Court Of Appeal Agrees $280 Pizza Oven Is Not A "Thing Of Value"

• Published date: 19 August 2022
• Subject Matter: Litigation, Mediation & Arbitration, Trials & Appeals & Compensation
• Law Firm: Allen Matkins Leck Gamble Mallory & Natsis LLP
• Author: Mr Keith P. Bishop

Not too long ago, the Third District Court of Appeal held that a bumblebee is a fish. This week, the Third District Court of Appeal concluded that a pizza oven is not a "thing of value". Dep't of Alcoholic Beverage Control v. Alcoholic Beverage Control Appeals Bd.,2022 WL 3442549 (Cal. Ct. App. Aug. 17, 2022).

Why is the Department of Alcoholic Beverage Control concerned about whether a pizza oven is a "thing of value"? The Department has a rule which provides ". . . No licensee shall, directly or indirectly, give any premium, gift, free goods, or other thing of value in connection with the sale, distribution, or sale and distribution of alcoholic beverages, and no retailer shall, directly or indirectly, receive any premium, gift, free goods or other thing of value from a supplier of alcoholic beverages, except as authorized by this rule or the Alcoholic Beverage Control Act." 4 CCR Sec. 106. The rule implements California's statutory restrictions on so-called "tied houses". The legislature enacted tied house prohibitions in order to prevent manufacturers and wholesalers from gaining economic influence over retailers. Apparently, it was believed that permitting tied houses would result in a proliferation of bars and saloons and promote intemperance. See Actmedia v. Stroh, 830 F.2d 957, 960 n.2 (9th Cir. 1986) (quoting S. Rep. No. 1215, 74th Cong., 1st Sess. 2, 6-7 (1935).

The current case involved a promotion of "pizza month". Bogle Vineyards, Inc. purchased pizza ovens which were eventually placed in grocery store advertising displays. Bogle paid nearly $300 per oven and the particular oven at issue was displayed in an inoperable condition. The Department of Alcoholic Beverage Control charged Bogle with a violation of the tied house law and won its case before an administrative law judge...