U.S. Supreme Court denies cert in the retailer wine shipping case

Today, the U.S. Supreme Court denied cert in Lebamoff v. Whitmer, a case which challenged a Sixth Circuit ruling which held that Michigan’s ban on out-of-state wine retailer shipping was deemed constitutional.

Although the Sixth Circuit’s decision clearly deviates from the legal standards set forth in Granholm and Tennessee Wine, the Supreme Court will wait for a circuit split to emerge before granting cert on this issue.

The Court’s lack of action leaves in place a decision which replaces the Commerce Clause standards set forth in Granholm and Tennessee Wine, and deems the nondiscriminatory reasonable alternatives test required for Commerce Clause/21st Amendment cases as an irrelevant legal doctrine.

In real life terms, the Court’s lack of activity leaves in place, state protectionist regimes, which put a fence around state borders, and do not allow out-of-state retailers access to consumers that desire a specific product.

In the end, the real losers are the consumers, small specialty wine retailers, and taxpayers.

If a consumer can not obtain a specific wine because the in-state wholesale network does not supply that wine to retailers, the consumer is forbidden from accessing another state’s marketplace to satisfy its demands.

The out-of-state specialty wine retailer, cannot access customers in other states that desire their products. This leaves them shut off from the laws of supply and demand of a free market systems, which are replaced by protectionist state specific regimes.

As COVID has greatly increased demand for shipping wine, many consumers desire wines not available in their marketplace, by not being able to purchase wine they desire, the state and local governments unnecessarily lose out on sales tax revenue from these purchases. With the COVID crisis decimating state budgets, losing tax revenues is not something state and local governments can afford.

The winner in this is big retailers and protectionism. Unlike small specialty retailers that can’t afford a place of business in a state as a requirement for accessing the state markets, retailers like Total Wine and Whole Foods which is owned by Amazon, have the capital to put a physical location in each state.  Putting a fence around interstate commerce will favor those businesses while hurting small independent specialty wine retailers.

In the end, I am disappointed in the Court’s lack of action on an important issue. Similar to the Post-Granholm days, the Court has decided to let terrible precedent stand and allow an issue to unnecessarily carry on, instead of taking the right course of action immediately!

The fight will go onto the next circuits!