Well this is an interesting twist. The 3rd Circuit announced a decision in the morning of February 28th to a challenge to wine retailing laws in New Jersey. The decision upheld the New Jersey laws.
Then at 7:48 PM the same evening, the Clerk of the court entered a decision vacating the decision stating: “The opinion and judgment entered February 28, 2025 are hereby VACATED having been issued in error.”
So we wait. Whether the decision to vacate was for cosmetic and editorial purposes or whether it reflects something more sinister, we have to wait for an update from the 3rd Circuit.
(previous post) 3rd Circuit Upholds Dismissal of Challenge to New Jersey Retailer Shipping Laws
The Third Circuit affirmed today a trial court decision that held that New Jersey laws related to shipping by retailers do not violate the dormant Commerce Clause noting: “Because striking down New Jersey’s challenged regulations would shake the foundations of the “unquestionably legitimate” three-tiered system of alcohol regulation, and because New Jersey has provided sufficient public health and safety justifications for its policies, we will affirm.”
The court clarified existing 3rd Circuit precedent to note that a dormant Commerce Clause challenge presents a “different inquiry” that “asks of discriminatory regulations “whether the challenged requirement can be justified as a public health or safety measure or on some other legitimate nonprotectionist ground.” By looking at the declarations and dats provided by New Jersey, the court was satisfied that the state did justify these requirements noting “the declarations are sufficiently concrete evidence, and not “mere speculation” or “unsupported assertions,” that New Jersey’s “challenged requirement[s] can be justified as a public health or safety measure.”
The court noted that although section 2 of the 21st Amendment does not “sanction[] every discriminatory feature that a State
may incorporate into its three-tiered scheme,” it suggests that
“essential features” of the three-tier system pass constitutional
muster. This logic is sound: if the system itself is constitutional, then the core features that define the system are also constitutional.
Contrary to Appellants’ contentions, New Jersey has not “abandoned” its three-tier system as to wine.”
The court highlighted an important, yet overlooked understanding of state alcohol law; “Perhaps the most foundational element of a three-tier system is a state’s ability to prohibit the sale of alcohol that has not passed through its three-tier system. As several other circuits have recently held, permitting out-of-state retailers to sell alcohol from outside of a state’s three-tier system creates a regulatory hole large enough to shake the foundations of the
three-tier model.”
The Third Circuit concluded, “Because New Jersey’s wholesaler purchase requirement is fundamental to the state’s ability to ensure alcohol passes through each tier of its system, and because New Jersey’s physical presence requirement is key to enforcing its system by keeping retailers within its investigator’s jurisdiction, both challenged regulations are essential features of the three-tier system itself. As essential features, these regulations are
unquestionably legitimate and constitutional.”
The plaintiff’s attorney will presumably petition the Supreme Court hear this case as he has unsuccessfully attempted on nearly a other dozen cases since Granholm. The 3rd Circuit’s opinion can be downloaded below.
(previous post) Oral Argument Held by 3rd Circuit on Out-of-State Retailer Challenge to NJ Retailer Law
The Third Circuit held oral arguments on September 17th on the out of state retailer appeal of their district court loss on their dormant Commerce Clause challenge to the law that restricts out of state retailers from shipping to New Jersey consumers.
Most of the case centered around the odd posture of the case and plaintiff’s preferred remedy. The plaintiffs claim the ability to ship from out of state retailers but do not challenge the law requiring all retailers to get their alcohol from NJ wholesalers. As the district court stated in its opinion and all the judges on this panel noted in oral arguments, this case has real redressability issues.
To listen to the oral argument, click here. A decision is likely in the next few months.
(previous post) Briefing Complete in 3rd Circuit for Out of State Retailer Challenge to NJ Delivery Law.
Briefing has been completed for the 3rd Circuit on the appeal by an out of state retailer to their loss at the district court level alleging that NJ law violates the dormant commerce clause because it does not allow out of state retailers to do things that NJ retailers may be able to do.
The appellant has filed its opening brief and later its response brief. The state of New Jersey has filed its brief. Intervening Defendants Allied and Opici have filed their brief as well as another intervening defendant Fedway has filed their brief.
Amicus briefs were filed by the National Beer Wholesalers Association as well as a brief filed by American Beverage Licensees and the Wine and Spirits Wholesalers of America.
The Appellants have shifted their arguments to a frontal attack on physical presence laws while Defendants and Amici have pointed out the illogic of this attack compared to previous Supreme Court precedent upholding the three tier system.
Oral arguments are expected to take place after Labor Day.
(previous post) Federal Court Rules for New Jersey in Retail Shipping Case
Another win for the states, this time in New Jersey. New Jersey District Judge Julien Xavier Neals has ruled for the state on dualing summary judgment motions. The decision can be found here.
Judge Neals reviewed the claims and ultimately held for the state. Judge examined the flaws in the attacks on the New Jersey system and noted:
“The New Jersey System does not have different licenses for in-state vs out-ofstate wine retailers. Both are eligible for plenary retail licenses. Indeed, all potential licensees must satisfy the same requirements, obtain the same licenses, and be subject to the same inspections, audits, and investigations. In-state wine retailers are not provided special treatment or exemptions from certain aspects of the New Jersey System. Therefore, the State of New Jersey’s goal of “protecting public health and safety” is indeed “achieved through the alternative of an evenhanded licensing requirement” because
both in-state and out-of-state wine retailers are subject to the same procedures and requirements to sell wine to New Jersey consumers.”
Judge Neals noted the importance of the Garden State’s physical presence requirements in order to effectuate the regulatory scheme. He further highlights the red herring of the plaintiffs attempts to compare out of state winery rights with out of state retailer rights. “Because the Court must decide whether the New Jersey System treats in-state and out-of-state wine retailers the same and not whether the New Jersey System treats out-of-state wine producers and out-of-state wine retailers the same, N.J.S.A. 33:1-10(2e) does not trigger a dormant Commerce Clause violation.“
As the attorneys for the Plaintiffs have sought to get in front of the Supreme Court from any of their multiple lawsuits, it is expected that there will be an appeal to the Third Circuit.
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