For the uninitiated, Beverage Law mandates that three tiers exist in the alcohol beverage distribution chain layered from supplier, distributor and finally to retailer. As discussed in other blog posts, tied house prevents, generally speaking, one level from operating in the space of another level. The three tier system is the bedrock of the alcohol beverage industry with its existence controlled and monitored by federal and state(s) permitting and licensing schemes.

Orion Wine Imports, LLC of Clearwater, Florida, since 2018, has conducted a full frontal attack on the California’s three-tier system under a Granholm argument by filing suit in U.S. District Court.

First, Orion desires to sell (presumably) from its Florida warehouse directly to California consumers bypassing the states licensing requirements. Orion has argued that under the watershed U.S. Supreme Court decision of Granholm, (states cannot discriminate against out of state wineries from shipping to consumers if in state wineries are permitted to do same), California is discriminating against out of state wholesalers by not letting it sell directly to California retailers. Orion has argued that this type of discrimination violates the dormant commerce clause and should not be permitted.

The U.S. District Court, however, thinks otherwise, and has granted Defendants (California ABC) Motion(s) to Dismiss on two amended complaints filed by Orion. Apparently Orion has filed a third amended compliant which of course the California ABC has moved to dismiss. Hearing is set for November 22. Anyone care to wager on the outcome?