Greenspoon Marder Hospitality, Alcohol & Leisure Blog: Case Update

Aug 28, 2019

The inherent tension between the commerce clause and the 21st Amendment continues in the court system.

On August 15th the 5th Circuit Court of Appeals heard arguments in Wal-Mart Stores Inc. et al. v. Texas Alcoholic Beverage Commission et al.

The case concerned a specific type of retail license, called P licenses, which permit package liquor sales. The permit is offered to privately corporations only – public companies are explicitly prohibited from holding P licenses.

Wal-Mart brought an action against Texas Alcohol Beverage Commission (TABC) claiming that Texas law 22.16 violated the commerce clause and the equal protection clause of the US Constitution.

TABC relied on its authority under section 2 of the 21st Amendment claiming that the state had the authority to regulate the transport, sale and service of alcohol beverage within its borders.

The lower court ruled that the ban against public corporations had a discriminatory purpose and was a burden on interstate commerce. Wal-Mart appealed to the 5th Circuit.

The 5th Circuit, after rigorous analysis determined that even though Texas had a history of past discriminatory measures applied to beverage alcohol, because the ban prohibited in-state and out of state public companies from holding P licenses, that ban, on its face, is not violative of the commerce clause and remanded the case for further consideration under a Pike analysis (as well as other areas)(Pike v. Bruce Church, Inc. 397 U.S. 137, 142 (1970). The circuit court suggest that under Pike, the lower court should consider whether the law burdens interstate commerce, whether there is a legitimate local interest, and when both are present, if the extent of the burden should be tolerated based on the local interest involved.

The final outcome of this case is difficult to predict. On it’s face it does stand for the proposition that perceived protectionist beverage alcohol legislation will be increasingly confronted by stakeholders both on the legislative floor and in the Federal Courts.

Click here to view my recent Law360 article discussing this case.

About Greenspoon Marder

Greenspoon Marder LLP is a full-service law firm with over 240 attorneys and more than 20 office locations across the United States. With operations from Miami to New York and from Denver to Los Angeles, our firm attracts some of the nation’s top talent in key markets and innovation hubs. Our core practice areas include Real Estate, Litigation, and Transactional Services, complemented by the capabilities of a full-service firm. Greenspoon Marder has upheld a spot on The American Lawyer’s Am Law 200 as one of the top law firms in the U.S. since 2015, and our goal is to provide exceptional client service by developing a thorough understanding of each client’s business needs and objectives in order to provide strategic, cost-effective solutions.

MEDIA CONTACT

Natalie Villanueva, Director of Marketing
954.333.4308 | natalie.villanueva@gmlaw.com

This Greenspoon Marder LLP Client Alert is issued for informational purposes only and is not intended to be construed or used as general legal advice nor a solicitation of any type. Please contact the author(s) or your Greenspoon Marder LLP contact if you have any questions regarding the currency of this information. The hiring of a lawyer is an important decision. Before you decide, ask for written information about the lawyer’s legal qualifications and experience.

Next Previous

News

Greenspoon Marder Hospitality, Alcohol & Leisure Blog: Case Update

Share

Subscribe for
News & Events

News & Events

News & Events

News

Greenspoon Marder Hospitality, Alcohol & Leisure Blog: Case Update

Share

Subscribe for News & Events

News & Events

News & Events

Subscribe for
News & Events