New briefs filed in 6th Circuit out-of-state retailer direct wine shipping case with broad implications for alcohol delivery in the U.S. (Amazon of liquor… if Amazon wasn’t already registering in every state).
Imagine being able to order whatever libation you wanted and having it delivered directly to your door. A beer shop in Maine has some local variant you can’t get in Oregon – no problem, just have them send it. A wine shop in Florida can send you a case of something Kermit Lynch ran out of – perfect!
The recent Supreme Court decision in Tennessee Wine reiterating the broad scope of the Commerce Clause’s applicability and protection hasn’t stopped states from attempting to limit/challenge/hinder progress that constitutional scholars see as inevitable in the market when it comes to parity for in-state and out-of-state retailer shipping to state citizens. Hopefully two of the challenges winding their way through midwest federal courts will end much of the debate (Illinois and Michigan liquor lawyers rejoice).
In Illinois, as we’ve written about, the 7th Circuit has allowed a challenge to Illinois’s refusal to issue licenses for shipping to out-of-state retailers. That case is progressing through discovery.
In Michigan, a federal district court entered but stayed an injunction pending appeal that would have forced Michigan to grant such commercial equality to out of state alcohol retailers where Michigan allows in-state retailers to deliver directly to consumers. The case is on appeal to the 6th Circuit and the State’s initial brief appealing the decision can be found in our post and analysis of it here.
The district court winners – those challenging the prohibition have now filed their brief and two Amici have joined them.
The appellate brief filed by the plaintiffs ably addresses the relevant arguments regarding whether strict scrutiny or some other test applies along with taking Michigan to task over not having Tennessee Wine’s newly minted “legitimate local purpose” such that it would justify the current ban on shipping liquor and wine and beer to residents. Interestingly, there is an argument about the wine passing through a licensed Michigan wholesaler (p. 42) that those pressing this issue in other jurisdictions should read through as developing it will be important – the main thrust right now is that requiring purchase by a retailer from a Michigan wholesaler violates the Commerce Clause as well as it is both discriminatory, but also violates the extraterritoriality principle of the Commerce Clause in directing how out-of-state retailers obtain their inventory (Michigan reaching beyond its borders). The brief also makes short work of claims that the ban promotes public safety and points out the lack of evidence that tainted alcohol is an issue.
The ATA’s brief points out that it is irrational for carriers to be able to transport wine in Michigan if it is picked up in Michigan and the destination is in Michigan but that they cannot transport the same cargo if it must cross state lines unless it originates from a certain type of shipper (e.g. Wineries). The brief also takes Michigan to task for its arguments that underage access and distribution of “unsafe” alcohol. Years of wine shipping and beer shipping by wineries and breweries show carriers are more than able to handle checking IDs. And fake alcohol is not a large problem in the US such that it would justify a restriction – Michigan presents no evidence of counterfeit alcohol.
The NAWR brief takes issue with an Amicus brief in support of Michigan’s assertion that Tennessee Wine somehow removed strict scrutiny as the test of the validity of a discriminatory statute where the 21st Amendment is concerned and points out that there is a path of least resistance here, Michigan can simply create a license for out-of-state liquor, wine, and beer retailers. Good points and worth a read. Tennessee Wine did not change the test and creating a simple license for out-of-state retailers to obtain is easy. (Also,we totally would have gone with “planes trains and automobiles” in that order and reverence for John Candy – putting trains before planes isn’t right.(see p. 12)).
The bottom line is that we’re still calling this one for the plaintiffs looking to have the Michigan system declared unconstitutional.