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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