Anvar v. DwyerAnvar v. Dwyer
I
We briefly rehearse the background facts and travel of the case.
Rhode Island, like many states, controls the distribution of alcohol within its borders through what is commonly described as a three-tier system. The state issues licenses specific to the manufacture, wholesale, or retail of alcohol, thereby maintaining a distinction between each tier of the alcohol supply chain. See
The licensing of retailers is left to local municipalities. See
Within this three-tier system, alcoholic beverages sold to consumers are first funneled through in-state wholesalers. They are the only entities allowed to sell alcohol to licеnsed Rhode
This regulatory scheme does admit one exception: consumers may buy alcohol for a non-business purpose from an in-state or out-of-state manufacturer and have it shipped directly to their home by common carrier if the purchase is made in person on the manufacturer‘s premises. See
B
Against this backdrop, we turn to the case at hand. Plaintiffs-appellants Kambis Anvar and Michelle Drum are Rhode Island wine consumers who allege that they would purchase wine from out-of-state retailers and have it delivered to their homes if that course of action was not prohibited by state law. In October of 2019, they sued Elizabeth K. Dwyer, in her official capacity as the Interim Director of the DBR, and Peter F. Neronha, in his official capacity as the Rhode Island Attorney General, in the United States District Court for the District of Rhode Island. The plaintiffs entreated the district court to declare the challenged liquor laws unconstitutional and tо enjoin their enforcement. Subsequently, the Rhode Island Responsible Beverage Alcohol Coalition, Inc., an association of Rhode Island alcohol wholesalers, intervened as a party-defendant to protect the interests of its members. See
In due course, the parties cross-moved for summary judgment. See
After hearing oral argument and mulling the parties’ competing contentions, the district court held that requiring retailers to establish a physical presence within the state to sell and deliver alcohol was allowed under the Twenty-first Amendment because the physical-presence requirement was essential to the state‘s three-tier system and, thus, necessary to “promote[] the health and safety of Rhode Islanders.” Anvar v. Dwyer, 633 F. Supp. 3d 592, 599 (D.R.I. 2022). In upholding the in-state-presence requirement for retailers, the court did nоt examine concrete evidence to discern the effectiveness of that requirement in promoting public health and safety. The court also upheld, on similar grounds, the requirement that licensed retailers purchase alcohol only from licensed in-state wholesalers. See id.
When all was said and done, the district court granted the defendants’ motion for summary judgment and denied the plaintiffs’ cross-motion. This timely appeal followed.
II
We review an order granting or denying summary judgment de novo. See Minturn v. Monrad, 64 F.4th 9, 13 (1st Cir. 2023). “The pendency of cross-motions for summary judgment does not alter the standard of review.” Conlogue v. Hamilton, 906 F.3d 150, 154 (1st Cir. 2018). “Cross motions simply require us to determine whether either of the parties deserves judgment as a matter of law on facts that are not disputed.” Barnes v. Fleet Nat‘l Bank, N.A., 370 F.3d 164, 170 (1st Cir. 2004) (quoting Wightman v. Springfield Terminal Ry. Co., 100 F.3d 228, 230 (1st Cir. 1996)).
The Constitution grants Congress the power “[t]o regulate Commerce . . . among the several States.”
Even so, states are afforded greater leeway when regulating alcohol because of the authority granted to them by the Twenty-first Amendment. See Tenn. Wine, 139 S. Ct. at 2470. Section 2 of the Twenty-first Amendment provides:
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.
It follows, we think, that when assessing whether a state‘s law regulating alcohol runs headlong into the dormant Commerce Clause, a court first must determine whether the challenged law discriminates — either on its face, in effect, or in purpose — against interstate commerce. See Or. Waste Sys., Inc., 511 U.S. at 99; Fam. Winemakers of Cal., 592 F.3d at 9-10, 13. If it does, the inquiry then shifts to whether the challenged law “serve[s] a State‘s legitimate [section] 2 intеrests” such as addressing “the public health and safety effects of alcohol use.” Tenn. Wine, 139 S. Ct. at 2469, 2474. To prove as much, the state may not rely on either “mere speculation” or “unsupported assertions” but, rather, must proffer “concrete evidence” demonstrating that the main effect of the law is the advancement of, say, public health and safety, not economic protectionism.
IV
With this legal framework in place, we move from the general to the specific. The plaintiffs asseverate that Rhode Island‘s issuance of licenses only to retailеrs who maintain a physical presence within the state unconstitutionally discriminates against out-of-state retailers who are thus prohibited from delivering alcohol directly to Rhode Island consumers. See
A
Rhode Island law facially discriminates against out-of-state retailers by authorizing the issuance of retail licenses exclusively to state residents or in-state businesses. See
Despite that impediment to interstate commerce, the district court upheld the in-state-presence requirement on the ground that it is integral to Rhode Island‘s three-tier system of alcohol regulation and, thus, a valid exercise of the state‘s authority under the Twenty-first Amendment. See Anvar, 633 F. Supp. 3d at 598-99. In announcing this holding, the court relied in part on a Supreme Court dictum describing the three-tier system of alcohol regulation in favorable terms. See id.
We dо not gainsay that the Supreme Court has, in the past, described the implementation of a three-tier system as an appropriate use of a state‘s authority under the Twenty-first Amendment. See Granholm, 544 U.S. at 489 (“We have previously recognized that the three-tier system itself is ‘unquestionably legitimate.‘” (quoting North Dakota v. United States, 495 U.S. 423, 432 (1990))); see also Cherry Hill Vineyard, LLC v. Baldacci, 505 F.3d 28, 30 (1st Cir. 2007).3 But the Court, of late, has
Here, the district court concluded that the in-state-presence requirement is an essential feature of Rhode Island‘s three-tier system because it allows state officials to conduct on-site inspections to ensure compliance with the law. See Anvar, 633 F. Supp. 3d at 599. But the court arrived at that conclusion based on an expert rеport affirming that principle in the abstract, together with the naked fact that retailers are required by law to maintain certain sales records for inspection. See
Nor did the district court explicitly consider whether the plaintiffs’ arguments or proffered evidence were sufficient to
The short of it is that a discriminatory aspect of a state‘s version of the three-tier system cannot be given a judicial seal of approval premised either on the virtues of three-tier systems generally or on the basis of a theoretical benefit to public health and safety associated with the challenged regulation. See Tenn. Wine, 139 S. Ct. at 2474-75. After all,
B
We add a coda. The plaintiffs argue vociferously that the district court applied the wrong legal standard by not considering whether nondiscriminatory alternatives to the challenged laws were available. That argument, however, conflates the proper Twenty-first Amendment inquiry with a traditional analysis under the dormant Commerce Clause. See supra Part III. The district court may find the existence of alternatives relevant
C
That ends this aspect of the matter. We vacate the district court‘s entry of summary judgment as to the constitutionality of the in-state-presence requirement for retailers, and we remand that issue for a fuller consideration of the parties’ respective offers of proof. The district court may, of course, take additional evidence on this issue if it sees fit.
V
The plaintiffs concede that their challenge to Rhode Island‘s common-carrier restriction, see
Below, the district court — despite upholding the in-state-presence requirement — proceeded to address the plaintiffs’ challenge to the common-carrier restriction. The court ruled that the latter requirement was nondiscriminatory because the relevant statutory and regulatory provisions made no distinction between in-state and out-of-state retailers. See Anvar, 633 F. Supp. 3d at 599. That portion of the district court‘s judgment also must be vacated. We explain briefly.
Even if a law does not appear to be discriminatory on its face, it still may have a discriminatory effect if “it affects similarly situated entities in a market by imposing disproportionate burdens on out-of-state interests and conferring advantages upon in-state interests.” Fam. Winemakers of Cal., 592 F.3d at 10. So, too, a law may be discriminatory in its purpose if it is “motivated by an intеnt to discriminate against interstate commerce.” Id. at 13. As a threshold matter, though, it is incumbent upon the plaintiffs to provide proof of any allegedly discriminatory effect or purpose. See id. at 9.
VI
We need go no further. For the reasons elucidated above, the judgment of the district court is affirmed in part, vacated in part, and remanded for further proceedings consistent with this opinion. All parties shall bear their own costs.
So Ordered.