6th Circuit Denies Rehearing in Michigan Retail Shipping Case

The 6th Circuit has denied the request for a rehearing en banc on the decision upholding Michigan’s law banning out of state retailer direct shipping.  The order noted, “No judge has requested a vote on the suggestion for rehearing en banc.”

At this time, it is unknown if there will be an appeal to the United States Supreme Court.

(previous post) –  6th Circuit Rules for Michigan in Alcohol Retail Direct Shipping Challenge

The 6th Circuit held oral arguments in March and less than five weeks later has ruled for the state of Michigan beating back a challenge by an Indiana retailer seeking to sell alcohol to Michigan consumers.

The opinion was authored by Judge Sutton and there was a concurring opinion by Judge McKeague.   The decision recognizes the importance of physical presence with retail sales and the strong record put forward by Michigan to defend its law.

Judge Sutton saw through the intent of this lawsuit and what a ruling for plaintiff would mean.  In reviewing other cases upholding similar state laws he noted, “As these opinions suggest, there is nothing unusual about the three-tier system, about prohibiting direct deliveries from out of state to avoid it, or about allowing in-state retailers to deliver alcohol within the State. Opening up the State to direct deliveries from out-of-state retailers necessarily means opening it up to alcohol that passes through out-of-state wholesalers or for that matter no wholesaler at all. See Arnold’s Wines, 571 F.3d at 185 n.3. That effectively eliminates the role of Michigan’s wholesalers. If successful, Lebamoff’s challenge would create a sizeable hole in the three-tier system.”

This opinion is a strong opinion for the state right to regulate alcohol and the importance of the three-tier system.  It notes the importance of in state wholesalers and that efforts to go around them, while potentially creating short term economic efficient arguments, raise real life concerns for the state.

There remain a half dozen similar lawsuits perculating through the federal court system on the same claims from this law firm.

(previous post) Oral Argument Held on Dormant Commerce Clause Challenge to Michigan Retailer Shipping Law

The 6th Circuit met in Cincinnati to hear oral arguments on the challenge to Michigan’s retail shipping laws.

The judges for this panel were Circuit Judges Bernice Donald, David McKeague, and Jeffrey Sutton.

Predicting who won oral arguments is inevitably a fool’s errand and I won’t offer a prediction here.  The Judges asked tough questions of all lawyers and raised new lines of questions that have not been featured in other cases.

Here is a link to the oral argument for your social distancing listening pleasure.

(earlier post)  Briefing Complete for 6th Circuit in Challenge to Michigan Retail Shipping Laws

Briefing is complete in the 6th Circuit and the parties will await oral argument scheduling by the court presumably in the first quarter of 2020. Recall the district court struck Michigan’s law related to out of state retailer sales as a violation of the dormant commerce clause.

The state of Michigan has filed its reply brief as has intervenor Michigan Beer and Wine Wholesaler Association.   Michigan’s appellant brief can be found here and the intervenor’s brief here.

Amicus briefs were filed in support of the state by the Center for Alcohol Policy along with the Michigan Alcohol Policy Promoting Health and Safety and also a brief by American Beverage Licensees/ Wine and Spirits Wholesalers of America.

In addition to the brief of the Plaintiff-Appellee Lebamoff Enterprises, there were amicus briefs in support filed by the National Association of Wine Retailers and the American Trucking Association .

There will presumably be a race with the pending 8th Circuit appeal to see which case is argued and decided first in 2020.  The 5th Circuit’s ruling for Texas against a Walmart challenge already won the crown for first place in deciding a dormant commerce clause case after the Supreme Court’s June decision in Tennessee Wine Retailers Association which upheld the 6th Circuit.

(previous post) Michigan Court Enters Stay of Retail Shipping Order Pending Supreme Court Review of TN Case

Because of the pending Supreme Court review of the Byrd v. TN Retailers Association matter, Judge Tarnow granted the state of Michigan’s motion and has issued a stay of his injunction against the Michigan retail shipping law.   In acknowledging the pending Supreme Court matter, the judge noted:

“The Court is aware that legislative efforts to bring Michigan into compliance with the injunction may need to be duplicated after the Supreme Court’s ruling on Byrd, and that an environment of legal uncertainty is not ideal for well-reasoned lawmaking.”

(previous post) Michigan District Court Rules for Out of State Retailer

Senior United States District Court Judge Arthur J. Tarnow sitting in the Eastern District of Michigan ruled against the state and for out of state retailer Lebamoff Enterprises on the dormant Commerce Clause challenge to Michigan’s alcohol laws limiting store delivery to consumers to Michigan Retailers.   In his Order and Opinion Judge Tarnow noted how he was bound by the recent 6th Circuit ruling in Tennessee Retailers v. Byrd.  Michigan is within the 6th Circuit as is Ohio, Kentucky and Tennessee.   As readers will recall the Supreme Court agreed to hear the TN Retailers case last week so the Supreme Court ruling will directly impact the next steps of Michigan law on this matter.   All eyes will be on the Supreme Court.

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  1. […] opinion for the state right to regulate alcohol and the importance of the three-tier system,” per the NBWA’s Alcohol Law Review blog. “It notes the importance of in state wholesalers and that […]

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