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H0591...........................................................by BUSINESS
WINE - Adds to existing law to set forth provisions for agreements between
wine distributors and wine suppliers and for transfers of wine
distributors' businesses; to prohibit certain acts; and to provide judicial
remedies.
02/08 House intro - 1st rdg - to printing
02/11 Rpt prt - to Bus
|||| LEGISLATURE OF THE STATE OF IDAHO ||||
Fifty-sixth Legislature Second Regular Session - 2002
IN THE HOUSE OF REPRESENTATIVES
HOUSE BILL NO. 591
BY BUSINESS COMMITTEE
1 AN ACT
2 RELATING TO DISTRIBUTORS AND SUPPLIERS OF WINE; AMENDING TITLE 23, IDAHO CODE,
3 BY THE ADDITION OF A NEW CHAPTER 15, TITLE 23, IDAHO CODE, TO DECLARE LEG-
4 ISLATIVE POLICY, TO DEFINE TERMS, TO EXEMPT CERTAIN AGREEMENTS, TO SET
5 FORTH PROHIBITED ACTS, TO PROVIDE FOR NOTICE OF TRANSFERS OF A
6 DISTRIBUTOR'S BUSINESS, TO PROVIDE FOR WRITTEN CONSENT OF TRANSFERS BY
7 SUPPLIERS, TO PROVIDE FOR A SUPPLIER'S RIGHT TO AMEND, CANCEL OR REFUSE TO
8 RENEW AGREEMENTS UPON WRITTEN NOTICE IN SPECIFIED SITUATIONS, TO PROVIDE
9 FOR A SUPPLIER'S RIGHT TO DISCONTINUE DISTRIBUTION OF BRANDS OF WINE, TO
10 PROVIDE FOR SUPPLIER REQUIREMENTS UPON AMENDMENT, CANCELLATION OR REFUSAL
11 TO RENEW AN AGREEMENT, TO PROVIDE NOTICE REQUIREMENTS, TO PROVIDE THAT
12 CERTAIN PERSONS SHALL BE BOUND BY TERMS AND CONDITIONS OF AGREEMENT IN
13 EFFECT AT THE TIME OF TRANSFER OR SUCCESSION, TO PROVIDE FOR COMPENSATION
14 TO DISTRIBUTORS UPON TERMINATION, CANCELLATION OR NONRENEWAL OF AGREE-
15 MENTS, TO PROVIDE FOR ARBITRATION, TO PROVIDE JUDICIAL REMEDIES, TO PRO-
16 VIDE FOR WAIVERS AND TO PROVIDE SEVERABILITY; AND DECLARING AN EMERGENCY
17 AND PROVIDING APPLICATION.
18 Be It Enacted by the Legislature of the State of Idaho:
19 SECTION 1. That Title 23, Idaho Code, be, and the same is hereby amended
20 by the addition thereto of a NEW CHAPTER, to be known and designated as Chap-
21 ter 15, Title 23, Idaho Code, and to read as follows:
22 CHAPTER 15
23 DISTRIBUTORS AND SUPPLIERS OF WINE
24 23-1501. DECLARATION OF POLICY. It is hereby declared to be the policy of
25 the legislature of the state of Idaho to regulate and control the importation,
26 sale and distribution of wine within the state of Idaho, in the exercise of
27 its powers under the twenty-first amendment to the constitution of the United
28 States of America, and pursuant to section 26, article III, of the constitu-
29 tion of the state of Idaho. In furtherance of that policy, the restrictions
30 contained in this chapter are enacted to promote equality and fair dealing in
31 the business relationship between Idaho distributors of wine and the suppliers
32 of wine and to assure the establishment and maintenance of an orderly system
33 for the distribution of such products in accordance with the laws of this
34 state regulating the sale and distribution of wine to the public.
35 23-1502. DEFINITIONS. As used in this chapter:
36 (1) "Agreement" means any agreement between a distributor and a supplier,
37 whether oral or written, whereby a distributor is granted the right to pur-
38 chase a brand or brands of wine sold by a supplier and to resell such wine
39 within the state of Idaho.
40 (2) "Amendment" or "modification" means any alteration or change in the
41 agreement that causes a material change in the distributor's business or rela-
2
1 tionship with the supplier, and which alteration or change does not apply to
2 all distributors in the state of Idaho who distribute supplier's products.
3 (3) "Ancillary business" means a business owned by a distributor, by a
4 substantial stockholder of a distributor, or by a substantial partner of a
5 distributor, the primary business of which is directly related to the trans-
6 porting, storing or marketing of the supplier's products.
7 (4) "Designated member" means:
8 (a) The parent, spouse, sibling, child or grandchild of a deceased indi-
9 vidual who owned an interest in a distributor;
10 (b) Any person who inherits an ownership interest in a distributor;
11 (c) The appointed and qualified personal representative or the testamen-
12 tary trustee of a deceased individual owning an interest in a distributor;
13 (d) The person appointed by a court as the guardian or conservator of the
14 property of an incapacitated individual owning an interest in a distribu-
15 tor; or
16 (e) A person who has succeeded to the deceased individual's ownership
17 interest in the distributor pursuant to a written contract or instrument
18 which has been previously approved, in writing, by a supplier.
19 (5) "Distributor" means a business entity, whether sole proprietorship,
20 partnership, corporation, association, syndicate, or any other combination of
21 persons, licensed by the state of Idaho to sell wine to retailers. The term
22 "distributor" does not include a winery that is licensed by the state of Idaho
23 and which license authorizes sales of wine to be made directly to a retailer,
24 whether or not licensed as a distributor by the state of Idaho.
25 (6) "Good faith" is as defined in section 28-4-605, Idaho Code.
26 (7) "Person" means any individual, partnership, corporation, association,
27 syndicate, or any other combination of individuals or corporations.
28 (8) "Reasonable standards and/or qualifications" means those criteria
29 established and consistently applied by a supplier to distributors within the
30 state of Idaho and similarly situated distributors in adjoining states who:
31 (a) Have entered into, continued or renewed an agreement with the sup-
32 plier during a period of twenty-four (24) months immediately preceding the
33 proposed transfer of the distributor's business; or
34 (b) Have changed managers or successor managers during a period of
35 twenty-four (24) months immediately preceding the proposed change in man-
36 ager or successor manager of the distributor.
37 (9) "Retaliatory action" includes the refusal to continue an agreement,
38 or a material part of an agreement, or a material reduction in the quality of
39 service or quantity of products available to a distributor under an agreement,
40 which refusal or reduction is not made in good faith.
41 (10) "Similarly situated distributors in adjoining states" means distribu-
42 tors in adjoining states having an agreement with the supplier who have rea-
43 sonably comparable business, area and market characteristics to an Idaho dis-
44 tributor of the supplier's products, which business, area and market charac-
45 teristics may include, but are not limited to: gross sales volume concerning
46 supplier's products, facilities, number of employees, business capitalization,
47 market areas, considering the population and the demographics thereof, and the
48 square miles of area served.
49 (11) "Substantial stockholder" or "substantial partner" means a person who
50 owns an interest of ten percent (10%) or more in a distributorship.
51 (12) "Supplier" means any person, within or outside the state of Idaho,
52 who enters into an agreement with a distributor for the sale of wine to such
53 distributor with the intent that such products will be resold by the distribu-
54 tor to retailers within the state of Idaho. The term "supplier" includes the
55 successor in interest to a supplier's business generally, or with reference to
3
1 a specific brand or brands of wine.
2 (13) "Transfer of distributor's business" or similar phrase, means the
3 voluntary sale, assignment or other transfer of all or control of the busi-
4 ness, or all or substantially all of the assets of the distributor, or all or
5 control of the capital stock of the distributor including, but not limited to,
6 the sale or other transfer of:
7 (a) Capital stock or assets by merger, consolidation or dissolution;
8 (b) Capital stock of the parent corporation; or
9 (c) Capital stock or beneficial ownership of any other entity owning or
10 controlling the distributor.
11 (14) "Wine" means all alcoholic beverages permitted to be sold by a dis-
12 tributor pursuant to chapter 13, title 23, Idaho Code.
13 23-1503. EXEMPTION. The provisions of this chapter shall not apply to
14 agreements between a supplier and distributor if the supplier manufactures,
15 bottles or sells less than fifty thousand gallons (50,000) of wine within the
16 United States within a period of twelve (12) consecutive months.
17 23-1504. PROHIBITED ACTS. The following acts are prohibited under the
18 provisions of this chapter:
19 (1) A distributor shall not:
20 (a) Transfer the distributor's business without giving the supplier writ-
21 ten notice of the proposed transfer of the business as required under the
22 provisions of this chapter.
23 (b) Transfer the distributor's business without receiving the supplier's
24 written approval for the proposed transfer, where such approval is
25 required by an agreement and consistent with the provisions of this chap-
26 ter.
27 (c) Distribute, sell or deliver wine to a retailer whose premises are
28 situated outside the geographic territory agreed upon by the distributor
29 and the supplier, as the area in which the distributor will sell wine pur-
30 chased from the supplier, without the consent of the supplier and the dis-
31 tributor who has been assigned such territory by the supplier.
32 (2) A supplier shall not, directly or indirectly, or through an affiliate
33 or subsidiary:
34 (a) Require any distributor to do any illegal act or to violate any law,
35 rule or regulation by threatening to amend, modify, cancel, terminate or
36 refuse to renew any agreement existing between the supplier and the dis-
37 tributor, or by any other means.
38 (b) Require any distributor to accept delivery of any wine or other com-
39 modity which has not been ordered by the distributor or, if ordered, has
40 been canceled by the distributor in accordance with reasonable cancella-
41 tion procedures of the supplier. Provided however, a supplier may impose
42 reasonable inventory requirements upon a distributor if the requirements
43 are made in good faith and are generally applied to other distributors in
44 Idaho and similarly situated distributors in adjoining states having an
45 agreement with the supplier.
46 (c) Withhold delivery of wine ordered by a distributor or change a
47 distributor's allocation of a brand or brands by the supplier if the with-
48 holding or change is not made in good faith.
49 (d) Engage in any conduct that requires a distributor to fix or maintain
50 the resale prices at which the distributor sells products received from
51 the supplier.
52 (e) Require a distributor to purchase one (1) or more brands of wine or
53 other products in order for the distributor to purchase another brand or
4
1 brands of wine. Provided however, that if a distributor has agreed to dis-
2 tribute a brand or brands of wine before the effective date of this act,
3 the distributor shall continue to distribute the brand or brands of wine
4 in conformance with the provisions of this chapter.
5 (f) Require a distributor to assent to any unreasonable requirement, con-
6 dition, understanding or term of an agreement which limits the
7 distributor's right to sell a brand or brands of wine or other products of
8 any other supplier.
9 (g) As a condition of renewal or continuation of an agreement, require a
10 distributor to submit financial reports or other specific financial or
11 sales information regarding products, other than those of the supplier,
12 sold by the distributor.
13 (h) Require a distributor to terminate the designation of an individual
14 as a manager or successor manager of a distributor, or refuse to approve
15 the designation of an individual as a manager or successor manager, unless
16 the manager or successor manager fails to meet reasonable standards or
17 qualifications that are nondiscriminatory and applied uniformly to all
18 distributors similarly situated. In any legal action or other dispute res-
19 olution proceedings challenging such termination or designation, the dis-
20 tributor shall have the burden of proving that the termination of the man-
21 ager or successor manager was required by the supplier or that the sup-
22 plier refused to approve the designation of an individual as a manager or
23 successor manager. Upon the distributor making such prima facie showing,
24 the supplier shall have the burden of proving that such person fails to
25 meet nondiscriminatory and reasonable standards and qualifications.
26 (i) Take any retaliatory action against a distributor who, with just
27 cause, files a complaint with any regulatory body or in any court of law
28 regarding an alleged violation by the supplier of federal, state or local
29 law or of any administrative rule.
30 23-1505. NOTICE OF TRANSFER BY DISTRIBUTOR -- CONSENT BY SUPPLIER. (1) A
31 distributor who proposes to transfer the distributor's business shall give the
32 supplier written notice of such proposed transfer not less than thirty (30)
33 days prior to the date specified in the notice for completion of the transfer;
34 provided however, that in the case of a transfer to a designated member, the
35 transferee shall give the supplier written notice of the transfer within a
36 reasonable time after the transfer is completed.
37 (2) A supplier's written consent shall be required for a transfer of the
38 distributor's business to a person other than a designated member; provided
39 however, written consent from a supplier shall be required for a transfer of
40 the distributor's business to a designated member if any of the following con-
41 ditions apply:
42 (a) The transferee or any owner of the transferee has been convicted of a
43 felony under the laws of any state or of the United States which felony
44 would adversely affect the good will or interests of the supplier.
45 (b) The transferee or any owner of the transferee has had a license for
46 the sale of beer, wine or any alcoholic beverage suspended or revoked by a
47 regulatory agency of any state or of the United States and such suspension
48 or revocation interrupted service by the transferee or by the owner of the
49 transferee for a period of more than thirty (30) days.
50 (c) The transferee or any owner of the transferee is insolvent, as
51 defined in 11 U.S.C. section 101, or there has been a liquidation, disso-
52 lution or assignment for the benefit of creditors of substantially all of
53 the transferee's business or assets, or an order for relief under 11
54 U.S.C. sections 701 through 784, has been entered with respect to the
5
1 transferee.
2 (d) The transferee or any owner of the transferee has had any previous
3 agreement with the supplier involuntarily terminated, canceled, discontin-
4 ued or not renewed by the supplier for good cause.
5 (3) If the transferee is a designated member, a supplier shall not inter-
6 fere with, prevent or unreasonably delay the transfer of the distributor's
7 business. "Unreasonable delay" means a delay that exceeds thirty (30) days
8 after the service of the notice required by subsection (1) of this section and
9 the receipt of all material information reasonably requested from which the
10 supplier can determine whether the transfer to the designated member may
11 require the supplier's consent. If consent is required, a supplier may not
12 withhold consent or unreasonably interfere with the transfer of the
13 distributor's business if the transferee meets reasonable standards and quali-
14 fications which are material and nondiscriminatory.
15 (4) If the transferee is not a designated member, a supplier may not
16 withhold consent or unreasonably interfere with or delay the transfer of the
17 distributor's business if the transferee meets reasonable standards and quali-
18 fications which are material and nondiscriminatory. "Unreasonable delay" means
19 a delay that exceeds thirty (30) days after the receipt of all material infor-
20 mation reasonably requested to enable the supplier to determine whether the
21 transferee meets reasonable standards and qualifications.
22 (5) In any legal action or other dispute resolution proceeding between a
23 distributor and supplier relating to the supplier's refusal to consent to the
24 transfer of the distributor's business to a transferee, the distributor shall
25 have the burden of proving that the supplier withheld consent, interfered with
26 or delayed the proposed transfer of the distributor's business. Upon the dis-
27 tributor making such a prima facie showing, the supplier shall have the burden
28 of proving that the proposed transferee does not meet reasonable standards and
29 qualifications.
30 23-1506. SUPPLIER'S RIGHT TO AMEND, CANCEL OR REFUSE TO RENEW IMMEDIATELY
31 UPON WRITTEN NOTICE -- GROUNDS. A supplier may amend, modify, terminate, can-
32 cel, discontinue or refuse to renew an agreement with a distributor immedi-
33 ately upon written notice given by the supplier as provided in section
34 23-1509, Idaho Code, only if any of the following occur:
35 (1) Revocation or suspension of a governmental permit or license held by
36 the distributor whereby the distributor cannot service the distributor's sales
37 territory for a period of more than thirty (30) days;
38 (2) The distributor is insolvent, as defined in 11 U.S.C. section 101, or
39 there has been a liquidation, dissolution or assignment for the benefit of
40 creditors of substantially all of the distributor's business or assets, or an
41 order for relief under 11 U.S.C. sections 701 through 784 has been entered
42 with respect to the distributor;
43 (3) A stockholder or a partner of the distributor who holds or owns ten
44 percent (10%) or more of the stock or value of the distributor has been con-
45 victed of a felony under the laws of any state or of the United States, which
46 conviction would adversely affect the good will or interests of the distribu-
47 tor or supplier; provided however, that if another stockholder or other stock-
48 holders, or a partner or partners, or a designated member or members, or other
49 person notifies the supplier in writing prior to the conviction of an intent
50 to purchase the partnership interest or the stock of the convicted stockholder
51 or partner and then purchases the interest or stock within thirty (30) days
52 after a final conviction or within thirty (30) days after the supplier has
53 consented to the transfer, whichever is later, the supplier shall not amend,
54 modify, terminate, cancel, discontinue or fail to renew such agreement. Any
6
1 purchase of an interest or stock pursuant to the provisions of this subsection
2 shall comply with the requirements and conditions of supplier consent con-
3 tained in the provisions of section 23-1505, Idaho Code;
4 (4) An assignment of the distributor's agreement with the supplier, or a
5 transfer of the distributor's business, other than to a designated member, has
6 been made without written notice as provided under the provisions of this
7 chapter;
8 (5) Fraud has been committed by the distributor in his dealings with the
9 supplier or with reference to supplier's products;
10 (6) The distributor has failed to pay for products ordered and delivered
11 in accordance with established terms of an agreement with a supplier and fails
12 to make full payment within five (5) business days after receipt of a written
13 notice of the delinquency and demand for immediate payment from the supplier;
14 (7) A transfer of the distributor's business is made despite timely and
15 proper notice of disapproval by the supplier; or
16 (8) The distributor has sold or delivered wine to a retailer whose prem-
17 ises are outside of the territory assigned to the distributor by the supplier
18 as set forth in the agreement.
19 23-1507. SUPPLIER'S RIGHT TO DISCONTINUE DISTRIBUTION OF BRAND. (1) With
20 reference to a brand sold by a supplier, a supplier may amend, modify, termi-
21 nate, cancel, discontinue or refuse to renew an agreement not less than thirty
22 (30) days after written notice is given by the supplier as provided in section
23 23-1509, Idaho Code, if the supplier discontinues production or discontinues
24 distribution in this state of a brand of wine sold by the supplier to the dis-
25 tributor.
26 (2) Nothing in this section shall prohibit a supplier from conducting
27 test marketing of a product that is not currently being sold in this state,
28 provided that the supplier has notified the director of the Idaho state police
29 in writing of its plans to conduct such test marketing. The notice shall
30 describe the market area in which the test shall be conducted, the name or
31 names of the distributor or distributors who will be selling the product, the
32 name or names of the product being tested, and the period of time, not to
33 exceed eighteen (18) months, during which the testing will take place.
34 (3) If a supplier causes the discontinuance of distribution in this state
35 of a brand of wine, except a brand that is being test marketed pursuant to
36 subsection (2) of this section, then that brand shall not be reintroduced or
37 sold to distributors within this state by any supplier for a period of six (6)
38 months after providing the written notice required in the provisions of this
39 section. A supplier who is test marketing a brand or brands in this state in
40 compliance with subsection (2) of this section shall not be subject to the six
41 (6) month reintroduction limitation as set forth in this subsection.
42 (4) If a supplier discontinues distribution in this state of a brand of
43 wine, the supplier shall, at the distributor's request, purchase from the dis-
44 tributor any unsold inventory of that brand.
45 23-1508. SUPPLIER REQUIREMENTS UPON AMENDMENT, CANCELLATION OR REFUSAL TO
46 RENEW AGREEMENT. Except as provided in sections 23-1506 and 23-1507, Idaho
47 Code, a supplier shall not amend, modify, terminate, cancel, discontinue or
48 refuse to renew an agreement with a distributor, or cause a distributor to
49 resign from an agreement, unless the supplier has complied with the following
50 requirements:
51 (1) The supplier gives written notice to the distributor, as provided in
52 section 23-1509, Idaho Code;
53 (2) The supplier acts in good faith. In any legal action or dispute reso-
7
1 lution proceeding, the supplier shall have the burden of proving that it acted
2 in good faith; and
3 (3) The supplier has good cause. In any legal action or dispute resolu-
4 tion proceeding, the supplier shall have the burden of proving that it has
5 good cause. Good cause exists when all of the following have occurred:
6 (a) The distributor has failed to comply substantially with essential and
7 reasonable requirements imposed upon him by the agreement, if such
8 requirements are not discriminatory, either by their terms or in the
9 method of their enforcement, as compared with requirements imposed on
10 other distributors in Idaho or similarly situated distributors in adjoin-
11 ing states and if such requirements are not in violation of any law, rule
12 or regulation;
13 (b) The supplier first acquired knowledge of the failure described in
14 subsection (3)(a) of this section not more than twenty-four (24) months
15 before the date notification was given pursuant to the provisions of sec-
16 tion 23-1509, Idaho Code;
17 (c) The supplier has given written notice to the distributor stating spe-
18 cifically the manner in which the distributor has failed to comply with
19 the agreement; and
20 (d) The distributor was given adequate opportunity to use good faith
21 efforts to correct the failure to comply with the agreement. Adequate
22 opportunity shall be thirty (30) days after receipt of the supplier's
23 notice to submit a plan of corrective action to comply with the agreement
24 and an additional ninety (90) days after the submission of a plan of cor-
25 rective action to correct the failure in accordance with the plan.
26 23-1509. NOTICE REQUIREMENTS. Written notice by a supplier of any pro-
27 posed amendment, modification, termination, cancellation, discontinuance or
28 refusal to renew an agreement with the distributor shall be provided to the
29 distributor in the manner provided in the agreement, if written, or if the
30 agreement is oral, by certified mail, and the notice shall contain all of the
31 following:
32 (1) A statement of intention to amend, modify, terminate, cancel, discon-
33 tinue or refuse to renew the agreement;
34 (2) A statement of the reason or reasons for the amendment, modification,
35 termination, cancellation, discontinuance or nonrenewal; and
36 (3) The date on which the amendment, modification, termination, cancella-
37 tion, discontinuance or nonrenewal will take effect.
38 23-1510. AGREEMENTS IN EFFECT AT TIME OF TRANSFER AND SUCCESSION. (1) A
39 transferee of a distributor's business that continues to operate the business
40 shall have the benefit of and shall be bound by all terms and conditions of
41 the agreement with the supplier in effect on the date of the transfer.
42 (2) A successor to a supplier's interest in a particular brand or brands
43 of wine, whether acquired by purchasing of the brand name or of all or sub-
44 stantially all of the stock or assets of the supplier of that brand or brands,
45 or who has been granted the marketing rights to a particular brand or brands
46 of wine shall be bound by all terms and conditions of each agreement with dis-
47 tributors with respect to that brand or brands in effect on the date of the
48 succession to such interest as a condition of such successor in interest con-
49 tinuing to sell that brand or brands to distributors for resale within this
50 state.
51 23-1511. COMPENSATION TO DISTRIBUTOR UPON TERMINATION, CANCELLATION OR
52 NONRENEWAL OF AGREEMENT. (1) In the event that an agreement is terminated,
8
1 canceled or not renewed by a supplier, the distributor shall be entitled to
2 reasonable compensation for the laid-in cost to the distributor of the inven-
3 tory of the supplier's products, including any taxes paid on the inventory by
4 the distributor together with a reasonable charge for handling of the prod-
5 ucts.
6 (2) In the event that an agreement is terminated, canceled or not renewed
7 by a supplier in bad faith or for other than good cause, the distributor shall
8 be entitled to additional compensation from the supplier for:
9 (a) The fair market value of any and all assets, including ancillary
10 businesses, related to the transporting, storing or marketing of
11 supplier's products; and
12 (b) The good will of the business.
13 (3) The total compensation to be paid by the supplier shall be reduced by
14 any sum received by the distributor from the sale of assets of the business
15 used in the distribution of the supplier's products as well as by whatever
16 value such assets may have to the distributor that are unrelated to the
17 supplier's products.
18 (4) As used in this section, "fair market value" means the highest dollar
19 amount at which a seller would be willing to sell assets and a buyer would be
20 willing to buy such assets when both the seller and the buyer possess all
21 information relevant to the transaction.
22 23-1512. ARBITRATION. Any dispute arising under the provisions of this
23 chapter may be settled by such dispute resolution procedures, including arbi-
24 tration, as may be provided by a written agreement between the parties. In the
25 absence of a written agreement providing for dispute resolution procedures,
26 any dispute arising under the provisions of this chapter may be settled by
27 arbitration, if every party involved in the dispute agrees to arbitrate. Arbi-
28 tration shall be conducted in accordance with the uniform arbitration act,
29 chapter 9, title 7, Idaho Code.
30 23-1513. JUDICIAL REMEDIES OF PARTIES. (1) If a supplier engages in con-
31 duct prohibited under the provisions of this chapter, a distributor with which
32 the supplier has an agreement may maintain a civil action against the supplier
33 to recover actual damages, court costs and, in the court's discretion,
34 attorney's fees, reasonably incurred as the result of the prohibited conduct.
35 (2) If a distributor engages in conduct prohibited under the provisions
36 of this chapter, a supplier with which the distributor has an agreement may
37 maintain a civil action against the distributor to recover actual damages,
38 court costs and, in the court's discretion, attorney's fees reasonably incur-
39 red as a result of the prohibited conduct.
40 (3) A supplier or distributor may bring an action for declaratory judg-
41 ment for determination of any controversy arising pursuant to the provisions
42 of this chapter.
43 (4) Upon proper application to the court, a supplier or distributor may
44 obtain injunctive relief against any violation of the provisions of this chap-
45 ter.
46 (5) The remedies provided in this section shall not abolish any other
47 cause of action or remedy available to the supplier or the distributor.
48 (6) Nothing contained in this chapter shall give rise to a claim against
49 the supplier or distributor by any proposed transferee of the distributor's
50 business.
51 (7) As used in this section, "actual damages" includes any damages to any
52 ancillary business incurred as a result of the prohibited conduct.
9
1 23-1514. WAIVER. No agreement shall require a supplier or distributor to
2 waive any rights granted pursuant to any provision of this chapter, and the
3 provisions of any agreement that would have such an effect shall be null and
4 void; provided however, that if a good faith dispute arises between the par-
5 ties as to the meaning of any rights or obligations created in the provisions
6 of this chapter, or the performance by a party of its obligations, the parties
7 may enter into a written voluntary settlement of the dispute.
8 23-1515. SEVERABILITY. The provisions of this chapter are hereby declared
9 to be severable and if any provision of this chapter or the application of
10 such provision to any person or circumstance is declared invalid for any rea-
11 son, such declaration shall not affect the validity of the remaining portions
12 of this chapter.
13 SECTION 2. An emergency existing therefor, which emergency is hereby
14 declared to exist, this act shall be in full force and effect on and after its
15 passage and approval; provided however, that the provisions of this act shall
16 not apply to agreements between distributors and suppliers that are made and
17 entered into prior to the effective date of this act; provided further, that
18 the provisions of this act shall apply to any renewal of such agreements, or
19 any extension of the provisions of such agreements, occurring on or after the
20 effective date of this act.
STATEMENT OF PURPOSE
RS 11989
The legislation establishes certain rights and duties
governing the business relationship between large wine suppliers
and distributors. The legislation mirrors the law governing the
business relationship between beer suppliers and wholesalers
enacted by the Idaho legislature in 1993.
The legislation does not apply to wine suppliers who sell, bottle
or manufacture less than 50,000 gallons of wine annually. The bill
does not affect existing contracts between wine suppliers and the
distributors.
The proposed legislation establishes standards of good faith and
fair dealing to the relationship between the wine suppliers and
the distributors. It recognizes the right of a supplier to terminate
agreements for just cause, requires distributors to meet reasonable
standards and qualifications that are nondiscriminatory, and
provides remedies for arbitrary terminations of contracts without
just cause.
This legislation is necessary to assure that Idaho’s wine
distributors who build the good will for the products they sell
and who meet reasonable requirements established by the suppliers
will be treated fairly and not subject to arbitrary decisions and
the loss of their businesses without just compensation.
FISCAL IMPACT
There is no fiscal impact
Contact
Name: Bill Roden Jeremy Pisca
Idaho Beer & Wine Distributors
Phone: 208-336-7930
STATEMENT OF PURPOSE/FISCAL NOTE H 591