Table 3.

Legal challenges to pricing policy implementation in the United States (ChangeLab Solutions, 2018)

Legal challenge	Description	Example
State police powers	• Unreasonable exercise of police power • Court fails to find evidence that the policy adequately addressed its defined purpose • Court determined purpose fell outside of police power	In Drink v. Babcock, the New Mexico Supreme Court invalidated a requirement that wholesalers minimally markup the price of liquor on the grounds that the state's pricing provisions were designed to protect the profits of the businesses, rather than to promote the public peace, health, welfare and safety (a purpose it reaffirmed as valid). 77 N.M. 277 (1966).
Delegation of powers	• Insufficient authority provided to agencies propagating a rule • Not authorized to delegate the power	In State ex rel. Anderson v. Megrims, the Florida Supreme Court invalidated a regulation promulgated by the state's alcohol agency that established minimum prices for alcoholic beverages because the state statute only granted the agency authority to determine whether the public welfare would be enhanced by using the police power to establish minimum prices, not to establish them (this power remained reserved to the state). 187 Kan. 611, 358 P.2d 936 (1961).
Antitrust law	• States allow private industry to oversee the maintenance of price instead of taking on this responsibility directly	William J. Mezzetti Associates, Inc. v. State Liquor Authority, 66 App.Div.2d 800 (1978, 2d Dept). Theodore Polon, Inc. v. State Liquor Authority, 59 App.Div.2d 946(1977, 2d Dept). Rice v. Alcoholic Beverage Control Appeals Board, 21 Cal.3d 431 (1978).