gmanpilot wrote:I'm sorry, but I have to defend ELU... I did check with my state regulatory agency and nothing has changed. There has been no indication that WW cannot ship to my and other similarly situated states. To stop doing so without a clear explanation to a loyal customer base is indefensible.
Of course they are going to say nothing has changed. Would you expect them to say, "Whoops, we've been doing it wrong for years?"
I can make a direct analogy to a field in which I have personal experience, and in which the stakes are much higher. In the early 1980's EPA wrote rules about when a large industrial facility needs to obtain an air emissions permit for changes and upgrades to the facility. After the kinks were worked out, the program proceeded for quite a few years, with everyone understanding how the rules were being interpreted, Then about 1995 EPA abruptly changed the interpretation of the rules, and began issuing multi-million dollar penalties to facilities for making changes without getting needed permits. EPA (to this day) maintains that nothing has changed. Even as they proceeded to penalize companies who had obtained written determinations that their changes did not require permits. Even despite the fact that the EPA personnel who wrote the rules stated that the way EPA was interpreting the rules conflicted with how the rules were written.
EPA's response essentially was the previous determination was issued incorrectly, that the companies should have known the determination was incorrect, and that they should not have relied on the determinations that were made by the agencies in response to requests for a determination about whether the rule applied.
In the world of regulation, those sorts of things are not changes. Nothing is different from before. If there is any issue it's simply that the previous decisions were in error. And you, permit holder, should have known that what we told you before was not correct.
The reality is that as an entity that operates subject to regulatory oversight, you cannot fully rely on guidance provided by a regulatory agency as to what their rules mean. Maybe if you get an opinion from the state Attorney General that might hold some weight - until the next AG came in and rescinded the previous determination.
WW is operating in a circumstance where one state agency has made a specific determination that certain language is to be applied in a specific manner and is ready to act in a certain manner. That automatically brings into question the situation for every other state that uses similar language in its rules.
That leaves WW in a situation of needing to make a risk-reward decision. And that is an individual decision. If I'm operating a three person wine distribution business as a C Corporation out of a rented garage, pulling $200k/year out of the operation and having less than $50k in fixed assets, I'm probably going to be pretty aggressive in my response to a situation such as this. I just don't have very much at stake and I'm generating a good income. If they come after me, I declare bankruptcy, shut the doors and give up my puny investment.
If you change that so that the line of business is 5% of sales, I have hundreds of millions dollars in assets, and could get a penalty that would easily exceed 10x my annual profits out of the business, I'm probably going to approach the situation differently.