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R & R Marketing, L.L.C. v. Brown-Forman Corp.

January 27, 1998

R & R MARKETING, L.L.C., ROYAL DISTRIBUTORS AND IMPORTERS, LTD., INC., AND REITMAN INDUSTRIES, INC., PETITIONERS-APPELLANTS,
v.
BROWN-FORMAN CORPORATION, RESPONDENT-RESPONDENT.



On appeal from the New Jersey Department of Law and Public Safety, Division of Alcoholic Beverage Control.

Before Judges Long, Kleiner and Kimmelman.

SYLLABUS BY THE COURT

This case of first impression requires us to interpret N.J.S.A.

33:1-93.6, New Jersey's wholesaler anti-discrimination statute, as it

may affect licensed liquor wholesalers who have been authorized to

distribute liquor supplier's products, and who elect to incorporate

under the Limited Liability Company Act, N.J.S.A. 42:2B-1 et seq. (the

Act).

To more fully define the parameters of the issues presented on this

appeal from a decision of the Director of the Division of Alcoholic

Beverage Control, we must first analyze the factual background predating

a decision by petitioners Royal Distributors and Importers, LTD., Inc.

(Royal), and Reitman Industries, Inc. (Reitman), to form a limited

liability company.

The opinion of the court was delivered by: The opinion of the court was delivered by Kleiner, J.A.D.

Argued November 12, 1997

For over twenty years Royal and Reitman were wholesalers, each authorized by Brown-Forman Corporation, a wholesale supplier, to distribute its nationally advertised distilled spirits. Neither Royal nor Reitman have a written contract with Brown-Forman. The relationship of each petitioner with Brown-Forman was protected by N.J.S.A. 33:1-93.6, which prohibits:

discrimination in the sale of any nationally advertised brand of alcoholic beverage other than malt alcoholic beverage, by importers, blenders, distillers, rectifiers and wineries, to duly licensed wholesalers of alcoholic beverages who are authorized by such importers, blenders, distillers, rectifiers and wineries to sell such nationally advertised brand in New Jersey.

In the summer of 1993, Royal and Reitman began discussing the possibility of combining their respective businesses. Ultimately, as discussed in greater detail infra, those Discussions led to the formation of R & R Marketing, L.L.C. (R&R), also a petitioner herein. *fn1 The major issue that apparently pervaded these Discussions was the form or structure of the proposed venture. It seems evidently clear from the record that the corporate representatives and their respective counsel considered the advantages or disadvantages of a partnership, limited liability company, and holding company. Each party weighed tax considerations of the potential prospective ...


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