Idlewild Bon Voyage Liquor Corporation v. Epstein

PETITIONER:Idlewild Bon Voyage Liquor Corporation
RESPONDENT:Epstein
LOCATION:South Carolina State House

DOCKET NO.: 138
DECIDED BY: Warren Court (1962)
LOWER COURT: United States Court of Appeals for the Second Circuit

CITATION: 370 US 713 (1962)
ARGUED: Feb 28, 1962
DECIDED: Jun 25, 1962

Facts of the case

Question

  • Oral Argument – February 28, 1962 (Part 1)
  • Audio Transcription for Oral Argument – February 28, 1962 (Part 1) in Idlewild Bon Voyage Liquor Corporation v. Epstein

    Audio Transcription for Oral Argument – February 28, 1962 (Part 2) in Idlewild Bon Voyage Liquor Corporation v. Epstein

    Charles H. Tuttle:

    If I may just conclude this matter with (Inaudible) sentences, I’ll come directly to the Twenty-First Amendment.

    I would ask Your Honors’ attention to the reasons which they assign for these new proposals.

    At page 38 of our brief, it’s in one sentence and I’ll read it.

    The petitioner seeking a threatened infringement of its rights under the Federal Constitutions may have a cause of action which it cannot seek in the federal court.

    It should not be foreclosed for bringing such suit nor should it be subjected to irreparable harm pending the judicial determination of those rights.

    And then it proceeds to — at page 31 to offer and what it calls an assurance that if the case in the federal court is suspended, pending to file determination in a state court action to be brought, they will agree that there will be no enforcement proceedings in the meanwhile and or any penalties for business in the meanwhile.

    Of course, it’s inconceivable that even where they have assurance of that third parties like those who are the trackers and so forth are going to be very much impressed with that protection.

    They are not parties to this case.

    And in also, it puts our entire business onto a shadow.

    I’m stating that because they cite the Harrison case in 360 U.S. 167 where abstention was granted in an opinion which stressed the fact that as a matter of discretion, there had been assurances by the state officials that there would be no enforcement proceedings pending final determination.

    Well, the answer to that is, in the first place that that assurance had been given at the very outset of the federal court suit.

    They came by to him and said but in this case of course, we met nothing but threats and effort suit proceedings, subpoenas save, representatives consulting, going to interstate bonded trackers, going to us and telling us that there would be criminal and civil proceedings.

    And in the second place, in the Harrison case as it all the cases they say that foreign commerce isn’t involved at all with all the consequences in law and to the — make them so on nationalism which is essential here are.

    Our justice sentenced from the — this Court.

    I am quoting from 289 U.S. Board of Trustees, “The principle of duality in our system does not attach the authority of the Congress in the regulation of foreign commerce the right to engage in foreign commerce is not the gift to a state and the state cannot regulate or restrain.”

    Now of that being so, I am also saying that the Harrison case has no parallel to this case or to these proposals because as I come to the Twenty-First Amendment, I will refer you to two state court decisions in New York each by our appellant division which is the intermediate appellate court holding squarely that the Twenty-First Amendment does not give any dual jurisdiction or any much less any veto power over foreign commerce in wines and liquors conducted as it’s conducted here.

    Now then, I come to the Twenty-First Amendment.

    And I’m going to call Your Honors’ attention to the extraordinary statement that they make and have to make in order to give that Amendment any possibility of application here.

    You will find it on page 18 of their brief, it’s in a heading and in black type and I’ll read it.

    “Regulation of the liquor traffic in the state — by the state is paramount,” notice this word paramount “To the Federal Governments’ right to regulate” and all we are talking about is foreign commerce here, “Whether under the constitutional provisions governing commerce, exports and imports and supremacy or under statutory and regulatory provisions of a preemptive character.”

    I regard that as the extremely revolutionary statement the like of which will be found in no decision by this or any other court.

    “Paramount”, it’s a complete denial of the national power as regards foreign commerce in wines and liquors.

    It would make impossible the plan which is contained in 311, any state on the seaboard or on the Pacific Coast or indeed in the interior could veto that plan in cause it to fall as utterly ineffective.

    Now, let me refer in the discussion back to the concessions made by the Attorney General in his opinion.

    We all know that the wording of the Twenty-First Amendment is this, “The transportation or importa — importation into any state territory or possession of the United States for delivery or use therein of the intoxicating liquors in violation of the laws thereof is hereby prohibited.”

    Now I read you, but may I just repeat these three concessions.

    Delivery is not made within the state because it isn’t.

    There’s no delivery to anybody except to cause delivery to the place or to the plane but that plane is an interstate — is upon plane — upon commerce plane and there’s no delivery to the passenger until he’s reached abroad.

    The original package is not destroyed.

    Second concession was it’s not a sale or consumption in the state and of course, that means within the state.

    Charles H. Tuttle:

    And the third one is that this is an export within the meaning of Section 311.

    Now says my friend, that not withstanding all that, that Statute 311 does mean a thing when it comes to wines and liquors is completely at the mercy of the state either to impose a license or to impose a tax or to veto it altogether.

    And it’s that, that is claimed in this case, complete disruption.

    And of course it — that claim about the Twenty-First Amendment now brought forward completely contradicts the whole doctrine that the other side of contended before up to this moment that they shouldn’t be abstention by the federal court because could there’d be anymore of a federal question, a preeminent federal question than the interpretation and application of the Twenty-First Amendment.

    If there was anything in the world that made this a federal case which should not have been bound out to the state courts for determination in some state action not then existing, it would be the question of the Twenty-First Amendment.

    So they contradict their whole line by bringing this into the picture and I’m saying that if there is any question about the Twenty-First Amendment then the relief I ask for should be granted.

    We should be put right back in the state court as of the preeminent court by statute and the right of the case.

    Earl Warren:

    Federal court?

    Charles H. Tuttle:

    The federal court, excuse me — federal court for determination.

    Now —

    William J. Brennan, Jr.:

    Mr. Tuttle, I suppose the state might answer you an interpretation of the state statutes as not applicable to your business, makes it unnecessary to reach the constitutional question or the meaning of the Twenty-First Amendment.

    Charles H. Tuttle:

    I can appreciate the force of that Your Honor but the statute which is 2281 until 4 under which we have asked for the — to three-judge court and the federal statute 1327 gives us the right of protection where the issue arises under acts of Congress of which where we are situated, a right of protection against officers of the state claiming to act under a Constitution.

    Now, if the — if the state has no jurisdiction at all in this field, there is nothing to refer to the state court.

    William J. Brennan, Jr.:

    No, I’m — I’m just addressing myself to your argument based in Twenty-First Amendment.

    Charles H. Tuttle:

    Yes.

    William J. Brennan, Jr.:

    Because I think you yourself said earlier that you made reference to one or two cases at least Pullman and Sabre which is frivolous that a proper reason for abstention is that a state law might be so constitute as to avoid the necessity to determine a federal constitutional question.

    Charles H. Tuttle:

    Now, the Pullman case is the progenitive of a line of federal cases on which abstention has been based from time-to-time.

    I deal with that in the brief because I show that in every case including the Pullman case which my friend cites in his brief, there were outstanding grounds for the inapplicability of the doctrine of those cases here.

    In the first place, there was no foreign commerce involved in anyone of it.

    In the second place, there was no affirmative right in anyone of them created by the Federal Government in the exercise of its constitutional power.

    Certainly, no paramount right created.

    There were cases where the Federal Constitution was invoked solely for the protection of private right.

    Let me give you one of the illustrations.

    Under a state court — under a state statute of Pennsylvania, there was a condemnation proceeding against the plaintiff’s property.

    The issue was whether the state statute made adequate provision for proper compensation.

    The owners of the property rushed in to the federal court and said the sup — Due Process Clause gathers supremacy from this nature as one of the provisions in the Constitution and because of the Supremacy Clause.

    And this Court said that there was a question which might remove the constitutional question.

    There was no action of a hostile character being taken like sending the police surrounded to, solving injunction of criminal proceedings as I gave.

    The — this Court said that — those are questions is to whether that statute did or did not provide adequate cause and compensation.

    And therefore, there could be an abstention to find out what they are — there was plainly a duality of jurisdiction.

    Charles H. Tuttle:

    Plainly and above all exclusive jurisdiction was not involved in any sense of the claim.

    Now, all these cases and all those cited by Judge Beeks including the Pullman case fall within that area.

    Now, they have —

    Felix Frankfurter:

    Mr. Tuttle —

    William J. Brennan, Jr.:

    Yes, Your Honor.

    Felix Frankfurter:

    — you’re going to — onto another point?

    Charles H. Tuttle:

    Well, I have started to go — I’ve got to the Twenty-First Amendment.

    Felix Frankfurter:

    Well, are you — well, I just want to ask you this, (Voice Overlap) —

    Charles H. Tuttle:

    Yes, surely.

    Felix Frankfurter:

    Certainly, the — the Twenty-First Amendment permits state to pass enactments which control, although prior to the Twenty-First Amendment, they would have constituted infringement of the Commerce Clause.

    Charles H. Tuttle:

    Yes.

    Felix Frankfurter:

    The whole (Inaudible) starting point of all this that no state may keep out liquors taken has been limited by the Twenty-First Amendment as to interstate commerce.

    Charles H. Tuttle:

    Interstate.

    Felix Frankfurter:

    And what I want to put to you is whether the restrictions upon state power regarding where foreign commerce is involved is greater, a state can’t do as to foreign commerce but it can do today as to interstate commerce.

    Charles H. Tuttle:

    See, it cannot do under the Twenty-First Amendment, the decisions of this Court and the Court under the decisions of the New York Court in foreign commerce.

    Felix Frankfurter:

    We’ve had good many differences among ourselves as to what the Twenty-First Amendment involved with reference to interstate commerce.

    Charles H. Tuttle:

    Yes.

    Felix Frankfurter:

    I do not recall you correctly or before me — I do not recall that we had foreign commerce problems under that Amendment.

    Have we had them, Mr. Tuttle?

    Charles H. Tuttle:

    Let me give you the citations.

    Felix Frankfurter:

    I mean this Court, not (Voice Overlap) —

    Charles H. Tuttle:

    Yes, this Court.

    Felix Frankfurter:

    Which case was it?

    Charles H. Tuttle:

    Two of them.

    You will find them in my reply brief at page 9.

    Now, those — those were foreign commerce in this sense that they involve one, the Yosemite National Park which is conclusively under — so this Court held for these papers under federal jurisdiction.

    Felix Frankfurter:

    Oh, yes.

    Charles H. Tuttle:

    It is a foreign area.

    William O. Douglas:

    I thought that — Mr. Tuttle that you perhaps would start with the Twenty-First Amendment and say that it talks about importation not exportation.

    Charles H. Tuttle:

    Yes, it does.

    Charles H. Tuttle:

    It talked about importation into any state.

    Now, I was going to say —

    Felix Frankfurter:

    You’re talking about the sale import.

    Charles H. Tuttle:

    Well, what a sale is to regulate — oh, where do I get — the transportation or importation into any state.

    Now, that’s the predicate.

    Now, I was about to say that that is what happens here at all.

    The Attorney General’s —

    Felix Frankfurter:

    I’m not suggesting it.

    My question didn’t imply that I disagreed with you.

    Charles H. Tuttle:

    No, (Voice Overlap) —

    Felix Frankfurter:

    My only question was whether under the Twenty-First Amendment, there may not be the need for ascertaining underlying state law or state practice in order to determine whether it is or it isn’t within the Twenty-First Amendment.

    I’m not in indicating that I think it is.

    To the —

    Charles H. Tuttle:

    Well —

    Felix Frankfurter:

    — inside or outside.

    Charles H. Tuttle:

    I don’t believe.

    I’ll put it this way that where foreign commerce is involved, there can be no abstention in favor of the courts of a sovereignty that has no jurisdiction.

    And so far as interstate commerce is concerned, there have been cases where there had been abstention for the purpose of determining what the state statute means.

    But I don’t know of any decision that even as to interstate commerce that where there is no delivery, and the Attorney General has conceded it, there’s no delivery within the state and where there’s no use within the state that there can be any abstention because I don’t see anything to abstain in favor of.

    Felix Frankfurter:

    Well, there’s certainly delivery from your wholesale as to you.

    Charles H. Tuttle:

    Oh, it — it have — well, if we don’t get it —

    Felix Frankfurter:

    Pardon me.

    Charles H. Tuttle:

    We don’t get it, it comes through the Bureau of Customs into the Bureau of Customs warehouse in our least supremacies under —

    Felix Frankfurter:

    But am I wrong that New York wholesalers put into that bonded house liquor within the State of New York?

    Charles H. Tuttle:

    Well —

    Felix Frankfurter:

    Am I wrong about that?

    Charles H. Tuttle:

    The record doesn’t show here except —

    Felix Frankfurter:

    You must get the liquor from somewhere.

    Charles H. Tuttle:

    Certainly.

    The record doesn’t show anything except that the bonded warehouse in question was Maryland.

    Felix Frankfurter:

    Do you mean called Maryland or the name?

    Charles H. Tuttle:

    No, State Maryland.

    Felix Frankfurter:

    Did not?

    Charles H. Tuttle:

    Was in Maryland.

    Felix Frankfurter:

    But how did it get to New York?

    Charles H. Tuttle:

    It came under the control guidance and direction of the U.S. Bureau of Customs on abandoned tracker who was responsible into the Bureau of Customs.

    Felix Frankfurter:

    I’m not at all sure that under the Twenty-First Amendment in light of the decision of this Court that that transportation from Maryland to New York can’t be shut out by New York.

    I’m not at all sure.

    Charles H. Tuttle:

    Well, may I — may I — to come right to it.

    May I refer Your Honors to —

    Felix Frankfurter:

    I’m not saying I’m in favor of it.

    Charles H. Tuttle:

    I know.

    I understand that.

    But I —

    Felix Frankfurter:

    — (Voice Overlap) —

    Charles H. Tuttle:

    — I’m saying that the two decisions — I’m saying that the two decisions of this Court cited on my reply brief at page 9, answer of the question that where —

    Potter Stewart:

    Is this the brief you filed on February 26 involving this Wisconsin Supreme Court?

    Charles H. Tuttle:

    No, no my reply brief, page 9.

    Now, it so happens providentially that four days ago, they came out in a — the last northwestern advance sheets of decision of the Supreme Court of Wisconsin —

    Potter Stewart:

    But —

    Charles H. Tuttle:

    — which I put in an addendum and I trust Your Honors all have this addendum because l ask the clerk to see that they were distributed.

    It covers both points in my argument.

    Potter Stewart:

    I have the addendum but I don’t seem to have what it’s an addendum to.Was this the —

    Charles H. Tuttle:

    Well, it’s addendum to briefs of petitioner.

    Potter Stewart:

    Well, how about (Voice Overlap) —

    Charles H. Tuttle:

    I file the (Voice Overlap) —

    Potter Stewart:

    By the general replied brief, is that July 7?

    Charles H. Tuttle:

    No.

    Felix Frankfurter:

    In December 29, the petitioners’ reply brief —

    Potter Stewart:

    Well, I guess I’m missing it.

    Charles H. Tuttle:

    No.

    Felix Frankfurter:

    Mr. Tuttle —

    Charles H. Tuttle:

    It’s —

    Felix Frankfurter:

    I have a brief —

    Charles H. Tuttle:

    — it’s an addendum to briefs of petitioner, opinion of the Supreme Court of Wisconsin filed —

    Potter Stewart:

    (Inaudible)

    Charles H. Tuttle:

    If you have gotten it, I’d like to see that —

    Felix Frankfurter:

    We have it.

    Charles H. Tuttle:

    — it gets supply.

    Now, that is deceits the decisions of this Court and holds that the — number one, that the State of Wisconsin has no taxing power over liquor that is being imported.

    It’s going the other way as long as the original package in Wisconsin hasn’t been broken.

    And in second place, it holds that the Twenty-First Amendment has it all application until the bringing of that liquor into Wisconsin and cites the decisions of this Court which should regard as controlling on that thing.

    Earl Warren:

    Thank you Mr. Tuttle.

    Mr. Sackman.

    Julius L. Sackman:

    Thank you, sir.

    Mr. Chief Justice, may it please the members of the Court.

    The petitioner has brought this action for a judgment declaring that certain provisions of New York’s Alcoholic Beverage Control law sought to be applied to it are unconstitutional and void by reason of the fact that as so applied, they violate the Commerce Clause, the Export-Import Clause and the Supremacy Clause of the United States Constitution.

    And the premises, this alleged unconstitutionality on the fact that the State seeks to regulate in an area where by reason of the provisions of the Tariff Act of 1930 as amended coupled with the provisions of the Internal Revenue Code.

    The National Government has allegedly preempted regulation by the states.

    The jurisdiction of the Court is predicated solely on the presence of the alleged federal question.

    There is no diversity of citizenship involved nor — or any facts alleged upon which jurisdiction may be based other than the fact that there is this alleged violation of the United States Constitution.

    If —

    William O. Douglas:

    That’s a costumer, isn’t?

    Either —

    Julius L. Sackman:

    That’s right.

    William O. Douglas:

    — constitutional statute.

    Julius L. Sackman:

    That’s right.

    But by point is that the jurisdiction of the Court, the petitioner of (Inaudible) stand or fall on the fact that he presents to the Court a substantial federal question.

    With respect to the first part of the proceeding which involved —

    Felix Frankfurter:

    Stand or fall with reference to what?

    Julius L. Sackman:

    With reference to the fact —

    Felix Frankfurter:

    — (Voice Overlap) all tangled up with a lot of snarl of — of procedural problem.

    Julius L. Sackman:

    I agree with you Your Honor.

    Felix Frankfurter:

    Now, stand or fall with reference to what?

    Julius L. Sackman:

    With reference to the fact that he has presented to the federal court a substantial federal question which is in condition to be considered by the Court at the present time.

    Felix Frankfurter:

    Altogether whether the Court has any kind of jurisdiction?

    Fully apart from the question of whether to one judge or three-judge court?

    I think there is — that the complaint presented no federal question.

    Julius L. Sackman:

    No, I’m not saying that.

    I’m saying the complaint presented a potential federal question, the substantiality of which presently cannot be determined on the posture of the case as it’s presented to the Court at the present time.

    Felix Frankfurter:

    Would you mind stating what you conceive to be — what you conceive to be the federal question that was alleged which gave the District Court jurisdiction putting to one side for the moment whether a three-judge court was required to be convenient.

    Julius L. Sackman:

    Right.

    The question of whether in fact the statutes of the State of New York were enacted or were being sought to be applied at the present time in a manner which was violative of alleged paramount federal rights respecting interstate commerce, foreign commerce and under this alleged preemptive scheme under the Tariff Act and the Internal Revenue Code.

    Felix Frankfurter:

    Now, assume that — that as a matter of allegation, he stated enough.

    He didn’t just present that abstract question.

    Does the District Court have jurisdiction?

    Julius L. Sackman:

    Assuming that the — you’re — you’re keeping out of the case now the question of state law.

    Felix Frankfurter:

    No.

    I’m building on what you said.

    Julius L. Sackman:

    Well, I — I —

    Felix Frankfurter:

    Does the claim seeking an injunction against the enforcement of state laws because they have no force?

    In that, they are subordinates to — to federal authority with the constitutional as both constitutional and statutory which gives them the right way of viewing this thing without later interfering by state officials on acting under state law.

    Julius L. Sackman:

    Assuming that —

    Felix Frankfurter:

    That’s what the — that’s what the case — that’s their complaint, isn’t it?

    Julius L. Sackman:

    Yes, sir.

    Assuming that the federal regulations were paramount, assuming that the federal jurisdiction was paramount then there would be no question about the substantiality.

    Felix Frankfurter:

    But I mean they’re making that claim.

    Julius L. Sackman:

    They do make that claim.

    And I —

    Felix Frankfurter:

    And on face of it, you couldn’t file in old fashion the merit, could you?

    Julius L. Sackman:

    No, you couldn’t because as the — as Judge Beeks put it, he couldn’t determine at either way because of — as he put it, the tentative and hypothetical posture in which the case was presented to him, that pending the determination of a necessary aspect of the case, he couldn’t tell whether the question — the federal question which clearly was stated was in fact substantial.

    That is the point which Judge Beeks made when he turned them down in their application for the convening of the three-judge court.

    Felix Frankfurter:

    Was not — whether they were substantial, whether on the merits, they could — the state law would have to yield or can bend to federal law.

    Julius L. Sackman:

    Well —

    Felix Frankfurter:

    Are you here agreeing with Judge Beeks?

    Are you trying to sustain his original judgment namely that this presented a problem within his jurisdiction but in view of the entanglement of federal and state law, you first wanted the state court to determine what the state law was.

    Julius L. Sackman:

    I agree with that completely, sir.

    Felix Frankfurter:

    Does that involve you in agreeing that he could do all that by himself?

    Julius L. Sackman:

    Yes, sir.

    I agree with that.

    Felix Frankfurter:

    — (Voice Overlap) —

    Julius L. Sackman:

    I do agree with that.

    May I proceed?

    William O. Douglas:

    Well, are you tendering them the proposition that the litigation started pursuant to the authorization of Congress in the Federal District Court challenged in the constitutionality of the state statute must go to be transferred to the state tribunal, is that your proposition?

    Julius L. Sackman:

    In all instances?

    I don’t say its — its automatic and I don’t say it’s true in all instances.

    There may be situations where the questions —

    William O. Douglas:

    What is there dubious here?

    The Attorney General of the State has taken a clear definite position, (Voice Overlap) —

    Julius L. Sackman:

    Yes, but the Attorney —

    William O. Douglas:

    — as the law, he speaks, this is not the —

    Julius L. Sackman:

    — the Attorney General, nevertheless, he’s still merely another lawyer.

    He may — he’s — his opinion may have a little greater weight perhaps when addressed to governmental state problems.

    Nevertheless, it’s still an opinion of a lawyer.

    There is no judicial determination, no state judicial determination of the question which was before the Attorney General.

    William O. Douglas:

    Yes, but this is the man who commands the law enforcement agencies.

    He says this is what I’m going to do if you do this.

    Julius L. Sackman:

    And that’s why I’m here now contending —

    William O. Douglas:

    So this is not just — he’s not — the petitioner isn’t dreaming imaginary things.

    Julius L. Sackman:

    No, no, we have said these things.

    Julius L. Sackman:

    We have said — we have said that this is a sale within the meaning of New York State Alcoholic —

    William O. Douglas:

    Yes, I just wonder what theory do you make the federal court sort of the secondary tribunals.

    Julius L. Sackman:

    We do not, sir.

    We do not make the federal court a secondary tribunal.

    We take the position that there is no federal question ready for determination.

    We say that the federal question is not yet right for determination that the application is pre-mature.

    But we do not suggest even though we formally moved to dismiss, our position now is that we do not suggest that the action be terminated by way of dismissal.

    We suggest that the federal court retain jurisdiction and abstain pending the determination of the state question.

    William O. Douglas:

    How long does it take litigant to get through a trial court in your State to the Court of Appeals these days?

    Julius L. Sackman:

    Well, what will happen in — in the state court is that there won’t even have to be a trial and an action for declaratory judgment is brought.

    A motion will be made purely as a question of law.

    There’s merely a question of law involve and motion will be made —

    William O. Douglas:

    There’s a question of law then we — all that it’s in question on that — on affidavit, would it?

    Julius L. Sackman:

    No, no, it — it would be a question of law based upon the allegations of the complaint.

    We will accept the allegations of the compliant —

    William O. Douglas:

    How long —

    Julius L. Sackman:

    — as to —

    William O. Douglas:

    — how long does it take a case of that kind to get through your court?

    Julius L. Sackman:

    I think we can — I think we can go through special term, the appellant division and the Court of Appeals in six months.

    Felix Frankfurter:

    What is the state question which —

    Julius L. Sackman:

    The state —

    Felix Frankfurter:

    — do you think is a — a condition — an undeceiving condition to determining the federal issue attended by Mr. Tuttle.

    Julius L. Sackman:

    Well, at the demise premises, the plaintiff as Mr. Tuttle has rather accurately stated —

    Felix Frankfurter:

    Well —

    Julius L. Sackman:

    Sells — sells bottles of liquor is an actual sales transaction.

    They take an order, they take the payment for it, they give a receipt for it, which receipt the passenger purchaser uses, I suppose, later on to retrieve the bottle at the point of this embarkation in a foreign country.

    But there is an actual sale which takes place at that point.

    Felix Frankfurter:

    You get the piece of paper which entitled them to get a bottle labeled, is that it?

    Julius L. Sackman:

    That’s right.

    Now —

    Potter Stewart:

    In England or France or Italy?

    Julius L. Sackman:

    That’s right.

    However, unless this Court misconceived the thing, we do not conceive of the sale transaction in the normal sense of a sale in which the question delivery is involved as to whether it’s consummated time of delivery or at the place of delivery.

    We have a specific statute which defines a sale under the Alcoholic Beverage Control law.

    And Your Honors will find in the appendix to the States’ brief or the liquor authorities’ brief rather at page 42, sale means any transfer, exchange or barter in any manner and by any means whatsoever for a consideration and includes and means all sales made by any person whether principle, proprietor, agent, servant or employee of any alcoholic beverage indoor or warehouse receipt pertaining thereto to sell includes to solicit or receive an order for, to keep or expose for sale and to keep with intent to sell and shall include the delivery of any alcoholic beverage in the State.”

    Now, the mere fact that they have this bottle on their shelves exposed for sale, the mere fact that they solicit orders under our statute constitutes a sale.

    And so therefore, whether we treat of this transaction as the sale in the traditional commercial sense or whether we treat of the sale as defined in the rather limited or rather broadened in which is defined in our Alcoholic Beverage Control law, it’s quite clear that the Courts of the State of New York may very well go along with the Attorney General in his opinion that the transactions which were involved here constituted sales within the State of New York.

    William J. Brennan, Jr.:

    Well, was that question involved neither the two appellant division cases that Mr. Tuttle mentioned?

    Julius L. Sackman:

    Those cases that he was talking about dealt with the relative supremacy or paramountcy of rights between the state regulation and federal regulation of the Twenty-First Amendment and have nothing to do with this particular point.

    William J. Brennan, Jr.:

    Was this question as a construction of the right?

    Julius L. Sackman:

    That’s right but this of course, I — l merely pointed this out incidentally, that will be the question which will be the state courts and which is within the peculiar prerogative of the state courts to determine.

    And it’s the determination of that question which is the necessary prerequisite to the presentation of a federal question to the —

    William J. Brennan, Jr.:

    Well, do you imply as confident as you are or the Attorney General is in his interpretation?

    New York Courts may not agree with it as applied for this particular case.

    Julius L. Sackman:

    I make no such implication.

    I agree — I agree that there’s a possibility they may disagree with us.

    But I — I rather confidently expect that they’ll go along with us.

    Felix Frankfurter:

    Did the Attorney General passed on this very question or is it merely was there a — or did he merely pass on whether the transactions are taxable under New York law or rather two — or is there an equation between them?

    There — if there is a sale they’re taxable, if they’re not taxable, there’s no sale.

    Julius L. Sackman:

    No, I didn’t go into that at all.

    He went for the — the question that was involved here was imposed directly by the Idlewild Bon Voyage Liquor Corporation to the State Liquor Authority which was referred to the Attorney General as to whether a description was given of the business which was transacted and the question was do they need a license?

    There’s no question of taxes or whether there was a sale or no sale.

    The question was do they have to be licensed under our Alcoholic Beverage Control Law?I should like to correct in that respect —

    Felix Frankfurter:

    Before you move on, if they do need a license and operate without a license, then there’s an illegality with certain consequence?

    Julius L. Sackman:

    No question about that, sir.

    And I should like to at this point to correct the third thing which was contained in the Attorney General’s opinion.

    The Attorney General made the statement that this petitioner was not eligible under the law, under the Alcoholic Beverage Control Law to a license that the Alcoholic Beverage Control Law made no provision for a license in this case.

    And I think Your Honors might have gotten the misimpression from Mr. Tuttle’s argument that this was because the Legislature never contemplated that they will going to interfere with interstate commerce to foreign commerce and that was not the point at all.

    When the statute was enacted, it was provided that licenses shall be issued to stores under certain physical conditions one for example, that the store be at street level.

    The only exception to that was that in a railroad terminal where there’s an arcade or a wreath going down that a license — license premises could be located there.

    Julius L. Sackman:

    Other than that, they could be no license.

    Now, the petitioner’s premises are located on the second floor in one of the buildings of the Idlewild Airport.

    Now at the time that this Section was enacted, of course we didn’t have the airports that we have today.

    We didn’t have the commercial activity around the airports or the transportation of passengers that we have today, and if it just never occur to make an exception in favor of the issuance of licenses to somewhat above or below street level at an airport.

    And so for that reason only did the Attorney General say that the law provides has no provision for the issuance of a license to a petitioner who is conducting premises of this character.

    Felix Frankfurter:

    That still would leave open the question whether as a matter of federal constitutional law such a restriction invaliding really the facts which is foreign commerce.

    Julius L. Sackman:

    That’s true.

    And l proposed to discuss that Your Honor.

    Hugo L. Black:

    Mr. Sackman, would you oppose to stay in your determination on these issues which should claim in the case rather (Inaudible)

    Julius L. Sackman:

    Of course not — of course not.

    We said so affirmatively and in that respect, I — I might say this, that it’s true that I didn’t make these assurances until we got to this Court because this is the first court in which I appear for — on behalf of the Attorney General in this case if others appear before then and I will say this.

    This policy generally, the State Liquor Authority being an enforcement agency in this field is not be stayed, they don’t want to be stayed.

    But I spoke to them about it and I assured them that we ought to give a stay in this case and all fairness we ought to do this.

    William J. Brennan, Jr.:

    Well would that —

    Julius L. Sackman:

    My — my —

    William J. Brennan, Jr.:

    — would that include the — Mr. Tuttle makes the point that may be alright for him but what about the tracking companies that delivered?

    Julius L. Sackman:

    We can give the stay just as broadly as they wish it.

    We will desist of many harassment of any sort.

    Mr. Tuttle has sort of look to give to us in amount here, when I made these assurances, I made it out of an abundance of caution because as a matter of fact, he doesn’t need the assurances.

    He can get unlimited restraint right under New York Civil Practice Act.

    The point that he makes about the inadequacy of the state remedy and one of the reasons why he dislikes going into the state courts is that irreparable injury will be done to him because under Section 121 of the Alcoholic Beverage Control Law, a stay is limited to 30 days.

    But I should like to call Your Honors’ attention to the fact that the state under 121 applies only to actions which are brought under 121.

    And those actions are to review, and they — they appear on page 31 and 32 of my brief, to review certain categories of determinations made by the State Liquor Authority where they seek to review such and there usually by and it — these are administrative determinations which are then reviewed and delayed by proceedings in the nature of certiorari.

    Under those circumstances, Section 121 limits the stay to 30 days.

    But in this case, the type of action which the petitioner would bring in the State Supreme Court is an action not to review the action of the State Liquor Authority either under its general jurisdiction or within the specific categories which are made under Section 121.

    His action is based upon an assertion that the authority is without jurisdiction at all over him by virtue of the impact of interstate and foreign commerce.

    William J. Brennan, Jr.:

    — (Voice Overlap) — with the issue sale or not under the definition is something that under your practice would first have to go through administrative proceeding —

    Julius L. Sackman:

    No.

    William J. Brennan, Jr.:

    — before it gone in to court?

    Julius L. Sackman:

    No, sir.

    William J. Brennan, Jr.:

    It goes directly to the declaratory judgment.

    Julius L. Sackman:

    He could bring this action under New York Civil Practice Act Section 473 for declaratory judgment.

    And 20 years ago in 1941, the New York State Court of Appeals and New York Operators against the State Liquor Authority in — an action involving the identical situation here and it’s against the State Liquor Authority said they can be no doubt that the necessary jural relation exist between the plaintiff and the defendants for such an action.

    And it concluded the necessity of a license may be the subject of an action for declaratory judgment.

    Well, now that’s the very point that would be involved in our case.

    William J. Brennan, Jr.:

    Does it brought in your Supreme Court?

    Julius L. Sackman:

    Brought in the Supreme Court of the State of New York.

    And since it’s brought under the Civil Practice Act provisions is under this action, Sections 877 and 879 of our Civil Practice Act would apply.

    And I should like to take just a moment to read to you some relevant provisions of those Sections.

    Felix Frankfurter:

    Before you go into that Mr. Sackman, you have only less your — whatever, it’s 50 minutes or something like that, for me this case raises questions have put the argue that you only had to listen to oral argument for hours and hours and hours.

    Now, your contend to — you are just here sitting pretty on what the Court of Appeals did, aren’t you?

    Julius L. Sackman:

    In the sense —

    Felix Frankfurter:

    (Inaudible) the appeal and brought —

    Julius L. Sackman:

    Except — I — I think I have attempted to overcome it in my — in my —

    Felix Frankfurter:

    I don’t mean that.

    Julius L. Sackman:

    — my practical suggestion as to a solution —

    Felix Frankfurter:

    Yes, but so far —

    Julius L. Sackman:

    I’ve shown that I’m not content just to take advantage of — of the position that I am in.

    Felix Frankfurter:

    But so far as the Court — as far as the judgment that is before us leaves you in a position of getting exactly what you wanted, the reference by Judge Beeks that a single judge had the state court to pass on or whatever to pass on.

    Julius L. Sackman:

    That’s correct.

    Felix Frankfurter:

    Now, for me the as — the perfect whole basket full of — of snails in this case, and I hope before you sit down you’ll indicate your view as to whether Judge Beeks was entitled, assuming he has the power, it was appropriate, whether he, as a single judge could fold this thing in up stay, whether Court of Appeals was right in dismissing this appeal.

    What we can do with reference to the thing that we are reviewing what the Court of Appeals did.

    Certainly, there are those three questions.

    Julius L. Sackman:

    Right.

    And I —

    Felix Frankfurter:

    But we have deal with before we ever get to your question whether anybody should abstain.

    Julius L. Sackman:

    I have answered every one of those questions.

    We is discussed —

    Felix Frankfurter:

    Do you mind —

    Julius L. Sackman:

    — everyone of those points and I should like to get to it if I may.

    Julius L. Sackman:

    First of all —

    Felix Frankfurter:

    But what’s your oral argument is for?

    Julius L. Sackman:

    As to the power of the single judge District Court to order abstention.

    In Poresky, this Court held that a single judge District Court or rather let me put it this way.

    In the case at bar, a single judge District Court has refused to convene a statutory court on the ground that because of the tentative and hypothetical posture of the case, he is unable to find that there exist, the substantial federal question which is an essential prerequisite to the convening of the statutory court.

    Now, that he has this power was the purport of this Court’s decision in Poresky where the Court held that the provision requiring the presence of a court of three judges necessarily assumes that the District Court has jurisdiction but that the determination of this question is not — does not — is not required by the statute to be passed upon by the three judges.

    And the Court concluded that the District Court clearly has authority to dismiss for the want of jurisdiction when the question lacks the necessary substance and no other ground of jurisdiction appeal.

    Felix Frankfurter:

    Precisely this case, Poresky was a case in which a statute was attacked as unconstitutional which had already been, I don’t know in how many instance, held constitutional.

    And the court held what we held in the different situation on Monday.

    But there was no — in fact, there is no real question.

    But you don’t say there’s no real question.

    What you say is it may depend on what the state law ingredient of the federal question is.

    Julius L. Sackman:

    True.

    Felix Frankfurter:

    That’s your position.

    You don’t say there’s no federal question.

    You say there is a statute — a state statutory ingredient and that if — that would be authority will — will determine that.

    Julius L. Sackman:

    But I say that there’s a federal question which lurks in the background which —

    Felix Frankfurter:

    Yes.

    Julius L. Sackman:

    — may materialize or may not materialize and for that reason —

    Felix Frankfurter:

    But not because it’s so frivolous or so depiction as we said in Bailey.

    That was Poresky — Porensky — there was no question legally speaking.

    Julius L. Sackman:

    In Bailey — in Bailey, you said that a three-judge court is not required when the claim for the statute is unconstitutional as wholly insubstantial, legally speaking on existence —

    Felix Frankfurter:

    You wouldn’t say that here would you?

    Julius L. Sackman:

    No, but I would say here that here we can’t tell whether it is or is not insubstantial.

    Felix Frankfurter:

    (Inaudible) of ordering an abstention.

    It doesn’t go to the merits of the jurisdiction of the District Court nor to the merit of the question where the three judges have to fold their hands until they get enlightenment from the state court.

    Julius L. Sackman:

    I say that the single judge court who had to decide the preliminary question of substantiality before he had the right to request the convening of a three-judge court needed enlightenment from the state courts as to a question of state law, the court — before he could determine the substantiality of the federal question.

    Felix Frankfurter:

    But you said (Voice Overlap) went into the — United States District Court claiming that his right for being blunt to threat — to a real threat of state officials claiming that they were acting under state law.

    And his claim is that those state laws are unconstitutional.

    And therefore in effect — I have — I suppose in terms he has for an injunction against a claim authorization by state statutes which made statute.

    Felix Frankfurter:

    He said to fail because of the superior federal authority and that the District Court neither granted the injunction nor denied the injunction, did he?

    Julius L. Sackman:

    That’s right.

    Felix Frankfurter:

    He lifted like Muhammad’s coffin (Inaudible) as in a mount or abattoirs.

    And therefore, there’s a serious question whether a single judge when asked to grant or deny the injunction which normally requires three judges can say, “I’ll hold the matter of until I hear from the state court.”

    Julius L. Sackman:

    But — but Your Honor this Court has held time and again in cases that — and — and premised on the — on the determination in Poresky were — was dismissed on those grounds that the greater power includes the lesser power and then if has the right to dismiss under those circumstances, it has a right to retain jurisdiction and order abstention so that it can determine later on when the determination comes in from the state court whether the question is substantial or not.

    Felix Frankfurter:

    What judge — Judge Beeks had dismissed this complaint?

    Julius L. Sackman:

    I say — well, some courts have dismissed on abstention grounds.

    I think that by retaining jurisdiction and abstaining, he was doing — he was doing the right thing.I — I don’t believe the he should’ve dismissed on abstention grounds.

    Although, there had been cases where federal courts have dismissed on so called —

    Felix Frankfurter:

    But unless you can say about the claim of right protected by the Constitution of the United States and more is blunt and sought to be frustrating on the claim that there are some state legislation which can blunt such a claim.

    And the claim is made that that state legislation is unconstitutional then 3281 say you must summon three judges.

    Julius L. Sackman:

    Well, then may I call Your Honors’ attention.

    In this Court’s decision in the City of Meridian against Southern Bell Telegraph and Telephone Company in 1959, the — a declaratory judgment action was broached to declare that a state statute didn’t apply to the plaintiff in that case and that if it did apply, it was unconstitutional.

    The case was tried before a single judge District Court on the merits and the statute was held invalid.

    The Court of Appeals affirmed, this Court without passing on demerits, vacated the judgment of the Court of Appeals and remanded the case to the single judge District Court with the directions to hold the cause while the parties were paired to a state tribunal for an authority of declaration of applicable state law.

    And the interesting thing about that case and this case is that in both cases, the sole predicate for federal jurisdiction is the alleged federal question.

    Felix Frankfurter:

    Mr. Sackman, I’m well aware of the fact that in the lower court, single judges have done precisely what Judge Beeks said as a division in the lower courts.

    I’m well aware in the fact that in one or two cases, this Court, without considering the problem, has disposed of the matter without any reference to whether a single judge who when asked to enjoin a state statute, enforcement of a state statute can do it by himself or as to someone has to ask the senior — circuit judge to convene three judges.

    And I’m well aware of that fact.

    This case is here partly to — to examine and face those problems which are very serious jurisdiction —

    Julius L. Sackman:

    Well then I should like to — to continue along those lines Your Honors in several cases.

    As I read them, they seem to be all going in one direction.

    Even from this —

    Felix Frankfurter:

    — (Voice Overlap) — not in one case has this Court consider this problem.

    Julius L. Sackman:

    Well now, even prior to Meridian and subsequent to Meridian, the — the problem seems to have been before the Court.

    For example in Chicago against Fieldcrest Dairies back in 1942, a suit which was within the ambit of three courts — three-judge court jurisdiction, the single judge District Court determined the question of state law which was involved and the Circuit Court of Appeals did the same thing.

    This Court vacated the judgment, remanded the course to the single judge District Court with directions to abstain.

    And Spector Motor Service against Mclaughlin in 1944, again a suit which fell into the ambit of three-judge court jurisdiction, the single judge District Court decided the case on the merits including the question of state law.

    The Circuit Court of Appeals reversed the District Court but its decision too was based upon a consideration of the merits.

    This Court vacated the determination of the appellate court, remanded the case to the single judge District Court with directions to abstain —

    Felix Frankfurter:

    Did this Court ever say a word on the subject in many of those cases?

    Julius L. Sackman:

    It said with directions to retain the bill pending —

    Felix Frankfurter:

    Did this Court ever consider the question that I’m putting to you?

    Now, did it ever spell out or did it ever discuss it in hour briefly namely, whether a single judge is asked to enjoin state statute and he neither enjoins, he neither grants nor deny but stays, whether he can do that all by himself.

    Has this Court ever say a word —

    Julius L. Sackman:

    If this — it’s —

    Felix Frankfurter:

    — on the subject?

    Julius L. Sackman:

    If this Court had said it in such terms, I would have had it in my brief Your Honor.

    Felix Frankfurter:

    Alright.

    Julius L. Sackman:

    So what I’m doing is to pointing out what the Court — well, you can’t find what the Court says, you try to show what the Court did —

    Felix Frankfurter:

    When this Court often or too often over 170 or 180 years, not too often but often necessity makes rulings when the problem isn’t (Inaudible) or rightly before it then there comes a time when you have to consider it.

    And this is one of those times.

    Julius L. Sackman:

    Right.

    Well now then may I call your attention —

    William J. Brennan, Jr.:

    May I ask a question, the remand in those cases where they in turn to remand to quote single judge District Court or just remand to District Court?

    Julius L. Sackman:

    No, the — the remand was to the District Court.

    William J. Brennan, Jr.:

    Well —

    Julius L. Sackman:

    But, they were — they were matters which emanated —

    William J. Brennan, Jr.:

    Well, they may have.

    Julius L. Sackman:

    — from a single judge District Court.

    And I don’t think — I don’t think that I was out of line when I, of course, emphasized single judge because it’s a matter like they came from a single judge court.

    I can see that the — the — in terms of the remand was to the District Court.

    Now even subsequent to the Meridian case, in two cases which I will concede at the outset were not within the ambit of the three-judge District Court jurisdiction.

    In Louisiana Power Light Company against the City of Thibodaux, the District Court, a single judge District Court ordered abstention and the Court of Appeals reversed the decision.

    This Court reversed the judgment of the Court of Appeals and reinstated the abstention order of this Court — of the District Court.

    And on the same day in the Mashuda case, Your Honors will recall that a single judge District Court had dismissed the suit on principles and abstention.

    It was a dismissal on the principles of abstention.

    The Court of Appeals reversed the lower court and this Court affirmed the determination of the Court of Appeals but it was by a split decision.

    The majority held that the District Court had abused its discretion in dismissing on the ground of abstention and the minority were — reviewed that the District Court had acted within its proper discretion.

    But what is of paramount interest in this case is that neither the majority nor the minority question the right of the District Court to exercise its discretion.

    Julius L. Sackman:

    The single judge District Court to exercise its discretion in this respect, they merely deferred as to whether he had properly exercised it or abused it.

    Now as I pointed out about Mashuda and Thibodaux, both cases in which were not within ambit of three-judge jurisdiction.

    But again I say that where a cases within the conceded jurisdiction of the single judge District Court, no matter what the basis of that jurisdiction may be, if before he can determine the question, if in order to ripen the question, even — if in order to mature the things to the point where he can apply the federal principles which are involved, he has the power as supplemental to his power subsidiary to his power to order abstention.

    Felix Frankfurter:

    The statute says he — if when he denies or grants, now if he’s asked to grant and he doesn’t grant, he doesn’t explicitly deny but he at least for a period denies by not granting.

    Julius L. Sackman:

    That’s correct.

    Felix Frankfurter:

    One has to overcome those terms of that statute.

    Julius L. Sackman:

    Well, I — I think were — were —

    Felix Frankfurter:

    Alright.

    Julius L. Sackman:

    — if I may judge —

    Felix Frankfurter:

    You put the problem.

    You’ve met —

    Julius L. Sackman:

    The Court of Appeals in considering this matter, even though they dismissed the appeal, did conclude that the right to abstain in the first instance in cases which come within the ambit of three-judge District Court jurisdiction was for the three-judge court and not for the single judge court.

    And they reasoned that the decision to abstain is different from preliminary contamination of substantiality since it’s not automatically said.

    It presupposes jurisdiction that is subsequently surrendered.

    Now, I think that the Court of Appeals gave unwarranted weight to this distinction.

    I think, first, that a decision to abstain is similar in many ways to a decision on the question of substantiality or decision on the question of equity.

    And that these matters are for — the disposition of these matters is mandatory, not discretionary, when the facts come within the criteria which have been fixed by this Court.

    Felix Frankfurter:

    But if a single judge — if a single judge on an application under 2281 says, “I decide myself this is frivolous” and I don’t have to call three judges mandamus (Inaudible) if he’s taking too much liberty with — in regarding of the non-substantial, wouldn’t it?

    Julius L. Sackman:

    That’s true.

    But I — but I should — but I — but I —

    Felix Frankfurter:

    So that if says so, isn’t enough.

    Julius L. Sackman:

    But my — my point is here Your Honor that — if I may continue with the reasons why it is not in the first instance within the prerogative of the three-judge court, a decision to abstain, just like a decision on the question of substantiality —

    Felix Frankfurter:

    But you don’t know whether he’ll abstain or not when the petition is filed.

    Where no suit, we’re not dealing (Inaudible) asking that he grant the injunction then in there on the pleading, you must determine whether this is a case to summon three judges or not.

    You don’t know whether he granted or denied or abstain.

    Julius L. Sackman:

    Well Your Honor, asking a question purely rhetorically, I’m not expecting an answer unless Your Honor wishes to answer it.

    If you would to follow out that reasoning then every time a complaint was filed in the Federal District Court which, at least on its face, fell within the ambit of three court jurisdiction.

    Actually, the —

    Felix Frankfurter:

    And it’s not within the —

    Julius L. Sackman:

    — the convening —

    Felix Frankfurter:

    And it’s not within the Bailey doctrine or the —

    Julius L. Sackman:

    That’s right.

    Felix Frankfurter:

    — Poresky doctrine.

    Julius L. Sackman:

    That’s true.

    Then, under those circumstances, the convening of the three-judge court would become a purely automatic thing calling for no thinking on the part of the judge before — the single judge before whom it appears in the first instance.

    Felix Frankfurter:

    Except that he has to determine justifiably that it presents as a real question.

    And that’s exactly what Congress meant him to be.

    Congress —

    Julius L. Sackman:

    Well, I —

    Felix Frankfurter:

    — didn’t want a single judge to decide the faith of state legislation.

    Julius L. Sackman:

    Now —

    Potter Stewart:

    Am I right in my recollection Mr. Sackman that its an actual fact, the Chief Circuit Judge has convened a three-judge court to decide whether not to do it?

    Julius L. Sackman:

    What happens is that the — the single judge court makes the request of the Chief Circuit Judge to convene with the court.

    Potter Stewart:

    Is it your impression that the Chief Circuit Judge has no discretion then when such a request has received?

    Julius L. Sackman:

    I would say that —

    Potter Stewart:

    Or perhaps does that varied by service?

    Julius L. Sackman:

    I think that is true even under the existing.

    I think we would all agree that if the single judge District Court decides to make a request but the Senior Circuit Court Judge would have to convene the — the statutory court.

    Felix Frankfurter:

    He shall, the statute says.

    Julius L. Sackman:

    That’s right.

    I think he has to —

    Potter Stewart:

    But then (Voice Overlap) statute.

    Julius L. Sackman:

    — but my — my point is — was this that on the — if we follow out to its extreme, the suggestion is made by Judge Frankfurter and I know he is making the suggestions purely for the purpose of eliciting the reasoning.

    The action of the single judge District Court makes him almost an automaton.

    Felix Frankfurter:

    It does in fact you can call it that.

    Congress did not want to have a single judge decide whether he should declare a statute unconstitutional or not.

    And it didn’t propose to have him wait at the end in order to find out where this going to knock it out as a standing.

    That’s the whole point of the three-judge mechanism.

    Potter Stewart:

    I think Your Honors —

    Felix Frankfurter:

    If it applies, if it applies —

    Potter Stewart:

    Your Honors —

    Felix Frankfurter:

    If it applies when there is a substantiality or federal question.

    Potter Stewart:

    Your Honors, there are many questions I have to discuss here.

    I have — I believe only about 15 minutes so I’m going to rely on my brief first.

    That on the assumption that Your Honors agree with me that the single judge District Court did have the power to abstain and that was within his sound discretion to do so, I have argued in my brief that his exercise of the discretion was a proper exercise in the discretion.

    Now basic to this determination is of course the Twenty-First Amendment.

    And I should like to spend a few more minutes on that.

    The Twenty-First Amendment, of course, is a federal question.

    We have never said that it’s not a federal question.

    As a mater of fact, it’s my adversary who confuses the question of what is a state question and what is a federal question.

    He has, if one reads his brief, stated that the determination of superior regulatory rights of the State, this would be the Federal Government, is a question which the State has decided against — against us.

    And I say that assuming the State has — some of the state courts have done so and I can only see one case that does so.

    But that’s not binding upon this Court because this is essentially a federal question.

    In State Board of Equalization against Young’s Market Company, this Court held that under Section 2 of the Twenty-First Amendment, the states’ power of regulation of the liquor traffic is paramount to the Federal Government’s control over interstate commerce.

    And Your Honor wished to know, I think it was Judge Frankfurter who wish to know earlier of the day, as to whether this Court had ever made a decision respecting the relative supremacy as to exports.

    And I might call Your Honors’ attention to the 1939 decision of this Court in the Ziffrin against Reeves, where the appellant had argued that despite the Twenty-First Amendment, exports remain subject to the Commerce Clause and free of state regulations.

    This Court affirmed the lower court’s rejection of the appellant’s argument and held for the supremacy of the state rights under Section 2 of the Twenty-First Amendment.

    There are many cases which follow up the interstate commerce situation.

    Hugo L. Black:

    You mean that give the rule that did apply, same rule that applied to foreign as to interstate commerce?

    Julius L. Sackman:

    Yes, sir.

    As I read the case, I — I–

    Hugo L. Black:

    I thought it said, I have forgotten, but I thought you said (Inaudible) in foreign ex — exports apply?

    Julius L. Sackman:

    Well, unless I have misread the case Your Honor —

    Hugo L. Black:

    Is that what meant by Mr. Justice McReynolds?

    Julius L. Sackman:

    I don’t recall.

    I haven’t got the name of the judge who rendered the decision Your Honor.

    And unless I have misread the case, it applied the same rule that was applied in State Board of Equalization and in Carter against Virginia.

    And those cases applied to interstate commerce, I believe it was applied to exports.

    Now, the best statement I think or I should say — shouldn’t say the best statement but a good statement of the relative rights was given by a Federal District Court affirmed by the Fourth Circuit, certiorari later being denied by this Court.

    In United States against Rankin where the Court said that under the Twenty-First Amendment, it is entirely up to the state where the liquor can be imported into or delivered or used within its boarders.

    Julius L. Sackman:

    Since it can prohibit, it may permit under such terms as it sees fit untrammeled by the Due Process Clause, the Equal Protection Clause or the Commerce Clause of the Constitution.

    William O. Douglas:

    Have you found any export cases under (Voice Overlap)?

    Julius L. Sackman:

    The only one I — I found was the Ziffrin case to which I’ve referred.

    William J. Brennan, Jr.:

    (Inaudible)

    Julius L. Sackman:

    Ziffrin’s against the —

    William J. Brennan, Jr.:

    Does Ziffrin actually involved in the foreign commerce?

    What were the facts?

    Did it actually involve?

    Julius L. Sackman:

    Well right now, with the — I think I had a hundred cases to this case and I — when — they begin to merge with each other.

    William J. Brennan, Jr.:

    I’ll look out the (Inaudible)

    Julius L. Sackman:

    In California against Washington, which Your Honors may recall, only in 1958, that was an action which arose under the original jurisdiction of this Court where the State of California sought to file a bill.

    And my office filed a brief in support of California’s position as amicus curiae.

    Now, we contended in that case that the Twenty-First Amendment did not subordinate federal rights arising under the Commerce Clause to state regulation, and we specifically requested this Court to overrule its decision in State Board of Equalization against Young’s Market Company.

    This Court rejected our argument and denied leave to file the bill.

    So now were on the other side and we kind of take advantage or something we learned in the California case.

    Now, I should like to continue under this Twenty-First Amendment situation.

    Counsel for the petitioner says that this is a state question and he says in Rosenbloom against Franklin appellate division case in New York State, the — the views which he expressed as to relative superiority of supremacy were decided in favor of the Federal Government.

    Now assuming that is so, I still say that this Court is not bound by a state court determination on a federal question.

    Now, the other cases which they cite may be distinguished on various grounds.

    For example, manner of Gulf Oil Co. against McGoldrick which was in an appellate division decision affirmed by the New York Court of Appeals and later affirmed by this Court.

    The Court disallowed a city sales tax on oil which was held in bonded warehouses Class 6.

    And might I parenthetically amplify on the definition of a Class 6 warehouse about which Mr. Justice Stewart inquired.

    Class 6 bonded warehouses don’t deal only with wines and liquors.

    All merchandise for export is in Class 6 bonded warehouses.

    And so here, you had oil which was in a bonded warehouse Class 6.

    And the tax was stricken down on the ground that this was an unconstitutional interference for foreign commerce, but this case dealt with oil, not liquor.

    The impact of the Twenty-First Amendment wasn’t present.

    In addition to that, it may be distinguished on the ground that it dealt with the tax and not with that part of the police power of the state which is reserved to the state under Section 2 of the Twenty-First Amendment.

    In Drory against Valenti, another case relied upon by the petitioner.

    There was a question with respect to liquor stored for export purposes in the foreign trade zone in the Port of New York.

    Julius L. Sackman:

    Now, that is an enclosed police area which was created under federal law pursuant to state statutory authorization.

    The City of New York had to get authorization from the State of New York to apply to the federal authorities to create this foreign trade zone in the Port of New York.

    And the state statute which authorized the City of New York to make the application specifically provided that if it would be granted, the City was to operate — establish, operate and maintain such zone in accordance with law that is in accordance with the federal law.

    So that to this extent, the state statute may be construed as a legislative surrender by the state with respect to the foreign trade zone area —

    Hugo L. Black:

    Are you arguing —

    Julius L. Sackman:

    — of its paramount rights of regulation in much — may I just finish this sentence, in much the same way that the state concededly has no paramount rights of regulation over lands which are — where sovereignty is seated to the Federal Government.

    Hugo L. Black:

    Are you arguing for abstention on the theory that you will ask your state court to hold that this — these activities are not covered by the act — by the state law?

    Julius L. Sackman:

    I’m going to argue that this — in the — I’m going to argue with the state court that this activities are illegal under the state law.

    Hugo L. Black:

    Well then, why — why are you in favor of abstention?

    Julius L. Sackman:

    Because —

    Hugo L. Black:

    Suppose that you agreed with that.

    Julius L. Sackman:

    Well —

    Hugo L. Black:

    I understand that that they are covered by the state law.

    Julius L. Sackman:

    Well, if — if counsel where to concede that his operations were illegal under —

    Hugo L. Black:

    (Voice Overlap) —

    Julius L. Sackman:

    — the state’s Alcoholic Beverage Control Law —

    Hugo L. Black:

    I do not understand.

    He can take — concede it’s illegal and I understand, maybe I’m wrong, if he is insisting that it is protected by the commerce law.

    Julius L. Sackman:

    That’s correct.

    That’s his contention.

    Hugo L. Black:

    And you ought to send it back to the state you — in order to get them to hold that the activities are the kind that he says they are.

    Julius L. Sackman:

    No, that they’re not.

    Hugo L. Black:

    And yet they are covered by the act (Voice Overlap) —

    Julius L. Sackman:

    I say they are not — they are not protected that the right — the regulatory rights of the state with respect to a licensing transactions of liquor are superior to any rights that the petitioner claims under the federal —

    Hugo L. Black:

    Agreeing with him as to what those activities are as any disagreement —

    Julius L. Sackman:

    Factually, we have no dispute as to what —

    Hugo L. Black:

    Factually, you have no dispute.

    Julius L. Sackman:

    We have no dispute is to what the — what the facts are.

    Potter Stewart:

    Your position in other words is the same position as that exemplified in the Attorney General’s letter.

    Julius L. Sackman:

    That’s correct.

    Julius L. Sackman:

    We say that exactly what we said in the Attorney — in the opinion which was issued.

    Hugo L. Black:

    But why is the matter (Inaudible) in going back to the Supreme Court —

    Julius L. Sackman:

    I think —

    Hugo L. Black:

    — unless we’re going to assume that they will hold different to your argument and different to his argument that these activities are not in — does not part by the state law.

    Julius L. Sackman:

    Well, there are two things that the state court can hold.

    The state court can hold one that this — that this didn’t constitute a sale.

    Hugo L. Black:

    What?

    Julius L. Sackman:

    That these transactions do not constitute a sale and then the whole case is down the drains so far as the state is concern.

    Hugo L. Black:

    That’s not your argument, isn’t it?

    Julius L. Sackman:

    No.

    No, that’s not our argument.

    But they could find that and then there’d be no federal question because their — their —

    William J. Brennan, Jr.:

    Well except for that possibility, what is the reason would it be for an abstention?

    Julius L. Sackman:

    Well, of course, we’re operating on the — on the point that if there is abstention, there is state court action, there will be a fine but —

    William J. Brennan, Jr.:

    Well, is there any reason for state court action except there may be a question whether in fact sale means as used (Inaudible) does under your statute.

    What done here?

    Julius L. Sackman:

    Your Honor, this Court —

    Felix Frankfurter:

    (Voice Overlap) —

    Julius L. Sackman:

    This Court had said, and I think Your Honor earlier in the day, referred to the fact that this Court will avoid unnecessary friction.

    The general basis of the Pullman decision and the cases which follow will avoid on committee reasons and early determination and unnecessary determination for constitutional question.

    Now, that’s — that’s based on the fact that, of course, these state courts might decide contrary to the Attorney General’s view as to whether it’s a sale.

    Now, we, of course, aren’t going through this just for the exercise.

    William J. Brennan, Jr.:

    We don’t avoid the constitutional question unless the state — your state court do disagree with Attorney General —

    Julius L. Sackman:

    That’s right.

    William J. Brennan, Jr.:

    — with the meaning of that.

    Julius L. Sackman:

    That’s right.

    Now, we — we expect that the states — that is that we — we are hoping that the states will — that the courts will agree with the Attorney General’s opinion.

    Hugo L. Black:

    You don’t avoid it unless the state — you loose your case before the state court and Mr. Tuttle wins this case.

    Julius L. Sackman:

    That’s right.

    And there’s nothing to come back for.

    Julius L. Sackman:

    Now —

    Hugo L. Black:

    That’s a rather — a pretty claim uses the doctrine of abstention, isn’t it?

    Julius L. Sackman:

    Well, —

    Hugo L. Black:

    It hasn’t been said that we always have fame.

    Julius L. Sackman:

    True, but how are you — how — I — I’ll concede that I’m saying that you must abstain in order — because you haven’t got a right to do this because maybe the courts will hold against me.

    And therefore, you’ll never have to answer the question, and then there’s something anomalous about it.

    But nevertheless, from your point of view, where the impartial point of view where you don’t — where you don’t hold anything either way as to how the state court is going to decide it.

    You cannot reach the question which is for your determination until you’ve gotten the determination no matter how it goes.

    Now, it may be peculiar that this argument comes from my mouth rather than from my adversaries —

    Hugo L. Black:

    Come from both arguments, doesn’t it?

    Julius L. Sackman:

    My adversary doesn’t want abstention under any circumstances.

    He doesn’t want abstention under any circumstances.

    He says that so long that it’s an interstate commerce, foreign commerce, that’s what distinguishes all of the cases from this.

    And what he’s forgotten about is that the cases which he cites on these things don’t deal with the police power.

    They deal — we can see for example that the state cannot tax merchandise which is an interstate commerce even if its wines or liquors.

    Hugo L. Black:

    Did you —

    Julius L. Sackman:

    That even if its wines and liquors, the state cannot tax.

    Hugo L. Black:

    Under any circumstances?

    Julius L. Sackman:

    But that is we cannot tax if it’s an interstate commerce.

    Felix Frankfurter:

    Since the Twenty-First Amendment?

    Julius L. Sackman:

    Yes, because —

    William J. Brennan, Jr.:

    You mean that is in that truck, if it’s going from Maryland across the State of the New Jersey and New York and the same truck in New Jersey can’t tax it?

    Julius L. Sackman:

    The tax — you’re talking about the merchandise.

    Now, the wines and the liquors —

    Felix Frankfurter:

    — (Voice Overlap) — merchandise.

    Julius L. Sackman:

    That’s right.

    I say you cannot tax.

    The Twenty-First Amendment Section 2 did not reserve to the states any taxing power or any of its general police powers other than that part of its police power which dealt with the regulation of transactions in liquor.

    The police power —

    Felix Frankfurter:

    You can keep the liquor out, can they?

    Julius L. Sackman:

    We can keep it out.

    Yes.

    Felix Frankfurter:

    You can let it in unconditioned?

    Julius L. Sackman:

    Right.

    Felix Frankfurter:

    And it can let it unconditioned that you pay a heavy tax.

    Julius L. Sackman:

    Now there, Your Honor, I must disagree even though it might be contrary to the position hence that I ought to take.

    Felix Frankfurter:

    It should to be on decision on it that —

    Julius L. Sackman:

    Well, I — I — I have read the decisions.

    For example, I — I might say this, just so that before we pass this that I — that I cover a little more fully.

    It has been said that the Treasury Department’s letter which is Exhibit A next to the complaint that this is the approval of the petitioner’s operation.

    And I think it should be recognized only for what it actually and expressly approves.

    The letter of the Treasury Department does not approve the operation as free of state regulation.

    It merely approves the operation as quote “free of duty and tax”.

    And the Tariff Act, too, when the regulation is there under deal with only with duties and taxes.

    And the letter of the New York State Department of Taxation to which Mr. Tuttle referred simply says that it shall be free from state taxes, the various cases that he cites, the case which he fought and this is important because it shows the — what I believe to be his misconception of the point.

    His addendum, he thought it’s important enough to make an addendum to all of his briefs, a verbatim and complete copy of the Wisconsin decision in Morton (ph) against the Board of Review.

    And the very first paragraph of that decision, Judge — Chief Judge Bradford said the issue here is whether merchandise imported for sale and kept on hand by the import of wholesale to meet current or anticipated business demand is protected by Article I Section 7 Clause 2 of the United States Constitution from the ad valorem personal property tax.

    Now, we don’t say that we have the paramount power to tax and thereby interfere with interstate commerce or foreign commerce or areas where the Federal Government is preempted under the Tariff Act.

    But we say, and we dot even claim as to general police powers, but we say as to that cause of the police power of the State of New York which was reserved to us under the Twenty-First Amendment where do have the — the paramount powers of regulation.

    Now, as a result of the questioning, I have skipped around and frankly I — I should like to just hurriedly now, just to make a few points.

    The petitioner asserts that — well, I’ll cover the state question.

    He asserts that the adequate — the state remedy is not adequate.

    And I pointed out that the — he has his action for declaratory judgment.

    And I was discussing, when I was interrupted, the fact that under Sections 877 and 879 of the CPA, he can get complete and unlimited restraint in a declaratory judgment action.

    I won’t read it, i’ll leave it to Your Honors to read at the brief.

    His claim for inadequacy of relief falling, he then claims that there’s no state action now pending and therefore they can’t be abstention.

    And of course, this Court has many times ordered abstention where no state action was presently pending.

    For example in Albertson against Millard, the Court remanded it to the lower court to hold the proceedings in advance the reasonable time pending construction of the statute by the state courts either impending litigation or other litigation which may be instituted.

    And in Spector Motor Service against Mclaughlin, it — the remand was quote with directions to retain the bill pending the determination of proceedings to be brought with reasonable constitute.

    William J. Brennan, Jr.:

    Well, I was —

    Julius L. Sackman:

    So —

    William J. Brennan, Jr.:

    — wasting more time on that.

    You’ve done that severally.

    Julius L. Sackman:

    Alright.

    Now then, I should like, for just for a moment, spend some time if I may on the certiorari.

    Now here, we’re in a tricky area.

    The certiorari from the Court of Appeals may be considered either on the basis of assumption of jurisdiction in the single judge court or lack of jurisdiction in the single judge court.

    I don’t think I need to spend too much time on the assumption of jurisdiction because I’ve argued that with respect to the petition for mandamus.

    But I merely want to add this that if the single judge District Court had jurisdiction then of course the Court of Appeals has jurisdiction accepting that its action instead of being to dismiss the appeal should have been to affirm, according to our contention.

    Since the ultimate result would be the same neither event, I see no point in — in the — in — on — in paying any attention to that aspect.

    Now, if the single judge District Court did not have jurisdiction then of course we have the Stratton situation where the Court of Appeals says the single judge District Court didn’t have jurisdiction.

    Therefore, we don’t have jurisdiction because if we were to take jurisdiction, we would be supplanting the statutory scheme for direct appeal from the single judge court — from the three-judge court to the Supreme Court.

    And therefore, they should dismiss the appeal.

    That was what said in Stratton.

    That’s exactly what the Court of Appeals did in this case.

    If this Court was to follow Stratton, it would have to tell the court to do exactly what has already done.

    Now, lastly, I’ll admit that it was born of a spirit of impatience —

    Felix Frankfurter:

    In Stratton — in Stratton that sudden determination was on the merits.

    It said you — you have the — instead there was a determination on the merits, Court of Appeals on the merits that the tax was valid or invalid, I forgot which.

    And they had no power to do that.

    But it’s a very different thing to decide just as this Court when it holds it had no jurisdiction as we did in Bailey.

    We can make a proper disposition for the Court of Appeals.

    It was too modest with his power in saying it couldn’t do anything.

    It could pass on — it had jurisdiction to decide what the District Court Judge did, and then it could have jurisdiction to seek the District Court did and in fact that the District Judge did the right thing.

    Julius L. Sackman:

    May I just take a moment, I see the — my time is almost up.

    Just to make some comments about my practical solution.

    I’ll admit that it was born on the spirit of impatience with the fact that the rules should have become such that six judges seating, three in the district level and three in the — in the Court of Appeals plus attorneys and the Attorney General’s Office plus eminent counsel Mr. Tuttle could have become embroiled in such awfulness.

    And so purely for the sake of cutting the Gordian Knot, without minimizing the force of any of the objection for that made or any of the arguments that I’ve made.

    I have suggested this alternative suggestion — alternative method of remanding it to the single judge granting the petition for mandamus, directing him to request the convening of a three-judge court but directing the three-judge court to abstain pending determination of the state question.

    Now, there are a several things I think Your Honors ought to consider.

    Julius L. Sackman:

    First place, the question of whether abstention should have in the first instance be considered by the three-judge court of the first or the single judge court would be out, we wouldn’t have to worry about that.

    The question of the restraints whether we give them voluntary assurances or whether they have it under the state statute would be out because of three-judge court unquestionably could restrain.

    But lastly and most importantly, I think, is the fact that actually doesn’t make any difference whether it’s a single judge court or a three-judge court which abstains.

    Because if the cases preempted to the state courts in the manner of which this Court in the Windsor case, on the second remain, said it should be remanded where it said that it should — the state question should be decided by the state court in the light of the constitutional objections which were presented to the federal court.

    The entire case would be before the state court.

    In other words, not merely was this is a sale, but assuming it was a sale, does it violate the Federal Constitution in the respects alleged by the petitioners.

    That being so, when it goes through the three tiers of the state court, it will be reviewable by this Court directly on certiorari, thereby effectively bypassing the — the District Court whether it’d be single judge or three -judge court.

    William J. Brennan, Jr.:

    Well now, how about the possible problem comes through the state courts, may they come here directly or do they have to get back from abstaining federal court?

    Julius L. Sackman:

    I think they can — I think they can come here directly.

    And I —

    William J. Brennan, Jr.:

    Well, they do it but that’s not (Inaudible)

    Julius L. Sackman:

    Well, I — I think they — I think they — they ought to be permitted some way or to be found for them to do it for this reason that if they go back to the District Court, you might then find some conflicting decisions between at least in the ultimate aspect of the case before it gets here, between the Federal Court of Appeals and the New York Court of Appeals.

    And the only — the only dangerous thing ultimately wouldn’t make any difference if we got a complete decision from this Court no matter what — whether they had disagreed or not.

    But assume the odd situation that we had only eight judges sitting as we have right now and we had a — a 44 decision in which would be the law, the Federal Court of Appeals or the New York Court of Appeals.

    Felix Frankfurter:

    I think it’s merely, for instance, that the fact that only eight judges — the fact that only eight judges sit and therefore may — you may complicate this — get some more (Inaudible) practical even.

    William J. Brennan, Jr.:

    That’s right.

    Thank you very much, gentlemen.

    Earl Warren:

    May I say just one word about Ziffrin case and nothing else.

    I’ve read it.

    My recollection is that the word “export” that’s used in this citation there, means export from one state to another as in foreign commerce (Inaudible)