Attorney General's Opinion
Attorney General, Richard Blumenthal
October 17, 1990
Honorable John F. Healy
Chairman, Department of Liquor Control
State Office Building
165 Capitol Avenue
Hartford, CT 06106
Dear Chairman Healy:
This is in response to your recent request for an opinion of the Attorney General concerning fee charges for the registration of brands of alcoholic liquors under the Liquor Control Act, Conn. Gen. Stat. e 30-63(a). Three questions are presented:
(1) What is the proper fee to be charged Connecticut liquor wholesalers who register brands of liquor; the one hundred dollar fee rate applicable to out-of-state shippers or the three dollar rate for Connecticut manufacturers?
(2) If Connecticut wholesalers have been undercharged in the past, can the Department seek repayment?
(3) Is the statutory difference in fee rates between out-of-state and in-state registrants constitutional in light of recent decisions of the Supreme Court of the United States?
For the following reasons, we conclude that wholesalers should be charged the one hundred dollar rate applicable to out-of-state shippers, and that the Department can seek repayment for any brands undercharged in the past. We must, however, decline to advise you on the constitutionality of the law. Our reasons for reaching these conclusions are as follows:
The Statutory Scheme
Brand registration is a pre-requisite for the sale or distribution of alcoholic liquor in Connecticut. Conn. Gen. Stat. e 30-63(a); Reg. Conn. Agencies, Liq. Cont., Sec. 30-6-A35; State ex rel. Am. Distilling Co. v. Patterson, 133 Conn. 345, 347, 51 A.2d 141 (1947); 23 Conn. Op. Atty. Gen. 357 (1944). This requirement has been part of the Liquor Control Act since 1937.1 Under current rules, a registration is required of "any manufacturer, wholesaler or out-of-state shipper." Registration is valid for three years, and it is renewable at the end of that period. The statute setting forth these rules provides as follows:
No holder of any manufacturer, wholesaler or out-of-state shipper's permit shall ship, transport or deliver within this state, or sell or offer for sale, any alcoholic liquors unless the name of the brand, trade name or other distinctive characteristic by which such alcoholic liquors are bought and sold, the name and address of the manufacturer thereof and the name and address of each wholesaler permittee who is authorized by the manufacturer or his authorized representative to sell such alcoholic liquors are registered with the department of liquor control and until such brand, trade name or other distinctive characteristic has been approved by the department. Such registration shall be valid for a period of three years. The fee for such registration, or renewal thereof, shall be one hundred dollars for out-of-state shippers and three dollars for Connecticut manufacturers for each brand so registered, payable by the manufacturer or his authorized representative when such liquors are manufactured in the United States and by the importer when such liquors are imported into the United States.
Conn. Gen. Stat. e 30-63(a).
In interpreting this statute, the familiar rules of statutory construction require that the words used by the legislature must be given their plain and ordinary meaning and be interpreted in their natural and usual meaning unless the context indicates that a different meaning was intended. Conn. Gen. Stat. e 1-1a; Caldor, Inc. v. Heffernan, 183 Conn. 566, 570, 440 A.2d 767 (1981). Where words are specifically defined by the legislature, we are bound to accept that definition. Johnson v. Manson, 196 Conn. 309, 316, 493 A.2d 1063 (1985) cert. denied 474 U.S. 1063, 106 S.Ct. 813, 88 L.Ed.2d 787 reh. denied, 475 U.S. 1061, 106 S.Ct. 1290, 89 L.Ed.2d 597 (1986). Technical words and phrases, and such as have acquired a peculiar and appropriate meaning in the law, shall be construed and understood accordingly. Conn. Gen. Stat. e 1-1a. With these principles in mind, your questions are addressed seriatim:
1. The Proper Fee To Be Charged Connecticut
Wholesalers For The Registration Of Brands Is
One Hundred Dollars.
The brand registration fee schedule established in Conn. Gen. Stat. e 30-60(a) clearly requires a tri-annual, one hundred dollar fee for out-of-state shippers and a three dollar fee for Connecticut manufacturers. The statute is seemingly silent with respect to wholesalers.2 However, the terms "out-of-state shipper" and "manufacturer" have a special meaning in the Liquor Control Act.3
An out-of-state shipper is a business with an out-of-state shipper's permit authorizing it to bring liquor into Connecticut for distribution from abroad or from plants and warehouses located outside of the State. Conn. Gen. Stat. e 30-18, 19; Ruppert v. Liquor Control Commission, 138 Conn. 669, 673, 88 A.2d 388 (1952); D. Brennan, Sr., Liquor Control, 54 Conn. B.J. 611, 613 (1980). A "manufacturer" is a business with a manufacturer permit authorizing it to bottle and manufacture liquor primarily from plants located within the state. Conn. Gen. Stat. e 30-16; Connecticut General Assembly, Report of the Liquor Price Fixing Investigation Commission (February, 1978) at p. 6. As introducers of products into commerce in Connecticut, both out-of-state shipper and manufacturer permit holders occupy the first tier of distribution in Connecticut's three-tier system composed of shippers, wholesalers and retailers. See, Serlin Wine & Spirits Merchants, Inc. v. Healy, 512 F.Supp. 936, 937-38 (D.Conn. 1981), aff'd sub nom. Morgan v. Division of Liquor Control, 664 F.2d 353 (2nd Cir. 1981). They must register the brands they introduce and pay the registration fee. Conn. Gen. Stat. e 30-63(a).
Wholesalers purchasing from out-of-state shippers or manufacturers ordinarily occupy the second tier in this system, and they hold wholesaler permits. Conn. Gen. Stat. e 30-17; 30-76. Products purchased by wholesalers are already registered and no further registration is necessary. However, the statutes also provide that "[t]he holder of a wholesaler permit may apply for and shall thereupon receive an out-of-state shipper's permit for direct importation from abroad of alcoholic liquors manufactured outside the United States...." Conn. Gen. Stat. e 30-17(a)(1). Consequently, a wholesaler permit holder may introduce a brand of liquor into the State from abroad, but when it does, it must obtain an out-of-state shipper's permit, and it must register that brand as a shipper. Under these circumstances, the wholesaler is also an out-of-state shipper in the contemplation of Conn. Gen. Stat. e 30-63(a), and so the appropriate fee to be charged for registration of each brand is the one hundred dollar fee applicable to out-of-state shippers.
In reaching this conclusion, we are mindful of the fact that the Department, for many years, has been charging wholesalers who import products under out-of-state shipper permits the three dollar rate applicable to manufacturers. We have learned that this practice has been in effect probably since 1973. Prior to 1973, the fee rate was three dollars for all licensees. See, generally, footnote 1, supra. The Department's reason for not changing the rate in step with the statutory changes is not documented. Ordinarily, an administrative practice is cogent evidence of statutory intent. Savings Bank of Rockville v. Wilcox, 117 Conn. 188, 194, 167 A. 709 (1933); State ex rel. Gray v. Quintilian, 121 Conn. 300, 304, 184 A. 382 (1936). However, where the agency practice is incorrect, this history is of no avail. Downer v. Liquor Control Commission, 134 Conn. 555, 561, 89 A.2d 290 (1948). Consequently, those Connecticut wholesalers should be subject to a registration fee of one hundred dollars per brand for the reasons detailed above.
2. The Department Can Seek Repayment From Connecticut
Wholesalers Undercharged In The Past.
Wholesalers are responsible for paying the proper registration fee for past registrations as well as for new registrations. It has been held that where a licensing fee is created by statute, the fact that the licensee did not pay at the time the law so required does not release the licensee from liability for the past period. 53 C.J.S., Licenses, e 46 citing State v. Raymond, 12 Mont. 226, 29 P. 732 (1892). The fees involved in the instant question are established by statute, but the statute does not prescribe any particular method for collection. See, Conn. Gen. Stat. e 30-63(a). In such instances, such fees may be collected in a civil action. 53 C.J.S. Licenses, e 53 citing Grisbord v. City of Philadelphia, 148 Pa. Super. 91, 24 A.2d 646 (1942).
To remedy past underpayments, the Department should determine the amounts underpaid and give wholesalers notification that they must pay the total amount as required by law. If this amount is not paid by the specified time, the matter should be referred to this office for collection.
3. We Decline To Advise On The Constitutionality Of
The Fee Rate Statute.
Your final question points out that the statutory fee schedule sets a rate for out-of-state shippers which is higher than that for in-state manufacturers. As you note, the Supreme Court of the United States, in recent decisions, has struck down liquor laws which create stricter rules for competitors from out-of-state as impermissible discrimination under the Commerce Clause of the United States Constitution. See, e.g., McKesson Corp. v. Florida Alcohol & Tobacco Div., 58 U.S.L.W. 4665 (U.S. June 4, 1990)(No. 88-192) rev'g 524 So.2d 1000 (1988)(Postpayment relief ordered to remedy discriminatory tax); Healy v. The Beer Institute, 109 S.Ct. 2491 (1989) (Affirmation for out-of-state shippers held discriminatory); Bacchus Imports, Ltd. v. Dias, 468 U.S. 263, 104 S.Ct. 3049, 82 L.Ed.2d 200 (1984) (Tax exemption for local wine held discriminatory)
We do not resolve issues concerning the constitutionality of an enacted statute, except where the statute is unquestionably unconstitutional on its face. See, e.g., 90 Conn. Op. Atty. Gen. 4/11/90. (Invalidity clear beyond a reasonable doubt); 76 Conn. Op. Atty. Gen. (1976), 38 Conn. L.J. No. 6 (August 10, 1976), p. 19 (Supreme Court decision invalidated similar law). All laws enjoy a presumption of validity, and liquor laws enjoy an added presumption of validity by virtue of the broad powers granted to states in this area by the Twenty-first Amendment to the United States Constitution. California v. LaRue, 409 U.S. 109, 118, 93 S.Ct. 390, 34 L.Ed.2d 343 (1972). We accord to this law the presumption of validity to which it is due.
Moreover, it is not the province of the Attorney General, except in rare cases, to pass upon the constitutionality of an act which becomes law in the prescribed manner. 22 Conn. Op. Atty. Gen. 228, 229 (1941). The adjudication of constitutional issues is reserved exclusively to the judiciary. Savage v. Aronson, 214 Conn. 256, 269, ___ A.2d ___ (1990).
Very truly yours,
CLARINE NARDI RIDDLE
ATTORNEY GENERAL
Robert F. Vacchelli
Assistant Attorney General
CNR/RFV/td
1 Brand registration has been required since 1937. See, 1937 Conn. Pub. Acts No. 37-317, Sec. 13. In 1945, the General Assembly established a one-time registration fee of three dollars payable "by the manufacturer or his duly authorized representative when such liquors are manufactured in the United States and by the importer when such liquors are imported into the United States...." 1945 Conn. Pub. Acts No. 45-341. In 1973, the statute was rephrased and the fee was changed to twenty-five dollars for "out-of-state manufacturers" and three dollars for "Connecticut manufacturers." Also, the registration was limited to a three year period renewable upon expiration. See, 1973 Conn. Pub. Acts No. 73-535. In 1974 the term "out-of-state manufacturers" was changed to "out-of-state shippers." See, 1974 Conn. Pub. Acts No. 74-19. Finally, in 1982, the brand registration fee for out-of-state shippers was raised to one hundred dollars. See, 1982 Conn. Pub. Acts No. 82-238.
2 The Liquor Control Act also assesses permit fees against these licensees for the privilege of selling alcoholic liquor in Connecticut. These fees also vary in cost. See Conn. Gen. Stat. e 30-41.
3 That the General Assembly intended that the terms used in Conn. Gen. Stat. e 30-63(a) be consistent with those used throughout the Liquor Control Act was made plain in 1974 Conn. Pub. Acts No. 74-19 where the legislature eliminated the use of the term "out-of-state manufacturer", which was undefined, and substituted "out-of-state shipper", which is a type of licensee. As Senator Zajac, who introduced the measure in the Senate, explained:
...it is a technical change which simply adjusted itself to using the terminology of out of state shipper and out of state manufacturer. It so happens that that is incorrect and there is no such classification as out-of-state manufacturer he is the biller, he is the distiller, he is the out of state shipper.
17 S. Proc. 1974 Sess. Pt. 1 at p. 163.