Post on 02-Jan-2016
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21st Amendment Litigation 2013: Commerce Clause, Antitrust, and More
Deborah A. Skakel, Esq. Dickstein Shapiro LLPSteve Gross Wine InstituteWalter A. Marston, Jr., Esq. Marston & McNally, P.C.NABCA 20th Annual
Legal Symposium on Alcohol Beverage Law & Regulation March 12, 2013
A very brief refresher on Granholm….
“Pure” Granholm
• Producer to consumer direct shipping
• Facially discriminatory statutes
Facially Neutral Statutes
• Gallonage caps
• On premise/In person requirement
Retail to Consumer (“Retail Direct”)
• Applicability of Granholm
• Second vs. Fifth Circuits
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Residency Requirement Challenge
Prior Cases in Texas and Kansas
Missouri: SWS Litigation Plus
• Applicability of Granholm
• Amici include Missouri Beverage and State AGs
• “Related” litigation: Pernod v. Major Brands & Glazer’s
• Recent legislation: S365 (community of interest concept)
Indiana: SWS Litigation Plus
• SWS litigation leads to AG Opinion and ATC change of position
• Recent legislation: H1259 (increase duration from 5 to 6 years)
Tennessee AG Opinion No. 12-59 (6/16/2012)
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Sales in Grocery & Convenience Stores
Maxwell’s Pic-Pac Kentucky Litigation
• Equal Protection, not Granholm/Commerce Clause
Legislative Initiatives
• Kentucky H310 (separate package store license; separate entrance for premises required; grandfathering)
• Tennessee S837/H610 (allows towns to hold referendums)
• Oklahoma (2012’s Initiative Petition No. 396 withdrawn; petition to be refiled in Fall 2013 for Fall 2014 General Election)
• Kansas, Colorado, New York, Maryland, and New Jersey Legislation
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Developments in Third-Party Provider Area
California’s 2011 Industry Advisory: Status
Virginia Fulfillment Warehouse Regs
Legislative Initiatives
• North Dakota – S 2147 (allows use of fulfillment houses in wine direct shipping law)
• Maryland – H 1420 & S 990 (“prohibiting an order to be transmitted to the permit holder by a retailer, a wholesaler, or any other third party, including a marketplace site on the Internet in which sellers offer products to customers”)
• Nebraska – L 230 (limit sales to manufacturers (“person”) attempting to block some portal programs)
New York SLA 1/17/2013 Hearing
Amazon: Business model now used in 15 States and DC
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Post and Hold/Quantity Discount Summary of Cases
• Battipaglia (2d Cir. 1984)
• Costco (9th Cir. 2008)
• TFWS (4th Cir. 2009)
• District Court decisions in Massachusetts (1998) and Pennsylvania (1999)
Legislative Initiatives
• Connecticut – S749 (elimination of 10% minimum markup)
Interplay Between Quantity Discounts & Cooperative Buying
• Washington
• New York
Enforcement
• NY SLA December 2012 historic wholesaler license suspension
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Unorthodox Use of Preemption Argument
Miller Coors v. Chesbay Dist. litigation: Short-lived, but results in legislation in Virginia
Recent SCOTUS preemption cases (non-21st Amendment): Court appears reluctant to expand Commerce Clause
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On The Horizon Developments re: craft brewers and artisan distillers
• New York’s first “Wine, Beer and Spirits Summit”: “Regulatory reforms”
• VA Winery Distribution Co.
Use of gallonage cap concept outside direct shipping (tax structure (NM), franchise law applicability (MI), and grocery store sale privilege (AR))
Further consolidation
• A-B In Bev merger, DOJ action, and proposed resolution
Direct shipment data: Lessons learned
• MD Comptroller December 2012 “Study on the Impact of Direct Wine Shipment”
• VA direct shipment data
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VIRGINIA DEPARTMENT OF ALCOHOLIC BEVERAGE CONTROLDATA ON WINE IMPORTERS AND WINE SHIPPERS
LICENSE TYPES Number Issued
Active In-State Wine Shippers Permits Issued 155 Active Out-of-State Wine Shippers Permits Issued 928 Inactive Wine Shippers In-State Permits Issued 33 Inactive Wine Shippers Out-of-State Permits Issued 299 Total Wine Shippers Issued 1415 FISCAL YEAR 2012 Number
Shipped Wine Liters Shipped by Out-of-State Shippers 1,066,329.225 Wine Liters Shipped by In-State Shippers 55,425.188 Total Wine Liters Shipped (In- & Out-of-State Shippers) 1,121,754.413 Wine Tax Collected by Out-of-State Shippers $426,531.69 OUT OF STATE WINE SHIPMENTS TO VIRGINIA DISTRIBUTORS – FISCAL YEAR 2012
Number Shipped
Wine Liters Shipped to Virginia Distributors 99,717,900.535 Number of Out-of-State Vendors Shipping Wine to Virginia Distributors
2,338
Percentage of Out-of-State Vendors Shipping Less Than 3,000 Cases to Virginia Distributors
89.4%
Percentage of Out-of-State Vendors Shipping Less Than 100 Cases to Virginia Distributors
33.l%
Estimated Number of Wine Labels Approved for Sale in Virginia 65,979