WSWA’s nemesis Alex Tanford interviews with Irish Liquor Lawyer about Byrd and challenging the system and the potential of legal upheaval.

Introduction

A couple of weeks ago, I spoke to Professor Alex Tanford, who clearly is on the opposite side of WSWA. Professor Tanford successfully argued the Granholm case at the U.S. Supreme Court, which overturned New York and Michigan’s laws that restricted out-of-state wineries from shipping into their states.

After posting the WSWA press release yesterday and presenting their point of view, I thought it would only be fair to present Professor Tanford’s views. This interview was conducted at a time before the release of WSWA’s press release, so as to avoid a situation where one party spends their time ripping apart the other side, as opposed to providing their side and educating the public about their philosophy.

What is Byrd and why is it important?

The Granholm decision overturned the New York and Michigan laws that restricted out-of-state wineries from shipping into these states. Problematically, the decision left a gaping hole of ambiguity in the liquor legal scene. We all asked, “is Granholm limited to out-of-state wineries being able to ship into a state, or does it also allow out-of-state retailers to ship into the state?”

This unanswered question has inspired many legal challenges to state statutes that restrict out-of-state retailers from shipping into the state, while at the same time allowing in-state retailers the right to ship to customers.

I had the privilege of discussing with Professor Tanford his views on how Byrd will evolve and how it could shape the future of the liquor world.

 

Interview

Will this case decide the Granholm issue?

It always seemed that this case was an odd one to decide whether Granholm extended to retailers. In fact, Tennessee’s statute could be challenged on its durational residency requirements without even delving into the issue of whether out-of-state retailers can ship product into a state.

Irish Liquor Lawyer: Will this case decide the Granholm issue?

Professor Tanford: They will take up Granholm and it will not be limited to the Tennessee residency issue. The cert petition lays out the general confusion among the circuits that no two decisions are consistent on how far, if at all Granholm extends outside of wineries. How expansive or narrow Granholm is read, depends on how they can get a majority.

Irish Liquor Lawyer: Were you surprise they took Byrd and not any of the Lebamoff cases that you are arguing or some other case out there?

Professor Tanford: No, even though Lebamoff (http://irishliquorlawyer.com/lebamoff-takes-on-the-state-of-illinois/) is a cleaner question, there is no conflict yet amongst the circuits. (In the Lebamoff cases out Michigan, Missouri, and Illinois, Tanford challenged the laws that allow in-state retailers to ship to customers while denying this privilege to out-of-state retailers).

With the residency requirements issue, there already is clear and existing conflict amongst the circuits. There is the Cooper case out of the 5th Circuit that affirms after Granholm that residency requirements  Post-Granholm violate the Constitution. Cooper v. Texas Alcoholic Beverage Comm’n, 820 F.3d 730 (5th Cir. 2016)

And then there is the 8th Circuit decision in Southern Wine and Spirits, where the Circuit upheld the residency requirement for the wholesaler license. And the 8th circuit said that in their view Granholm didn’t mean anything.  Southern Wine and Spirits of America, Inc. v. Di-vision of Alcohol and Tobacco Control, 731 F.3d 799 (8th Cir.2013)

In their grant of cert, they talk about the residency requirements for wholesalers and retailers, even though Byrd didn’t involve a wholesaler residency requirement. Clearly, they are thinking about the 8th circuit wholesaler case.

It looks from the cases cited in the cert petition and the nature of the case, that if they can get agreement, that they will look at it more broadly than the peculiar Tennessee issue.

 

Modern commerce view and will it change Justice Thomas

Justice Thomas was in the dissenting opinion in Granholm and sided with the state regulators. He is one of three justices still on the court from that decision. The other two being Ginsburg and Breyer, which both ruled in the majority and against the state.

Since the decision in 2005 the world has changed. My beloved White Sox have not won another World Series and e-commerce has rapidly developed, which has shaped many people’s outlook including judges.

In Lebamoff, Chief Judge of the 7th Circuit Diane Wood questioned the State of Illinois’ position and stated that Illinois’ laws were hampering modern commerce.

Closer to home for Justice Thomas, he ruled with the majority in the Wayfair decision, which taxed internet sales even without the previously necessary physical presence requirement. In the majority opinion Justice Anthony Kennedy overturned legal precedent by relying on the theory of a changing and modern economy.

Irish Liquor Lawyer: So it begs the question, does this change Justice Thomas’ view and does he switch from siding with the state to siding with this modern commerce theory and how the laws may be behind the times?

Professor Tanford: It will be interesting to see, when Granholm came up, the most liberal and conservative judges on the 6th Circuit agreed with each other.  When it came up to the U.S. Supreme Court it was not the liberal/conservative split. It had Scalia and Thomas on other sides, Ginsburg and Stevens on other sides. My experience going through Granholm, is it’s impossible to predict, how will they will vote.

The people that took the hard line state’s rights stance on the 21st Amendment are off the court now, that was Stevens and Rehnquist.  Stevens opinion in Granholm throws all legal reasoning out the window.

No two circuit opinions have gone the same direction.

 

The Commerce Clause, always an interesting question

Irish Liquor Lawyer:  How could this case transform the Commerce Clause?

Professor Tanford: States have used the argument that the system is necessary because they don’t have the resources to regulate an industry and it is required for public safety. And the courts laughed at them and said hire more people then!

The only argument they have is that the 21st Amendment gives us the power to engage in economic protectionism.

If the Court decides that the core of the Commerce Clause is getting product to market, then we limit Granholm to getting product to market, it would radically change the Commerce Clause.

The Commerce Clause gives Congress the power to regulate commerce, why the hell haven’t they done anything the last 25 years.  They could solve this problem.

 

The Kavanaugh effect

Irish Liquor Lawyer: Any prediction on how Kavanaugh will decide in Byrd?

Professor Tanford: Kavanaugh’s particular bias is unpredictable with this issue. But he didn’t come up out of a state court environment system.  Justice O’Connor who was in the Granholm dissent ruled this way because she believed in state and local authority and was skeptical of federal power. Kavanuagh is the opposite and believes in the almighty federal power. If the solicitor general weighed in, he would side that way, if not, we don’t know. All he wrote about on the D.C. Circuit was federal regulation, he is not an anti-government Republican.

-The End-

 

3 thoughts on “WSWA’s nemesis Alex Tanford interviews with Irish Liquor Lawyer about Byrd and challenging the system and the potential of legal upheaval.”

  1. I may be able to offer insight into some of Justice Kavanaugh’s views on state’s rights, based on the conditions he encountered as a high schooler in search of beer in Bethesda in the late 1980’s.

    Bethesda is in Montgomery County Md, the only county in the US where you’ll never see a beer company truck making deliveries to a store or restaurant. Unlike the rest of Md, in MoCo all wholesale alcohol is delivered to restaurants and stores by county employees on county trucks.

    The county is also the monopoly retailer of spirits, and by far the dominant retailer of wine. Beer sales are left mostly to the private sector.

    As an immigrant to the US in the early 1990’s my second job was managing one of the county owned stores for a period of 21 months under a pilot program contract management arrangement. I know where at least some of the skeletons are buried.

    If the teenage J. Kavanaugh was in search of a cold six pack, no point in going to a county store which only sold beer by the case, warm. The local private stores while they had cold six packs had limited selections. They couldn’t and still can’t survive on beer and limited sales, so have to also operate deli’s etc. hence pressure on space to display beer. At that time, few, if any at all, stores in MoCo sold kegs, so would not have been a reliable option for either selection or price for a group of high schoolers who were on a mission to empty 100 kegs.

    More likely they nipped across the line into DC where prices are much lower, and selection much better, and many stores along the border cater to the Md trade. Before I managed the MoCo store, I managed one of those too,

    I’m not (yet) accusing the teenage J. Kavanaugh of running contraband beer across the Md state line (prohibition style) just saying if it was me, I woulda done it, and his formative years experience with the deficiencies of government alcohol regulation may have had a lasting effect. Legal reasoning be damned.

    1. Pete, Professor Tanford was not counsel on the Tennessee Wine case. He argued the Lebamoff series of cases in Illinois, Michigan, and Missouri. Thanks for your comment have a good night

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