*1 III. remittance of special assessments except in specified circumstances not relevant Government also challenges here, we therefore conclude district court’s the dis- Roper’s remittance of trict court erred in special remitting Roper’s assessment. spe- Whether a district cial assessment sponte. court sua has the authority to remit previ ously imposed special assessment is a
question of law that we review de novo. IV.
Collins,
Section 3013 states that a “court the district court’s orders and remand with shall any assess on person convicted of an instructions reinstate the restitution or- offense against the United ... States ders and special assessment. the case a felony of the amount of if $100 REVERSED AND REMANDED
the defendant is an individual.” 3013(a)(2)(A)(West § U.S.C.A. 2000)(em- added).
phasis This section “requires a
federal district court to impose a ... spe
cial every assessment for conviction,” Rut ledge States, v. United Peter BROOKS; Gies; David T. Patricia (1996). Peters; L.Ed.2d 419 Clemmer Heatwole; Robin B. Dry Comal Vineyards, Creek a Texas
Just as the mandatory nature of the Corporation; Hood River Vineyards, MVRA counsels finding an implied Oregon an Proprietorship; Sole authority to remit orders, restitution so Liquor Company, Schneider Incorpo- too does the mandatory language §of 3013 rated, Plaintiffs-Appellees, suggest that district courts may not sua sponte remit special Also, assessments. like the limited exception found Vineyards, Miura a California Limited MVRA, § provides for the remittance Liability Company; Bolick, Clint of special assessments in one instance. Plaintiffs, Section 3013 allows district courts to remit a special assessment “upon the petition of the Government showing that reasonable VASSAR, Esther H. Chairman, Virginia efforts to collect a fine or assessment are Department Beverage Alcoholic not likely to be effective.” 18 U.S.C.A. Control; O’Berry Pamela Evans, (West § 3573 2000)(emphasis added); see Commissioner, Virginia Department 3612(h) (West also 18 2000). § U.S.C.A. Beverage Alcoholic Control; Susan To § read into grant 3013 a of unfettered Swecker, R. Commissioner, Virginia authority for district courts to remit man- Department Beverage Alcoholic datory special assessments would run afoul Control, Defendants-Appellants, of Congress’s intent to give courts the power to remit special assessments
upon the petition of government. See Virginia Wine Association, Wholesalers (“When Raleigh, 80 U.S. at a statute Incorporated, Intervenor- limits a thing to be done a particular Defendant. mode, it includes a negative other mode.”). Because language Vineyards Association, clearly unambiguously prohibits the Movant. *2 Control; Susan Beverage of Alcoholic Gies; Patricia Brooks; T. David
Peter Commissioner, Virginia Swecker, Heatwole; R. Peters; B. Robin Clemmer Beverage of Alcoholic Department Vineyards, Texas Dry Creek Comal Defendants-Appellees, Control, Vineyards, River Hood Corporation; Proprietorship; Oregon Sole an Incorpo- Company, Liquor Schneider Plaintiffs-Appellees,
rated, Association, Wholesalers Virginia Wine Intervenor- Incorporated, Defendant. Limited Vineyards, a California Miura Bolick, Liability Clint Company; Association, Vineyards Virginia Plaintiffs, Movant. v. 05-1541, Chairman, Virginia 05-1540, 05-1791. Vassar, Nos. H.
Esther Beverage Alcoholic Department Appeals, States United Evans, O’Berry Control; Pamela Circuit. Fourth Department Commissioner, Virginia Control; Beverage Susan Alcoholic 26, 2006. May Argued Commissioner, Virginia Swecker, R. Beverage 11, 2006. Alcoholic Sept. Decided Department Defendants, Control, Association, Wholesalers Wine Intervenor-Defendant-
Incorporated,
Appellant. Association, Vineyards
Movant. Gies; Patricia Brooks; T. David
Peter Heatwole; Peters; B. Robin Clemmer Vineyards, Texas
Dry Creek Comal Vineyards, River
Corporation; Hood Proprietorship; Oregon Sole
an Incorpo- Company, Liquor
Schneider Plaintiffs-Appellants,
rated, Limited Vineyards, a California
Miura Bolick,
Liability Company; Clint
Plaintiffs, Chairman, Virginia Vassar, H.
Esther Beverage Alcoholic
Department Evans, O’Berry
Control; Pamela Department
Commissioner, *3 VIRGINIA, OF GENERAL
TORNEY Appellants/Cross- for Richmond, Virginia, Ortiz, Roy UNIVERSI- Daniel Appellees. LAW, OF SCHOOL OF VIRGINIA TY Appel- Charlottesville, Virginia, Ju- BRIEF: ON lees/Cross-Appellants. Attorney General Jagdmann, Williams dith Collins, Associate R. Carla Virginia, Reg- N. General, Ronald Solicitor State General, Solicitor State *4 nery, Associate GENER- ATTORNEY THE OF OFFICE Richmond, Virginia, VIRGINIA, OF AL Chairman, Pamela Vassar, H. Esther for Commissioner, and Susan Evans, O’Berry Commissioner, Alco- Swecker, R. A. Board; Walter Beverage Control holic L.L.P., SMITH, Jr., Marston, REED Virginia Wine Richmond, for Virginia, Association, Inc. Wholesalers TRAXLER, and NIEMEYER Before R. JOSEPH Judges, and Circuit Judge District GOODWIN, States United Virginia, of West District the Southern for designation. sitting and part; in part; in reversed Affirmed and remanded vacated part, dismissed Judge NIEMEYER opinion. published Judge in which opinion, wrote the to Part except as concurred TRAXLER concurred Judge GOODWIN and III.B Judge and IV. III to Parts except as concurring opinion an wrote TRAXLER concurring judgment. in the part opinion an wrote Judge GOODWIN I, II, Vand concurring Parts IV. III and Parts dissenting OPINION Judge: NIEMEYER, Circuit challenge, facial involves appeal This Commerce the dormant under Constitution, to various States United Thro, State Eugene William ARGUED: Beverage Alcoholic aspects THE AT- General, OF OFFICE. Solicitor (“ABC Act”), Control Act § Va.Code 4.1- they are the prevailing party, provided 100 et seq., which prohibits generally by 42 § U.S.C. we affirm. importation, distribution, and sale of wine I and beer in Virginia except through a reg- ulated, three-tier structure. We sustain Through Act, its ABC which was enact- the constitutionality of: ed following the ratification of the Twenty- (1) first Amendment and the end § Code 4.1-310(E), Prohibi- which tion, Virginia regulates
provides an
exception to
distribution
the three-tier
and sale of alcoholic
import
beverages
restriction for
under a
consumers who
three-tier structure.
personally
Under
carry
structure,
this
into Virginia no more
producers
(or
than
sellers of
gallon
one
liters)
alcoholic
four
bever-
of alco-
ages may sell holic
only to
beverages
personal
Virginia-
consump-
licensed
tion;
wholesalers, who in
turn may sell
only to Virginia-licensed retailers, who
(2) Virginia
Code
4.1-119(A), which
may then sell to consumers.
authorizes state-owned
-operated
November
ABC stores to
Clint Bolick
market and
*5
Robin Heatwole,
produced
individual
at Virginia
consumers of
“farm” wineries.
wine
beer,
and
Dry
and
Comal Creek Win-
Accordingly, with
to
respect
these two as-
ery, Miura Vineyards, and Hood River
pects of the
Act,
ABC
we reverse the
Vineyard, wineries
Texas,
based
Califor-
judgment of
court,
the district
which con-
nia, and Oregon, respectively, commenced
cluded that
these provisions unconstitu-
this action
under
§
U.S.C.
1983 against
tionally
discriminated
interstate
the members of Virginia’s Alcoholic Bever-
commerce.
age
(“ABC”)
Control
Board, alleging that
With respect to challenged provisions of Virginia’s ABC Act violated the dormant
the ABC Act that permit in-state produc- Commerce Clause of the United States
ers
beer,
wine and
but not out-of-state
by
Constitution
favoring in-state wine and
producers, to bypass the three-tier struc-
producers
beer
and discriminating against
ture and sell directly to in-state retailers
producers.
out-of-state
The district court
and
Virginia
§§
Code
4.1-
consumers—
granted summary judgment
to
plain-
112.1(B); 4.1-207(4),(5); 4.1-208(1),(7)— tiffs, sustaining the plaintiffs’ challenges
we conclude that Virginia legislative
and enjoining the enforcement of the rele-
amendments enacted while this appeal was
portions
vant
of the ABC Act. See Bolick
pending render the challenge to
pro-
those
Roberts,
v.
the district are retailers sumers, out-of-state light reconsideration ease for permis- written to obtain required also Beskind opinion intervening our type of each producer sion Cir.2003), (4th F.3d Easley, 325 planned the retailer or beer wine challenge a similar addressed which 4.1- id. See Virginia. into ship laws. ABC Carolina’s North 112.1(B). second filed a remand, plaintiffs On Excep- Import a “Personal The fourth new substituted complaint amended consumers individual allows tion” claims plaintiffs’ modified and plaintiffs or four gallon one into import enacted revisions account into take containers) (if in metric packaged liters Assembly. Virginia General by the requiring without beer and of wine Dry Comal plaintiffs,” “winery original through the sold to be the beer and Vineyards, Hood River Winery and Creek 4.1-310(E). §id. See system. three-tier T. Brooks, David Peter joined were Restric- Stores “ABC is an And the fifth Peters, con- Clemmer Gies, Patricia -operated state-owned tion,” limiting beer, by Schneider of wine sumers selling- marketing stores ABC retailer beer wine and Company, Liquor “farm” produced only wine District in the licensed incorporated 4.1-119(A). §id. See wineries. com- amended second In their Columbia. sum- cross-motions parties’ aspects theOn identify five plaint, held court district amended, judgment, mary Act, as ABC *6 Act ABC of the portions challenged discriminate the unconstitutionally allege against unconstitutionally discriminated sellers and producers out-of-state and producers beer and wine out-of-state beverages: of alcoholic were portions that those and sellers Privilege” “Distribution is the The first Twenty-first Amendment. the by saved breweries and wineries in-state of the April dated judgment, its breweries, and wineries in-state which en- and unconstitutional declared court and brew- wineries not out-of-state Code the enforcement joined whole- the bypass eries, are allowed 4.1-207(4),(5); 4.1- 4.1-112.1(B); §§ unlimited and deliver and level sale 4.1-119(A). 4.1-310(E); 208(1),(7); in- directly beer wine and amounts §§ 4.1- a motion Va.Code filed Thereafter, See plaintiffs retailers. 4.1-208(1),(7). court’s 207(4),(5); clarify the district amend for a a motion filed Privilege” “Delivery judgment, ais second Be- appeal. pending deliv- judgment producers stay of on in-state conferred these had resolved beer court district fore unlimited amounts er its issued pro- motions, Supreme provided to consumers directly Heald, 544 U.S. transpor- mode Granholm opinion own use their ducers 1885, 161 L.Ed.2d deliveries, limit- 460, while perform tation rela- directly addressed (2005), and sellers which producers out-of-state ing Commerce car- the dormant common tionship between using month per two cases Amendment Twenty-first 4.1-207(4),(5); 4.1- §§ id. See riers. ABC to the similar of laws the context 208(1),(7). In Memorandum here. issue Act Privilege” “Shipping The third 16, 2005, the district June dated Opinion All re- retailers. in-state which favors court in this case recognized Supreme court’s judgment concerning the Distribu- intervening Court’s decision and held tion, Delivery, and Shipping Privileges, ef- because “Granholm resolved the central July fective 2006. After enactment of question of this case consistent with the this legislation, Virginia filed a motion to Fourth Circuit’s interpretation [in Bes- vacate the district court’s judgment in part kind ] the' tension between the Com- and to dismiss the plaintiffs’ cross-appeal, merce Clause and the Twenty-First claiming that the General Assembly’s Amendment, the Court is unpersuaded changes rendered moot the plaintiffs’ chal- it should stay the operation of its lenges to the Distribution, Delivery, and [April order.” 2005] The district court Shipping Privileges and to the district denied plaintiffs’ motion to amend or court’s remedy. agree and clarify the judgment and Virginia’s motion state that Virginia’s appeal with respect to for a stay. the Distribution, Delivery, and Shipping Privileges
From the district should court’s also be judgment, Vir- dismissed as ginia filed this moot. appeal, challenging the dis-
trict ruling court’s only insofar as it struck Accordingly, we are presented now with down the Personal Import Exception (1) following issues: whether Virginia’s (§ 4.1-310(E)) and the ABC Stores Re- legislation recent moots Virginia’s appeal (§ 4.1-119(A)). striction Virginia con- concerning the Distribution, Delivery, and ceded that Distribution, Delivery, and Shipping Privileges and plaintiffs’ Shipping Privileges were unconstitutional cross-appeal concerning the imposed reme- Granholm, under and it initially indicated (2) dy; whether the Personal Import Ex- an intent to ask the Supreme Court to ception violates the dormant Commerce overrule its decision uphold pro- those Clause interpreted light of the Twenty- visions. But it has abandoned that course Amendment; (3) first whether the ABC by reason of subsequent legislative action Stores Restriction violates the dormant Assembly. General In its Commerce Clause interpreted in light of appeal, Virginia also contends that the dis- the Twenty-first Amendment; (4) *7 trict court erred in construing the plain- whether the plaintiffs’ dormant Commerce tiffs’ action as arising under 42 U.S.C. Clause claims arise under 42 U.S.C. § 1983. § 1983. plaintiffs
The filed a cross-appeal, chal- lenging the district court’s remedy II of striking down the Distribution, Delivery, The district April 27, court’s 2005 and Shipping Privileges for pro- in-state judgment held in part that particu- some ducers of wine and beer. The plaintiffs lar provisions of Act, the ABC which af- contend that the appropriate remedy is to ford local wineries Distribution, Delivery, enjoin the ABC Act’s prohibition against and Shipping Privileges §of 4.1- —all direct shipments to Virginia retailers and 112.1(B) of the Virginia Code and por- consumers out-of-state wine and beer §§ tions of 4.1-207(4), 4.1-207(5), 4.1- producers rather than striking down the 208(1), 4.1-208(7) and an un- —constituted privileges given to in-state producers and constitutional discrimination against out- retailers. producers of-state and sellers of wine
While these appeals were pending, the By beer. statutory modification, ef- Virginia General Assembly passed H.B. 1, July fective co- virtually 601, which essentially codified the district dified portions the of the district court’s yet repetition, of “capable is that harma The privileges. to these relating
decision at 364. See id. review.” evading al- track Assembly’s amendments General or- court’s district the completely most or re amends legislature aWhen § 4.1- amendment the Although pri- der. challenging the statute, a ease a peals in the only one sentence 112.1(B) strikes where re “even moot can become lawor does therefore statutory provision within is at issue the statute of enactment order, the court’s Legion literally implement Am. legislature.” not the of power the substan- change Dur Assembly’s City Durham, General the N.C. Post of of striking Cir.2001). (4th order the 601, 606 tially effectuates ham, F.3d offending sen- constitutionally merely possible is not the Only reenactment if the find may we probable tence. appears but yet repetition, of “capable to be harm recent these that agree parties is the case hold that review” evading district the fully implemented amendments City Reyes v. Id.; also see moot. of enjoining enforcement judgment court’s (4th Cir. 449, 453 F.3d Lynchburg, Further- statutes. the relevant portions was there when 2002) appeal (mooting an conceded all but have more, plaintiffs Lynch- that expectation reasonable “no that likelihood practical is no there (citing ordinance” reenact burg [would] amendments these repeal will English, 520 U.S. Arizonans Official for Accord- provisions. enjoined restore 1055)). 67, 117 S.Ct. portions requests ingly, Virginia us, parties before case In the deal judgment court’s the district district with that, consistent agree Ship- Distribution, Delivery, and with amend recent order, Virginia’s court’s moot. vacated Privileges be ping claims of the moot three “essentially ments the amend because below” Plaintiffs won consti of mootness doctrine Distri operation changed ments limits of constitutional part tutes Privileges Shipping Delivery, bution, qualify as “To jurisdiction. court federal judg court’s the district effectuate so as to an adjudication, fit federal-court case Furthermore, because ment. at all extant must be controversy actual prac no there agreed have all the time merely at review, not stages of these will reenact likelihood tical Arizonans filed.” complaint for Of parties agree with we privileges, Arizona, 520 U.S. English v. ficial are moot privileges to these challenges (1997) L.Ed.2d to determine no jurisdiction have that we omitted). Fed marks (internal quotation *8 constitution are amendments the whether moot to hear power no have courts eral judgment court’s district the al or whether moot can become case a cases, and because Vir dismiss we Accordingly, was correct. a final entry of after any time—even to the pertains as it insofar appeal ginia’s a federal prevents doctrine judgment —the Distribution, challenges to plaintiffs’ exercising appel its appeals court Privileges and Shipping Delivery, and See Mel a ease. in moot jurisdiction late cross-appeal. plaintiffs’ entirety of the (4th 355, 363-64 F.3d Bunting, 327 v. len moot, we appeal an dismiss we moot, the When and Cir.2003). case is A court’s district also vacate ap generally may be jurisdiction federal exercise court to district order judgment demon however, can party if a propriate, See case. of the portions moot dismiss of a live absence apparent that the strate Inc., 340 Munsingwear, v. States of United abeyance temporary a merely dispute 36, 39, industrial, L.Ed. 36 ample, U.S. manufacturing, and med- (1950); Mellen, Although at 364. purposes, Virginia F.3d ical see § Code 4.1- 310(A)(i) (iii), a compels boats, railcars, dismissal of Constitution and for — case, an appeal equita- engaged moot vacatur on common carriers in interstate commerce, 4.1-310(E)(iii). § ble rule “warranted where mootness id. see It also through happenstance, makes an exception has occurred rather for a small amount (one liters) through losing gallon or voluntary than action of the four of alcoholic bev- Mellen, 364; erages party.” personal 327 F.3d at see also consumption Per- —the v. Bancorp Mortgage Import Exception U.S. Co. Bonner sonal § id. 4.1- —see SlO(EXi).1 18, 25, P’ship, Only through Mall exceptions such (1994). may person 130 L.Ed.2d Inasmuch as we as these a entity import or legislature’s a beverages have held that State amend- alcoholic outside of the three- challenged “voluntary ment law is not tier structure. cessation” attributable the State’s exec- contend that the Personal challenge defending utive officials to that Import Exception discriminates in- law, Paige, see Valero Terrestrial Corp. terstate commerce because it (4th Cir.2000), 211 F.3d we de- limits amount of wine and beer Vir- plaintiffs’ cline the we request that remand ginia can personally consumers trans- to have the district court determine port into the State for their personal directly “whether mootness was and delib- consumption, “causing goods thus local by erately caused Defendants.” share, larger to constitute a goods portions of the district court’s with an out-of-state source constitute Distribution,
judgment holding that of, a smaller share the total in the sales Delivery, and un- Shipping Privileges are time, Virginia market....” At the same portions constitutional its final imposes no restriction on how much injunction barring their are enforcement wine or beer can purchase residents vacated, and we remand this case to the wineries, retailers, from in-state district court to dismiss the relevant personally transport breweries claims. within the Commonwealth. ... This difference treatment constitutes facial
Ill and effectual discrimination violation We now consider whether Code of the dormant Commerce 310(E)(i), § Import the Personal Ex- cannot Twenty-First be “saved” 4.1— ception system, to the three-tier violates Amendment.
the dormant Commerce Clause. Plaintiffs this argument advanced in their prohibits gener- Code legislature’s 4.1-310 brief before the re- ally importation cently beverages of alcoholic enacted amendments rendered moot Virginia except through plaintiffs’ challenges into the three-tier to the Distribu- however, tion, provision, Delivery, structure. That Shipping Privileges for, exceptions way some challenge makes of ex- the ABC Act. And their to the *9 4.1-310(E) resale, Virginia beverages 1. Section the not of Code monwealth for alcoholic provides part: in relevant gallon an not exceed in amount to one or four provisions chapter prohibit part beverages of this not if the shall liters of alcoholic (i) any person bringing, personal from being in his transported held in con- is metric-sized possession, through or United States Customs tainers. baggage, accompanying in his into the Corn- 350 the of power the on constraint mant” depended Exception Import Personal interferes that legislation to enact States Vir- created discrimination on the
part commerce. interstate or burdens with buy unlimit- to consumers allowing ginia’s 447, 439, 111 Higgins, v. Virginia Dennis directly from wine of ed amounts (“It (1991) is 969 865, L.Ed.2d 112 struc- S.Ct. three-tier the (bypassing wineries however, the that Commerce clear, of also liters or four ture) gallon only one but on power confer than more does Because Clause wineries. out-of-state from wine a sub Government; is also direct- the Federal longer no can wineries state permissible on restriction has also stantive consumers, argument this ly to (inter commerce” interstate of regulation the amend- Indeed, with moot. become v. omitted)); Healy marks quotation nal wineries out-of-state place, now ments 1, 324, n. 326 Inc., Institute, in Beer wineries in-state over favored be may (1989) 275 L.Ed.2d 2491, 105 or S.Ct. gallon 109 one purchase can consumers that this recognized has (“This long out-of- directly from of wine liters four authority Congress of grant into affirmative the wine import and wineries state ‘dormant’ or implicit an encompasses three- the also through going without the States authority of the on di- limitation buy wine they cannot but system, tier com affecting interstate legislation enact wineries.2 in-state rectly from discriminates merce”). law A Im- to the Personal challenge Plaintiffs’ para is the commerce interstate against argument included also Exception port under prohibited legislation of digm interstate it discriminates Clause, Brown-Forman see Commerce pur- can consumers because commerce Liquor State York New Corp. v. Distillers Vir- wine from of amounts unlimited chase 2080, 90 573, 579, 106 S.Ct. Auth., 476 U.S. gal- only a may import retailers ginia (1986), discrimination where L.Ed.2d out-of-state wine of four liters lon “ treat ‘differential simply defined summarize, per- “The As suppliers. economic and out-of-state in-state ment discriminates limitation importation sonal bur former that benefits interests out purchased and beer against wine ” Beskind, F.3d latter.’ dens ren- been has argument This state.” Inc. Sys. Waste Oregon (quoting forth need set moot, we dered U.S. Quality, 511 Environmental Dep’t of Commerce principles governing 1345, L.Ed.2d Amendment Twenty-first and the Clause (1994)). addressing it. before Commerce the dormant applying A we regulations, alcohol to state Clause consideration into take also must states The Commerce rati- Amendment, was which Twenty-first ... To Power have “shall Congress Eighteenth repealing fied the several among ... Commerce regulate country’s ex- ending this Const, Amendment It is I, § cl. 3. art. U.S. states.” 2 of Section Prohibition. with grant periment affirmative this established well that: provides Amendment or “dor “negative” authority implies consump- personal directly consumers exception to another contains Act The ABC 2. or beer of wine cases two than tion not more structure, neutral which three-tier out-of-state in-state Both per month. 4.1-112.1(A) case. Section this issues li- such may obtain breweries wineries beer authorizes Code ship censes. sell and licenses shippers to obtain
351
ly
or
transportation
importation
by
into
implicated
regulation]
[State
the
...
State, Territory,
any
possession
to outweigh the
princi-
Commerce Clause
”
for delivery
or use
United States
ples that would otherwise be offended.’
intoxicating
in
liquors,
therein of
viola-
(second
Id. at 513-514
in origi-
alteration
thereof,
pro-
tion
the laws
hereby
nal) (quoting
Imports,
Bacchus
Ltd. v.
hibited.
Dias,
263, 275,
3049,
104 S.Ct.
82
(1984))
The Twenty-first Amendment was de- L.Ed.2d 200
signed
protect
certain “core interests”
Beskind,
Since our
decision
“
Su-
‘promoting temperance,
of the
States
preme Court has
.analytical
modified this
conditions,
ensuring orderly market
framework, preserving
”
inquiry
the first
raising
through regulation
revenue’
narrowing
second,
but
at least when
manufacture, distribution,
and sale of
protectionism
economic
at
issue.
In
Beskind,
beverages.
alcoholic
325 F.3d at
Granholm, which invalidated direct-ship-
(quoting
North
Dakota
United
prohibitions
ment
Michigan
and New
States,
423, 432,
110 S.Ct.
York’s laws—similar to
North
Carolina
(1990)).
accomplish
L.Ed.2d
To
laws struck down in
pro-
Beskind and the
end,
power
regulate
“some
inter-
by
visions mooted
here
recent
state commerce was withdrawn from Con-
legislation
Supreme Court affirmed
—the
gress so that the Commerce Clause could
that the
step
first
in reviewing state alco-
prevent
be construed to
the enforce-
regulations
hol
is to determine whether
regulating
impor-
ment of State laws
they discriminate against interstate com-
beverages
tation of alcoholic
and the man-
merce in violation of the Commerce
consumption of
ufacture and
alcoholic
Clause.
U.S. at
“whether the State however, be upheld applying still Com violates the without con- Commerce Clause jurisprudence determining merce Twenty-first of the sideration Amend- — ment,” and, second, did, regulations whether reasonably if it the state we then asked “ legitimate whether the advance ‘principles underlying the interests “that Twenty-first Amendment sufficient- be adequately [were] cannot served reasonable *11 consumers, directly to Id. at amounts of wine
nondiscriminatory alternatives.”
(internal
could
sell
only
while out-of-state wineries
quotation
S.Ct.
omitted).
to
for
Thus,
gallon
one
or four liters
consumers
Supreme
marks
Court
“exacting
personal import
been rendered moot
made clear that
the same
has
—has
statutory
discriminatory
by Virginia’s
enactments.
applies
that
to
recent
standard”
regulations
applies
in other contexts
state
Nonetheless,
continue to
regulations,
state alcohol
such that dis-
to
argue,
Import
the Personal
challenging
dormant
crimination
violation
advantage
it
Exception,
“operates
that
“only
can
af-
upheld
be
Commerce
directly
all in-state entities that sell
finding,
on concrete record evi-
ter
based
consumers ... over out-of-state counter-
dence,
al-
nondiscriminatory
that a State’s
added).
parts.”
(Emphasis
Because
prove
at
ternatives will
unworkable.” Id.
may now
directly
retailers in
sell
493,
wine, Virginia against “discriminates wine Under Act, the ABC Virginia regulates purchased beer out of state” because all sales of wine and beer in Virginia, but it “Virginia imposes no restriction on how regulate does not any sales outside of Vir- much wine or beer residents purchase can ginia. Virginia regulates all imports of from in-state retailers.” argument This wine and beer into Virginia without regu- on (1) rests the syllogism that because lating the prior of imports sales are that wine limited gallon to one or four beer. liters, The Personal Import purchases Exception out-of-state are is limited (2) an exception only same way; yet, to its purchases generally applica- in-state are ble import gallon regulation. limited one liters; Thus, or four an import (3) therefore, regulation import quite limitation distinct and different discriminates a pur- from regulation, out-of-state sales and comparing in- logic chases. The argument, state howev- sales with importation cannot give er, rests on at least two errors. rise to a legitimate comparison for deter- mining
First, discrimination. only fair the plaintiffs’ com- comparison assumes parison would be that how regulation statute of the treats in- quantity of wine state sales may sales, be imported out-of-state into or in- Virginia is a state surrogate wineries for the regulation ivineries, out-of-state quanti- or ty of in-state may product purchased be prodtict. outside out-of-state of the State. But it does not logical- follow The Personal Import Exception places (nor ly factually) that a restriction on im- no restriction on the amount wine a portation effects a restriction on out-of- person may purchase, either inside or out- purchases. Second, even if importa- side Virginia. It also permits any person tion were a surrogate for pur- out-of-state import unlimited amounts of wine into chases, the argunient improperly compares the state through the three-tier structure. unlike market functions. claiming After Where does make an exception —allow- the import limitation is equivalent ing the import of a gallon or four liters of of a limitation on purchases, out-of-state wine without going through the three-tier then compare the one gal- structure —it favor, tends to not discrimi- lon/four-liter out-of-state wine purchases against, nate interstate commerce because from wineries with purchases of unlimited a consumer can buy gallon one or four amounts from in-state retailers. But in liters of wine directly from winery a comparing these different purchases —re- another State and personally carry stricted purchases out-of-state from winer- wine into ies for consumption with unrestricted without purchases in-state comporting from with the retailers —the plaintiffs system three-tier overlook the fact going through a ABC Act retailer. authorizes The same con- purchase sumer, however, quantities unlimited cannot buy alco- similar holic beverages out-of-state, quantity of wine directly which then an in-state may be imported winery; into the State through consumer would pur- have to the three-tier structure. And it chase all such wine from an in-state retail- purchases of unlimited er. amounts through Personal Import is, Exception structure, three-tier bottom, not through the only an exception for small one-gallon/four-liter exception to the struc- amounts of wine that need not imported be ture, that may be compared with the un- through the structure, three-tier and this Bacchus, Similarly in the Court struck Virginians and afforded to both
benefit is
exempted
local
down Hawaiian law
nonresidents.
tax
State’s 20% excise
wine from the
Twenty-first Amendment
Because the
protectionism.” The Court ren-
“economic
*13
“
virtually
con-
‘grants
complete
the States
response
in
to the
holding
follow-
dered its
importation
or
permit
over whether
trol
ing question:
the
liquor
of
and how to structure
sale
case
whether
this
is thus
question
” Granholm,
system,’
liquor distribution
the Twenty-
principles underlying
the
488,
(quoting
at
situations the government where acting is regulator as a of the products it is IV selling or purchases.” The also Virgi- contend that applying Before the dormant Com nia’s authorizing restriction ABC stores to merce Clause to State activities that bur sell only “produced by wine [Virginia] farm den or against discriminate com interstate 4 wineries,” 4.1-119(A), § see Va.Code im- merce, a must court determine whether permissibly against discriminates wines the acting State as partici “is a market produced Commonwealth, outside the pant, rather than as a market regulator.” violation dormant Commerce South-Central Timber Development, Inc. Clause. Wunnicke, 82, 93, 104 S.Ct. deny does not 2237, (1984) its ABC 81 71 (emphasis L.Ed.2d add ed). Stores Restriction If discriminates is a partici State market valid out-of-state wines but claims that its policy pant, “the dormant Commerce Clause of selling only in-state through wines its places no on limitation its Id. activities.” own protected stores under “market participant exception This market “makes participant” exception to the dormant sense evil because the addressed by [the Commerce Clause. dormant Commerce prospect Clause]—the 4. orchard, Act winery” ABC defines "farm vineyard, as producing or similar growing agreements purchasing or (i) area for an establishment located on a farm in grapes agricultural other fruits from or producing Commonwealth with a vine- orchard, growers Commonwealth, yard, growing within or similar area and fermenting bottling bottling with with fermenting facilities for facilities premises on the premises wine on where the owner or where or owner lessee manufactures wine that lessee contains not manufactures wine contains percent by than 18 percent more alcohol volume more than alcohol volume. (ii) located in the a Commonwealth with Va.Code 4.1-100. duties, Mayor’s order who was affected exclu
that States will use custom
sense,
was,
exer
“in
if informal
sionary
regulations, and other
a substantial
trade
”
(as
211,
governmental power
opposed
city.’
‘working
cises of
for the
Id.
resources) to
expenditure of
to the
n. 7.
S.Ct. 1042
entirely
their
citizens—is
absent
favor
own
however,
did,
define some
The Court
selling in
buying and
where the States are
excep
participation
limits to the market
Bank v. Flori
College
Sav.
market.”
Timber, in
which a
tion
South-Central
Prepaid Postsecondary
Expense
Educ.
da
held that
the State
Alaska
plurality
Bd.,
2219,
119 S.Ct.
sale,
not,
require
could
condition
omitted).
(citation
(1999)
L.Ed.2d 605
unprocessed
of its
timber
purchasers
the market
applying
line of
cases
though
it in-state. Even
process
exception
prin-
this
participant
establishes
principle
reaffirmed “the
Court
consistently.
ciple
clearly and
both
on
places no limitations
Commerce Clause
Scrap Corp., 426
Hughes v. Alexandria
particular
refusal
to deal with
State’s
L.Ed.2d
U.S.
participating
in the in
parties when
(1976),
held that
the State
*15
94,
goods,”
market in
467 U.S. at
terstate
auto-
Maryland
pay
could
local sellers of
2237,
scope of
104 S.Ct.
it limited the
the
rates for the
scrap
mobile
above-market
principle
the market in which the State
to
though
activity po-
scrap even
State’s
recognized
Court
participating.
was
The
tentially
export
automobile
reduced
participant
was
in the
the State
a
The Court held
scrap
Maryland.
from
a
in
participant
market but was not
timber
animating
“[njothing
purposes
in the
of timber-process
downstream market
a
prohibits
State
Commerce Clause
ing. And,
the construction
unlike
workers
...
in the market and
participating
White,
purchasers
in
the timber
could not
exercising
to favor its own citi-
right
employees.
State
The Court
be deemed
810,
zens over others.”
Id.
S.Ct.
concluded that because the State did not
Stake,
Reeves,
In
Inc. v.
447 U.S.
2488.
competitor in
participate as an economic
(1980),
2271,
65 L.Ed.2d
timber-processing
the downstream
market
approved
Dakota’s de-
Court
South
in
had a
which its restrictions nevertheless
a
cision to limit the sale of cement from
effect,
significant
the State’s conditions
to
facility
state-owned
South Dakotans.
regulation.
to impermissible
amounted
And
in White Massachusetts Council of
Inc.,
Employers,
Construction
principle
for the
These cases stand
(1983),
L.Ed.2d
exception
participation
ap
that the market
Mayor
of Boston
Court held that the
plies
discriminatory
to
conduct
protect
was
in the construction mar-
participating
participant
acts like a
in
when
State
buildings
ket
ordered that
funded
when he
the relevant market.
South-Central
only
con-
from the
fisc could
be
public
Cf.
Timber,
would be free to make for itself. This
Supreme
The
deny
Court did not
Alaska
indistinguishable
choice is
Maryland’s
right
sell
to
the timber as a market
in
Scrap.
choice Alexandria
Just as Ma
participant
to whomever it chose and at
ryland favored
sellers
it pur
in-state
when
Rather,
price.
whatever
as the
not-
Court
scrap
high
chased automobile
at
prices,
ed,
attempting
impose
Alaska was
“con-
Virginia favors in-state wines in its stores.
ditions downstream in the timber-process-
plaintiffs
contend that
the ABC ing market.”
Id. at
But
monopoly
it
a
in which
has
market
exception
participant
the market
applying
—“to
regulatory
prohibited
achieve otherwise
regulations
are
even when
State’s
market. To
power in another” —the wine
specific
on
market which
trained
claim,
plain-
“leveraging”
support this
situation in Al-
This was the
participates.
that, Virginia
private
argue
if
licensed
tiffs
the State of
Scrap, in which
Ma-
exandria
than state-
liquor
to sell
rather
retailers
in the automo-
ryland
only participated
not
stores,
law
pass
it could
run ABC
but,
market,
through the same
scrap
bile
allowing
private
stores to
pur-
legislation authorizing above-market
That
Virginia wines.
would discriminate
sellers, also re-
scrap
from in-state
chases
in violation of
out-of-state wines
to “obtain a license
quired those sellers
*17
Clause.
the dormant Commerce
if
did
recurring fine”
not
pay
and
a
purchasers,
in-
scrap
willing
their
to
sell
“leveraging”
argument,
find this
We
Scrap,
cluding Maryland. See Alexandria
to
hypothetical
reasoning advanced
2488; see also
at
it,
misleading and irrelevant.
support
both
Dakota, 97
Inc. v. South
Mgmt.,
Chance
misleading because it
hypothetical
is
(8th Cir.1996)
(finding
F.3d
private
regulation of
busi-
involves state
regula-
that, despite
heavy
Dakota’s
South
in the wine market and
competing
nesses
lottery
and all other forms
tion of
state
market, fa-
in that
participation
not state
involve-
gambling,
pervasive
the State’s
assuming away
prerequisites
tally
running
lottery
“regu-
was
ment in
not
is
participant exception;
it
the market
”
market,’
was no
of ‘the
but rather
lation
not
Virginia
pro-
because
does
irrelevant
its
“administering
than
own busi-
more
selling
from
privately-owned stores
hibit
ness”).
Indeed,
plain-
out-of-state wines.
as
concede,
there are thousands
retail
regulates the alco-
tiffs
Virginia
The fact that
may purchase
consumers
preclude
not
to
its
outlets at which
hol market is
sufficient
Virginia-produced
To contra-
both out-of-state
participant.
status as a market
fully
prices. Fur-
Clause,
competitive
a wines at
Commerce
vene
dormant
thermore,
no
rec-
there is
evidence
regulate
more than
markets
State must do
suggest
Virgi- open market,
ord to
that
sale of
making business choices to
nia
buy
goods,
farm wines at ABC stores interferes
and sell
if
even
those choices
local
competitive
products.
with or burdens
free and
favor
And that
all
is
here;
Virginia
has done
market
both in-state and
sells
out-of-state
in-state
from
fully
wines
its ABC
in a
There
no
stores
com-
wines.
evidence
consum-
petitive
Reeves,
wine market. See
any
impediment
purchasing
ers face
(“There
U.S.
360
(1891));
Medigen
whiskey
that de- L.Ed. 649
see also
or vodka will fulfill
Comm’n, 985
Kentucky,
that
Inc. v. Pub. Serv.
by buying a bottle of wine or
mand
(4th Cir.1993)
164,
(applying
167 n. 3
will F.2d
demanding a bottle of wine
consumers
holding
Dennis
that
“Commerce
buying
that
a bottle of
fulfill
demand
Clause violations
actionable under
whiskey
[are]
Common sense com-
vodka.
1983”);
§
Corp.
Yamaha Motor
is no
Jim’s
simply
a conclusion that there
pels
Inc.,
499, 502
Motorcycle,
F.Supp.2d
381
cross-elasticity
justify con-
of demand to
(E.D.Va.2005)
J.)
(noting that
(Payne,
single
is a
market con-
cluding that there
“Gonzaga
Higgins
does not overrule
liquor.
sisting of
Hig-
has applied
that the Fourth Circuit
stands,
fully competitive
As the
record
result”).
in
gins
reaching the same
in
Virginia for
sale of
market exists
wine,
expressly
ABC Stores are but
Gonzaga
Given that
did not
Dennis,
in
participates
one class of retailer
Dennis remains control-
overrule
ling
previously
that market.
have
ac-
authority. We
knowledged
Supreme
Court’s instruc-
“
V
a precedent
tion that
of this Court
‘[i]f
case, yet ap-
direct
in a
application
has
Finally,
Virginia’s con
we address
pears
rejected
rest
on reasons
some
plaintiffs
bring
tention that
cannot
decisions,
Appeals
line
the Court of
their dormant
Clause chal
Commerce
directly
should follow the case which
con-
1983,
that,
§
42
lenges under
U.S.C.
trols, leaving
prerogative
to this Court the
qualify
not
consequently,
plaintiffs
do
”
overruling
its own
Nat’l
decisions.’
a claim for
under
attorneys
to make
fees
Face,
Equity Mortgage Ass’n v.
283
1998,
§
Home
they satisfy
provi
42
if
U.S.C.
(4th Cir.2002) (alteration
220,
that,
224
F.3d
Specifically, Virginia
sion.
claims
Felton,
Doe,
original) (quoting Agostini v.
521
273,
University v.
Gonzaga
203,
1997,
(2002),
117
L.Ed.2d
U.S.
S.Ct.
138
Higgins, (1991). Dennis, sum, L.Ed.2d the Su- In affirm district court’s we may preme among ruling bring Court resolved a conflict their Com- precisely question, holding challenges circuits on this merce Clause under U.S.C. that, 1983; allocating power be- we reverse the district court’s addition governments, judgment holding tween the and state unconstitutional the Per- federal *19 “ right Import Exception ‘a sonal and ABC Commerce Clause confers Restriction; every which citizen the United States is and we dismiss as Stores insofar appeal cross-appeal entitled exercise under the Constitution moot ” appeals provisions and laws Id. at these of the United States.’ as relate to 448, by Virginia legisla- 111 Crutcher v. ABC laws amended (quoting S.Ct. 865 47, 851, 57, 1, 2006, Kentucky, July 141 11 ture vacate the rele- U.S. S.Ct. 35 effective court, judgment Twenty-first vant of the district Amendment” to determine if with plain- remand instructions to dismiss sufficiently are implicated by the law challenges tiffs’ to these provisions. “to outweigh the Commerce princi ples that would otherwise be offended.” PART; AFFIRMED IN REVERSED Beskind, 325 F.3d 513-14 (quoting Bac PART; PART, IN AND IN DISMISSED Dias, Imports, chus v. Ltd. AND REMANDED VACATED (1984)). L.Ed.2d TRAXLER, Circuit Judge, concurring in I believe the majority opinion miscon- part concurring judgment: strues the effect that Supreme Court’s I concur in judgment, I concur decision in Granholm had on the analytical III(B) in all part of the opin- excellent framework we constructed in Beskind. Niemeyer. ion written Judge Granholm, majority reads modifying that framework. The majority GOODWIN, Judge, concurring District explains, “the Supreme Court has modified dissenting: framework, th[e] [Beskind] preserving the I, II, I concur in Parts and V of the inquiry but narrowing the second.” first I majority opinion. respectfully dissent added). Op. 15 (emphasis my view, In from Parts III and IV. I would affirm the narrow, Granholm does not but rather district court’s conclusion that the Person- completely eliminates consideration of Bes- Import Exception1 al and ABC Stores Re- kind’s “second inquiry.” striction are unconstitutional.
Quite
I
simply,
read Granholm as re-
I.
quiring
apply
us
the same dormant
analysis
Commerce Clause
to discriminato-
Heald,
460, 125
Granholm
ry liquor
apply
laws that we
to other dis-
(2005),
L.Ed.2d 796
criminatory
Granholm,
laws.
Supreme
544 U.S. at
Court adopted a framework for
476, 125
examining
liquor
whether state
vio
S.Ct. 1885. We do not consider
laws
late the dormant Commerce
principles
Clause. The
Twenty-first
Amend-
responded
to lower court decisions
487-88,
ment. See id. at
Easley,
Cir.2003),
II.
product,
also that the
purchase
a
but
majority
that to find
The
concludes
By
it.
preventing
consumer be able to use
Exception unconstitution
Import
Personal
Im-
Virginia,
into
the Personal
importation
Virginia’s
al,
have to find
also would
we
Exception impedes
com-
port
interstate
system unconstitu
three-tier distribution
merce.
discriminatory ef
The
disagree.
tional.
I
example:
this
Mr.
lives
Consider
Smith
oc
Import Exception
fect of the Personal
Bristol,
Virgi-
a
Virginia,
town on the
beverages
passed
have
curs after
pur-
border. He wants to
nia/Tennessee
Virginia’s
system.
It
through
three-tier
12-pack
place
a
of beer. The closest
chase
beverages
stage,
the alcoholic
at this
when
buy
just across
State
he can
beer is
West
market,
ready
the shelves
are on
The
Street in Tennessee.
closest store
impermissibly im
commerce is
interstate
twice
far from Mr.
nearly
Sons, Inc. v. Du
peded.
H.P. Hood &
See
Import
The
Ex-
Smith’s house.
Personal
525, 535,
Mond,
336 U.S.
meaningful
of
deprives Mr. Smith
ception
(1949) (“[T]he
or ‘dor
‘negative’
L.Ed. 865
conveniently
located Tennes-
access
pro
aspect
mant’
of the Commerce
it
merely
is located
see retailer
because
‘advancing
from
their own
hibits States
buy
To
than
across the state line.
more
by curtailing the
commercial
interests
(128 ounces),
gallon
one
of beer
Mr. Smith
commerce, either
movement of articles of
store. Mr.
go
must
a
Smith
”).
law tilts
into or out of the State.’
presumably
go
buy
could
to Tennessee and
of
the market in favor
in-state retailers
ounces),
12-pack
a
(approximately
having mean
preventing Virginians from
either
or drink two
would have to
discard
ingful
to the markets of other
access
crossing the street
of the beers before
Granholm,
States. See
import restriction
Virginia.
back into
liquor laws
(finding
S.Ct. 1885
prevents Virginians
meaningfully
from
they
cit
“deprive
unconstitutional because
in the markets of other
participating
right to
izens of their
have access
result,
imper-
States. As a
the restriction
terms”)
equal
of
on
markets
other States
missibly impedes interstate commerce.
added).
(emphasis
argued that
The Commonwealth
because
imports
that a restriction on
I concede
that a State could com
Granholm noted
necessarily target out-of-state
does not
alcohol,
pletely
importation
bar the
Obviously, Virginian may
a
purchases.
limiting
importa
follows that a law
alcohol
an
or
buy the same amount of beer wine
Granholm,
clearly permissible.
tion is
may a
purchaser
out-of-state store as
however, plainly
complete
indicates that a
theory then, Virginia
any other State.
bar could be enacted
State
“[a]
access to the
consumers are not denied
con
which chooses to ban the sale and
because
are
markets of other States
sumption
altogether.”
alcohol
Gran
purchase
the same amounts as
free
488-89,
holm,
363 purposes Michigan As for explains, nomic interests. Grcmholm and New York laws). Supreme has again Court] “Time and [the that, all but the narrowest circum
held
I
Accordingly,
believe the Personal Im-
stances,
violate the
state laws
Commerce port Exception is unconstitutional because
if
mandate
treat
‘differential
it violates
dormant
Commerce Clause.
ment of in-state and out-of-state economic
the former and bur
interests
benefits
III.
”
dens the latter.’
Id.
125 S.Ct.
The ABC
Stores Restriction
also un-
Sys., Inc.
(quoting Oregon
1885
Waste
v.
constitutional.
concedes this law
93, 99,
Dep’t
Quality,
Envtl.
511 U.S.
against
wines,
discriminates
out-of-state
(1994)).
128
S.Ct.
L.Ed.2d 13
but claims
“market participant”
excep-
“generally
with this effect are
Statutes
justifies
tion
the discrimination.
inquiry.”
...
struck down
without further
487, 125
(quoting
Id. at
S.Ct. 1885
Brown-
majority
The
finds
partici-
the market
Forman
v. N.Y.
Corp.
Distillers
State Li
pant exception applicable
because
Auth.,
573, 579,
quor
is a
competitor
the market for wine in
(1986)).
2080,
S.Ct. 1885 revenue
and protecting legitimate minors as local