Supreme Court, and wine.

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AndrewH
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Re: Supreme Court, and wine.

#101 Post by AndrewH » June 26th, 2019, 1:15 pm

Mike Evans wrote:
June 26th, 2019, 10:17 am
I suspect that it will be harder for wholesalers and retailers to build coalitions supporting anti-shipping measures now that Wayfair has significantly undercut the lost tax revenue argument.
At a minimum any coalition will have the higher hurdle of "mor tax revenue" to overcome.
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Re: Supreme Court, and wine.

#102 Post by Jonathan Loesberg » June 26th, 2019, 1:24 pm

crickey wrote:
June 26th, 2019, 12:47 pm
Ethan H wrote:
June 26th, 2019, 12:27 pm
crickey wrote:
June 26th, 2019, 12:17 pm
The dormant commerce clause covers both direct discrimination and where the effect is to discriminate in favor of in-state interests. Preventing someone from selling into a state because they don't have a physical location there has the effect of discriminating in favor of a person who does have a physical location there. It's not hugely different from the present case, where the license would only be granted to someone who was a Tennessee resident.
I haven't read Granholm in years, but this quote from Gorsuch's dissent today would seem to undercut that proposition:

Granholm held that the Twenty-first Amendment does not protect laws that discriminate against out-ofstate products, but it also expressly reaffirmed the “‘unquestionabl[e] legitima[cy]’” of state laws that require “‘all liquor sold for use in the State [to] be purchased from a licensed in-state wholesaler.’”
The reason I am less enthused about today's ruling than others in this thread is that I do not read it to have eliminated the licensing requirement or to permit a retailer licensed in one state to sell to any state. It did not undercut the licensing requirement. It just said that the requirements to obtain a license in a state cannot discriminate in favor of residents of that state.

My point about the shipping ban, even applied within a state, is that it would effectively restrict the sale of alcohol within a state to retailers physically located in the state, which appears to be contrary to the holding in this case.

I am curious to know how this ruling will impact states that restrict the sale of alcohol to state-owned stores.
The actual ruling limited itself to the dispute before it and struck down the residency requirements, a normally prudential self-limitation in a Supreme Court ruling (though, alas, less normal days). The reason you are reading enthusiasm here is that the reasoning that got them to this ruling seemed to indicate that article 2 of the Prohibition repeal had extreme limits in its ability to trump the Commerce Clause. The logic for an out of state retail to test a state ban, under this ruling, is pretty straightforward. Short of a more expansive overturning of laws, I don't know what more you could have wanted.

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Re: Supreme Court, and wine.

#103 Post by Jay Miller » June 26th, 2019, 1:25 pm

David McMillen wrote:
June 26th, 2019, 10:42 am
Tom, NPR put out that this ruling could also change the limits on who can acquire a license, and that TN won't be allowed to place limits, thus allowing large chains to come in. Is this also true?
I am certainly no lawyer but I live in Nashville and my understanding is that current TN law only allows a person or entity to own 2 retail licenses, so that one person or company can only own up to 2 stores in the state. This law (if I am correct) would have to change before the chains would move in.
New York state limits people or companies to one store so Total Wine has one store in the state. But of course that one store can ship statewide.
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Re: Supreme Court, and wine.

#104 Post by Bruce Leiser_owitz » June 26th, 2019, 1:29 pm

I read the decision as simply holding that a state that imposes a two-year residency requirement before granting a license is going to have that requirement invalidated under the dormant Commerce Clause. Even the TN AG's office agreed that the requirement was invalid, and the State of Tennessee itself wouldn't go to bat for it when it was litigated.

Whether the rationale for the Tennessee case gets applied to non-residency licensing requirements will get worked out in future cases. I don't think it's a sea change, in and of itself.

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Re: Supreme Court, and wine.

#105 Post by crickey » June 26th, 2019, 1:54 pm

Jonathan Loesberg wrote:
June 26th, 2019, 1:24 pm
crickey wrote:
June 26th, 2019, 12:47 pm
The reason I am less enthused about today's ruling than others in this thread is that I do not read it to have eliminated the licensing requirement or to permit a retailer licensed in one state to sell to any state. It did not undercut the licensing requirement. It just said that the requirements to obtain a license in a state cannot discriminate in favor of residents of that state.

My point about the shipping ban, even applied within a state, is that it would effectively restrict the sale of alcohol within a state to retailers physically located in the state, which appears to be contrary to the holding in this case.

I am curious to know how this ruling will impact states that restrict the sale of alcohol to state-owned stores.
The actual ruling limited itself to the dispute before it and struck down the residency requirements, a normally prudential self-limitation in a Supreme Court ruling (though, alas, less normal days). The reason you are reading enthusiasm here is that the reasoning that got them to this ruling seemed to indicate that article 2 of the Prohibition repeal had extreme limits in its ability to trump the Commerce Clause. The logic for an out of state retail to test a state ban, under this ruling, is pretty straightforward. Short of a more expansive overturning of laws, I don't know what more you could have wanted.
The obviousness of the discrimination in this case cuts two ways: it made the application of the dormant commerce clause possible, but also leads to future litigation where the legitimate state protection lies. The case might end up being limited to where a law explicitly has a state-specific requirement, and all other "health protection" issues upheld. The difficulty is coming up with a legitimate health/protection issue that can only be controlled by a local entity.

I think the path the case points to is a system of 50-state (or maybe just multi-state, so big states to reduce the paperwork hassle) licensed retailers. I don't think it supports a system where a retailer licensed in one state can sell to residents of any state, which is what I think people expect when they think this case extended Granholm.

The next big litigation will be whether retailers have to buy alcohol from certain wholesalers (i.e., whether wholesalers could get licensed in any state, too).
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Re: Supreme Court, and wine.

#106 Post by Neal.Mollen » June 26th, 2019, 2:00 pm

crickey wrote:
June 26th, 2019, 12:47 pm
Ethan H wrote:
June 26th, 2019, 12:27 pm
crickey wrote:
June 26th, 2019, 12:17 pm
The dormant commerce clause covers both direct discrimination and where the effect is to discriminate in favor of in-state interests. Preventing someone from selling into a state because they don't have a physical location there has the effect of discriminating in favor of a person who does have a physical location there. It's not hugely different from the present case, where the license would only be granted to someone who was a Tennessee resident.
I haven't read Granholm in years, but this quote from Gorsuch's dissent today would seem to undercut that proposition:

Granholm held that the Twenty-first Amendment does not protect laws that discriminate against out-ofstate products, but it also expressly reaffirmed the “‘unquestionabl[e] legitima[cy]’” of state laws that require “‘all liquor sold for use in the State [to] be purchased from a licensed in-state wholesaler.’”
The reason I am less enthused about today's ruling than others in this thread is that I do not read it to have eliminated the licensing requirement or to permit a retailer licensed in one state to sell to any state. It did not undercut the licensing requirement. It just said that the requirements to obtain a license in a state cannot discriminate in favor of residents of that state.

My point about the shipping ban, even applied within a state, is that it would effectively restrict the sale of alcohol within a state to retailers physically located in the state, which appears to be contrary to the holding in this case.

I am curious to know how this ruling will impact states that restrict the sale of alcohol to state-owned stores.
Your last question is an excellent one. If a state (or Commonwealth -- looking at you PA) is an island, prohibiting shipping into the state and prohibiting shipping out of the state, I don't see Thomas as precluding it. It may yet be unconstitutional (I doubt it) but it doesn't fall under Thomas.
Last edited by Neal.Mollen on June 26th, 2019, 2:09 pm, edited 1 time in total.
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Re: Supreme Court, and wine.

#107 Post by Todd F r e n c h » June 26th, 2019, 2:06 pm

well, we know which way Judge Beer Me would vote on such a bill
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Re: Supreme Court, and wine.

#108 Post by EHeffner » June 26th, 2019, 2:08 pm

This thread brings me back to Con law. hitsfan
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Re: Supreme Court, and wine.

#109 Post by Neal.Mollen » June 26th, 2019, 2:13 pm

I feel very bullish after reading the opinion. There will absolutely be litigation, as the protected industry tries various strategies and rationales to fit within Thomas. I also can see retrenchment in some states -- making it harder on both in state and out of state sellers of wine and spirits (eg requiring all wines and spirits to be bought in person -- a system I do not believe Thomas condemns). And as I said above, I don't think Thomas directly impacts closed state-owned systems like PA.

But ultimately I think the vast majority of restrictive laws currently on the books became illegal today, and over the next year or two, courts will say so. By New Years' Day 2021, I predict that for the great majority of us, restrictions on our ability to buy wine and have it shipped to our homes will by and large be a relic of the past
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Re: Supreme Court, and wine.

#110 Post by cjsavino » June 26th, 2019, 2:19 pm

They also seemed to clarify that Granholm applied beyond producers/wineries
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Re: Supreme Court, and wine.

#111 Post by Neal.Mollen » June 26th, 2019, 2:34 pm

cjsavino wrote:
June 26th, 2019, 2:19 pm
They also seemed to clarify that Granholm applied beyond producers/wineries
Oh, that is absolutely clear.
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Re: Supreme Court, and wine.

#112 Post by Jayson Cohen » June 26th, 2019, 2:43 pm

crickey wrote:
June 26th, 2019, 12:17 pm
Jayson Cohen wrote:
June 26th, 2019, 12:05 pm
crickey wrote:
June 26th, 2019, 10:38 am


I don't think that sort of ban would survive under this ruling, as such a rule would effectively prohibit out-of-state retailers from selling in that state.
I don’t think this is right as such a statute does not facially discriminate.
The dormant commerce clause covers both direct discrimination and where the effect is to discriminate in favor of in-state interests. Preventing someone from selling into a state because they don't have a physical location there has the effect of discriminating in favor of a person who does have a physical location there. It's not hugely different from the present case, where the license would only be granted to someone who was a Tennessee resident.
I think details here matter a lot. When a statute isn’t facially discriminatory and when a statute has a police power rationale that a state can articulate (e.g., we want to require a buyer to show physical ID when purchasing alcohol), you have a different legal battle than this TN case presented. In the first step the state can (at least) argue for a balancing test for incidental burden on interstate commerce instead of stricter means-end scrutiny if it bans all shipments to all consumers, and even if it loses that argument, it can argue that its outright shipping ban is squarely contemplated by the 21st Amendment (i.e., it’s regulating transportation of alcohol) and it has a viable public health and safety rationale. It seems to me a much harder case than we had here in TN, but one that is helped marginally on the pro-consumer side by today’s ruling in the sense that out of state economic interests beyond just producers and products will be considered by 7 of the Justices.

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Re: Supreme Court, and wine.

#113 Post by Tom G l a s g o w » June 26th, 2019, 2:43 pm

D@vid Bu3ker wrote:
June 26th, 2019, 8:57 am
I am not saying I think this is appropriate, but I could see states saying the "legitimate purpose" is to protect consumers from unscrupulous merchants, e.g. Premier Cru.
What about the PLCB?

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Re: Supreme Court, and wine.

#114 Post by Chris S p i k e s » June 26th, 2019, 3:14 pm

I just hope the next moves come quickly. Waiting 14 years at a time for progress is going to render the outcome superfluous to me considering my life expectancy of wine enjoyment, not to mention life expectancy itself.

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Re: Supreme Court, and wine.

#115 Post by crickey » June 26th, 2019, 3:30 pm

Jayson Cohen wrote:
June 26th, 2019, 2:43 pm
crickey wrote:
June 26th, 2019, 12:17 pm
Jayson Cohen wrote:
June 26th, 2019, 12:05 pm


I don’t think this is right as such a statute does not facially discriminate.
The dormant commerce clause covers both direct discrimination and where the effect is to discriminate in favor of in-state interests. Preventing someone from selling into a state because they don't have a physical location there has the effect of discriminating in favor of a person who does have a physical location there. It's not hugely different from the present case, where the license would only be granted to someone who was a Tennessee resident.
I think details here matter a lot. When a statute isn’t facially discriminatory and when a statute has a police power rationale that a state can articulate (e.g., we want to require a buyer to show physical ID when purchasing alcohol), you have a different legal battle than this TN case presented. In the first step the state can (at least) argue for a balancing test for incidental burden on interstate commerce instead of stricter means-end scrutiny if it bans all shipments to all consumers, and even if it loses that argument, it can argue that its outright shipping ban is squarely contemplated by the 21st Amendment (i.e., it’s regulating transportation of alcohol) and it has a viable public health and safety rationale. It seems to me a much harder case than we had here in TN, but one that is helped marginally on the pro-consumer side by today’s ruling in the sense that out of state economic interests beyond just producers and products will be considered by 7 of the Justices.
I don't disagree that the cases would be different. As I noted above, the problem with TWSA is that the discrimination was both obvious and wholly unrelated to any plausible public interest, leaving open years of litigation where courts get to discover where the legitimate interests of the state in regulating the sale of alcohol is. In effect, you are arguing that the discrimination against out-of-state retailers could be justified by a public interest, despite the fact that only out-of-state retailers would be affected by the law in your hypothetical, which could lead to a different outcome consistent with this case.
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Re: Supreme Court, and wine.

#116 Post by pnitze » June 26th, 2019, 3:45 pm

The details certainly matter here. I agree that a state can likely ban shipment by mail of alcoholic beverages without running afoul of this ruling. States can also impose a licensing fee to in-state or out-of-state retailers, so long as there is approximate parity in the licensing regime. However, this ruling puts in jeopardy state laws permitting alcohol shipments by in-state retailers while prohibiting shipments by out-of-state retailers. So the states that will be in the crosshairs will be those that currently limit shipment by mail to in-state, licensed retailers.

What will be interesting about this ruling is how it plays out on the wholesaler side, assuming this reasoning holds. Like everything else, alcohol sales are increasingly moving online. Would wholesalers rather protect margins, but limit volume, by pushing for laws barring *all* offsite sales, or can they live with a level playing field, knowing that this will allow for higher volumes to be sold? Time will tell.

Another interesting wrinkle is the common carrier aspect. Can states thread the needle by barring common carriers from delivering alcohol, but allowing a retailer to perform its own offsite deliveries? That’s another possibility.
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Re: Supreme Court, and wine.

#117 Post by M.Kaplan » June 26th, 2019, 3:50 pm

Prediction: Amazon will be the big winner. They currently sell alcoholic beverages in 43 states and I forget how many municipalities and have a team dedicated to alcoholic beverage licensing issues across all of its platforms.
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Re: Supreme Court, and wine.

#118 Post by Nick Gangas » June 26th, 2019, 4:14 pm

I'm sure at this moment there is some asst. legislative scrub being dictated the terms of the new shipping law in Il.Meaning no shipping.

Years ago when this issue first came up here after Granholm I was talking to a manager at a large liquor chain here. He was on old friend from his wholesale days. Anyway he was very clear, they rather restrict their ability to ship wine out of state if they could stop shipping wine into IL.

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Re: Supreme Court, and wine.

#119 Post by Jayson Cohen » June 26th, 2019, 4:39 pm

crickey wrote:
June 26th, 2019, 3:30 pm
Jayson Cohen wrote:
June 26th, 2019, 2:43 pm
crickey wrote:
June 26th, 2019, 12:17 pm


The dormant commerce clause covers both direct discrimination and where the effect is to discriminate in favor of in-state interests. Preventing someone from selling into a state because they don't have a physical location there has the effect of discriminating in favor of a person who does have a physical location there. It's not hugely different from the present case, where the license would only be granted to someone who was a Tennessee resident.
I think details here matter a lot. When a statute isn’t facially discriminatory and when a statute has a police power rationale that a state can articulate (e.g., we want to require a buyer to show physical ID when purchasing alcohol), you have a different legal battle than this TN case presented. In the first step the state can (at least) argue for a balancing test for incidental burden on interstate commerce instead of stricter means-end scrutiny if it bans all shipments to all consumers, and even if it loses that argument, it can argue that its outright shipping ban is squarely contemplated by the 21st Amendment (i.e., it’s regulating transportation of alcohol) and it has a viable public health and safety rationale. It seems to me a much harder case than we had here in TN, but one that is helped marginally on the pro-consumer side by today’s ruling in the sense that out of state economic interests beyond just producers and products will be considered by 7 of the Justices.
In effect, you are arguing that the discrimination against out-of-state retailers could be justified by a public interest, despite the fact that only out-of-state retailers would be affected by the law in your hypothetical, which could lead to a different outcome consistent with this case.
[scratch.gif] I really don’t understand what you are saying. And I wasn’t really positing a hypo in the law school exam sense but the real possibility mentioned above, which has existed in real life in the past, that Illinois, Michigan, and Texas ban all shipments of wine to state consumers, whether from in-state or out-of-state retailers.

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Re: Supreme Court, and wine.

#120 Post by Tomcwark » June 26th, 2019, 4:48 pm

Nick Gangas wrote:
June 26th, 2019, 4:14 pm
I'm sure at this moment there is some asst. legislative scrub being dictated the terms of the new shipping law in Il.Meaning no shipping.

Years ago when this issue first came up here after Granholm I was talking to a manager at a large liquor chain here. He was on old friend from his wholesale days. Anyway he was very clear, they rather restrict their ability to ship wine out of state if they could stop shipping wine into IL.
Regarding IL, there is already a case challenging IL's ban on shipments of wine from out-of-state retailers. The Federal District Court said the law was constitutional. However, the Seventh Circuit Court of Appeals said that the law was likely unconstitutional based on Granholm and asked the Federal District Court to look at the case again based on its commentary.

IL allows its own retailers to ship wine to IL residents and bans shipments from out-of-state retailers. That law will undoubtedly be ruled unconstitutional after today's ruling. In fact, the lower court where the case was remanded for rehearing was waiting to see what the Supreme Court said.

If I had my druthers, I'd like to see the state of IL and IL wholesalers appeal as far as they can so that we can get precedents set in the seventh circuit. Then I want them to appeal to the Supreme Court, who will not take the case because they figured they've just ruled on the issue when they said: Granholm Applies To Retailers". That gives us precedent in the 7th Circuit (including IL and IN).

There is a possibility that IL wholesalers and retailers will ask the IL legislature to ban all shipments from both in-state and out-of-state retailers. That will result in a very big political fight that I'm happy to engage in. Wholesalers will come with their political donations in their pocket. However, I'll be bringing the top IL retailers to the table demanding the state not tie their hands. Moreover, I'm positive I can motivate thousands of IL consumers to make their voices heard. Finally, I've never once come across a media outlet that didn't condemn actions like attempting to deny consumers access to wine or banning shipping.
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Re: Supreme Court, and wine.

#121 Post by Jayson Cohen » June 26th, 2019, 5:16 pm

Tom

I skimmed that 2018 7th Circuit decision. A follow-on 7th Circuit decision in the same case saying “I told you so” would create a Circuit split that could lead the SC to take the case and affirm, sweeping away the contrary decisions in the 2d, 5th, and 8th. But if IL is smart, it will see the writing on the wall and never get that far, by instead trying to pass a smarter law that is less likely to create bad precedents from its perspective. It would be dense given today’s decision to tempt fate with a facially discriminatory law like currently on the books and already under challenge.

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Re: Supreme Court, and wine.

#122 Post by D@vid Bu3ker » June 26th, 2019, 5:56 pm

Jayson,

Have you met many state legislators? Most of them are dumb as toast.
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Re: Supreme Court, and wine.

#123 Post by Sc0tt F!tzger@ld » June 26th, 2019, 6:04 pm

D@vid Bu3ker wrote:
June 26th, 2019, 5:56 pm
Jayson,

Have you met many state legislators? Most of them are dumb as toast.
You're not being fair to toast.

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Re: Supreme Court, and wine.

#124 Post by crickey » June 26th, 2019, 6:25 pm

Jayson Cohen wrote:
June 26th, 2019, 4:39 pm
crickey wrote:
June 26th, 2019, 3:30 pm
Jayson Cohen wrote:
June 26th, 2019, 2:43 pm


I think details here matter a lot. When a statute isn’t facially discriminatory and when a statute has a police power rationale that a state can articulate (e.g., we want to require a buyer to show physical ID when purchasing alcohol), you have a different legal battle than this TN case presented. In the first step the state can (at least) argue for a balancing test for incidental burden on interstate commerce instead of stricter means-end scrutiny if it bans all shipments to all consumers, and even if it loses that argument, it can argue that its outright shipping ban is squarely contemplated by the 21st Amendment (i.e., it’s regulating transportation of alcohol) and it has a viable public health and safety rationale. It seems to me a much harder case than we had here in TN, but one that is helped marginally on the pro-consumer side by today’s ruling in the sense that out of state economic interests beyond just producers and products will be considered by 7 of the Justices.
In effect, you are arguing that the discrimination against out-of-state retailers could be justified by a public interest, despite the fact that only out-of-state retailers would be affected by the law in your hypothetical, which could lead to a different outcome consistent with this case.
[scratch.gif] I really don’t understand what you are saying. And I wasn’t really positing a hypo in the law school exam sense but the real possibility mentioned above, which has existed in real life in the past, that Illinois, Michigan, and Texas ban all shipments of wine to state consumers, whether from in-state or out-of-state retailers.
I said I didn't disagree with you on the differences in the cases. What part didn't you understand?

The only part I disagreed with you is that a law whose only effect is to prohibit retailers not located in Illinois from selling alcohol in the state of Illinois would be held to a different standard of judicial review than a law that explicitly stated that only a retailer located in Illinois can sell alcohol within the state of Illinois. Part V of the majority decision notes that in the context of Section 2 of the 21st Amendment, the standard of judicial review is different than in normal dormant commerce clause cases (i.e., not the same as in a facially discriminatory case under normal dormant commerce law cases; in this case, the judicial review afforded the state more deference). You may be right that a alcohol law that isn't facially discriminatory may be afforded even more deference than under a balancing test review, although it did not seem that way from the analysis of the TN law. I guess we will find out when a challenge to the Illinois, Michigan or Texas laws makes it through the courts following this case.
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Re: Supreme Court, and wine.

#125 Post by Matt Snow » June 26th, 2019, 7:52 pm

Under the reasoning of the Tennessee case, I don't see any way the bans on interstate retailing can survive. (Someone raised the topic of restrictions on private shipment, and I don't think those are implicated so long as they apply equally to intra and interstate.)

However states (including Massachusetts, where the interstate retailing ban has already been questioned) have shifted to restrictions on the shipping companies themselves. In Mass., for instance, every truck that carries wine has to have a Mass. wine shipping license, which makes it very difficult for UPS and FedEx to deal with shipments crossing state lines. My guess is that ultimately these laws fall as well under authorities like American Transportation v. Scheiner, but that line of authority is a bit less clear than interstate retailing appears to be under Tennessee Wholesalers.

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Re: Supreme Court, and wine.

#126 Post by Jim Brennan » June 26th, 2019, 8:18 pm

Tomcwark wrote:
June 26th, 2019, 10:20 am
Mike Evans wrote:
June 26th, 2019, 10:17 am
I suspect that it will be harder for wholesalers and retailers to build coalitions supporting anti-shipping measures now that Wayfair has significantly undercut the lost tax revenue argument.
Yes. That and the fact that the Supreme Court just said that discriminatory laws must serve the purposes of health and safety of a state and that such claims must come with real evidence. But here's what you can expect: Wholesalers and Retailers will attempt to pass laws that ban shipments from both in-state and out-of-state retailers so that there is no discrimination. We will likely see this happen sooner rather than later in places like Michigan, Illinois and Texas.
I think they'll be hard pressed to be successful in Michigan, given the number of wineries in state.

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Re: Supreme Court, and wine.

#127 Post by Keith Levenberg » June 26th, 2019, 8:20 pm

Matt Snow wrote:
June 26th, 2019, 7:52 pm
Under the reasoning of the Tennessee case, I don't see any way the bans on interstate retailing can survive.
The short answer is that the case says that each legislative scheme has to be evaluated individually "based on its own features" and that they can pass muster if justified by legitimate health-and-safety regulatory concerns other than protectionism. So, while the ruling puts the tailwinds in favor of the good guys fighting the shipping bans, you can expect states that want to keep their bans to conjure up fig-leaf justifications based on health-and-safety concerns. Their cases just got harder than they would have been before, but there's still enough wiggle room for judges to cook up a rationale for pretty much any result they want.

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Re: Supreme Court, and wine.

#128 Post by Ian Dorin » June 27th, 2019, 5:11 am

David McMillen wrote:
June 26th, 2019, 10:42 am
Tom, NPR put out that this ruling could also change the limits on who can acquire a license, and that TN won't be allowed to place limits, thus allowing large chains to come in. Is this also true?
I am certainly no lawyer but I live in Nashville and my understanding is that current TN law only allows a person or entity to own 2 retail licenses, so that one person or company can only own up to 2 stores in the state. This law (if I am correct) would have to change before the chains would move in.
You would be shocked how much damage a company like Total Wine can do to local businesses, even if they only have 2 locations, and in some cases 1. Total Wine buried the local competition in Long Island and they are fighting the state to get a second license in Westchester.
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Re: Supreme Court, and wine.

#129 Post by Victor Hong » June 27th, 2019, 5:20 am

Ian Dorin wrote:
June 27th, 2019, 5:11 am
David McMillen wrote:
June 26th, 2019, 10:42 am
Tom, NPR put out that this ruling could also change the limits on who can acquire a license, and that TN won't be allowed to place limits, thus allowing large chains to come in. Is this also true?
I am certainly no lawyer but I live in Nashville and my understanding is that current TN law only allows a person or entity to own 2 retail licenses, so that one person or company can only own up to 2 stores in the state. This law (if I am correct) would have to change before the chains would move in.
You would be shocked how much damage a company like Total Wine can do to local businesses, even if they only have 2 locations, and in some cases 1. Total Wine buried the local competition in Long Island and they are fighting the state to get a second license in Westchester.
The local competitors have suffered, but market competition itself may have improved meanwhile, thereby benefiting wine consumers.
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Re: Supreme Court, and wine.

#130 Post by Tomcwark » June 27th, 2019, 6:24 am

Keith Levenberg wrote:
June 26th, 2019, 8:20 pm
Matt Snow wrote:
June 26th, 2019, 7:52 pm
Under the reasoning of the Tennessee case, I don't see any way the bans on interstate retailing can survive.
The short answer is that the case says that each legislative scheme has to be evaluated individually "based on its own features" and that they can pass muster if justified by legitimate health-and-safety regulatory concerns other than protectionism. So, while the ruling puts the tailwinds in favor of the good guys fighting the shipping bans, you can expect states that want to keep their bans to conjure up fig-leaf justifications based on health-and-safety concerns. Their cases just got harder than they would have been before, but there's still enough wiggle room for judges to cook up a rationale for pretty much any result they want.
Keith, you are correct in what a state must do to see its discriminatory laws upheld. However, there is one more element that is important. The laws will pass muster if justified by legitimate health and safety concerns that show a regulatory concern AND THAT CAN'T BE PURSUED IN AN OTHERWISE LESS DISCRIMINATORY WAY. That said, I too expect some wiggling to occur.
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Re: Supreme Court, and wine.

#131 Post by Scott Brunson » June 27th, 2019, 6:25 am

Sc0tt F!tzger@ld wrote:
June 26th, 2019, 6:04 pm
D@vid Bu3ker wrote:
June 26th, 2019, 5:56 pm
Jayson,

Have you met many state legislators? Most of them are dumb as toast.
You're not being fair to toast.
Are any of them attorneys? newhere
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Re: Supreme Court, and wine.

#132 Post by Dennis Borczon » June 27th, 2019, 8:15 am

Neal.Mollen wrote:
June 26th, 2019, 2:13 pm
I feel very bullish after reading the opinion. There will absolutely be litigation, as the protected industry tries various strategies and rationales to fit within Thomas. I also can see retrenchment in some states -- making it harder on both in state and out of state sellers of wine and spirits (eg requiring all wines and spirits to be bought in person -- a system I do not believe Thomas condemns). And as I said above, I don't think Thomas directly impacts closed state-owned systems like PA.

But ultimately I think the vast majority of restrictive laws currently on the books became illegal today, and over the next year or two, courts will say so. By New Years' Day 2021, I predict that for the great majority of us, restrictions on our ability to buy wine and have it shipped to our homes will by and large be a relic of the past
Ahhhh, but PA allows shipping into the state from out of state wineries, with direct home delivery of wine. I get a couple of wineries that have purchased shipping of licences into PA legally. These wines can legit ship to me. It seems that the ice under the controlled state liquor system is getting thinner and thinner every day, especially as grocery stores can carry beer and wine in retail outside of the state monopoly system. I think the nose is now under the camels tent and it will be a matter of time until the door opens wider. Does anyone really beleive that state regulation of alcohol serves a helath related purpose? Like banning Sunday sales before noon so people have to wait after church to purchase booze?

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Re: Supreme Court, and wine.

#133 Post by Neal.Mollen » June 27th, 2019, 8:17 am

Dennis Borczon wrote:
June 27th, 2019, 8:15 am
Neal.Mollen wrote:
June 26th, 2019, 2:13 pm
I feel very bullish after reading the opinion. There will absolutely be litigation, as the protected industry tries various strategies and rationales to fit within Thomas. I also can see retrenchment in some states -- making it harder on both in state and out of state sellers of wine and spirits (eg requiring all wines and spirits to be bought in person -- a system I do not believe Thomas condemns). And as I said above, I don't think Thomas directly impacts closed state-owned systems like PA.

But ultimately I think the vast majority of restrictive laws currently on the books became illegal today, and over the next year or two, courts will say so. By New Years' Day 2021, I predict that for the great majority of us, restrictions on our ability to buy wine and have it shipped to our homes will by and large be a relic of the past
Ahhhh, but PA allows shipping into the state from out of state wineries, with direct home delivery of wine. I get a couple of wineries that have purchased shipping of licences into PA legally. These wines can legit ship to me. It seems that the ice under the controlled state liquor system is getting thinner and thinner every day, especially as grocery stores can carry beer and wine in retail outside of the state monopoly system. I think the nose is now under the camels tent and it will be a matter of time until the door opens wider. Does anyone really beleive that state regulation of alcohol serves a helath related purpose? Like banning Sunday sales before noon so people have to wait after church to purchase booze?
Interesting; I didn't know that! Hard to support a health and safety rationale when the permit wineries to do it but nor retailers. That just smacks of anti-competitive bias.
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Re: Supreme Court, and wine.

#134 Post by mmarcellus » June 27th, 2019, 11:50 am

Ian Dorin wrote:
June 27th, 2019, 5:11 am
David McMillen wrote:
June 26th, 2019, 10:42 am
Tom, NPR put out that this ruling could also change the limits on who can acquire a license, and that TN won't be allowed to place limits, thus allowing large chains to come in. Is this also true?
I am certainly no lawyer but I live in Nashville and my understanding is that current TN law only allows a person or entity to own 2 retail licenses, so that one person or company can only own up to 2 stores in the state. This law (if I am correct) would have to change before the chains would move in.
You would be shocked how much damage a company like Total Wine can do to local businesses, even if they only have 2 locations, and in some cases 1. Total Wine buried the local competition in Long Island and they are fighting the state to get a second license in Westchester.
As a long suffering LI wine drinker, I can emphatically say that most of the competition absolutely deserves to be buried.
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Re: Supreme Court, and wine.

#135 Post by Ian Dorin » June 28th, 2019, 4:34 am

Victor Hong wrote:
June 27th, 2019, 5:20 am
Ian Dorin wrote:
June 27th, 2019, 5:11 am
David McMillen wrote:
June 26th, 2019, 10:42 am


I am certainly no lawyer but I live in Nashville and my understanding is that current TN law only allows a person or entity to own 2 retail licenses, so that one person or company can only own up to 2 stores in the state. This law (if I am correct) would have to change before the chains would move in.
You would be shocked how much damage a company like Total Wine can do to local businesses, even if they only have 2 locations, and in some cases 1. Total Wine buried the local competition in Long Island and they are fighting the state to get a second license in Westchester.
The local competitors have suffered, but market competition itself may have improved meanwhile, thereby benefiting wine consumers.
There is no doubt that competition is good, as it typically drives down prices, but when you competition closes up shop and nothing returns, that's a different story.
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Re: Supreme Court, and wine.

#136 Post by Jason T » June 28th, 2019, 6:22 am

Ian Dorin wrote:
June 28th, 2019, 4:34 am
Victor Hong wrote:
June 27th, 2019, 5:20 am
Ian Dorin wrote:
June 27th, 2019, 5:11 am

You would be shocked how much damage a company like Total Wine can do to local businesses, even if they only have 2 locations, and in some cases 1. Total Wine buried the local competition in Long Island and they are fighting the state to get a second license in Westchester.
The local competitors have suffered, but market competition itself may have improved meanwhile, thereby benefiting wine consumers.
There is no doubt that competition is good, as it typically drives down prices, but when you competition closes up shop and nothing returns, that's a different story.
I'm not familiar with Total. How do they compare with, say, Binny's (an Illinois chain)? I get your concerns Ian however I'm wondering if there's a world where both the Totals and smaller players can coexist? I.e. the smaller players focus maybe more on specific niches? Just curious, and ultimately I defer to you and others as I'm definitely NOT on the business end of the wine world.
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Re: Supreme Court, and wine.

#137 Post by Sc0tt F!tzger@ld » June 28th, 2019, 6:28 am

The issue for me here in Texas is not whether more big box chains can enter the market. It's about internet access to retailers outside of Texas. The current distributors in Texas simply don't carry many of the wines I want to buy, and if they do, the stores charge exorbitant markups to get them (yes Pogo's, I'm talking to you). I've uncovered other options which I won't get into detail on this thread for obvious reasons, but it would sure be nice to order from places like Chambers, K&L, etc., from the comfort of my home.

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Re: Supreme Court, and wine.

#138 Post by Jay Miller » June 28th, 2019, 6:29 am

Jason T wrote:
June 28th, 2019, 6:22 am
Ian Dorin wrote:
June 28th, 2019, 4:34 am
Victor Hong wrote:
June 27th, 2019, 5:20 am

The local competitors have suffered, but market competition itself may have improved meanwhile, thereby benefiting wine consumers.
There is no doubt that competition is good, as it typically drives down prices, but when you competition closes up shop and nothing returns, that's a different story.
I'm not familiar with Total. How do they compare with, say, Binny's (an Illinois chain)? I get your concerns Ian however I'm wondering if there's a world where both the Totals and smaller players can coexist? I.e. the smaller players focus maybe more on specific niches? Just curious, and ultimately I defer to you and others as I'm definitely NOT on the business end of the wine world.
I'd say that they are no competition for the higher end specialty stores (Chambers St., Crush, Flatiron, probably Binnys?, etc.). I got their advertising in the mail all the time but it never tempted me to shop there. However they are huge competition for the stores that did a good business because there were no decent options in the neighborhood.

and they seem to be a good source for new release Bordeaux which is not something I'm buying these days.
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Re: Supreme Court, and wine.

#139 Post by CJ Beazley » June 28th, 2019, 6:36 am

Sc0tt F!tzger@ld wrote:
June 28th, 2019, 6:28 am
The issue for me here in Texas is not whether more big box chains can enter the market. It's about internet access to retailers outside of Texas. The current distributors in Texas simply don't carry many of the wines I want to buy, and if they do, the stores charge exorbitant markups to get them (yes Pogo's, I'm talking to you). I've uncovered other options which I won't get into detail on this thread for obvious reasons, but it would sure be nice to order from places like Chambers, K&L, etc., from the comfort of my home.
^this^^^^so much this.
For years I kept a spreadsheet of close out deals I missed out on (the massive dumps in 08 etc) it sucks. I only go to Pogo’s once a year during their only legitimate sale.
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Re: Supreme Court, and wine.

#140 Post by mmarcellus » June 28th, 2019, 7:41 am

Ian Dorin wrote:
June 28th, 2019, 4:34 am

There is no doubt that competition is good, as it typically drives down prices, but when you competition closes up shop and nothing returns, that's a different story.
On LI, I don't think there's been competition worthy of the name for a while, and this trend started well before Total showed up. Most of the shops that offered a good selection and/or good value have long since closed or simply handed the wine selection function over to the distributors and the points machine (Young's and Post being two prime examples of the latter). The points strategy was successful for a while, but it inevitably led to a sameness in all the stores, giving you no reason to make a special trip to any of them.

I give Total a lot of credit. The selection is broad, the prices are good, and the salespeople do a good job of serving their customers. I also don't think the quality of the offerings is that bad. The more casual wine drinkers I know are quite happy with what Total is selling them - and it's not just a matter of price. I am also able to walk in to the store and find wines I'm happy to buy. Granted, a major reason for that is their broad selection of good Finger Lakes wines, which was probably more of a political decision than an aesthetic or commercial one. But even beyond the NYS section, I can find good choices.

That said, I don't shop at Total all that often. When I'm not shopping at the NYC stores or having wine shipped, I can do better at my LWS, whose owner does know what he's doing, and is focused on offering a diverse and distinctive selection of wines that offer good value for what they are. I don't imagine he'll get super rich doing this, wine retail is tough on LI, but that was just as true before Total showed up. My hope is that the competition from Total will mean that we have a renaissance in stores that offer a well thought out, diverse, and distinctive selection because that's really the only way to effectively compete.
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Re: Supreme Court, and wine.

#141 Post by Chris S p i k e s » June 28th, 2019, 7:46 am

CJ Beazley wrote:
June 28th, 2019, 6:36 am
Sc0tt F!tzger@ld wrote:
June 28th, 2019, 6:28 am
The issue for me here in Texas is not whether more big box chains can enter the market. It's about internet access to retailers outside of Texas. The current distributors in Texas simply don't carry many of the wines I want to buy, and if they do, the stores charge exorbitant markups to get them (yes Pogo's, I'm talking to you). I've uncovered other options which I won't get into detail on this thread for obvious reasons, but it would sure be nice to order from places like Chambers, K&L, etc., from the comfort of my home.
^this^^^^so much this.
For years I kept a spreadsheet of close out deals I missed out on (the massive dumps in 08 etc) it sucks. I only go to Pogo’s once a year during their only legitimate sale.
I'm right there with both of you. But, realistically my big buying years are behind me and I'll drink down my cellar over the next 20-30+ (hopefully!) years of life expectancy. I just hope that with the potential all-or-none legislative solution some others have mentioned, Texas doesn't shut down all shipping from all sources - i.e. wineries too. The power of the distributors is enormous and behind the scenes. They have every legislator in their back pocket to some extent and their PR campaign centers around protecting the children. Who can possibly be against protecting the children???? /s

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Re: Supreme Court, and wine.

#142 Post by Neal.Mollen » June 28th, 2019, 8:13 am

Jason T wrote:
June 28th, 2019, 6:22 am
Ian Dorin wrote:
June 28th, 2019, 4:34 am
Victor Hong wrote:
June 27th, 2019, 5:20 am

The local competitors have suffered, but market competition itself may have improved meanwhile, thereby benefiting wine consumers.
There is no doubt that competition is good, as it typically drives down prices, but when you competition closes up shop and nothing returns, that's a different story.
I'm not familiar with Total. How do they compare with, say, Binny's (an Illinois chain)? I get your concerns Ian however I'm wondering if there's a world where both the Totals and smaller players can coexist? I.e. the smaller players focus maybe more on specific niches? Just curious, and ultimately I defer to you and others as I'm definitely NOT on the business end of the wine world.
Big-to-huge stores, mostly (but not entirely) middle-brow selections of wines and lots of beer, nice but largely uneducated sales staff. I haven't examined balance sheets but I don't see any evidence that they have significantly dented business at locally owned shops like Calvert Woodley, McArthurs, Schneiders etc. here in DC. (Although I am guessing that their bdx futures program has had a significant impact bc their prices are good and they only require 50% down).
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Re: Supreme Court, and wine.

#143 Post by Victor Hong » June 28th, 2019, 8:35 am

Ian Dorin wrote:
June 28th, 2019, 4:34 am
Victor Hong wrote:
June 27th, 2019, 5:20 am
Ian Dorin wrote:
June 27th, 2019, 5:11 am


You would be shocked how much damage a company like Total Wine can do to local businesses, even if they only have 2 locations, and in some cases 1. Total Wine buried the local competition in Long Island and they are fighting the state to get a second license in Westchester.
The local competitors have suffered, but market competition itself may have improved meanwhile, thereby benefiting wine consumers.
There is no doubt that competition is good, as it typically drives down prices, but when you competition closes up shop and nothing returns, that's a different story.
So long as consumers get free choice on where to buy, and new entrants are freely able to replace the exited ones, one could argue that the change, while painful for the exiting ones, has benefited all parties and left no holistic loss.
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Re: Supreme Court, and wine.

#144 Post by Ian Dorin » June 28th, 2019, 8:35 am

Jason T wrote:
June 28th, 2019, 6:22 am
Ian Dorin wrote:
June 28th, 2019, 4:34 am
Victor Hong wrote:
June 27th, 2019, 5:20 am

The local competitors have suffered, but market competition itself may have improved meanwhile, thereby benefiting wine consumers.
There is no doubt that competition is good, as it typically drives down prices, but when you competition closes up shop and nothing returns, that's a different story.
I'm not familiar with Total. How do they compare with, say, Binny's (an Illinois chain)? I get your concerns Ian however I'm wondering if there's a world where both the Totals and smaller players can coexist? I.e. the smaller players focus maybe more on specific niches? Just curious, and ultimately I defer to you and others as I'm definitely NOT on the business end of the wine world.
Similar and yet different. Binny's is only in Illinois, Total Wine is in many states. There market model is much more square footage too. They aim to dominate the local market.
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Re: Supreme Court, and wine.

#145 Post by Jason T » June 28th, 2019, 8:59 am

Victor Hong wrote:
June 28th, 2019, 8:35 am
Ian Dorin wrote:
June 28th, 2019, 4:34 am
Victor Hong wrote:
June 27th, 2019, 5:20 am

The local competitors have suffered, but market competition itself may have improved meanwhile, thereby benefiting wine consumers.
There is no doubt that competition is good, as it typically drives down prices, but when you competition closes up shop and nothing returns, that's a different story.
So long as consumers get free choice on where to buy, and new entrants are freely able to replace the exited ones, one could argue that the change, while painful for the exiting ones, has benefited all parties and left no holistic loss.
I can definitely see scenarios where it wouldn't be the case. My impression of Total is that while they have some good wines, and a good Bourdeaux futures program, they carry a great deal of plonk. And that because of the volume they are doing, they have a limited ability to highlight unusual/boutique wines. How accurate is that perception?

If it's accurate... I can picture a wine shop in a smaller market that maybe has a somewhat interesting selection, but doesn't do enough volume to get by just on that, so they also push popular plonk (Meomi, Caymus, etc). Total comes in and crushes them on the popular plonk. They go under. Discerning customers end up with nothing, the larger market has zero chance of being educated on better wines, and the masses go on pounding their Prisoner.

Am I crazy?
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Re: Supreme Court, and wine.

#146 Post by Jason T » June 28th, 2019, 9:00 am

Neal.Mollen wrote:
June 28th, 2019, 8:13 am

Big-to-huge stores, mostly (but not entirely) middle-brow selections of wines and lots of beer, nice but largely uneducated sales staff. I haven't examined balance sheets but I don't see any evidence that they have significantly dented business at locally owned shops like Calvert Woodley, McArthurs, Schneiders etc. here in DC. (Although I am guessing that their bdx futures program has had a significant impact bc their prices are good and they only require 50% down).
Thanks Neal. My impression has been that Binny's may have a moderately more interesting selection, but that could just be my Illinois-bias showing through.
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Re: Supreme Court, and wine.

#147 Post by crickey » June 28th, 2019, 9:18 am

I haven't shopped at many Total Wine stores, but based on the three in my area I have been to, Binny's has a much more interesting wine selection.
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Re: Supreme Court, and wine.

#148 Post by Jason T » June 28th, 2019, 9:20 am

Ok that's what I thought. I mean, I'm almost always able to find something cromulent when I'm in there, and my palate doesn't suck... that much.
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Re: Supreme Court, and wine.

#149 Post by Neal.Mollen » June 28th, 2019, 10:27 am

I think it very much depends on what you like to drink. Their bdx selection is better than most local wine shops (although limited almost entirely to recent vintages), and with the 15-20% off coupons on most such items the prices are hard to beat. In my limited experience, their CA cab selection is large but distinctly mid-brow. Their rioja and piemont selections are poor.
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Re: Supreme Court, and wine.

#150 Post by Al Osterheld » June 28th, 2019, 1:19 pm

I also think Bordeaux is their best area, fairly weak in most other wine sections. Their Champagne selection is especially weak.

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