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Law Firm of the Month in Attorney at Law Magazine


Taylor, Feil, Harper, Lumsden & Hess, PC
Alcohol Beverage Practice and More

By Jan Jaben-Eilon

Attorney at Law Magazine June 2013 Attorney at Law Magazine June 2013 (3324 KB)

Although a major part of Taylor Feil Harper Lumsden & Hess’ law practice is the alcoholic beverage industry, the fact that the Atlanta law firm is full service means that it can provide all aspects of legal work both to its alcohol beverage clients as well as other clients.

“Some firms are boutiques that focus solely on the alcohol industry,” says Otto Feil. “But when industry clients have matters that involve such things as a major transaction, a complex trial, a real estate issue or an employment problem, it really helps to have lawyers who have many years of experience in these areas that is not limited to the alcohol regulatory field. We think this broad experience allows us to give much better advice and representation to our alcohol industry clients.”

According to David Lumsden, who heads the firm’s transactional practice, “We know how to help start-up businesses with organizing an appropriate entity and raising capital. We also have years of experience in connection with the representation of established businesses of all sizes in various matters, including buy-sell agreements, contracts, leases, acquisitions and employment agreements. While the alcohol regulatory aspects are important, it is also crucial for the transactional lawyer to have experience with all of the other business and legal aspects of such transactions. Our diverse experience allows us to provide the complete package.”

Still, the heart of the firm’s law practice, and what put it on the national map, is the alcohol beverage industry. It was in 1979 when John Taylor and Otto Feil left a large Atlanta law firm to found their own firm. Several of its alcohol beverage clients followed them. “The liquor regulatory industry is a small group of folks. It’s not something you get into casually,” says Feil. “Folks who got involved early developed an expertise.”

It was in the 1980s when that expertise took the law firm to new heights, aft er it won a string of victories in court and administrative proceedings against some of the largest companies in the industry, who turned around and retained the firm to represent them. Georgia, which was the home of some of the biggest wholesalers who later expanded across the country, had an excise tax system that taxed Georgia manufacturers differently from manufacturers based outside the state. “We said this was unconstitutional,” says Feil. The 21st Amendment, which repealed the 18th Amendment’s prohibition of alcohol sales, changed the relationship between the federal government and the states and gave more power to the states.

Nonetheless, the firm won its case on behalf of national suppliers - and helped establish its national reputation - when the U.S. Supreme Court held that Georgia’s excise tax scheme was subject to the commerce clause of the U.S. Constitution. The firm was subsequently involved in litigation under the U.S. antitrust laws concerning regulatory issues of national prominence to the industry.

The question of whether the commerce clause does or does not trump the 21st Amendment continues to challenge beverage alcohol clients and industry attorneys. This question of states’ rights over federal rights, of course, transcends this significant industry.

The firm, meanwhile, became known for its relationships with top state and local regulators across the country, cementing its reputation for expertise in the alcoholic beverage industry. The firm has clients from all three sectors of the industry: suppliers, wholesalers and retailers. The firm has represented distilleries, breweries, wineries, importers and brokers. In the retail segment, the firm provides representation for companies ranging from small independent package stores to national big box retailers and grocery chains, as well as licensing and regulatory representation for hotels, restaurants, bars and other retail outlets. As its practice in this industry expanded, partners Max Hess and David Lumsden joined the firm in the early 1990s. The firm currently has 13 lawyers, eight of whom work on matters for alcohol industry clients.

The alcoholic beverage industry is specialized and complex, Feil explains. There are licensing and regulatory filings on several levels, including national, state, and city or county. Licensee qualification requirements can vary from one county or city to the next. And when an alcohol beverage business wants to establish a new outlet, the business must strictly adhere to real estate zoning laws; alcohol cannot be sold within so many feet from schools, for instance. As Hess notes, this information must be known even before any real estate is purchased.

“I’m working on a big hotel deal right now and the entire closing rests on its liquor license. This is not unusual. While our lawyers are experts at handling the everyday regulatory and licensing requirements throughout Georgia and in other states, we also have decades of experience in handling the most sophisticated matters, whether they involve complex litigation or the closing of a multi-million dollar sale or purchase of a business.”

Because the attorneys have been focused on this industry for so long, they have developed relationships with regulators on many different levels, which is helpful for clients. “This is a very technical industry. Most states have a system to protect wholesalers from their suppliers, but Georgia has one of the strongest franchise systems in the country,” says Hess. “We have one of the most developed franchise and three-tier systems in the country. That’s why some of the biggest wholesalers got started here and then expanded across the nation. Because of the history of the alcohol industry in this country, there are several administrative agencies that tightly police it. There are lots of subtleties and you get to know the people,” he says. To complicate matters even more, some of the regulatory practices aren’t even written down, Feil adds.

The firm has recently been involved in litigation across the country focused on the interface between the commerce clause and state regulatory systems. “We are doing national work that is cutting edge and gets us recognition from various national organizations,” adds Feil. Hess points out that there were court cases in other states that dealt with abuse of the three-tier system in favor of in-state industries. The U.S. Supreme Court struck that down in 2005, “opening up a wave of constitutional and antitrust litigation across the United States.” Although the alcohol industry is a major component of the firm’s overall practice, it has always represented diverse clients in areas such as corporate transactions, business litigation, real estate and employment law. The firm views this diversity as a major strength that enhances its ability to provide first-rate service to its alcohol beverage industry clients.

“One of our strengths,” Feil says, is that “when we litigate for our alcohol beverage clients, we bring our expertise gained from years of litigating other issues, such as complex business cases. So we know how to cross examine a witness, for instance, and we know the judges.” Lumsden, for example, applies his merger and acquisition knowledge to the alcohol industry as well as other industries. Aft er all, the alcoholic beverage industry is the “bread and butter of our practice,” sums up Feil.

Taylor, Feil, Harper, Lumsden & Hess, P.C.
3340 Peachtree Road, N.E. Suite 250
Atlanta, Georgia 30326-1045
Phone: 404-214-1200

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