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As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe NowRetailers outside Michigan can’t send alcohol directly to the state’s consumers, a federal appeals court said, a ruling that impacts at least one Indiana alcohol retailer.
The court overturned a decision by a federal judge in Detroit who had described Michigan’s restrictions as an “unjustifiable protectionist regime.”
The dispute centered on a law passed in 2016 by the Republican-controlled Legislature and signed by Gov. Rick Snyder. It allows in-state retailers to ship alcohol directly to consumers, but it doesn’t extend the practice to retailers outside Michigan.
“Michigan’s law promotes plenty of legitimate state interests, and any limits on a free market of alcohol distribution flow from the kinds of traditional regulations that characterize this market, not state protectionism,” Judge Jeffrey Sutton said in a 3-0 opinion released Tuesday.
The lawsuit was filed on behalf of three wine drinkers and Lebamoff Enterprises, which operates Cap n’ Cork stores in the Fort Wayne area.
Michigan had argued retailers would be undercut by out-of-state rivals who could avoid the state’s three-tier distribution system.
The Michigan ruling came after the U.S. Supreme Court last year struck down a residency requirement in Tennessee’s liquor laws in Tennessee Wine & Spirits Retailers Association v. Thomas, et al. – a ruling that put Indiana’s own live-here-sell-provision provisions on ice.
Similarly, Lebamoff has previously been involved in an alcohol shipping dispute at the 7th Circuit Court of Appeals in Lebamoff Enterprises Inc., et al. v. Rauner, et al. and Wine & Spirits Distributors of Illinois, 17-2495.
There, the appellate court remanded to the trial court in Illinois for more development on the issue of when states’ regulation of alcohol as allowed under the 21st Amendment becomes economic protectionism. In its Lebamoff decision, the 7th circuit noted the then-pending Tennessee Wine ruling could impact the Illinois case.
After the Tennessee Wine decision, Lebamoff lawyer Robert Epstein of Epstein Cohen Seif & Porter in Indianapolis said he was “very pleased,” adding that the justices underscored existing precedent holding that the 21st Amendment does not give states license to enact discriminatory alcohol laws.
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