Tennessee Whiskey Maker Challenges Storage Law
Diageo Americas Supply, Inc. has filed a declaratory judgment action against the Tennessee Alcoholic Beverage Commission director challenging the constitutionality of a 1937 law that requires licensed alcohol beverage makers in the state to store their products “only within the county authorizing the operation or in a county adjacent to the county authorizing the manufacturing operation, and such possession shall be limited to storage facilities of such manufacturer” (Storage Law). Diageo Americas Supply, Inc. d/b/a George A. Dickel & Co. v. Bell, No. 14-0873 (M.D. Tenn., filed March 28, 2014).
Alleging that the law has never been enforced, the complaint includes the defendant’s March 20 letter warning the company that it was in violation of the Storage Law because it “is storing product (manufactured/distilled alcoholic beverages) produced at its Tullahoma, Tennessee, distillery in warehouses located in Louisville, Kentucky.” According to the company, most of its distilled alcohol beverages are stored on-site in Tennessee, but it has transported “some Distilled Spirits manufactured at its George Dickel Distillery (other than George Dickel® Tennessee Whisky) to a company-owned distillery in Kentucky and stores those Distilled Spirits there.”
The company contends that the law violates its Commerce Clause and Due Process rights under the U.S. Constitution, arguing that it would have to incur costs to move the Kentucky-stored spirits back to Tennessee, perhaps requiring the construction of additional storage capacity or a reduction in its manufacturing output in Tennessee with a consequent loss of jobs in the state. According to the complaint, the law “prevents Dickel from transporting its products out-of-state for storage and accordingly prevents the movement of commercial goods in interstate commerce.” Seeking declaratory and injunctive relief, the company also claims that the law “mandates differential treatment of similarly-situated licensees who manufacture alcohol beverages in Tennessee.”
Issue 519
