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Convenience store association says cold beer ban discriminatory

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Along with the usual reasons including giving consumers more options, providing price competition and sparking new investment in the state, Indiana convenience store owners have added a new argument to their push to sell cold beer – it’s their constitutional right.
 

beer-cooler-15col.jpg Scot Imus (left), executive director of the Indiana Petroleum Marketers and Convenience Store Association, and Jay Ricker of Ricker Oil Co., are advocating that convenience stores be allowed to stock beer in their coolers. (IL Photo/ Perry Reichanadter)

Three gas marts have joined the Indiana Petroleum Marketers and Convenience Store Association to file a complaint in federal court, charging that the state’s current practice of regulating beer by temperature is arbitrary and leads to discriminatory treatment that violates state and federal constitutions.

The complaint, Indiana Petroleum Marketers and Convenience Store Association, Thorntons, Inc., Ricker Oil Company, Inc., Freedom Oil, LLC and Steve Noe v. Alex Huskey, in his official capacity as chairman of the Indiana Alcohol Tobacco Commission, The Indiana Alcohol and Tobacco Commission and The State of Indiana, 1:13-CV-0784, was filed May 14 in the U.S. District Court for the Southern District of Indiana.

For nearly the last five years, the Indiana Petroleum Marketers and Convenience Store Association has lobbied the Legislature unsuccessfully to be able to sell cold beer. Now the organization is turning to the courts.

Changing alcohol laws through means other than the General Assembly is not uncommon, said Scot Imus, the association’s executive director.

As an example, he pointed to the 1963 bulletin issued by the Indiana Alcoholic Beverage Commission that authorized liquor stores to sell cold beer. The Indiana Supreme Court upheld the cold beer sales in 1964, and the Legislature finally followed suit when it incorporated the language of the bulletin into the 1979 Acts.

However, Attorney General Greg Zoeller maintains alcohol laws are the purview of the General Assembly rather than the judiciary. The attorney general’s office is representing the ATC and defending the statute, which as Zoeller pointed out, is the current decision of the elected members of the Legislature.

“This subject has been debated in the legislature for a number of years and it will be the state’s position that the legislature is the proper forum for any changes to our laws and not the courts,” Zoeller stated May 14 in response to the complaint.

Constitutional grounds

In their complaint, the Indiana plaintiffs focus on the single issue of whether the regulation of beer by temperature is constitutional.

“We are the only state in the union regulating who can sell beer based on temperature,” said John Maley, Barnes & Thornburg LLP partner, who represents the plaintiffs. “There is no rational basis for this 50-year-old disparate treatment, particularly when liquor stores adjoining the convenience stores can sell chilled beer and adjoining convenience stores can sell only warm beer but can sell chilled higher-content drinks such as wine.”

The group asserts the state’s limitations on sales of cold beer violate the equal protection clause and the equal privileges clause of the U.S. Constitution. Also, the filing charges Indiana’s practices violate the equal protection clause of the state’s constitution.

Finally, the complaint contends that the law also violates Article 1, Section 1 of the Indiana Constitution.

This section echoes the Declaration of Independence in its provision, noting that all people have the inalienable rights of life, liberty and the pursuit of happiness. The convenience store association then points to the Indiana Supreme Court decision in Herman v. State, 8 Ind. 545, 558 (Ind. 1855), which determined that “the right of liberty and pursuing happiness secured by the constitution, embraces the right, in each compos mentis individual of selecting what he will eat and drink.”

The complaint by the Indiana retailers comes several months after a similar group in Kentucky was successful in making their argument against a state statute. Those plaintiffs charged that barring grocery and convenience stores from selling liquor and wine while permitting drugstores and others to do so is differential treatment that violates the equal protection provisions of the U.S. and Kentucky constitutions.

In Maxwell’s Pic-Pac, Inc. v. Dehner, 887 F.Supp.2d 733 (2012), the U.S. District Court Western District of Kentucky at Louisville agreed.

“Here the attenuated or non-existent relationship between the Statute’s classification and any number of potential legislative goals leaves the Court with no other conclusion than that the Statute offends the Equal Protection Clause and, for that reason, must be struck down as unconstitutional,” Judge John Heyburn II wrote for the court.

The defendants in the Indiana case have until July 5 to respond to the complaint. A pretrial conference has been scheduled for July 24 before U.S. Magistrate Judge Debra McVicker Lynch.

To John Livengood, president and CEO of the Indiana Association of Beverage Retailers, the pivot to the judicial branch is the equivalent of a Hail Mary pass by a team that could not get to the 20-yard line.

States have the right under the 21st Amendment of the U.S. Constitution to make laws regarding how alcohol is sold, Livengood said. Consequently, he believes the convenience stores have an uphill battle ahead.

Legislature will act

Under Indiana law, package liquor stores with a liquor dealer’s permit can sell warm or cold: liquor, beer, wine and malt beverages. Yet, they cannot offer much beyond that other than tobacco products, bar supplies and lottery tickets.

Convenience stores, defined as selling goods that may include milk, bread, soda, snacks and automotive fuel, are allowed to sell alcohol under a beer dealer’s permit. Indiana statute prohibits holders of beer dealer’s permits to offer beer that has been iced or cooled.

Changing the Indiana Code to enable more retailers to sell beer cold always comes back to the basic question of “What is good public policy?” said Sen. Ron Alting.
 

alting Alting

The Lafayette Republican is the current chair of the Senate Public Policy Committee and served in a leadership position on the Interim Study Committee on Alcoholic Beverage Issues during the summers of 2008 and 2009.

In the end, the committee unanimously recommended to the General Assembly that only package liquor stores be allowed to sell beer cold.

“I just don’t buy this that we’re living in prehistoric times here,” Alting said, referring to a criticism of Indiana’s alcohol laws.

In fact, he said the businesses that are complaining do not realize how good they have it under current statute and, he warned, they should be careful what they wish for.

While some legislators have introduced bills easing the limits on cold beer sales, other legislators have floated bills that added restrictions on grocery stores, convenience stores and pharmacies. These attempts would have required the food and drug stores to segregate the alcohol into a separate area where access was restricted to adults 21 and older.

However, Imus said the previous measures proposed in the Statehouse included lifting restrictions on liquor stores. He called it absurd that liquor stores can’t sell limes to go with the Corona beer.

Livengood countered the loss of cold beer sales would be a devastating blow to Hoosier liquor stores. Other states that have a viable package liquor store industry typically provide something to those entities that is not available to the other retailers, he said. While some states may make liquor and wine sales exclusive to liquor stores, Indiana has chosen to make these stores the proprietor of cold beer.

Alting is doubtful the convenience store owners will prevail in their lawsuit. He sees the state as clearly having the right to regulate alcohol but concedes no one can be certain of what the court will decide.

And if the court agrees with the convenience store association, Alting said the Legislature will not just sit back and pop a cold one.

“It would bring a lot of bills drafted by a lot of colleagues in the House and Senate,” he said.•

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  1. So that none are misinformed by my posting wihtout a non de plume here, please allow me to state that I am NOT an Indiana licensed attorney, although I am an Indiana resident approved to practice law and represent clients in Indiana's fed court of Nth Dist and before the 7th circuit. I remain licensed in KS, since 1996, no discipline. This must be clarified since the IN court records will reveal that I did sit for and pass the Indiana bar last February. Yet be not confused by the fact that I was so allowed to be tested .... I am not, to be clear in the service of my duty to be absolutely candid about this, I AM NOT a member of the Indiana bar, and might never be so licensed given my unrepented from errors of thought documented in this opinion, at fn2, which likely supports Mr Smith's initial post in this thread: http://caselaw.findlaw.com/us-7th-circuit/1592921.html

  2. When I served the State of Kansas as Deputy AG over Consumer Protection & Antitrust for four years, supervising 20 special agents and assistant attorneys general (back before the IBLE denied me the right to practice law in Indiana for not having the right stuff and pretty much crushed my legal career) we had a saying around the office: Resist the lure of the ring!!! It was a take off on Tolkiem, the idea that absolute power (I signed investigative subpoenas as a judge would in many other contexts, no need to show probable cause)could corrupt absolutely. We feared that we would overreach constitutional limits if not reminded, over and over, to be mindful to not do so. Our approach in so challenging one another was Madisonian, as the following quotes from the Father of our Constitution reveal: The essence of Government is power; and power, lodged as it must be in human hands, will ever be liable to abuse. We are right to take alarm at the first experiment upon our liberties. I believe there are more instances of the abridgement of freedom of the people by gradual and silent encroachments by those in power than by violent and sudden usurpations. Liberty may be endangered by the abuse of liberty, but also by the abuse of power. All men having power ought to be mistrusted. -- James Madison, Federalist Papers and other sources: http://www.constitution.org/jm/jm_quotes.htm RESIST THE LURE OF THE RING ALL YE WITH POLITICAL OR JUDICIAL POWER!

  3. My dear Mr Smith, I respect your opinions and much enjoy your posts here. We do differ on our view of the benefits and viability of the American Experiment in Ordered Liberty. While I do agree that it could be better, and that your points in criticism are well taken, Utopia does indeed mean nowhere. I think Madison, Jefferson, Adams and company got it about as good as it gets in a fallen post-Enlightenment social order. That said, a constitution only protects the citizens if it is followed. We currently have a bevy of public officials and judicial agents who believe that their subjectivism, their personal ideology, their elitist fears and concerns and cause celebs trump the constitutions of our forefathers. This is most troubling. More to follow in the next post on that subject.

  4. Yep I am not Bryan Brown. Bryan you appear to be a bigger believer in the Constitution than I am. Were I still a big believer then I might be using my real name like you. Personally, I am no longer a fan of secularism. I favor the confessional state. In religious mattes, it seems to me that social diversity is chaos and conflict, while uniformity is order and peace.... secularism has been imposed by America on other nations now by force and that has not exactly worked out very well.... I think the American historical experiment with disestablishmentarianism is withering on the vine before our eyes..... Since I do not know if that is OK for an officially licensed lawyer to say, I keep the nom de plume.

  5. I am compelled to announce that I am not posting under any Smith monikers here. That said, the post below does have a certain ring to it that sounds familiar to me: http://www.catholicnewworld.com/cnwonline/2014/0907/cardinal.aspx

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