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October 1, 2007

Update: High court won't hear appeal of R.I. liquor law

PROVIDENCE -- The U.S. Supreme Court on today rejected an appeal challenging a 3-year-old Rhode Island law that bans liquor sales by franchise stores.

Wine & Spirits Retailers, a company that had struck franchise agreements with several stores in the state, filed a federal lawsuit in 2004 arguing the law was unconstitutional. The company said the ban violated its right to free speech and free association.

Though state authorities enacted the law in 2004, they delayed enforcing it for two years while a legal challenge was pending. Before the nation's highest court was asked to weigh in, a federal appeals court declined to block the law from taking effect.

"At any step of the way, a court could basically invalidate the law, so we took a very measured approach to our enforcement," said Richard Berstein, a lawyer for the state Department of Business Regulation, which is responsible for enforcing the law.

The law broadened an existing ban on liquor chain stores by preventing business owners from using names that suggest their store is part of a franchise, which could give the stores a competitive advantage if consumers assumed they have a wider selection.

Berstein said the Supreme Court's decision meant the department would continue enforcing the law.

Attorneys for both sides did not immediately return calls for comment today.

Posted by Jack Perry  at 2:08 PM | Permalink

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