PRIA, Government Policy, Made Personal

Summary

You cannot become an officer or director of more than one company that distills, rectifies, or blends distilled spirits after August 29, 1935, unless you get permission from the Secretary of the Treasury before taking the job. The Secretary will approve or deny the request after you show that holding all those positions would not greatly reduce or stop competition in interstate or foreign trade in distilled spirits. Federal district courts and territorial U.S. courts can hear suits to block or undo the Secretary’s final decision. Anyone who breaks this rule can be fined up to $1,000. You may skip the permission step if the companies are affiliates when you take the job and they meet one of four tests: they were affiliates on August 29, 1935; each was formed under a state law that requires in-state organization to do business there; some were formed for that state requirement and the others already existed on August 29, 1935; or some were formed for that requirement and at most one other company was formed after August 29, 1935. "Company" here means a corporation, joint stock company, business trust, or association, but not a state agency or its officers or employees.

Title 27, §208

Intoxicating Liquors, Source: USLM XML via OLRC

(a)Offenses

Except as provided in subsection (b), it shall be unlawful for any individual to take office, after August 29, 1935, as an officer or director of any company, if his doing so would make him an officer or director of more than one company engaged in business as a distiller, rectifier, or blender of distilled spirits, or of any such company and of a company which is an affiliate of any company engaged in business as a distiller, rectifier, or blender of distilled spirits, or of more than one company which is an affiliate of any company engaged in business as a distiller, rectifier, or blender of distilled spirits, unless, prior to taking such office, application made by such individual to the Secretary of the Treasury has been granted and after due showing has been made to him that service by such individual as officer or director of all the foregoing companies of which he is an officer or director together with service in the company with respect to which application is made will not substantially restrain or prevent competition in interstate or foreign commerce in distilled spirits. The Secretary of the Treasury shall, by order, grant or deny such application on the basis of the proof submitted to him and his finding thereon. The District Courts of the United States, and the United States court for any Territory shall have jurisdiction of suits to enjoin, annul, or suspend in whole or in part any final action by the Secretary upon any application under this subsection.

(b)Conditions of lawfully taking office

An individual may, without regard to the provisions of subsection (a), take office as an officer or director of a company described in said subsection while holding the position of officer or director of any other such company if such companies are affiliates at the time of his taking office and if—

(1)Such companies are affiliates on August 29, 1935; or

(2)Each of such companies has been organized under the law of a State to comply with a requirement thereof under which, as a condition of doing business in such State, such company must be organized under the law of such State; or

(3)One or more such companies has been organized under the law of a State to comply with a requirement thereof under which, as a condition of doing business in such State, such company must be organized under the laws of such State, and the other one or more of such companies not so organized, is in existence on August 29, 1935; or

(4)One or more of such companies has been organized under the law of a State to comply with a requirement thereof under which, as a condition of doing business in such State, such company must be organized under the law of such State, and not more than one of such companies is a company which has not been so organized and which has been organized after August 29, 1935.

(c)“Company” defined

As used in this section, the term “company” means a corporation, joint stock company, business trust, or association, but does not include any agency of a State or political subdivision thereof or any officer or employee of any such agency.

(d)Penalty

Any individual taking office in violation of this section shall be punished by a fine of not exceeding $1,000.

Notes & Related Subsidiaries

Editorial Notes

Codification As originally enacted subsec. (a) of this section contained a reference to the Supreme Court of the District of Columbia. Act

June 25, 1936, substituted “the district court of the United States for the District of Columbia” for “the Supreme Court of the District of Columbia”, and act

June 25, 1948, as amended by act

May 24, 1949, substituted “United States District Court for the District of Columbia” for “district court of the United States for the District of Columbia”. However, the words “United States District Court for the District of Columbia” have been deleted entirely as superfluous in view of section 132(a) of Title 28, Judiciary and Judicial Procedure, which states that “There shall be in each judicial district a district court which shall be a court of record known as the United States District Court for the district”, and section 88 of Title 28 which states that “the District of Columbia constitutes one judicial district”.

Amendments

1988—Subsecs. (a), (b)(1), (3), (4). Pub. L. 100–690, § 8001(b)(2), substituted “the date of the enactment of this title” for “the date of the enactment of this Act”, which had been translated editorially as “August 29, 1935”, thereby requiring no change in text.

Executive Documents

Transfer of Functions

“Secretary of the Treasury” and “Secretary” were substituted for “Administrator”, meaning the Administrator of the Federal Alcohol Administration, pursuant to Reorg. Plan No. III of 1940, see note set out under section 201 of this title.

§208 Interlocking Directorates