I feel very confident that the legal issues raised in this litigation will reappear in another case in the future.

(earlier post)   10th Circuit Reverses and Remands US Airways Case Back To District Court

The 10th Circuit today reversed and remanded the district court’s decision which had ruled in favor of New Mexico.    When the district court gets this case again, it is instructed to balance both the state interests under the 21st Amendment and the federal interests under the Federal Aviation Act.   It is unclear if any party will try to appeal this to Supreme Court at this stage.  The 10th Circuit opinion can be found here.

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Oral Argument Set for September 20th in the 10th Circuit Appeal of USAIR Case

The oral argument of US Air’s appeal is set for September 20th in Denver before the 10th Circuit.   In a twist, the US Government has pushed to be allowed to participate in the oral argument and has been granted time. The motion the federal government filed to participate in oral argument is here.

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Appellate Briefs have been filed in the 10th Circuit.   Retailers, Mothers Against Drunk Driving, State AGs, US Justice Dept, three of the past  U.S. Solicitor Generals representing corporate interests , the list is long!

Four briefs have been filed in support of the State of New Mexico by:
-American Beverage Licensees , State AGs, Mothers Against Drunk Driving and Wine & Spirits Wholesalers of America

The state of New Mexico appellate brief is here.

The State AGs brief notes that the position of the USAir and appellants that they do not need to follow New Mexico alcohol laws would also support the amazing position that US Air could serve drinks to 11 year olds.

Four briefs have been filed in support of US Airways by:
-Air Transport Association of America, Association of Flight Attendants, Ten Former Secretaries of the DOT, and The United States

(The below was written after the trial stage and before 10th Circuit filings)

If you sell liquor to consumers in New Mexico, you need to be licensed by the state to do so. Period.

United States District Judge M. Christinia Armijo has rejected US Airways claims that federal aviation statutes and regulations (specifically the Airline Deregulation Act and the Federal Aviation Act) preempt New Mexico laws requiring every person selling alcohol to secure a public service license.  In her decision Jude Armijo noted there was no basis to assume Congress intended federal law to regulate alcohol service and that state laws are not preempted.    She noted:

Needless to say, the stakes are pretty high with this case and I personally expect an appeal by the Plaintiff in this case.    New Mexico is in the 10th Circuit.

This case further provides a strong rejection to the attempts to allow revisionist history to claim that the 21st Amendment essentially only allows a state to decide wet or dry issues.  The complaint implied that the 21st Amendment  allows a state “ONLY” to regulate the transportation or importation.  That very limited view of the 21st Amendment will not prevail.

Briefs have been filed in this case.

A press article summarizing these developments is here.

(earlier post) New Lawsuit Filed in Utah Challenging Pricing and Licensing Laws

The Utah Hospitality Association has filed a lawsuit against the state of Utah alleging that state law violates the federal Sherman Antitrust Act.  Specifically the complaint is alleging that the state laws related to retail drink price specials and the state limitations on retail licensing are violations of federal antitrust law.  (The complaint also appears to imply an equal protection challenge.)

A related newspaper article from the Salt Lake Tribune describing the lawsuit can be found here.    It  is interesting to note that the plaintiffs imply that they have filed this lawsuit to get the attention of the elected leaders in Utah.   If so it may be a good test of what was referenced in the Federalist 78: “The Courts must declare the sense of the law; and if they should be disposed to exercise will instead of Judgement, the consequences would be the substitution of their pleasure for that of the legislative body.”

I’ll add this to the list of cases to monitor.

Judge Hamilton has a long concurrence where he notes his disagreement with the 10th Circuit’s preemption analysis in USAirways and also notes that the forum for changing alcohol laws is the state legislature, not federal courts.  I’ve been saying that for years!

Both opinions note the problems with applying the Pike v. Bruce Church balancing test to state alcohol laws but that is another subject for another day.

(earlier post)   7th Circuit Sets Oral Arguments for September 12, 2011 in Indiana Retail Shipping Case

How nice of the 7th Circuit to schedule oral argument while I’ll already be in town for the Center for Alcohol Policy Legal Symposium.  Come to the CLE and perhaps we can organize a class trip over to the oral arguments.    The 7th Circuit set out notice for the oral argument in  Lebamoff Enterprises, Inc., et al v. Mark Massa for Tuesday, September 13, 2011, at 9:30 a.m. in the Main Courtroom, Room 2721. Each side limited to 20 minutes.

The  7th Circuit has been the busiest on alcohol law matters with the Baude case (face to face identification), the ABInBev lawsuit (Remedy/discrimination), and Thomas Family Winery matter (Dormant commerce clause) besides the pending Lebamoff matter.

(Previous Post)  Plaintiffs Seek 7th Circuit Review in Capt’n Cork Case in Indiana

UPDATE:

The plaintiffs in Captain Cork are appealling the district court’s decisions.     They have shifted strategy in their appeal and seek to emphasize preemption as their route to victory.  They have filed their brief in the appeal.  The state’s brief is due May 20th.  Appellants response is due June 3rd.

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The district court denied the motion for reconsideration.  Her order is here.

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The district court ruled against the Professor Tanford has sort of filed a motion for reconsideration of the trial court’s decision.    Not sure of the format and why the court would consider reversing itself but I guess it never hurts to ask.   A copy of the request is here.

(Earlier Post ) Indiana Wins;  Retailers and Wineries Are Indeed Different Entities

Federal District Judge Jane Magnus-Stinson issued an opinion for the state of Indiana in the Capt’n Cork case.   She noted that the theory of the plaintiff’s case was flawed in several aspects.  Most importantly she noted that nothing in the Granholm case suggested the expansion of its holding as sought by the plaintiffs.  She noted that state laws have a strong presumption of validity.   She indicated the lack of clarity over the plaintiff’s specific challenges but rejected each one nonetheless.  At the end of the opinion, she rejected a federal preemption claim in part by citing to the Stop Underage Drinking Act of 2006.    It is unclear whether there will be an appeal at this time.

(PREVIOUS POST)  Motions for Summary Judgement Filed in Indiana Retailer Case

A motion for summary judgement was filed by the plaintiffs in the Cap’n Cork case.   Recently Indiana  filed its cross motion for summary judgement.  The recent Wine Country 5th Circuit case as well as the Buy-Rite case from New York in the 2nd Circuit and the other Indiana case, Baude  at the 7th Circuit all heavily influence the state’s brief.  All those cases are discussed in other posts on this blog.

Updated:   This case has been transferred to federal court in Indiana.  It has been assigned to Judge McKinney.

A New Indiana Lawsuit Filed by Retailer Seeking Direct Shipping Rights

Just 24 hours after the United States Supreme Court stated they would not take an out-of-state winery’s unsuccessful challenge to one provision of the Indiana alcohol code, the same unsuccessful plaintiff’s attorney has filed a new lawsuit against Indiana this time on behalf of an Indiana retailer.

A new case has been filed in the Southern District of Indiana, Lebamoff Enterprises Inc. v. Thomas Snow, Chairman of the Indiana Alcohol & Tobacco Commission(PDF). Lebamoff Enterprises dba Cap N’ Cork has filed a challenge under Indiana law, the Equal Protection Clause, the Dormant Commerce Clause and federal preemption of state regulation of  common carriers.  The Cap N’ Cork believes it is unfair that wineries are able to do some sales via common carriers whereas retailers are not.  The ATC has cited Cap N’ Cork  for violations. This will likely be an interesting case to see if wineries and retailers are in fact different as apparently the plaintiff here claims there is no difference between winery sales and retail sales.

Also, there was a hearing today on the preliminary injunction in Cowlitz County.  The judge did not grant the PI and apparently did not deny on basis of probability of success on the merits.

Sorry for the non linkable information.

(Earlier Post) Second Lawsuit Filed Against Recently Passed I-1183 by Retailers and Public Health Officials

A second lawsuit was filed in Cowlitz County against the recently passed I-1183. Interestingly, Cowlitz County was one of the five Washington counties that voted against I-1183.   This complaint was filed by a retailer, an landlord for a state liquor store and the Washington Association for the Prevention of Substance Abuse and Violence Prevention.  They also filed a motion for preliminary injunction (which for some reason is too large to be uploaded to this site right now) and a hearing date on the injunction could be as soon as next week.

(Earlier Post)    Litigation Filed in Washington State Challenging Recently Passed I-1183

 Teamsters Local 174 and the United Food And Commercial Workers (UFCW) Local 21 have filed a lawsuit challenging the initative passed in Washington state.   The complaint can be found here.   I-1183 was a proposal funded mostly by the Costco Corporation which is based in Washington.  A list of Costco’s contributions for I-1183 can be found here.  By my guesstimation Costco has spent nearly $35 million over the past 10 years trying to rewrite Washington state liquor laws.   I-1183 won with over 58% of the vote.

The nuances of Washington state law and their court’s ultimate interpretation of their  “single subject” law is above my pay grade.    I do note that this initiative was indeed boldly written and as a result it does cover many various subjects from “getting state out of the liquor business” to “deregualting wine distribution” to “creating a new marketplace for large retailers” to “a new taxing and revenue scheme” to “state aid to local governments” as a few of the many topics.  Costco will argue they are all related.  The Unions and others will note that this is classic “logrolling”  and a purposeful attempt to try to hide things behind a bigger concept.    We’ll have more as this develops.

(earlier post) Illinois Lawsuit Seeks to Equalize Beer, Wine, Liquor Tax Rates? Related to tobacco?

There is a new Illinois lawsuit seeking to stop the recently enacted increases in beer, wine and spirits taxes.   There are several arguments advanced in the complaint.  Of interest to me is its discussion of beer taxes vs. wine/liquor taxes.  In a new twist on the long running equilization debate, the plaintiff claims it is unfair underIllinois law that higher alcohol products are taxed at a higher rate than lower alcohol products.   A copy of this lawsuit is available for your review.

(earlier post) 7th Circuit  Dismisses ABInBev v. Illinois

The 7th Circuit has dismissed the appeal by ABInbev on its attempt to  vertically integrate and own the distributor in Chicago.   Recent legislation signed into law by Governor Quinn has mooted this matter.    The order will be found here.      The billion dollar question is whether ABInbev runs back to court to challenge the new law. 

(previous post)

Well the Governor has not yet signed the previously mentioned legislation and the federal courts have their deadlines so any amicus brief in support of the state of Illinois position was due today.  In a brief filed by the Association of Beer Distributors of Illinois and the Marin Institute, the parties urge the 7th Circuit to properly confine the remedy aspect of the litigation (the only issue on appeal) to nullification rather than extension.   Actually the case law on this subject is interesting and someday the Supreme Court will clarify this issue.   It is expected that the signing of this legislation will moot this pending case so this amicus brief may raise issues only to be solved by some future lawsuit.  When a future court does face this issue they will have to deal with the current mischaracterization of remedy from the  Heckler v. Mathews, 465 U.S. 728 (1983) case dealing with welfare policyand a stated goal of extension compared to alcohol policy and the 21st Amendment’s call for states to be making decisions on alcohol policy, not courts.   It is a good reminder of  what was said in the Federalist Papers: “The Courts must declare the sense of the law; and if they should be disposed to exercise will instead of Judgment, the consequences would be the substitution of their pleasure for that of the legislative body.”  The Federalist 78

Will this case be mooted or proceed?  I guess that is the next post.

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(Earlier Post)  Legislation on Way to Governor. What to Do About Pending Appeal?

This week the Illinois House Of Representatives passed without objection legislation that addresses the subject of this litigation.   They have passed a law allowing all breweries under 15,000 barrels to self-distribute up to 7,500 barrels.   This addresses the law that had been struck down in the district court that Anheuser-BuschInbev challenged.

However, it is unlikely the Governor will sign this law before Judge Dow’s May 31st deadline.   Also, the briefing schedule for the 7th Circuit required the state to file its response brief this week.  As a result, the Illinois Attorney General’s office filed its reply brief here.  It disputes much of the assertions of Anheuser-BuschInbev, makes the case for a remedy of “levelling down” and also calls for an extension of the May 31 deadline.   The Illinois Attorney General’s office maintains that the signed legislation will moot this case.

By most accounts, the legislation should moot this case.  However, the state has got in its legal brief placeholder in should the 7th Circuit decide to rule on the matter anyway.

(Earlier Post) Update in 7th Circuit:  Tension in Illinois About What Litigation Means To Legislative Session

As you may recall, Judge Dow stayed his decision until May 31, 2011.    In the interim, scores of lobbyists have been retained and numerous articles have been written about the legislative sausage making in Springfield.   In response to ABInbev’s motion for a stay, the IL AG has filed briefings noting its frustration over the lobbying tactics and representation of the status of the litigation to legislators.  It is now up to Judge Dow to rule on ABInev’s motion for a stay.

If legislation is passed, it may moot the underlying case.   If not, the 7th Circuit will have to rule on the issue of remedy.  Level up or level down…That is the question….

(earlier post)  ABInBev Files Brief in 7th Circuit

ABInBev filed its brief in the 7th Circuit.  13 pages of “facts” and 34 pages of “legal argument” in this “brief.”   Now we know why ABInBev needed extra time to file this brief.  It is interesting that in the thousands of words in this document, the 21st Amendment is cited just once.   Here is a copy of the brief.

(earlier post) -ABInBev Playing Hardball On Attorney Fees in Illinois?

Although I don’t link to all the court filings in this matter, ABInBev is apparently trying the old full court pressure technique against the state AG office on attorney fees.   On one hand ABInbev says their case was cut and dry and was an easy case to win, yet they also claim they need their attorney fees now  despite their outstanding appeal of the portion they lost on remedy.  Moreover, the state has balked at the size of these fees for the “simple” litigation.   Normally a company with a $100 billion market cap could wait a few more weeks for all issues to settle or is it a part of the coorindated strategy of turning up heat on all fronts?

The judge has ruled that the attorneys fees portion will be decided earlier, however, he did express the beginnings of some thoughts that ABI may be disappointed in the amount they are entitled to in this “simple” litigation.

The order can be found here.  In addition to the full court press with the lawyers, ABI apprently is throwing the kitchen sink in public and private negotiations as the clock ticks on this matter before the March deadline.

( Earlier Post) ABInBev Files Appeal to 7th Circuit on Chicago Branch Issue

ABInBev filed its appeal of the district court’s decision which did not allow ABI to vertically integrate the Chicago market.   As a result, it is starting the process to appeal to the 7th Circuit.    The notice of Appeal and docketing statement can be found here and here.

Previous Posts:

Apparently ABI will not be running a branch in Chicago, at least  in 2010.   District Judge Robert Dow has issued an orderin the Anheuser-Busch InBev lawsuit against Illinois.   In his order he grants ABI’s partial motion for summary judgment on the Commerce Clause claim.   However, for a remedy he  has rejected ABI’s call to extend the self-distribution privilege to out-of-state brewers and has “nullified” the right of in-state breweries to self distribute.   He has  stayed his order and turned this back to the state legislature for a permanent solution  by March 31, 2011.   The opinion can be found here.  At this point, it is unclear whether ABI will appeal this to the 7th Circuit, file  a new case in state court, or just hire every lobbyist within a 100 mile radius of Springfield to try to change the law.   Interestingly, Judge Dow stated in a footnote that treating small producers differently is permissible and cited to the use of volume caps.   I am sure there will be more.

Updates in ABI Litigation against Illinois; Oral Argument on MSJ 6/16

The court issued a rulingtoday setting oral argument for ABI’s Motion for Summary Judgement for June 16.  It the decision it denied the Wine and Spirits Wholesalers of Illinois attempt to intervene in the lawsuit.  However it agreed to consider the arguments made by WSWI as well as those by the Associated Beer Distributors of Illinois in its Amcius brief as they raised isssues such as jurisdcition and constitutional avoidance that the court must consider.    ABI will have a chance to respond to those arguments by June 8.

ABI has filed their response brief.

The Associated Beer Distributors of Illinois filed their amicus brief and motion to intervene in the ABI litigation.

The state of Illinois has filed their brief opposed to ABI’s motion for summary judgement.  Read it here.

AnheuserBuschInBev filed their motion for summary judgement read it here.

As you recall, the Illinois Liquor Control Commission handed down a declaratory ruling last month that Anheuser-Busch, as a non-resident dealer, cannot own a controlling interest in a distributorship in the state.  It warned that City Beverage could lose its license if it attempts to proceed withthis deal with ABI.

ABI was trying to buy the remaining 70% of Soave Enterprises in Illinois. This ruling has been challenged. Read the complaint here.

The Illinois Wine and Spirit Wholesalers filed a motion to intervene in this matter. Read it here.

Wow.  “Rare” wine collectors and their law firms are crying foul that they were awarded “only” $675,000 in fees and expenses for the 1st Circuit volume cap matter.  They have filed this notice of appeal of United States District Judge Zobel’s recent order granting the plaintiffs $615,000 in attorneys fees and $62,000 in expenses.   This despite  the National Law Journal quoting one of the attorneys here:   ”Gerald Caruso, a litigator at Rubin & Rudman, said his research shows that Genesen’s fee award is among the highest awarded in the District of Massachusetts in a civil rights case.”   They want more.

So a statute designed to right the wrongs of a dangerous and oppressive government (think police brutality) is now  being used to reward those who fancy expensive wine with state tax dollars for a legitimate question about how Massachusetts set up laws to regulate small wineries.  Not sure that this fact pattern is what this civil rights statute was originally intended to address.  Judge Zobel has already helped oversee the fee request go from $2.1 million down to her present order,  I wonder if Judge Zobel can cut the fee more on appeal?

(earlier post)  Wine Companies and Wine Lovers seek $2 Million from Massachussetts Taxpayers

The aggrieved oenophiles and wine companies have filed their petition for attorneys fees after winning in the First Circuit.   Claiming 3,633 hours of work, the plaintiffs seek  $2,062,343 from Massachusetts taxpayers for declaring that the state’s facially neutral volume cap law treating big and small wineries differently was unconstitutional despite being upheld in Arizona and Kentucky.   Interestingly, the law firm seeks to be paid at 2010 rates and notes that this was a “test case.”   More tests to come?

A copy of the petition can be found here.

(Previous post)

District Judge Rules Against Coors

District Judge Daniel Dominguez has ruled against Coors in a comprehensive opinion.   Applying a recent Supreme Court decision that overturned the 2009 1st Circuit case in this litigation, the court approved the magistrate’s decision.   The opinion can be found here.

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Coors Files Objections to the Magistrate Judge’s Report and Recommendation

Coors has filed objections to the Magistrate Judge’s report and recommendations.  Most of the objections concentrate on the position of Coors that the Magistrate Judge got the dorman Commerce Clause language wrong.  The long-standing procedural history of this case is also addressed.   A copy of Coors filing can be found here.

(Earlier Post) Magistrate Rules for Puerto Rico and Against Coors

Chief United States Magistrate Judge Justo Arenas has sided with Puerto Rico and is seeking to dismiss the action brought by Coors against the Puerto Rico tax rate for small brewers.   This vein of litigation actually goes back over 30 years but the present matter started in 2006.  In a wide-ranging opinion covering many subjects the Magistrate sided with the arguments of Puerto Rico.   He dismissed the claims of Coors that the case violated the dormant commerce clause finding that there was no facial or intentional discrimination. His opinion can be found here.   Coors has until the 17th to file objections with the Magistrate.

(Earlier Post) Puerto Rico Seeks to Dismiss Coors Lawsuit Challenging Small Brewer Tax Rate

In a new filing, the government of Puerto Rico has sought to dismiss the Coors lawsuit against Puerto Rico.   In its lawsuit Coors Brewing seeks to eliminate the lower tax rate on small brewers.   Coors claims that it does not seek to lower the taxes Coors pays, just  eliminate the tax break small brewers have under Puerto Rico law.   However, a recent decision by the United States Supreme Court in Levin v. Commerce Energy has made it clearer that deference to state courts on state taxation matters is important even where someone (like Coors) claims they are not trying to lower their own taxes.   The Levin decision can be found here.  The filing by Puerto Rico notes that the 1st Circuit returned this case to Puerto Rico district court  by relying on a line of reasoning now discredited by the Levin decision.  As such, Puerto Rico’s brief argues that this matter should be dismissed in its entirety.

This case is being closely watched to see how state alcohol tax rates are impacted in the future.   Will there be more challenges to small brewer tax rates?  (FYI- A federal bill changing the tax rates of small brewers is also being considered by Congress.)

(previous post)

Interesting Puerto Rico Beer Tax Case Sent Back to District Court By First Circuit

Part of the 30 year long dispute over the taxation of beer in Puerto Rico has been a lawsuit filed by Coors Brewing Company against Puerto Rico for its tax treatment for small brewers.  It its lawsuit Coors is seeking to eliminate the tax exemption for small brewers in Puerto Rico.

Coors had lost at the district court level.   The First Circuit last week reversed and decided to send the case back to the district court for further instructions.  Complicating this case is the long history of small brewer tax rates and related litigation in Puerto Rico.   The 1st Circuit remanded the case to determine if Coors was barred by previous litigation related to a lawsuit filed by its importer for Puerto Rico or another older litigation filed by the United States Brewers Association in which Coors was a member.

It is worth a read just to learn about fun law school topics such as res judicata, collateral estoppel, the Butler Act, the Federal Relations Act and the litigious history of challenges to Puerto Rico’s treatment of small and large brewers.  Alas there is no substantive discussion of the underlying dormant commerce clause, 21st Amendment or Tax Injunction Act issues in last week’s opinion.  It is a case to monitor for future discussion of the dormant commerce clause.

Here is the complaint in Coors lawsuit against Puerto Rico. Read it here.

This judge also has other supplier termination cases before him.    His opinion in the Pabst case can be found here. 

Thanks to Dave Raber for the heads up.

The Supreme Court decision leaves in place the ruling of the 5th circuit upholding the Texas ruling that the alcohol licensing scheme by Texas is consistent with the 21st Amendment and previous ruling by the Supreme Court. The rejected petition challenged the Supreme Court’s statement that the three-tier system is unquestionably legitimate but could not cite to a circuit split as the 2nd circuit also ruled similar to the 5th.

This is the fourth denial of cert by the Supreme Court since the 2005 Granholm decision. (4th,6th, 7th and now 5th)

This probably means a new lawsuit in another state by plaintiffs trying to get back to the Supreme Court. Perhaps the 8th or 11th circuits will join the rest of the circuits as they are the only circuit courts spared alcohol litigation in the past five years.

Although the Supreme Court passed on this one, the next petitions could be coming later this year out of the 3rd Circuit case in New Jersey. (see below postings)

(Earlier Post) Another Monday, another day of no decision from last Friday’s conference with the Supreme Court.   This is the second consecutitve week where the Supreme Court had this case listed, but no order announced the following Monday.  Not sure whether I should read more into this (dissentin ranks?)  or just the volume of cases before the Supreme Court means they just haven’t gotten to this case yet.   Here is the list of today’s orders.   If they update the docket for this case it will be listed here.

(Earlier Post) Supreme Court to Decide Whether to Grant Cert on February 25

Looks like we will know next Monday whether the Supreme Court will hear this case despite the lack of a circuit split.   Here is the docket for the case.

(EARLIER POST)  Reply Brief In, Wine Country Matter in the Hands of the Supreme Court

The Supreme Court orders can be found here.

Well the briefing is all done.  Click here for the reply brief by petitioners in Wine Country.  Nothing new rather than repeat of their claim that their expansive view of Granholm is not being followed by the courts.  I must note that there still is no circuit split to back up their expansive view of Granholm.    The matter now is in the hands of the justices who will decide at some point in late February whether to grant cert, deny cert or ask for Texas to file a response.

(Earlier Post)  State Waives Filing, Respondents File In Opposition to Cert

The State of Texas waived a filing in response to the cert petition.     However, the respondents filed opposition to the cert petition.   Their brief can be found here.   The respondent’s brief concentrates on the basic and points out what the petitioners don’t like to acknowledge; 1) there is nothing close to a circuit split here warranting SCOTUS intervention and 2)  the courts below have followed Supreme Court direction in their opinions.    Expect more trees to be killed by the petitioners to try to keep their hopes alive.

(Earlier Post )-   Two Amicus Briefs Filed In Support of Cert. Petition In Wine Country/Siesta Village Matter

Happy New Year!    Sorry for the delay but two amicus briefs were filed in support of the plaintiffs seeking to reverse the 5th Circuit’s ruling for Texas.   One brief I’ll classify as the Nostalgic FTC Alumni Association was paid for by the Family Winemakers Association of California.  You will recall from the below note on the 1st Circuit case, the Family Winemakers Association of California is represented by Kirkland and Ellis, the same law firm who filed this pending cert petition.  In this brief which you can read for yourself here, former FTC staffers seek to highlight their various “research”  (that is often rolled out as not official FTC work) and imply that all state alcohol regulations are the product of big bad special interest wholesaler lobbying at the state level so state laws should be struck if it gets in the way of new business models.   I oversimplify of course but you can read for yourself.

The other brief was paid for by the Specialty Wine Retailers Association whose members include the plaintiff Wine Country.  It claims the 5th Circuit really messed things up and threaten to unravel the entire free world, again I may be overstating things but some of the rhetoric approaches those claims.   It was written by Bruce Hay, a former law clerk to Justice Scalia which probably explains all the repeated references to concurring opinions by Justice Scalia in their brief.  I guess they are trying to keep him on their side.   Also it is interesting to note that Mr. Hay and Einer Elhauge work for the same company Legal Economics, Inc. (http://www.legal-economics.com/) when they are not teaching Harvard law students.  In fact, just a few months ago, Mr. Elhauge testified before the House Judiciary Committee on behalf of the Beer Institute and noted that there was no real conflict in this area of law and suggested that fears of litigation in the retail shipping case were overblown:

“Challenges have also been brought against state laws that make direct sales to consumers illegal for out-of-state retailers but legal for in-state retailers. However, even though these state laws are facially discriminatory, they have actually been upheld by all three appellate federal circuits to consider the question, on the ground that favoring in-state retailers is inherent to the states’ Twenty-first Amendment authority to define who constitutes a retailer within the three tier system—a system whose legal validity has been unquestioned in the courts. True, one district court reached the opposite conclusion based on the law’s facial discrimination, but that district court did not consider the connection between the state law and the three-tier system and the appeal was mooted when the legislature amended the statute. There thus does not appear to be any final judgment that prohibits such statutes and little risk they would be invalidated, and in any event any nominal conflict in case law appears to have been decisively resolved in favor of the three circuits that sustained such laws.” (emphasis mine)

So what is next?   The Supreme Court has a cert and two amicus to consider.  The parties kill acres of trees trying to argue why the case should be heard and making crystal clear water muddy.  However, as Professor Elhauge has noted, there is no conflict in the courts that needs Supreme Court clarification.   For next steps, the State and intervenors could not file a response, or  they could file a response, or they can wait for the Supreme Court to tell them to respond.  A response at the end of the month is possible or one in February.   If so the earliest the Supreme Court could give the thumbs up to hear or deny this case is probably February.  If cert granted it probably would not be heard before the end of the Supreme Court term in June.  However, I am sure there is more to this saga and we’ll report it when it does.

(Earlier Post)  Plaintiffs File SCOTUS Petition in Wine

Country/Siesta Village Lawsuit Against Texas

The answer to the question of whether there would be an appeal was given today in the form of a Petition for a writ of certiorari filed in the Supreme Court of the United States.   The Supreme Court’s website shows that the petition was filed on the last possible day for the plaintiffs.   A link can be found here.        The state has until December 22 to file a response.

Here is a copy of the petition.   Once again they try to blur the lines and claim that retailers and wineries are the same entity.  They forgot to mention that the federal government doesn’t agree with that.  For example, the wineries need to be licensed at the federal level. Retailers do not.

What are the chances of the Supreme Court taking this?   Who knows.   They should not. There is no circuit split.  The 5th Circuit opinion is well reasoned.   However, this is the last play the plaintiffs have and perhaps the Hail Mary pass will work.   Will be an interesting start to 2011.

(EARLIER POST)

Judge Fitzwater has entered the final judgment for the state of Texas in the Siesta Village matter.  What will the folks that maintain wineries = retailers do next?

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5th Circuit Rejects Rehearing; Texas Wins; Supreme Court Next?

The 5th Circuit has wasted little time rejecting this third bite at the apple.  In the order, no judge on the 5th Circuit asked to hear and review this case.   Like the 2nd Circuit case, the 5th Circuit noted that Granholm dealt with wineries, not retailers.  The Granholm court’s holding that the three tier system is unquestionably legitimate remains powerful and was repeatedly used by the 5th Circuit.     Now the question is, will the plaintiffs attempt to seek the Hail Mary pass of the U.S. Supreme Court?

(PREVIOUS POST)

Maybe the third time is the charm.  Not satisfied with another 5th Circuit opinion rejecting the myth that alcohol retailers are the same as alcohol producers, the Siesta Village plaintiffs filed a new motion for a rehearing for an en banc hearing for the 5th Circuit.  Click here to read the petition.    Looks like they have trotted out the old “model bill”  myth again.  (See older posts for a discussion on that issue.)

(earlier post)  5th Circuit Rules For Texas. Granholm Means Wineries, Not Retailer

Today the 5th Circuit ruled for the state of Texas and that out of state alcohol retailers do not have the same rights of  in state alcohol retailers.  The opinion can be found here. Recall a panel of the 5th Circuit ruled for Texas in January (below).   The plaintiffs appealled for a full en banc review.   Instead today the 5th Circuit  denied the en banc review,  withdrew its ruling from January 26, 2010 and substituted today’s opinion.

The court agreed with much of the 2nd Circuit’s reasoning in Arnold’s Wine v. Boyle and noted that the Granholm decision focus was on products or producers, not  all three tiers in a state’s three tier system of alcohol regulation.  It noted the similarilities of  the Texas three tier system to North Dakota’s three tier system which it noted was approved and upheld  in North Dakota v. United States, 495 U.S. 423 (1986).

I expect an appeal to the U.S. Supreme Court despite the lack of a circuit split.

(from prior posts)          Updated: The state of Texas has filed their opposition to the en banc petition by the Plantiffs. Read their opposition here.

The Plaintiffs in the Wine Country Gift Baskets/Siesta Village case are trying to get the entire 5th Circuit to hear their case in a petition filed last week.   In a press release, the Specialty Wine Retailers Association stated:  “We are concerned not only that the Fifth Circuit’s recent ruling disregarded opinions of the U.S. Supreme Court, but that it also disregarded precedent from its own cases within the Fifth Circuit,” said Tom Wark, executive director of SWRA .   Personally, I believe that this rehearing petition grossly stretches the two Fifth Circuit decisions as well as the Granholm and I am hopeful that the state will again demonstrate this succinctly to the court.

As you recall, the State of Maryland sought an en banc opinion after it lost the most recent decision at the 4th Circuit.  Similarly, Costco failed to get the entire 9th Circuit to take up its cause after it lost most of its challenge to Washington state laws.    Both requests were denied.  Rehearings en banc are rarely granted.

A win for the 21st Amendment today in the 5th Circuit.

Our read of Granholm is that the Twenty-first Amendment still gives each State quite broad discretion to regulate alcoholic beverages. The dormant Commerce Clause applies, but it applies differently than it does to products whose regulation is not authorized by a specific constitutional amendment. Regulating alcoholic beverage retailing is largely a State’s prerogative. ”

“Because of  Granholm and its approval of three-tier systems, we know that Texas may authorize its in-state, permit-holding retailers to make sales and may prohibiti out-of-state retailers from doing the same.”

The decision gives the state of Texas a clear win on all counts and joins the 2nd Circuit in rejecting the attempts to twist the 2005 Supreme Court decision in Granholm v. Heald involving wineries into an examination of state distribution and retailing laws.

The Court did caution though that it was limiting its ruling.   “We pull back from any effort to define the reach of a three-tier retailer.”