Kentucky Is for (Rational) Bourbon Lovers

Chelsea Granville

Almost two years ago, a Kentucky federal court brought increased access to liquor and wine to the Bluegrass. Before all you bourbon lovers get excited, I should tell you–it did not last long.

In Maxwell’s Pic-Pac, Inc. v. Dehner,FN1 Kentucky grocers and convenience store owners brought suit in federal district court against the Kentucky Department of Alcohol and Beverage Control. The plaintiffs alleged a violation of their equal protection rights by the following Kentucky statute:

No quota retail package license or quota retail drink license for the sale of distilled spirits or wine shall be issued for any premises used as or in connection with the operation of any business in which a substantial part of the commercial transaction consists of selling at retail staple groceries or gasoline and lubricating oil.FN2

This ban, dating back to 1938, prevents the sale of liquor and wine in stores whose gross sales of groceries or gasoline reach ten percent or greater. Ouch.

The opinion, written by Judge John G. Heyburn II, is definitely worth a close read. Beginning with a thorough discussion of alcohol control laws in Kentucky, Heyburn takes a modern approach to alcohol regulation and sales in Kentucky. The heart of the opinion tackles equal protection, but ends with a twist.

In case your memory of constitutional law escapes you, for social or economic legislation to survive a challenge under the Equal Protection Clause of the Fourteenth Amendment, the government only needs to show that the law has a rational relationship to a legitimate government interest. Thus, as long as the government comes up with an explanation for the passage of a law that makes sense, the court must defer to the legislative process, the government wins, and everybody goes home. This is rational basis review.

Despite the deference owed to the legislative process in the application of rational basis review, Heyburn stated that deference does not disclose the judiciary from a complete “abdication” of their role.FN3 Describing the statute as an arbitrary one with an attenuated link to legislative goals, Heyburn found that the statute did not survive the rational basis analysis. He struck it down as unconstitutional on equal protection grounds.FN4 This meant grocers and gas stations would be free to sell liquor and wine within their establishments–a big win for bourbon lovers on a midnight grocery run! Yes!

The Sixth Circuit, however, was not quite so thrilled. Two weeks ago, they reversed the judgment, finding sufficient rational basis to support distinguishing grocery stores and gas stations from other retailers.FN5 Following a discussion of the history of prohibition and alcohol regulation in America and the resounding effect on Kentucky liquor laws, the Sixth Circuit concluded that Kentucky does have a rational basis for the statute; one of which includes limiting underage access to these products. The court expressed a concern that increased access to liquor and wine in these locations provide vulnerable minors, more susceptible to temptations presented by these products, greater opportunity to consume alcohol.

As a result of the Sixth Circuit’s reversal, Kentucky will remain in the minority of states banning liquor and wine sales in grocery stores and gas stations. Case closed, right? I hope not. What do you think? Despite the demise of liquor and wine in Kentucky, when it comes to outdated laws in need of reform, should rational basis remain a “government wins” standard? Should those seeking to reform Kentucky law instead head to the polls? Or should judicial willingness to modernize Kentucky legislation decide the fate of social and economic challenges such as outdated liquor laws? Needless to say, in a state where it is still against the law to tempt a horse with an ice cream cone, these questions may remain unanswered for quite awhile. In the meantime, stay thirsty my friends.

FN1. Maxwell’s Pic-Pac, Inc. v. Dehner, 887 F.Supp.2d 733 (W.D. Ky. 2012).

FN2. ky rev. stat. ann. § 243.230(7) (West 2014).

FN3. Maxwell’s Pic-Pac, 887 F.Supp.2d at 751.

FN4. Id. at 751-52.

FN5. See Maxwell’s Pic-Pac, Inc. v. Dehner, Nos. 12–6056, 12–6057, 12–6182, 2014 WL 128129 (6th Cir. Jan. 14, 2014).