And for those who don’t: Order – #43 in Lebamoff Enterprises, Inc. v. Snyder (E.D. Mich., 2:17-cv-10191-AJT-APP) – CourtListener.com
It looks pretty good. It’s summary judgment for the plaintiff, a retailer in Indiana. And it looks like the issue is similar to the Total Wine case in Tennessee. But it seems to turn on a provision in Michigan law that may not exist in other states allowing only in-state retailers to ship to consumers via common carriers (e.g., UPS, FedEx).
Frankly, I don’t know if I buy the court’s argument that Michigan departed from the three-tier system when it allowed in-state retailers to use common carriers. Was direct delivery by retailers to consumers an integral part of three-tier systems? Maybe it was, for all I know.
In any event, it’s certainly a pro-consumer and pro-out-of-state-retailer ruling.
Plaintiffs ask the Court to declare 2016 PA 520 unconstitutional to the extent that it amends M.C.L § 436.1203 to prohibit non-Michigan wine retailers from 1) selling and distributing wine directly to Michigan consumers, and 2) obtaining licenses and engaging in their occupations in Michigan.
Here’s the discussion of Granholm and the three-tier system:
Plaintiffs have met their burden of proving that the regulatory system created by 2016 PA 520 discriminates against interstate Commerce. The new statute permits only those who “hold a specially designated merchant license located in this state” to use a common carrier to ship to consumers in Michigan. 2016 PA 520 § 203(3). Though Defendants argue that Plaintiffs have every right to open a retail location in Michigan and ship from that store while maintaining their Indiana residency, > courts have “viewed with particular suspicion state statutes requiring business operations to be performed in the home State that could more efficiently be performed elsewhere.” > Pike v. Bruce Church, Inc., 397 U.S. 137, 145 (1970). In 2005, the Supreme Court ruled that Michigan and New York laws permitting direct shipment of wine from in-state wineries, but forbidding the same from out-of-state wineries, violated the Commerce Clause. > Granholm v. Heald> , 544 U.S. 460 (2005). Michigan and New York both argued in Granholm that excluding out-of-state wineries from selling directly to their consumers unless they had a physical presence in the state was nondiscriminatory because wineries need only open up an in-state storefront. > The Court rejected the states’ argument, referencing the “prohibitive” costs of establishing brick-and-mortar distribution centers in states that require retailers to do so. > Id. at 475.
Defendants argue that a ruling for the Plaintiffs would allow Lebamoff to do what no Michigan retailer may do: ship wine to Michigan consumers that has not passed through the Michigan three-tier system. > The dormant Commerce Clause is enforced against states, however, and the constitutionality of state action is of primary concern in this case. The governing question, therefore, is whether Michigan is permitted to enforce a statute that explicitly denies out-of-state retailers a privilege available to their in-state competitors. The answer at this stage must be no, for “state laws that discriminate against interstate commerce face a ‘virtually per se rule of invalidity.” Granholm, 544 U.S. at 476 (quoting Phila. v. New Jersey, 437 U.S. 617, 624 (1978)).
Michigan departed from a hermetically-sealed three-tier system when it chose to permit its wine retailers to join the digital marketplace and engage in direct shipping to customers. > The State created a market for Michigan consumers that implicated interstate commerce in a manner above-and-beyond that of a traditional three-tier system. These same laws then closed off this Michigan-sized portion of American interstate commerce to out-of-state competition. State laws that so favor in-state business presumptively violate the dormant Commerce Clause because they undermine “strong federal interests in preventing economic Balkanization.” Bacchus Imps. v. Dias, 468 U.S. 263, 276 (1984) (finding that a tax exemption for an indigenously produced Hawaiian brandy, Okolehao, skewed competition within the liquor market and therefore was subject to the Commerce Clause).
For better or worse, the states don’t need to have had the constitution first prohibit, then repeal and, in doing so, give absolute power to the states over marijuana commerce. They already have that, by virtue of the fact that’s it federally illegal ![[wow.gif]](/uploads/db3686/original/2X/7/7d450e9830889c8943b674446a21b7254cad657e.gif "wow"){kind=small}