Cheers to Michael Madigan

How to build a thriving alcohol practice before last call

Published in 2019 Minnesota Super Lawyers — July 11, 2019

Call Michael Madigan the anti-Andrew Volstead.

In 1919, Volstead, a Minnesota congressman and chairman of the House Judiciary Committee, shepherded the Volstead Act, aka the National Prohibition Act, aka the 18th Amendment to the Constitution, through Congress. It was enacted “to prohibit intoxicating beverages” and “to regulate the manufacture, sale, or transport of intoxicating beverages.” Didn’t take. One hundred years later, Madigan is on the forefront of an industry still affected by the fallout of Prohibition.

“Alcohol has two amendments devoted to it,” says Madigan. “It’s the only product in our constitution that has a constitutional amendment devoted to it. The two amendments were the 18th Amendment, which implemented Prohibition, and the 21st Amendment, which repealed Prohibition. But it did something else: It made states the primary authority to regulate alcohol.”

Congress could have passed a law decreeing that the sale of alcohol was permissible everywhere, Madigan explains, but some states were unwilling to repeal Prohibition under those circumstances. A compromise was struck. “And that’s somewhat unique in our system,” Madigan says. “Because ordinarily if there’s a conflict between a federal law and a state law, the federal law [overrules], but that’s not necessarily true with respect to alcohol.”

Focusing on alcoholic beverage licensing and distribution, he represents the National Beer Wholesalers Association, the Minnesota Beer Wholesalers Association, and counsels companies on how to minimize risk and defends establishments that have received citations or are at risk of losing their licenses.

“Alcohol is different than potato chips or butter,” he says. “The Centers for Disease Control estimates that alcohol causes or contributes to over 88,000 deaths in this country a year, and the cost to our economy from excessive drinking is estimated to be somewhere north of $223 billion. So this is a product that needs to be regulated carefully, and local norms and standards with regard to alcohol differ. I mean, there are still states in this country that have dry counties.”

Madigan first uncorked his practice in 1986, when he litigated one of the first beer franchise termination cases in the state. These days, as a partner with Madigan Dahl & Harlan, he sometimes works on cases involving significant constitutional issues, such as a case in Tennessee that’s pending before the U.S. Supreme Court.

At issue is ”a rather odd statute,” Madigan says, requiring those seeking a retail alcohol license to have been a state resident for two years. This also applies to officers and shareholders, if a corporation is applying. Do states have the ability to impose those kinds of requirements on liquor licenses, or does such a restriction unconstitutionally discriminate against an out-of-state entity?

Madigan and his firm have submitted an amicus brief in support of the state’s authority to pass such a law under the 21st Amendment.

“The whole premise of alcohol regulation in this country is that it’s regulated primarily at either a state or a local level,” Madigan says. “Because what may be acceptable in Manhattan isn’t acceptable in rural Tennessee, or in Kansas, or in another state or community.”

Community is a big draw for Madigan—the alcohol industry, “due in large part to the regulatory structure,” he says, is one of the last bastions of family-owned businesses in America.

“There are a lot of benefits to that,” he says. “If the folks who are selling this product that has the potential to damage lives are rooted in the communities in which they sell, they’re more likely to be responsible.

“Obviously, there’s this dual nature of alcohol,” Madigan adds. “It enriches our social gatherings, our family gatherings, our sporting events, which is fun; but it does have this darker side. So it’s trying to find a balance.” 

Alcohol in Minnesota

  • As of 2016, more than 63 percent of adult Minnesotans say they drink alcohol
  • Minnesota sports more than 110 craft breweries
  • 190 cities in the state have municipal liquor stores
  • Minnesota was one of just 12 states still banning Sunday liquor sales before changing the law in July 2017
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