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News & Press: Government Affairs

IABR File Amicus Brief in Cold Beer Lawsuit

Wednesday, September 30, 2015  
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Courtroom  Scales of Justice The Indiana Association of Beverage Retailers (IABR) has asked a federal court to consider its amicus brief in pending litigation filed by convenience stores who are challenging the state over who has the right to sell cold beer in Indiana.

The groups that filed the federal lawsuit last year include the Indiana Petroleum Marketers and Convenience Store Association (IPCA) and association members, including the Ricker Oil Co., Thorntons Inc. and Freedom Oil LLC convenience store chains.

An amicus brief does not make IABR a party to the federal case, but it reflects that the association has a direct interest in the outcome of the litigation. Under current Indiana law, only package stores are allowed to sell cold beer from retail stores.

IPCA officials and members claim Indiana law violates the equal protection clause of the U.S. Constitution under the 14th Amendment and that Indiana regulations have evolved "in an irrational and discriminatory manner that favors one class of retail over another."

In the amicus curiae brief filed Friday by attorney Anthony S. Kogut, IABR outlines the logic supporting Indiana's long-standing and comprehensive regulatory policy that limits the type of permit holders who can sell cold beer. The brief points out that no state, including Indiana, has a public policy of "making alcohol as widely and as cheaply available as possible so that more can be sold and consumed."

Indiana, like many states, has a three-tier distribution system including producers, wholesalers and retailers - and the lawsuit attacks the very heart of that system.

"Radically changing the rules creates instability and gives a dangerous incentive to licensees to pursue short-term maximization of profits," according to the brief. Unlike groceries and convenience stores, package stores have stringent regulatory burdens and were allowed to sell cold beer by the Indiana Alcohol & Tobacco Commission in 1963. That policy was also codified into state law. Limiting the sales of cold beer to package stores was in part because the number of package stores has always been limited. Stores were also restricted in a number of other ways - including a policy that an owner or permit holder must be an Indiana resident. IABR believes the federal lawsuit challenging the state is "meritless." According to the amicus brief, state laws are rational in limiting places that sell "immediately consumable cold beer" and permitting the sale of cold beer by convenience stores, groceries and others would undermine the entire system - especially by extending sales to less-regulated entities. "We believe that a three-tier distribution system does not discriminate against other retailers and also upholds the intent of policy makers to protect the health and welfare of Hoosiers," said Patrick Tamm, CEO of IABR. "This isn't a matter of consumer convenience," Tamm said. "Even a recent ruling from the Sixth Circuit recently pointed out that states should be able to limit the number of places that supply alcohol." Kogut also pointed out that while some of the court challenges to state beverage laws have been successful, many have not. "More recent appellate decisions are consistent with the United States Supreme Court's 2005 decision in Granholm v Heald, which re-affirmed that the 21st Amendment grants states 'virtually complete control' over how to structure their liquor distribution systems at the retailer and wholesaler levels," Kogut said. The Indiana Beverage Alliance also filed a request with the court to file an amicus brief in the case. To read the complete brief filed by IABR, click here. (In other breaking news, the Indianapolis-based 21st Amendment package liquor store chain was once again barred as a potential intervenor in the same federal lawsuit. Click here for the article that posted in The Indiana Lawyer.)

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