Alleged outdated laws lead to legal disputes for Indiana businesses

Indiana boasts one of the best business climates in the country, according to the Indiana Economic Development Corporation. With strong pro-business policies and a favorable business tax climate, the Hoosier State is a hotbed for new jobs, expanding companies and business investments.

However, some state businesses are grappling with restrictive liquor licensing laws that date back to the Prohibition-era. An Indianapolis-based company, the state's largest beer distributor, filed a federal lawsuit against the Indiana Alcohol and Tobacco Commission (IATC) earlier this year claiming that outdated alcohol regulations violate the U.S. Constitution and treat beer wholesalers unfairly.

Unequal treatment of Indiana businesses?

Food and alcohol distribution companies are big business in Indiana. According to the Indiana Business Journal, in the past couple years, the largest wine, liquor and distributor in the nation enlarged its facilities in the state with a multi-million dollar expansion and another food distributor spent over $6 million in building and lease improvements. Both companies added numerous jobs to the state economy.

Some claim that the IATC has not made it easy for certain businesses in the state, however. Indiana laws prohibit wholesale companies from supplying both beer and liquor to their customers. The restrictive laws are unlike any other in the nation and require alcohol distributors to choose which type of license they will obtain.

The recent lawsuit claims there is no reason for limiting Indiana alcohol distributors from choosing between a beer or liquor business model. Grocery and convenience stores have previously argued that the current system favors one type of retail business over another in violation of the equal protection clause of the 14th Constitutional Amendment. The current lawsuit seeks to set aside the distinction, allowing a single company to provide both types of liquor.

However, numerous Indiana businesses and governmental agencies oppose the stance taken with the commercial litigation action before the federal court. Small retailers are concerned that a law change will allow larger alcohol distribution companies to create monopolies, squeezing them out of business. Beer wholesalers in the state benefit from franchise law protections that could disappear in the wake of an adverse judicial ruling.

Previous attempts to bring about legislative changes have failed and government officials are concerned that requested legislative action will simply shift business to larger companies rather than promote healthy growth in the state.

Seek legal counsel

Parties on all sides of business disputes can benefit from experienced legal counsel. If your company or municipality faces a legal challenge, consult an Indiana business lawyer knowledgeable about commercial litigation, business law and governmental law.