Yesterday one of the most respected judges in the country penned the Federal Seventh Circuit Court of Appeals’ decision on Indiana’s alcohol delivery law, and it was not good news for retailers. Judge Richard Posner smacked down the latest challenge to wine shipping laws, rejecting a case that, in retrospect, might not have been the best next step in the fight.
At issue was Indiana’s law prohibiting delivery by anybody other than the wine seller or employee of the wine seller, barring delivery by carriers like UPS.
The Plaintiff, Cap N’ Cork, a Fort Wayne, Indiana, wine chain, argued the law should be struck for two reasons, conflict with federal law and violation of the Commerce Clause of the Constitution.
Conflict with Federal Law
Cap N’ Cork argued, first, that Indiana’s law conflicted with the Federal Aviation Administration Authorization Act of 1994, that provides that a state “may not enact or enforce a law, regulation, or other provision having the force and effect of law related to a price, route, or service of any motor carrier.” Judge Richard Posner, writing the opinion for the Court, started by noting that the Indiana statute does not regulate motor carriers, but it does prohibit at least one motor carrier, UPS, from providing a service it hopes to offer, home wine delivery.
The Court next considered the State’s “core power” under the 21st Amendment to “regulat(e) the times, places, and manner under which liquor may be imported and sold.” As part of that analysis, the Judge Posner observed that, while a liquor store could train its own employees to assure that deliveries were made to customers twenty-one or older, it had no such power over commercial carriers.
In an interesting aside, Judge Posner said the conclusion might be different if a carrier brought a case arguing it should be allowed to opt into the same training on age verification offered to retailers.
Commerce Clause violation
Cap N’ Cork’s next argument was that the statute placed unconstitutional burdens on interstate commerce, discriminating in favor of local producers against those more remote from the potential customer. The Court discussed at some length the 21st Amendment and permissible activities under the Commerce Clause, but eventually resolved the question on a much simpler basis. As Judge Posner noted, the Indiana Statute simply did not effect interstate commerce. Cap N’ Cork hoped to expand its delivery within Indiana beyond the reach of its own employees.
This simply might not have been the best case to challenge restrictions on wine delivery. Judge Posner himself went out of the way to note that a different challenge, one brought by the commercial carrier rather than the retailer, was likely to be met with approval. The decision itself is firmly grounded on sound reasoning and analysis. The fact that it was penned by Posner makes it likely to have strong persuasive power even in courts not bound by Seventh Circuit precedent. Further, should the Supreme Court ever hear the issue, on an appeal of this case or another case, it is likely to find Judge Posner’s reasoning persuasive.