This could be a huge game-changer for Washington breweries looking to distribute beer in Oregon. As well as any other out-of-state breweries looking to do the same. The inability to self-distribute beer in Oregon created an impenetrable wall around the state for many breweries.
Last July we reported that three of Washington’s breweries had filed a lawsuit against the Oregon Liquor & Cannabis Commission (OLCC) alleging that the state’s policy discriminated against out-of-state breweries by not allowing breweries to self-distribute beer in Oregon. That case, formally known as Garden Path Fermentation v. Brown, has now been settled.
Under the terms of the settlement, the OLCC agreed to permit out-of-state breweries to self-distribute beer to Oregon retailers. This removes a huge barrier for out-of-state breweries looking to sell beer in Oregon.
The three plaintiffs in the case were Garden Path Fermentation (Burlington, WA), Fortside Brewing (Vancouver, WA), and Mirage Beer (Seattle, WA). Together they filed a two-count complaint with the US District Court in Portland alleging that Oregon law discriminated against out-of-state breweries in violation of Article 1, Section 8, Clause 3 of the United States Constitution, also known as the “Commerce Clause.”
In addition to allowing out-of-state beer producers the ability to self-distribute beer, the OLCC has agreed to not enforce the Oregon law that limits direct-to-consumer shipping privileges to permittees that hold an alcohol license in states that make similar privileges to OLCC licensees.
The settlement will expire in five years or earlier if the Oregon legislature enacts a law that provides for substantially similar privileges. Currently, lawmakers in Salem are considering such a law in the form of HB 2013, which is currently making its way through the House’s Ways and Means Committee.
Pursuant to the settlement’s terms, the State of Oregon has not admitted any liability in connection with the Plaintiff’s claims. Still, the Plaintiffs see this settlement as a victory.
“This is a big win for Oregon consumers,” says Portland lawyer Judith A. Parker of the J.A. Parker Law Firm LLC, who served as local counsel for the Plaintiffs. “This settlement and the prospects of HB 2013 becoming law will bring Oregon policies in line with the United States Constitution’s provisions that prevent states from engaging in economic discrimination against out-of-state businesses.”
Prior to this settlement, Oregon statutes permitted in-state breweries to self-distribute to licensed retail businesses but did not allow out-of-state breweries the same right. Additionally, Oregon law allowed in-state breweries to ship their beer directly to Oregon consumers but prohibited Washington breweries from doing the same.
“This settlement is a critical step in a growing movement to increase social and economic equity in the beer industry, not simply by broadening consumer access beer, but likewise increasing the ability for out-of-state breweries to more easily access new markets,” says Justin Leigh, co-owner of Dwinell Country Ales (Goldendale, WA), a licensed attorney who helped to organize the lawsuit and served as an expert witness for the Plaintiffs.