Wisconsin Supreme Court Eliminates Protections for Wine Dealers Under Wisconsin’s Fair Dealership Law

June 12, 2018

This week, the Supreme Court of Wisconsin issued a ruling that the Wisconsin Fair Dealership Law does not apply to wine distributors[i]and that distribution agreements relating to wine are not subject to the Fair Dealership Law.

The Fair Dealership Law regulates actions taken by “grantors,” usually manufacturers or suppliers, against protected “dealers,” usually wholesale or retail businesses. For example, the Fair Dealership Law provides in part that the terms of the dealership may not be changed or terminated unless the grantor has good cause. The law also provides the dealer an opportunity to cure the alleged deficiency that forms the basis of the good cause.

In this case, Winebow, a wine importer, abruptly terminated its relationship with Capitol-Husting and L’Eft Bank, wine distributors. The parties had no written agreement preventing Winebow from doing so. The wine distributors responded to Winebow that the Fair Dealership Law protections prevented Winebow from terminating the relationship without “good cause.”

In making its decision, the court considered the convoluted legislative history of the Fair Dealerhsip Law, especially legislative changes and a subsequent partial veto in 1999. Originally, the legislature amended the Fair Dealership Law to include distributors of “intoxicating liquors” as defined in Wis. Stat. ch. 125, which would have included wine distributors.  However, then-Governor Tommy Thompson used his partial veto power to revise the definition of intoxicating liquors. The court determined that the definition that remained after the veto excluded wine from “intoxicating liquors” and applies throughout the statute, thus excluding wine distributors from the protections of the Fair Dealership Law.

[i] Winebow, Inc., v. Capital Husting Co., Inc. and L’Eft Bank Wine Co. Limited. A copy of the decision can be found at: https://www.wicourts.gov/sc/opinion/DisplayDocument.pdf?content=pdf&seqNo=213844

 

For more information about "Wisconsin Supreme Court Eliminates Protections for Wine Dealers Under Wisconsin’s Fair Dealership Law," contact Robert C. Procter at rprocter@axley.com or 608.283.6762.