New Defendant in NC and Final Briefing Filed by Appellant

Xander Guy resigned as chair of the North Carolina Alcohol Beverage Control.  He was the Respondent in this case until this week when his replacement was confirmed.  Hank Bauer is the new Defendant in the retailer challenge to NC laws.

The Appellant has filed its response to the state and amicus briefs.  They argue that (despite not being similarly situated) that if a state gives a winery an exception to the three-tier system it must also give one to retailers.  They claim that if there are any exceptions to an airtight three-tier system, then there is no three-tier system.

This case will now be scheduled for oral argument in the first quarter of 2022.

(previous post)    4th Circuit Briefing Finishing Up in Retail Shipping Case From North Carolina

B-21/Rash filed an appeal to the 4th Circuit from their loss at the North Carolina district court level. Their opening brief sought to cast the district court opinion as outside the parameters set by the US Supreme Court on dormant Commerce Clause challenges.

The comprehensive brief filed by the state of North Carolina argues otherwise. It notes that the facts as stipulated below and the law clearly support the district court’s decision.  The state points out the history of NC legislation and how the litigation seeks to have the benefit of selling in NC but without all the regulation that all other entities are subject too.

Two amicus briefs have been filed.  The first amicus brief was filed by the Center for Alcohol Policy and the North Carolina Association of ABC Boards.   This brief highlights the historical underpinnings of state alcohol regulation generally and how North Carolina’s regulatory structure flows from this historical development.  Much emphasis is placed on the seminal alcohol regulatory treatise Toward Liquor Control and its importance in informing alcohol policy.  The brief observes, “This book serves, in other words, much like a Federalist Paper for the Twenty-first Amendment.”

The other amicus brief was filed by the American Beverage Licensees, North Carolina Beer and Wine Wholesalers and Wine and Spirits Wholesalers of America.   The brief supplements points in the state’s brief which highlighted that the Appellants are seeking to ultimately evade wide swaths of NC state alcohol regulation by their litigation efforts.   The brief discusses the crucial role of in state retailers and wholesalers.

The appellant has an opportunity to file a response brief and then this matter will be scheduled for oral argument likely sometime in the first third of 2022.

The similar 7th Circuit case out of Indiana, which is scheduled for oral argument Friday, is slightly ahead of the NC case in timing.

(previous post) District Court Issues Rash Decision. Rules for State of North Carolina and Dismisses Out of State Retailer’s Dormant Commerce Clause Complaint

Pardon the pun but the lawsuit brought by Mike Rash, B-21 Wines, et. al has been dismissed by the district court so I will call it the Rash decision.

United States District Judge Frank Whitney of the Western District of North Carolina has granted the state of North Carolina’s motion to dismiss the effort of the plaintiffs to be able to ship wine from retailers directly to North Carolinians.

Judge Whitney noted that the attempts to claim constitutional protection for out of state retailers like out of state supplier jurisprudence is ill founded. He noted, “Wineries are producers; they are the first tier in a three-tier system and are meaningfully distinct from retailers, the third tier... Allowing producers to circumvent the three-tier system does not undermine the system in the same way allowing retailers to circumvent the system would.

Judge Whitney later reasoned that his decision is relatively straightforward, “Given a choice between virtually eliminating North Carolina’s three-tier system, which the Supreme Court and multiple Courts of Appeals have determined is unquestionably legitimate, and maintaining the status quo, the Court chooses the latter.”

It is unknown at this time whether the plaintiff will appeal.

(previous post)  Court Denies NC Motion to Dismiss Retail Shipping Case

Judge Frank Whitney of the Western District of North Carolina Granted in Part and Denied in Part the effort of NC to dismiss the retail shipping case brought by a Florida retailer and some consumers.   In his order,  Judge Whitney noted the plaintiffs had met their burden to overcome a 12b motion to dismiss.

The Court further noted it is still bound by the 4th Circuit’s  Beskind v. Easley decision from 2003 from the winery direct shipping fights.  The court also noted that the remedy applied in Beskind was to remove in state retailer shipping rather than extend retailer shipping rights to all.

The matter will return to normal discovery and briefing.

(previous post) State of North Carolina Files Motion To Dismiss Retail Shipping Case

The state of North Carolina filed its motion to dismiss against the recent complaint by an out of state retailer challenging laws that permit North Carolina retailers to perform some local delivery functions as a violation of the dorman Commerce Clause.

The state’s brief sought dismissal because the plaintiffs lack standing, the plaintiffs’ complaint fails to state a claim, and that the naming of the Attorney General as a Defendant was improper.

(previous post) Another Retailer Shipping Case Filed – This Time in North Carolina

The lawyer combination of Tanford and Epstein have filed their (at least) sixth retail shipping dormant commerce clause lawsuit since the Tennessee Wine & Spirits Retailers Association decision in the Supreme Court.

This time they have filed a complaint on behalf of Florida business and several North Carolina residents claiming that the North Carolina laws discriminate against commerce.  They claim a North Carolina retail residency law and the lack of the ability of the Florida company to secure a North Carolina permit to ship wine from out of state violate the U.S. Constitution’s dormant Commerce Clause.

Two of the North Carolina resident plaintiffs have the last name Rash.   So this will likely be a Rash decision at the end of the day.  (Sorry, had to go there.)

Comments

  1. Thanks for the update (and the laugh).

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