Maxwell's Pic-Pac, Inc. et al v. Vance et al
Filing
85
MEMORANDUM OPINION AND ORDER granting 70 Motion to Stay Absent a Bond. The Court will stay enforcement of its Memorandum Opinion and Order dated 8/13/2012, until further order of this Court. Signed by Judge John G. Heyburn, II on 10/3/12. cc:counsel (JBM)
UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF KENTUCKY
AT LOUISVILLE
CIVIL ACTION NO. 3:11-CV-18-H
MAXWELL’S PIC-PAC, INC., et al.
PLAINTIFFS
V
ROBERT VANCE, in his official capacity
as Secretary of the Kentucky Public
Protection Cabinet, et al.
DEFENDANTS
MEMORANDUM OPINION AND ORDER
Pursuant to Fed. R. Civ. P. 62(c), Defendants have moved to stay enforcement of the
Court’s prior Memorandum Opinion and Order dated August 13, 2012, which denied
Defendants’ motion for summary judgment and declared KY. REV. STAT. ANN. § 243.230(5)
(1942) and 804 KY. ADMIN. REGS. 4:270 (1982) unconstitutional (the “Order”). The Court
temporarily stayed the Order pending consideration of this subsequent motion to stay.
Defendants now argue that the Order should be further stayed, pending appeal to the Sixth
Circuit Court of Appeals.
To determine whether a stay is appropriate under Rule 62(c), the Court must consider the
following factors: “(1) whether the stay applicant has made a strong showing that [it] is likely to
succeed on the merits; (2) whether the applicant will be irreparably injured absent a stay; (3)
whether issuance of the stay will substantially injure the other parties interested in the
proceeding; and (4) where the public interest lies.” Nken v. Holder, 556 U.S. 418, 426
(2009)(quoting Hilton v. Braunskill, 481 U.S. 770, 776 (1987)). The Court must balance these
factors in determining whether to issue a stay. Baker v. Adams Cnty./Ohio Valley Sch. Bd., 310
F.3d 927, 928 (6th Cir. 2002).
This is an unusual, difficult and perhaps historic case. Nevertheless, the Court agrees
with Plaintiffs that Defendants are not likely to succeed on their appeal. The Court particularly
disagrees with Defendants that its failure to specifically discuss the Twenty-First Amendment is
a reversible error. The Court fully considered the state’s known regulatory powers in reaching
its decision. However, that amendment does not change the well-known equal protection
analysis. Thus, the first factor weighs against a stay.
The Court will consider the next three factors as interdependent and related. Of course,
either side might be momentarily prejudiced by either (1) a reversal of this Court’s opinion
which is unstayed or (2) an affirmance of the opinion which had been stayed. No doubt, some
stores that stand to benefit from this Court’s opinion might miss opportunities to obtain liquor
licenses due to the operation of Kentucky’s quota system.1 While Plaintiffs present a fair
argument as to the harms that would befall some retail establishments as a result of a stay, the
Court views the question of a stay in a larger context than the parties’ immediate interests.
Neither party’s particular interest is damaged irreparably or substantially by a stay.
Consequently, neither interest trumps the public’s interest in a fair and final result without
unnecessary regulatory confusion. Plaintiffs assert that this Court should not grant the stay
because they won the case, and granting it would effectively obviate that victory. It is important
1
In Kentucky, retail package licenses in Jefferson County are capped at one for every 1,500 residents, while
the rest of the state is capped at one for every 2,300 residents per county or jurisdiction. KY. REV. STAT. § 241.065;
KY. REV. STAT. § 241.060(2); 804 KY. ADMIN. REGS. 9:010. For example, in McCracken County, all retail package
licenses available have been issued. Plaintiffs argue that if one of these licenses becomes available in the time it
takes the Sixth Circuit to render an opinion on appeal or the Kentucky General Assembly to pass new retail liquor
sales legislation, grocery and convenient stores will not be able to apply for the available licenses under the stay,
resulting in a missed opportunity that may not come around again for some time.
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to remember that the Court did not decide that Plaintiffs have a right to sell package liquors, only
that the current statutory scheme regulating the licensing of package liquors or wine sales
violates the Equal Protection Clause. It is true that, absent a stay, this Court’s opinion would
cause the default result that no state law governs these sales and Plaintiffs and others similarly
situated could apply for package liquor licenses.
However, the courts are hardly the only branch of government with a role here. This
Court’s role is only to set the outlines of constitutionally permitted action. As this Court
acknowledged, the Kentucky legislature has the primary and broad power to regulate the sale of
package liquors. No doubt, prior to the conclusion of any appeal, the legislature will have an
opportunity to enact new legislation which could avoid or alter the default result of an
affirmance of this Court’s decision.
Regulatory confusion does not serve the public interest. That kind of confusion is more
likely were this Court to require a dramatic change in Kentucky regulatory policy prior to the
other participants – the legislature and the appellate courts – having their say. The Court
concludes that the public interest in a fair, stable and final process far exceeds that of the parties
in some immediate advantage.
The circumstances of this case are quite unusual. Though the Court held in their favor in
the Order, the Court does not believe that Plaintiffs can demonstrate a compelling interest in the
immediate enforcement of its decision. Consequently, the final three factors, and particularly the
final one, heavily favor a stay, even though the Court does not believe that the appeal will likely
succeed. For all these reasons, the Court will enter an order staying the enforcement of the
Court’s Memorandum Opinion and Order dated August 13, 2012.
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Whether to require a bond under a Rule 62(c) stay is in the Court’s discretion. Fed. R.
Civ. P. 62(c)(“[T]he court may . . . grant an injunction on terms for bond or other terms that
secure the opposing party’s rights.”). The legal issues disputed here are larger than the parties’
individual interests. Plaintiffs cannot obtain any money damages in this case. It would not serve
any purpose, therefore, to require a bond.
Being otherwise sufficiently advised,
IT IS HEREBY ORDERED that Defendants’ motion for a stay absent a bond is
SUSTAINED and the Court will stay enforcement of its Memorandum Opinion and Order dated
August 13, 2012, until further order of this Court.
October 3, 2012
cc:
Counsel of Record
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