Full Pull Wines: Illinois Liquor Law Challenged at Seventh Circuit

• Full Pull Wines LLC, a Seattle-based retailer, is challenging an Illinois liquor law that bans out-of-state wine shipping to Illinois consumers.
• Plaintiffs argue the Illinois law discriminates against out-of-state businesses, violating the Commerce Clause and 21st Amendment.
• The Seventh Circuit previously found the Illinois law discriminatory in *Lebamoff v. Rauner*, but that case concluded prematurely.
• Judges questioned the extent of state power under the 21st Amendment and compared Illinois' system to Indiana's, which was upheld in *Chicago Wine Co. v. Braun*.
• The outcome could redefine state authority over direct-to-consumer alcohol sales and impact compliance for retailers and distributors.

The Seventh Circuit's decision in this case could fundamentally redefine the scope of state power under the 21st Amendment, particularly concerning the ability of states to restrict out-of-state retailers from selling alcohol directly to their residents.

A Seattle-based wine retailer, Full Pull Wines LLC, along with two Illinois consumers, recently brought a challenge before the Seventh Circuit Court of Appeals concerning an Illinois liquor law. The Washington-based business contends that a specific provision within the state's liquor code unlawfully discriminates against out-of-state companies by prohibiting them from shipping wine directly to consumers within Illinois. This legal action seeks to overturn the state's ban, which the plaintiffs argue violates both the Commerce Clause and the 21st Amendment of the U.S. Constitution.

The core of the dispute revolves around the state's differing treatment of in-state and out-of-state wine retailers. While Illinois permits its own retailers to ship wine to consumers anywhere within the state, it explicitly forbids businesses located outside its borders from engaging in the same direct-to-consumer shipping. During arguments before a three-judge panel, attorney James Tanford, representing the plaintiffs, asserted that Illinois has failed to meet the necessary burden to justify this discriminatory ban. He emphasized that for such a regulation to be permissible, Illinois must demonstrate that the law addresses a genuine public health concern and that discriminating against out-of-state interests is a reasonably necessary measure to achieve that objective.

This is not the first time the Illinois out-of-state wine shipping ban has faced scrutiny in the Seventh Circuit. A similar challenge was mounted in the 2018 case, *Lebamoff v. Rauner*, where the court previously determined that the Illinois alcohol distribution regulations were discriminatory. That case was remanded to assess whether Illinois could provide a justification for requiring a local presence for statewide mail-order sales. However, the litigation concluded prematurely when Lebamoff ceased operations and the consumer plaintiff could not continue due to medical reasons, leaving the fundamental question of justification unresolved.

During the recent hearing, Senior U.S. Circuit Judge Ilana Rovner, participating remotely, highlighted the broad deference traditionally afforded to states under the 21st Amendment to regulate liquor distribution. She pointed to various historical and current "quirky" state liquor laws, such as Oklahoma's past requirement for room-temperature beer sales until 2018, Pennsylvania's state-run liquor stores, Utah's former opaque barriers for bartenders, and Virginia's mandate for restaurants to derive at least 45% of sales from food. Judge Rovner questioned why Illinois' rationale for its current law might not be sufficient, given this extensive state authority.

In response, attorney Tanford clarified that while the 21st Amendment grants states significant power, it is consistently limited by the non-discrimination principle embedded in the Commerce Clause. He argued that the examples cited by Judge Rovner, such as Oklahoma's beer sales, treated both in-state and out-of-state businesses equally, unlike the current Illinois law. U.S. Circuit Judge Frank Easterbrook also raised a pertinent question, inquiring about any material distinctions between the Illinois system and Indiana's, which the Seventh Circuit had previously deemed consistent with the Commerce Clause in *Chicago Wine Co. v. Braun*. In that case, the court upheld Indiana's prohibition on out-of-state retailers shipping wine directly to its consumers, presenting a potential counter-precedent for the current challenge.

The ongoing legal battle over the Full Pull Wines Illinois liquor law holds significant implications for the future of wine direct-to-consumer shipping laws and Illinois alcohol distribution regulations. The Seventh Circuit's decision in this case could fundamentally redefine the scope of state power under the 21st Amendment, particularly concerning the ability of states to restrict out-of-state retailers from selling alcohol directly to their residents. A ruling in favor of Full Pull Wines could open up new market access for out-of-state wine retailers and potentially lead to similar challenges against restrictive laws in other states.

Conversely, an affirmation of the Illinois ban would reinforce states' authority to regulate alcohol sales within their borders, potentially solidifying existing barriers for interstate wine commerce. This case, building on the unfinished business of *Lebamoff v. Rauner Illinois*, is being closely watched by legal professionals and businesses in the alcohol industry. The outcome will be crucial for lawyers advising alcohol retailers and distributors, especially those operating across state lines within the Seventh Circuit, as it could necessitate significant adjustments to compliance requirements and market strategies.

This case could redefine the scope of state power under the 21st Amendment regarding alcohol distribution, particularly for direct-to-consumer wine shipping. Lawyers advising alcohol retailers and distributors, especially those operating across state lines in the 7th Circuit, should monitor this decision for potential changes to compliance requirements and market access.

Source: Original reporting via Associated Press