Challenges to discriminatory and protectionist liquor distribution and sales laws continue in spite of pending SCOTUS case as wine importing challenge in CA gets hearing on motion to dismiss

In a case that I was sure would be put off until after the U.S. Supreme Court renders its decision in Tennessee Wine and Spirits Retailers Association v. Blair, a federal district court in California has finalized briefing and taken oral argument in another wine shipping, residency requirement, Commerce Clause case. This time, it’s about importers and the rights granted in-state importers vs. out-of-state importers.

The case is Orion Wine Imports, LLC et al v. Appelsmith (18 CV 1721). You can read the most recent complaint here. In the case, the plaintiffs (out of state parties (importers) interested in selling wine to California retailers) argue California’s requirement that California retailers purchase their alcohol from California importers and wholesalers is a violation of the Commerce Clause and the Privileges and Immunities Clause. Out of state importers are discriminated against because they cannot deliver to in-state retailers on terms similar to those allowing in state importers to deliver to California retailers.

The state filed a motion to dismiss and several wholesalers filing as amici filed a brief in support (links to briefs). The motion is fully briefed – you can read the plaintiffs’ response to the motion to dismiss here, the plaintiffs’ response to the amici here, and the defendant’s reply in support of their motion here.  Oral argument had been postponed a few times, but was finally heard on the 8th of February. You can understand some of what must have occurred as the plaintiffs filed a supplemental memorandum yesterday which you can read here.

The gist of the response in opposition to dismissal and the first point raised in the supplemental authority is an argument that a motion to dismiss is the incorrect method for disposing of these types of Commerce Clause cases. The argument is that Supreme Court precedent has developed to require “fact-based assessment” in such challenges where a court is required to review the “extent to which a law harmed interstate commerce and the extent to which it benefitted local economic activity.” Citing Brown-Forman Distillers Corp. v. N.Y. State Liquor Authority, 476 U.S. 573, 578-79 (1986).

The second point raised in the supplemental memorandum addresses the heart of the matter by showing that California law does not easily allow an out-of-state importer to simply gain the privilege to distribute wine directly to retailers by leasing space in a public warehouse. The brief goes on to list the California laws that prohibit sales by out-of-state importers directly to California wine retailers. These arguments are meant to obviate the assertions of the state and amici that there is no discrimination between in and out of state interests.

Again, Blair may help with these issues. But understanding that the case will need to be decided, the Court has pressed on and promised a decision on the motion at a later date.