7th Circuit Rules for Indiana in Cold Beer Case

The 7th Circuit finally ruled for the state of Indiana against a challenge by grocery stores related to the regulations on the sale of cold beer.    In its opinion, the court ruled for the state and concluded; “The Association’s policy arguments for allowing cold-beer sales by grocery and convenience stores are matters for the Indiana legislature, not the federal judiciary.”

The Indiana Petroleum Marketers and Convenience Store Association and others filed a lawsuit in federal court challenging the constitutionality of section 7.1-5-10-11 of the Indiana Code, which prohibits holders of a beer dealer’s permit from selling cooled packaged beer.   The 7th Circuit noted that while the 21st Amendment is not an absolute defense for the state, the association had failed to rebut every conceivable basis which might support the law.   Public policy interests such as preventing sales to minors and differences between package stores and grocery stores were legitimate state reasons for the beer laws.

The Court has had this case under advisement for over a year.   The state of Indiana likewise won a similar challenge to the cold beer laws in state court.

Back to the legislature for the plaintiffs.

(previous post)  State Court Upholds Indiana Cold Beer Ban

Marion County Superior Court Judge Cynthia J. Ayers granted Summary Judgment on August 12 in favor of the state of Indiana in its defense of the laws limiting cold beer sales to package stores.  This case reviewed the challenges to the law under the Indiana Constitution.

In her opinion she noted that Indiana has a state interest in limiting total alcohol sales as well as limiting the sales of alcohol to minors. The state demonstrated the differences between package stores and convenience stores. The inability of anyone to be in package stores under the age of 21 was an important fact for the state’s defense. The court also recognized the “virtually complete control” of Indiana under the 21st Amendment for states to regulate its markets for distribution and retail sale of alcohol.

There has been no reported action in the 7th Circuit appeal since December 2014.

(earlier post) Cold Beer Fight Goes to 7th Circuit

The losing plaintiffs in the Indiana “cold beer” fight have filed an appeal seeking 7th Circuit review.  Recall the district court upheld the way Indiana sells cold beer where liquor stores with restrictions on access and employees can sell cold beer but other retailers such as convenience and grocery stores cannot.  I am on the road and do not have access to the filings yet so I do not know what legal or factual errors they claim were made by the district court and will post when I get a copy. There are media reports such as this Associated Press article highlighting the story.  Like the retailers in the  Kentucky/6th Circuit, the plaintiffs apparently intend to fight this battle in the media, in the legislature and in the courts.

(previous post) Federal Court Upholds Indiana Cold Beer Law

The Southern District of Indiana granted summary judgment dismissing Indiana Petroleum Marketers and Convenience Store Association’s claim that the state law banning convenience, grocery and pharmacy stores from selling cold beer violates the U.S. Constitution’s equal protection clause as well as on other state claims. Judge Richard Young stated that “Indiana’s legislative classifications, which serve to limit the outlets for immediately consumable cold beer, is rationally related to the legitimate goals of Indiana’s alcoholic beverage laws…”  Young continued stating “the state has a legitimate interest in limiting the sale of alcohol and, more to the point, a legitimate interest in curbing the sale of immediately consumable beer to minors.”

The Court noted, “[E]qual protection is not a license for courts to judge the wisdom, fairness, or logic of legislative choices.” Federal Commc’n Comm’n v. Beach Commc’ns, Inc., 508 U.S. 307, 313 (1993). Rational basis review does not authorize “‘the judiciary [to] sit as a super legislature to judge the wisdom or desirability of legislative policy determinations made in areas that neither affect fundamental rights nor proceed along suspect lines.’” Heller v. Doe by Doe, 509 U.S. 312, 319 (1993) (quoting New Orleans v. Dukes, 427 U.S. 297, 303 (1976) (per curiam)).

The Indiana Petroleum Marketers and Convenience Store Association apparently plans to appeal the order.  The order can be read here.

(previous post)  Retailer Seeks Intervention/ Cross Claim in Indiana Litigation

Indiana retailer 21st Amendment, Inc. has filed a motion to intervene and cross-claim in the Indiana District Court.   The retailer complains that if the plaintiff wins, the existing liquor stores would be severely hampered as there would be many regulations on the liquor stores that do not apply to grocery/convenience stores.   Its arguments include noting that it has spent over $3.3 million for liquor licenses whose value is based in large part on the current regulatory scheme and that investment would be scuttled.   The retailer also raises the stakes by cross-claiming against the state should it try to grant grocery/C-stores the same rights as licensed liquor retailers since grocery stores do not have to follow the same regulatory regime (for example, no one under 21 allowed in liquor stores, allowed in grocery stores).  The supporting brief can be found here.

(Previous Post) Indiana Files Answer to Cold Beer Lawsuit

The Indiana Attorney General filed the state’s answer to the petroleum and convenience store operators’ charge that state regulations violate their federal and state Equal Protection and Priviliges rights.  The regulations in question prohibit convenience stores and gas stations from selling cold beer.

The state stands behind the constitutionality of the statutes, rules and policies, and raises defenses of 11^th amendment that plaintiffs’ claims are barred by sovereign immunity.  The response denies the allegations stating that the “plaintiff’s rights, privileges, and immunities secured under the Constitution or laws of the State of Indiana have not been violated by any alleged action, inaction, or omission of Defendants.”  The state concludes by asking the court to enter a judgment in its favor.  The state does not even have the need to raise directly the 21st Amendment as an affirmative defense.

You can read the full Answer.  A related  article can be found at The Indiana Lawyer.

(original post) Indiana Faces Federal Lawsuit Over Regulation of the Sale of Cold Beer

A new federal lawsuit has been filed against a state law regulating alcohol beverages.  Once again, Indiana is in the cross hairs having already won challenges by wineries and retailers regarding shipping.   This time Indiana petroleum and convenience store operators have filed a lawsuit alleging violations of the Federal  and Indiana Equal Protection clauses, the federal Privileges and Immunities Clause and Indiana’s constitutional protection for the pursuit of happiness.    Their complaint is that that liquor stores can sell beer cold but convenience stores and gas stations may not.  The lawsuit argues this is irrational and serves no benefit.    The state’s defense of the law is handled by the Attorney General’s office and he has promised to mount a vigorous defense  of the Indiana law.

A copy of the complaint can be found here.

In many ways this lawsuit is similar to the Kentucky grocery sales of liquor case pending in the 6th  Circuit.  The plaintiffs in Kentucky, like these in Indiana were unsuccessful in the state legislatures for many years and have sought judicial approval of what the legislature would not give them.   In Kentucky, the district court agreed with plaintiffs and ruled against the state.   The Kentucky case was given an expedited briefing schedule by the 6th Circuit but has since stalled with no oral argument date set as of yet.  See earlier posts for more detail on the Kentucky case.