THE INSTITUTE FOR RESPONSIBLE ALCOHOL POLICY v. STATE ex rel. ALCOHOLIC BEVERAGE LAWS ENFORCEMENT COMM.

2020 OK 5
CourtSupreme Court of Oklahoma
DecidedJanuary 22, 2020
StatusPublished

This text of 2020 OK 5 (THE INSTITUTE FOR RESPONSIBLE ALCOHOL POLICY v. STATE ex rel. ALCOHOLIC BEVERAGE LAWS ENFORCEMENT COMM.) is published on Counsel Stack Legal Research, covering Supreme Court of Oklahoma primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

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THE INSTITUTE FOR RESPONSIBLE ALCOHOL POLICY v. STATE ex rel. ALCOHOLIC BEVERAGE LAWS ENFORCEMENT COMM., 2020 OK 5 (Okla. 2020).

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THE INSTITUTE FOR RESPONSIBLE ALCOHOL POLICY v. STATE ex rel. ALCOHOLIC BEVERAGE LAWS ENFORCEMENT COMM.
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THE INSTITUTE FOR RESPONSIBLE ALCOHOL POLICY v. STATE ex rel. ALCOHOLIC BEVERAGE LAWS ENFORCEMENT COMM.
2020 OK 5
Case Number: 118209
Decided: 01/22/2020
IN THE SUPREME COURT OF THE STATE OF OKLAHOMA


Cite as: 2020 OK 5, __ P.3d __

THE INSTITUTE FOR RESPONSIBLE ALCOHOL POLICY, SOUTHERN GLAZER'S WINE AND SPIRITS OF OKLAHOMA, LLLP, J.B. JARBOE II, CENTRAL LIQUOR CO. L.P. d/b/a RNDC OKLAHOMA, JUSTIN NAIFEH, E. & J. GALLO WINERY, SUTTER HOME WINERY INC., d/b/a TRINCHERO FAMILY ESTATES, DIAGEO AMERICAS, INC., LUXCO, INC., RIBOLI FAMILY OF SAN ANTONIO WINERY, INC., JENNIFER BLACKBURN, d/b/a CELLAR WINE AND SPIRITS OF NORMAN, and DALE BLACKBURN d/b/a GRAND CRU WINE AND SPIRITS SUPERSTORE, Plaintiffs/Appellees,
v.
STATE OF OKLAHOMA, ex rel. ALCOHOLIC BEVERAGE LAWS ENFORCEMENT COMMISSION, and THE HONORABLE KEVIN STITT, GOVERNOR, in his official capacity, Defendants/Appellants,
and
BRYAN HENDERSHOT, individually, and d/b/a BOARDWALK DISTRIBUTION COMPANY, Intervenor/Appellant.

ON APPEAL FROM THE DISTRICT COURT OF OKLAHOMA COUNTY

The Honorable Thomas E. Prince, Trial Judge

¶0 Senate Bill 608 mandates that manufacturers of the top 25 brands of liquor and wine sell their product to all licensed wholesalers. Appellees, a group of liquor and wine wholesalers, manufacturers, retail liquor stores, and consumers, challenged Senate Bill 608 as unconstitutional, contending it was in conflict with Okla. Const. art. 28A, § 2(A)(2)'s discretion given to a liquor or wine manufacturer to determine what wholesaler sells its product. The district court agreed and ruled Senate Bill 608 unconstitutional. Appellants appealed, and this Court retained the appeal.

DISTRICT COURT'S JUDGMENT AFFIRMED.

Mithun Mansinghani, Solicitor General, and Zach West, Assistant Solicitor General, Office of the Attorney General, Oklahoma City, Oklahoma, for Defendants/Appellants.

Thomas G. Wolfe, Heather L. Hintz, Fred A. Leibrock, and Martin J. Lopez III, Phillips Murrah P.C., Oklahoma City, Oklahoma, for Intervenor/Appellant.

Robert G. McCampbell, Amelia A. Fogleman, and Travis V. Jett, GableGotwals, Oklahoma City, Oklahoma, for Plaintiffs/Appellees.

D. Kent Meyers, Crowe & Dunlevy, P.C., Oklahoma City, Oklahoma, for Plaintiffs/Appellees.

Winchester, J.

¶1 The Oklahoma Legislature passed Senate Bill 608 ("SB 608") which mandates that liquor and wine manufacturers of the 25 top-selling brands must sell their products to all licensed Oklahoma wholesalers. Appellees, The Institute for Responsible Alcohol Policy; Southern Glazer's Wine & Spirits of Oklahoma, LLLP; J.B. Jarboe II; Central Liquor Co. L.P., d/b/a RNDC Oklahoma; Justin Naifeh; E. & J. Gallo Winery; Sutter Home Winery, Inc., d/b/a Trinchero Family Estates; Diageo Americas, Inc.; Luxco, Inc.; Riboli Family of San Antonio Winery, Inc.; Jennifer Blackburn, d/b/a Cellar Wine and Spirits of Norman; and Dale Blackburn, d/b/a Grand Cru Wine and Spirits Superstore (collectively "Distributors"),1 challenged SB 608 as unconstitutional, arguing it conflicts with the recently passed Article 28A, § 2(A)(2) of the Oklahoma Constitution (State Question 792).

¶2 The issues before the Court are (1) whether SB 608 is in conflict with Article 28A, § 2(A)(2), and (2) whether SB 608 is a proper use of legislative authority under the anticompetitive provisions of the Oklahoma Constitution. For the reasons stated herein, we hold SB 608 is "clearly, palpably, and plainly inconsistent" with Article 28A, § 2(A)(2)'s discretion given to a liquor or wine manufacturer to determine what wholesaler sells its product. See EOG Res. Mktg. v. Okla. State Bd. of Equalization, 2008 OK 95, ¶ 13, 196 P.3d 511, 519. We further rule that SB 608 is not a proper use of legislative authority as Article 28A, § 2(A)(2) is not in conflict with the Oklahoma Constitution's anticompetitive provisions. The district court did not err by granting Distributors' Motion for Summary Judgment and ruling SB 608 unconstitutional.

I. FACTS

¶3 Since the end of alcohol prohibition, Oklahoma has maintained strict control over the distribution of alcoholic beverages. See State ex rel. Hart v. Parham, 1966 OK 9, ¶ 11, 412 P.2d 142, 147. Beginning in 1984, Oklahoma regulated alcohol pursuant to Article 28 of the Oklahoma Constitution, which created Appellant Alcoholic Beverage Laws Enforcement Commission ("ABLE Commission"). The centerpiece of this regulation still in place today is Oklahoma's three-tier system for alcohol distribution: alcohol manufacturers (first tier) can only sell to licensed Oklahoma wholesalers (second tier); licensed Oklahoma wholesalers (second tier) can only sell to licensed retailers (third tier); and licensed retailers (third tier) can only sell to consumers. This case involves the relationship between the first and second tiers under the recently passed Article 28A. Until recently, the top two tiers operated under a "forced sale clause" that required a manufacturer to sell its products to every licensed Oklahoma wholesaler. See Central Liquor Co. v. Okla. Alcoholic Beverage Control Bd., 1982 OK 16, ¶ 4, 640 P.2d 1351, 1353 (discussing the forced sale clause). Now repealed Article 28 of the Oklahoma Constitution stated:

Provided, that any manufacturer . . . shall be required to sell such brands . . .

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