I Took Legal Advice From Wine Wholesalers and Only Got This Tee Shirt

In the wake of the Supreme Court agreeing on Thursday to hear a case of great importance to wine retailer shipping, the very next day the state of Michigan receive the kind of news regarding its wine shipping laws that it has had to confront a number of times before. On Friday, a Michigan Federal District Court ruled its wine retailer shipping law to be unconstitutional and enjoined the state from enforcing its ban on out-of-state wine retailer shipments.

This is the fourth time a Michigan wine shipping law has been found unconstitutional by federal courts. Twice its winery shipping laws were found unconstitutional and now twice it’s wine retailer shipping laws have been ruled unconstitutionally discriminatory.

How does one state get it wrong so many times?

Never Take Legal Advice From Wholesalers

The answer is it gives too much deference to the needy desires of its wholesalers to demand protection from competition. At some point, perhaps after losing three federal cases, you’d think Michigan lawmakers might listen to the folks that know better. But as we know, money talks.

Imagine this:

In 2004 the Sixth Circut Court of Appeals ruled a wholesaler backed Michigan law that banned out-of-state wineries from shipping to consumers in the state was unconstitutional.

In 2005 the Supreme Court, listening to an appeal of the above decision by the State of Michigan and its wholesalers, affirmed that its law was unconstitutional.

In 2008 a Michigan Federal Court ruled the state’s ban on shipments from out-of-state wine retailers was unconstitutionally discriminatory.

In 2008 Michigan wholesalers, in response to the above decision, got a law passed that only allowed retailer wine deliveries by retailers using their own delivery vehicles (making deliveries from retailers outside the state very difficult if not impossible.

In 2016, wholesalers pushed through a law that was identical to the anti-wine retailer law ruled unconstitutional in 2008, even though lawmakers were warned by out-of-state retailers and the attorneys that filed and won the case in 2008 that this new law would be challenged and found unconstitutional.

Last Friday, the 2016 law was found unconstitutional, as predicted.

Is this the point at which lawmakers in the state of Michigan might finally stop taking legal advice from a small group of wholesalers who have gotten it wrong every single time? We’ll see.

At this point, the State of Michigan has a few options:

-They can write and pass a law the provides out-of-state retailers the ability to obtain a permit allowing them to ship to consumers in the state.

-They can appeal the case to the Sixth Circuit Court of Appeals

-They can ask the District Court in Michigan to stay the decision until the Supreme Court rules on the matter of retailer wine shipping in 2019.

-They can do nothing and simply let out-of-state wine retailers ship.

-They can pass a law that bars all retailers (those inside and outside of Michigan) from shipping wine to Michigan consumers.

What will Michigan Do?

If Michigan lawmakers listen to the state’s beer and wine wholesalers, I put my money on the last option, because that’s the dumbest thing the state could do for its consumers and the best thing that could be done for wholesalers.

If Michigan lawmakers decide to listen to the reasonable people and take consumers’, Michigan retailers’ and the state’s interests to heart, they’ll do the first thing and create a shipping permit for out-of-state retailers, in the same manner, they’ve created one for out-of-state wineries.

As for the upcoming Supreme Court case, I’ll have more to say about that in the future. However, there is no question that it has sparked a great deal of excitement among wine retailers and consumers across the country who have long been subjected to nonsensical bans on retailer wine shipments. Most of these bans have the same origins as the Michigan law that was recently overturned: they were instituted at the behest of wholesalers and even local retailers who wanted a closed market and were willing to sacrifice principles of free trade and the well being of consumers in order to achieve protection from competition.

The Supreme Court decison in Byrd v Tennessee Wine & Spirit Retailers will likely come sometime in the late Spring of 2019. The outcome will determine the character of they ongoing lobbying and consumer effort to overturn the retailer wine shipping bans and bring numerous states into a 21st-century economy.

 


11 Responses

  1. VVP (veux, veux-pas) - October 1, 2018

    Tom, don’t you know that wholesaler in Michigan is the State of Michigan? And retailer as well.

    FCR uniformly describes alcohol beverage dealers. There is no retail dealer in wine.

    Who are the wine retailers? Again, Californian wholesalers?

  2. Helene - October 1, 2018

    Goodness me! How does anyone get a bottle, or even a glass, of wine? I thought Pennsylvania was harsh when I lived there 25 years ago, but at least you could order special cases and the monopolists had to source it (at a cost, of course!) I have feeling that my 1985 Lafite came via that route…It’s now back in France.

  3. Stan Duncan - October 2, 2018

    Does this mean I can once again order wine from out of state retailers and have it shipped to me in Michigan? (Like anyone should be able to do in a free country.)

  4. VVP (veux, veux-pas) - October 2, 2018

    Stan:

    You always could, but no, you can’t. FedEx and UPS enforce their own “laws” blocking all retail shipments to Michigan.

    “UPS policy supersedes state law”. This reply we received from UPS executive.
    “FedEx prohibits retail shipping of alcohol to consumers in Michigan” replied FedEx’s director of operations.

  5. Diwali SMS - October 3, 2018

    I really loved reading your blog. Normally I don’t come across such contents. This one is good.

  6. Jerry - October 4, 2018

    Let me strongly disagree with author’s conclusion and say:

    At this point, the State of Michigan

    – Can’t write or pass any out-of-state shipping law because has no power to regulate out-of-state retailers and has no power to regulate interstate transportation.

    – May appeal the case, but result can be worse.

    – Can’t ask the District Court in Michigan to stay the decision because “Governor Rick
    Snyder and Michigan Attorney General Bill Schuette, in their official capacities, and the State of Michigan ARE PERMANENTLY RESTRAINED AND ENJOINED from enforcing provisions of M.C.L. §§ 436.1607 and 436.1203 to preclude out-of-state retailers…”

    – Can do nothing, watch and enjoy the out-of-state retailers ship.

    – Can pass a law that bars all in-state retailers (those inside Michigan) from shipping wine to Michigan consumers, but can’t bar those outside of Michigan because has no power to regulate them.

    – Can move distribution and sale from government monopoly to private enterprise.

  7. Jerry - October 4, 2018

    Forgot to add:

    – Yes, can become dry if it chooses and completely prohibit production, distribution, sale, possession and consumption. Only this way any shipping to the state will be illegal.

  8. Stan Duncan - October 6, 2018

    “UPS policy supersedes state law”. This reply we received from UPS executive.
    “FedEx prohibits retail shipping of alcohol to consumers in Michigan” replied FedEx’s director of operations.
    —————————-
    I don’t understand. So it is not possible to ship wine to Michigan residents from out of state retailers, because UPS and FedEx will not allow it, despite Michigan’s law as being deemed unconstitutional. So is UPS and FexEx now violating the constitution? Are retailers using some other service (like DHL) or what?

  9. Joel Miller - October 8, 2018

    Best Headline of the Week! Thanks for keeping wine reg write-ups somewhat interesting….

  10. Fakrash-el Aamash - October 8, 2018

    Stan Duncan

    Wine, as any other alcoholic beverage is not a contraband. It does not matter how and where you obtained an alcoholic beverage for your personal consumption. UPS, FedEx or any other for-hire common carrier of property must deliver upon shipper request or demand by the consignee.

    They both violate common carriage obligations. They act discriminatory and unconstitutional.

  11. Gregt - October 11, 2018

    Jerry -wine retailing is not a government monopoly in Michigan. They pass laws not to benefit themselves but to benefit a couple of preferred distributors.


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