Dedicated In Memorium to Lieutenant Michael Murphy,
a Great American Hero
A US District Court held that Michigan’s law banning out-of-state retailers from shipping wine into the state was unconstitutional. It held that the nondiscrimination principle which applied to suppliers in Granholm extended to retailers. Michigan sits in the 6th Federal Judicial Circuit, the same Circuit in which the Tennessee Wine case derived, and the same circuit which held in the Tennessee Wine case that Granholm’s nondiscrimination principles extended to retailers.
At present, the law is stayed pending the outcome of the Tennessee Wine case at the U.S. Supreme Court.
Even though the law was adjudicated and found unconstitutional, this still hasn’t stopped Michigan from threatening those who ship wine into the state with sanctions. Michigan claims that out-of-state wine shipments are unlicensed and illegal.
The State threatens that if the shipments continue to occur that the offender’s activity constitutes criminal activity punishable as a felony. The state is threatening the most draconian penalty against a practice that the state is on notice is unenforceable.
Michigan justifies its position by invoking its powers under the 21st Amendment.
Michigan refuses to license those retailers that desire to ship wine into the state.
Truth is stranger than fiction
I am not sure I have seen this type of case before, the party that loses continues to enforce a law that was found unconstitutional and flexes its 21st Amendment muscles, even though a federal court adjudicated that these powers related to the specific facts were suspect and unconstitutional.
In the end it didn’t matter. The federal stay acted as a power vacuum for the state which stepped into it and started threatening those it deemed in violation of the law.
How this will all shake out?
We will know soon whether Tennessee Wine decides the case one way or another.
But the more interesting debate is what should a federal stay mean?
Should we allow a state that loses to exercise its power pending final adjudication?
Does a stay constitute a power vacuum that a state can step into to exercise its power and if so, what rights does the other side have?
Or should we determine that the result is valid pending a final adjudication and the state can’t impose sanctions until the appeal is resolved?