Thursday, June 30, 2011

State officials sued over liquor bill

Posted By on June 30, 2011, 4:59 PM

Late this afternoon the Utah Hospitality Association filed a lawsuit in federal court suing Gov. Gary Herbert for unlawfully restricting trade through terminating drink specials at bars and linking the number of liquor licenses to the number of public safety officials employed by the state. ---

The lawsuit, which also names Attorney General Mark Shurtleff and several DABC commissioners as defendants, seeks to stall at the gate the overhauling of the DABC Act by Senate Bill 314, which is set to go partially into effect tomorrow, July 1, 2011, and also in a year's time.

As of tomorrow, SB314 will eliminate discount pricing of alcohol by bars. That means bars can no longer offer "drink specials," without being hit by both civil and criminal penalties. That amounts to "fixing resale prices" of liquor, according to the lawsuit -- which, it states, is illegal under the antitrust Sherman Act.

S314 also links the number of liquor licenses not only to population quotas in Utah but also, as of July 1, 2012, to the number of public safety officers, namely Utah Highway Patrol officers, said UHA board member and ex-DABC director Ken Wynn.

The Utah Hospitality Association [UHA] represents the interests of bar owners and employees in Utah. Under Gov. Jon Huntsman Jr., the UHA enjoyed a productive relationship, resulting in the elimination of bar membership fees. The end of memberships, however, the lawsuit alleges, led to push back from legislators. "The initial concerns of some of the most influential members of the Utah legislature about the elimination of that requirement focused exclusively on their opinion that a large increase in drunk driving and underage drinking would result."

Faced with SB314, which was signed into law by Gov. Herbert on March 25, 2011, the UHA has come out swinging. "Defendants conspired to supplant the Federal Government's authority over commerce by enacting amendments to the ABC Act that created illegal restraints on trade," the lawsuit claims. The bill "will significantly harm Utahns and visitors to the State of Utah, particularly consumers and the social clubs that operate in the State of Utah," the lawsuit states.

Along with the UHA, the lawsuit's two unnamed plaintiffs represent those caught in the cross-hairs of SB314. One owns a social club, the lawsuit states, but cannot lower alcoholic beverage prices as specials -- unless s/he then keeps their prices at the new lower levels -- without facing penalties. The second plaintiff, after complying with all legal requirements to obtain a liquor license, has been repeatedly denied one by the DABC.

Gov. Herbert's spokesperson, Ally Issom, said it was too early to comment on the lawsuit.

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