Federal Judge in Texas Lets Beer Be Beer

Yesterday a federal judge ruled that several restrictions on beer marketing enforced by the Texas Alcoholic Beverage Commission (TABC) violate the First Amendment. In response to a lawsuit by three Austin-based businesses—Authentic Beverages, which distributes craft beer; Jester King Craft Brewery, which makes it; and Zax Restaurant and Bar, which serves it—U.S. District Judge Sam Sparks overturned the state's arbitrary distinction between malt beverages containing up to 4 percent alcohol by volume, which are legally defined as "beer," and malt beverages stronger than that, which are called "ale" or "malt liquor." Those definitions do not conform to common usage, according to which all these beverages are beer, a category that is subdivided, based on fermentation method, into ales and lagers. Sparks did not buy the TABC's argument that the state's idiosyncratic terminology renders everyday usage inherently misleading:

In a remarkable (though logically dubious) demonstration of circular reasoning—a tactic it repeats throughout its briefing, and which it echoed in open court—TABC attempts to defend the constitutional legitimacy of the Code through an appeal to the statutory authority of the Code itself...

TABC's argument, combined with artful legislative drafting, could be used to justify any restriction on commercial speech. For instance, Texas would likely face no (legal) obstacle if it wished to pass a law defining the word "milk" to mean "a nocturnal flying mammal that eats insects and employs echolocation." Under TABC's logic, Texas would then be authorized not only to prohibit use of the word "milk" by producers of a certain liquid dairy product, but also to require Austin promoters to advertise the famous annual "Milk Festival" on the Congress Avenue bridge [a reference to the Austin Bat Festival]. Regardless of one's feelings about milk or bats, this result is inconsistent with the guarantees of the First Amendment.

The TABC also tried to justify the state's inaccurate beer/ale distinction by arguing that it provides a rough guide to alcohol content. Meanwhile, however, state law restricts more precise information about alcohol content, banning such numbers from ads for all brewery products, prohibiting them on labels for "beer," allowing them on labels for "ale," and requiring them on labels for distilled spirits. It also bans descriptions that allude to alcoholic strength (such as "strong" or "high proof") from ads and labels for all brewery products. Sparks overturned these rules as well.

Finally, Sparks rejected a regulation, ostensibly aimed at preventing vertical integration, that prohibits a brewery from telling its customers where they can buy its products. Among other things, that rule required brewers to disable the retailer location functions on their websites for customers in Texas. As with the other regulations, Sparks concluded that the state had failed to show the ban on publicizing retailers directly advanced a substantial government interest, let alone that it did so in a way that was no more extensive than necessary—the test the Supreme Court has established for restrictions on nonmisleading commercial speech related to legal activitity.

The state's burden was much lighter in defending the regulations that Authentic Beverages et al. challenged on equal protection grounds, such as the distinction between brewpubs (which are allowed to sell their products at the point of production but may not sell through distributors or retailers) and breweries (vice versa). The state needed only "a rational basis" to justify such disparate treatment, Sparks said, and Authentic "made no attempt" to anticipate and rebut plausible rationales. But Sparks reserved most of his criticism for the state:

Whether the challenged provisions of the Alcoholic Beverage Code could have withstood Authentic's First Amendment challenges under any circumstances is questionable, but under the circumstances of this case—most notably, defense counsel's candid admission in open court that the State submitted virtually no summary judgment evidence regarding some of Authentic's claims—there is no question the Texas Alcoholic Beverage Commission (TABC) has failed to meet its summary judgment burden as to these challenges....

Whether this failure reflects a tactical error, laziness, an implicit concession that the Code cannot withstand constitutional scrutiny, an erroneous assumption that TABC is entitled to special treatment, or a mere oversight, the Court cannot say....

The Court is shocked and dismayed at the Texas Attorney General's halfhearted conduct in this case. The very purpose of having the Attorney General's Office defend suits like this, is so the State of Texas can vigorously defend its duly enacted legislative mandates. Here, however, when TABC responded to Authentic's challenges at all, it responded with little in the way of argument, and even less in the way of relevant evidence. The State of Texas is lucky the burden of proof was on Authentic for many of its claims, or else the Alcoholic Beverage Code might have fared even worse than it has.

Lift a glass of beer to Greg Abbott's laziness!

Sparks' decision is here. I discuss some of the challenged regulations here and here. The Supreme Court overturned a federal rule banning alcohol content information from beer labels in 1995.

[Thanks to lunchstealer for the tip.]

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  • Brian E||

    Let's?

  • Apatheist||

    Yay! We large could buy most beers anyways but this should open up the sale of beers that weren't able to adjust their packaging.

    The advertisement of locations is nice too. There is a blog for the chronicle that lists where in Houston new beers are available to get around that ridiculous rule.

    The 3rd one is a bummer though. Bigger microbreweries get around it by serving free beer with the tour or just giving it out for free. Real Ale does the second, free beer every Friday.

  • Gray Ghost||

    As does Southern Star in Conroe. Saint Arnolds and Karbach both charge for their tours. All are worth your time, IMHO, if you are in the Houston area.

  • Brett L||

    Wait, Conroe has a brewery now? All those years I lived up there and NOW they get one?

  • Gray Ghost||

    Yep. http://www.southernstarbrewery.com/ Makers of the best Texas commercial stout not named Jester King Black Metal.

    Free tour/drinks, and there's usually tasty BBQ (for a fee) too. Not New Zion, but passable.

    There are quite a few new breweries coming into Houston. Austin (Circle, Jester King, 512, a few others I'm sure I've forgotten) and San Antonio (Ranger Creek, Freetail) have some that are worth your time too. Not San Diego or Denver, but what is?

    It's truly a golden age for beer lovers.

  • Montani Semper Liberi||

    What's your favorite DFH brew?

    Me: Burton Baton

  • ||

    I actually favor the one pictured.

  • ||

    Alt-text: PISS!!!

  • Gray Ghost||

    Their Pumpkin ale is outstanding. Love their 60 and 90 too.

    You can keep the Palo Santo.

  • spencer||

    Midas is good. 120 ipa. Raison d'Xtra. I love the strong stuff!

  • ||

    Kick ASS! Glad to see all this nonsense get swept away.

  • ||

    Sparks is fairly well known in legal circles for his, erm, outspoken opinions. He does not disappoint, here.

    BUT - he is a lowly trial judge. This could still go to the Fifth Circuit (the original "hey, there IS a Second Amendment after all" Circuit), where I would be cautiously optimistic. Then potentially to the Supes, where I predict a 9-0 victory for the state, with a learned opinion setting forth in scholarly fashion "Because fuck you, plebe."

  • ||

    i disagree. i think this would be an easy win for beer freedom (and the 1st) at the scotus

    the scotus is PRETTY good on free speech, unless it's high school kids (bong hits for jesus!!!)

  • ||

    Ah, but this isn't free speech, this is commercial [spit] speech, and the First Amendment clearly says "Congress shall make no law abridging the freedom of non-commercial speech. . . ."

  • ||

    So, what do you think would happen to Sparks if he, in an amazing epiphany, decided to take his oath seriously, and voided the commerical speech doctrine, in its entirety and then proceeded to void the TABC?

    Assume he were to continue to issue such opinions.

    What would be his fate?

  • ||

    Unfortunately, the existence of the TABC is kinda-sorta protected by Section 2 of the 21st Amendment, in that it implies a specific right of states and territories to set alcohol laws.

    Otherwise, were I sitting in Sparks' place, I would not only find for the plaintiffs on all complaints, but also impose a punitive measure consisting of a ban on the TABC, and to impose restrictions on all its former employees that they may no longer be employed in the state of Texas, nor receive direct state assistance in any form. They must be reduced to living solely on the charity of others, or leave the state never to return.

    That this is both a massive overreaction and plausibly a violation of the non-aggression principle suggest that I never be given any sort of power, as I am not to be trusted.

  • Coeus||

    That this is both a massive overreaction and plausibly a violation of the non-aggression principle suggest that I never be given any sort of power, as I am not to be trusted.

    The key to the non-agression principle is the initiation of force. Given that TABC regularly barges into private property and arrests people for public intoxication, I think that the force can easily be considered initiated. And that's not even mentioning their use of swat tactics and warrentless searches. I'd say you're letting them off easy.

  • Apatheist||

    As Dean said the ruling on commercial speech are murky at best. I doubt this ever goes to the SCOTUS. It's pretty clear that Texas isn't really bothering to defend the law.

  • robc||

    Sam Adams can now take the "Ale in Texas" bit off some of their lager labels.

  • Warren||

    Congratulations on learning to use alt text Jacob.

  • Auric Demonocles||

    You're welcome.

  • Auric Demonocles||

    You are welcome

  • Auric Demonocles||

    Dang squirrels. That was to Warren, and the spam filter wouldn't let it through at first.

  • ||

    restrictions on nonmisleading commercial speech related to legal activitity.

    activity - legal
    speech - not misleading (hence, not fraud)

    well, I for one am glad there are regulations for these completely legal and voluntary business interactions.

  • ||

    I should give credit for my own hat tip to my friend Brig, who is a brewer, gamer, and all around great person.

  • ||

    What the fuck is a federal judge? Do those even exist?

  • EDG reppin' LBC||

  • spencer||

    NEXT- BEER AVAILABLE 24 HRS A DAY!

  • EscapedWestOfTheBigMuddy||

    In a remarkable (though logically dubious) demonstration of circular reasoning—a tactic it repeats throughout its briefing, and which it echoed in open court—TABC attempts to defend the constitutional legitimacy of the Code through an appeal to the statutory authority of the Code itself.

    Now what does that remind me of?

    Oh, yeah!

    Dunphy. After all he seems to figure that we know the system works because when the system is allowed to grind along the results are consistent with the system.

    Well. Yeah.

  • ||

    Good call.

  • NoTalentAssclown||

    As if I could like Jester King any MORE... good, but not great, victory

  • Coeus||

    The Court is shocked and dismayed at the Texas Attorney General's halfhearted conduct in this case. The very purpose of having the Attorney General's Office defend suits like this, is so the State of Texas can vigorously defend its duly enacted legislative mandates. Here, however, when TABC responded to Authentic's challenges at all, it responded with little in the way of argument, and even less in the way of relevant evidence.

    There are only two ways to be suprised by the TABC responding in this manner. Either he figured that he was important enough to warrant a different level of respect than the TABC regularly shows everyone else in the state (likely), or he has never read a newspaper in the state of Texas (unlikely, but possible).

  • seguin||

    I met Greg Abbot once. Seemed kinda smarmy.

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