MONARCH BEVERAGE COMPANY, INC., Appellant-Plaintiff, v. David COOK, in his official capacity as Chairman of the Indiana Alcohol and Tobacco Commission, et al., Appellees-Defendants.
No. 49A02-1504-PL-245.
Court of Appeals of Indiana.
Dec. 17, 2015.
37 N.E.3d 525
Gregory F. Zoeller, Attorney General of Indiana, Thomas M. Fisher, Solicitor General, Heathеr Hagan McVeigh, Lara Langeneckert, Deputy Attorneys General, Indianapolis, IN, Attorneys for Appellees.
Michael P. Maxwell, Jr., John B. Herriman, Clark Quinn Moses Scott & Grahn, LLP, Indianapolis, IN, Attorneys for Amicus Curiae Wine & Spirits Distributors of Indiana.
Steven M. Badger, Matthew P. Thielemann, Badger Law, Carmel, IN, Attorneys for Amicus Curiae The Indiana Beverage Alliance.
KIRSCH, Judge.
[1] Indiana‘s Alcoholic Beverages Law, which consists of sevеral statutory provisions (“the Prohibited Interest Provisions“), prohibits alcohol wholesalers from holding interests in both beer and liquor permits. Monarch Beverage Company, Inc. (“Monarch“) filed a complaint against David Cook, in his official capacity as Chairman of the Indiana Alcohol and Tobacco Commission, et al. (“the State“), alleging that the Prohibited Interest Provisions violate the Equal Privileges and Immunities Clause of the Indiana Constitution because the statutes discriminate on their face against beer wholesalers by prohibiting beer wholesalers from seeking a permit to distribute liquor and such restraint is not based upon an inherent difference between beer and liquor wholesalers. The trial court granted summary judgment in favor of the State and against Monarсh, finding the statutes to be constitutional. Monarch appeals the trial court‘s order, alleging that the trial court erred in its determination that the statutes are not unconstitutional.
[2] We affirm.
[3] Indiana extensively regulates the alcoholic beverage industry in the state and has done so since the end of Prohibition. The general purposes of the regulation of alcohol in Indiana are: (1) “[t]o protect the economic welfare, health, peace, and morals of the people of this state“; (2) “[t]o regulate and limit the manufacture, sale, possession, and use of alcohol and alcoholic beverages“; and (3) “[t]o provide for the raising of revenue.”
[4] The focus of this litigation is on the second tier, the wholesalers of alcoholic products. Wholesalers are central to the alcohol regulatory system by creating a buffer between the manufacturers and retailers; they also serve as a port of entry for out-of-state alcoholic products imported into the state, collect excise taxes on alcohol, and ensure that alcoholic products are sold only to licensed retailers and dealers.
[5] In order to wholesale or distribute alcohol in Indiana, one must obtain a permit issued for that limited purpose by the Indiana Alcohol and Tobacco Commission (“the Commission“). See
[6] The Commission also regulates the type and number of permits a particular wholesaler may hold at any given time. The Commission issues separate permits for the wholesale distribution of beer, wine, and liquor. Beer wholesale permits are issued on a county-by-county basis, with a limit on the number of wholesale рermits that can be issued by each county based on the county‘s population.
[7] Wholesalers who have acquired a permit for beer receive certain statutory franchise protections. One such franchise protection makes it unlawful for a manufacturer of beer to terminate an agreement or contract with a beer wholesaler “unfairly and without due regard for the equities of the other party.”
[8] Monarch is a wholesaler of alcoholic products in Indiana and currently possesses permits to distribute both beer and wine. Monarch has been a wholesaler of beer since 1947, when it began operation, and a wholesaler of wine since 1976. Monarch distributes wine in all ninety-two counties in Indiana and beer in eighty-nine counties and is the exclusive distributor of MillerCoors beer in seventy of those eighty-nine counties. It distributes wine manufactured by E. & J. Gallo Winery (“Gallo“). Gallo also manufactures four liquor products, which Gallo would like Monarch to distribute as well; however, because Monarch holds a permit for the wholesale of beer, under Indiana law, it cannot also obtain a permit to wholesalе liquor.
[9] On March 5, 2014, Monarch filed a complaint against the State, alleging that Indiana‘s restriction against the joint wholesaling of beer and liquor, specifically, the Prohibited Interest Provisions, violates the Equal Privileges and Immunities Clause of the Indiana Constitution. After discovery, the parties filed cross-motions for summary judgment. The State contended that Monarch could not maintain an Equal Privilegеs and Immunities claim because the Prohibited Interest Provisions treated all wholesalers alike and that, even if they did not, the statutes were justified as they are rationally related to the legitimate public purposes underlying Indiana‘s regulation of the alcoholic beverage industry. Monarch asserted that an Equal Privileges and Immunities claim existed because the Prohibited Interest Prоvisions singled out beer wholesalers for disparate treatment and that such treatment is not justified by an inherent and substantial difference between beer wholesalers and liquor wholesalers.
[10] On April 22, 2015, the trial court issued an order denying Monarch‘s motion
Discussion and Decision
[11] “When a party claims that a statute is unconstitutional on its face, the claimant assumes the burden of demonstrating that there are no set of circumstances under which the statute can be constitutionally applied.” Meredith v. Pence, 984 N.E.2d 1213, 1218 (Ind.2013) (citing Baldwin v. Reagan, 715 N.E.2d 332, 337 (Ind.1999)). “[I]n reviewing the constitutionality of a statute, ‘every statute stands before us clothed with the presumption of constitutionality unless clearly оvercome by a contrary showing.‘” Id. (quoting Baldwin, 715 N.E.2d at 338).
Our methodology for interpreting and applying provisions of the Indiana Constitution is well established. It requires a search for the common understanding of both those who framed it and those who ratified it. To determine this intent, we examine the language of the text in the context of the history surrounding its drafting and ratification, the purpose and structure of our cоnstitution, and case law interpreting the specific provisions. We look to history to ascertain the old law, the mischief, and the remedy. A statute challenged under the Indiana Constitution stands before this Court clothed with the presumption of constitutionality until clearly overcome by a contrary showing. The party challenging the constitutionality of a statute bears the high burden of ovеrcoming this presumption and establishing a constitutional violation, and any doubts are resolved in favor of the legislature. Paul Stieler Enters., Inc. v. City of Evansville, 2 N.E.3d 1269, 1272-73 (Ind.2014) (internal citations and quotations omitted).
[12] When reviewing the grant of summary judgment, our standard of review is the same as that of the trial court. Seth v. Midland Funding, LLC, 997 N.E.2d 1139, 1140 (Ind.Ct.App.2013) (citing Dreaded, Inc. v. St. Paul Guardian Ins. Co., 904 N.E.2d 1267, 1269-70 (Ind.2009)). We stand in the shoes of the trial court and apply a de novo standard of review. Old Utica Sch. Pres., Inc. v. Utica Twp., 7 N.E.3d 327, 330 (Ind.Ct.App.2014) (citing FLM, LLC v. Cincinnati Ins. Co., 973 N.E.2d 1167, 1173 (Ind.Ct.App.2012), trans. denied). Our review of a summary judgment motion is limited to those materials designated to the trial court.
[14] Monarch argues that the Prohibited Interest Provisions are unconstitutional because the statutes violate
[15] Monarch argues that the Prohibited Interest Provisions are facially discriminatory, and the trial court erred when it determined that Monarch cannot sustain an Equal Privileges and Immunities claim because the Prohibited Interest Provisions subject all wholesalers to the same discriminatory restraint. Monarch contends that the Prohibited Interest Provisions arе “quintessential examples of laws that classify” because the laws clearly designate a trait, the possession of a beer wholesaler permit, and impose burdens on those that hold such a trait. Monarch alleges that the Prohibited Interest Provisions specifically deny to anyone holding a beer wholesaler‘s permit the privilege of holding a liquor wholesaler‘s permit, and likewise, anyone holding a liquor wholesaler‘s permit from holding a beer wholesaler‘s permit, while affording that opportunity to everyone else.
[16] As a threshold matter, before reaching the two-part test from Collins, it is necessary that an appellant identify two groups of people who are disparately treated by the statute the appellant challenges. Robertson v. Gene B. Glick Co., 960 N.E.2d 179, 185 (Ind.Ct.App.2011) (citing Collins, 644 N.E.2d at 78-79), trans. denied. Therefore, before we can engage in the Equal Privileges and Immunities analysis, Monarch must demonstrate that the challenged statutes grant unequal privileges or immunities to
[17] In its order granting summary judgment to the State and denying summаry judgment to Monarch, the trial court did not agree with Monarch‘s contention that the Prohibited Interest Provisions created a discriminatory restraint on beer wholesalers and that, therefore, the Equal Privileges and Immunities Clause analysis applied to Monarch‘s challenge. The trial court stated that, “[a]t the time of election of which wholesaler to be, beer or liquor, the wholesalers stand equal [and] [o]nly after the election by statute do the subsequent and consequential restrictions apply.” Appellant‘s App. at 11. Finding that Monarch had not met the threshold requirement that an appellant must identify two groups of people who are disparately treated by the challenged statute, the trial court did not reach the two-part test.
[18] Under thе Prohibited Interest Provisions, a wholesaler may obtain one of the three individual permits, both a wine and a beer permit, or both a wine and a liquor permit. However, a wholesaler may not hold both a beer and a liquor wholesale permit.
[19] Monarch does not identify any similarly situated class that receives preferential treatment under the Prohibited Interest Provisions. Monarch contends that the Prohibited Interest Provisions “deny to anyone holding a beer wholesaler‘s permit the privilege of holding a liquor wholesaler‘s permit, and vice versa, while affording that opportunity to everyone else.” Appellant‘s Br. аt 17 (emphasis added). Monarch does not explain who the phrase everyone else refers to and identifies no particular class that is treated differently under the Prohibited Interest Provisions. Pursuant to the Prohibited Interest Provisions, all persons who seek to obtain a wholesaler‘s permit from the Commission are treated equally and have an equal opportunity to choose to become either a beer wholesaler or a liquor wholesaler, and after a choice has been made, beer and liquor wholesalers are equally prohibited from acquiring a permit to distribute any other alcohol except for wine. There can be no Equal Privileges and Immunities claim where all classes of person are treated equally. Robertson, 960 N.E.2d at 185. The Prohibited Interest Provisions preсlude any person from acquiring permits to become a wholesaler of both beer and liquor and treat Monarch no differently than other persons.
[20] Because Monarch has not identified any group of people who are disparately treated by the Prohibited Interest Provisions and allowed to obtain permits to distribute both beer and liquor, it has failed to meet the thrеshold requirement
[21] Affirmed.
NAJAM, J., and BARNES, J., concur.