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Indiana Beer, Wine, and Liquor Battle Continues

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By William Vogeler, Esq. on January 09, 2018 5:57 AM

A legal battle over beer, wine, and liquor licensing has been brewing for years in Indiana.

Monarch Beverage -- the state's largest beer distributor -- won't let go of a state law that prohibits companies from holding permits for both beer and liquor wholesaling at the same time.

After the U.S. Seventh Circuit Court of Appeals ruled, however, one thing is clear: the strange brew battle is not over yet.

Strange Brew

The case of E.F. Transit, Inc. v. Cook began ten years ago when E.F. Transit entered an agreement to transport wine and liquor with Indiana Wholesale. Under the agreement, the transport company would provide services to Indiana Wholesale and Monarch -- which also had an ownership interest in E.F. Transit.

On paper, the proposed trifecta created a conflict under the statute prohibiting interests in beer and liquor. The Indiana Alcohol and Tobacco Commission refused to approve the arrangement.

E.F. Transit sued, saying federal law preempted the state statute. It was not the first time Monarch had challenged the law.

In a related case, Indiana Alcohol and Tobacco Commission v. Spirited Sales, LLC., the state Supreme Court invalidated a license because of "Monarch and Spirited's overlapping ownership."

It's Ripe Now

A trial judge in the E.F Transit case ruled the issue was not ripe, but the Seventh Circuit reversed after the Supreme Court decision. Because of Monarch's interest there, it created a justiciable issue in the E.F. Transit case.

It will not be an easy case for any speakeasy because Monarch lost a similar battle last year. In Monarch Beverage Co. v. Cook, the appeals court upheld the same law against a constitutional challenge.

Monarch had argued the prohibited interest law violated the Equal Protection Clause. The Seventh Circuit said it was rationally related to the government's "interest in encouraging temperance."

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