Sometimes in life a little alcohol can cause us to do some funny things.
In Mississippi a little wine is causing upheaval in the legal system. The state has decided that it can control legal matters beyond his borders and reach into another state to pursue legally liability.
The State of Mississippi, led by agents of the Attorney General’s office along with the Department of Revenue, decided to conduct a sting on out-of-state wine retailers. Mississippi Agents would go online and attempt to purchase wine from out-of-state retailers and have them ship wine into Mississippi.
Mississippi does not allow wine retailer shipping for in-state and out-of-state retailers.
Unfortunately for the State of Mississippi, it seems they could not locate a retailer that would break Mississippi law and sell wine in Mississippi and ship the wine there.
Without any success in this area, they decided to pursue another course of action.
Mississippi representatives entered into contracts with retailers in California and New York where under the contract terms the sale would take place in California and New York (the place of business of the retailer) and the retailer would help arrange for shipping. After the sale, the consumer is legally responsible for the shipment pursuant to contract terms.
When the wine was shipped via common carrier, the State of Mississippi decided to pursue legal action and charge the retailers with breaking Mississippi law that prohibits retailers from shipping wine into the state.
The Rankin County Chancery Court held that the sale took place outside of Mississippi under the terms of the contract and dismissed the case with prejudice.
The Attorney General appealed and the Mississippi Supreme Court agreed to hear the case.
Mississippi doing some funny things
Unable to get numerous retailers to directly ship into Mississippi, the state decided to create his own legal course of action.
They decided to sign legal contracts where they agreed to the terms of sale and that they would be legally responsible for shipping wine. Of course, they agreed to this legal responsibility after they agreed that the sale of wine would occur in New York and California.
The sale being agreed to as a California and New York sale is a very important factor. Mississippi agents effectively went into another state and left Mississippi to purchase wine. The 21st Amendment and the Constitution’s jurisdictional principles limit Mississippi’s powers to its specific jurisdiction. Mississippi agents are acting under a suspect legal theory, because they are the ones who initiated the act of placing an order and then agreed to the legal terms of the sale.
Also, it can’t be ignored that these retailers were passive sellers in the Mississippi market. All of the retailers at issue never targeted the Mississippi market nor did they advertise in Mississippi. Mississippi agents went out of their way to create and invite this controversy. Essentially creating a scenario where they would pull people into a jurisdiction that they never actively sought.
One must wonder where Mississippi agents will strike next? Will they send mystery shoppers into California and New York and play Mississippi tourists looking to purchase wine from them and get it shipped back to Mississippi?
Why things are so funny?
The State of Illinois because of high taxes has a major problem with bootlegged liquor. An Indiana border store is notorious for selling to Illinois residents who load up cases of liquor and bring it back into Illinois. Often times the large quantities end up illegally on Illinois retail shelves. Illinois can’t charge the Indiana retailer because the sale of liquor did not occur in Illinois and thus it has no jurisdiction over the retailer.
However, Illinois can impose jurisdiction over the party illegally importing the liquor into the state. In fact, Illinois has sanctioned parties importing liquor from Indiana.
Similarly, Mississippi should take the same course of action and impose sanctions over the party it has jurisdiction over. There is only one problem, under this circumstance, the guilty party would be the Mississippi agents! They are entering into a contract where they: 1. Go into another jurisdiction to purchase liquor; and 2. Then take legal responsibility of shipping liquor in contravention of Mississippi law.
What does this all mean?
Mississippi imposes a theory of jurisdiction over entities that never availed themselves to the Mississippi market and never consented to jurisdiction. Being part of a legal enforcement team, Mississippi agents should know the terms of a sales contract that they entered into. Terms which required them to agree to a sale in California and New York and terms that made them legally responsible for shipping into Mississippi.
As I stated earlier, Mississippi put themselves into a bind with this situation. If they go after the party that brought the wine into the state against Mississippi law, they would need to go after themselves. Instead they are trying to utilize jurisdictional principles to make a legal case!
I guess a little wine will cause you to do some funny things!
Note: Sean O’Leary wrote an amicus brief on behalf of Wine Freedom in this case