Texas Alcoholic Beverage Commission v. Live Oak Brewing Co.
The Texas Alcohol Beverage Commission appealed a trial court's judgment declaring Section 102.75(a)(7) of the Texas Alcoholic Beverage Code unconstitutional. This statute prohibits manufacturers from accepting payment for the assignment of territorial distribution rights. Appellees, several craft breweries, argued the statute violated their economic liberty interest under the Texas Constitution's due course of law clause by restricting their ability to sell territorial rights and hindering business expansion. The appellate court reversed the trial court's decision, finding that the appellees failed to demonstrate the statute deprived them of occupational freedom or was unconstitutionally oppressive. The court affirmed the constitutionality of the statute, stating it operates within the legitimate framework of the state's three-tier alcoholic beverage regulatory system and is part of a broader legislative compromise.