Indiana can no longer enforce a statutory provision requiring out-of-state owners of bars and restaurants to gross more than $100,000 in food sales each year to have an Indiana alcohol permit.
Senior Judge Sarah Evans Barker of the federal district court determined those statutes violated the dormant Commerce Clause of the U.S. Constitution.
There were two statutes in question. One requires 60% of limited liability company to be owned by a person who has lived in Indiana for at least five years. The other says that provision doesn’t apply if the establishment gross more than $100,000 in food sales at its Indiana location.
“Indeed, the constitutionality of a nearly identical statute was adjudicated in a recent lawsuit presided over by our colleague, the Honorable Tanya Walton Pratt,” Barker wrote in her preliminary injunction order, referencing Indiana Fine Wine & Spirits, LLC v. Cook, 459 F. Supp. 3d 1157 (S.D. Ind. 2020).
“There, Judge Pratt reviewed Indiana’s prohibition on the issuance of ‘an alcoholic beverage dealer’s permit of any type for the premises of a package liquor store to a limited liability company unless at least sixty percent (60%) of the outstanding membership interest in the limited liability company is owned by persons who have been (continuous) and bona fide residents of Indiana for five (5) years.’
“That statute, like the one at issue, facially discriminated against out-of-state limited liability companies and thus could be saved only if there was a ‘legitimate local purpose that [could not] be adequately served by reasonable nondiscriminatory means,’” Barker wrote, citing Granholm v. Heald, 540 U.S. 460 (2005).
The State of Indiana offered no evidence to show a “legitimate local purpose” for the statutes. Both the state and the entrepreneurs agreed “a motion for permanent injunction would be the most efficient procedure to dispose of this matter.”