Total Wine Seeks Full 2nd Circuit En Banc Review on Challenge to Connecticut Pricing Laws

Connecticut Fine Wine and Spirits d/b/a Total Wine & More is asking the full 2nd Circuit to hear and reverse the panel that recently upheld four Connecticut alcohol pricing laws against a Sherman Act challenge.

In a comprehensive filing Connecticut Fine Wine and Spirits (CFWS) claims that the decisions of the district court and 2nd Circuit panel were wrong; that previous 2nd Circuit precedent (Battipaglia v. NYSLA) should be overturned; and that prior Supreme Court precedent favors the position of CFWS.  Much of the brief reads like a cert petition to the United States Supreme Court and highlights that the 2nd Circuit decision conflicts with other circuit decisions (ironically, other cases often involve Total Wine).

En banc reviews are rarely granted.  If the 2nd Circuit were to pass on considering this, the next step for CFWS would be the likely appeal to the United States Supreme Court later this year.

(previous post) 2nd Circuit Upholds Connecticut Alcohol Pricing Laws Against Total Wine Challenge

The 2nd Circuit ruled today in favor of Connecticut in its defense of its alcohol pricing laws.   Oral Argument was held in February of 2018 and a decision was announced today in a comprehensive ruling authored by District Judge Paul Englemayer who was sitting on this 2nd Circuit panel by designation.

Total Wine had challenged the Connecticut alcohol laws on price post, price hold, ban on price discrimination/volume discount and minimum retail pricing provisions.   The 2nd Circuit upheld the district court’s decision.   This opinion is a traditional antitrust review matter and issues of alcohol policy (concerns of lower prices of alcohol and impact on public health) or other 21st Amendment issues did not really impact the court’s analysis in this case.

The 2nd Circuit had the opportunity to review a previous precedent upholding a similar NY law in a 1984 2nd Circuit opinion Battipaglia v. NYSLA.  The court noted that there have been several important antitrust decisions since then and reviewed the relevance of this precedent.  It concluded, “Under these circumstances, we do not find reason to conclude that Battipaglia has been, sub silentio, overruled. If anything, its reasoning has been fortified by intervening decisions like Fisher and Twombly. Battipaglia remains good and persuasive law.”

They concluded that the challenged provisions of the Connecticut laws governing liquor pricing  are not preempted by § 1 of the Sherman Act.

The court opinion noted that 2nd Circuit precedent can only be changed by higher court precedent or an en banc panel.   It remains to be seen if the Appellant will seek for en banc review by the 2nd Circuit or file an appeal with the Supreme Court.

(previous post – Second Circuit Holds Oral Argument on Antitrust Challenge to Connecticut Liquor Laws)

On February 1, 2018, the 2nd Circuit held oral argument on the appeal by Connecticut Fine Wine and Spirits (Total Wine).   The argument was scheduled for 24 minutes but was extended due to the court’s questioning and interest in the case. 

Total Wine has argued that the laws on price posting, price hold, price discrimination, and minimum retail pricing laws violate the Sherman Act.   It conceded at trial that it is making a facial challenge to the law. 

The state argued that its regulatory system serves many important policy objectives and these types of laws  have already been found by the Second Circuit not to violate the Sherman Antitrust Act.  The Wine & Spirits Wholesalers of Connecticut, Inc., the Connecticut Restaurant Association, the Connecticut Beer Wholesalers Association, and the Connecticut Package Stores Association all intervened in this case and they consolidated their arguments into one brief on appeal.  The state and the interveners split their allotted time at oral argument in defense of the laws.

The oral arguments helped flesh out the specifics of this facial challenge and also required the court to wrestle with the 2nd Circuit precedent on this very same point.  The 2nd Circuit upheld a substantially similar state law in Battipaglia v.  NYSLA in 1984.   The effort by plaintiffs to have all the laws lumped together versus the state’s (and precedent’s) call to have these laws examined individually.

The Second Circuit could rule within the next few months and an appeal to the Supreme Court is likely.

(previous post) Court Rules for Connecticut and Against Total Wine in Antitrust Challenge

United States District Court Judge Janet Hall upheld various Connecticut laws from antitrust challenges brought by Connecticut Fine Wine and Spirts which most of us know as Total Wine.  In her thorough 40 page opinion granting the state and intervenors’ motions to dismiss, Judge Hall methodically went through the challenges and held: “Total Wine’s challenges to the post and hold provisions and minimum retail price provisions are dismissed, because these provisions constitute hybrid restraints that receive rule of reason scrutiny and therefore cannot be preempted. Total Wine’s claim that the price discrimination prohibition is preempted is also dismissed, because that provision is a unilateral restraint outside the scope of the Sherman Act.

Give the plaintiff’s aggressive litigation history and some potential inconsistent application of new Supreme Court precedent,  I fully expect an appeal to the 2nd Circuit which has previously upheld these same laws in questions.

(previous post)  State Files Motion to Dismiss, Parties Seek to Intervene In Total Wine Anti trust Lawsuit in Connecticut

Four parties have sought court permission to intervene in the antitrust lawsuit filed by Connecticut Fine Wine and Spirits (Total Wine) in federal court in Connecticut.  The Wine & Spirits Wholesalers of Connecticut, Inc., the Connecticut Restaurant Association, the Connecticut Beer Wholesalers Association, and the Connecticut Package Stores Association have all weighed in with separate motions seeking to intervene in the case and oppose the Complaint.   The Plaintiff has filed opposition to these motions to intervene.  The four parties must respond within a week.

Also, the state has filed a Motion to Dismiss the Complaint noting that the challenged laws have already been previously upheld at the district court and 2nd Circuit levels.  It further notes that the laws under challenge are unilateral complaints and previous Supreme Court precedent gives wide leeway for state legislation reviewed under this standard.  Finally, the brief notes the failure of the Plaintiff to properly plead an antitrust complaint under the Supreme Court’s recent Twombly decision and argues that is because there is no actionable basis for the Plaintiff’s complaint.    The Plaintiff will now have an opportunity to respond to the Motion to Dismiss.   If intervening parties are added, the too will press the motion to dismiss.

(previously posted- August 24, 2016)  New Antitrust Lawsuit Filed in Connecticut

Connecticut Fine Wine & Spirits, also known as Total Wine & More, has just filed a complaint alleging that certain alcohol laws in Connecticut are in violation of the Sherman Act.     The lawsuit apparently challenges the state’s laws on price post, price hold, quantity discounts, and selling below costs.

This is not the first litigation rodeo for the nation’s largest privately held liquor store as they have filed lawsuits in other states in conjunction with their lobbying efforts as covered previously on this blog.    Nor is the first time the courts have heard a challenge to these laws.   The state won previous challenges at both the district court and 2nd Circuit levels to the same post and hold laws..

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