Dickerson v. Bailey, 02-21137.

Citation336 F.3d 388
Decision Date26 June 2003
Docket NumberNo. 02-21137.,02-21137.
PartiesC.A. DICKERSON; Roland R. Pennington; David Vukovic, Plaintiffs-Appellees, v. Doyne BAILEY, in his official capacity as administrator of the Texas Alcoholic Beverage Commission, Defendant-Appellant.
CourtUnited States Courts of Appeals. United States Court of Appeals (5th Circuit)

Mark C. Harwell (argued), Cotham, Harwell & Evans, Houston, TX, Sterling W. Steves, Fort Worth, TX, for Plaintiffs-Appellees.

Philip Andrew Lionberger, Deputy Sol. Gen., W. Reed Lockhoof, Asst. Atty. Gen., Rance Lamar Craft (argued), Austin, TX, for Bailey.

Louis R. Cohen, Todd Cornelius Zubler, C. Boyden Gray, Wilmer, Cutler & Pickering, Mitchell Craig Wolf, Washington, DC, for Wine & Spirits Wholesalers of America, Inc., National Ass'n of Beverage Importers, American Beverage Licensees, National Beer Wholesalers Ass'n, Coalition of Licensed Beverage Ass'ns and Presidents' Forum of the Beverage Alcohol Industry, Amici Curiae.

James M. Goldberg, Goldberg & Associates, Washington, DC, for National Alcohol Beverage Control Ass'n Inc. and National Conference of State Liquor Administrators, Amici Curiae.

Steven M. Simpson, Clint Russell Bolick, William H. Mellor, Institute for Justice, Washington, DC, for Swedenburg, Swedenburg Winery, Lucas and Lucas Winery, Amici Curiae.

Tracy Sue Carlin, Mills & Carlin, Jackson, FL, Kevin Murray Fong, Pillsbury Winthrop, San Francisco, CA, Tracy K. Genesen, Hyde, Miller, Owen & Trost, Sacramento, CA, for Family Winemakers of California and Coalition for Free Trade, Amici Curiae.

Appeal from the United States District Court for the Southern District of Texas.

Before WIENER and CLEMENT, Circuit Judges, and LITTLE*, District Judge.

WIENER, Circuit Judge:

Defendant-Appellant Doyne Bailey, in his official capacity as Administrator of the Texas Alcoholic Beverage Commission (the "Administrator"), appeals from the district court's grant of summary judgment to Plaintiffs-Appellees C.A. Dickerson et al. ("Plaintiffs"). Plaintiffs have challenged portions of the Texas Alcoholic Beverage Code ("TABC") that regulate the sale and importation of wine by citizens of the State of Texas from out-of-state vintners, contending that Texas violates the Commerce Clause by economically discriminating against out-of-state wineries in favor of its own in-state wineries. As we determine that summary judgment was properly granted and that the district court's ordered remedy was appropriate in light of its judgment, we affirm.

I. FACTS AND PROCEEDINGS

Plaintiffs are oenophiles who reside in the Houston area. In April 1999, they brought suit under 42 U.S.C. § 1983 against the Administrator, contending that particular provisions of the TABC, which he and the Alcoholic Beverage Commission enforce, violate the Commerce Clause of the United States Constitution.1 The uncontested predicate for Plaintiffs' lawsuit was their attempt to purchase wines directly from Wiederkehr Wine Cellars, a small vintner in Arkansas, and have it shipped directly to Plaintiffs in Texas. Because of the small size of the winery Wiederkehr has been unable to secure importation and distribution of its wines in Houston, Texas, through the permitted wholesaler. Plaintiffs also purchase wine while visiting out-of-state wineries, which produce wine that is unavailable in Texas; and Plaintiffs' efforts to have their purchases shipped directly to their homes are frustrated by Texas's prohibition against out-of-state wineries selling and shipping directly to Texas consumers.2 Wineries in Texas, however, are permitted to sell and ship wine directly to Texas consumers.3 Thus, claim Plaintiffs in their complaint, Texas's prohibition against out-of-state wineries shipping their products directly to Texas consumers constitutes a "significant burden on interstate commerce and bars them and all other Texans from engaging in their fundamental liberty of interstate commerce."

After receiving cross-motions for summary judgment by the parties, the district court granted summary judgment to Plaintiffs (and, accordingly, denied summary judgment to the Administrator). In its extensive Memorandum and Order the district court thoroughly surveyed the extant case law, then held that (1) TABC § 107.07(a) and § 107.07(f) facially violate the Commerce Clause, and (2) these provisions are not saved by the powers granted to Texas under § 2 of the Twenty-First Amendment because their purpose is to protect in-state economic interests, rather than promoting the legitimate state policy of temperance. The Administrator filed a motion for reconsideration.

Shortly thereafter, the Seventh Circuit issued its decision in Bridenbaugh v. O'Bannon, reversing a district court's ruling in the Northern District of Indiana that the district court here had relied on in its summary judgment order.4 In light of the Seventh Circuit's Bridenbaugh decision, the district court granted the Administrator's motion for reconsideration. The court also granted Plaintiffs' motion to amend their complaint, in which they maintained that the Administrator raised new arguments in his motion for reconsideration. All parties were ordered to rebrief their motions for summary judgment.

In his second motion for summary judgment, the Administrator relied heavily on Bridenbaugh and also insisted for the first time that in-state and out-of-state vintners are treated equally under § 107.07. In their amended complaint and new summary judgment motion, Plaintiffs urged that Texas's discriminatory treatment of out-of-state wineries was explicitly revealed by the Texas legislature's recent enactment of the Texas Wine Marketing Assistance Program Act ("Texas Wine Marketing Act"),5 effective September 1, 2001. Plaintiffs also challenged the Administrator's new claim of equal treatment for in-state and out-of-state wineries under § 107.07, specifically highlighting § 107.12 as facially discriminatory in favor of in-state wineries at the expense of out-of-state wineries.6 Finally, Plaintiffs expanded the scope of the relief they sought, requesting that numerous "duplicative" statutes in the TABC be adjudged as unconstitutional, either facially or as applied.7

In its second, and equally comprehensive, Memorandum and Order, the district court acknowledged that its prior summary judgment ruling and the Bridenbaugh decision "motivated both sides to reframe their claims."8 After exhaustively reviewing the case law and the parties' new arguments, though, the district court again granted summary judgment in favor of Plaintiffs, determining that (1) § 107.07(f) is facially unconstitutional, and (2) §§ 6.01, 11.01, 37.07, 107.05(a), and 107.07(a) are unconstitutional as applied to Plaintiffs. The district court based this conclusion on the same reasoning as in its first summary judgment order: These statutes preclude Plaintiffs from purchasing wine directly from out-of-state wineries and having it shipped directly to their Texas residences, but does allow them to purchase wine directly from in-state wineries and have it shipped directly to them in Texas. This is the kind of economic discrimination, the court explained, that is proscribed by the Commerce Clause: The purpose of the state scheme is economic discrimination against out-of-state interests or, depending on one's point of view, economic protectionism of in-state competitors. Accordingly, the district court held that the subject provisions of the TABC are not saved by the powers granted to the states under § 2 of the Twenty-First Amendment to regulate alcohol. The district court enjoined the Administrator from enforcing the challenged statutory provisions because they "depriv[e] Plaintiffs... of their right to engage in interstate commerce by importing out-of-state wine for personal consumption without the threat of criminal punishment if they violate the statute[s]."9

The Administrator again filed a motion for reconsideration. In response, the district court modified its second summary judgment order, ruling that § 107.07(f) is unconstitutional only as applied to the Plaintiffs, not facially. The court also stayed its injunction pending any appeal to us. In all other respects, the second summary judgment decision remained unchanged. The Administrator timely filed a notice of appeal.

II. ANALYSIS

On appeal, the Administrator urges us to hold that the provisions of the TABC that are challenged by Plaintiffs are sanctioned by the power granted to the states under § 2 of the Twenty-First Amendment. Under controlling precedent in this circuit and in the Supreme Court, we are required to assess first whether these statutes violate the Commerce Clause, and, if we so determine, we must then ask whether they are saved by § 2 of the Twenty-First Amendment.10 In the alternative, the Administrator maintains, if we affirm the district court's judgment, then we should reform the ordered remedy. We will address these two claims in order.

A. Standard of review.

We review a grant of summary judgment de novo, applying the same standard as the district court.11 A motion for summary judgment is properly granted only if there is no genuine issue as to any material fact.12 In reviewing all of the evidence, we must disregard all evidence favorable to the moving party that the jury is not required to believe, and should give credence to the evidence favoring the nonmoving party as well as that evidence supporting the moving party that is uncontradicted and unimpeached.13 The nonmoving party, however, cannot satisfy his summary judgment burden with conclusional allegations, unsubstantiated assertions, or only a scintilla of evidence.14

B. Do the challenged provisions of the TABC violate the Commerce Clause?
1. The dormant Commerce Clause analysis.

The U.S. Constitution empowers Congress "[t]o regulate Commerce ... among the several States."15 The Supreme Court has long recognized that this...

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