Texas' Homegrown Liquor Lobby Tries to Kill Total Wine, Gets Laughed Out of Court
It was a valiant effort. Earlier this year the Texas Package Stores Association, in an attempt to shield the thousand or so liquor stores it represents from meaningful competition, sought to resuscitate an obscure and transparently stupid provision of Texas Alcoholic Beverage Code barring non-Texans from holding Texas liquor licenses.
The law was overturned by the 5th U.S. Circuit Court of Appeals in 1994 because it "discriminates against out-of-staters" -- in that particular case a Florida man and a Tennessee man who wanted to by San Antonio's Baby Dolls topless club -- and thus was a violation of the Commerce Clause of the U.S. Constitution.
But 1994 was a long time ago, well before Maryland-based Total Wine & More introduced its peculiarly non-seedy brand of liquor emporium to Texas and began siphoning customers with its reasonable prices and fantastic selection. It was also before another federal appeals court, the 8th Circuit, decided that residency requirements for liquor wholesalers were just fine in Missouri.
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In June, the TPSA moved to intervene in and reopen the 1994 San Antonio Baby Dolls case, treating the 8th Circuit's decision as new evidence supporting Texas' still-on-the-books residency requirements. "Just like in a murder trial," Lance Lively, the association's executive director, told The Dallas Morning News in June..
If the liquor lobby prevailed, it would have meant that Total Wine, and possibly grocers like Kroger or Wal-Mart, would be unable to sell alcohol in Texas without either moving here or finding and exploiting some obscure loophole.
The problem with the TPSA's argument -- aside from the obvious disparity between a murder case and a long-settled spat over liquor laws -- is that it was terrible. This month, a federal judge effectively laughed them out of court, systematically dismantling every one of the association's claims before finishing with this coup de grace:
Although TPSA is not audacious enough to come out and say it directly, it is not difficult to see why TPSA wants this Court to withdraw its injunction. TPSA represents exclusively in-state liquor interests. By imposing the injunction against the enforcement of the residency requirement, this Court knocked down an artificial and illegal barrier intended to limit out of state competitors from competing with TPSA members. As a result of the Court's decision, then, TPSA members and other in-state liquor interests found themselves having to compete not only with establishments owned by qualified Texas citizens, but also with bar and restaurant owners hailing form the 49 states.
While the Court understands the business imperatives that might lead TPSA or its members to support laws that prohibit would-be competitors from entering or continuing to exist in the marketplace, having to compete in a free and fair marketplace is not an injury.
At the very least, a rare victory for sanity in Texas liquor laws.
Send your story tips to the author, Eric Nicholson.
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