Source: http://newalbanian.com/complete-text-floyd-county-new-albany-ordinance-issue-in-violation-of-ic-7-1-3-9-2-7-1-3-9-6/
Timestamp: 2017-01-24 11:14:55
Document Index: 551717121

Matched Legal Cases: ['§ 7', '§ 7', '§7', '§7', '§ 7', '§ 7', '§ 36', '§ 36', '§ 36', '§ 7', '§ 7']

Complete text: “Floyd County/ New Albany ordinance issue in violation of IC 7.1-3-9-2, 7.1-3-9-6” | New Albanian Brewing Company
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News	1 Comment	Floyd County/ New Albany ordinance issue in violation of IC 7.1-3-9-2, 7.1-3-9-6
Floyd County enacted an ordinance in 2008 that requires a “Retail Food Establishment that operates for a period of no more than fourteen (14) consecutive days in conjunction with a single event or celebration” to obtain a Temporary Food Establishment permit. FCO 2008-V. This permit costs $20 a day with a $100 maximum. The New Albanian Bank Street Brewery, a restaurant and brewery in New Albany (NABSB), was found to be in violation of this Floyd County ordinance in June 2013 despite the fact that NABSB is a holder of a small brewer’s permit, a three-way riverfront permit and attached to that, a Type 222 Supplemental Catering permit. All three of these permits are issued under Title 7.1, Alcohol and Tobacco of the Indiana Code.
The sale of Tobacco and Alcohol in Indiana is broadly regulated in the Indiana Code under Title 7.1, Alcohol and Tobacco. IC 7.1-1-2-2 provides that the scope of the title is “[t]he commercial manufacturing, bottling, selling, bartering, importing, transporting, delivering, furnishing, or possessing of alcohol, alcoholic beverages, industrial alcohol, malt, malt syrup, malt extract, liquid malt or wort.” Ind. Code Ann. § 7.1-1-2-2 (West 2013). Additionally, the purpose of Title 7.1 is “(a) to protect the economic welfare, health, peace and morals of the people of this state; (b) to regulate and limit the manufacture, sale, possession, and use of alcohol and alcoholic beverages; and, (c) to provide for the raising of revenue.” Barco Beverage Corp. v. Indiana Alcoholic Beverage Comm’n, 595 N.E.2d 250, 254 (Ind. 1992). The activity of NABSB falls within the broad scope of Title 7.1 as it “brew[s], keg[s], and bottle[s]” beer for “on-premise consumption and distribution.” New Albanian Brewing Company, History,(2013)http://newalbanian.com/history/. NABSB is engaging in “the commercial manufacture, bottling, selling…transporting, delivering, furnishing, or possessing of…alcoholic beverages” when they brew their beer and then sell it in their brewery, in a store, or at a festival. This is well within the scope of Title 7.1. NABSB is also engaging in the “manufacture, sale, possession, and use of…alcoholic beverages” when they brew their beer, and sell it in their retail establishment or at festivals. This is exactly the type of activity Title 7.1 seeks to regulate in order to “protect the economic welfare, health, peace and morals of the people of this state.” Ind. Code Ann. § 7.1-1-1-1 (West). The activity NABSB engages in to brew and sell their product in their restaurant and elsewhere is the type of activity that Title 7.1 seeks to regulate.
Additionally, Title 7.1 is “broad in scope and purpose” in that it establishes seventeen different types of permits that a retailer can hold. City of Fort Wayne v. Kotosopoulos, 704 N.E.2d 1069 (1992). The three permits held by NABSB include a small brewer’s permit, a three-way riverfront permit and attached to that, a Type 222 Supplemental Catering permit. Each of these permits is established in Title 7.1. The Supplemental Catering permit allows for NABSB “to sell, on a temporary basis only, alcoholic beverages for on premise consumption at locations other than his licensed premises. Ind. Code Ann. §7.1-3-9.5-1 (West 2013). This would include the festivals and other off premises events where NABSB sells their product. In order to obtain permission to serve alcohol at these events, NABSB must provide notice of the event. Ind. Code Ann. §7.1-3-9.5-2 (West 2013). Once NABSB has complied with the requirements of the Supplemental Catering permit they are free to serve alcohol at off premises event. NABSB is engaging in activity that Title 7.1 seeks to regulate through a Type 222 Supplemental Catering permit and has complied with the regulations in order to obtain this permit and then engage in this type of activity.
In addition to being broad enough to encompass and regulate the type of activity engaged in by NABSB, Title 7.1 directly addresses the ability of local municipalities to regulate the sale of alcoholic beverages. IC 7.1-3-8-2 provides that:
A liquor retailer’s permit may be issued under the provisions of this title for premises situated in a city having a population of at least five thousand (5,000). A city or town legislative body, or an officer of one (1) of them, shall have no power or jurisdiction to regulate the sale of, traffic in, or transportation of alcoholic beverages, or to levy a tax, fee, license fee, or to issue or require a license to be issued by it or its officer or agent in respect to alcoholic beverages.
Ind. Code Ann. § 7.1-3-9-2 (West 2013) (emphasis added). Further, IC 7.1-3-9-6 provides that
A city or town shall not enact an ordinance which in any way, directly or indirectly, regulates, restricts, enlarges, or limits the operation or business of the holder of a liquor retailer’s permit as provided in this title. A city or town shall not enact an ordinance covering any other business or place of business for the conduct of it in such a way as to prevent or inhibit the holder of a liquor retailer’s permit from being qualified to obtain or continue to hold the permit, or operate to interfere with or prevent the exercise of the permittee’s privileges under the permit.
Ind. Code Ann. § 7.1-3-9-6 (West 2013).
The Indiana Court of Appeals interpreted these portions of the statue in City of Fort Wayne v. Kotsopolous,704 N.E.2d 1069 (Ind. Ct. App. 1989). In this case the court held that “local regulation of one aspect of the permits would interfere with state regulation of other aspects of the permits” and found a city ordinance regulating alcohol permits to be invalid. Id. at 1072. The Indiana Court of Appeals reached a different result in O’Bannion v. State ex rel. Shivley, 253 N.E.2d 793 (Ind. App. 1969). In this case the court found that because the local zoning ordinance regulated property and was “not a regulation governing the sale of, the traffic in, or the transportation of, alcoholic beverages” then it was valid. Id. at 745. The essential difference between these two cases is what is being regulated by the local ordinance. The regulation imposed by Floyd County for Temporary Food Service Permits is similar to the ordinance in Kotsopolous in that it is now the policy of the Floyd County health department to require all alcoholic beverage establishments to obtain this permit even if they have a three way permit with Type 222 privileges attached. This “lev[ies] a tax, fee or license requirement on alcohol sales,” which the court in Kotsopolus found to be invalid. Kotsopolus, 704 N.E.2d at 1072.
When NABSB participates in festivals they are participating in the sale and traffic of their product and the Floyd County ordinance imposes a restriction on those sales by not allowing NABSB to sell their product without first acquiring an additional permit at an additional cost. By regulating the sale of NABSB’s beer in this way, the Floyd County ordinance has interfered where the state has already regulated. Not only is this in violation of what is expressly stated in IC 7.1-3-8-2 and I. 7.1-3-9-6 regarding local regulation of alcohol and tobacco, but it also is a violation of the Home Rule Act.
The Home Rule Act states that “it is the policy of the state to grant units all the powers that they need for the effective operation of government as to local affairs.” Ind. Code Ann. § 36-1-3-2 (West 2013). This is a broad grant of authority to all local units of government to regulate their own affairs as they see fit as long as that power “is not expressly denied by the Indiana Constitution or by statute.” Ind. Code Ann. § 36-1-3-5 (West 2013). Additionally, the Home Rule Act does not allow a local unit “to regulate conduct that is regulated by a state agency, except as expressly granted by statute.” Ind. Code Ann. § 36-1-3-8 (West 2013). Although, a “local regulation might not be considered preempted by state law” if “a state statute does not deal comprehensively with a subject matter.” 2003 Ind. Op. Att’y Gen. No. 2 (Jan. 31, 2003).
Floyd County’s ordinance does not comport with the requirements of the Home Rule Act. There are two statutes in place that expressly limit the authority of a local jurisdiction to regulate alcohol and tobacco. IC 7.1-3-9-2 provides that a locality such as Floyd County, “shall have no power or jurisdiction to regulate the sale of, traffic in, or transportation of alcoholic beverages.” Ind. Code Ann. § 7.1-3-9-2 (West 2013). Additionally, IC 7.1-3-9-6 indicates that a “city or town shall not enact an ordinance” that interferes with the business of a permit holder and that a “city or town shall not enact an ordinance” that “interfere[s] with or prevent[s] the exercise of the permitee’s privileges under the permit” Ind. Code Ann. 7.1-3-9-6 (West 2013). These statues expressly deny Floyd County the ability to impose a regulation such as the Temporary Food Service Permit. The Floyd County permit regulates “the sale of, traffic in, or transportation of alcoholic beverages” by requiring businesses, such as NABSB, to acquire a permit in addition to the permit already issued by the state under Title 7.1 before selling their products at festivals.
Imposing this type of regulation also interferes with NABSB’s privileges under the permit. If NABSB did not have to apply and pay for the additional Floyd County permit then they would be free to participate in festivals under their state issued licenses without having to go through this extra step. The Floyd County ordinance is not permitted by these statues and is attempting to regulate something that is already comprehensively regulated by a state agency.
Title 7.1 creates the Alcohol and Tobacco Commission (Commission) which is granted, “in addition to the express powers enumerated in this title, the authority to exercise all powers necessary and proper to carry out the policies of this title” Ind. Code Ann. § 7.1-2-3-31 (West 2013). This agency has been statutorily granted the power to regulate the permitting of alcoholic beverage retailers such as NABSB. Floyd County’s own regulation of this is in conflict with this power and Floyd County does not have any other power expressly granted by statute as would be permitted under the Home Rule Act. Title 7.1 expressly states that the Commission has “the authority to exercise all powers necessary and proper to carry out the policies of this title.” Id. This does not leave room for Floyd County to enact their own ordinance regulating the permitting of alcoholic beverage retailers. Not only is the Commission given this power to regulate, but Title 7.1 is comprehensive enough to preempt the local ordinance.
Title 7.1 broadly regulates the “manufacture, sale, possession, and use of alcoholic beverages” in Indiana through seventeen different permits. Katsapolous, 704 N.E.2d at 1071. The statute does not contemplate a role for localities in this regulation and, in fact, even expressly prohibits it through IC 7.1-3-9-2 and IC 7.1-3-9-6. There are times when the state legislature has found it appropriate to allow for local regulation of certain activity. In State, By & Through Indiana State Bd. of Accounts v. Town of Roseland, 383 N.E.2d 1076, 1080 (Ind. App. 1978), the court determined that while the State controls public highways and streets, “the State authorizes local authorities to determine and declare reasonable and safe maximum speed limits, within certain guidelines.” In this case there was an express statutory provision that allowed for local regulation. That is not the case with the Floyd County ordinance where the statute has left no room for local regulation and it is comprehensive enough to preempt the Floyd County regulation.
The Temporary Food Permit ordinance enacted by Floyd County requiring a permit for businesses, such as the New Albanian Bank Street Brewery to participate in festivals, is not valid. The ordinance limits the ability of NABSB to sell its products at local festivals and interferes with the permission given by the state permits already held by NABSB for this activity. This is in direct conflict with IC 7.1-3-9-2 and IC 7.1-3-9-6 which restrict this type of local regulation of alcohol sales. In addition to this, the ordinance is in violation of the Home Rule Act which allows for localities to broadly regulate as long as those regulations do not directly interfere with a statute or agency action or if a statute is comprehensive enough that it preempts the local regulation.
Tags: Christmas presents we have known, Floyd County Health Department, Indiana Attorney General, PourGate
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In the matter of NABC and PourGate, total and unequivocal defeat for the Floyd County Health Department | New Albanian Brewing Company - December 11, 2013
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