Judge Wood makes a power play into the Supreme Court Wine Shipping Case

Disclaimer: The analysis does not reflect my personal opinion, but is a legal analysis of the case
With a Supreme Court case already in the hopper, why did the 7th Circuit decide Lebamoff?

With a Supreme Court case, Tennessee Wine & Spirits Retailers Association v. Byrd, set for hearing that will probably deal with the same issue of controversy in Lebamoff, many legal experts may have been shocked when the 7th Circuit issued its decision.  Tennessee Wine & Spirits Retailers Association v. Byrd, No 18-96 cert granted, 2018 WL 3496882 (Sept. 27, 2018)

But after reading the opinion, I think Chief Judge Diane Wood may have pulled off a stroke of legal genius and made the 7th Circuit a major player on this issue.  Lebamoff Enterprises Inc., et al. v. Bruce Rauner, et al, No. 17-2495 (7th Cir. 2018).

Why was Lebamoff  issued and what does it do?
Introduction

The 7th Circuit reversed and remanded a District Court decision which was terminated by a motion to dismiss, a challenge to Illinois’ wine shipping laws. Illinois allows in-state retailers to ship to Illinois customers but does not afford the same privileges to out-of-state retailers.

The 7th Circuit objected because the lower court did not allow a fair hearing on constitutionally contested issues. In their view the record should have been developed and the issues fully vetted. As they noted, Granholm was decided after summary judgment.

So why did the 7th Circuit render the decision?

The 7th Circuit surprised many people with this decision, especially in light of the fact that the Tennessee Wine case will probably decide this issue in the Supreme Court’s coming session.

So again, why decide something that may be moot and usurped by a higher court?

The answer is simple, the 7th Circuit wanted their say in the matter!

Circuit Splits

If you look at the decision, Judge Wood’s opinion went through great lengths in its legal analysis about how the circuits split on the issue of the 21st Amendment overriding the Commerce Clause and permitting states to treat in-state retailers and wholesalers differently from their out-of-state equivalents.

She presented the fact that the 2nd, 4th, and 8th have sided with the 21st Amendment, while the 5th and 6th and numerous district courts have affirmed that the general non-discrimination principle in Granholm applies to the different tiers.

Interesting enough, she goes on to water down the strong 21st Amendment positions in the 4th and 8th Circuits and cast doubt on whether they really split from the general non-discrimination principle in Granholm.

Wood starts out stating that the 4th Circuit held the 21st Amendment overrode the Commerce Clause and permitted states to treat in-state retailers and wholesalers differently from their out-of-state equivalents. Brooks v. Vassar, 462 F3d. 341, 352 (4th Cir. 2006). However, later in the opinion she discusses the 4th Circuit’s view on non-discrimination cases by quoting a passage which states “these cases stand for the proposition that a State’s regulation of the transportation, importation, and use of alcoholic beverages in the state is protected by the 21st Amendment but economic protectionism is not … .”

For the 8th Circuit, she cites a case that upheld a wholesaler residency requirement. Southern Wine & Spirits of Am., Inc. v. Division of Alcohol & Tobacco Control, 731 F.3d 799 (8th Cir. 2013). But later in the opinion she notes that the “Eighth Circuit upheld a residency requirement, but in that case the plaintiff’s “protectionist intent argument” was waived.”

For the 2nd Circuit decision in Arnold Wines,  she readily admits it relied on the producer only exception in Granholm and would not extend it to retailers. Arnold ‘s Wines, Inc. v. Boyle, 571 F.3d 185 (2nd Cir. 2009). Judge Wood states that the 7th Circuit disagrees with the 2nd Circuit’s analysis on this issue.

Judge Wood provided an opinion that weakened the supposed split circuit theory and limited the narrow absolutist Granholm view to one isolated circuit.

In my view, Wood wrote this opinion to influence the Supreme Court’s decision and weaken the opposing viewpoint. Wood’s opinion goes to great lengths to explain the circuit splits and lay out for the Supreme Court a battlefield that strongly tilts in favor of a broad reading of Granholm.

Mandating the decision on this issue

Lebamoff’s language indicates that the 7th Circuit remanded the case to the District Court with instructions to decide the case when it heard the full body of evidence. That is what the case reads, but is it really what the case says!

This decision really provides a lower court no option other than to agree with the 7th Circuit and hold Illinois’ retailer shipping laws as unconstitutional. Judge Wood’s opinion goes to great lengths to rip apart Illinois’ law as protectionist and discriminatory. There is no scenario I see where the case could be remanded and uphold Illinois’ law and then the 7th Circuit affirms the lower court. Judge Wood’s strong words show the die is cast and the 7th Circuit made up their minds.

Conclusion: Judge Wood’s power play makes the 7th Circuit a major player

Judge Wood’s strongly worded opinion says that she wants the 7th Circuit to be dealt in the game. And that she wants to strengthen the hand of broadening Granholm  to other tiers. Further, her opinion wants to weaken the opposing side’s hand and water down its significance.

Some were surprised the 7th Circuit rendered this decision in light of the Supreme Court’s pending case in Tennessee Wine.  But it is because of the Tennessee Wine case that this decision was made. By rendering a decision, the 7th Circuit insured that its voice will be heard and that its decision may tip the Supreme Court’s views on the balance of power in the circuits.

To some this decision may seem irrelevant, but dig deeper and you will see that Judge Wood’s opinion, whether you agree with it or not, was a brilliant stroke of genius! She took the 7th Circuit off the sidelines and made them a major player!

4 thoughts on “Judge Wood makes a power play into the Supreme Court Wine Shipping Case”

  1. My understanding is that the Constitution makes it clear that states cannot restrict interstate trading unless the same law applies to intrastate trading. It took 70 years to finally get the motion before the Supreme Court in 2004 and they ruled almost unanimously against the states. So, why is this even an issue.

    Prohibition was bad enough. The 21st Amendment just allowed to break the Constitution for 70 years. The fact is, this is all Southern Glazer and WSWA’s doing. Pure and simple.

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