An Act To Amend the Laws Governing the Relationship between Alcoholic Beverage Wholesalers and Certificate of Approval Holders
Maine Legislature, Session 126, LD 1258
Committee: Veterans and Legal Affairs
Sponsors: CAREY, MASON, BEAULIEU, CLARK, RUSSELL, SAUCIER, WILLETTE, CLEVELAND, PATRICK, TUTTLE
Amends: 28-A MRSA §1452, 28-A MRSA §1454, 28-A MRSA §1455, 28-A MRSA §1456, 28-A MRSA §1457, 28-A MRSA §1458

Legislative Document 
No. 1258 
H.P. 892 
House of Representatives, March 27, 2013 
An Act To Amend the Laws Governing the Relationship between 
Alcoholic Beverage Wholesalers and Certificate of Approval 
Holders 
Reference to the Committee on Veterans and Legal Affairs suggested and ordered printed. 
MILLICENT M. MacFARLAND 
Clerk 
Presented by Representative CAREY of Lewiston. 
Cosponsored by Senator MASON of Androscoggin and 
Representatives: BEAULIEU of Auburn, CLARK of Easton, RUSSELL of Portland, 
SAUCIER of Presque Isle, WILLETTE of Mapleton, Senators: CLEVELAND of 
Androscoggin, PATRICK of Oxford, TUTTLE of York. 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1.  28-A MRSA §1452, as enacted by PL 1987, c. 45, Pt. A, §4, is amended to 
read: 
§1452.  No inducement or coercion 
1.  Certificate of approval holder.  No A certificate of approval holder may not:  
A.  Induce or coerce, or attempt to induce or coerce, any wholesale licensee to accept 
delivery of any liquor or any other commodity which that has not been ordered by the 
wholesale licensee; 
B.  Induce or coerce, or attempt to induce or coerce, any wholesale licensee to do any 
illegal act or thing by threatening to amend, cancel, terminate or refuse to renew any 
agreement existing between a certificate of approval holder and a wholesale licensee; 
or 
C.  Require a wholesale licensee to assent to any condition, stipulation or provision 
limiting the wholesale licensee in his the licensee's right to sell the product of any 
other certificate of approval holder anywhere in the State if the acquisition of the 
product of another certificate of approval holder does not materially impair the 
quality of service or quantity of sales of the existing brand or brands of the certificate 
of approval holder seeking to impose the condition, stipulation or provision.; 
D.  Require that any dispute arising out of any agreement with a wholesale licensee 
be determined by the application of the laws of another jurisdiction or a federal court 
sitting in another state; or 
E.  Require that the wholesale licensee waive or otherwise agree to not enforce any 
provision in this chapter. 
Sec. 2.  28-A MRSA §1454, sub-§1,  as enacted by PL 1987, c. 45, Pt. A, §4, is 
amended to read: 
1.  Good cause.  Notwithstanding the terms, provisions or conditions of any 
agreement, no a certificate of approval holder may not amend, cancel, terminate or refuse 
to continue or renew any agreement, or cause a wholesale licensee to resign from an 
agreement, unless good cause can be established or proven for amendment, termination, 
cancellation, nonrenewal, noncontinuation or causing a resignation.  "Good cause" does 
not include the sale or purchase of a certificate of approval holder.  "Good cause" 
includes, but is not limited to, the following:  
A.  Revocation of the wholesale licensee's license to do business in the State; 
B.  Bankruptcy or insolvency of the wholesale licensee; 
C.  Assignment for the benefit of creditors or similar disposition of the assets of the 
wholesale licensee; and 
D.  Failure by the wholesale licensee to substantially comply, without reasonable 
excuse or justification, with any reasonable and material requirement imposed upon 
him the licensee by the certificate of approval holder. 
The burden is on the certificate of approval holder to establish good cause under this 
subsection. 
Sec. 3.  28-A MRSA §1455, sub-§1,  as enacted by PL 1987, c. 45, Pt. A, §4, is 
amended to read: 
1.  Written notice.  Before any termination procedure initiated by the certificate of 
approval holder, the certificate of approval holder shall give the wholesale licensee 
written notice of any claimed deficiency existing in his the licensee's territory and shall 
give the wholesale licensee reasonable time to correct the claimed deficiency or 
deficiencies.  If a claimed deficiency subject to a notice under this section is corrected 
within the reasonable period of time given by the notice to the wholesale licensee, the 
certificate of approval holder may not terminate an agreement with the wholesale licensee 
based upon that deficiency.  After this reasonable time has elapsed and the deficiency has 
not been corrected, the certificate of approval holder shall provide the wholesale licensee 
at least 90 days prior written notice of any intent to amend, terminate, cancel or not renew 
any agreement.  The notice must state all the reasons for the intended amendment, 
termination, cancellation or nonrenewal. The notice provisions of this section do not 
apply if the reason for the amendment, termination, cancellation or nonrenewal is:  
A.  The bankruptcy or insolvency of the wholesale licensee; 
B.  An assignment for the benefit of creditors or similar disposition of the assets of 
the wholesale licensee's business; 
C.  Revocation of the wholesale licensee's license; or 
D.  Conviction or a plea of guilty or no contest to a charge of violating a law relating 
to the business that materially affects the wholesale licensee's ability to remain in 
business. 
Sec. 4.  28-A MRSA §1456, as enacted by PL 1987, c. 45, Pt. A, §4, is amended to 
read: 
§1456.  Assignment, transfer, merger or sale of business 
No A certificate of approval holder may not unreasonably withhold consent to or 
interfere with any assignment, transfer, merger or sale of the wholesale licensee's 
business whenever if the wholesale licensee to be substituted meets the material and 
reasonable qualifications and standards required of its the certificate of approval holder's 
wholesale licensees. 
Sec. 5.  28-A MRSA §1457, as enacted by PL 1987, c. 45, Pt. A, §4, is amended to 
read: 
§1457.  Compensation 
1.  Reasonable compensation.  Any A certificate of approval holder which that 
amends, cancels, terminates or refuses to continue or renew any agreement, or causes a 
wholesale licensee to resign, unless for good cause shown, as defined in section 1454, 
from an agreement or unreasonably withholds consent to any assignment, transfer, 
merger or sale of a wholesale licensee's business, shall pay the wholesale licensee 
reasonable compensation for damages to the value of the wholesale licensee's business 
related to the terminated, including a diminishment in the overall business, as a result of 
the termination of a brand or brands under this subsection, including damages resulting 
from the certificate of approval holder's notice or publication of intent to assign, transfer 
or sell a brand.  The value of the wholesale licensee's business includes inventory and 
other tangible assets and its good will. 
2.  Neutral arbitrator.  If the certificate of approval holder and the wholesale 
licensee are unable to agree on the reasonable compensation to be paid for the value of 
the wholesale licensee's business, as defined in subsection 1, they shall submit the matter 
to a neutral arbitrator selected by the parties, or, if they cannot agree, by the Chief Justice 
of the Supreme Judicial Court.  The costs of the arbitration shall must be paid 1/2 by the 
wholesale licensee and 1/2 by the certificate of approval holder or otherwise the 
arbitration proceeding shall be is governed by the Maine Uniform Arbitration Act. 
3.  Compensation must be agreed upon.  Unless both parties consent, a certificate 
of approval holder may not amend, cancel, terminate or refuse to continue or renew any 
agreement, or cause a wholesale licensee to resign, until all issues of compensation under 
this section have been determined and the affected wholesale licensee is compensated. 
4.  Wholesale licensee to serve territory.  Unless both parties consent, a wholesale 
licensee shall continue to serve a territory exclusively subject to an agreement in dispute 
under this section until the dispute is finally resolved under this section or section 1458. 
5.  Discontinuation of brand from territory.  The provisions of this section do not 
preclude a certificate of approval holder from discontinuing a brand from a territory if 
that brand is not sold in the territory for a period of at least 5 years after the brand is 
discontinued. 
Sec. 6.  28-A MRSA §1458, sub-§2, as enacted by PL 1987, c. 45, Pt. A, §4, is 
amended to read: 
2.  Equitable relief.  The court may grant equitable relief necessary to remedy the 
effects of conduct which it that the court finds to exist and which is prohibited under this 
chapter, including, but not limited to, declaratory judgment and injunctive relief.  An 
injunction under this subsection concerning section 1457 may not be issued if a brand that 
is subject to the dispute represents 5% or less of the distributor's gross revenue. 
SUMMARY 
This bill amends the liquor laws as they pertain to agreements between certificate of 
approval holders and wholesale licensees by adding prohibited coercive actions by 
certificate of approval holders and amending the laws surrounding the sale of a wholesale 
licensee's business, the termination of an agreement by a certificate of approval holder, 
compensation to a wholesale licensee for damages from an unlawful action by a 
certificate of approval holder and the injunctive relief provisions.