california liquor dealers midcal aluminum argued january decided march california statute requires wine producers wholesalers file fair trade contracts price schedules state producer set prices fair trade contract wholesalers must post resale price schedule prohibited selling wine retailer price set price schedule fair trade contract wholesaler selling established prices faces fines license suspension revocation charged selling wine less prices set price schedules also selling wines fair trade contract schedule filed respondent wholesaler filed suit california appeal asking injunction state wine pricing scheme appeal ruled scheme restrains trade violation sherman act granted injunctive relief rejecting claims scheme immune liability act state action doctrine parker brown also protected amendment prohibits transportation importation intoxicating liquors state delivery use therein violation state laws held california wine pricing system constitutes resale price maintenance violation sherman act since wine producer holds power prevent price competition dictating prices charged wholesalers state involvement system insufficient establish antitrust immunity parker brown supra system satisfies first requirement immunity challenged restraint one clearly articulated affirmatively expressed state policy meet requirement policy actively supervised state system state simply authorizes price setting enforces prices established private parties establish prices review reasonableness price schedules regulate terms fair trade contracts monitor market conditions engage pointed reexamination program national policy favor competition thwarted casting gauzy cloak state involvement essentially private arrangement pp amendment bar application sherman act california wine pricing system pp although amendment retain substantial discretion establish liquor regulations governing importation sale liquor structure liquor distribution system controls may subject federal commerce power appropriate situations pp basis disagreeing view california courts asserted state interests behind resale price maintenance system promoting temperance protecting small retailers less substantial national policy favor competition view reasonable supported evidence nothing indicate wine pricing system helps sustain small retailers inhibits consumption alcohol californians pp powell delivered opinion members joined except brennan took part consideration decision case william chidlaw argued cause filed briefs petitioner jack owens argued cause respondent midcal aluminum brief elliot kaplan frank damrell george roth deputy attorney general california argued cause state california amicus curiae urging reversal brief george deukmejian attorney general curtis sewell filed brief virginia beer wholesalers association amicus curiae urging reversal briefs amici curiae urging affirmance filed solicitor general mccree assistant attorney general shenefield deputy solicitor general wallace elinor hadley stillman barry grossman ron landsman michael sohn kirk mckenzie consumers union justice powell delivered opinion action respondent midcal aluminum wine distributor presented successful antitrust challenge california resale price maintenance price posting statutes wholesale wine trade issue case whether state laws shielded sherman act either state action doctrine parker brown amendment california business professions code wine producers wholesalers rectifiers must file fair trade contracts price schedules state wine producer set prices fair trade contract wholesalers must post resale price schedule producer brands wine merchant may sell wine retailer price set either effective price schedule effective fair trade contract west supp state divided three trading areas administration wine pricing program single fair trade contract schedule brand sets terms wholesale transactions brand within given trading area west supp similarly state regulations provide wine prices posted single wholesaler within trading area bind wholesalers area midcal aluminum rice cal app cal rptr licensee selling established prices faces fines license suspension outright license revocation cal bus code ann west supp state direct control wine prices review reasonableness prices set wine dealers midcal aluminum wholesale distributor wine southern california july department alcoholic beverage control charged midcal selling cases wine less prices set effective price schedule gallo winery department also alleged midcal sold wines fair trade contract schedule filed midcal stipulated allegations true state fine suspend license transgressions app midcal filed writ mandate california appeal third appellate district asking injunction state wine pricing system appeal ruled wine pricing scheme restrains trade violation sherman act et seq relied entirely reasoning rice alcoholic beverage control appeals cal california struck parallel restrictions sale distilled liquors case held state played passive part liquor pricing parker brown immunity program price maintenance program us state plays role whatever setting retail prices prices established producers according economic interests without regard actual potential anticompetitive effect state role restricted enforcing prices specified producers control pointed state insure policies sherman act unnecessarily subordinated state policy cal instant case state appeal found analysis rice squarely controlling cal app cal ordered department alcoholic beverage control enforce resale price maintenance price posting statutes wine trade department rice sought certiorari appeal ruling case appeal brought california retail liquor dealers association intervenor california declined hear case dealers association sought certiorari granted writ affirm decision state ii threshold question whether california plan wine pricing violates sherman act ruled consistently resale price maintenance illegally restrains trade dr miles medical john park sons observed arrangements designed maintain prices prevent competition among trade competing goods see albrecht herald parke davis schrader son many years however act permitted authorize resale price maintenance stat goal statute allow protect small retail establishments congress thought might otherwise driven marketplace discounters congressional permission rescinded consumer goods pricing act stat repealed act related legislation consequently sherman act ban resale price maintenance applies fair trade contracts unless industry program enjoys special antitrust immunity california system wine pricing plainly constitutes resale price maintenance violation sherman act schwegmann calvert see albrecht herald supra joseph seagram sons dr miles medical john park sons supra wine producer holds power prevent price competition dictating prices charged wholesalers justice hughes pointed dr miles vertical control destroys horizontal competition effectively wholesalers formed combination endeavored establish restrictions agreement moreover claim california program simply intrastate regulation beyond reach sherman act see schwegmann calvert supra burke ford per curiam thus must consider whether state involvement program sufficient establish antitrust immunity parker brown immunity state regulatory programs grounded federal structure dual system government constitution sovereign save congress may constitutionally subtract authority unexpressed purpose nullify state control officers agents lightly attributed congress parker brown found sherman act purpose nullify state powers act directed individual state action concluded state regulatory programs violate program challenged parker state agricultural prorate advisory commission authorized organization local cooperatives develop marketing policies raisin crop emphasized advisory commission appointed governor approve cooperative policies following public hearings state created machinery establishing prorate program state acting commission adopts program enforces ibid view extensive official oversight wrote sherman act apply without oversight result different expressly noted state give immunity violate sherman act authorizing violate declaring action lawful several recent decisions applied parker analysis goldfarb virginia state bar concluded fee schedules enforced state bar association mandated ethical standards established state fee schedules therefore immune antitrust attack enough anticompetitive conduct prompted state action rather anticompetitive activities must compelled direction state acting sovereign similarly cantor detroit edison majority found antitrust immunity conferred state agency passively accepted public utility tariff contrast arizona rules lawyer advertising held immune sherman act challenge reflect ed clear articulation state policy regard professional behavior subject pointed policymaker arizona enforcement proceedings bates state bar arizona last term found antitrust immunity california program requiring state approval location new automobile dealerships new motor vehicle bd cal orrin fox program provided state hold hearing automobile franchisee protested establishment relocation competing dealership view state active role held program subject sherman act clearly articulated affirmatively expressed goal state policy displace unfettered business freedom matter establishment relocation automobile dealerships decisions establish two standards antitrust immunity parker brown first challenged restraint must one clearly articulated affirmatively expressed state policy second policy must actively supervised state city lafayette louisiana power light opinion brennan california system wine pricing satisfies first standard legislative policy forthrightly stated clear purpose permit resale price maintenance program however meet second requirement parker immunity state simply authorizes price setting enforces prices established private parties state neither establishes prices reviews reasonableness price schedules regulate terms fair trade contracts state monitor market conditions engage pointed reexamination program national policy favor competition thwarted casting gauzy cloak state involvement essentially private arrangement parker teaches state give immunity violate sherman act authorizing violate declaring action lawful iii petitioner contends even california system wine pricing protected state action amendment bars application sherman act case section amendment repealed eighteenth amendment prohibition manufacture sale transportation liquor second section reserved certain power regulate traffic liquor transportation importation state territory possession delivery use therein intoxicating liquors violation laws thereof hereby prohibited remaining question us whether permits california countermand congressional policy adopted commerce power favor competition determining state powers amendment focused primarily language provision rather history behind state board young market terms amendment gives control transportation importation liquor territories course control logically entails considerable regulatory power strictly limited importing transporting alcohol ziffrin reeves however lose sight explicit grant authority early decisions amendment recognized state holds great powers importation liquor jurisdictions young market supra concerned license fee interstate imports alcohol another case focused law restricting types liquor imported mahoney joseph triner two others involved retaliation statutes barring imports proscribed shipments liquor joseph finch mckittrick indianapolis brewing liquor control upheld challenged state authority case largely basis special power importation transportation intoxicating liquors yet even acted explicit terms amendment resisted contention freed restrictions upon police power found provisions constitution young market supra subsequent decisions given wide latitude state liquor regulation joseph seagram sons hostetter also stressed important federal interests liquor matters survived ratification amendment tax imported liquor violation clause department revenue james beam insulate liquor industry fourteenth amendment requirements equal protection craig boren due process wisconsin constantineau difficult define however extent congress regulate liquor interstate commerce power although power directly qualified held federal government retains commerce clause authority liquor william jameson morgenthau per curiam found violation amendment requirement prescribed federal alcohol administration act stat ziffrin reeves supra uphold kentucky system licensing liquor haulers satisfied state program reasonable contours congress commerce power liquor sharpened hostetter idlewild liquor draw conclusion amendment somehow operated repeal commerce clause wherever regulation intoxicating liquors concerned however absurd oversimplification commerce clause pro tanto repealed congress left regulatory power interstate foreign commerce intoxicating liquor conclusion patently bizarre demonstrably incorrect pragmatic effort harmonize state federal powers evident several decisions held liquor companies liable anticompetitive conduct mandated state see joseph seagram sons frankfort distilleries schwegmann calvert example liquor manufacturer attempted force distributor comply louisiana resale price maintenance program program similar many respects california system issue held louisiana statute violated sherman act enforced distributor fifteen years later rejected sherman act challenge new york law requiring liquor dealers attest prices higher lowest price charged anywhere joseph seagram sons hostetter supra concluded statute exerted irresistible economic pressure dealers violate sherman act order comply also cautioned othing amendment course prevent enforcement sherman act interstate conspiracy fix liquor prices see burke ford per curiam decisions demonstrate bright line federal state powers liquor amendment grants virtually complete control whether permit importation sale liquor structure liquor distribution system although retain substantial discretion establish liquor regulations controls may subject federal commerce power appropriate situations competing state federal interests reconciled careful scrutiny concerns concrete case hostetter idlewild liquor supra federal interest enforcing national policy favor competition familiar substantial antitrust laws general sherman act particular magna carta free enterprise important preservation economic freedom system bill rights protection fundamental personal freedoms topco associates state interests protected california resale price maintenance system identified state courts case cal app cal rice alcoholic beverage control appeals cal course findings conclusions courts binding extent undercut state rights guaranteed amendment see hooven allison evatt creswill knights pythias nevertheless accords respectful consideration great weight views state highest matters state law indiana ex rel anderson brand customarily accept factual findings state courts absence exceptional circumstances lloyd fry roofing wood california appeal stated review state system wine pricing controlled reasoning california rice supra cal app cal therefore turn opinion treatment state interests resale price maintenance distilled liquors rice state found two purposes behind liquor resale price maintenance promote temperance orderly market conditions cal found little correlation resale price maintenance temperance cited state study showing increase per capita liquor consumption california resale price maintenance effect citing california dept finance alcohol state reappraisal california alcohol control policies xi studies wrote least raise doubt regarding justification laws ground promote temperance cal rice opinion identified primary state interest orderly market conditions protect ing small licensees predatory pricing policies large retailers gauging interest adopted views appeals board alcoholic beverages control department first ruled claim rice state agency rejected argument fair trade laws necessary economic survival small retailers ibid agency relied congressional study impact small retailers fair trade laws enacted act study revealed fair trade laws percent higher rate firm failures free trade rate growth small retail stores free trade per cent higher fair trade laws citing pointing congressional abandonment fair trade consumer goods pricing act see supra state found persuasive justification continue fair trade laws eliminate price competition among retailers cal appeal came conclusion respect wholesale wine trade cal app cal basis disagreeing view california courts asserted state interests less substantial national policy favor competition evaluation resale price maintenance system wine reasonable supported evidence cited state rice nothing record case suggests wine pricing system helps sustain small retail establishments neither petitioner state attorney general amicus brief demonstrated program inhibits consumption alcohol californians need consider whether legitimate state interests temperance protection small retailers ever prevail undoubted federal interest competitive economy unsubstantiated state concerns put forward case simply stature goals sherman act conclude california appeal correctly decided amendment provides shelter violation sherman act caused state wine pricing program judgment california appeal third appellate district affirmed footnotes wine grower wholesaler licensed sell wine wine rectifier rectifier shall post schedule selling prices wine retailers consumers resale price governed fair trade contract made person owns controls brand make file fair trade contract file schedule resale prices owns controls brand wine resold retailers consumers cal bus code ann west licensees sell wine prices specified fair trade contracts schedules also may subject private damages suits unfair competition west cited record evidence july five leading brands gin sold california fifth gallon five leading brands scotch whiskey sold either fifth rice alcoholic beverage control appeals cal nn nn state also appeal decision capiscean alcoholic beverage control appeals cal app cal rptr used analysis rice invalidate california resale price maintenance scheme retail wine sales consumers california retail liquor dealers association trade association independent retail liquor dealers california claims members congressional reports accompanying consumer goods pricing act noted repeal fair trade authority alter whatever power hold amendment control liquor prices consider effect amendment case part iii infra rice california found direct evidence resale price maintenance resulted horizontal price fixing see supra although appeal made specific finding case noted wine pricing system upheld reasons retail price maintenance provisions declared invalid rice midcal aluminum rice cal app cal rptr see norman waterfront wheatley asheville tobacco bd ftc note parker brown revisited state action doctrine goldfarb cantor bates colum rev california program contrasts approach completely control distribution liquor within boundaries code comprehensive regulation immune sherman act parker brown since state displace unfettered business freedom power new motor vehicle bd cal orrin fox see state board young market approach supported sound canons constitutional interpretation demonstrates wise reluctance wade complex currents beneath congressional proposal amendment ratification state conventions senate sponsor amendment resolution said purpose restore absolute control effect interstate commerce affecting intoxicating liquors cong rec remarks blaine yet also made statements supporting midcal claim designed ensure dry forced federal government permit sale liquor see cong sketchy records state conventions reflect consensus thrust although delegates several conventions expressed hope state regulation liquor traffic begin immediately brown ratification amendment constitution wilson president idaho convention darnall president maryland convention gaylord chairman missouri convention resolution adopted washington convention calling state action regulate liquor traffic see generally note effect amendment state authority control intoxicating liquors colum rev note economic localism state alcoholic beverage laws experience amendment harv rev nippert richmond commented ven commerce intoxicating liquors amendment gives highest degree control altogether beyond reach federal commerce power rate state regulation squarely conflicts regulation imposed congress unusual posture case reflects state california shown less enthusiastic interest wine pricing system noted state agency responsible administering program appeal decision california appeal see supra tr oral arg instead action maintained california retail liquor dealers association private intervenor neither intervenor state attorney general filed brief amicus curiae support legislative scheme specified state interests protected resale price maintenance system noted opinions cited text california appeal found additional state interests instant case cal app cal rejected suggestion wine price program designed protect state wine industry pointing statutes distinguish california wines imported wines ibid see joseph seagram sons hostetter citing study concluding resale price maintenance new york state significant effect upon consumption alcoholic beverages california also stated orderly market conditions might reduce excessive consumption thereby encouraging temperance cal concern temperance however considered independent state interest resale price maintenance liquor since midcal requested injunctive relief state question us involving liability damages