46 Years Ago Today, the Supreme Court Reconsidered and Amended Its Ruling

Unsuccessful litigants sometimes try to persuade appellate courts to reconsider and amend or reverse their decisions.  Rarely does that succeed.  On this day in 1972, however, the Supreme Court, acting on new information provided not by a losing party, but by intervenors who joined the case after the Court’s initial decision, amended its original judgment in favor of the intervenors.

The case was Affiliated Distillers Brands Corp. v. Sills, 60 N.J. 342 (1972).   There, in a prior opinion reported at 56 N.J. 251 (1969), the Court had ruled that a “grandfather clause” contained in a paragraph of a 1966 amendment to N.J.S.A. 33:1-43 was unconstitutional, but that the grandfather clause could be severed from the rest of the amendatory paragraph in which it appeared.

After the Court ruled, “several wholesale licensees who would be protected by the ‘grandfather clause’ moved to intervene on the ground that they had not been heard and that the effect of [the Court’s] decision would jeopardize their businesses.”  The Court granted intervention, heard argument, in 1970, on intervenors’ motions for a rehearing (itself a highly unusual step), and remanded the case to the Chancery Division to take additional evidence “with respect to the identity, interest and volume of business of the persons affected by the ‘grandfather clause’ and with respect to the identity, interest and volume of business of the holders of Class A licenses (N.J.S.A. 33:1-10) as of the date of the passage of” the provision in question.

After the Chancery proceedings concluded, the Supreme Court heard oral argument in 1972 “as if the petitions for rehearing had been granted.”  The Court then issued a per curiam opinion on April 5, 1972 that granted rehearing and considered the additional evidence that had been produced in the Chancery Division.

After reviewing that evidence, the Court adhered to its prior ruling that the grandfather clause was unconstitutional.  But the new evidence persuaded the Court to change its ruling as to severability.  “When this case was originally argued before us, we were led to believe that only a ‘handful of manufacturers’ having a relatively small share of the market would be affected by our decision. Evidence on remand has shown this to be incorrect. It now appears that about one-third of those holding wholesale licenses representing at least 15% Of the sales of spirits and at least 25% Of the sales of wine would be protected by the ‘grandfather clause’ if it were valid.”

As a result, the Court could no longer “say with assurance that the Legislature would have intended the remainder of the statute to stand alone.”  Severability, the Court observed, is a question of legislative intent.  Given the Court’s doubt about severability, the more prudent course was to “treat the paragraph as an entity rather than sever the offending part,” in order to avoid “usurp[ing] the legislative function of lawmaking.”  Accordingly, the Court amended its prior opinion to provide that the entire paragraph in which the grandfather clause appeared was invalid.

Besides the unusual nature of this case, it is notable for the presence of a number of venerable and distinguished law firms, all but one of which no longer exists in the same form.  Those included the now-defunct firm of Clapp & Eisenberg, the firm of Shanley & Fisher, which was later absorbed into Drinker Biddle & Reath, and the firm of Pitney, Hardin & Kipp, now a part of Day Pitney.  The one such firm that remained as it was is the firm known in shorthand form, then and now, as Riker Danzig.


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