Respondents Brief — Lebamoff Enterprises, Inc., et al., Petitioners v. Gretchen Whitmer, et al.

Supreme Court briefNov 9, 2020

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No. 20-47

In the Supreme Court of the United States

LEBAMOFF ENTERPRISES, INC., ET AL., PETITIONERS

GRETCHEN WHITMER, ET AL., RESPONDENTS

ON PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

BRIEF IN OPPOSITION

Dana Nessel

Michigan Attorney General

Fadwa A. Hammoud

Solicitor General

Counsel of Record

P.O. Box 30212

Lansing, Michigan 48909

HammoudF1@michigan.gov

(517) 335-7628

Mark G. Sands

Donald S. McGehee

Melinda A. Leonard

Assistant Attorneys General

Alcohol & Gambling

Enforcement Division

Attorneys for Respondents

QUESTION PRESENTED

1. Did the Sixth Circuit Court of Appeals correctly

apply the “different inquiry” that Tennessee Wine &

Spirits Retailers Ass’n v. Thomas, ___ U.S. ___; 139 S.

Ct. 2449 (2019), requires to be applied to Commerce

Clause cases involving alcohol regulations?

PARTIES TO THE PROCEEDING

Petitioners are Lebamoff Enterprises, Inc., its

part-owner and general manager, Joseph Doust, and

three Michigan wine consumers—Jack Stride, Jack

Schultz, and Richard Donovan.

Respondents are Gretchen Whitmer, Governor of

the State of Michigan; Dana Nessel, Michigan Attorney General; Pat Gagliardi, Chairperson of the Michigan Liquor Control Commission; and the Michigan

Beer & Wine Wholesalers Association, which was the

intervening defendant below.

iii

TABLE OF CONTENTS

Question Presented...................................................... i

Parties to the Proceeding ........................................... ii

Table of Authorities ................................................... iv

Opinions Below ........................................................... 1

Jurisdiction ................................................................. 1

Constitutional and Statutory Provisions Involved .... 1

Introduction ................................................................ 4

Statement of the Case ................................................ 5

Reasons for Denying the Petition............................. 10

The Sixth Circuit’s decision does not conflict

with decisions of other circuits. ......................... 10

II. The Sixth Circuit’s decision does not conflict

with this Court’s precedent. ............................... 12

Conclusion ................................................................. 21

TABLE OF AUTHORITIES

Cases

Bacchus Imports, Ltd. v. Dias,

468 U.S. 263 (1984) ............................ 7, 15, 16, 18

Byrd v. Tennessee Wine & Spirits Retailers Ass’n,

883 F. 3d 608 (6th Cir. 2018) ......................... 6, 10

Cooper v. Texas Alcoholic Beverage Comm’n,

820 F.3d 730 (5th Cir. 2016) .............................. 11

Granholm v. Heald,

544 U.S. 460 (2005) ............................ 7, 16, 17, 18

Heald v. Engler,

342 F.3d 517 (6th Cir. 2003) .............................. 16

Lebamoff Enterprises, Inc. v. Rauner,

909 F.3d 847 (7th Cir. 2018) ........................ 10, 11

North Dakota v. United States,

495 U.S. 423 (1990) ............................................ 19

Tennessee Wine & Spirits Retailers Ass’n v.

Thomas,

___ U.S. ___; 139 S. Ct. 2449 (2019) .......... passim

Statutes

28 U.S.C. § 1254(1) ..................................................... 1

Mich. Comp. Laws § 436.1203 ................................ 2, 6

Mich. Comp. Laws § 436.1203(1) ............................... 6

Mich. Comp. Laws § 436.1901(1) ............................... 6

Mich. Comp. Laws § 436.1901(3) ............................... 6

Mich. Comp. Laws § 436.1901(4) ............................... 6

Mich. Comp. Laws § 436.1901(6) ............................... 6

Rules

Sup. Ct. R. 10 .................................................. 5, 10, 12

Constitutional Provisions

U.S. Const. art. I, § 8, cl. 3...................................... 1, 6

U.S. Const., amend. XXI, § 2 ........................ 1, 4, 5, 17

OPINIONS BELOW

Petitioners seek review of the Sixth Circuit Court

of Appeals’ decision in Lebamoff Enterprises, Inc. v.

Whitmer, which is reported at 956 F.3d 863. The decision of the United States District Court for the Eastern District of Michigan is reported at 347 F. Supp. 3d

301.

JURISDICTION

Respondents agree that Petitioners timely filed a

petition for a writ of certiorari and that this Court has

jurisdiction over the petition under 28 U.S.C.

§ 1254(1).

CONSTITUTIONAL AND STATUTORY

PROVISIONS INVOLVED

The relevant constitutional and statutory provisions are:

U.S. Const. art. I, § 8, cl. 3:

The Congress shall have Power . . . To regulate Commerce with foreign Nations, and

among the several States, and with the Indian

Tribes.

U.S. Const., amend. XXI, § 2:

The transportation or importation into any

State, Territory, or possession of the United

States for delivery or use therein of intoxicating liquors, in violation of the laws thereof, is

hereby prohibited.

Mich. Comp. Laws § 436.1203:

(1) Except as provided in this section and

section 301, a person shall not sell, deliver, or

import alcoholic liquor, including alcoholic liquor for personal use, in this state unless the

sale, delivery, or importation is made by the

commission, the commission’s authorized

agent or distributor, an authorized distribution agent approved by order of the commission, a person licensed by the commission, or

by prior written order of the commission.

***

(3) For purposes of subsection (1), a retailer

that holds a specially designated merchant license located in this state may use a common

carrier to deliver wine to a consumer in this

state. . . .

***

(12) A retailer that holds a specially designated merchant license, a brewpub, a micro

brewer, or an out-of-state entity that is the

substantial equivalent of a brewpub or micro

brewer may deliver beer and wine to the home

or other designated location of a consumer in

this state . . . .

(13) A retailer that holds a specially designated merchant license may use a third party

that provides delivery service to municipalities in this state that are surrounded by water

and inaccessible by motor vehicle to deliver

beer and wine to the home or other designated

location of that consumer . . . .

(14) A retailer that holds a specially designated distributor license may deliver spirits to

the home or other designated location of a consumer in this state . . . .

(15) A retailer that holds a specially designated merchant license located in this state

may use a third party facilitator service by

means of the internet or mobile application to

facilitate the sale of beer or wine to be delivered to the home or designated location of a

consumer . . . .

(16) A retailer that holds a specially designated distributor license located in this state

may use a third party facilitator service

by means of the internet or mobile application

to facilitate the sale of spirits to be delivered

to the home or designated location of a consumer . . . .

INTRODUCTION

The Twenty-first Amendment allows states to

control alcohol importation and distribution within

their borders through a three-tier system. In 2016, the

Michigan Legislature amended the Michigan Liquor

Control Code (Code) to allow certain licensed retailers

within Michigan’s three-tier system to ship or deliver

alcohol to Michigan consumers.

While this case was pending before the United

States Court of Appeals for the Sixth Circuit, this

Court issued its decision in Tennessee Wine & Spirits

Retailers Ass’n v. Thomas, ___ U.S. ___; 139 S. Ct.

2449 (2019). The analysis in Tennessee Wine examined precedent concerning the interplay between the

Twenty-first Amendment and the Commerce Clause.

Id. at 2462–74. Based on that review, this Court recognized that alcohol regulations are subject to a “different inquiry” from other regulations challenged under the Commerce Clause; if alcohol regulations are

discriminatory, this Court asks “whether the challenged requirement can be justified as a public health

or safety measure or on some other legitimate nonprotectionist ground.” Id. at 2474. Such regulations are

saved by § 2 of the Twenty-first Amendment if the

“predominant effect” of the regulation is “the protection of public health or safety[.]” Id. The Sixth Circuit

applied Tennessee Wine and upheld the challenged

statute as a valid exercise of State power under § 2 of

the Twenty-first Amendment. Pet. App. 6a, 15a–19a.

Petitioners and their amici assert two bases for

this Court to grant review. Neither withstands scrutiny.

First, they contend that the Sixth Circuit’s decision conflicts with two cases decided before Tennessee

Wine. Those cases do not address the relevant issue—

applying the “different inquiry” from Tennessee Wine.

Second, Petitioners ask this Court to correct a perceived error in the Sixth Circuit’s decision. Not only

do Petitioners inaccurately describe the Sixth Circuit’s opinion, they fail to demonstrate any error. Critically, Petitioners all but ignored Tennessee Wine in

their briefing before the Sixth Circuit, instead insisting that alcohol regulations are subject to the same

strict-scrutiny test as other regulations challenged on

Commerce Clause grounds. Petitioners continue down

the wrong path in this Court, failing to even mention

the “different inquiry” that Tennessee Wine requires

for examining alcohol regulations. Petitioners still fail

to acknowledge that Tennessee Wine, 139 S. Ct. at

2474, allows a discriminatory alcohol regulation to be

saved by § 2 of the Twenty-first Amendment if its predominant effect is protection of public health or safety.

Their argument is not that the Sixth Circuit applied

the Tennessee Wine “different inquiry” in an incorrect

manner. Instead, they argue that the Sixth Circuit

should have applied strict scrutiny, as though the

Tennessee Wine “different inquiry” did not exist.

Because Petitioners fail to demonstrate a “compelling reason” under Rule 10 for this Court to grant certiorari, this Court should deny the petition.

STATEMENT OF THE CASE

The Code and the Michigan Liquor Control Commission’s (MLCC) administrative rules regulate

alcohol importation and distribution in Michigan.

Like many states, Michigan controls alcohol sales

through a three-tier system of licensed suppliers,

wholesalers, and retailers. Retailers selling alcohol to

consumers located in Michigan must purchase that alcohol from the State or a state-licensed wholesaler in

almost

all

instances.

Mich.

Comp.

Laws

§§ 436.1203(1); 436.1901(1), (3), (4), (6). In late 2016,

the Michigan Legislature amended Mich. Comp. Laws

§ 436.1203 to permit certain MLCC-licensed retailers

located in Michigan to ship or deliver wine and other

forms of alcohol to Michigan consumers.

The principal petitioner, Lebamoff Enterprises, is

an Indiana wine retailer that is not licensed by the

MLCC and does not obtain its alcohol products from a

licensed Michigan wholesaler. Therefore, the Code

prohibits Lebamoff Enterprises from shipping alcohol

directly to Michigan consumers. Three of the individual petitioners are Michigan wine consumers who

wish to receive shipments from Lebamoff Enterprises.

Petitioners hope to bypass Michigan’s three-tier system, so they sued Michigan, challenging its new law

under the dormant aspect of the Commerce Clause,

U.S. Const. art. I, § 8, cl. 3.

After discovery, the parties filed cross-motions for

summary judgment. The State and intervening defendant submitted affidavits and other evidence

demonstrating that the distinction between in-state

and out-of-state retailers serves numerous health and

safety goals closely related to the powers reserved by

the Twenty-first Amendment, under the then-prevailing standard in Byrd v. Tennessee Wine & Spirits Retailers Ass’n, 883 F. 3d 608, 616–22 (6th Cir. 2018).

But the district court granted Petitioners’ motion for

summary judgment, concluding that the law was discriminatory and that it was not saved by the Twentyfirst Amendment because the State failed to establish

that it advanced a legitimate local purpose that could

not be adequately served by reasonable alternatives.

Pet. App. 39a–43a.

While the State’s appeal of the district court’s decision was pending, this Court issued its decision in

Tennessee Wine. That decision thoroughly examined

the interplay between the Commerce Clause and the

Twenty-first Amendment and analyzed cases such as

Granholm v. Heald, 544 U.S. 460 (2005), and Bacchus

Imports, Ltd. v. Dias, 468 U.S. 263 (1984). Based on

its precedent, this Court held that Commerce Clause

cases involving discriminatory alcohol regulations are

subject to a “different inquiry” because of the Twentyfirst Amendment. Tennessee Wine, 139 S. Ct. at 2474.

If the “predominant effect” of the discriminatory law

is “the protection of public health or safety” rather

than protectionism, the law is shielded by the Twentyfirst Amendment. Id.

On appeal, the State and intervening defendant

argued that Michigan’s retailer-delivery law satisfied

the Tennessee Wine standard. Among other things, the

State contended that the requirement for physical instate retailer presence and the requirement for alcohol to first be sold to an in-state wholesaler enabled

licensee oversight and regulatory inspections of alcohol—unlike the durational-residency requirement on

retail license holders struck down in Tennessee Wine.

See Tennessee Wine, 139 S. Ct. at 2475 (recognizing

that retail stores’ in-state location enabled

“monitor[ing] the stores’ operations through on-site

inspections, audits, and the like”).

Significantly, Petitioners did not argue that the

law was invalid under the “different inquiry” in Tennessee Wine. Rather, they improperly asserted that

the Michigan law should be subject to strict scrutiny

in the same manner as laws unrelated to alcohol regulation. Pet. App. 15a.

The Sixth Circuit properly applied Tennessee

Wine’s “different inquiry.” Pet. App. 6a. The Sixth Circuit began its analysis by assuming that the law was

discriminatory. Pet. App. 8a–9a. The court recognized

that the law serves “plenty of legitimate state interests” and that “any limits on a free market of alcohol

distribution flow from the kinds of traditional regulations that characterize this market, not state protectionism.” Pet. App. 9a.

The Sixth Circuit further observed that allowing

out-of-state retailers to deliver alcohol into Michigan

would “create a sizable hole in the three-tier system”

that would, in turn, permit alcohol to be imported into

Michigan without passing through its wholesaler tier.

Pet. App. 12a. Eliminating the wholesaler tier would

harm the State’s interest in controlling consumption.

Id. at 12a–13a.

The court also recognized that creating such a

hole in Michigan’s three-tier system would leave

Michigan with the same problem that pre-Prohibition

dry states faced—out-of-state producers dodging state

restrictions with direct-to-consumer deliveries. Id. at

14a. The court said that the Webb-Kenyon Act, the

model for § 2 of the Twenty-first Amendment, fixed

that problem, but “Lebamoff’s lawsuit is nothing less

than an effort to re-create [it].” Id. (citing Tennessee

Wine, 139 S. Ct. at 2466–67). Further, in this case, the

State “could not maintain a three-tier system, and the

public-health interests the system promotes, without

barring direct deliveries from outside its borders.” Pet.

App. 15a.

The court concluded by recognizing that while

there may be policy reasons for loosening state regulation of alcohol in the internet-era, “the Twenty-first

Amendment leaves these considerations to the people

of Michigan, not to federal judges.” Pet. App. 19a.

Although joining Judge Sutton’s opinion of the

court, Judge McKeague issued a concurrence, stating

that “Michigan has presented enough evidence, which

[Petitioners] have not sufficiently refuted, to show its

in-state retailer requirement serves the public

health.” Pet. App. at 22a (McKeague, J., concurring).

While expressing “reservations,” he ultimately concluded that Petitioners had not shown that Michigan’s

“public health concerns are ‘mere speculation’ or ‘unsupported assertions,’ or that the ‘predominant effect’

of the in-state retailer requirement is not the protection of public health.” Id. at 27a (citing Tennessee

Wine, 139 S. Ct. at 2474). Judge Donald joined both

opinions.

The Sixth Circuit denied Petitioners’ subsequent

petition for rehearing en banc. Pet. App. 46a.

REASONS FOR DENYING THE PETITION

The Sixth Circuit’s decision does not conflict

with decisions of other circuits.

The petition fails to establish a circuit split

providing a “compelling reason” to grant certiorari under Rule 10. Petitioners argue that the Sixth Circuit’s

decision conflicts with the Seventh Circuit’s analysis

in Lebamoff Enterprises, Inc. v. Rauner, 909 F.3d 847

(7th Cir. 2018). Crucially, however, Rauner was decided before this Court decided Tennessee Wine and

cannot, therefore, conflict with the Sixth Circuit’s application of Tennessee Wine.

Moreover, Petitioners misunderstand Rauner. At

issue there was whether the nondiscrimination principle of Granholm applied to the wholesaler and retailer tiers of the three-tier system at all. Rauner, 909

F.3d at 855. The Seventh Circuit reversed the district

court’s dismissal at the pleadings stage, holding that

Granholm did not support treating the wholesaler and

retailer tiers of the three-tier system differently than

the producer tier. Id. at 854–55. But the Seventh Circuit did not decide whether the challenged retailer-delivery statute violated the Commerce Clause. Rather,

it remanded the case for discovery to allow the district

court to consider whether that law was “necessitated

by permissible Twenty-first Amendment interests[.]”

Id. at 856.

Notably, the Sixth and Seventh Circuits were not

even split on the issue actually decided in Rauner. The

Sixth Circuit had already declined to limit Granholm

to the producer tier in Byrd, 883 F. 3d at 616–22, and

Rauner cited Byrd to support its conclusion. See

Rauner, 909 F.3d at 855 (citing Byrd, 883 F.3d at 621).

Amici 23 Wine Consumers also attempt to manufacture a circuit split based on a Fifth Circuit case decided before Tennessee Wine—Cooper v. Texas Alcoholic Beverage Comm’n, 820 F.3d 730 (5th Cir. 2016)

(Cooper II). Amici 23 Wine Consumers br. at 10. Their

argument fares no better. Like Rauner, Cooper II cannot conflict with the Sixth Circuit’s application of Tennessee Wine. Additionally, Cooper II is merely another

decision declining to limit Granholm to the producer

tier, id. at 742, like Rauner and Byrd.

Not only do Rauner and Cooper II not conflict with

the Sixth Circuit’s opinion, Tennessee Wine definitively resolved the question they examined. Tennessee

Wine held that Granholm applies to the wholesaler

and retailer tiers of the three-tier system, concluding

that there is “no sound basis” for an argument that a

different rule applies to in-state alcohol distribution.

Tennessee Wine, 139 S. Ct. 2470–71. That conclusion

is not disputed in this case.

No circuit split exists on the question actually before this Court—whether the Sixth Circuit properly

chose to apply the “different inquiry” articulated in

Tennessee Wine. Although some pending cases involve

the application of Tennessee Wine, Pet. at 8, it would

be premature for this Court to examine how Tennessee

Wine applies just one year after it was decided, instead of allowing the circuits to consider the question.

Waiting for the issue to percolate is particularly merited here because Tennessee Wine instructed that

“each variation [of a three-tiered system] must be

judged based on its own features.” 139 S. Ct. at 2472.

What one circuit has said about one state’s retailerdelivery law may not apply to other variations of

three-tiered systems.

II. The Sixth Circuit’s decision does not conflict

with this Court’s precedent.

Stripped of the illusory circuit conflict, the petition rests only on Petitioners’ dissatisfaction with the

Sixth Circuit’s decision. “A petition for a writ of certiorari is rarely granted” in such a circumstance. Sup.

Ct. R. 10. And the Sixth Circuit’s correct application

of the “different inquiry” that Tennessee Wine requires, see Pet. App. 6a, 9a, falls far short of the rare

error-assertion case that merits this Court’s review.

Even so, the petition fails to demonstrate error.

Petitioners begin by misarticulating the Sixth Circuit’s holding. They contend that “[t]he Sixth Circuit

held that the Twenty-first Amendment gives states

the authority to regulate wine sales regardless of

whether those regulations discriminate against outof-state interests . . . and immunizes those laws from

being challenged under the Commerce Clause.” That

is incorrect. The Sixth Circuit did not announce a new

rule of law; it applied the rule that Tennessee Wine

discerned from prior cases like Bacchus and

Granholm—that, in fact, discriminatory alcohol regulations can be saved from invalidation under the Commerce Clause based on § 2 of the Twenty-first Amendment depending on the regulations’ predominant effect. Tennessee Wine, 139 S. Ct. at 2474.

At issue in Tennessee Wine was Tennessee’s durational-residency requirement for a retail liquor-

license holder. Id. at 2456. This Court recognized that

the durational-residency requirement “plainly favors

Tennesseans over nonresidents[.]” Id. at 2461–62. But

that alone did not trigger applying strict scrutiny, as

Petitioners urge. Under Petitioners’ theory, the opinion could have quickly concluded—a discriminatory

liquor law receives strict scrutiny. Full stop. But that

was not the end of this Court’s opinion.

After analyzing caselaw interpreting the interplay between the Commerce Clause and § 2 of the

Twenty-first Amendment, this Court acknowledged

that the discriminatory two-year residency requirement “could not be sustained if it applied across the

board to all those seeking to operate any retail business in the State.” Id. at 2474 (citations omitted). Applying strict scrutiny would have sounded the death

knell for the residency requirement if it had applied

across the board.

But because the durational-residency requirement did not apply across the board and applied only

to alcohol retailers, the mere presence of discrimination did not trigger strict scrutiny. “[B]ecause of § 2,

we engage in a different inquiry.” Id. at 2474. This

Court then articulated that “different inquiry”:

[W]e ask whether the challenged requirement

can be justified as a public health or safety

measure or on some other legitimate nonprotectionist ground. . . . Where the predominant

effect of the law is protectionism, not the protection of public health or safety, it is not

shielded by § 2.

Id.

In other words, this Court concluded that a discriminatory alcohol law is subject to strict scrutiny

only if its predominant effect is economic protectionism. If protection of public health or safety predominates, then the law—even if discriminatory—is protected by the Twenty-first Amendment. Id.

Applying this test to the durational-residency requirement, this Court held that the law had “at best a

highly attenuated relationship to public health or

safety.” Id. For example, this Court disagreed that the

durational-residency law was necessary to maintain

oversight over liquor store operators. Id. at 2475. Specifically, this claim was not persuasive because:

the stores at issue are physically located

within the State. For that reason, the State

can monitor the stores’ operations through onsite inspections, audits, and the like. . . .

Should the State conclude that a retailer has

“fail[ed] to comply with state law,” it may revoke its operating license. Granholm, 544 U.S.

at 490[]. This “provides strong incentives not

to sell alcohol” in a way that threatens public

health or safety. Ibid.

Id. at 2475.

Ultimately, this Court concluded that the predominant effect of the durational-residency requirement

was to protect in-state residents from out-of-state

competition. Because the requirement was not

shielded by the Twenty-first Amendment and did not

survive strict scrutiny, this Court affirmed the Sixth

Circuit’s decision invalidating the law. Id. at 2474–76.

Significantly, Petitioners do not mention Tennessee Wine’s “different inquiry” at all, instead arguing

that strict scrutiny applies in the same manner as it

applies in any other Commerce Clause case involving

a discriminatory law. And the phrases “public health”

and “predominant effect” do not appear in the petition. Petitioners do not contend that the Sixth Circuit

incorrectly applied the “different inquiry.” They

simply ignore its existence.

But as this Court explained in Tennessee Wine, its

decision to apply a “different inquiry” in light of § 2

flows directly from both Bacchus and Granholm and

is consistent with the Webb-Kenyon Act, which was

the model for § 2 of the Twenty-first Amendment. Petitioners extensively quote those cases, but they fail to

recognize the nuances and distinctions that led this

Court to hold in Tennessee Wine that strict scrutiny

does not automatically apply to discriminatory liquor

laws because of § 2 of the Twenty-first Amendment.

There is no dispute here that “[t]he central purpose of [§ 2 of the Twenty-first Amendment] was not

to empower States to favor local liquor industries by

erecting barriers to competition.” Bacchus, 468 U.S. at

276. In Bacchus, the tax exemption at issue was held

discriminatory because Hawaii clearly intended to favor local products by exempting them from taxation;

the state’s interest in subsidizing a financially troubled local industry was not sufficient to permit that

intentional discrimination. Id. at 270–73.

But because of the Twenty-first Amendment, this

Court continued its analysis. It recognized that even

a discriminatory alcohol regulation could be upheld if

it was “so closely related to the powers reserved by the

Twenty-first Amendment that the regulation may

prevail, notwithstanding that its requirements directly conflict with express federal policies.” Id. at

275–76. Petitioners’ argument—that strict scrutiny

always applies—cannot survive that aspect of Bacchus.

The regulation in Bacchus was ultimately invalidated. By Hawaii’s own admission, however, the exemption was not designed to promote temperance,

control the import of alcohol into the state, or serve

any other traditional Twenty-first Amendment purpose. Id. at 275. Rather, it was designed to protect a

local alcoholic beverage industry. Id. Thus, the exemption was struck down because it was discriminatory

and constituted “mere economic protectionism.” Id. at

276. Therefore, the exemption was not saved by the

Twenty-first Amendment. Id.

The same approach was adopted in Granholm. At

issue in Granholm were discriminatory laws from

Michigan and New York that allowed only in-state

wineries to bypass the three-tier system and ship wine

directly to consumers. Granholm, 544 U.S. at 466–67.

In light of Bacchus, the Sixth Circuit had rejected

Michigan’s argument that all state liquor laws are

shielded by the Twenty-first Amendment from Commerce Clause scrutiny. Id. at 470 (citing Heald v. Engler, 342 F.3d 517 (6th Cir. 2003)).

Although the Granholm Court ultimately concluded that not all liquor laws are protected by the

Twenty-first Amendment, see id. at 488, it did not

contradict Bacchus and hold that no liquor laws can

be saved by the Twenty-first Amendment. Just as in

Bacchus, the Granholm Court analyzed whether the

laws at issue—exceptions to the three-tier system—

were consistent with the Twenty-first Amendment’s

purpose. This Court examined the history of pre-Prohibition laws limiting the importation of alcohol into

“dry” states. Id. at 476–87. Of particular note were the

Wilson Act, which allowed states to regulate imported

liquor to the same extent and in the same manner as

domestic liquor; and the Webb-Kenyon Act, which forbade shipment or transportation of alcohol into a state

where it runs afoul of the state’s generally applicable

laws governing receipt, possession, sale, or use. Id. at

478, 482 (citations omitted).

Granholm reiterated that the language of § 2

closely followed the Wilson and Webb-Kenyon Acts

and discerned that § 2 was intended to “allow States

to maintain an effective and uniform system for controlling liquor by regulating its transportation, importation, and use.” Id. at 484. But § 2 “did not give states

the authority to pass nonuniform laws in order to discriminate against out-of-state goods, a privilege they

had not enjoyed at any earlier time.” Id. at 484–85.

Nevertheless, Granholm determined that New

York and Michigan had done just that—created nonuniform exceptions to the three-tier system in order to

discriminate against out-of-state wineries. Id. at 486–

89. Like the tax law in Bacchus, the three-tier exceptions were both discriminatory and protectionist and,

thus, were not protected by the Twenty-first Amendment. Id. at 489. Petitioners wrongly assert that

Granholm held that any discriminatory state liquor

law is not saved by the Twenty-first Amendment. Pet.

at 9. On the contrary, it held that the laws at issue in

that case (which were unlike the law at issue in this

case) were not saved by the Twenty-first Amendment.

Thus, this Court’s precedents do not require that

strict scrutiny always applies to a discriminatory liquor law. Rather, they explain that strict scrutiny may

or may not apply, depending on the provision’s effects.

Tennessee Wine clarified that a three-step analysis applies to alcohol regulations challenged under the

dormant Commerce Clause.

The first step is to ask whether the law is discriminatory in nature. Bacchus, 468 U.S. at 273;

Granholm, 544 U.S. at 473–76; Tennessee Wine, 139

S. Ct. at 2461–62. If so, the second step is to conduct

the “different inquiry” to determine whether the law

is saved by § 2 of the Twenty-first Amendment. Tennessee Wine, 139 S. Ct. at 2474. If the evidence shows

that protection of public health or safety is the law’s

predominant effect, then the regulation is saved by

the Twenty-first Amendment and no further analysis

is necessary. If the predominant effect of the law is

economic protectionism rather than public health or

safety, the third step is to apply the traditional strictscrutiny test. Granholm, 544 U.S. at 489.

That is the process the Sixth Circuit used to analyze this case. First, the court assumed for purposes of

its opinion that Michigan’s retailer-delivery statute is

discriminatory. 1 Pet. App. 8a–9a. Second, the Sixth

1 The State has argued throughout the case that its retailer-de-

livery statute is not discriminatory because in-state and out-ofstate retailers are not similarly situated for Commerce Clause

purposes. Pet. App. 8a–9a. The Sixth Circuit did not decide this

issue. Id. Thus, even if this Court were to grant certiorari and

Circuit conducted the “different inquiry” that Tennessee Wine requires, analyzing whether the predominant effect of the statute is protecting public health or

safety or engaging in economic protectionism. In so doing, the court noted that the challenged law serves an

important role in protecting public health and

safety—such as by promoting temperance and controlling the flow of alcohol into the state. Pet. App. 9a–10a

(lead opinion); 22a–23a (McKeague, J., concurring).

More specifically, the Sixth Circuit saw that allowing an out-of-state retailer like Lebamoff to deliver

to Michigan customers would allow alcohol to avoid

the wholesaler tier of the three-tier system. Pet. App.

12a. The court explicitly recognized that Michigan’s

taxation and pricing scheme, implemented significantly through the wholesaler tier, serves a vital public safety function by ensuring alcohol is not sold at

such a low price that it stimulates overconsumption.

Id. With close to 2,000 retailers already in the digital

marketplace, there is no mechanism through which

the State could maintain its pricing scheme. See id. at

12a–13a. Thus, the court agreed that allowing out-ofstate retailers to deliver into Michigan would create

“a ‘substantial’ risk that out-of-state alcohol will get

‘diver[ted] into the retail market[,] . . . disrupti[ng] the

[alcohol] distribution system’ and increasing alcohol

consumption.” Id. (quoting North Dakota v. United

States, 495 U.S. 423, 433 (1990) (plurality opinion)).

hold that the Sixth Circuit misapplied Tennessee Wine, the State

would still be entitled to a remand to the Sixth Circuit to decide

the “similarly situated” argument. For that reason, this case is a

poor vehicle for review of Tennessee Wine, and this Court should

deny the petition on that ground.

Because the Sixth Circuit concluded that the retailer-delivery statute has the predominant effect of

protecting public health or safety, the statute constitutes permissible discrimination, and the Sixth Circuit did not need to complete the third step of applying

strict scrutiny to the statute.

Again, the petition does not argue that the Sixth

Circuit misapplied Tennessee Wine’s “different inquiry.” Rather, it ignores it altogether. But the Sixth

Circuit applied the test this Court articulated in

Tennessee Wine and it reached the correct result. As

such, there is no error, and this Court should deny the

petition for a writ of certiorari.

CONCLUSION

The Petition for a Writ of Certiorari should be denied.

Respectfully submitted,