Dallas-based Deep Ellum Brewery has filed a federal lawsuit against the Texas ABC claiming that the state’s alcohol laws unconstitutionally discriminate against certain alcohol manufacturers. Matthew McLaughlin gives a good summary, but the gist is that while brewpubs, distilleries, and wineries in Texas have the ability to sell alcohol direct-to-consumers, other alcohol manufacturers such as Deep Ellum do not have that privilege.
This is similar to the situation in Alabama, so it has piqued our interest.
Does the Texas lawsuit have strong merit?
That will probably take the court system some time to figure out. Historically, state alcohol laws were believed to be somewhat-exempt from other portions of the US Constitution due to the special status afforded to them under the 21st Amendment. However, the Supreme Court has more recently corrected what it considered some state overreach in this area.
The critical turning point on this came from the Granholm decision of 2005, which overturned two state laws in Michigan and New York. To paraphrase, the court stated that although the 21st Amendment gives states discretion in developing alcohol laws, that discretion cannot be at the expense of the dormant commerce clause of the United States Constitution. In essence, the 21st Amendment does not invalidate the rest of the Constitution when it comes to alcohol.
Whether or not that will extend to the Equal Protection Clause, and whether or not the Equal Protection Clause is being violated by this Texas law, is a question that is way above my expertise.
Will someone in Alabama sue under the same theory?
The Alabama Brewers Guild has no plans to participate in any lawsuit against the state at this time.
Could the Texas lawsuit have implications in Alabama?
Absolutely, although it will likely be some time before those implications are realized or understood.
If Deep Ellum Brewery is successful, it may set a precedent that states cannot discriminate against different classes of alcohol manufacturers unless there is a compelling government interest in doing so. If they are not successful, it probably doesn’t really change anything.
However, the legislative reaction to such a precedent may be unfavorable. In 2003, the Alabama Supreme Court decided that certain laws related to taxation were discriminatory against out-of-state wineries. The legislature reacted by making it harder for everyone rather than easier for everyone, to the detriment of local wineries.
So if and when the Texas lawsuit is resolved, this organization may re-evaluate the situation. For now, however, we remain committed to using the legislative process to update policy in Alabama, and we will continue working with the Alabama Alcoholic Beverage Study Commission in their work at making recommendations to the legislature.
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