First Circuit Vacates Ruling Upholding RI Ban on Direct Delivery of Wine by Out-Of-State Retailers to RI Consumers A state law that discriminates

First Circuit Vacates Ruling Upholding RI Ban on Direct Delivery of Wine by Out-Of-State Retailers to RI Consumers A state law that discriminates

against out-of-state goods or nonresidents would normally be struck down as contrary to the Commerce Clause of the U.S. Constitution unless it advances a legitimate local purpose that cannot be adequately served by reasonable nondiscriminatory

alternatives. However, when alcohol is involved, a different standard applies. The Twenty-first Amendment allows states more leeway to enact measures to address the public health and safety effects of alcohol use.

Despite such leeway, the Supreme Court has held that states are not free to adopt protectionist measures with no demonstrable connection to legitimate interests, such as public health and safety.

In a recent case, two Rhode Island wine consumers sued in federal court seeking a declaration that a state law—which imposed an in-state-presence requirement to sell and deliver alcohol—was unconstitutional, and to enjoin its enforcement.

The district court held that the in-state-presence requirement was allowed under the Twenty-first Amendment because it was necessary to promote the health and safety of Rhode Islanders. Specifically, it concluded that the requirement allowed state officials to conduct on-site inspections to ensure compliance with the law.

As relevant, the First Circuit vacated and remanded. The court of appeals noted that, in upholding the in-state-presence requirement for retailers, the district court did not examine concrete evidence to discern the effectiveness of the requirement in promoting public health and safety.

The First Circuit explained that the district court made no mention of whether the on-site inspections actually take place, whether such efforts have effectively curtailed behavior deleterious to the public health, or whether the requirement has tangibly benefited public health and safety in some other way.

It also underlined that the district court did not explicitly consider whether the plaintiffs' arguments or proffered evidence—including “data ostensibly demonstrating that out-of-state retail deliveries of alcohol do not cause an erosion in public health and safety”—were sufficient to rebut the defendants' stated justification for the in-state-presence requirement.

The Court of appeals thus remanded for a fuller consideration of the parties' respective offers of proof. On remand, the state will face an uphill climb in defending the in-state-presence requirement. This is because in Tennessee Wine, 139 S.

Ct. 2449, the Supreme Court was not persuaded by arguments similar to those raised by Rhode Island, including “that the prohibition on the shipment of wine from out-of-state sources [is] justified because the State [cannot] adequately monitor the activities of nonresident entities.”