sales and purchases of Gambrinus products at effectively reduced prices of goods." (Emphasis added.) The trial court interpreted this statement to mean that the substance of the offenses against the plaintiffs involved charging “reduced prices.” We disagree. As noted later in this opinion, the substance of the offenses and the direct result of the plaintiffs’ product promotion was the inducement of the sale of alcohol.

       We agree with the trial court, although for a different reason, that § SOBS (b) does not necessarily implicate § 30-63 (c). In its reasoning, the trial court focused on the discrimination section of § 30-63 (b) — “ ‘price discounts’ may be given to a wholesaler or shipper’s customers so long as the seller does not‘discriminate’between customers in the discounts . . —but the department found a violation of the inducement section of the statute — “the department sees in this same set of facts a program of . . . ‘rebates’ ... in violation of . . . [§] 30-63 (b).” For the identical reasons that we conclude that § 30-94 does not implicate § 30-63 (c) under these circumstances, we conclude that the plaintiffs’ violation of § 30-63 (b) similarly does not implicate § 30-63 (c).

       We can only assume that the legislature felt there was already enough “natural” stimulation inducing the purchase of liquor.

       When promulgated in 1939, the regulation provided as follows: “Inducement to Purchase. No permittee shall directly or indirectly offer or furnish any gifts, prizes, coupons, premiums, or similar inducements with the sale of any alcoholic beverages. Nothing herein shall prohibit the furnishing of advertising novelties of nominal value.” Regs., Liquor Control Commission § 19, Connecticut Law Journal Vol. 7, No. 30, p. 246 (August 31, 1939).
      The regulation was subsequently amended, including the addition of a statement of purpose, to provide as follows:
      “Inducements to Purchase. No permittee in transaction with another permittee shall directly or indirectly offer, furnish or receive any free goods, discounts, gratuities, gifts, prizes, coupons, premiums, combination items, quantity prices, cash returns, loans, guarantees, inducement or special prices, or other inducements with the sale of any alcoholic liquors.
      “No permittee shall require any purchaser to accept additional liquors in order to make a purchase of any particular, desired item.”
      “(These provisions shall apply to all types of permittees, and are intended to prevent artificial stimulation of sales of liquor by any means.)” Regs., Liquor Control Commission § 151-20, Connecticut Law Journal Vol. 15, No. 37, p. 5 (February 23, 1948).

       We recognize that any discount, rebate, or cash return effectively reduces the price of the product sold. In theory, however, any benefit received by the purchaser in addition to the product sold can be characterized as effectively reducing the sale price. Instead of drawing a line between cash and noncash gifts 1o distinguish between those transfers that necessarily implicate the price posting statute and those that do not, we choose instead to look at the direct result of the program in question.

       Had a reduction in sales price been the goal, the plaintiff could have tied the cash return to the quantity of product bought by the wholesaler from the plaintiffs rather than the quantity sold by the wholesaler to the retailers. While this scheme would also violate § 30-94, it would necessarily implicate the price posting statute, because the practical result of the program would be a reduced purchase price. In this way, the department would not be able to avoid court review of the price posting scheme by a simple recharacterization of the alleged violation. Similarly, we will not allow the plaintiffs to achieve judicial review by a simple recharacterization of the alleged violation.

       We note that the plaintiffs could have availed themselves of General Statutes §§ 4-176 or 4-175 in their effort to have the constitutionality of § 30-63 (c) determined.
      Section 4-176 provides in relevant part: “(a) Any person may petition an agency, or an agency may on its own motion initiate a proceeding, for a declaratory ruling as to the validity of any regulation, or the applicability to specified circumstances of a provision of the general statutes, a regulation, or a final decision on a matter within the jurisdiction of the agency.”

        Section 4-175 provides in relevant part: “(a) If a provision of the general statutes, a regulation or a final decision, or its threatened application, interferes with or impairs, or threatens to interfere with or impair, the legal rights or privileges of the plaintiff and if an agency (1) does not take an action required by subdivision (1), (2) or (3) of subsection (e) of section 4-176, within sixty days of the filing of a petition for a declaratory ruling, (2) decides not to issue a declaratory ruling under subdivision (4) or (5) of subsection (e) of said section 4-176, or (3) is deemed to have decided not to issue a declaratory ruling under subsection (i) of said section 4-176, the petitioner may seek in the superior court a declaratory judgment as to the validity of the regulation in question or the applicability of the provision of the general statutes, the regulation or the final decision in question to specified circumstances. The agency shall be made a party to the action.”

       General Statutes § 30-55 provides in relevant part: “(a) The department of liquor control may, of its own motion, revoke or suspend any permit upon cause found after hearing, provided ten days’ written notice of such hearing has been given to the permittee setting forth, with the particulars required in civil pleadings, the charges upon which such proposed revocation or suspension is predicated and provided no permit shall be suspended or revoked for any violation of this chapter of which the permittee or his servant or agent was finally found not guilty by, or received dismissal in, a court having jurisdiction thereof, and no disciplinary action shall be taken thereafter by said department against the backer or such permittee, servant or agent, and provided the department shall not initiate hearing proceedings pursuant to this section based upon any arrest which has not resulted in a conviction.”


source: Caselaw Access Project

author: BERDON, J.

license: Public Domain

text:
    DEER HILL ARMS II LIMITED PARTNERSHIP v. PLANNING COMMISSION OF THE CITY OF DANBURY
    (15448)
    Borden, Berdon, Norcott, Katz and Palmer, Js.
    Argued October 1
    officially released December 31, 1996

      James Mulvey, for the appellant (plaintiff).

      Daniel E. Casagrande, for the appellee (defendant).
   BERDON, J.

The broad issue in this appeal is whether a condition imposed by the defendant planning commission of the city of Danbury that restricts occupancy of units in one of two condominium buildings on a single tract of land to persons fifty-five years of age or older without children violates the prohibition of discrimination based on familial status under the federal Fair Housing Act (act), 42 U.S.C. § 3601 et seq., and is therefore void. For the purposes of this case, this issue is resolved by determining whether the condition qualifies under the act’s “housing for older persons” exemption. 42 U.S.C. § 3607 (b) (2) (C) (1994).

The plaintiff, Deer Hill Arms II Limited Partnership, brought this action against the defendant, the Danbury planning commission, for a declaratory judgment seeking to declare invalid a condition of the special exception imposed by the defendant that the occupancy of one of two buildings (Deer Hill Arms II) at the Deer Hill Arms Condominium complex be restricted to persons fifty-five years of age or older without children. The plaintiff asserted that the condition violates the prohibition of discrimination against families with children under the act. The trial court held that Deer Hill Arms II was exempt from the requirements of the act because it qualifies for the “housing for older persons” exemption provided by the act. The plaintiff appealed to the Appellate Court and we transferred the appeal to this court pursuant to Practice Book § 4023 and General Statutes § 51-199 (c). We affirm the judgment of the trial court.

The following facts are not disputed. The real property that is the subject of this litigation is located in Danbury and consists of approximately 2.1 acres (site). In 1973, the defendant granted a special exception and site plan approval for the construction on the site of an unrestricted building consisting of twenty-eight dwelling units (Deer Hill Arms I) and a second building, consisting of thirty-two dwelling units, which was restricted to residents fifty-five years of age or older without children, Deer Hill Arms II, pursuant to § 4.3.4 of the zoning regulations of the city of Danbury. The legal title to the site was transferred to Deer Hill Arms Condominium (condominium). After completion of Deer Hill Aims I, title to the unsold units passed to the Danbury Savings and Loan Association (Danbury Savings). Because the construction did not commence on Deer Hill Arms II, the special exception for those units expired in 1976. In 1982, the defendant approved the application of Danbuiy Savings for a special exception and site plan in order to construct Deer Hill Arms II on the site as an elderly housing facility pursuant to § 4.C.4 of the 1981 zoning regulations of the city of Danbury. Section 4.C.4 is identical in all pertinent respects to the 1973 regulation, § 4.3.4, in that it restricted housing to “persons fifty-five (55) and above, without children.” In granting the special exception for Deer Hill Arms II, the defendant considered that both Deer Hill Arms I and II were to be located on the site under the ownership of the condominium. The plaintiff took title to Deer Hill Arms II in 1987 and, in 1989, constructed those units authorized by the 1982 special exception granted by the defendant to Danbury Savings.

In 1990, the plaintiff informed the defendant that, in its opinion, the requirement that Deer Hill Arms II be occupied only by persons fifty-five years of age or older without children violated the act, thereby rendering the condition null and void. The plaintiff also advised the defendant that it intended to sell units in Deer Hill Arms II without regard to the condition of the special permit. Thereafter, the plaintiff brought this action for a declaratory judgment.

Enacted by Congress as Title VIII of the Civil Rights Act of 1968, the act was designed to establish a national policy against discrimination in housing based upon race, color, religion, or national origin. See Civil Rights Act of 1968, Pub. L. No. 90-284, tit. VIII, §§ 801-819, 82 Stat. 81 (codified as amended at 42 U.S.C. § 3601 et seq.); Elliott v. Athens, 960 F.2d 975, 978 (11th Cir.), cert. denied, 506 U.S. 940, 113 S. Ct. 376, 121 L. Ed. 2d 287 (1992). Subsequently, Congress amended the act in 1974 to prohibit discrimination based upon sex. See Housing and Community Development Act of 1974, Pub. L. No. 93-383, tit. VIII, § 808 (b), 88 Stat. 633 (codified at 42 U.S.C. § 3604 [a]). Effective March 2,1989, Congress extended coverage of the act to prohibit discrimination based upon “familial status.” See Fair Housing Amendments Act of 1988, Pub. L. No. 100-430, § 5, 102 Stat. 1619 (codified at 42 U.S.C. § 3602 [k]). Section 3602 (k) (1) of the act defines familial status as one or more individuals, who have not attained the age of eighteen, being domiciled with a parent or other person having legal custody of such minor. If there were nothing more, the condition of the special exception for Deer Hill Arms II would be void as violating provisions of the act prohibiting discrimination based upon familial status. See Edmonds v. Oxford House, Inc., 514 U.S. 725, 731, 115 S. Ct. 1776, 131 L. Ed. 2d 801 (1995) (acknowledging act’s stated policy “ ‘to provide, within constitutional limitations, for fair housing throughout the United States’ ”); Trafficante v. Metropolitan Life Ins. Co., 409 U.S. 205, 211-12, 93 S. Ct. 364, 34 L. Ed. 2d 415 (1972) (holding that act should be afforded “generous construction” in order to carry out “ ‘policy that Congress considered to be of the highest priority’ ”).

Nevertheless, as the defendant argues and as the trial court concluded, Deer Hill Arms II falls within an exception to the act. Title 42 of the United States Code, § 3607 (b) excepts “housing for older persons” from the prohibition against discrimination based upon familial status. Housing for older persons is specifically defined to include housing: “(C) intended and operated for occupancy by at least one person 55 years of age or older per unit. In determining whether housing qualifies as housing for older persons under this subsection, the Secretary shall develop regulations which require at least the following factors: (i) the existence of significant facilities and services specifically designed to meet the physical or social needs of older persons, or if the provision of such facilities and services is not practicable, that such housing is necessary to provide important housing opportunities for older persons; and (ii) that at least 80 percent of the units are occupied by at least one person 55 years of age or older per unit; and (iii) the publication of, and adherence to, policies and procedures which demonstrate an intent by the owner or manager to provide housing for persons 55 years of age or older.” 42 U.S.C. § 3607 (b) (2) (C) (1994).

Although the trial court addressed the significant facilities and services and the publication and adherence prongs of 42 U.S.C. § 3607 (b) (2) (c), the parties agree that the only relevant issue that they addressed before the trial court was whether at least 80 percent of the units are intended to be occupied by at least one person fifty-five years of age or older per unit. The answer to this part of the three part test set forth in § 3607 (b) (2) (C) is determinative of the issue in this case.

If Deer Hill Arms I and II are treated as a single entity for the purposes of determining the percentage of the units that are “intended to be operated” for persons fifty-five years of age and older, this part of the exception would not be satisfied. Only 51 percent of the units would be intended to be occupied by those persons if the thirty-two units in Deer Hill Arms II are compared to the total of sixty units in Deer Hill Arms I and II. If, however, Deer Hill Arms I and II are considered to be separate entities for the purposes of the act, then 100 percent of the units in Deer Hill Arms II would be intended to be occupied by persons fifty-five years of age and older and the exemption for older persons would apply in this case. The trial court concluded that Deer Hill Arms I and II were, in fact, separate entities for the purposes of the act. We agree.

We recognize that “[e]xemptions from the Fair Housing Act are to be construed narrowly, in recognition of the important goal of preventing housing discrimination.” Massaro v. Mainlands Section 1 & 2 Civic Assn., Inc., 3 F.3d 1472, 1475 (11th Cir. 1993), cert. denied, 513 U.S. 808, 115 S. Ct. 56, 130 L. Ed. 2d 15 (1994); see Elliott v. Athens, supra, 960 F.2d 979 (noting exemptions contained in act are to be construed narrowly). Nevertheless, the legislative history is replete with expressions of congressional concern on protecting choice of living in housing of older persons with respect to their age and interests. Accordingly, a flexible fact specific inquiry must be made to determine whether the exemption is applicable so that these legislative goals may be achieved. Massaro v. Mainlands Section 1 & 2 Civic Assn., Inc., 796 F. Sup. 1499, 1501 (S.D. Fla. 1992), rev’d on other grounds, 3 F.3d 1472 (11th Cir. 1993), cert. denied, U.S. , 115 S. Ct. 56, 130 L. Ed. 2d 15 (1994); Seniors Civil Liberties Assn., Inc. v. Kemp, 761 F. Sup. 1528, 1553 (M.D. Fla. 1991), aff'd, 965 F.2d 1030 (11th Cir. 1992).

There is no dispute that the title to the land upon which Deer Hill Arms I and II were constructed — that is, the site — is in the name of “Deer Hill Arms Condominium.” Other than the legal title to the land and a common driveway, Deer Hill Arms I and II are separate communities, controlled by, and operated as, separate entities. Deer Hill Arms I was constructed in 1976 and Deer Hill Arms II in 1989. Indeed, certain unit holders appealed from the 1982 decision of the defendant to grant Danbury Savings the special exception to construct Deer Hill Arms II. The plaintiff was able to construct Deer Hill Arms II only by taking advantage of the special exception granted to Danbury Savings. The plaintiff marketed Deer Hill Arms II as a “unique innovation one-of-a-kind condominium catering to the discriminating buyer 55 years of age and older.” More importantly, Deer Hill Arms II assesses its own unit owner common charges to maintain those units and has its own checking account from which the common expenses for Deer Hill Arms II for landscaping, garbage removal, utilities, common maintenance, snow removal and other such common charges are paid. Unit owners of Deer Hill Arms II do not contribute to the operating expenses of Deer Hill Arms I, nor do the unit owners of Deer Hill Arms II contribute to the expenses of Deer Hill Arms I. Occupants of Deer Hill Arms I do not have access to the common areas of Deer Hill Arms II, nor do the occupants of Deer Hill Arms II have access to those of Deer Hill Arms I. The plaintiff does not own or control any of the units in Deer Hill Arms I. No evidence was presented as to the entity that collects the common charges and pays the related expenses of Deer Hill Arms I. With respect to the condominium, there was no evidence that it functioned in any manner with respect to Deer Hill Arms I or II other than as the conduit for legal title to the land for both. In short, Deer Hill Arms I and II are separate and distinct communities for the purposes of the act.

The trial court was correct in concluding that Deer Hill Arms II is a separate entity and, therefore, that 100 percent of its emits are intended for persons fifty-five years of age or older, satisfying that part of the housing for older persons exemption. “The conclusions reached by the trial court must stand unless they are legally and logically inconsistent with the facts found or unless they involve the application of some erroneous rule of law.” (Internal quotation marks omitted.) Newbury Common Ltd. Partnership v. Stamford, 226 Conn. 92, 100, 626 A.2d 1292 (1993).

In reaching our conclusion in this case, we emphasize that a fact specific inquiry governs our analysis. We recognize that a different result would have been reached had the original developer established two separate buildings, one with occupancy restricted to persons fifty-five years of age or older and the other without restriction, but with a common condominium association acting as the sole decision maker. We emphasize that our decision today in no way authorizes developers to establish occupancy restrictions in different buildings in one housing community in an attempt to thwart the purposes of the act.

The judgment is affirmed.

In this opinion the other justices concurred.

       Title 42 of the United States Code, § 3607 (b) (1994), provides: “(1) Nothing in this subchapter limits the applicability of any reasonable local, State, or Federal restrictions regarding the maximum number of occupants permitted to occupy a dwelling. Nor does any provision in this title regarding familial status apply with respect to housing for older persons.
      “(2) As used in this section, ‘housing for older persons’ means housing—
      “(A) provided under any State or Federal program that the Secretary determines is specifically designed and operated to assist elderly persons (as defined in the State or Federal program); or

        “(B) intended for, and solely occupied by, persons 62 years of age or older; or
      “(C) intended and operated for occupancy by at least one person 55 years of age or older per unit. In determining whether housing qualifies as housing for older persons under this subsection, the Secretary shall develop regulations which require at least the following factors:
      “(i) the existence of significant facilities and services specifically designed to meet the physical or social needs of older persons, or if the provision of such facilities and services is not practicable, that such housing is necessary to provide important housing opportunities for older persons; and
      “(ii) that at least 80 percent of the units are occupied by at least one person 55 years of age or older per unit; and
      “(iii) the publication of, and adherence to, policies and procedures which demonstrate an intent by the owner or manager to provide housing for persons 55 years of age or older.
      “(3) Housing shall not fail to meet the requirements for housing for older persons by reason of:
      “(A) persons residing in such housing as of September 13, 1988, who do not meet the age requirements of subsections (2) (B) or (C): Provided, That new occupants of such housing meet the age requirements of subsections (2) (B) or (C); or
      “(B) unoccupied units: Provided, That such units are reserved for occupancy by persons who meet the age requirements of subsections (2) (B) or (C).
      “(4) Nothing in this subchapter prohibits conduct against aperson because such person has been convicted by any court of competent jurisdiction of the illegal manufacture or distribution of a controlled substance as defined in [the Controlled Substances Act, 21 U.S.C. § 802].”

       The trial court granted a motion to be cited in as a defendant filed by Sylvia Browd, an eighty-three year old owner of one of the living units in the condominium building that is the subject of this litigation. For the purposes of this opinion, all references to the defendant refer solely to the planning commission of the city of Danbury.

       The trial court also based its decision on the assumption that Deer Hill Arms II is exempt from the prohibition of discrimination based on the familial status provision of the 1988 amendment to the act because these provisions are not retroactive. We agree with the plaintiff, and the defendant on appeal also agrees, that whether the amendment to the act is retroactive is not relevant to our inquiry. The act “and the rules promulgated thereunder set rules for future use and transfer and interfere with the expectations of past purchasers only regarding the future use of their property by themselves and by others.” (Emphasis in original.) Seniors Civil Liberties Assn., Inc. v. Kemp, 761 F. Sup. 1528, 1558 (M.D. Fla. 1991), aff'd, 965 F.2d 1030 (11th Cir. 1992).

         The specific number of units initially authorized and subsequently constructed in Deer Hill Arms I and II varied with the permission of the defendant. Because these changes do not materially affect the issue in this case, we refer only to the exact number of units constructed in both Deer Hill Arms I and II.

       In 1973, § 4.3.4 of the zoning regulations of the city of Danbury provided in pertinent part: “In the case of Garden Apartments, Garden Apartment efficiency units, Apartment Houses and Apartment House efficiency units which are constructed and/or operated by a private profit-making organization solely for occupancy by elderly persons aged 55 and above, without children, the Planning Commission may by the granting of a special exception reduce the required Minimum Lot Area per dwelling to a minimum of 600 sq. ft.....” (Emphasis added.)

       Section 4.C.4 of the 1981 zoning regulations of the city of Danbury provided in pertinent part: “In the case of garden apartments, garden apartment efficiency units, apartment houses and apartment house efficiency units, which are constructed and/or operated by a private profit-making organization, solely for occupancy by elderly persons fifty-five, (55) and above, without children, the planning commission may by the granting of a special exception reduce the required minimum lot area per dwelling to a minimum of six hundred (600) sq. ft.....” (Emphasis added.)

       Certain unit owners in Deer Hill Arms I appealed from the granting of the 1982 special except ion to the Superior Court, alleging inadequate parking and insufficient open space. Specifically, the issue in the administrative appeal was whether the land upon which Deer Hill Arms II was to be constructed would be considered as a separate parcel from that of Deer Hill Arms I, and therefore did not meet the requirements for parking and open space. Val v. Planning Commission, Superior Court, judicial district of Danbury, Docket No. 280454 (January 6, 1984). The trial court dismissed that appeal, finding tha1 the site was to be considered as one parcel for zoning purposes and, therefore, the parking and open space requirements for Deer Hill Arms II were satisfied. Id.

       Title 42 of the United States Code, § 3602 (lc), provides: “ ‘Familial status’ means one or more individuals (who have not attained the age of 18 years) being domiciled with—
      “(1) a parent or another person having legal custody of such individual or individuals; or
      “(2) the designee of such parent or other person having such custody, with the written permission of such parent or other person.
      “The protections afforded against discrimination on the basis of familial status shall apply to any person who is pregnant or is in the process of securing legal custody of any individual who has not attained the age of 18 years.”

       See footnote 1.

       We note that effective December 28,1995, Congress enacted the Housing for Older Persons Act of 1995, Pub. L. No. 104-76, 109 Stat. 787, which amended 42 U.S.C. § 3607 (b) (2) by eliminating the “significant facilities and services” requirements for housing for older persons. Title 42 of the United States Code, § 3607 (b) (2) (C), now provides that housing for older persons means housing: “intended and operated for occupancy by persons 55 years of age or older, and—
      “(i) at least 80 percent of the occupied units are occupied by at least one person who is 55 years of age or older;
      “(ii) the housing facility or community publishes and adheres to policies and procedures that demonstrate the intent required under this subparagraph; and
      “(iii) the housing facility or community complies with rules issued by the Secretary for verification of occupancy, which shall—
      “(I) provide for verification by reliable surveys and affidavits; and
      “(II) include examples of the types of policies and procedures relevant to a determination of compliance with the requirement of clause (ii). Such surveys and affidavits shall be admissible in administrative and judicial proceedings for the purposes of such verification.”

       The parties disagree in this case about who had the burden of proving that Deer Hill Arms II falls within the housing for older persons exception of the act. Both parties agree that when a party claims that an exception to the act is applicable, that party generally bears the burden of proving the exception. See United States v. Columbus Country Club, 915 F.2d 877, 882 (3d Cir. 1990) (“[u]nder general principles of statutory construction, one who claims the benefit of an exception from the prohibition of a statute has the burden of proving that his claim comes within the exception” [internal quotation marks omitted]).
      In this case, however, the defendant argues that the plaintiff alleged in the complaint that Deer Hill Arms II does not qualify for the older persons exception of the act and, therefore, the condition requiring occupancy by persons fifty-five years of age or older without children is void as having been preempted by the act. The defendant argues that the burden of proof is therefore on the plaintiff to prove that the act preempted the condition of the special exception, including the inapplicability of the exemption for older persons. Because we conclude that there was substantial evidence to support the trial court’s finding that Deer Hill Arms I and II were separate communities for the purposes of the act and, therefore, that Deer Hill Arms II qualified for the exemption of housing for older persons, we need not decide the issue of the burden of proof in the context of this case.

       “In reading the applicable legislative history, this Court found a substantial amount of specific and persuasive testimony on this point. See, 134 Cong. Rec. H4605 (daily ed. June 22, 1988) (remarks of Rep. Fish) (‘Finally, the bill contains language aimed at protecting senior citizens retirement communities — those that are intended for and principally occupied by the elderly. The aim is not to disrupt the lives of senior citizens or the operation of legitimate retirement communities.’); id. at H4606-07 (remarks of Rep. Pepper) (‘There are some who say that the rights of senior citizens to reside in an all senior community will be taken away if this bill is enacted. I am here today as a well-known advocate for senior citizens, to say unequivocally, that this will not happen. The [a]ct fully protects the rights of senior citizens who live in retirement communities, and would allow these communities to exclude families with children if they so chose.’); id. at H4608 (remarks of Rep. Edwards) (‘We were careful in writing the bill to make clear exceptions for “housing for older persons” — senior citizens who live in retirement communities will not be forced to live with children.’); id. at H4680-81 (remarks of Rep. Synar) (‘As a member of the Select Committee on Aging and one who is deeply involved and concerned about the issues facing our older citizens in this country, I have studied this issue at great length and . . . the committee went to great lengths to make exceptions which we believe take care of the situations which would affect our elderly.’); 134 Cong. Rec. S10469 (daily ed. August 1, 1988) (remarles of Sen. Kennedy) (‘it was never intended to be a requirement that additional kinds of services would be necessary in order to enjoy the provisions and protections of the act’); id. at S10557 (remarks of Sen. Cranston) (‘fair and balanced compromise that protects young families and senior citizens alike’); id. at S10558 (remarks of Sen. Metzenbaum) (‘fine-tuning led to “flexibility” of exemptions.’).” Seniors Civil Liberties Assn., Inc. v. Kemp, 761 F. Sup. 1528, 1553 (M.D. Fla. 1991), aff'd, 965 F.2d 1030 (11th Cir. 1992).

       See footnote 7.

       The plaintiff argues that the federal regulations specifically refer to this factual scenario and provide that Deer Hill Arms I and II axe to be considered one entity for purposes of calculating the percentage in order to determine if 80 percent of the units are intended for persons fifty-five years of age or older. Title 24 of the Code of Federal Regulations, § 100.70 (c), provides in relevant part: “Prohibited actions . . . which are generally referred to as unlawful steering practices, include, but are not limited to . . . (4) Assigning any person to a particular section of a community, neighborhood or development, or to a particular floor of a building, because of race, color, religion, sex, handicap, familial status, or national origin.” The regulation, however, is applicable to situations in which there is one community, and has no application to separate entities such as Deer Hill Arms I and II. Indeed, this would be an entirely different case if residents were, in fact, assigned or steered to one of the two buildings based on their familial status. Here, however, neither Deer Hill Arms I nor Deer Hill Arms II is controlled by a single authority and, therefore, there is no centralized decision maker assigning residents to certain units.

       See footnote 14.


author: MCDONALD, J.

text:
    STATE OF CONNECTICUT v. OTIS JACKSON
    (15428)
    Borden, Norcott, Katz, Palmer and McDonald, Js.
    Argued October 3, 1996
    officially released January 7, 1997

      Carolyn K. Longslreth, assistant state’s attorney, with whom were Russell Zentner, assistant state’s attorney, and, on the brief, John T. Redway, state’s attorney, for the appellant (state).

      Mark Rademacher, assistant public defender, for the appellee (defendant).
   MCDONALD, J.

At issue in this appeal is whether the trial court properly ordered the disclosure of the identity of a person who acted as a police informant in a narcotics sale.

The defendant, Otis Jackson, was charged with the sale of cocaine in violation of General Statutes § 2 la-278 (b). After learning that an informant had been instrumental in his arrest, the defendant moved for disclosure of the informant’s identity. The trial court, O’Keefe, J., granted the defendant’s motion, concluding that disclosure was mandated by the defendant’s claim of mistaken identity. After the state refused to disclose the informant’s identity, the trial court granted the defendant’s motion to dismiss. The state, with permission, appealed to the Appellate Court. The Appellate Court reversed the trial court’s judgment of dismissal and remanded the case for a hearing consistent with Roviaro v. United States, 353 U.S. 53, 62, 77 S. Ct. 623, 1 L. Ed. 2d 639 (1957). State v. Jackson, 37 Conn. App. 491, 656 A.2d 1056 (1995).

After a hearing on remand, the trial court, J. Walsh, J., determined that the state must disclose the identity of the informant because the evidence had failed to show that the informant’s identity was confidential and, therefore, covered by the state’s privilege to conceal the identity of confidential informants. The state again refused to disclose the informant’s identity, and the trial court granted the defendant’s motion to dismiss. The state appealed, with permission, from the trial court’s judgment of dismissal to the Appellate Court, and we transferred the appeal to this court pursuant to Practice Book § 4023 and General Statutes § 51-199 (c).

The trial court found the following facts. On January 20,1993, an undercover police officer and an informant viewed photographs of fifteen suspected drug dealers. Each of the dealers allegedly frequented Mac’s Safari Cafe (Mac’s) in Middletown. After viewing the photographs, the undercover officer and the informant entered Mac’s. Once inside, the informant pointed to a man and said to the undercover officer: “There is Otis Jackson.” The officer and the informant approached the man and the informant stated: “Otis, this is my cousin, take care of him.” The informant and the man spoke together for approximately fifteen seconds.

The man then led the undercover officer to the lavatory. Alone together in the lavatory, the same man sold the undercover officer a packet of cocaine for $20. Thereafter, the undercover officer and the informant left Mac’s. Immediately after leaving the bar, the undercover officer viewed a photographic array and identified a photograph of the defendant as the man who had sold him cocaine. About two months later, the defendant was arrested.

On the basis of these facts, the trial court held that the informant’s involvement in the drug transaction did not rise to the level of participation that would require disclosure of his identity in accordance with Roviaro v. United States, supra, 353 U.S. 53. The trial court ordered disclosure, however, because it found that the evidence failed to demonstrate that the informant’s identity was confidential and, therefore, subject to the confidential informant privilege. The court reasoned that because the informant was known to the man who sold the drugs, there was no reason why his identity should be confidential and therefore it should be disclosed by the state. Because we conclude that the trial court’s finding that the informant’s identity was not confidential was clearly erroneous, we reverse the trial court’s order to disclose the informant’s identity and its judgment dismissing the case.

In Roviaro v. United States, supra, 353 U.S. 53, the United States Supreme Court had occasion to define the nature and scope of the informant’s privilege. “What is usually referred to as the informer’s privilege is in reality the Government’s privilege to withhold from disclosure the identity of persons who furnish information of violations of law to officers charged with enforcement of that law. . . . The purpose of the privilege is the furtherance and protection of the public interest in effective law enforcement. The privilege recognizes the obligation of citizens to communicate their knowledge of the commission of crimes to law-enforcement officials and, by preserving their anonymity, encourages them to perform that obligation.” (Citations omitted; emphasis added.) Id., 59; see State v. Richardson, 204 Conn. 654, 657-58, 529 A.2d 1236 (1987).

Roviaro established a test for assessing challenges to the applicability of the informant’s privilege. This test involves the balancing of two competing interests: (1) the preservation of the “underlying purpose” of the privilege; and (2) the “fundamental requirements of fairness.” Roviaro v. United States, supra, 353 U.S. 60. The underlying purpose of the privilege is to protect the public interest in the flow of information to law enforcement officials. The fundamental requirements of fairness comprise the defendant’s right to a fair trial, including the right to obtain information relevant and helpful to a defense. Id., 60-61; see also State v. Telesca, 199 Conn. 591, 606, 508 A.2d 1367 (1986); State v. McDaniel, 176 Conn. 131, 133, 405 A.2d 68 (1978); State v. Johnson, 162 Conn. 215, 228, 292 A.2d 903 (1972). “Whether a proper balance renders nondisclosure erroneous must depend on the particular circumstances of each case, taking into consideration the crime charged, the possible defenses, the possible significance of the informer’s testimony, and other relevant factors.” Roviaro v. United States, supra, 62.

Informants may be citizens reporting criminal conduct out of both civic responsibility and fear of retaliation. They may also be associates of subjects of investigation reporting crime in the hope of some reward. These professional or criminal informants may report ongoing crimes and also gain for police undercover officers the confidence of their associates. Such informants are useful only so long as they are trusted by the criminals. They fear exposure, all the more, as it may lead to social harm or physical injury.

The privilege to maintain the secrecy of the informant’s identity is part of a complex privilege relating to the needs of government. Four general principles should be considered in applying the privilege: “(1) The communications must originate in a confidence that they will not be disclosed ... (2) [t]his element of confidentiality must be essential to the full and satisfactory maintenance of the relation between the parties ... (3) [t]he relation must be one which in the opinion of the community ought to be sedulously fostered [and] (4) [t]he injuiy that would inure to the relation by the disclosure . . . must be greater than the benefit thereby gained [by disclosure].” 8 J. Wigmore, Evidence (4th Ed. 1961) § 2285, p. 527. All four are clearly present in the case of the informant-government relationship.

As Wigmore points out, communications of persons reporting crimes to the government ought to be encouraged. Such people are discouraged, however, if their identity is disclosed. An informant cooperates usually on the condition of his or her anonymity being maintained as protection from physical harm and adverse social reactions. Law enforcement often depends on professional informants and disclosure of their dual role ends their usefulness and discourages others from assuming those roles. Id., § 2374, pp. 761-62. The privilege is, therefore, “well established and its soundness cannot be questioned.” Id., p. 762.

Evidence that the informant’s role as a police agent is not confidential vitiates the underlying purpose of the privilege. If the informant’s role is known, the protection of the informant and the safeguarding of information are no longer served by nondisclosure.

“The privilege . . . [for confidential informants] may be invoked by [the state’s] officers who as witnesses or otherwise are called on for the information . . . .” C. McCormick, Evidence (4th Ed. 1992) § 111, pp. 408-409; see also 2 C. Mueller & L. Kirkpatrick, Federal Evidence (1994) § 229, p. 598 (“[t]he privilege belongs to the [state] rather than the informant, and may be asserted by [state’s] counsel”). The state must not only assert the privilege, but also present to the court the underlying circumstances supporting its claim that the privilege applies. Here, the state invoked the privilege through counsel and called witnesses to establish the role played by the informant.

The trial court’s determination to apply the privilege is reviewed for abuse of discretion. State v. McDaniel, supra, 176 Conn. 133; see also United States v. Lilla, 699 F.2d 99, 105 (2d Cir. 1983). We accord great deference to the trial court’s factual findings because it is the trial court’s function to weigh the evidence and determine the credibility of witnesses. This court, however, “may reverse or modify the decision of the trial court if it determines that the factual findings are clearly erroneous in view of the evidence . . . .” Practice Book § 4061; see also State v. Reagan, 209 Conn. 1, 8, 546 A.2d 839 (1988). Accordingly, we will disturb the trial court’s findings only when those findings are clearly eixoneous as where there is no evidence in the record to support such findings. State v. Webb, 238 Conn. 389, 449-50, 680 A.2d 147 (1996); State v. Ellis, 232 Conn. 691, 700-701, 657 A.2d 1099 (1995). Here, we conclude that the trial court’s finding that the privilege should not apply was clearly erroneous because it was unsupported by the evidence.

The trial court determined that because the informant personally introduced the undercover officer to the drug dealer, the informant must have been known to the dealer and thereby lost his expectation of confidentiality. The only evidence here, however, was that the police assured the informant of the confidentiality of his role as informant and that the informant then took part in a police undercover operation where he introduced a police officer to unsuspecting drug dealers so that the officer could buy drugs. An immediate arrest was not made in order to conceal the true roles of the police officer and the informant and to protect the undercover operation from discovery. Under these circumstances, the fact that the dealer knew the informant does not mandate disclosure of the informant’s role as a police agent. See United States v. Jimenez, 789 F.2d 167, 170 (2d Cir. 1986) (disclosure not warranted though defendant met informant several times); Churder v. United States, 387 F.2d 825, 831 (8th Cir. 1968) (where it was likely that defendant knew informant, court stated that “we regard the detail as unimportant”).

Simply being an associate of an informant cannot reasonably be equated to knowledge on a criminal’s part of the informant’s secret role as a police agent. If the trial court’s reasoning were correct, the privilege would never apply to undercover police drug purchases, a recognized and important law enforcement technique. There, the informant’s role was to introduce a stranger, the undercover officer, to the informant’s associates in order to instill trust in those drug dealers who would not otherwise deal with a stranger.

In this case, the evidence shows only that the informant’s identity as a police agent was unknown and was intended to be hidden. There was no testimony that the drug dealer knew the informant’s true role. Further, the undercover nature of the operation, as found by the trial court, required it to apply the privilege. The trial court could not, therefore, conclude that the informant’s identity as a police agent was not confidential.

Our conclusion does not disrupt the remaining Roviaro analysis performed by the trial court. Once the state has invoked the privilege, it is then the defendant’s burden to show that the balance of the evidence falls in favor of disclosure. State v. West, 178 Conn. 444, 446, 423 A.2d 117 (1979); United States v. Jimenez, supra, 789 F.2d 170; United States v. Lilla, supra, 699 F.2d 105; 2 C. Mueller & L. Kirkpatrick, supra, § 230, p. 609. This burden is met by addressing the two competing interests identified in Roviaro. The defendant may show that the informant’s role as a police agent has been disclosed to the people likely to retaliate against the informant; Roviaro v. United States, supra, 353 U.S. 60; which he has not done, or he may show that disclosure of the informant’s identity is “ ‘essential to the defense.’ ” United States v. Jimenez, supra, 170, quoting Scher v. United States, 305 U.S. 251, 254, 59 S. Ct. 174, 83 L. Ed. 151 (1938); see State v. Richardson, supra, 204 Conn. 663 (“[m]ere speculation that the informant’s information will be helpful to the defense is not sufficient to mandate disclosure”). Disclosure is essential to the defense where nondisclosure could hamper the defendant’s right to a fair trial, such as where “the informant is a key witness or participant in the crime charged, someone whose testimony would be significant in determining guilt or innocence.” United States v. Russotti, 746 F.2d 945, 950 (2d Cir. 1984).

The trial court thoroughly balanced all of the evidence that did not go to confidentiality and properly found that the balance of the evidence fell in favor of nondisclosure. The trial court considered, and found inapplicable, various circumstances under which disclosure is warranted, such as whether the informant was a participant in or a witness to the crime; State v. Conger, 183 Conn. 386, 392-93, 439 A.2d 381 (1981); State v. McDaniel, supra, 176 Conn. 134; see United States v. De Angelis, 490 F.2d 1004, 1010 (2d Cir.), cert. denied, 416 U.S. 956, 94 S. Ct. 1970, 40 L. Ed. 2d 306 (1974) (disclosure not warranted where informant “was at most a ‘mere introducer’ ”); and whether entrapment had been claimed as a defense. Roviaro v. United States, supra, 353 U.S. 64. The court also considered the defendant’s mistaken identity claim based on the assertion that he was not in Mac’s on the night of the drug sale. The court properly determined that it would be inappropriate to weigh this claim in favor of disclosure because the defendant offered no alibi in support of his claim and would have ample opportunity to challenge the undercover officer’s identification of his photograph at trial. See State v. Jackson, supra, 37 Conn. App. 498-99 (discussing impact of mistaken identity defense on disclosure). We conclude, therefore, that all the remaining Roviaro factors were appropriately considered and applied.

Because we conclude that the evidence established only that the informant’s role was confidential, the privilege should have been applied under the Roviaro standards.

The judgment of dismissal is reversed and the case is remanded with direction to deny the defendant’s motion for disclosure of the informant’s identity, and for further proceedings according to law.

In this opinion the other justices concurred.

       General Statutes § 21a-278 (b) provides in relevant part: “Any person who manufactures, distributes, sells, prescribes, dispenses, compounds, transports with the intent to sell or dispense, possesses with the intent to sell or dispense, offers, gives or administers to another person any narcotic substance, hallucinogenic substance other than marijuana, amphetamine-type substance, or one kilogram or more of a cannabis-type substance except as authorized in this chapter, and who is not at the time of such action a drug-dependent person, for a first offense shall be imprisoned not less than five years nor more than twenty years; and for each subsequent offense shall be imprisoned not less than ten years nor more than twenty-five years. . . .”

       Regrettably, Judge Walsh, a dedicated and able judge, died during the pendency of this appeal.