Movie theaters with restaurant-style food service will reach a broader audience with the recent signing into law of a bill passed by the Washington State Legislature allowing service of food and alcoholic beverages to their patrons. The law as currently written allows some service of alcohol in movie theaters, but requires exclusion of minors from the premises. The new law will create a new, more family friendly, beer, wine and spirits license for theaters. The license will allow minors if certain conditions are met and approved by the Washington State Liquor Control Board, such as submission of an alcohol control plan outlining the methods to prevent minors from obtaining alcohol, similar to plans that are required for clubs and show venues that host all‑ages concerts. Theaters will also be required to meet food and service requirements, similar to restaurants, to qualify for the license. (Senate Bill 5607 as Passed by Legislature)Continue Reading...
Stoel Rives LLP offers its congratulations to Rick Garza on his appointment as Director of the Washington State Liquor Control Board. Today the agency issued a press release announcing the appointment will be effective June 1, 2013. Garza will be assuming leadership in a time of unprecedented change – the agency is on the tail end of implementing privatization of liquor sales and at the forefront of developing a comprehensive regulatory system to govern legalized growing, processing and retailing of marijuana for recreational use.
Sales Limit Increase Could Give Washington State Craft Distilleries More Momentum in the Retail Market
This week, a bill passed the Washington legislature that will allow a craft distillery to sell more of its product to customers visiting its distillery.
House Bill 1149 has been sent to Governor Inslee to sign in to law, amending RCW 66.24.145 to allow a craft distillery to sell a maximum of three liters of spirits of its own production per person per day for off-premise consumption. The prior limit was two liters per person per day. Importantly, craft distilleries that opt to sell spirits from their premises must be aware that they are required to comply with the applicable laws that relate to retail liquor licensees, such as responsible alcohol sales, as well as the state and federal requirements that apply to distilleries.
Craft distilleries are distinguished from larger distilleries most notably by the amount of spirits produced—a maximum of 60,000 proof gallons per year (WAC 314-28-050)—and the requirement that a minimum of 50% of Washington-grown raw materials be used for production (WAC 314-28-060). The craft distillery industry has experienced steadfast growth since the Washington State Liquor Control Board implemented the license less than three years ago. The passage of 1149 is a clear indication of the need for refinement of the laws that regulate this growing industry. Craft distilleries have the potential to gain a stronger presence in the liquor market as more people look to them directly for unique, local spirits.
Please join us for our inaugural Washington Winery, Brewery & Distillery law seminar at the Columbia Winery in Woodinville, Washington on Thursday, March 15.
Panels to include these hot topics, plus much more:
- Employment Laws
- Tasting Room Operations
For more information and registration visit: http://www.stoel.com/showevent.aspx?Show=9199
Defenders of I-1183 received a holiday gift last week from the Cowlitz County Superior Court. On Thursday, December 22, 2011, the Court issued two important rulings in the declaratory judgment action challenging the constitutionality of I-1183.
First, the Court granted the motion to intervene brought a group of supports of I-1183 led by Costco and the Washington Restaurant Association. In so ruling, the Court observed that those entities’ economic interests were implicated by challenge to I-1183 and that their interests were distinct from those of the State. Those entities now will be able to participate fully in the defense of I-1183.
Second, the Court denied the motion for preliminary injunction to block implementation of I-1183. The Court explained that I-1183 is the law of Washington and that Plaintiffs had not carried their heavy burden for altering that status quo.
Following that ruling and recognizing that the challenge to I-1183 turns largely, if not exclusively, on pure legal arguments, the Court set the following expedited schedule for summary judgment briefing and a trial date if necessary:
- January 20, 2012: Opening Summary Judgment Briefs Due
- February 10, 2012: Responsive Briefs Due
- February 17, 2012: Reply Briefs Due
- March 5, 2012: Summary Judgment Hearing
- April 16, 2012: Trial
In setting this schedule, the Court stated that it welcomed extensive briefing on the issues presented. Thus, there might be an opportunity for the filing of amicus briefs.
We will continue to monitor developments in the case. If you have any questions, please do not hesitate to contact us.
Despite Washington voters’ approval of I-1183 in the November 2011 election, the effort to privatize the wholesale distribution and retail sale of liquor in Washington faces another hurdle. Last week, two lawsuits were filed in Washington courts challenging the validity of I-1183. The plaintiffs in both cases contend that the newly enacted law violates the single-subject rule for legislative bills and ballot initiatives under the Washington Constitution. Article II, § 19 of the Washington Constitution, which applies to both legislative bills and ballot initiatives, provides that “[n]o bill shall embrace more than one subject, and that shall be expressed in the title.” The plaintiffs allege a violation of that constitutional provision because the terms of I-1183, in addition to paving the way for private retailers to sell liquor, affect fines for selling alcohol to minors, taxes, and the wine distribution and pricing scheme.
Some past single-subject challenges to ballot initiatives have been successful. For instance, in 2000 a group of plaintiffs succeeded in repealing an initiative that addressed both the fees for car license tabs and required voter approval for all future state and local tax increases. But I-1183 differs from that initiative because it did not join together two completely separate subjects but instead deals entirely with various aspects of state regulation of alcohol distribution and retail sales. Thus, the key issue in the litigation appears to be whether I-1183 conforms to the single-subject rule when the provisions deal with the same general subject.
One of the challenges to I-1183 was filed in King County Superior Court, and the other in Cowlitz County Superior Court. The King County case was brought by two labor unions and is named General Teamsters Local Union No. 174 v. State. The Cowlitz County case was brought by the Washington Association for Substance and Violence Prevention, a property owner who leases a liquor store to the state, and two grocery stores. It is named WASAVP v. State. Both groups of plaintiffs seek declaratory and injunctive relief blocking the implementation of I-1183. The plaintiffs in the WASAVP case have also filed a motion for preliminary injunction, which is scheduled to be heard in Cowlitz County Superior Court on Friday, December 16.
Even though both lawsuits are against the Washington state government, it is very likely that businesses or associations whose interests are affected by I-1183 will have the opportunity to intervene in the litigation. We will continue to monitor the proceedings. If you have any questions, please don’t hesitate to contact us.
Initiative Measure No. 1183 is passing by a 20% margin according to Washington Secretary of State’s 2011 General Election Results website. The same source indicates that, as of this morning, a majority of voters in only four of Washington State’s counties in the state were not definitively in favor of the measure.
A Press Release by the Washington State Liquor Control Board indicates that the agency “will continue to maximize revenue in responsible ways through the holiday season” and, in January, will focus on divesting its self of the state’s current wholesale distribution and retail operations. “By June 1, 2012, all liquor business operations - including purchasing, distribution and retail -- will be transitioned to the private sector.”
There are many unknowns that we expect to be addressed by agency rulemaking in the coming months of transition and we will be working closely with our current and future clients to help them understand how the changes affect their current business interests and strategic plans.
Dueling Liquor Privatization Initiatives in Washington State: What do the Initiatives Say and Who are the Players?
Word is out that enough signatures have likely been gathered to ensure that an initiative backed by Costco will make it on the on the ballot in Washington State in November. The Costco backed initiative would transition sales of spirits in Washington State from state operated liquor stores to private retail stores and allow manufacturer to retailer direct sales and volume discounts.
A second initiative backed by distributors would also move spirits sales from state operated stores to private retail stores, but would preserve the role of distributors in a traditional three tier system, has until July 2nd, to amass enough signatures to make it on the ballot.
A third group is raising money to oppose any attempts to change the current state administered system. Combined contributions of over $1,200,000 have been reported to the Washington State Public Disclosure Commission in support of and opposition to privatization.
We have assembled the following information so that you can read the actual initiatives, explore the proponents and opponents, and form your own opinion.
1. Initiative No. 1100 was filed by Modernize Washington, is financially backed by big box retailer Costco, and has statements of support from other groups that retail liquor such as the Northwest Grocery Association and the Washington Restaurant Association.
- Where to Follow updates: Modernize Washington on Facebook
- Reported Contributions: > $700,000
- Where to Follow updates: Yes on 1105 on Facebook
- Reported Contributions: $400,000
3. Keep our Kids Safe is leading efforts to preserve the existing state operated system. Washington Association for Prevention of Substance Abuse filed fund raising reports for Keep our Kids Safe with the Public Disclosure Commission. The reports identify the union that the state liquor store employees belong to, United Food and Commercial Workers as the source of the funds. UFCW 21, with the endorsement of other organizations, has issued a fact sheet outlining rationales for preserving the current system of state run liquor stores.
- Reported Contributions: $38,000
We will report back in a few weeks to let you know if one or both privatization initiatives make on to the ballot and the status of efforts to promote preservation of the existing state operated system.