Recently, the Eighth Circuit affirmed a ruling upholding Missouri’s liquor statute requiring a corporation that wants to obtain a wholesaler license for the sale of intoxicating liquor containing alcohol in excess of five percent to be a “resident corporation.” Pursuant to Missouri’s statute, to qualify as a “resident corporation” requires that, among other things, all officers and directors be residents of Missouri for the three years immediately prior to filing the application. Additionally, all resident stockholders must own at least sixty percent of all the financial interests in the business.
This week the Missouri House passed the proposed legislation that would modify the definition of a liquor franchise under Missouri law. Click here to read our previous posts on this potential modification to Missouri franchise law.
The bill that was passed this week by the House was not the existing bill pending (HB 759), but instead provisions were incorporated into another bill pertaining to home brewed liquors (SB 114). The amended SB 114 that was passed by the House would modify current Missouri franchise law to remove the trademark and community of interest in the marketing of goods or services requirements as to liquor wholesalers and suppliers, and expressly reject the holding in Missouri Beverage Co., Inc. v. Shelton Brothers, Inc. by the United States District Court for the Western District and the Eighth Circuit Court of Appeals and note that the law “was not correctly interpreted” in that case.
Last year, a related bill was passed to make these changes, but was vetoed by the Governor.
SB 114 (with amendments) is now pending in the Missouri Senate.
The Missouri legislature is again considering modifying the definition of a "franchise" under Missouri law. Specifically, with regard to alcohol wholesalers and suppliers, the modification would eliminate the requirement of a trade name, trademark, or service mark and a community of interest to be a franchise under Missouri law. The current bills follow the same attempt to amend Missouri law in 2012. The bills are Missouri Senate Bill 365 and Missouri House Bill 759.
For more information about the proposed bills, contact a member of Greensfelder's Franchise & Distribution Group.