COA affirms finding liquor stores violated rules on home delivery of wine

March 19, 2015

The Indiana Court of Appeals reinstated the Indiana Alcohol and Tobacco Commission’s final order fining a northern Indiana liquor store company for using common carriers to transport wine to customers, which is a violation of its liquor permit.

The ATC issued its final order in February 2012 that approved recommendations by an administrative law judge to fine Lebamoff Enterprises Inc. $1,000 for the six citations which alleged it improperly used common carriers to transport wine to customers. A suspension of Lebamoff’s permit was deferred as long as it did not accrue any further violations during a one-year period.

Lebamoff sought judicial review of the ATC’s final order, arguing the state agency’s interpretation of I.C. 7.1-3-10-7 was unreasonable. In 2014, the trial court issued an order finding the ATC’s interpretation of that statute was incorrect and that ATC’s final order amounted to an improper attempt to exercise the ATC’s rulemaking function.

In Indiana Alcohol and Tobacco Commission v. Lebamoff Enterprises, Inc., 49A02-1408-MI-529, the COA examined Title 7.1 and all the various liquor permits the state can issue. Lebamoff has a liquor dealer’s permit, which allows it to sell liquor to customers for consumption off the licensed premises. It requires that delivery of liquor to a customer’s residence, office or designated location may only be performed by the permit holder or an employee who holds an employee permit.

“The express language of Indiana Code section 7.1-3-10-7(c) indicates that the General Assembly intended that a home delivery of wine under this section was limited to delivery by the permit holder, i.e., the owner, partner, or manager of the package liquor store, or an employee of the permit holder, so long as the employee holds an employee permit. This language does not appear to allow for delivery of the wine by any other individual who might be acting as an agent for the permit holder,” Judge Cale Bradford wrote. “If the General Assembly had intended for Indiana Code section 7.1-3-10-7(c) to allow for home delivery by a common carrier, it could have crafted the language of this section to specifically allow for such delivery as it did in Indiana Code section 7.1-3-26-9. We therefore conclude that the ATC’s interpretation of Indiana Code section 7.1-3-10-7(c) was reasonable.”

The judges also concluded that the ATC’s order did not reflect an improper attempt to create an agency rule, but rather was a proper exercise of its adjudicatory function. As such, the Court of Appeals reinstated and affirmed the ATC’s final order. The matter is remanded to the trial court with instructions.


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