The issue of retailer DTC shipping is heating up with the state of Ohio acknowledging that the 6th Circuit’s decision in Block v. Canepa presents a circuit split on the issue of whether direct shipping restrictions are upheld as a matter of law, like in the 4th and 8th Circuit, or whether they require a factual inquiry as indicated by the 1st and 7th Circuit.
Interesting to note on this important issue is that the 6th Circuit split on this issue with the Whitmer decision upholding Michigan’s wine retailer shipping law as a matter of law, while at the same time in Block v. Canepa, holding that Ohio’s law needed to be subjected to a factual inquiry and the concrete evidence standard in Tennessee Wine.
This Ohio development is interesting as a state is acknowledging there is a circuit split, which my allies and I have been making this same argument since the 7th Circuit decided Lebamoff v. Rauner
Something tells me that Ohio must be nervous about the record and that by filing this petition to the U.S. Supreme Court that it wants to bypass the factual inquiry and make this a matter of law argument. As that ship has already set sail in the 6th Circuit, there only alternative route is through the U.S Supreme Court.
Grounds for Motion
Ohio filed a Motion to Stay Mandate Petition ( Ohio filing) requesting that the 6th Circuit stay its mandate for Ohio to utilize concrete evidence to justify its discriminatory wine retailer shipping law.
Ohio claimed that the case presents a substantial question of federal law, and good cause exists to stay the mandate while
Ohio seeks further review
Under the substantial question standard, there needs to be a reasonable probability that four Justices will grant certiorari and a reasonable possibility that five Justices will vote to reverse the judgment of the 6th circuit.
Ohio indicated that there were two main reasons why the Court should grant cert.
First, there is a circuit split on the issue of whether direct-ship restrictions are a factual question that requires
further inquiry as indicated in Tennessee Wine, or whether the Court created a sharp conflict with decisions from the 4th
and 8th Circuits.
According to the Ohio petition Courts have upheld shipping restrictions as a matter of law and point to the decisions from the 4th and 8th Circuits on wine retailer shipping case, and they even pull out the terrible decision from Arnold’s Wines, which was effectively neutered by Granholm.
The second grounds for the petition was Ohio’s belief that “this case involves an issue in which the Supreme Court has already demonstrated an interest.” They point to the Court’s recent decision in Tennessee Wine. As Ohio noted, “Only a few years ago, it addressed the relationship between the Twenty-First Amendment and the dormant Commerce Clause doctrine,” and based on the Tenn. Wine precedent, the Court would have an interest in revisiting this issue
Ohio goes on to state that there is a reasonable possibility 5 justices would reverse as they may follow the reasoning of the 4th and 8th Circuits in upholding state liquor laws based on the unquestionably legitimate doctrine as referenced in the North Dakota and Granholm cases, and further the shipping issue present a far different issue than Tenn. Wine., which dealt with a durational residency requirement issue
Good Cause for a Stay
Ohio’s took the position that there was a good cause for a stay. The petition stated that “Ohio’s direct-ship restriction is an essential element of the three-tiered alcohol distribution system that the Ohio General Assembly has created. As the District Court recognized,
“[a]llowing out-of-state retailers to ship wine directly to Ohio consumers would all but topple the scheme that the Ohio General Assembly has established, with prices easily undercut and enforcement agencies easily neutered.”
The petition goes onto state that Ohio maintains an interest in not being forced to defend shipping restrictions similar to neighboring states like Michigan and Indiana and that Ohio will be harmed if it is forced to defend restrictions that Michigan and Indiana are free to enforce.
Finally, Ohio made the public interest claim.