Judge Strikes Down Ban On Stores Selling Liquor

Aug 14, 2012

LOUISVILLE, Ky.  -- Kentucky's seven-decade old ban on grocery stores, gas stations and other retailers selling wine and liquor is unconstitutional because it violates the equal protection clause of the Fourteenth Amendment to the Constitution, a federal judge ruled.

U.S. District Judge John G. Heyburn II ordered that the ban may remain in place for the time being because there are other legal issues to sort out.

Heyburn said in a 9-page opinion issued Monday that the state legislature "wanted to limit liquor sales generally ... and it did so by arbitrarily distinguishing grocers from all other retailers" when the law was adopted.

"Perhaps back then grocers were different from other potential alcohol vendors in some manner that rationally related to the sale of liquor and wine. If so, none of those differences appear today; most drugstores sell staples and some grocers sell prescription drugs," Heyburn wrote.

Heyburn noted that some grocery stores have obtained a retail package liquor license for a separate store on the same grounds.

"This does not negate the underlying injury, however," Heyburn wrote. "To the contrary, it demonstrates the financial burdens a grocery store must undertake to sell wine and liquor."

A Louisville convenience store, Maxwell's Pic-Pac, and the Food with Wine Coalition challenged the ban in a lawsuit filed in federal court in 2011. The plaintiffs said the law treated them differently from package liquor stores simply because they sold food and other staples.

The ruling impacts only areas of Kentucky where sales of package wine and distilled spirits are currently permitted by law. In a statement, the Food with Wine Coalition said Kentucky now joins a list of approximately 36 other states allowing consumers to add wine and distilled spirits to their shopping cart as they shop for food.

In a statement, the Frankfort-based Food with Wine Coalition said the ruling "vindicates the members' belief in the unjustifiably discriminatory nature of the state statute."

Dick Brown, a spokesman for the state ABC, said "We are studying the ruling to determine its impact."

The state has required grocery stores to have a separate entrance and shop to sell alcoholic beverages. Such requirements do not apply to drug stores.

Heyburn held that there is no rational basis for distinguishing among retailers and permitting all retailers except for grocers and fuel sellers to apply for the limited number of licenses available. Heyburn found that, because of the higher potency of liquor and wine, the state has an interest in limiting accessibility to the general public to avoid alcohol abuse. But, that can be done by limiting the number of licenses issued for a certain area, Heyburn wrote.

"However, it does not explain why a grocery-selling drugstore like Walgreens may sell wine and liquor, but a pharmaceutical-selling grocery store like Kroger cannot," Heyburn wrote.

Heyburn's ruling comes on the eve of the first meeting of The Governor's Task Force on the Study of Alcoholic Beverage Control Laws in Kentucky. Gov. Steve Beshear put together the 20-member panel of lawmakers, activists, ABC department administrators and industry hands to study if and how Kentucky's liquor laws could be overhauled.

The state has more than 13,000 licenses issued to manufacturers, distributors, and retailers for alcoholic beverages, with more than 70 different license types to regulate those operations.

The group, which is set to meet Thursday in Frankfort, has been tasked with reviewing the number and types of alcohol licenses issued by the state and what activities each license should authorize; the effectiveness of local option election laws in achieving their goals and representing the interests of the various voting localities; and the enhancement of public safety and compliance with regulatory requirements.