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Lill v. Director

Decided: June 8, 1976.

KENNETH A. LILL, COMPUTER PRINTING CAPABILITIES, INC., A CORPORATION OF THE STATE OF NEW JERSEY; PARKER PRINTING COMPANY, INC., A CORPORATION OF THE STATE OF NEW JERSEY; AND PARKER PRINTING COMPANY, A JOINT VENTURE, PLAINTIFFS-RESPONDENTS,
v.
THE DIRECTOR, DIVISION OF ALCOHOLIC BEVERAGE CONTROL, DEPARTMENT OF LAW AND PUBLIC SAFETY, DEFENDANT, N.J. WINE AND SPIRIT WHOLESALERS ASSOCIATION; AND JERSEY PRINTING CO., INC., A CORPORATION OF THE STATE OF NEW JERSEY, DEFENDANTS-APPELLANTS



Lynch, Larner and Horn. The opinion of the court was delivered by Larner, J.A.D.

Larner

Plaintiffs brought this action in the Chancery Division to restrain the State Director of the Division of Alcoholic Beverage Control from awarding a contract to Jersey Printing Co., Inc. for the printing of price lists pursuant to the rules of the Division of Alcoholic Beverage Control. Primarily, plaintiffs sought a judgment declaring that the award of the contract for printing and distributing the price lists could only be awarded after public advertising and competitive bidding pursuant to N.J.S.A. 52:34-6 et seq. After a plenary trial the court below entered judgment in favor of plaintiffs, declaring that the contract at issue was subject to the public bidding statute. Defendants appeal, asserting that the nature of the contract and the factual background underlying its award dictate the conclusion that the state competitive bidding statute is not applicable.

In carrying out its statewide functions pursuant to the authority of N.J.S.A. 33:1-39.2 and 33:1-93, the Director of the Division of Alcoholic Beverage Control (ABC) promulgated rules pertaining to the printing, publication and distribution of wholesale and retail minimum price lists. N.J.A.C. 13:2-34.6; N.J.A.C. 13:2-31.2. These lists are published quarter-annually in accordance with requisite filings by licensees with the ABC. N.J.A.C. 13:2-31.1.

Payment of the printing and mailing costs of these price lists is accomplished by assessing the charges proportionately among those firms which participate in the filings. N.J.A.C. 12:2-34.6; 13:2-31.3. Each price list is published

in pamphlet form over the signature of the Director and the seal of the State of New Jersey and contains the legend, "Not printed at State Expense -- cost paid by Filers."

In harmony with actual practice for many years the ABC does not select the printer, nor does it become a party to the contract. The selection is made by the representative organization of the more substantial filers known as N.J. Wine and Spirit Wholesalers Association (Association) which becomes the contracting party. For the past 25 years the Association by appropriate resolution, upon consideration of contract proposals, has seen fit to award the contract to Jersey Printing Co., Inc. (Jersey). There was testimony that although the ABC does not participate in the selection of the printer, it prescribed the standards and specifications for the work undertaken by the firm.

The Director receives the invoice from the printer and then proceeds to allocate the cost among the filers in proportion to the number of items contained in each filing. Notification of this allocation is then given to the filers who then remit directly to the printer. Failure to make payment may result in the imposition of sanctions by the Director. Since 1970 ABC has added a 15% surcharge to the printing bill, also allocated among the filers, in order to defray the expense of its office in processing the price filings.

The statutory provision which establishes the public bidding requirements for state purchases and contracts states:

All purchases, contracts or agreements, the cost or contract price whereof is to be paid with or out of State funds shall, except as otherwise provided in this act, be made or awarded only after public advertisement for bids therefor, in the manner provided in this act. [ N.J.S.A. 52:34-6]

Since none of the exceptions in other sections of the act are relevant to the issue under consideration, the legal question must be answered within the ambit of the meaning

and intent of this legislative provision and the precedents dealing with public ...


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