MIDCAL ALUMINUM, INC., et al.
A California statute requires all wine producers and wholesalers to file fair trade contracts or price schedules with the State. If a producer has not set prices through a fair trade contract, wholesalers must post a resale price schedule and are prohibited from selling wine to a retailer at other than the price set in a price schedule or fair trade contract. A wholesaler selling below the established prices faces fines or license suspension or revocation. After being charged with selling wine for less than the prices set by price schedules and also for selling wines for which no fair trade contract or schedule had been filed, respondent wholesaler filed suit in the California Court of Appeal asking for an injunction against the State's wine-pricing scheme. The Court of Appeal ruled that the scheme restrains trade in violation of the Sherman Act, and granted injunctive relief, rejecting claims that the scheme was immune from liability under that Act under the "state action" doctrine of Parker v. Brown, 317 U.S. 341, 63 S.Ct. 307, 87 L.Ed. 315, and was also protected by § 2 of the Twenty-first Amendment, which prohibits the transportation or importation of intoxicating liquors into any State for delivery or use therein in violation of the State's laws.
1. California's wine-pricing system constitutes resale price maintenance in violation of the Sherman Act, since the wine producer holds the power to prevent price competition by dictating the prices charged by wholesalers. And the State's involvement in the system is insufficient to establish antitrust immunity under Parker v. Brown, supra. While the system satisfies the first requirement for such immunity that the challenged restraint be "one clearly articulated and affirmatively expressed as state policy," it does not meet the other requirement that the policy be "actively supervised" by the State itself. Under the system the State simply authorizes price setting and enforces the prices established by private parties, and it does not establish prices, review the reasonableness of price schedules, regulate the terms of fair trade contracts, monitor market conditions, or engage in any "pointed reexamination" of the program. The national policy in favor of competition cannot be thwarted by casting such a gauzy cloak of state involvement over what is essentially a private price-fixing arrangement. Pp. 102-106.
2. The Twenty-first Amendment does not bar application of the Sherman Act to California's wine-pricing system. Pp. 106-114.
(a) Although under that Amendment States retain substantial discretion to establish liquor regulations over and above those governing the importation or sale of liquor and the structure of the liquor distribution system, those controls may be subject to the federal commerce power in appropriate situations. Pp. 106-110.
(b) There is no basis for disagreeing with the view of the California courts that the asserted state interests behind the resale price maintenance system of promoting temperance and protecting small retailers are less substantial than the national policy in favor of competition. Such view is reasonable and is supported by the evidence, there being nothing to indicate that the wine-pricing system helps sustain small retailers or inhibits the consumption of alcohol by Californians. Pp. 110-114.
90 Cal.App.3d 979, 153 Cal.Rptr. 757, affirmed.
William T. Chidlaw, Sacramento, Cal., for petitioner.
Jack B. Owens, San Francisco, Cal., for respondents.
George J. Roth, Sacramento, Cal., for the State of California, as amicus curiae, by special leave of Court.
In a state-court action, respondent Midcal Aluminum, Inc., a wine distributor, presented a successful antitrust challenge to California's resale price maintenance and price posting statutes for the wholesale wine trade. The issue in this case is whether those state laws are shielded from the Sherman Act by either the "state action" doctrine of Parker v. Brown, 317 U.S. 341, 63 S.Ct. 307, 87 L.Ed. 315 (1943), or § 2 of the Twenty-first Amendment.
* Under § 24866(b) of the California Business and Professions Code, all wine producers, wholesalers, and rectifiers must file fair trade contracts or price schedules with the State.1 If a wine producer has not set prices through a fair trade contract, wholesalers must post a resale price schedule for that producer's brands. § 24866(a). No state-licensed wine merchant may sell wine to a retailer at other than the price set "either in an effective price schedule or in an effective fair trade contract . . . ." § 24862 (West Supp.1980).
The State is divided into three trading areas for administration of the wine pricing program. A single fair trade contract or schedule for each brand sets the terms for all wholesale transactions in that brand within a given trading area. §§ 24862, 24864, 24865 (West Supp.1980). Similarly, state regulations provide that the wine prices posted by a single wholesaler within a trading area bind all wholesalers in that area. Midcal Aluminum, Inc. v. Rice, 90 Cal.App.3d 979, 983-984, 153 Cal.Rptr. 757, 760 (1979). A licensee selling below the established prices faces fines, license suspension, or outright license revocation. Cal.Bus. & Prof.Code Ann. § 24880 (West Supp.1980).2 The State has no direct control over wine prices, and it does not review the reasonableness of the prices set by wine dealers.
Midcal Aluminum, Inc., is a wholesale distributor of wine in southern California. In July 1978, the Department of Alcoholic Beverage Control charged Midcal with selling 27 cases of wine for less than the prices set by the effective price schedule of the E. & J. Gallo Winery. The Department also alleged that Midcal sold wines for which no fair trade contract or schedule had been filed. Midcal stipulated that the allegations were true and that the State could fine it or suspend its license for those transgressions. App. 19-20. Midcal then filed a writ of mandate in the California Court of Appeal for the Third Appellate District asking for an injunction against the State's wine pricing system.
The Court of Appeal ruled that the wine pricing scheme restrains trade in violation of the Sherman Act, 15 U.S.C. § 1 et seq. The court relied entirely on the reasoning in Rice v. Alcoholic Beverage Control Appeals Bd., 21 Cal.3d 431, 146 Cal.Rptr. 585, 579 P.2d 476 (1978), where the California Supreme Court struck down parallel restrictions on the sale of distilled liquors. In that case, the court held that because the State played only a passive part in liquor pricing, there was no Parker v. Brown immunity for the program.
"In the price maintenance program before us, the state plays no role whatever in setting the retail prices. The prices are established by the producers according to their own economic interests, without regard to any actual or potential anticompetitive effect; the state's role is restricted to enforcing the prices specified by the producers. There is no control or 'pointed re-examination,' by the state to insure that the policies of the Sherman Act are not 'unnecessarily subordinated' to state policy." 21 Cal.3d, at 445, 146 Cal.Rptr., at 595, 579 P.2d, at 486.
Rice also rejected the claim that California's liquor pricing policies were protected by § 2 of the Twenty-first Amendment, which insulates state regulation of intoxicating liquors from many federal restrictions. The court determined that the national policy in favor of competition should prevail over the state interests in liquor price maintenance—the promotion of temperance and the preservation of small retail establishments. The court emphasized that the California system not only permitted vertical control of prices by producers, but also frequently resulted in horizontal price fixing. Under the program, many comparable brands of liquor were marketed at identical prices.3 Referring to congressional and state legislative studies, the court observed that resale price maintenance has little positive impact on either temperance or small retail stores. See infra, at 112-113.
In the instant case, the State Court of Appeal found the analysis in Rice squarely controlling. 90 Cal.App.3d, at 984, 153 Cal.Rptr., at 760. The court ordered the Department of Alcoholic Beverage Control not to enforce the resale price maintenance and price posting statutes for the wine trade. The Department, which in Rice had not sought certiorari from this Court, did not appeal the ruling in this case.4 An appeal was brought by the California Retail Liquor Dealers Association, an intervenor.5 The California Supreme Court declined to hear the case, and the Dealers Association sought certiorari from this Court. We granted the writ, 444 U.S. 824, 100 S.Ct. 45, 62 L.Ed.2d 31 (1979), and now affirm the decision of the state court.
The threshold question is whether California's plan for wine pricing violates the Sherman Act. This Court has ruled consistently that resale price maintenance illegally restrains trade. In Dr. Miles Medical Co. v. John D. Park & Sons Co., 220 U.S. 373, 407, 31 S.Ct. 376, 384, 55 L.Ed. 502 (1911), the Court observed that such arrangements are "designed to maintain prices . . ., and to prevent competition among those who trade in [competing goods]." See Albrecht v. Herald Co., 390 U.S. 145, 88 S.Ct. 869, 19 L.Ed.2d 998 (1968); United States v. Parke, Davis & Co., 362 U.S. 29, 80 S.Ct. 503, 4 L.Ed.2d 505 (1960); United States v. A. Schrader's Son, Inc., 252 U.S. 85, 40 S.Ct. 251, 64 L.Ed. 471 (1920). For many years, however, the Miller-Tydings Act of 1937 permitted the States to authorize resale price maintenance. 50 Stat. 693. The goal of that statute was to allow the States to protect small retail establishments that Congress thought might otherwise be driven from the marketplace by large-volume discounters. But in 1975 that congressional permission was rescinded. The Consumer Goods Pricing Act of 1975, 89 Stat. 801, repealed the Miller-Tydings Act and related legislation.6 Consequently, the Sherman Act's ban on resale price maintenance now applies to fair trade contracts unless an industry or program enjoys a special antitrust immunity.
California's system for wine pricing plainly constitutes resale price maintenance in violation of the Sherman Act. Schwegmann Bros. v. Calvert Corp., 341 U.S. 384, 71 S.Ct. 745, 95 L.Ed. 1035 (1951); see Albrecht v. Herald Co., supra; Kiefer-Stewart Co. v. Joseph E. Seagram & Sons, 340 U.S. 211, 71 S.Ct. 259, 95 L.Ed. 219 (1951); Dr. Miles Medical Co. v. John D. Park & Sons Co., supra. The wine producer holds the power to prevent price competition by dictating the prices charged by wholesalers. As Mr. Justice Hughes pointed out in Dr. Miles, such vertical control destroys horizontal competition as effectively as if wholesalers "formed a combination and endeavored to establish the same restrictions . . . by agreement with each other." 220 U.S., at 408, 31 S.Ct., at 384.7 Moreover, there can be no claim that the California program is simply intrastate regulation beyond the reach of the Sherman Act. See Schwegmann Bros. v. Calvert Corp., supra; Burke v. Ford, 389 U.S. 320, 88 S.Ct. 443, 19 L.Ed.2d 554 (1967) (per curiam ).
Thus, we must consider whether the State's involvement in the price-setting program is sufficient to establish antitrust immunity under Parker v. Brown, 317 U.S. 341, 63 S.Ct. 307, 87 L.Ed. 315 (1943). That immunity for state regulatory programs is grounded in our federal structure. "In a dual system of government in which, under the Constitution, the states are sovereign, save only as Congress may constitutionally subtract from their authority, an unexpressed purpose to nullify a state's control over its officers and agents is not lightly to be attributed to Congress." Id., at 351, 63 S.Ct., at 313. In Parker v. Brown, this Court found in the Sherman Act no purpose to nullify state powers. Because the Act is directed against "individual and not state action," the Court concluded that state regulatory programs could not violate it. Id., at 352, 63 S.Ct., at 314.
Under the program challenged in Parker, the State Agricultural Prorate Advisory Commission authorized the organization of local cooperatives to develop marketing policies for the raisin crop. The Court emphasized that the Advisory Commission, which was appointed by the Governor, had to approve cooperative policies following public hearings: "It is the state which has created the machinery for establishing the prorate program. . . . [I]t is the state, acting through the Commission, which adopts the program and enforces it . . . ." Ibid. In view of this extensive official oversight, the Court wrote, the Sherman Act did not apply. Without such oversight, the result could have been different. The Court expressly noted that "a state does not give immunity to those who violate the Sherman Act by authorizing them to violate it, or by declaring that their action is lawful . . . ." Id., at 351, 63 S.Ct., at 314.
Several recent decisions have applied Parker § analysis. In Goldfarb v. Virginia State Bar, 421 U.S. 773, 95 S.Ct. 2004, 44 L.Ed.2d 572 (1975), the Court concluded that fee schedules enforced by a state bar association were not mandated by ethical standards established by the State Supreme Court. The fee schedules therefore were not immune from antitrust attack. "It is not enough that . . . anticompetitive conduct is 'prompted' by state action; rather, anticompetitive activities must be compelled by direction of the State acting as a sovereign." Id., at 791, 95 S.Ct., at 2015. Similarly, in Cantor v. Detroit Edison Co., 428 U.S. 579, 96 S.Ct. 3110, 49 L.Ed.2d 1141 (1976), a majority of the Court found that no antitrust immunity was conferred when a state agency passively accepted a public utility's tariff. In contrast, Arizona rules against lawyer advertising were held immune from Sherman Act challenge because they "reflect[ed] a clear articulation of the State's policy with regard to professional behavior" and were "subject to pointed re-examination by the policymaker—the Arizona Supreme Court—in enforcement proceedings." Bates v. State Bar of Arizona, 433 U.S. 350, 362, 97 S.Ct. 2691, 2698, 53 L.Ed.2d 810 (1977).
Only last Term, this Court found antitrust immunity for a California program requiring state approval of the location of new automobile dealerships. New Motor Vehicle Bd. of Cal. v. Orrin W. Fox Co., 439 U.S. 96, 99 S.Ct. 403, 58 L.Ed.2d 361 (1978). That program provided that the State would hold a hearing if an automobile franchisee protested the establishment or relocation of a competing dealership. Id., at 103, 99 S.Ct., at 408. In view of the State's active role, the Court held, the program was not subject to the Sherman Act. The "clearly articulated and affirmatively expressed" goal of the state policy was to "displace unfettered business freedom in the matter of the establishment and relocation of automobile dealerships." Id., at 109, 99 S.Ct., at 412.
These decisions establish two standards for antitrust immunity under Parker v. Brown. First, the challenged restraint must be "one clearly articulated and affirmatively expressed as state policy"; second, the policy must be "actively supervised" by the State itself. City of Lafayette v. Louisiana Power & Light Co., 435 U.S. 389, 410, 98 S.Ct. 1123, 1135, 55 L.Ed.2d 364 (1978) (opinion of Brennan, J.).8 The California system for wine pricing satisfies the first standard. The legislative policy is forthrightly stated and clear in its purpose to permit resale price maintenance. The program, however, does not meet the second requirement for Parker immunity. The State simply authorizes price setting and enforces the prices established by private parties. The State neither establishes prices nor reviews the reasonableness of the price schedules; nor does it regulate the terms of fair trade contracts. The State does not monitor market conditions or engage in any "pointed reexamination" of the program.9 The national policy in favor of competition cannot be thwarted by casting such a gauzy cloak of state involvement over what is essentially a private price-fixing arrangement. As Parker teaches, "a state does not give immunity to those who violate the Sherman Act by authorizing them to violate it, or by declaring that their action is lawful . . . ." 317 U.S., at 351, 63 S.Ct., at 314.
Petitioner contends that even if California's system of wine pricing is not protected state action, the Twenty-first Amendment bars application of the Sherman Act in this case. Section 1 of that Amendment repealed the Eighteenth Amendment's prohibition on the manufacture, sale, or transportation of liquor. The second section reserved to the States certain power to regulate traffic in liquor: "The transportation or importation into any State, Territory, or possession of the United States for delivery or use therein of intoxicating liquors, in violation of the laws thereof, is hereby prohibited." The remaining question before us is whether § 2 permits California to countermand the congressional policy—adopted under the commerce power—in favor of competition.
In determining state powers under the Twenty-first Amendment, the Court has focused primarily on the language of the provision rather than the history behind it. State Board v. Young's Market Co., 299 U.S. 59, 63-64, 57 S.Ct. 77, 78-79, 81 L.Ed. 38 (1936).10 In terms, the Amendment gives the States control over the "transportation or importation" of liquor into their territories. Of course, such control logically entails considerable regulatory power not strictly limited to importing and transporting alcohol. Ziffrin, Inc. v. Reeves, 308 U.S. 132, 138, 60 S.Ct. 163, 166, 84 L.Ed. 128 (1939). We should not, however, lose sight of the explicit grant of authority.
This Court's early decisions on the Twenty-first Amendment recognized that each State holds great powers over the importation of liquor from other jurisdictions. Young's Market, supra, concerned a license fee for interstate imports of alcohol; another case focused on a law restricting the types of liquor that could be imported from other States, Mahoney v. Joseph Triner Corp., 304 U.S. 401, 58 S.Ct. 952, 82 L.Ed. 1424 (1938); two others involved "retaliation" statutes barring imports from States that proscribed shipments of liquor from other States, Joseph S. Finch & Co. v. McKittrick, 305 U.S. 395, 59 S.Ct. 256, 83 L.Ed. 246 (1939); Indianapolis Brewing Co. v. Liquor Control Comm'n, 305 U.S. 391, 59 S.Ct. 254, 83 L.Ed. 243 (1939). The Court upheld the challenged state authority in each case, largely on the basis of the States' special power over the "importation and transportation" of intoxicating liquors. Yet even when the States had acted under the explicit terms of the Amendment, the Court resisted the contention that § 2 "freed the States from all restrictions upon the police power to be found in other provisions of the Constitution." Young's Market, supra, 229 U.S., at 64, 57 S.Ct., at 79.
Subsequent decisions have given "wide latitude" to state liquor regulation, Joseph E. Seagram & Sons, Inc. v. Hostetter, 384 U.S. 35, 42, 86 S.Ct. 1254, 1259, 16 L.Ed.2d 336 (1966), but they also have stressed that important federal interests in liquor matters survived the ratification of the Twenty-first Amendment. The States cannot tax imported liquor in violation of the Export-Import Clause. Department of Revenue v. James Beam Co., 377 U.S. 341, 84 S.Ct. 1247, 12 L.Ed.2d 362 (1964). Nor can they insulate the liquor industry from the Fourteenth Amendment's requirements of equal protection, Craig v. Boren, 429 U.S. 190, 204-209, 97 S.Ct. 451, 460-463, 50 L.Ed.2d 397 (1976), and due process, Wisconsin v. Constantineau, 400 U.S. 433, 436, 91 S.Ct. 507, 509, 27 L.Ed.2d 515 (1971).
More difficult to define, however, is the extent to which Congress can regulate liquor under its interstate commerce power. Although that power is directly qualified by § 2, the Court has held that the Federal Government retains some Commerce Clause authority over liquor. In William Jameson & Co. v. Morgenthau, 307 U.S. 171, 59 S.Ct. 804, 83 L.Ed. 1189 (1939) (per curiam ), this Court found no violation of the Twenty-first Amendment in a whiskey-labeling requirement prescribed by the Federal Alcohol Administration Act, 49 Stat. 977. And in Ziffrin, Inc. v. Reeves, supra, the Court did not uphold Kentucky's system of licensing liquor haulers until it was satisfied that the state program was reasonable. 308 U.S., at 139, 60 S.Ct., at 167.
The contours of Congress' commerce power over liquor were sharpened in Hostetter v. Idlewild Liquor Corp., 377 U.S. 324, 331-332, 84 S.Ct. 1293, 1298, 12 L.Ed.2d 350 (1964).
"To draw a conclusion . . . that the Twenty-first Amendment has somehow operated to 'repeal' the Commerce Clause wherever regulation of intoxicating liquors is concerned would, however, be an absurd oversimplification. If the Commerce Clause had been pro tanto 'repealed,' then Congress would be left with no regulatory power over interstate or foreign commerce in intoxicating liquor. Such a conclusion would be patently bizarre and is demonstrably incorrect."
This pragmatic effort to harmonize state and federal powers has been evident in several decisions where the Court held liquor companies liable for anticompetitive conduct not mandated by a State. See Kiefer-Stewart Co. v. Joseph E. Seagram & Sons, Inc., 340 U.S. 211, 71 S.Ct. 259, 95 L.Ed. 219 (1951); United States v. Frankfort Distilleries, Inc., 324 U.S. 293, 65 S.Ct. 661, 89 L.Ed. 951 (1945). In Schwegmann Bros. v. Calvert Corp., 341 U.S. 384, 71 S.Ct. 745, 95 L.Ed. 1035 (1951), for example, a liquor manufacturer attempted to force a distributor to comply with Louisiana's resale price maintenance program, a program similar in many respects to the California system at issue here. The Court held that because the Louisiana statute violated the Sherman Act, it could not be enforced against the distributor. Fifteen years later, the Court rejected a Sherman Act challenge to a New York law requiring liquor dealers to attest that their prices were "no higher than the lowest price" charged anywhere in the United States. Seagram & Sons v. Hostetter, supra. The Court concluded that the statute exerted "no irresistible economic pressure on the [dealers] to violate the Sherman Act in order to comply," but it also cautioned that "[n]othing in the Twenty-first Amendment, of course, would prevent enforcement of the Sherman Act" against an interstate conspiracy to fix liquor prices. Id., at 45-46, 86 S.Ct., at 1261. See Burke v. Ford, 389 U.S. 320, 88 S.Ct. 443, 19 L.Ed.2d 554 (1967) (per curiam ).
These decisions demonstrate that there is no bright line between federal and state powers over liquor. The Twenty-first Amendment grants the States virtually complete control over whether to permit importation or sale of liquor and how to structure the liquor distribution system. Although States retain substantial discretion to establish other liquor regulations, those controls may be subject to the federal commerce power in appropriate situations. The competing state and federal interests can be reconciled only after careful scrutiny of those concerns in a "concrete case." Hostetter v. Idlewild Liquor Corp., supra, at 332, 84 S.Ct., at 1298.
The federal interest in enforcing the national policy in favor of competition is both familiar and substantial.
"Antitrust laws in general, and the Sherman Act in particular, are the Magna Carta of free enterprise. They are as important to the preservation of economic freedom and our free-enterprise system as the Bill of Rights is to the protection of our fundamental personal freedoms." United States v. Topco Associates, Inc., 405 U.S. 596, 610, 92 S.Ct. 1126, 1135, 31 L.Ed.2d 515 (1972).
See Northern Pacific R. Co. v. United States, 356 U.S. 1, 4, 78 S.Ct. 514, 517, 2 L.Ed.2d 545 (1958). Although this federal interest is expressed through a statute rather than a constitutional provision, Congress "exercis[ed] all the power it possessed" under the Commerce Clause when it approved the Sherman Act. Atlantic Cleaners & Dyers v. United States, 286 U.S. 427, 435, 52 S.Ct. 607, 609, 76 L.Ed. 1204 (1932); see City of Lafayette v. Louisiana Power & Light Co., 435 U.S., at 398, 98 S.Ct., at 1129. We must acknowledge the importance of the Act's procompetition policy.
The state interests protected by California's resale price maintenance system were identified by the state courts in this case, 90 Cal.App.3d, at 983, 153 Cal.Rptr., at 760, and in Rice v. Alcoholic Beverage Control Appeals Bd., 21 Cal.3d, at 451, 146 Cal.Rptr., at 598, 579 P.2d, at 490.12 Of course, the findings and conclusions of those courts are not binding on this Court to the extent that they undercut state rights guaranteed by the Twenty-first Amendment. See Hooven & Allison Co. v. Evatt, 324 U.S. 652, 659, 65 S.Ct. 870, 874, 89 L.Ed. 1252 (1945); Creswill v. Knights of Pythias, 225 U.S. 246, 261, 32 S.Ct. 822, 827, 56 L.Ed. 1074 (1912). Nevertheless, this Court accords "respectful consideration and great weight to the views of the state's highest court" on matters of state law, Indiana ex rel. Anderson v. Brand, 303 U.S. 95, 100, 58 S.Ct. 443, 446, 82 L.Ed. 685 (1938), and we customarily accept the factual findings of state courts in the absence of "exceptional circumstances." Lloyd A. Fry Roofing Co. v. Wood, 344 U.S. 157, 160, 73 S.Ct. 204, 206, 97 L.Ed. 168 (1952).
The California Court of Appeal stated that its review of the State's system of wine pricing was "controlled by the reasoning of the [California] Supreme Court in Rice [supra]." 90 Cal.App.3d, at 983, 153 Cal.Rptr., at 760. Therefore, we turn to that opinion's treatment of the state interests in resale price maintenance for distilled liquors.
The Rice opinion identified the primary state interest in orderly market conditions as "protect[ing] small licensees from predatory pricing policies of large retailers." Id., at 456, 146 Cal.Rptr., at 602, 579 P.2d, at 493.15 In gauging this interest, the court adopted the views of the Appeals Board of the Alcoholic Beverages Control Department, which first ruled on the claim in Rice. The state agency "rejected the argument that fair trade laws were necessary to the economic survival of small retailers . . . ." Ibid. The agency relied on a congressional study of the impact on small retailers of fair trade laws enacted under the Miller-Tydings Act. The study revealed that "states with fair trade laws had a 55 percent higher rate of firm failures than free trade states, and the rate of growth of small retail stores in free trade states between 1956 and 1972 was 32 per cent higher than in states with fair trade laws." Ibid., citing S.Rep. No. 94-466, p. 3 (1975). Pointing to the congressional abandonment of fair trade in the 1975 Consumer Goods Pricing Act, see supra, at 102, the State Supreme Court found no persuasive justification to continue "fair trade laws which eliminate price competition among retailers." 21 Cal.3d, at 457, 146 Cal.Rptr., at 603, 579 P.2d, at 494. The Court of Appeal came to the same conclusion with respect to the wholesale wine trade. 90 Cal.App.3d, at 983, 153 Cal.Rptr., at 760.
We have no basis for disagreeing with the view of the California courts that the asserted state interests are less substantial than the national policy in favor of competition. That evaluation of the resale price maintenance system for wine is reasonable, and is supported by the evidence cited by the State Supreme Court in Rice. Nothing in the record in this case suggests that the wine pricing system helps sustain small retail establishments. Neither the petitioner nor the State Attorney General in his amicus brief has demonstrated that the program inhibits the consumption of alcohol by Californians. We need not consider whether the legitimate state interests in temperance and the protection of small retailers ever could prevail against the undoubted federal interest in a competitive economy. The unsubstantiated state concerns put forward in this case simply are not of the same stature as the goals of the Sherman Act.
Mr. Justice BRENNAN did not take part in the consideration or decision of this case.
"(a) Post a schedule of selling prices of wine to retailers or consumers for which his resale price is not governed by a fair trade contract made by the person who owns or controls the brand.
"(b) Make and file a fair trade contract and file a schedule of resale prices, if he owns or controls a brand of wine resold to retailers or consumers." Cal.Bus. & Prof.Code Ann. § 24866 (West 1964).
Licensees that sell wine below the prices specified in fair trade contracts or schedules also may be subject to private damages suits for unfair competition. § 24752 (West 1964).
The court cited record evidence that in July 1976 five leading brands of gin each sold in California for $4.89 for a fifth of a gallon, and that five leading brands of Scotch whiskey sold for either $8.39 or $8.40 a fifth. Rice v. Alcoholic Beverage Control Appeals Bd., 21 Cal.3d, at 454, and nn. 14, 16, 146 Cal.Rptr. 585, 600, and nn. 14, 16, 579 P.2d, at 491-492, and nn. 14, 16.
The State also did not appeal the decision in Capiscean Corp. v. Alcoholic Beverage Control Appeals Bd., 87 Cal.App.3d 996, 151 Cal.Rptr. 492 (1979), which used the analysis in Rice to invalidate California's resale price maintenance scheme for retail wine sales to consumers.
The California Retail Liquor Dealers Association, a trade association of independent retail liquor dealers in California, claims over 3,000 members.
The congressional Reports accompanying the Consumer Goods Pricing Act of 1975, noted that repeal of fair trade authority would not alter whatever power the States hold under the Twenty-first Amendment to control liquor prices. S.Rep. No. 94-466, p. 2 (1975); H.R.Rep. No. 94-341, p. 3, n. 2 (1975), U.S.Code Cong. & Admin.News, p. 1569. We consider the effect of the Twenty-first Amendment on this case in Part III, infra.
In Rice, the California Supreme Court found direct evidence that resale price maintenance resulted in horizontal price fixing. See supra, at 101, and n. 3. Although the Court of Appeal made no such specific finding in this case, the court noted that the wine pricing system "cannot be upheld for the same reasons the retail price maintenance provisions were declared invalid in Rice." Midcal Aluminum, Inc. v. Rice, 90 Cal.App.3d 979, 983, 153 Cal.Rptr. 757, 760 (1979).
See Norman's On the Waterfront, Inc. v. Wheatley, 444 F.2d 1011, 1018 (CA3 1971); Asheville Tobacco Bd. v. FTC, 263 F.2d 502, 509-510 (CA4 1959); Note, Parker v. Brown Revisited: The State Action Doctrine After Goldfarb, Cantor, and Bates, 77 Colum.L.Rev. 898, 916 (1977).
The California program contrasts with the approach of those States that completely control the distribution of liquor within their boundaries. E. g., Va.Code §§ 4-15, 4-28 (1979). Such comprehensive regulation would be immune from the Sherman Act under Parker v. Brown, since the State would "displace unfettered business freedom" with its own power. New Motor Vehicle Bd. of Cal. v. Orrin W. Fox Co., 439 U.S. 96, 109, 99 S.Ct. 403, 412, 58 L.Ed.2d 361 (1978); see State Board v. Young's Market Co., 299 U.S. 59, 63, 57 S.Ct. 77, 78, 81 L.Ed. 38 (1936).
The approach is supported by sound canons of constitutional interpretation and demonstrates a wise reluctance to wade into the complex currents beneath the congressional proposal of the Amendment and its ratification in the state conventions. The Senate sponsor of the Amendment resolution said the purpose of § 2 was "to restore to the States . . . absolute control in effect over interstate commerce affecting intoxicating liquors. . . ." 76 Cong.Rec. 4143 (1933) (remarks of Sen. Blaine). Yet he also made statements supporting Midcal's claim that § 2 was designed only to ensure that "dry" States could not be forced by the Federal Government to permit the sale of liquor. See 76 Cong.Rec., at 4140-4141. The sketchy records of the state conventions reflect no consensus on the thrust of § 2, although delegates at several conventions expressed their hope that state regulation of liquor traffic would begin immediately. E. Brown, Ratification of the Twenty-first Amendment to the Constitution 104 (1938) (Wilson, President of Idaho Convention); id., at 191-192 (Darnall, President of Maryland Convention); id., at 247 (Gaylord, Chairman of Missouri Convention); id., at 469-473 (resolution adopted at Washington Convention calling for state action "to regulate the liquor traffic"). See generally Note, The Effect of the Twenty-First Amendment on State Authority to Control Intoxicating Liquors, 75 Colum.L.Rev. 1578, 1580 (1975); Note, Economic Localism in State Alcoholic Beverage Laws—Experience Under the Twenty-First Amendment, 72 Harv.L.Rev. 1145, 1147 (1959).
"[E]ven the commerce in intoxicating liquors, over which the Twenty-first Amendment gives the States the highest degree of control, is not altogether beyond the reach of the federal commerce power, at any rate when the State's regulation squarely conflicts with regulation imposed by Congress . . . ." Id., at 425, n. 15, 66 S.Ct., at 591, n. 15.
As the unusual posture of this case reflects, the State of California has shown less than an enthusiastic interest in its wine pricing system. As we noted, the state agency responsible for administering the program did not appeal the decision of the California Court of Appeal. See supra, at 101-102; Tr. of Oral Arg. 20. Instead, this action has been maintained by the California Retail Liquor Dealers Association, a private intervenor. But neither the intervenor nor the State Attorney General, who filed a brief amicus curiae in support of the legislative scheme, has specified any state interests protected by the resale price maintenance system other than those noted in the state-court opinions cited in text.
The California Court of Appeal found no additional state interests in the instant case. 90 Cal.App.3d, at 984, 153 Cal.Rptr., at 760-761. That court rejected the suggestion that the wine price program was designed to protect the State's wine industry, pointing out that the statutes "do not distinguish between California wines and imported wines." Ibid.
See Joseph E. Seagram & Sons, Inc. v. Hostetter, 384 U.S. 35, 39, 86 S.Ct. 1254, 1258, 16 L.Ed.2d 336 (1966) (citing study concluding that resale price maintenance in New York State had "no significant effect upon the consumption of alcoholic beverages").
The California Supreme Court also stated that orderly market conditions might "reduce excessive consumption, thereby encouraging temperance." 21 Cal.3d, at 456, 146 Cal.Rptr., at 602, 579 P.2d, at 493. The concern for temperance, however, was considered by the court as an independent state interest in resale price maintenance for liquor.
Since Midcal requested only injunctive relief from the state court, there is no question before us involving liability for damages under 15 U.S.C. § 15.


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Can I file a motion with DCP&P if I’m not the biological parent of the child?
If you are a step-parent, relative, or friend, and you have a deep concern for a child and wish to assist them but the Division of Child Protection and Permanency (DCP&P) as well as the Courts are ignoring your request, there is a way your voice can be heard. The DCP&P defense lawyers at our law firm are ready and able to assist you. We can protect your rights, your family, and your future. Please contact our experienced DCP&P defense lawyers today for immediate assistance at (908)-356-6900. The initial consultation is always provided free of charge.
Can I file a motion with DCP&P if I am not the biological parent? The answer is “Yes”.
Generally, the standard to determine custody between natural parents is which custodial arrangement will serve the best interest of the child. Fantony v. Fantony, 21 N.J. 525, 536 (1956). However, not every case is the same and as such, our Supreme Court announced in Watkins v. Nelson that “it is the relationship of the child to the person seeking custody that determines the standard to be used in deciding [a] custody dispute.” Watkins v. Nelson, 163 N.J. 235, 253 (2000). Accordingly, “[t]he standard that controls a custody dispute between a third party and a parent involves a two-step analysis. The first step requires application of the parental termination standard or a finding of ‘exceptional circumstances.” Id. “If either the statutory parental termination standard or the ‘exceptional circumstances’ prong is satisfied; the second step requires the court to decide whether awarding custody to the third party would promote the best interests of the child.” Id. at 254.
Termination of parental rights standard is set forth in Title 30 and consists of a four-part test. N.J.S.A. 30:4C-15.1. The first prong is that the child’s safety, health or development has been or will continue to be endangered by the parental relationship. Id. The second prong is that the parent is unwilling or unable to eliminate the harm facing the child or is unable or unwilling to provide a safe and stable home for the child and the delay of permanent placement will add to the harm. Id. The third prong is two-part and is that the Division has made reasonable efforts to provide services to help the parent correct the circumstances which led to the child’s placement outside the home and that the Court has considered alternatives to termination of parental rights. Id. The fourth and final prong is a catchall category and is that termination of parental rights will not do more harm than good. Id.
With regard to exceptional circumstances in relation to third parties, in the seminal case of V.C. v. M.J.B, 163 N.J. 200 (2000), the Court was called on to determine what legal standard applies to a third party’s claim to joint custody and visitation of her former domestic partner’s biological children, with whom she lived in a familial setting and in respect of whom she claims to have functioned as a psychological parent. Id at 205. The Court in V.C. noted that “a legal parent has a fundamental right to the care, custody and nurturance of his or her child.” Id. at 218. This right derives from the notion of privacy. Id. However, the right of privacy is not absolute. Id. In addition to cases of unfitness, abandonment or gross misconduct, an alternative basis for a third party to seek custody of another person’s child is that of exceptional circumstances. Id. at 219; see also Watkins, supra, 163 N.J. at 247–48; In re D.T., 200 N.J.Super. 171, 176 (App.Div.1985). “Subsumed within that category is the subset known as the psychological parent cases in which a third party has stepped in to assume the role of the legal parent who has been unable or unwilling to undertake the obligations of parenthood.” V.C., supra, 163 N.J. at 219. According to the V.C. Court, “[a]t the heart of the psychological parent cases is a recognition that children have a strong interest in maintaining the ties that connect them to adults who love and provide for them.” Id. at 221.
Relying upon that recognition, the Court in V.C. adopted a test to evaluate whether a third party has become a “psychological parent” to a child of a fit and involved legal parent. The test was based on In re Custody of H.S.H.K., 193 Wis.2d 649, cert. denied, 516 U.S. 975 (1995), a Wisconsin based case, which held the petitioner must demonstrate the existence of four elements: (1) the biological or adoptive parent consented to, and fostered, the petitioner’s formation and establishment of a parent-like relationship with the child; (2) the petitioner and the child lived together in the same household; (3) the petitioner assumed the obligations of parenthood by taking significant responsibility for the child’s care, education and development, including contributing to the child’s support, without expectation of financial compensation, and (4) the petitioner had been in a parental role for a length of time sufficient to establish with the child a bonded, dependent relationship parental in nature. V.C., supra, 163 N.J. at 223.
Once a third party has been deemed to be a psychological parent to a child under the four-prong V.C. test, he or she stands in parity with the legal parent. Id. at 227, (citing Zack v. Fiebert, 235 N.J.Super. 424, 432 (App.Div.1989). From there, custody and visitation issues are then determined on a best interests standard as if two legal parents were in conflict. P.B. v. T.H., 370 N.J. Super. 586, 597(App. Div. 2004).
If you or a loved one needs assistance with a child abuse or neglect allegation or investigation in New Jersey, contact our offices now for a free initial consultation at (908)-356-6900.

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Decisions > Federal Court Decisions > Masterpiece Inc. v. Alavida Lifestyle Inc.
Masterpiece Inc. v. Alavida Lifestyle Inc.
 Masterpiece Inc. and Alavida Lifestyle Inc. both operate in the retirement residence business. Masterpiece Inc. claims that it has been using various trade-marks that include the word “Masterpiece” for about five years. However, in 2007, Alavida registered the trade-mark “Masterpiece Living” for use in its business. Masterpiece Inc. was unaware of Alavida’s registration and failed to oppose it. Now, Masterpiece Inc. seeks to expunge Alavida’s trade-mark from the register on grounds that Masterpiece Inc. had already acquired rights to it and because Alavida’s trade-mark is likely to be confused with Masterpiece Inc.’s. Masterpiece Inc. relies on s. 57 of the Trade-marks Act, R.S.C. 1985, c. T-3 (relevant provisions are set out in an Annex).
 I am not satisfied that Masterpiece Inc. had acquired rights to the word “Masterpiece” or that confusion between the two trade-marks is likely. Accordingly, I must dismiss Masterpiece Inc.’s application for expungement.
 There are two questions to be decided: (1) Did Masterpiece Inc. use or make known its trade-marks before Alavida applied to register the trade-mark “Masterpiece Living”? (2) If so, was Alavida’s registered trade-mark, “Masterpiece Living” likely to be confused with Masterpiece Inc.’s trade-marks?
 Masterpiece Inc. was incorporated in 2001. It operates primarily in Alberta but plans to expand. Masterpiece Inc. maintains that it has been using the word “Masterpiece” in its advertisements, its dealings with suppliers and customers, and in trade-shows since 2001. The word “Masterpiece” has been used alone, as well as with other words, including the word “living”. Examples include “Masterpiece the Art of Living”, and “Masterpiece the Art of Retirement Living”.
 Masterpiece Inc. also claims that it developed and began using the trade-mark “Masterpiece Living” in December 2005. It attempted to register the trade-marks “Masterpiece” and “Masterpiece Living” in 2006 but its application was refused by the Canadian Intellectual Property Office on the basis that Alavida had already applied to register “Masterpiece Living”.
 Alavida was incorporated in 2005 and operates mainly in Ottawa. It claims that it hired a firm to conduct a search for other companies using “Masterpiece” and did not find Masterpiece Inc. On December 1, 2005, Alavida applied to register the trade-mark “Masterpiece Living” and began using it in early January 2006 on its website. Alavida’s trade-mark application was granted in March 2007. It uses the words “Masterpiece Lliving” in its advertising along with its corporate name.
 To expunge Alavida’s trade-mark from the register, Masterpiece Inc. must show that Alavida was not entitled to register “Masterpiece Living” (s. 18). A person is not entitled to register a trade-mark for proposed use if, at the time the application was filed, it was confusing with a trade-mark that had been previously used or made known in Canada (s. 16(3)(a)).
 The parties dispute how this provision should be interpreted. Masterpiece Inc. argues that s. 16(3)(a) involves looking at the likelihood of confusion both at the time of the trade-mark application and into the future. Alavida submits that the wording of the provision makes clear that the analysis of confusion must be made as of the date of the trade-mark application, in this case, on December 1, 2005.
 I agree with Alavida on this point. The provision clearly states that a person is entitled to register a proposed trade-mark “unless at the date of filing of the application it was confusing” with a previously used mark. In turn, s. 57 of the Act states that a trade-mark can be expunged if it “does not accurately express or define the existing rights of the person appearing to be the registered owner of the mark”. Read together, where a person has registered a mark for proposed use and, at the time of the registration, the mark was likely to be confused with a pre-existing mark, it can be expunged from the register. The interpretation Masterpiece Inc. urges on me would require me to overlook the words “at the date of filing of the application” and to expand the past tense “was” to include the future “will be”. I see no basis for doing so. Indeed, the case law confirms that the relevant date is the date of filing of the application: Hugo Boss AG v. Paragon Clothing Ltd. (1994), 58 C.P.R. (3d) 504 (F.C.T.D.); California Fashion Industries, Inc. v. Reitmans (Canada) Ltd. (1991), 38 C.P.R. (3d) 439 (F.C.T.D.). Accordingly, I will confine myself to evidence and events relating to potential confusion up to December 1, 2005.
 Alavida also argued that Masterpiece Inc.’s application for expungement was premature. Masterpiece Inc.’s notice of application was filed before Alavida had actually obtained its registration. However, by the time of the hearing of the application, Alavida’s trade-mark had certainly been registered. I see no basis, therefore, for Alavida’s challenge to the Court’s jurisdiction to deal with Masterpiece Inc.’s application.
 For Masterpiece Inc. to succeed in this proceeding, it must show that Alavida was not entitled to register “Masterpiece Living” because, prior to Alavida’s application (December 1, 2005), Masterpiece Inc. had been using and making known a trade-name and trade-marks with which Alavida’s mark would be confused. I have split this test into two parts and analyze them separately below.
 Confusion exists if the use of the trade-mark or trade-name in issue would likely cause the average consumer to infer that the goods or services offered by two different companies actually have the same source (s. 6). One must consider the “first impression in the mind of a casual consumer somewhat in a hurry” who has an “imperfect recollection” of another trade-mark (Veuve Clicquot Ponsardin v. Boutiques Cliquot Ltée,  1 S.C.R. 824, at para. 20). In essence, the question is whether “ordinary casual consumers somewhat in a hurry are likely to be deceived about the origin of the wares or services” (Mattel Inc. v. 3894207 Canada Inc.,  1 S.C.R. 772, at para. 58). This is consistent with the objective of trade-mark law, which is to ensure that consumers know from whom they are buying products and services (Mattel Inc., above, at para. 21).
1. Did Masterpiece Inc. use or make known its trade-marks before Alavida applied to register the trade-mark “Masterpiece Living”?
 Masterpiece Inc. must show that it used or made its trade-marks known before December 1, 2005.
 Masterpiece Inc. maintains that, since 2001, it has used extensively both its trade-name “Masterpiece” as well as various trade-marks, such as “A Living Masterpiece”, “Masterpiece Clubs”, “Masterpiece the Art of Living”, and “Masterpiece the Art of Retirement Living”. It also began using “Masterpiece Living” in late December 2005, but this is irrelevant as it post-dates Alavida’s trade-mark application.
 Masterpiece Inc. explains that it has used “Masterpiece” and the variations on it in relation to its operation of seniors’ residences and assisted-living facilities. The evidence shows, however, that this use was not extensive during the relevant period (2001-2005).
 To constitute “use” of a trade-mark in relation to a service, the mark must have been used or displayed in the performance of the service or in advertising the service. If the latter, the service must have been available when it was advertised (s. 6).
• brochures containing the words “Masterpiece – The Art of Retirement Living”.
 Little of this evidence supports the use of “Masterpiece” or its variants in respect of the performance of services or in advertising those services. For example, contracts and prospectuses are not advertising; nor do they display any particular connection with the services Masterpiece Inc. actually provides. Having reviewed the evidence put forward by Masterpiece Inc., it appears to me that the use of “Masterpiece” and the related marks was rather sporadic. Masterpiece Inc. seems to have given more priority to the trade-name “Club Sierra” and to its association with partner companies. Further, where the word “Masterpiece” was used, the emphasis was clearly on that word alone, not on the other associated words described above (e.g., “the Art of Retirement Living”), which were in much smaller type.
 Still, Masterpiece has shown some use of its trade-name and marks in respect of its services prior to December 1, 2005. The question, then, is whether there was likely to be confusion between Masterpiece Inc.’s trade-name or marks and Alavida’s registered trade-mark “Masterpiece Living” on that date.
2. Was Alavida’s registered trade-mark, “Masterpiece Living”, likely to be confused with Masterpiece Inc.’s trade-marks?
 Dr. Michael Mulvey, an expert in marketing, believes that there is a possibility, but not a likelihood, of confusion between the trade-mark “Masterpiece Living” and Masterpiece Inc.’s trade-name and marks. He views the word “masterpiece” as being a common, laudatory word. It lacks inherent distinctiveness.
 He noted that Masterpiece Inc.’s trade-name and marks do not align exactly with Alavida’s registered mark for “Masterpiece Living”. His view is that the differences between them would be noticed by consumers. For example, in “Masterpiece Living” the emphasis is on “living”. By contrast, in “Masterpiece”, “Masterpiece Clubs” or “Masterpiece the Art of Living”, the emphasis is on “Masterpiece”. This difference is reflected in the way in which the respective companies present themselves in promotional materials. For example, as mentioned, in Masterpiece Inc.’s advertising and brochures, the word “Masterpiece” is predominant. In Alavida’s materials, “Masterpiece Living” is always presented as a whole idea, in distinctive script, with a TM symbol, adjacent to the Alavida Lifestyles logo or website address.
 Dr. Ruth Corbin was asked by Masterpiece Inc. to respond to Dr. Mulvey’s opinion. Her view was that Dr. Mulvey’s opinion actually supports a likelihood of confusion, contrary to his stated conclusion. Further, she found that Dr. Mulvey’s conclusion was unsupported by survey data.
 In general, Dr. Corbin felt that Dr. Mulvey provided an artificial and unrealistic analysis of how consumers would actually perceive the “Masterpiece Living” mark. For example, she doubts that consumers would engage in the kind of “detailed, syllable-by-syllable analysis” described by Dr. Mulvey. His analysis of the various linguistic elements of “Masterpiece Living” simply introduced “unnecessary complication”.
 I do not believe these criticisms are well-founded. As Dr. Mulvey pointed out in a supplementary affidavit, many of Dr. Corbin’s observations are based on an unfair reading of his opinion. I accept Dr. Mulvey’s general proposition that the various elements of a trade-mark and the manner in which they are presented can influence the way consumers perceive the mark as a whole.
“If you have an opinion, what company promotes retirement residences and retirement services using the brand name ‘Masterpiece Living’”?
 Most people (81%) had no idea. As Dr, Corbin reports, only “6% said or speculated that the name of the company was “Masterpiece”. She concluded that this 6% figure represents a “top-of-mind likelihood of confusion”.
 Among this group of respondents, 42% chose the name Masterpiece Inc. from the list.
 Of this group, 67% gave the answer “same company”.
 Looking at the respondents as a whole, and giving equal weight to all of their answers, Dr. Corbin concluded that 74% of them exhibited “apparent confusion” before discounting for irrelevant guessing. She reduced this figure to 53% based on her analysis of the results for a control group.
 The control group was set up to test for guessing. Dr. Corbin presented members of the control group with the name “Fine Quality Living” and asked them to name the company that used that trade-mark. The results for this question are not included within Dr. Corbin’s report or her analysis of the control data, but Dr. Chakrapani (whose report is discussed below) analyzed the data from the original questionnaires. He determined that 4% of these respondents named “Fine Quality” as the name of the company using that mark.
 As with the main group of respondents, a subset of the control group was also presented with a list of companies and asked whether one of them used the trade-mark “Fine Quality Living”. However, there did not appear to be an analogous company name on the list of possibilities. One would have thought that the list should have included the name “Fine Quality Inc.” in order to test the degree to which the respondents in the main group might simply have guessed the name “Masterpiece Inc.” after being shown the words “Masterpiece Living.” The closest name to “Fine Quality Living” in the control group was “Quality Lifestyles”. Dr. Chakrapani pointed out that the choice of a two-word modifier (“Fine Quality”) confounded the results of this control group somewhat. “Quality Lifestyles” was chosen by 4 out of 27 respondents (15%). Dr. Corbin, on cross-examination on her affidavit, agreed that more people would have answered “Fine Quality” if that option had been provided to them.
 Members of the control group were also shown the Masterpiece Inc. exhibit booth or advertisement. They were then asked whether the trade-mark “Fine Quality Living” was used by the same or a different company. Most of them could not say (32 out of 73, or 44%), but 26 of them (36%) believed it was a different company and 15 (20%) believed it was the same. The results for this group were not part of the calculation of the effect of the control conditions.
 Overall, Dr. Corbin concluded that her survey shows that the word “Masterpiece” in Masterpiece Inc.’s trade-name and trade-marks is the dominant element in them and, therefore, that the use of “Masterpiece Living” by another company in the same channel of trade would likely lead to confusion.
 Dr. Chuck Chakrapani reviewed Dr. Corbin’s analysis on behalf of Alavida. He concluded that Dr. Corbin’s survey does not provide evidence of a likelihood of confusion as to the source of the “Masterpiece Living” trade-mark. In his view, Dr. Corbin’s work shows that only 11 out of 178 respondents in Ottawa, Toronto, and Calgary thought that “Masterpiece Living” might be owned by a company called “Masterpiece” or “Masterpiece Inc.” (we do not know how many chose one versus the other). Dr. Chakrapani questioned the validity of 5 of the Calgary responses because they all gave virtually identical verbatim answers in perfect sequence. In any case, none of the 11 respondents seemed aware that there was actually a company called “Masterpiece Inc.” Rather, they appeared simply to have speculated that the company using “Masterpiece Living” was called “Masterpiece”. The survey did not analyze the perspective of a consumer who was familiar with, but had an imperfect recollection of, the prior trade-mark.
 Dr. Chakrapani found that there was no statistically significant difference between the number of respondents who thought that “Masterpiece Living” was used by “Masterpiece” compared to the number of respondents who inferred that “Fine Quality Living” was used by a fictitious company called “Fine Quality”. This suggests mere word association on the part of respondents, not confusion. In Dr. Chakrapani’s view, the respondents’ verbal explanations for their answers confirmed this.
 Dr. Chakrapani also pointed out that those respondents who did not answer “Masterpiece” to Dr. Corbin’s open-ended question about the source of “Masterpiece Living” were, in effect, told in the second question that there was a company called “Masterpiece Inc.” that provided retirement residences and services and then asked whether they thought there was a connection. Others were shown a Masterpiece Inc. trade-show booth or advertisement and asked whether they thought “Masterpiece Living” was used by the same or a different company. Dr. Chakrapani felt that these respondents were, in effect, prompted to identify Masterpiece Inc. as the company using the “Masterpiece Living” mark.
 I agree with Dr. Corbin that there is some distinctiveness in the use of the word “Masterpiece” in association with retirement residences or services. While “Masterpiece” is a common word with wide use in naming or describing goods and services available to the public, its use in relation to the particular services at issue here is somewhat distinctive.
 As for the extent to which the trade-marks have become known, I have no evidence. Dr. Corbin’s survey does not suggest that respondents were aware of a company called “Masterpiece” or had seen the trade-mark “Masterpiece Living” before. I agree with Dr. Mulvey that Masterpiece Inc.’s marks did not acquire distinctiveness, given the time-frame and the inconsistent manner in which they were used, before Alavida registered its mark.
 Turning to the nature of the business, both companies operate in the area of expensive retirement residences and services. People take considerable care in choosing a residence and selecting the company that will provide it. In these circumstances, consumers can be presumed to be less susceptible to confusion about the source of the goods or services they are seeking because they are unlikely to make choices based on first impressions. They will generally take considerable time to inform themselves about the source of expensive goods and services (General Motors Corp. v. Bellows,  S.C.R. 678).
 Alavida suggests that the two companies actually operate in different segments of the retirement services industry. For example, Alavida does not offer the same level of medical assistance to its residents as does Masterpiece Inc. Masterpiece Inc. tends to operate more in the assisted-living market whereas Alavida generally targets persons who do not need assistance. Alavida is an up-market provider, whereas Masterpiece Inc. operates in the middle-market category.
 Masterpiece seeks to use its marks in relation to the “operation of seniors’ lodges, condominiums and assisted-living facilities.” By contrast, Alavida’s trade-mark is registered in relation to a broad range of services: “Real estate development services, real estate management services, residential building construction services, dining services, namely a dining room restaurant, housekeeping services, medical services namely medical clinic services, spa services, fitness services, namely a fitness centre, and concierge services”. Clearly, though, the services and client base of the two companies overlap. Still, people seeking a retirement residence can be expected to research carefully the characteristics of the properties in which they are interested and the services associated with them, and to become knowledgeable about their providers. As Justice Ian Binnie stated in Mattel, Inc., above, at para. 58. “When buying a car or a refrigerator, more care will naturally be taken than when buying a doll or a mid-priced meal”. All the more so when choosing a residence.
 There is obviously a degree of resemblance as between Masterpiece Inc.’s trade-name and marks and Alavida’s registered mark for “Masterpiece Living”. However, as part of the overall circumstances, I note that Alavida’s use of “Masterpiece Living” has been in the nature of a slogan accompanying its corporate identity. By contrast, Masterpiece Inc. uses “Masterpiece” to identify the company itself, along with various other words and phrases of far lesser prominence, alongside a distinctive butterfly logo. These differences help reduce the likelihood of confusion.
 Looking at all of the circumstances described above, I am not satisfied that Masterpiece Inc. has established that there was a likelihood of confusion between its trade-name and marks and Alavida’s registered trade-mark on or before December 1, 2005. While there are obvious similarities, Masterpiece Inc’s use of its trade-name and marks was clearly limited both in time and scope. Accordingly, they were neither particularly distinctive nor well-known as of December 1, 2005. The nature of the business in which the marks in issue have been used suggests that consumers will be careful in choosing a provider. They are not likely to make choices based on first impression or be easily confused about the source. The expert evidence relied on by Masterpiece Inc. does not, in my view, show a likelihood of confusion.
 I would dismiss Masterpiece Inc.’s application with costs.
1. The application for expungement is dismissed, with costs.
(2) No person is entitled to institute under this section any proceeding calling into question any decision given by the Registrar of which that person had express notice and from which he had a right to appeal.
6. (1) Pour l’application de la présente loi, une marque de commerce ou un nom commercial crée de la confusion avec une autre marque de commerce ou un autre nom commercial si l’emploi de la marque de commerce ou du nom commercial en premier lieu mentionnés cause de la confusion avec la marque de commerce ou le nom commercial en dernier lieu mentionnés, de la manière et dans les circonstances décrites au présent article.
(2) L’emploi d’une marque de commerce crée de la confusion avec une autre marque de commerce lorsque l’emploi des deux marques de commerce dans la même région serait susceptible de faire conclure que les marchandises liées à ces marques de commerce sont fabriquées, vendues, données à bail ou louées, ou que les services liés à ces marques sont loués ou exécutés, par la même personne, que ces marchandises ou ces services soient ou non de la même catégorie générale.
(3) L’emploi d’une marque de commerce crée de la confusion avec un nom commercial, lorsque l’emploi des deux dans la même région serait susceptible de faire conclure que les marchandises liées à cette marque et les marchandises liées à l’entreprise poursuivie sous ce nom sont fabriquées, vendues, données à bail ou louées, ou que les services liés à cette marque et les services liés à l’entreprise poursuivie sous ce nom sont loués ou exécutés, par la même personne, que ces marchandises ou services soient ou non de la même catégorie générale.
(4) L’emploi d’un nom commercial crée de la confusion avec une marque de commerce, lorsque l’emploi des deux dans la même région serait susceptible de faire conclure que les marchandises liées à l’entreprise poursuivie sous ce nom et les marchandises liées à cette marque sont fabriquées, vendues, données à bail ou louées, ou que les services liés à l’entreprise poursuivie sous ce nom et les services liés à cette marque sont loués ou exécutés, par la même personne, que ces marchandises ou services soient ou non de la même catégorie générale.
c) la marque de commerce a été abandonnée.
Sous réserve de l’article 17, l’enregistrement est invalide si l’auteur de la demande n’était pas la personne ayant droit de l’obtenir.
(2) Nul enregistrement d’une marque de commerce qui était employée au Canada par l’inscrivant ou son prédécesseur en titre, au point d’être devenue distinctive à la date d’enregistrement, ne peut être considéré comme invalide pour la seule raison que la preuve de ce caractère distinctif n’a pas été soumise à l’autorité ou au tribunal compétent avant l’octroi de cet enregistrement.
57. (1) La Cour fédérale a une compétence initiale exclusive, sur demande du registraire ou de toute personne intéressée, pour ordonner qu’une inscription dans le registre soit biffée ou modifiée, parce que, à la date de cette demande, l’inscription figurant au registre n’exprime ou ne définit pas exactement les droits existants de la personne paraissant être le propriétaire inscrit de la marque.
(2) Personne n’a le droit d’intenter, en vertu du présent article, des procédures mettant en question une décision rendue par le registraire, de laquelle cette personne avait reçu un avis formel et dont elle avait le droit d’interjeter appel.
STYLE OF CAUSE: MASTERPIECE INC. v. ALAVIDA LIFESTYLE INC.

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Lightle v. Kotar, 2014 BCCA 69 – Stock broker’s book of business deemed family property.
Leskun v. Leskun, 2006 SCC 25 – Established key principles for spousal support decisions.
Young v. Young, 1993 4 S.C.R. 3 – Successfully represented wife on leading Canadian case on child custody, guardianship and special costs.
A.R.J. v. Z.S.J., 2009 BCSC 1662 – One of BC’s highest combined support judgments.
Mills v. Eglin, 2009 BCSC 1595 – Termination of spousal support.
Johnston v. Embree, 2013 BCCA 74 – Biological father ordered to meet child support obligations while child is with a step-parent.
Richardson v. Richardson, 2013 BCCA 378 – Successful appeal to increase retroactive award for support and to establish law in Canada on how corporate income related to real estate holdings is calculated.
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Disclaimer: This Article represents a general critique of current legal decisions by the author and is not intended to be used as a source of legal advice. If the reader would like to determine whether a specific court would likely rule that a band is subject to the Charter in particular circumstances, a fact-specific legal opinion must be sought.
The Constitution left it to the courts to interpret what is meant by “government” and “matters within the authority of [Parliament or the legislature of a province]”.Since the entrenchment of the Charter into the Constitution, the Honourable Justices of the Supreme Court of Canada have debated whether the Charter applies to statutory entities, universities, colleges, hospitals, or to private bodies delivering government programs and services. In doing so, they have developed a legal test to determine when an entity is a government body, and when the actions of a private entity constitute government action, making their actions subject to the Charter. In this article, we will review the development of those legal tests and look at how they have been applied to the laws, by-laws or decisions of a first nation band (“band”). In reviewing the the case law concerning Charter application to a band, it becomes questionable whether the courts have missed analyzing key facts regarding the manner in which a band operates when assessing whether a band should be considered a government actor. In some circumstances, it is quite clear that a band is undertaking an action on behalf of government but there is much more to the story that needs to be uncovered before all the actions of a band should be considered subject to the Charter.
39. It would also seem that the Charter would apply to many forms of delegated legislation, regulations, orders in council, possibly municipal by-laws, and by-laws and regulations of other creatures of Parliament and the Legislatures. It is not suggested that this list is exhaustive. Where such [page603] exercise of, or reliance upon, governmental action is present and where one private party invokes or relies upon it to produce an infringement of the Charter rights of another, the Charter will be applicable.
In Slaight Communications Inc. v. Davidson,Justice Lamer writing in dissent (whose reasons were agreed to in Chief Justice Dickson’s majority judgement) said the Charter applies to an order made by an adjudicator, where that adjudicator is appointed pursuant to a legislative provision and derives all his powers from the statute. In McKinney v. University of Guelph, Justice La Forest added to Justice Lamer’s comments by saying “the mere fact that an entity is a creature of statute and has been given the legal attributes of a natural person is in no way sufficient to make its actions subject to the Charter”. Justice Lamer recognizes entities are established by statute for many reasons, not all of which involve the performance of tasks that are generally assigned to government.
In determining whether a University was a government actor for the purpose of the Charter to apply, Justice La Forest wrote the leading opinion focussing on the level of control the government had over the University’s decision-making. The receipt of government funding combined with some regulatory limitations were not enough to bring the University within the control of government making it a government actor. The fact that the University had its own autonomous governing body, majority of whom were not appointed by government, and that there was no question of the University’s power to negotiate contracts and collective agreements despite there being no statutory compulsion for them to do so, contributed to Justice La Forest’s conclusion that the University was not an organ of government for the purposes of the Charter.Justice La Forest also clarified that a body may be a statutory body performing a public service and be subject to judicial review of certain decisions, but this does not in itself make them part of government for the purposes of Charter application. During the same time as McKinney v. University of Guelph was decided, the Supreme Court of Canada also considered Douglas/Kwantlen Faculty Assn. v. Douglas College. In that case, the Charter was found to apply to a community college that (1) was established by statute, (2) had a board appointed and removed at the pleasure of government, and (3) was bound to comply at all times with the laws and policies set for it by government.
36. Legislatures have created many other statutory entities, however, that are not as clearly autonomous from government. There are myriad public or quasi-public institutions that may be independent from government in some respects, but in other respects may exercise delegated governmental powers or be otherwise responsible for the implementation of government policy. When it is alleged that an action of one of these bodies, and not the legislation that regulates them, violates the Charter, it must be established that the entity, in performing that particular action, is part of "government" within the meaning of s. 32 of the Charter.
44.… the Charter may be found to apply to an entity on one of two bases. First, it may be determined that the entity is itself "government" for the purposes of s. 32. This involves an inquiry into whether the entity whose actions have given rise to the alleged Charter breach can, either by its very nature or in virtue of the degree of governmental control exercised over it, properly be characterized as "government" within the meaning of s. 32(1). In such cases, all of the activities of the entity will be subject to the Charter, regardless of whether the activity in which it is engaged could, if performed by a non-governmental actor, correctly be described as "private". Second, an entity may be found to attract Charter scrutiny with respect to a particular activity that can be ascribed to government. This demands an investigation not into the nature of the entity whose activity is impugned but rather into the nature of the activity itself. In such cases, in other words, one must scrutinize the quality of the act at issue, rather than the quality of the actor. If the act is truly "governmental" in nature -- for example, the implementation of a specific statutory scheme or a government program – the entity performing it will be subject to review under the Charter only in respect of that act, and not its other, private activities.
In the end, what must be assessed is whether an entity is found to be “government”, either because of its nature or because the government maintains substantial control over its activities, then all of its activities will be subject to the Charter. If an entity is not found to be “government” but performs “governmental activities” then only those activities that are governmental in nature will be subject to the Charter.
The courts have applied the Charter to band custom elections laws, custom membership laws, and decisions made under those laws, as well as with regard to band by-laws, a band council’s application for injunctions against band members protesting at their band office, and a private contract for services entered into by a band. Although Charter challenges have been raised against bands in more circumstances than those just listed, there are many cases where judges have decided the outcome of a case based on other grounds and decided there is no need to deal with the Charter challenge to dispose of the case. The next part of this article will provide an overview of select court decisions where judges have considered Charter challenges, and we will see that in many cases the court has given no consideration to the Supreme Court of Canada’s legal tests set out above, despite most of these cases being heard after the development of those legal tests. After we review the decisions made by the courts, we will come back to a discussion around where the courts have “missed the boat” in their reasons for decision.
Before getting into a discussion of the cases dealing with custom election laws, let’s review how they operate and consider key differences with regard to the government’s control over a band council that has a custom election law compared to one operating under the Indian Actelection rules. A band’s elections may be conducted pursuant to the Indian Act, First Nations Election Act, a self-government agreement, or custom rules and procedures determined by members of the band. Under the Indian Act, the Minister of Indigenous and Northern Affairs Canada may declare by order that the council of a band be selected in accordance with rules and procedures set out in the Indian Act, and its associated regulations, if the Minister deems it to be advisable in the good governance of the band to do so. Without such an order in place, the members of a band may select their council according to the custom of the band.
Where the election of a band council is conducted under the Indian Act, government has a high level of control over the manner in which the band council is elected and makes decisions compared to when a band operates under a custom election law. The Governor in Council has control over the composition of the band council, eligibility to be on band council, terms of office, the manner in which elections are held and the power to set aside the election of a chief or councillor in certain circumstance. The band must also operate in accordance with specified rules of procedure set out by the federal government. Where a band is ordered to conduct their elections in accordance with the Indian Actelection rules and procedures, they may apply to the Department of Indigenous and Northern Affairs for the order to be repealed, but first the band must develop and approve its own rules and procedures governing elections, which rules and procedures must meet certain criteria as set out in federal policy, including that they must be consistent with the Charter of Rights and Freedoms. Such rules and procedures are often called custom election laws, by-laws, rules, regulations, and codes and once they are in place the federal government does not have any control over the composition of council, eligibility to be on band council, term of council, or over that band’s elections or disputes concerning elections and council members. The federal government will not consider disputes, does not monitor amendments or act as a decision maker in any manner with regard to the band council’s operations.
One week prior to releasing his decision in Bone v Sioux Valley Indian Band No. 290,Justice Heald released reasons for decision inCrow v. Blood Band, where he assumed without any analysis that the Charter applies to a band’s custom election rules and procedures and decided that the Blood Band’s custom election rules and procedures violate the Charter. There are numerous other cases where Federal Court assessed alleged Charter violations in custom election laws while presuming application of the Charter without analyzing it.
In Mohawk of Kanesatake v Mohawk of Kanesatake (Council), Justice Martineau of the Federal Court spent much time comparing the authority of a band to that of a municipality pointing out similarities but failing to consider the major differences that exist between the two entities before concluding the band’s law-making powers under the Kanesatake Interim Land Base Governance Actcome within the application of the Charter. Without expressing a final opinion on whether the Charter applies to the band’s custom election law, Justice Martineau pointed out that although the Federal Court had considered such cases in the past, in none of those decisions did it engage in any extensive analysis of the “complex” legal issues in determining whether a case concerning compliance of the Indian Actprovisions with regard to elections with the Charter also applied to custom bands. It was unnecessary for Justice Martineau to undertake this analysis in that case as a decision had already been made based on other grounds.
36In this case, the Council of the Kahkewistahaw First Nation (formed of an elected Chief and councillors) is clearly a sui generis government entity which exercises government authority within the sphere of federal jurisdiction under the Indian Act and other federal legislation. Pursuant to ss. 18(2), ss. 20(1), ss. 28(2), para. 57(a), ss. 58(1), and para. 58(4)(b) of the Indian Act, the Council plays a key role in the management of reserve land. Pursuant to ss. 52.1(1), s. 59, ss.64(1), ss. 66(1), and par. 73(1)(m) of the Indian Act, it also plays a key role in the management of band assets and band monies. The Council also holds extensive by-law making powers under ss. 81(1), ss. 83(1)(2), and ss. 85.1(1) of the Indian Act. Moreover, the Council is entrusted with the management of numerous federal government programs destined to Indian members of the First Nation. It consequently largely acts as a government under federal legislation and in matters within the authority of Parliament.
37Moreover, there can be no doubt that the election process through which the Council members are elected under sections 74 to 79 of the Indian Act is subject to Charter scrutiny, including scrutiny under section 15 (Corbiere v. Canada (Minister of Indian and Northern Affairs),  2 S.C.R. 203 ("Corbiere")). The fact that the Minister has taken measures to revoke the order under subsection 74(1) of the Indian Act so as to allow the First Nation to determine itself its election code does not result in the repudiation of Charter scrutiny. Indeed, a government should not be able to shirk its Charter obligations by simply conferring its powers to another entity: Eldridge v. British Columbia (Attorney General), above, at para. 42; Godbout v. Longueil, above, at para. 48. As a result, the application of Corbiere (and of subsection 15(1) of the Charter) cannot be avoided through the adoption by a First Nation of a community election code pursuant to the revocation of an order under subsection 74(1) of the Indian Act.
On appeal to the Supreme Court of Canada Justice Abella did not address the question of application of the Charter and there were no intervenors in the courtroom to comment on the issue. Rather, Justice Abella presumed that the Charter does apply and overturned the Federal Court of Appeal’s decision, concluding there was not enough evidence led to support a section 15 claim. In Orr v Peerless Trout First Nation, the Alberta Court of Queen’s Bench followed the Federal Court of Appeal’s decision in Tayopotat v. Kahkewistahaw First Nationregarding application of the Charter to a customary band’s election law but provided no clear reasons for their conclusion that it should be applied.
Custom election laws are not the only type of customary laws where the Federal Court has made substantive Charter infringement decisions without adequate analysis of Charter application. They have also done so when it comes to a band’s customary membership laws. Before looking at what the courts have said, let’s first recap how these laws operate. Under the Indian Act, a band list must be maintained containing the names of all persons who are members of a band and such band lists are either maintained by the federal government or by the band itself. Where the federal government maintains the band list, the band may assume control over it by developing their own membership rules and having a majority of their members who are over 18 years of age consent to those rules. There are nominal restrictions on who musts be eligible as a member under the band’s membership rules. Once a band has control of its own membership, the procedures in the Indian Actfor inquiries regarding who is on a band list, and protests regarding decisions around membership cease to apply to the band, removing the government’s control over disputes regarding membership. There is no authority in the Indian Act for the federal government to force a band to return control over its membership to the federal government and such decision can only be made with consent of the members of the band who are over 18 years of age.
· bands are pre-existing entities with a legal status of their own and they have their own customs, laws, privileges, rights and obligations.
66. Since condominium boards, and quite often provincial boards have authority to make by-laws, it is not the authority to make the by-laws, but the source of the authority that attracts the requirement that a body comply with the Charter. Accordingly, whether a Native Band Council functioning on an Indian Reservation must comply with the Charter could depend on where the Council gets its authority to enact laws or to govern.
18. The Alberta Court of Appeal in R. v. Paul Band,  1 C.N.L.R. 87 held that "[b]and councils are created under the Indian Act and derive their authority to operate qua band councils exclusively from that Act. In the exercise of their powers they are concerned with the administration of band affairs on their respective reserves whether under direct authority of Parliament or as administrative arms of the Minister. They have no other source of power. Band councils are thus within the exclusive legislative jurisdiction and control of the Parliament of Canada over 'Indians, and Lands reserved for Indians' ... and such councils are thus immune to provincial legislation": p. 7 of 8 [p. 94 C.N.L.R.].
19. Consequently, the Charter should apply to the by-laws and actions of Band Councils; and members of Bands should be able to assert rights, such as the right to freedom of expression, against Band Councils.
29 The Charter should apply to any decision or by-law or action the Band Council or the Band makes under the authority of the Indian Actbecause the Band is using its statutory authority to regulate the life of its members. Therefore, the women whom the Band seeks to restrain from protesting should be able to raise freedom of expression against the Band Council.
30 There are circumstances where the decisions of the Band should not be subject to the Charter. For example, if the Band or Band Council is contracting with a private party for goods or services, the relationship is one that would likely be governed by private contract law.
In Band (Eeyouch) v. Napash, Justice Gervais of the Court of Quebec took some time to analyze the application of the Charter to a band’s by-law enacted under the Cree-Naskapi (of Quebec) Act, an Act which put into place the James Bay and Northern Quebec Agreement, and which provided the band law-making authority over intoxicants within specified territorial boundaries. In his reasons, Justice Gervais considered and dismissed the position that the James Bay and Northern Quebec Agreement could be nothing but the expression of an inherent right that existed previously. Justice Gervais found that the Charter applies as the by-law making authority was provided to the band by way of an Act of Parliament. In coming to this conclusion, Justice Gervais referred to Justice La Forest’s legal test in Eldridge v British Columbia, canvassed a myriad of case law but made no conclusion on whether the band was substantially controlled by government overall. Rather, he focussed on the source of the authority to enact a law.
In Siksika Nation v. Crowchief, Justice Hunt McDonald of the Alberta Court of Queen’s Bench considered whether band members who were blockading a work site on band lands could claim the protection of the Charter under section 2(b) – freedom of expression – in response to the band’s application for an injunction against them for interfering with the building of new homes. In applying RWDSU v. Dolphin Delivery, as well as Justice Lee’s words in Horse Lake First Nation v Horseman, she determined that the band had entered into a private agreement with a contractor to conduct work and was acting under a private contract so the Charter did not apply. It appears from Justice Hunt McDonald’s reasons that she did not consider the application of other Supreme Court of Canada decisions. Rather, she acknowledged a lack of certainty in the law then went on to analyze the Charter breach in the event her decision around application was wrong.
There are many factors with regard to a band’s existence, and operations, which have not been mentioned in the courts’ reasons’ regarding whether a band’s laws, by-laws and actions are subject to the Charter. The mere fact that a band is a recognized by statute and is given the legal attributes of a natural person is in no way sufficient to make all of its actions subject to the Charter. The courts’ have put a strong focus on the Indian Act’s regulation of a band’s decisions regarding its reserve lands, finances, and by-law making but have failed to look at a band from all viewpoints.
Like the university’s governing body in McKinneyv University of Guelph, the councils of many bands have an autonomous governing body consisting of individuals appointed by the members of the band, none of whom are appointed by government, and none of whom can be removed from their positions by a government official. There are exceptional circumstances where a band is subject to an order from the Minister to elect its officials under the Indian Act. Despite the original assessment undertaken when a band wants to be removed from under the Indian Act election process, once they are operating under a customary law there is a hands-off approach taken by the government with regard to the band’s elections and the conduct of their elected officials. The only way to have an election set aside, or challenge an elected official’s position is to do so in accordance with the rules and procedures set out in the band’s customary law. The responses given by government officials when band members contact them for remedial action is that they have no control or authority to intervene.
A band council cannot derive its authority “exclusively” from the Indian Act, have no source of other power, but at the same time have the power to negotiate on behalf of its membership and contract with private parties outside of the Indian Act. Bands negotiate treaties with the federal and provincial government and impact benefit agreements with industry proponents, not because they have any statutory authority to do so but because they are granted authority from their own members to do so. A band may also create its own laws, not under the authority of an Act of Parliament, and may follow indigenous laws that come from “sacred teachings, naturalistic observations, positivistic proclamations, deliberative practices, and local and national customs”. Whereas a sacred law may come from the Creator or a creation story, naturalistic observations come from the indigenous people’s observations of the natural world.
When it comes to the implementation of government programs and policies, in some circumstances a band may receive funding from the government and be required to spend that funding on certain matters and in accordance with government policies. In other circumstances, the band will maintain control over how they spend that funding. There are also circumstances in which a band may have “own source revenue” arising from market-based activities, such as impact and benefit agreements, or commercial operations run by the band. A band may make decisions with regard to spending of this own source revenue and is not in any manner controlled by the government with regard to those expenditures. The First Nations Financial Transparency Act requires a band to prepare financial statements setting out their assets, liabilities, equity, income, expenses and cash flows, and those financial statements must include the financial information for own-source revenue. However, the purpose of that Act is to enhance financial accountability and transparency of bands. It does not act to control how such funds are spent. Likewise, while a band’s chief and council must uphold fiduciary duties with regard to their control of band-owned assets and their approval of spending activities, this duty flows from the common-law not from an Act of Parliament.
The current legal test regarding application of the Charter has been in clear existence since Justice La Forest set it out in Eldridge v British Columbia. It has been clear since that time that an entity may be a government actor or it could be a private entity, in which case more is required in order to bring that entity’s actions within the scope of the Charter. In assessing whether the entity has violated the Charter, the courts must look to more than just the legislation that regulates it. For the most part, the lower courts have failed to adequately assess application of the Charter to the laws and actions of a band. In fact, there are quite a few cases where they have not mentioned the appropriate legal test or where they have purely focussed their attention on the legislation that regulates some aspects of a band’s operations. The courts have embarked upon various analysis of whether other courts have applied the Charter to one circumstance or another, despite those courts often providing no analytical reasons for their decisions. Until such time as the courts take the time to assess the many differences that exist between a band and a municipality, hospital, college, university, etc., the matter of whether a band should or should not be considered a government actor or undertaking government action for purposes of the Charter will remain inadequately addressed.
Dolphin Delivery, at para 39; Also, note that the Interpretation Act(R.S.C., 1985, c. I-21) defines a “regulation” as including “an order, regulation…by-law, resolution or other instrument issued, made or established in the execution of a power conferred by or under the authority of an [Act of Parliament], or by or under the authority of the Governor in Council.

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