Wednesday, December 21, 2011

Jester King Wins Judgment Against TABC

AUSTIN - A federal court ruled Monday in Jester King's favor on several key issues in a suit brought against the Texas Alcoholic Beverage Commission (TABC).

Judge Sam Sparks of the US District Court ruled in favor of Jester King, Authentic Beverages Company and Austin's Zax Restaurant & Bar with regard to their First Amendment challenges of restrictive beer labeling laws included in the TABC Code. As a result, breweries will no longer be bound by arbitrary label definitions of "beer," "ale" or "malt liquor," or descriptions of strength or alcohol content that have proved troublesome in the past.

Judge Sparks writes:
Although the Code is free to define "beer" and "ale" as it sees fit, Texas may not compel malt beverage producers to use those terms, and only those terms, in advertising and labeling. Accordingly, all statutes and regulations that compel such speech, including Texas Administrative Code, Title 16, Sections 45.77 and 45.90, are declared unconstitutional. Again, nothing prevents Texas or TABC from passing appropriate regulations requiring producers to include accurate statements about the alcohol content of their products in labeling or advertising; absent a constitutionally sound justification, however, Texas may not dictate the exact words producers must use to do so.
The restriction of brewers advertising or promoting retail locations where their products can be purchased was also lifted, with some Texas breweries already preparing their websites to include commercial listings.

However, Judge Sparks ruled that the plaintiffs failed to produce sufficient evidence for overturning the restriction of direct sales from breweries, citing:
Authentic bears the burden of demonstrating there is no reasonably conceivable basis which might support the classifications in the challenged sections of the Code...
The ruling affirmed Texas has the right to regulate businesses in such a way, with changes in this respect necessarily coming through the legislature.

The TABC responded favorably, releasing a statement that said they have no plans to appeal.

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