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E.F. Transit, Inc. v. Indiana Alcohol and Tobacco Commission

United States District Court, S.D. Indiana, Indianapolis Division

March 9, 2015

E.F. TRANSIT, INC., Plaintiff,


MARK J. DINSMORE, Magistrate Judge.

This matter comes before the Court on Plaintiff's Motion to Compel. [Dkt. 91.] For the reasons set forth below, the Court GRANTS Plaintiff's motion.

I. Background

On December 6, 2014, E.F. Transit, Inc. ("Plaintiff") sued the Indiana Alcohol and Tobacco Commission, alleging that the Commission's interpretation and enforcement of Indiana state law was inconsistent with and therefore preempted by federal law. [ See Dkt. 1 (Pl.'s Compl.).]

The allegations arise from Indiana's regulation of the state's alcoholic beverage industry. Under Indiana law, a state-issued permit is required for any business to serve as a manufacturer, wholesaler, or retailer of alcoholic beverages, including beer, wine, and liquor. See Ind. Code §§ 7.1-3-1-1 et seq. In addition, Indiana prohibits a private beer wholesaler from holding an interest in a liquor permit, and vice versa. See, e.g., Ind. Code Ann. § 7.1-5-9-3 ("It is unlawful for the holder of a brewer's or beer wholesaler's permit to have an interest in a liquor permit of any type under this title.").

Plaintiff in this case is a trucking company with operations based at a warehouse in Indiana. [Dkt. 1 ¶ 9.] Pursuant to Indiana law, Plaintiff is licensed to transport and deliver all varieties of alcoholic beverages, including beer, wine, and liquor. [ Id. ] Plaintiff shares common ownership with Monarch Beverage Company ("Monarch"), a state-licensed beer and wine wholesaler, and Plaintiff routinely transports Monarch's beer and wine to retailers across Indiana. [ Id. ¶ 27.] Plaintiff also subleases a portion of its warehouse to Monarch and allows Monarch to store its beer and wine in that location. [ Id. ¶ 28.]

In 2009, Plaintiff reached a tentative agreement to store and ship products for Indiana Wholesale Wine & Liquor Company ("IWWL"). [ Id. ¶ 31.] IWWL then applied to the Indiana Alcohol and Tobacco Commission ("Defendant" or "Commission") for permission to change the location of its warehouse to Plaintiff's Indiana location. [ Id. ¶¶ 31-33.] The Commission, however, allegedly rejected this application on the grounds that "allowing a liquor wholesaler (Indiana Wholesale) to share a warehouse with a beer wholesaler (Monarch) and its corporate sister (E.F. Transit) would create a prohibited joint interest in a beer and liquor wholesaler's permit." [ Id. ¶ 34.]

As a result, IWWL withdrew its application. [ Id. ¶ 35.] Plaintiff and IWWL then arranged to enter a more limited services agreement in which Plaintiff would ship IWWL's products without any change in the location of IWWL's warehouse. [ Id. ¶ 36.] Plaintiff asked the Commission for an advisory opinion giving advance approval to this arrangement, but the Commission declined to provide such approval. [ Id. ¶¶ 38-40.] Plaintiff and IWWL were thus unable to finalize their services agreement. [ Id. ¶¶ 41-43.]

Plaintiff then filed this lawsuit to challenge the Commission's actions. Plaintiff alleges that the Commission's interpretation of Indiana law is inconsistent with and therefore preempted by the Federal Aviation Administration Authorization Act ("FAAAA"). [ Id. ¶ 45-47.] That Act provides, inter alia, that a state "may not enact or enforce a law, regulation, or other provision having the force and effect of law related to a price, route, or service of any motor carrier... or any motor private carrier, broker, or freight forwarder with respect to the transportation of property." 49 U.S.C. § 14501. Plaintiff argues that the Commission's application of Indiana law violates this provision, and Plaintiff thus seeks an injunction prohibiting the Commission from enforcing the relevant Indiana laws against it. [ Id. at 12.]

The Commission answered Plaintiff's complaint on January 1, 2014. [Dkt. 18.] During discovery, a dispute developed over the Commission's decision to withhold certain documents on the basis of the attorney-client privilege, the deliberative process privilege, and the investigative privilege. [ See Dkt 91.] The parties were unable to resolve the dispute, [ see id. at 3 n.1], and Plaintiff filed the currently pending Motion to Compel on February 10, 2015. Plaintiff contends that the privilege that the Commission has asserted with respect to each document at issue either does not apply to the document or has been waived. [Dkt. 91 at 2.]

After Plaintiff filed its motion, the Commission produced many of the documents Plaintiff originally sought, [ see Dkt. 103 at 2 (Def.'s Resp.)], and Plaintiff then withdrew its motion with respect to the remaining documents for which Defendant asserted the deliberative process privilege. [Dkt. 105 at 17.] The only documents at issue were thus Bates Nos. 45458, 61198, 61274-75, 51903, 34986, 35163, and 38097, for which Defendant asserted the attorneyclient privilege [Dkt. 103 at 5-6, 8]; and the documents Bates Nos. 141203 through 141230, for which Defendant asserted the investigative privilege. [ Id. at 12.] Defendant then added document Bates No. 150279 to its privilege log and asserted that the investigative privilege applied to this document as well.

On March 6, 2015, the Court conducted a hearing to address the parties' arguments. The parties agreed that they had no remaining dispute regarding document Bates No. 34986. [Motion to Compel Hr'g, March 6, 2015 at 11:10.] Defendant also agreed to produce documents Bates Nos. 35163 and 38097 [Hr'g at 11:23]; document Bates No. 51903 [Hr'g at 11:31-32]; and document Bates No. 61198 [Hr'g at 11:35.] This left only documents Bates Nos. 45458, 61274-75, 141203 through 30, and 150279 at issue. The Court has reviewed these documents in camera and now addresses the parties' arguments.

II. Discussion

A party may obtain discovery regarding "any matter, not privileged, that is relevant to the claim or defense of any party." Fed.R.Civ.P. 26(b)(1). A party may also "move for an order compelling disclosure or discovery." Fed.R.Civ.P. 37(a)(1). The party resisting such a motion bears the burden to show why a particular discovery request is improper. See, e.g., Cunningham v. Smithkline Beecham, 255 F.R.D. 474, 478 (N.D. Ind. 2009). When the party resists on the basis of privilege, that party must demonstrate both that the privilege applies and that it has not been waived. See, e.g., Acosta v. Target ...

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