The Thirsty Beagle: Oklahoma court denies liquor association lawsuit

Thursday, August 24, 2017

Oklahoma court denies liquor association lawsuit

A federal judge in Oklahoma City today ruled against a lawsuit that challenged State Question 792, leaving the law in tact as it was approved by state voters in November 2016.

State Question 792 -- approved by more than 65 percent of voters -- reforms Oklahoma's alcohol laws, amending the state constitution and introducing a large amount of significant changes to the state's Prohibition-style regulatory set-up.

Primarily, SQ 792 will serve to eliminate the sales distinction between high- and low-point beer in Oklahoma and allow grocery and convenience stores to sell wine and high-point beer. On the whole, the changes will affect all levels of the alcohol industry, from production, to distribution to retail sales.

Liquor store owners argued, in part, that they would be treated unfairly under SQ 792 because grocery and convenience stores would receive unfair business advantages. This, they argued, violated the Equal Protection Clause of the 14th Amendment of the U.S. Constitution. They argued they should be held on a level playing field with grocery and convenience stores because they are similarly situated.

They sued in December, asking the court for an injunction to block the law from going into effect.

In a 13-page opinion issued today in federal court in Oklahoma City, District Judge Robin Cauthron ruled that the Retail Liquor Association of Oklahoma had "not upheld the burden ... for their requested declaratory relief."

There was, of course, a rather glaring problem with the liquor store argument: Liquor stores have a significant distinction that naturally makes them not similarly situated with grocery and convenience stores. That being the ability to sell liquor.

The court pointed this out in the opinion.

"Plaintiffs essentially argue that because Oklahoma has drawn the dividing line for regulation between all beverages containing more or less than 3.2% ABW in the past, any change to the division is unconstitutional," the ruling states. "This simply cannot be the case."

"...the Court finds Plaintiffs’ argument that Oklahoma’s history of regulation shows spirits are similarly situated to wine and beer unconvincing."

The court went on to rule that evidence provided by the defendants demonstrating that liquor is different from beer and wine, and showing that 23 other states regulate liquor differently than beer and wine, "makes it rational to conclude all alcohol sellers holding licenses in Oklahoma are not similarly situated."

The liquor stores had challenged several other portions of SQ 792, but the court found cause to reject all claims.

As it stands, SQ 792 is still on track to go into effect on Oct. 1, 2018.

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