II. Coercive Tactics.
In addition to the alleged Sherman Act violations arising out of the termination of Cicione's distributorship, which we have already ruled upon, Cicione makes three additional claims of Sherman Act violations not connected with its termination. The first of these additional claims is the alleged "coercive tactics" which Schmidt pursued with respect to Cicione. Cicione charges that Schmidt forced it to make substantial investments in plant and equipment for the sole benefit of Schmidt; imposed a quota system for sales; instituted inventory requirements; changed Cicione's territory; and dictated advertising and personnel assignments.
However, even accepting these charges as true, we find no law nor has the plaintiff referred us to any law which makes such practices violations of the Sherman Act.
III. Territorial Restrictions.
The second of Cicione's additional Sherman Act claims not connected with its termination is its contention that Schmidt's allocation and implementation of territorial restrictions violates Section I of the Sherman Act. Although both parties agree that pursuant to Pennsylvania law, Schmidt, in 1971, gave each of the six wholesalers a "territorial letter" defining an exclusive territory, Cicione claims that this was illegal under the teachings of United States v. Arnold, Schwinn & Co., 388 U.S. 365, 87 S. Ct. 1856, 18 L. Ed. 2d 1249 (1967). There the Supreme Court said: ". . . where a manufacturer sells products to his distributor subject to territorial restrictions upon resale, a per se violation of the Sherman Act results." 388 U.S. at 379. Schmidt, however, argues that since the territorial arrangements were undertaken pursuant to the Pennsylvania Liquor Code, they were insulated from the antitrust statutes by virtue of the Twenty-first Amendment.
Section 2 of the Twenty-first Amendment states: "The transportation or importation into any state, territory, or possession of the United States for delivery or use therein of intoxicating liquors, in violation of the laws thereof, is hereby prohibited." It gives the states broad regulatory power over liquor use, distribution, or consumption within its borders. See, Joseph E. Seagram & Sons, Inc. v. Hostetter, 384 U.S. 35, 86 S. Ct. 1254, 16 L. Ed. 2d 336 (1966); Hostetter v. Idlewild Bon Voyage Liquor Corp., 377 U.S. 324, 84 S. Ct. 1293, 12 L. Ed. 2d 350 (1964). However, it is clear that the Sherman Act is applicable whenever its enforcement would not defeat the state's liquor policy. United States v. Frankfort Distillers, 324 U.S. 293, 65 S. Ct. 661, 89 L. Ed. 951 (1945). "Such a policy may be expressed either formally by legislation or by implied permission." 324 U.S. at 301. The problem, then, in cases like this is to determine whether the policy of the state sanctions the arrangement claimed to violate the Sherman Act. See United States v. Erie County Malt Distributors Association, 264 F.2d 731 (3d Cir. 1959); Fairfield County Beverage Distributors, Inc. v. Narragansett Brewing Company, 378 F. Supp. 376 (D. Conn. 1974); J.W.T. Inc. v. Kobrand Corp., CCH TRADE CASES, 1973-2 P 74,726 (N.D. Ill. 1973). At the very least, the Pennsylvania Liquor Code
must be considered "implied permission" for Schmidt's action in making territorial assignments to wholesalers. As a Pennsylvania manufacturer of brewed beverages who named its wholesalers as "primary or original [suppliers]" of its beer,
the Pennsylvania Liquor Code required Schmidt to designate the specific geographical area within which these "ID" distributors could resell beer. Because Schmidt's territorial restrictions were issued pursuant to the Pennsylvania Liquor Code, its actions are immune from the prohibitions of the Sherman Act.
However, Cicione's allegations go further than a claim that the allocation of territories was, in itself, illegal. Cicione also avers that the territorial designations were illegal insofar as Schmidt misused them. In this connection it complains that Schmidt's reduction of Cicione's territory in July of 1972 was undertaken to punish Cicione for its failure to adhere to Schmidt's unlawful demands. However, inasmuch as we have found that the business dictates were not illegal and since we hereafter find that its resale price policy was not illegal, there is no basis for the allegation that the territorial allocations were misused.
IV. Price Fixing.
The third claim of Cicione which does not arise from its termination is its allegation that Schmidt violated Section I of the Sherman Act by dictating the price at which Cicione could resell the beer to distributor and tavern accounts. Accepting this allegation as true for the purposes of this motion, the question remains whether the resale maintenance was permissible under the Pennsylvania Fair Trade Law. This law, 73 P.S. § 7, provides, in part, as follows:
No contract relating to the sale or resale of a commodity which bears, or the label or content of which bears, or the vending equipment from which said commodity is sold to the consumer bears the trademark, brand, or the name of the producer or owner of such commodity, and which is in fair and open competition with commodities of the same general class produced by others, shall be deemed in violation of any law of the State of Pennsylvania by reason of any of the following provisions which may be contained in such contract: