The Montana attorney general's office has announced that it will not appeal a state district court decision striking down a Montana law banning non-residents from acquiring liquor licenses.
Montana Atty. Gen. Mike McGrath said that the state had been pondering an appeal of the decision, rendered on May 11 by Helena District Court Judge Thomas C. Honzel. However, a subsequent U.S. Supreme Court decision regarding direct shipment of wine used a similar analysis and rationale as Honzel in striking down state bans on out-of-state wineries' shipping their products directly to consumers.
Both decisions found that laws discriminating against out-of-state businesses were unconstitutional violations of interstate commerce provisions, said McGrath.
"That cut the legs out from underneath us," he said.
Honzel ruled that, while Montana does have authority to regulate alcohol sales under the 21st Amendment of the U.S. Constitution (which ended national Prohibition in 1933 and granted states exclusive authority over alcohol), it may not do so in a way that discriminates between in-state and out-of-state interests.
Similarly, the U.S. Supreme Court ruled just a day later that state laws in Michigan and New York banning out-of-state wineries from directly shipping their goods to consumers in those states were unconstitutional violations of the commerce clause.
The court, in a close 5-4 decision that featured lineups of justices never before seen, ruled that states may either allow or prohibit direct shipment of wine to consumers, but they must treat in-state wineries and out-of-state wineries equally.
"Any thoughts the state had of appealing were resolved by the U.S. Supreme Court's wine importation opinion," McGrath said in a news release. "That opinion takes away all of the arguments we had to defend our statute."
The plaintiffs in the Helena district court case, a three-man Texas limited partnership that operates the Billings Holiday Inn Grand Montana Hotel, are now pushing ahead to have their license application approved, said McGrath. He added that he is unaware of any other out-of-state interests that have applied for Montana liquor licenses.
Any non-resident seeking a license will be "subject to the same background (checks) and scrutiny" as a Montana applicant, McGrath said. Such checks should not pose any problem for the Montana Department of Revenue, he added.
McGrath also said that the recent state and federal court decisions will have no impact on Montana's liquor license quota system.
"That's a completely separate issue," he said. "They're just not related."
Source: The Montana Tavern Times, July, 2005, published monthly by Continental Communications, 125 W. Granite St., Suite 102, Butte, MT 59701.