Massachusetts Fine Wines & Spirits, LLC v. Alcoholic Beverages Control Commission (Lawyers Weekly No. 12-094-17)

                                      COMMONWEALTH OF MASSACHUSETTS   SUFFOLK, ss.                                                                            SUPERIOR COURT                       CIVIL ACTION 2017–003120-C   MASSACHUSETTS FINE WINES & SPIRITS, LLC[1]   vs.   ALCOHOLIC BEVERAGES CONTROL COMMISSION   MEMORANDUM OF DECISION AND ORDER ON CROSS-MOTIONS FOR JUDGMENT ON THE PLEADINGS   This is an action for judicial review, pursuant to G.L. c. 30A, § 14, of a decision of the Alcoholic Beverages Control Commission (“ABCC” or the “Commission”) finding that the plaintiff, Massachusetts Fine Wines and Spirits, LLC d/b/a Total Wine & More (“Total Wine”), sold certain alcoholic beverage products at a retail price below their “invoiced cost” in violation of 204 Code Mass. Regs. § 2.04(1).  The matter is before the Court on the parties’ Cross-Motions for Judgment on the Pleadings.  For the reasons set forth below, the Commission’s motion is DENIED and Total Wine’s motion is ALLOWED. BACKGROUND   The material facts revealed in the administrative record are largely undisputed, and are as follows.    Total Wine is a national alcoholic beverage retailer, and the holder of a retail license for the sale of alcoholic beverages to be consumed off of the premises under G.L. c. 138, § 15.  This case concerns two of Total Wine’s Massachusetts stores, which are located in Natick and Everett.   Total Wine purchases alcoholic beverage products for its Natick and Everett stores from wholesalers Horizon Beverage Company (“Horizon”) and Martignetti Companies (“Martignetti”).  Horizon and Martignetti offer merchant customers like Total Wine a 1% discount for prompt payment (the “prompt payment discount”), and additional discounts based on the total quantity of a particular product purchased during a specified period of time (commonly referred to as the “promotional period”). The latter is known in industry parlance as a cumulative quantity discount (“CQD”), and the nature of this discount and its impact on downstream retail pricing lie at the heart of the present dispute. When wholesalers like Horizon and Martignetti deliver alcoholic beverage products to retailers, Commission regulations require them to “carry an invoice or sales slip, stating the names and addresses of the purchaser and seller, the date and the amount of the purchase, and also itemizing the number of the various kinds of containers and the kinds, quantities and brands of alcoholic beverages or alcohol.”  204 Code Mass. Regs. § 2.05(3).  Horizon’s and Martignetti’s delivery personnel typically present these invoices (hereinafter, the “original invoice”) to Total Wine at the time of product delivery.  The wholesalers’ original invoices state that a 1% prompt payment discount applies to the product order if the invoice is paid in full within 10 days.  These original invoices are silent, however, as to the CQD.   Total Wine’s policy is to pay the total cost stated on […]

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