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Texas shoppers could soon buy a handle of whiskey or vodka at Walmart and other publicly traded big-box retailers if a opposing group doesn’t successfully appeal a federal judge’s ruling.
Under state law, publicly owned retailers like Walmart Stores, Costco Wholesale Corp. and Target Corp. are prohibited from selling liquor — a rule that doesn’t apply to privately held retailers.
That could change after U.S. District Judge Robert Pitman in Austin sided with Walmart late Tuesday in a federal lawsuit against the Texas Alcoholic Beverage Commission, stating in a 50-page ruling that the ban violates the Dormant Commerce Clause of the U.S. Constitution.
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Pitman also ruled against a state law prohibiting some retailers and not others from obtaining more than five permits, citing the constitution’s Equal Protection clause.
“We applaud Judge Pitman’s order striking down Texas laws that have prevented us from fully serving our customers,” Walmart spokeswoman Anne Hatfield said in a statement. “Walmart filed suit because these laws are unfair and hurt our customers. We are grateful for Judge Pitman’s thoughtful opinion, finding that these laws violate the U.S. Constitution.”
Shoppers shouldn’t expect to immediately see liquor bottles on store shelves in Walmart, Costco and Target. Pitman put a 60-day stay on any implementation of the ruling to allow defendants ample time to appeal.
The Texas Alcoholic Beverage Commission is currently reviewing Pitman’s ruling with the state Attorney General’s Office to decide whether to appeal, agency spokesman Chris Porter said. Porter declined to comment on the substance of the ruling but said he does not expect the ruling to be implemented until after any appeal process is exhausted.
The Texas Package Stores Association, an organization that represents 2,500 liquor store owners, has vowed to appeal the ruling. The group was allowed to intervene in the case in 2015.
“The Texas Legislature put a system in place to ensure safe access to alcoholic beverages in Texas, and that system has worked for over 80 years,” Lance Lively said in a statement. “We will appeal the trial court’s decision and continue to fight for family-owned liquor store owners against the world’s largest corporate entities that seek to inflate their profits by upending sensible state laws that protect both consumers and small businesses.”
And consumers won’t likely see bottles of Jack Daniel’s and Jose Cuervo in stores’ grocery aisles should the ruling survive the appeals process. State law requires retailers like Walmart to sell liquor out of a space separate from its main stores and with its own entrance.
The Tuesday ruling is the latest in a years-long tug-of-war over the state’s alcohol laws, some of which date back to the Prohibition era.
A series of bills signed by then-Gov. Rick Perry in 2013 allowing independent brewers to sell their beer on-site and brewpubs to boost their maximum beer production, sell off-site through distributors and sell limited amounts directly to retailers led to a boom in the state’s craft beer industry.
But Perry also signed a bill that year prohibiting independent brewers from selling their distribution rights to distributors. A trio of Texas brewers — Live Oak Brewing in Austin, Peticolas Brewing Co. in Dallas and Revolver Brewing in Granbury — sued the Texas Alcoholic Beverage Commission in 2014 to overturn the law but are awaiting a ruling in the case from the state Supreme Court.
State lawmakers passed a law last year barring brewers who produce a certain amount of beer from operating an on-site tasting room. Under the same law, brewers are capped at self-distributing 40,000 barrels of beer annually. If they want to exceed that amount, they have to pay a distributor.
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