Active: State court appeal filed to strike down unlawful brewery restrictions

Chuck Garrity is a longtime home brew hobbyist in New Jersey. Although he always enjoyed the beer-making process, his day job as an executive medical industry consultant paid the bills for more than 20 years. Everything changed for Chuck and many of his fellow home brewers in 2012, when the state legislature created a “limited brewery” license and empowered home brewers to turn their hobby into full-time jobs.

Under this license, limited breweries cannot sell food or operate a restaurant, but the generous 300,000-barrel-per-year production cap proved fruitful. By 2019, the Garden State boasted 130 limited breweries, including Chuck’s new venture, Death of the Fox Brewing Company.

Joined by his wife Kat, and a former neighbor, Dan Natkin, Chuck used a large chunk of retirement money he socked away during his consulting career to open Death of the Fox in the Philadelphia suburb of Clarksboro, New Jersey, in 2017. Chuck’s dream brewery, named for a historic Inn from colonial and Revolutionary War times, is also a coffee shop, featuring coffee beans from around the world that are roasted in-house.

As the business grew, Chuck gained community support as a vocal advocate for local small businesses and New Jersey’s craft brewery industry.

Then in 2019, with little warning or notice, the state’s Alcoholic Beverage Control agency (NJ ABC) issued a so-called “Special Ruling” for limited breweries that imposed a long list of severe restrictions. Food trucks were no longer allowed, for instance, and breweries could host no more than 25 special events per year. “Special events” include anything advertised beyond the brewery—trivia and fundraisers, for example. Live or DJ-spun music are also events—advertised or not. So are televised sports championships, which rope in the first rounds of any playoff series, meaning a brewery could blow through its yearly event limit in week one of the NCAA men’s basketball tournament.

The NJ ABC claims these restrictions will somehow “balance” competition between the state’s 130 fledgling microbreweries and the 6,000 established bars, restaurants, and liquor stores.

Calling breweries and other alcohol license-holders competitors is a stretch, however, as these breweries can sell only their own product. And no matter how popular a limited brewery becomes, it cannot sell more than its license allows.

These rules exist only to protect established businesses by hamstringing newcomers’ ability to thrive. But they are unlawful. For one, capping the number of “on-site special events” that may be advertised violates the First Amendment. State law also requires that rulemaking agencies follow proper notice-and-comment procedures when imposing new rules; they must also submit a proposed rule to the legislature. The NJ ABC did neither, which means the whole laundry list of rules imposed through the ABC’s Special Ruling are invalid

Represented at no charge by PLF, Chuck and Death of the Fox are fighting back against the agency’s unlawful rulemaking shortcut to stop the government from kneecapping some businesses to benefit others, to restore New Jersey microbrewers’ right to make and sell beer to patrons on their property, and to ensure accountability and transparency in government.

What’s At Stake?

  • The government cannot treat similar businesses differently without good reason. ABC’s Special Ruling is a transparent attempt to favor one kind of business—bars and restaurants—over another—craft breweries.
  • ABC failed to submit its rules for public notice and comment to the Legislature for review, which is required under New Jersey’s Administrative Procedure Act. Public notice is essential because it ensures transparency and accountability of government officials.

Case Timeline

September 21, 2022
September 21, 2022