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.

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