633 F.Supp.3d 592
D.R.I.2022Background
- Plaintiffs Kambis Anvar and Michelle Drum are Rhode Island residents who want to buy wine from out-of-state retailers and have it shipped to their homes.
- Rhode Island enforces a three-tier alcohol system that requires retailers to have an in-state presence, mandates that retailers purchase from licensed Rhode Island wholesalers, and prohibits delivery by common carrier.
- Plaintiffs sued, claiming these requirements discriminate against out-of-state businesses in violation of the dormant Commerce Clause and moved for summary judgment.
- State defendants (DBR Director and Attorney General), joined by an industry intervenor, cross-moved, arguing the Twenty-first Amendment and public-health/safety justifications permit the regulations.
- The court applied the “different inquiry” approach from Tennessee Wine, asked whether the rules are justified by public health/safety (with concrete evidence), and concluded Rhode Island’s scheme is a legitimate exercise of state power.
- Court denied plaintiffs’ motion and granted defendants’ cross-motions for summary judgment, upholding the challenged statutes and regulations.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Do the challenged rules violate the dormant Commerce Clause? | Rules discriminate against out-of-state sellers and burden interstate commerce. | Twenty-first Amendment gives states leeway; rules serve public health and safety. | Upheld under the different inquiry; no dormant Commerce Clause violation. |
| Retailer in-state presence requirement | Unlawful barrier to out-of-state sellers. | Enables on-site inspections, audits, and license enforcement to protect public safety. | Requirement is valid and upheld. |
| In-state wholesaler purchase requirement | Blocks out-of-state suppliers and discriminates. | Ensures regulatory oversight, inspections, and tax/audit compliance. | Requirement is valid and upheld. |
| Ban on delivery by common carrier | Prevents out-of-state retailers from shipping to RI consumers. | Rule is nondiscriminatory; it applies equally to in-state and out-of-state retailers. | Ban is nondiscriminatory and upheld. |
Key Cases Cited
- Tenn. Wine & Spirits Retailers Ass'n v. Thomas, 139 S. Ct. 2449 (2019) (articulates the “different inquiry” test and permits state alcohol rules justified by health/safety)
- Granholm v. Heald, 544 U.S. 460 (2005) (limits dormant Commerce Clause discrimination but recognizes Twenty-first Amendment context)
- North Dakota v. United States, 495 U.S. 423 (1990) (upholds in-state wholesaler requirement under state authority)
- Family Winemakers of California v. Jenkins, 592 F.3d 1 (1st Cir. 2010) (describes three-tier system and its regulatory purposes)
- Sarasota Wine Mkt., LLC v. Schmitt, 987 F.3d 1171 (8th Cir. 2021) (explains hallmark features and purposes of the three-tier regime)