Ignoring the circling Byrd, Court denies Missouri citizens the right to receive direct wine shipments from out-of-state retailers citing Southern Wine and Spirits precedent

Back in November we wrote about the recent 7th circuit decision in Lebamoff v. Rauner reversing a District Court decision refusing to consider whether restricting out of state alcoholic beverage retailers from shipping to Illinois customers violated the commerce clause where Illinois allows Illinois sited wine, craft beer and spirits retailers to ship directly to Illinois consumers. A classic commerce clause question that, but for the fact that it involves alcohol, would be resolved in the out of state retailers’ favor under current Commerce Clause jurisprudence.

In applying Granholm v. Heald and rendering decisions in its wake, some circuits chose to see Granholm as a Commerce Clause case. Finding that alcohol should not receive special treatment as the 21st amendment did not except alcohol from the Commerce Clause. While other circuits chose to view Granholm as an alcohol case generally parsing its words to find a meaning that applied solely to alcohol products and producers but not to the other tiers of the three-tiered system.

This is what is mainly at stake in the currently pending Tennessee Wine & Spirits v Byrd (Blair) the Supreme Court will soon decide. Hopefully cleaning up the mess that the Circuit Courts have made of Granholm and Commerce Clause jurisprudence involving alcohol. If the decision involves agreement that the 21st Amendment does not except or treating alcohol different than every other commodity on the planet when it comes to the Commerce Clause the reasoning could very well acknowledge that the 21st Amendment only repealed the 18th and did not grant any special exception to alcohol regarding other constitutional issues (Commerce Clause, First Amendment, Privileges and Immunities Clause, Due Process Clause all come to mind).

So what just happened in Missouri?

A District Court following Southern Wine and Spirits v. Missouri, 8th Circuit precedent that we wrote about back in 2013 (link to article), decided not to wait a few weeks to see what the Supreme Court was going to say in Byrd and decided to resolve another liquor shipping case under the very 8th Circuit precedent that is one of the cases at risk of being abrogated, if not outright overturned, by the Supreme Court’s decision in Byrd.

The recent case is Sarasota Wine Market v. Parson (link to opinion). The matter involves a group of plaintiffs – consumers, wine shops and a wine broker – who brought suit against Missouri’s Division of Alcohol and Tobacco Control arguing that Missouri’s laws allowing in-state alcoholic beverage retailers selling craft beer and wine and spirits to deliver directly or by common carrier to Missouri residents violated the Commerce and Privileges and Immunities Clauses by restricting that right in not also allowing out-of-state retailers to ship booze to Missouri residents (and brokers and not allowing Missouri residents to receive shipments of wine not available in Missouri).

The opinion dismissed the matter under FRCP 12(b)(6) for failure to state a claim, so, much like District Court case the 7th Circuit’s opinion overturned, the District Court here refused to consider evidence on the matter and relied squarely on 8th Circuit precedent in Southern Wine and Spirits to hold that Missouri’s laws did not violate the Commerce Clause or the Privileges and Immunities Clause of the Constitution.

In rehashing the Southern case, the District Court’s opinion becomes a tad weak and circular regarding Granholm’s limitation to producers as the entire case is based on the dicta from Granholm citing to the “legitimacy” of the three-tiered system (which was itself dicta from another opinion) and holding that such language authorizes Commerce Clause violations by laws protecting alcohol wholesalers and retailers from out of state competition to preserve the “system.” This method of citing to a flippant statement from Granholm was also used by the 2nd Circuit and conveniently allows Circuit Courts to achieve their goal by citing something as “precedent” without having to acknowledge that they are really saying: “yes, we hold states can violate the Commerce Clause rights of citizens of the United States when the commodity in commerce is alcohol because the 21st Amendment allows states to infringe the rights of citizens where alcohol is concerned.”  

Back to Missouri: the Court found in favor of the State here, holding that – because the three-tiered system is legitimate, and because Missouri has a tiered system (albeit a 4-tiered system) Missouri’s system must also be “legitimate” as the 8th Circuit found in Southern, which allowed dismissal without considering the facts of the matter.

The Missouri Attorney General’s office specifically requested that the Court not wait to issue a decision. Disagreeing with others, they put a response together (you can read it here) claiming the case was not similar to Byrd and that a decision would not be issued until 2019 or later.

Again, not a total loss for the plaintiffs here because in a very short time the Supreme Court will decide the Byrd matter. In doing so POTUS will likely find for Commerce Clause rights for citizens rather than wholesale exempting Commerce Clause rights where alcohol is concerned just to protect State regulations that have no grounding in rational thought or empirical testing  and which are merely vestiges of what a few people connected to John Rockefeller thought might be an interesting method of reducing consumption and collecting extra taxes on alcohol back in the 1930s (looking at you Fosdick and Scott). Methods since debunked through empirical testing.