Review of Irish Liquor Lawyer’s U.S. Supreme Court amicus brief

As promised, I am providing a summary review of my amicus brief and why the U.S. Supreme Court should grant cert in Lebamoff v. Whitmer.

Judge Sutton in Lebamoff v. Whitmer, a case which challenged Michigan’s discriminatory wine shipping law, got it wrong. But if we believe being wrong was the only consequence of his opinion, then we are missing the greater harm that could come from his decision.

Judge Sutton rejects and replaces the U.S. Supreme Court precedent in Tennessee Wine and replaces it with a new legal theory which lowers the bar for discrimination.

He essentially turns a Commerce Clause strict scrutiny analysis into a rational review analysis. The newly created test goes against U.S. Supreme Court Commerce Clause precedents.

If the Supreme Court does not hear a challenge to Judge Sutton’s newly created legal theory, it will provide confusion to lower courts on what is the proper standard for judging cases involving the interplay between the Twenty-first Amendment and the Commerce Clause.

Where it all goes wrong

Judge Sutton’s opinion in Lebamoff v. Whitmer ignores the analytical framework from the U.S. Supreme Court cases from Bacchus to Granholm to Tennessee Wine.

In these cases, the Supreme Court went through a two-level analysis. One, determine whether the law discriminated against the out-of-state actor. If the law discriminated against an out-of-state actor, because these cases involved the Twenty-first Amendment, the Court considered a second level analysis, whether the state’s regime “advances a legitimate local purpose that cannot be adequately served by reasonable nondiscriminatory alternatives.”[1]

The Court in Granholm found the reasons for state discrimination, to combat tax evasion and preventing minors from getting their hands-on alcohol, as unconvincing reasons for discriminating. The Granholm Court held the state did not need to discriminate and could have exercised non-discriminatory alternatives to address these problems, such as reducing minor access to alcohol by requiring an adult signature.

Following Granholm, nearly fifteen years later, the Court in Tennessee Wine adopted the analytical framework of Granholm and extended Granholm’s nondiscrimination principle to retailers.

Subsequent to Granholm and prior to Tennessee Wine, Circuit Court cases which denied the privilege for out-of-state retailers to ship into a state-based on residency, utilized the legal principle that Granholm was limited to producers and did not extend to retailers. With the Granholm non-discrimination principle not applying to retailers, these Circuit Court indicated that the Twenty-first Amendment precluded a Commerce Clause analysis of discriminatory state liquor laws aimed at retailers.

Justice Alito’s opinion in Tennessee Wine rejected this analysis and extended Granholm’s non-discrimination principle to retailers. The extension of Granholm’s non-discrimination principle to retailers, requires a state discriminatory law aimed at retailers go through a Commerce Clause analysis.

Under a Commerce Clause analysis, a state discriminatory law can only be justified if its based on legitimate public health and safety concerns and the state can demonstrate that nondiscriminatory alternatives were not available. However, as in Granholm and Tennessee Wine, the Court requires more than “mere speculation” or “unsupported assertions” to back up its health and safety concerns. Rather, it requires a record of concrete evidence to sustain a law that would otherwise violate the Commerce Clause.

Problematically, Judge Sutton applied an altogether different standard for evaluating Commerce Clause challenges to state liquor laws:

“When faced with a dormant Commerce Clause challenge to an alcohol regulation, as a result, we apply a “different” test. TennWine & Spirits139 S. Ct. at 2474. Rather than skeptical review, we ask whether the law “can be justified as a public health or safety measure or on some other legitimate nonprotectionist ground.” Id. But if the “predominant effect of the law is protectionism,” rather than the promotion of legitimate state interests, the Twenty-first Amendment does not “shield[]” it.”[2]

Judge Sutton indicated that his own and newly minted “Predominant Effect” test applies instead of the traditional Strict Scrutiny Commerce Clause test because the Twenty-first Amendment permits a “three-tier system” and the Commerce Clause does not prohibit a three-tier system. Judge Sutton’s theory is unrecognized in the Supreme Court’s Commerce Clause jurisprudence.

In Sutton’s view, since the state can mandate a three-tier system under the Twenty-first Amendment, the state has carte blanche power to regulate the importation of alcohol. As Judge Sutton, writing for the Sixth Circuit indicated, a state’s “decision to adhere to a three-tier distribution system is immune from direct challenge on Commerce Clause grounds.” However, the Sixth Circuit does not contend with Tennessee Wine’s admonition that, “Although Granholm spoke approvingly of that basic model, it did not suggest that § 2 sanctions every discriminatory feature that a State may incorporate into its three-tiered scheme.”[3]

Judge Sutton in Lebamoff rejected established Supreme Court analysis for Twenty-first Amendment/Commerce Clause cases.  If Judge Sutton’s position is adopted by other courts, this would lead to a result, where unsupported assertions and theoretical positions, replace concrete evidence as a means to justify discriminatory laws.

Ironically, the Supreme Court in Tennessee Wine acknowledged Sutton’s views from his Sixth Circuit dissent in Byrd and essentially dismissed his views. Why, because the Sutton analytical model does not jive with Supreme Court precedent from Bacchus, Healy, Brown Forman, and Granholm.

To demonstrate the absurdity of Sutton’s position, if we applied the Sutton analytical framework to Granholm, the New York and Michigan discriminatory wine shipping laws would have been upheld. Michigan and New York’s discriminatory wine shipping laws would have been upheld because the laws’ predominant effect is to prevent minor consumption and tax evasion, regardless of whether the problem existed or not.

Sutton’s legal principle does not require a record of evidence. Under his deferential and rejected analytical framework, all that is needed to uphold the discriminatory state liquor law, is a nice sounding purpose other than economic protectionism.

Further, in his opinion, Judge Sutton does not even discuss whether the state’s interest could have been adequately served through, reasonable, nondiscriminatory alternatives.

In concluding, even though the Supreme Court was dismissive of Judge Sutton’s Commerce Clause/Twenty-first Amendment view in the Byrd dissent from the Sixth Circuit, he is applying the same legal reasoning in the Lebamoff case that he applied in the Byrd dissent. He acts as though Tennessee Wine either never happened or isn’t controlling.  

What will result if the Supreme Court is silent

If the Supreme Court decides not to step in and correct this legal faux pas, then it leaves us with a situation in which a dissent from a previous Circuit Court case, that was previously rejected by the Supreme Court, could become the guiding precedent going forward.

The consequences would be shocking and chaotic! And it would unravel years of Supreme Court precedent on the Twenty-first Amendment v. Commerce Clause issues.

[1] Granholm v. Heald, 544 U.S. 460, 463 (2005)

[2]Lebamoff Enters. v. Whitmer, No. 18-2199, 5 (6th Cir. Apr. 21, 2020)

[3] Tennessee Wine and Spirits Retailers Assn. v. Thomas, 139 S. Ct. 2449, 2471 (2019)