A win is a win, and Ohio wine lovers scored a win in court last week in a wine shipping case. But this is a Prosecco-in-a-glass win, not a Champagne-sprayed-over-your-head win.
What happened is that the state of Ohio changed its mind and decided not to ask the US Supreme Court to overturn a federal appeals court decision that went against its restrictive wine-shipping law.
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It's good for wine lovers, not to mention out-of-state retail shops, that Ohio lost at the appeals court. But the impact of the decision isn't as great as it would have been had the Supreme Court decided to take the case. Moreover, the law that prevents out-of-state retailers from shipping wine into Ohio, while allowing in-state stores to ship to Ohio residents, will remain in place while the case is reconsidered.
"The decision that came down at the 6th Circuit [appeals court] was good news," said Tom Wark, executive director of the National Association of Wine Retailers. "And the fact that Ohio was going to appeal it to the Supreme Court was good news. The fact that they're not going to appeal it ... we still have good news. But it also means this process will be longer than if they had appealed to the Supreme Court. That's a bit of a bummer.
"I was always surprised that Ohio wanted to appeal. The consequences of losing are huge. Absolutely gigantic. You don't take that chance. You'd rather delay the loss than throw the Hail Mary and hope you win."
I called the Ohio Attorney General's office to ask why the state's strategy changed between late September, when the attorney general announced that he planned to appeal, and last week, when he filed a court document saying he would not. I reached a spokesperson who said he would look into it, but I never received a reply. I guess we can file that under not wanting to give up the strategy before the new trial.
That trial will strongly favor the plaintiffs, an Illinois wine shop and an Ohio wine collector, because of the ruling of the 6th Circuit Court of Appeals. The appeals court ruled that Ohio cannot simply say that its shipping law protects public health and safety because it supports the three-tier system; Ohio will have to show actual evidence that its law has some beneficial impact.
That "actual evidence" requirement was the standard applied by the US Supreme Court in the 2019 case of Tennessee Wine & Spirits Retailers Association v. Thomas, which seemed at the time to be a landmark ruling that would open retail wine shipping across the country. That hasn't happened because subsequently three appeals courts have basically ignored what SCOTUS said in the Tennessee case. The Ohio case is one of the first that appears to have taken the Tennessee case into account, and it could eventually be a big deal for wine lovers, but it's going to take time.
What will happen now is that the original case – still called Block v. Canepa even though Block, another Ohio wine lover, has withdrawn from it – will go back to the federal district court that originally ruled in favor of Ohio (Jim Canepa is the superintendent of the Ohio Division of Liquor Control). US District Judge Sarah Morrison originally dismissed the plaintiffs' claims without requiring any evidence whatsoever. Now, Morrison has been directed by the appeals court that it is necessary to prove that Ohio benefits by keeping Cleveland residents from ordering fine wine from New York or Los Angeles.
"What are they going to talk about? Minors are getting their hands on alcohol? Prove it," said Chicago-based beverage alcohol attorney Sean O'Leary. "It's causing societal harms? Prove it. The appeals court is saying you can't just say it's a challenge to the three-tier system. You have to prove harm. This is a field we want to play on. The Vinoshipper study shows minors are not ordering alcohol online. There are easier ways to access alcohol."
Another argument states have used to try to protect their local distributors is that the three-tier system provides some protection against adulterated alcohol. If I were to choose one word to characterize the response of O'Leary and Wark to that, I would be torn between "poppycock" and "balderdash".
"They can never guarantee safety because they never test products," O'Leary said. "Let them demonstrate in evidence how they're elevating safety. There's no testing of product. If a product comes in and it's tainted, they're not going to know. It's never tested."
In fact, wine fraud expert Maureen Downey told me last month that counterfeit wines frequently find their way into the three-tier system; distributors don't check for counterfeits either.
O'Leary said that Ohio has been one of the most aggressive states about enforcing its laws, filing claims against big out-of-state retailers including Wine.com. Even with this recent loss at the appeals court level, Ohio can continue to be aggressive while the case is being re-heard. A new ruling could possibly be quick – it certainly sounds simple to an outsider – but it could also take months.
"Right now the question in the case is, how will the lower court judge handle this?" Wark said. "Will she require new evidence to be submitted, or will she use the evidence that has already been submitted? But at the end of the day, this is a win."
