The office address is 1106 Meridian St, Suite 251, Anderson, IN 46016 (follow that link for a map.)
Telephone: 765-641-7906
Fax: 765-374-3811
The best time to reach me by telephone is (usually) after 4:00 pm.
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I still have my interest in alcoholic beverage law. If you have an Indiana business that deals with alcholic beverages and need a lawyer, please give me a call.
I give these in no particular order:
I caught SCOTUS denies Indiana wine case from The Indiana Lawyer Daily during my hiatus from this blog. I think it still worth publicizing.
The Supreme Court of the United States won't consider whether Indiana's wine shipping law is constitutional by requiring in-person contact before any direct delivery is allowed.
Justices considered the case of Patrick L. Baude, et al. v. David L. Heath and Indiana Wine and Spirits Wholesalers of Indiana, Nos. 07-3323 and 07-3338, at a private conference on Thursday, and the decision denying the writ of certiorari came this morning when the order list was released.
Attorneys had asked the court in early February to accept the case, which challenged an Aug. 7, 2008, ruling from the 7th Circuit Court of Appeals.
The Circuit court ruled that Hoosiers must first make face-to-face contact at a winery to verify their age before being allowed to purchase any alcohol online or by phone. Appellate judges reversed a 2007 decision from then-U.S. District Judge John D. Tinder in Indianapolis, who'd struck down part of the state's 2006 law banning out-of-state shipments to Indiana customers without that initial in-person contact.
I was not able to publish A Ferment Among Calif. Vintners - washingtonpost.com as quickly as I ought to have but still worth keeping an eye on:
As the American wine industry began its march to becoming the $1 billion-a-year export industry it is today, the federal government established a system in 1978 to recognize the country's distinct grape-growing areas. The appellation system creating American Viticultural Areas, or AVAs, is popular in the wine industry, which uses it as a marketing tool.
Now the tiny federal agency that oversees the program has triggered an uproar within the industry because it wants to make it tougher to win an AVA designation -- a move highly unpopular with many vineyards. The Alcohol and Tobacco Tax and Trade Bureau, an obscure agency of the Treasury Department, thinks that the changes are needed to protect existing brands that use a region's name in their labels even if their grapes do not come from that region. But opponents say that by protecting those brands, the government would be misleading consumers as to the origins of the grapes.
This issue is at the heart of a controversy surrounding the proposed creation of a Calistoga AVA.
***
The TTB argues that AVAs can be misused by wineries to limit competition. "We believe that preserving the integrity of the AVA program mandates clarifying the standards for AVAs to foster greater scrutiny on the establishment of new AVAs," agency administrator John J. Manfreda said in a written response to questions.
The TTB has proposed that Calistoga Cellars be granted a "grandfather" exemption that would allow it to continue to use the Calistoga name but with a disclaimer on the label to make it clear the wine does not meet the AVA standards.
Manfreda said such exemptions should be granted "only in the rarest of cases" and only with disclaimers providing adequate assurance that consumers would not be misled as to the origin of the grapes.
I say it is highly likely from reading the following from the IBJ:
The nation’s largest liquor distributor is suing the state in hopes of overturning an arcane law that requires distributors doing business here to be owned by Indiana residents.
Southern Wine & Spirits of Indiana Inc., part of a Miami-based company that does business in 30 states and distributes about 20 percent of the country’s booze, filed suit after the Indiana Alcohol and Tobacco Commission said it is not eligible to distribute liquor in Indiana “due to the owners being from out of state.”
The powerful liquor distribution lobby has fought to keep the post-Prohibition-era residency requirement on the books as a means to protect its turf and prevent competitors from poaching their brands.
The suit argues the state’s denial violates the company’s right to do business across state lines, a guarantee set out in the Commerce Clause of the U.S. Constitution. The company successfully challenged a similar law in Texas, getting a federal judge to overturn it in May 2007. “No federal court in memory has ever found a residential requirement as a condition to doing business constitutional,” said J. Alexander Tanford, an IU law professor who has fought with some success to allow Hoosiers to buy wine online. “This seems open and shut to me.”
Despite informing Southern in October 2008 that it isn’t eligible for a liquor permit, the state granted the company’s request for a wine distribution permit. The state dropped its residency restrictions on beer and wine distribution several years ago.
Liquor distributors have lobbied to retain the law in part because they have more to lose: While beer distributors have franchise agreements with beer brands that give them exclusive rights to a brand for a set time period, liquor distributors don’t enjoy the same contractual protections. Liquor brands can switch distributors without financial consequences.
“A residency requirement is about the only thing that protects them from losing their brands without compensation,” Carmichael said. “If I were them, I’d be doing the same thing.”
Southern’s arrival would pose a “huge threat” to National Wine & Spirits, said John J. Baker, the company’s chief operating offi cer.
He acknowledged that saving the residency law could be tough. If it doesn’t survive, the state must find another way to ensure a fair and competitive market, Baker said. He’s concerned in particular about a joint venture between Southern and Texas-based Glazer’s Distributors, announced last year, that gives the fi rms control of about 80 percent of the nation’s wine and spirits volume.
***
Tanford said the state has every right to require distributors to obtain licenses, pay fees and comply with a laundry list of regulations, but the residency rule is another story. He expects existing wholesalers will claim that state regulation will be more diffi cult for companies that aren’t headquartered here—an argument Tanford dismisses as hiding the real issue: a fear of competition.
If the same residency rule were to be extended to other industries, he said, something like half the companies in Indianapolis would have to shut down.
The Supreme Court of the United States is being asked to consider the constitutionality of Indiana's wine shipping law, which requires in-person contact before any direct delivery is allowed.
While there's no guarantee the nation's highest court will accept it, chances may be greater since conflicting rationale has surfaced among the lower appellate courts in the past year.
***
Attorneys today filed a petition for writ of certiorari in Patrick L. Baude, et al. v. David L. Heath and Indiana Wine and Spirits Wholesalers of Indiana, Nos. 07-3323 and 07-3338, which challenges an Aug. 7, 2008, ruling from the 7th Circuit Court of Appeals.
The Circuit Court ruled that Hoosiers must first make a face-to-face contact at a winery to verify their age before being allowed to purchase any alcohol online or by phone. Appellate judges reversed a 2007 ruling from then-U.S. District Judge John D. Tinder in Indianapolis, who'd struck down part of the state's 2006 law banning out-of-state shipments to Indiana customers without that initial in-person contact.
***
This request comes following a Dec. 24 ruling from the 6th Circuit Court of Appeals, which struck down Kentucky's state law requiring in-person contact before consumers could obtain a wine shipment. That case is Cherry Hill Vineyards v. Lilly, No . 07-5128, and representing the appellees is attorney and Indiana University Maurer School of Law-Bloomington professor James Tanford, who is also counsel on this 7th Circuit case.
Having written about some of the legal issues of absinthe here and here, I thought I should note The Diluted Mystery of Absinthe from The New York Times that gives a more business-oriented view of the product:
Now it is legal, and so we are in the midst of what appears to be an absinthe mini-craze. But to follow the arc of this craze, like others that have come before (remember cigar bars?) is to see just how quickly something that was once illicit — and acquired notoriety because of that very illicitness — can lose its sheen of mystery and become, well, rather uncool. Once the naughty aura of the forbidden fruit is removed, all that remains is a grasp at unearned sophistication.
If absinthe were a band, it would be Interpol, third-hand piffle masquerading as transgressive pop culture. If absinthe were sneakers, it would be a pair of laceless Chuck Taylors designed by John Varvatos for Converse. If it were facial hair, it would be the soul patch. If absinthe were a finish on kitchen and bath fixtures, it would be brushed nickel.
The absinthe available over the counter nowadays is neither dangerous — in fact, it’s debatable whether it ever was — nor illegal (and whether it ever was is also unclear, but that, apparently, is a really long story).
I freely admit a bias: the spirits trade bring out the silliest in government regulation. THE FIRM's More tea, vicar? provides a Scottish example:
"Those of you involved in advising licensees will know that there are very strict new regulations governing the display of alcohol in off sales premises to prevent alcohol harm. Alcohol is to be recognised as a special product and not normal goods. Vicky believes that if alcohol is displayed with other goods we will be more tempted to buy it and abuse the product. Indeed one supermarket had alcohol on display in at least 10 places. Golly! The new rules are that alcohol can only be displayed in 2 locations in any store. One behind the counter (difficult if you have a central till) and the other to be a defined area approved by the local licensing board. It is not to be sold alongside other goods. With this in mind we start our story."
I know the posts here about alcoholic beverages have been few and far between. Frankly, several things have kept me from pursuing this area of law as much as I expected when I started this blog. It will be a New Year's Resolution to do something about developing this practice area next year.
Meanwhile, here is a site with a list of brewery related blogs. Which might serve to keep those interested in the business side informed of what is happening in the wider world.
Something that came across via e-mail last week, FR Doc E8-25896:
"Proposed Revision of Distilled Spirits Plant Regulations (2001R- 194P); Extension of Comment Period AGENCY: Alcohol and Tobacco Tax and Trade Bureau, Treasury. ACTION: Notice of proposed rulemaking; extension of comment period.
SUMMARY: In response to an industry association request, the Alcohol and Tobacco Tax and Trade Bureau extends the comment period for Notice No. 83, Proposed Revision of Distilled Spirits Plant Regulations, a notice of proposed rulemaking published in the Federal Register on May 8, 2008, for an additional 90 days. DATES: Written comments on Notice No. 83 must now be received on or before February 3, 2009."
Ah, the headline has all the shock of this post. What this post does have is the intersection of newspapers reporting on legal issues and the actual Court of Appeals opinion, and some insight into the licensing of adult entertainment bars.
Not that the Kokomo Tribune's Ultimate Place wins court battle is all that inaccurate but there is what I call fudging to tell a clean story. I have a link the actual opinion below, and reading that it seems clear to me that the remonstrators did not have the evidence necessary to win.
First, some quotes from the Kokomo Tribune:
"The court of appeals ruling was a blow to local remonstrators, led by two pastors at Crossroads Community Church.The Memorandum opinion (PDF format) cannot be used for precedent. It does have its uses to show how the licensing process works and the law cited in the case remains good law.
The pastors, Kevin Smith and Jeff Harlow, reluctantly gave up a previous remonstrance against the Dumoulin family after receiving certain assurances in 2001.
While Smith, Harlow and the other remonstrators may have considered those assurances — offered in writing by Dan Dumoulin II’s parents — binding, the court of appeals disagreed.
Instead, the judges last week ruled Dumoulin II was never a party to any agreement his parents made with the remonstrators.
The 2001 agreement, the judges said, was that Hoosier LLC, the corporation owned by Joan and Dan Dumoulin Sr., would not turn what opened as a sports bar into a strip club.
Arguments still rage as to whether Joan and Dan Sr. honored the second part of the agreement. In 2001, they promised that remonstrators would be notified if Hoosier LLC ever sought to transfer the liquor license."
***
The ruling notes that Kokomo attorney Mark McCann, who in 2001 had represented the remonstrators, acknowledged receiving oral notice of the pending liquor license transfer from fellow Kokomo attorney Dick Russell, prior to the transfer request being heard by the Howard County Alcoholic Beverage Board.
The remonstrators insisted the agreement was that the notification would be in writing. The appeals court was, however, satisfied that proper notice had been served, “albeit oral rather than written.”
The appeals court, like Burke, also rejected claims Joan and Dan Sr. never made a “bona fide” sale of the club to their son. An ATC hearing judge had originally ruled no paperwork existed to support the Dumoulins’ claims the club was actually sold.
That point was important to the remonstrators, who tried to claim the Dumoulins — Joan, Dan Sr. and Dan II — had always intended to operate the Ultimate as a strip club, but had been temporarily thwarted by the 2001 remonstrance.
So I see in Meeting The Sin Laws Blog's Georgia's wine sales to go online:
Reading this excerpt makes me think that Georgia wineries have an easier time selling online than may Indiana wineries. About Indiana's laws, take a look at my posts here and here.The Atlanta Journal Constitution reports here that, "[s]tarting July 1, Georgia residents can have any winery ship to them up to 12 cases a year as long as someone 21 or older signs for the shipment." Awesome! Because shipments to the front door were previously off-limits, leaving hard-to-find bottles and wines not represented by local distributors out of reach, this measure is sure to help Georgia's upstart wineries.
New regulations proposed and can be seen here.
SUMMARY: The Alcohol and Tobacco Tax and Trade Bureau is adopting as a final rule, without changes, the temporary regulations implementing the certification requirements regarding production practices and procedures for imported natural wine. These requirements were adopted in section 2002 of the Miscellaneous Trade and Technical Corrections Act of 2004 as an amendment to section 5382 of the Internal Revenue Code of 1986.
I noticed A Befuddlement of Liquor Laws published by The New York Times. I have had no time to notice if Indiana's General Assembly has any legislation pending regarding interstate sales, but the Times article s provides a tantalizing glimpse of legislation elsewhere:
Of course, retailers are not calling for the end of regulation. They want regulated interstate shipping, as in Virginia, which now issues licenses to out-of-state retailers, who collect and pay sales tax to Virginia. Washington State is considering a similar bill, which would permit consumers to make legal purchases from an out-of-state retailer.
“It’s very difficult if not impossible to enforce compliance off the Internet,” said Rick Garza, deputy director of the Washington Liquor Control Board. “We know it happens, so creating a license for it, and permits and requirements is probably the best course, rather than ignoring it.”
Checking in at Wineries of Indiana shows nothing about any new legislation.
Indiana's Alcohol Beverage & Tobacco Commission has some online resources that I want to highlight. First, the Licensing page - which is a collection of links to further information on the different types of licenses issued by the Commission.
As of today, the following contains all of the Commission's alcohol FAQ's (Frequently Asked Questions):
ALCOHOL FAQs
Since I post news about business related blogs and with my continuing interest in the legal aspects of alcoholic beverages, I thought I might as well post a link to The Bruery Blog. The person writing this blog is written by the people running a new microbrewery. Fun to read and maybe educational and/or inspirational for those wanting to open their own microbrewery.
As Professor Bainbridge points out (and I forgot) in Prohibition Yesterday and Today Prohibition ended seventy-four years ago this past Wednesday.
Professor Bainbridge points out how we still try to prohibit what some people think are not good for us, but I want to point out how Prohibition still looms over the alcoholic beverage industry.
Absinthe made a big splash this past year. My attention having been on breweries, beer and cider, I never thought much about absinthe. Looking at the traffic to this blog, absinthe is the only topic attracting attention on the alcoholic beverage front.
The New York Times published A Liquor of Legend Makes a Comeback this past week. For those interested in the liquor only, I suggest clicking on the link now. Others might want to read the following, for it does a good job of describing how tortuous can be the process of getting a product away from the Treasury Department and to the public:
Federal law regulates the labels for alcoholic beverages and those regulations reflect a moralistic concern for the effects of alcoholic beverages on the public."The division of the Treasury Department that approves alcohol packaging sent back his label seven times, he said. They thought it looked too much like the British pound note. They wondered why it was called Absinthe Verte when their lab analysis said the liquid inside was amber. Mostly, it seemed to him, they didn’t like the monkey."“I had the image of a spider monkey beating on a skull with femur bones,” Mr. Winters said. But he said that the Alcohol and Tobacco Tax and Trade Bureau thought the label “implied that there are hallucinogenic, mind-altering or psychotropic qualities” to the product.
“I said, ‘You get all that just from looking at a monkey?’”
His frustration came to a sudden end last Wednesday, when he learned the agency had finally granted approval to his St. George Absinthe Verte, the first American-made absinthe on the market in almost a century.
Alcohol and Tobacco Tax and Trade Bureau has new regulations on viticultural areas for comment. The proposed regulations can be found by clicking here. The notice states the following for why these areas are now under review:
Remember that these regulations apply to Indiana as well as California.For a number of reasons, TTB and Treasury believe that a
comprehensive review of the AVA program is warranted in order to
maintain the integrity of the program. First, we are concerned that
because the establishment of an AVA can limit the use of existing brand
names, approval of an AVA can have a deleterious effect on established
businesses, can limit competition, and can be used by petitioners to
adversely affect a competitor's business. We note in this regard that
where a conflict exists between a proposed AVA name and an established
brand name used on a wine label approved by TTB, a choice must be made
between competing commercial interests; we do not believe that, in the
context of the labeling provisions of the FAA Act, it is an appropriate
governmental role to make choices that undermine the commercial
interests of particular entities, if such choices can be avoided.
In addition, we note that over the years there has been an increase
in the number of petitions for the establishment of new AVAs within
already existing AVAs. Because the idea behind the recognition of an
AVA is that it is a unique area for viticultural purposes with
reference to what is outside it, we believe that preserving the
integrity of the AVA program mandates clarifying the standards for AVAs
to foster greater scrutiny on the establishment of new AVAs within
existing AVAs.
Finally, there is a need to explain and clarify the AVA petition
submission and review process and to clearly state the existing
authority to deny, and the grounds for denying, an AVA rulemaking
petition.
I think this article from the Scottish Sunday Herald, It looks like Scotch ... but don't be fooled, provides a justification for our American regulation of alcoholic beverages:
"BOGUS SCOTCH whisky from China is the subject of the majority of as many as 70 legal actions being pursued by the Scotch Whisky Association (SWA) in its global battle to protect the integrity of an industry worth £2.47 billion in exports last year."
***
The discovery and prosecution of bogus whisky generally follows a pattern. Sales representatives for the major whisky companies, scouring shelves all over the world, provide tip-offs about offending products. These are then dispatched to Scotland where the content is analysed. Armed with chemical proof, the lawyers then go to work.
***Barclay's legal team has a formidable arsenal of existing law at its disposal, including Scotland's own definition of what exactly constitutes Scotch whisky, as well as supporting EU legislation on spirits law and the "geographical indication" rules enshrined in the principles of the World Trade Organisation.
The team's hand will be strengthened still further in early 2008 when, after a four-year campaign led by the industry, the British government passes an all-embracing law tightly defining labelling, geographical provenance and the producing distillery.
Thanks to the Indiana Law Blog for pointing me to the Wine Spectator's article Indiana and Oregon Change Laws on Direct-to-Consumer Wine Shipments. The article has this to say about the future prospects for Indiana's law:
Because the judge focused on those two particular elements of Indiana's law, the state's existing direct-shipping rules remain intact. So long as the wineries are willing to ship and the courier services such as FedEx and UPS are willing to deliver, direct wine shipments to Indiana residents can commence. Unfortunately, however, Indiana consumers can't count their chickens just yet. Since the law is written to limit individual households to 24 cases per year rather than the wineries themselves, the wineries have no way of knowing if they'll be sending, say, the 25th case to a particular Indiana resident, and therefore violating the law. It's a risk some wineries are willing to take—but not all of them.
"Right now we are not shipping but are informing our Indiana wine lovers that we need their help to fix poor legislation," said Dennis Cakebread, director of marketing for Cakebread Cellars in Napa, Calif.
Despite that remaining barrier in Indiana, the state's wine wholesalers are unhappy with the decision. "We think the judge erred," said Jim Purucker, executive director of the Wine & Spirits Wholesalers of Indiana. "We think the legislature has the right to regulate alcohol under the 21st Amendment, and it's unfortunate that the legislature tried to do their best to … treat everybody equally, but I guess that didn't satisfy the judge. There are other places around the country where the face-to-face provision has been upheld. We would hope that on appeal his decision would be overturned."
Whether such an appeal will be filed, however, remains to be seen. "We're evaluating what we're going to do. A determination hasn't been made yet," Purucker said. Part of the reason may be, as Tanford pointed out, that if the state does not appeal a decision in which it was involved, a private third party, the wholesalers' association in this case, usually lacks the grounds to do so.
They’ll also face formidable opposition. In the months leading up the court decision, a group of Indiana consumers, led by Indiana resident Allen Dale Olson, formed an advocacy group called VinSense to fight the state's shipping laws. The only other state to see a group of consumers unite in protest of its direct-shipping laws was Michigan, one of the two states at the center of the 2005 Supreme Court decision.
Yesterday, the Alcohol and Tobacco Tax and Trade Bureau put into effect a new rule on authorized materials and processes for wine. You can find the full text of the rule here but this is the summary:
SUMMARY: The Alcohol and Tobacco Tax and Trade Bureau is adopting as a final rule, with minor technical changes, temporary regulations that revised the list of materials authorized for the treatment of wine and juice and the list of processes authorized for the treatment of wine,juice, and distilling material. The regulatory amendments involved the addition of new materials and processes and changes to the limitations on the use of certain approved materials.
