B-21 Wines, Inc. v. Hank Bauer, 36 F.4th 214

Background:

Plaintiff B-21 Wines (Florida retailer), its owner, and three NC residents sued the Chair of the N.C. Alcoholic Beverage Control Commission under 42 U.S.C. § 1983 challenging North Carolina laws that bar out-of-state retailers from shipping wine directly to NC consumers while permitting in-state retailers to ship.
Key statutes at issue: N.C. Gen. Stat. § 18B-102.1(a) (bars out-of-state retailers), § 18B-109(a) (bars NC residents from having alcohol shipped from outside), and § 18B-900(a)(2) (retail premises/management residency requirement).
District court granted summary judgment to the Commission, concluding the restrictions are authorized by Section 2 of the Twenty-first Amendment; plaintiffs appealed to the Fourth Circuit.
The Fourth Circuit applied the Supreme Court’s Tennessee Wine two-step framework: (1) ask whether the law discriminates against interstate commerce; (2) if so, ask whether it is justified as a public-health/safety measure or other legitimate nonprotectionist ground under § 2.
The court held the provisions are facially discriminatory but nevertheless justified as essential to preserving North Carolina’s three-tier alcoholic-beverage system and therefore authorized by § 2; judgment affirmed. Judge Wilkinson dissented.

Issues:

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether NC statutes discriminate against interstate commerce	Statutes facially discriminate by allowing in-state retailers to ship while forbidding out-of-state retailers	Commission argued the statutes do not give a tangible benefit to in-state retailers because §18B-109 restricts shipments from outside generally	Yes — statutes are facially discriminatory (court so held)
Proper standard of review when §2 implicated (Tennessee Wine step two)	Apply a stricter, quasi–strict-scrutiny test requiring the state show an important regulatory interest that cannot be served by nondiscriminatory means	Apply Tennessee Wine: if discriminatory, ask only whether justified as a public-health/safety measure or other legitimate nonprotectionist ground under §2	Tennessee Wine framework controls; court used the §2-tailored inquiry (less stringent than ordinary strict-scrutiny)
Whether the discrimination is justified (preserving the three-tier system)	North Carolina has effectively abandoned the three-tier system for wine (wineries may ship directly); nondiscriminatory alternatives are available	Preserving the three-tier system is a legitimate, §2-protected interest and the shipping bar is an essential feature to prevent bypassing tiers	Yes — preserving the three-tier system justifies the discrimination under §2; statutes upheld
Remedy/relief if discrimination invalid	Plaintiffs sought access for out-of-state retailers to ship to NC consumers	State preferred a remedy that would restrict in-state shipping rather than extend privileges to out-of-state retailers	Court affirmed district judgment; no remedial change ordered (discrimination sustained as constitutional)

Key Cases Cited

Tenn. Wine & Spirits Retailers Ass'n v. Thomas, 139 S. Ct. 2449 (2019) (two-step framework for §2/dormant Commerce Clause review; ask discrimination then whether justified as public health/safety)
Granholm v. Heald, 544 U.S. 460 (2005) (§2 does not absolve states from nondiscrimination requirement; if permitting direct shipment, must do so evenhandedly)
State Bd. of Equalization v. Young's Market Co., 299 U.S. 59 (1936) (early plenary view of state power under §2)
Beskind v. Easley, 325 F.3d 506 (4th Cir. 2003) (struck down NC law allowing only in-state wineries to ship; precedent on three-tier/§2 interplay)
Lebamoff Enters., Inc. v. Whitmer, 956 F.3d 863 (6th Cir. 2020) (upheld similar regime as §2-authorized preservation of three-tier system)
Sarasota Wine Mkt., LLC v. Schmitt, 987 F.3d 1171 (8th Cir. 2021) (upheld similar restriction as essential to three-tier system)
New Energy Co. of Indiana v. Limbach, 486 U.S. 269 (1988) (ordinary dormant Commerce Clause test requiring nondiscriminatory alternatives)