Bolick v. Roberts

Decision Date29 March 2002
Docket NumberNo. 3:99CV755.,3:99CV755.
Citation199 F.Supp.2d 397
PartiesClint BOLICK, et al., Plaintiffs, v. Clarence ROBERTS, et al., Defendants.
CourtU.S. District Court — Eastern District of Virginia

Matthew Scott Hale, Law Office of Matthew Hale, Newport News, VA, Channing Moore Hall, III, Hale & Hale, PLLC, Williamsburg, VA, Michael Paul Thomas, Law Offices of Michael Paul Thomas, APC, Newport Beach, CA, Daniel R. Ortiz, Charlottesville, VA, for plaintiffs.

George Walerian Chabalewski, Office of Atty. Gen., Richmond, VA, Barbara Joan Gaden, Barbara J. Gaden, LLC, Richmond, VA, William Henry Hurd, Office of Atty. Gen. of VA, Richmond, VA, for Clarence W. Roberts, Sandra Canada, Clater Mottinger, defendants.

Walter A. Marston, Jr., Samuel Miles Dumville, Reed Smith Hazel & Thomas, LLP, Richmond, VA, Ernest Gelhorn, Washington, DC, Lee A. Rau, Reed Smith Shaw & McClay, LLP, Washington, DC, for Virginia Wine Wholesalers Ass'n, Inc., defendant.

William B. Gair, Porter & Gair, PC, Fairfax, VA, for Virginia Vineyards Ass'n, movant.

Melanie Diana Coates, Wilmer, Cutler & Pickering, Washington, DC, for Wine and Sprits Wholesalers of America, Inc., amicus.

Mary Chlopecki, Law Office of Douglas C. Herbert, Washington, DC, William Charles Kinzler, Benicia, CA, for Coalition for Free Trade, amicus.


RICHARD L. WILLIAMS, Senior District Judge.

Plaintiffs Clint Bolick and Robin Heatwole, individual consumers of wine, beer and distilled spirits, and plaintiffs Dry Comal Creek Winery, Miura Vineyards, and Hood River Vineyard, all out-of-state growers and producers of wine, brought this action against the defendants, Clarence Roberts, Sandra Canada, and Clater Mottinger, in their official capacities as appointed members of the Virginia Alcoholic Beverage Control Board (ABC Board or Board), challenging Virginia's regulatory scheme involving the shipment and distribution of alcoholic beverages. The plaintiffs' causes of action properly invoke this Court's federal question jurisdiction under the United States Constitution and relevant statutes, 42 U.S.C. §§ 1983, 1988 and 28 U.S.C. §§ 2201, 2202. The Virginia Wine Wholesalers, Inc. intervened as a defendant. Pursuant to United States Code Title 28, Section 636(b)(1)(A) and (C), and Federal Rule of Civil Procedure 72, the matter was referred to the United States Magistrate Judge for the handling of all pretrial motions. On July 27, 2001, the United States Magistrate Judge issued a Report and Recommendation addressing the various motions. The proposed opinion of the Magistrate Judge is attached hereto as an addendum.


The parties were given notice that they could file objections to the Report and Recommendation and were granted until August 29, 2001 to file any such objections. Plaintiffs, defendants and intervenor filed objections on August 29, 2001. Also on August 29, 2001, the plaintiffs filed objections to the Magistrate Judge's Order of July 27, 2001, regarding non-dispositive evidentiary motions. Those objections were overruled by Order of this Court on October 4, 2001. On August 30, 2001, the Virginia Wineries and Vineyards Associations filed a motion for leave to enter as amicus curiae, which was denied by Order of this Court on October 4, 2001.


"The magistrate makes only a recommendation to this court. The recommendation has no presumptive weight, and the responsibility to make a final determination remains with this court." Estrada v. Witkowski, 816 F.Supp. 408, 410 (D.S.C. 1993) (citing Mathews v. Weber, 423 U.S. 261, 270-71, 96 S.Ct. 549, 46 L.Ed.2d 483 (1976)). This Court "shall make a de novo determination of those portions of the report or specified proposed findings or recommendations to which objection is made." 28 U.S.C. § 636(b)(1)(C). "The filing of objections to a magistrate's report enables the district judge to focus attention on those issues — factual and legal — that are at the heart of the parties' dispute." Thomas v. Arn, 474 U.S. 140, 147, 106 S.Ct. 466, 88 L.Ed.2d 435 (1985).


A motion for summary judgment must be decided on undisputed material facts and reasonable inferences therefrom. In this case, deciding whether one party is entitled to judgment as a matter of law requires the Court to determine, based on the standards set forth by the Supreme Court and relevant Fourth Circuit precedent, whether certain of Virginia's ABC statutes violate the dormant Commerce Clause. As the Magistrate's Report makes clear, the challenge in this case is to the statutory scheme for regulating alcohol in Virginia. The Magistrate's Report outlines certain "Material Facts Not in Dispute" in order to place the nature of the parties' dispute in proper context. All parties have made objections to the findings of material facts. Although none of the parties' objections to these material facts create a "genuine issue of material fact" that would affect the outcome of the case or preclude summary judgment, the Court will nonetheless address each of them, sustaining some and overruling others, in order to provide a more complete record.

1. Defendants' and Intervenor's objections

The defendants and intervenor numbered each paragraph of their objections and the Court will refer to the objections by paragraph number a. The defendants and intervenor argue that the Magistrate's Report omits evidence relating to the purpose, structure, operation and practical effect of the ABC Act which, if included, would show that the authority of licensed Virginia wine and beer producers to sell and ship beer and wine to consumers is subject to the same obligations and bears the same burdens as imposed on the importation of out-of-state products.

The objections in defendants and intervenor's paragraph 1 deal with certain specific sections of the Virginia Code dealing with excise taxes and importation. How and when excise taxes are due and that importation must be to a Virginia licensed entity may be undisputably governed by Va.Code Ann. §§ 4.1-235-236; 207(3), 208(3), but that does not diminish the impact of whether there is a state statute that permits direct shipment of beer and wine by in-state entities and prohibits direct shipment by out-of-state entities. Furthermore, the report contains citation to the entire ABC Act in its findings (See Report and Recommendation of the Magistrate Judge (R & R) ¶ 2 at 5) and importation sections are discussed throughout the report. Collection of excise taxes is an important function of the ABC, and while the questions of how the market will apportion the state excise taxes among participants and how it affects consumer choice are interesting, they are not questions that need to be answered considering the confines of the dormant Commerce Clause analysis. Further, considering the constitutional proscription on taxation of transactions which are wholly interstate in nature, the Commonwealth could not collect excise taxes from out-of-state entities for delivery directly to Virginia consumers. Quill Corp. v. North Dakota, 504 U.S. 298, 112 S.Ct. 1904, 119 L.Ed.2d 91 (1992). Finally, this objection raised by the Defendants and Intervenor points directly to issues recognized in the report. For instance, the report adequately notes that there is no proscription on the importation of out-of-state alcohol products provided they first pass through a Virginia licensed importer. (R & R ¶ 11 at 6). Therefore, this objection by the defendants and intervenor is overruled.

In paragraph 2, the defendants and intervenor seek to include information about requirements for obtaining a license to manufacture alcohol within the Commonwealth of Virginia. A dormant Commerce Clause analysis requires a plaintiff to show that a statute or statutory scheme is facially or functionally discriminatory and it requires the defendant to show it has a legitimate purpose that can be accomplished by no other nondiscriminatory means. It is relevant to consider the code provisions that establish these elements. To the extent that the Report fails to adequately explain that a manufacturer seeking a Virginia license must be sited in Virginia and that it must meet stringent corporate bookkeeping and management guidelines, the objection in defendants' and intervenor's paragraph 2 is well taken and is sustained.

Likewise, to the extent that the Report fails to adequately explain the statutory entitlements of the Virginia farm winery, brewery, and winery licensees, as outlined in paragraph 3 of the defendants' and intervenor's objections, the objection in paragraph 3 is sustained.

In their paragraph 4, the defendants and intervenor object to the facts contained in the Report regarding physical segregation of products at Virginia licensees. Because the Magistrate's Report adequately addresses this issue in its findings, and because the specificity raised by the defendants' and intervenor's objection, while perhaps not in dispute, is of no relevance, the objection in paragraph 4 is overruled.

In the objections in paragraphs 5 through 9, the defendants and intervenor urge the Court to consider facts relating to regulation, taxation, enforcement, inspection and monitoring of licensees, producers, wholesalers and retailers. Paragraph 10 urges the Court to consider undisputed facts relating to the extent to which Virginia breweries, wineries and farm wineries direct-ship to consumers. Paragraph 11 complains that there is no evidence that the cost of complying with ABC regulations is higher or lower for in-state producers. None of the facts urged in these paragraphs is material to the resolution of this case. In a case of facial discrimination, the Court need not consider the quantum of the economic impact on either the instate or out-of-state entities. New Energy...

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  • Swedenburg v. Kelly, 00 Civ. 0778(RMB).
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    • U.S. District Court — Southern District of New York
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    ...of minors." Slip Op. at 10. Two (other) district courts have found direct shipment laws to be unconstitutional. In Bolick v. Roberts, 199 F.Supp.2d 397 (E.D.Va.2002), the District Court for the Eastern District of Virginia adopted a Magistrate Judge's report and recommendation that the Virg......
  • Dickerson v. Bailey
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    • July 17, 2002
    ...and it does not affect the determination of whether such a statute passes constitutional muster. See, e.g., Bolick v. Roberts, 199 F.Supp.2d 397, 412-13 (E.D.Va.2002). Furthermore, as evidenced by the text, there is no evidence supporting Defendants' contention that Senator Orrin Hatch repr......
  • Dickerson v. Bailey
    • United States
    • U.S. Court of Appeals — Fifth Circuit
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    ...100 S.Ct. 937 (quoting Hostetter, 377 U.S. at 332, 84 S.Ct. 1293). 81. Quality Brands, 715 F.Supp. at 1143. See also Bolick v. Roberts, 199 F.Supp.2d 397, 445 (S.D.Va.2002) (holding that Virginia's "preference for in-state wineries ... cannot by sustained because it is but a pretext for exc......
  • Brooks v. Vassar
    • United States
    • U.S. Court of Appeals — Fourth Circuit
    • September 11, 2006
    ...the plaintiffs' challenges and enjoining the enforcement of the relevant portions of the ABC Act. See Bolick v. Roberts, 199 F.Supp.2d 397, 416-17 (E.D.Va.2002) ("Bolick I"). Virginia appealed that decision to this While the appeal of Bolick I was pending, the Virginia General Assembly enac......
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