The Lane Report
LOUISVILLE, Ky. (Aug. 14, 2012) — A federal judge ruled Monday that prohibiting Kentucky grocery stores and gas stations from applying for retail package liquor and wine licenses — while allowing other establishments to do so — is unconstitutional.
State laws and administrative regulations preventing grocery stores from obtaining licenses to sell package liquor and wine is a violation of the Equal Protection Clause of the 14th Amendment of the U.S. Constitution, said Judge John G. Heyburn II in his order, filed Monday in U.S. District Court for the Western District of Kentucky in Louisville.
The Food With Wine Coalition, an organization established in 2007 by several large and small Kentucky retail grocery, supermarket and convenience stores, filed the lawsuit last year challenging Kentucky’s statutory prohibition of the sales in grocery stores and gas stations. The defendants are Tony Dehner, commissioner of the Kentucky Department of Alcoholic Beverage Control, and Danny Reed, distilled spirits administrator of the Kentucky Department of Alcoholic Beverage Control.
The coalition was represented by Wyatt, Tarrant & Combs, which has offices in Lexington and Louisville.
“We are pleased that this decision puts all Kentucky retailers on a level playing field insofar as the ability to apply for retail wine and distilled spirits is concerned,” said attorney Steve Pitt. “Judge Heyburn’s well-reasoned opinion leaves no doubt that a Kentucky statute that has discriminated against grocers for over 60 years violates our Constitution.”
There is no basis for distinguishing among retailers and permitting all retailers except for grocers and fuel sellers to apply for the limited number of available package liquor and wine sales licenses, the judge said.
[pullquote_left]“Judge Heyburn’s well-reasoned opinion leaves no doubt that a Kentucky statute that has discriminated against grocers for over 60 years violates our Constitution.” — Attorney Steve Pitt. [/pullquote_left]
“The Court finds no logical explanation for the classification of grocers as community gathering centers, but not other retailers, like drugstores,” Heyburn said is his memorandum opinion. “Nor can the Court think of a rational relation between what apparently makes a store a community gathering center — substantial sales of groceries versus sales of non-food necessities — and whether that store may sell every type of alcoholic beverage, or only beer. The State gives no plausible reason for the distinction.”
Heyburn said he could only conclude that the legislature wanted to limit liquor sales in general, “and it did so by arbitrarily distinguishing grocers from all other retailers.”
The Food With Wine Coalition members believe “that as the only retail channels in Kentucky specifically excluded by law from applying for and obtaining package wine and spirits licenses, grocery and fuel retailers, (we) were being unfairly discriminated against and excluded from participating in a legal and competitive marketplace without a rational basis for the exclusion,” the group said in a statement Tuesday.
While other establishments — including drug stores — have long been allowed to apply for and obtain wine and spirits licenses, grocery and fuel retailers have been treated unequally and unfairly, the grocers group said.
“The court’s ruling today vindicates the members’ belief in the unjustifiably discriminatory nature of the state statute,” the statement reads.
Heyburn said his order is not final and put off its enforcement until other issues can be resolved. A meeting to deal with remaining loose ends will be scheduled.