Request By:
The Honorable H. Ramsey Morris, Jr.
Representative
State Capitol
Frankfort, Kentucky 40601
Opinion
Opinion By: Steven L. Beshear, Attorney General; By: John A. Miller, Assistant Attorney General
You have requested an opinion of this office on the question of whether a retailer, as defined by KRS 365.270(6), is in violation of KRS 365.280 when accepting a rebate from a wholesaler, as defined in KRS 365.270(5), in connection with the purchase of cigarettes from that wholesaler.
It is the opinion of this office that in a legal action brought against a retailer proof that he had accepted a rebate from a wholesaler would raise a rebuttable presumption that the retailer was guilty of violating KRS 365.280. That statute states in part:
It shall be unlawful for any retail dealer toinduce or attempt to induce ortoprocure or attempt to procure the purchase of cigarettes at a price less than 'cost to wholesaler' and it shall be unlawful for any retail dealer toinduce or attempt to induce ortoprocure or attempt to procure any rebate or concession of any kind or nature whatsoever in connection with the purchase of cigarettes. Any . . . retailer whoviolatestheprovisionsofthissectionshallbeguiltyofamisdemeanor andbepunishablebyafineofnotmorethan$500.00. (Our emphasis)
A retailer is only guilty of a misdemeanor in connection with the receipt of a rebate when he solicits or in any other manner actively seeks to obtain that rebate. In the language of the statute, he must either "induce" or "procure" the rebate. Both of these words contemplate the taking of some positive action. Mere passive acceptance of a rebate would not fulfill the requirement of a positive act. 1 However, common sense dictates that in the normal course of events a retailer will not receive a rebate from a wholesaler unless he asks for it or in some manner communicates to the wholesaler that a rebate is a condition precedent to a purchase by the retailer. This is because the rebate operates to reduce or eliminate the wholesaler's profit on the transaction and, thus, he is unlikely to offer a rebate in the absence of some pressure from the retailer. Therefore, if the Commonwealth proves that a retailer accepted a rebate, the burden of proof would shift to the retailer to offer evidence that he did nothing to "procure" or "induce" that rebate. Failing that, a conviction pursuant to KRS 365.280 would be in order.
Footnotes
Footnotes
1 "Induce" has been defined to mean: "To bring on or bout, to effect, cause, to influence to an act or course of conduct, lead by persuasion or reasoning, incite by motives, prevail on." Black's Law Dictionary, 4th Ed., p. 515 (1968); "procure" has been defined to mean: "To initiate a proceeding; to cause a thing to be done; to instigate; to contrive, bring about, effect, or cause." Id., p. 1373.