CINCINNATI (CN) — A Sixth Circuit panel on Friday revived a challenge against Ohio liquor laws that allow only in-state wine retailers to ship directly to customers in the Buckeye State.
Kenneth Miller, an Ohioan and wine lover, sued the state of Ohio in July 2020, claiming two of its liquor laws — one prohibiting most out-of-state liquor retailers from shipping product directly to Ohio consumers and another in part limiting Ohio consumers from transporting more than 4.5 liters of wine from out of state in a 30-day period — discriminate against interstate commerce and violate the U.S. Constitution’s Commerce Clause.
Joining Miller in his lawsuit was House of Glunz, an Illinois wine retailer claiming the Ohio regulatory scheme restricts it from shipping wine directly to Ohio consumers, which it otherwise would do. Ohio Attorney General Dave Yost and Ohio Department of Public Safety Director Andy Wilson are included as defendants in the case.
U.S. District Judge Sarah Morrison, a Donald Trump appointee, found for the state in September 2022 and granted its motion for summary judgment regarding the direct shipment restriction, having already tossed the plaintiffs’ challenge to the liquor transportation restriction at the dismissal stage for lack of standing. Miller and House of Glunz appealed, and arguments were held at the Cincinnati-based Sixth Circuit in May.
In the lead opinion of the Sixth Circuit panel’s decision on Friday, U.S. Circuit Judge Eric Clay laid out that the challenge to the direct shipment restriction requires reconciling tensions between the 21st Amendment, the Commerce Clause, U.S. Supreme Court precedent in Tennessee Wine & Spirits Retailers Association v. Thomas, and the Sixth Circuit’s own precedent in Lebamoff Enterprises Inc. v. Whitmer.
Morrison’s decision relied on Lebamoff, which found a nearly identical Michigan law to be constitutional due to the state’s interests in controlling the distribution of alcohol. She determined that Lebamoff was binding and that “Ohio’s Direct Ship Restrictions can be justified on legitimate nonprotectionist grounds, and their predominant effect is not protectionism,” making the regulations constitutionally sound.
Clay, a Bill Clinton appointee, felt the lower court was right that Lebamoff is “controlling” law, but he also felt it incorrectly considered the precedent “dispositive” and settled all the issues in Miller and House of Glunz’s challenge to Ohio law just because it dealt with a similar law in a different state.
“The district court failed to consider plaintiffs’ evidence in this case concerning Ohio’s Direct Ship Restriction,” Clay explained. (Emphasis in original).
Clay felt the lower court did not go far enough in weighing the parties’ conflicting arguments, expert reports and witness testimony and considering how they jibe with precedent, as Lebamoff was limited to the evidence concerning the Michigan challenge.
“In this case, both parties have conflicting arguments, expert reports and witness testimony. Plaintiffs have submitted evidence detailing the ways in which the Direct Ship Restriction promotes protectionism, and defendants have submitted evidence suggesting that the restriction promotes public health. The district court should have considered how that evidence stacks up against the Tennessee Wine test” balancing justifiable state interests in public health and safety versus interests that are predominantly protectionist, Clay said.
Clay’s decision reversed the lower court’s summary judgment decision concerning the constitutionality of the direct shipments restriction and remanded for the lower court to consider the facts and evidence involved and determine whether they pass muster under Tennessee Wine’s test.
Clay was joined on the Sixth Circuit panel by U.S. Circuit Judges Karen Moore and Andre Mathis, appointed by Bill Clinton and Joe Biden, respectively.
The panel's decision also reversed the lower court’s holding that the plaintiffs lacked standing to challenge the liquor transportation restriction, finding Miller had met his burden to show his fear of prosecution for violating that law by transporting wine from out of state was not merely speculative.
The decision affirmed, however, that Wilson, the director of the Ohio Department of Public Safety, has immunity from the suit under the 11th Amendment. Moore penned a brief opinion dissenting in part on this matter, finding Miller’s claim is in keeping with an exception to the 11th Amendment carved out by U.S. Supreme Court precedent.
Communications staff with the Ohio Attorney General’s office and lawyers for Miller and House of Glunz could not immediately be reached for comment Friday.
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