Among other weird rules, in NY a person or entity may have only one single liquor license. So you can’t open two or three wine stores. And you can’t sell it by the bottle and also serve it by the glass in the same place, so while other states have these nice wine store/wine bar combos, those can’t exist in NY.
Anyway, Total wanted to open a second store in NY. They were turned down by the State Liquor Authority (SLA). Went to court and the decision was upheld. So Total is appealing. Eventually it will end up in the US Supreme Court. The recent Tennessee case was based on a residency requirement for liquor store owners. The SC ruled for Total in that case. For some reason, New York made the mistake of making a reference to residency when turning down Total Wine. It will be interesting to see how this now plays out.
And I like that they were trying to open in a “hamlet”. We too rarely see that word any more.
Though its application to open a wine and spirits store in Westchester County was shot down three separate times, Total Wine’s owners’ claim the denials are based on anti-competitive protectionism, political opposition, and the applicant’s non-resident status. Total Wine, which has a mega-store on Long Island, is appealing the New York State Supreme Court’s decision to deny the retail chain a second liquor license. Citing the large number of wine and spirits stores in the area, acting state Supreme Court Justice Gerard Maney agreed in his September ruling with the New York State Liquor Authority’s (SLA) December 2018 decision denying Total Wine a license to open a liquor store in the hamlet of Hartsdale, 30 miles north of Manhattan.
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Total Wine’s owners claim the denial violated the Commerce Clause and the Privileges and Immunities Clause of the U.S. Constitution. The SLA argued the area for the proposed store is over saturated with 19 retail outlets for liquor and wines within two miles.
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In the appeal brief filed on December 26, 2019, Trone’s attorneys note that SLA commissioner Lily Fan considered Trone’s out-of-state residency when denying his application. “I do believe the applicant is very, very qualified and experienced in this area; however, he’s not a New York resident and I think that it’s hard to be local if you’re not local,” she said.
New York State is full of hamlets, people forget that but that is what we call them. Not towns…not villages…they are a term of usually a place that has old roots, but never became incorporated into anything. City people tend to forget that NYS is mostly rural, but then, they are afraid to travel beyond Westchester or Rockland County.
Markus, from your name and photo I always assumed you were Scandinavian, but g-d if that doesn’t look just like upstate NY, a place where I misspent some of my youth, much of that time in hamlets. And of course it’s a long and winding road from Hartsdale to Wawbeek to Honeoye to Wellsville to Olcott.
Hartsdale. Hmm. Right next to Scarsdale. I bet Zachys is following this closely.
Yes, we have hamlets and villages and cities, but a “town” is what would be called a township in any other state – an area without any requirement that it be inhabited.
I am not sure I follow the residency argument. No New Yorker is allowed more than one store, so it does not discriminate against Total if they also are not allowed more than one.
According to the OP, the SLA brought up the fact that the applicant was a non-resident, which was stupid on their part. I agree that Total doesn’t have much of a chance if what they’re try to do is get the courts to void the NY single ownership law. And Danny Wegman can attest to the fact that the SLA does not distinguish between residents and non-residents when enforcing that provision.
Based on my conversations with the folks at the front desk of the Total Wines in Westbury, I don’t think the company was completely prepared for how onerous the provisions of the NYS law are. For example, the original plan was for the Westbury store to hook into the corporate web site, which turned out to be a non-starter, since any coordination between stores is not allowed. There are some stores that manage to nibble at the edges of the law, though I’m not sure whether that’s because there are loopholes which allow some limited coordination, or whether they’re small enough that the SLA doesn’t care to go after them. One example is the Bottle x group of stores on LI (Bottle Buys, Bottle Bargains, etc.). And there’s the Buy-Rite cooperative which was pretty prominent in the 5 boroughs 20-30 years ago, less so now. But there’s absolutely no way that a company like Total could pull this off in a way that would make sense for them.
My hope is that Total’s strategy is to build up a critical mass of stores in NY run on the Westbury model and then pay lobbyists, not lawyers, to get the laws changed. If that’s what the intent was behind this application, and the applicant was not the owner of the Westbury store, then the fact that the SLA brought up residency in denying the application is absolutely relevant, and does have a good chance of helping Total in swaying the court in their favor. And yes, I’m rooting for Total in all this. I’m normally in favor of the little guy, but the NYS ownership laws aren’t on the books to protect the little guys, they are there to protect the big distributors.
It’s kind of strange to me - NY and CA are both ironclad blue states yet they have such different approaches to consumer fairness. It’s not just in dimensions around wine/booze where CA is totally on another planet, but all kinds of stuff.
I’m not seeing the constitutional hook for this one unless Total can show the state has relaxed its one-store restriction in the past arbitrarily or in a way that has favored in-state but not out-of-state owners. I’ve never heard of that.
One rule in MN works against Total Wine. Anyone can sell their private label wines which is what is happening by many MN wine shops. Surprisingly their prices are much lower than Total Wine. Always nice to see the smaller, independents stick it to Total Wine!
It is nothing more complicated than the distributors outright own the legislators here, and thus are able to pass laws that are completely focused on what benefits the distributors.
I don’t think California ever had the history of blue laws that New York did. Liquor/wine stores in New York couldn’t open on Sundays until ~20 years ago. And you couldn’t pay with a credit card until the late 80s or 90s – just cash or check.
New York didn’t allow baseball on Sundays until 1917!
In NY, because of the one-license limit, you also have thousands of mom-and-pop liquor store owners who vote. I doubt the distributors ever cared about credit card or Sunday sales. And the big distributors might even prefer to let chains like Total in. It would be easier to move quantities through them than via thousands of corner stores, though the distributors would have less bargaining power.
Regardless of the answer, shouldn’t that be a question consumers answer with their feet and wallets, and not state legislators in the pockets of big wholesalers and distributors?
I can relate my experiences with TW here in the Bay Area: we now have half a dozen or so around the Bay, having entered the market a few years ago. I can’t comment on if or how they have affected business at the smaller retailers. I can only say that I have bought maybe a hand full of wine bottles there over the past several years. A few recent release Bordeaux, a couple of Ridge Zins when I needed them, etc. I’ve bought some spirits there, some beer. TW is a big step up from Bevmo (I’ll be surprised if our local Bevmo continues to survive now that Total is in the area, but they are a few miles apart, so who knows). One caveat: the town I live in has zero fine wine options, so TW is by far the “best” wine shop in town. On the Peninsula, where there are multiple fine wine options, things might be different.
Probably negative in NY because WB people tend to dislike big. And TW doesn’t really offer the best prices. Stores like PJs in NYC were always able to beat most anyone when it came to prices, and there are many smaller stores that have well-curated selections. But for the average Joe, I don’t think it would matter. As to BevMo, they seem to be doing well enough. They have a lot of proprietary wines and I think that’s where they make their money. Their five cent sales rarely do much except drop the price to where it should be anyway. Prices are generally pretty high and selection sucks. TW did affect a few local wine shops in my neighborhood though. One closed. But another is doing just fine because they’re not competing for the TW customer. The little guys can compete, they just have to be smart about how they do it.
Don’t know why the SLA brought up the residency issue at all when denying the permit. I’m not sure they do either! Not relevant in any way that I can see.
I do remember when they changed that law to allow sales on Sunday though! I had to stop and pick something up on a Sunday a week after it came into effect and was thrilled that I could finally do so.
And I know that there are lots of hamlets in upstate NY. I have a brother who lives in Saratoga and I’ve spent a lot of time up in the Adirondacks, which are among the most beautiful places in the country in the fall. It’s just that the word is one of those quaint terms you rarely hear anyone use.
Maryland has or did have the same single license law but there are two Total Wine stores in the state. They used to have different names but now both are Total Wine.
In my misspent youth I spent time between Cayuga, Corning and Binghamton and vaguely remember countryside and barns that looked like that.
I have mixed feelings about NY law. I like the idea of one license per entity, as it protects the individual owner. OTOH, it places a lot of power in the hands of the distributors, denying retailers the economic clout to demand better treatment from distributors.
I am far from up to date on the regulations in each state, but I remember that in the past New Jersey had some carefully crafted laws that nicely divided power between suppliers, distributors and retailers. IIRC retailers were limited in the number of licenses, but could associate in buying groups. Suppliers could name multiple distributors for the same products. The result was fierce market competition. I don’t know what the laws are today, but I know that New Jersey retailers figure prominently as having low prices on Wine-Searcher.
Having just done a detailed analysis of the applicable court decisions and delivered a one hour Continuing Legal Education seminar on this subject (which was video recorded and will be posted somewhere soon for all of you to complain about my bad TV presence), I note the following:
New York has lots of stupid liquor restrictions, BUT Total Wine should lose on this one if I understand their position correctly.
The clash between Paragraph 2 of the 21st Amendment and the Dormant Commerce Clause comes out in favor of the Commerce Clause IF state law discriminates against out of state actors. Thus, in Granholm, the Supreme Court held that Michigan ( and NY in a companion case) could not give special treatment to in state wineries that was not given to out of state wineries. Likewise, in Tennessee Retailers, the two year residence requirement discriminated against Total Wine because the residence requirement was imposed on all directors and officers of a corporate licensee. The same result should pertain in out of state retailer shipping cases where NY allows local retailers to ship to customers in the state, but not out of state retailers. That case is currently percolating through the courts in the Seventh Circuit in a case out of Chicago but unless the SCOTUS make up changes, the decision should be the same as in Granholm and Tennessee Retailers.
If New York prohibits everyone from having two licenses, be it individuals or corporations (it does) and treats in state and out of state actors the same, then Total Wine should lose because of the broad interpretations given to Paragraph 2 of the 21st Amendment.
Assuming that Total Wine’s position is as described in the posts above, they should have talked to me first and not wasted all that money on legal fees. However, I suspect that there may be nuances in their position that are not clear from the articles I just read on the subject, which were written by people who didn’t know shit.
The Supreme Court in New York is a TRIAL COURT, it is not an appellate court, and there are two levels of appellate courts above it. The Court of Appeals is the highest court in NY.
Hamlet is an important geo-political terms in New York, although not used often. It is a geographic area that is not in a city, not in a town and not in a village. It is, unfortunately, a term often misused by courts and legislators. There is a similar reference, unincorporated village, but it is only used once in NY statutes which is a royal PITA, because it is in the Banking Law and has caused me to have all sorts of aggravation over the years but is not legally relevant in the Total Wine dispute because one license means one license, it doesn’t mean one license per legal subdivision.