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21st Amendment again shut out of federal cold-beer suit

February 7, 2014

A federal judge Thursday affirmed a ruling that the Indianapolis-based 21st Amendment package liquor store chain is not entitled to intervene in a federal lawsuit challenging Indiana’s law prohibiting convenience and grocery stores from selling cold beer.

Meanwhile, the challenge to Indiana’s Prohibition-era alcoholic beverage laws could come to a head later this month.

Chief Judge Richard Young of the U.S. District Court for the Southern District of Indiana signed an order affirming a magistrate’s earlier ruling that barred 21st Amendment’s participation in the case. Convenience and grocery store owners claim state laws that bar them from selling cold beer are unconstitutional. They claim violations of the Commerce Clause, the Equal Protection Clause and Indiana’s Equal Privileges Clause.

But 21st Amendment challenged the order because it claims its liquor licenses cost about $144,000 to $475,000, compared to $6,000 for retailers who cannot sell cold beer. On that basis, 21st Amendment argued it had an interest to protect and represent, and that federal court rules permit its participation in litigation that it said could devalue its licenses.

Young declined 21st Amendment’s request to overturn the magistrate’s order. “21st Amendment cannot identify a conflict that suggests the state will not vigorously defend its alcoholic beverage laws. The ultimate goal of this litigation, from the viewpoint of both the state and 21st Amendment, is to uphold the constitutionality of the present statutory scheme.

“The fact that the state’s motivation in defending this action is to uphold the law, while 21st Amendment’s motivation is to protect its business investment, is not a conflict sufficient to rebut the presumption of the state’s adequacy” in defending the suit, Young wrote.

“The magistrate judge found that 21st Amendment’s plans to file a cross-claim against the State that presupposes the court first rules against the state on plaintiffs’ claims would unnecessarily complicate the litigation and threaten to delay its resolution, to the prejudice of the existing parties. The court agrees,” Young wrote.

The case is Indiana Petroleum Marketers and Convenience Store Association, Thornton’s Inc., Ricker Oil Company Inc., Freedom Oil, LLC, Steve E. Noe v. Alex Huskey, in his official capacity as Chairman of the Indiana Alcohol and Tobacco Commission, 1:13-CV-784.

Last month Young set a preliminary injunction hearing for 9 a.m. Feb. 20 in Room 349 of the Birch Bayh Federal Courthouse in Indianapolis. Two days have been set aside for the hearing.

 

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