TEXAS EX-RESIDENCY LAW MAY OPEN THE DOOR BEYOND SOUTHERN
As WSD reported last month, Texas Gov. Rick Perry signed a bill that bars wine and spirits package stores from shipping to consumers and on-premise accounts anywhere in the state, effective September 1. Under SB 1229, package stores will only be able to deliver in the counties where they are located. We see this as a justification for keeping out-of-state retailers from entering the state once and for all since Texas package stores can no longer deliver across county lines.
In another ruling, a Texas federal court did away with a law that required owners of a distributorship (or 51% of the company) to live in the state for at least a year before obtaining a wholesaler license. That law is no longer applicable on the grounds that it is in violation of the Commerce Clause. After the ruling was made, out-of-state retailers immediately filed notice of the decision in Dallas, where they are currently suing. We think the dissolution of the residency requirement may help them in their lawsuit.
The Specialty Wine Retailers Association filed a lawsuit last year that claims Texas is in violation of the Interstate Commerce Clause by not allowing out-of-state retailers to ship into the state. Now that wine and spirits wholesalers no longer have to reside in Texas to hold a distribution license, out-of-state retailers could argue that it’s unfair to prevent them from acquiring a direct shipping license on the same grounds.
Republic and Glazer’s are asking the federal judge overseeing the case to do away with the agree-to preliminary injunction between the state and the SWRA that prohibits regulators from enforcing a ban on direct wine shipping from out-of-state retailers. The wholesalers issued six claims as to why the preliminary injunction is harmful to consumers and the state, which include tax collections, regulations and underage drinking.
Strangely enough, the state has had a hard time picking sides. Assistant Attorney General James Todd, which is a co-defendant alongside Glazer’s and Republic, is clearly anti-wholesaler and seems bent on overthrowing the three-tier system.
It’s all very interesting stuff and something that we’ll be watching closely.
In another ruling, a Texas federal court did away with a law that required owners of a distributorship (or 51% of the company) to live in the state for at least a year before obtaining a wholesaler license. That law is no longer applicable on the grounds that it is in violation of the Commerce Clause. After the ruling was made, out-of-state retailers immediately filed notice of the decision in Dallas, where they are currently suing. We think the dissolution of the residency requirement may help them in their lawsuit.
The Specialty Wine Retailers Association filed a lawsuit last year that claims Texas is in violation of the Interstate Commerce Clause by not allowing out-of-state retailers to ship into the state. Now that wine and spirits wholesalers no longer have to reside in Texas to hold a distribution license, out-of-state retailers could argue that it’s unfair to prevent them from acquiring a direct shipping license on the same grounds.
Republic and Glazer’s are asking the federal judge overseeing the case to do away with the agree-to preliminary injunction between the state and the SWRA that prohibits regulators from enforcing a ban on direct wine shipping from out-of-state retailers. The wholesalers issued six claims as to why the preliminary injunction is harmful to consumers and the state, which include tax collections, regulations and underage drinking.
Strangely enough, the state has had a hard time picking sides. Assistant Attorney General James Todd, which is a co-defendant alongside Glazer’s and Republic, is clearly anti-wholesaler and seems bent on overthrowing the three-tier system.
It’s all very interesting stuff and something that we’ll be watching closely.
posted at 12:48 PM
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