Panelists at NBWA/Brewers Legislative conference discuss three-tier threats

Modern Brewery Age, April 25, 2005

The second possible outcome would be a decision similar to the Fourth Circuit, which would hold that Michigan and New York could not differentiate between in-state and out-of-state suppliers, but might further hold that the proper remedy would be to strike the in-state exemption, not strike the direct shipping prohibition. From my perspective, that would avoid throwing the baby out with the bathwater.

The third possible outcome would be one where they don't make an definitive or all-encompassing decision. That's possible in three ways:

There might be an even split among the justices. If that occurs, the lower court ruling would stand. That would leave us with no definitive ruling from the Supreme Court, and conflicting opinions at the Court of Appeals level.

Two, the court could decide that they need further factual findings in order to decide the legal issues in the case, and they would remand the case to the lower courts to determine those factual issues. And the case would be turned back to them, after the factual issues have been resolved.

Three, the court would decide some of the issues in the case, but not decide the remedy. They might remand the case back to the lower court to determine the remedy. You might recall, that in framing the issue for consideration, the Supreme Court specifically excluded the remedy issue.

The final possible outcome in this case, is that the Supreme Court would hold that the states, Michigan and New York, could not differentiate between in-state and out-of-state suppliers, and would further hold that the appropriate remedy would be to strike down the direct shipping prohibition.

So there are four broad possible outcomes that could be reached by the Supreme Court. A decision is expected sometime between April 18th and the end of June.

The important thing to recognize is that NBWA and the state associations are preparing for each one of these possible outcomes.

No matter what the outcome, the sun will come up the day after the opinion is issued, and beer wholesalers will continue to operate their businesses. It's also important to recognize that this will not be the end of this battle. There will be disagreements about this opinion, and what it means. There will be disagreement on how it applies to other states, and other statutes. And our opponents will not stop in the courts. They will take this battle into the state legislatures.

We can meet these challenges if we continue to work together, and reach out to others that have a common interest in defending responsible and carefully-crafted regulation. If we work together with our allies, I am confident we can prevail.

Phil Wayt: Let me give a little background on the issues in Washington. In February 2004, Costco sued the state of Washington in the Federal district court in Seattle. Shortly thereafter, the Washington Beer & Wine Wholesalers were allowed to intervene. We are in the discovery phase of the case. At the moment, we have been undergoing an extensive document discovery phase. Nine of our wholesalers have been subpoenaed. One of our board members has been subpoenaed. I've been told that when I get back, there will be a subpoena waiting on my desk.