Challenge to Retailer Crowler Ban in Texas Has Another Win – And Court Finds Regulatory FAQs are Rulings that Can be Challenged

Growler/crowler laws and regulations across the country are a hodgepodge of nonsensical restrictions on the sale of beer that usually come down to a singular question – who can fill containers of beer to go?  Some states say the privilege rests solely with brewers in their tap rooms, some states let any retailer – gas stations included – fill growlers, some say the privilege rests solely with retailers.

What many of the states have in common is that no legislative code actually addresses the practice.  In a larger portion of our republic, your right to purchase beer to go from a tap has been determined by the state’s alcohol regulatory division’s interpretation of the law – it’s a regulation or a rule, not a law.  Sometimes the regulatory body doesn’t even publish what they would call a “rule” but they address the issue through an FAQ or on a Q&A portion of their website.

The debate about this practice has rarely focused on the growler vs. crowler distinction.  A crowler’s sealed can vs. a growler’s sealed cap makes no difference to rational human beings as a seal is created in either case.  But things don’t always take a rational course where alcohol policy is concerned and a debate over the large novelty “cans” that are crowlers is creating a fun spectacle in Texas.

Last year the Texas Alcoholic Beverage Commission seized a crowler machine from Cuvee coffee shop in Spicewood, Texas.  Cuvee has a retailer’s license and sells beer in addition to coffee.  Under Texas’ interpretation retailer rights, Cuvee could sell sealed growlers, but crowlers cross a line a “cans” (raise your hand if you know that a growler is a glass bottle) even though both are manually filled from a tap and sealed.  So the TABC took the machine under the theory that Cuvee was running an illegal canning operation, stating that only brewers can fill cans because the TABC viewed the crowlers a “re-packaging” but didn’t view cans that way

The official line from the TABC:

“We know this issue is important to craft beer retailers and their customers, and we support all citizens’ right to petition the Commission, the Legislature or the courts if they feel a provision in the Alcoholic Beverage Code is unfair,” said Dexter K. Jones, TABC Assistant Chief for Audit and Investigations. “However, we do not support the continued violation of the law just because a retailer disagrees with it. Cuvee Coffee ignored our repeated warnings and discussions, and that conduct resulted in TABC seizing the illegal equipment and subjecting its permit to a civil penalty. Other retailers who engage in illegal canning risk similar consequences.”

Cuvee took umbrage and continues to do so, challenging the seizure administratively by refusing to pay a fine and later in court arguing that the operative law (Section 25.01 of the Texas Alcoholic Beverage Code) doesn’t address the types of containers in which beer may be sold to go.

Sec. 25.01.  AUTHORIZED ACTIVITIES.  The holder of a wine and beer retailer’s permit may sell:

(1)  for consumption on or off the premises where sold, but not for resale, wine, beer, and malt liquors containing alcohol in excess of one-half of one percent by volume and not more than 17 percent by volume;  and

(2)  for consumption on the premises traditional port or sherry containing alcohol in excess of one-half of one percent by volume and not more than 24 percent by volume.

An administrative judge handed Cuvee a win over the issue back in late November in a ruling that referenced that a bar could apparently put beer in a tennis ball can and a mayonnaise jar, but not a crowler under the TABC interpretation.  The TABC and Cuvee also apparently had a case winding through the courts and the Texas Appellate court recently handed Cuvee a win holding that it could challenge the TABC’s interpretation of the law, which the TABC had made in a series of questions and answers available on their website under the general questions section of their FAQ.  Specifically, the court held:

Accordingly, we hold the posted questions and answers meet the APA’s definition of the term “rule,” so their validity and applicability can be challenged in an action for declaratory relief under section 2001.38 of the APA. This holding should not be read as expressing any opinion regarding TABC’s interpretation of the law.

While the fight isn’t over yet, it’s looking like crowlers will be coming back to Texas once this is sorted out.