Federal Court Upholds Illinois Law Banning Out of State Retailer Shipping

Judge Samuel Der-Yeghiayan sitting in the Northern District of Illinois rejected the complaints of an Indiana retailer and Illinois resident claiming Illinois law requiring customers receive their wine through Illinois retailers violated the Dormant Commerce Clause and the Privileges and Immunities clause of the Constitution.

In a crisp 9 page opinion, the court noted that the claims of Plaintiff “fail at the most basic starting point.” The court outlined how the plaintiff failed to allege a preferential in versus out of state treatment.  Moreover, the court noted, “Plaintiff’s constitutional claim related to unfair treatment is an attempt to circumvent the Illinois statutory schemed designed to protect Illinois citizens.”   Moreover,  the court noted that “Out of State Plaintiff’s constitutional interests in conducting commerce in Illinois does not provide them with unfettered access to Illinois markets to prey on Illinois consumers and reap profits without regard to the health and welfare of the Illinois pubic without complying with Illinois regulations and laws that are applicable to all.”

Presumably, the plaintiffs will bring another appeal to the 7th Circuit.  We will see.

(previous post) Indiana Retailer Challenges Illinois Law Banning Out of State Retailer Shipping

Professor Alex Tanford has returned to the alcohol litigation wars.  This time he and others are representing an Indiana retailer, owner and Illinois resident challenging laws in Illinois that permit Illinois residents to ship to consumers but prohibit out of state retailers.  In the Complaint, the plaintiffs seek to invalidate the Illinois laws on dormant Commerce Clause and Privileges & Immunities grounds.

Similar lawsuits seeking the same relief have failed in the 2nd Circuit (Arnold v. Buy Rite)  and the 5th Circuit (Siesta Village v. Steen).   Missouri also has successfully defended wholesaler level regulation in the Southern Wine case at the 8th Circuit.

Illinois has had high profile investigations into unauthorized sales of alcohol by Indiana businesses. Illinois estimates losing million in tax revenues due to illegal sales.

Previously, the same plaintiff team unsuccessfully filed a lawsuit against Indiana laws relating to winery sales and the 7th Circuit  ruled for Indiana in an opinion by Judge Posner that highlighted strong 21st Amendment rationales.


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