The Tennessee Wine Test? 6th Circuit falls in line with requiring evidence of out-of-state alcohol shipping restriction’s health and safety benefits in order to surmount a Dormant Commerce Clause challenge. The State says it wants to take the matter to the Supreme Court.

“However, the Court in Lebamoff did not hold that direct ship restrictions are always constitutional. The concurring opinion, which had the support of a majority of the panel, emphasized that the Court upheld Michigan’s statute because “the plaintiffs ha[d] not sufficiently refuted” the defendant’s evidence indicating that the challenged statute “serves the public health.” 

In an opinion limiting its prior Lebamoff decision to the facts, the 6th Circuit has denied an en banc rehearing in its Block v. Canepa case leading the State of Ohio to request a stay of the mandate to remand for further fact finding so that it, the State, can file a petition for certiorari asking the Supreme Court to review the decision.

This is a twist of the procedure we usually see in these wine shipping cases challenging state laws that allow in-state alcohol retailers to ship alcoholic beverages to residents but deny that right to out-of-state alcoholic beverage retailers and the act of a State requesting review will likely receive greater consideration by virtue of the State’s request (not to mention further recent opinions since the denial of review in the B-21 Wine case from the 4th Circuit).

In Block, a wine retailer and wine enthusiast brought challenges to Ohio’s alcohol retailer shipping law allowing in-state retailers to ship to residents, but denying the same ability to out-of-state retailers (they also challenged Ohio’s laws on quantities of personal importation of alcoholic beverages). The parties each moved for summary judgment. The District Court reviewed competing affidavits and granted summary judgment to the State of Ohio based on the 6th Circuit’s prior Lebamoff precedent holding that the Michigan restrictions on out-of-state retailer shipping at issue in Lebamoff were substantively identical in this case regarding Ohio’s laws. The plaintiffs appealed the decision.

Falling in line with Anvar v. Dwyer from the First Circuit, the 6th Circuit reviewed the evidence and the District Court’s reasoning and found it lacking; holding that its prior decision in Lebamoff did not remove a requirement of weighing evidence and that the District Court should have reviewed the expert opinions proffered by both sides and analyzed them under the Tennessee Wine test (yes, the “Tennessee Wine test” is what they called it). Here’s the meat:

A discriminatory state liquor law will survive a dormant Commerce Clause challenge if (1) it “can be justified as a public health or safety measure or on some other legitimate nonprotectionist ground,” and (2) its “predominant effect” is “the protection of public health or safety,” rather than “protectionism,” Tenn. Wine, 139 S. Ct. at 2474. In Lebamoff, this Court held that the plaintiffs failed to provide sufficient evidence that Michigan’s direct ship restriction failed the Tennessee Wine test. The Court did not, however, foreclose challenges to other states’ direct ship restrictions.

The district court failed to consider Plaintiffs’ evidence in this case concerning Ohio’s Direct Ship Restriction. Instead, it treated Lebamoff’s holding – which dealt with a different state’s law and involved different evidence – as dispositive. Through their cross-motions for summary judgment, the parties submitted abundant evidence, including expert reports and witness testimony, to support their arguments around the Tennessee Wine test. For example, Plaintiffs provided an expert report from the Executive Director of the National Association of Wine Retailers detailing his opinion as to the practical effects of the Direct Ship Restriction on Ohio consumers. On the other side, Defendants submitted an expert report on the public health benefits of the Direct Ship Restriction. The district court should have considered the competing evidence and determined whether a genuine issue of material fact existed. See Fed. R. Civ. P. 56(a).

The Court’s holding in Lebamoff was expressly limited to the evidence before the Court because the plaintiffs failed to “produce[] sufficient countervailing evidence showing that [Michigan’s] public health concerns are ‘mere speculation’ or ‘unsupported assertions,’ or that the ‘predominant effect’ of the in-state retailer requirement is not the protection of public health.” Lebamoff, 956 F.3d at 877 (McKeague, J., concurring) (quoting Tenn. Wine, 139 S. Ct. at 2474)). In this case, both parties have conflicting arguments; expert reports; and witness testimony. Plaintiffs have submitted evidence detailing the ways in which the Direct Ship Restriction promotes protectionism, and Defendants have submitted evidence suggesting that the restriction promotes public health. The district court should have considered how that evidence stacks up against the Tennessee Wine test. We therefore reverse the district court’s grant of summary judgment as to the constitutionality of the Direct Ship Restriction. 

The date to file the petition for certiorari is within the later of 90 days from the judgment or the denial of a request for rehearing en banc (asking the whole Circuit to review the decision of the three judge panel that rendered the opinion) if one was filed. The 6th Circuit denied the State of Ohio’s request for rehearing on September 11th. That makes the 90th day December 10th.