The Supreme Court said yesterday that it will decide whether a 1974 Maryland law barring petroleum producers and refiners from operating retail service stations violates the Constitution by depriving them of due process and burdening interstate commerce.
At least 32 other states have adopted or have considered identical or parallel laws in the last four years.
The Chamber of Commerce of the United States, in a friend-of-the-court brief, says the issue raised by the constitutionality of the Maryland law "is the very existence of a dual-market structure," in which company-operated retail outlets of various kinds "exist and compete side-by-side with franchised dealers."
The Maryland Court of Appeals upheld the law earlier this year, rejecting challenges by oil companies that own 245 of the state's 3,800 filling stations; the rest are operated by independent dealers. Of the company-owned stations, 85 are operated by non-major oil companies.
In adopting the law, the Maryland Legislature claimed it would enhance competition; opponents claimed the [TEXT OMITTED FROM SOURCE]
In other major actions, the court let stand decisions allowing telephone subscribers to use equipment of their own choice without paying the phone company for a protective device, and allowing a state to regulate the terms of retail sales made by out-of-state mail-order houses.
The action in the phone company case was a victory for the Federal Communications Commission over, among others, the North Carolina Utilities Commission. In a decision in March, the Fourth U.S. Circuit Court of Appeals hold that the FCC, not the states, has primary authority over terminal equipment used for both interstate and local communications.
The federal agency had ruled in June 1976 that customers could connect extension phones, automatic answering machines and other devices without having to pay a service charge to the phone company.
The Fourth Circuit decision also had been challenged by the American Telepone & Telegraph Co. (Bell System) on the ground that it should not be required to register its own equipment with the FCC.
"The Bell System will do its best to make the FCC's registration program work," AT&T chairman John DeButts said yesterday.
The lower court's ruling also had been challenged by the Independent Telephone Association, composed of 1,600 non-bell System companies, and Continental Telephone Corp. Both contended that the Supreme Court should decide the significant question of federal-state jurisdiction raised by the case.
The net effect of yesterday's refusal by the Supreme Court to review the lower-court ruling is to strengthen the government's effort to inject competition into the phone industry.
In the mail-order case, the Seventh U.S. Circuit Court of Appeals had upheld a Wisconsin law limiting annual charges for consumer credit to 18 per cent. In contrast, Aldens, Inc., a Chicago mail-order house, charge customers in all 50 states 21 per cent monthly for sales under $350 and 12 per cent for sales in excess of that sum.
The Seventh Circuit rejected Aldens' claims that the Wisconsin law denies it due process and burdens commerce, particularly because it has no physical presence in Wisconsin and because its credit terms comply with Illinois law.
In addition, Aldens, in its Supreme Court brief, said it was pleading "the cause of some 8,00 mail-order houses, large and small, to be free from the conflicting regulations of up to 50 states and territorial governments . . ." It said compliance with the Wisconsin law would cost it $163,000 a year.
The appellate court held that the Wisconsin law is an exercise of police power that has not been shown "to be an undue burden on interstate commerce."
The Direct Mail/Marketing Association, in a friend-of-the-court brief, said the Seventh Circuit decision threatens direc-marketers, with "irreconciliably different sets of requirements" imposed by 50 states.
The Supreme Court took action on a broad range of other issues. Combined Newspaper Broadcast Ventures
In January 1975, after five years of study, the FCC issued an order forbidding future common ownership in a single community of a daily newspaper and a broadcast station. But the agency "grandfathered" in about 90 per cent of the existing newspaper/television and newspaper/radio combinations.
Last March however, the Court of Appeals for the District of Colombia nullified the portion of the order protecting existing combinations and sent the case back to the FCC with a directive to come up with a divestiture order.
The court said that it was rejecting the FCC's presumption that existing combinations serve the public interest unless proved otherwise in favor of a presumption that "divestiture is required except in those cases where the evidence clearly discloses that cross-ownership is in the public interest."
Along with numerous newspaper and broadcast organizations, including the Washington Post Co., the FCC asked the Supreme Court to review the appellate court decision.
In other actions the Supreme Court:
Rejected a challenge to a Department of Transportation safety standard for truck air-brake systems.
Rejected a claim by two railroads that they are exempt from the Occupational Safety and Healthy Act.
Let stand a decision that New Jersey can make federal and state welfare payments to strikers.