Just a year after the US Supreme Court ruled that states cannot discriminate against out-of-state wine retailers, the justices are being asked to rule on the exact same issue again.
Unfortunately, it's possible the Supreme Court won't want to wade back into liquor law again so soon, and consumers in Michigan and Ohio will be screwed – they won't be able to order wine from retail stores in other states. Currently consumers in Ohio can do so, but in Michigan they cannot. By total wine consumption, those states rank 10th (Michigan) and 12th in the country, so they are big markets.
It's also possible that the seven Supreme Court justices who voted (in essence) for out-of-state retailers in last year's landmark Tennessee Wine & Spirits Retailers Association vs. Thomas case may be pissed off that a federal court of appeals – one rank below it – directly contradicted its ruling; they may wish to smite the appeals court with a verbal spanking. Unfortunately, to do so, they will have to take on another liquor case, even though several justices remarked last January in the Tennessee hearings that this was something they wanted to avoid, and may have been the reason their ruling in Tennessee was so broad.
The case in question is Lebamoff vs. Gretchen Whitmer, Governor of Michigan (not her personally). Lebamoff Enterprises owns an Indiana wine shop called Cap n' Cork that wants to ship wine to customers in Michigan. Lebamoff won a similar lawsuit against the state of Illinois, allowing it to ship wine there.
Lebamoff won the first round vs. Michigan in federal district court, but the decision was reversed on appeal by the Sixth Circuit Court of Appeals in a ruling that I frankly find bewildering. Attorneys for Lebamoff filed a petition for a writ of certiorati last week asking the Supreme Court to hear the case.
"It's very frustrating," Bob Epstein, one of the attorneys for Lebamoff, told Wine-Searcher. "I'm frustrated because we think we're right on the law, we're right on the facts, and then to have a panel seemingly disregard precedent, it's frustrating. [Supreme Court Justice Samuel] Alito wrote the opinion in Tennessee. The [appeals court] opinion runs right in the face of Alito. I think we have a small chance of having it heard for that reason."
Michigan a law unto itself
Michigan is one of the most stubborn states in trying to discriminate against out-of-state wine businesses. Michigan was one of the states that lost in the landmark 2005 Granholm v Heald ruling that said states could not allow their own wineries to ship to state residents while prohibiting out-of-state wineries from doing so. With its law struck down, the Michigan legislature's response was to pass essentially the same law again. That was also struck down.
Granholm vs. Heald left a gray area about whether discrimination against out-of-state retailers is also illegal. Last year's Tennessee case emphatically stated that it is. The 7-2 ruling was quite broad. Alito, who wrote the decision, stated: "The [Commerce] Clause prohibits state discrimination against all 'out-of-state economic interests'."
In theory, the federal appeals court should have considered the Supreme Court's ruling in making its own decision. But the appeals court refused to follow the Supreme Court's guidance.
"Today [w]e live in a global economy and we shop in virtual marketplaces for everything from luxuries to necessities," wrote Sixth Circuit Court of Appeals judge David McKeague. "But the Twenty-first Amendment leaves these considerations to the people of Michigan, not to federal judges."
McKeague, 73, was appointed to the court of appeals by George W Bush in 2005. Democrats at first filibustered against his appointment, but some Democratic senators compromised and he took the bench.
This is only one of several cases festering in the wake of the Tennessee ruling. In Ohio, earlier this month state Attorney General Dave Yost filed a complaint in federal court asking for an injunction preventing out-of-state retailers from shipping wine to Ohio residents, even though local retailers are allowed to. Campaign contribution records show that Yost received nearly $30,000 over the last two years from liquor wholesalers, who prefer that all wines pass through their hands so they can extract a percentage.
Ohio and Michigan are both in the sixth circuit, so McKeague's bizarre ruling in the Lebamoff case may be cited in the looming federal court battle in Ohio.
That said, even though it's the same circuit, the Ohio case could get a different panel of judges from the sixth circuit court of appeals, when it eventually makes its way there, and could get a different ruling. The conflict in rulings might induce the Supreme Court to take up the issue again. Or, the fact that Lebamoff won the Illinois case in the seventh circuit court of appeals, but lost an identical case in the sixth circuit, could induce the Supremes to take the case. There's also a looming case of discrimination against out-of-state retailers in Kentucky – also in the sixth circuit.
"We're hoping we can get different results in Ohio and Kentucky and we get different panels on appeal," Epstein said. "Maybe within a couple of years. Our quickest remedy would be if the Supreme Court grants cert [in the Michigan case]."
In the meantime, if you are a wine lover in Ohio, it's a good time to stock up right now in case a renegade judge like McKeague shuts down wine shipping. Want a birth year Bordeaux that's only available in New York, or a special sake you can only buy in Los Angeles? Buy it now.
July 22, 2020 at 07:01AM
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Appeals Court Ignores SCOTUS Wine Ruling | Wine-Searcher News & Features - Wine-Searcher
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