Little Beverage Co., Inc. v. DePrez

777 N.E.2d 74, 2002 Ind. App. LEXIS 1758, 2002 WL 31402006
CourtIndiana Court of Appeals
DecidedOctober 25, 2002
Docket49A02-0203-CV-232
StatusPublished
Cited by26 cases

This text of 777 N.E.2d 74 (Little Beverage Co., Inc. v. DePrez) is published on Counsel Stack Legal Research, covering Indiana Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Little Beverage Co., Inc. v. DePrez, 777 N.E.2d 74, 2002 Ind. App. LEXIS 1758, 2002 WL 31402006 (Ind. Ct. App. 2002).

Opinions

OPINION

MATHIAS, Judge.

Little Beverage Co., Inc. and Miami Beverage, Inc. (collectively “Little”) appeal the trial court’s grant of summary judgment in favor of the Alcohol and Tobacco Commission and its commissioners individually (collectively “ATC”), and Anheuser-Busch, Inc. (“A-B”), and its judgment in favor of A-B on the declaratory relief A-B requested in its counterclaim, raising the following issues for review:

I. Whether, after the repeal of Rule 28, exclusive beer distribution territories are now permitted in Indiana under Title 7.1 of the Indiana Code;
II. Whether the ATC violated the Administrative Procedures Act by the “sunset” expiration of Rule 28 and by its de facto adoption of the contrary rule;
III. Whether the expiration of Rule 28 operated as a revocation or alteration of Little’s Indiana beer wholesaler’s permit; and,
IV.Whether the trial court erred in granting A-B’s request for declaratory judgment on its breach of contract counterclaim.

We affirm.

Facts and Procedural History

In 1973, the Indiana General Assembly repealed Title 7, Alcoholic Beverages, and enacted Title 7.1, Alcoholic Beverages. The general purposes of Title 7.1 are set out in Indiana Code section 7.1-1-1-1: “(a) to protect the economic welfare, health, peace and morals of the people of this state; (b) to regulate and limit the manufacture, sale, possession, and use of alcohol and alcoholic beverages; and (c) to provide for the raising of revenue.” The General Assembly created the Indiana Alcohol Beverage Commission, currently known as the Indiana Alcohol & Tobacco Commission (“ATC”), to administer Title 7.1 and gave the ATC power to promulgate rules and regulations. Ind.Code § 7.1-2-1-1 (1982 & Supp.2002); Ind.Code § 7.1-2-S-7 (1982). Indiana Code section 7.1-2-3-31 also provides that: “The commission and the chairman shall have, in addition to the express powers enumerated in this title, the authority to exercise all powers necessary and proper to carry out the policies of this title and to promote efficient administration by the commission.”

Over the years, pursuant to this authority, the ATC has promulgated a series of rules found in the Indiana Administrative Code title 905. Rule 1-28-1(3) (“Rule 28”), promulgated in 1979, prohibited beer distributors in Indiana from having exclusive territories. In 1996, the General Assembly enacted Indiana Code section 4-22-2.5-2 (the “Sunset Law”), which provides in pertinent part that all administrative rules1 expire on January 1 of the [77]*77seventh year after the year in which the rule takes effect, and any administrative rule in force on December 31, 1995, expires on January 1, 2002, if the administrative agency takes no affirmative action to readopt it. Ind.Code § 4-22-2.5-2 (2002).

In June 2001, the ATC posted a notice on its website to explain that it did not intend to readopt Rule 28. On July 1, 2001, and August 1, 2001, the ATC published additional notices in the Indiana Register listing the rules it intended to readopt effective January 1, 2002. Rule 28 was not included in this readoption list. On August 28, 2001, the ATC met to receive testimony regarding Rule 28. At the conclusion of this meeting, the ATC voted 3-0 not to readopt Rule 28. This position effectively permitted exclusive beer distribution territories in Indiana effective January 2, 2002. On September 4, 2001, the ATC again published notice of the rules it intended to readopt. This notice also omitted Rule 28. Thus, Rule 28 expired as of January 1, 2002.2

Little distributes A-B beer products in Indiana. Its distributorship agreement with A-B was executed in 1997 and provides for an exclusive distributorship for Little in a specified area, unless prohibited by law. Under the agreement, where such exclusivity is legally prohibited, Little’s otherwise exclusive territory is designated as its “primary area of responsibility,” but it retains the right to sell beer to retailers in other areas, a practice called “transshipping.” Under Rule 28, Little did much transshipment and generated a significant portion of its business from selling beer outside its area of primary responsibility. On November 15, 2001, A-B announced to all of its Indiana wholesalers, including Little, that it intended to enforce the exclusive wholesale territories in its distributorship agreements effective January 2, 2002, upon the “sunset” of Rule 28.

On November 28, 2001, Little filed suit against the ATC and A-B seeking injunc-tive relief to prohibit the sunset of Rule 28. The Indiana Beverage Alliance, Zink Distribution Company, LLC, United Beverage Company of South Bend, Inc., and Monarch Beverage Co., Inc. (“Intervenors”) intervened in the suit, arguing in favor of Rule 28’s sunset. A-B filed a counterclaim asking for a declaratory judgment that Little would be in breach of contract if it continued transshipping. Both parties moved for summary judgment, stipulating that there were no genuine issues of material fact.

The trial court entered summary judgment in favor of the ATC and A-B and denied Little’s motion for summary judgment and its request to temporarily enjoin the expiration of Rule 28, finding that Little had failed to meet its burden of proof on each element which it was required to show to obtain a temporary injunction. Further, the trial court found in favor of A-B on its counterclaim. Little now appeals.

Standard of Review

When reviewing the grant or denial of a summary judgment motion, this court applies the same legal standard as the trial court, i.e., summary judgment is appropriate when no designated genuine issues of material fact exist and the moving party is entitled to judgment as a matter of law. Ind. Ins. Co. v. Am. Cmty. Servs., Inc., 718 N.E.2d 1147, 1152 (Ind.Ct.App.1999); May v. Frauhiger, 716 N.E.2d 591, 594 (Ind.Ct.[78]*78App.1999) (citing Ind. Trial Rule 56(C)). Our standard of review is not altered by-cross motions for summary judgment on the same issues. Ind. Ins. Co., 718 N.E.2d at 1152. A party appealing the denial of summary judgment carries the burden of persuading this court that the trial court’s decision was erroneous. Id. The movant must demonstrate the absence of any genuine issue of fact as to a determinative issue and only then is the non-movant required to come forward with contrary evidence. Id. (citing Jarboe v. Landmark Cmty. Newspapers of Ind., Inc., 644 N.E.2d 118, 123 (Ind.1994)). This court may not search the entire record but may only consider the evidence that has been specifically designated. Id.

All pleadings, affidavits, and testimony are construed liberally and in a light most favorable to the nonmoving party. May, 716 N.E.2d at 594.

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777 N.E.2d 74, 2002 Ind. App. LEXIS 1758, 2002 WL 31402006, Counsel Stack Legal Research, https://law.counselstack.com/opinion/little-beverage-co-inc-v-deprez-indctapp-2002.