NBWA Statement on 9th Circuit Ruling Upholding California Tied-House Laws
Source: NBWA
June 14th
Today, an en banc panel of the United States Court of Appeals for the 9th Circuit issued its opinion in Retail Digital Network’s suit against a California law prohibiting beverage alcohol manufacturers and wholesalers from providing anything of value, directly or indirectly, to retailers in exchange for advertising their alcoholic beverages.
Retail Digital Network (RDN) challenged California’s tied-house law that bans alcohol suppliers and wholesalers from providing retailers direct or indirect funding for advertising. RDN is a company that would solicit supplier/wholesaler funds to operate kiosks in retailer accounts and share revenue with the retailer. When the California ABC informed RDN that this practice was prohibited under state law, RDN filed a lawsuit asserting that the regulation violated the First Amendment’s limits on commercial speech. Federal law and the alcohol laws of a vast majority of states contain similar restrictions to the challenged California law.
In a 10-1 decision, Judge Paez upheld that law, noting that the challenged California law “directly and materially advances the state’s interests in a triple-tiered distribution scheme.”
The National Beer Wholesalers Association (NBWA), along with the Wine and Spirits Wholesalers of America, filed an amicus brief in support of the state of California in this case. The California Beer and Beverage Distributors and the Wine and Spirits Wholesalers of California, Inc., Public Citizen, California Craft Brewers Association and Brewers Association also filed amicus briefs in the case.
NBWA President & CEO Craig Purser issued the following statement in response to the ruling:
“The 9th Circuit ruling today is a significant win for state-based alcohol regulation and statutes designed to prevent vertical integration and preserve the independence of each tier in the alcohol industry. This is an important decision for responsible alcohol regulation and avoids a dangerous precedent that would have undermined states’ primary authority to regulate alcohol.”