DISRUPTORS PART II: THE DYNAMIC DUO OF DISRUPTION-TANFORD AND EPSTEIN/TO THEIR ADVERSARIES THE DYNAMIC DUO OF DESTRUCTION

Disclaimer: The video is not presenting this as a battle of good v. evil or one side over another. I thought it was a witty display of Tanford and Epstein. Also, this post does not seek to bias the reader to one side over another.  I am providing an observation based on what I have seen.

 

Introduction

In Part II of the disruptor series we look at Professor Alex Tanford and Attorney Robert Epstein. Between these two attorneys, they have embarked on a constitutional war against state liquor laws and often defeated the states.

For an estimated twenty-five years Tanford and Epstein have sued state liquor authorities in state and federal courts. They base their claims on Commerce Clause challenges to laws they deem discriminatory and protectionist.

Their opponents will tell you that Tanford and Epstein are weakening a state’s right to determine how they want to regulate their own liquor markets. A right they will indicate that a state is provided under the 21st Amendment of the U.S. Constitution. In their view, Tanford and Epstein’s escapades have in some areas destroyed these constitutionally granted powers.

Tanford and Epstein’s victories have changed the liquor legal landscape drastically. They are now embarking on a system of cases running through numerous court systems to further challenge state legal authority.

And of course, in an unlikely scenario, a law professor and an attorney from Indiana caused more upheaval and change to the liquor world than technology.

 

The Big Fish

In 2005 Tanford and Epstein acted as co-counsel on the Granholm case at the U.S. Supreme Court. The plaintiff in Granholm sued to overturn a Michigan and New York law that made it illegal for an out-of-state winery to ship product to a customer in another state. Tanford and Epstein successfully argued the plaintiff’s case and won at the U.S. Supreme Court.

This case lead to a drastic change in the liquor world. In previous days, wine lovers in certain states could not get the wines they desired. Often wine connoisseurs desire specialty and non-mass-produced wines that are not readily available at the local store. Numerous wines on the Top 100 list, fall into the aforementioned category. If the favorite wine was not at a state or local liquor stores, a consumer had few options, if any to purchase the wine.

As a result of Granholm, a consumer could purchase these wines directly from the winery. Tanford and Epstein succeeded in changing the legal landscape and knocking down a state prohibition on alcohol entering into a state.

 

The Show goes on

Tanford and Epstein have sued the states in numerous federal courts. Their goal remains constant to overturn state laws they claim violated the Commerce Clause and are discriminatory and protectionist.

Specifically, they want to extend the ruling in Granholm to out-of-state retailers.

In three states, Illinois, Michigan, and Missouri, Tanford and Epstein challenged laws which ban an out-of-state retailer from shipping into the state, while affording this privilege to in-state retailers. Following the same game plan, they claim these laws violate the Commerce Clause and are discriminatory and protectionist.

 

Status of the cases

Tanford and Epstein have run a series of Lebamoff cases in Illinois and Michigan and brought the Sarasota Wine case to a federal court in Missouri.

Illinois

Tanford and Epstein’s efforts in Illinois could have a profound effect on changing the liquor world.

An Illinois Federal District Court dismissed without prejudice a Commerce Clause and a Privilege and Immunities Clause challenge to an Illinois law banning out-of-state retailers from shipping to Illinois customers, while allowing these same privileges to Illinois retailers.

Tanford and Epstein appealed this decision to the 7th Circuit. The 7th Circuit reversed and remanded the Federal District Court’s decision.

Although remanded, the 7th Circuit’s opinion was so strongly written that it’s hard to imagine a scenario where a district court judge could deem Illinois’ law as constitutional and have it upheld on appeal.

Chief Judge Diane Wood’s opinion essentially labeled the Illinois law as protectionist and discriminatory and indicated that it did not agree with the principle that Granholm could extend only to producers.

In other words, Judge Wood’s argument echoed the principles that Tanford and Epstein espouse.

Why is this Illinois case important?

There is a theory out there that this decision may have no influence because the Supreme Court will rule on Lebamoff’s main issue in Tennessee Wine Retailers Association v. Blair. Thus, the 7th Circuit’s decision may be obsolete.

This may be true, but this conclusion ignores an important element of this case. Judge Wood’s opinion created a circumstance where another Circuit agreed with the principle of expanding Granholm beyond the producer tier. Further, its strongly worded opinion could provide direction and guidance on where the Supreme Court could land.

If the 7th Circuit becomes a major influencer of the Tennessee Wine case, then even in their absence, Tanford and Epstein could heavily influence the direction of a potentially ground-breaking case.

Michigan

A Michigan Federal District Court judge deemed a Michigan law which banned out-of-state retailers from shipping into the state as unconstitutional. This decision is stayed pending the outcome of the Tennessee Wine case at the U.S. Supreme Court.

The Judge held that it should follow the 6th Circuit precedent set down in Tennessee Wine (formerly referred to as Byrd) that stood for the proposition that Granholm’s reach was not limited to producers.

However, the Court espoused another interesting principle in this case that could change the direction of liquor law.

The main change that could occur from this case is the Court’s position that allowing in-state retailers to ship, breaks the hermetically-sealed three-tier system and hence its integrity. If this principle is upheld and cemented as law, the 21st Amendment justification for maintaining the integrity of the three-tier system becomes harder to defend.

But remember folks, this is far from settled legal principle and state regulators and wholesalers will fight tooth and nail against this interpretation of the law.

Missouri

In Sarasota Wine Market, LLC v. Greitens, 4:17-cv-02792 HEA (Eastern District of Missouri 2018), the judge granted the state’s motion to dismiss a complaint filed by a Florida retailer, who claimed that the Missouri law which did not allow out-of-state retailers to ship into the state while allowing in-state retailers this privilege as unconstitutional.

The Judge granted Sarasota Wine Market’s request to amend its complaint after the original motion to dismiss. Presently, there has been no final adjudication on this issue and the case resides in legal limbo.

Florida   

Although Tanford and Epstein have not filed a formal case in Florida challenging its wine shipping laws, it has sought a declaratory statement from the Florida Division of Alcoholic Beverages and Tobacco that request that Florida allow out-of-state retailers to ship wine to customers located in Florida.

Initially the State of Florida sided with Tanford and Epstein’s position, but four wholesaler association appealed the decision. Only time will tell whether Tanford and Epstein will change the landscape in another state.

California discrimination

Tanford and Epstein don’t limit their fights to shipping case. They recently decided to take on California in a case they claim is blatant discrimination. Orion Wine Imports, LLC and Peter E. Creighton v. Jacob Appelsmith, 2:18-cv-01721, Eastern District of California (2018). The spelling for Appelsmith is different from the name on the complaint. However, I corrected the spelling for this citation, as to not make Jacob Appelsmith upset during this holiday season.

In this case, Tanford and Epstein sued California because California will grant to an in-state importer a double license, that allows an importer to distribute and import within the state; while an out-of-state entity is not afforded these same privileges. In Tanford and Epstein’s view this is a protectionist law that allows the state to utilize the three-tier system as an excuse for discrimination. http://irishliquorlawyer.com/they-wont-be-coming-to-the-dance-together-alex-tanford-and-the-wine-and-spirits-wholesalers-of-america-give-their-strong-and-opposing-views-on-the-three-tier-system/

 

Final thoughts

Tanford and Epstein are changing the liquor world faster than technology and disrupting the legal environment. Even if Tanford and Epstein are not directly involved in a case, they are still influencing the legal course.

Their detractors would criticize them for trying to destroy the 21st Amendment and the state’s right to define what is acceptable within their borders. And they view Tanford and Epstein as suing to overturn the will of the people.

Nevertheless, no one can argue that Tanford and Epstein have made history in Granholm and are attempting to shape history again. Any state regulator with a law that has a hint of protectionism or discrimination is looking over their shoulder for Tanford and Epstein. Because eventually the dynamic duo of disruption is coming to challenge their state laws.

 

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