Indiana’s cold beer prohibition survives rational-basis review

Finding retailers did not meet their burden in attempting to overturn one of Indiana’s quirky alcohol laws, the 7^th Circuit Court of Appeals ruled the state’s limits on the sale of cold beer is not unconstitutional.

Convenience stores and gas stations have waged a battle against the prohibitions on selling beer cold since 2013 when their trade association filed a complaint in the U.S. District Court for the Southern District of Indiana. While these stores can sell beer, Indiana allows only packaged liquor stores to sell the beverage cold.

The retailers argued in district court that the state’s cold-beer statute violates the Commerce Clause, the Equal Protection and Due Processes clauses of the Fourteenth Amendment and parallel provisions in the Indiana Constitution. Chief Judge Richard Young granted summary judgment to Indiana, finding the state has a rational basis for limiting the sale of cold beer.

On appeal, the retailers focused only on their equal protection claim.

However, the 7^th Circuit Court of Appeals affirmed in a13-page opinion in Indiana Petroleum Marketers and Convenience Store Association et al. v. David Cook, 14-2559.  

At the outset the 7^th Circuit warned the convenience stories and gas stations would have a “heavy legal lift” to pass the rational-basis review. Citing Goodpaster v. City of Indianapolis, 736 F.3d 1060, 1072 (7^th Cir. 2013), the unanimous panel noted it only had to find only one “reasonably conceivable state of facts that could provide a rational basis” for the classification in order to uphold the Legislature’s choices.

Meanwhile the association had to show Indiana’s cold-beer regulatory scheme treats retailers differently than liquor stores and the difference is not rationally related to a legitimate state interest.

Indiana defended its prohibition on selling cold beer by pointing out package liquor stores are subject to stricter regulations, including forbidding people younger than 21 from entering or working in the store and limiting the hours and days of operation.

The association countered that beer is beer and grocery and convenience stores already sell it but they can’t sell it cold even though they are permitted to sell other drinks cold that have a higher alcohol content. Also it argued the grocery and convenience stores have a better record of compliance with state liquor laws and selling beer in refrigerators makes it less accessible than selling it warm.

Not only was the 7^th Circuit unconvinced, it asserted the court was not the proper place for this issue.

“This mode of argument doesn’t suffice under rational-basis review. To succeed on its claim, the Association must ‘negative every conceivable basis which might support’ the statutory scheme,” Judge Diane Sykes wrote for the court. “The Association’s policy arguments for allowing cold-beer sales by grocery and convenience stores are matters for the Indiana legislature, not the federal judiciary.”