Judge opens door to liquor store com­pe­ti­tion

Law­suit seek­ing to pro­tect prox­im­ity rule dis­missed

The Detroit News - - Metro - BY JONATHAN OOSTING Detroit News Lans­ing Bu­reau

Lans­ing — Michi­gan liquor store own­ers could face new com­pe­ti­tion next door as a re­sult of a court rul­ing al­low­ing the state to act on plans to lift a long­stand­ing rule pro­hibit­ing li­censees from op­er­at­ing within a half-mile of each other.

Michi­gan Court of Claims Judge Stephen Bor­rello on Mon­day dis­missed a law­suit filed by an as­so­ci­a­tion rep­re­sent­ing ex­ist­ing liquor store own­ers, who ar­gued they paid to buy their busi­nesses and li­censes with the ex­pec­ta­tion the prox­im­ity rule would stay in place.

“There is no prop­erty right to be free from in­creased com­pe­ti­tion,” Bor­rello wrote in a sum­mary opin­ion and or­der sid­ing with the Michi­gan Liquor Con­trol Com­mis­sion. “Nor can plain­tiff claim a prop­erty right in the con­tin­u­a­tion of an ex­ist­ing law or rule.”

The rul­ing is the lat­est de­vel­op­ment in a pro­longed fight over the 1968 rule, which gen­er­ally lim­its liquor stores from op­er­at­ing within 2,640 feet of each other. The Michi­gan Liquor Con­trol Com­mis­sion be­gan ef­forts to re­scind the law in 2017, call­ing it “pro­tec­tion­ist and an­ti­com­pet­i­tive.”

Bor­rello tem­po­rar­ily blocked those plans in Jan­uary af­ter the As­so­ci­ated Food and Petroleum Deal­ers sued the state for a sec­ond time. A group spokesman was not im­me­di­ately avail­able for com­ment.

The Liquor Con­trol Com­mis­sion was “con­fi­dent that the judge would agree with our ar­gu­ments, and we are pleased with the de­ci­sion to­day,” said spokesman David Harns.

“We are now tak­ing the nec­es­sary steps for fi­nal rescis­sion of this rule and we look for­ward to work­ing with all of our li­censees to con­tinue to en­sure the health, safety, and wel­fare of the pub­lic.”

Liquor store own­ers have flooded re­cent com­mis­sion and leg­isla­tive hear­ings in protest. As­so­ci­a­tion at­tor­neys ar­gued they would face “ir­repara­ble harm” af­ter in­vest­ing sub­stan­tial “sums, time and sweat” into their busi­nesses.

The law­suit asked Bor­rello to keep the rule in place while the Michi­gan House of Rep­re­sen­ta­tives con­sid­ers a Se­nateap­proved bill that would write the dis­tance rule into state law. But pas­sage of that leg­is­la­tion “is far from guar­an­teed,” Borello wrote.

“At most, plain­tiff has called into ques­tion the ad­vis­abil­ity of the rescis­sion,” he said. “The ap­par­ent wis­dom (or lack thereof ) of the MLCC’s ac­tion is not a mat­ter for this Court. It is, how­ever, a mat­ter for the Leg­is­la­ture, where ap­par­ently, plain­tiff ’s fate lies.”

State Sen. Rick Jones, a Grand Ledge Repub­li­can who spon­sored the bill that would keep the half-mile rule in place, said Mon­day he con­tin­ues to push for ac­tion in the House Reg­u­la­tory Re­form Com­mit­tee. The panel has not yet taken up the mea­sure the up­per cham­ber ap­proved 27-9 in De­cem­ber.

“Most cities would pre­fer that they don’t have four liquor stores on a cor­ner. They would pre­fer that they’re evenly spaced,” Jones said. Chang­ing a rule own­ers have op­er­ated un­der for years is “an ex­tremely bad way to treat peo­ple who have in­vested their life sav­ings in a store.”

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