Number 11. October 8, 1968

Number 11. October 8, 1968 ALCOHOLIC BEVERAGES CONTROL COMMISSION State Office Building 100 Cambridge Street Boston, Massachusetts 02202 Gentlemen: You have requested my opinion as to whether you may, under the circumstances described in your letter of October 7, defer implementing the new sixty-day credit law applicable to sales of alcoholic beverages (St. 1968, c. 574) until such time as the Legislature appropriates to your Commission the funds you deem necessary for this purpose. In general, this law provides for a maximum lawful period of sixty days for credit extended to a retailer by a wholesaler for prohibiting any credit to a retailer who is delinquent in his payments beyond sixty days and for criminal penalties for violations of these rules. You have previously been advised by my office as to certain of your duties under this credit law, in connection with a proposal by which you may avail yourselves of the output of a private service bureau which will employ a computer to process the necessary initial paper work. You have been advised that prior to your certification of the correctness of a daily list of delinquent retailers, you must be independently satisfied that it accurately represents the underlying delinquency notices. You have also been advised that you should provide procedures which would permit retailers an opportunity to contest the factual allegations made by wholesalers in the underlying delinquency notices. You state that the Legislature has appropriated no funds whatever for your administration of this new law and that without additional funds any attempt to process the several thousand daily delinquency notices, to hear protests, determine violations and otherwise administer the new law will be "absolutely impossible". You further state that in your opinion, such an attempt to implement the law in a partial, incomplete or inadequate manner would "cause serious hardship and injustices to innocent licensees. " In support of this statement, you cite the possibility of unjustified economic and criminal penalties which might be suffered by these licensees. It is of course beyond my province to make a judgement as to your internal financial or personnel needs. These are administrative and executive matters, involving factual determinations and judgments which are beyond the realm of my office. My legal opinion, based on the facts as stated by you, is as follows. I find little legal precedent to guide you in the difficult situation in which you find yourselves. You are faced with the responsibility of administering a law, yet, on the facts stated, you are denied the tools necessary to perform your task. Plainly you cannot formally suspend the operation of the law, that being a function reserved by Article 20 of the Massachusetts Declaration of Rights to P.D. 12 47 the Legislature itself. But this obvious proposition is not fully responsive to the issue presented. In the first place, you do not seek to effect such a suspension, since portions of the act, such as the establishment of sixty days as the maximum lawful term of credit, do not need any administrative action to become effective. Secondly, there are numerous examples of state and federal laws which require some form of administrative action in order to become fully effective. While such action should, of course, in the usual case be taken as soon as practicable, seldom is this action completed by a law's effective date. Delays of this nature are generally accepted as inherent in any complicated regulatory structure. Thirdly, and most important, the present situation is one in which incomplete or inadequate administrative action (which would be caused in this instances by a lack of appropriated funds) would result in the risk of serious injustices to various persons subject to your jurisdiction. For example, unless you were to establish adequate procedures (which obviously would involve considerable staff and Commission time and effort) to permit retailers to contest the accuracy of delinquency notices, retailers could be posted as delinquent solely on the basis of allegations of any wholesaler. But there obviously will be cases of bona fide disputes as to the delivery of goods, as to their quality or quantity and as to payments claimed to have been made or not made on their account. If retailers were posted as delinquent without a chance to dispute wholesalers' claims, their credit could be cut off (and criminal penalties threatened) even though not in fact delinquent. Thus adequate administrative staff work under this law would seem essential to its fair application. As public officials you are charged with the duty of executing your duties in a fair and impartial manner. It is inconceivable that the Legislature intended you to administer the new statute in any other manner. If the unfair consequences of implementation described above are, in your judgment, reasonably certain to occur at this time in light of your present administrative capacity, then I would advise you that sound public policy dictates that you should defer implementation until such time as they may be avoided. If in your view this situation cannot be remedied until you receive additional funds (a conclusion on which, as stated earlier, I pass no judgment), you should await the appropriation of such funds. Cf. 1 Op. A.G. 556 (1898). In the meantime, of course, you should be taking all necessary steps to adopt the procedures and regulations that will eventually govern the administration of the law. My office will, of course, be available to render you all necessary legal assistance in this regard. Sincerely, ELLIOT L. RICHARDSON Attorney General