First Circuit Affirms In Part, Sends Back for More Evidence in Rhode Island Retail Direct Shipping Challenge

The First Circuit ruled on the appeal of a challenge to Rhode Island retail shipping laws.  The opinion was authored by Circuit Judge Selya and affirms part of the state win below, but also sends back for additional fact-finding on several parts of the challenged statutes.

The First Circuit upheld the district court’s ruling upholding Rhode Island’s requirement that licensed retailers purchase alcohol only from licensed in-state wholesalers.

The First Circuit believes that the district court did not sufficiently examine the evidence of the state defending the in-state retailer requirement as well as the ban on common carrier delivery.  The court noted the state had general reasons for its regulation, but had not presented more specific evidence on how it was doing so. Like the decision in a recent 6th Circuit challenge in Ohio, the court has sent back to the district court for more evidence to be examined in line with the Supreme Court’s 2018 decision in Tennessee Wine Retailers Association.

The Court also threw cold water on the Plaintiff’s claims that other states choosing a different regulatory path must be considered when reviewing the state law.  Just because state X has a “lesser” law does not compel state Y to accommodate it with the court noting,  “but the mere existence of possible alternatives does not, for purposes of a Twenty-first Amendment inquiry, necessarily invalidate a challenged law.”  There is no mandated “regulatory race-to-the-bottom” for alcohol regulation. 

The court further rejected plaintiff’s attempt to shoehorn alcohol litigation into traditional dormant Commerce Clause standards saying “That argument, however, conflates the proper Twenty-first Amendment inquiry with a traditional analysis under the dormant Commerce Clause.”

At some point the Supreme Court may be asked once again to clarify and harmonize its dormant Commerce Clause jurisprudence.  On one hand, the Supreme Court recently allowed a state’s animal welfare regulations to survive dormant Commerce Clause challenge (despite no specific constitutional amendment on animal rights), yet continues to muddy the reach of the state rights to regulate alcohol under the 21st Amendment.  The plaintiffs are clearly seeking some form of strict scrutiny on any state regulation of alcohol which seems to me far beyond anyone’s intent 90 years ago when this country passed the 21st Amendment.

(previous post) Rhode Island Retailer Case Going to First Circuit

The First Circuit will get to join the fun of dormant commerce clause litigation.  The plaintiffs who lost in Rhode Island District Court have filed a Notice of Appeal  with the First Circuit so briefing in this case will occupy the first half of 2023.

In their continuous effort to create a federal appellate court split, the plaintiff’s attorney will be joining their to-date-unsuccessful efforts in the 4th, 6th, and 8th Circuits.

(previous post) District Court Grants State of Rhode Island’s Summary Judgment Motion and Dismisses Challenge for Out-of-State Retailer Sales

United States District Court Judge John McConnell ruled for the state of Rhode Island today against a challenge by wine consumers.  Judge McConnell noted in his opinion that the “strict scrutiny” standard sought by the plaintiffs was not the proper legal analysis to use, and instead used the “different inquiry” standard urged by the Defendants.

The court noted that state requirements such as the requirement that in-state retailers secure their alcohol from in-state wholesalers and that an in-state retailer have a physical presence in Rhode Island, serve public health and safety purposes.  It noted Rhode Island provided evidence of these issues.

The court noted that ruling for the plaintiffs would undo Supreme Court precedent noting that state three-tier alcohol distribution systems are “unquestionably legitimate.”

This district court opinion is in line with recent rulings upholding state laws from the 4th, 6th, and 8th Circuits.

(previous post) Motions for Summary Judgment Filed in Rhode Island Retail Shipping Case

The state of Rhode Island and intervenor have filed renewed motions for summary judgment to dismiss the attempt by an out of state retailer to ship into Rhode Island.   The plaintiff has previously filed its motion for summary judgment.  

Both the initial brief of Rhode Island and the brief of the intervenor-Defendant Rhode Island Responsible Beverage Alcohol Coalition point out that the Plaintiff’s position essentially makes the three-tier system optional for out of state retailers, but mandatory for in state retailers.   The state notes how self-serving, selective, and overbroad the relief sought by Plaintiff is.  The state points out that the Plaintiffs claim they are interested in the fine wine market but their attack would apply to beer and liquor too.  The coalition brief notes:

By seeking to permit retailers nationwide to ship alcohol to Rhode Island without maintaining licensed premises in the State and without purchasing those alcohol products from a licensed in-state Rhode Island wholesaler, Plaintiffs effectively challenge a core component of the State’s three-tier system…thereby challenging Rhode Island’s three-tier system itself. Under well established Supreme Court precedent, such a challenge must fail.” 

An amicus brief in support of the motions was filed by the Rhode Island Liquor Stores Association. The amicus brief supported the Defendants’ briefs with more specific emphasis on the various aspects of Rhode Island retail alcohol licensing the Plaintiff is specifically trying to avoid including all the stringent requirements of a Class “A” retail license in Rhode Island.

The Plaintiff’s response to these briefs is due April 1 while the replies of the defendants are due April 29.

(earlier post) Rhode Island Judge Denies Motion To Dismiss Retail Shipping Case

Judge John McConnell has ruled against the state of Rhode Island’s Motion to Dismiss.   The state argued that the plaintiffs did not have standing in fact due to admissions made during depositions.  The court found that the plaintiffs’ motivation is not relevant to the existence of standing.  The court concluded noting, “Plaintiffs have pleaded sufficient injury in fact to constitute Article III standing to clear this early jurisdictional hurdle.  Naturally, the question of whether Rhode Island’s three-tier alcohol distribution system and bar on out-of-state retailer direct-to-consumer alcohol sale, delivery, and shipment can withstand Plaintiff’s attack is for another day.”  A copy of the Memorandum and Order can be found here.

This case will continue with discovery until April of 2022.

(previous post) Defendants’ File Motion to Dismiss in Rhode Island Retail Shipping Case Noting Plaintiffs Haven’t Been Harmed

The Defendant in the Rhode Island dormant Commerce Clause change has filed its Motion to Dismiss.   The parties in this case have already undertaken basic discovery and that discovery serves as the basis for this motion by the defendants.  The Defendants note that the Plaintiffs lack standing to pursue their claim because they have suffered no concrete or particularized injury in fact. 

The Rhode Island case is different than most since there is no out of state retailer as a plaintiff.  Instead, it is just two Rhode Island consumers who filed this complaint.   Once in discovery the state determined their claims suffer greatly and deviate substantially from the allegations in the Complaint. 

 The defendants note, “As set forth in greater detail below, Plaintiffs’ deposition testimony told a different story; both testified that they contacted out-of-state retailers for the purpose of this lawsuit at the suggestion of their counsel, but not with any intention of purchasing wine. Nor could either Plaintiff identify even one of the alleged many rare, unusual, and allocated wines that they claim could not be found in Rhode Island.

Another part of the motion noted, “both Plaintiffs called several liquor stores outside of Rhode Island at counsel’s suggestion, but with no intention of actually purchasing a specific wine. Further, neither Anvar nor Drum could identify a single instance in which they were unable to buy a particular wine they sought. Indeed, neither Plaintiff could identify any specific wine unavailable for purchase in Rhode Island.”

The Motion to Dismiss has several other examples where the deposition of the plaintiffs undercut the issues raised in their underlying Complaint and support the defendants’ effort to dismiss this case under 12b(6).

The Plaintiffs will have an opportunity to respond to this motion.

(previous post) Additional Retailer Shipping Lawsuit Filed in Rhode Island

I neglected to cover another federal lawsuit by Mssr. Tanford & Epstein filed late in 2019.   They have filed a dormant Commerce Clause challenge to Rhode Island law related to retailer shipping claiming laws that allow local retailers to deliver but not out of state retailers is a violation of the Constitution.  Their complaint can be accessed here.

The State of Rhode Island has filed an Answer and a Statement of the Case. Also, the Rhode Island Responsible Beverage Coalition, Inc which is an association of local Rhode Island businesses has been permitted to intervene in this case.   Discovery in this case is due this summer.

There are over a half dozen similar lawsuits  by this law firm against state alcohol laws across the country.


  1. Mssr. Tanford & Epstein do not understand that if a retailer will get liquor license in another state, then he no longer will be a part of interstate commerce.

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