The Sixth Circuit Court of Appeals has determined that Kentucky has a rational basis for restricting the types of retailers that may be issued licenses to sell liquor and wine, thus ruling that the law does not violate grocers’ equal protection rights. Maxwell’s Pic-Pac, Inc. v. Dehner, Nos. 12-6056, -6057, -6182 (6th Cir., decided January 15, 2014).

A state law adopted in 1939 that today prohibits the issuance of a retail drink license to “any business in which a substantial part of the commercial transaction consists of selling at retail staple groceries or gasoline and lubricating oil,” was interpreted in 1982 by the Alcohol Beverage Control Board in a regulation that defines “substantial part” (10% or greater of the monthly gross sales) and “staple groceries” (foods intended for human consumption other than soft drinks, candy, hot foods, and foods prepared for immediate consumption). Grocers challenged the restrictions on equal-protection, separation-of-powers and due-process grounds. The district court agreed with their equal-protection claim but rejected the others in granting them summary judgment.

Citing the state’s interest in reducing access to products with high alcohol content, the Sixth Circuit concluded that “reasonably conceivable facts support the contention that grocery stores and gas stations pose a greater risk of exposing citizens to alcohol than do other retailers.” The court was especially concerned about drunk driving, minors and people who “object to confronting wine and liquor.” Accordingly, the court reversed the equal protection ruling.

As to the grocer’s claim that allowing an agency to define statutory terms violated the state constitution’s separation-of-powers principle, the court ruled that the statutory language “limits the board’s authority to define the terms of the statute” and thus appropriately limits the administrative board’s discretion. The grocers relied on cases involving criminal statutes to support their void-for-vagueness challenge, and the court rejected the argument because, unlike in the criminal context, the statute here “affects no liberty interest.” Therefore, the court affirmed the lower court’s rulings as to these two issues.


Issue 510

About The Author

For decades, manufacturers, distributors and retailers at every link in the food chain have come to Shook, Hardy & Bacon to partner with a legal team that understands the issues they face in today's evolving food production industry. Shook attorneys work with some of the world's largest food, beverage and agribusiness companies to establish preventative measures, conduct internal audits, develop public relations strategies, and advance tort reform initiatives.

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