        OFFICE      OF THE      ATTORNEY     GENERAL      OF   TEXAS
                                    AUSTIN




Honorable Bert Ford, Atilnietmtor
                     Atilnietrator
Texas Liquor Control Boasd
Austin 1, Texas
Dear sir:




            lh   quote   from   a   p                  or aotlon from ttm
Tour Branerr Instituter



                                                    th8   utmost oo-
                                              law0 aad wartime
                                             0s   OQvommont an4 of
                                           1,approdiatlonof
                                               to pnvm inria-
                                             a4 publlo, we tlm
                                               10~ serve4 the
                            ato, herein glvo notloe that uoh
                               to oontinuo or naintain a dlstrl-
                            lth any bear distributorrho 8011s
                            I!lxoom of oailln4 prices estab-
                            loo   oi Price Abminietration.   It


         "(a) Dlreotly or lndiremtlp oharges mom than
    the wholerralaoellln4 prioe fixed by the Offlaa of
                        for the bran4 of bear he ~0118;
    Prloe Adrainlstratlon
                                                               292




Bon. Bert lord, Page &


          *lb) I? a dlatrlbutor in making dalivaries
     favora or permits the b4yar to maka any *aid+
     paymenta’ or bonur paymants to himself, an agent,
     amploya*, or any other parson aa an Induoemantto
     obtain auoh dalivaries.
          Vaoh of us will rafuae to oontlnuo or
    maintain a distributing nlatlon with may dls-
    tributorwho sails beer to any parson for raeah
    in violation of law la the dry areas of Tarns as
    dellaad by tha laws of this Stata.
         vhoh o? ~8 will ratuse to ooatlnua or
    maintain a dlstrlbutlngralatlon with l ay dls-
    trlbutor who solis baer ?ouad by tha Texas LIquac
    Control Board to ba of a quality ooadomnad by the
    laws 0r this state.
           "The foregoing polloy will ba adhatad to In
    our r.osprrtite  boslnars tnasaotions for so long
    a tlmo a8 tha Oorernment of the Walt04 States amp
    4eam lt neooaaary to eatabllah an4 maintain prloa
    oontrolr as a prt of thr Hation*a war effort. It
    1s raoognIee4 that than ara ?ar distributor8who
    msIm$aIn nr anoauraga thr preiotloor  against whloh
    thf8 doolara$lona? pollay 18 4Ireoto4,aul wa
    oon814rr   tlmt it 1s our 4uty to adopt 8ny reason-
    able mean8 to incurs   that our nrprotlva prodUOt8
    will   not reach tha oonsumer through those diatrf-
    butora   who may be nagllgaat or lndiftorenttoward
    the war afrorta of their gorarnmant and tha Paople
    In gaaar81."
       " In oonaeotlonwlth this pro,osal you State that You
aooapt the soprasahtatlons"aa bafsx 9mado) in 4oo4 iaith an4
motivated by a daalr$ to pravaat tbs 401olO~nt Of Praatiaaa
la violation of Btate aad Tedaral law*."
         You wish to ba adYlse4r
           “A. -#ould tha signing and ldharonoa to
     the pmposrd daalaration by se~6ral brewerlss
     oouatltuto  a rlolatlon of thS 'PSXSSLiquor Co+
     trol Act?
Hon. Bert Ford, ta~a 3


           ”6.   ~Xvuldthe exlatence ana adherence to
      the a@ead polloy by several breweries conatl-
      tUte a ViOhtioSJ  Of the Anti-Tru6t laws of tbls
      State or any other State law?”
              This office reoently   he& ocoasim  to represent the
ToiiaaLiquor Cortrul Board in a oatsawhere the aoaatltutlonelity
 of the Zmergena~ Eric6 Control Aat of 1948 waa direotly In issue.
United   States  Dlstriot Judge,,%. A. Keeling aaid, “in this oaae
 the Court 1s of the oplnlon that Con&rear he4 the luthorlty to
 enaot the Rmurgenoy Prloi Control dot- of 1.0~3, in tb taoa of
 the existing   lmer g a of  no y
                                the war, and that tha Act Is within
 the Constibutionelpoware of the Con4resa.* Sfnca the oourt waa
 lmmedlatel oonaernad with tlm Office of Price AdalnlrtMtion*s
 power to f fx prloaa a,nd praotloss    In mapoot to beer an4 liquor,
 the court*6 opinion Is prouliarlyapplloab1e       here. See Brown,
(idmlnfstrator,    ~8. lores  Liquor Control Board, et al, Ro. 192,
Auatin Dlvlslon, YSmateraCIatriot of Taxaa, United States Dla-
trict Court, not yet reported. Sudga Keeling ?ollomd the ml-
ing ot the Suprem Court of the palted Stat00 in Xl&land vs.
Ruaaall Car atSnow Plow Co., 879 0. E. 601: 73 L. Sd. 688,
peasing    upon the LoFor Aot of World War f.

          In addition to tha Pe4oral E;tatutea,t!:eso-oallea
entI-truat.lawaor Tatsa ara alraotly ~otolved. Artiolo 74Ex5
defines and srohlblts tntats,   and,partloularlyprice fislng.
                    an4 prohIblta monopoller. krtlole 7428,
Articla 74p7 d.afi~nes
defining an4 prohibltlrg? oonspir4mIaa  a&not  trade, partloular-
1~ aenounoesagr*aswnts to rsfuae to ~aellto ear particular
pnraon.
           :iequote hrtlole 7428:
           *zither 01:any or tha following acta *hall
      conat~itute
                a conapIraoyin rsatraint of trade.
            “1.   Shire any Wo or more persona, firma,
      eoxpomtlona    or associations of paraona, who axe
      engaeea In buylu& or aeillng any artiola Of mer-
      obandlae, produce or any oorwPodItyenter into en
      agreement or understandingto refuse to buy from
      or sell to any peraou, Tim, 0orPOntIon 02 assoaia-
      tlon of persona, any crrtiole of morohanalae, proauoa
      or comlnodlty.
 Hon. Bert     ford,      Pees   4


               *z.      aware any two or more pereon8, iirma,
         Oorprratiozs      or asao0latlona or persons, aball
         a&Tee to boycott  or threaten    to refuse to buy
         from or Eel1 to any ~crp~on, firm, oorporatlon      0r
         @seoOiatiOn of person6 for buying from or salliw,
         to any other person, firm,    eorporatton  or aesooia-
         tfon or persona.*

            Thla state   rtatuta  praeaatr a altuatlon   where a
parson   ie broadlY prohibited    tram agreeing  not to sell  a lawrul
Oomodlty    to any partioular    person.   Opposed to thie stat@ law
16 an order of a oompetant Pador         agenoy acting  In pureuenoa
of 8 valid Aot of the Congress in affect owandlng the sale of
a lawful oommo4ltY Of 001~r0a in all legal an4 valid ohannals,
but pruh.lbitlng suoh sale at a prioe above that,fixedby the
appropriate Federal auanoy or to persona not authorized to pur-
ohme the 6ame.

           Your ragout alllo preoenta the queetlon &ether,
under Artiolaa 74.26,74Z7 or 74i?S,an agrawnt aot'to tiolata
the law8 oi the Unit04 Btatecl,even thou&h in tarmu Oontrary to
state law, 0~14 form tha baaia of an enfor?aabIa rtste action,
altbar orlmlnal  or oltili~
           This department recently tilad tb,t'uhere pr$oae are
fired by the crri00 or I-z-100 A&nlnlrtrrtloa,~ Lt 3r: not a tlola-
tion or the &ate anti-trust laws for a doalar Sd bear or liquor
to adhere strlotly to arch prioas an4 to adiatifaa the 8ama, 80
low as ha holds himself free or innooant of dny agreement to fix
prl006 within the m~xlmum range iIre by the Federal. e.&enoY. Sea
Opinion 2~0.O-5811 and authoritlea there cited, anolosad hara*ith.
                 trink that th.a aolcnowla4ga4
              ?:::~a                         supremacy      0r Illetlonal
law with     l-gferenoe     to commodity
                                     ptioss   ~0~14, be .aqUallY appllcabla
fn principle   t0 the o.ontraots   and relatione    between persona deal-
bne in *uch co~odit~ss      so long as euoh mea~ure8 are 4aama4 neOef+.
gery or asaantlsl.   by the Federal a%flnOy tc effeOtuat@ its aUWFW
war powers.
                A* re v~sn the propoeed    aa.raement , ite   did   1s that
those    jl.‘h~,si.ga the same:
Eon. Bert ford,       Pago S


            (a) WI11 not 8011 to a dlatrlbutor who n-
       86118 la 6x0.0080
                       Of th8 mXiaum priaaa rim& by the
       orrio ot Prioa Adasiniatratloa~
              (b)    Will not dolate tha rnulmum prioa
       IWgUiatiOO8     Or t&e OfflCimOf Pm0 Adninlat~tlon~
            (0)  Will mt aall to a Uatributor who in-
       diroofly by ~ai40-pay6entaw  bonuaaa or othondaa
       vlelatoa aaxi6vm prloi ragdationag
              (d) WI11 not aall $0 a dl8trlbutOrwho 80118
       tha HI* to persona purohaab& it ror ra-aalr   in
       dry area8 Oz tlm Stata of Tans in vlolathn    of   its
       larrg
            (0,) Will not aall to a distributor who rolla
       bear fouM by the Tuaa Liquor Oontrol Board to be
       or a qlullty pvehibitod by law.
          Thla, upoa It8 raoo, la both UI agrrurnt  to obey and
not to riolata tbr lawa or Toraa and oi thr Unitad 6taka.  Sinoe
you rtda that  JOU 8ooopttha aama “88 bolag in good faith' In
oan ihd no ruma te wmdaam tk we         under the lawa ei Tam*.
It must be boraa ira tied, howOver, that #a propor       ruuaf
r 0a mt k mid ww           0~ h~a l=8pt   a-  th  0~28 7 80 or tbr
mrgmo~    war p&war8 o? tha ?Odarrl gey*N@nt.     mt;.:ttf
thoaa amrrgwmf war pewara aspita or lra remld
trust law8 of Taxas will oparata ag@aiato pmhibfi the Oono@rta4
lotion propoa04.
                                       Your8 wry truly




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