John Guadnola recently represented the Washington Beer & Wine Wholesalers Association in defending challenges brought by Costco to virtually all of Washington’s laws governing the distribution and sale of beer and wine at the distributor to retailer level.  Guadnola took the lead role in the litigation with respect to the antitrust issues, both at the trial court level and before the Ninth Circuit Court of Appeals.  In a major victory for the citizens of the State of Washington, the Ninth Circuit has ruled that all but one of the laws are valid exercises of the State’s rights to regulate alcoholic beverages and thus are free from preemption by the Sherman Act.  The Court of Appeals rejected Costco’s challenges to state laws requiring that a distributor charge the same price to every customer the distributor serves, prohibiting the extension of credit or volume discounts to distributors’ customers, requiring minimum markups, banning central warehousing by retailers, requiring delivered pricing to retailers, and prohibiting retailers from selling beer or wine to other retailers.  The only provision Costco was successful in challenging was the law requiring that distributors and manufacturers post and hold their prices.  The Ninth Circuit agreed that none of the other challenged laws are subject to preemption by the Sherman Act because they are the kind of “unilateral” restraints of trade that are within the power of the State to enact.