Supreme Court denies certiorari in Wine Country case

Today the United States Supreme Court issued a long list of orders.  On this list was the denial of certiorari in the Wine Country Gift Baskets v. Steen case out of the 5th Circuit.   The orders can be found here.

The Supreme Court decision leaves in place the ruling of the 5th circuit upholding the Texas ruling that the alcohol licensing scheme by Texas is consistent with the 21st Amendment and previous ruling by the Supreme Court. The rejected petition challenged the Supreme Court’s statement that the three-tier system is unquestionably legitimate but could not cite to a circuit split as the 2nd circuit also ruled similar to the 5th.

This is the fourth denial of cert by the Supreme Court since the 2005 Granholm decision. (4th,6th, 7th and now 5th)

This probably means a new lawsuit in another state by plaintiffs trying to get back to the Supreme Court. Perhaps the 8th or 11th circuits will join the rest of the circuits as they are the only circuit courts spared alcohol litigation in the past five years.

Although the Supreme Court passed on this one, the next petitions could be coming later this year out of the 3rd Circuit case in New Jersey. (see below postings)

(Earlier Post) Another Monday, another day of no decision from last Friday’s conference with the Supreme Court.   This is the second consecutitve week where the Supreme Court had this case listed, but no order announced the following Monday.  Not sure whether I should read more into this (dissentin ranks?)  or just the volume of cases before the Supreme Court means they just haven’t gotten to this case yet.   Here is the list of today’s orders.   If they update the docket for this case it will be listed here.

(Earlier Post) Supreme Court to Decide Whether to Grant Cert on February 25

Looks like we will know next Monday whether the Supreme Court will hear this case despite the lack of a circuit split.   Here is the docket for the case.

(EARLIER POST)  Reply Brief In, Wine Country Matter in the Hands of the Supreme Court

The Supreme Court orders can be found here.

Well the briefing is all done.  Click here for the reply brief by petitioners in Wine Country.  Nothing new rather than repeat of their claim that their expansive view of Granholm is not being followed by the courts.  I must note that there still is no circuit split to back up their expansive view of Granholm.    The matter now is in the hands of the justices who will decide at some point in late February whether to grant cert, deny cert or ask for Texas to file a response.

(Earlier Post)  State Waives Filing, Respondents File In Opposition to Cert

The State of Texas waived a filing in response to the cert petition.     However, the respondents filed opposition to the cert petition.   Their brief can be found here.   The respondent’s brief concentrates on the basic and points out what the petitioners don’t like to acknowledge; 1) there is nothing close to a circuit split here warranting SCOTUS intervention and 2)  the courts below have followed Supreme Court direction in their opinions.    Expect more trees to be killed by the petitioners to try to keep their hopes alive.

(Earlier Post )-   Two Amicus Briefs Filed In Support of Cert. Petition In Wine Country/Siesta Village Matter

Happy New Year!    Sorry for the delay but two amicus briefs were filed in support of the plaintiffs seeking to reverse the 5th Circuit’s ruling for Texas.   One brief I’ll classify as the Nostalgic FTC Alumni Association was paid for by the Family Winemakers Association of California.  You will recall from the below note on the 1st Circuit case, the Family Winemakers Association of California is represented by Kirkland and Ellis, the same law firm who filed this pending cert petition.  In this brief which you can read for yourself here, former FTC staffers seek to highlight their various “research”  (that is often rolled out as not official FTC work) and imply that all state alcohol regulations are the product of big bad special interest wholesaler lobbying at the state level so state laws should be struck if it gets in the way of new business models.   I oversimplify of course but you can read for yourself.

The other brief was paid for by the Specialty Wine Retailers Association whose members include the plaintiff Wine Country.  It claims the 5th Circuit really messed things up and threaten to unravel the entire free world, again I may be overstating things but some of the rhetoric approaches those claims.   It was written by Bruce Hay, a former law clerk to Justice Scalia which probably explains all the repeated references to concurring opinions by Justice Scalia in their brief.  I guess they are trying to keep him on their side.   Also it is interesting to note that Mr. Hay and Einer Elhauge work for the same company Legal Economics, Inc. ( when they are not teaching Harvard law students.  In fact, just a few months ago, Mr. Elhauge testified before the House Judiciary Committee on behalf of the Beer Institute and noted that there was no real conflict in this area of law and suggested that fears of litigation in the retail shipping case were overblown:

“Challenges have also been brought against state laws that make direct sales to consumers illegal for out-of-state retailers but legal for in-state retailers. However, even though these state laws are facially discriminatory, they have actually been upheld by all three appellate federal circuits to consider the question, on the ground that favoring in-state retailers is inherent to the states’ Twenty-first Amendment authority to define who constitutes a retailer within the three tier system—a system whose legal validity has been unquestioned in the courts. True, one district court reached the opposite conclusion based on the law’s facial discrimination, but that district court did not consider the connection between the state law and the three-tier system and the appeal was mooted when the legislature amended the statute. There thus does not appear to be any final judgment that prohibits such statutes and little risk they would be invalidated, and in any event any nominal conflict in case law appears to have been decisively resolved in favor of the three circuits that sustained such laws.” (emphasis mine)

So what is next?   The Supreme Court has a cert and two amicus to consider.  The parties kill acres of trees trying to argue why the case should be heard and making crystal clear water muddy.  However, as Professor Elhauge has noted, there is no conflict in the courts that needs Supreme Court clarification.   For next steps, the State and intervenors could not file a response, or  they could file a response, or they can wait for the Supreme Court to tell them to respond.  A response at the end of the month is possible or one in February.   If so the earliest the Supreme Court could give the thumbs up to hear or deny this case is probably February.  If cert granted it probably would not be heard before the end of the Supreme Court term in June.  However, I am sure there is more to this saga and we’ll report it when it does.

(Earlier Post)  Plaintiffs File SCOTUS Petition in Wine

Country/Siesta Village Lawsuit Against Texas

The answer to the question of whether there would be an appeal was given today in the form of a Petition for a writ of certiorari filed in the Supreme Court of the United States.   The Supreme Court’s website shows that the petition was filed on the last possible day for the plaintiffs.   A link can be found here.        The state has until December 22 to file a response.

Here is a copy of the petition.   Once again they try to blur the lines and claim that retailers and wineries are the same entity.  They forgot to mention that the federal government doesn’t agree with that.  For example, the wineries need to be licensed at the federal level. Retailers do not.

What are the chances of the Supreme Court taking this?   Who knows.   They should not. There is no circuit split.  The 5th Circuit opinion is well reasoned.   However, this is the last play the plaintiffs have and perhaps the Hail Mary pass will work.   Will be an interesting start to 2011.


Judge Fitzwater has entered the final judgment for the state of Texas in the Siesta Village matter.  What will the folks that maintain wineries = retailers do next?

(earlier post)

5th Circuit Rejects Rehearing; Texas Wins; Supreme Court Next?

The 5th Circuit has wasted little time rejecting this third bite at the apple.  In the order, no judge on the 5th Circuit asked to hear and review this case.   Like the 2nd Circuit case, the 5th Circuit noted that Granholm dealt with wineries, not retailers.  The Granholm court’s holding that the three tier system is unquestionably legitimate remains powerful and was repeatedly used by the 5th Circuit.     Now the question is, will the plaintiffs attempt to seek the Hail Mary pass of the U.S. Supreme Court?


Maybe the third time is the charm.  Not satisfied with another 5th Circuit opinion rejecting the myth that alcohol retailers are the same as alcohol producers, the Siesta Village plaintiffs filed a new motion for a rehearing for an en banc hearing for the 5th Circuit.  Click here to read the petition.    Looks like they have trotted out the old “model bill”  myth again.  (See older posts for a discussion on that issue.)

(earlier post)  5th Circuit Rules For Texas. Granholm Means Wineries, Not Retailer

Today the 5th Circuit ruled for the state of Texas and that out of state alcohol retailers do not have the same rights of  in state alcohol retailers.  The opinion can be found here. Recall a panel of the 5th Circuit ruled for Texas in January (below).   The plaintiffs appealled for a full en banc review.   Instead today the 5th Circuit  denied the en banc review,  withdrew its ruling from January 26, 2010 and substituted today’s opinion.

The court agreed with much of the 2nd Circuit’s reasoning in Arnold’s Wine v. Boyle and noted that the Granholm decision focus was on products or producers, not  all three tiers in a state’s three tier system of alcohol regulation.  It noted the similarilities of  the Texas three tier system to North Dakota’s three tier system which it noted was approved and upheld  in North Dakota v. United States, 495 U.S. 423 (1986).

I expect an appeal to the U.S. Supreme Court despite the lack of a circuit split.

(from prior posts)          Updated: The state of Texas has filed their opposition to the en banc petition by the Plantiffs. Read their opposition here.

The Plaintiffs in the Wine Country Gift Baskets/Siesta Village case are trying to get the entire 5th Circuit to hear their case in a petition filed last week.   In a press release, the Specialty Wine Retailers Association stated:  “We are concerned not only that the Fifth Circuit’s recent ruling disregarded opinions of the U.S. Supreme Court, but that it also disregarded precedent from its own cases within the Fifth Circuit,” said Tom Wark, executive director of SWRA .   Personally, I believe that this rehearing petition grossly stretches the two Fifth Circuit decisions as well as the Granholm and I am hopeful that the state will again demonstrate this succinctly to the court.

As you recall, the State of Maryland sought an en banc opinion after it lost the most recent decision at the 4th Circuit.  Similarly, Costco failed to get the entire 9th Circuit to take up its cause after it lost most of its challenge to Washington state laws.    Both requests were denied.  Rehearings en banc are rarely granted.

Texas Wins Wine Country Retail Shipping Case in 5th Circuit

A win for the 21st Amendment today in the 5th Circuit.

Our read of Granholm is that the Twenty-first Amendment still gives each State quite broad discretion to regulate alcoholic beverages. The dormant Commerce Clause applies, but it applies differently than it does to products whose regulation is not authorized by a specific constitutional amendment. Regulating alcoholic beverage retailing is largely a State’s prerogative.

“Because of  Granholm and its approval of three-tier systems, we know that Texas may authorize its in-state, permit-holding retailers to make sales and may prohibiti out-of-state retailers from doing the same.”

The decision gives the state of Texas a clear win on all counts and joins the 2nd Circuit in rejecting the attempts to twist the 2005 Supreme Court decision in Granholm v. Heald involving wineries into an examination of state distribution and retailing laws.

The case further reversed the district court’s findings of violations of the dormant commerce clause for the personal importation exemptions under Texas law.

The Court did caution though that it was limiting its ruling.   “We pull back from any effort to define the reach of a three-tier retailer.”


  1. From a public health standpoint, there is a good reason to treat retailers differently from manufacturers. All states place heavy responsibilities on the shoulders of retailers; specifically, the job of refusing sales to underage youth and to intoxicated persons. These responsibilities are at the core of our regulatory purpose. It makes retailers partners with the regulatory agency in its effort to prevent problems with alcohol abuse. It is very difficult to place the same responsibility on an out-of-state retailer and truly ensure that these reponsibilities are being carried out. As a former state regulator, I know how difficult it is to enforce anything on an out-of-state entity.

  2. Great blog! I am actually the author of a wine law blog myself. I just stumbled upon your blog and I will certainly return. The SCOTUS denial is unfortunate, but I do not believe this is the end of this issue.


  1. […] that retailers somehow have no protections under the Commerce Clause are weak. For example, At Alcohol Law Review, a website administered by wholesalers, the following was recently […]

  2. […] Supreme Court announced last week that it would not review a decision made by the Fifth Circuit. The appeal made by Wine Country Gift […]

Leave a Reply