A 1938 law bans wine and liquor sales at retailers that sell 10% of groceries or gasoline.
LOUISVILLE — Kentucky's post-Prohibition era ban on wine and liquor at grocery stores is constitutional, a federal appeals court ruled Wednesday, saying the state has every right to restrict the sales, "just as a parent can reduce a child's access to liquor."
A three-judge panel of the 6th U.S. Circuit Court of Appeals in Cincinnati overturned a 2012 ruling by a Louisville federal judge who had decided that allowing liquor sales in drug stores while banning them in groceries and convenience stores was a violation of the equal protection clause of the 14th Amendment.
The appeals court ruled that Kentucky already limits access to wine and liquor by restricting the number of licensed retailers and that "the state can also reduce access by limiting the types of places that supply it — just as a parent can reduce a child's access to liquor by keeping smaller amounts in the house and by locking it in the liquor cabinet."
Judge Deborah Cook, writing for the panel, added that the state has an interest in limiting wine and liquor sales to retailers that don't have as much walk-in traffic, including minors, as a grocery store or gas station.
A 1938 Kentucky law bans wine and liquor sales at retailers that sell substantial amounts — later set at 10% — of groceries or gasoline. To get around the ban, groceries in Kentucky apply for liquor licenses for separate stores with separate, though often adjacent, entrances.
U.S. District Judge John Heyburn's ruling overturning the law was never put into effect, as defendants pursued an appeal.
The Food with Wine Coalition, a group of grocers, and Maxwell's Pic-Pac, a small Louisville grocer, filed the lawsuit challenging the law and named administrators of the Kentucky Department of Alcoholic Beverage Control as defendants. They argued that the statute discriminated against their businesses.
Stephen Pitt, attorney for the Food with Wine Coalition, said he and his clients were still evaluating the opinion and have not determined their next step, which could include asking for a rehearing before the same panel, seeking a hearing before the full 6th Circuit or appealing to the U.S. Supreme Court.
In a 2013 (Louisville, Ky.) Courier-Journal Bluegrass Poll, 62% of respondents favored allowing groceries to sell wine and liquor in areas that already allow alcohol sales.
In his 2012 ruling that the law is unconstitutional, Heyburn questioned why a grocery-selling drug store such as Walgreens could sell wine and liquor, but a Kroger that sells pharmaceuticals cannot.
Pitt said they were disappointed that the appeals court failed "to consider the fact that in today's business environment, there is very little difference between so-called grocery stores, which are not able to sell wine, and so-called drug stores, which are."
Pitt said the rational basis for distinguishing between those businesses no longer exists.
Tim McGurk, a spokesman for Kroger, directed a request for comment to the Kentucky Grocers Association, which issued a statement that the decision is still being evaluated by its attorneys.
Ken Handmaker, who represents The Party Source, a liquor store which defended the law, said the judges looked closely at the legislative history and state actions to determine that the law is consistent with state policy limiting alcohol sales.
"There is a sufficient, rational basis to support the right for the state to regulate the sale and distribution of alcoholic beverages within its borders," said Handmaker.
He argued "there is still a big difference (between those types of businesses) and the Legislature has recognized that and provided for it."
Handmaker said he was hopeful that the ruling would end the debate over the statute.
"Today's ruling from the U.S. Court of Appeals confirms the validity of Kentucky's existing statutes and regulations regarding the sale of wine and spirits, and the Department of Alcoholic Beverage Control's application of those rules," the state ABC said in a prepared statement.
The court also wrote that more minors work at grocery stores and gas stations, increasing their access, and that larger, busier grocery stores present the possibility that minors could steal liquor.
The appeals court concluded that grocery stores and gas stations could "pose a greater risk of exposing citizens to alcohol than do other retailers" because they may be visited more frequently.
Courts, including the 6th Circuit, have sustained "similar alcohol provisions against challenges under the Equal Protection Clause," including an Ohio law that differentiated between taverns and breweries in selling beer, according to the Wednesday ruling. In that case, taverns posed a greater threat of fights, crime, and car accidents, according to the ruling. In another ruling, bars posed a greater risk of underage drinking than restaurants.
Thirty-six other states allow wine and distilled spirits to be sold at grocery stores.
Contributing: Gregory A. Hall, The (Louisville, Ky.) Courier-Journal and the Associated Press.