Winner, LTD v. Pabst Brewing

Frederick P. Winner, LTD v. Pabst Brewing Company, Case No. 1882, September Term
2019. Opinion filed on January 29, 2021, by Berger, J.

MARYLAND BEER FRANCHISE FAIR DEALING ACT - SUCCESSOR BEER
MANUFACTURER - CHANGE IN OWNERSHIP AND AT CORPORATE
GRANDPARENT LEVEL - CHANGE IN CORPORATE STRUCTURE

The Maryland Beer Franchise Fair Dealing Act protects beer distributors by generally
prohibiting not for cause terminations of distributorships by beer manufacturers. A
“successor beer manufacturer” may terminate a distributorship under certain circumstances
but is required to remunerate the terminated distributor. A change in the corporate structure
and a change in ownership at a beer manufacturer’s corporate grandparent level did not
render the entity a “successor beer manufacturer” under the statute when the entity with
the right to sell, distribute, or import the brands of beer remained the same, and, therefore,
was not replaced.
Circuit Court for Baltimore County
Case No. 03-C-15-004824

REPORTED

IN THE COURT OF SPECIAL APPEALS

OF MARYLAND

No. 1882

September Term, 2019
_____________________________________

FREDERICK P. WINNER, LTD

v.

PABST BREWING COMPANY
_____________________________________

Kehoe,
Berger,
Reed,

JJ.
_____________________________________

Opinion by Berger, J.
_____________________________________

Filed: January 29, 2021

Pursuant to Maryland Uniform Electronic Legal Materials Act
(§§ 10-1601 et seq. of the State Government Article) this document
is authentic.

Suzanne Johnson
2021-01-29 13:18-05:00

Suzanne C. Johnson, Clerk
 This is the second time this case has been before us on appeal. This appeal arises

from the termination by Pabst Brewing Company, Inc. (“Pabst Brewing”) of distribution

rights that it had previously granted to beer distributor Frederick P. Winner, Ltd.

(“Winner”). After Pabst Brewing came under new ownership in 2014, it terminated

Winner’s distributorship. Winner filed suit against Pabst Brewing in the Circuit Court for

Baltimore County, alleging, inter alia, that the termination of Winner’s distribution rights

violated the Maryland Beer Franchise Fair Dealing Act (“BFFDA”). 1 Winner

subsequently filed an amended complaint in the circuit court. Pabst Brewing moved to

strike the amended complaint, and the circuit court granted Pabst Brewing’s motion to

strike. On appeal, we vacated the trial court’s order striking Winner’s amended complaint

and remanded for further proceedings. On remand, the circuit court granted Pabst

Brewing’s motion for summary judgment and denied Winner’s motion for partial summary

judgment. Winner again appealed.

In this appeal, Winner presents four questions for our review. 2 We shall address

only the following single issue because it is dispositive of the appeal:

1
At the time Pabst Brewing terminated Winner’s distribution rights, the BFFDA
was codified at Md. Code, (1957, 2011 Repl. Vol.), Article 2B, § 17-101 et seq. (black
volume). Effective July 1, 2016, the BFFDA was recodified without substantive change at
Md. Code (2016), § 5-101 et. seq. of the Alcoholic Beverages Article (red volume) (“AB”).
The parties cite the prior code references in their briefs, but, in this opinion, we shall cite
the current code sections.
2
The questions, as presented by Pabst Brewing, are:

1. Whether Pabst [Brewing] may terminate Winner’s
distribution rights without cause, where Md. Code, Art.
 Whether the circuit court erred by determining that Pabst
Brewing and its parent and grandparent companies satisfied the
definition of “successor beer manufacturer” set forth in the
BFFDA and, accordingly, that Pabst Brewing’s termination of
Winner’s distributorship was permitted as a matter of law.

As we shall explain, we shall reverse the judgment of the circuit court and remand for

further proceedings.

FACTS AND PROCEEDINGS

We previously set forth the relevant underlying facts in Frederick P. Winner, Ltd. v.

Pabst Brewing Co., No. 1165, Sept. Term 2016 (filed Nov. 21, 2017) (unreported opinion),

as follows:

Factual Circumstances

On April 30, 2014, Winner entered into a distributorship
agreement (“2014 Agreement”) with Pabst [Brewing], a
supplier of malt beverages operating in Maryland as a non-

2B, § 17-103 prohibits the termination of a beer
distributor without cause?

2. Whether Pabst [Brewing] may terminate Winner’s
distribution rights where no entity has “replace[d Pabst
Brewing] with the right to sell, distribute, or import” the
Pabst [Brewing] brands in Maryland, as required under
Md. Code, Art. 2B, § 21-103?

3. Whether Pabst [Brewing] may terminate Winner’s
distribution rights without first paying to Winner the
fair market value of those distribution rights, as required
by Md. Code, Art. 2B, § 21-103?

4. Whether the Circuit Court erred in granting summary
judgment in favor of Pabst [Brewing], where Pabst
[Brewing] is not entitled to judgment as a matter of law
and there exist disputes of material fact?

2
 resident dealer. Under the 2014 Agreement, Winner had the
right to sell twenty-two brands of Pabst [Brewing] products.
The 2014 Agreement supplanted a previous distributorship
agreement that Pabst had made with an earlier incarnation of
Winner on January 31, 1994 (“1994 Agreement”). 3

When the parties entered into the 2014 Agreement,
Pabst [Brewing] was a Delaware corporation and a wholly-
owned subsidiary of Pabst Holdings Inc., which was, in turn, a
wholly-owned subsidiary of Pabst Corporate Holdings, Inc.
On November 13, 2014, Pabst [Brewing] became a Delaware
limited liability company. On the same day, Pabst Corporate
Holdings, Inc. sold its interest in Pabst Holdings, Inc. to Blue
Ribbon, LLC. In the wake of the acquisition, Pabst [Brewing]
replaced all of its directors and officers.

On March 9, 2015, Pabst [Brewing] informed Winner
that it was terminating Winner’s distribution rights effective
May 8, 2015. In Pabst [Brewing]’s view, Pabst [Brewing] had
become a “successor beer manufacturer” as defined by the
BFFDA and was, therefore, entitled to terminate its agreement
with Winner. In response, Winner’s attorney sent a letter to
Pabst [Brewing] asserting that Pabst [Brewing] was not a
“successor beer manufacturer” and that, consequently, Pabst
[Brewing] had no legal right to terminate the 2014 Agreement.
Despite Winner’s protest, Pabst [Brewing] refused to rescind
its termination letter.

Winner, supra, slip op. at 3-4.

In its brief, Pabst Brewing provided a helpful chart illustrating the change in the

Pabst Brewing Corporate Structure, which we have reproduced below:

3
The current incarnation of Winner is the result of a merger between Frederick P.
Winner, Ltd. and MMA Beverage Inc. that occurred on April 28, 2014. Although this
change in corporate form was apparently the catalyst for the 2014 Agreement between
Winner and Pabst [Brewing], it is not relevant to our resolution of the case. [(Footnote in
original.)]

3
 Pabst Ownership Structure April 2014

Pabst Corporate Holdings, Inc.

Pabst Holdings, Inc.

Pabst Brewing Company

Pabst Ownership Structure November 13, 2014

Blue Ribbon, LLC

Pabst Holdings, Inc.

Pabst Brewing Company

We previously set forth much of the relevant procedural history of this case in our

previous unreported opinion in this case as follows:

Procedural History

On May 4, 2015, Winner filed a complaint in the Circuit
Court of Baltimore County asserting two causes of action: (1)
an action for declaratory judgment; and (2) an action for breach
of contract. The Initial Complaint sought the following forms
of relief: (a) a declaration that Pabst [Brewing] had no basis to
terminate Winner’s franchise; (b) a permanent injunction
prohibiting Pabst [Brewing] from terminating Winner’s
distributorship; (c) an order preliminarily and permanently
enjoining Pabst [Brewing] from contracting with other
distributors for Winner’s territories; (d) an order preliminarily
and permanently enjoining Pabst [Brewing] from interrupting
delivery of Pabst [Brewing] products to Winner, and (e) an
award of damages Winner sustained as a result of Pabst
[Brewing]’s violations of the BFFDA.

4
 Winner’s Initial Complaint, however, contained a few
mistakes. Although Winner’s relationship with Pabst
[Brewing] was governed by the 2014 Agreement, the Initial
Complaint referred to the 1994 Agreement as the basis for
Winner’s claims. The Initial Complaint did not explicitly
mention the 2014 Agreement at all, although it contained
language consistent with an ongoing contractual relationship.
Winner also attached the 1994 Agreement, rather than the 2014
Agreement, to the Initial Complaint.

On June 19, 2015, Pabst [Brewing] notified Winner that
it was terminating product deliveries to Winner effective
July 24, 2015, at which point the successor distributors would
take over distribution of the Pabst [Brewing] brands. On July
21, 2015, the circuit court issued a scheduling order. Under the
scheduling order, discovery was to be closed by . . . January 9,
2016, and all motions (excluding motions in limine), were to
be filed on or before January 24, 2016.

On August 3, 2015, Pabst [Brewing] sent a letter to
Winner reiterating that Winner’s distribution rights had been
terminated and that henceforth its brands could only be
distributed by the successor distributors. On August 4, 2015,
Winner filed a request for a temporary restraining order
(“TRO”) against Pabst [Brewing]. The circuit court denied the
request. Thereafter, Pabst [Brewing] completed the
termination of Winner’s rights and entered into distribution
agreements with seven local distributors.

On January 21, 2016, Winner filed the Amended
Complaint without leave of the circuit court. The Amended
Complaint left the basic claims of the Initial Complaint intact.
It corrected the Initial Complaint, however, by referring to the
2014 Agreement as the basis for Winner’s contractual claims.
The Amended Complaint also anticipated a [potential] finding
that Pabst [Brewing] was, indeed, a “successor beer
manufacturer,” arguing that such a finding would actually
entitle Winner to an award of the fair market value of the
distribution rights. Finally, the Amended Complaint revised
the request for injunctive relief by seeking an order requiring
Pabst [Brewing] to reinstate Winner and terminate the
successor distributors.

5
 On February 4, 2016, Pabst [Brewing] filed a motion to
strike the Amended Complaint. On January 27, 2016, Winner
filed a motion for partial summary judgment. The same day,
Pabst [Brewing] filed its own motion for summary judgment.
On March 3, 2016, the clerk of the circuit court issued a notice
setting a trial date for October 17, 2016.

On April 26, 2016, the circuit court entertained a
hearing on the open motions. Thereafter, on June 28, 2016, the
Circuit Court for Baltimore County issued a Memorandum
Opinion on the parties’ motions. The circuit court granted
Pabst [Brewing]’s motion to strike the Amended Complaint on
the grounds that allowing it to stand would result in prejudice
to Pabst [Brewing]. The circuit court then granted Pabst
[Brewing]’s motion for summary judgment, finding that the
Initial Complaint’s request for declaratory judgment was moot
and that the contractual claim failed because the 1994
Agreement was no longer in force. Although the circuit court
had stricken the Amended Complaint, it nonetheless proceeded
to address Pabst [Brewing]’s arguments concerning the
Amended Complaint. Finally, the circuit court considered
Winner’s motion for partial summary judgment, which it
understood to be based on the contract claim in the Amended
Complaint. The Circuit Court, siding with Pabst [Brewing] on
the merits, denied Winner’s motion for partial summary
judgment.

Winner, supra, slip op. at 4-6.

Winner appealed to this Court. On appeal, we vacated the trial court’s order striking

Winner’s amended complaint and remanded for further proceedings. On remand, Winner

filed a Second Amended Complaint on January 16, 2018. Count I of the Second Amended

Complaint claimed a violation of the BFFDA and sought an injunction reinstating Winner’s

distribution rights as well as damages “including, but not limited to, the loss of the value

of the . . . distributorship rights and a loss [of] the value of . . . Winner’s enterprise.” Count

II of the Second Amended Complaint alleged a breach of contract and sought monetary

6
damages. Winner moved for partial summary judgment on the Second Amended

Complaint on February 6, 2018. Winner also produced supplemental interrogatory

responses providing calculations of damages including the fair market value of Winner’s

distribution rights, as well as details regarding how the termination of the distribution rights

resulted in additional negative financial consequences for Winner. Pabst Brewing filed its

own Motion for Summary Judgment on August 7, 2019.

On November 22, 2019, the circuit court entered summary judgment in favor of

Pabst Brewing and denied Winner’s motion for partial summary judgment. The circuit

court found that Pabst Brewing’s parent company, Blue Ribbon, was a successor beer

manufacturer, and, therefore, that Pabst Brewing’s not-for-cause termination of Winner’s

distribution rights was permitted as a matter of law. The circuit court found that Winner

would have been entitled to an award of the fair market value of its distribution rights but

concluded that Winner’s request for a fair market value award was time-barred. The circuit

court additionally found that Pabst Brewing’s termination of Winner’s distribution rights

did not constitute a breach of contract as a matter of law due to Pabst Brewing’s status as

a successor beer manufacturer. Winner appealed.

Additional facts shall be addressed as necessitated by our discussion of the issues

on appeal.

STANDARD OF REVIEW

The entry of summary judgment is governed by Maryland Rule 2-501, which

provides:

7
 The court shall enter judgment in favor of or against the
moving party if the motion and response show that there is no
genuine dispute as to any material fact and that the party in
whose favor judgment is entered is entitled to judgment as a
matter of law.

Md. Rule 2-501(f).

The Court of Appeals has described the standard of review to be applied by appellate

courts reviewing summary judgment determinations as follows:

On review of an order granting summary judgment, our
analysis “begins with the determination [of] whether a genuine
dispute of material fact exists; only in the absence of such a
dispute will we review questions of law.” D’Aoust v.
Diamond, 424 Md. 549, 574, 36 A.3d 941, 955 (2012) (quoting
Appiah v. Hall, 416 Md. 533, 546, 7 A.3d 536, 544 (2010));
O’Connor v. Balt. Cnty., 382 Md. 102, 110, 854 A.2d 1191,
1196 (2004). If no genuine dispute of material fact exists, this
Court determines “whether the Circuit Court correctly entered
summary judgment as a matter of law.” Anderson v. Council
of Unit Owners of the Gables on Tuckerman Condo., 404 Md.
560, 571, 948 A.2d 11, 18 (2008) (citations omitted).

Thus, “[t]he standard of review of a trial court’s grant of a
motion for summary judgment on the law is de novo, that is,
whether the trial court’s legal conclusions were legally
correct.” D’Aoust, 424 Md. at 574, 36 A.3d at 955.

Koste v. Town of Oxford, 431 Md. 14, 24-25 (2013).

This case involves the interpretation of a Maryland statute. “The interpretation of a

statute is a question of law that [Maryland appellate courts] review[] de novo.” Johnson v.

State, 467 Md. 362, 371 (2020). The Court of Appeals has recently reiterated the

well-established principles courts apply when interpreting statutes as follows:

“This Court provides judicial deference to the policy
decisions enacted into law by the General Assembly. We
assume that the legislature’s intent is expressed in the statutory

8
language and thus our statutory interpretation focuses
primarily on the language of the statute to determine the
purpose and intent of the General Assembly.” Blackstone v.
Sharma, 461 Md. 87, 113, 191 A.3d 1188 (2018) (quoting
Phillips v. State, 451 Md. 180, 196, 152 A.3d 712 (2017)).

The statutory construction analysis begins “with the
plain language of the statute, and ordinary, popular
understanding of the English language dictates interpretation
of its terminology.” Id. (quoting Schreyer v. Chaplain, 416
Md. 94, 101, 5 A.3d 1054 (2010)). We read “the statute as a
whole to ensure that no word, clause, sentence or phrase is
rendered surplusage, superfluous, meaningless or nugatory.”
Phillips, 451 Md. at 196-97, 152 A.3d 712 (quoting Douglas v.
State, 423 Md. 156, 178, 31 A.3d 250 (2011)).

“We, however, do not read statutory language in a
vacuum, nor do we confine strictly our interpretation of a
statute’s plain language to the isolated section alone.” Wash.
Gas Light Co. v. Md. Pub. Serv. Comm’n, 460 Md. 667, 685,
191 A.3d 460 (2018) (quoting Lockshin v. Semsker, 412 Md.
257, 275, 987 A.2d 18 (2010)). The plain language “must be
viewed within the context of the statutory scheme to which it
belongs, considering the purpose, aim or policy of the
Legislature in enacting the statute.” State v. Johnson, 415 Md.
413, 421, 2 A.3d 368 (2010) (quoting Lockshin, 412 Md. at
276, 987 A.2d 18). Our search for legislative intent
contemplates “the consequences resulting from one
construction rather than another.” Blaine v. Blaine, 336 Md.
49, 69, 646 A.2d 413 (1994) (citing Kaczorowski v. City of
Balt., 309 Md. 505, 513, 525 A.2d 628 (1987)).

“We presume that the Legislature intends its enactments
to operate together as a consistent and harmonious body of law,
and, thus, we seek to reconcile and harmonize the parts of a
statute, to the extent possible consistent with the statute’s
object and scope.” Johnson, 415 Md. at 421-22, 2 A.3d 368
(quoting Lockshin, 412 Md. at 276, 987 A.2d 18). When the
“words of a statute are ambiguous and subject to more than one
reasonable interpretation, or where the words are clear and
unambiguous when viewed in isolation, but become
ambiguous when read as a part of a larger statutory scheme, a
court must resolve the ambiguity by searching for legislative

9
 intent in other indicia[.]” State v. Bey, 452 Md. 255, 266, 156
A.3d 873 (2017) (quoting Johnson, 415 Md. at 422, 2 A.3d
368); cf. Blaine, 336 Md. at 64, 646 A.2d 413 (“Even where
the language of a statute is plain and unambiguous, we may
look elsewhere to divine legislative intent; the plain meaning
rule is not rigid and does not require us to read legislative
provisions in rote fashion and in isolation.”) (citing Motor
Vehicle Admin. v. Shrader, 324 Md. 454, 463, 597 A.2d 939
(1991)). Absent ambiguity in the text of the statute, “it is our
duty to interpret the law as written and apply its plain meaning
to the facts before us.” In re S.K., 466 Md. 31, 54, 215 A.3d
300 (2019).

Johnson v. State, 467 Md. 362, 371-73 (2020).

DISCUSSION

The issue before us in this appeal is quite narrow. We must determine whether

Pabst Brewing and/or its parent or grandparent companies constitute a “successor beer

manufacturer” under the relevant statute. The Maryland Beer Franchise Fair Dealing Act

(“BFFDA”) was enacted in 1974 with the stated purposes of “foster[ing] and promot[ing]

temperance in the consumption of beer” and “promot[ing] respect for and obedience to the

laws that control the distribution and sale of beer.” AB § 5-103(a)(1). 4 One way in which

the BFFDA operates to protect distributors is by limiting the circumstances under which a

beer manufacturer may terminate a distributorship and by generally prohibiting

4
The General Assembly expressly recognized that legislation was “necessary to
accomplish this policy to eliminate the undue stimulation of sales of beer in the State by
beer manufacturers that induce or coerce, or attempt to induce or coerce, beer distributors
to act detrimentally to the orderly and lawful distribution of beer by (1) threatened or actual
termination of the beer manufacturer and beer distributor relationship, directly or
indirectly; (2) the establishment of dual beer distributors of a brand or brands of beer in a
sales territory presently served by a beer distributor; or (3) the sale of the same brand or
brands of beer in one sales territory by more than one franchisee.” AB § 5-103(b).
10
not-for-cause terminations of distributorships. AB §§ 5-107 & 5-108. The statute provides

that “[n]otwithstanding the terms of a beer franchise agreement, a franchisor may not

terminate or refuse to continue or renew a beer franchise agreement, or cause a franchisee

to resign from a beer franchise agreement, without good cause.” AB § 5-108(b)(ii).

Section 5-201 of the Alcoholic Beverages Article addresses the obligations of a

“successor beer manufacturer.” It is this section that is at the center of this appeal. Pabst

Brewing asserts that its grandparent company, Blue Ribbon, is a “successor beer

manufacturer” that was permitted to terminate Winner’s distributorship; Winner asserts

that Pabst Brewing and Blue Ribbon do not satisfy the definition of “successor beer

manufacturer” and, therefore, Pabst Brewing was not permitted to terminate Winner’s

distributorship. Pursuant to AB § 5-201, a successor beer manufacturer may terminate an

agreement made between a distributor and the predecessor beer manufacturer but the

successor beer manufacturer “shall remunerate the beer wholesaler a sum equal to the fair

market value for the sale of the subject brand or brands of beer calculated from the date of

termination.”

The statute defines a beer manufacturer as “(i) a brewer, fermenter, processor,

bottler, or packager of beer located in or outside the State; or (ii) a person located in or

outside the State that enters into an agreement with a beer wholesaler doing business in the

State.” AB § 5-201(a)(3). The statute also defines the term “successor beer manufacturer,”

providing that “‘[s]uccessor beer manufacturer’ includes a person or license holder who

replaces a beer manufacturer with the right to sell, distribute, or import a brand of beer.”

AB § 5-201(a)(5).

11
 We briefly revisit the 2014 change in Pabst Brewing’s ownership structure before

delving into our analysis of whether the successor beer manufacturer statute is implicated

in this case. Winner and Pabst Brewing entered into the 2014 Agreement on April 30,

2014, which supplanted a prior agreement that had begun January 31, 1994. When the

parties entered into the 2014 Agreement, Pabst Brewing was a Delaware Corporation and

a wholly-owned subsidiary of Pabst Holdings, Inc., which was, in turn, a wholly-owned

subsidiary of Pabst Corporate Holdings, Inc., which was controlled by Dean Metropoulos.

As of November 13, 2014, Pabst Brewing became a Delaware limited liability company

and Pabst Corporate Holdings, Inc. sold its interest in Pabst Holdings, Inc. to Blue Ribbon,

LLC, which was controlled by Eugene Kashper. Following the acquisition, Pabst Brewing

replaced its directors and officers.

Barbara J. Hruby, Pabst Brewing’s Manager of Government Affairs, sent a letter to

the Comptroller of Maryland advising that “on November 13, 2014, a new group of

investors completed the purchase [of] all of the equity interests of Pabst Holdings, LLC,

the parent of Pabst Brewing Company, which holds the above license(s)/permit(s).” Pabst

Brewing advised that it would “file amended Brewer’s Notices and permits with the federal

Alcohol and Tobacco Tax and Trade Bureau” but explained that Pabst Brewing “will

continue to be the operating company doing business with the same Employer

Identification Number (EIN).” Pabst Brewing further explained:

For business tax planning purposes, the parties to the
transaction did elect to be treated as a limited liability company
immediately prior to closing, but no new entity was formed and
all basic business functions will continue uninterrupted. All
existing bonds will be updated with the information on the new

12
 owners. Pabst brands will remain the same after closing and
distribution to retailers will continue through the three-tier
system. While Pabst Brewing Company will have several new
senior executives in its management team, many veteran
executives and most of the other Pabst employees remain,
including members of the existing compliance team. We do
not anticipate immediate changes in day-to-day operations.

Pabst Brewing further provided the names of the new officers as well as the names of

former officers who had submitted their resignations. Following the change in ownership,

Winner received a letter terminating its distributorship. The letter was written on the

letterhead of “Pabst Brewing Company.” 5

We must determine whether the change in Pabst Brewing’s corporate structure in

2014, coupled with the change in ownership at Pabst Brewing’s grandparent level, rendered

Pabst Brewing and/or its parent and grandparent companies “successor beer

manufacturers” under the statute. Answering this question requires us to decide if Pabst

Brewing and/or Blue Ribbon is, pursuant to AB § 5-201(a)(5), “a person or license holder

who replaces a beer manufacturer with the right to sell, distribute, or import a brand of

beer.”

In explaining why it concluded that Blue Ribbon was a successor beer manufacturer,

the trial court emphasized that “Blue Ribbon, LLC now owns the Pabst brands and has

complete control over every aspect of Pabst’s business, and therefore, is a successor beer

Pabst Brewing explains that the termination was done on the “Pabst Brewing
5

Company” letterhead because “internally within Kashper’s beer enterprises, all the various
legal entities -- including Blue Ribbon LLC, other Blue Ribbon entities, Pabst Brewing
Company LLC, Pabst Holdings, LLC, and Falstaff Brewing Company, LLC -- are
colloquially referred to as ‘Pabst Brewing Company.’”
13
manufacturer.” As we shall explain, we disagree with the circuit court. First, we observe

that Eugene Kashper, the CEO of both Blue Ribbon, LLC and Pabst Brewing Company

LLC, submitted an affidavit declaring that Blue Ribbon “owns 100% of the shares of Pabst

Holdings, LLC, which owns the membership interests of Pabst Brewing Company, LLC.”

Contrary to the trial court’s finding that Blue Ribbon owns the Pabst Brewing brands, Mr.

Kashper stated in his affidavit that “Pabst Brewing Company LLC owns the Pabst brands

of beer.” Mr. Kashper maintained, however, that “[e]ffectively, through Blue Ribbon,

LLC, I am the owner of the Pabst brands.” Furthermore, Pabst Brewing’s former General

Counsel, Michael J. Kramer, explained that Blue Ribbon’s purchase of Pabst Holdings,

Inc. “was structured as a sale of stock and not a sale of assets” and did not “involve the sale

of any brands belonging to [Pabst Brewing],” nor did the transaction include “any

assignments of [Pabst Brewing’s] trademarks, or any assignments of contracts related to

[Pabst Brewing’s] brands.”

In our view, the trial court overemphasized the ownership of Pabst Brewing’s parent

company and Mr. Kashper’s control of Pabst Brewing through his ownership interest in

Blue Ribbon. The definition of successor beer manufacturer does not refer to the control

of a company, but rather provides that a successor beer manufacturer is “a person or license

holder who replaces a beer manufacturer with the right to sell, distribute, or import a brand

of beer.” Pabst Brewing urges us to adopt a “control-based” test and conclude that because

Blue Ribbon’s purchase of Pabst Holdings, Inc. served to change the entity in control of

Pabst Brewing, Blue Ribbon is therefore a successor beer manufacturer.

14
 Pabst Brewing asserts that other courts have adopted a control-based test and that

we should similarly do so. In particular, Pabst Brewing points to the decision of the United

States Court of Appeals for the Sixth Circuit in Tri County Wholesale Distributors v. Labatt

USA Operating Co., 828 F.3d 421 (6th Cir. 2016). Like the case before us in this appeal,

Tri County required a determination of whether a supplier satisfied a definition of a

successor beer manufacturer, and, therefore, whether the supplier was permitted to

terminate franchise agreements. 828 F.3d at 423. In Tri County, the appellate court

employed a “functional, control-based approach” and reasoned that the supplier satisfied

the successor beer manufacturer definition after a parent company acquired a holding

company that, “through a series of . . . intermediate nesting holding companies,” owned

and controlled Labatt USA Operating. Id. at 424-27.

Critically, however, the language of the statute at issue in Tri County was far broader

than the statute at issue in this appeal. The relevant Ohio statute at issue in Tri County

provided that a “successor manufacturer” may terminate a distributor when “a successor

manufacturer acquires all or substantially all of the stock or assets of another

manufacturer through merger or acquisition.” Id. at 429 (quoting Ohio Rev. Code §

1333.85(d)) (emphasis supplied). 6 This is a much broader definition than the definition of

successor beer manufacturer under Maryland law, which recognized a successor as one

6
Pabst Brewing also directs our attention to, Bellas Co. v. Pabst Brewing Co., No.
15-873 (S.D. Ohio Mar. 27, 2017), an unpublished memorandum opinion from the United
States District Court for the Southern District of Ohio in which the trial court construed the
same Ohio successor manufacturer statute. In our view, as we explained with respect to
the Tri County case, the significantly different language of the Ohio statute renders Pabst
Brewing’s reliance upon these cases misplaced.
15
who “replaces a beer manufacturer with the right to sell, distribute, or import a brand of

beer.” AB § 5-201(a)(5). Indeed, if the General Assembly had intended the determination

of whether an entity is a successor beer manufacturer to be focused upon the control of the

company and/or the acquisition of stock or assets, the legislature could have included such

language in the statute. Instead, the General Assembly focused upon whether a beer

manufacturer was “replaced” with an entity that has “the right to sell, distribute, or import

a brand of beer.” This is the clear and unambiguous language that we must apply to the

undisputed facts presented in this case.

Pabst Brewing asserts that although the Maryland statute is, in Pabst Brewing’s

words, “not a model of clarity,” a reading of the relevant statutory language compels the

conclusion that Pabst Brewing, under the direction of Blue Ribbon, was permitted to

terminate Winner’s distributorship. We are not persuaded. The Maryland statute, unlike

the Ohio statute discussed in Tri County, focuses on whether “a person or license holder”

had “replace[d] a beer manufacturer with the right to sell, distribute, or import a brand

of beer.” AB § 5-201(a)(5) (emphasis supplied). Pabst Brewing expressly informed the

Maryland Comptroller that although “investors completed the purchase all of the equity

interests [sic] of Pabst Holdings, LLC,” Pabst Brewing would “continue to be the operating

company doing business with the same Employer Identification Number (EIN).” Pabst

Brewing further informed the Comptroller that “the parties to the transaction did elect to

be treated as a limited liability company immediately prior to closing, but no new entity

was formed and all basic business functions [would] continue uninterrupted.”

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 Furthermore, the undisputed evidence demonstrates that Blue Ribbon’s purchase of

Pabst Holdings, Inc. was “a sale of stock and not a sale of assets” and did not “involve the

sale of any brands belonging to [Pabst Brewing],” nor did the transaction include “any

assignments of [Pabst Brewing’s] trademarks, or any assignments of contracts related to

[Pabst Brewing’s] brands.” In our view, the sale of the equity interests in Pabst Brewing’s

parent company when Blue Ribbon purchased Pabst Holdings, Inc. from Pabst Corporate

Holdings, Inc., did not constitute a “replacement” of Pabst Brewing, nor did the entity that

had the “right to sell, distribute, or import a brand of beer” change. Prior to the 2014

transaction, Pabst Brewing, structured as a corporation, had the right to sell, distribute, or

import certain brands of beer. Following the transaction, Pabst Brewing, structured as a

limited liability corporation but operating under the same EIN and having reassured the

Comptroller that no new entity had been formed, had the right to sell, distribute, or import

the same brands of beer. A change in ownership and control occurred two rungs up the

corporate chain, but the entity with the right to sell, distribute, or import the brands of beer

remained the same, and, therefore, was not replaced.

This conclusion is compelled by the relevant statutory language, but further, the

result is consistent with general well-settled principles of corporate law. “In Maryland, . . .

a corporation is a distinct legal entity, separate and apart from its stockholders.’” Gosain v.

Cty. Council of Prince George’s Cty., 420 Md. 197, 210 (2011) (quoting Dean v. Pinder,

312 Md. 154, 164 (1988)). Consistent with this principle, when determining whether an

entity meets the definition of “successor beer manufacturer,” we shall not blur the

distinction between Pabst Brewing Company, LLC itself and its parent and grandparent

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companies. See id. (expressly rejecting a petitioner’s attempts “to blur the distinction

between the corporations and the individuals owning the corporations”).

For these reasons, we hold that the circuit court erred when it concluded that Blue

Ribbon satisfied the statutory definition of “successor beer manufacturer.” AB

§ 5-201(a)(5). As we have explained, neither Pabst Brewing nor its parent or grandparent

entities satisfy the definition of AB § 5-201(a)(5). The circuit court’s grant of summary

judgment in favor of Pabst Brewing as to both counts was premised upon this incorrect

conclusion. Accordingly, we hold the circuit court erred in granting summary judgment in

favor of Pabst Brewing.

Having determined that the circuit court incorrectly granted summary judgment in

favor of Pabst Brewing, we shall remand this case for further proceedings. Because, as we

have explained, this case does not involve a successor beer manufacturer, we shall not

address the issue of whether the circuit court erred in connection with its determination that

Winner’s statutory claim for a fair market value award was time-barred. The statutory fair

market value compensation provision set forth in AB § 5-201(d) is no longer applicable in

light of our determination that this case does not involve a successor beer manufacturer.

Furthermore, we shall not address additional matters not expressly decided by the

circuit court. Specifically, we shall not address any issues relating to whether Pabst

Brewing was permitted to terminate Winner’s distributorship for cause, nor will we address

whether Winner presented sufficient evidence to substantiate a claim for damages. We

also take no position as to what, if any, remedy is permitted under the law when a beer

manufacturer who does not satisfy the definition of “successor beer manufacturer”

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terminates a distributor. The circuit court did not make any determinations regarding these

issues and we will not, in the first instance, address them on appeal.

JUDGMENT OF THE CIRCUIT COURT
FOR BALTIMORE COUNTY REVERSED.
CASE REMANDED FOR FURTHER
PROCEEDINGS CONSISTENT WITH
THIS OPINION. COSTS TO BE PAID BY
THE APPELLEE.

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