Monarch Beverage Co., Inc. v. Grubb

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Indiana’s alcohol regulatory scheme, like that of many states, divides the market into three tiers of the distribution chain (producers, wholesalers, and retailers) and three kinds of alcohol (beer, liquor, and wine). With limited exceptions, Indiana prohibits any person who holds a permit in one tier of the distribution chain from also holding an interest in a permit in another tier. For example, anyone who holds an interest in a retailing permit is generally prohibited from having any interest in a manufacturer’s or wholesaler’s permit of any type. Indiana also restricts the issuance of wholesaling permits by type of alcohol. The law allows some wholesaling permits to be combined: a beer wholesaler can get a permit to wholesale wine; a liquor wholesaler can get a permit to wholesale wine, but a beer wholesaler may not acquire an interest in a liquor-wholesaling permit and vice versa. Monarch holds permits to wholesale beer and wine and would like to wholesale liquor. Monarch sued, alleging that this aspect of the law facially discriminates against beer wholesalers in violation of the equal protection guarantee. The district court and Seventh Circuit upheld the law as surviving “rational basis” review. Monarch could not identify a similarly situated class that receives better treatment under the statute and reducing liquor consumption is a legitimate governmental interest. View "Monarch Beverage Co., Inc. v. Grubb" on Justia Law