The time for an appeal to the United States Supreme Court has passed in the Wine Express matter in Mississippi state courts. As such, this matter will return to lower courts for additional proceedings as a result of the Attorney General’s sting and enforcement actions against out of state retailers for illegally selling alcohol into Mississippi.
(previous post) Wine Retailers File Paperwork Indicating They Will Appeal Their Loss in Mississippi to the United States Supreme Court
The Defendant/Appellant wine retailers have filed a motion with the Mississippi Supreme Court to stay the Writ of Mandate from the recent ruling against them while they file certiorari to the United States Supreme Court. The Mandate was due to be issued March 18, 2020.
In their motion they note they will shortly file an appeal of their loss to the United States Supreme Court on the issue of the dormant commerce clause, an issue they did not raise until their final briefing before the Mississippi Supreme Court.
The Supreme Court usually takes a dozen appeals from state supreme courts but it is unclear what substantial federal question is raised by the application of the Mississippi minimal jurisdiction statute to this case.
(previous post) Mississippi Supreme Court Unanimously Rules for the State and Finds Long Arm Statute Applicable to Wine Shippers
The Mississippi Supreme Court has ruled for the state in their effort to hold wine shippers liable for selling to MS in violation of several laws. This unanimous decision reverses the trial court’s decision.
This case served as a reminder of first year law school’s Civil Procedure class and examination of when personal jurisdiction kicks in. The opinion does not really address alcohol laws in depth.
The court noted that Mississippi law sets forth the various permits that must be obtained from the State in order to engage in the possession, sale, and distribution of alcoholic beverages to adults. The Defendants did not possess any of the permits required by state law. “The Defendants attempt an end run around Mississippi law and the purposeful-availment due-process requirement by employing F.O.B. terms that customarily govern the shipper’s costs or loss from destruction or breakage during delivery…. Were it that simple to defeat jurisdiction, almost no entity that engages in the interstate sale of goods and products would be amenable to suit outside of that entity’s principle state of business—regardless of their purposeful contact(s) with the other state.“
The Court noted, “As we see it, regardless of the F.O.B. contract terms used here by the Defendants in their sales contracts, the Defendants “stood ready and willing to do business” with Mississippi residents, and “knowingly did do business” with Mississippi residents. Hemi Group, 662 F.3d at 758. And they did so frequently. Had the Defendants wanted to avoid being sued in Mississippi, they simply could have chosen—like the other Internet wine-and spirit retailers—not to sell their alcoholic-beverage products to residents in Mississippi.”
The Court concluded its opinion noting; “We find that the doing-business component of Mississippi’s long-arm statute is applicable to the Defendants. We further find that each of the Defendants have established sufficient minimum contacts with Mississippi and that those contacts relate to the State’s claims against the Defendants. Personal jurisdiction over each of the Defendants comports with fair play and substantial justice and does not violate their constitutional due process rights.”
This matter returns to Rankin County Court unless the plaintiffs seek to appeal this decision to the United States Supreme Court. The United States Supreme Court normally takes around a dozen appeals from the highest state courts per term but in my opinion this case lacks a pressing federal issue needing clarification.
(previous post) Oral Arguments Held Before Mississippi Supreme Court on Illegal Sales of Alcohol
Oral argument was held by the Mississippi Supreme Court on January, 15, 2020, in the matter of Lynn Fitch, Attorney General of the State of Mississippi, ex rel., the State of Mississippi and Commissioner of Revenue Herb Frierson and Mississippi Department of Revenue v. Wine Express Inc., Bottle Deals Inc. and Gold Medal Wine Club. A link to watch the hearing can be found here. (Start the argument at minute 15 as there is dead space before then.)
It is dangerous business predicting the outcome of oral arguments, especially when several justices did not ask any questions of either party. Nonetheless, besides serving as a great refresher course in Civil Procedure 101 and the issue of personal jurisdiction, the court seemed to understand the unique nature of alcohol especially in a state like Mississippi and the implications of a ruling for the alcohol shippers would have on other core state enforcement concerns.
The case is now submitted and I will post an update when the court issues its opinion.
(previous post) Oral Argument in Mississippi Illegal Shipping Case Moved to January 15, 2020
The Mississippi Supreme Court has agreed to delay oral arguments for the Wine Express case related to unauthorized sales of alcohol and personal jurisdiction. Oral arguments will now be held January 15, 2020.
(previous post) Briefing Complete in Mississippi Supreme Court for Illegal Shipping Matter
The state of Mississippi filed its reply brief in their case against three out of state alcohol companies that shipped alcohol to minors, dry counties, and consumers in violation of Mississippi law.
This brief rebuts arguments made by the alcohol companies and their amicus briefs about their claim of a lack of jurisdiction over these companies. The state’s reply brief notes that the Mississippi long arm jurisdiction is applicable and the position advocated by the appellees would create an imbalance in regulating the alcohol industry. It notes that self-serving technicalities in the boilerplate sales contract from these companies cannot exclude these companies from the oversight of law for sales into the state.
The state also pointed out that raising a dormant commerce clause claim at the Supreme Court level is wrong as the argument was waived by failure to raise the issue earlier and the facts show there is no dormant Commerce Clause claim in this case. Direct shipping is illegal for everyone in Mississippi, in state and out of state.
The case now waits for an oral argument date before the Mississippi Supreme Court and then a decision after that. I expect oral argument to be held this fall.
The losing party could then ask the United States Supreme Court to take this case as they have jurisdiction to hear appeals from state supreme courts. According to SCOTUSBlog.com, 11 of the 75 cases heard by the United States Supreme Court this year came from state courts.
(previous post) Briefing Almost Complete for Mississippi Supreme Court on Challenge to Mississippi Sting on Illegal Shipping
I have not posted updates to this litigation in some time. After the state of Mississippi filed its appeal brief in March, amicus briefs in support of the state were filed by the National Alcohol Beverage Control Administration; a brief filed for the Mississippi Beverage Merchants Committee, Mississippi Beer Distributors Association, & Mississippi Hospitality &Beverage Association; and a brief for the National Beer Wholesalers Association and the Wine and Spirits Wholesalers of America.
The brief of appellees Wine Express, Bottle Deals, and Gold Medal Wine Club has also been filed. Amicus briefs have been proposed by the National Association of Wine Retailers as well as their related organization Wine Freedom.
This case presents a wide contrast of positions between basics of law school Civil and Criminal Procedure classes from minimum contacts discussions to bootlegging and tax evasion including the claim that the Mississippi efforts to enforce their shipping/dry laws would have a chilling effect on the national alcohol market. Perhaps this case is the next United States Supreme Court case?
The Mississippi Attorney General will file a reply brief and then this matter will be scheduled for oral argument before the court.
Additional information on this case can be tracked at the Mississippi Supreme Court site at this link.
(earlier post) Appeal filed in Mississippi Action Against Illegal Alcohol Shipment
The Attorney General of Mississippi has indeed filed an appeal with the Supreme Court of Mississippi to the Judgments and Orders of the Chancery Court of Rankin County which had dismissed the state’s Complaint. We will keep you up to date on additional briefing.
(earlier post) Mississippi AG to Appeal Shipping Ruling
A state trial court in Mississippi granted defendants’ motion to dismiss a Complaint filed by the State of Mississippi against several retailers that were illegally shipping alcohol into the state. The court’s opinion did not provide much detail on his rationale. Read the Rankin County Court decision for yourself (attached as Exhibit A of the Notice of Appeal) here.
The Mississippi Attorney General’s office and the Mississippi Department of Revenue conducted a few “stings” against companies shipping alcohol online. The news coverage noted several vendors sold into Mississippi despite several laws against shipping. These companies also directly shipped the alcohol to the office of Commissioner of the Department of Revenue, did not pay taxes and did not confirm the purchaser or recipient was over 21.
The Mississippi Attorney General’s office indicated it will appeal this decision.
The Courts 101 suggests that disputes between individuals or entities in two or more states have to be resolved rather in the Federal Court System than in the State one.
Why this obviously of interstate character case is in the State Court System at all?