Byrd reach far beyond residency. If the Supreme Court reverses the Sixth Circuit on broad grounds and finds that state laws regulating wholesalers and retailers are not subject to challenge under the dormant Commerce Clause, Byrd would maintain the status quo with respect to direct shipping of spirits. If the Court affirms Byrd on the broad principle that the Commerce Clause’s non-discrimination principles apply to state laws regulating wholesalers and retailers (as opposed to only producers), then many state laws prohibiting out-of-state retailers from shipping alcohol beverages (including spirits) to in-state consumers could be vulnerable to an attack on constitutional grounds. Most states authorize in-state retailers to ship alcohol directly to a consumer’s home, so the application of non-discrimination principles could force states to extend similar privileges to out-of-state retailers. On a final note, several other cases currently being litigated in courts around the country also have the potential to shape the future of spirits direct shipping. For example, in late September 2018, a federal district court in Michigan struck down a Michigan
statute that allowed only in-state retailers to BYRD’S direct-ship alcohol beverages to Michigan OUTCOME consumers and prohibited out-of-state retailers from exercising that privilege. COULD HAVE Whether that case survives an appeal SIGNIFICANT likely will depend on the Supreme IMPLICATIONS FOR Court’s decision in Byrd, indicating THE FUTURE OF that Byrd’s outcome could have significant implications for the THE DIRECT-TOfuture of the direct-to-consumer CONSUMER MARKET market for alcohol beverages in the FOR ALCOHOL U.S. The Byrd case will take some time to BEVERAGES IN resolve. Briefs from both parties will be THE U.S. due towards the end of 2018, and the Court likely will hear oral arguments in early 2019. A decision likely will come down several months later, in mid2019.
Marc E. Sorini is a partner in the law firm of McDermott Will & Emery LLP, based in the Firm’s Washington, D.C. office. He leads the Firm’s Alcohol Regulatory & Distribution Group, where he concentrates his practice on regulatory and litigation issues faced by supplier-tier industry members. His practice for craft distillers includes distribution agreements, distribution counseling and litigation, spirits formulation, labeling, promotional compliance, compliance strategy, and federal and state tax and trade practice enforcement defense. Bethany K. Hatef is a senior associate in the law firm of McDermott Will & Emery LLP, based in the Firm’s Washington, D.C. office. She is a member of the Firm’s Alcohol Regulatory & Distribution Group, where she concentrates her practice on a wide variety of regulatory and distribution issues involving alcohol beverage suppliers. Her practice includes counseling on distribution relationships, trade practice compliance, and alcohol regulatory and distribution risks associated with corporate transactions.
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