Ninth Circuit’s Amended Wine Shipping Opinion: Discrimination? Irrelevant.

by Ashley Brandt · September 11, 2025

Earlier this year, we wrote that the Ninth Circuit’s original decision in Day v. Henry created such a departure from current law that en banc review looked inevitable. The March opinion claimed Arizona’s in-state presence requirement did not discriminate at all—an approach out of step with Granholm and Tennessee Wine. We were right. The Ninth recently withdrew that opinion and issued an amended one. Outcome stayed; logic shifted. The panel now says discrimination doesn’t matter: because the requirement functions as an “essential feature” of the three-tier system, Arizona’s regime survives.

Key Takeaways

Ninth Circuit pivoted from “not discriminatory” to “even if discriminatory, allowed” by anchoring Arizona’s rule in an “essential feature” of three-tier regulation.
The case arose from summary judgment on a declaratory judgment action, so the parties did create a limited factual record. The flaw lies in the Ninth Circuit’s choice to skip step one of Tennessee Wine and collapse the analysis, not in a denial of evidence.
Circuit landscape now splits into different camps: (1) no-discrimination rulings or discriminatory-but-saved under a per se “essential feature” rationale; and (2) discriminatory-and-requires-evidence but the evidence shows that health or safety or both are met.
Judge Forrest’s dissent supplies the better roadmap: decide discrimination first, then weigh evidence at step two; her reasoning tracks the Fourth Circuit dissent in B-21 Wines and part of the Seventh Circuit opinion in Braun.
Plaintiffs filed a new en banc petition; real movement likely turns on correcting the Ninth’s misapplication of the test, not on complaints about lack of process.

1) A strategic retreat: sidestepping discrimination

In March, the panel declared Arizona’s presence rule non-discriminatory. That conclusion ignored how an in-state storefront mandate burdens out-of-state retailers—classic Granholm discrimination. The amended opinion backed off, assumed discrimination arguendo, then jumped to step two and upheld the law anyway.

Because the case came from summary judgment, the record existed. The Ninth simply refused to evaluate it at step one. That move undermines the function of Tennessee Wine’s sequence: a no-discrimination finding ends the case; a discrimination finding forces a court to weigh the record evidence at step two. By skipping step one, the Ninth denied neither side its day in court but instead collapsed the analysis in a way that distorts the framework.

2) The Circuit Split

By framing Arizona’s rule as an “essential feature” of the three-tier system, the Ninth joined the Third, Fourth, and Eighth Circuits in the “per se validity” camp. Those courts treat laws tied to the three-tier system as automatically justified, with no evidentiary showing required.

In contrast, the First and Sixth Circuits demand evidence. Lebamoff once suggested that presence rules might survive without record evidence, but Block v. Canepa, decided later, required concrete proof that discrimination advances legitimate state interests. Because Canepa came later, it controls in the Sixth Circuit. That precedent places the Sixth with the First in the evidence-required camp.

The split now looks sharp: some circuits cut off litigation with a per se rule, while others insist on record development. That divergence heightens the possibility of eventual Supreme Court involvement but since every circuit is coming out in favor of allowing these restrictions on shipping, it is unlikely this is really an issue that needs the Supreme Court’s attention. If the SC really wants this fight, it would likely shadow docket and overturn the decisions that refuse to grant an evidentiary hearing and sustain the ones that do. (I am not factoring in Judge Easterbrook’s salient distinction between shipping an delivery and the interplay with the Dormant Commerce Clause that he recognized under the specific terms of the Indiana statute at issue in Braun because that rationale would not apply to many states that allow “shipping” (third-party) and “delivery” (employees of retailer) and it is also a fresh take on these statutes and this issue that has not had a real chance at development, but that rationale has legs because there is a difference between those two methods for getting beverages to the consumer off-premise.)

For those of you graphically inclined:

3) Forrest’s dissent: a better roadmap

Judge Danielle Forrest sharpened her dissent in the amended opinion. She used analogies—comparing Arizona’s law to hiring preferences for University of Idaho library readers, and invoking the Supreme Court’s Dean Milk precedent—to highlight how out-of-state presence requirements function as discrimination in plain sight.

Equally important, she respected the structure of Tennessee Wine. Courts must first determine discrimination at step one, then demand evidence at step two. Her dissent, like Judge Wilkinson’s in the Fourth Circuit’s B-21 Wines case, demonstrates superior reasoning. It grounds itself in precedent, common sense, and respect for both plaintiffs’ rights and state sovereignty.

These dissents give litigants a clear roadmap for framing appeals and, potentially, persuading the Supreme Court.

4) En banc posture and constructive synthesis

Plaintiffs filed for en banc review, but because the Ninth’s amended opinion places it squarely in line with several other circuits, full review looks unlikely. At best, the Ninth could revisit whether the panel erred by skipping step one of the Tennessee Wine framework.

That posture opens the door for a constructive synthesis: rather than leaning on the fuzzy “essential feature” label, courts should ground the three-tier system in the third prong of Tennessee Wine’s step two — “other legitimate non-protectionist grounds.” The historical and functional logic of three-tier fits that category.

Three-tier as applied antitrust.

After Prohibition, legislatures adopted three-tier to dismantle the “tied house” system, where producers dominated retailers through exclusive dealing and coercive sales quotas. That regime created monopolistic conditions and excessive consumption.
By mandating separation of producers, wholesalers, and retailers, states embedded structural antitrust principles into alcohol regulation. Three-tier functions less as protectionism and more as a prophylactic competition safeguard.
The model resembles structural antitrust remedies like divestiture or conduct separation. Instead of punishing abuses after the fact, it prevents vertical integration from creating them in the first place.

Why this framing matters.

The Supreme Court in Granholm and Tennessee Wine described the three-tier system as “unquestionably legitimate.” But courts like the Ninth have twisted that dicta into a shortcut: if something counts as “essential” to three-tier, it automatically survives scrutiny. That collapses the test.
If courts instead articulate that three-tier advances “other legitimate non-protectionist grounds” — namely antitrust-like competition policy — the justification fits squarely into Tennessee Wine’s structure without creating a per se rule.
This approach also avoids the appearance of states sheltering protectionist schemes under the three-tier umbrella. It treats three-tier as what it historically represents: a structural market-regulation device designed to prevent coercion, abuse, and vertical foreclosure.

In short, labeling three-tier as “applied antitrust” allows courts to preserve the system’s legitimacy while still respecting Tennessee Wine’s two-step process. It affirms that states can defend structural regulation as pro-competition, but it requires courts to articulate the reasoning under the proper prong of the test, rather than shortcutting analysis with “essential feature” dicta.

5) Not retreat, but percolation

These cases illustrate doctrinal percolation, not Dormant Commerce Clause retreat. Tennessee Wine laid down a two-step test and circuits now experiment with how to apply it. Some end cases at step one, some uphold laws per se at step two, and others require record evidence. The Supreme Court seems content to watch the split evolve. Only when litigants reframe the issue as a misapplication of Tennessee Wine—a legal flaw rather than an evidentiary one—will certiorari become likely – but even then, as I noted above, Tennessee Wine is still the final word and it seems unlikely that these wine shipping cases will create a vehicle for some expanded elaboration on that test. More likely – easy affirmance of the correct rationale and rejection of the incorrect rationale would let everyone see how to properly apply Tennessee Wine.

This does leave the doctrinal point raised in the dissent open: must the state face the added burden of proving no non-discriminatory alternative option exists. But that will wait as the evidence in these matters appears poorly developed and so far, in applying the health and safety filter, courts agree that state statutes meet those criteria. It would take a deeper investment in studies and experts to overcome that burden and the side of wine shipping doesn’t appear to want to spend the money or the time or effort to actually establish the fact.

Closing thought

The Ninth Circuit’s amended Day v. Henry opinion doesn’t say “discriminatory but justified.” It declares discrimination irrelevant because the law fits as an “essential feature.” The flaw lies not in denying the parties process—they had it—but in collapsing Tennessee Wine’s two-step design. That collapse distorts the balance between state sovereignty and Commerce Clause protection. For now, Arizona’s law stands. But the deeper fight—whether courts can shortcut Tennessee Wine—remains alive across circuits.