Legal Battles

Alas, Texans’ Dream of Sam’s Club Scotch and Costco Vodka Is, for Now, Over

Available at liquor stores only in Texas. Still.
Available at liquor stores only in Texas. Still. Getty Images
The 5th U.S. Circuit Court of Appeals is not going to save us. Tuesday, the federal appellate court rejected the final pre-Supreme Court appeal from Walmart, putting a large dent in the retail giant's quest to take down one of Texas' thorniest remaining blue laws.

Put simply, Walmart wants to sell liquor in Walmarts and Sam's Clubs across Texas, as it does in many other states. That's against state law, because Texas bans publicly traded companies from operating so-called package, or liquor, stores. Naturally, the state's liquor stores, represented by the Texas Package Stores Association Inc., don't want Walmart to get its way, because it would open the door to their becoming functionally obsolete.

To hear Observer staffers who visited locales with less arcane blue laws over the holidays, Texans are living in the dark ages. Cross state lines — or several state lines, as the case may be — and one can find handles of Costco private label vodka for $12.99, Tito's at Sam's and Johnnie Walker Black, at 2 a.m., at Walmart, all for sale to the public because their state governments don't treat them like children.

Walmart first filed suit against Texas in 2015, arguing that state law, which bans publicly owned companies from operating liquor stores, was unconstitutional. In 2018, a lower federal court agreed, leading the state and the Package Store Association to appeal the decision to the 5th Circuit.

The 5th Circuit initially voted to overturn the lower court's decision in August. The lower court misinterpreted the law, the court ruled, because Texas law discriminates against Texas companies and those from outside the state in the same way. Walmart's most recent appeal asked for the entirety of the 5th Circuit, rather than the typical three-judge panel, to hear the case.

G. Alan Waldrop of Terrill & Waldrop, an attorney for the Texas Package Stores Association Inc., told Wine Business, the outlet that first reported the court's decision, that his clients were "delighted" with the ruling.

“We continue to believe that the decision hurts Texas consumers. We have not made any decisions on next steps, but will consider all of our options.” — Walmart

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The only place left for Walmart to go, now that its 5th Circuit options are exhausted, is the U.S. Supreme Court. The company didn't admit defeat, at least not on Tuesday.

“We continue to believe that the decision hurts Texas consumers. We have not made any decisions on next steps but will consider all of our options,” Walmart told Wine Business
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Stephen Young has written about Dallas news for the Observer since 2014. He's a Dallas native and a graduate of the University of North Texas.
Contact: Stephen Young