Lawyers for Austin’s Live Oak Brewing Company and two other Texas breweries were in a Travis County court on Monday to argue that a 2013 state law unfairly hinders their ability to grow their businesses.

With dueling motions, lawyers on both sides of the issue presented their arguments in a case that could have implications for the state’s burgeoning craft beer industry. At issue is the constitutionality of a law that restricts brewers from selling distribution rights.

State District Judge Karin Crump said she would make a decision on the case in two weeks.

Karen Watkins, a lawyer from the office of Texas Attorney General Ken Paxton, defended the law on behalf of the Texas Alcoholic Beverage Commission and said the state must not weaken the current regulatory system.

In Texas, the sales of beer and liquor are governed by post-Prohibition rules that maintain strict boundaries between manufacturers, distributors and retailers. In the three-tier system, makers of beer, wine and spirits create their products, distributors sell them, and bars and other retailers peddle the beverages to the public.

"The government’s interest is in preserving the integrity to the three tier system," Watkins said. She said the state intends to prevent any overlap between the manufacturing tier and the distributing tier.

Watkins said the law helps the Texas Alcoholic Beverage Commission, for example, quickly remove tainted products from store shelves, if needed.

Arguing the case for the brewers, Matt Miller, an attorney for the Arlington, Va.-based Institute for Justice, said the case isn’t about the three tier system, but about fairness.

"It enriches distributors at the expense of craft brewers," Miller said.

Miller said the law prevents many brewers from selling their products in some markets, which has the effect of providing less choice to consumers and fewer opportunities to expand for craft brewers that choose not to give away distribution rights.

Before the passage of 2013’s Senate Bill 639, authored by then-state Sen. John Carona, R-Dallas, distributors would pay brewers for the right to sell their beer, but the law changed the system to prevent brewers from accepting money for distribution rights, Miller said.

Wholesale Beer Distributors of Texas, an association representing distributors, has maintained since the case was filed in 2014 that the change in the law was a necessary clarification. They say that the sale of distribution rights by brewers has always been illegal.

After the brewers filed their lawsuit, Keith Strama, general counsel for the Wholesale Beer Distributors of Texas, said the brewers are seeking to change the relationship between brewers and distributors.

If a distributor invested a large sum in a particular brewery by purchasing its distribution rights, then that distributor would be more likely to market that brewery’s beer over another brewery’s beer, creating an unfair business practice, Strama said.

Taking the opposing point of view, Chip McElroy, owner of Live Oak Brewing Co. in Austin, said after the hearing that the current law means he cannot invest in his own business in the same manner that other businesses can.

"My biggest asset, I can’t sell. I have to give it away," he said.

Still, Live Oak and the other brewers in the lawsuit — Peticolas Brewing Company in Dallas and Revolver Brewing in Granbury — are not seeking any money, just a change in the law, McElroy said.

The craft beer industry in Texas has grown quickly in Texas. There were 59 breweries in 2011, and as of 2015, the state was home to 189 breweries, according to the Brewers Association, a national not-for-profit trade organization.