He later noted:   We do not address the merits of Coors’s challenge to the beer tax regime and make no ruling as to the validity of that regime under the dormant Commerce Clause. Should Coors choose to pursue its case in the Puerto Rico courts, it may press its federal constitutional claims there and, should it receive an unfavorable disposition, it may seek further review of any substantial federal claims in the U.S. Supreme Court.

I guess we will wait and see if Coors appeals to the US Supreme Court or seeks to start litigation to challenge the small brewer tax rate in the Puerto Rico Courts.

(Earlier Post)  1st Circuit Holds Oral Argument on Coors Challenge to Small Brewer Tax Rate in Puerto Rico

Earlier this month, the 1st Circuit held oral arguments on the  long-standing effort by Coors to challenge the Puerto Rico excise tax system.   The vast majority of this argument discussed recent Supreme Court decisions and whether comity should preclude these sorts of tax challenges.  A link for your listening pleasure is here.

(Earlier Post)  Coors Seeks Appeal in 1st Circuit in Puerto Rico Tax Case

Well here we go. The 1st Circuit will get another chance to address alcohol litigation.  Coors has filed a notice of appeal to the 1st Circuit on their attempt to strike down the small brewer tax rate in Puerto Rico.  Their notice of appeal is here.

(Previous post)

District Judge Rules Against Coors

District Judge Daniel Dominguez has ruled against Coors in a comprehensive opinion.   Applying a recent Supreme Court decision that overturned the 2009 1st Circuit case in this litigation, the court approved the magistrate’s decision.   The opinion can be found here.

(Previous Post)

Coors Files Objections to the Magistrate Judge’s Report and Recommendation

Coors has filed objections to the Magistrate Judge’s report and recommendations.  Most of the objections concentrate on the position of Coors that the Magistrate Judge got the dorman Commerce Clause language wrong.  The long-standing procedural history of this case is also addressed.   A copy of Coors filing can be found here.

(Earlier Post) Magistrate Rules for Puerto Rico and Against Coors

Chief United States Magistrate Judge Justo Arenas has sided with Puerto Rico and is seeking to dismiss the action brought by Coors against the Puerto Rico tax rate for small brewers.   This vein of litigation actually goes back over 30 years but the present matter started in 2006.  In a wide-ranging opinion covering many subjects the Magistrate sided with the arguments of Puerto Rico.   He dismissed the claims of Coors that the case violated the dormant commerce clause finding that there was no facial or intentional discrimination. His opinion can be found here.   Coors has until the 17th to file objections with the Magistrate.

(Earlier Post) Puerto Rico Seeks to Dismiss Coors Lawsuit Challenging Small Brewer Tax Rate

In a new filing, the government of Puerto Rico has sought to dismiss the Coors lawsuit against Puerto Rico.   In its lawsuit Coors Brewing seeks to eliminate the lower tax rate on small brewers.   Coors claims that it does not seek to lower the taxes Coors pays, just  eliminate the tax break small brewers have under Puerto Rico law.   However, a recent decision by the United States Supreme Court in Levin v. Commerce Energy has made it clearer that deference to state courts on state taxation matters is important even where someone (like Coors) claims they are not trying to lower their own taxes.   The Levin decision can be found here.  The filing by Puerto Rico notes that the 1st Circuit returned this case to Puerto Rico district court  by relying on a line of reasoning now discredited by the Levin decision.  As such, Puerto Rico’s brief argues that this matter should be dismissed in its entirety.

This case is being closely watched to see how state alcohol tax rates are impacted in the future.   Will there be more challenges to small brewer tax rates?  (FYI- A federal bill changing the tax rates of small brewers is also being considered by Congress.)

(previous post)

Interesting Puerto Rico Beer Tax Case Sent Back to District Court By First Circuit

Part of the 30 year long dispute over the taxation of beer in Puerto Rico has been a lawsuit filed by Coors Brewing Company against Puerto Rico for its tax treatment for small brewers.  It its lawsuit Coors is seeking to eliminate the tax exemption for small brewers in Puerto Rico.

Coors had lost at the district court level.   The First Circuit last week reversed and decided to send the case back to the district court for further instructions.  Complicating this case is the long history of small brewer tax rates and related litigation in Puerto Rico.   The 1st Circuit remanded the case to determine if Coors was barred by previous litigation related to a lawsuit filed by its importer for Puerto Rico or another older litigation filed by the United States Brewers Association in which Coors was a member.

It is worth a read just to learn about fun law school topics such as res judicata, collateral estoppel, the Butler Act, the Federal Relations Act and the litigious history of challenges to Puerto Rico’s treatment of small and large brewers.  Alas there is no substantive discussion of the underlying dormant commerce clause, 21st Amendment or Tax Injunction Act issues in last week’s opinion.  It is a case to monitor for future discussion of the dormant commerce clause.

Here is the complaint in Coors lawsuit against Puerto Rico. Read it here.

(Earlier Post )     Utah Files Motions to Dismiss Pricing Lawsuit

Utah has filed its Motion to Dismiss and their supporting brief.   It noted that the complaint is barred by the state action and unilateral doctrines of antitrust law and the 21st Amendment.  It also notes that the religion groups like the LDS Church, like any group or individual,  has an obvious right to petition government and participate in the political process.

A press article summarizing these developments is here.

(earlier post) New Lawsuit Filed in Utah Challenging Pricing and Licensing Laws

The Utah Hospitality Association has filed a lawsuit against the state of Utah alleging that state law violates the federal Sherman Antitrust Act.  Specifically the complaint is alleging that the state laws related to retail drink price specials and the state limitations on retail licensing are violations of federal antitrust law.  (The complaint also appears to imply an equal protection challenge.)

A related newspaper article from the Salt Lake Tribune describing the lawsuit can be found here.    It  is interesting to note that the plaintiffs imply that they have filed this lawsuit to get the attention of the elected leaders in Utah.   If so it may be a good test of what was referenced in the Federalist 78: “The Courts must declare the sense of the law; and if they should be disposed to exercise will instead of Judgement, the consequences would be the substitution of their pleasure for that of the legislative body.”

I’ll add this to the list of cases to monitor.

In sum, the Court concludes that this case presents one of those relatively rare instances in which a party “formally prevails” on at least a portion of its lawsuit, but “should receive no attorney’s fees at all.” Farrar, 506 U.S. at 115… Or, put another way, even if the litigation could be said to have “alter[ed] the legal relationship between the parties” in a way that (briefly and marginally) benefited Plaintiffs (see Farrar, 506 U.S. at 111-12), Plaintiffs’ overall lack of success in achieving their stated goal was so apparent that the only reasonable fee is zero.”

According to a statement reported in both Beer Business Daily and Beer Marketer’s Insights, ABI disagrees and is planning next steps.   Recall there is still action at the liquor control commission to figure out what to do about the 30% stake of ABI in City Beverage.   We’ll post it here if an appeal does develop.

(Earlier Post)  7th Circuit Clarifies Their Order of Dismissal in InBev v. Illinois

The 7th Circuit clarified their July 6 order with a new order clarifing that the appeal is moot because “Public-Law 97-005 eliminates the geographically disparate treatment of beer distributors. Appellees’ request to vacate the district court’s judgment is DENIED.”

(earlier post) 7th Circuit  Dismisses ABInBev v. Illinois

The 7th Circuit has dismissed the appeal by ABInbev on its attempt to  vertically integrate and own the distributor in Chicago.   Recent legislation signed into law by Governor Quinn has mooted this matter.    The order will be found here.      The billion dollar question is whether ABInbev runs back to court to challenge the new law.

(previous post)

Well the Governor has not yet signed the previously mentioned legislation and the federal courts have their deadlines so any amicus brief in support of the state of Illinois position was due today.  In a brief filed by the Association of Beer Distributors of Illinois and the Marin Institute, the parties urge the 7th Circuit to properly confine the remedy aspect of the litigation (the only issue on appeal) to nullification rather than extension.   Actually the case law on this subject is interesting and someday the Supreme Court will clarify this issue.   It is expected that the signing of this legislation will moot this pending case so this amicus brief may raise issues only to be solved by some future lawsuit.  When a future court does face this issue they will have to deal with the current mischaracterization of remedy from the  Heckler v. Mathews, 465 U.S. 728 (1983) case dealing with welfare policyand a stated goal of extension compared to alcohol policy and the 21st Amendment’s call for states to be making decisions on alcohol policy, not courts.   It is a good reminder of  what was said in the Federalist Papers: “The Courts must declare the sense of the law; and if they should be disposed to exercise will instead of Judgment, the consequences would be the substitution of their pleasure for that of the legislative body.”  The Federalist 78

Will this case be mooted or proceed?  I guess that is the next post.

,

(Earlier Post)  Legislation on Way to Governor. What to Do About Pending Appeal?

This week the Illinois House Of Representatives passed without objection legislation that addresses the subject of this litigation.   They have passed a law allowing all breweries under 15,000 barrels to self-distribute up to 7,500 barrels.   This addresses the law that had been struck down in the district court that Anheuser-BuschInbev challenged.

However, it is unlikely the Governor will sign this law before Judge Dow’s May 31st deadline.   Also, the briefing schedule for the 7th Circuit required the state to file its response brief this week.  As a result, the Illinois Attorney General’s office filed its reply brief here.  It disputes much of the assertions of Anheuser-BuschInbev, makes the case for a remedy of “levelling down” and also calls for an extension of the May 31 deadline.   The Illinois Attorney General’s office maintains that the signed legislation will moot this case.

By most accounts, the legislation should moot this case.  However, the state has got in its legal brief placeholder in should the 7th Circuit decide to rule on the matter anyway.

(Earlier Post) Update in 7th Circuit:  Tension in Illinois About What Litigation Means To Legislative Session

As you may recall, Judge Dow stayed his decision until May 31, 2011.    In the interim, scores of lobbyists have been retained and numerous articles have been written about the legislative sausage making in Springfield.   In response to ABInbev’s motion for a stay, the IL AG has filed briefings noting its frustration over the lobbying tactics and representation of the status of the litigation to legislators.  It is now up to Judge Dow to rule on ABInev’s motion for a stay.

If legislation is passed, it may moot the underlying case.   If not, the 7th Circuit will have to rule on the issue of remedy.  Level up or level down…That is the question….

(earlier post)  ABInBev Files Brief in 7th Circuit

ABInBev filed its brief in the 7th Circuit.  13 pages of “facts” and 34 pages of “legal argument” in this “brief.”   Now we know why ABInBev needed extra time to file this brief.  It is interesting that in the thousands of words in this document, the 21st Amendment is cited just once.   Here is a copy of the brief.

(earlier post) -ABInBev Playing Hardball On Attorney Fees in Illinois?

Although I don’t link to all the court filings in this matter, ABInBev is apparently trying the old full court pressure technique against the state AG office on attorney fees.   On one hand ABInbev says their case was cut and dry and was an easy case to win, yet they also claim they need their attorney fees now  despite their outstanding appeal of the portion they lost on remedy.  Moreover, the state has balked at the size of these fees for the “simple” litigation.   Normally a company with a $100 billion market cap could wait a few more weeks for all issues to settle or is it a part of the coorindated strategy of turning up heat on all fronts?

The judge has ruled that the attorneys fees portion will be decided earlier, however, he did express the beginnings of some thoughts that ABI may be disappointed in the amount they are entitled to in this “simple” litigation.

The order can be found here.  In addition to the full court press with the lawyers, ABI apprently is throwing the kitchen sink in public and private negotiations as the clock ticks on this matter before the March deadline.

( Earlier Post) ABInBev Files Appeal to 7th Circuit on Chicago Branch Issue

ABInBev filed its appeal of the district court’s decision which did not allow ABI to vertically integrate the Chicago market.   As a result, it is starting the process to appeal to the 7th Circuit.    The notice of Appeal and docketing statement can be found here and here.

Previous Posts:

Apparently ABI will not be running a branch in Chicago, at least  in 2010.   District Judge Robert Dow has issued an orderin the Anheuser-Busch InBev lawsuit against Illinois.   In his order he grants ABI’s partial motion for summary judgment on the Commerce Clause claim.   However, for a remedy he  has rejected ABI’s call to extend the self-distribution privilege to out-of-state brewers and has “nullified” the right of in-state breweries to self distribute.   He has  stayed his order and turned this back to the state legislature for a permanent solution  by March 31, 2011.   The opinion can be found here.  At this point, it is unclear whether ABI will appeal this to the 7th Circuit, file  a new case in state court, or just hire every lobbyist within a 100 mile radius of Springfield to try to change the law.   Interestingly, Judge Dow stated in a footnote that treating small producers differently is permissible and cited to the use of volume caps.   I am sure there will be more.

Updates in ABI Litigation against Illinois; Oral Argument on MSJ 6/16

The court issued a rulingtoday setting oral argument for ABI’s Motion for Summary Judgement for June 16.  It the decision it denied the Wine and Spirits Wholesalers of Illinois attempt to intervene in the lawsuit.  However it agreed to consider the arguments made by WSWI as well as those by the Associated Beer Distributors of Illinois in its Amcius brief as they raised isssues such as jurisdcition and constitutional avoidance that the court must consider.    ABI will have a chance to respond to those arguments by June 8.

ABI has filed their response brief.

The Associated Beer Distributors of Illinois filed their amicus brief and motion to intervene in the ABI litigation.

The state of Illinois has filed their brief opposed to ABI’s motion for summary judgement.  Read it here.

AnheuserBuschInBev filed their motion for summary judgement read it here.

As you recall, the Illinois Liquor Control Commission handed down a declaratory ruling last month that Anheuser-Busch, as a non-resident dealer, cannot own a controlling interest in a distributorship in the state.  It warned that City Beverage could lose its license if it attempts to proceed withthis deal with ABI.

ABI was trying to buy the remaining 70% of Soave Enterprises in Illinois. This ruling has been challenged. Read the complaint here.

The Illinois Wine and Spirit Wholesalers filed a motion to intervene in this matter. Read it here.

(previous post) Judge Rules Two Seperate Initiatives Within I-1183.  Future Uncertain

Although I-1183 passed in November, its fate will not be known until the Washington Supreme Court rules on this issue.

One of the two lawsuits filed had an important day on Friday when Cowlitz County Judge Stephen Warning ruled that I-1183 had two seperate initatives within it.  The court noted that section 302 of I-1183 violated the single subject rule. Washington case law is clear that the only remedy where there is more than one subject in an initiative is to void the entire initative. A copy of the decision is here.

The court has scheduled another hearing on the issue of severability; whether I-1183 without the funding for public safety funding component in section 302 would still have passed.   Not sure how anyone can discern what people were thinking when they passed this so this will be an interesting hearing.

The King County case was put on hold pending the Cowlitz County case but the urgency to get this to the Washington Supreme Court will only increase.  Here is a link to a Seattle P-I article about the hearing.

Earlier Post-   Motions for Summary Judgement in I-1183 Litigation- Cowlitz County

The Challenges to Costco may take most of the first 6 months before reaching the Washington Supreme Court.   Not sure if they will get the case before the state is ordered out of business on June 1, 2012.

There are updates in one of the matters.  The Cowlitz County case filed by the retailers and public health groups have had motions for summary judgement filed by the state and by the Costco intervenors and the plaintiffs have filed their opposition to this motion.

Both sides disagree on what I-1183 does.   The Defendants state that the voters were well informed and there are no violations of the single subject rule.  The Plaintiffs point out that I-1183 imposes new taxes, substantially changes the wine distribution laws; changes the rules for alcohol pricing and advertising, and perhaps most seriously, points out that the initiative eliminates  “the fundamental state policy of moderation in alcohol consumption”

(Updates in I-1183 Litigation)

I’m having a bad computer day and cannot upload some documents but there have been a bunch of things going on in Washington state.   Apparently, Costco, the Northwest Grocery Association, the Yes on I-1183 campaign,  Costco counsel John McKay, and others have moved to intervene in these cases.

Also, there was a hearing today on the preliminary injunction in Cowlitz County.  The judge did not grant the PI and apparently did not deny on basis of probability of success on the merits.

Sorry for the non linkable information.

(Earlier Post) Second Lawsuit Filed Against Recently Passed I-1183 by Retailers and Public Health Officials

A second lawsuit was filed in Cowlitz County against the recently passed I-1183. Interestingly, Cowlitz County was one of the five Washington counties that voted against I-1183.   This complaint was filed by a retailer, an landlord for a state liquor store and the Washington Association for the Prevention of Substance Abuse and Violence Prevention.  They also filed a motion for preliminary injunction (which for some reason is too large to be uploaded to this site right now) and a hearing date on the injunction could be as soon as next week.

(Earlier Post)    Litigation Filed in Washington State Challenging Recently Passed I-1183

 Teamsters Local 174 and the United Food And Commercial Workers (UFCW) Local 21 have filed a lawsuit challenging the initative passed in Washington state.   The complaint can be found here.   I-1183 was a proposal funded mostly by the Costco Corporation which is based in Washington.  A list of Costco’s contributions for I-1183 can be found here.  By my guesstimation Costco has spent nearly $35 million over the past 10 years trying to rewrite Washington state liquor laws.   I-1183 won with over 58% of the vote.

The nuances of Washington state law and their court’s ultimate interpretation of their  “single subject” law is above my pay grade.    I do note that this initiative was indeed boldly written and as a result it does cover many various subjects from “getting state out of the liquor business” to “deregualting wine distribution” to “creating a new marketplace for large retailers” to “a new taxing and revenue scheme” to “state aid to local governments” as a few of the many topics.  Costco will argue they are all related.  The Unions and others will note that this is classic “logrolling”  and a purposeful attempt to try to hide things behind a bigger concept.    We’ll have more as this develops.

WHY SHOULD THE PUBLIC CARE ABOUT BEER FRANCHISE LAWS?

The beer industry in the United States has recently undergone dramatic change.  While the industry as a whole has been consolidating for years, the creation in 2008 of two global behemoths, Anheuser-Busch InBev (ABI) and MillerCoors LLC (MillerCoors), has concentrated 80 percent of United States beer sales into two foreign-owned companies.  ABI is based in Belgium and is managed by Brazilian leadership.  MillerCoors is based in London and is primarily managed by South African leadership.  The Marin Institute (now known as Alcohol Justice) has described these developments as creating a “Big Beer Duopoly.”  The economic and political power of these international organizations cannot be underestimated, and their impact on  alcohol regulation, small brewers, and public health and safety in the U.S. is significant.

Under these circumstances, beer franchise laws, which govern the relationship between brewers and distributors, take on a growing importance.  There are two complimentary purposes and
policies that underlie beer franchise laws.

First, beer franchise laws promote and support the “three-tier” system and “tied-house” laws.  As recognized by the U.S. Supreme Court, under the 21^st Amendment, “within the area of its jurisdiction, the state has ‘virtually complete control’ over the importation and sale of liquor and the structure of the liquor distribution system.”  North  Dakota v. United States, 495 U.S. 423, 431 (1990).        Pursuant to the 21^st Amendment power, most states have adopted the three-tier system with tied-house bans.  The  three-tier system mandates separation of the alcohol/beverage industry into three tiers: supplier, distributor and retailer.

As recently noted by the Louisiana Court of Appeals:

“Without the three-tier system, the natural tendency historically has been for the supplier tier to integrate vertically.  With vertical integration, a supplier takes control of the manufacture, distribution, and retailing of alcoholic beverages, from top to bottom.  The result is that individual retail establishments become tied to a particular supplier.  When so tied, the retailer takes its orders from the supplier who controls it, including naturally the supplier’s mandate to maximize sales.  A further consequence is a suppression of competition as the retailer favors the particular brands of the supplier to which the retailer is tied to the exclusion of the other suppliers’ brands. With vertical integration, there are also practical implications for the power of regulators.  A vertically integrated enterprise – comprising manufacture, distribution, and retailing – is inevitably a powerful entity managed and controlled from afar by non-residents.

The three-tier system was implemented to counteract all these tendencies.  Under the three-tier system, the industry is divided into three tiers, each with its own service focus.  No one tier controls another.  Further, individual firms do not grow so powerful in practice that they can out-muscle regulators.  In addition, because of the very nature of their operations, firms in the wholesaling tier and the retailing tier have a local presence, which makes them more amenable to regulation and naturally keeps them accountable.  Further, by separating the tiers, competition, a diversity of products, and availability of products are enhanced as the economic incentives are removed that encourage wholesalers and retailers to favor the products of a particular supplier (to which wholesaler or retailer might be tied) to the exclusion of products from other suppliers.”

   Manuel v. State of Louisiana, 2008 WL 1902437 (April 30, 2008 La. App. 3 Cir.) (rejecting an antitrust challenge to state liquor laws).

As noted by the U.S. Supreme Court, “the three-tier system itself is unquestionably legitimate.” Granholm v. Heald, 544 U.S. 460, 488-89 (2005).

With regard to “tied houses,” the seminal text on liquor regulation notes:

“The ‘tied house’ system had all of the vices of absentee ownership.  The manufacturer knew nothing and cared nothing about the community.  All he wanted was increased sales.  He saw none
of the abuses, and as a non-resident he was beyond local social influence.  The ‘tied house’ system also involved a multiplicity of outlets, because each manufacturer had to have a sales agency
in a given locality.  In this respect the system was not unlike that used now in the sale of gasoline, and with the same result: a large excess of sales outlets.  Whether or not this is of concern to the public in the case of gasoline, in relation to the liquor problem it is a matter of crucial importance because of its effects in stimulating competition in the retail sale of alcoholic beverages.

Fosdick and Scott, Toward Liquor Control at 43 (Harper & Bros. Publishers 1^st Ed. 1933).

It is impossible to have an effective three-tier system and tied-house ban without ensuing relatively equal bargaining power between suppliers and distributors.  Beer franchise laws safeguard the independence and relative bargaining power of distributors vis-à-vis suppliers and thereby ensure that distributors may fulfill their public policy functions of serving as a buffer between suppliers and retailers, preventing vertical integration of the industry and ensuring local control and accountability of alcohol distribution channels.

Second, beer franchise laws, like all franchise laws, are remedial legislation designed to address the unequal bargaining power existing between a “franchisor” and a “franchisee,” ensure fairness and equity in the relationship and protect a “franchisee’s” equity from arbitrary and capricious termination. See, e.g. Arneson Distributing Co., Inc. v. Miller Brewing Company, 117 F.Supp.2d 905 (D.
Minn. 2000).  Beer distributors make substantial investments of capital and personnel to create a market for a supplier’s  products within their territories.  Beer franchise laws protect that investment from arbitrary and capricious termination by suppliers.  A supplier must have “good cause” to terminate and usurp that investment.  As a consequence of the strong public policy underlying beer franchise laws, they are deemed to be “remedial legislation” which “should be given a liberal construction to effectuate its statutory purpose.”  Arneson Distributing Co., Inc. v. Miller Brewing Company, 117 F.Supp.2d 905 (D. Minn. 2000).

CONCLUSION

Beer franchise laws are more important and needed today than perhaps at any time in recent history. Never before has market power been concentrated in two international companies which control over 80 percent of the U.S. beer market.  Never before has the imbalance between supplier and distributor been so great.  Without beer franchise laws, distributors will be unable to maintain meaningful independence from suppliers and will be unable to fulfill their quasi-regulatory roles as a buffer between suppliers and retailers, thereby preventing the vertical integration of the industry.
Furthermore, by safeguarding the independence of distributors, beer franchise laws promote consumer choice and product diversity because distributors are  free to carry the products of any supplier, particularly those of the growing craft segment.  Small craft brewers lack the substantial resources required to make a market for a new product.  Independent distributors are able and willing
to make that investment on behalf of craft brewers.  Without beer franchise laws, however, the dominant suppliers will insist upon exclusive distribution and all but shut down this exciting market segment.

]]> http://www.alcohollawreview.com/2012/02/06/first-guest-column-why-should-public-care-about-franchise-laws/feed/ 0 http://www.alcohollawreview.com/2012/01/31/new-mexico-liquor-regulations-upheld-against-challenge-by-us-airways/ http://www.alcohollawreview.com/2012/01/31/new-mexico-liquor-regulations-upheld-against-challenge-by-us-airways/#comments Tue, 31 Jan 2012 16:03:34 +0000 davetate http://www.alcohollawreview.com/?p=238 Well this case went out with a whimper.  After being remanded to the district court  by the 10th Circuit and having a trial date set for this April,  the parties in the US Airways lawsuit against New Mexico dismissed this case without prejudice.  Recall this case was challenge by US Airways to the propriety of New Mexico alcohol licensing powers.  The Joint Stipulation of Dismissal Without Prejudice can be accessed here.

I feel very confident that the legal issues raised in this litigation will reappear in another case in the future.

(earlier post)   10th Circuit Reverses and Remands US Airways Case Back To District Court

The 10th Circuit today reversed and remanded the district court’s decision which had ruled in favor of New Mexico.    When the district court gets this case again, it is instructed to balance both the state interests under the 21st Amendment and the federal interests under the Federal Aviation Act.   It is unclear if any party will try to appeal this to Supreme Court at this stage.  The 10th Circuit opinion can be found here.

(earlier post)

Oral Argument Set for September 20th in the 10th Circuit Appeal of USAIR Case

The oral argument of US Air’s appeal is set for September 20th in Denver before the 10th Circuit.   In a twist, the US Government has pushed to be allowed to participate in the oral argument and has been granted time. The motion the federal government filed to participate in oral argument is here.

PREVIOUS POST

Appellate Briefs have been filed in the 10th Circuit.   Retailers, Mothers Against Drunk Driving, State AGs, US Justice Dept, three of the past  U.S. Solicitor Generals representing corporate interests , the list is long!

Four briefs have been filed in support of the State of New Mexico by:
-American Beverage Licensees , State AGs, Mothers Against Drunk Driving and Wine & Spirits Wholesalers of America

The state of New Mexico appellate brief is here.

The State AGs brief notes that the position of the USAir and appellants that they do not need to follow New Mexico alcohol laws would also support the amazing position that US Air could serve drinks to 11 year olds.

Four briefs have been filed in support of US Airways by:
-Air Transport Association of America, Association of Flight Attendants, Ten Former Secretaries of the DOT, and The United States

(The below was written after the trial stage and before 10th Circuit filings)

If you sell liquor to consumers in New Mexico, you need to be licensed by the state to do so. Period.

United States District Judge M. Christinia Armijo has rejected US Airways claims that federal aviation statutes and regulations (specifically the Airline Deregulation Act and the Federal Aviation Act) preempt New Mexico laws requiring every person selling alcohol to secure a public service license.  In her decision Jude Armijo noted there was no basis to assume Congress intended federal law to regulate alcohol service and that state laws are not preempted.    She noted:

Needless to say, the stakes are pretty high with this case and I personally expect an appeal by the Plaintiff in this case.    New Mexico is in the 10th Circuit.

This case further provides a strong rejection to the attempts to allow revisionist history to claim that the 21st Amendment essentially only allows a state to decide wet or dry issues.  The complaint implied that the 21st Amendment  allows a state “ONLY” to regulate the transportation or importation.  That very limited view of the 21st Amendment will not prevail.

Briefs have been filed in this case.

Judge Hamilton has a long concurrence where he notes his disagreement with the 10th Circuit’s preemption analysis in USAirways and also notes that the forum for changing alcohol laws is the state legislature, not federal courts.  I’ve been saying that for years!

Both opinions note the problems with applying the Pike v. Bruce Church balancing test to state alcohol laws but that is another subject for another day.

(earlier post)   7th Circuit Sets Oral Arguments for September 12, 2011 in Indiana Retail Shipping Case

How nice of the 7th Circuit to schedule oral argument while I’ll already be in town for the Center for Alcohol Policy Legal Symposium.  Come to the CLE and perhaps we can organize a class trip over to the oral arguments.    The 7th Circuit set out notice for the oral argument in  Lebamoff Enterprises, Inc., et al v. Mark Massa for Tuesday, September 13, 2011, at 9:30 a.m. in the Main Courtroom, Room 2721. Each side limited to 20 minutes.

The  7th Circuit has been the busiest on alcohol law matters with the Baude case (face to face identification), the ABInBev lawsuit (Remedy/discrimination), and Thomas Family Winery matter (Dormant commerce clause) besides the pending Lebamoff matter.

(Previous Post)  Plaintiffs Seek 7th Circuit Review in Capt’n Cork Case in Indiana

UPDATE:

The plaintiffs in Captain Cork are appealling the district court’s decisions.     They have shifted strategy in their appeal and seek to emphasize preemption as their route to victory.  They have filed their brief in the appeal.  The state’s brief is due May 20th.  Appellants response is due June 3rd.

(Previous Post)
The district court denied the motion for reconsideration.  Her order is here.

(Previous Post)
The district court ruled against the Professor Tanford has sort of filed a motion for reconsideration of the trial court’s decision.    Not sure of the format and why the court would consider reversing itself but I guess it never hurts to ask.   A copy of the request is here.

(Earlier Post ) Indiana Wins;  Retailers and Wineries Are Indeed Different Entities

Federal District Judge Jane Magnus-Stinson issued an opinion for the state of Indiana in the Capt’n Cork case.   She noted that the theory of the plaintiff’s case was flawed in several aspects.  Most importantly she noted that nothing in the Granholm case suggested the expansion of its holding as sought by the plaintiffs.  She noted that state laws have a strong presumption of validity.   She indicated the lack of clarity over the plaintiff’s specific challenges but rejected each one nonetheless.  At the end of the opinion, she rejected a federal preemption claim in part by citing to the Stop Underage Drinking Act of 2006.    It is unclear whether there will be an appeal at this time.

(PREVIOUS POST)  Motions for Summary Judgement Filed in Indiana Retailer Case

A motion for summary judgement was filed by the plaintiffs in the Cap’n Cork case.   Recently Indiana  filed its cross motion for summary judgement.  The recent Wine Country 5th Circuit case as well as the Buy-Rite case from New York in the 2nd Circuit and the other Indiana case, Baude  at the 7th Circuit all heavily influence the state’s brief.  All those cases are discussed in other posts on this blog.

Updated:   This case has been transferred to federal court in Indiana.  It has been assigned to Judge McKinney.

A New Indiana Lawsuit Filed by Retailer Seeking Direct Shipping Rights

Just 24 hours after the United States Supreme Court stated they would not take an out-of-state winery’s unsuccessful challenge to one provision of the Indiana alcohol code, the same unsuccessful plaintiff’s attorney has filed a new lawsuit against Indiana this time on behalf of an Indiana retailer.

A new case has been filed in the Southern District of Indiana, Lebamoff Enterprises Inc. v. Thomas Snow, Chairman of the Indiana Alcohol & Tobacco Commission(PDF). Lebamoff Enterprises dba Cap N’ Cork has filed a challenge under Indiana law, the Equal Protection Clause, the Dormant Commerce Clause and federal preemption of state regulation of  common carriers.  The Cap N’ Cork believes it is unfair that wineries are able to do some sales via common carriers whereas retailers are not.  The ATC has cited Cap N’ Cork  for violations. This will likely be an interesting case to see if wineries and retailers are in fact different as apparently the plaintiff here claims there is no difference between winery sales and retail sales.

Judge Sparks struck down three provisions of the Texas ABC code for violating the 1^st Amendment right to commercial speech.   He upheld the equal protection and commerce clause challenges to the Texas code.  Texas has some unique laws on “ale” and “beer” definitions and Judge Sparks did not have nice things to say about the state’s defense of these laws.

The portions struck include:

1.  The “tied house” rule prohibiting brewers and beer wholesalers from advertising which retailers sell their beers.
2. The labeling and advertising rules requiring beer products containing 4% alcohol by weight as  ”beer” while requiring beer products containing more than 4% to be labeled “ale” or “malt liquor.”
3. The beer advertising rule prohibiting references to strength.

The portions of ABC code upheld:

1.  Regulations prohibiting breweries from selling their products at the point of production while allowing wineries and brewpubs to do so.
2. Regulations prohibiting brewpubs from selling their products to distributors and retailers while allowing wineries and microbreweries to do so
3. Regulations treating foreign breweries as the first American source of supply of malt beverages while treating importers as the first American source of supply of wine and distilled spirits.

Again, the sections struck down were mostly unique to Texas but there may be follow up questioning about similar federal laws.    Also, the judge made it clear that his opinion that it was limited to the challenged three sections of the ABC Code and should not be seen as an invitation to strike down the entire statute; “ Within this limitation, however, nothing in this opinion should be construed as preventing Texas or TABC from prohibiting, through appropriate statute or regulation, any undue collusion, financial or otherwise, between producers and retailers. “

(Earlier Post)    Supreme Court Asked to Consider Dormant Commerce Clause Case.

Direct TV has filed a petition for the Supreme Court to overrule the Ohio Supreme Court on dormant commerce clause grounds.  The Ohio Supreme Court upheld an Ohio law that taxed cable at lower rates  than satellite television.   Since the cable industry employs more Ohio residents than satellite TV it is alleged by the petitioners that this method of taxation is a protectionist violation of the dormant commerce clause.   The state of Ohio disagrees in its brief in opposition.   They rephrase the question “May a state, consistent with the Commerce Clause, tax satellite television services differently from cable broadcast services, given  their different methods of operation and the different regulatory sttructure that applies to each? 

Interestingly, the Specialty Wine Retailers Association filed an amicus brief in support of the petitioners claiming that “the wine and satellite TV industry are just the tip of the iceberg” for oppressive tax regimes by the states if the Ohio ruling stands.  Other amicus briefs  supporting the petition were filed by law professors and the National Taxpayers Union.

The United States Supreme Court is currently in its summer recess.  No oral arguments are scheduled until October.  They have had a long summer to where possible cases for consideration accumulated. No conferences are scheduled until Monday, September 26.   At that conference, the Justices will select cases for review from the summer lists.  Given the backlog of cases since their last conference in May, it is possible some decisions may not be made at the conference on September 26. 

Thanks to Scotusblog  for the heads up on the developments in this case. 

(Earlier Post)  Ohio Supreme Court Case With Commerce Clause Implications

Thanks to David Raber of Ohio for catching  and forwarding this one. 

The Ohio Supreme Court has upheld a state sales tax for satellite TV providers that cable competitors don’t have to pay, rejecting arguments from the satellite industry that the tax is unfair and unconstitutional.     In the 5-2 decision rendered 12/27/10, the Court ruled that the 2003 tax does not violate the U.S. Constitution’s Commerce Clause because the tax is based on differences between the nature of the businesses and does not favor in-state interests at the expense of out-of-state interests.

The Granholm and Bacchuscases are distinguished page 13 of the decision.   There was an amicus curiae brief filed by the Specialty Wine Retailers Association urging reversal which is attached here.   The brief waves the flag of internet regulation freedom. It was interesting to note the brief “blamed” certain state alcohol laws on other wineries or retailers for a change instead of  the supposed unchecked wholesaler power in the state house;  ”location specific” language-i.e., “in person” or “on the premises”-and are enacted for the sole purpose of favoring local wineries at the expense of out-of-state wineries, states will defend these statutes as doing nothing more than distinguishing between two “modes” of selling wine to consumers.”