Recent Court Cases Are One Step Forward, One Step Back
When American Beverage Licensees (ABL) speaks as an organization, people listen. For example, ABL recently wrote: “Were plaintiffs to prevail, in-state licensed Texas retailers would remain subject to comprehensive and effective regulation, while all other retailers would be free to sell and deliver to Texas residents outside of the three-tier distribution structure that Texas has elected.” These words were stated by ABL in its amicus brief to the 5th Circuit in the Siesta Village/Wine Country Gift Baskets vs. Perry case.
The 5th Circuit can now be counted among those who listen to ABL. In its opinion supporting the state of Texas and rejecting the concept that a California or Florida retailer should have all the rights of a Texas retailer, the 5th Circuit adopted much of the logic and arguments of the ABL brief. It noted that the regulations for beverage alcohol are different than for potato chips. The ABL brief noted that ABL members in Texas are subject to the laws of Texas and the extensive regulation by the Texas Alcohol Beverage Commission (TABC), but there is no way the TABC could make a California retailer do the same things. The 5th Circuit agreed and noted:
Our read of Granholm is that the 21st Amendment still gives each State quite broad discretion to regulate alcoholic beverages. The dormant Commerce Clause applies, but it applies differently than it does to products whose regulation is not authorized by a specific constitutional amendment. Regulating alcoholic beverage retailing is largely a State’s prerogative.
The National Beer Wholesalers Association is proud to work with ABL on a wide variety of matters, including issues ranging from preserving a state’s ability to regulate alcohol to credit card exchange fee concerns. United, beer distributors and independent retailers have long been recognized as a potent force legislatively. The recent decision of the 5th Circuit underscores ABL’s stewardship on the judicial front and is another testament to the organization’s leadership.
The win in the 5th Circuit is important for state-based alcohol regulation and ensuring that all licensed retailers (as well as licensed beer distributors) play by the same rules. It clearly recognized that alcohol needs different regulation than other consumer products. However, it is only a temporary win. A terrible loss in the 1st Circuit in the Family Winemakers vs. Jenkins case has muted any claims of clear-cut victory for any side.
The 1st Circuit has issued a very anti-state-regulation opinion that the biggest players in the alcohol industry may try to use to muscle away state laws that protect orderly markets and conditions that help small business like those of ABL members grow. The court rejected all 21st Amendment arguments by the state and stated, “Massachusetts bears the heavy burden of showing that the statute is nonetheless constitutional.”
Over the past several years, 28 states have had their alcohol laws challenged through litigation. Opinions as varied as the 1st and 5th Circuits only guarantee more litigation and uncertainty. NBWA looks forward to continuing to work with ABL to fight efforts in Congress, state legislatures and, yes, the federal courthouse to help preserve and support the world’s best system for regulating alcohol.
National Beer Wholesalers Association President & CEO Craig Purser provides industry commentary each quarter for ABL Insider, a publication of American Beverage Licensees (ABL), a national trade association for retail alcohol beverage license holders across the United States. Each column provides insight on issues of concern to beer distributors, their retail partners and others in the alcohol beverage industry. To learn more about ABL Insider, please visit http://ablusa.org/news/abl-insider.