The opinion of the court was delivered by: ADKINS
Plaintiff William Jameson & Company, Inc., a Delaware corporation, is engaged in the business of importing whiskey into the United States and of selling the same in interstate commerce.
In June, 1938 plaintiff having imported from Scotland five cases of whiskey labeled "Sandy Ross Brand Blended Scotch Whiskey" made demand on the Collector of Customs at New York City for the release of said whiskey; two certificates of age and origin accompanying the request and signed by an officer of Customs and Excise of the British Government stated that the spirits involved were 50% Scotch whiskey and 50% Northern Irish whiskey.
By direction of defendant Wilford S. Alexander, Administrator of the Federal Alcohol Administration, the Collector of Customs refused to release the whiskey on the ground that it was improperly labeled Scotch whiskey.
This suit is filed to restrain defendants from refusing to release the whiskey.
From the complaint it appears that the Sandy Ross whiskey is a blend of equal parts of grain spirits distilled in Northern Ireland and of Scotch whiskey distilled in Scotland from malted barley, the blending being done in Scotland.
Defendants contend that the name "Scotch Whiskey" is applicable only to whiskey all of which has been distilled in Scotland. Plaintiff asserts that the expression "blended Scotch whiskey" means only that it shall be composed in part of whiskey distilled in Scotland from malted barley, and that the grain spirits used as a diluent may be distilled in Ireland, England, or Wales.
Defendants contend that their position is in accord with the Federal Alcohol Administration Act, 27 U.S.C.A. §§ 201-211, and with Regulations No. 5 promulgated thereunder by the Administrator with the approval of the Secretary of the Treasury.
Section 46 (a) of Regulations No. 5 relating to labeling and advertising of distilled spirits provides that Scotch whiskey, whether blended or unblended, shall not be released from customs custody for consumption unless accompanied by a certificate issued by a duly authorized official of the British Government certifying that the particular spirits are Scotch and have been manufactured in compliance with the laws of the government regulating the manufacture of whiskey for home consumption.
The officials of the Custom and Excise Office of Great Britain, in issuing such certificates, require that all the spirits contained in whiskey to be certified as Scotch whiskey shall be distilled in Scotland.
Plaintiff contends that the Regulation is invalid because it exceeds the authority conferred by the statute, and also because it delegates to a foreign government the determination of what is Scotch whiskey; that the effect of the Regulation is to deprive plaintiff of its lawful right to import into the United States the whiskey here involved as Scotch whiskey, and thereby to deprive plaintiff of its property without due process of law.
Plaintiff further contends that the 21st Amendment to the Constitution, U.S.C.A. Const. Amend. 21, transfers to the states all power with respect to alcoholic liquors, including foreign and interstate commerce therein, and that therefore the Federal Alcohol Administration Act is beyond the powers of Congress and unconstitutional.
This case is heard upon plaintiff's application for a preliminary injunction to restrain the enforcement of the Federal Alcohol Administration Act and Regulations No. 5 thereunder; and also upon defendants' motion to dismiss the complaint.
1. The Constitutional Questions.
a. The 21st Amendment does not deprive Congress of all power to regulate foreign and interstate commerce in intoxicating liquors.
The 21st Amendment to the Constitution provides: "The transportation or importation into any State, Territory, or possession of the United States for delivery or use therein of intoxicating liquors, in ...