Cold Beer Sales Dispute Goes to Trial in Indiana Federal Court

****Reiser Legal is not licensed to practice law in Indiana and we cannot provide legal advice with regard to its law. But from time to time we like to comment on things happening to brewers around the globe! So here is some of our feelings on a recent case.****

Screen shot 2014-02-21 at 11.13.19 AMToday’s the last day of a two-day trial in Indiana over rights to sell cold beer in convenience stores. For those not familiar with the state’s alcohol laws, which are among the country’s most restrictive, Indiana allows cold beer sales from traditional package stores and, to a limited extent, breweries themselves. However, grocery stores and convenience stores are prohibited from selling cold beer. This past year, the Indiana Petroleum Marketers and Convenience Store Association filed a federal lawsuit, alleging that Indiana’s laws were unconstitutional. You can read their complaint here.

We’ll see what the Southern District of Indiana does with the case, but from our perspective, the court is likely to uphold Indiana’s laws (even if they do seem a little outdated). In fact, we’re wondering if the whole lawsuit was a roundabout way for convenience stores to persuade the legislature to bite the bullet and make changes this session—but no bill has been introduced that would affect the laws at issue here.

Although Indiana’s laws may not create an ideal business climate for convenience store operators, or grocery stores for that matter, they just don’t involve the kind of disparate treatment the Constitution is concerned about preventing. Notably, the convenience stores are not challenging the law on dormant commerce clause grounds. They couldn’t, in that Indiana’s law here is discriminating against in-state commercial interests, not out-of-state interests. Rather, the lawsuit is all about the Equal Protection clause of the 14th Amendment, and similar protections built into Indiana’s Constitution.

The convenience stores essentially have the difficult task of persuading the court that the cold beer laws are wholly unrelated in any rational way to a legitimate state interest. The trouble is, the law seems to meet this low threshold, at least from a federal perspective. Limiting access to alcohol by structuring the alcohol market, and even completely prohibiting in-state sales of alcohol, are all within a state’s core concerns and protections under the 21st Amendment. Even absent the additional insulation the 21st Amendment gives states, it’s hard to say that eliminating sales of readily drinkable beer at gas stations—sold directly to drivers—is not rationally related to the state’s legitimate interest in keeping intoxicated drivers off the roads.

Whether we all think the law is outdated is immaterial. We’re sure loads of Indiana consumers would be happy to pick up a case of cold beer during a quick grocery store run (on a Sunday for that matter, but we’ll leave Indiana’s restrictive Sunday laws alone for today). Case outcome aside, what will prove really interesting is a read through the various Amici Curiae briefs filed in this case, revealing the positions of some of the most vocal lobbying groups in the state, including package stores. We’ll report back later as the case progresses.

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Massachusetts House Bill 267 Would Affect Brewer-Distributor Relationships

BostonFor craft brewers distributing in Massachusetts, or thinking about it, there’s a bill before the legislature that you’ll want to know about. House Bill 267, if passed, would make it easier for small breweries to change distributors. Right now, Massachusetts law makes it difficult for brewers to make a switch, requiring permission from the Alcoholic Beverages Control Commission that doesn’t always come easily.

Interestingly, the existing law went into effect to protect mom & pop distributors from the whims of the “big guy” beer brands. Now, though, the tide has changed and there are good reasons for revising the law, in favor of letting the contracting parties terminate the agreement when and how their contract specifies. Notably, the bill would also provide an alternative non-contractual route to termination. There’s good reporting on MA H267 from the Boston Globe here, and you can check out the full text of the bill right here.

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Do You Know Your Filing Deadlines? Lessons from AT&T.

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AT&T and its legal team got some bad news last week. For those not yet in the loop, AT&T recently lost a big patent-infringement case and was ordered to pay $40 million. AT&T planned to appeal the verdict (a small price to pay for a better result), but missed the deadline. If you’re interested, here’s the court order denying AT&T an extension of time.

Why do we share this story? Mostly to emphasize the importance of deadlines, in life and especially the law. Specific to our law practice, it segues into a trademark issue we’ve seen come up with increasing frequency when consulting with existing breweries. We’ll flag it here, and save more for a later post.

Many breweries across the country started small a few years back, and now amazing things are happening. It’s awesome. At first, maybe a DIY approach to legal seemed to work, and they took the wise step of successfully registering the brewery’s name as a federal trademark. But, not all breweries are aware that even if they own a successful registration, they must regularly file documents with the United States Patent and Trademark Office to keep protecting those nationwide rights. Registering the trademark puts you in the race, not at the finish line.

For breweries with existing registrations, it’s worth taking a moment to think about those details, and who (if anyone) is watching them. It’s easy to get busy building your brand and growing your business, forgetting about filing deadlines that pop up years and years down the road. That’s why every trademark owner should look into ongoing trademark monitoring services, making absolutely sure those services include flagging future filings (your §8 Declaration of Continued Use), safeguarding the marks you’ve paid to protect.

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I Want My Beer By Delivery Drone!

Beer delivered by drone? FAA says no. Dreams immediately dashed everywhere.
Beer delivered by drone? FAA says no. Dreams immediately dashed everywhere.

Put this piece of beer news in the bizarre column. We may not have jet packs yet, but drones are a real thing. So real that a Minnesota brewery, Lakemaid, has been testing a drone-delivery system that would drop off frosty ones to ice fishermen in their isolated shacks. Cheers to Lakemaid for the ingenuity. Unfortunately, their YouTube video (worth a watch, right here) caught the Federal Aviation Administration’s attention. (Wait, the FAA watches YouTube…?)

The FAA has grounded Lakemaid’s drone—guess it’s illegal to use a drone for commercial purposes. Damn! The feds ruin all the fun! Oh well, hitting headlines can’t hurt Lakemaid’s bottom line. Cheers!

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Washington Legislators Consider Bottle Bill to Encourage Recycling

Washington's Bottle Bill is aimed at reducing sights like this one. If passed, it would affect the brewing industry.
Washington’s Bottle Bill aims to reduce sights like this. If passed, it would affect the brewing industry.

As environmentally conscious as leaders in the brewing industry are, deep down, we all know that bottles and packaging don’t always wind up in recycling bins. For Washington brewers, however, a “Bottle Bill” initiative before legislators is poised to help make sure bottles do end up where they belong.

Before we discuss it, a bit of history. Back in the 1970s, states like Washington and Oregon took two different paths in efforts to reduce waste and encourage recycling. Washington elected to tax big-time waste producers, generating $7 million or so a year in revenues that go toward recycling-awareness efforts. Oregon, however, went the route now commonly known as the Bottle Bill. The state encourages recycling by paying consumers to return bottles to certain outlets. Some stats estimate that this policy can cut litter anywhere between 34 and 64 percent. That’s a dent.
Senate Bill 6498 is Washington’s proposed Bottle Bill, which would offer a redemption rate of at least 5 cents per bottle. Dealers, which “means every person in this state who engages in the sale of beverages in beverage containers to a consumer” would be required to buy back bottles, as long as they fit certain criteria—being the kind the dealer already sells, are clean, etc. Bottles would also need to be clearly embossed, stamped, or labeled with the redemption rate.
We’ll see how far SB 6498 makes it down the pike, and what impact that means on day-to-day ops at the brewery. Wherever it lands, we do applaud legislative efforts that take our environment into account.

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