Missouri Files Response for SCOTUS Review of 8th Circuit Retail Shipping Case

The state of Missouri has filed its response brief to the petition for writ of certiorari filed by a Florida retailer challenging Missouri alcohol delivery laws.  The state noted a number of reasons why this case is not appropriate for Supreme Court review including: there is no circuit split; there are at least seven other similar cases percolating down at lower district court review; and that the 8th Circuit faithfully applied the proper law in this matter.

This is likely the final step before the Supreme Court justices meet on September 27 to consider this, and hundreds of other petitions, as they fill out their appellate docket for the year.    The Supreme Court could choose to hear this case, deny to hear this case, or pass it over to the next court conference.   The September 27 conference is often referred to as the “long conference” due to the large volume of cases before it due to backups from the summer recess and changing of law clerks.

In other news, the Supreme Court announced last week that it would return to in person oral arguments this fall after using virtual arguments for the past year.

(previous post) Supreme Court Seeks Response from Missouri in Alcohol Retailer’s Appeal of 8th Circuit Decision

The Supreme Court has asked the state of Missouri to respond to the filings in the pending Sarasota Wine cert petition.  They have asked that the state file by September 10, 2021.

The Supreme Court undertook the same request on the recent certiorari review of the 6th Circuit ruling for Michigan.  The State filed its response and the Court later declined to take up the case.

(previous post) Briefs Filed in Support of Petition Seeking Review of 8th Circuit Retail Shipping Case

Two Amicus Briefs were filed with the Supreme Court supporting the request of the Florida retailer to have the Supreme Court grant review of the 8th Circuit’s ruling for Missouri upholding their alcohol retail delivery laws.

The first brief was filed by the National Association of Wine Retailers who argues that the 8th Circuit misapplied the proper dormant Commerce Clause standard.  They also complain that dicta from previous Supreme Court rulings has been elevated to holding and that clouded the 8th Circuit’s analysis.

The second brief was filed by 22 wine consumers and argues similar points as the other briefs.  It also argues that the COVID-19 pandemic necessitates judicial action to change laws to allow these consumers to get the wines they desire.

The Supreme Court is slated to consider whether to take this case at its conference on September 27.  The State of Missouri has waived its response to this petition but the Court could ask them to submit a response at any point before the September conference as they did in the Michigan shipping case.   The Supreme Court asked Michigan to respond and still denied the cert petition out of the 6th Circuit case.

(previous post) Florida Retailer Asks Supreme Court to Review Adverse 8th Circuit Decision Upholding Missouri’s Retail Shipping Laws

The Florida retailer who lost their attempt to get shipping rights in Missouri at the district court and 8th Circuit has filed a writ of certiorari with the United States Supreme Court asking them to take up the case and reverse the 8th Circuit.

The plaintiffs argue that the 8th Circuit misapplied previous Supreme Court precedents and that Missouri alcohol laws violate the dormant Commerce Clause.   It appears the plaintiffs’ Privileges and Immunities challenge has been dropped on this appeal.

On one hand the petition complains that the court needs to resolve this issue because of “confusion” in lower courts yet also laments that the 6th Circuit and 8th Circuit are not split on this issue.  The plaintiffs apparently are comfortable blurring the distinction between wineries and retailers although they are regulated differently by the federal and state governments.  And the plaintiffs try to imply (incorrectly) that Missouri has some form of residency law for retailers akin to the law struck down in the Supreme Court’s Tennessee Wine and Spirits Retailers Association case.

The Plaintiffs disagree with the 8th Circuit’s rationale that “Missouri’s law prohibiting out-of-state wine retailers from participating in its online market was protected by the [21st] Amendment and immune from Commerce Clause scrutiny because physical presence in a state is an inherent prerequisite to effective regulation. The question, upon which the lower courts disagree, is: When considering both the Twenty-first Amendment and the Commerce Clause, may Missouri ban out-of-state wine retailers from participating in its online market when nondiscriminatory alternatives are available that would serve its regulatory interests?

The Plaintiffs then cite to a bunch of non legal news articles noting the increase in ecommerce due to COVID and conflates issues related to this temporary phenomenon with a constitutional right.   Their petition for writ of certiorari cites to 22 court cases but interestingly 13 of these cases were actually filed/ brought by this same lawyer/firm for the same issues including the recently denied Michigan case out of the 6th Circuit.

The state has until later this summer to respond to the filing.  States often do not respond and if they choose not to file, the court sometimes asks them to file as the Supreme Court did in the recent appeal by the same lawyer from his loss in the 6th Circuit case out of Michigan.  Even after asking for additional briefing, the court declined to take up the Michigan case.

I expect a decision on whether to take this case to be decided much later this year as the earliest the court could consider taking this case is at the very end of September.

(Previous Post) 8th Circuit Won’t Entertain Rehearing/En Banc Request in Challenge to Missouri Retail Shipping Law

The 8th Circuit denied the request for a rehearing as well as the request for an en banc review of the 8th Circuit’s decision upholding Missouri’s law on retailer shipping against a dormant Commerce Clause challenge.  The one page order can be found here.

Now the clock starts on the expected appeal to the Supreme Court by the plaintiffs so that will be something we will track over the next few months.

(previous post) En Banc Request Filed in Missouri Direct Retail Shipping Case

As expected the plaintiffs have filed a request for a rehearing as well as a rehearing en banc from their loss on the right to sell alcohol to Missouri residents from a Florida retailer.

Plaintiffs claim the district court and 8th Circuit panel prematurely judged their Commerce Clause and Privileges and Immunities Clause claims.  They also claim the state has not yet proved a public safety justification so they should be allowed to proceed.

Missouri has the chance to respond and we’ll provide their response.

(previous post) 8th Circuit Affirms, Missouri Retailer Shipping Laws Upheld

The 8th Circuit has affirmed the district court which had upheld Missouri’s law allowing only licensed in-state Missouri retailers to deliver alcohol to local residents.   The plaintiffs representing an out of state wine retailer and consumers lost their effort to create a judicially created right to have direct shipment.  Their constitutional challenges under the dormant Commerce Clause and Privileges & Immunities Clause failed.

Oral argument was held in September and there was some concern that the court would overturn the district court but the 6th Circuit’s opinion and the Supreme Court’s recent denial of certiorari were probably helpful to Missouri.

Since the district court’s opinion was issued before the Supreme Court’s most recent pronouncement on alcohol and the dormant Commerce Clause in 2019’s Tennessee Wine and Spirits Retailer Association, the 8th Circuit noted that whether under Granholm or TN Wine and Spirits Retailers, the district court analysis was supported.  The 8th Circuit reviewed several of the other circuit courts and noted that the essential features of the three-tier system have not been gutted and the plaintiff’s lawsuit seeks to gut essential features.  The recent 6th circuit case from Michigan which the Supreme Court declined to hear was a key influence for the 8th Circuit.

The opinion in many ways captures the oddity of alcohol litigation.  Section Two of the 21st Amendment put decisions on alcohol policy in the hands of state legislatures.   There have been over two thousand changes to state alcohol laws in the past nine years but all these tweaks were made in the state house, not the federal court house.  Judge Loken’s opinion captures that concern and concludes that “… those seeking a more consumer-oriented organization of alcohol industries must “turn to state-by-state political action on behalf of consumers who are hurt by these laws.”

The 8th Circuit’s decision is an important reminder that these decisions belong in the state house so that they can haggle over the important definitions such as essential features of brick and mortar locations.  In these days of ecommerce expansion, the Missouri law is an important reinforcement of physical presence requirements.   The Supreme Court denied review of the recent 6th Circuit case with similar fact patterns and attorneys and previously denied review of a similar 5th Circuit case in 2011 so the Supreme Court does not seem eager to nationalize alcohol policy via court decision.

The state legislatures will be dealing with a rapidly-changing ecommerce landscape and terms of localized, last mile shipping versus national shipping.  While ecommerce is new, the public health costs, industry investments and needed tax revenues of the alcohol industry continue to remain essential features of any debate.

(previous post) Oral Argument in 8th Circuit’s Retailer Dormant Commerce Clause Matter Set for September 24

Oral argument before the 8th Circuit on the Sarasota Market lawsuit against Missouri for not allowing out of state retailer delivery has been set for September 24.  This hearing will be held virtually.  This is a week before the United States Supreme Court will meet to consider a similar case out of the 6th Circuit challenging Michigan’s laws.

(previous post) No Oral Argument Yet in 8th Circuit Retail Shipping Case, State Files Supplemental Authority Notice With Court

The 8th Circuit has not yet scheduled oral arguments on the dormant Commerce Clause challenge by a Florida retailer to the Missouri local delivery law.

Recent the state of Missouri filed a supplemental authority letter with the court letting them know of the recent ruling by the 6th Circuit for the state of Michigan in a very similar case.   The state noted previous decisions “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 within the state.”   It highlighted similar findings from the 2nd, 5th and 7th Circuits.

We will wait for oral arguments on this case.

(earlier post) Briefing Complete in 8th Circuit Retailer Shipping Case Challenging Missouri Law

Since the June ruling by the Supreme Court in Tennessee Wine Retailers Association there have been a few other judicial developments that this website has covered such as newly filed lawsuits, a 5th Circuit win by Texas and a victory by California against a challenge by an out of state importer.

One of the other closely watched cases will be in the 8th Circuit where briefing is complete in a challenge by a Florida retailer to Missouri law that permits local retailers to make deliveries of wine but prohibits out of state retailers.   The district court had ruled for Missouri on March 29, 2019.

The appellants have filed their initial brief and recently filed their final brief.    They make the argument that Missouri law prevents an out of state retailer like the plaintiff from opening a retailer in the state.  However, it ignores the obvious fact that out of state companies like Total Wine, Walmart and others based overseas have Missouri retailer licenses.

Missouri’s brief can be found here.     Amicus briefs to support the state were filed by the Wine & Spirits Wholesalers of America/ American Beverage Licensees as well as by the National Beer Wholesalers Association/Missouri Beer Wholesalers Association.  If the 8th Circuit does not uphold the district court it may instead seek a rehearing to develop a record for a court to review.

These cases were filed before the Supreme Court decision in Tennessee, but Supreme Court Justices Kagan and Gorsuch predicted during oral argument in January that challenges related to physical presence were likely the next frontier of the attack on state alcohol laws.

The next step will be to wait for the 8th Circuit to hold oral arguments.

(previous post)  Florida Retailer Seeks Appeal to 8th Circuit From Missouri District Court Loss on Direct Sales

As expected, the plaintiffs have filed their notice of appeal stemming from their loss at the Missouri district court where Judge Autrey noted there was no dormant commerce clause violation barring out of state retailers from selling to Missouri consumers.  Briefing will commence on this appeal this summer.  The United States Supreme Court will rule on a dormant Commerce Clause matter in the interim.

(previous post) Missouri District Court Throws Out Challenge to Missouri Law By Out of State Retailer

While many in the United States are waiting on the Supreme Court’s decision in the Tennessee Retailers Association case, there are many alcohol cases still percolating at lower courts. Today, U.S. District Judge Henry Edward Autrey ruled for Missouri and granted the Motion to Dismiss the dormant Commerce Clause and Article IV Privileges and Immunities claims brought by a Florida alcohol retailer, a Florida resident, and two Missouri residents.   He had previous dismissed this case for a lack of standing but allowed the plaintiffs the opportunity to amend their complaint.  The state then moved to dismiss the amended complaint.

Judge Autrey agreed with the state that the Plaintiffs failed to state a claim upon which relief can be granted.  On the dormant Commerce Clause case the court noted the plaintiff’s claims are barred by both the Supreme Court’s decision in Granholm v. Heald, 5.444 US. 460 and the 8th Circuit’s decision in Southern Wine and Spirits of Am., Inc. v. Division of Alc. & Tobacco Control, 731 F.3d 799 (8th Cir. 2013).

Judge Autrey noted, “The four-tier system is a legitimate exercise of Missouri’s power under the Twenty-first Amendment to “maintain an effective and uniform system for controlling liquor by regulating its transportation, importation, and use,” including the ability to “funnel sales through the [multi]-tier system.” Granholm, 544 U.S. at 484. …To allow out-of-state retailers to ship directly to Missouri residents would not only burden in-state retailers, who would have to operate within the four-tier system while out-of-state retailers could circumvent the Missouri regulatory system entirely, it would also violate the Twenty-first Amendment by undermining Missouri’s “unquestionably legitimate” system.”

Judge Autrey also noted, “However, the privilege of engaging in the occupation of selling alcohol is not protected by the Privileges and Immunities Clause, due to the Twenty-first Amendment’s “broad grant of power to the states . . . to implement [multi]-tier liquor distribution systems which disparately affect non-resident wholesalers and retailers.”  He concluded noting that because the occupation is subject to limitations imposed by the 21st Amendment, the plaintiff’s right to pursue it across state lines is not protected by the Privileges and Immunities Clause. The Order of Dismissal can be found here.

(previous post) Amended Complaint Filed Against Missouri by Florida Retailer, Renewed Motion to Dismiss Filed by Missouri

Judge Autrey gave the plaintiffs the opportunity to amend their         complaint which he had previously dismissed.   The plaintiff, Sarasota Wines, did in fact file an Amended Complaint.  In turn the state has filed a renewed motion to dismiss noting the Amended Complaint still contains fatal flaws.  The briefing by both parties on the state’s renewed Motion to Dismiss has been completed and the parties are waiting for a hearing on the renewed motion to dismiss filed by Missouri.

(previous post) Missouri District Court Dismisses Out of State Retailer Challenge to Missouri Alcohol Law

United States District Judge Henry Edward Autrey granted the state of Missouri’s Motion to Dismiss the complaint filed by a Florida wine retailer, a Missouri consumer, and a Florida wine “advisor” against the Missouri law that only allows Missouri retailers to deliver to consumers.   The Complaint alleged violations of the dormant Commerce Clause and the Privileges and Immunities Clause of the Constitution.

Judge Autrey noted that the complaint failed to meet standing by alleging any injury in fact.  The Court’s opinion noted Plaintiff’s claims were too abstract and hypothetical to meet requirements of injury in fact.  The judge noted that the complaint failed to state a claim that could win.  The Court also noted that the Supreme Court’s Granholm decision and the 8th Circuit’s Southern Wine decision precluded the relief sought by Plaintiffs as the multi-tier system of alcohol regulation being challenged by Plaintiffs has been upheld previously.  Furthermore, the plaintiff’s P&I challenge was dismissed for failing to state a privilege or immunity protected by the Privileges and Immunities Clause.

Plaintiff was given 10 days to attempt to amend its Complaint in accordance with the order and opinion.

This decision continues a trend of courts to reject expanding the dormant Commerce Clause protections articulated in 2005 in Granholm for alcohol producers, to other tiers of the industry such as wholesalers or retailers.  The 2nd, 4th, 5th and 8th Circuit have dealt with this issue and have rejected the application of Granholm to all tiers of the alcohol industry.

(previous post) New Dormant Commerce Clause Lawsuit Filed by Out of State Retailer in Missouri

A new lawsuit has been filed in federal court in Missouri challenging the law that allows Missouri retailers to sell, ship and deliver wine directly to Missouri consumers but not out of state retailers.  The Complaint alleges violations of the dormant Commerce Clause and Privileges & Immunities law.  It is brought by a Florida wine retailer, its owner and a Missouri resident.  The case is Sarasota Wine Market v. Nixon.

Similar lawsuits seeking the same relief have failed in the 2nd Circuit (Arnold v. Buy Rite)  and the 5th Circuit (Siesta Village v. Steen).   Missouri also has successfully defended wholesaler level regulation in the Southern Wine case at the 8th Circuit.

Comments

  1. Jeremiah S. says:

    It was probably the stupidest idea to sue the states for what they never did. It was just another poorly articulated attempt to compel states to “allow retail sales from outside of their borders”, power that they never had.

    Challenge legitimacy of “unquestionably legitimate” regulatory systems was another unpardonable failure which just brought another unrepeatable injury to retailers and consumers.

Leave a Reply

*