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Appeals Court Deals Blow To Walmart’s Bid To Sell Spirits In Texas

August 16, 2019

In a blow to Walmart’s bid to sell spirits in Texas, the U.S. Court of Appeals for the Fifth Circuit has overturned a lower court ruling that found a Texas state law against spirits sales by publicly traded corporations discriminatory to out-of-state entities.

The Fifth Circuit panel said U.S. District Judge Robert Pitman’s 2018 ruling was incorrect in declaring the law discriminatory on the basis of the state’s history of litigation against out-of-state operators, and did not take into account “evidence addressing the public corporation ban’s effect on the flow of interstate goods, or how the ban affects the flow of the potential market participant’s goods to the Texas liquor retail market.”

The panel observed that out-of-state interests already own package stores in the state, and added that it found no direct evidence that the state congress had discriminatory intent in banning publicly traded companies from selling spirits. Under the decision, Texas is allowed to enforce the ban and the case has been remanded to the lower court.—Daniel Marsteller

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