At the end of the month the Supreme Court will decide whether it will hear another interesting case which concerns alcohol beverage law and the longstanding pressures of the Commerce Clause against the 21st Amendment of the US Constitution.
Lebamoff Enterprises v. Whitmer, decided upon this past April by the 6th Circuit, upholds a Michigan law that allows retail wine shops in the state to ship directly to consumers (DTC) in Michigan but prohibits out-of-state retailers from doing the same. Lebamoff Enterprises owns a wine retail operation in Indiana and desires to sell its wines directly to consumers in Michigan. It may be obvious, and in the broadest sense, Lebamoff essentially argued that such a restriction is a violation of the Commerce Clause while Michigan countered that it was well within its grant of authority under the 21st Amendment to regulate this type of activity.
The backdrop of the case is most interesting. Ganholm v. Heald, a watershed case in beverage law and ruled upon by the Supreme Court in 2005, established that a Michigan Law that permitted in state wine manufacturers to ship direct to consumers but prohibited out-of-state wineries from doing the same was a violation of the Commerce Clause and not within the states powers granted by the 21st Amendment. The very basic premise of this case is not dissimilar to Lebamoff and it is most interesting that another Michigan statute is being challenged on similar grounds. Also, the 6th Circuit’s ruling is contrary to the June 2019 decision in Tennessee Wine & Spirits Retailers Association (TWSRA). In that case, the Court decided that a Tennessee statute that mandated a residency requirement in order to be granted a beverage alcohol license discriminated against out-of-state residents in violation of the Commerce Clause. The Circuit Courts ruling in Lebamoff stands in contrast to the TWSRA case.
Court observers are suggesting that it is unlikely that the Supreme Court will hear the case given that it only recently decided TWSRA. However, the fact that the ruling in Lebamoff by the lower court represents a departure from the highest courts past rulings on similar issues suggests that in fact another alcohol beverage law and 21st Amendment case may soon be heard.
