Flip-Flop

Test case of the constitutionality of New York's Feld-Crawford Fair Trade Act of 1935 was Doubleday, Doran & Co., Inc., publishers, v. Manhattan's R. H. Macy & Co. (TIME, Nov. 18, 1935). No facts were disputed. Macy's admitted selling books at prices lower than those agreed upon between Doubleday, Doran and its retail affiliate. New York Supreme Court Justice Frederick P. Close decided Macy's could sell books at whatever price it chose, declared the Feld-Crawford Act unconstitutional (TIME, Nov. 25, 1935). Opined he: "The act attempts to give to private persons unlimited power over the property of others." The State's highest court agreed, voided the law in January 1936.

Last December, in cases involving California's Pep Boys and Illinois' Old Dearborn Distributing Co., the U. S. Supreme Court unanimously held that those States' anti-price-cutting laws were not in conflict with the U. S. Constitution (TIME, Dec. 21). Since the Feld-Crawford Act was for all intents & purposes identical with these fair trade laws, New York's Court of Appeals could do nothing but gracefully perform a judicial flipflop. Last week it did.

In the case of Bourjois Sales Corp. (cosmetics) v. Druggist Abraham Dorfman, the Court reversed itself, declared the Feld-Crawford Act constitutional. Ignored altogether in the 600-word opinion was Brooklyn Druggist Dorfman's act of selling Bourjois products at prices lower than those stipulated in Bourjois contracts with Druggist Dorfman's competitors and 4,000 other New York State retailers.

What the Court of Appeals had to do was to get in step with the U. S. Supreme Court by explaining its Doubleday, Doran-Macy decision. Wrote Chief Justice Frederick E. Crane: "[When] the publisher sought ... to compel Macy to sell the books at the price it had fixed with another Doubleday corporation . . . we thought this to be a clear case of unauthorized restriction upon the disposition of one's own property and unconstitutional within former decisions of the United States Supreme Court. That court has [now] taken a different view ... so we feel it to be our duty to submit our own judgment to the rulings of the Supreme Court on the Constitution." Immediate effect of the opinion in Manhattan was to end a cat-&-dog price fight in the retail liquor business. Publishers and cosmetic makers at last foresaw the end of cut-throat price competition in the nation's No. 1 buying State.* Second day after the Albany flip-flop mammoth Macy's which traditionally "will not be undersold," announced what the world's biggest department store was going to do about it. Full-page newspaper advertisements screamed: "The Consumer will NOW decide." Macy's said it would henceforth offer goods in three classifications plainly labeled and described as 1) merchandise on which the price is fixed, 2) merchandise on which the price is not fixed, 3) merchandise marked "Macy's Own--Why Pay More?"

*Besides New York, California and Illinois, 13 other States have fair trade laws, another 13 are considering them.

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