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

Posted by Tom Wark on Oct 1, 2018

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.