TEXAS COURT SIDESTEPS DISTRIBUTORS
In an ominous development for wholesaler advocates, a Texas court signed a preliminary injunction that makes it legal for out-of-state beer and wine RETAILERS to ship to adults in the state without a permit.
Northern Texas District Judge John McBryde wrote the order, which states that “out-of-state retailers using permitted carriers may ship wine to adult Texas consumers without applying for or obtaining a permit.” That means out-of-state retailers can ship wine to consumers anywhere in the state, even in dry areas, something even in-state retailers had always believed was illegal. Even wineries outside the state must obtain a permit to ship to Texas consumers, so this injunction is extremely surprising.
“It’s hard for me to believe that any court would say that the state can’t regulate any retailers. It’s unimaginable,” said Mike McKinney, president of the Wholesale Beer Distributors of Texas, to Beer Business Daily this morning.
The original lawsuit, brought by the Specialty Wine Retailers Association, contends that Texas’ requirement that retailers reside in Texas in order to have a license is unconstitutional under Granholm. We’ve since learned that Glazer’s has issued a motion to intervene in the case, arguing that this order would essentially give out-of-state retailers an advantage, as in-state retailers must obtain their product through the three-tier system. It’s the exact same argument in Granholm, only in reverse.
However, one source points out that maybe the harsh nature of the injunction was actually intentional, even encouraged by state regulators, as it would force the issue to be resolved in a full fledged trial, which would test the state’s alcohol laws completely, rather than an easy compromise reached by all parties, which could invite more litigation down the road.
Northern Texas District Judge John McBryde wrote the order, which states that “out-of-state retailers using permitted carriers may ship wine to adult Texas consumers without applying for or obtaining a permit.” That means out-of-state retailers can ship wine to consumers anywhere in the state, even in dry areas, something even in-state retailers had always believed was illegal. Even wineries outside the state must obtain a permit to ship to Texas consumers, so this injunction is extremely surprising.
“It’s hard for me to believe that any court would say that the state can’t regulate any retailers. It’s unimaginable,” said Mike McKinney, president of the Wholesale Beer Distributors of Texas, to Beer Business Daily this morning.
The original lawsuit, brought by the Specialty Wine Retailers Association, contends that Texas’ requirement that retailers reside in Texas in order to have a license is unconstitutional under Granholm. We’ve since learned that Glazer’s has issued a motion to intervene in the case, arguing that this order would essentially give out-of-state retailers an advantage, as in-state retailers must obtain their product through the three-tier system. It’s the exact same argument in Granholm, only in reverse.
However, one source points out that maybe the harsh nature of the injunction was actually intentional, even encouraged by state regulators, as it would force the issue to be resolved in a full fledged trial, which would test the state’s alcohol laws completely, rather than an easy compromise reached by all parties, which could invite more litigation down the road.
posted at 10:45 AM
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