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Tuesday, July 23, 2019

Craft brewer fights for lawsuit against feds, says gov't shutdown cost it thousands

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By Karen Kidd | Jul 1, 2019


| MorgueFile - DodgertonSkillhause

WASHINGTON (Legal Newsline) – A federal judge is mulling a D.C.-based craft brewer's request not to dismiss its case against the U.S. government over the most-recent shut down, saying future shutdowns will again stop labeling approval and restrict its free speech freedoms.

"It is best to deal with this matter now, rather than during the exigency of the next shutdown," Atlas Brew Works said in its memorandum and points filed in U.S. District Court for the District of Columbia. "The court can take time to reflect on the matter, and the government can weigh its response without an overhanging injunction. 

"Dismissing this case now will not make the issue go away. It will only serve to have this issue returned before the court at the outset of the next shutdown, needlessly wasting judicial and litigant resources."


U.S. District Court Judge Christopher R. Cooper | dcd.uscourts.gov

The case is assigned to U.S. District Court Judge Christopher R. Cooper, who last week also received an unopposed motion for time extension from U.S. Attorney General William Barr.

Atlas Brew Works filed its initial lawsuit against the federal government in January and its amended lawsuit in March, claiming the government shutdown prevented shipment of its new beers, costing the company thousands of dollars.

In its 47-page memorandum and points filed June 10 in opposition to the federal government's third motion to dismiss the case, filed in May. Atlas Brew Works maintained the government's "enforcement policy is indefensible."

The government's arguments in its latest motion to dismiss, based on standing, mootness and prudential defenses, "lack merit," the memorandum and points said.

"Government shutdowns happen," the memorandum and points said. "Appropriation lapses occur, on average, every two years in the modern budget era, and the Treasury Department has already shut down the label approval process twice in Atlas’s short history."

Atlas Brew Works' problems began a couple of days before the most-recent government shutdown when the craft beer company applied for a new keg label for its new beer, The Precious One, in time to begin shipping two months later. Atlas Brew Works already had label approval for the beer in cans but needed it for kegs and also was asking for label approval for four other beers.

Federal law requires label pre-approval from the Alcohol and Tobacco Tax and Trade Bureau (TTB) for any that enters interstate commerce under the certificate of label approval (COLA) rule of the Federal Alcohol Administration Act.

TTB was one of many government agencies shuttered during the shutdown and because TTB wasn't around to approve labels or process permits, label pre-approval didn't happen.

Industry insiders warned that the government shutdown that began Dec. 22 was causing problems for small and independent craft brewers with label approval, taxes and applying for loans.

"Breweries should be prepared for the labeling and permit process to take longer than previously estimated," the Brewers Association said at the time. "Also, be aware that when the government is funded again there could be a backlog. Breweries should plan accordingly."

The 35-day shutdown - the longest in U.S. history - was prompted largely by a spat between Democrats, then poised to take over the House following wins in the November midterm elections, and the Trump administration over roughly $5 billion for a new border wall. About 420,000 federal employees worked without pay and many more were furloughed until the shutdown ended Jan. 25.

Fears currently are building about a possible government shutdown this fall and Atlas Brew Works' memorandum and points mentions how the possible future shutdown will harm the business in its "perpetual need of COLA approval." Atlas Brew Works asked the court to intervene.

"The next shutdown of the TTB's COLA process will therefore again silence Atlas' speech and imperil its business, unless this court declares that prosecuting Atlas for publishing without a COLA, when COLAs become unavailable, violates Atlas' First Amendment rights and the rights of its customers," the memorandum and points said.

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