Antitrust Law Daily Wrap Up, TOP STORY—D. Nev.: Las Vegas liquor ordinance not subject to the Sherman Act, (Oct 10, 2014)

By Greg Hammond, J.D.

The owners of three souvenir and packaged liquor stores along the Fremont Street Experience in Las Vegas were unable to obtain a preliminary injunction against an ordinance restricting the sale of liquor. In denying the owners’ motion for a preliminary injunction, the federal district court in Las Vegas held that the companies failed to demonstrate that the ordinance at issue was subject to the Sherman Act (G&G Freemont, LLC v. City of Las Vegas, October 9, 2014, Mahan, J.).

G&G Fremont, LLC and Crazy Ely Western Village, LLC own and operate three souvenir and packaged liquor stores along the Fremont Street Experience. In an effort to reduce issues caused by high alcohol consumption near that area, the city passed ordinance number 6320, which: (1) applies to package liquor sellers adjacent to or on a pedestrian mall; (2) restricts the sale of single-serving alcoholic products, products with over 32 ounces, and products that have over eleven percent alcohol by volume; (3) places restrictions on window advertisements; and (4) requires sellers to post a sign disclosing that consumption of alcohol on the Fremont Street Experience is forbidden. The companies filed suit against the city and moved for preliminary injunction, alleging—in part—that the city’s ordinance violates Section 1 of the Sherman Act.

According to the court, “the city has the power to regulate liquor sales, and enforcement of the ordinances is not the type of conduct that the Sherman Act prohibits.” Although the plaintiffs argued that the Sherman Act preempts local laws that force competitors to violate the Sherman Act, the court found that—unlike this case—the case law the plaintiffs cited involved specific pricing systems that were imposed on sellers. Consequently, the court found that the plaintiffs failed to demonstrate that the ordinance at issue was subject to the Sherman Act, as municipal regulations are typically not. Because the plaintiffs failed to demonstrate a likelihood of success on their Sherman Act claims, the motion for preliminary injunction was denied.

The case number is 2:14-CV-1006 JCM (PAL).

Attorneys: Jeffrey F. Barr (Ashcraft & Barr LLP) for Crazy Ely Western Village, LLC, and G & G Fremont, LLC. Philip R. Byrnes, City Attorney's Office, for City of Las Vegas.

Companies: Crazy Ely Western Village, LLC; G & G Fremont, LLC

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