State and Wholesalers file briefs in U.S. Supreme Court case: Will it move the Court to hear the case?

The U.S. Supreme Court received the response briefs from the wholesalers and the State of Michigan in the Lebamoff v. Whitmer case. This case pertains to the Michigan wine retailer shipping law which allows Michigan retailers to ship wine to Michigan residents, but denies this privilege to out-of-state wine retailers.

The Sixth Circuit ruled in favor of Michigan’s discriminatory law and Lebamoff¸ the retailer, appealed to the U.S. Supreme Court.

The Petitioner, Lebamoff Enterprises, in filing its cert petition was joined by Amici, National Association of Wine Retailers and 23 Wine Consumers.

After reading the briefs, the Supreme Court requested a response from the Michigan Beer & Wine Wholesalers and the State of Michigan.

The State of Michigan and the Wholesalers drafted briefs, I want to analyze their two main arguments.

Tennessee Wine created a different legal standard

Somehow the wholesalers and the state concluded that Tennessee Wine replaced the strict scrutiny standard present in Granholm, Bacchus, Brown-Forman, and Healy, and in its place is a new predominant effect test. “In other words, this Court concluded that a discriminatory alcohol law is subject to strict scrutiny only if its predominant effect is economic protectionism. If protection of public health or safety predominates, then the law—even if discriminatory—is protected by the Twenty-first Amendment.” State of Michigan Brief Page 14.

The argument is so egregiously bad and even insulting to the precedent in Tennessee Wine, that this legal principle may lead to the Supreme Court granting cert.

The newly made up standard jettisons long established traditions such as requiring the state to exercise reasonable nondiscriminatory alternatives before engaging in discrimination.  The state’s brief altogether ignores the reasonable alternatives test when going through its analysis.

The state and wholesaler’s views are influenced by Judge Sutton’s reasoning from the Sixth Circuit decision. Judge Sutton’s views on the Twenty-First Amendment which were present in the Lebamoff case, where rejected by the Supreme Court in the Tennessee Wine case.

“The dissent disagreed, reading § 2 of the Twenty-first Amendment to grant States ” ‘virtually’ limitless” authority to regulate the in-state distribution of alcohol, the only exception being for laws that “serve no purpose besides ‘economic protectionism.” [1] Tennessee Wine and Spirits Retailers Assn. v. Thomas, 139 S. Ct. 2449, 2459 (2019)

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.

To illustrate the consequences of this legal reasoning, under Granholm, if we applied the Sutton analytical model, 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.

In my mind, the predominant effect theory is so bad that the Court may grant cert on this issue alone. The Sixth Circuit took a rejected legal doctrine in Tennessee Wine and attempts to impose it back into the law against the weight of Supreme Court precedent.

Whether this is enough for the Supreme Court to grant cert, remains to be seen, but if it does grant cert, this will become the main reason.

No genuine circuit split exists

The better argument put forth is a circuit split does not exist. The petitioner’s briefs indicated a circuit split between the Seventh and Sixth Circuit on the wine retailer shipping issue. The Seventh Circuit reversed and remanded a decision upholding Illinois’ discriminatory wine retailer shipping law. While the Sixth upheld Michigan’s wine retailer shipping ban.

The state and the wholesalers noted that the Illinois decision in Lebamoff v. Rauner, preceded Tennessee Wine, whereas the Sixth Circuit decision was decided subsequent to Tennessee Wine.

The State and the wholesalers also questioned not only the timing of Lebamoff v, Rauner but also its breadth. In their views, they believe the Seventh Circuit only ruled on whether Granholm’s nondiscrimination principle applied to wholesalers and retailers, and not whether Illinois’ law violated the Commerce Clause.

This view proffered by the state and the wholesalers is quite simplistic. The Seventh Circuit began its analysis by stating “the question is thus whether the Twenty-first Amendment saves Illinois’s law.” LeBamoff Enters., Inc. v. Rauner, No. 17-2495 C 8607 (7th Circuit November 28, 2018); Page 9

Further the Seventh Circuit held that the “Twenty-first Amendment can save an otherwise discriminatory regulation only if it “is demonstrably justified by a valid factor unrelated to economic protectionism.” Id.

From these statements it is clear the state and wholesaler’s position that Lebamoff v, Rauner only dealt with a single issue is simplistic and simply not accurate.

Conclusion: Will the Supreme Court take this case?

Obviously, the odds are against the Supreme Court granting cert in any case. In 2016 only 1.2% of cert petitions were granted, which is not great odds. However, the Supreme Court requested a response to the briefs filed by the petitioner, which means there is at least one justice very interested in this case.

Even with this development, the odds have gone up a lot, but are still not very high for granting cert.

I am going out on a limb and predicting the Supreme Court will grant cert in this case.

Looking at the history of wine shipping at the Supreme Court we have Granholm. The Supreme Court allowed for a circuit split to develop in Granholm before granting cert. The consequences of waiting were negative. It took seven years to decide the winery shipping controversy and there were eight different cases filed in various states. It resulted in a legal mess.

As there are numerous wine retailer shipping cases working their way through the system, I don’t think the Supreme Court wants a repeat of this legal mess.

Finally, as I stated numerous times, the newly created legal doctrine of a predominant effect test is so bad and against the weight of Supreme Court precedent that the Court must step in and impose its proper legal standards.

Time will tell what happens, but I see against all odds, the Supreme Court taking this case.