Despite an online shopping spike during the Covid-19 pandemic and the historic 2005 High Court ruling outlawing discrimination against out-of-state businesses, retailers still face major wine shipping roadblocks. But retailers are not backing down. A recent U. S. Supreme Court’s decision not to hear a lawsuit challenging a Michigan law preventing out-of-state retailers from shipping wine to state consumers is the tip of a legal iceberg drifting into hot judicial water. The law, allowing only in-state retailers to ship wines to Michigan consumers, was being challenged as discriminatory. “We are not surprised by the result,” says Robert Epstein, an attorney for the plaintiffs. “We filed a petition cert to get on the Supreme Court’s radar screen. Since there are eight other pending cases, they’re waiting for more to percolate up.”
Similar legal challenges are pending at the federal level in California, Illinois, Indiana, Kentucky, New Jersey, North Carolina, and Rhode Island. Epstein, who is also involved in the cases in these other states, anticipates decisions coming next in Missouri, Illinois, and Indiana. “We will be going back to the Supreme Court sometime in the near future,” Epstein says.
Lebamoff Enterprises filed the petition with the Supreme Court after a ruling from a judge in Michigan for the Court of Appeals for the Sixth Circuit. “The panel upheld a blatantly discriminatory Michigan law that allowed in-state retailers to sell wine online and ship it to consumers, but prohibited out-of-state retailers from doing so,” the petition states.
The Sixth Circuit ruling came as a shock to some, considering the U. S. Supreme Court’s landmark 2005 ruling on Granholm v Heald upholding the Constitution’s Commerce Clause preventing states from discriminating against out-of-state wineries. Retailers and their attorneys argue the non-discrimination principal also applies to retailers “We are an over-regulated industry and states are still trying to asset that the 21st Amendment overrides the dormant Interstate Commerce Clause when the Supreme Court has ruled that it doesn’t,” says Daniel Posner, owner of Grapes The Wine Company in White Plains, New York. “We have situations where the states are going to defy the court and we’re going to do our best to fix that.”
A Pandemic Setback
The Michigan situation, meanwhile, is a setback for retailers. “It’s overstating the obvious when you think that during a pandemic state regulators would try to make it easier for people,” Posner says. “If a customer in Michigan wants to buy a wine from a retailer in California why is that treated any differently from buying it from a retailer in Detroit? It shouldn’t be. It should all be the same. Unfortunately it’s not.”
Posner adds that in comparison to New York and some other states, Michigan has limited distribution of fine wines. “New York probably has ten times the wines available than Michigan does at the distribution level,” he says. “There is no valid reason. Why are we limiting selection to that customer?”
Shipping wines to consumers remains important to many retailers. “We have customers all over the country that would like the wines we sell,” Posner says. “We need state regulators and elected officials to look at the spirit of the law and follow it. This is about a wine collector trying to buy great Burgundy they don’t have access to in Michigan and other states.”