Texas Alcohol Law Gets Watered Down by Judge

     AUSTIN (CN) – Change is brewing for booze law in Texas where a federal judge found that certain state restrictions on the alcohol beverage industry are unconstitutional.
     Authentic Beverages Co., Jester King Craft Brewery and Zax LLC sued the Texas Alcoholic Beverage Commission and four of its officials, claiming violations of the First Amendment, the equal protection clause and the commerce clause.
     U.S. District Court Judge Sam Sparks ruled Monday that sections of the Texas Alcoholic Beverage Code and the Texas Administrative Code do restrict free speech.
     The order clears the way for makers of beer, ale and malt liquor to advertise which retailers carry their products, “provided there is no financial remuneration, incentive, inducement, or compensation between producers and retailers.”
     The commission cannot restrict references to alcohol content in advertising and labeling, according to the court, referring to the three beverage companies collectively with the name of the lead plaintiff, Authentic Beverages.
     Sparks champions the people of Texas in his 37-page order, though neither the state officials nor the companies suing them come out smelling like roses.
     Chiding the commission for its weak defense in the case, the judge alternately refers to it as “anemic,” “laughable” and a “low estimation of Texans.”
     “The practice of law is often dry, and it is the rare case that presents an issue of genuine interest to the public,” Sparks wrote. “This is just such a case, however. Dealing as it does with constitutional challenges to the Texas Alcoholic Beverage Code, it is anything but ‘dry’ – and this court would never be so foolish as to question the sincerity of Texans’ interest in beer.”
     “Given this obvious public interest, it is both surprising, and unfortunate for proponents of the Alcoholic Beverage Code, that the state of Texas does not appear to have taken as much of an interest in this case as it might have,” Sparks added. “Whether the challenged provisions of the Alcoholic Beverage Code could have withstood Authentic’s First Amendment challenges under any circumstance is questionable, but under the circumstances of this case – most notably, defense counsel’s candid admission in open court that the state submitted virtually no summary judgment evidence regarding some of Authentic’s claims – there is no question the Texas Alcoholic Beverage Commission (TABC) has failed to meet is summary judgment burden as to these challenges. Thus, almost by default, the court grants Authentic’s motion for summary judgment on these claims.”
     But Authentic’s equal protection and commerce clause claims were not as successful. “In a strange parallel, Authentic offers little evidence in support of its equal protection challenges, instead attempting – impermissibly – to shift its evidentiary burden on these claims to TABC,” Sparks wrote. “Because Authentic has failed to provide evidence demonstrating a genuine dispute of material fact on it equal protection claims, the court grant TABC’s motion for summary judgment as to these challenges.”
     “The court is shocked and dismayed at the Texas attorney general’s halfhearted conduct in this case,” the decision concludes. “The very purpose of having the attorney general’s office defend suits like this, is so the state of Texas can vigorously defend its duly enacted legislative mandates. Here, however, when TABC responded to Authentic’s challenges at all, it responded with little in the way of argument, and even less in the way of relevant evidence. The state of Texas is lucky the burden of proof was on Authentic for many of its claims, or else the Alcoholic Beverage Code might have fared even worse than it has.”

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