                                In the

    United States Court of Appeals
                 For the Seventh Circuit
                      ____________________
No. 16-3641
E.F. TRANSIT, INC.,
                                                   Plaintiff-Appellant,
                                  v.

DAVID COOK, et al.,
                                                Defendants-Appellees.
                      ____________________
             Appeal from the United States District Court
      for the Southern District of Indiana, Indianapolis Division.
       No. 1:13-cv-01927-RLY-MJD — Richard L. Young, Judge.
                      ____________________

     ARGUED APRIL 10, 2017 — DECIDED JANUARY 2, 2018
                 ____________________

   Before EASTERBROOK, ROVNER, and SYKES, Circuit Judges.
    SYKES, Circuit Judge. E.F. Transit, Inc., is a motor carrier
licensed in the state of Indiana to transport beer, wine, and
liquor. In an effort to expand its business, E.F. Transit en-
tered into talks with Indiana Wholesale Wine & Liquor
Company, a liquor and wine wholesaler, to deliver its wares.
Twice the parties sought a regulatory green light from the
Indiana Alcohol and Tobacco Commission, the agency
tasked with enforcing Indiana’s alcoholic beverage laws.
2                                                 No. 16-3641

Twice the Commission noted concerns with the arrangement
under Indiana’s prohibited-interest laws, which require strict
separation of beer and liquor wholesaling. The obstacle was
that E.F. Transit shares the same ownership and manage-
ment as Monarch Beverage Company, Inc., a licensed beer
and wine wholesaler. Based on the overlap, E.F. Transit
might be deemed to hold an interest in Monarch’s beer
wholesaling permit, which might in turn block its venture
with Indiana Wholesale.
    The Commission never definitively ruled on the pro-
posed arrangement, but the regulatory cloud scuttled the
budding business relationship. E.F. Transit and Indiana
Wholesale broke off their plan. E.F. Transit then brought this
suit for declaratory judgment and injunctive relief, arguing
that enforcement of Indiana’s prohibited-interest statutes is
preempted by federal law. The district court dismissed the
claim as unripe based on the aborted business relationship
and regulatory uncertainty. E.F. Transit appealed.
    In the meantime, separate litigation moving through the
state courts was poised to resolve the predicate state-law
question: In light of their shared ownership and manage-
ment, does E.F. Transit hold an interest in Monarch’s beer
wholesaling permit under Indiana’s prohibited-interest
laws? While this appeal has been underway, the Indiana
Supreme Court delivered an affirmative answer, holding
that E.F. Transit and Monarch are “not just … two separate
entities conducting close business transactions” but are
“practically one in the same” under the prohibited-interest
laws. Ind. Alcohol & Tobacco Comm’n v. Spirited Sales, LLC,
79 N.E.3d 371, 379 (Ind. 2017).
No. 16-3641                                                   3

    That ruling—and the standing threat of prosecution—are
enough to remove any ripeness barrier to this suit.
E.F. Transit need not violate the law and expose itself to
punishment to raise its preemption claim. We reverse and
remand for further proceedings.
                        I. Background
    Indiana regulates alcohol distribution “along two dimen-
sion: three tiers of the distribution chain (producers, whole-
salers, and retailers) and three kinds of alcohol (beer, liquor,
and wine).” Monarch Beverage Co. v. Cook, 861 F.3d 678, 680
(7th Cir. 2017). The state regulatory scheme generally pro-
hibits permit holders in one tier of the distribution chain
from holding an interest in a permit in another tier. Id. And
state law also limits the issuance of permits within the distri-
bution tier by type of alcohol. Id. As relevant here, Indiana’s
prohibited-interest laws require the separation of beer and
liquor wholesaling by prohibiting the holder of an interest in
a beer permit from acquiring an interest in a liquor permit
and vice versa. IND. CODE §§ 7.1-5-9-3(b), -6(a). A violation is
punishable as a Class B misdemeanor. Id. §§ 7.1-5-9-3(c),
-6(b).
    E.F. Transit is an Indiana motor carrier engaged in the
business of warehousing and transporting beer, wine, and
liquor. Its largest customer is Monarch Beverage, a licensed
Indiana beer and wine wholesaler. E.F. Transit and Monarch
are closely related corporations: they have the same owners,
directors, CEO, address (Monarch leases warehouse space
from E.F. Transit), and even (for the most part) the same
workforce. But they are legally distinct as a matter of Indiana
corporate law.
4                                                 No. 16-3641

    In 2009 E.F. Transit entered into a tentative agreement to
provide transportation, warehouse, and delivery services for
Indiana Wholesale, a wine and liquor wholesaler. Under the
arrangement E.F. Transit would obtain alcohol products
from Indiana Wholesaler’s suppliers, transport the products
to its warehouse for storage and sorting, and package and
deliver the products to retailers and dealers—sometimes in
tandem with its Monarch deliveries if the destinations were
the same.
    In furtherance of the new venture, Indiana Wholesale
applied to the Commission to transfer its permit warehouse
location to E.F. Transit’s location, a regulatory prerequisite.
A staff attorney had preliminarily reviewed the proposal;
her quick-look assessment was positive, but the Commission
did not immediately approve the arrangement. After a delay
of six months, the Commission ordered a full investigation
and eventually issued a report identifying a possible viola-
tion of the state’s prohibited-interest laws. Specifically, the
Commission noted E.F. Transit’s common ownership with
Monarch and observed that although E.F. Transit was not
itself a beer wholesaler, it had an indirect interest in
Monarch’s beer wholesaling permit. That in turn could be an
impediment to the proposed relationship between
E.F. Transit and Indiana Wholesale. In light of the regulatory
skepticism, in 2010 Indiana Wholesale withdrew its applica-
tion without waiting for a formal decision from the Commis-
sion.
   In 2012 E.F. Transit and Indiana Wholesale tried again.
This time they proposed a narrower agreement. E.F. Transit
would transport and deliver products for Indiana Wholesale
in exchange for a flat, per-case fee. Unlike the previous
No. 16-3641                                                     5

agreement, E.F. Transit would not lease warehouse space to
Indiana Wholesale, though Monarch’s products would be
commingled with Indiana Wholesale’s on the warehouse
floor and in E.F. Transit’s delivery trucks. Although this new
agreement did not require regulatory clearance, Indiana
Wholesale conditioned its involvement on the Commission’s
approval.
    To satisfy that condition, E.F. Transit asked the Commis-
sion to bless the new arrangement. After another investiga-
tion, the Commission flagged the same potential violation of
the prohibited-interest statutes. In a letter to E.F. Transit, the
Commission’s chairman explained the concern about poten-
tial prohibited interests but stated that the Commission
would not give legal advice and advised E.F. Transit to
consult with an attorney.
   Indiana Wholesale construed the chairman’s letter as a
denial and withdrew from the agreement. E.F. Transit then
sued the Commission and its individual commissioners to
block enforcement of the prohibited-interest laws on
grounds of federal preemption. More specifically, the com-
plaint alleged that enforcement of the state law is preempted
by the Federal Aviation Administration Authorization Act of
1994 (“FAAAA”). On cross-motions for summary judgment,
the district judge dismissed the claim against the Commis-
sion based on sovereign immunity and dismissed the claim
against the individual defendants as unripe. E.F. Transit
appealed, challenging only the latter ruling.
                          II. Analysis
   The FAAAA preempts any state “law, regulation, or other
provision having the force and effect of law related to a
6                                                  No. 16-3641

price, route, or service of any motor carrier … or any motor
private carrier, broker, or freight forwarder with respect to
the transportation of property.” 49 U.S.C. § 14501(c)(1).
E.F. Transit contends that enforcing the prohibited-interest
laws against it falls within the scope of FAAAA preemption
by limiting its motor-carrier services. The judge dismissed
the claim as unripe because E.T. Transit and Indiana Whole-
sale walked away from their proposed business relationship
without a definitive ruling from the Commission about its
legality. E.T. Transit argues that it need not wait for a formal
ruling; the potential for prosecution under the prohibited-
interest law is sufficient for a ripe preemption claim.
    Embedded in the preemption claim—and thus also in the
dispute about ripeness—is an antecedent question about
whether and how state regulators and the state courts will
interpret and apply the prohibited-interest laws to the facts
of E.T. Transit’s shared ownership and management with
Monarch Beverage. Separate state-court litigation has now
answered that question.
    As relevant here, Indiana law makes it “unlawful for the
holder of a brewer’s or beer wholesaler’s permit to have an
interest in a liquor permit of any type under this title.”
§ 7.1-5-9-3(b). Correspondingly, “[i]t is unlawful for the
holder of a … liquor wholesaler’s permit to have an interest
in a beer permit of any type under this title.” § 7.1-5-9-6(a).
While we’ve had this appeal under advisement, the Indiana
Supreme Court had occasion to authoritatively interpret and
apply these statutes to the relationship between E.F. Transit
and Monarch. In Spirited Sales the court held that the “ties
between [E.F. Transit] and Monarch [are] so extensive that
[E.F. Transit] could reasonably be deemed to hold an interest
No. 16-3641                                                     7

in a beer wholesaler’s permit—an interest prohibited by a
combined reading of sections 7.1-5-9-6 and 7.1-1-2-5.” 79
N.E.3d at 379. The court also explained that the lines be-
tween Monarch and E.F. Transit are “quite blurred,” making
the Commission’s conclusion that Monarch and E.F. Transit
are “practically one in the same a reasonable inference.” Id.
    The state high court’s decision in Spirited Sales eliminates
any concern that E.F. Transit’s preemption claim may be
unripe. Ripeness doctrine has both constitutional and pru-
dential aspects. Hinrichs v. Whitburn, 975 F.2d 1329, 1333 (7th
Cir. 1992). A claim is ripe if it is fit for judicial decision and
not resolving it will cause hardship to the plaintiff. Nat’l Park
Hospitality Ass’n v. Dep’t of Interior, 538 U.S. 803, 808 (2003).
Preemption is a predominantly legal question, Pac. Gas &
Elec. Co. v. State Energy Res. Conservation & Dev. Comm’n,
461 U.S. 190, 201 (1983), and legal questions are “quintessen-
tially fit” for judicial decision, Metro. Milwaukee Ass’n of
Commerce v. Milwaukee County, 325 F.3d 879, 882 (7th Cir.
2003) (quotation marks omitted).
    Hardship exists in this context if the plaintiff has “an in-
tention to engage in a course of conduct arguably affected
with a constitutional interest[] but proscribed by a statute”
and “there exists a credible threat of prosecution” under the
statute. Babbitt v. United Farm Workers Nat’l Union, 442 U.S.
289, 298 (1979). A plaintiff need not engage in the proscribed
conduct and expose himself to punishment or prosecution
before bringing a constitutional claim. Id. But the potential
for prosecution must be likely; if a prosecution is unlikely or
not even “remotely possible,” then the dispute is not “sus-
ceptible to resolution by a federal court.” Id. at 299.
8                                                 No. 16-3641

    E.F. Transit has clearly demonstrated an intention to
transport, warehouse, and deliver liquor for Indiana Whole-
sale. Their proposed business relationship was memorialized
in two agreements, and the parties twice sought the
Commission’s approval to proceed. Although they aban-
doned their plans before a formal ruling on the matter, the
regulatory red flags raised by the Commission were clearly
the cause. And the Indiana Supreme Court has now con-
strued the prohibited-interest statutes to forbid E.F. Transit
from entering into an agreement like the one it negotiated
with Indiana Wholesale (or any similar company). Although
the penalty of permit revocation would fall on Monarch,
prosecution for a prohibited-interest violation is a standing
threat against both it and E.F. Transit. That’s easily enough
for a ripe claim.
   Accordingly, we reverse the district court’s judgment
dismissing E.F. Transit’s claim as unripe. Only the ripeness
question is before us. We have no occasion to weigh in on the
merits of the preemption claim.
                                   REVERSED AND REMANDED.
