Cadena Comercial USA Corp. D/B/A Oxxo v. Texas Alcoholic Beverage Commission

COMERCIAL USA CORP. CADENA OXXO, Petitioner,

d/b/a

v. ALCOHOLIC BEVERAGE

TEXAS

COMMISSION, Respondent

No. 14-0819

Supreme Court Texas.

Argued October April

OPINION DELIVERED: Smith, Alsup, Christopher

Dеbora B. Danley Cousar, E. Cornyn, James Na- K. Palmer, LLP, Thompson Knight than & TX, Austin for Petitioner.

Joseph ‘Jody1 Hughes, David Assistant General, Roy, E. Solicitor Charles First General, Attorney Assistant W. Kenneth Texas, Jr., Attorney Paxton General Sanders, Keller, Robin A. Scott Office General, Kennison, Attorney L. Judith TX, Division, Austin Legal for Re spondent. opinion

Justice Johnson delivered Green, Court, Justice which Justice Guzman, Lehrmann, Justice Justice Devine, joined. and Justice Brown Johnson, Phil Justice interpret This us to requires case Tex- prohibit as’s “tied house” statutes overlapping ownership between manu- facturing, wholesaling, retailing seg- beverage industry. ments the alcoholic Mexicano, Fomento Económico S.A.B. (FEMSA) 20% of de C.V. owns the stock companies in two which in turn Heineken own hold breweries. The brewers non-resi- permits dent manufacturer’s Texas. owns, through FEMSA also intermediate holding companies, 100% of Cadena Com- Corp., company ercial USA formed to operate stores Texas. convenience When permit sought a retailer’s to sell alcohol, Alcoholic Beverage the Texas (TABC) protested per- Commission discretion any requirement and without being granted mit’s basis cooperate consult or ... with FEMSA.” ownership FEMSA’s interests in Cadena The Agreement bars the Heineken Group and Heineken would violate the house tied from acquiring any stock in FEMSA. , if granted. statutes were 10,000 approximately FEMSA owns con- county judge in an hearing administrative venience stores concentrated in Mexico agreed the TABC. The court district that operate and Colombia under the name likewise, judge did ap- the court of OXXO, open reg- continues to more peals affirmed. ularly. FEMSA formed Cadena to extend affirm.

We retail FEMSA’s convenience store busi- ness into Texas. Cadena wanted to sell Background

I. stores, wine beer in which in its Texas Underlying require A. would it to a Facts have wine and beer off-premises consumption permit. retailer’s Petitioner a corporation Texas When Cadena tried obtain one these FEMSA, wholly subsidiary owned TABC, permits from the routine financial entity. Mexican Before was FEMSA it during application disclosures made directly brewing in beer. It trans- involved process revealed FEMSA’s 100% owner- part of its ferred business to Heinek- ship of Cadena as its significant well as (col- Holding, en N.V. and Heineken N.V. ownership interest in Heineken Group, lectively, Group) exchange the Heineken in that, which owns the Heineken Brewers for more than million shares of stock turn, hold Texas non-resident brewer’s Heineken and more than million N.V. permits. The TABC protested Cadena’s Holding shares Heineken 20% N.V.—a grounds it granting Group. combined in the Heineken result in violation of Texas tied house holdings largest FEMSA’s make it the statutes, rejécted application. its except shareholder in Heineken Group companies parent for the that own B. Tied House Texas’s Statutes controlling Group, The Heineken shares. through a intermediary compa- series The Texas tied house are found statutes (the nies, owns three brewers Heineken Code. See Beverage Alcoholic the Texas Brewers). 102.01-.82; Algo. §§ The Tex. Bev. Code genesis provisions Liquor of the was the obtained

When FEMSA its interest Act, Control which the Group, the Heineken entered into a Cor years adopted repeal two after the Pro- рorate Agreement Governance that enti See Act, Liquor hibition. Texas Control appoint FEMSA one of tles Heineken C.S., 1-23, §§ Leg., 44th 2d ch. Holding N.V.’s directors five and two Liquor Tex. Laws Control Gen. 1795. The Supervisory ten members of the Board of progeny eventually Act’s were into codified Agreement speci Heineken N.V. The also the Alcoholic An Beverage Code. Act given “any right fies FEMSA is Code, Adopting Beverage Alcoholic right control or influence consultation R.S., 1,§ Leg., 65th ch. 1977 Tex. cooperation” other relating form of (codified as Gen. Laws amended Group. Similarly, the Heineken L’Arche 1.01-251.82). Green, §§ parent company of the The Tex. Alco. Bev. Code Heineken provisions Group, rights catalyst for the tied was a reserved all make deci house in management returning fear of -to state of sions of the Heineken affairs Group, “independently and at their sole before Prohibition when tied houses played er, thought a substantial or between a and retail- was to be role wholesaler

what “wholesaler,” “retailer,” er, over-intoxicating society. provisions The words ordinarily designed to certain over- “manufacturer” are used prevent en- those .... lapping relationships between and understood industry beverage gaged in the alcoholic 102.01(a). contains numer- levels, or tiers. See different Alco. designed ov- provisions ous to achieve this 102.01(a)-(b). Bev. Code industry erarching goal separating the independent into tiers: manufactur- three generally tied Pre-Prohibition houses distribution, ing (brewing), and retail. See selling their developed from tavern owners §§ attempts id. 102.01-.82. It achieve becoming taverns brewers and separation prohibiting cross-tier D. generally, tenants. M. brewers’ See relationships. provisions of these Knox, Several Development the Tied House grounds protest served as for the TABC’s London, System in Econ. Pa- Oxford application permit. of Cadena’s for a 1, 1958, at no. 66-83. pers, Series, New other Financial conditions and factors Background Procedural C. near-necessity agreements made these Positions of the Parties economically. owners to for tavern survive pro- During permit application the retail stipula- agreements Most included cess, applicant an Cadena must such as only sell tion that the tavern the would to the designated forms submit disclosure products. The brewer brewer-landlord’s 61.31(a). 26.03, §§ TABC. Id. on Based a then had vested interest in the tavern forms, in information the TABC ei- these selling much as of the brewer’s beer as protests grants the the application ther regard or no for possible, little the 61.31(a). § permit. Id. If the TABC finds personal or societal This tied effects. house protest grounds there are to reasonable phenomenon push to for contributed the permit, required the then it to do so and Prohibition. application. reject the ended, When Prohibition lawmakers rejects permit applica- If the TABC relatively started from a clean slate with tion, applicant may request the an admin- respect regulating to alcoholic bever- the hearing county judge before istrative the prevent age industry, goal and to their was in county applicant in the which the de- pre-Prohibition to the a return status. See §§ to sires conduct business. Id. 61.31-32. Beverage Comm’n, Alcoholic The His- Tex. county judge legal grounds If the no finds tory Beverage the Texas Alcoholic application, judge to refuse the orders the (2005). targets 1-2 One Commission grant permit. the to id. TABC the See attempt tied house an relationships. was § judge applica- 61.32. If the denies the prevent relationships these from form- tion, applicant thirty days ap- the has ing, provides the Code for “strict adher- peal to the district court. 61.34. See id. general to a policy prohibiting ence the practices.” tied house and related Here, the TABC that Cade- determined 102.01(b). The Code Alco. Bev. Code na’s connection the Brewers Heineken defines “tied house” as through ownership FEMSA’s 100%

any overlapping ownership pro- large .in ownership other and Cadena interest granting hibited those en- relationship Group between the Heineken meant that in gaged beverage the alcoholic industry the retail would result Cadena levels, is, haying overlapping different that between manu- interests the industry facturing manufacturer retail and wholesaler retail- levels the managing of four control separate provisions in violation have over entities in pro- more one tier. the house statutes. Thus TABC than Cadena main- tied further rejected application. tained that FEMSA’s tested Cadena’s remote connection with the Heineken Brewers too was atten- proceeded matter then to an eviden- The implicate historical uated tied house hearing tiary county before At judge. the concerns, the interest could hearing, parties stipulated the the the imputed piercing Cadena without Cadena, corporate relationships between corporate veils of all the entities involved. FEMSA, companies. and the Heineken stipulated TABC further Following hearing, five administrative statutory provisions only county judge at issue denied Cadena’s applica- were grounds protesting appli- statutory grounds Cadena’s tion based cited TABC,' During finding (1) TABC’s hearing, cation. that: licensing director alcohol- expert and an interest “has real the business ic-beverage if industry of the holder of a premises laws testified manufacturer’s license”; (2) “[fjor entity one tier of owned or industry distributor’s licens- FEMSA, ing purposes,' subsidiary one share stock as a even in member tier, manufacturer”; (3) ownership another is a overlapping [Cadena] “[f]or pro- statutory licensing purposes, subsidiary violate the tied house FEMSA, argued hibitions. TABC that FEM- has an [Cadena] (4) brewer”; issuing interests Heineken of a SA’s Cadena and the prohibited were requested permit Brewers “interests” under “would violate Sections 102.11(1) 102.01(c), (h), 102.07(a)(1), Beverage Alcoholic Code under disput- appealed interpretation. Although Code.” Cadena the district court, ed that actual cross-tier of entities which affirmed the control administrative required implicate appealed again. to house the tied order. Cadena restrictions, that nevertheless asserted of appeals The court focused on section could FEMSA control the Heineken Brew- 102.07(a)(1), per- provides which that “no of its di- ability appoint ers because to an son who owns or has in the interest It Group’s rectors to Heineken boards. ... brewer ... may business of a ... own argued impute also court should or a or indirect in the have direct interest to regulation pur- connection Cadena of a ... retailer.” 449 business poses. 2014); App.-Austin

Conversely, 102.07(a). argued Cadena that the Alco. court Bev. dispositive only “interest” sufficient to the tied that the issue was violate determined Heineken, prohibitions is simulta- shares in allowing house one whether FEMSA’s ownership paired neous actual financial or FEMSA’s indirect administrative 102.07(a) Cadena, control of entities Under of would violate section different tiers. interpretation, permit applica- permit application grant- Cadena’s if its Cadena’s were ‘interest,’ granted tion have been It “the should as matter ed. Id. concluded term 102.07(a)(1), ability of because no en- broadly law FEMSA has used section manage compasses any control Heineken in- either the commercial economic Companies Holding Heineken that a stake in financial .provides terest result, argued, of performance entity engaged Brewers. As an in the Cadena manufacture, distribution, granting application its alco- would not violate or sale of compa- beverages.” the tied house statutes no holic Id. at 166. court because ny that an within business structure would further concluded FEMSA owns Cadena, (3) of application a retail- the TABC’s in the of selective

interest business permit application er, ownership of its indirect the statute Cadena’s by virtue 100% interest, rejected equal protection principles violates because corporate Cadena’s oth- holdings by arguments. pervasive at 169-70. It of the separateness Id. cross-tier across Cadena also that the of “business” entities the State. reasoned definition er briefing throughout merely having expresses than an inter- concern includes more inter- appeals’ expansive The court that the court of in the assets est business. authority to provides TABC though only pretation that even FEMSA concluded only permit or cancel indirectly reject application owned Cadena and indirect- Brewers, person’s ownership on a stock Heineken based ly held separate of stock in tiers.1 meaning single and “busi- share two “interest” broad be- implicate the principles ness” did (1) responds The TABC that the court recognizing corporate identi- separate hind reading implicated appeals’ interests ties, under the statute FEMSA owned 102.07(a) to the accurately conforms both. Id. at 168. Legisla- plain meaning statute’s Finally, separation that Cade- desire strict the court ture’s maintain determined alcoholic protection the three tiers of the equal na’s claim failed because between (2) prove beverage industry; veil-pierc- that Cadena failed TABC Cadena’s similarly granted permits any arguments faulty assump- situated ing rest on the Although point- Id. at of a entities. Cadena that “interest in the tion cross-tier own- pervasive legal ownership; ed to evidence brewer” is tantamount to ership (3) interests that violated court’s claim Cadena’s equal enforcement 102.07(a), reading section Cadena did no is meritless because evidence there any permitted entities not show similarly situated permittees “similarly significant cross-tier invest- held Cadеna, improper nor of suspect ment interests.” part TABC. The motivation is- also one-share characterizes the Court, Before this raises the herring designed a red divert sue as same three claims it in the court of did inter- significant attention FEMSA’s (1) plain reading appeals: in both the Heineken ests Cadena and 102.07(a) only can to the lead conclusion Brewers.2 a control- intended determining which inter- based test when II. Standard of Review statute, any other ests come under the and Beverage provides Alcoholic The Code reading renders unconstitution- the statute refused, unenforceable; (2) party whose is application that ally corpo- vague and suspended, is or or whose cancelled separateness veil-piercing princi- rate and may appeal that implicated decision. ples proper application and Tex. Alco. Bev. 11.67(a), 61.34(a). § re- The Code prevent of rules Cadena’s li- these would Code quires challenged from courts to deci- being censure violation of the review Code rule FEMSA’s in both sions under substantial evidence because attenuated; is to the Administrative pursuant and Heineken Brewers Procedure support support briefs the TABC have 1. Amicus of Cadena have Amicus briefs of Texas, by by been submitted The Texas Association of of been submitted The Beer Alliance Inc.; and Company, Texas, Business McLane Texas and the Beer Wholesale Distributors Foundation; Policy Murphy Public Oil Policy. Alcohol Center for USA Inc.

325 (APA). 11.67(b). brewer”; (2) § APA Act The dic- in the business of a whether judicial scope disregarded tates that properly sepa- “[t]he review the TABC agency ... is provided corporate a state as decision rate statuses in- entities by sought.” is law under which review deciding issuing permit volved when if 2001.172; State v. Pub. Cadena would result a violation of sec- Tex Code Gov’t Tex., 349, (3) Util. Comm’n 102.07(a); 344 S.W.3d 355 tion whether (Tex. 2011). protesting TABC’s application, Cadena’s subsequent sustaining pro- interpretation is Statutory courts, by test the lower violated Cadena’s primary appeal, in issue and that equal protection rights. questions volves we review de novo. law Royalties, Hegar, Sw. Inc. v. S.W.3d A. “Interest in the Business This is true even of a Brewer” reviewing agency when we are decisions. Cadena’s basic issue with the court of See, Shumake, e.g., State v. S.W.3d appeals’ holding by is summarized the fol- (Tex. 2006). An agency’s 284-85 inter lowing language from briefing: pretation of a statute enforces “is enti violation, order find the court of consideration,’ long tled ‘serious so as appeals expansively defined the term the construction is does not reasonable and encompass[] to “broadly “interest” language.” conflict with the statute’s R.R. or commercial economic interest Comm’n Tex. v. Citizens Tex. for Safe provides as per- take the financial Water, Future & Clean entity engaged of an formance (Tex. 2011). provides APA The manufacture, distribution, or sale of al- cases or if should be remanded reversed beverages.” appear coholic These words is “in violation administrative decision nowhere in the statute. of a provision,” constitutional is “not ... (alteration orig- Brief for Petitioner at 8 reasonably supported substantial evi inal) (citation omitted). dence,” “arbitrary or decision caрricious characterized abuse goal Our when fundamental discretion.” reading give “is to ascertain statutes Gov’t Tex. 2001.174(2)(A), (E), (F); see also Pub. Legislature’s to the intent.” effect Comm’n, Util. at 356. 344 S.W.3d Ruttiger, Mut. Ins. Co. v. (Tex. 2012). this, To do we look to and Analysis

III. meaning of a rely plain statute’s originally expressing legislative asserted four as intent un stat- words meaning is utory provisions protesting supplied, less a grounds different context, application. county apparent plain Cadena’s judge meaning that each of leads absurd district court determined words provisions support rejecting Energy nonsensical results. Crosstex Plus, Servs., Inc., However, permit. appeals only court of L.P. v. Pro 430 S.W.3d the 102.07(a) (Tex. 2014). 384, phras Words and considered section con- 389-90 because and provision dispositive. “shall be read context construed cluded the was 449 es 161-62, grammar In determining according S.W.3d at rules and the correct, (citing Tex. usage.” appeals whether the court of was common Gov’t Code 311.011). (1) Legislature § the presume we consider issues: We three main care, 102.07(a) and, language with particu- reach of “chooses statute’s section lar, purpose, for a phrase including each word chosen meaning of the “an interest

326 ant, omitting not cho or of them.” purposefully employee words while Tex. 1.04(6). Cadena, § Geophysical v. Alco. FEM- Co. sen.” TGS-NOPEC Code Bev. (Tex. 2011). Combs, 432, SA, Group, 340 439 S.W.3d the Heineken Heineken vein, them Brewers, we as we find take statutes and each relevant intermediate are, therefore, rewriting Legisla company “per and holding refrain from Entergy Sum ture's text. States v. Although the statute. son[s]”. under Gulf (Tex. 2009). mers, 433, 282 443 Legislature S.W.3d provide did not the definition ordinary “brewer,” meaning is intui language in The relevant section Moreover, tive. defines “brew” Webster’s 102.07(a)provides (as malt as “to beer or from prepare ale (b), Except provided in Subsections by steeping, boiling, and and fer hops) (d), (g), has person and no who owns or mentation.” Webster’s Third New Inter a ... an interest business of Dictionary (2002). 275 The same national .,. own have ... or may brewer dictionary “brewery” as build defines “a in- or indirect interest busi- direct ing plant beer is manufactured.” where ness, premises, equipment, fixtures of Id. The Heineken Brewers brew beer a retailer .... breweries, thus are they brewers within 102.07(a). These Tex. Alco. Bev. Code meaning. if Cadena were Code’s And phrases not and are be consid words granted off- a wine and beer retailer’s isolation, ered rather context premise permit, consumption it would be Auto., as a statute whole. Meritor a “retailer” as term is used Co., Leasing 44 90 Inc. Ruan v. S.W.3d 102.07(a)(1). See Tex. Code Alco. Bev. 2001). (Tex. differently, our objective Put 26.01, §§ Finally, Legis because the mechanically not to take and definitions provided specific lature has defini together—as Cadena claims the tack them , terms, their many tions for we look to appeals we court consider did—-rather ordinary plain meaning, unless a and dif context entire and framework meaning apparent ferent from the con into statute meld its words cohesive Co., text of In re Motor the statute. Ford legislative reflection of intent. Anheu See (Tex. 2014). 442 S.W.3d ser-Busch, Cty. As L.L.C. v. Harris Tax sessor-Collector, —, 102.07 is within Chapter Section (Tex. 2016). Still, we con WL Chapter of the Code. This is enti cerned with specific the definitions “Intra-Industry Relationships” and tled they provide because words the material provides comprehensive framework statutory that is refined context. regulating overlapping everything pro are either terms definitions some among ownership the three tiers down vided clear based specific gifts financial transactions and meaning. common oth usage their For promotions. See Bev. Code Alco. ers, must to the statutory we look context A, §§ Subchapter in 102.01-.82. which meaning. to provide 102.07(a), provides expan cludes section comprehensive sive begin We with definitions statutes 311.011; prohibit range provides. rela Code broad cross-tier Tex. Gov’t Ebrom, tionships influences. See id. Hernandez v. Further, “per §§ Legislature’s 102.01-.22. Code defines asspciation express policy as “a are indicative son” statements person natural Reddy, persons, corporation, legislative ... intent. Hebner v. natural or , 37, (Tex. 2016); 41 agent, serv- 498 R.R. ganization, manager or the S.W.3d

327 v. Tex. Tex. Citizens lature did not define. At the time Comm’n the tied Water, enacted, Future & Clean 336 house S.W.3d statutes were Black’s Law Safe (Tex. 619, 2011). express 628 The Code Dictionary defined “interest” as “[t]he policy separation between general es “strict employed most term that can be manufacturing, wholesaling, and re property denote a or chattels” or lands tailing beverage levels” the alcoholic right “a advantage to have the accruing industry prevent in Texas to “the cre Interest, anything.” Black’s Law Dic ” ‘tied house.’ ation maintenance tionary (3d 1933). English language ed. 6.03(f). Bev, § Section Tex. Alco. dictionaries at time took similarly 102.01, which first a tied house defines instance, For broad view. Dic Oxford “any overlapping ownership or other as tionary defined “interest” to include a prohibited relationship” among the three concern, title, “[l]egal right,” “pecuniary industry, beverage the alcoholic tiers stake,” “advantage,” “profit,” “party “general policy of reiterates the State’s having a common interest.” Concise tied and related house prohibiting Dictionary English Oxford Current (b) 102.01(a), (emphasis § practices.” Id. (7th 1919). 427 Contemporary ed. dictio added). 102.75(c) mandates “the Section “interest,” confirm standing naries that independence of members of the three- alone, meaning. still has a broad See Web 102.75(c). From system.” Id. all tier College Dictionary 758 ster’s New World this, con clearly was (5th 2016) (“[A] right ed. or claim to some paradig only preventing cerned not with business, thing ... as a par which one houses, matic, pre-Prohibition tied share.”); ticipates Interest, or has a practices” might also with “related (10th Dictionary 2014) ed. Black’s Law public negatively safe affect health and (“Collectively, ag word includes 102.01(b). Although See ty. id. gregation rights, privileges, powers, not previously Court has addressed ”). .... immunities provisions, courts that Texas tied house h foregoing. appeals have are accord wit court reasoned 388, Bailey, many Dickerson v. 336 F.3d. term dif See “the ‘interest’ invokes (5th 2003); and, modifier, Liquor, Cir. 397 S.A. Disc. ferent definitions without Comm’n, Beverage v. Alcoholic Inc. Tex. be so could the abstract broad (5th 1983); 291, 293 Neel F.2d ambiguous.” 709 Cir. vague and 449 S.W.3d at Bd., Liquor v. Tex. Control agree general proposition. with We 312, (Tex. 1953, App.-Austin Civ. Cadena contends that “interest” should be n.r.e.); Liquor ref'd Control writ narrowly vague construed or it will be Co., Distilling v. Bd. Cont’l Sales that, agree. unenforceable. we With do (Tex. App.-Dallas Civ. S.W.2d in a If undefined used has word statute n.r.e.); May also writ see ref'd broad; definitions, multiple pre we Store, Super Inc. v. Liquor hue’s Meik statutory lan sume—unless clear there (5th 1970) Cir. lejohn, 426 F.2d contrary—that Legisla to the guage liquor (noting that “the business has equally broad ture intended have subject legislative severe re been See, e.g., applicability. Greater Hous. straints”). Paxton, P’ship v. mind, that is history When faced term so With this structure being ambiguous, that it borders meaning to the “an interest broad we ten statutory look to the to limit a ... We start context the business of brewer.” we See, “interest,” possible meanings. e.g., id. Legis- with the term which correct (“Not key relationships, a level of control. ‘supported,’ the But surprisingly, “interest,” here, in subject dispa- to at the term as the context least six used term is alone, statute, in its verb form any rate of this not include inter- definitions does including est, nuanced many of those more as of ap- Cadena contends the court By reading in Rather, the term sub-definitions. peals’ holding requires. court the however, context, we can the- uni- narrow of other ‍‌‌​​‌‌​​‌​‌​‌​‌​​​‌‌​‌‌​‌‌​​​​​‌‌​​‌‌‌‌‌‌​‌​‌​​​‍appeals pointed to modified uses possible of definitions to the most verse throughout of “interest” the Code as hav- omitted)). (citations Thus, apposite.” when they ing thing one all refer to common: broad, terms interpreting context-sensitive economic interests. commercial and Con- “interest,” to such as we must be sensitive of common theme' to sideration this leads the context. Legislature the conclusion that the was that result from concerned with interests

Looking surrounding statutory the dealings among various business determining for assistance environment “interest,” participants between in the alcohol indus- meaning of we note that here, try. And of instances of term as evidenced the lack Code contains modifier, narrowing Legislature a throughout, both with and without modifi used variously broadly ers. “Interest” is referred the term “interest” and intended interest,” “pecuniary ownership “an inter to include all these interests. est,” interest,” inter “a “a real financial However, the term is nar then est,” any kind,” “any “an interest “in phrase rowed business Algo. Bev. See, e.g., Tex interest.” Having plain brewer.” determined 5.05(a)(3), (b)(1), 61.44(a)(1), §§ “brewer,” meaning of must we determine 102.01(c), Further, 61.71(a)(21), 102.10(b). of a business” brewer means. what “the specific “corpo Code uses terms is definition business more finite stock,” “affiliate,” “director,” “officer,” rate than the of interest. definition “Business” See, 11.48(a), e.g., §§ id. and “control.” generally enter “[a] refers commercial 102.14, 102.15(a), 37.07(1), Impor 102.18. prise profit; particular on for carried 102.07(a)(1) tantly, refers to “di occupation employment habitually en rect or indirect interest” the business Business, gaged gain.” in for livelihood 102.07(a)(1). ar retailer. Id. Cadena Dictionary (10th ed. Black’s Law gues multiple that the references differ Combining meaning this with the ent kinds interests and this latter refer with the “brewer”—and contextualized ence to a interest” indirect “direct definition of “interest” discussed above—

means that intended leads to conclusion “an interest in the of a to be interest business retailer of a business brewer” means what the broadly than more an interest viewed it appeals phrase court said did: disagree. We of brewer. “broadly any encompassеs commercial “interest,” alone, standing necessarily term provides a economic interest that stake might subsumes the other modifiers of an performance entity the financial en example, limit the term. For either the gaged ... of the manufacture alcoholic term interest” or “a “an indirect the term beverages.” at 166. interest,” considered, separately direct ap for the asserts was error court “an in than interest.” “Interest” narrower words, these, peals specific isolate the define in addition cludes both individually, nor them and then combine them other neither direct Further, produce clause. “an While court indirect. interest” also sub stock, appeals’ might not be affiliate-subsidiary approach appropri- corporate sumes case, every legislative it was. Its Holding ate for here inter- intent. that only a brewer, plain both the lan- or pretation meshes with someone in the shoes of a brew- er, “person is an words, with interest in guage and context of the statute’s of ... business open brewer” would Legislature’s policy as of strict well for companies door across the alcohol in- tiers of the separation between the indus- dustry to tied provi- circumvent the house try. reading Such a significantly sions. would Next, turn to we Cadena’s other Legislature’s expressly frustrate the stat- arguments, argument with its beginning purpose separation” ed of “strict pre- in of that an the business a brew “interest venting “any overlapping ownership” to only actually er” should those extend among industry. the three of the tiers See beer, engaged brewing in the business 6.03(i), 102.01(a). §§ Tex. Alco. Bev. Code not a disagree brewer’s stockholders. We argues Cadena also the relation- First, for interpretation two reasons. this ships prohibited provisions in other effectively would eliminate “interest” from provide for support argument Code least, very the statute. At the Cadena’s relationship that FEMSA’s with the Hei- reading modify term would “interest” neken Brewers is not included in section something “engaged.” into akin to When 102.07(a). pro- For section 102.11 example, Legislature phrase or uses a word in hibits a or distributor” from “manufacturer part of it from one a statute excludes “directly through a indirectly, or or subsid- another, implied not be term should affiliate, officer, iary, employee, agent, di- it has where been excluded. Future & Safe rector, member,” from owning firm Water, at A Clean look to “any premises interest the business provisions other shows Code that the Leg An a retail of beer.” Id. 102.11. dealer islature to was careful use the term “en controls, “affiliate” is person “a who gage” it to limit a sought when statute’s by, controlled common control is under applicability directly to those who were Orgs. Bus. person.” with another Code participating in one of three tiers of § 1.002. Cadena is evi- asserts See, industry. e.g., Tex. Alco. Bev. only Legislature dence the intended 61.44(a)(2), (a)(29), 102.01(a), §§ 61.71 prohibit typical tied houses and 102.15(a). 102.09, Legislature in Had failure use terms as affiliate such meaning “person tended to limit the of a 102.07(a) subsidiary in shows the section ... with the business something Legislature more nar- intended beer, engaged brewing brewer” those fundamentally argument row. But this presume just we it have that. said Leg- flawed because it fails to consider the Geophysical, See TGS-NOPEC express policy separa- islature’s strict 439; (Dall.), Sys. Laidlaw Inc. v. Waste tion tiers. A fair reading between the three Wilmer, City SW.2d 102.07(a) light Legisla- section 1995) (“When Legislature employs multiple policy ture’s statements shows the term section of statute ex one designed prevent far more statutes are section, the term cludes another than of a paradigm the historical tied excluded.”). house, implied directly should not be where in which manufacturers interpretation Our finds reinforcement in owned retail outlets. viewed in con- When text, meaning Legislative the broad of “interest” in- estab this statute manifests Second, agree prevent relationships. lished above. we tent to more tenuous 102.07(a) 102.01(b) (pro- TABC that Tex. Alco. interpreting See Bev. Code viding general to a only extend would subvert “strict adherence brewers appeals court of claims that the the tied house prohibiting policy added)). The (emphasis because practices” applied the statute “backwards” related number statutes sheer only that it is such the structure 102.07 approaches it the different enacted and in the with an interest applies those relation- proscribing prohibited took trying to of a who are brewer broad, its ships, and reinforce specific both business—i.e., the in a meddle retailer’s § 102.14 e.g., id. Compare, intent. clear cor- relationship. Cadena typical house tied and prohibiting manufacturers (specifically great deal that there is a rectly points out fixtures and providing from wholesalers from prohibited more that a brewer brewery prod- selling equipment anyone a than the reverse. doing with retailer with consumption), on-premises for ucts 102.07(a) person no provides that Section 102.11(1) a man- (broadly prohibiting §id. meet may a condition who meets certain directly indirectly own- from ufacturer any eight separate conditions set out the retailer). in ing any a interest (a)(8). (a)(1) through in See subsections court of further that the claims Cadena § 102.07.While there Tex. Alco. Bev. Code section wrong to consider appeals was things a brewer cannot do with are more 102.01(a)’s house and use definition of tied versa, vice the respect to a retailer than support its conclusion language to apply that we it statute does not mandate forbid- any tiers is overlap between any particular in manner. The condition- (1) reasoning is two-fold: Cadena’s den. (a) triggering in subsections and verbs 102.01(a) a definition contains and section (a)(1) in tense present and are both (2) phrase “tied prohibition, not a holdings. contemplate future current anywhere in sec- appear not house” does Legislature only prevent intended If the Both of these statements are tion 102.07. in read interests brewers preexisting true. But it would nonsensical those with references particular retailers, sections Cadena in it acquiring from interests with considering them in concert have, without have, presumably would could 102.01, provides overarching section which 311.012(a) See Tex. said so. Gov’t entire stat- fairly reading for context (“Words present in tense include house statutory definition tied ute. The Legislative tense.”); see also future in unre- found an provision is not narrow Legislative Council, Council Draft- Texas statute; undergirds it and frames the lated 2017) ing (Jan. (directing § 7.35 Manuаl subsequent purpose Chapter Each tense present drafters to whenever “[u]se by given context is informed and provision only this statute possible”). To hold that rate, application was any it. At Cadena’s prevent in those one direction would flows cross-tier not because FEMSA’s denied gaining from an interests brewers with 102.01(a). It was section interests violated retailers, not but retailers interest relationship violated denied because Although gaining brewers. interests 102.07(a). considering Even without section typical is the controlling a retailer brewer 102.01, 102.07—by language, section house, the statute’s exemplar of a tied structure, policy multiple other policy the various language, as well as throughout the Code— statements found statements, legislative intent demonstrate Thus, section requires separation. strict separation going both provide strict terms, 102.07(a), prohibits its own reading proposes is ways. The Cadena out has an interest the business person who step completely at odds with that having an of a from also brewer policy. a retailer. tee, Additionally, language’s claims that but the reach extends well stat- interpretation beyond permittees. court of Both appeals’ permittees and like gives pow- ute the TABC entities FEMSA are covered effectively a new sub- (a), grant only permittee it can provides er that carte avail blanche exceptions itself of the reject application an the statute. Sec- ond, “permittee” appears term no guiding principles applicants which over First, times If disagree. Code. rely. can We this is 102.07(a) TABC; had intended section it power new conferred on the include only permittees, say it is safe to simply interpretation power have term. used always has had under the Code. Second, the TABC does not carte have Finally, Cadena claims that reject grant application. blanche appeals’ court of “signifi use the word only reject It power applications has the cant” to describe interest in FEMSA’s the that section or some other violate 102.07 guid Heineken Brewers further without provision of Res. the Code. See Tex. Nat. 102.07(a) impermissi- ance section renders v. Util. Conservation Comm’n Lakeshore But bly vague. we view court of ap the (hold- Co., 368, (Tex. 2005) 164 377 S.W.3d “significant” peals’ consideration of in that, ing despite petitioner’s arguments to its in reaching light conclusion the facts contrary, the “the Commission has statuto- of this See Fin. case. Comm’n Tex. v. ry authority pursue an ac- enforcement (Tex. Norwood, 566, 2013) 594 court”). tion in Again, district Const, I, II, (citing art. art. is violated a with only person 102.07 when statute, conclude that under the an We a direct in or indirect interest the business in the interest business of a brewer exists of a retailer has a or also “commercial person when has commercial finan in provides economic that a stake interest interest—significant cial or otherwise— entity performance” financial of an en- in provides per that stake the financial in gaged manufacturing distributing entity person engaged of an in formance beverages. of alcoholic See 449 S.W.3d Further, can brewing. hardly Cadena is agree we that the While statement argument credible make a that FEMSA’s broad, this does not render the statute million in Group 115 shares the Heineken unenforceable. unwilling not it significant when of ap-

Cadena contends that the court give permit so Cadena can up obtain peals for “potential read into the statute a it seeks. no in influence” standard finds basis FEMSA, by ownership stock in language. Regardless statute’s has Group, a commercial eco- Heineken so, of appeals

whether the court we do did provides a stake in nomic interest that not, explained. as we have entity engaged performance financial brewing beverages. in alcoholic This inter- argument Cadena also raises the est, indirect own- multiple permittee coupled references to with FEMSA’s “a (a)” Cadena, in ership covered in ex- interest who be under Subsection if ceptions beverages sec- retailer of alcoholic section 102.07 mean that 102.07(a) only granted, tion were would violate section 102.07. applies permittees. 102.07(b), (d), Thus, See Tex. Alco. agree appeals’ §§ Bev. Code we court 102.07(a) (e), (g). wrong of section interpretation This is for at two now least First, corporate separateness turn person reasons. with an interest to Cadena’s if arguments permit- business a brewer can be a determine FEMSA’s 2002) sepa corporate (refusing collapse from must be excluded interests cross-tier purposes); jurisdictional rateness in- corporations because consideration Branscum, Castleberry S.W.2d v. separate entities. volved (Tex. 1986) finding (reinstating jury allowing the entity not sham status and on Corporate Separateness B. individuals fiction to insulate corporate argues doctrine Cadena corporation’s liability from their applies separateness corporate note); Gentry Plan v. Credit promissory ignored context and cannot regulatory (Tex. Hous., 528 Corp. S.W.2d has an determining FEMSA whether ego 1975) of alter (affirming principle of the Heineken interest in the Co. v. liability); Bell Oil & Gas tort or a or indirect Brewers direct 336, 341 Corp., Allied Chem. cites cases Cadena the business Cadena. 1968) not (holding parent corporation distinct holding that subsidiaries are obligations of affiliated for contract liable compa parent companies because parent Mortg. Ayub, v. corporation); Co. Auto. that do simply shareholders nies are (Tex. 1924) (holding that 266 S.W. an interest the business own corporation in a are entire shares of stock Thus, they stock. in which hold companies corpora ly from the separate and distinct by, in erred argues the TABC R.R. Comm’n property); tion’s cf. im effect, corporate veils piercing the 679, Co., Gas 844 S.W.2d Tex. Lone Star v. Cadena’s, Brewers’, the Heineken puting (Tex. 1992) separate the (upholding 690 holding company’s each intermediate Rail but because the corporate existence FEMSA, of evidence absent interests question in contem rule road Commission form, or of it to corporate use of the abuse such, not because of common-law plated v. a See SSP Partners circumvent statute. result). require that principles would (USA) Corp., Gladstrong Invs. 275 S.W.3d out, But, correctly points TABC as the 2008). 444, (Tex. 451 principles are dif corporate separateness dispute, generally, have no we While For ex regulatory in context. fеrent the it ref reading of the cases with Cadena’s Mid Co. ample, in Financial of Beneficial erences, disagree application the we with Miskell, with a land v. we were faced proposes. As the of the law it (Tex. 482, 483-84 issue. 424 S.W.2d similar out, cites of the cases Cadena points each 1968). Finan Beneficial App.-Austin Civ. sepa principle corporate of regarding the wholly Company cial of Midland was in doctrine rateness addresses Finance subsidiary Beneficial owned liability, oth or contract context tort at Benefi Company Delaware. Id. E.g., Miles v. circumstances. er similar all of the stock cial Delaware owned (5th 193, Co., Tel. F.2d 197 Am. Tel. & 703 Reg sixty corporations that all held Texas 1983) liability on (refusing impose Cir. ulatory Loan Licenses issued under company for tortious invasion Id. Act of 1963. parent Loan Regulatory Texas Partners, at 275 S.W.3d an appli SSP filed privacy); Beneficial Midland When subsidiary License, (refusing to hold liable Regulatory 451-52 cation for a Loan indemnify Loan company’s Regulatory because parent failure was denied retailer); City v. Edin license S. Union Co. Commissioner determined (Tex. (refus 74, 2003) provision 89 cause a violation burg, 129 S.W.3d any person, “di identity prohibited for tax Act that ing collapse corporate indirectly, through subsidiaries Belg., rectly or N.V. ing purposes); BMC Software (Tex. or have an Marchand, 789, holding companies, to hold 83 799 v. S.W.3d

333 (60) licenses, thereof,” “or sixty phrase than the business interest in more thereof, statute, the business now-repealed requires tied house (citing Regulatory license.” Texas such separateness corporate to be observed. 205, 1963, R.S., Leg., Loan 68th ch. Act notably, But both of were these issued 10(c), Laws revised Tex. Gen. Compare Miskell before was decided. Tex by Revising Regula Act of Texas (1946), Att’y Op. 0-7039 No. Gen. Tex R.S., tory ch. Leg., Loan Act of 60th Att’y Op. (1942), No. 0-4750 Gen. 617). 3.06(3), Gen. Laws Miskell, holding at 484. Our S.W.2d In upholding application, brings denial Miskell Attorney General’s rea- statutory Court provision Second, held that the soning question. into courts are corporate sepa- directed that fiction “the by attorney general opinions. bound rating parent, Corporation, Delaware Smith, re subsidiaries, its Texas sixty-one Instead, are by principle we bound

corporations—the wholly of which is stock statute, terms, by in Miskell-. outlined parent corporation”—should owned agency’s controls administrative author- ignored Id. at that situation. ity ignore corporate separateness. recognized implicitly Court that a statute statutory if 484. Even lan- look agencies could authorize regulatory guage attorney general in the referenced beyond Doing veil. See id. so corporate opinions language exact tracked the sec- circumventing prevents corporations 102.07(a),- tion our section interpretation frustrating legislative statutes and intent 102.07(a)—and its still con- reach—would corpo- using legislatively authorized above, trol. And as discussed rate form to avoid statute’s reach and extremely prohibits broad and 102.07 out to allow harms set long interests so as those even attenuated applies The same prevent. See id. rationale per- financial interests rooted argues here. that Miskell is distin- of the in is question. formance entities This in guishable because the statute at issue authority to statutory allow the sufficient to that references subsidiar- case included past corporate look the fiction TABC to companies. and lan- holding ies But the enforcing this when statute. 102.07(a) sufficiently in guage section subsidiary to encompass corporate broad if argues also that even the stat- Cadena view, relationships. by enacting In our disregard corpo- the to permits ute TABC that “no language providing person broad it does not have authori- separateness, rate or busi- who owns has interest an the Rather, interest. Cadena ty over FEMSA’s may ness a ... also have “a brewer” authority TABC’s posits that the extends interest direct the business indirect interest, which does not only to Cadena’s retailer,” Legislature of a ... the intended 102.07(a). Because the violate section beyond the courts look TABC and authority permit appli- over has the TABC corporate enforcing separateness status in reasons, cant, authority its does Cadena provisions. the tied house to its FEMSA or interests. not extend allowing contends that the TABC’s Cadena attorney points Cadena to various authority prevail to this case exercise it its general opinions support claims authority every person it give will over for persuasive find these view. We do a fi- First, the world remote anywhere with appli several reasons. the two most permit in a holder. nancial interest But opinions—the only cable two that discuss power confuses the argument this both statutes—question the tied house whether thority every might person over who have the TABC the reach section and 102.07(a). prohibited a interest. sum, the the TABC Code authorized 26.03(a) the provides that Section grant permit applica- to to refuse Cadena’s retailer’s rules a wine and governing beer granting tion when it would have resulted as those off-premise license same are of the in a violation tied house statutes. As li off-premise governing a retail dealer’s 102.07(a)’s case, it to relates section 26.03(a). If cense. Tex. Alco. Bev. Code permits disregard TABC language to protests TABC a permit application, corporate separateness of entities judge county hearing. holds determining an has a entity when whether 61.31-32, provisions §§ other Various then direct or interest in cross-tier indirect grant or county power to give judge of a business retailer an interest §§ 61.42-.44. application. Id. refuse aof business brewer. FEMSA’s indirect points to various use Cadena statutes’ ownership of provides it 100% Cadena prove “applicant” to that the and an interest of a business retailer. only county judge’s authority extends Likewise, ownership large FEMSA’s stock agencies This is applicants. true. State ability appoint members to and statutory creatures have no inherent the Heineken directors in Brew- board authority powers the other than those companies holding provides it with ers’ an expressly confers. Mun. Thus, in the business a brewer. v. Agency

Power Pub. Util. Comm’n of acting and county judge the TABC were 2007); Tex., S.W.3d they their authority when refused within Co., 164 Lakeshore Util. grant application Cadena’s only grants Section 61.43 the TABC upon finding granting it would result an county judge authority refuse 102.07(a). in a violation of section granting applicant’s permit it would when cause “conduct retailеr Equal C. Protection contrary to place law -in a manner equal protection Cadena its claims - manner conducive to violation process rights due were violated Tex, Amco, Bev, 61.43(a)(9). law.” arbitrary discriminatory re- TABC’s terms, 102.07(a), But very evidence, grant permit. fusal As person to every much broader applies expert report references it in- requirements who meets establish sig- into evidence which reflects troduced prohibited gives the interest. Code pervasive holdings nificant and cross-tier to authority TABC like provisions enforce by publicly throughout companies traded 102.07(a) Thus, against permit applicants. argues the of Texas. that State Cadena its permit if the TABC approved, were expert report proves also the State of that authority not have to force FEMSA Texas billions of of holds dollars cross-tier retailing to one of its sell interests the is in violation of investments and itself the manufacturing and based tiers tied house statutes. 102.07(a).But the TABC does have author ity, proceedings, on the power based the In conferred administrative Legislature, reject to if of play” fair must ob Cadena’s the “rudiments Chevrolet, it granting operate to Inc. would cause served. Austin v. Motor in a “manner of violation Bd. Div. conducive Vehicle & Motor Vehicle Tex. of 425, (Tex. Thus, Transp., Dep’t See id. not 438 law.” we do read of 2006) 102.07(a) provide App.-Austin (quoting au- with Pub. Office of

335 Comm’n, Despite significant Counsel Util. overlapping Util. v. Pub. in (Tex. App.-Austin terests, expert report S.W.3d not provide does denied)). “licensing An pet. any administrative of applicants evidence that are similar authority unlawfully and if arbitrarily ly acts Each of situated Cadena. entity’s similarly applicants it treats situated dif cross-tier interests in alcoholic-beverage- ferently justifica without an articulated companies related outlined the ex equal protection Id. To tion.” establish report pert demonstrably is qualita claim, (1) deprived must it party show tively Cadena, different from those of differently from other similar was treated FEMSA, Group, Heineken (2) no ly persons, situated reasonable First, respect brewers. to the defined exists treatment. disparate basis employee contribution plans’ and benefit City Living v. Cleburne See Cleburne of cross-tier ownership, Cadena does 432, 439, Ctr., 473 U.S. 105 S.Ct. any point holding entities cross-tier (1985); v. Town Mayhew L.Ed.2d stakes come close to FEMSA’s multi Sunnyvale, 964 million share interest in the Heineken 1998). Cadena fails to meet the first ele Second, Group. mutual managers fund ment. duty generally have diversify fund’s portfolio. See Restatement (Third) points While Cadena evidence op 1992) cmt. m (Am. Trs. Inst. Law pervasive holdings cross-tier (“[A] array of pooled vast investment vehi State, it not show that' across does cles are now available investors ... similarly entities situat involved are including] the shares mutual funds ... primary to itself. The evidence of ed over [, offer holdings which] diversified trustees ownership expert report lapping ”). FEMSA, course, .... has not been during hearing submitted before the a duty nothing shown to have such county judge. report on a based suggests it would. the Texas And Public portfolios of four Texas Pub review heavily regulated Pension Funds are statu lic contri Pension Funds and the defined torily See Tex. entities. created Gov’t Code publicly plans and benefit traded bution (Employees §§ 811.001-815.515 Retire retailing the alcohol companies Texas); §§ System ment id. 821.001- manufacturing experts industries. The re 830,205 (Teacher System Retirement Public ported each Pension Texas Texas); §§ 43.001-.020 Tex. ownership Educ. had cross-tier Fund interests l (Texas Fund); Schoo id. Permanent totaling aggregate. over in the billion $5 (Permanent §§ University 66.01-.84 According to report, the State Texas Fund). caps And the Texas Constitution beverages is a licensed retailer of alcoholic University security Fund’s Permanent universities, through several which state corporation single investments at 1% ostensibly causes it to be violation of the single and stock of a ownership corpora house tied statutes because the interest VII, § art. tion 5%. 11a. manufacturing through holds tier Const. contrast, a non-governmental FEMSA is report, The Texas Pension Funds. also greater corporation a far with provides significant of indirect evidence Group the Heineken overlapping both its subsid ownership, through most often iaries—culminating in its equity funds that indirect mutual own alcohol- 100% ownership cap of companies, related as Cadena—than the that as well direct over places on ownership multiple the Texas Constitution Per lapping tiers plans. University defined retirement manent Fund’s and benefit investments. 336 amici not that ions such as the seek could be appeals court of determined n.18; Farm more certain. Id. at Greene v. not an application of was denial Cadena’s (Tex. Exch., 761, ers Ins. 446 S.W.3d 767 protection violation “because there is equal 2014); Black, Hosp. State v. 392 Rusk TABC has granted no evidence that 2012); 88, (Tex. 95 In re Gen. Elec. S.W.3d applicant an permit to license Co., 681, (Tex. 2008); 693 S. 271 S.W.3d cross-tier similarly significant investment Lomas, Tex. Auth. v. 223 S.W.3d Water agree. at 172. interest.” 449 S.W.3d We 304, (Tex. 2007); Northglen 307 Brooks v. that Although provides evidence Cadena 158, Ass’n, (Tex. 2004); 141 164 S.W.3d holdings— cross-tier some entities have Grant, Power Co. v. Sw. Elec. 73 S.W.3d pension public both entities state 211, (Tex. 2002); 222-23 Med. McAllen any evidence of provides no funds—it (Tex. Cortez, 227, Ctr. v. 66 S.W.3d 232 significantly, or are in a situation them 2001); Bus. Tex. Ass’n v. Tex. Air Control of to materially, even similar Cadena’s. See ., 440, (Tex.1993); Bd 852 S.W.2d 939; City see Mayhew, 964 also S.W.2d 1, (em Const, IV, art. §§ see also Jones, Dallas v. of attorney general, of powering part denied). (Tex. App.-Dallas pet. We department government, the executive of appeals’ agree with the court determina- advisory opinions to governor issue to the to an

tion failed establish officials); Valley Baptist other Med. equal protection claim on based Gonzalez, (Tex. v. Ctr. permit applica- TABC’s treatment of its 2000) II, (“Under article 1 of the tion. Constitution, juris Texas courts have no advisory opinions.”). Ad diction issue Theory

D. One Share dressing the one share issue head unquestionably advisory would in this Finally, theory we come the one share for a case that is not about application parties both the addressed and the permit being of one share denied because theory amici. The and one dissent share This overlapping of stock as the interest. ap- if argue advocates the court ownership is case about FEMSA’s 100% peals’ upheld, decision is the TABC will Cadena, ownership 100 million over reject per- have unlimited discretion Group, shares of stock the Heineken application mit on the applicant’s based financial resulting and the interests. ownership single shares of stock in two application Cadena’s is business. about argu- of the three tiers. essence It to conceive of a enter- is hard produce ment is that this would an absurd prise that refuse itself to divest give result and TABC unbridled dis- overlapping one share of stock order to suspend cretion almost permit. equally obtain a And hard reject any application. almost The amici the re- expending conceive much, “clarity” regarding any, seek how if necessary to litigate sources a one-share ownership permissible cross-tier under if holding. happen, But cross-tier it does the statutes. applicant opportunity then the will have unsympathetic We toward the contest the TABC’s decision on the based industry’s clarity. desire But as was facts that case statutes then McRaven, recently going in Hall v. said effect. beyond jurisdiction of our no limits “is Response E. Dissent

trifling matter.” 508 S.W.3d 2017) (Guzman, J., concurring). And our Our as a court is to deter- role ‍‌‌​​‌‌​​‌​‌​‌​‌​​​‌‌​‌‌​‌‌​​​​​‌‌​​‌‌‌‌‌‌​‌​‌​​​‍limited jurisdiction mining legislative advisory opin- through lack to issue intent words Legislature it the selected. dissent’s So is here argument with Cadena’s analysis proposed signifi- position. result would and the dissent’s cantly express erode Legislature’s the In determining plain language the mean- of separation mandate strict between the ing “interest,” the dissent looks legal beverage tiers of the alcoholic three indus- ordinary in at dictionaries use the time try, and would undermine the statutory 102.07(a)(1) was enacted. Post at designed indepen- construct to “assure the 356-57. Those indicate that “interest” had the members the dence three-tier array meanings. a broad It “could mean 102.75(c). system.” Tex. Aloo. Bev. Code anything from a concern mere or advan- agrees The dissent that case turns tage to participation, right, share, language “person on the who owns or has title.” Post at But rather than apply brewer,” in the business of a an presumption the Legislature that the that it turns specifically, more on the meant what it said and meant to “in- use meaning of In construing “an interest.” ordinary, sense, in terest” broad language, the does that dissent what we meaning dissent would narrow recently held be error ExxonMobil v. by adding statute engrafting words and Coleman, (Tex. 900-01 S.W.3d control, into the statute a participation, 2017). That the construc- case concerned influence element no that has basis of a Texas provision tion Citizens statutory language and is direct contra- (TCPA). Participation Act Id. at 897-98. legislative diction of express directive appeals’ judg- the court of We reversed regarding significant- tied It would houses. language ment because read into the ly application narrow the of the statute. application. TCPA narrowed its Id. at essence, the would manufacture dissent applies What we said here. 897-98. there by definition not found in the statute add- First, unremarkable, we recited the ing words not Legislature did enact. foundational, may principle that court “[a] further concludes that dissent judicially by adding amend a not statute “‘[ijnterest’ then, must, mean something words that not contained the lan- interest, than as the TABC less main Instead, guage apply it must statute. supports tains.” Post at 360. that state It (altera- the statute as written.” Id. at 900 by simply saying specific ment original) (quoting Lippincott tion v. language at narrower issue is than the Whisenhunt, (Tex. post breadth as whole. See 2015)). Next, that “the court of we noted 360-61. But this matter must be decided appeals improperly scope narrowed the whole, within the Code as a the context of plain TCPA the Act’s ignoring lan- prohibiting which is all about tied houses. guage inserting requirement Cont’l v. Functional See Cas. Ins. Co. Res more than a ‘tan- communications involve Assocs., toration S.W.3d relationship’ gential public matters all, not After if the did (citing Lippincott, concern.” Id. at 900 statutes limit (‘We intend tied house Legisla- at 509 presume the beverage industry partici what alcoholic ture included each word the statute for do, purpose could what pants and could purpose and that words not included omitted.”)). And for would the statutes serve? the dis purposefully express- We were say major part statu sent that a ly argu- noted that of Coleman’s “[e]ach whole, than tory is narrower narrow scheme constitute^] ments effort any basis in the reading pointing without statu scope language the TCPA tory disingenuous. language, into statute that is not there.” Id. at that trouble the dis- further that its attenuated scenarios says The dissent sent. only one is that renders interpretation Post at

the statute enforceable. 365-66. recognize that under in our We way of that our saying is another That likely or terpretation, there are be will construction, ap that of the court 102.07 that will not violations of section not light. come But does render the urged by is the construction peals, which incapable being meaningless or statute TABC, In absurd or is nonsensical. enforced. There is difference between deed, expressly says just that. the dissent enforceability. enforceability perfect disagree. dissent Post at 363-64. We regulatory that no Experience teaches absurdity by stating show “the attempts to agency has resources to police enforce inescapable extension of inter logically every every against violation. But statute mean any financial preting ‘interest’ jaywalking, against speeding, laws even single-share so-called theo interest is the murder, they not invalid because are are goes provide It ry.” Post at 363. it is not enforceable. And not for perfectly consequences of our read examples make courts to laws “better” undertake above, ing As this of the statute. discussed them, into by reading language absent the by the precluded legislative Court is Constitution necessity to clear do so effect intent an absurd nonsensical advisory opinions. Advisory avoid issuing from Legislature could not result that the have they opinions prohibited pur because Corp. Syn intended. Carbide v. Union port parties future on a to bind based atzske, (Tex. 2014). That 438 S.W.3d injury,” rather “actual “hypothetical than not the circumstance here. is Bd., harm.” Tex. Air imminent Control inter While court S.W.2d Conclusion IV. “the con preting a statute should consider ownership indirect FEMSA’s sequences possible that result each breweries, Group and its Heineken on conse interpretation,” dissent relies together ownership its indirect inter- quences conjures that transcend Cadena, prohibitions triggers est pre realistic situations. boundaries of We as to outlined in 102.07 Cadena and Legislature sume is to know “the bound apрlication permit. for a consequences” only its actions and judgment appeals of the court if con ask “the intended those affirmed. White, sequences.” City Desoto v. Cf. dissenting opinion, filed a In this Justice Willett joined. in which Chief Hech’t Justice case, broadly Legislature provided pared its reach inclusive statute participate in Boyd Justice did not leaving its enforcement the TABC. The decision. TABC, agency, is afford administrative Willett, joined by Justice Chief Justice great ed a deal discretion and deference. Hecht, dissenting. Co., Serv. State v. Malone See pub- transaction shameful When this Indeed, (Tex. 1992). 763, 767 arewe seen lished to it will the world what only interpreting this now statute system brewing may vile monopoly, eighty years than after it first time—more of unscrupulous the hands become .in enacted—suggests was the TABC has the tied persons. Thank house con- God effectively reasonably used date tains it- the seeds destruction within self, day come—perhaps will pursuing the and the that discretion and avoided come, my in time or in Inn to yours, plying will Castle focus less on certainty—when to a this shameful mo- liquor on welcoming and more hotel no will more.1 nopoly be tolerated guests. Till to limit consumption So tried Inn, imposing at a semi-teetotaling the losing party’s That was condemna- man, policy. “one brewery one drink” England’s pervasive tion tied-house re- sued, successfully contending liquor in gime what is as the “one remembered limits the lease. breached one drink” man case. At turn century, Englishman nineteenth named story repli- Till’s was one would be in village Elliott Downs Till retired throughout England, cated ultimately Eynsford, nestled within the farmland houses, America. by Tied saloons owned Kent, Till England. acquired con- woods under exclusive contracts producers, with Eynsford property siderable and be- pre-Prohibition saturated America. But his came invested the value of new Twenty-First once the Amendment ended surroundings. But Eynsford one establish- what President Hoover called the “noble “public Till: a small ment concerned experiment,” government the federal Harrow,” or beershop house” called “the sweeping legislation the states enacted by a Till brewery, later owned which eliminating at tied aimed houses. place encouraged describe “a [that] Till drunkenness.”2 believed establish- own prohi- Texas enacted its tied-house proper place was better “a ment suited as has bitions the 1930s and them amended travelers, of accommodation” for so he repeatedly key provision then. The since brewery with the contracted transform 102.07(a)(1) today’s case is of the section country Harrow into hotel called Code, which Beverage Alcoholic states “no renovations, completing Inn.3 After Castle or has an person who interest in the owns into 50-year entered lease with Till ... ... may business brewer ... own brewery, keep Inn promising to the Castle or have a direct or indirect interest in the greatest open days “on the number of of a ... retailer.”6 allowed,” hours one law Beverage The Texas Alcoholic Commis- “usual tied-house He addi- conditions.”4 application sion denied Cadena Comercial’s tionally pledged exclusively” to “deal retailer’s Cadena’s because stout, beer, brewery porter, “for all publicly parеnt company, FEM- ale, traded liquors, draught or other malt whether bottle, levels of intermediate owner- SA—several which con- should sold ship removed from a 20 sumed” But Till ab- at Castle Inn.5 Cadena—owns promiscuous drinking appoint horred stock and can percent and wanted 1. “One Man One Novel 4. "One Man One Drink—Landlord’s Novel Drink—Landlord’s n Brewers,” Methods—Objected Brewers," Methods—Objected Ashbur- Ashbur- Guardian, 1906, 24, July Guardian, available ton at July ton at available https://paperspast.natlib.govt.nz/imageserver- https://paperspast.natlib.govt.nz/imageserver- newspapers/AG 19060724.pdf. newspapersMG19060724.pdf. Drink,” Herald, "One Man One 2. Vol. Timaru Brewery Co. Lim. v. Till and God 5. Dartford LXXXIII, 20, 1906, Issue June avail- (1907) frey 643. 95 L.T. https://paperspast.natlib.govt.nz/ able newspapers/THD19060620.2.40. 102.07(a)(1). Tex. Alco. Bev. Code Castle Inn was Castle Ho- renamed today. open http://www. tel remains See file). case (copy castlehotelkent.com meaning of two within percent board members brewer 102.07(a)(1). of inter- neither holding companies—several Reading levels the statute nonliterally hyperliterally, from FEM- nor but contex- ownership removed mediate SA—that, turn, foreign must, Hei- that “an tually, apparent own three as we it is “any claimed that breweries. TABC interest” cannot mean interest” neken application Cadena’s would vio- all-encom- granting “an interest kind”—two 102.07(a)(1) FEMSA passing late section because formulations elsewhere used pro- the busi- expressly would have interest both law Code. Texas tied-house (Cadena) objective the busi- overriding of retailer and claims the ness (Heineken). indepen- system: of brewer “to assure the ness three-tier sys- of members of three-tier dence TABC, appeals court sided The textually “pub- This is the tem.” manifest holding that as “interest” used section policy,” lic into the Code itself. enshrined 102.07(a)(1) “broadly encompasses any specific term with The used pro- that commercial economic interest specific meaning: “independence,” de- performance a stake the financial vides Dictionary “[t]he Black’s fined Law manufacture, entity engaged of an being from de- condition of free state distribution, or of alcoholic bever- sale subjection, pendence, or control.”10 We ages.” Applying expansive, zero-tol- not deduce we can The need when derive. standard, appeals erance the court held plausible textually interpretation most any person any the Code is violated time ability “interest” to con- that connotes the any share of owns interest—even one trol, coerce, opera- influence stock, companies apparently—in two en- tions in another tier. industry. gaged in different tiers Cross-ownership of “any financial interest” any This record is cross- devoid such any “potential for influence” violates subjection. corporate tier actors here 102.07(a)(1), of ap- the court section said independent, incapable flexing remain concluding a for- peals,8 has FEMSA monopolistic Corporate tendencies. The overlapping the retailer bidden Agreement expressly denies Governance (Cadena) (Heineken) and brewer tiers. right “any or influence FEMSA or control right coop- or consultation or other form of down, simply stat- Distilled the issue is Holding relating eration” Heineken prohibited is a under ed: What “interest” cross- Companies.11There is no verboten 102.07(a)(1)? Does Texas law forbid coercion, or retailer- tier otherwise-illicit connectedness, degree of commercial manufacturer amounts attenuated, overlap that trifling however are corporate violation—not tied-house unless relationships only prohib- certain cross-tier discounted, agree- ited, company structures namely specter those that raise the disbelieved, ments are contextual stat- marketplace influence or coercion? disregarded. utes are FEMSA, I reverse and hold otherwise, I parent, Because the Court holds Cadena’s far-removed does respectfully an “interest” in business of a dissent. have 7. Corp. Independence, 10. v. Tex. Dictionary Comercial USA Alcohol Black’s Law Com’n, Beverage (http://thelawdictionary.org/independence/). ic App.-Austin Corporate Agreement Governance 19.10(a). 102.75(c). 9. Tex. Alco. Bev. Code op History Regulations Liquor system

I. pire.15The new rife with cor- was Leading however, ruption, monopolies and led to Tied-House Statutes justices peace had little England’s Licensing A. Scheme authority 1600s, to curb.16 early and the American Pre- Parliament, up corruption, fed with the Prohibition Era giving justices power passed laws regulations. legis- enforce the Incremental Tricking, treating, prostitution.12 eventually led to Licensing lation Act History regarded public has saloons and required which makers sellers disdain, houses with no small measure “spirits” to obtain a bona fide license deeming repute places them of ill where governing “An authority.17 irrevo- society’s subjects ply their seediest trades monopoly being cable was now brought passersby. innocent the in- Regardless, more and into to royal more subservience dustry has for been around millennia. And authority.”18 These typically licenses were so, industry regulated has been only granted to taverns and inns and were millennia. purpose offering for the of sole refresh- Some of first regu- recorded alcohol ment to brought travelers.19 Retailers were lations form penalties took the of criminal licensing into the scheme in 1737.20Under 1000, In year govern- for intoxication.13 the statute, tied-house-type the first the “Gin began taxing of import liquor.14 ments 1751,” monetary penalties Act of were as- But uniformity regulation the real be- against distillers to also sessed found be gan early and 17th centuries 16th product.21 selling their own during English of reigns monarchs Ed- 1552, regulatory As tightened ward and Elizabeth I. In Edward noose on VI alike, per- producers justices decreed ale makers must receive consumers and of peace requiring mission to their the em- of began proof sell wares within suitable 13, Johnson, “Probably supra (citing 12. the word ‘saloon’ 15. note when we use at 214-15 English public place most of it as understands History Holdsworth, William of Searle 222, (3d ed.) 357-58.). where there be unlimited excessive drink can Law ing place in a called a 'tied-house.' Unlimited drinking excessive because result of as a 16. Id. high keeper cost of his wares the saloon encourage every I, (formal- would use trick and (1627) device §4 17. Act of 1 Charles c. 2 sales, treating, prostitution such and so ly Suppressing “An for the titled Act better Fogаrty, Super forth." David keepers”). From Saloon to unlicensed Alehouse Reshaping Packaged market: Beer and the Brewing Industry, 12 U.S. Vol. Johnson, Contemp. supra note 18. n.83 (1985) Drug (cleaned [hereinafter 564-65 up). Probs. Fogarty]. ("These designed 218 were 19. Id. at acts Kessler, inns, 13. Frederic R. victualling A. Johnson and Ruth prevent ale-houses or Liquor Origin System—Its The fostering License drunkenness and be- houses from Q. Development, might coming Constitutional 15 N.Y.U. L. one centers disorder. ... No (1983) intoxicants, except 210 be travellers [hereinafter served with Johnson] Rev. Hlothhere, Eadric, persons (citing and a limited class whose business Decrees 673, 685, 686, brought places."). King them to such Ine in II, (1736-37). c. Act of 10 Geo. Agnes Kings Robertson, The Jane Laws (1925) (citing England the 4th Series II, (1751). Aethebred). §40 the Laws 21. Act of 24 Geo. c. too, America, system the tied-house issuing licenses.22.Eventu- premises before pre-Prohibition in the figured prominently tavern owners to ally, this would-be forced 1900s, early consumption In the beer era. these “suitable seek loans underwrite gallons high of a then-historic eager to reached all too were premises”; breweries 150,000 annually.27 More than per capita property, gap, buy fill this financial United States existed saloons applicant.23 license and lease to the so, consumption.28 Even much. The facilitate good for this Not price deed? superiority an air Americans exhibited their bene- only agree sell lessee need England’s contempt regarding tied- only prod- those products—and factor’s A in the article San public system. house purchase “This was the ucts.24 reported on and lambasted suddenly Francisco Call firm real- big one houses. When Purity Englishman’s [the] possible “Turn[] profit that it ized the He Lease Them Supported keeping Movement by buying public houses make man previously had for the to Brewers.”29 managers of their own them under promoted a movement that only own the others worked of their beer sale system—in the “madly” de- the end of the tied-house madly.”25 And well rushed in words, whereby public a scheme privately author’s speed with which scribes the large “should be owned transformed houses public houses were owned breweries, lie interests necessarily scholar noted whose into houses. As one tied The possible.”30 in much as 1895, system, selling “It is as beer the under tied-house of tenants at one his replaced later twenty-five more than man that not say safe brewery, a effec- public are own houses with of the inns and beerhouses per cent transforming into tied tively those houses And the from the brewers.”26 thus free noted, This, disdainfully of the article dispose houses. regulatory designed effort example of of striking the sacrifice the was “a monopolies in the alcohol trade led to rare in the profit by no means system. principle English creation of tied-house the 29, 2014), Webb, https;//www. History (July at available Sidney 22. Webb Beatrice Principally Licensing England Liquor washingtonpost.com/news/wonk/wp/2014/07/ in of 1830, (1903). 88-89 29/where-the-biggest-beer-wine-and-liquor- 1700 to (explaining many drinkers-live-in-the-u-s/ Askwith, George British Taverns: 23. Ranken consumption experience alcohol rates states 68, (1928); Laws, History Their 72-75 high gallons per capita) (copy in 40 case as Knox, Development Tied The D.M. file). London, 10 Oxford Economic System House 1, 1958, [herein- no. at 67 Papers, Series, New 548; 12, Fogarty, supra at also note see 28. Knox]. аfter 1; Prohibition, Burns, Episode A Nation Ken 23, Knox, supra at 66 generally Drunkards, (2011) note 24. See (describing PBS the na- ownership (detailing high of tavern levels leading up trade ture of American alcohol breweries). by English 300,- stating more than Prohibition—and country at taverns dotted 000 saloons and English 25. Won Point in War on Chancellor century). 20th turn 30, 1915, 5, 'Pubs’, May sec. at 3. Sun, The Porritt, Liquor Big He 26. Edward Five Centuries 29. Saloons Earl Makes Profit from 1905, 15, Legislation Owns, England, 10 Political Jan. at Science Call, Francisco San (Dec. Quarterly, No. at 624 Cf, supra Roberto Fogarty, note 30. Id. A, Wine, Ferdman, Beer, Biggest Where U.S., Liquor Live in the Drinkers Post Wash.

343 aristocracy.”31 published by British An article the Webb-Kenyon Act vote Stop gave 1892 entitled “To Beer Wars” 95.35The Act prohibited had the importa- Chicago into glimpses the first what one tion of alcohol into states that had already experience sys- could a tied-house under to prohibit decided alcohol within its bor- explained tem.32 The article that two En- Temperance ders. The Movement was sud- glish brewing companies had invested $6 denly much a religious more than move- enterprises. million in new Ac- Chicago ment out to souls—it was a powerful save cording to a (presumably rep- “director” political machine sudden big victory companies), resentative one of the “In in its pocket. places England per selling cent of by Emboldened the movement’s sudden Bass Bullard’s beer or Guinness success, Wheeler, Wayne leader by ... pro- controlled and we brewer powerful group the lobbyist Anti-Saloon stop by owning pose beer sa- wars League, Washington for moved to the ex- important part, loons.” most convincing press purpose of members of view, director’s was “that all the ‘tied hous- Congress prohibition enact amend- es’ we will for all secure be our customers by Rockefeller, ment.36 John D. Bankrolled time; [they] by will be unaffected beer and other pro-temperance Jr. industrial- away and cannot by wars be taken from us ists, the League dominated the movement competition.”34 keener 1900s, early achieving prohibition B. American Prohibition states League 1919. And

and Its Aftermath support for a declared federal constitution- prohibition. al Amending Constitution grew public Concerns sentiment heavy lift, ma- requiring two-thirds against saloon eventually turned owners. Congress jority vote from each house of temperance waged a fo- movements and then adoption amendment organized set- cused war—and would legislatures.37 then 48 nothing complete less state tle than abolition calling liquor. One of a resolution for the movement’s chief amendment passed the Constitution out put pro- tactics was to members of of the up House temperance groups for of- committee and reached for as candidates the floor the particularly This on a first time in Most helpful history.38 fice. was House mem- 1913, amendment, example, national scale. For for sup- the bers voted the but Congress Taft’s veto of failed the porters overrode President to muster two-thirds 31. id. before whom the the United Senate States up begs”). sits Wars, Stop To 32. Beer Arizona Republican, The 14, 1892, Sept. at 1. ("The Congress, 37. U.S. art. V. when Const. ever two thirds houses shall it both deem Id. 33. necessary, shall propose to this amendments Constitution ... ... shall valid to all which 34. purposes, part intents this Constitu tion, ,when legislatures ratified of three Okrent, “Wayne Daniel B. Wheeler: The 35. states,”). , of the fourths several Taps,” Man Who Turned Off the Smithsonian 2010) Magazine (May [hereinafter at 1-3. Ok nearly Similar bills been introduced had rent]. every legislative since 1876 had session Okrent, (citing Evening Id. at 3 York News never supra the New made it out of committee. 3, legislative bully which Wheeler note called "the rampant spurred it the chamber.39 Rocke- necessary pass out of lawlessness feller, vote, however, reinvigorated teetotaling temper- member of the close movement, saying: ance determi- movement and steeled leaders’ enough by electing attempt the war total bring to win In the about nation absti- time, Congress through prohibition, so next an evil even nence members than pass greater intemperance And it resulted— pass. would the amendment namely, disrespect for swept after 1916 election nation-wide did. law, all with attendant abuses that into office across the temperance members in its train. That this intoler- followed Sheppard country, Texas Senator Morris away able situation should be done newly Congress led the elected important has seemed me more even approval prohibition overwhelming of the promotion the moment than the Eigh- resolution that become temperance.42 necessary state Amendment.40 teenth quick succession. ratification followed urged passage of President Roosevelt Amendment, Twenty-First promising peo- ingenuity of the American But the that taxes alcohol sales would benefit Shep- eventually ple would defeat Senator the nation.43 The amendment sailed Wheeler, movement, temperance pard, through Congress both and was houses Eighteenth Amendment. Citizens and the flurry ratified the states in a reminis- illegal—to means—legal resorted to repealed. cent Amendment gains gain alcohol. The access syndi- organized-crime Rockefeller, eroded as favoring 1920s repeal, be- while power, part by providing cates rose end Prohibition would not be lieved liquor to the And then illegal masses.41 “liquor problem,”44 the end America’s Depression. By early “If saying, carefully plans came Great laid of control 1980s, made, country disarray, against was are not old evils which easily of Prohibition laws was not was can prohibition enforcement invoked re- priority writing But he on the the foremost of the federal and turn.” saw the wall governments. regarding Twenty-First state The mass Amendment disobedience Crime, (1914) (record- Cong. Organized 39. See 52 Commission on State dent's Rec. (Nov. 29,. (statement ing 1983) the votes on the amend- Dept. constitutional at 9-10 197 “for” Smith, ment on December 1914 as Attorney William French United States “against”). General) (detailing criminal the rise of ele- liquor ments "distribute determined to Senate, 8,” 40. "Prohibition Wins in 47 to throughout country.”). the Interestingly, 1917. the N.Y. Dec. Times, secondary story accompanying this headline Rockefeller, Jr., John D. 42. Foreword to Ray- story Legislature’s on in- remarked the Texas mond B. Fosdick Scott, and Albert L. Toward ratify tention to the as soon as amendment at vii-viii (1933). Liquor Control possible. pending "The to th[e] amendment by Constitution be ratified the Federal will Prohibition, session, Campaign special of Texas to be 43. Address 1 at a Pub. 27, 1932). early part coming year. (August in the held оf the Papers. Although the session will be for other called specific purposes by Hobby, there Governor Levine, Harry 44. Gene The Alcohol Problem upon no action doubt favorable Alcoholism, Temperance in America: From be Act amendment will Once,” "Texas to taken.” at (December J. of 4 British Addiction N.Y. 1917. Dec. Times, Organized 41. 1 Crime: Law Federal Enforce- Foreword, supra vii. 45. note Perspective: Hearing Presi- ment Before report and commissioned a on the England, nation’s As in America’s leg- tied-house impending liquor regulation.46 Toward Li- islation took aim monopolistic at the ten- Control, quor Ray- written scholars of dencies relationship. brewer-retailer Scott, Fosdick attempted mond and Albert Connecticut’s courts recognized design study get first front of the laws, of its tied-house remarking the law problem how grapple states should codified an intention “to circumvent the repeal.47 Prohibition’s Toward Liquor Con- concentration of power tremendous influential, highly leading trol was to mod- inordinate control in the hands of wholesal- legislation for regarding el states man- manufacturers, who, ers and by reason of ufacture beverages,48 and sale alcoholic economic superiority and the extension suggested Fosdick and Scott post- two credit, generous might well be so (1) systems regulation: Prohibition circumstanced as to throttle the retail (which monopoly approach they strongly dealer monopolize the retail mar- preferred) managed all alcohol sales ket.” (2) through government, licensing industry the alcohol auspices resulting under the legislation, tied-house regulatory a state however, board.49 solely was not product legislators. concerned To contrary, hold, As repeal Prohibition’s took Presi brewers drafted the initial federal tied- encouraged dent Roosevelt the states to legislation house on which much of the legislation.50 liquor enact sensible Most subsequent legislation state would be adopted states some version state licen- based. Self-interest existed on all sides. sure, abiding Liquor Toward Control’s ad temperance refrains movement guard monition to against tied houses general and a society desire cure keeping industry tiers of separate may evils alcohol prompted have from one another.51 implemented States brewers, legislation. too, But under- what has come be known as the “three- stood that strict tied-house prohibitions system,”52 manufacturers, tier licensing competition among would reduce brew- distributors, and retailers separately, and ers—no more vying would there be endless baning a firm one tier owning for new acquisitions real estate and saloon firm another. operate Businesses must prohibited. because tied-houses would be only within their assigned Today, tier. The brewers also knew that states use the tied-house monopoly-control model, plus while states prohibitions the District of Colum would allow them some de- licensing system.53 bia gree plausible regarding have deniability regulating 46. Id. at alcoholic-beverage xiii. tern in in- dustry). B. Fosdick Raymond Scott, Albert L. Liquor (1933) Toward 1-3 [hereinafter Control 52. Id. Fosdick], Systems, 53. See The Control Nat. Alco. Bev. http://www.nabca. available at Ass’n, Control 49. Id. at 24-60. (last 21, org^States/States.aspx Aрr. visited 2017). Proclamation, 5, 50. Presidential Dec. 1933. Pic-Pac, Dehner, 51. See Maxwell’s v. Inc. 739 Comm’n, Liquor 54. v. Control 13 Kantrowitz 936, (6th 2014) (noting F.3d Cir. most 248, (Conn. Conn.Supp. C.P. sys- chose states the recommended three-tier regula- for providing pass laws of saloons.55 fives perception negative public intoxicating bever- in a tied- that owned saloons tion and elimination Brewers sense, were, directly 1854, in a system ages. In introduced house any per- responsible for governor to and connected measure ordered ballot debauchery. But drunkenness and the individual ceived an election which to hold system, brewers a tied-house-less prohibition under on the counties would vote disclaiming any goods, their while can sell selling liquor entity other saloons responsibility participation in or Though a quart.59 less than quantities Indeed, happenings in the saloons. not to issue majority of the counties voted attempted use Brewers Association U.S. salesmen, held liquor we licenses many regarding precise argument unconstitutional, en- and it was never law ownership of saloons. The lack of brewers’ Undaunted, groups anti-liquor forced.60 miscon- popular Association “a disclaimed Temperance, Friends of like the United all owned ception” that often brewers Christian Hope, the Women’s Bands contrary, rights To said in saloons.56 Union, Grange, Temperance Association, typically only brewers others, waged among flocked to Texas and money or take mort- owners lend saloon Collectively, these on Texas saloons. war .they on saloon own gages property; don’t “Drys,” groups were called temperance Therefore, the As- saloons themselves. to turn the State reference to their desire concluded, can- largely sociation brewers “dry” from alcohol.61 Texas for saloons.57 responsible not be considered elec- losing several referendum

Despite Promulgation Liquor The C. attempted to con- Drys tions which Regulations in Texas pro- legislators citizens vince Texas alcohol, grew. And their numbers hibit prev- as temperance movement was battle, pro-Prohibition each in the in Texas as it was alent elsewhere changes support. Incremental crowd drew place the Texas nation. Some sources Though not liquor laws. came the state’s membership groups such as the Sons bans, greatly outright regulations reduced 3,000 by 1840s.58 Temperance at the late in Texas.62The new the role of the saloon urged representa- their citizens Concerned important to dis- And it for brewers was 55. 57. here owners themselves because saloon tance constantly the sensitivities of those battled 1560. Gammel’s Laws of Texas 58. synony- that "saloon" was civilized circles feelings These "drunkenness." mous with Bagur, Jacques Jefferson, Antebellum Texas: 59. English’s of activi- to the scorn harkened back (2012). Town Everyday Life in an East Texas houses, public which one ties within as, "squalid colorfully newspaper described Swisher, 17 Tex. 448-49 60. State v. housefe], English public where no customer (1856). up keeps drink- he stands unless welcome constantly long his ing as he can maintain "Prohibition," Kerr, Austin K. Handbook 61. serving any- standing posture, where the (2010), through available Texas Online sternly dis- thing intoxicating drinks https:// at Association Texas State Historical short, where, British couraged, tshaonline.orghandbook/online/articles/vapOl encouraged every possible workingman is file). (copy in case Won himself a Chancellor way sot[.]” to make ‘Pubs,’ May English Point in War Sun, Bell, See, 6 S.W. e.g., parte Ex 62. 30, 1915, at 3. sec. 1887) (holding own- App. that a saloon’s liquor license when he er could be denied Fogarty, supra note

347 adopted local-option Liquor Constitution of 1876 administer enforce the and Control laws, Act.65 governed individual and The Act all where communities alcohol-related inception from its prohibit counties the sale transactions 1933 un- could 1977, superseded til when was Finally, 1918, Leg- of alcohol. the Texas the adopted Beverage the Texas Alcoholic language pro- Code.66 islature posed prohibition national As amendment. adopted The State the system three-tier nation, sweeping across the Prohibition independence to of retailers, ensure the enacted, legislation including was the Dean manufacturers, and distributors and to Law, any which banned the manufacture prevent the re-creation of tied-houses that liquor any purpose.63 largely Prohibition had eliminated. Li- The quor year brought of Prohi- Control Board was 1933 the end tasked with su- pervising regulating every 'phase bition across the response nation. the repeal Eighteenth Amendment, the the state’s alcoholic-beverage industry. As Legislature passed put shortly Texas it' the Texas Li- one court after Board’s creation, Legislature Act quor delegated Control and Texas voters functions, adopted among “certain an amendment the Texas Con- Board which are legalizing determining place sale of in the first stitution beer. Never- to whom and theless, 199 of the shall privileges counties when certain be state’s extended persons second, option liquors, chose utilize the local-control to sell complete persons or not such prohibition the whether so maintained favored alcohol; only have sale breached conditions under 10 counties were free which regulation. privilege granted.”67 form of has been After the Board’s overall mir- Twenty-First purpose Amendment Pro- mission and repealing 1933, purpose hibition took rored the- stated Liquor effect December Act, preceded Control Legislature Texas which our another current submitted Alcoholic Currently, amendment to the Texas Beverage Constitution Code.68 charge completely vestiges of TABC’s mission includes to “en- repeal fair within the alcoholic prohibition. competition statewide sure ap- Texas voters industry consistent, 1935,64 beverage ensure proved [and] the amendment restoring communities, timely predictable, right [the individual enforcement Code].”69 counties to whether alcohol could decide respective sold within their borders. Also II. Factual Overview created Texas (renamed

Liquor Corp. Control Petitioner Cadena Comercial USA Board Texas (“Cadena”), Beverage 1970) corporation, organized Alcoholic a Texas Commission provide did not the appropriate because 66. Id. at 1. bond Legislature possessed authority absolute saloons). regulate Liquor Floyd, 67. Control v. Bd. (Tex. App.-Fort S.W.2d Civ. Worth Beverage Comm'n, 63. Tex. Alcoholic The Histo- 1938, writ). no Beverage ry of the Alcoholic Texas Commission (2005), https://www.tabc.state. available Shearer, See v. Flowers tx.us/about_us/history/70HistoryBooLpdf App.-Amarillo Civ. writ file). (copy in case dism’d) (stating . Act intent of the was to regulations ensure laws and in the effective XVI, 64. Tex art. Const. liquor). traffic of Beverage History 65. The of the Texas Alcoholic 5.31(b)(3)—(4). 69. Tex. Alco. Bev. Code at 1-2. Commission of Heineken appoint one in ties FEMSA stores operate convenience own two Holding, brand directors and N.V.’s five Mexican the state under and wine. Board of “OXXO,” Supervisory to sell beer wants members ten subsidiary of wholly Green, is a owned con Cadena L’Arche Heineken N.V.70 Mexicano, S.A.B. de Económico Fomento Heineken holder of the trolling-interest (“FEMSA”), compa- publicly traded C.V. obligated spon Holding Companies, was through in- several ny owns Cadena members, for board FEMSA’s choice sor holding companies. termediary Mexican Agreement Corporate Governance but also, intermediary FEMSA via various “any given is not specifies FEMSA Kingdom, in the United holding companies or consulta control or influence right or stock in- twenty-percent a combined holds right cooperation” form of tion or other in Heineken NV and Heineken terest Holding Compan relating to Heineken (“Heineken Holding Compa- Holding NV Hei Similarly, L’Arche Green and ies.71 nies”). publicly Heineken The two traded to make Holding rights all neken reserved its Companies, through own series Holding of the Heinek management in its decisions for- three intermediary companies, own Holding Companies, “independently en (“Heineken Brew- eign Heineken brewers and without and at their sole discretion ers”). per- non-resident The TABC issued cooperate to consult or any requirement Brewers, of the mits each Heineken also Agreement with ... FEMSA.”72 for- beer at allowing them to manufacture any stock in acquiring bars Heineken breweries, none of the Heineken eign but FEMSA. The busi- brewery Brewers has Texas. put it OXXObrand complicated, FEMSA’s stores under the ness structures attached to wine chart to sell beer and mildly, as detailed must be authorized opinion this illustrates. in the convenience-store order thrive applied Consequently, Cadena market. has no undisputed It is that Cadena off-premises per- a wine and beer retailer’s Brewers Heineken direct tied- applying mit from TABC. (or in the entity involved any other disregarded TABC provisions, house industry). Similarly, the beverage alcoholic various enti- legal separateness among the have no interest Heineken Brewers and Heineken ties both FEMSA (or entity within other For corporate example, families. family). When FEMSA corporate FEMSA corporate structure collapsed the elaborate stock interest twenty-percent its obtained FEM- parent, Cadena from separating Holding Companies, in the Heineken two SA, single considered them Corporate into Governance entered cor- collapsed the enterprise. TABC then that, things, enti Agreement among other records, company. FEMSA holds two for the decisions 70.According Heinek- to Heineken’s (who also Holding, managed by a six-member chairman en is seats N.V. board—its chairman holds Holding, of directors—FEMSA’s board N.V. board sits on the Heineken position Hei- on this board. directors) a non-executive Superviso- is Vice-Chairman managed by two-member is neken N.V. Board, ry FEMSA executive and another (the of this current members Board Executive holds second seat. CFO). The board are Heineken’s CEO “primary decision- Executive Board Agreement Corporate Governance super- making body within Heineken” and 19.10(a). "Supervisory by the eleven-member vised Supervisory Board advises Board.” 19.10(b). at§ 72. Id. basis,” on-going "on an Executive Board majority of the Board makes a the Executive of porate separating ability structure the Heineken neken Brewers its because to holding compa- appoint Brewers from parent Compa- their directors to Heineken the nies, single and considered them enter- argued nies’ boards. It also the court expert also. TABC’s testified that prise, impute this should connection to Cadena corporate separateness disregarded can be for of purposes regulation. area, arguing layers

in the regulatory “the Conversely, argued that Cadena the disregarded be ought of entities here to for only “interest” sufficient violate tied- TABC, regulatory purposes.” According to prohibitions house is one that al- would any FEMSA shareholder would have an low actual financial administrative interest brewer. TABC’s Heineken among control least two the three licensing director that a testified tied- interpretation, tiers. Under Cadena’s its if house violation exist would someone application should have been owned FEMSA stock and also in a stock granted as a matter law because Indeed, TABC-permitted retailer. TABC ability has no to manage FEMSA interprets the overlapping to bar Code control Holding either the Heineken permittees ownership even share of one Companies or the Heineken Brewers. As tiers, notwithstanding multiple at different result, granting Cadena its argued, ap- layers ownership. intervening TABC purpose would not the plication violate then relationship reviewed the between the because no compa- tied-house statute Holding and the Com- FEMSA Heineken ny within the business structure would and there was forbid- panies determined managing have control over more than overlap den that retailer-brewer violated argued one tier. Cadena further five different tied-house statutes. FEMSA’s with connection the Heineken FEMSA refused to divest itself far too was remote and attenu- Brewers indirect shareholder’s interest the Hei- implicate ated to historical tied-house Brewers, pro- neken TABC’s denial concerns and this interest could not to an At hearing. ceeded administrative imputed piercing be to Cadena without hearing, stipulated parties corporate all veils of the entities in- Cadena, corporate between relationships volved. FEMSA, companies.73 and the Heineken hearing, judge At administrative During hearing, a witness—TABC’s application based denied Cadena’s licensing expert director alcohol- and an TABC, statutory finding: grounds cited ic-beverage industry laws—testified that (1) real interest in the Cadena “has a one of stock overlapping even share own- of the of a premises business or holder ership statutory would tied- violate license”; manufacturer’s distributor’s prohibitions. argued house TABC (2) licensing as a purposes, subsid- “[f]or overlapping interest FEMSA’s FEMSA, iary of is a manufac- [ Cadena] was sufficient Heineken Brewers (3) turer”; licensing purposes, “for as a prohibited “interest” considered a FEMSA, subsidiary has an [Cadena] Beverage the Texas Alcoholic under brewer”; in the any interpretation, disputed under (4) issuing requested permit “the required to implicate that actual control is 102.01(c), (h), 102.07(a)(1), restrictions, pertinent violate tied-house Sections 102.11(1) ap- control asserted FEMSA could Hei- of the Code.”74 Cadena Permit, Cadena, Orig. App. Order 161. 74. Den. Nov. S.W.3d at court, pealed implying is essential to requirement trial which such affirmed denying rendering the administrative order Cadena’s the statute avoid unconstitution- permit.75 ally vague.”81 Observing the Code failed “own,” “interest,” terms define the af- appeals noted court could “business,” appeals attempted the court grounds firm on cited common “apply meaning [the terms’] order, specifi- but focused administrative consistent extent context 102.07(a)(1), pro- cally on which section the and they which are used statute’s ob- has an person vides that “no who owns or jective.” in of a interest the business ... brewer or ... ... or have may a direct own TABC, appeals, of The court like con- of a the ... indirect interest in business corporate separate- tracted the entities’ retailer,”76 of the analyzing this section ness, expanded the of then definition Code, and several terms the court defined “interest,” “broadly concluding it encom- “per- phrases the statute,-including, within passes or in- any economic commercial son,” “brewer,” “retailer,” has an “owns or in provides terest that a stake the finan- business,” have in the and interest “own or performance entity cial in engaged of an busi- in a indirect interest or the' direct manufacture, distribution, or the sale for provides ness.” The Code a definition beverages.”83 alcoholic The court reject- “person,” all so the court then that held' for argument a control-fo- ed Cadena’s Cadena, Hei- parties—FEMSA, and the test, stating it lacked a cused “founda- “persons”' neken finder Brewers—were statutory tion in text” and held court also statute.78 The held Heineken and economic inter- FEMSA’s financial “brewer,” category fell into the Brewers ests both Heineken Brewers and just qualify as- a “retail- Cadena qualified as “interests” Thus, granted.79 permit er” if its were 102.07(a)(1).84 purposes of section became, analysis point court’s main “whether interest owns has an FEMSA court then .to turned term “busi- Brewers business Heineken ness,” deciding use section has direct owns or indirect also 102.07(a)(1) to be was broad intended business interest Cadena.”80 enterprise include “commercial carried profit.”85 these sweeping on for Under According appeals, court the' “business,” of “interest” definitions issue which' section was “the extent 102.07(a)(l)’s court that 102.07(a)(1) “plain section implies requirement held language carry applie[d] FEMSA’s own rela- disqualifying it ‘interest’ some degree relationships ... of cross-tier control tionships, imputed and whether (cleaned up). § 75. Pursuant to Tex. Gov't Code Id. at 80. 2001.174 (Texas Act) Procedure Administrative Tex. 61.31 and 11.67. Code§§ Id. Alco. Bev. 81. 102.07(a)(1), 76. Bev. Code Alco. 82. Id. Cadena, at

77. 163. 83. Id. at Id.;

78. also Tex. Alco. Bev. see 84. at Id. 167-69. 104.01(6). 163-64, Cadena, at at 85. rejects court then addressed ness. TABC FEMSA.”86 The control-based test n veil-piercing arguments, but held appeals’ the court Cadena’s endorses view 102.07(a) principles corporate ap- if the even law “interest” in section “broad- plied ly “in some ... regulatory encompasses any contexts commercial or eco- not implicated, provides those principles interest that in the nomic stake language legislature employed performance entity broad financial an engaged 102.07(a)(1).”87 manufacture, distribution, Because deter- sale TABC granting mined beverages.”90 Cadena’s alcoholic having in FEMSA would result significant points Two merit mention of a the business brewer and direct First, the Outset. TABC reaffirmed both in the indirect interest a retail- argument at oral and in a post-argument er, court denying affirmed the order letter recog- Court the Code permit.88 Cadena’s “no nizes de minimis exception,” a Latin- ized locution of the single-share- theory— Analysis III. that even one of overlapping share stock person no who owns or has an interest in constitutes a violation. is tied-house There may a ... ... the business brewer no practical of difference de between “no .,. a own or have direct indirect exception” “single-share minimis ... a re- the business theory.” functionally of terms The are indis- tailer Second, tinguishable. Corporate Gov- Agreement ernance makes clear that parties agree The the Heineken ability FEMSA lacks control “brewer[s],” are Brewers manage, directly either or indirectly, any granted if permit. would be “retailer” of aspect entity. Heiheken however, (1) They disagree, over whether so, (2) is if “person,” FEMSA a even below, explained reading As a contextual of what “the business a ... brewer” en- 102.07(a)(1) of section forecloses TABC’s (3) compasses, and FEMSA has whether interpretation, “one share” crabbed which an of a “interest” in the business brewer. by including hyperli- all all. This excludes ‍‌‌​​‌‌​​‌​‌​‌​‌​​​‌‌​‌‌​‌‌​​​​​‌‌​​‌‌‌‌‌‌​‌​‌​​​‍For I purposes dispute, of assume not fair-reading teral construction is textu- deciding that is “per- without FEMSA alista, allergic which to interpretive is not son” and that the Heinek- “brewer” covers short, aids like context. the court Holding Companies en that own Hei- rejected a appeals says test lacks interpretive is neken Brewers. focus lacking textual favor of' one basis prohibited thus is a narrow: “inter- What basis, a zero-tolerance test di- contextual 102.07(a), est” and does under reality existing permit- vorced such an “interest” FEMSA have who, concedes, tees hold billions Heineken Brewers’ business? holdings. dollars cross-tier The State Texas, parties’ arguments straightfor- example, through for public its universities, insists the retail permittee ward. Cadena word “interest” is a that sells control—ie., connotes a at sporting FEMSA alcohol certain events and sense beverages university must exert control busi- at over Brewers’ mixed other 102.07(a)(1). 86. at Alco. Id. 169-70. 89. Tex. Bev.

87. Id. at 169. Cadena, 449 at 90. 166. objective no vertical billions lature’s codified It owns dollars

events. also present No strong-arming. Had TABC treated such interest is cross-tier investments. itas treated Cade- here. application the State’s

na’s, rejected it. In other it would have (as words, regulator) of Texas the State Judges A. Must Read Neither Statutes (as regulated), is says the State of Texas Literally Liberally, Nоr Com- But thus at of for- illegally and risk operating monsensibly, Discerning Ac- Words’ feiting permit.91 its cepted Meaning Contextual rational, fair-reading A test cannot arbi- statutory-interpre- first. In things First depend is trarily being on who tested— (and cases, tation are to begin we almost some, Laws strict for loose others. end) always the Legislature’s chosen consistently, applied giving fair must be text, index collec- surest lawmakers’ prescribed notice what conduct Interpreting tive is the will.93 statutes proscribed. interpretation The Court’s appellate bread butter modern power—re- TABC with enormous vests judging, and this Court has stated view statutes, writing collapsing separate corpo- simply: The truest manifestation what entities rate without evidence-based they enact- lawmakers intended what selectively veil-piercing inquiry, applying method, interpretive ed.94As an textualism in a criteria manner standardless objective: ascertaining has singular applicants similarly treats situated dissimi- accepted meaning words’ contextual when larly, picking thus winners and losers they No ab- were enacted. concern with marketplace. Virtually all applicants (and manipulable) purposes. stract thus implicated by reading a sweeping are such (and with No concern thus wished-for “interest,” reading that bans indi- preference-imposing) consequences. Just any degree—except rect interest of when unremitting an focus on their giving words arbitrary it doesn’t. Such an selective and meaning—not and not contextual literal permitting regime squared cannot be with liberal, but commonsensible. law, particularly Legislature’s Texas explicitly public purpose ensuring stated com- commonsensible, I And mean i.e., “independence,” of out- absence munal, community un- enacting what cross-tier influence sized coercion.92 This is the derstood their words mean. interpretation point: given

The most reasonable second “Words must be A meaning they this: “interest” forbidden under section had when the text was 102.07(a) control, coercion, adopted.”95 important principle, connotes or in- On this recently quoted fluence over activities in we another Justice Frankfurter: tier, participation imperils Legis- gloss “Words must be read with See, e.g., 102.01(j) 91. guide Bev. Code should Tex. Alco. words it chooses be tire surest (setting penalty tied-house violation intent.”). legislative suspension cancellation and ineligibility reapply year). for one Ruttiger, Mut. Ins. Co. v. 381 S.W.3d 2012) (citing Alex Sheshunoff 102.75(c). Servs., Johnson, Mgmt. L.P. v. (Tex. 2006)). Fitzgerald Spine 93. See v. Advanced Fixation Reading Inc., (Tex. 1999) Sys., 95. Antonin Scalia & A. Bryan Garner, Legal ("[I]t assumption Legislature is a fair that the Texts Interpretation Law: The means, (2012) Reading say tries to what it and therefore the Law]. [hereinafter experience of who them.”96 the meaning those framed understand of surrounding they words how agree. interpreting put together. cases lan- Our When statutory constitutional, guage, both interpretive process recognizes The original public aim to mean- we determine lawmaker-drafters, not judge-interpreters, ing, what the meant to those words who language. Judges’ enact interpretive role is and ratified them.97 wrote discern, dictate, not Legislature how the uses language. authors Third, text cannot con- divorced policy and its baked-in political bargains, sаid text. It is that text without context is judiciary, and the aggrandizing avoid This pretext. straightforward, is a well- confined-but-consequential role, must ex- interpretive principle, we defined one have text, amine all the not snip- enacted mere frequently applied asserted assiduous- Yes, pets. a statute’s reign supreme, words law, all, begins ly. language, after with seeking statutory but when meaning, as- of language—not cardinal rule one cetic parsing literal cloak can sometimes just legal language language—is but all clarify. construing rather than Even when “Language interpreted this: cannot be clear in- ostensibly statute seems For apart judges play from context.”98 obvious, tuitively may we consider related lexicographic legislative role in their legislation plus other contextual cues to project, just we not must be attentive to glean import—not the text’s semantic ex- alone, standing words to structure and tra-statutory legislative materials like his- historical architecture. On this fateful tory, range mira-statutory but the full A point, precedent judge our clear: conventions, grammatical aids: dictionar- scrupulously giving legal concerned ies, legal specialized usage, or technical meaning always texts their honest must colloquial nuances, and forth.100 so Textual- surrounding statutory consider “the land- literalism, ought ism is not not and courts welcome, resist, scape” interpre- adopt wooden constructions foreclosed usages linguistic context like context, tive and statutory Court has done interpretive conventions that help sound language, import here.101The plain Yes, meaning.99 not, illuminate this case is its linguistic be drawn from con- must word, legal text, interpretation about the one in common a self-evident rule rooted law,103 “interest,” sense,102 statutory case- requires but that task us to Texas Kimbrell, Nami, See, e.g., 100. v. 356 S.W.3d 96. Union Pac. R.R. Co. v. 498 S.W.3d Molinet 407, (Tex. 2011) 890, (Tex. 2016) (rejecting (quoting often-unre States 414-15 904 United v. 56, Rabinowitz, 70, 430, legislative history liable extrinsic aids like 339 U.S. 70 S.Ct. 94 context); (1950) (Frankfurter, J., Lottery divining statutory dissenting)). when L.Ed. 653 DeQueen, 325 Com’n v. State First Bank of 2010) Taylor (Tex. (same); 628, 97. v. & Tay Firemen’s Civil Policemen’s S.W.3d 635-37 Lubbock, lor, City Serv. Comm’n 616 S.W.2d (looldng text- 616 S.W.2d at 189-90 187, (Tex. 1981) Robison, (citing aides). Manry 189 v. based semantic cues but not external 213, 438, (1932)). 122 Tex. 56 S.W.2d 447 Inc., Ojo Grp., 101. See v. Farmers 356 S.W.3d J., Combs, 421, 2011) (Willett, (Tex. Geophysical concurring) 98. TGS-NOPEC v. Co. 451 (Tex. 432, ("Modern allergic con 340 S.W.3d 441 is not textualism text.”). Scott, 99. Ind. Sch. Dist. 309 Presidio v. (“Before (Tex. 2010) auto-antonyms can 102. Some words are S.W.3d 929-30 21.307(a), things depending diametrically opposite parsing language a brief mean example, surrounding word survey statutory landscape the context. For provides helpful or “to di context for section’s "cleave” can mean "to adhere” Cleave, ....”). 'party' New Int’l Dic use of the term vide.” Webster’s Third 354 Code, general has a example, erage and the United from both this Court104

law terms, defining 28 provision, definitional Supreme Court.105 States cooler. to “wine everything from “minibar” B. “An Interest” Should Not “One Share” Is One Dimensional— Mean "11 Legislature’s Purpose Codified 1. Attenuated, Interest,

Any However (to “Independence”) Ensure Only an That But Interest Threat- TABC’s Own Internal Guidance or Influence Control ens Cross-Tier Determination That Buttress ”106 meaning. may strangle “Literalness Something “An Connotes Interest” means, divining enacted law When what More De Minimis Than myopic aim is not a judge-interpreter’s Unfortunately, the Code nowhere de- clinical- reading, Reading sound one. silent, a statute is fines “interest.” When micro- reading mean under ly does not guidance reputable judges often seek “interest,” scope. Today’s case concerns definitions, legal dictionary particularly (and meaning) term is found but that era, enacting since from the dictionaries Accordingly, larger enactment. we within usage nuances can shift over semantic lit- hyperliteralism—“a sterile must resist all are created time. Not dictionaries sight of the forest for which loses eralism however; are richer and more equal, some meaning favor of “literal the trees”107—in Unfortunately, definition explanatory. in context.”108 the 1910 edition of Black’s of “interest” in Dictionary, available at the time Tex- Legislature helpfully Law de Sometimes laws, uses,109 originally imbuing adopted its tied-house even fines terms common, (and divining pre- ordinary usually helpful isn’t words technical conclusive) early- usage.112 Bev Neither are meaning.110The Alcoholic ferred Ebrom, view, 110. See (2002). Court's v. my Hernandez tionary ("If (Tex. 2009) Legislature provides myopic ap- today “cleaves” to a decision statutes, meaning proach "cleaves" literal it uses in then definitions for words task.”); meaning. City plain in our we use those definitions Hughes, 246 v. S.W.3d Rockwall 311.011(a). 103. Tex. Gov’t Code§ (Tex. 2008) ("We prescribed use definitions particu- technical Mexia, See, e.g., City Tooke v. meaning acquired.”). words have lar 2006) (recognizing that meaning of words "cannot ascertained 1.04(21), (24). Alco. Bev. occur”). apart they context in which from the interests, States, 129, property defined 105. See Deal v. United As to Black's 112. 508 U.S. 131-132, 1993, general term "[t]he 124 44 "interest” as most that 113 S.Ct. L.Ed.2d (1993). property employed denote a in can be to Interest, or lands chattels." Black’s Law Dictio- Porter, 39, 44, 106. Utah Junk Co. v. 328 U.S. (2d acknowledged It 647 ed. nary 889, (1946). S.Ct. 90 L.Ed. 1071 66 "frequently used in connection "interest” was ” ‘estate,’ ‘title,’ ‘right,’ terms and the Commissioner, 68 107. New York Trust Co. v. terms ‘interest’ “[t]he but it cautioned 19, (2d 1933) (Judge Learned 20 Cir. F.2d synonymous.” Id. and ‘title’ not Black's are court). writing Hand for the context of defined “interest” also Regarding that no "a statute law evidence. Reading supra note 95 at 40. 108. Law, by interest shall be excluded witness suit,” Co., "interest” Black’s defined 109. In event of re Ford Motor share, "concern, advantage, good, (Tex. 2014). mean to 1900s in the and concretely, succinctly—not supplant definitions “interest” dictionaries, text, Chambers which give and it meaning. Oxford provide narrowing little aid the possible contrast, By interpretive makes no Unsurprising- definitions relevant here.113 that the provides, difference as stat ly, the “interest” can various word mean do, commonly utes that it should be “lib things, Using on depending a context. construed,” erally here to protect “the wel dictionary, more is de- modern “interest” health, fare, peace, temperance, safety and influencing,” or fined as “the power people of the On state.”119 “persons effectively controlling an enter- point—whether legislative branch can prise dominating or a or of activity,” field judicial to put branch command lib dominating group “the of owners in field (or nonliberal) gloss eral language—I business, industry, or finance.”114 Yes, answer no.120 overall Code’s aim is Legislature expressly—and (if legislatively nebulously) prescribed: helpfully—declared public policy aim “welfare, health, promote peace, temper system.115 legisla- the three-tier When ance, safety,”121akin to the Constitu explicit tors purpose articulate goal Union, “to form a perfect tion’s more statute, very words of the Court need Justice, establish insure domestic Tran not—speculate.116 not—and should As two quility But diaphanous, good-gov ....”122 it, legal lexicographers eminent “words put provisions ought precatory ernment given meaning context, their expand beyond its text contextual mean context purpose includes ing, gauzy phrases judicial lest all become Here, text.”117 codified impose license to wished-for outcomes. The objective plainly: public rather “It is the judicial goal must remain fixed—ascertain policy the interest of this state meaning—“the ing meaning fair independence of assure the members Legislators causes it to make sense.”123 system.”118 Maintaining three-tier certainly supply, can then, text-specific defini mani- independence, cross-tier is the tions, purpose provision object preamble or fest tied-house Law- Texas laws. purpose clarify makers their can textual as section precisely, ambiguity, defined (cleaned ‘identify portion, part, participation.” Act aims and eliminate frivolous Id. Thus, up). liability under those expeditiously, "interest” definitions claims while healthcare anything ”) could from a potential (quoting mean mere concern preserving those of merit.’ share, advantage right, participation, Wooten, v. mlowski Sa title. 2011)). Interest, Century 113. Chambers’s Twentieth Reading supra at 56. Law, note 95, 117. (1903) (including only com- Dictionary pound land interest and vested interests 102.75(c). Bev. Code 118. Tex. Alco. term): Interest, definitions for the Concise ed, (7th 1919) (limiting Dictionary Oxford §1.03. land, its definitions interests property interest, stake, compound pecuniary (“We Reading supra at 233 note welfare”). pursuit “the of one’s Law, not.”). think Interest, Webster’s Dictio- 114. Third New Int’l (2002). nary 1178 § 1.03. Alco. Bev. Code 121. Tex. 102.75(c). 115. See Tex Alco. Bev. Code § Const. 122. U.S. pmbl. See, 37, e.g., Reddy, Hebner v. 498 S.W.3d 116. (Tex. 2016) ("The Reading Liability supra 40 Texas Medical at 236. note 95, 123. Law, 356 aim restrictions here, the Code’s tied-house

102.75(c) proclaiming cross-tier does subjection. coercion and in cross-tier rein (read: con no undue “independence” trol/coercion/influence) goal as actually make regulations own TABC’s lawmakers, by system.124 three-tier But point, stating that under construction,” cannot commanding 102.07(a)(1), “liberal interest a “direct indirect put a on the of a retailer” means judges to thumb the business “instruct suffi- held the manufacturer system of In our in this fashion.”125 scale at “place independence cient to retailer is a interpreting laws separated powers, Likewise, Application TABC’s risk.”128 judicial function. quintessential control, Retailers centers Guide for What, then, by “in- legislators mean did control, in “cannot stating applicants “interest,” the Code As with dependence”? fashion, licensee/per- of a any the interests contemporaneous But silent. itself is li- TABC’s at a different level.”129 mittee Dictionary offers of Black’s Law edition businesses, form for application new cense defining “independence” guidance, on-point cross- discussing prohibition when being free state condition as interests, applicants “[t]he explains that tier or con- subjeсtion, dependence, from interests fashion the “cannot control is de- lev- Similarly, “independent” lieensee/permittee at a different of a trol.”126 130 subject to the control el.” “not as scribed con- The Court influence of another.”127 long the funda- Courts have understood only can be achieved independence tends purpose of Texas tied-house laws mental separation, but the Code and total strict integration” “vertical prohibiting alcohol- thing, no such the Texas says industry, anyone to prevent alcohol TABC-per- replete with landscape, op- “dominating” ic-trade “controlling” or investments, punctuates not an This is multiple cross-tier tiers.131 mitted erations Rather, one but rather a familiar as the definitions outlier view point. underscore, regulators133 by courts132and state “independence” shared “interest” 102.75(c). ... large liquor interests controlled 124. Tex Alco. Bev. Code productive distributive channels 95, Reading supra note at 233. added); 125. industry") (emphasis Discount S.A. Law, Beverage Liquor, Tex. Alcoholic Inc. v. Independence, Black's 126. Dictionary Law 291, 1983) Comm’n, (5th 293 Cir. 709 F.2d ://thelawdictionary. org/independence/). (http purpose of the statute (explaining the monopolistic companies with "preventing Independent, 127. Dictionary Law Black’s dominating levels of the all tendencies from (http://thelawdictionary.org/independent/). community”); beverage Dickerson alcoholic 691, (S.D. Tex. Bailey, F.Supp.2d v. 45.110(c). 128. 16 Tex Admin. 2000) (“A arrangement, common 'tied house' Prohibition, during involved manufacturers Commission, Beverage Texas Alcoholic sale of distribution and who controlled the 42, at Dec. Application Guide Retailers ....”) products monopoly in a vertical their added). (emphasis (5th added), aff'd, (emphasis 336 F.3d Commission, Beverage Alcoholic 130. Texas Cir. 2, added). L-B, (emphasis June 2012 Form Promotions, 132.See, e.g., Inc. Sales Foremost Director, Alcohol, Bd., & See, Tobacco Bureau Liquor v. e.g., Control Neel v. 1988) (7th Firearms, Cir. 860 F.2d App-Aus 316-17 Civ. n.r.e.) tied- of the federal (explaining the intention (holding the Texas ref'd tin writ prevent supplier con- provision is "to in an at house were tied-house statutes enacted outlets”); Co. v. over Nat’l Distrib. retail tempt prevent of the evils ti-ol “to a recurrence (D.C. Dep’t, Treasury 626 F.2d U.S. prevalent prohibition when were before

357 throughout of adopts appeals’ the nation. The term “interest” Court the court defini- construed in light 102.07must be tion as “encompass[ing] any “interest” legislatively purpose of the declared pro- economic interest that commercial “to Texas in- tied-house assure the laws: performance vides stake the financial dependence of of the members three-tier [a brewer].”135 But considers the system.”134 “independence” And connotes in a provision vacuum rather than con- control, just the absence “interest” text, de adopts practice “no TABC’s presence of control—or connotes the at minimis exception” standard—a standard to portend least influence sufficient forbid- broad as to be no so standard at all. In cross-tier den coercion. so, doing disregards entirety Court text, separately of the defining discrete Varying Use 2. Code’s of “Inter- cobbling together words then those Narrow, est”—Sometimes Some- separate provision dеfinitions. The must be Interpre- Broad—Supports times an whole, however, defined as contextual That, Here, tation As Used the Term merely as a its sum stand-alone Degree Means a of Influence That parts.136 Independence Imperils Cross-Tier provisions The tied-house intently focus Courts must statutes in their analyze (and prohibiting entirety—not relationships certain cherry-picking individual others), or phrases meaning. allowing words using discern word “interest” 1980) ("the (same) subsidiary); Licenses—Interpretation Cir. tied [federal] house provision designed prevent by was control Term Interest” in "Financial Provision Al- beverage producers Beverage alcoholic and wholesalers coholic That Law Prohibits Manufac- added); outlets.”) (emphasis May over retail Having From turers and Wholesalers Financial Store, Meiklejohn, Super Liquor Retailers, hue's Inc. v. 21, Op. Att’y Interest in 84 Md. Gen. 142, 1970) (describ (5th 9, 1999) F.2d 147-48 Cir. (Apr. (explaining the definition of ing being Florida’s "Tied House Evil Act” as by a tied house is a retailer "that is controlled designed prevent monopoly "to or control manufacturer, wholesaler, [distrib- or other manufacturers or of the distributors retail added); utor]”) (emphasis In the Matter of liquors”) intoxicating (emphasis outlets GameWorks, Comm’n, Liquor Control Mich. added); Liquor Sharpenter, Ted Inc. v. Ill. (Dec. 17, 1997) Dep’t of & Indus., Consumer 169, Comm’n, Control 119 Ill.2d Ill.Dec. (concluding § that Mich. 436.31 Comp. Laws 603, (describ 128, (1987) 518 N.E.2d 130-31 (The Act) Michigan Liquor Control did not ing system the tied house as a that "allowed prohibit subsidiary obtaining a retail- complete the distributor to exercise almost parent company ers’ license because added); retailers”) (emphasis control over the subsidiary of the could not "attain control” Quinn, Boy, Tom Inc. v. 431 S.W.2d board.) added); management (emphasis (Mo. 1968) (holding purpose of the statute Beverage Reg- Ark. Alcohol Control Rules and prevent is to control "financial retailer 2.28(1) (construing § ulations Ark. Code Ann. wholesaler,”) added); by the (emphasis Picke (The Alcoholic 3-3-212 Arkansas Control Schott, (Fla. 1951) rill v. 55 So.2d Act) "may prohibit tend to (holding purpose of Florida’s "Tied House licensee."). influence [a] monopoly Evil prevent Act” "was to con trol manufacturers or distributors 102.75(c). 134. Tex. Alco. Bev. outlets”) added). (emphasis retail Cadena, (citing 135. Ante at 328 449 S.W.3d at See, GameWorks, e.g., In the Matter of Dep’t Beverage Ken. of Alcoholic Control 24, 1999) (allowing (Sept. retailers’ license General, subsidiary Attorney parent to be See re issued to a because its Office of distiller, 2015); company, see could not also ties to a Reading dealings supra control influence the business 167-69. Law, note every modifier necessarily “in- fied includes times,137 usually preceding many throughout Code sprinkled a terest” modifier: with or any commercial “broadly encompasses (cid:127) any interest138 in provides a interest stake economic (cid:127) interest139 real entity of an en- performance financial (cid:127) interest140 a financial manufacture, distribution, or gaged (cid:127) interest141 pecuniary beverages.”145 All inter- sale alcoholic (cid:127) ownership interest142 an type. any degree. anyOf ests. (cid:127) any an kind143 interest broad, reading is far too disagree. I This differently. is structured 102.07 Section (1) is not modified “interest” here because the relevant text: Again, here’s (2) indirect,” and or modified “direct

(a) or has an person ... no who owns “in phrase businеss a brew- by the ... in the of a brewer interest business er,” any it cannot mean interest thus (1) or or have a direct may ... ... own brewer, logically only any kind in a of a .. . in the business indirect interest in a brewer’s business. direct interest retailer.144 parent nor FEMSA Neither Cadena person has “an interest” It bars a who interest any prohibited such has having from “a brewer business legal has or Heineken Brewers. Neither business or indirect interest” direct Heineken equitable title Brewers’ with its phrase, latter of a retailer. The or Heineken Brew- stock modifier, or indicates indirect” “direct ers, way to exert cross- any or other direct invites “interestedness” with retailer Moreover, influence or tier control. than with a brewer. broader examination Agreement Corporate makes Governance an Code bars someone ability to lacks FEMSA clear that “in- merely having a brewer manage, directly or control or either indi- something more in a retailer but terest” of the two Heineken rectly, the business “a indirect interest.” expansive, direct Companies, turn Holding which own formulation indirect” This looser “direct above, As noted Brewers. Heineken net, scope expanding the casts a wider explicitly that Agreement states FEMSA tied-house to thwart classic “interest” or influence “right has no control retail- controlling arrangement brewers cooper- form of right or other consultation ers. Holding relating to the Heineken ation” Holding route, Similarly, Companies.146 Heineken holding goes another

The Court “in- rights all make decisions and unmodi- reserved standing alone that “interest” 28.03(8), 11.47, 11.61(b)(l7), 3.05(b), 11.10, §§ §§ 140. See id. 137. See Tex. Aim Bev. 61.44(a), 61.71(a)(28), 54.03(5), 102.06. 22.04(c), 22.04(a), 22.04(b)(l)-(2), 11.70(a), 37.04, 28.16(2), 32.21(2), 22.06(a), 24.05(a), 5.05(a)(3). § 141. See id. 37.07(1), 50.003, 51.06, 61.02(b), 61.43(a)(6), 61,71(15), 102.01(c). 61.45(a)(l)-(2), 61.45(b)(l)-(2), 6.05, 22.16(b)(2), §§ 142. See id. 74.01(d), (27)—(28), 61,74(a)(10), 61.71 28.03(8), 11.48(a)-(b), §§ 143. See id. 102.04(a), 102.04(b)(1), 102.01(c), l(j), 102.0 102.03(b). 61.71(a)(21), 61.71(a)(26), 102,11(2), 102.07(c), 102.06, 102.07(a), 109.59(c). added). 102.07(a)(1) (emphases § 145. Ante at 323. 102.11(1), 102.18(b). 102.10(b), §§ 138. See id. Agreement Corporate Governance 19.10(a). 61.44(b)(1).

139. See id. sole into dependency and at their ‍‌‌​​‌‌​​‌​‌​‌​‌​​​‌‌​‌‌​‌‌​​​​​‌‌​​‌‌‌‌‌‌​‌​‌​​​‍discretion enter profit-sharing arrangements any permittee or a .requirement and without consult with in another tier.151Such cooperate with ... FEMSA.”147 The are they activities because forbidden im- pro- provisions peril independence Code’s tied-house aim to monopolis- induce “independence,”148 industry practices, mote and FEMSA tic and lawmakers want any ability lacks Heineken blunt Brew- manufacturer direct control/coercion/in- fluence/subjeetion ers. retailers. over But all not potential prohibited; connections are Legislature’s overarching The concern is no on there absolute bar even the most “independence”—minimizing cross- picayune cross-tier affiliations.152 coercion—permeates tier control and Code, relationships which bars that exert The “any uses terms undue influence. 102.07 itself con- interest” Section and “an interest of any kind” prohibitions tains to restrict in several how a elsewhere But not here. If Code.153 strong-arm might manufacturer a retailer. “an interest” captures .everything on its own, For example, a cannot why broadening manufacturer be a then is the “direct or guarantor, pay 102.07(a)(1)? retailer’s a retailer’s indirect” needed section advertising, give Why scope-expanding a retailer dis- are other aggressive modifiers counts, section 102.01 Similarly, etc.149 re- used elsewhere in Code? The Code having stricts various cross-tier For forbids a frоm a brewer “direct or incursions. retailer, permittees one tier example, prohib- are indirect interest” in but does not from officers in serving having any ited as another retailer from forbid may Many not Additionally, permittees tier.150 whatsoever a brewer. relation- ships provide fixtures or credit Code equipment; own forbidden affirmatively “affiliate[s],”154 security, loans, agree manage, encompass or extend “subsid- Now, 19.10(b). sion, 147. Id. arrange- § alongside provisions at if this read other above, directionally, speaks opposite including ment were the section 101.01 to the stoek, Holding relationship permittees. Heineken FEMSA or if It owned makes no between entities, representative Holding corporate served Heineken mention of other or affil- stockholders, board, could be a tied-house iates as other FEMSA’s tied-house view, provisions encompasses my violation under that cover restrictions stock- do. permittees. industry participants, parent holders of active not com- Tex. Alco. Bev. Code 102.03(b). converse, stockholders, affiliates, § governed by panies, holding com- But the 102.07(a), FEMSA, panies, section not true. board members. the non- permitted parent prospective company of 148. Tex. Alco. Bev. Code 102.75(c). § minority retailer and an indirect stockholder minority position on with a two non- board 149. Id. 102.07(a). § permitted holding companies, is "engaged not beverage industry." in the alcoholic The Hei- 102.01(d). 150. Id. § manufacturers, neken Brewers FEM- are Cadena, words, 151. Id. 102.01(e)-(i). § and not In other FEMSA SA engaged is not Heineken's Brewers’ mention; 152. Another point Section merits brewing And Heineken beer. 101.01(a) any house defines a over- tied as indirect, interest, Brewers have zero direct lapping ownership prohibited other rela- application. .Cadena's retailor tionship engaged in those “between alco- industry beverage holic levels.” different See id. 11.48. added). 101.01(a) (emphases Some of 37.07, 11.48(a)-(b), 74.01(d), prohibited relationships statutorily §§ those See id. defined, 102.07(a), 101.41(a), 102.03(b), 102.11-13, 101.43(a), barring section 102.14(a), 102.18(a)(3), 102.22(a), 102.15(a), having brewer from or indirect inter- a direct 109,08, 102.31(b), 108.01(a), 108.05-06, provi- est in This the business of retailer. Agreement strips FEMSA iar[ies],”155 Governance majority stockholders.156 ability any aspect or control any to direct language no such Legislature included 102.07(a)(1). dealings. Brewers’ FEMSA is both in section Corporate (by the Governance legally must, then, something mean “Interest” practically (by nature Agreement) and interest, as maintains. less than Brewers) barred attenuation from the of “tied the definition holds Court any attempt place act in 102.01(a) applicable house” control the Heineken Brewers. over exert here, “any includes because definition this read- ownership.”157 But overlapping 102.07 statutory The context section in relation to section ing is too broad must strongly that an “interest” indicates 102.07(a)(1) in phrase “interest because the ownership. than more mere stock involve than is narrower the business of brewer” example, in Elsewhere The as a whole.158 of the Code the breadth expressly—and repeatedly— three tiers was independence “corporate in stock”: to interests refers tied Legislature’s explicit objective, and 102.01(c) (cid:127) discusses an “own- Section originally formed because housеs were ership interest the business pres- financial intersection retailers’ corporate stocks.”159 financial corresponding sures and brewers’ 102.10(b) (cid:127) “any prohibition of cross-tier Section includes inter- benevolence. assets, business, interests, then, permit, financial est affects interests. stock.”160 corporate stock owner- twenty-percent FEMSA’s (cid:127) 102.18(b) “any in- Holding Companies in the Heineken Section refers ship license, business, assets, into step not mean it can the shoes of terest does corporate influ- stock.”161 Brewers even flex the Heineken affecting Brewers’ point of ence to the unique This is not to section treatment publicly traded FEMSA is business. Indeed, Alcoholic throughout the Bev- 102. parent or separated by at least three hold- in cor- erage Code references to interests companies from the Heineken Brew- ing porate appear frequently stock and—at companies ers. of these intermediate Two distinguished from least three times—are compa- internationally publicly traded are in a business: interests offi- Additionally, though FEMSA’s nies. (cid:127) person 37.04 states that “[a] Section positions hold on the board di- cers board,” per- who nonresident seller’s “supervisory these holds a rectors and in the may mit have an interest busi- only to Heineken Hold- positions relate stock, ness, assets, or per- corporate ing Companies, not the Heineken Brewers. mit of brewer’s companies person who holds a holding control Insofar Brewers, permit.”162 Corporate the actions 102.07(a)(1). 11.48(a)-(b), 74.01(d), 158. See Tex. Alco. § 155. §§ See id. Bev. Code 102.03(b), 102.11-13, 101.41(a), 101.43(a), 102.15(a), 102.31(b), 108.01(a), 102.14(a), added). 102.01(c) (emphasis 159. Id. § 108.05-06. added). 102.10(b) (emphases 160. Id. § 11.13(d), 11.45-.46, 11.61(a), §§ See id. 22.05-06, 61.74(b). 61.71(c), added). 102.18(b) (emphases 161. Id. § 326; 157. Ante at see also Tex. Alco. Bev. Code added). 102.01(a). (emphases 37.04 (cid:127) 37.07 to “an interest in rate entities must legally Section refers be treated as assets, business, permit, or cor- distinct, if one is even owned another. stock.”163

porate shareholder, investor, Thus a as an has a (cid:127) distinguishes 5.05 between Section financial in a company’s monetary interest

“hold[ing] an stocks or alco- bonds value. But the cogniza- shareholder has no on beverage holic business” one legal ble interest in the as- company’s hand,164 “hav[ing] any financial sets.168 person engaged with a connection There is not even the assertion here beverage

an alcoholic business” complicated FEMSA/Heineken “hav[ing] pecuniary structure, corporate specifically the inter- beverage alcoholic business” mediate entities between FEMSA other hand.165 Holding Companies, being Heineken This distinction also true for statutes finagled to circumvent Texas tied-house Code; Alcoholic Beverage outside the Nevertheless, laws.169 the Court disregards other instances encom- many “interest” corporate separateness, the col- entities’ passes ownership per- of a even small ' lapsing distinctions parent all between Nevertheless, of stock.166 centage and as companies, holding companies, and subsid- 102.07(a) above, articulated section does disagree iaries. I that veil-piercing princi- ownership interest as stock not define ples apply “in con- regulatory do not contemрlate does not that even small text,” evidence of absent furtiveness. percentage qualifies stock an “inter- as corporate Cadena and FEMSA are distinct recognizes corporate sepa- est.” law Texas entities, separated by multiple layers of rateness, principle that subsidiaries Likewise, corporations. intermediate legal distinct from their have identities Holding parent Companies Heineken Heinek- holding It is a corporations.167 entities, principle corpo- corporate fundamental en are distinct different Brewers added). § (emphases percent voting 163. 10 of the interest Id. 37.07 "more than entity"). business 5.05(a)(2). § 164. Id. Hous., Gentry Corp. v. 167. See Credit Plan 5.05(a)(1), (3). § 165. Id. 571, (Tex. 1975); 575 Oil & 528 S.W.2d Bell Corp., Gas Allied 431 Co. v. Chem. S.W.2d 51.923(e) (defining § See Tex Educ. Code 336, (Tex. 1968) (citing Eagle Drye 340 v. "[fjor purposes of term this section” "sub- Inc., (Tex. Ranch, 364 Rock S.W.2d as, entity” stantial interest a business 1962)). among things, owning percent other "10 voting of the stock of the more or shares See, e.g., Reid Rd. Util. Dist. No. v. Mun. 66.08(k) (defining § entity”); business id. Stores, Ltd., Stop Speedy Food 337 S.W.3d purposes of term “in- section” "[f]or (Tex. 2011) ("[S]hareholders of as, entity” among a business other terest corporation corporate are as- not owners owning things, percent five or more sets.”). entity); voting stock or shares the business 171.002(a) (defining Loc. Gov’t Code (USA) Gladstrong 169. See SSP v. Invs. Partners purposes chapter” of this the term "[f]or (Tex. 2009); Corp., 450-51 as, entity” in a “substantial interest business Branscum, Castleberry v. things, percent among owning other "10 1987) sepa- (holding corporate 271-72 voting more of stock or shares sepa- when the rateness will not be observed entity”); 572.005 business Tex Gov’t Code “perpetrat[e] (defining as a means to "a ration used substantial in business as, fraud,” monopoly, legal obli- among controlling or evade entity” things, other "a entity” owning gations). interest in business rejected by multiple layers intermedi- The Court should have TABC’s separated corporations. corporate separateness The burden should have ate contention that can for on TABC to make the case blithely rested disregarded regulatory corporate disregarding distinct identities. precisely oppo- context. Our cases evidentiary But, offering TABC no despite site, attempts to resisting regulators’ treat corporate ignoring separateness, for basis one, legal distinct as unless the entities adopts reasoning TABC’s as the Court controls the parent record inter- shows own. nal affairs of operations case, subsidiary.176 has In this never Legislature Again, the knows well how (or produced alleged) even evidence specific If law- relationships. to forbid “subterfuge ownership” or other abuse makers had wished justify veil-pierc- circumvention that would 102.07(a)(1) disrespect sepa- corporate ing.177 fully compli- disclosed rateness, legal no paying mind distinct cated cor- FEMSA—and Heineken-related identities, so, they could have done porate relationships, complexity driven they provisions.170 in other Code did laws, tax and and TABC corporate never specifies 102 of Chapter indeed demonstrated, intra-industry alleged, relation- much less prohibited certain degrees acceptable anything other ships and different these were than entities connectedness. sections inter-tier Some legal distinct identities. “af- Chapter explicitly

within include repeatedly language has drafted forbid permittee filiates” and “subsidiaries” relationships specific involving corporate listing prohibited when relationships.171 affiliates, subsidiaries, parents, etc. It did sections, 102.07(a)(1), like section Other 102.07, presumably not so do in on section do not.172 sections within the Code Some purpose.

broadly prohibited relationships define (1) The is Court’s error here two-fold: kind,” forbid interest of in- and “an separateness improperly ignores corporate Others, ownership.173 cluding stock like (collapsing legal distinct entities across 102.07(a)(1), say, do not.174All to multiple throughout levels FEMSA adept Legislature prohibiting at corporate and families based Heineken to, specific relationships when it wishes (2) solely on ownership), and then stock presume and vice We should versa. interprets open-endedly “interest” so words it to included wanted it prohibits nonprohibited relationships. words it include and excluded wanted treating TABC exclude.175 erred far-removed enti- Interests, 11.48(a)—(b), City §§ 175. See Ltd. v. Jack- 170. See Wasson Tex. Alco. Bev. Code. sonville, (Tex. 2016) 37.07, 74.01(d), 101.41(a), 101.43(a), (citing Ruttiger, 381 S.W.3d 108.05-06, 108.01(a), 109.08. Belgium, See BMC N.V. v. Mar Software 102.03(b), 102.11-13, 102.14(a), §§ 171. Id. chand, (re 2002) 83 S.W.3d 102.31(b). 102.18(a)(3), 102.22(a), 102.15(a), quiring parental control "fuse” evidence subsidiary parent jurisdictional and purposes). 102.07(a)(1). § 172. Id. 109.53; 177. See Tex. Alco. see also Bev. 28.03(8), 11.48(a)-(b), §§ See id. Partners, (holding at 455 SSP 61.71(a)(21), 61.71(a)(26), 102.03(b). abuse, injustice, “there must be evidence inequity” corporate disregard separate- ¿d. 102.07(a)(1). ness) (cleaned up). 174. See entity one interconnected enter- control or influence over an in an- ties as compounds tier, the Court error prise and other neither rational nor practical. single and here. Cadena FEMSA are not person No reasonable could have intended entity, nor are Heineken retailer it, very absurdity. which is the definition of Compa- Holding Brewers Heineken Indeed, “an changing in- “any interest” single entity. majority’s nies brewer The applying it terest”—and across interpretation, disregarding free-wheeling require board—would the revocation legal identities, limitless distinct confers many currently issued permits alcohol upon TABC. statuto- power Unanchored in (those granted to brewers and retailers text, grants ry interpretation the Court’s alike).179 absurdity bar this Court is ar- authority selectively one,180 high theory single-share permit similar dissimi- bitrarily applicants it—easily. scales larly. hyperliteral Court’s interpre-

Under the 3. TABC’s Ascetic the Code View 102.07(a)(1), That tation of section an individual Excep- De Minimis “No

Allows special-interest group ma- easily could Single-Share Theo- tion”—aka nipulate potentially wreak havoc Arbitrary ry—Invites Absurd and permitting system. Everyone could Results the mom-and-pop general affected—from our stores rural that dot counties to today adopts Court view TABC’s large retail chains with locations across 102.07(a)(1) only not that section covers ability state and nation. Without every type interest, every but also guests to their provide alcohol custom- interest, quantum slight however ers, many of these establishments would trifling. The Court offers assurances be run out business. Under the Court’s dealing single-share aren’t issue we practical application restrictive view—a here, concluding we need decide single-share theory—any can persоn But the ex- logically inescapable issue.178 imperil unilaterally a Texas interpreting tension mean “interest” Buy a business. How? share of stock any financial interest is the so-called sin- buy Then company. that a share another theory, an gle-share interpretation just company permitted within another tier. yield would nonsensical results—not results, TABC, According A the Court and preposterous ones. sin- both odd now in gle-share interpretation, companies are violation of section opposed 102.07(a)(1) asking entity permits.181 an tier exerts and must lose their whether one single-share theory at 337-38. defend the be- 178. Ante tinued to Here, appeals. says fore the court TABC Court insists we theory 179. The need not address application simply pres- of the not theory, eventually single-share asserting, and disagree. ent. I holding, it need whether only decide Constr., Inc., prohibited has a de- FEMSA interest without Comet II 180. Jaster v. (Tex. 2014) (hold ciding really what "interest” liti- (plurality) means. But S.W.3d gants seeking "high, come to ing Court concrete bar is it [as] the absurd-result like, coy be.”) guidance, Magic (quoting not responses Care Ball should Combs v. Health 2013)). again you "Ask later” or tell Corp., “Better not Serv. apply statutory now.” How can term we a See, knowing e.g., Tex. Alco. Bev. Code without what it More to the 102.01(j) means? theory point, presented single-share (setting penalty TABC for a violation tied-house its legal permit explain suspension cancellation of a at trial this case to basis ineligibility reapply year). denying permit. con- for one for Cadena’s TABCthen (cid:127) account A child with an investment potentially employee could disgruntled A longer can no re- college tuition a manufactur- in a retailer and buy shares parents from who ceive his allowance permits. both lose their ensure will er and in a different single even a stock own buy cross- competitors Motivated could industry.185 tier long- up-and-coming of both shares (cid:127) money to both a A bank cannot loan and end their standing industry rivals and a local retailer.186 local brewer The conse- for economic success. quests Eighteenth Amendment quences impossible or seem If these situations modern-day if tee- again realized could far-fetched, in- repeating: it TABC bears obtained interests different totalers there is “no de minimis exception.” sists shut down industry in order to tiers of the holding, today’s into position, baked Their A citizen lone Texas alcohol trade. rule, inevitably single-share to the leads of alcohol could use of the evils convinced which, stock given of modern the nature neighborhood his today’s holding ensure funds, pension ownership, mutual This is a was alcohol-free. to de grocery store tantamount plans, would be facto interpretation. And counsel ridiculous if enforced. TABC Prohibition fair, rule, reading contextual “a compelled by single-share agreed that under a 102.07(a)(1). holders large number of current “if the violating statute.” And ... are spurred actor Even without bad ... impose prohibition,” does share statute intent, theory single-share malicious a lot of problems “cause[ ] would management mutual will still affect a lot of cancellations and result in funds, agreements, retirement insurance Nonetheless, Court, while revocations.” anyone nearly with diversified plans, acknowledging post-argument TABC’s 102.07(a)(1) applies If portfolio.182 section that there is no de minimis excep- view interest, financial then: tion, interpretation adopts expansive 102.07(a)(2) (cid:127) prohibits a fa Section rule” indistinguishable from “one-share brewery stock ther who owns Count- disquieting result: and dictates present giving from a Christmas including State permittees, less current stock in a retailer.183 his son who owns illegally operating permittees,

TABC’s own admission. (cid:127) says regardless stock one whether neighbor A who owns in- de minimis housesitting cross-tier prohibits

tier is forbidden terests, pro- not enforce that “TABC need neighbor for a with an interest de minimis interest.” against hibition tier.184 another 102.07(a)(2) (and 183. See argues funds should TABC mutual 182. Tex. Alco. Bev. Code would) "thing differently, gifts any much like the cross-tier (prohibiting be treated governing judges value”). contem- the recusal rules from plate except funds most mutual quick point is But TABC consideration. furnishing (prohibiting See id. cross-tier exception for in section 102.07 out—no exists “services”). lending So, too, ownership or interest. de minimis exception par- for does not contain an statute furnishing (prohibiting cross-tier See id. ticipation Instead it’s an all- in mutual funds. money). or-nothing argument. If an means interest,’’ then, explicit excep- “any an absent 186. See id. tion, funds necessarily includes mutual it like. ease, Today’s though, is about selective It single-share disavow it. dismisses the permitting, not selective enforcement. This as a stalking standard fictitious horse that case, is a permitting not an enforcement it refuses to dismount. case. The permitting sets the At argument, oral the State reaffirmed criteria, question not simply TABC. The is its view that the statute contains no de objective stated: Does Cadena meet the exception minimis and that numerous cur- statutory qualifies criteria? Either Cadena permittees rent violation of Texas permit

for a retailer it doesn’t. And if tied-house laws: qualifies, no TABC has discretion JUSTICE BROWN: But under the in- deny Courts, permit. including the terpretation favors, that Court, agency Supreme U.S. repeatedly have rec- aren’t already large there ognized number of permitting, that selective unlike discretion, prosecutorial current impermissible violating is holders who are where the statute? differently someone “treated similarly others with “no situated” rational are, ATTORNEY: There there are. And for

basis treatment.”187 difference gets through to the distinctions be-' contends, “it is thing one inter- intérpretation tween of the statute and pret being applicable a statute as to a enforcing it. scenario,

certain factual quite another scenario,” it in adding, “just enforce agen- JUSTICE BROWN: But it’s the agency an interprets because a statute to position that there is cy’s not a de min- apply particular in a situation does not exception, imis correct? agency always mean the must it in enforce ATTORNEY: There is no de rules, minimis that situation.” The rules are the ’ exception. basis, I any and am unaware of principled Code, certainly required by none applying differently them to different com- CHIEF .JUSTICE HECHT: I take panies. complex, Alcohol laws are but the your point about difference between requires uniformity, Rule Law not selec- licensing. enforcement and But if the anticompetitive tive enforcement and fa- single-share prohi- statute impose does (cid:127) benefitting prеferred

voritism permittees. bition, practically can it be enforced? Every industry actor an has “interest” Probably ATTORNEY: not or at least in knowing what Texas law does and does way problems a lot of causes not require. Every industry actor has an and would result a lot cancellation “interest” in TABC adopting consistent again, revocations. But we don’t have permitting approach applies the law happening. evidence that that’s uniformly to incumbents and newcomers trying alike. It is TABC asserts it enough single- “not walk cast rule; away share from” hypothetical just as a the one-share will purely situation scenario never Startlingly, and insist that TABC re- enforce the Court it. frain from expending enforcement re- seems untroubled TABC’s insistence on sources in such an way. admittedly audacious In this standard that unenforceable Court, unwilling arbitrarily TABC was to defend the favors some dis- businesses and single-share theory yet unwilling also to favors others. Olech, (2000); Pasadena, Village Lindquist City v. Willowbrook U.S. see also v. of of 562, 564, Tex., (5th 120 S.Ct. L.Ed.2d 525 F.3d Cir. in a manner possesses legiti- Interpreting a

Again, every Texan statute that is unequal ratifies odd. Our knowing enforcement mate “interest” in what Texas law line-drawing—iso- focus should not be on prescribes proscribes and that those lating percentage below TABC, lowest which power evenhandedly. will enforce to ownership must satisfy interests fall for principled for when pressed basis 102.07(a)(1). Instead, we should dissimilarly, re- treating similar businesses in the context of read “interest” related sponds: of noL—lack enforcement re- fear statutes, particularly the codified purpose prevent uniform sources will enforcement ensuring “independence.” of actors’ This de minimis exception” of “no position. its reading yields a more non-ascetic contex- This distressing. is understanding of thorough tual and “inter- apply to consistently must Legal rules sufficient to est”: exert financial stake everyone, meaning of in- TABC treatment cross-tier or coercion. influence treat- dustry upstarts must match TABC A of reading is common-sense Code heavyweights. ment of TABC’s industry given the especially Legis- here warranted today be fairly enforcement can regime against express lature’s admonitions “sub- passive-aggressive: passive described as by terfuge practices” industry and related de some, aggressive for “[N]o others. it comes to participants.188 liquor When minimis exception” synonymous with regulation, path of the has law been a discretion,” equal “no limit to our But rocky Perhaps long, one. because precisely treatment the law under means regulation colorful history liquor that, vesting regulators with standard- governments invariably difficulties ex- legal power play favorites. less perience regulate alcohol, attempting above, promises exer- As noted repeated has inserted ‍‌‌​​‌‌​​‌​‌​‌​‌​​​‌‌​‌‌​‌‌​​​​​‌‌​​‌‌‌‌‌‌​‌​‌​​​‍stat- enforcing prosecutorial cise discretion in utory prohibit that the Code edicts into statute, expansive interpretation its specific “subter- conduct well as its by admitting en- partially inability fuge” whereby industry participants en- In- uniformly single-share force rule. gamesmanship gage technically deed, applica- denial Cadena’s TABC’s complies but the Code undermines tion other view, clashes with its treatment of goals. prohibiting subterfuge my permittees. similarly record seeing ways, by through situated should cut both own- attempts compliance shows billions dollars by cross-tier to avoid also by ership permittees avoiding hyper-technical the retail constructions that application re- was find common sense. defying brewer tiers. Cadena’s violations jected Legislature’s retail simul- artifice permittees other while unease with should invite taneously publicly interpretations own traded dissuade non- stock permit ripple sensical that either effects manufacturers. 102.07(a) (re- Alco, ownership use of a of or See unlawful Bev. by payments quiring premises permit; further certain cash and such all covered type holder providing “[n]o provisions either liberally of this be con- code shall maneuver, device, may license subter- intent, use carry and it strued out this shall fuge, accepted”); or shift which credit is duty the commission or the administra- ("If permittee § 102.01(g) a loan id. secures provide general to the tor strict adherence state, outside the is a from a source there subterfuge policy preventing and related presumption relationship of a tied house practices hereinafter declared to constitute ....”); ("It subterfuge id. 109.53 practices,"). unlawful trade prevent subterfuge legislature intent of the permitted ing judicial proscribed proscribe conduct or discretion and prizing well- consistently applied, conduct. rules defined se- best Law, certainty cures and thus the Rule Unlike IV. other of interpretation, methods Conclusion purposivism, scrupulous like textualism is Prohibition, During Americans seeking agnostic, politically proudly and so—caring scarpered alcoholic refreshments whether not result scratches an ideologi- market mass disobedience. The black itch, only cal interpretive whether (President experiment” “noble Hoover’s principles applied forthrightly are to honor term)189 consequences, had many ignoble political legislators, bargains what- however, Twenty-First and after color their jersey. ever ratified, states Amendment was were said, That interpretation is done by urged adopt protective measures to flesh-and-blood people, as and this case pre-Prohibition forestall and licentiousness shows, guarantee textualism not does una- pleaded Roosevelt lawlessness. President nimity. hard, disputes Some are condemning temperance, for “the curse of avowed textualists disagree. will Jus- Chief intoxicating liquors” excessive use of tice slipperiness Marshall observed liquor imploring regulate pur- states nearly ago: words two centuries “Such in a way “repug- chases that avoided the language, the character of human that no predated Eigh- nant conditions” that conveys mind, in all situations, word especially teenth Amendment: “I ask single one definite ....”191 idea Words no state authorize the law otherwise slippery, interpreting slippery words of the saloon in its old form or in return eludes robot-like precision. Textualist guise.”190 some modern readers invariably read text variably. 80-plus years, For Texas’s tied-house Judges upon interpretive seize different have three-tiered laws mandated a alcohol differently, clues and balance them not to distributors, industry—producers, and re- but' through reach desired outcome ear- guard against tailers—to criminal ele- grappling. par- nest can Determinations alcoholic-beverage ment trafficking and ticularly when excavating indeterminate prevent ownership overlaps cross-tier interpretive original community, how an coercion, monopolies, that induce and dom- generations ago, perhaps centuries un- mind, ination. in the With this tied- they language derstood the enacted. That’s context, house should mean “interest” Court, why hopes we’re nine-member “control.” (and hopefully collegial) that collaborative sharpen jousting analysis. will our reputation This Court has a well-earned textualism, interpretive mooring The Court doubtless believes its hyperli- rules, prizes interpretive clear es- interpretation—reading “an teral interest” legal ju- minimizes dice-loading, chews “any pragmatic interest”—is more workable, lawmaking. Policy calls are for the I disagree consequen- dicial with branches, adventurist, view, which, ease, reform- political tialist does not text, judges. square reality, given minded Fidelity irrationality curtail- Feibelman, (4 Maryland, Herbert U. Another Noble Ex 191. McCulloch v. U.S. J, (1929). League Wheat.) 316, 414, (1819). periment, 34 Com. L. L.Ed. Proclamation, 5, 1933; 190. Presidential Dec. Ratified,” Repeal is see also “Prohibition N.Y. 5, 1933, Times, Dec. at Al. of saloons breweries theory. digm commit- controlled Our single-share reality It blinks has befallen Texas. and self-abne- judicial

ment textualism regulatory that the entire grumble has been State’s to honor what gation requires us TABC hangs in the balance when draft laws scheme Judges ought neither written. overlapping inter- guise of inter- countenances scores revise under the nor them that, excep- Rather, its “no de minimis seek an under we should ests preting them. position, illegal ripe for rev- namely tion” are interpretation, objective basis functional semantic, anything If threatens meaning ocation. contextual system, of the three-tier it themselves.192The term “interest” derailment words strict, enforcement TABC’s all-encompassing standing no-favorites may seem above, no-exception alone, context clar- standard. explained but as every day are ifies content. Courts tasked equity stake the Heineken FEMSA’s lan- meaning imprecise assigning implicate not sec- Holding Companies does point an guage. Isolating the exact when 102.07(a)(l)’s tion concern with retailer- unduly influential “interest” becomes overlap. The Court seeks manufacturer certainty. resists mathematical coercive separation” “strict between the enforce judges no when But is more blurred as tiers, not three but the does under the U.S. Constitution determine only relationships, proscribe all cross-tier a search is “unreasonable”193 bail when specifically enumerated ones. The Code “probable”195 “excessive”194 cause Prohi- hodgepodge of laws enacted since punishment “cruel and unusual.”196These repeal, and lawmakers over time bition’s inquiries, requiring vexing, fact-laden are Code, overlap inviting have tweaked judges judgmental. be through sys- to the exceptions three-tier example, operate For can Unfortunately, adopts a con- tem. wineries the Court tiers;197 brewpubs all three can sell stringent as to across struction of “interest” so retailers;198 product directly their small meaning. fair deform does dis- can permittees and manufacturers distribute current pute numerous brewers retail;199 stores package cross- wholesale and sell billions of dollars so-called hold investments, can also local distributors.200 Strict nothing the evils tier like reality.201 sometimes lenient plagued para- tied-house rhetoric is the classic 22.03(a). 200. Id. legislature § inquire what 192. “We do not meant; only we what the statute ask means.” Holmes, Theory Legal said, Oliver Wendell liquor 201. That some Texas restrictions Interpretation, sacrosanct, 12 Harv. L. Rev. quite unique to the Lone (1899). State, privately example, For held com- Star liquor panies can sell hard in Texas while U.S Const. amend. IV. companies publicly traded cannot. Tex. Alco. example: § 22.16. Another the five- Bev. VIII. Id. 194. U.S. Const. amend. permit cap liquor ownership. store law, person § 22.04. Under no can hold Texas permits, Const. amend. IV. “package 195. U.S. five more than store” cap by consolidating people avoid the certain single legal entity” VIII. with their permits 196. U.S. amend. “into a Const. children, parents, siblings, and a maneuver § uncapped 16.01. own an number 197. Tex. Alco. that frees them to Bev. Code stores. Id. liquor Consanguinity § 22.05. matters, 74.03(a). incumbency—businesses § and so does 198. Id. 1,May exempt established before 1949 are 22.04(c). limit. five-permit 199. Id. 12.052. Nothing addresses, Any section 102.07 licensing system tends to project forbids, question the whole politics into applicant’s much less parent Indeed, keep it there. it compels the having from an company minority indirect traffic to be in politics self-protection. ownership parent companies stock The licensing body a powerful becomes of non-resident brewers. The Code’s over- political engine. Every licensee ... be- riding goal safeguarding “indepen- gins political marshal his own control, coercion, dence”—the absence of strength to serve his own ends.202 subjection—is imperiled by such 102.07(a)(1) Section prohibits one attenuated, far-removed connectedness in a having interest brewer portend domination, doesn’t vertical direct indirect in a retailer. or even trace influence. (the applicant) Neither Cadena nor its dis- vested authority state TABC with parent tant FEMSA influences controls to regulate alcoholic-beverage indus- the business of the Heineken Brewers in try, history provides backdrop way such a hazard the Brewers’ the wisdom tied-house But no “independence.” statutes. It fanciful to contend laws, agency state should be that Texas explicitly able tied-house discriminate preserving aimed at actors’ independence, indiscriminately. TABC’s “no de minimis remotely imperiled. exception” standard confers vast autonomy conjures system an erratic of con- On this record—corporate separateness stantly moving goalposts. Government by governance agreement cemented similarly must not parties treat situated denies form of FEMSA influence that dissimilarly, imperil goal the Code’s playing regulatory stated favorites “independence”—there prohibited, no by applying different standards differ- cross-tier “interest” under ent companies. 102.07(a)(1).Because the Court oth- holds Such effects predicted by were fact erwise, I respectfully dissent. authors of Liquor Toward Control 1933: Attachment supra 202. Fosdick, note at 59.

Case Details

Case Name: Cadena Comercial USA Corp. D/B/A Oxxo v. Texas Alcoholic Beverage Commission

Court Name: Texas Supreme Court

Date Published: Apr 28, 2017

Citation: 518 S.W.3d 318

Docket Number: 14-0819

Court Abbreviation: Tex.