BRADFORD, Judge.
Title 7.1 of the Indiana Code sets forth statutory restrictions relating to the sale of alcoholic beverages within the State of Indiana. Title 7.1 differentiates between the available permits for the sale of liquor, beer, and wine. With respect to the sale of wine, Title 7.1 further differentiates between various types of available permits. The General Assembly has crafted different rules and regulations for each of the available permits. These rules and regulations allow the permit holder to complete certain actions and restrict the permit holder from completing certain actions. The General Assembly has stated that the classifications and differentiations made in Title 7.1 are real and are substantially related to the accomplishment of the purposes of this title. As such, one can reasonably presume that the level of care undertaken by the General Assembly in differentiating between the rules and regulations that apply to the different types of permits indicates that the General Assembly intended for the rules and regulations relating to each individual type of permit to be read alone, and not for any differences between the rules and regulations relating to the different types of permits to be harmonized with each other upon review.
In the instant matter, Appellant-Respondent the Indiana Alcohol and Tobacco Commission (the "ATC") determined that Appellee-Petitioner Lebamoff Enterprises, Inc. ("Lebamoff"), which holds a liquor dealer's permit, had violated the applicable rules and regulations relating to the home delivery of wine. Lebamoff sought judicial review of the ATC's interpretation in the trial court which, upon review, held in favor of Lebamoff. The ATC appealed. Concluding that the ATC's interpretation of the applicable rules and regulations was reasonable and did not amount to an improper exercise of the ATC's rulemaking function, we reinstate and affirm the ATC's final order.
Our decision in the parties' prior appeal of the matter to this court provides the following:
Lebamoff Enterprises, Inc. v. Ind. Alcohol & Tobacco Comm'n, 987 N.E.2d 525, 526-27 (Ind.Ct.App.2013).
On February 29, 2012, Lebamoff filed a petition for judicial review of the ATC's final order. In its petition for judicial review, Lebamoff argued that the ATC's interpretation of Indiana Code section 7.1-3-10-7 was unreasonable. On March 28, 2012, the ATC filed a response to Lebamoff's petition in which the ATC argued that the issues raised by Lebamoff were barred by the doctrines of res judicata, collateral estoppel, and judicial estoppel.
On April 10, 2012, the ATC filed a request for the trial court to dismiss the case for failure to file the administrative record. The trial court granted the ATC's motion on September 20, 2012. Lebamoff appealed, and, on April 26, 2013, we concluded that although Lebamoff did not meet the requirements for filing an agency record that are set forth in the Administrative Orders and Procedures Act ("AOPA"), the materials submitted with the petition were sufficient for judicial review of the legal question at issue. Id. at 531. We then remanded the matter to the trial court for further proceedings. Id.
On January 23, 2014, the ATC filed a brief in opposition to Lebamoff's petition for judicial review. Lebamoff responded to the ATC's brief in opposition on February 7, 2014. On July 8, 2014, the trial court issued an order in which it found that the ATC's interpretation of Indiana Code 7.1-3-10-7(c) was incorrect and that the ATC's final order amounted to an improper attempt to exercise the ATC's rulemaking function. This appeal follows.
On appeal, the ATC contends that, in reversing its decision, the trial court erroneously determined that its interpretation of the relevant statutory language was unreasonable. In support, the ATC argues that the relevant statutory language — which it claims does not allow for wine sold by Lebamoff to be delivered to a customer's residence by a common carrier — is unambiguous and allows for only one reasonable interpretation. The ATC also contends that the trial court erroneously determined that its order reflected an improper attempt to create an agency rule rather than an administrative adjudication.
LTV Steel Co. v. Griffin, 730 N.E.2d 1251, 1257 (Ind.2000). "The party seeking judicial review bears the burden to demonstrate that the agency's action is invalid." Pendleton v. McCarty, 747 N.E.2d 56, 61 (Ind.Ct.App.2001) (citing Ind.Code § 4-21-5-5-14(a)).
A review of an administrative agency's decision at the trial court level "is not intended to be a trial de novo, but rather the court simply analyzes the record as a whole to determine whether the administrative findings are supported by substantial evidence." Whirlpool Corp. v. Vanderburgh Cnty.-City of Evansville Human Relations Comm'n, 875 N.E.2d 751, 759 (Ind.Ct.App.2007) (citing Amoco Oil Co. v. Comm'r of Labor, 726 N.E.2d 869, 872 (Ind.Ct.App.2000)). A party may appeal a trial court's determination of the propriety of the administrative agency's decision pursuant to the rules governing civil appeals. See Ind.Code § 4-21.5-5-16. "When reviewing an administrative agency's decision, appellate courts stand in the same position as the trial court." Pendleton, 747 N.E.2d at 61 (citing Amoco, 726 N.E.2d at 872).
An appellate court "may not substitute [its] judgment on factual matters for that of the agency and are bound by the agency's findings of fact if [the findings] are supported by substantial evidence." Whirlpool, 875 N.E.2d at 759 (citing Ind. Dep't of Natural Res., Law Enforcement Div. v. Cobb, 832 N.E.2d 585, 590 (Ind.Ct.App.2005)).
Id. However, "[a]n interpretation of a statute by an administrative agency charged with the duty of enforcing the statute is entitled to great weight, unless this interpretation would be inconsistent with the statute itself." LTV Steel, 730 N.E.2d at 1257; State Emps. Appeals Comm'n v. Barclay, 695 N.E.2d 957, 959-60 (Ind.Ct. App.1998).
As is stated above, Title 7.1 of the Indiana Code sets forth statutory restrictions relating to the sale of alcohol within the State of Indiana. Title 7.1 applies to the commercial manufacturing, bottling, selling, bartering, importing, transporting, delivering, furnishing, or possessing of alcohol and alcoholic beverages. Ind.Code § 7.1-1-2-2. The following are the general purposes of Title 7.1:
Ind.Code § 7.1-1-1-1.
Title 7.1 differentiates between the available permits for the sale of liquor, beer, and wine. As is stated above, with respect to the sale of wine,
The ATC may issue a liquor dealer's permit to a person,
Ind.Code § 7.1-3-10-7(c) (emphasis added).
The ATC may issue a wine dealer's permit to a person who desires to sell wine or flavored malt beverages for consumption off the licensed premises. Ind. Code § 7.1-3-15-1. However, "[t]he commission may issue a wine dealer's permit only to the following: (a) A person who is the holder of a beer dealer's permit; or, (b) A person who is the holder of a liquor dealer's permit." Ind.Code § 7.1-3-15-2. The holder of a wine dealer's permit "shall be entitled to sell wine for consumption off the licensed premises only and not by the drink." Ind.Code § 7.1-3-15-3(a).
"A wine dealer shall be entitled to sell wine in permissible containers in a quantity of not more than three (3) standard cases, as determined under the rules of the commission, in a single transaction." Ind.Code § 7.1-3-15-3(b). "However, a wine dealer who is licensed under [Indiana Code section] 7.1-3-10-4 may possess wine and sell it at retail in its original package to a customer only for consumption off the licensed premises." Id. Furthermore, "a wine dealer who is licensed under [Indiana Code section] 7.1-3-10-4 may deliver wine only in permissible containers to a customer's residence, office, or designated location." Ind.Code § 7.1-3-15-3(c). "This delivery may only be performed by the permit holder or an employee who holds an employee permit." Id. (emphasis added). "The permit holder shall maintain a written record of each delivery for at least one (1) year that shows the customer's name, location of delivery, and quantity sold." Id.
"A person located within Indiana or outside Indiana that wants to sell and ship wine directly to a consumer must be the holder of a direct wine seller's permit and comply with this chapter." Ind.Code § 7.1-3-26-5.
Ind.Code § 7.1-3-26-7.
A seller may sell and ship wine directly only to a consumer who meets all of the following requirements:
Ind.Code § 7.1-3-26-6(a).
Accordingly, a direct wine seller's permit allows a seller to sell and ship wine to a consumer by receiving and filling orders that the consumer transmits by electronic or other means if all of the following conditions are satisfied before the sale or by the times set forth as follows:
Ind.Code § 7.1-3-26-9.
A wine shipment purchased under this chapter must be delivered to:
Ind.Code § 7.1-3-26-13.
"The commission may issue a carrier's alcoholic permit to a person who is a carrier upon a showing of the reliability and responsibility of the carrier and the propriety of issuing the permit." Ind. Code § 7.1-3-18-1. Indiana Code section 7.1-1-3-8 defines a "carrier" as
(Footnote omitted).
"A carrier's alcoholic permit shall be required only for, and be applicable to, the movement, conveyance, importation and transportation of alcohol and alcoholic beverages on a public highway in this state." Ind.Code § 7.1-3-18-2. "A carrier's alcoholic permit shall not be required when the conveyance, movement, importation, or transportation is conducted by means of cars or trains operated by a railroad of any type over fixed rails." Id. "A carrier shall be required to apply for and obtain a carrier's alcoholic permit before he may haul, convey, transport, or import alcoholic beverages on a public highway of this state or crossing a boundary of it." Ind.Code § 7.1-3-18-3.
"The commission may issue an employee's permit to a person who desires to act as: (1) a clerk in a package liquor store; (2) an employee who serves wine at a farm winery; or (3) a bartender, waiter, waitress, or manager in a retail establishment, excepting dining car and boat employees." Ind.Code § 7.1-3-18-9(a). "A permit authorized by this section is conditioned upon the compliance by the holder with reasonable rules relating to the permit which the commission may prescribe from time to time." Ind.Code § 7.1-3-18-9(b).
Ind.Code § 7.1-3-18-9(d).
Indiana Code section 7.1-3-1-17 provides that the "traffic and transportation
It is unlawful for an officer, agent, or employee of a common carrier to recklessly deliver: "(1) an alcoholic beverage to a person other than the person to whom it is consigned; (2) it without a written order by the consignee; or (3) it to a person when the alcoholic beverage has been consigned to a fictitious person or a person under a fictitious name." Ind.Code § 7.1-5-11-4(a). Further, it is unlawful for a person to present or tender for transportation to a carrier or a person acting or assuming to act for a carrier an alcoholic beverage:
Ind.Code § 7.1-5-11-8(a).
The ATC contends that the trial court erred in determining that its interpretation of Indiana Code section 7.1-3-10-7(c) was unreasonable. In raising this contention, the ATC argues that the relevant statutory language — which it claims does not allow for wine sold by Lebamoff to be delivered to a customer's residence by a common carrier — is unambiguous and allows for only one reasonable interpretation. For its part, Lebamoff contends that the trial court properly determined that the ATC's interpretation of the relevant statutory language was unreasonable. In raising this contention, Lebamoff argues for a broad interpretation of the meaning of the term "permit holder." Lebamoff also argues that the rules of statutory construction indicate that when Title 7.1 is read together in a harmonious fashion, the only reasonable interpretation would allow Lebamoff to ship wine to a customer's residence via common carrier.
Again, review of Title 7.1 of the Indiana Code clearly demonstrates that the General Assembly has taken great care to differentiate the types of permits available for individuals, partnerships, or corporations that produce and sell alcoholic beverages in Indiana. Each specific type of permit has its own rules and regulations. The fact that some rules and regulations are not commonly applied to all types of permits is evidence that the General Assembly intended to craft specific rules and regulations for each type of permit. Moreover, the language of Title 7.1 makes it clear that the General Assembly knew how to, and in fact did, specifically provide for delivery of wine via common carrier in situations where it intended to allow such delivery. See e.g., Ind.Code § 7.1-3-26-9 (providing that a direct wine seller may ship wine to customers via common carrier if certain requirements are met).
With respect to the delivery of wine by the holder of a liquor dealer's permit, Indiana Code section 7.1-3-10-7(c) specifically provides that a liquor dealer licensed under Indiana Code section 7.1-3-10-4
In Lebamoff Enterprises, Inc. et al. v. Huskey, 666 F.3d 455, 457 (7th Cir. 2012), the United States Court of Appeals for the Seventh Circuit interpreted Indiana Code section 7.1-3-15-3(c) to "forbid liquor stores to use motor carriers [such as UPS or FedEx] to deliver wine (also beer and liquor, Ind.Code §§ 7.1-3-5-3(d), 7.1-3-10-7(c) ...)[.]" In discussing Indiana Code section 7.1-3-15-3(c), the Seventh Circuit stated the following:
Lebamoff, 666 F.3d at 458-59. We find the Seventh Circuit's analysis to be persuasive and applicable to the instant matter.
In addition, we are unpersuaded by Lebamoff's argument that the General Assembly intended for the language of Indiana Code section 7.1-3-10-7(c) to be read in a broad enough fashion to include delivery by a common carrier, even if we assume that the common carrier is acting as an agent of the permit holder. The parties discuss the meaning of the term "permit holder" at length, with Lebamoff arguing that the term is equivalent to the term "permittee" and the ATC arguing for a more narrow construction. Indiana Code chapter 7.1-1-3 provides definitions that shall be applied throughout Title 7.1 unless the context clearly requires otherwise. Indiana Code section 7.1-1-3-29 defines the term "permit" as "a written authorization issued by the [ATC] entitling its holder to manufacture, rectify, distribute, transport, sell, or otherwise deal in alcoholic beverages, all as provided in this title." Indiana Code section 7.1-1-3-30 defines the term "permittee" as:
Upon reading the above-quoted language, one can reasonably infer that the General Assembly intended for the term "permittee" to be read in a broader fashion than the term "permit holder" because the definition for the term "permittee" explicitly includes not only a permit holder, but also an agent, servant, employee, or other person acting on behalf of the permit holder.
The express language of Indiana Code section 7.1-3-10-7(c) indicates that the General Assembly intended that a home delivery of wine under this section was limited to delivery by the permit holder, i.e., the owner, partner, or manager of the package liquor store, or an employee of the permit holder, so long as the employee holds an employee permit. This language does not appear to allow for delivery of the wine by any other individual who might be acting as an agent for the permit holder. If the General Assembly had intended for Indiana Code section 7.1-3-10-7(c) to allow for home delivery by a common carrier, it could have crafted the language of this section to specifically allow for such delivery as it did in Indiana Code section 7.1-3-26-9. See Ind.Code § 7.1-3-26-9 (allowing for home delivery of wine by the holder of a direct wine seller's permit via common carrier). We therefore conclude that the ATC's interpretation of Indiana Code section 7.1-3-10-7(c) was reasonable.
It is undisputed that "[a]n administrative agency must follow the procedures outlined for it and the law which establishes the agency; an administrative agency can have no more or less power than the statute creating it grants." Ind. Air Pollution Control Bd. v. City of Richmond, 457 N.E.2d 204, 206 (Ind.1983) (citing Gordon v. Review Bd. of Ind. Emp't Sec., 426 N.E.2d 1364 (Ind.Ct.App.1981)). On appeal, the ATC also contends that the trial court erroneously determined that its order reflected an improper attempt to create an agency rule rather than an administrative adjudication. Conversely, Lebamoff contends that the trial court's determination that the ATC's order reflected an improper attempt to create an agency rule was proper because the ATC failed to follow the necessary procedures for completing its rulemaking function.
Indiana Code section 4-22-2-3(b) defines a "rule" as "the whole or any part of an agency statement of general applicability that: (1) has or is designed to have the effect of law; and (2) implements, interprets, or prescribes: (A) law or policy; or (B) the organization, procedure, or practice requirements of an agency." Indiana Code section 4-22-2-3(c) defines a "rulemaking action" as "the process of formulating or adopting a rule." "The term does not include an agency action." Ind. Code § 4-22-2-3(c). An agency must follow certain procedures when engaging in a rulemaking action.
Id. at 1375.
Upon review, we conclude that the ATC's final order aims to retrospectively determine whether six specific acts that were alleged to have been committed by Lebamoff amounted to violations of the applicable statutory authority. The record demonstrates that the ATC conducted an investigation, collected evidence, and made related findings based off of the information learned during the investigation. In order to make these findings, the ATC was
Lebamoff relies on this court's opinion in Miller Brewing Company v. Bartholemew County Beverage Company, Inc., 674 N.E.2d 193 (Ind.Ct.App.1996), trans. denied, in support of its claim that the trial court properly determined that the ATC's final order reflected an improper attempt to create an agency rule without following the applicable rule making procedures. In Miller Brewing Company, we were faced with the broad question of whether a change in the price promotion and volume discount allowance reimbursement programs — which provided significantly higher rates of reimbursement for sales completed within a distributor's area of primary responsibility ("APR") — violated Indiana law. Specifically, the parties argued as to whether the changes constituted an unlawful restriction of the sale of beer in violation of 905 IAC 1-28-1 ("Rule 28"). 674 N.E.2d at 197-99. In making their arguments, the parties discussed a prior decision of the LABC, the predecessor to the ATC, which prescribed a twelve percent limit on the inter- and intra-APR price discount differentials. Id. at 202. On appeal, we concluded as follows:
Id.
Unlike the prior decision of the IABC that was discussed in Miller Brewing Company, the ATC's interpretation of Indiana Code section 7.1-3-10-7(c) did not operate as a new broad rule going forward, but rather was an interpretation of what we believe to be unambiguous existing statutory language. As we stated above, the interpretation was necessary to retrospectively determine whether the specific alleged violations that were at issue were in fact violations under the law. For this reason, we find our prior decision in Miller Brewing Company to be distinguishable from the instant matter.
Further, although Lebamoff argues that the ATC has changed its enforcement of Indiana Code section 7.1-3-10-7(c) and is attempting to promulgate a rule that implements a new interpretation of Indiana Code section 7.1-3-10-7(c), the record is devoid of any evidence that the ATC has actually changed its enforcement of this section. Lebamoff attempts to support this argument by its claim that it has been shipping wine to customer's residence via common carrier for approximately thirty years. In issuing its final order, however, the ATC indicated that while Lebamoff may have been using this method to ship wine to customer's residences, the ATC was not aware of Lebamoff's practice in this regard until it became aware of the six violations of Indiana Code section 7.1-3-10-7(c) that are at issue in the instant appeal. Because Lebamoff has failed to provide evidence that the interpretation of Indiana Code section 7.1-3-10-7(c) represents
Applying only the provisions relating to a liquor dealer's permit, we conclude that the ATC's interpretation of the relevant statutory authority was reasonable. We further conclude that the ATC's order did not reflect an improper attempt to create an agency rule, but rather was a proper exercise of the ATC's adjudicatory function. As such, we reinstate and affirm the ATC's final order.
The judgment of the trial court is reversed and the matter remanded to the trial court with instructions.
NAJAM, J., and MATHIAS, J., concur.
Villegas, 832 N.E.2d at 608 n. 13.
