Judge rules on liquor law changes
Senate Bill 608 deemed `unconstitutional' in trying to change parts of SQ792
A judge Monday blocked implementation of a new law that walks back some changes made to Oklahoma's alcohol distribution system.
Oklahoma County District Judge Thomas Prince ruled in favor of attorneys representing a dozen local and national alcohol businesses that claimed Senate Bill 608 violates the state's constitution.
The bill would require the top 25 wine and spirits brands, ranked by sales, be made available to all wholesale distributors within Oklahoma. It was signed by Gov. Kevin St it tin May and is set togo into effect Aug. 29. Stitt, t he Alcohol Beverage Laws Enforcement Commission and the state of Oklahoma were defendants in
the plaintiffs' motion for summary judgment.
Prince agreed with the plaintiffs, finding in the order signed Monday that SB 608 "is clearly, palpably, and plainly inconsistent" with portions of the Oklahoma Constitution, "is unconstitutional, and is therefore declared void."
"The Plaintiffs' Motion for Summary Judgment should be and is HEREBY granted and Defendants' and Intervenor's Cross-Motion for Summary Judgment should bean dis HEREBY denied ," Prince stated in the order.
The bill walks back changes made to Oklahoma's alcohol distribution system included in State Question 792, approved by voters in 2016. The measure all owed wine and spirits manufacturers to designate individual wholesale distributors. The change disrupted along-standing distribution system that previously required manufacturers make their products available to all wholesale distributors in Oklahoma.
"This is a victory for the voters of Oklahoma, who overwhelmingly approved changes to the state's alcohol distribution laws when they said yes to State Question 792 in 2016," said John Maisch, president of the Institute for Responsible Alcohol Policy, a plaintiff in the matter. "SB 608 ignores the will of the voters and violates the plain language of the Oklahoma Constitution."
The bill is supported heavily by Tulsa-based Boardwalk Distribution, owned by Bryan Hen der shot, whose company has struggled since the October changes. Hendershot has told The Oklahoman his company failed to secure rights to distribute any of the top 100 wine and spirits brands and was projected to lose $100 million in sales in its first year following the changes.
Hen der shot expressed disappointment and said he will" immediately appeal" the judge' s decision to the Oklahoma Supreme Court.
"SQ 792 modernized Oklahoma's liquor laws but contained a provision t hat was hidden from Oklahoma's voters that allowed out of state businesses to come into Oklahoma and partner with the two biggest distributors to form a monopoly that was devastating to hard working small business men and women," he said in a statement. "SB 608 was an attempt by the legislature and Governor Stitt to fix the situation. We look forward to presenting our case on appeal."
While Boardwalk struggled, other distributors in the state flourished under the new laws. Oklahoma-based Central Liquor Co. and Jarboe Sales Co. were two long- operating wholesalers that secured partnerships with large, outof-state distributors. Central and Jar bo ea renamed as plaintiffs in the motion Prince considered after hearing arguments from both sides of the debate Thursday.
Attorney Robert McCampbell, who argued on behalf of the plaintiffs, said the measure "clearly and explicitly states that the manufacturer can select, can elect, whether it's going to have an exclusive wholesaler or not."
"We are obviously pleased with the result," McCampbell said in a statement. "We are particularly pleased that there forms approved by Oklahoma voters in 2016 have been upheld.”
Attorney General Mike Hunter's office is reviewing the order, a spokesman said.