Just days after getting turned down for a liquor permit, a huge Maryland-based liquor retailer is suing the Indiana Alcohol and Tobacco Commission, saying the denial was unconstitutional and amounted to economic protectionism.
Indiana Fine Wine & Spirits LLC, an affiliate of national retailer Total Wine & More, filed a complaint March 6 in the U.S. Southern District Court in Indianapolis, saying the state’s ruling violated the U.S. Constitution’s Commerce Clause.
The state liquor commission denied the company a permit on March 3 for a proposed superstore in the old Marsh supermarket at Nora Corners Shopping Center. Its rationale was that state law prohibits it from issuing a retail permit to any company unless at least 60% of the company’s common stock is owned by people who have been Indiana residents for five years.
Total Wine, the nation’s largest liquor retailer with 206 superstores in 24 states, is based in Bethesda, Maryland. It’s a private company with no known Indiana connections.
In its complaint, the company cites a 7-2 decision by the U.S. Supreme Court last year that struck down a similar residency requirement in Tennessee as unconstitutional.
“The intent and purpose of Indiana’s in-state residency requirements is to protect in-state owners of package stores from economic competition by out-of-state owners,” the complaint said.
Total Wine would be the first out-of-state company to open a liquor store in Indiana since the Supreme Court’s ruling.
The company said it has spent more than $100,000 in architectural fees and other costs in preparation for opening a store at 1460 E. 86th St.
It said it also spent hundreds of hours studying possible locations before deciding on that site, which has “outstanding road visibility, an ample parking field, easy ingress and egress, and a co-tenancy mix, including several national retailers, that will complement one another and provide the typical Total Wine customer an outstanding, one-stop shopping experience.”
The liquor commission declined IBJ’s request for comment on Tuesday morning.
John Krauss, the commission’s vice chairman, said last week that the state was in a “legal quagmire,” with the Supreme Court decision on one hand and the existing state law on the other.
“But until the General Assembly or a court acts to invalidate our existing statute, we have no choice but to deny the permit,” he said.
Total Wine wants to remodel about 26,000 square feet of the former Marsh, according to plans it submitted to the state several weeks ago for a building permit.
The former Marsh space, which measures about 49,000 square feet, went vacant when the now-defunct grocery chain closed the store in April 2017. It filed for bankruptcy a month later.
Discount grocer Aldi opened a store in the space in 2018 but left more than 25,000 square feet empty.
Total Wine typically operates huge liquor superstores that are about five times the size of typical liquor stores currently operating in Indiana.