ILNews

Ice cold beer? Not here

Back to TopCommentsE-mailPrintBookmark and Share

Hoosiers walking into a convenience store in Oklahoma are able to do something they cannot do in Indiana – reach into the cooler and get a cold beer.

An attempt to change the Indiana statute that prohibits gas stations and grocery stores from selling beer cold was put on ice in June when a federal court ruled the law that restricts beer sales is rational. Just like the foam rising in a freshly poured mug of beer, cries of frustration arose from consumers after the decision was handed down, asking why their home state has such seemingly outdated alcohol laws.

However, attorneys familiar with the beverage industry say Indiana is not quite the outlier some residents think it is. All states have laws regulating the distribution and sale of alcohol that are unique and what some might consider ridiculous.

Oklahoma is an example. Hoosiers who look closely at that cold bottle of beer will notice it is not a regular full-strength brew. Instead, convenience stores in the Sooner State can only sell so-called “near beer” – beer that contains 3.2 percent alcohol.

Some states have requirements that allow only residents to hold alcohol permits, and other states have dry counties where the sale of all alcohol is prohibited. Residents in certain states can buy spirits like bourbon and gin only in liquor stores while those in neighboring states cannot buy alcohol on Sunday. Eighteen states are control states, meaning the state government owns and operates the liquor stores.

The roots of these laws can be traced to the repeal of Prohibition. When the 21st Amendment was ratified, states were allowed to design their own regulatory schemes. Since then, the federal government has turned over the primary authority to states.

kogut-anthony-mug Kogut

“Usually there are historical reasons why the laws developed as they did,” said Anthony Kogut, attorney with the Michigan firm of Willingham & Coté P.C. States have “developed fairly complicated regulatory systems and tampering with a piece of it creates the danger of upsetting the balance and impacting the interests of people who structured their business in the highly regulated industry.”

Brewing a balance

The convenience stores acknowledge other states have nuanced alcohol laws, but they contend that only Indiana regulates beer by temperature. The group filed a complaint in the U.S. District Court for the Southern District of Indiana, Indiana Petroleum Marketers and Convenience Store Association, et al. v. Alex Huskey, Chairman of the Indiana Alcohol and Tobacco Commission, 1:13-CV-000784, challenging the state’s alcohol laws on constitutional grounds.

They argued that Indiana’s law is irrational, in part, because it is not keeping alcohol from minors. The plaintiffs not only pointed out that children and teenagers already see the beer stocked in convenience and grocery stores, they also highlighted statistics that show liquor stores have a higher rate of selling alcohol to minors.

This argument addresses the balance states try to strike with their alcohol laws.

States make alcohol available – but not too available. No state has a policy of promoting overuse by making liquor, beer and wine widely accessible. Instead, states put up hurdles so alcohol is not available on every street corner which, the theory goes, reduces the impulse to buy.

“Because the laws have been so effective, people forget how much of a problem alcohol can be,” Kogut said. “It is still a problem but not like before Prohibition and before strong regulation.”

U.S. District Court Chief Judge Richard Young was not convinced by the plaintiffs’ argument. He described the statistics “problematic” and said the conclusion that convenience and grocery stores along with pharmacies would not sell to minors if cold beer was allowed was “pure speculation.”

maley-john-mugNew013013 Maley

Young also referred to Indiana balancing availability with oversaturation. In his ruling, he found the state “could have rationally believed” that limiting the sale of cold beer and placing more restrictions on liquor stores than other retailers furthers the goal of curbing underage consumption of alcohol.

Temperance shift

The convenience stores and their trade association are continuing their fight to overturn Indiana’s cold beer law. They have filed a complaint in Marion County, charging the regulation violates the state constitution, and they have appealed Young’s decision to the 7th Circuit Court of Appeals on the grounds that legal and procedural errors occurred.

“The undisputed facts are that Indiana convenience stores are compliant retailers of beer and wine, and that there is no rational basis to allow liquor stores to hold a monopoly on cold beer, particularly when their compliance rate with Indiana alcohol laws is so poor,” said plaintiffs’ attorney John Maley, partner at Barnes and Thornburg LLP.

Patrick Tamm, president and CEO of the Indiana Association of Beverage Retailers, reiterated that states have the right to craft their own alcohol laws. Alcohol, unlike peanut butter, eggs, bread or milk, has significant consequences when misused so its sale should be restricted.

Tamm charged convenience stores knew the laws when they decided to do business in Indiana but now they are turning to the courts rather than the Legislature for the ability to change their business model.

“They want to sell anything and everything any way they want to sell it,” Tamm said.

The fight in Indiana is an example of how the policy of temperance is instituted.

Max Hess, attorney at Taylor Feil Harper Lumsden & Hess in Atlanta, Ga., said temperance has shifted over the years to the free enterprise system, and vested interests have been solicited to limit the availability of alcohol. By reining in the number of outlets where alcohol is available and by issuing permits, states have cultivated vested interests to implement public policy.

tamm-patrick-mug Tamm

The convenience stores could have a difficult time convincing the courts to limit the latitude that has been given to Indiana to regulate alcohol as it sees fit. Two federal appellate courts have found that other states have legitimate interests in restricting alcohol in the unique ways that they do.

The 6th Circuit Court of Appeals reversed the District Court’s ruling in Maxwell’s Pic-Pac, Inc., et al. v. Tony Dehner, et al., ruling that Kentucky’s law which lets pharmacies – but not grocery stores – stock liquor is a rational way to reduce access to high-alcohol products.

The 8th Circuit Court of Appeals upheld Missouri’s wholesaler residency requirement in Southern Wine and Spirits of America, Inc., et al. v. Division of Alcohol and Tobacco Control, et al. The wholesaler, Southern Wine and Spirits, challenged the state’s law that allows only “resident corporations” (businesses that have been incorporated under Missouri laws and have officers and directors who legally reside in the Show Me State) to sell alcohol to retailers.

States are fiercely protective of their own alcohol laws, Kogut said, and they do not let the laws of other states affect how they regulate the intoxicants.

And with the courts affirming the patchwork of laws, Hoosiers may have to be satisfied with the warm beer they get at the convenience store.•

ADVERTISEMENT

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in Indiana Lawyer editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by

facebook - twitter on Facebook & Twitter

Indiana State Bar Association

Indianapolis Bar Association

Evansville Bar Association

Allen County Bar Association

Indiana Lawyer on Facebook

facebook
ADVERTISEMENT
Subscribe to Indiana Lawyer
  1. My daughter was taken from my home at the end of June/2014. I said I would sign the safety plan but my husband would not. My husband said he would leave the house so my daughter could stay with me but the case worker said no her mind is made up she is taking my daughter. My daughter went to a friends and then the friend filed a restraining order which she was told by dcs if she did not then they would take my daughter away from her. The restraining order was not in effect until we were to go to court. Eventually it was dropped but for 2 months DCS refused to allow me to have any contact and was using the restraining order as the reason but it was not in effect. This was Dcs violating my rights. Please help me I don't have the money for an attorney. Can anyone take this case Pro Bono?

  2. If justice is not found in a court room, it's time to clean house!!! Even judges are accountable to a higher Judge!!!

  3. The small claims system, based on my recent and current usage of it, is not exactly a shining example of justice prevailing. The system appears slow and clunky and people involved seem uninterested in actually serving justice within a reasonable time frame. Any improvement in accountability and performance would gain a vote from me. Speaking of voting, what do the people know about judges and justice from the bench perspective. I think they have a tendency to "vote" for judges based on party affiliation or name coolness factor (like Stoner, for example!). I don't know what to do in my current situation other than grin and bear it, but my case is an example of things working neither smoothly, effectively nor expeditiously. After this experience I'd pay more to have the higher courts hear the case -- if I had the money. Oh the conundrum.

  4. My dear Smith, I was beginning to fear, from your absense, that some Obrien of the Nanny State had you in Room 101. So glad to see you back and speaking truth to power, old chum.

  5. here is one from Reason magazine. these are not my words, but they are legitimate concerns. http://reason.com/blog/2010/03/03/fearmongering-at-the-splc quote: "The Southern Poverty Law Center, which would paint a box of Wheaties as an extremist threat if it thought that would help it raise funds, has issued a new "intelligence report" announcing that "an astonishing 363 new Patriot groups appeared in 2009, with the totals going from 149 groups (including 42 militias) to 512 (127 of them militias) -- a 244% jump." To illustrate how dangerous these groups are, the Center cites some recent arrests of right-wing figures for planning or carrying out violent attacks. But it doesn't demonstrate that any of the arrestees were a part of the Patriot milieu, and indeed it includes some cases involving racist skinheads, who are another movement entirely. As far as the SPLC is concerned, though, skinheads and Birchers and Glenn Beck fans are all tied together in one big ball of scary. The group delights in finding tenuous ties between the tendencies it tracks, then describing its discoveries in as ominous a tone as possible." --- I wonder if all the republicans that belong to the ISBA would like to know who and why this outfit was called upon to receive such accolades. I remember when they were off calling Trent Lott a bigot too. Preposterous that this man was brought to an overwhelmingly republican state to speak. This is a nakedly partisan institution and it was a seriously bad choice.

ADVERTISEMENT