Tennessee Puts the Smack Down on First-Time DUI

By - April 26, 2013 | Alcoholic Beverage Law | Email Will Cheek

Tennessee’s drunk driving laws gave first-time offenders a wake up call, with mandatory 48 hour jail time and costs of around $4,900 for towing, bail, attorney, high risk insurance, court costs, school, and reinstatement fees.

This year, Tennessee upped the ante for first time DUI’ers. Ignition interlock devices were an optional penalty for first-timers, with the penalty usually reserved for repeat offenders. Ignition interlock requires the driver to blow into a tube to demonstrate sobriety before the car can start.

As we read it, the new law requires ignition interlock for all first-time DUI offenders.

Reminds us of lyrics from punk band Black Flag’s tune “Drinking and Driving”:

Party down, party down
Drinkin’ til you can’t even see
Fill your car with your buddies
And wrap it around a tree

The new law requires cameras on the devices. Previously, one way for a drinker to get around an interlock device and drive home was to have a sober friend blow to start the car. Cameras will make it more difficult for a drunk driver to start the car.

Although we applaud the effort to rid the road of drunk drivers, the new law has a potentially unfortunate consequence. The cost of the interlock may force average Tennesseans to drive illegally without a driver’s license.

An interlock currently costs around $1,000 a year. We suspect the price with the newly-required camera will be higher. With average household income in Tennessee at $52,762 per the 2010 US Census, the cost for a first-time DUI’er may lead many to surrender their driver’s licenses and drive illegally.

Eliminating drunk driving would be great for Tennessee. Making more Tennesseans drive illegally is not as great.

New Tennessee Law Narrowly Defines Whiskey and May Exclude Moonshine Distilleries

By - April 22, 2013 | Alcoholic Beverage Law | Email Will Cheek

The moral of this story is, don’t mess with Jack. Daniels that is.

Late in the Legislative session, an amendment to a bill about storing booze was quietly introduced. The amendment sought to define “Tennessee Whiskey” in a way that would exclude Pritchard’s Distillery from calling its whiskey “Tennessee Whiskey.” Pritchard’s whiskey is not charcoal filtered through maple wood, which was a requirement under the proposed definition of “Tennessee Whiskey.”

Phil Pritchard had to come to Nashville to defend his livelihood. His local legislator’s support was key, and his whiskey was exempted from the new definition.

The official summary of the new law is here.

Problem is, under the new law, most newly-approved purveyors of moonshine cannot use “Tennessee Whiskey” to describe their product. Moonshine is often described as “Tennessee White Whiskey.” The new law does not specifically reference “Tennessee White Whiskey,” but distilleries are understandably concerned. The penalty for unauthorized labeling of “Tennessee Whiskey” is a one year suspension of the distillery license.

We think the new law favors a local giant at the expense of Tennessee entrepreneurs. Distilleries are proliferating under recently-adopted liquor laws that allow distilling in scores of towns and counties where whiskey making had been outlawed since prohibition.

Tennessee moonshine is an industry trendsetter, with chic citified canteens featuring moonshine cocktails. Even Jack has joined the moonshine craze, with its Unaged Tennessee Rye.

George Jones may know Tennessee Whiskey better than anyone:

Honey, You’re as smooth as Tennessee Whiskey
You’re as sweet as strawberry wine
You’re as warm as a glass of brandy
And I stay stoned on your love all the time 

Tennessee Revamps Laws for Distilling Whiskey

By - April 16, 2013 | Alcoholic Beverage Law | Email Will Cheek

A couple of years ago, Tennessee dramatically changed liquor laws for distilleries, paving the way for whiskey making in places like Nashville and Gatlinburg. This year, Tennessee is changing distillery laws again, and as we read the law, making Tennessee more friendly to making hooch, legally that is.

Rob Pinson, go to man for distilleries on the Bonelaw Alcoholic Beverage Team, has been following the bill as it wound its way through a particularly brutal political process. The bill has cleared the House and is up for vote tomorrow in the Senate. The official history and language of the bill is here.

There may be minor changes, but this is how Rob reads the new law:

  • The following locations are eligible for a distillery:
    • Cities and counties where it was allowed under 2009 law
    • Pigeon Forge and Sevierville (as premier type tourists resorts)
    • Incorporated cities with double referendum
    • Unincorporated parts of counties (and cities with a population of less than 1,000 persons located in such counties) that have LBD approved somewhere in the county and retail package stores approved somewhere in the county
    • Locations on the National Register of Historic Places where liquor has been distilled in the past (meant to include a location in Greenbrier)
  • Any city or county described above (except Greenbrier) has 45 days to opt out of this legislation.  After 45 days, any person can write a letter of intent to distill to such city or county and the city or county is prohibited from opting out until such letter is withdrawn or the resulting application is denied.  Any city or county can opt back into eligibility at any time.
  • Persons who have manufacturing licenses granted or applications pending with either the TTB or TABC by July 1, 2013, may be allowed to receive a distilling license as long as they were eligible to apply under now current law.  If such licenses are issued, then the jurisdictions in which these licensees are located are eligible for other manufacturers.  These persons do not appear to be subject to the opt-out provisions above.
  • High alcohol beer laws do not appear to be impacted
  • Previously issued distillery licenses by TABC are ratified.
  • Distilleries will automatically be allowed to have retail sales and offer tours and samples without need for local approval and separate liquor license; size restrictions on sales; expanded hours of sale; Sunday sales from noon-7pm; can sell at retail anywhere on premises where permitted by federal law; must involve wholesale in retail sales and local inspection fees must be collected and paid by wholesaler for such retail sales
  • If the city or county has distance requirements for beer, then such distance requirements shall apply to the building which contains the distillery’s retail business with regard to churches and schools, measured building-to-building.

Vicki Schmidt OK from Boston Marathon

By - April 15, 2013 | Alcoholic Beverage Law | Email Will Cheek

Many in the licensing realm know that Bone paralegal extraordinaire, Vicki Schmidt, was thrilled to qualify for the Boston Marathon. Vicki was so excited to run the celebrated race – a huge milestone for a dedicated runner.

Vicki is shaken, but not harmed from today’s attack. Vicki was about 400 meters from the explosions – less than two minutes from the finish line.

Vicki’s Beau, Phil Kirkpatrick, was not as fortunate, but Phil was not seriously injured. Phil was waiting near the finish line to snap a photo of Vicki achieving a major milestone.

Vicki reported this afternoon: “We are okay. I was within 400 meters of the explosion and they stopped me and others. We saw the smoke. I thought I had heard fireworks. Phil was near the explosion to take my picture and he got blown down with other people. Unfortunately he can’t hear in his right ear. It’s really a tragic experience. We are very shaken. Thanks for all your texts, calls, etc.”

Our thoughts and prayers go out to Vicki, Phil and all the participants and spectators at the marathon.

Tennessee Beer Lovers Victorious

By - April 12, 2013 | Alcoholic Beverage Law | Email Will Cheek

This week, the Tennessee legislature passed a tax law that will be a big boost for craft and high end beer in Tennessee. Unbeknownst to most, beer in Tennessee has the highest tax rate in the U.S.

The way taxes are imposed, the tax rate is higher on better brews than cheap swill. You pay higher taxes for quality suds than PBR.

Tennessee has a beer tax that is based on the price of beer. Most sin taxes are based on the amount of alcohol sold, so that cheap beer and expensive beer have the same tax rate. Sin taxes are designed to moderate consumption of alcohol. The Tennessee tax system makes it cheaper to drink cheap beer, which can encourage binge drinking.

Reminds us of a classic drinking song, thought to have originated on Royal Navy ships:

A bushel of malt, a barrel of hops, you stir it with a stick,
The kind of lubrication to make your engine tick.
Forty pints of wallop a day will keep away the quacks.
It’s only eight pence ha’p’ny a pot and one and six in tax
One, two, three, four, five

The current beer tax is particularly hard on microbreweries, which typically sell beer at higher prices than mainstream suds. The existing tax makes local craft beer even more expensive. We suspect that the proliferation of local Tennessee breweries was a critical catalyst to the change in taxation.

The new tax system does not mean that the price for beer will suddenly decrease, but over time, the change will lead to lower taxes for better beer.

Nashville Welcomes Out of Town Ownership of Liquor Stores

By - April 06, 2013 | Alcoholic Beverage Law | Email Will Cheek

Nashville Tennessee has eliminated its local residency requirement for retail package stores. The change in the law opens the door to out of town and even out of state liquor store owners.

Previously, no one that resided outside of Nashville could own a liquor store in Nashville. A large part of the local application process was demonstrating residency in Nashville.

We see the change as being good for existing Nashville package store owners. Although the local residency requirement was a barrier to entry in the business, it also limited the pool of potential purchasers, decreasing the sales price of existing liquor stores.

Eliminating the local residency requirement also allows out of towners to start a distillery with a tasting room in Nashville.

Here is the skinny on how it came to be.

Last summer, the Tennessee Attorney General declared that the state residency requirement for ownership of wholesale and retail liquor stores was unconstitutional. Click here to read the opinion. Although we are not aware of ABC approval of any out of state owners to date, we expect the ABC to follow the AG opinion and approve out of state owners.

Striking down the state residency requirement led us to ask Metro Nashville lawyers if the the local residency requirement was also unconstitutional. Metro lawyers agreed that the local residency requirement was potentially problematic, but thought it best that the Metro Council amend city laws to make the change.

On April 4, 2013, Mayor Karl Dean signed the law, Ordinance No. BL2013-388 (00900658).

We appreciate the assistance of Metro Legal and legal counsel to the Council on this matter.