Utah's Happy Hour Ban: Liquor Lawsuit Filed

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By Stephanie Rabiner, Esq. on July 13, 2011 9:43 AM

A new addition to the state's incredibly limiting liquor laws, Utah's happy hour ban went into effect at the beginning of the month, depriving stressed workers of discounted drinks every day of the week.

In addition to the ban, Utah's SB 314 drastically cuts down on the availability of liquor licenses, issuing them based on the local population and number of police officers.

Of course, someone has sued.

The Utah Hospitality Association (UHA), which represents those with a stake in alcohol, has filed a federal lawsuit against a group of Utah legislators, including the state's governor and attorney general, reports Time.

The suit argues that the happy hour ban, including the prohibition of drink specials, amounts to price fixing under the Sherman Antitrust Act.

It also claims that the unavailability of liquor licenses, which Time reports have plummeted to less than 20% than those requested, are an unreasonable restraint of trade.

Though it's a bit unclear from the UHA's complaint, their basic argument is that SB 314 is preempted by federal antitrust laws, and is therefore unenforceable.

Previously, the Supreme Court has said that a "state statute is not preempted by the federal antitrust laws simply because the state scheme might have an anticompetitive effect."

In more simplistic terms, Utah's new liquor rules are only preempted by federal antitrust law if they are an unreasonable restraint of trade.

The unreasonableness of most practices is analyzed by the rule of reason, with a court taking into consideration the extent of anticompetitive impact, and any procompetitive justifications.

It's unclear just where the happy hour ban will fall on this spectrum, but keep in mind that Massachusetts has had a similar law in effect since 1984.

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