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Supreme Court Won’t Take Pennsylvania Liquor Case

June 17, 1985

WASHINGTON (AP) _ Pennsylvania officials failed today in an effort to ″sue″ 37 states in the Supreme Court over regulation of wholesale liquor prices.

The court refused to invoke its ″original jurisdiction″ and hear Pennsylvania’s legal arguments before they are aired in any lower court.

Today’s action, however, does not preclude the state’s officials from pursuing the case in a state or federal trial court.

The officials contended that liquor-pricing regulations imposed by 38 states - including Pennsylvania - unconstitutionally interfere with interstate commerce.

The request for Supreme Court intervention was filed by Gary Divito, chief counsel of Pennsylvania’s Liquor Control Board, and by state Attorney General Leroy S. Zimmerman.

The 12 states not named as potential defendants were Alaska, Arkansas, Colorado, Illinois, Indiana, Kentucky, Missouri, Nevada, North Dakota, South Dakota, Texas and Wisconsin.

All other states, according to the Pennsylvania officials, require in varying forms that liquor suppliers wholesale their products in those states at prices as low as anywhere else in the United States.

The practice of liquor suppliers pledging that the prices charged in a particular state are the lowest in the country is known as giving an ″affirmation warranty.″ It is required by law in Pennsylvania, one of the states that chooses to operate a liquor-retailing monopoly, and the 37 other states.

In their Supreme Court request, the Pennsylvania officials said, ″The national price affirmation system prevents the normal operation of the free market and replaces it with a system of state regulation resulting in uniform prices to all wholesalers in all 38 affirmation states.″

They said the system prevents ″large purchasers, such as Pennsyvlania, from negotiating a free market price based on competitive cost factors, payment terms and quantity discounts.″

In fiscal year 1983-84, Pennsylvania bought about $292 million worth of liquor, the vast majority of it from out-of-state suppliers.

″Pennsylvania and other purchasers are deprived of the benefits of free and open competition in the sale and the purchase of distilled spirits,″ the state officials told the justices.

Maryland Attorney General Stephen H. Sachs, whose state was listed as one potential defendant, urged the high court to dismiss the would-be lawsuit.

He said Pennsylvania should be required first to challenge the price affirmation system in a state or federal trial court.

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