FILE - Greenbush Brewery

Greenbush Brewery in Sawyer, Michigan

When Michigan government officials raided Greenbush Brewing Co. on June 19, seized wine and cider, and shut down their sales, owner Scott Sullivan was more than 750 miles away.

“Someone called me later, and said the liquor commission raided us, then asked to look around,” Sullivan said. “No one knew enough to tell them ‘No way’. People thought, ‘Oh, the liquor commission is here, we have to let them in the back’."

Greenbush Brewing has since filed a lawsuit against the Michigan Liquor Control Commission.

The seizure caused about $7,200 in lost revenue from products Greenbush can’t touch until the lawsuit concludes, according to court documents. The Fourth of July is the brewery’s busiest week of the year.

Sullivan said he thinks a potential violation that resulted in the raid stemmed from an issue with the bond and transfer process for wine, but the MLCC hasn’t officially ticketed him 22 days after raiding his store.

Sullivan said Greenbush had a small winemaker and microbrewery license before the raid.

State law changed last year to ease the bond and transfer process, but the MLCC has shut down other breweries over the bond and transfer process since last fall.

“It’s happened to several dozen other breweries before this,” Sullivan said. “I was just the first one to get fed up and sue.”

Sullivan joined with three other breweries to sue the MLCC “to clarify the law and actually adhere to statutes that are on the books and not be enforced arbitrarily.”

The parties claim the agency’s enforcement actions and revisions to state liquor code enacted last fall are unconstitutional, and that federal law supersedes state laws regarding the production and sale of alcohol. That’s why he said he filed the lawsuit in federal court.

“They had no warrant to do this,” Sullivan said.

Greenbush acquires wine and cider from Vander Mill Cidery through a bond and transfer process that requires both parties to have a small winemaker’s license.

Sullivan said they bought the small winemaker’s license because they’re a brewery – they focus on beer, but want to accommodate customers with other preferences.

Greenbush produces some of its own wine and cider, so it qualifies under new state law for bonded transfers, he said.

“They shot themselves in the foot because we pay taxes on this stuff and would have ran out and had to go to buy more, which means we would have had to pay more sales tax, so that’s lost revenue,” Sullivan said. “It’s classic government overreach.”

Plaintiffs say their businesses are being financially harmed because of MLCC actions and that the new law is unconstitutionally vague, leaving breweries open to “arbitrary and capricious” enforcement.

The MLCC has “no authority to regulate wine held under federal bond and no authority to seize federally bonded wine,” court documents state.

The producer requests the federal court issue a declaratory judgment that the federal law supersedes state law and asks the court to issue an injunction and temporary restraining order to restrict the MLCC from prohibiting federally bonded wine transfers. The company also requests damages, court costs, and attorney fees.

The MLCC said it was unable to comment on pending litigation.

*A previous version of this article called Vander Mill a Brewery. It's a Cidery

Staff Writer

Scott McClallen is a staff writer covering Michigan and Minnesota for The Center Square. A graduate of Hillsdale College, his work has appeared on Forbes.com and FEE.org. Previously, he worked as a financial analyst at Pepsi.