The Thirsty Beagle: State responds to lawsuit against SQ 792

Thursday, January 19, 2017

State responds to lawsuit against SQ 792

There have been some interesting developments recently in the lawsuit where the trade group representing the state's liquor stores sued to have State Question 792 thrown out.

Most recently, court records show that the case is being transferred from Oklahoma County District Court to federal court. More important to note is that attorneys for the state ABLE Commission earlier this month filed their response to the complaints laid out in the lawsuit.

ABLE is asking a judge to deny the plaintiffs' request for an injunction and to dismiss the lawsuit, arguing that the plaintiffs actually have no valid grounds for relief from the courts.

The defendant (ABLE) laid out several compelling counterarguments, several of which have been made in this space and also in many of the social media fights that have broken out in relation to SQ 792.

First and foremost is the key claim by liquor store owners that Oklahoma's constitutional amendment violates the 14th Amendment of the U.S. Constitution, leading them to be unlawfully treated differently than those with licenses to sell only wine and beer. The defendants call this claim "a flawed premise."

As the response states: "But the Equal Protection Clause demands only that 'all persons similarly situated should be treated alike.' Yet plaintiffs are not similarly situated as those who do not possess licenses to sell spirits because -- unlike all others -- Plaintiffs have been given the privilege by the State to sell spirits."

In another section, you find this:

"Plaintiffs' ... complaint is that the lack of limits on grocery stores will cause a 'rapid influx of retail wine and beer license holders' that will 'threaten the viability of retail spirit licensees,' who must now compete with others to sell wine and beer. But too much competition is not an Equal Protection violation, and plaintiffs retain a key competitive advantage over grocery stores: the privilege of selling spirits. If they truly believe that they will no longer be able to survive because of the license restrictions, they are free to give up their spirits license and obtain as many wine and beer licenses as they please to compete with the rest of the market."

Ouch!

Some other high points from the court filing:

-The plaintiffs used the lawsuit to protest at least one idea they had actually included in their own initiative petition. To wit, the plaintiffs argued that capping sales of non-alcohol items to 20 percent of a store's monthly sales is irrational, even though they suggested such a cap (at 30 percent) in their own initiative petition.

-The 20 percent cap is necessary to stop grocery stores from becoming liquor stores and vice versa, and that provision actually protects retail spirits license holders.

-Plaintiffs challenged regulations on wholesalers and manufacturers included in the amendment, but lack the standing to challenge such regulations because they are neither wholesalers nor manufacturers and are not regulated by those sections of the law.

-The system Oklahoma will employ -- using different regulations for liquor compared to wine and beer -- is already used by nearly half of all states.

-Issuing an injunction is not proper because even if the case were to be litigated, the amendment and related statutes don't go into effect until October 2018, and the plaintiffs would not suffer any harm in the interim status quo situation.

-This: "All of plaintiffs' specific claims of harm lack any evidentiary support. Plaintiffs claim that Article 28A 'threaten(s) the viability of retail spirits licensees such as plaintiffs,' but offer no evidence -- much less clear and convincing evidence -- supporting this bald allegation."

You can read the entire document here -- scroll to the bottom and look for the file titled "Defendant's combined motion to dismiss and response." It's actually a pretty compelling read if you have a few free minutes.

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